Mar 082019
 
 March 8, 2019  Posted by at 10:39 am Finance Tagged with: , , , , , , , , , , , , , ,  


Pablo Picasso Visage 1928

 

Paul Manafort Sentenced To 47 Months In Prison (ZH)
ECB’s Surprise Policy Moves Send Shivers Through Global Stock Markets (MW)
US Dollar Hits 52-Week High on New ECB Stimulus (WS)
China Exports Fall 20.7% In February; Trade Data Much Weaker (CNBC)
China’s February Trade Surplus With US Narrows Sharply To $14.72 Billion (R.)
US Households See Biggest Decline In Net Worth Since Financial Crisis (CNBC)
Fed QE Unwind Reaches $501 Billion, Balance Sheet Falls Below $4 Trillion (WS)
Germany Won’t Ban Huawei, Says Ready To Oppose US Pressure (RT)
May Urges EU To Agree Brexit Backstop Changes (BBC)
Corbyn Backtracks On Final Say Referendum (Ind.)
British Life Expectancy Falls By Six Months (G.)
Default Or Exit: A Battle Between Italy And The EU Is Inevitable (OR)
Blackout Darkens Much Of Venezuela (AFP)
This Jew Tells Speaker Pelosi: “You May Well Prove Ilhan Omar Correct” (Cohen)
Chelsea Manning Risks Jail To Fight WikiLeaks Grand Jury (SP)

 

 

Shimon Prokupecz from the courtroom: “Judge tells the courtroom that Manafort is not being sentenced for anything related to the Special Counsel’s investigation into Russian interference. Ellis said “He is not before the court for anything having to do with colluding with the Russian government”

So what’s the Guardian headline? “Trump-Russia figure Paul Manafort jailed”.

Paul Manafort Sentenced To 47 Months In Prison (ZH)

In a surprise decision that stands as a slap in the face to Special Counsel Robert Mueller, Judge Ellis handed Paul Manafort a surprisingly light sentence of 47 months -or just under four years in prison – rejecting federal sentencing guidelines that recommended Manafort face up to 24 years in prison – a sentence that would have effectively condemned him to die in jail. Manafort was also fined $50,000 (equivalent to a few of Manafort’s bespoke suits) and ordered to pay restitution of $25 million. At this rate, Manafort might be out before Mueller finally wraps up his probe.

Early in the trial, Manafort appeared headed for a stiff sentence despite showing up in court in a wheelchair and green prison jumpsuit. Initially, after a lengthy review of Manafort’s charges, Ellis, who presided over Manafort’s August trial, said he would reject his lawyers’ request for leniency and accused the former Trump campaign executive of not being entirely forthcoming with the court about his finances. Furthermore, he refused to give him credit for accepting responsibility for his crimes, and also rejected his lawyers’ argument that the fact that Manafort hadn’t been found complicit in Russian collusion detracted from the charges for which he was convicted. When it came time for their statement, prosecutors told the judge Manafort offered little meaningful help during his 50 hours of meetings with investigators, and that the main reason he spent so much time with investigators was because he had lied.

But when it came his turn to speak, Manafort sounded genuinely contrite, telling the judge he felt “humiliated and ashamed” for what he’d done, and that the last two years had been “the most difficult years for my family and I.” “I appreciate the fairness of the trial you conducted,” he said. “My life is professionally and financially in shambles.” In the first indication that the sentence would be lighter than many had anticipated, the judge told Manafort and the court that he felt the federal sentencing guidelines were too stiff, and that Manafort had led an “otherwise blameless” life. Ellis recommended that Manafort – who is reportedly suffering from gout and other unspecified health issues – serve his sentence in a Cumberland, Maryland prison camp. He also credited him with nine months already served.

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The power of central banks is destructive in every possible sense.

ECB’s Surprise Policy Moves Send Shivers Through Global Stock Markets (MW)

Mario Draghi has been grumbling about the deleterious side effects of trade tensions and other geopolitical worries for months, but the ECB’s surprise policy moves in the face of a slowing global economy appeared to bring the danger home to investors. Stocks on Wall Street fell alongside European equities, underlining rising worries among investors that weakness in the global economy could prove to be a drag on U.S. growth. While analysts had expected the ECB president to strike a dovish tone, policy makers went much further than anticipated.

First, the ECB extended its so-called forward guidance on ultralow interest rates, saying it doesn’t expect to begin lifting them until at least early 2020. That’s compared to its earlier plan to leave them on hold at least through the end of this summer. Second, the ECB launched its third iteration of a program of cheap loans — known as targeted long-term refinancing operations, or TLTROs — to eurozone banks. It all came as ECB staff slashed their macroeconomic forecasts, including reducing the outlook for 2019 GDP growth to 1.1% from a previous 1.7% and signaling that inflation will take even longer to reach the central bank’s target of near but just below 2%. Price stability is the ECB’s sole policy mandate.

Draghi’s comments on the economy were getting the blame from analysts and investors for a decline in European and, in part, U.S. stocks. The pan-European Stoxx Europe index ended 0.4% lower, while on Wall Street, the S&P 500 and the Dow Jones Industrial Average ended with a loss of more than 200 points, or 0.8%, after declining 320 points at its session low. European government bonds rallied and the euro extended a decline versus the U.S. dollar.

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Draghi just scared friend and foe. Get rid of him, and his job. The damage is unthinkable.

US Dollar Hits 52-Week High on New ECB Stimulus (WS)

The Dollar Index (DXY), which tracks the dollar against the euro, yen, pound sterling, Canadian dollar, Swedish krona, and Swiss franc, and which is dominated by the euro, jumped 0.83% to 97.71 at the moment, hitting at least briefly its 52-week high, as the euro slumped 1.1% against the dollar, following the ECB’s announcement earlier today. But it wasn’t just a one-day event for the dollar, but an eight-day rally in an uptrend that started in early February. The real worry is the economy in the Eurozone – despite the fabulous stimulus the ECB has heaped on it for years, including a brutal negative-interest-rate policy and massive QE that has inflated the ECB’s balance sheet to over 40% of Eurozone GDP (by comparison, the Fed’s balance sheet is down to 19.5% of US GDP).

The Eurozone economy is deteriorating rapidly. In the post-meeting press conference today, ECB president Mario Draghi announced that the ECB had slashed its economic growth forecast for the Eurozone to 1.1% for 2019, a sharp cut from its forecast of 1.7% growth at the December meeting, and down from its 1.9% growth forecast last summer. “Incoming data have continued to be weak, in particular in the manufacturing sector, reflecting the slowdown in external demand compounded by some country and sector-specific factors,” the statement says.

Instead of admitting that its radical experimental monetary policies were a colossal error as the economic growth is now dwindling despite or because of the stimulus, and instead of gradually raising its policy rates above the rate of inflation to end its brutal “financial repression,” and instead of shedding the bonds on its balance sheet to push up long-term interest rates and force a restructuring of the bogged-down European economy so that it would liquidate or restructure the debts of zombie companies and lighten the load of restructured companies to allow them to have a fresh start – all of it at investors expense – the ECB does the opposite.

It promises new bank liquidity programs in the Eurozone which is already drowning in central-bank liquidity, to get banks to lend more to these zombie companies and keep them from restructuring their debts.

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When did that big Party meeting end?

China Exports Fall 20.7% In February; Trade Data Much Weaker (CNBC)

China on Friday reported worse than expected trade data for the month of February, customs data showed amid Beijing’s trade dispute with the U.S. Dollar-denominated exports plunged 20.7 percent for the month of February from a year ago, missing economists’ expectations of a 4.8 percent decline, according to a Reuters poll. January exports had risen 9.1 percent from a year ago. Dollar-denominated imports fell 5.2 percent in February from a year ago, missing economists’ forecast of a 1.4 percent fall. January imports had fallen 1.5 percent on-year. China’s February trade balance was also significantly weaker than expected at $4.12 billion. Economists polled by Reuters had expected the overall trade balance to come in at $26.38 billion.

The country’s trade balance in January had been $39.16 billion. China’s politically sensitive trade surplus with the U.S. narrowed sharply to $14.72 billion in February from $27.3 billion in January. Although the 20.7 percent decline in Chinese exports for the month of February was a “big number” and the market will be “clearly disappointed,” the negative number should not come as a surprise as investors have been expecting a slowdown both globally and in China, said Sarah Lien, director and client portfolio manager at Eastspring Investments. “There are a lot of headwinds; there’s a lot of moving parts in market,” Lien told CNBC.

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So no currency manipulation needed?

China’s February Trade Surplus With US Narrows Sharply To $14.72 Billion (R.)

China’s trade surplus with the United States narrowed to $14.72 billion in February, from $27.3 billion in January, customs data showed on Friday. For January-February combined, China’s trade surplus with the U.S. stood at $42.1 billion. China’s large trade surplus with the United States has long been a sore point with Washington, and is at the center of a bitter dispute between the two countries. In 2018, the two governments imposed tit-for-tariffs on goods worth hundreds of billions of dollars.

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Do note: what wealth there is, or is measured, sits in real estate and stocks, the very two biggest bubbles blown by the Fed. Net worth my donkey.

US Households See Biggest Decline In Net Worth Since Financial Crisis (CNBC)

Americans’ net worth fell at the highest level since the financial crisis in the fourth quarter of 2018 as sliding stock market prices ate into the household balance sheet. Net worth dropped to $104.3 trillion as the year came to an end, a decrease of $3.73 trillion from the third quarter, according to figures released Thursday by the Federal Reserve. The fall amounted to a drop of 3.4 percent. Much of the slide came due to Wall Street’s woes, as the stock market suffered a precipitous decline that started in October and briefly reached bear market status. Equities skidded as investors began to fear that the Fed would keep raising interest rates even as economic conditions began to deteriorate. By the time the market drop ended in late December, households saw $4.6 trillion worth of equity value deteriorate.

The decline was offset somewhat by a $300 billion increase in real estate value. The overall move was the second-highest quarterly dollar drop since the Fed began tracking the statistic. Overall, financial assets totaled just more than $85 trillion at the end of the year, while real estate value was $29.2 trillion. Household net worth has been rising strongly since the crisis and is up 73 percent since 2009. After suffering their worst Christmas Eve in history, stocks staged a turnaround and ultimately saw their best two-month start to a year since at least 1991. The Dow Jones Industrial Average is off about 1.6 percent in March though still up more than 9 percent year to date.

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Cui bono.

Fed QE Unwind Reaches $501 Billion, Balance Sheet Falls Below $4 Trillion (WS)

Over the next few months, the Fed is expected to announce its new plan for its balance sheet. Meanwhile, as we’re riveted to the edge of our seat, the old plan continues on autopilot, and February was one of the few months when the Treasury “roll-off,” as Chairman Jerome Powell likes to call it, hit the “caps.” In February, the Fed shed $57 billion in assets, according to the Fed’s balance sheet for the week ended March 6, released this afternoon. This slashed the assets on its balance sheet to $3,969 billion, the lowest since December 2013. Via its “balance sheet normalization,” the Fed has now shed $501 billion. And since peak-balance-sheet at the end of 2014, the Fed has shed $547 billion:

During peak-balance-sheet at the end of 2014, total assets ($4.52 trillion) amounted to 26% of GDP. Today’s assets amount to 19.4% of GDP. In the years before QE started, the balance sheet ran around 6% of GDP. By comparison, the ECB’s balance sheet assets now exceed 40% of GDP, and the Bank of Japan’s assets amount to 101% of GDP. February’s drop of $57 billion is larger than the scheduled QE unwind that is capped at $50 billion. But the Fed has other activities that impact the balance sheet. QE revolved around Treasury securities and mortgage-backed securities (MBS). And so does the QE unwind.

[..] On February 15, three issues of Treasury securities on the Fed’s balance sheet totaling $43.5 billion matured. On February 28, three issues totaling $12.5 billion matured. This brought the total for the month to $56 billion – above the cap of $30 billion. So the Fed reinvested $26 billion in new Treasury securities and allowed $30 billion of Treasuries to “rolled off” the balance sheet without replacement. This reduced the total balance of Treasury securities by $30 billion, to $2,175 billion, the lowest since December 2013 – and down by $290 billion since the QE unwind began. This has whittled down the Treasuries acquired during the infamous “QE Infinity” by about one-third:

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When it comes to things like 5G networks, which cross borders, the rest of Europe has little choice but to follow Germany.

Germany Won’t Ban Huawei, Says Ready To Oppose US Pressure (RT)

Germany does not intend to prevent Chinese tech giant Huawei from developing 5G networks, the country’s economy minister said, adding that the EU stands ready to defend its interests, should a trade war with Washington escalate. Berlin will not pre-emptively ban any specific companies from bidding for contracts to develop the country’s next generation 5G mobile network, despite immense pressure from the United States to ostracize Huawei, Peter Altmaier said on Thursday evening, during a debate on ZDF television. “No, we will not want to exclude any company,” he stressed, explaining that the government is capable of implementing enough safeguards to protect Germany’s future networks.

Ignoring Washington’s earnest ‘concerns’ that, through Huawei systems, the Chinese government is planning to spy on the entire world, German authorities produced a list of telecom security requirements on Wednesday. Part of the new German rules requires certifying any security-related components with Germany’s IT security agency. The 5G network “may only be sourced from trustworthy suppliers whose compliance with national security regulations and provisions for the secrecy of telecommunications and for data protection is assured,” Germany’s Economic Ministry and the Federal Network Agency said in their guidelines. Thus Huawei, which has recently sued the US government demanding to see any proof behind their claims, can participate in the tendering process if it meets the requirements set out by Berlin.

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3 weeks to D-Day. Cue blame game.

May Urges EU To Agree Brexit Backstop Changes (BBC)

Theresa May will urge the EU to help get her Brexit deal through the Commons by agreeing legally binding changes to the controversial backstop. On Friday, she will say the EU’s actions will “have a big impact on the outcome” when MPs vote on it next week. But Labour’s Sir Keir Starmer said it was now “clear” the PM “will not be able to deliver the changes she promised to her failed Brexit deal”. The EU says the UK must come forward with new ideas to break the deadlock. The UK is due to leave on 29 March.

Mrs May will visit workers in Grimsby, Lincolnshire, on Friday, days before the second “meaningful vote” in the Commons on the withdrawal deal she has negotiated with the EU. She will tell them: “Just as MPs will face a big choice next week, the EU has to make a choice too. “We are both participants in this process. It is in the European interest for the UK to leave with a deal. “We are working with them but the decisions that the European Union makes over the next few days will have a big impact on the outcome of the vote.”

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Has Corbyn done anything not wrong?

Corbyn Backtracks On Final Say Referendum (Ind.)

Labour has admitted it will not support a new referendum on Brexit in all circumstances, in a major blow to those in the party campaigning for one. Sources close to the Labour leadership confirmed that the party is not advocating a referendum on anything other than a “damaging Tory Brexit” and will not support one if Britain leaves the EU on terms that Labour backs. The Independent has learnt that the issue was the subject of a row between Mr Corbyn’s shadow ministers that pitted Keir Starmer and Emily Thornberry against Brexit-backing frontbenchers led by Jon Trickett. As it dawned on Labour Remainers today, a prominent MP who backs the People’s Vote campaign warned that a failure of the party to follow through on the pledge to back a new referendum would be seen as a “betrayal”.

It comes as deputy leader Tom Watson is in the process of forming a new “social democrat” group within the party, while eight MPs have quit the party, in large part over Brexit policy, to form the new Independent Group. Labour said last week that it would support a vote on any “credible” exit plan passed by parliament, and shadow ministers took to the airwaves to promise to demand a “confirmatory referendum” on “whatever deal may or may not pass through parliament”. However, sources have now told The Independent that the party will only support a referendum on a “damaging Tory Brexit” deal. Crucially, it is understood that Labour does not consider this to include the type of arrangement being proposed by former Conservative ministers Sir Oliver Letwin and Nick Boles, who Mr Corbyn held talks with yesterday. Their plan would keep the UK in the single market and a customs union with the EU.

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This should panic the country like nothing else. But instead all the talk is Brexit and they’re signaling the advantages for pension schemes of people dying younger.

British Life Expectancy Falls By Six Months (G.)

British adults’ life expectancy has been cut by six months in the biggest reduction in official longevity forecasts. The Institute and Faculty of Actuaries, which calculates life expectancy on behalf of the UK pension industry, declined to speculate on why longevity is deteriorating for men and women in England and Wales. Some analysts, however, blame austerity and cuts in NHS spending, others point to worsening obesity, dementia and diabetes. The institute said it now expects men aged 65 to die at 86.9 years, down from its previous estimate of 87.4 years, while women who reach 65 are likely to die at 89.2 years, down from 89.7 years. The actuaries said the evidence of slowing life expectancy that first emerged around 2010-11 is “a trend as opposed to a blip”. Falling longevity has accelerated.

Last year’s analysis cut forecasted life expectancy by two months. This year it took off another six months. Compared with 2015, projections for life expectancy are now down by 13 months for men and 14 months for women. Flat or falling longevity has major implications for health, finance and government policy. The state pension age is planned to rise to 68 in 2037, and the government has floated the idea of increasing it to 70 but will come under pressure to backtrack if longevity drops. [..] Pension companies have already begun to cash in on falling expectations. This week Legal & General said it was releasing £433m of the reserves it holds to pay future pensions because of the reductions in longevity expectations.

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European parliament elections in May. That will bring a lot into the open.

Default Or Exit: A Battle Between Italy And The EU Is Inevitable (OR)

There is a dual Italian crisis brewing in the European Union. On the one hand, it is a political, or even geopolitical, crisis. Italy is undermining the unity of the European Union; blocking the EU’s recognition of those behind the coup in Venezuela as the legitimate authority; preventing the expansion of sanctions against Russia; and even supporting the ‘yellow vest’ movement in France, which is arousing the anger of the French government. On the other hand, the crisis is economic in nature. Italy is once more sliding into a recession (economic growth was negative in the country); Italian banks are again facing financial problems; and the business media has already estimated that the Italian economic crisis could blow up the entire European banking system.

There is a strong possibility that the EU’s leaders will soon be faced with a choice: try to save Italy (and the whole of Europe) from yet another crisis or set an example by punishing the Italian government for the country’s independent economic and foreign policies. In turn, Italian Prime Minister Giuseppe Conte’s government will most likely have its own dilemma to deal with: bow down and sell its principles to get help from Brussels or go all out and regain Italian independence. The choice will not be easy and either decision will be painful. Neither ending to this Italian drama could really be called happy. As this headline in The Telegraph quite rightly notes: “Crisis brewing in Italy will lead to default, exit from the euro, or both.”

[..] To really understand the Italian problem, it should be borne in mind that, as a member of the European Union and the eurozone, Italy does not have full national sovereignty, especially when it comes to economic matters. It does not control the monetary policy of the European Central Bank and cannot even prepare a budget in line with the wishes of its own government or parliament without the risk of running into sanctions or fines from the European Commission. What’s more, Italian eurosceptic politicians suspect that the European Commission (in which the main roles belong to people hand-picked by Germany, France and the US) is punishing Italy and literally strangling its economy because of a political dislike of the Italian government’s geopolitical actions.

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If this happens more often it won’t be a coincidence.

Blackout Darkens Much Of Venezuela (AFP)

Most of Venezuela plunged into darkness on Thursday evening as a blackout served up more misery for people enduring an economic crisis that has fueled a potent challenge to President Nicolas Maduro’s rule. The socialist government quickly blamed the outage affecting 23 of the country’s 24 states on what it called sabotage of a major hydroelectric dam. In Caracas, traffic lights went out and the subway system ground to a halt, triggering gridlock in the streets and huge streams of angry people trekking long distances to get home from work. The blackout in the capital was total and hit at 4:50 pm (2050 GMT), just before nightfall. Caracas is one of the world’s most crime-ridden cities so people set out for home early, well before the sun went down.

Commerce was shut down because most transactions are done with debit or credit cards. Hyperinflation has rendered the local currency, the bolivar, almost worthless. Telephone services and access to the internet were also knocked out. The capital’s international airport was hit, according to social media posts from would-be travelers. A Copa Libertadores football game in the city of Barquisimeto was postponed. As night set in, the nationwide outage dragged on and some people in Caracas banged pots and pans – a traditional Latin American method of letting off steam. About seven hours after the mess started, the lights did come back on in some buildings in eastern Caracas.

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But campaign finance!

This Jew Tells Speaker Pelosi: “You May Well Prove Ilhan Omar Correct” (Cohen)

Speaker Nancy Pelosi is reportedly still considering a symbolic “show vote” in Congress on an anti-Semitism and “hate” resolution – which would offer all the authenticity and honesty of a Soviet show trial. If Pelosi proceeds, it will prove Rep. Ilhan Omar’s point about the inordinate influence wielded over Congress by the “Israel-right or-wrong”/AIPAC lobby and its power to stifle criticism of Israel. The anti-Omar resolution, whether mentioning Omar or not, was originated by two Democrats who are among Congress’s most longstanding pro-Israel diehards: Eliot Engel and Nita Lowey. Both endorsed Bush’s Iraq invasion. Both opposed Obama’s Iran nuke deal. Both supported Trump’s move of the U.S. embassy to Jerusalem.

I’m a proud Jew raised in a liberal family that supported civil rights and human rights. My experience growing up during the 1950s and 1960s was typical of many Jewish Americans. Like many Jews with this background, I’ve grown increasingly ashamed of Israel. For 40 years, Israel has been ruled mostly by a series of right-wing governments – more and more openly racist and abusive of Palestinian rights. It’s not the land of tree-planting, kibbutzim and “a country treating its Arab minority nicely” that we were sold as youngsters. That’s why a large number of proud Jewish Americans – raised to believe in civil liberties and open discussion – are appalled by the campaign to muzzle Rep. Ilhan Omar, as well as Speaker Pelosi’s role in it. We’re also appalled that human-rights-abusing Israel is virtually off-limits to debate.

[..] Rep. Omar has made a simple and undeniable point – that AIPAC (American Israel Public Affairs Committee) and the funding it [receives] influences exert extraordinary power over Congress. Disputing that point is flat-earther terrain. The Capitol Hill farce of an “anti-hate” resolution would provide still more evidence on behalf of her argument.

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We lock up our best, brightest and bravest. It’s the only way we can continue on our present paths. But there should be a big Hollywood movie in the works about Chelsea Manning as a role model for all young Americans.

Chelsea Manning Risks Jail To Fight WikiLeaks Grand Jury (SP)

Chelsea Manning will face a closed contempt hearing after she refused to answer questions during proceedings held by a grand jury in Alexandria, Virginia, that is investigating WikiLeaks. The WikiLeaks grand jury investigation has been ongoing in some form or another in Alexandria since at least December 2010. It was convened by the Justice Department in response to disclosures Manning made to WikiLeaks in 2010, when she was an intelligence analyst for the United States Army. What Manning disclosed exposed war crimes, diplomatic misconduct, and other instances of wrongdoing and questionable conduct by U.S. government officials. But she arrested, subject to a court-martial, and convicted of violating the Espionage Act and other related offenses.

She received a 35-year sentence and was released after six years in military prisons because a grassroots campaign successfully pressured President Barack Obama to commute her sentence. “A judge will consider the legal grounds for my refusal to answer questions in front of a grand jury. The court may find me in contempt and order me to jail,” Manning stated. On March 6, Manning appeared before the grand jury after she was granted immunity for her testimony. “All of the substantive questions pertained to my disclosures of information to the public in 2010—answers I provided in extensive testimony during my court-martial in 2013. I responded to each question with the following statement: ‘I object to the question and refuse to answer on the grounds that the question is in violation of my First, Fourth, and Sixth Amendment, and other statutory rights.’”

Manning added, “In solidarity with many activists facing the odds, I will stand by my principles. I will exhaust every legal remedy available. My legal team continues to challenge the secrecy of these proceedings, and I am prepared to face the consequences of my refusal.” She could face up to 18 months in jail if she is found “in contempt” of court. A legal attempt to quash the subpoena prior to her appearance before the grand jury was rejected by a federal judge on March 5. Grand juries can be empaneled for 18 months, or if they are “special” grand juries, they may last up to 36 months. Over the past eight years, the grand jury has presumably gone through multiple iterations, either being renewed or relaunched.

According to a report from the Washington Post, the grand jury is interested in whether WikiLeaks editor-in-chief Julian Assange solicited Manning to disclose documents. Manning testified during her court-martial about accounts linked to WikiLeaks, or WLO, that she communicated with. It is possible she communicated with Assange, but they never exchanged identifying information. “No one associated with the WLO pressured me into giving more information. The decisions that I made to send documents and information to the WLO and the website were my own decisions, and I take full responsibility for my actions,” Manning asserted. The grand jury would like to try and poke holes in Manning’s testimony to try and build a case against Assange and possibly other staff members of WikiLeaks.

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Mar 072019
 


Edward Hopper Le Bistro or The Wine Shop 1909

 

US Credit Card Debt Rises to Record $870 Billion (ET)
Fed Scraps ‘Qualitative’ Test For US Banks In 2019 Stress Tests (R.)
Beware The ‘Japanification’ Of Europe – ING Economists (MW)
Huawei Hits Back, Sues America, Claims US Hacked Its Servers (Age)
Nadler’s ‘Obstruction’ Quest (WSJ Ed.)
Michael Cohen Asked His Former Lawyer To Seek Pardon From Trump (WSJ)
Democrats Bar Fox From Hosting Primary Candidate Debates (AFP)
EU Urges UK To Offer ‘Acceptable’ Brexit Plan (BBC)
Brexit Meaningful Vote Will Go Ahead, Says No 10 (G.)
Monthly Income Lasts Just 19 Days For Over Half of Greek Households (K.)
Italy’s Welfare Revolution Kicks Off As ‘Citizens’ Income’ Goes Live (R.)
Red Wolf: The Struggle To Save One Of The Rarest Animals On Earth (G.)
China Prosecutes 11 People In $119 Million Totoaba Fish Bust (AFP)
Microplastics Found ‘Absolutely Everywhere’ (G.)

 

 

Let’s wind it down in an orderly fashion and call it a day. This is hopeless.

US Credit Card Debt Rises to Record $870 Billion (ET)

Americans expanded their credit card debt by $26 billion in the last quarter of 2018, making it reach $870 billion—a record. “The increase in credit card balances is consistent with seasonal patterns but marks the first time credit card balances re-touched the 2008 peak,” the Federal Reserve Bank of New York stated in a quarterly report (pdf) released Feb. 12. The credit card debt rose for the 24th consecutive quarter; and balances sliding into 90 or more days of delinquency have increased since 2017. Total household debt increased by $32 billion in the last quarter and finished the year at more than $13.5 trillion. The largest chunk of that sum is mortgages at $9.1 trillion—virtually unchanged from the quarter before. Student loans stood at nearly $1.5 trillion and auto loans at almost $1.3 trillion.

Americans hold about 480 million credit cards, which is about 100 million more than in 2010, but still a bit fewer than at the precipice of the 2008 recession. Consumer spending accounts for two-thirds of growth in the world’s largest economy and is expected to hold strong this year. However, credit inquiries, which are one sign of consumer demand, slipped in the second half of 2018 to the lowest level recorded by the New York Fed. Another signal of weaker demand, the closing of credit cards and other accounts, jumped to its highest level since 2010. [..] The report also showed that Americans have continued to turn away from home equity lines of credit, or HELOC, which can free up funds for other purchases. HELOC balances dropped to $412 billion in the fourth quarter, the lowest level in 14 years.

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And while we’re at it let’s scrap the Fed.

Fed Scraps ‘Qualitative’ Test For US Banks In 2019 Stress Tests (R.)

The U.S. Federal Reserve said on Wednesday it would no longer flunk banks based on operational or risk management lapses during its annual health check of the country’s domestic banks. The “qualitative” portion of the 2019 test, however, will still apply to the U.S. subsidiaries of five foreign banks subject to the annual exam. The move, which is a big win for major banks, such as Goldman Sachs, Morgan Stanley and JP Morgan, Bank of America and Citigroup, forms part of a broader effort by the Fed to overhaul its annual “stress-testing” process, which the industry has long criticized as too onerous and opaque. Since the 2007-09 global financial crisis, the Fed has put the country’s lenders through strict annual tests to see whether they would have enough capital to withstand a major economic downturn.

For the largest lenders, that test also included a so-called “qualitative objection,” that gives the Fed the discretion to fail banks due to risk management or operational failures, even if they have sufficient capital. Most banks that have failed the tests in the past stumbled on the qualitative objection. Banks that receive an objection from the Fed are required to adjust their capital distribution plans. [..] The Fed will still examine domestic banks for operational and risk management problems, but will address them through enforcement actions rather than a public flunking. The U.S. subsidiaries of five foreign lenders – Deutsche Bank, Credit Suisse, UBS, Barclays and TD Bank – would also still be subject to the qualitative objection.

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And scrap the ECB and BOJ too. Their only goal is to preserve zombies.

BTW, does anyone seriously think it’s not too late yet for Europe? Asking for a friend.

Beware The ‘Japanification’ Of Europe – ING Economists (MW)

The eurozone is beginning to resemble Japan with its low-growth and low-inflation environment, coupled with still very loose monetary policy, according to economists at ING. This raises questions about the European Central Bank’s tool kit and firing power. Interest rates haven’t gone up in either the eurozone or Japan since the aftermath of the global financial crisis. Conversely, the Federal Reserve has raised rates nine times since the crisis years, presumably giving it room to cut them again should the economy need a boost. The Bank of Japan is considered the most hesitant of its peers to normalize monetary policy. And already since the mid-1990s, Japan has been struggling with a high public debt ratio and stubbornly low inflation and growth rates.

None of that bodes well for a hawkish central bank approach. The eurozone looks like it entered a similar trend of late, said ING economists Carsten Brzeski and Inga Fechner, one day ahead of the European Central Bank’s next policy update. “An end to current unconventional monetary policy, i.e. the negative deposit rate and ample liquidity, is not insight and the ECB is expected to do everything it can to avoid an unwarranted tightening of its monetary stance.” “Last year, Japan’s debt-to-GDP ratio stood at 238%, and since 1994, headline inflation has been negative for almost half of the time. This trend has also emerged in the eurozone in recent years,” said Brzeski and Fechner, pointing at Greece, as well as Spain and Italy, in the aftermath of the European sovereign debt crisis. Though deflationary risks have disappeared in the eurozone, consumer prices haven’t exactly been soaring.

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The power of US intelligence.

Huawei Hits Back, Sues America, Claims US Hacked Its Servers (Age)

Huawei has accused the US of hacking its computers in a defiant press conference where the Chinese telecommunications giant announced it had taken legal action in a Texas court to overturn a US ban. Huawei’s rotating chairman Guo Ping said in China that the US Congress had failed to produce any evidence to justify its ban which prevents US agencies, private companies that deal with US agencies and recipients of US loans or grants from using Huawei’s gear. The Trump Administration has accused Huawei of being a national security risk because it was a tool of the Chinese government. But Guo fired back, saying the US “has hacked our servers and stolen our emails and source code”.

“Despite this, the US has never produced any evidence supporting their allegations that Huawei poses a cyber security threat.” He added: “The US is trying to block us from 5G markets in other countries.” Guo said that a section of the US National Defense Authorisation Act that names Huawei not only damages the company’s reputation but stops Huawei from servicing customers outside the US. US Secretary of State Mike Pompeo has publicly urged other countries, particularly in Europe, to ban Huawei from 5G if they want to continue to deal with the US. Germany and Britain are due to make decisions this month.

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They’ll simply shift from collusion to -now- obstruction to yet another term. Just as long as it takes.

Nadler’s ‘Obstruction’ Quest (WSJ Ed.)

Well, we’re off on the march to impeachment, as we predicted last year even as Democrats said it wasn’t on their minds. With Chairman Jerry Nadler’s subpoena swarm from House Judiciary this week, and his assertions that President Trump obstructed justice, the articles of impeachment are apparently awaiting only the collection of the readily available details to fill in the blanks. “Do you think the President obstructed justice?” asked ABC’s George Stephanopoulos on Sunday. “Yes, I do,” replied Mr. Nadler. “It’s very clear that the President obstructed justice. It’s very clear—1,100 times he referred to the Mueller investigation as a witch hunt, he tried to—he fired—he tried to protect [Michael] Flynn from being investigated by the FBI. He fired [FBI director Jim] Comey in order to stop the Russian thing, as he told NBC News.”

Credit Mr. Nadler for candor that Democrats didn’t display when they campaigned last year. Then they talked only about holding the President “accountable.” Now they claim they already have enough to impeach Mr. Trump, though as Mr. Nadler admitted Sunday, “you have to persuade enough of the opposition party voters, Trump voters . . . that you’re not just trying to steal the last—to reverse the results of the last election.” That may be harder than he imagines, and not only because of Mr. Nadler’s Freudian slip there of “steal.” Based on the public evidence so far, Mr. Trump hasn’t obstructed justice in any of the examples Mr. Nadler cited. Mr. Nadler wants to turn the President’s exercise of his normal constitutional powers into impeachable offenses.

The case against Mr. Nadler’s obstruction theory has been made in these pages by former Attorney General Michael Mukasey and appellate lawyer and our contributor David Rivkin. Attorney General William Barr also made the case in his 2018 memo to the Justice Department when he was still in private life. A President can obstruct justice while in office but only if he is committing a per se illegal offense. That is, if he suborns perjury or destroys evidence, or commits “any act deliberately impairing the integrity or availability of evidence,” as Mr. Barr put it. Presidents Richard Nixon and Bill Clinton committed such acts in Mr. Barr’s view, but Mr. Trump has not as far as we can see.

On the other hand, a President cannot obstruct justice when he takes actions that are consistent with his Article II powers under the Constitution. That includes in particular firing inferior executive-branch officers such as Mr. Comey. Such acts may be politically stupid, but they aren’t obstruction.

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Less than 100% truthful.

Michael Cohen Asked His Former Lawyer To Seek Pardon From Trump (WSJ)

Michael Cohen, a former lawyer for President Donald Trump, directed his attorney last spring to inquire about the possibility of a presidential pardon, weeks after federal agents raided his properties, Cohen’s lawyer said Wednesday. The Wall Street Journal previously reported that Stephen Ryan, Cohen’s attorney at the time, discussed the possibility of a pardon with lawyers for Trump in the weeks after the Federal Bureau of Investigation in April raided Cohen’s home, office and hotel room. The president’s lawyers, including Jay Sekulow, Rudy Giuliani and Joanna Hendon, dismissed the idea of a pardon at the time, people familiar with the discussions said.

But at least one of them, Giuliani, left open the possibility that the president could grant Cohen one in the future, they said. In testimony before the House Oversight Committee last week, Cohen said: “I have never asked for, nor would I accept, a pardon from Mr. Trump.” Lanny Davis, a lawyer for Cohen, said Wednesday that in the months after the FBI raid, Cohen was open to a pardon from the president. “During that time period, he directed his attorney to explore possibilities of a pardon at one point with Trump lawyer Rudy Giuliani as well as other lawyers advising President Trump,” Davis said. He referred to the discussions with the president’s lawyers as the “ongoing ‘dangling’ of a possible pardon.”

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It’s all about money, nothing else.

Democrats Bar Fox From Hosting Primary Candidate Debates (AFP)

The Democratic Party said Wednesday it will not allow Fox News to host any of its primary candidate debates, after published revelations suggested the network is a “propaganda” vehicle for President Donald Trump. National Committee (DNC) chairman Tom Perez said a story in this week’s New Yorker magazine on the White House’s apparently close relationship with the channel prompted the decision. “Just to be clear, Fox News will not serve as a media partner for the 2020 Democratic primary debates,” Perez said on Twitter. “Recent reporting in the New Yorker on the inappropriate relationship between President Trump, his administration and Fox News has led me to conclude that the network is not in a position to host a fair and neutral debate for our candidates,” he added in a statement to The Washington Post.

News of the move enraged Trump, who suggested on Twitter he would “do the same thing with the Fake News Networks and the Radical Left Democrats” — despite having no authority over Republican debate broadcasting rights. Trump often refers to CNN, The New York Times, The Washington Post and MSNBC as “fake news.” US presidential debate and primary debate broadcast rights are coveted prizes for American media outlets. The events traditionally draw broad viewership, and the series of debates beginning this year – aimed at winnowing the Democratic field of over a dozen candidates – will likely have large television audiences.

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I’m thinking if they haven’t so far, what are the odds?

EU Urges UK To Offer ‘Acceptable’ Brexit Plan (BBC)

The UK has been urged to table fresh proposals within the next 48 hours to break the Brexit impasse. EU officials said they would work non-stop over the weekend if “acceptable” ideas were received by Friday to break the deadlock over the Irish backstop. The UK has said “reasonable” proposals to satisfy MPs’ concerns about being tied to EU rules had already been made. It comes as Jeremy Corbyn has met with Tory MPs to discuss possible alternatives to the PM’s deal. The Labour leader held talks with ex-Tory minister Nick Boles and Sir Oliver Letwin, who favour a closer, Norway-style relationship with the EU.

He said he had discussed the so-called “Common Market 2.0 option” – which would see the UK remain in the EU’s single market by staying part of the European Economic Area – but would not commit to backing it at this stage. There have been few visible signs of progress ahead of Parliament’s second vote on the Brexit deal next Tuesday. MPs emphatically rejected the terms of withdrawal negotiated by Theresa May in January. If they do so again, they will get to choose between leaving without a deal or deferring the UK’s exit date from the EU beyond the scheduled 29 March. The PM is seeking legally-enforceable changes to the backstop – an insurance policy designed to prevent physical checks on the border between Northern Ireland and the Republic of Ireland.

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Telegraph today: “Brexit deal ‘will be defeated by 100 votes’, ministers believe, after talks in Brussels collapse..”

Brexit Meaningful Vote Will Go Ahead, Says No 10 (G.)

Downing Street has insisted the meaningful vote on Theresa May’s Brexit deal will go ahead as promised on Tuesday, despite negotiations in Brussels stumbling. The prime minister’s spokesman repeated the line on Wednesday that the government is determined to secure “legally binding changes” to the Irish backstop, despite the attorney general, Geoffrey Cox, returning empty-handed from the talks. Shortly before leaving Brussels, he conceded “strong views” had been expressed during three hours of “robust” discussions. Downing Street said the talks had been “difficult”, but stressed the vote would take place on Tuesday, as committed by May.

If it is lost, MPs will vote on successive days on whether to block a no-deal Brexit and whether to extend the departure date. With it increasingly being assumed No 10 will not secure significant EU concessions on the backstop, May is expected to try to sell her plan to MPs and the public later in the week, potentially with a speech. There are no plans as yet for the prime minister or Cox to return to Brussels, but it is understood this could happen if required. Sunday night is the final deadline for any changes, as the government needs to publish and print copies of deal documents on Monday, and publish the motion MPs will then vote on.

[..] Cabinet ministers are pessimistic about the prospects of wooing enough waverers in parliament to win the second meaningful vote. May will then come under intense pressure to offer MPs a free vote on a no-deal Brexit, with her cabinet deeply divided. The opportunity to vote on this was only secured after scores of frontbenchers made it clear they were willing to resign, and the cabinet ministers Amber Rudd, Greg Clark and David Gauke wrote to the Daily Mail rejecting the idea of a no-deal departure.Senior EU diplomats said the bloc’s deputy chief negotiator, Sabine Weyand, offered a “gloomy” analysis of the talks. According to a diplomatic note, Weyand told the ambassadors: “Cox’s asks are going well beyond where Barnier can go.”

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“..49.1 percent of households have a main pension as their primary source of income..”

Monthly Income Lasts Just 19 Days For Over Half of Greek Households (K.)

The Greek economy’s scars from the decade-long financial crisis and the internal devaluation are more than obvious. Despite the slight improvement in certain income-related indexes, three in 10 households get by on an annual income of less than 10,000 euros, while pensions comprise the main source of income for almost half of all households, according to a survey published on Wednesday by the Institute of Small Enterprises of the Hellenic Confederation of Professionals, Craftsmen & Merchants (GSEVEE). In this first survey after the completion of the bailout programs, GSEVEE found that 43.9 percent of households reported a decline in their incomes last year compared to 2017.

Almost half of the households surveyed (48.9 percent) reported income stability, up from one in three (35.6 percent) in 2017, while 7.1 percent said they had seen an increase, up from just 2 percent in 2017. At the same time, the share of households on an annual income of less than 10,000 euros remained quite high, at 31.7 percent, against 34.2 percent in 2017. The biggest income bracket is that of households with earnings of between 10,000 and 18,000 euros per year, accounting for 39.8 percent in 2018 against 37.5 percent in 2017. This illustrates the shift of a number of households that were in the bottom bracket to a higher one; however, it also points to declines in the incomes of some households that in 2017 had been in the over-18,000 euros per annum bracket.

The bulk of Greek households find themselves in the bottom two income tiers. More than one in eight (12.7 percent) households say their incomes do not suffice to cover their basic needs, and more than half (52.5 percent) say their monthly income is not enough to carry them through all 30 days, sufficing instead for an average of just 19 days per month. All this is explained by the fact that 49.1 percent of households have a main pension as their primary source of income, even if that has been significantly reduced in recent years.

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Neoliberalism is killing the EU as a project, maybe not in Germany, but certainly in Italy and Greece. Still, labeling a basic income project ‘welfare’ is leading, Reuters.

Italy’s Welfare Revolution Kicks Off As ‘Citizens’ Income’ Goes Live (R.)

Italy’s flagship welfare reform kicked off in busy but orderly fashion on Wednesday as thousands of poor and unemployed people applied in post offices and tax assistance centers for the “citizens’ income” scheme. The populist 5-Star Movement, which governs with the right-wing League and has long promoted the measure, hopes it will lift its flagging fortunes ahead of European Parliament elections in May. Despite a steady flow of applicants, warnings of chaos and long queues proved misplaced, as many people appeared to heed advice not to sign up on the scheme’s first day.

“This is so helpful, it will give me some breathing space to get to the end of each month,” said 36-year-old Svetlana Guerra as she left a small tax assistance center (CAF) in a densely populated quarter of south-eastern Rome. Guerra, a Ukrainian-born widow who has lived in Italy for 19 years and survives thanks to odd jobs paid under the counter, said she expected the citizens’ income to give her about 280 euros ($315) per month to help her pay her rent. Guerra is one of millions struggling to make ends meet in a country in its third recession in 10 years and where the economy has barely grown since the start of the century.

Italians in absolute poverty, defined as not having enough money to buy a basket of basic goods and services, rose to 5.1 million in 2017, according to statistics office ISTAT. That is a more than threefold increase in a decade. Italy has traditionally had a generous pension system and offered limited-term state benefits for those laid off from work, but until last year it was virtually unique among rich countries in having no means-tested welfare scheme.

The previous center-left government aimed to fill that gap, but the “inclusion income” program it launched ahead of elections a year ago set aside just 2 billion euros and was widely deemed inadequate. The citizens’ income, a rallying call for 5-Star since its foundation in 2009, will cost 7 billion euros this year and is expected to go initially to 2.7 million people, according to ISTAT. Critics say Italy’s strained public finances cannot afford it. The 5-Star Movement was easily the biggest party at the March 2018 national election but has seen its support slide since then and been overtaken in opinion polls by the League.

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Make America Great Again must start with its wildlife. That’s much greater than millions working bullshit jobs where they drive an hour a day from the burbs. Nothing great about that.

First, define greatness.

Red Wolf: The Struggle To Save One Of The Rarest Animals On Earth (G.)

Attempting to locate one of the rarest animals on the planet, US government scientist Joe Madison pointed an antiquated VHF tracking antenna at a tangle of thick vegetation and twiddled some dials on the receiver. A red wolf, judging by the beeps, was in the vicinity but well-hidden. “Did you hear that beep? That’s a six-year-old male we just heard,” said Madison, a Tennessean with a sandy-coloured beard who is manager of the US Fish and Wildlife Service’s (FWS) red wolf program. “I mean, obviously I don’t see anything.” Sightings of red wolves are uncommon not only due to their elusive nature but also their plummeting population. Only around 30 of the creatures remain in the wild, in a corner of North Carolina, with 18 of them fitted with radio collars that Madison attempts to pick up with his antenna.


Photograph: Salwan Georges/The Washington Post/Getty Images

An FWS assessment in 2016 warned this vestige could completely vanish within eight years. The scenario now is even grimmer. “We’re already way ahead of where that projection was,” Madison said. “If we stay on the current trajectory it won’t be that long before we lose the population. In fact, we are down to one known breeding pair.” Faced with hardening opposition to the wolves’ presence from some nearby landowners, the FWS has gradually pulled back. Wild releases of captive pups have stopped, as has the sterilization of encroaching coyotes to avoid hybridization. In June, the Trump administration unveiled a plan, several years in the making, that would scale the red wolves’ protected area back to its federally owned core and allow people to shoot the species without repercussions on private land.

Conservation groups argue this plan will swiftly snuff out the red wolf and have taken the fight to the courts. “The impression we’ve gotten is that Fish and Wildlife have got tired of trying to save controversial species like wolves,” said Dr Ron Sutherland, an ecologist and red wolf expert at the Wildlands Network. “They don’t have the budget or the backing of Congress. It’s easier to let the wolves decline to the point where they can just pull the plug and we’re very nearly at that point. This wasn’t a thing started by Trump but Trump could certainly finish it off.”


Photograph: Salwan Georges/The Washington Post/Getty Images

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I’m sure this is a priority for Beijing. Stop trading with these countries or they won’t stop.

China Prosecutes 11 People In $119 Million Totoaba Fish Bust (AFP)

Chinese authorities have prosecuted 11 people for smuggling $119 million worth of Mexican totoaba fish swim bladders, one of the country’s biggest busts related to the trafficking of an endangered species used in traditional medicine. Mexico has urged China for years to crack down on totoaba smuggling over fears that illegal fishing operations in the Gulf of California are also killing off the world’s smallest porpoise, the near-extinct vaquita marina. The Jiangmen city procuratorate in southern Guangdong province said the 11 people are suspected of smuggling nearly 20,000 swim bladders worth more than 800 million yuan ($119 million) from Mexico. The group of smugglers, led by an individual named Liang Weihua, transported the fish parts in “large quantities” and sold them to consumers in China.

“This crime lasted for more than three years,” said the Guangdong-based procuratorate, a legal supervision agency, on its website. The smuggling route involved a number of neighbouring countries, including Cambodia, Laos, and Vietnam, it said, adding that the case is currently under further investigation. The critically endangered totoaba fish has been in steep decline since the 1940s, largely because of its reputed healing powers in Chinese medicine. The fish’s swim bladder can fetch up to $20,000 on the black market in China, where it is believed to have beautifying properties and cure a host of ailments, from arthritis pain to discomfort during pregnancy. In fact, they are so prized that some Chinese simply display them in fancy cases in their homes.

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“..more than 400 types of bacteria on 275 pieces of microplastic collected from local beaches. They included bugs that cause gastroenteritis and wound infections in humans..”

Microplastics Found ‘Absolutely Everywhere’ (G.)

Microplastic pollution spans the world, according to new studies showing contamination in the UK’s lake and rivers, in groundwater in the US and along the Yangtze river in China and the coast of Spain. Humans are known to consume the tiny plastic particles via food and water, but the possible health effects on people and ecosystems have yet to be determined. One study, in Singapore, has found that microplastics can harbour harmful microbes. The new analysis in the UK found microplastic pollution in all 10 lakes, rivers and reservoirs sampled. More than 1,000 small pieces of plastic per litre were found in the River Tame, near Manchester, which was revealed last year as the most contaminated place yet tested worldwide. Even in relatively remote places such as the Falls of Dochart and Loch Lomond in Scotland, two or three pieces per litre were found.

“It was startling. I wasn’t expecting to find as much as we did,” said Christian Dunn at Bangor University, Wales, who led the work. “It is quite depressing they were there in some of our country’s most iconic locations. I’m sure Wordsworth would not be happy to discover his beloved Ullswater in the Lake District was polluted with plastic. “Microplastics are being found absolutely everywhere [but] we do not know the dangers they could be posing. It’s no use looking back in 20 years time and saying: ‘If only we’d realised just how bad it was.’ We need to be monitoring our waters now and we need to think, as a country and a world, how we can be reducing our reliance on plastic.”

[..] “Microplastic has been found in our rivers, our highest mountains and our deepest oceans,” said Julian Kirby, a plastics campaigner at Friends of the Earth who helped collect water samples for the new UK study. He urged MPs to back legislation “to drastically reduce the flow of plastic pollution that’s blighting our environment”. Research by the National University of Singapore found more than 400 types of bacteria on 275 pieces of microplastic collected from local beaches. They included bugs that cause gastroenteritis and wound infections in humans, as well as those linked to the bleaching of coral reefs.

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Feb 232019
 


Henri Rousseau The sleeping gypsy 1897

 

A Fed Pivot, Born Of Volatility, Missteps, And New Economic Reality (R.)
Get Out Of The Bond And Stock Market, Put Your Money In Cash – Stockman (MW)
Global Sovereign Debt Will Top $50 Trillion This Year (ZH)
Mueller Won’t Deliver Report To DOJ Next Week (Hill)
Schiffting to Phase 2 of Collusion (Strassel)
‘Even Nixon Wasn’t Like Him’: Trump’s Bid To Upend Russia Inquiry (G.)
Great Investigations (Kunstler)
Theresa May Must Go In Three Months, Cabinet Ministers Say (G.)
UK Food Imports From EU Face ‘£9bn Tariff Bill’ Under No-Deal Brexit (G.)
Dianne Feinstein Snaps At Group Of Environmental Activist Children (ZH)
The Cold War in Tech (Barron’s)
Silicon Valley Wants In On It Pair Of Gene-Edited Chinese Twins (ZH)
China Blocks 17.5 Million Plane Tickets Due to Lack of ‘Social Credit’ (Ind.)

 

 

The folly of our times. The Fed has completely destroyed America’s market system, and thus its economy, and they are treated as wise men. There are no markets left, there are no pensions left, there’s only the Fed.

A Fed Pivot, Born Of Volatility, Missteps, And New Economic Reality (R.)

The Federal Reserve’s promise in January to be “patient” about further interest rate hikes, putting a three-year-old process of policy tightening on hold, calmed markets after weeks of turmoil that wiped out trillions of dollars of household wealth. But interviews with more than half a dozen policymakers and others close to the process suggest it also marked a more fundamental shift that could define Chairman Jerome Powell’s tenure as the point where the Fed first fully embraced a world of stubbornly weak inflation, perennially slower growth and permanently lower interest rates. Along with Powell’s public comments, Fed minutes, and other documents, the picture emerges of a central bank edging towards a period of potentially difficult change as it reviews how to do business in light of that new reality.

[..] Concern that years of solid economic growth and falling unemployment would inevitably rekindle inflation or threaten financial stability have been a staple of Fed debates, but had largely disappeared by the Fed’s Dec. 18-19 meeting, according to a review of Fed meeting minutes and officials’ public statements. It was a conclusion hiding in plain sight. After a year when the Trump administration pumped around $1.5 trillion of tax cuts and public spending into a full employment economy, the Fed in 2018 would miss its 2 percent inflation target yet again.

“I hate to say we were right,” Dallas Federal Reserve president Robert Kaplan told reporters on Jan. 15 in Dallas. “But we have been warning for quite some time that…the structure of the economy has changed dramatically.” Technological innovation, globalization, and the Fed’s commitment to its inflation target all held down prices, and “those forces are powerful and they are accelerating,” he said.

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Dave Stockman, too, keeps referring to markets. Stop it. A market has a definition, a function, based one-on-one on price discovery. And that simply ceased to exist.

Get Out Of The Bond And Stock Market, Put Your Money In Cash – Stockman (MW)

[..] thus far the market has bounded higher after shaking off a withering decline toward the end of 2018 that culminated in the worst Christmas Eve drop on record. The Dow Jones Industrial Average is up 19.4% since that time, breaking above a psychologically significant at 26,000 level on Friday, while the S&P 500 has advanced 19.5%, the Nasdaq Composite has risen 22.4% and the small-capitalization focused Russell 2000 index has returned more than 25%, according to FactSet data. Much of that gain has been underpinned by a Fed that has signaled that it is likely to slow a reduction of its $4 trillion balance sheet as soon as this year and a willingness to wait before increasing borrowing costs further. Both of those plans had been cited as a source of friction for markets.

However, Stockman has said a yawning deficit and an economic expansion in the U.S. that is making history for its length are signs that a reckoning my be at hand. He says easy-money days cannot last and has ramifications for all, arguing that the Fed must normalize its policy, at some point: “My point is, it’s finally catching up with us. We’ve gotten by with this for 30 years ‘cause the Fed has been monetizing the debt — buying bonds hand over fist. When Greenspan arrived, the balance sheet of the Fed was $200 billion; at the peak it was $4.5 trillion,” he told Cavuto, referring to former Fed boss Alan Greenspan. “We need to wake up and smell the roses here. We’re in year 10 of the longest business expansion in history.

We’re increasing the deficit at the very wrong time. They say it’s $900 billion this year it’ll be $1.2 trillion of borrowing at the same time that the Fed is beginning to shrink its balance sheet, which means they’ll be dumping bonds into the market,” he said.

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All that new debt and still pension systems are being fully gutted.

Global Sovereign Debt Will Top $50 Trillion This Year (ZH)

It has been one week since the US Treasury revealed that the national debt had topped $22 trillion (only 11 months after it had topped the $21 trillion threshold). And as the US budget deficit shows no signs of shrinking thanks to the Trump tax cuts and the death of the Obama-era budget sequester that has allowed for an expansion of federal spending (with more presumably on the way once the Trump infrastructure plan comes into focus), S&P warned on Thursday that worldwide sovereign debt could reach $50 trillion this year. According to Reuters, S&P predicted that governments will borrow some $7.78 trillion this year, up 3.2% since 2018 (the US will constitute more than $1 trillion of that all by itself). That’s a 6% increase in the total debt pile from the year before.

Most of this borrowing will be rolling over long-term debt. “Some 70 percent, or $5.5 trillion, of sovereigns’ gross borrowing will be to refinance maturing long-term debt, resulting in an estimated net borrowing requirement of about $2.3 trillion, or 2.6 percent of the GDP of rated sovereigns,” said S&P Global Ratings credit analyst Karen Vartapetov. Governments, like corporations and individuals, took advantage of low interest rates around the world to step up borrowing in the wake of the financial crisis. Now, with borrowing costs expected to rise, these long-term burdens will become more burdensome to service. And with central banks slowly beginning to allow their inflated balance sheets to run off…

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No collusion.

Mueller Won’t Deliver Report To DOJ Next Week (Hill)

Special counsel Robert Mueller will not deliver his report to the Justice Department on Friday or next week, a Justice Department official told The Hill. The news comes amid broad speculation that Mueller’s probe into Russia’s electoral interference is wrapping up, with several news outlets reporting Wednesday that newly confirmed Attorney General William Barr was preparing to receive Mueller’s final report as soon as next week. The highly anticipated report is expected to cap off a sprawling, nearly two-year investigation into Russia’s attempts to meddle in the 2016 presidential election, a probe that has ensnared multiple former Trump campaign officials and associates.

Next week is already slated to be a busy week in Washington, with former longtime Trump lawyer Michael Cohen appearing for testimony on Capitol Hill and several other major hearings and votes set to take place. President Trump is also slated to travel to Vietnam next week for his second summit with North Korean leader Kim Jong Un, which is scheduled for Wednesday and Thursday. It remains unclear when Mueller will ultimately wrap up and submit his final documentation, though Friday’s news indicates the end of the investigation is at least a week away.

Mueller has been investigating Russian interference and potential coordination between the Trump campaign and Moscow since May 2017, weathering constant attacks from Trump, who views the investigation as a “witch hunt” and has long denied allegations of collusion between his campaign and the Kremlin. In the course of his investigation, Mueller has unveiled charges against more than two dozen Russians for hacking Democratic emails and committing fraud in an elaborate plot to use social media to meddle in the election. The special counsel has also charged six Trump associates with making false statements, illegal foreign lobbying, financial violations and other crimes. However, none of the charges have alleged a conspiracy between the campaign and the Russians to interfere in the election.

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“No acknowledgment that Mr. Schiff & Co. for years have pushed fake stories that accused innocent men and women of being Russian agents. No relieved hope that the country might finally put this behind us. Just a smooth transition—using Russia as a hook—into Mr. Trump’s finances. Mueller who?”

Schiffting to Phase 2 of Collusion (Strassel)

There’s been no more reliable regurgitator of fantastical Trump-Russia collusion theories than Democratic Rep. Adam Schiff. So when the House Intelligence Committee chairman sits down to describe a “new phase” of the Trump investigation, pay attention. These are the fever swamps into which we will descend after Robert Mueller’s probe. The collusionists need a “new phase” as signs grow that the special counsel won’t help realize their reveries of a Donald Trump takedown. They had said Mr. Mueller would provide all the answers. Now that it seems they won’t like his answers, Democrats and media insist that any report will likely prove “anticlimactic” and “inconclusive.” “This is merely the end of Chapter 1,” said Renato Mariotti, a CNN legal “analyst.”

Mr. Schiff turned this week to a dependable scribe—the Washington Post’s David Ignatius—to lay out the next chapter of the penny dreadful. Mr. Ignatius was the original conduit for the leak about former national security adviser Mike Flynn’s conversations with a Russian ambassador, and the far-fetched claims that Mr. Flynn had violated the Logan Act of 1799. Mr. Schiff has now dictated to Mr. Ignatius a whole new collusion theory. Forget Carter Page, Paul Manafort, George Papadopoulos—whoever. The real Trump-Russia canoodling rests in “Trump’s finances.” The future president was “doing business with Russia” and “seeking Kremlin help.”

So, no apologies. No acknowledgment that Mr. Schiff & Co. for years have pushed fake stories that accused innocent men and women of being Russian agents. No relieved hope that the country might finally put this behind us. Just a smooth transition—using Russia as a hook—into Mr. Trump’s finances. Mueller who? What’s mind-boggling is that reporters would continue to take Mr. Schiff seriously, given his extraordinary record of incorrect and misleading pronouncements. This is the man who, on March 22, 2017, helped launch full-blown hysteria when he said on “Meet the Press” that his committee already had the goods on Trump-Russia collusion. “I can’t go into the particulars, but there is more than circumstantial evidence now,” Mr. Schiff declared then. Almost two years later, he’s provided no such evidence and stopped making the claim..

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Perhaps even more than politicians, it’s the media that will keep the collusion tale alive. They wouldn’t know how to make money anymore if they didn’t.

‘Even Nixon Wasn’t Like Him’: Trump’s Bid To Upend Russia Inquiry (G.)

It was yet another bombshell report for a president already ensnared in multiple investigations against his campaign, administration and family members. This time it had to do with hush money paid to women to silence them from speaking about alleged affairs they had with Donald Trump. According to a New York Times report published this week, Trump asked Matthew Whitaker, his controversial acting attorney general, if he could install a loyalist at the helm of the investigation into the hush money.

Although Whitaker declined Trump’s request, the story has raised fresh questions over whether the president was seeking to obstruct justice and how the reported move fits into a broad pattern of Trump attempting to interfere with an investigation concerning himself. Since taking office, Trump’s fixation on the federal inquiry into Russian interference in the 2016 election – and potential collusion between his campaign and Moscow – has spurred a series of actions that could now imperil his presidency and prospects of a second term.

From high-level firings to public misstatements, Trump’s repeated steps to undermine the investigations that have clouded his two years in office paint a picture of a president who is his own worst enemy, legal experts say. “It is quite clear from all the evidence that the president has had the intent to obstruct this investigation,” said Andy Wright, a former associate counsel to Barack Obama and the founding editor of the legal blog Just Security. “It’s been in plain sight.” “It’s a fundamental abuse of power for the president to be trying to shut down an investigation in which he has a personal stake – both as a potential target himself and his political allies and family members,” he added.

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Jim stays on message. I changed the headline from Great Expectations to Great Investigations.

Great Investigations (Kunstler)

Meanwhile, their antics may be eclipsed by the now inevitable inquiry around the misdeeds carried out by public officials in Act I of the show: the Russia Collusion Ruse. Based just on the current Andy McCabe book tour, there will be an awful lot to get to, and it is liable to be far more compelling than the nonsense conjured up by the Three Stooges. Mr. McCabe, in his quest to hand off the hot potato of culpability to his former colleagues, and to sell enough books to pay his lawyers’ retainers, has neatly laid out the case for his orchestrating a coup d’etat within the FBI. It’s an ugly story, and it’s all out there now, like so much spaghetti hurled against the wall, and it won’t be ignored.

There are many other spaghetti wads already plastered on that wall ranging from Hillary Clinton’s Fusion GPS hijinks, to Loretta Lynch’s written assurances to the Clinton campaign that the email server matter would be dropped, to the rather complete failure of the FISA process, and much much more that needs to be ventilated in a court of law. I suspect that Barack Obama and his White House confidents will enter the picture, too, sooner later, and to the great dismay of his partisans who do not want to see his legacy tarnished. Whatever your view of all these dark events, it would be pretty awful for the country to have to see him in a witness chair, but it may be unavoidable. Ditto Hillary, who is liable to go all Captain Queeg-y when she finally has to answer for her campaign’s turpitudes.

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Can both major parties in Britain dissolve in just 4 weeks time?

Theresa May Must Go In Three Months, Cabinet Ministers Say (G.)

Cabinet ministers will make it clear they believe Theresa May should step down after the local elections in May and allow a new leader to deliver the next phase of the Brexit negotiations, the Guardian understands.Senior figures in government have suggested they want the prime minister to leave shortly after the first phase of the Brexit negotiations finishes – or risk being defeated in a vote of no confidence at the end of the year. May wants to stay in place for long enough after Brexit to secure a political legacy beyond the fraught negotiations. But some ministers believe she should announce the timeline for her departure “on a high” after the local election results, paving the way for a Conservative leadership contest over the summer.

Brexiters in the cabinet are keen to see a new leader take over for the next stage of the negotiations with the EU, which May has already pledged will involve more active involvement for politicians rather than advisers. The hardening mood among cabinet ministers on the timeline for her departure will place further pressure on May before a critical week of Brexit talks and votes amid a febrile climate in Westminster. On Thursday the Guardian revealed that remainer ministers emboldened by the departure of three MPs to the Independent Group (TIG) were threatening to rebel against her leadership to prevent a no-deal outcome – daring her to sack them.

And in a fresh blow to May, three cabinet ministers publicly say they would back moves to delay Brexit if she fails to get her deal through parliament. In a joint newspaper article, Amber Rudd, the work and pensions secretary, David Gauke, the justice minister, and the business secretary, Greg Clark, say they want to ensure the UK does not crash out of the EU without a deal on 29 March. And they insist they are prepared to defy the prime minister and join those MPs pushing for an extension to article 50 if there is no significant progress next week.

Writing for the Daily Mail on Saturday, they argue that a no-deal Brexit would wreck the country’s economy and put its security at risk. “If there is no breakthrough in the coming week, the balance of opinion in parliament is clear – that it would be better to seek to extend article 50 and delay our date of departure rather than crash out of the European Union on 29 March,” they write. “It is time that many of our Conservative parliamentary colleagues in the ERG recognised that parliament will stop a disastrous no-deal Brexit on 29 March. If that happens, they will have no one to blame but themselves for delaying Brexit.”

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Both May and Brussels appear to think they stand to gain from a no-deal Brexit. Maybe that makes it more likely than we think.

UK Food Imports From EU Face ‘£9bn Tariff Bill’ Under No-Deal Brexit (G.)

The government is expected next week to spell out its plan to mitigate a potential £9bn food-price shock from a no-deal Brexit, as analysts predict the cost of staples such as beef, cheddar cheese and tomatoes could soar. With just over a month until the Brexit deadline, the Department for International Trade is expected on Monday to publish a list of new import taxes, or tariffs, that will apply to 5200 products, including food and clothing, should the UK crash out of the EU without a deal. The relationship with the EU is key to the price of food because nearly one third of the food eaten in the UK comes from the bloc. At this time of year the situation is more acute because, with UK produce out of season, 90% of lettuces, 80% of tomatoes and 70% of soft fruit is sourced from, or via, the EU.

“Food and drink tariff rates will be higher than those in any other supply chain,” says Richard Lim, chief executive of consultancy firm Retail Economics. “All stages within the food supply chain will experience increased costs, with retailers hit disproportionately as processed goods attract higher duties than raw materials and semi-processed goods.” In 2017 the UK bought about £34bn of groceries from the EU, which arrived on supermarket shelves and at factory gates without being hit by customs duties or other trade costs. But if the UK leaves the EU without a deal, both will fall back on the World Trade Organisation’s “most favoured nation” tariffs, which means they must pay import duties on each other’s trade. On that basis the UK’s 2017 EU food imports would come with a hefty £9.3bn tariff bill on top, according to Retail Economics’s analysis.

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Having been there for 30 years is not exactly a positive thing, given how much things have deteriorated in that time. Hand it over to the kids, they couldn’t possibly do worse.

Dianne Feinstein Snaps At Group Of Environmental Activist Children (ZH)

Armed with an impassioned letter and memorized talking points, the children belonging to three Bay Area environmentalist groups (Sunrise Bay Area, Youth Versus the Apocalypse, and Earth Guardians San Francisco) implored Feinstein to support the Green New Deal. The Senator responded: “Ok, I’ll tell you what. We have our own Green New Deal.” The video skips forward to the children warning Feinstein that “some scientists have said that we have 12 years to turn this around” – referring to a conclusion by a recent UN-backed report that man-made climate change will become irreversible if carbon emissions are not significantly reduced over the next 12 years (which Ocasio-Cortez turned into “the world is gonna end in 12 years if we don’t address climate change”).

“It’s not gonna get turned around in 10 years,” responded Feinstein – drawing a harsh rebuke from an angry chaperone. “Senator if this doesn’t get turned around in 10 years you’re looking at the faces of the people who are going to be living with these consequences,” said the adult – as one of the children chimed in “the government is supposed to be for the people and by the people and for all the people!” Feinstein was not amused. I’ve been doing this for 30 years. I know what I’m doing. You come in here and you say “it has to be my way or the highway.” “I don’t respond to that,” shot back Feinstein. “I’ve gotten elected. I just ran. I was elected by almost a million vote plurality. And, I know what I’m doing. So, you know, maybe people should listen a little bit. -Dianne Feinstein

One kid shot back “I hear what you’re saying but we’re the people who voted you. You’re supposed to listen to us, that’s your job.” “How old are you?” challenged Feinstein. “I’m 16. I can’t vote,” said the girl. “Well you didn’t vote for me,” replied the Senator.

https://twitter.com/sunrisemvmt/status/1099075460649107458

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The new fight for control of the world. Orwell International Inc.

The Cold War in Tech (Barron’s)

Cisco Systems, an early Silicon Valley success story, has become one of the nation’s top tech exporters. Today, roughly half of the networking giant’s sales come from outside the U.S. As foreign countries sought to catch up with U.S. connectivity, Cisco helped plug them in. But a wave of nationalist thinking has put Cisco—and most of its peers—in an uncomfortable position. Earlier this month, Cisco CEO Chuck Robbins described the current climate as “one of the more complex macro, geopolitical environments that I think we’ve seen in quite a while with all the different moving parts.” It’s likely to get worse.

While investors are cheering indications of progress being made toward a resolution of trade issues between China and the U.S., the battle for tech supremacy between the two global superpowers shows few signs of abating. Even as the White House was negotiating on trade with Beijing, it was also contemplating a U.S. ban of telecommunications equipment from Chinese companies like Huawei Technologies, essentially China’s version of Cisco. As President Donald Trump was tweeting about the importance of 5G on Thursday, Secretary of State Mike Pompeo was pushing U.S. allies to ditch Huawei. This is a fight that is not going to end anytime soon. For years, U.S. officials have worried about Chinese equipment being used to infiltrate U.S. networks and businesses for possible espionage and theft of intellectual property.

Even a resolution of the trade war won’t quell those fears. “The perception is that too much of the information- and communication-technology supply chain is centered on China,” says Paul Triolo, who focuses on global technology policy issues for risk consulting firm Eurasia Group. “If we are in a conflict and using infrastructure built by China, they could theoretically hit a button and shut off everything.” “After 30 years of saying companies should optimize supply chains and move some abroad, now we are saying it’s a security concern,” he says. “Adjusting to that is jarring.”

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The sort of thing you know someone will always try, no matter what laws are invented. And it’s not about Silicon Valley, it’s about the CIA through big Tech.

Silicon Valley Wants In On It Pair Of Gene-Edited Chinese Twins (ZH)

A pair of Chinese twins who were gene-edited for resistance to HIV may also have ‘supercharged’ brains, along with possible resistance to age-related cognitive diseases such as Alzheimer’s. In a controversial experiment led by Chinese scientist He Jiankui, the embroys of seven couples had their genes “edited” using a tool known as CRISPR. By removing a gene called CCR5, Jiankui sought to create a natural immunity to HIV – which requires CCR5 to enter blood cells. Based on new research, however, Jiankui may have also left the twins, Lulu and Nana, with improved memory and enhanced cognition, according to MIT Technology Review. They may also enjoy some degree of protection from Alzheimer’s Disease and other maladies which are rapidly being linked to chronic inflammation, as some groups of mice without CCR5 – or who have been given CCR5 inhibitors, experience less severe dementia or Alzheimer’s symptoms.

“The answer is likely yes, it did affect their brains,” says UCLA neurobiologist Alcino J. Silva, whose lap discovered a link between CCR5 and the brain’s ability to form new connections. “The simplest interpretation is that those mutations will probably have an impact on cognitive function in the twins,” says Silva, adding that the exact effect on the girls’ cognition cannot be predicted, which is “why it should not be done.” Jiankui’s human experiments drew harsh rebuke after news of Lulu and Nana’s birth in late October or early November, and has reportedly been fired from his position at the Southern University of Science and Technology (SUSTech) in Shenzhen, China. Jiankui says there are more gene-edited babies on the way.

Silva tells the MIT Technology Review that “because of his research, he sometimes interacts with figures in Silicon Valley and elsewhere who have, in his opinion, an unhealthy interest in designer babies with better brains.” When word of Jiankui’s experiment went public, Silva says he immediately questioned whether enhanced cognition was the real goal of the experiment. “I suddenly realized—Oh, holy shit, they are really serious about this bullshit,” said Silva. “My reaction was visceral repulsion and sadness.” He Jiankui acknowledged that he knew about the potential cognitive benefits of removing the CCR5 gene discovered by the UCLA team during a Q&A session, though he said “I am against using genome editing for enhancement.”

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Brave new world: gene-edited superhumans controlled through embedded technology. That Orwell guy appears smarter by the day.

China Blocks 17.5 Million Plane Tickets Due to Lack of ‘Social Credit’ (Ind.)

The Chinese government blocked 17.5 million would-be plane passengers from buying tickets last year as a punishment for offences including the failure to pay fines, it emerged. Some 5.5 million people were also barred from travelling by train under a controversial “social credit” system which the ruling Communist Party claims will improve public behaviour. The penalties are part of efforts by president Xi Jinping‘s government to use data-processing and other technology to tighten control on society. Human rights activists warn the system is too rigid and may lead to people being unfairly blacklisted without their knowledge, while US vice-president Mike Pence last year denounced it as “an Orwellian system premised on controlling virtually every facet of human life”.

Authorities have experimented with social credit in parts of China since 2014. Points are deducted for breaking the law, but also, in some areas, for offences as minor as walking a dog without a lead. Offences punished last year also included false advertising and violating drug safety rules, said China’s National Public Credit Information Centre. It gave no details of how many people live in areas with social credit systems. [..] The ruling party is spending heavily to roll out facial recognition systems, and human rights activists say people in Muslim and other areas with high ethnic minority populations have been compelled to give blood samples for a genetic database. Those systems rely heavily on foreign technology, which has prompted criticism of US and European suppliers for enabling human rights abuses.

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Feb 122019
 
 February 12, 2019  Posted by at 11:20 am Finance Tagged with: , , , , , , , , , , , ,  


Vincent van Gogh On the outskirts of Paris 1887

 

Global Insect Decline May See ‘Plague Of Pests’ (BBC)
Complex, Dynamic Environmental Destabilisation (BBC)
Politicians Are Complicit In The Killing Of Our Insects (G.)
Should We Really Not Worry About The Fed’s Balance Sheet? (Roberts)
Party Leaders Reach Deal To Avoid Fresh US Government Shutdown (AP)
Warren’s Foreign Policy Shows She’s Missing Why Trump Was Elected (G.)
Mistaken Futures (Kunstler)
May To Ask MPs For Further Fortnight’s Grace In Brexit Talks (G.)
Europeans Must Get Rid Of The Failing EU One Way Or Another (MW)
“Insane” Deutsche Bank Drowning Under Soaring Funding Costs (ZH)
Nearly A Fifth Of The EU’s Budget Goes On Livestock Farming (G.)
China Has No Use For Democracy. It Needs A Strong Leader Like Xi (SCMP)
History’s 10 Most Culturally Significant Dick Pic Scandals (Taibbi)

 

 

Roaches in a nuclear winter.

Global Insect Decline May See ‘Plague Of Pests’ (BBC)

A scientific review of insect numbers suggests that 40% of species are undergoing “dramatic rates of decline” around the world. The study says that bees, ants and beetles are disappearing eight times faster than mammals, birds or reptiles. But researchers say that some species, such as houseflies and cockroaches, are likely to boom. The general insect decline is being caused by intensive agriculture, pesticides and climate change. Insects make up the majority of creatures that live on land, and provide key benefits to many other species, including humans. They provide food for birds, bats and small mammals; they pollinate around 75% of the crops in the world; they replenish soils and keep pest numbers in check.

Many other studies in recent years have shown that individual species of insects, such as bees, have suffered huge declines, particularly in developed economies. But this new paper takes a broader look. Published in the journal Biological Conservation, it reviews 73 existing studies from around the world published over the past 13 years. The researchers found that declines in almost all regions may lead to the extinction of 40% of insects over the next few decades. One-third of insect species are classed as Endangered. “The main factor is the loss of habitat, due to agricultural practices, urbanisation and deforestation,” lead author Dr Francisco Sánchez-Bayo, from the University of Sydney, told BBC News.

“Second is the increasing use of fertilisers and pesticides in agriculture worldwide and contamination with chemical pollutants of all kinds. Thirdly, we have biological factors, such as invasive species and pathogens; and fourthly, we have climate change, particularly in tropical areas where it is known to have a big impact.” [..] “Fast-breeding pest insects will probably thrive because of the warmer conditions, because many of their natural enemies, which breed more slowly, will disappear,” said Prof Dave Goulson from the University of Sussex who was not involved in the review. “It’s quite plausible that we might end up with plagues of small numbers of pest insects, but we will lose all the wonderful ones that we want, like bees and hoverflies and butterflies and dung beetles that do a great job of disposing of animal waste.” Prof Goulson said that some tough, adaptable, generalist species – like houseflies and cockroaches – seem to be able to live comfortably in a human-made environment and have evolved resistance to pesticides.

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Nobody listened so far; why would they now?

Complex, Dynamic Environmental Destabilisation (BBC)

• Topsoil is being lost 10 to 40 times faster than it is being replenished by natural processes • Since the mid-20th Century, 30% of the world’s arable land has become unproductive due to erosion • 95% of the Earth’s land areas could become degraded by 2050 • Since 2005, the number of floods has increased by a factor of 15, extreme temperature events by a factor of 20, and wildfires sevenfold • Vertebrate populations have fallen by an average of 60% since the 1970s, and insect numbers – vital for pollination – have declined even faster in some countries.

Scientists warn of a potentially deadly combination of factors. These include climate change, mass loss of species, topsoil erosion, forest felling and acidifying oceans. The report from the centre-left Institute for Public Policy Research says these factors are “driving a complex, dynamic process of environmental destabilisation that has reached critical levels. “This destabilisation is occurring at speeds unprecedented in human history and, in some cases, over billions of years.” The UK is described as one of the most nature-depleted countries in the world. Some 2.2 million tonnes of UK topsoil is eroded annually, and over 17% of arable land shows signs of erosion. Nearly 85% of fertile peat topsoil in East Anglia has been lost since 1850, with the remainder at risk of being lost over next 30–60 years. The IIPR says many scientists believe we have entered a new era of rapid environmental change.

The report warns: “We define this as the ‘age of environmental breakdown’ to better highlight the severity of the scale, pace and implications of environmental destabilisation resulting from aggregate human activity.” Simon Lewis, Professor of Global Change Science at University College London, told BBC News: “IPPR are right to say that environmental change is happening ever-faster and threatens to destabilise society. “Future problems with food supplies could cause price spikes that drive civil unrest, while increases in levels of migration can strain societies. “Both together could overload political institutions and global networks of trade. “This century will be marked by rapid social and environmental change – that is certain. What is less clear is if societies can make wise political choices to avoid disaster in the future.”

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Written of course by a politician. Who thinks politicians can turn this around. Because they can do anything.

Politicians Are Complicit In The Killing Of Our Insects (G.)

Most of us spend more time swatting away or avoiding wasps and moths than we do contemplating their importance to the web of life. But it is no exaggeration to say that the horrifying decline in the number of these creatures – the most widespread on Earth – is a barometer for the whole planet. The new global scientific review into the perilous condition of our insects reports that more than 40% of insect species are threatened with extinction while the mass of insects is declining by 2.5% a year. This catastrophic decline is a direct cause of the existential threat to other animals, insects being at the bottom of the chain and the primary food source. Since 1970, 60% of mammals, birds, fish and reptiles have been wiped out.

The review identifies a key driver towards this mass extinction: habitat loss and conversion to intensive agriculture with its associated use of pesticides. Given this is a manmade disaster, surely we are capable of tackling and reversing it? As a member of the European parliament’s agriculture committee, I regularly debate the use of pesticides in farming with my colleagues. I have lost count of the number of times I have begun meetings with what feels like a sermon on the Armageddon taking place in our countryside. I am always greeted with patient, patronising smiles from many of my fellow MEPs, before they go on to ignore the warnings and refuse to limit the use of pesticides in our fields.

Some of the members of this committee are themselves farmers who have grown increasingly dependent on powerful and toxic pesticides. But others have taken the agribusiness shilling and believe that their role in policymaking is simply to support the corporations that sell these poisons. And this is the nub of the issue. What might accurately be dubbed insectageddon is being driven by the agrichemicals industry. This situation is compounded by compliant politicians and policymakers who fall prey to lobbying pressure and then refuse to implement science-driven policy to protect wildlife.

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What we should do is end the Fed. And replace it with markets.

Should We Really Not Worry About The Fed’s Balance Sheet? (Roberts)

Bill Dudley, who is now a senior research scholar at Princeton University’s Center for Economic Policy Studies and previously served as president of the New York Fed and was vice-chairman of the Federal Open Market Committee, recently penned an interesting piece from Bloomberg stating: “Financial types have long had a preoccupation: What will the Federal Reserve do with all the fixed income securities it purchased to help the U.S. economy recover from the last recession? The Fed’s efforts to shrink its holdings have been blamed for various ills, including December’s stock-market swoon. And any new nuance of policy — such as last week’s statement on “balance sheet normalization” — is seen as a really big deal. I’m amazed and baffled by this. It gets much more attention than it deserves.”

[..] In his opening paragraph, Bill attempts to dismiss the linkage between the balance sheet and the financial markets. “Yes, it’s true that stock prices declined at a time when the Fed was allowing its holdings of Treasury and mortgage-backed securities to run off at a rate of up to $50 billion a month. But the balance sheet contraction had been underway for more than a year, without any modifications or mid-course corrections. Thus, this should have been fully discounted.” While this is a true statement, what Bill forgot to mention was that Global Central banks had stepped in to flood the system with liquidity. As you can see in the chart below, while the Fed had stopped expanding their balance sheet, everyone else went into over-drive.

The chart below shows the ECB’s balance sheet and trajectory. Yes, they are slowing “QE” but it is still growing currently.

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Far from over.

Party Leaders Reach Deal To Avoid Fresh US Government Shutdown (AP)

Democratic and Republican leaders announced late Monday that they had reached a deal to avoid a government shutdown when funding under a stopgap agreement expires at midnight on Friday. The proposal would require the signature of Donald Trump to avert a new shutdown. The agreement would allocate far less money for Trump’s border wall than the White House’s $5.7bn wish list, settling for a figure of nearly $1.4bn, according to congressional aides. The funding measure is through the fiscal year, which ends 30 September. The agreement means 55 miles of new fencing — constructed through existing designs such as metal slats instead of a concrete wall — but far less than the 215 miles the White House demanded in December. The fencing would be built in the Rio Grande Valley in Texas.

At a rally in El Paso, Texas, on Monday Trump said he had been informed about the committee’s progress. “Just so you know, we’re building the wall anyway”, he added. Negotiators have been trying to reach a deal to fund nine government departments that partially closed for 35 days in December and January. Trump and congressional Democrats agreed on 25 January to temporarily fund the departments and negotiate a funding solution by 8 February. Talks most recently broke down on Sunday, reportedly over a disagreement about the maximum number of undocumented immigrants who might be detained at any one time.

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Warren is irrelevant.

Warren’s Foreign Policy Shows She’s Missing Why Trump Was Elected (G.)

The United States, Warren says, has embarked on “a series of seemingly endless wars, engaging in conflicts with mistaken or uncertain objectives and no obvious path to completion”. It’s fine rhetoric but the obvious path to completion is merely to end the wars. And yet the Bush White House couldn’t or didn’t want to. And Obama vacillated and expanded to the point where bombing and killing was being pursued in almost a dozen countries when he left office. And as for Trump? He’s done little and he’s been publicly admonished by his own secretary of defense when he decided he wanted to end just one of those conflicts.

But “the United States”? Really? Other than Afghanistan after 9/11 – and that’s all – “the United States” didn’t embark on these wars. The national security community did. The government. Overtly, covertly, with high hopes or unwarranted self-confidence, they got their way. Who is the real culprit then? It isn’t Warren’s “elites”, the corporation, or Trump. It is Washington and its ability, indeed even its self-appointed duty, to stand in the way of anything that it sees as not in its interest.

She may not think it, but Warren is merely genuflecting before this deep state, declaring her allegiance to a “muscular military” and calling for “strong yet pragmatic security policies”. She of course offers a laundry list of things that must be preserved or strengthened that’s non-military – from technological superiority to diplomacy to strong alliances. And she decries the military and civilian policymakers who “seem [in]capable of defining success”. But in her innocence as to why we are stuck in seemingly endless wars she also seems oblivious to the fact that she is already capitulating to the very forces that ensure that we can’t change anything.

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Will the Green New Deal Make America Great Again?

Mistaken Futures (Kunstler)

The self-proclaimed socialists are actually seeing the world through a rear-view mirror. What they are really talking about is divvying up the previously-accumulated wealth, soon to be bygone. Entropy is having its wicked way with that wealth, first by transmogrifying it into ever more abstract forms, and then by dissipating it as waste all over the planet. In short, the next time socialism is enlisted as a tool for redistributing wealth, we will make the unhappy discovery that most of that wealth is gone. The process will be uncomfortably sharp and disorientating. The West especially will not know what hit it as it emergently self-reorganizes back into something that resembles the old-time feudalism.

We have a new kind of mass squalor in America: a great many people who have nothing to do, no means of support, and the flimsiest notions of purpose in life. The socialists have no answers for them. They will not be “retrained” in some imagined federal crusade to turn meth freaks into code-writers for Google. Something the analysts are calling “recession” is ploughing across the landscape like one of those darkly majestic dust-storms of the 1930s, only this time we won’t be able to re-fight anything like World War Two to get all the machines running again in the aftermath. Nor, of course, will the Make America Great Again fantasy work out for those waiting in the squalid ruins of the post-industrial rust-belt or the strip-mall wastelands of the Sunbelt.

Most of the beliefs and attitudes of the present day will be overturned with the demise of the industrial orgy, like the idea that humanity follows an unerring arc of progress, that men and women are interchangeable and can do exactly the same work, that society should not be hierarchical, that technology will rescue us, and that we can organize some political work-arounds to avoid the pain of universal contraction. There are no coherent ideas in the political arena just now. Our prospects are really too alarming. So, jump on-board the socialism ship and see if it makes you feel better to sail to the end of the earth. But mind the gap at the very edge. It’s a doozie.

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And 2 more weeks after that etc. till the clock runs out.

May To Ask MPs For Further Fortnight’s Grace In Brexit Talks (G.)

Theresa May hopes to convince the House of Commons on Tuesday to give her another fortnight’s grace to keep pushing for changes to the Irish backstop – despite the insistence of Michel Barnier that it is Britain that must compromise. With 45 days to go until Britain is due by law to leave the EU, with or without a deal, the prime minister will address MPs about progress in the Brexit talks, No 10 announced on Monday. She is unlikely to signal any shift towards a closer future relationship with the EU, after writing to Jeremy Corbyn to underline her continued objections to a customs union, and instead she will focus on the backstop.

“We are absolutely clear on this: we’re not considering Jeremy Corbyn’s customs proposals, we’re not considering any proposals to remain in the customs union. We must have our own, independent trade policy,” May’s spokesman said on Monday. May will stress her continued focus on the backstop, but the EU’s chief negotiator insisted on Monday there was no question of Brussels giving in to Downing Street’s demands. “We’re waiting for clarity and movement from the United Kingdom,” Barnier told reporters after talks in Luxembourg with the country’s prime minister, Xavier Bettel.

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The EU has the exact same flaws as its member states, but in the latter the losers can get voted out.

Europeans Must Get Rid Of The Failing EU One Way Or Another (MW)

Populism is sweeping Europe, because the European Union and its constituent governments have become as unresponsive as the 18th century aristocracies those replaced.The EU antecedent, the European Economic Community (1957) was created to prevent another World War by integrating the continent’s iron and steel industries and then its broader continental markets for goods, services, capital and labor. The process created a politically unaccountable bureaucracy, whose broad policy directions are set by consensus among the national heads of government and cabinet ministers. However, Brussels enjoys wide administrative discretion in supervising the customs union, agricultural and fisheries management, and national subsidies, anticompetitive practices, and other behavior that could undermine the “single market.”

Through a succession of treaties and agreements, national leaders “pooled sovereignty” to empower the European Commission to issue edicts that member states must directly obey or conform national laws and regulations in areas such as social policy and human rights, consumer protection and product standards, transportation, and immigration. European Court rulings have direct application in national courts, and 19 of the 28 states have ceded monetary policy to the European Central Bank by adopting the euro. To win votes, mainstream national politicians have endemically statist impulses, and hue to globalist views regarding the virtues of freer trade and more open immigration, regulatory responses to environmental challenges like climate change rather than mitigation, and impelling cultural diversity as opposed to preserving local cultures.

In Europe, national leaders have empowered the commission to impose the pain and constraints on private freedoms that such globalist policies require. Then they can point to Brussels to alibi they are just advancing a stronger European Union.

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Deutsche is a wager gone horribly wrong.

“Insane” Deutsche Bank Drowning Under Soaring Funding Costs (ZH)

Following years of dismal performance, uncovered attempts at market manipulation and fraudulent activities, and painful corporate reorganizations which its latest earnings report showed have “cut deeply into the muscle”, Deutsche Bank is a shadow of its former self, with its stock price trading just shy of all time lows. But an even bigger problem for Germany’s biggest lender is that it is now forced to pay the highest financing rates on the euro debt market for a leading international bank this year according to the FT, and also the highest rates among large banks to raise debt this year according to Bloomberg, in a further sign of the German lender’s uphill struggle to turn its operations around and reduce its funding costs.

As the FT first reported, followed promptly by Bloomberg, the bank raised eyebrows last week when it sold a total of €3.6BN in euro-denominated debt, paying 180 bps over the benchmarks for a two-year bond, a steep rate for short-term funding. Deutsche Bank also paid 230 bps over benchmarks for a senior seven-year bond that can absorb losses in a crisis. By comparison, French banking giant BNP Paribas SA last month offered 50 bps less for equally-ranked notes that mature one year later. More embarrassing, Deutsche Bank paid a higher rate than Spanish lender CaixaBank, which recently raised five-year bonds at 225bp.

In a latest note to clients, Corinna Dröse, a Frankfurt-based bond analyst at DZ Bank, said: “The high spreads reflect [Deutsche’s] high idiosyncratic risk, which is rooted in the lender’s chronic weakness in earnings.” “Deutsche has to pay significantly higher risk premiums than almost all other large European banks . . . [the] high spreads express severe doubts, mainly triggered by its poor revenue,” said Michael Hünseler, head of credit portfolio management at Assenagon. Intimately linked with the bank’s deteriorating fortunes – and stock price – investors are increasingly demanding that Deutsche Bank pay higher rates of return than even some of Europe’s “most troubled banks” as the firm grapples with a prolonged decline in revenue.

Finance chief James von Moltke said last year that the bank was caught in a “vicious circle” of declining revenue, sticky expenses, a lowered credit rating and rising funding costs. While the firm cut expenses, revenue and the price of funding remain a concern. “A key priority for us now is lowering our funding costs and improving our credit ratings,” von Moltke said during a call with fixed-income investors last week. “We must not compromise on the strength of our capital, funding, or liquidity, but we have to prove that we can generate long-term, sustainable profitability.”

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It’s not about eating meat, it’s about industrial farming. All these scientists telling people what to eat are useless.

Nearly A Fifth Of The EU’s Budget Goes On Livestock Farming (G.)

Nearly a fifth of the EU’s total budget – more than £24bn of taxpayer money – goes to support livestock farming across Europe, according to new research by Greenpeace. At a time when scientists are calling for significant reductions in meat consumption, the report’s authors say taxpayers’ money should be redirected away from grain-fed, industrial animal farming. Last month, the Eat-Lancet Commission of scientists called for a new plant-focused diet to help avoid dangerous levels of climate change and the destruction of wildlife. Such a diet would require cutting red meat consumption in Europe by 77%.

Public Health England’s dietary guidelines recommend that meat and dairy, including non-animal-based protein alternatives such as beans and pulses, should make up no more than our 20% of dietary intake. Yet, Europeans eat more than twice as much meat as national dietary authorities recommend, as well as twice the global average. “Adopting diets lower in meat and dairy would not only tackle health problems but would also reduce the pressure on land, freeing up more space for nature,” said the Greenpeace EU agriculture policy director Marco Contiero. [..] Researchers calculated that 125 million hectares (308 million acres) of land in Europe is used to graze livestock or produce feed – this includes more than 60% of arable land that could otherwise be used to grow food directly for human consumption.

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China has no idea what democracy is. But it has a ruling class just like our countries.

China Has No Use For Democracy. It Needs A Strong Leader Like Xi (SCMP)

Throughout my life, I have had the opportunity to meet nearly every Chinese leader since the 1930s (with the exception of Mao Zedong), including Chiang Kai-shek, Wang Jingwei and more contemporary figures such as Hu Jintao, Jiang Zemin and Xi. As individuals, they frequently came off as kind, caring and intelligent. From afar, as I watched them govern, I would view them in a different light, as dictators. This is the reality of leadership in China. Previously, emperors in China were said to rule because of their “Mandate of Heaven”. When Mao seized power, it was clear that he had won his position through revolution. Yet the selection of Xi, like the selection of his predecessors since Mao’s death in 1976, is cloaked in secrecy.

Even those in the US who question whether, and to what degree, Russian interference influenced the 2016 election will concede that, based on US law, Trump is a legally elected president. These results are publicly available, and have been analysed repeatedly by the media, politicians and the American public. But China lacks such luxuries. Its citizens have no official records to turn to for an explanation of why and how Xi was chosen. [..] Under Xi’s leadership, China has adopted a more aggressive stance internationally, imprisoned thousands of party members on corruption charges and removed constitutional limitations on presidential term limits. Amid these developments, the question of how Xi was chosen again comes to mind. The short answer is, we can only guess.

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Why, why and why?

History’s 10 Most Culturally Significant Dick Pic Scandals (Taibbi)

The AMI-Jeff Bezos scandal is set up to dominate headlines for a while. Who knows where it will lead? In the third world, an oligarch-president proxy war playing out in public like this usually presages a coup. If this were Thailand or Uruguay, bookies would already have odds on a Bezos-Mark-Zuckerberg-Sundar-Pichai junta being in power by May. This scandal will at least drag us through unprecedented legal and ethical conundrums. Can the president use the surveillance powers of the state to go after political enemies? Can a billionaire intelligence contractor and administrator of one of earth’s largest private data collections — including the so-called “Secret Region” cloud — fight back using his own surveillance trove through a newspaper he owns?

This story could blur the lines between public and private power to the point of meaninglessness. America could very well find its fate decided by a series of pre-dawn phone calls, after which we’d wake up to find Trump flying to Switzerland, Amazon lieutenants in the Joint Chiefs office and the presidency replaced by an executive board. At the center of all of this: a dick pic. Nothing could be more American than the fate of our democracy now hanging (!) on what Enquirer editor Dylan Howard euphemistically describes as a “below-the-belt selfie.”

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Feb 092019
 
 February 9, 2019  Posted by at 11:03 am Finance Tagged with: , , , , , , , , , , , , , ,  


Pablo Picasso Le pigeon aux petits pois (Pigeon with Peas) – stolen May 20 2010 1911

 

German Industrial Production Falls Most Since 2009. New Orders Plummet (WS)
Fed’s QE Unwind Reaches $434 Billion, Remains on “Autopilot” (WS)
UK Forcing Poor Nations Into Risky Post-Brexit Trade Deals (Ind.)
Acting AG Whitaker Says He Has Not Meddled In Russia Inquiry (AP)
US Faces A Catastrophic Food Supply Crisis, As Farmers Struggle (SHTF)
The State of the American Debt Slaves, Q4 2018 (WS)
Bezos, Amazon And Privacy (Greenwald)
Leaked Wikileaks Doc Reveals US Military Use of IMF, World Bank (MPN)
Venezuela: The US’s 68th Regime Change Disaster (AntiWar)
US In Direct Contact With Venezuelan Military, Urging Defections (R.)
Venezuela’s Maduro Spurns US Aid, Rival Warns Military Not To Block It (R.)
Dreams Die Hard (Kunstler)
Wiped Out Before Our Eyes’ Hawaii Proposes Ban On Shark Killings (G.)

 

 

Almost off the news radar, Germany’s problems get serious, and drag Europe down with it.

German Industrial Production Falls Most Since 2009. New Orders Plummet (WS)

“Unexpectedly,” German industrial production fell 3.9% in December 2018 compared to December 2017, after having fallen by a revised 4.0% in November, according to German statistics agency Destatis Thursday morning. These two drops were steepest year-over-year drops since 2009. Even during the European Debt Crisis in 2011 and 2012 – it hit Germany’s industry hard as many European countries weaved in and out of a recession, with some countries sinking into a depression — German industrial production never fell as fast on a year-over-year basis as in November and December:

The declines on a year-over-year basis were broad: Without construction, industrial production fell 3.9% year-over-year in December, after having fallen 4.5% in November. And just manufacturing production, which includes mining and quarrying, fell 4.0% year-over-year in December, after having fallen 4.6% in November. On a longer-term scale, the industrial production index peaked in May 2018 and has since fallen 4.6%. It is now back where it had first been in February 2017:

And industrial production is not getting a whole lot better any time soon as new orders for the manufacturing sector have plunged – according to data released by Destatis on Wednesday. New orders dropped 7.0% year-over-year in December (adjusted for calendar differences), after having fallen 3.4% in November and 3.0% in October. In fact, orders have fallen seven months in a row on a year-over year basis in ever larger drops. The chart below shows the decline in each month compared to the same month a year earlier — with a sharp deterioration at the end of the year:

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As I’ve said before, tweaking rates is sort of an instant measure, but re-purchasing $434 billion in assets takes much longer. If only because the Fed will cause a panic if they try.

Fed’s QE Unwind Reaches $434 Billion, Remains on “Autopilot” (WS)

The Fed shed $32 billion in assets in January, according to the Fed’s balance sheet for the week ended February 6, released this afternoon. This reduced the assets on its balance sheet to $4,026 billion, the lowest since January 2014. Since the beginning of this “balance sheet normalization,” the Fed has now shed $434 billion.

[..] the questions going forward are these: One, will the Fed continue to trim its balance sheet on “autopilot,” or will it deviate from plan and slow or stop the balance sheet reductions; Or two, will the Fed reverse course and restart QE all over again at any moment now, as the biggest Wall Street hype-mongers have prophesied; Or three, will the Fed tweak the roll-off – as a slew of Fed governors have suggested – to where it would get rid of its MBS more quickly by outright selling them; and by replacing some of them with short-term Treasury bills to lower the balance sheet’s average maturity, which currently is over eight years.

Over the next few months, the Fed will likely announce some tantalizing tidbits about how it might tweak the balance-sheet reduction. One of those tidbits will likely relate to how it will shed MBS faster and replace those additional reductions of MBS with short-term Treasury bills. The effects of this may not be what the markets had hoped for in their wildest dreams. And the Fed will likely dole out more clues about how much further it wants to cut its balance sheet. But all this will take months, and until those tweaks are nailed down and announced, the balance sheet normalization will proceed on autopilot at its by now customary glacial pace.

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Dreams of empire. France does the exact same thing.

UK Forcing Poor Nations Into Risky Post-Brexit Trade Deals (Ind.)

Some of the world’s poorest countries are being forced to agree potentially damaging trade deals with the UK by government “threats” in the rush to Brexit, campaigners say. Liam Fox, the international trade secretary, is accused of piling pressure on developing nations to “sign up blind” – without knowing the value of the deals – with a warning they will otherwise be lost. Just three of the 40 agreements the UK enjoys through EU membership, covering 71 countries, have been successfully “rolled over” – as the government promised – with Brexit day just seven weeks away. Now the Department for International Trade is under fire for telling the countries concerned they risk punishing tariffs on crucial exports to the UK, unless they re-sign the deals in time.

Among them are Ghana, which relies on banana sales, Mauritius (tuna), Kenya (flowers), Cote d’Ivoire (cocoa), Namibia (grapes and beef), Swaziland (sugar), and scores of other developing countries in Africa, the Caribbean and Central America. And, says the fair trade charity Traidcraft Exchange, they risk a legal challenge at the World Trade Organisation (WTO) under an extraordinary plan to treat EU parts as originating from the UK. “The continuity agreements are being rushed because of the threat of no deal. Countries are being asked to sign up blind,” said Liz May, the charity’s head of policy.

“Without the full picture of how the EU and UK will trade in the future, it is impossible for countries to judge what these deals are really worth, how they will work in practice or even how some elements will be enforced. “Instead of acknowledging this difficulty, the government is relying on developing countries being compelled to sign up at the last minute, rather than risk high tariffs being slapped on their key exports. “This type of bad-faith negotiating – using implicit threats to get countries ‘over the line’ – is not a great way to start the UK’s independent trade policy.”

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“I’m thinking about maybe we just set up a popcorn machine in the back because that’s what this is becoming. It’s becoming a show..”

The Senate will vote on Barr next week anyway, so why the showboating carnival?

Acting AG Whitaker Says He Has Not Meddled In Russia Inquiry (AP)

The acting attorney general, Matthew Whitaker, said on Friday that he has “not interfered in any way” in the special counsel’s Russia investigation as he faced a contentious congressional hearing in his waning days on the job. The hearing before the House Judiciary Committee was the first, and likely only, chance for newly empowered Democrats in the majority to grill an attorney general they perceive as a Donald Trump loyalist, and whose appointment they suspect was aimed at suppressing investigations of the Republican president. Democrats confronted Whitaker on his past criticism of the special counsel Robert Mueller’s work and his refusal to recuse himself from overseeing it, attacked him over his prior business dealings, and sneeringly challenged his credentials as the country’s chief law enforcement officer.

“We’re all trying to figure out: who are you, where did you come from and how the heck did you become the head of the Department of Justice,” said congressman Hakeem Jeffries. When Whitaker tried to respond, the New York Democrat interrupted: “Mr Whitaker, that was a statement, not a question. I assume you know the difference.” Yet Democrats yielded no new information about the status of the Mueller invesetigation as Whitaker repeatedly refused to discuss conversations with the president or answer questions that he thought might reveal details. Though clearly exasperated – he drew gasps and chuckles when he told the committee chairman that his five-minute time limit for questions was up – Whitaker nonetheless sought to assuage Democratic concerns by insisting he had never discussed the Mueller probe with Trump or other White House officials, and that there’d been no change in its “overall management”.

“We have followed the special counsel’s regulations to a T,” Whitaker said. “There has been no event, no decision, that has required me to take any action, and I have not interfered in any way with the special counsel’s investigation.” Republicans made clear they viewed the hearing as pointless political grandstanding, especially since Whitaker may have less than a week left in the job, and some respected his wishes by asking questions about topics other than Mueller’s inquiry into potential coordination between Russia and the Trump campaign. The Senate is expected to vote as soon as next week on confirming William Barr, Trump’s pick for attorney general. “I’m thinking about maybe we just set up a popcorn machine in the back because that’s what this is becoming. It’s becoming a show,” said the Republican congressman Doug Collins ,of Georgia, who accused his Democratic colleagues of “character assassination”.

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The US food crisis is exclusively caused by Big Ag and Monsanto. Farmers depending on China is not in their interest.

US Faces A Catastrophic Food Supply Crisis, As Farmers Struggle (SHTF)

American farmers are battling several issues when it comes to producing our food. Regulated low prices, tariffs, and the inability to export have all cut into the salaries of farmers. They are officially in crisis mode, just like the United States’ food supply. “The farm economy’s in pretty tough shape,” said John Newton, chief economist at the American Farm Bureau Federation. “When you look out on the horizon of things to come, you start to see some cracks.” Average farm income has fallen to near 15-year lows under president Donald Trump’s policies, and in some areas of the country, farm bankruptcies are soaring. And with slightly higher interest rates, many don’t see borrowing more money as an option.

“A lot of farmers are going to give the president the benefit of the doubt, and have to date. But the longer the trade war goes on, the more that dynamic changes,” said Brian Kuehl, executive director of Farmers for Free Trade, according to Politico. With no end to the disastrous trade war in sight, many farmers have traveled to Washington to share their plights with the president himself hoping that he’ll end the trade war that’s exacerbating an already precarious food crisis. Farmers make up a fairly large chunk of president Trump’s base, and an unwillingness to put food production in the United States first could be detrimental for Trump reelection chances in 2020. It could also be the beginning of a catastrophic food shortage.

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“It’s a tough job, but someone’s got to do it: Propping up the massive US economy.”

The State of the American Debt Slaves, Q4 2018 (WS)

It’s a tough job, but someone’s got to do it: Propping up the massive US economy. And consumers are doing it, but in a somewhat lackadaisical manner when it comes to spending money they don’t have. Consumer debt – more enticingly, “consumer credit” similar to “extra credit” – rose 4.7% in the fourth quarter 2018 compared to the fourth quarter last year. In the year 2018, Americans added $179 billion to their balances on their credit cards, auto loans, and student loans. Every dime was spent and added to GDP. It amounted to nearly 1% of GDP. If GDP grew 3.1% in 2018, just under one third of the growth was generated by that additional consumer debt.

Without this additional consumer borrowing, if consumers had just maintained their debt levels, GDP growth might only have been 2.2% in 2018, instead of 3.1%. So, a huge round of applause is due our debt slaves that now owe over $4 trillion for the first time ever, according to the Federal Reserve Thursday afternoon. Consumer debt includes auto loans, student loans, credit-card debt, and personal loans, but it excludes housing related debt, such as mortgages and HELOCs. The $4.01 trillion in consumer debt is up 52% from the peak early in the Financial Crisis in Q3 2008. This is not adjusted for inflation. Over the same period, the Consumer Price Index rose 16% and nominal GDP rose 39%. Thus, Americans are sticking to their time-honored plan of out-borrowing both inflation (by a big margin) and economic growth.

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Summary: Trump accused of using the same FBI that spies on him, to spy on Bezos, who’s in bed with the FBI.

I may have temporarily lost the thread, and the logic.

Bezos, Amazon And Privacy (Greenwald)

On Thursday, Bezos published emails in which the Enquirer’s parent company explicitly threatened to publish intimate photographs of Bezos and his mistress, which were apparently exchanged between the two through their iPhones, unless Bezos agreed to a series of demands involving silence about the company’s conduct. [..] Despite a lack of evidence, MSNBC is already doing what it exists to do – implying with no evidence that Trump is to blame (in this case, by abusing the powers of the NSA or FBI to spy on Bezos). But, under the circumstances, those are legitimate questions to be probing (though responsible news agencies would wait for evidence before airing innuendo of that sort).

If Bezos were the political victim of surveillance state abuses, it would be scandalous and dangerous. It would also be deeply ironic. That’s because Amazon, the company that has made Bezos the planet’s richest human being, is a critical partner for the U.S. Government in building an ever-more invasive, militarized and sprawling surveillance state. Indeed, one of the largest components of Amazon’s business, and thus one of the most important sources of Bezos’ vast wealth and power, is working with the Pentagon and the NSA to empower the U.S. Government with more potent and more sophisticated weapons, including surveillance weapons.

In December, 2017, Amazon boasted that it had perfected new face-recognition software for crowds, which it called Rekognition. It explained that the product is intended, in large part, for use by governments and police forces around the world. The ACLU quickly warned that the product is “dangerous” and that Amazon “is actively helping governments deploy it.” “Powered by artificial intelligence,” wrote the ACLU, “Rekognition can identify, track, and analyze people in real time and recognize up to 100 people in a single image. It can quickly scan information it collects against databases featuring tens of millions of faces.” “Amazon’s Rekognition raises profound civil liberties and civil rights concerns.”

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The core of the Venezuela crisis: “Hugo Chávez, broke ties with the IMF and World Bank, which he noted were “dominated by US imperialism.” Instead Venezuela and other left-wing governments in Latin America worked together to co-found the Bank of the South..”

Leaked Wikileaks Doc Reveals US Military Use of IMF, World Bank (MPN)

In a leaked military manual on “unconventional warfare” recently highlighted by WikiLeaks, the U.S. Army states that major global financial institutions — such as the World Bank, IMF, and the OECD — are used as unconventional, financial “weapons in times of conflict up to and including large-scale general war,” as well as in leveraging “the policies and cooperation of state governments.” The document, officially titled “Field Manual (FM) 3-05.130, Army Special Operations Forces Unconventional Warfare” and originally written in September 2008, was recently highlighted by WikiLeaks on Twitter in light of recent events in Venezuela as well as the years-long, U.S.-led economic siege of that country through sanctions and other means of economic warfare. Though the document has generated new interest in recent days, it had originally been released by WikiLeaks in December 2008 and has been described as the military’s “regime change handbook.”

WikiLeaks’ recent tweets on the subject drew attention to a single section of the 248-page-long document, titled “Financial Instrument of U.S. National Power and Unconventional Warfare.” This section in particular notes that the U.S. government applies “unilateral and indirect financial power through persuasive influence to international and domestic financial institutions regarding availability and terms of loans, grants, or other financial assistance to foreign state and nonstate actors,” and specifically names the World Bank, IMF and the OECD, as well as the Bank for International Settlements (BIS), as “U.S. diplomatic-financial venues to accomplish” such goals.

[..] Given the close relationship between the U.S. government and these international financial institutions, it should come as little surprise that – in Venezuela – the U.S.-backed “interim president” Juan Guaidó – has already requested IMF funds, and thus IMF-controlled debt, to fund his parallel government. This is highly significant because it shows that top among Guaidó’s objectives, in addition to privatizing Venezuela’s massive oil reserves, is to again shackle the country to the U.S.-controlled debt machine. As the Grayzone Project recently noted: Venezuela’s previous elected socialist president, Hugo Chávez, broke ties with the IMF and World Bank, which he noted were “dominated by US imperialism.” Instead Venezuela and other left-wing governments in Latin America worked together to co-found the Bank of the South, as a counterbalance to the IMF and World Bank.”

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So many millions of victims nobody tries to count anymore.

Venezuela: The US’s 68th Regime Change Disaster (AntiWar)

In his masterpiece, Killing Hope: U.S. Military and C.I.A. Interventions Since World War II, William Blum, who died in December 2018, wrote chapter-length accounts of 55 US regime change operations against countries around the world, from China (1945-1960s) to Haiti (1986-1994). Noam Chomsky’s blurb on the back of the latest edition says simply, “Far and away the best book on the topic.” We agree. If you have not read it, please do. It will give you a clearer context for what is happening in Venezuela today, and a better understanding of the world you are living in. Since Killing Hope was published in 1995, the US has conducted at least 13 more regime change operations, several of which are still active: Yugoslavia; Afghanistan; Iraq; the 3rd US invasion of Haiti since WWII; Somalia; Honduras; Libya; Syria; Ukraine; Yemen; Iran; Nicaragua; and now Venezuela.

William Blum noted that the US generally prefers what its planners call “low intensity conflict” over full-scale wars. Only in periods of supreme overconfidence has it launched its most devastating and disastrous wars, from Korea and Vietnam to Afghanistan and Iraq. After its war of mass destruction in Iraq, the US reverted to “low intensity conflict” under Obama’s doctrine of covert and proxy war. Obama conducted even heavier bombing than Bush II, and deployed US special operations forces to 150 countries all over the world, but he made sure that nearly all the bleeding and dying was done by Afghans, Syrians, Iraqis, Somalis, Libyans, Ukrainians, Yemenis and others, not by Americans. What US planners mean by “low intensity conflict” is that it is less intense for Americans.

[..] While Venezuelans face poverty, preventable diseases, malnutrition and open threats of war by US officials, those same US officials and their corporate sponsors are looking at an almost irresistible gold mine if they can bring Venezuela to its knees: a fire sale of its oil industry to foreign oil companies and the privatization of many other sectors of its economy, from hydroelectric power plants to iron, aluminum and, yes, actual gold mines. This is not speculation. It is what the US’s new puppet, Juan Guaido, has reportedly promised his American backers if they can overthrow Venezuela’s elected government and install him in the presidential palace.

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“..a source in Washington close to the opposition expressed doubts whether the Trump administration has laid enough groundwork to spur a wider mutiny in the ranks..”

US In Direct Contact With Venezuelan Military, Urging Defections (R.)

The US is holding direct communications with members of Venezuela’s military urging them to abandon President Nicolas Maduro and is also preparing new sanctions aimed at increasing pressure on him, a senior White House official said. The Trump administration expects further military defections from Maduro’s side, the official told Reuters, despite only a few senior officers having done so since opposition leader Juan Guaido declared himself interim president last month, earning the recognition of the United States and dozens of other countries. “We believe these to be those first couple pebbles before we start really seeing bigger rocks rolling down the hill,” the official said this week, speaking on condition of anonymity. “We’re still having conversations with members of the former Maduro regime, with military members, although those conversations are very, very limited.”

With the Venezuelan military still apparently loyal to Maduro, a source in Washington close to the opposition expressed doubts whether the Trump administration has laid enough groundwork to spur a wider mutiny in the ranks where many officers are suspected of benefiting from corruption and drug trafficking. Members of the South American country’s security forces fear they or their families could be targeted by Maduro if they defect, so the U.S. would need to offer them something that could outweigh those concerns, said Eric Farnsworth, vice president of the Council of the Americas think tank in Washington. “It depends on what they’re offering,” Farnsworth said. “Are there incentives built into these contacts that will at least cause people to question their loyalty to the regime?”

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A horse felled Troy.

Venezuela’s Maduro Spurns US Aid, Rival Warns Military Not To Block It (R.)

Venezuela’s government on Friday said the United States should distribute humanitarian aid in Colombia where it is being stockpiled, while the opposition warned that blocking much-needed food and medicine could constitute crimes against humanity. A day after the aid convoy arrived in the border city of Cucuta, President Nicolas Maduro ridiculed the United States for offering small amounts of assistance while maintaining sanctions that block some $10 billion of offshore assets and revenue. Rival Juan Guaido, who is recognized by dozens of countries as Venezuela’s legitimate leader, warned military officers against blocking the arrival of aid amid spiraling disease and malnutrition brought on by a hyperinflationary collapse.

“Take all that humanitarian aid and give it to the people of Cucuta, where there is a lot of need,” Maduro said in a news conference. “This is a macabre game, you see? They squeeze us by the neck and then make us beg for crumbs.” “They offer us toilet paper, like (U.S. President) Donald Trump threw at the people of Puerto Rico,” he said at the conference, which experienced technical difficulties including a blackout and a microphone failure. He was referring to Trump’s improvised 2018 aid distribution in the U.S. territory following a hurricane, during which he threw rolls of paper towels.

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“Societies and economies are fundamentally emergent, non-linear, and self-organizing as they respond to the mandates of reality — which are not necessarily consistent with human wishes.”

Dreams Die Hard (Kunstler)

America has been blowing green smoke up its own ass for years, promoting oxymorons such as “green skyscrapers” and “clean energy,” but the truth is we’re not going to run WalMart, Suburbia, DisneyWorld, and the interstate highway system on any combination of wind, solar, geothermal, recycled Fry-Max, and dark matter. We’re just running too much stuff at too great a scale for too many people. We’ve blown through the capital already and replaced it with IOUs that will never be honored, and we’re caught in an entropy trap of diminishing returns from all the work-arounds we’re desperately trying. For all that, there are actually some sound proposals in the mostly delusional matrix of the Green New Deal promoted by foxy front-person AOC.

• Revoke corporate personhood by amending our Constitution to make clear that corporations are not persons and money is not speech. Right on, I say, though they have not quite articulated the argument which is that corporations, unlike persons, have no vested allegiance to the public interest, but rather a legal obligation solely to shareholders and their boards-of-directors.
• Replace partisan oversight of elections with non-partisan election commissions. A no-brainer.
• Replace big money control of election campaigns with full public financing and free and equal access to the airwaves. Quite cheap and worth every penny.
• Break up the oversized banks that are “too big to fail.” And while you’re at it, resume enforcement of the anti-trust laws.
• Restore the Glass-Steagall separation of depository commercial banks from speculative investment banks. Duh….

There are two kinds of deadly narcissism at work in American culture these days: techno-narcissism — the belief that magical rescue remedies can save the status quo of comforts and conveniences — and organizational narcissism — the belief that any number of committees can lead a march of humanity into a future of rainbows and unicorns. Both of these ideas are artifacts of a fossil fuel turbo-charged economy that is coming to an end. Societies and economies are fundamentally emergent, non-linear, and self-organizing as they respond to the mandates of reality — which are not necessarily consistent with human wishes. Circumstances in the world change and sometimes, when the changes are profound enough, they provoke episodes of flux and disorder. A better index for our journey into the unknown frontier beyond modernity will not be what is “green” and “smart” but perhaps what is “sane” and “insane.”

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100 million sharks are killed globally each year.

We need to protect, and love, life in all its glory and beauty, because we are life. But we don’t see what connects us to all that we kill, we think we’re some separate entity.

There is no more flagrant failure in our education systems than this: they don’t teach us who we are.

Wiped Out Before Our Eyes’ Hawaii Proposes Ban On Shark Killings (G.)

Sharks could soon become more numerous in Hawaii waters – and advocates say that’s a good thing. Lawmakers in Honolulu advanced a proposed ban on killing sharks in state waters on Wednesday, after receiving hundreds of calls and letters of support from around the country. The law, which would provide sweeping protection for any shark, rather than select species, could be the first of its kind in the United States. “These amazing animals are getting wiped out before our eyes, and people don’t even realize what they’re missing out on,” said Ocean Ramsey, a Hawaii-based shark conservationist, researcher and tour operator who has been instrumental in lobbying for the bill. Last month, a photo of Ramsey swimming with a 6-metre (20ft) great white shark off the coast of Oahu went viral.


Photograph: OneOceanDiving

Along with killing the animals, capturing or harming them would also incur fines and count as a misdemeanor offense. Sharks, Ramsey said, are deeply misunderstood. Their presence in the ocean is unlike any other animal’s, she noted. “Everything else in the ocean swims away from you, but you can have these incredible interactions with sharks because they’re apex predators and they’re not afraid of you.” The threats to Hawaii’s sharks are numerous, proponents of the bill argue. [..] shark fins can sometimes sell for as much as $500 a pound. Shark fin soup, a delicacy once favored by Chinese emperors, has become widely popular as a status symbol in modern China. As a result, nearly 100 million sharks are killed globally each year, and species are disappearing.

[..] Sharks are crucial to Hawaii’s marine ecosystem, and oceans worldwide. “They’re the ocean’s immune system,” Ramsey said. Multiple studies have linked shark populations to overall ocean health. They serve a critical purpose by picking off sick and injured marine animals and keeping smaller fish populations under control. When the shark population declines, large predatory fish can overproduce and decimate the populations of small plant-eating fish, which are crucial to keeping algae down and supporting reef systems.


Photograph: OneOceanDiving

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Feb 072019
 
 February 7, 2019  Posted by at 10:15 am Finance Tagged with: , , , , , , , , , , , , , ,  


René Magritte The Pleasure Principle (Portrait of Edward James) 1937

 

Led By Donkeys (G.)
Tusk: Special Place In Hell For Brexiteers Without Even Sketch Of A Plan (Ind.)
Corbyn Lays Out Labour’s Terms For Backing May On Brexit (G.)
Not Opposing Brexit Could Lose Labour 45 Seats (G.)
Yellen: Next Fed Move May Be A Rate Cut (CNBC)
Fed’s Quarles Sees 2019 As An ‘Interim’ Year For Bank Stress Tests (R.)
Press Needs More Than Super Bowl Ad To Fix Its Plunging Credibility (ZH)
Homo Credulus (Bowman)
French, German Farmers Must Destroy Crops After GMOs Found In Monsanto Seeds (RT)
The Killing Of Large Species Is Pushing Them Towards Extinction (G.)
Global Warming Could Exceed 1.5ºC Within Five Years (G.)

 

 

50 days to Brexit. Don’t be surprised if that whole country dissolves before our eyes.

Perfect name, good actions.

Led By Donkeys (G.)

At 5.55am, Talgarth Road, one of the major arteries into west London, is just beginning to clog up with early rush-hour traffic. A man named Dave, his white van pulled over into a loading bay, is putting up a billboard poster by the side of the carriageway. The previous one was an advert for Calvin Klein featuring the model Lara Stone. Over the course of 20 minutes, Dave covers Stone up, expertly pasting rectangles of paper over her, using a ladder for the high ones, then sweeping over with his brush. The first rectangle, in the top left corner, contains a headshot of Jacob Rees-Mogg and the beginning of his Twitter handle. As Dave lines up edges, pastes and brushes, and Stone disappears, a quote emerges from Rees-Mogg.

This one wasn’t a tweet; he said it in parliament. “We could have two referendums. As it happens, it might make more sense to have a second referendum after the renegotiation is completed.” There are three other men here, dressed in hoodies, lumberjack shirts and beanies, lurking around and admiring the work. Their work – because Richard, Adam and Chris are three of the four key people behind Led By Donkeys, the remainer guerrilla activists highlighting the hypocrisy and lies of politicians by posting their damning quotes on billboards around the country. Less guerrilla now, actually: they’ve gone legit, this hoarding is paid for. Before, they just took them over.

[..] It all began, as most good ideas do, in the pub. They were talking about the infamous David Cameron tweet – “Britain faces a simple and inescapable choice – stability and strong government with me or chaos with Ed Miliband” – which was doing the rounds again after Theresa May cancelled the vote on her deal in December. And someone said: why don’t they slap it on a billboard, make it the tweet you can’t delete? The next day, on the WhatsApp group, one of them said they had found someone who would print it out for them. They all agreed: “Let’s just fucking do it.” It was cheaper to do five, so they cobbled together four more tweets – from Michael Gove, David Davies, John Redwood and Liam Fox – not really thinking they’d ever put them up. Initial outlay was about 200 quid, plus £90 on a ladder from B&Q.

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Tusk is an idiot, but he was right when he said thet as both May and Corbyn want to Leave, there is no political leadership for Remain. But the majority of Britons by now want to Remain. Don’t underestimate the danger of this.

Tusk: Special Place In Hell For Brexiteers Without Even Sketch Of A Plan (Ind.)

A war of words has further undermined Theresa May’s mission to Brussels to rescue her Brexit deal, after the EU warned of a “special place in hell” for politicians who botched the project. Downing Street and Tory politicians hit back angrily after the extraordinary attack by Donald Tusk on those who triumphed in the referendum “without even a sketch of a plan how to carry it safely”. The prime minister’s spokesman urged people to ask whether such language was “helpful” – before noting, sarcastically, that was impossible “because he didn’t take any questions”. Andrea Leadsom, the Commons leader, condemned the comments by Mr Tusk, the European Council president, as “disgraceful” and “spiteful”, saying such behaviour “demeans him”.

Sammy Wilson, Brexit spokesman of the Democratic Unionist Party (DUP), which props up the Tories in power, went further – branding him a “devilish, trident-wielding, Euro maniac”. But pro-EU Tory Anna Soubry backed him and named Boris Johnson, David Davis and Nigel Farage as among his likely targets, for having “abdicated all responsibility”. The fury overshadowed the tough message for Ms May before she lands in Brussels on Thursday morning – that the EU will never agree to reopening the divorce deal, as she has vowed to do. The prime minister will again demand either an end date for the Irish backstop or an exit mechanism from it for there to be any hope of the Commons passing the deal. Ms May appeared to drop her third option – replacing the backstop with ill-defined “alternative arrangements”, based on unproven technology – to the anger of some Brexiteer Tories.

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Vote Corbyn, get May.

Corbyn Lays Out Labour’s Terms For Backing May On Brexit (G.)

Jeremy Corbyn has written to the prime minister, offering to throw Labour’s support behind her Brexit deal if she makes five legally binding commitments – including joining a customs union. The Labour leader held private talks with Theresa May last week for the first time since her deal was rejected by a historic margin of 230 votes in January. In a follow-up letter sent on Wednesday, he laid out in the clearest terms yet what commitments he is seeking in exchange for offering Labour support. His intervention will dismay backbench Labour MPs and grassroots activists still hoping he will switch the party’s policy towards demanding a second Brexit referendum – which is not mentioned in the letter.

And it comes as No 10 prepares to publish legislation underpinning workers’ rights, perhaps as early as next week, in an attempt to win support from Labour backbenchers. In his letter, Corbyn calls for the government to rework the political declaration setting the framework for Britain’s future relationship with the EU – and then enshrine these new negotiating objectives in UK law, so that a future Tory leader could not sweep them away after Brexit. He says the changes to the political declaration must include:

• A “permanent and comprehensive UK-wide customs union”, including a say in future trade deals.
• Close alignment with the single market, underpinned by “shared institutions”.
• “Dynamic alignment on rights and protections”, so that UK standards do not fall behind those of the EU.
• Clear commitments on future UK participation in EU agencies and funding programmes.
• Unambiguous agreements on future security arrangements, such as use of the European arrest warrant.

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Britain can no longer manage with two parties. Same as so many countries.

Not Opposing Brexit Could Lose Labour 45 Seats (G.)

A trade union affiliated with the Labour party has claimed that Jeremy Corbyn’s party could lose an additional 45 seats in a snap election if it fails to take an anti-Brexit position, in a leaked report. The report, drawn up by the transport union TSSA and including extensive polling, was sent to the leftwing pressure group Momentum. It appears to be an attempt to pile pressure on the Labour leader over Brexit. It claims that “Brexit energises Labour remain voters” disproportionately, and warns: “There is no middle way policy which gets support from both sides of the debate.” The Guardian understands that while the report was sent to Momentum, it was not commissioned or requested by the group.

Sources inside the party stressed that there were risks from turning either way on Brexit – and other polls showed a different picture. The document – marked strictly confidential – says: “There can be no disguising the sense of disappointment and disillusionment with Labour if it fails to oppose Brexit and there is every indication that it will be far more damaging to the party’s electoral fortunes than the Iraq war. “Labour would especially lose the support of people below the age of 35, which could make this issue comparable to the impact the tuition fees and involvement in the coalition had on Lib Dem support.” The document starts by pointing out that the TSSA has “supported Jeremy Corbyn’s leadership from the very beginning”.

It says that the party’s supporters view Brexit as a “Tory project”. It adds that four-fifths of them believe the current deal will hurt the British economy and 91.4% of Labour voters do not trust the government to deliver a good Brexit for people such as them.

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Only in hindsight will Americans see the damage done by these people.

Yellen: Next Fed Move May Be A Rate Cut (CNBC)

The Federal Reserve’s next move may well be an interest rate cut if weakening growth around the world starts infecting the U.S. economy, former central bank Chair Janet Yellen said Wednesday. Weakening economies in China and Europe are posing danger to an otherwise strong U.S. economy, Yellen told CNBC’s Steve Liesman during a “Power Lunch” interview. “Of course it’s possible. If global growth really weakens and that spills over to the United States where financial conditions tighten more and we do see a weakening in the U.S. economy, it’s certainly possible that the next move is a cut,” she said. “But both outcomes are possible.” The former central bank head cited “slowing global growth” as the biggest threat to the economy she once watched over. “The data from China has been recently weak, the European data has also come in weaker than expected,” she said.

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The very last people who should conduct such tests.

Fed’s Quarles Sees 2019 As An ‘Interim’ Year For Bank Stress Tests (R.)

U.S. bank stress tests conducted during an “interim” period this year will help the Federal Reserve decide what permanent changes to make to the closely followed examinations, the Fed’s point person on financial supervision Randal Quarles said on Wednesday. On Tuesday the Fed said it would make its stress testing of large banks more transparent in 2019, providing financial firms significantly more information about how their portfolios would perform under potential economic shocks. The changes respond to long-running bank complaints that the current stress-testing process is cumbersome and opaque. Less complex banks with assets between $100 billion and $250 billion, such as SunTrust Banks and Fifth Third Bancorp, do not have to face 2019 stress tests, as the Fed is moving to a two-year cycle for testing those firms.

“Our challenge now is to preserve the strength of the test, while improving its efficiency, transparency, and integration into the post-crisis regulatory framework,” Federal Reserve Vice Chairman of Supervision Randal Quarles said in remarks prepared for delivery at a Council for Economic Education event in New York. “Our experience with this ‘interim’ year will inform the move to a permanently longer testing cycle – a change that would, of course, be subject to a full notice and comment process.” The 2019 tests also include factoring in a jump to 10 percent unemployment from the current 4 percent rate, as well as elevated stress in corporate loan and commercial real estate markets in the most severe scenario.

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The press, including WaPo, have changed tactics. They no longer try for a larger audience, they make their existing readers more faithful. More subscribers, much ‘better’ targeted ads.

Press Needs More Than Super Bowl Ad To Fix Its Plunging Credibility (ZH)

Media Bias: While journalists are getting pink slips across the country, the Washington Post decided to dump a boatload of cash for a Super Bowl image ad that tried to portray the news media as national heroes. Here’s a better, and much cheaper, idea to restore the industry’s shattered reputation: Be less blatantly partisan. In the 60-second ad, Tom Hanks intones about the importance of journalists against the backdrop of historic events. Thankfully, during these times, the ad says, “There’s someone to gather the facts. To bring you the story. No matter the cost. Because knowing empowers us. Knowing helps us decide. Knowing keeps us free.” The problem with journalists today, however, is that they aren’t interested in gathering facts or empowering the public with knowledge.

Instead, they are interested mainly in pushing their agenda — a basic failing of the profession brought into high relief over the past two years. The latest IBD/TIPP Poll makes this abundantly clear. The poll asked several questions to gauge the public’s perception of the mainstream news media. What did it find? First, that fully half the country says its trust in the media decreased over the past two years. A tiny 8% say it’s increased. That includes a plurality of independents (49%). Even among Republicans, who’ve long grown accustomed to media bias, 81% say their trust in the press has dropped over the past two years. Geographically, those in the Midwest and the South are mostly likely to say their trust in the press has declined (52% and 57%, respectively) since Trump took office.

Men are far more likely than women (54% vs. 47%). And those with incomes over $75,000 (51% of home distrust the media more) more than lower-income households. These findings alone should be alarming. After all, as any corporate executive knows, you can’t run a successful business when a vast and increasing share of your customer base doesn’t trust the product you are selling. It gets worse. The poll found that more than two-thirds of the public (69%) think the news media “is more concerned with advancing its points of view rather than reporting all the facts.” Only 29% of the public disagrees with that statement. In other words, nearly seven out of 10 adults in the country think the Post ad’s blather about “gathering the facts” is bull. That includes 72% of independents, 95% of Republicans, and — surprisingly enough — 43% of Democrats.

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And how can the press pull off its tricks? Easy as pie. Edward Bernays and Goebbels.

Homo Credulus (Bowman)

Given the right circumstances… a little programing… and enough time for it all to marinate in his soft, mammalian brain… there is almost nothing Homo Credulus will not learn to embrace. Don’t believe us? Take a look at the historical record; you’ll soon wonder how we ever got this far. Sure, you’ll discover gizmos and flying contraptions… art and agriculture… music and mathematics. You’ll witness spectacular scientific breakthroughs, the number “0” and a man’s footprint on the moon. You’ll also find automobiles with so many cup holders, you won’t know where to holster your oversized 7/11 Big Gulp. But you’ll also scratch you head. Perhaps you’ll even weep. And if you think hard enough, you’ll put a few things to serious question…

“Central banks?” “Modern democracy?” “The Rosie O’Donnell Show?” How has mankind survived such atrocities? Self inflicted, no less! And why, moreover, does he rush so earnestly to repeat and replay his worst mistakes? Don’t be too hard on yourself, Dear Reader. After all, repetition is nothing new… You’ll recall that it was the Greeks who first gave the world democracy – from the Greek, demokratia, literally “Rule by ‘People’”. (And yes, it was those very same Greeks who put their own beloved Socrates to death… by a majority vote of 140-361.) Today, democracy is a cherished tenet of “the West.” It is woven into the civic religion, sewn into the social fabric. Men march off eagerly to fight for it, to proselytize it … and to die in forgotten ditches defending it. At least, that’s what they believe they’re doing. As usual, the poor saps have been duped.

The phrase “Making the world safe for democracy” was actually a marketing slogan, coined back in the 1910s, as a way to sell “The Great War” to America. Weary from their own disastrous Civil War just a few decades earlier, in which hundreds of thousands gave up the ghost, Americans were mostly inward looking at the time. That is to say, they wanted little to do with what they largely saw as a “European affair.” Polls might have indicated no appetite for battle… but the nation’s politicians were nonetheless starved for military misadventure. They sensed big profits abroad, both in manufacturing armaments and making onerous bank loans to foreign lands. Sure, “the nation” would have to fill tank and trench with warm young bodies… but very few soldiers would carry senatorial surnames along with their rifles.

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Too late already. A deliberate Monsanto policy.

French, German Farmers Must Destroy Crops After GMOs Found In Monsanto Seeds (RT)

French and German farmers have been forced to dig up thousands of hectares of rapeseed fields after authorities found an illegal GMO strain mixed in with the natural seeds they’d bought from Bayer-Monsanto. Authorities discovered the illicit seeds in three separate batches of rapeseed seeds last fall, but the public has only just been notified. While Bayer issued a recall, by the time the farmers learned of it some of the seeds had already been planted, covering 8,000 ha in France and 3,000 ha in Germany. Bayer-Monsanto estimated the number of rogue seeds at just about .005 percent of the total volume of rapeseed seeds sold to both nations under the brand name Dekalb, but each country has a ban on GMO cultivation, with strict penalties for “accidental” contamination of standard crops.

The agrochemical giant refused to estimate the total cost of the GMO contamination, which knocks out not only this season’s crop but also the next season’s, as farmers will be barred from growing rapeseed next year “to avoid re-emergence of the GMO strain,” according to Bayer-Monsanto’s French COO Catherine Lamboley. They offered to compensate farmers €2,000 per hectare, which would work out to about €20 million between both countries. The cause of the contamination is unknown, Lamboley said, claiming the seeds were produced in Argentina “in a GMO-free area” and declaring that the company “has decided to immediately stop all rapeseed production in Argentina.” The rogue GMO seeds were of a variety grown in Canada that is banned in Europe, although imported food made with the modified rapeseed is permitted for human and animal consumption as long as it is adequately labeled.

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Except those farmed.

The Killing Of Large Species Is Pushing Them Towards Extinction (G.)

The vast majority of the world’s largest species are being pushed towards extinction, with the killing of the heftiest animals for meat and body parts the leading cause of decline, according to a new study. While habitat loss, pollution and other threats pose a significant menace to large species, also known as megafauna, intentional and unintentional trapping, poaching and slaughter is the single biggest factor in their decline, researchers found. An analysis of 362 megafauna species found that 70% of them are in decline, with 59% classed as threatened by the International Union for Conservation of Nature. Direct killing by humans is the leading cause across all classes of animals, the study states.

A range of maladies including intensive agriculture, toxins and invasive competitors are also helping to trigger these declines. This situation adds to the “mounting evidence that humans are poised to cause a sixth mass extinction event”, according to the research, published in Conservation Letters. It adds that “minimizing the direct killing of the world’s largest vertebrates is a priority conservation strategy that might save many of these iconic species and the functions and services they provide.” Humans cause the deaths of large creatures in a variety of ways, from snares that entangle mountain gorillas and the poaching of elephants for ivory to the killing of the Chinese giant salamander, which can grow up to 6ft long and is considered a delicacy in Asia.

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So what are you going to do about it? Appeal to your politicians?

Global Warming Could Exceed 1.5ºC Within Five Years (G.)

Global warming could temporarily hit 1.5C above pre-industrial levels for the first time between now and 2023, according to a long-term forecast by the Met Office. Meteorologists said there was a 10% chance of a year in which the average temperature rise exceeds 1.5C, which is the lowest of the two Paris agreement targets set for the end of the century. Until now, the hottest year on record was 2016, when the planet warmed 1.11C above pre-industrial levels, but the long-term trend is upward. Man-made greenhouse gases in the atmosphere are adding 0.2C of warming each decade but the incline of temperature charts is jagged due to natural variation: hotter El Niño years zig above the average, while cooler La Ninã years zag below.

In the five-year forecast released on Wednesday, the Met Office highlights the first possibility of a natural El Niño combining with global warming to exceed the 1.5C mark. Dr Doug Smith, Met Office research fellow, said: “A run of temperatures of 1C or above would increase the risk of a temporary excursion above the threshold of 1.5C above pre-industrial levels. Predictions now suggest around a 10% chance of at least one year between 2019 and 2023 temporarily exceeding 1.5C.” Climatologists stressed this did not mean the world had broken the Paris agreement 80 years ahead of schedule because international temperature targets are based on 30-year averages.

“Exceeding 1.5C in one given year does not mean that the 1.5C goal has been breached and can be redirected towards the bin,” said Joeri Rogelj, a lecturer at the Grantham Institute. “The noise in the annual temperatures should not distract from the long-term trend.”

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Feb 052019
 
 February 5, 2019  Posted by at 10:54 am Finance Tagged with: , , , , , , , , , , , , , ,  


René Magritte Meditation 1936

 

How Much Could Negative Rates Have Helped the US Recovery? (FRBSF)
Bill Gross Retires (R.)
SOTU (Jim Kunstler)
EU Goods Will Be Waved Through British Ports In Case Of No Deal Brexit (Sun)
Nissan Was Offered Secret UK State Aid To Cope With Brexit (G.)
Merkel Says ‘Still Time’ To Find Brexit Solution (AFP)
An Italian Debt Crisis Could Take Down The EU (ZH)
Australia Central Bank Stays Calm As Shoppers Go Missing (R.)
Recognising Juan Guaidó Risks A Bloody Civil War In Venezuela (Ponceleon)
The Venezuelan Coup and Gilets Jaunes: Great-Power Politics (Pieraccini)
Italy Vetoes EU Recognition Of Venezuelan Opposition Leader Guaido (RT)
Twitter Erupts After 2,000 Pro-Venezuelan Accounts Are Deleted (Telesur)

 

 

As Trump has dinner with Powell, some San Francisco Fed theorist waxes enthusiastically about what more the Fed could have done. Not pre-2008, when the crisis caused by Fed policies erupted, but post-2008, when it tried to repair the damage it had done -and ‘failed’. Get these guys out of your economy or you’re going to see a real crisis. The Fed serves rich people only. All these people claim to defend a free market, but the Fed is the biggest enemy of a free market.

How Much Could Negative Rates Have Helped the US Recovery? (FRBSF)

The Federal Reserve responded aggressively to the most recent financial crisis and the Great Recession of 2007-2009 by cutting the target for its benchmark short-term interest rate, known as the federal funds rate, to a range just above zero in December 2008, where it stayed until the end of 2015. Traditionally, it has been assumed that nominal interest rates cannot fall below zero, known as the “lower bound.” Ever since 2008, researchers have debated how much monetary policy was constrained by this lower bound and how much it affected economic outcomes. To work around this constraint, the Federal Reserve turned to unconventional monetary policy tools such as forward guidance and large-scale asset purchases.

Other central banks—in Switzerland, Sweden, Japan, and the euro area—took unconventional policy one step further and challenged the traditional view on the lower bound by setting their target rates below zero. In this Economic Letter, I consider whether pushing rates below zero would have improved economic outcomes in the United States in the aftermath of the financial crisis. Model estimates suggest that reducing the effective lower bound for the federal funds rate to –0.75% would have reduced economic slack by as much as one-half at the trough of the recession and sped up the ensuing recovery. While the boost to the economy would have been negligible after 2014, inflation would have been higher throughout the recovery by about half a percentage point on average.

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Alternative headline: Fed policies killed Bill Gross. Can’t support stocks without killing bonds. It’s about pensions, don’t you know.

Bill Gross Retires (R.)

Bill Gross, once the bond market’s most influential investor, will retire from Janus in coming weeks, ending attempts to reclaim the stature he enjoyed leading the world’s largest fixed-income investing firm. Gross, who turned to investing after serving as U.S. naval officer, co-founded Pacific Investment Management Co in 1971, attaining rock-star status in investing circles as he attracted hundreds of billions of dollars in assets. Under his watch, Pimco blossomed into a $2 trillion asset-management powerhouse, one so influential that the U.S. Federal Reserve tapped it to help implement its program of emergency bond purchases in the financial crisis in 2008. At Janus, however, Gross was unable to repeat his earlier success, with the performance of the fund he managed ranking near the bottom. Gross told Reuters on Friday that low rates are distorting returns.

His tenure at Pimco ended abruptly and acrimoniously in September 2014, when he was ousted. His flagship Total Return Fund – which hit a peak of $292.9 billion in assets in April 2013 – was hemorrhaging assets. At the end of April 2015, the Pimco Total Return Fund had lost its title as the world’s biggest bond mutual fund to the Vanguard Total Bond Market Index Fund, which had $117.3 billion of assets. “You have to give Bill a lot of credit because he was the prime mover, popularizing active management,” Dan Fuss, vice chairman at Loomis, Sayles & Co LP, and one of Gross’ biggest competitors, said in a telephone interview. “I had hoped he’d be out and about and stay in the business because I know he would have wound up doing a good job.”

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Here’s hoping he rips them all another one. That the SOTU may be as exciting as the Super Bowl was dull.

SOTU (Jim Kunstler)

It’s conceivable, in a nation that absolutely can’t make sense of itself, that Mr. Trump’s annual report to congress will be as incomprehensible as this year’s Superbowl halftime show. Even the weather in Atlanta was a complete mystery with Maroon 5’s front man, Adam Levine, capering half-naked in tattoo drag amid artificial fires-of-hell, and then local hero rapper Big Boi’s triumphal entry in a limo, nearly lost inside what looked like the pelt of a giant ground sloth — an eight-year-old’s idea of what it means to be important. Or maybe it was just all code for two sides of the climate change debate. You can be sure the atmosphere will be frosty to the max when the Golden Golem of Greatness lumbers down the aisle of congress’s house on Tuesday night.

I wouldn’t be surprised if the Democratic majority turns its backs on him during the always excruciating preliminaries and then just walks out of the chamber. Don’t expect the usual excessive rounds of applause from the president’s own party this time, either, in the big, half-empty room. They don’t know what to do about him at this point… or what to do with themselves, for that matter. The running theme for State of the Union (SOTU) messages going back to Ronald Reagan is American Wonderfulness, so expect at least forty minutes of national self-esteem therapy, which nobody will believe. Throw in another ten minutes of elevating sob stories about “special guests” up in the galleries. But leave a little time for Mr. Trump to roll a few cherry bombs down the aisles. He must be good and goddam sick of all the guff shoveled at him for two years.

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Smugglers rejoice!

EU Goods Will Be Waved Through British Ports In Case Of No Deal Brexit (Sun)

GOODS shipped to Britain from the EU are to be waved through 20 UK ports without checks in a No Deal to avoid huge jams – HMRC has declared. In official advice released today, HM Revenue & Customs said that “for a temporary period” it would allow “most” shipments into the country before companies have even informed them they’ve arrived. Exporters would have just over 24 hours to then fill in an electronic declaration. The revelation comes just months after HMRC bosses warned the UK’s post-Brexit customs system would not work properly for two years in a No Deal. HMRC chief John Thompson told MPs last year that the Government would have a choice to make – whether to keep trade moving, ensure security at the border, or collect revenues.

Insiders said it appeared that HMRC had decided it was essential to keep trade moving rather than risk huge queues on the way to ports such as Dover or at Eurotunnel terminals. Hauliers have been furious at the lack of guidance from HMRC and the Government over how the customs system would work in the event of a No Deal. Today’s “updated guidance” warns that anyone importing into Brexit Britain will have to fill out a customs form before checking goods onto a ferry or train on the EU side. But it adds: “For a temporary period, HMRC will allow most goods moving from the listed roll on roll off locations to leave the UK port or train station before you’ve told us that the goods have arrived.”

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What other secret plans are there?

Nissan Was Offered Secret UK State Aid To Cope With Brexit (G.)

The business secretary has been forced to admit the existence of a previously secret package of state aid to Nissan that could have been worth up to £80m had the carmaker gone ahead with plans to manufacture a new model X-Trail in Sunderland after Brexit. Greg Clark released a letter dated October 2016 in which he pledged tens of millions of taxpayer support and promised the Japanese company it would not be “adversely affected” after the UK left the EU. Yet, at the time the commitments were first made, Downing Street had said “there was no special deal for Nissan” and Clark refused six times to answer a question about what was on offer when interviewed on the BBC. He even appeared to suggest no money was involved. Asked on BBC One’s Question Time about the deal, he said: “There’s no chequebook. I don’t have a chequebook.”

Clark and the government had repeatedly refused to release the 2016 letter until the promises turned out to be worthless, because Nissan had abandoned its future investment plan, partly because of uncertainty over Brexit. The four-page document, sent by Clark to Nissan’s then chief executive, Carlos Ghosn, committed the government to “a package of support in areas such as skills, R&D and innovation” which “could amount to additional support of up to £80m”. The state aid package ultimately turned out to be worth £61m when it was formally awarded to Nissan in June 2018, a fact only acknowledged by Clark in a second letter sent on Monday to the Labour MP Rachel Reeves, who chairs the business select committee.

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Merkel seems to open a door just to slam it shut again the next instant.

“..she was clear that any solution could only come via the political declaration attached to the withdrawal agreement – rather than re-opening talks on the actual exit deal.”

Merkel Says ‘Still Time’ To Find Brexit Solution (AFP)

There is still time to find a solution to Britain’s exit from the EU, German Chancellor Angela Merkel said Tuesday, voicing optimism on a political deal over the tricky “backstop” that has stymied progress. Speaking to Japanese and German business leaders in Tokyo, Merkel stressed that “on the one hand, time is pressing” and businesses using “just-in-time” delivery processes could not afford lengthy customs procedures. However, she added: “From a political point of view, there is still time. Two months is not a long time but there is still time, and this should be used by all sides.” Britain is poised to leave the EU at the end of March following a 2016 referendum. Merkel acknowledged the issue of the unpopular Northern Ireland backstop provision was “complicating” Brexit talks.

The backstop is intended to ensure there is no return to a hard border with Ireland, but Brexit supporters fear it will keep Britain tied to EU customs rules. She said the issue with the backstop was a “problem that is precisely defined and therefore one should be able to find a precisely defined solution”. “But this solution depends on the question of what the future relationship between Britain and the EU will be like and what type of trade deal we sign with each other,” added the chancellor. Throwing the ball into London’s court, she stressed: “It will be very important for us to know what exactly the British side sees as its future relationship with the EU.” [..] she urged “creativity” and “goodwill” to find a solution. However, she was clear that any solution could only come via the political declaration attached to the withdrawal agreement – rather than re-opening talks on the actual exit deal.

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French banks. And Wall Street.

An Italian Debt Crisis Could Take Down The EU (ZH)

Plagued by another run of bank bailouts and simmering tensions between the partners in its ruling coalition, Italy’s brief reprieve following the detente between its populist rulers and angry bureaucrats in Brussels is already beginning to fade. As Bloomberg reminded us on Monday, Italy’s $1.7 trillion pile of public debt – the third largest sovereign debt pool in Europe – is threatening to set off a chain reaction that could hammer banks from Rome, to Madrid, to Frankfurt – and beyond. Just the mention of the precarity of Italian debt markets “can induce a shudder of financial fear like no other” in bureaucrats and businessmen alike – particularly after Italy’s economy slid into a recession during Q4. While much of Italy’s debt burden is held by its banks and private citizens, lenders outside of Italy are holding some €425 billion ($486 billion) in public and private debt.

The Bloomberg analysis of Italy’s financial foibles follows more reports that Italy’s ruling coalition between the anti-immigrant, pro-business League and the vaguely left-wing populist Five-Star Movement has become increasingly strained. Per BBG, the two parties are fighting a battle on two fronts over the construction of a high speed Alpine rail and a legal case involving League leader Matteo Salvini over his refusal to let the Dicotti migrant ship to dock in an Italian port last summer. After M5S intimated that it could support the investigation, the League warned that such a move would be tantamount to “blackmail” against Salvini, whose lieutenants have been pushing for him to take advantage of the party’s rising poll numbers and push for early elections later this year. However, Salvini has rebuffed these demands, warning that there’s nothing stopping Italian President Sergio Mattarella from calling for a new coalition instead of new elections.

[..] To keep operating without massive budget cuts (something neither party in the ruling coalition has shown any sign of supporting) Italy must sell 400 billion euros ($457 billion) of debt per year. But since Italy’s banks hold so much of the country’s debt, declines in the price of Italian bonds inevitably hurts the shares of Italian banks, and also forces them to hold more capital on their books to ensure liquidity from the ECB. This creates the potential for a negative feedback loop known as the “doom loop”. Put another way, “a government crisis could drag down the banking system or a banking crisis could suck in the government.”

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And the Chinese withdraw.

Australia Central Bank Stays Calm As Shoppers Go Missing (R.)

Australia’s central bank warned of risks to growth on Tuesday but wrongfooted rate bears by steering clear from an explicit easing signal, even as data showed shoppers slashed spending during Christmas in another sign of cooling economic momentum. The Reserve Bank of Australia (RBA) left rates at a record low 1.50 percent for a 30th straight month, saying accommodative policy was supporting the economy and that further progress was expected in reducing unemployment and lifting inflation over time. The local dollar jumped as the statement sounded less dovish than the markets had wagered on.

“The main message from the RBA today was that they are still positive on the growth outlook, and particularly on the labor market, and they see the economy as still on track towards lifting inflation back to their target,” said HSBC Australia’s chief economist Paul Bloxham. Yet, interest rates futures continued to price in a 50-50 chance of a rate cut by the end of the year, reflecting the deteriorating growth momentum in the face of rising global and domestic risks. Lowe expects Australia’s A$1.8 trillion economy ($1.3 trillion) to expand at an above-trend rate of around 3 percent this year. That is a slightly more cautious view compared to “a little above 3 percent” in its previous statement.

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Temir Porras Ponceleon was chief of staff to Nicolás Maduro from 2007 to 2013. He is now a visiting professor at Sciences Po, Paris.

Stangely missing from this piece: the CIA.

Recognising Juan Guaidó Risks A Bloody Civil War In Venezuela (Ponceleon)

Falsely presented as a “fresh face”, Guaidó first came to prominence in 2007, as a member of a generation of students who led protests against Chávez’s socialism, despite his landslide presidential victory in 2006. Guaidó is part of an opposition that never stopped challenging Chávez’s popular legitimacy even in his heyday, and who naturally doubled down as soon as the less assertive Maduro took office. The challenges to Maduro’s legitimacy began the moment he was elected. His presidential opponent, Henrique Capriles, labelled the 2013 election a fraud (without providing any supporting evidence). Capriles called on his followers to ventilate their “anger” in the streets, a move resulting in the killing of a number of Chavistas.

In January 2014 Guaidó’s political party, Voluntad Popular, launched a nationwide insurrectionary movement aimed at forcing Maduro out of office. This was only nine months into Maduro’s term, and long before the country faced any serious economic or social problems. In fact, in early 2014 oil prices were at record highs, and Venezuelans were still enjoying their highest levels of income ever, in terms of GDP per capita. [..] And then oil prices collapsed in June 2014, leaving an ill-prepared country frozen in inaction. Living standards started to deteriorate, and while a Maduro-led Chavismo remained a large and organised political force, it lost its dominance. Maduro suffered a humiliating defeat in the December 2015 legislative elections, which allowed an opposition coalition to seize a potentially devastating two-thirds supermajority in the national assembly.

[..] Unless the international community is willing to risk a needless war on the American continent, it must urgently create conditions for a national dialogue aimed at reaching a political agreement. [..] The idea that Maduro has managed to remain in office during the past six years solely through corruption and the use of force is a gross misrepresentation. It ignores that, beyond the president, the Chavismo social movement counts millions of supporters, primarily from lower-income communities, and is strongly embedded within the Venezuelan military.

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“The protests seen in France and the interference in the domestic politics of Venezuela highlight Western double standards, which stand in contrast to the respect for international law maintained by China, India and Russia.”

The Venezuelan Coup and Gilets Jaunes: Great-Power Politics (Pieraccini)

In France on November 17, 2018, hundreds of thousands of citizens, angered by the diminishing quality of their lives, the social iniquity in the country, and the widening gap between rich and poor, took to the streets in protest. The protests can easily be encapsulated in the following slogan: “We the people against you the elite.” This slogan has been a recurring theme throughout the West over the last three years, shaking up the British establishment with the pro-Brexit vote, discombobulating the United States with Trump’s victory, overturning Italy with the Lega/Five-Star government, and bringing Merkel’s star crashing down in Germany.

Now it is the turn of Macron and France, one of the least popular leaders in the world, leading his country into chaos, with peaceful protests drawing a bloody response from the authorities following ten weeks of unceasing demonstrations. In Venezuela, Western elites would like us to believe that the situation is worse than in France in terms of public order, but that is simply a lie. It is a media creation based on misinformation and censorship. In Europe, the mainstream media has stopped showing images of the protests in France, as if to smother information about it, preferring to portray an image of France that belies the chaos in which it has been immersed for every weekend over the last few months.

In Caracas, the right-wing, pro-American and anti-Communist opposition continues the same campaign based on lies and violence as it has customarily conducted following its electoral defeats at the hands of the Bolivarian revolution. The Western mainstream media beams images and videos of massive pro-government Bolivarian rallies and falsely portrays them as anti-Maduro protests. We are dealing here with acts of journalistic terrorism, and the journalists who push this narrative, instigating clashes, should be prosecuted by a criminal court of the Bolivarian people in Caracas.

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Good on them. All these EU countries don’t deem it needed to explain why they do it, other than: Maduro is a dictator. Well, his approval rating is higher than any of theirs.

Italy Vetoes EU Recognition Of Venezuelan Opposition Leader Guaido (RT)

Rome has effectively derailed an EU statement meant to recognize Juan Guaido as Venezuela’s interim leader if President Nicolas Maduro fails to set up snap elections, a Five Star Movement source confirmed to RT. Italy announced the veto at an informal meeting of EU foreign ministers that started on January 31 in Romania, the source said. The statement, which was supposed to be delivered by EU foreign affairs chief Federica Mogherini recognized Guaido as interim president if snap elections were not held. The European Parliament is the first European body to recognize Guaido “as the only legitimate interim president of the country until new free, transparent and credible presidential elections can be called in order to restore democracy.”

The parliament urged the EU to follow suit but the effort stalled due to internal discord. A range of European nations have separately recognized the opposition chief as Venezuela’s acting president, including the UK, France, Sweden, Spain, and Austria. The coordinated move came after an eight-day deadline for Maduro to call presidential elections expired on Monday. The US announced that it is backing the new interim leader and pledged their full support immediately after what has been labeled “a coup” by officials in Caracas. However Russia, China, Turkey and Iran said they see Maduro as the only legitimate leader, warning against meddling in Venezuela’s domestic affairs.

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Orwell.

Twitter Erupts After 2,000 Pro-Venezuelan Accounts Are Deleted (Telesur)

Nearly 2,000 pro-Venezuelan Twitter accounts have been removed for “engaging in a state-backed influence campaign,” the social media company said in a blog post on Thursday. A total of 1,196 social media accounts based in Venezuela suspected of attempting to “influence domestic audiences” were purged last week. Another 764 accounts were deleted, although the San Francisco-based company told users, “We are unable to definitively tie the accounts located in Venezuela to information operations of a foreign government against another country.” Allegations of censorship soon filled the site’s timeline.

Television host for the investigatory series, Empire Files, Abby Martin tweeted, “While pro-coup Venezuelans & right-wing exiles dominate the media sphere, tech companies are actively censoring pro-government accounts they say are working to “influence” people.” Another journalist, Ben Norton, accused the company of catering to “U.S. government interests:” Twitter is now removing thousands of accounts supposedly linked to Venezuela’s sovereign government. This comes after Twitter suspended Venezuelan government accounts 1.5 years ago. Social media corporations act as an extension of US government interests.” In another blog post, Twitter announced the release of five new datasets which were allegedly created in relation to suspected foreign interference efforts it had encountered.

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Jan 312019
 


René Magritte The key to the fields 1936

 

Dovish Fed Sparks Stock-Market Rally And Tanks The US Dollar (MW)
Will The EU To Cave On May’s Brexit At The Very Last Minute? (ZH)
China Manufacturing Contracted For The Second-Straight Month In January (CNBC)
Macron Has Declared War On The French People – Yellow Vest Activist (RT)
UK Consumer Borrowing Slowed Sharply In December, Says Bank of England (Ind.)
British Car Production Slumps To Five-Year Low (G.)
US Refiner CITGO Caught In Venezuela Political Upheaval (R.)
Russia Vows To Defend Its Venezuelan Oil Assets (RT)
US Regime Change Laboratory Created Venezuela’s Coup Leader
Facebook Reports Record Profit, Stock Surges 12% After Earnings (MW)
Mueller: Evidence Against Russian Firm Used In Disinformation Campaign (CNBC)
Mueller Claims Evidence Shared Leaked To ‘Discredit Investigation’ (RT)
Mueller Says Russians Are Altering Evidence From Investigation (Ind.)
Acropolis Museum Director: British Museum Not Owner Of Parthenon Marbles (K.)

 

 

Powel’s Fed started off promising, but now concedes that it doesn’t want functioning markets. Too risky for the rich.

Dovish Fed Sparks Stock-Market Rally And Tanks The US Dollar (MW)

The Federal Reserve and its chairman, Jerome Powell, changed their tune Wednesday, striking a surprisingly dovish tone that sparked a stock-market rally, tanked the U.S. dollar and roiled other financial markets. The Fed hinted that it may be at the end of its rate-hike cycle and further surprised investors by issuing a separate statement regarding its balance sheet, indicating that its efforts to reduce the $4 trillion asset portfolio could end sooner than expected. The tone was seen as an about-face from the Fed’s hawkishly received December meeting when it delivered its fourth rate increase of 2018. “This is one of the most dovish turnarounds by a Fed chair that I have ever seen in my 30-year career,” said Tom di Galoma, managing director at Seaport Global Holdings.

And the initial reaction across markets appeared in keeping with the perceived shift. The message delivered by the Fed “just couldn’t be much better for both bonds and equities and for the credit markets that track Treasurys,” said Mark Grant, chief global strategist at B. Riley FBR, in a note. [..] Not everyone was popping the champagne. Some economists feared the Fed had eroded its credibility, caving in to market pressure. “Talk about a Fed put,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a note, referring to the idea that central bank policy makers have grown increasingly sensitive over the years to stock-market declines and stand ready to intervene in an effort to provide calm.

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Someone in Britain appears to be spreading rumors about Brussels willing to give in. Is that just so May will still be PM at the end of March? Are the Brits going to risk that based on rumors alone?

Will The EU To Cave On May’s Brexit At The Very Last Minute? (ZH)

After a series of embarrassing Parliamentary defeats (and still more embarrassing triumphs over a series of no-confidence votes), Theresa May is we imagine reveling in what was a rare win for on Tuesday: MPs backed an amendment that calls for removing the backstop from her Withdrawal agreement and replacing it with a commitment to find something better after the prime minister vowed to ask the EU to reopen negotiations (something she has reportedly been trying to persuade the block to do behind the scenes for weeks now with little apparent success).

Now that she’s won what her cabinet believes is enough support for a modified version of the deal, having finally corralled a majority for something resembling her current deal, the hard work truly begins: Convincing the EU to reopen negotiations on the withdrawal agreement, something officials have publicly insisted will not happen (though there have been whispers that they have been slowly coming around to the idea). In a speech on Wednesday, European Commission President Jean Claude Juncker blasted the vote as irresponsible and once again insisted that removing the backstop from the agreement is out of the question. “This is not a game,” he said, according to Bloomberg.

If there’s anything new to take away from the developments of the past two days, it can be found in a Bloomberg report published Wednesday afternoon that effectively confirmed what many have long suspected: That there won’t be any movement on the deal – either from the EU or, likely, the UK, until the last possible minute. According to BBG, EU diplomats have pointed to a last-minute summit set for March 21 and March 22 – just a week before Brexit Day – as the likely time when a deal may finally be struck.

“The European Union is prepared to take Brexit down to a last-minute, high-stakes summit rather than cave into U.K. Prime Minister Theresa May’s demands over the next few weeks, diplomats said. Although May is getting ready to head back to Brussels to reopen the Brexit deal that she negotiated over the past 18 months, the EU isn’t planning to give her any concessions before she returns for a vote in the British Parliament on Feb. 14, according to the diplomats. Behind closed doors, European officials are sticking to their well-coordinated public line that they won’t rework the deal.”

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And that’s official numbers.

China Manufacturing Contracted For The Second-Straight Month In January (CNBC)

China said on Thursday its manufacturing activity contracted for the second-straight month in January — another sign that the world’s second-largest economy is slowing down amid domestic headwinds and the ongoing trade dispute with the U.S. The official manufacturing Purchasing Managers’ Index (PMI) for January was 49.5, according to the Chinese National Bureau of Statistics. That’s higher than the 49.3 expected by analysts in a Reuters poll, and the 49.4 reported in the previous month when China’s manufacturing PMI fell into contraction territory for the first time since July 2016. The PMI — a widely-watched indicator — is a survey of businesses in a specific industry about the operating environment.

A reading above 50 signals expansion in the sector from the previous month, while one below 50 represents contraction. Meanwhile, China’s services PMI for January came in at 54.7 — better than the 53.8 reported in the previous month, according to official data. The services sector accounts for more than half of the Chinese economy and has helped cushion the impact of a slowing manufacturing industry. Despite the better-than-expected PMI numbers, some economists said the statistics — particularly the manufacturing data — still point to a weakening Chinese economy.

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See my article last night: Flash-Balls, Pitchforks And A Backstop

Macron Has Declared War On The French People – Yellow Vest Activist (RT)

The French government won’t stop the Yellow Vests by force, but only by doing what the people demand, according to prominent protester Jerome Rodrigues, who may remain blind in one eye after being injured by the police. “The president [Emmanuel Macron] declared war on us and our injuries are battle wounds. The traumatic weapons are equipped with collimators [optical sights] – such equipment is used on the battlefield, at war,” Rodrigues told RT. “I never thought that such a thing could happen in France,” he added, describing what the country has been going through in recent months as “dark times.” The activist, who calls himself “a hyper pacifist,” was broadcasting live on Facebook from a rally in Paris last weekend when a police officer fired at him from an LBD 40 non-lethal gun.

A projectile hit him in the eye, leading to hospitalization and a medically induced coma. The man said “there are no guarantees that the injured eye will be able to see again.” Now we understand that by going to a rally we put ourselves at risk of becoming victims of the government. It happened to me, but could’ve well happened to anyone,” Rodrigues said. The French authorities are employing violence to scare the people off the streets, but “we won’t retreat,” he said. Rodrigues promised to resume protesting after he gets better, saying that his family fully supported him in this decision.

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The hurt is only starting.

UK Consumer Borrowing Slowed Sharply In December, Says Bank of England (Ind.)

UK consumer borrowing slowed sharply in December, adding to the impression of weakening confidence among households ahead of Brexit. The Bank of England reported that the annual growth of unsecured lending in the month fell to 6.6 per cent, down from 7.2 per cent in November. This was the weakest figure since December 2014. Credit card lending growth slowed to 7.1 per cent, down from 7.9 per cent the previous month. Surveys have shown consumer confidence to be at a 5 year low due, in part, to concerns over Brexit.

The Bank of England’s credit conditions survey showed last week showed that demand over the next three months for such unsecured lending is expected by lenders to be the weakest since the survey began in 2007. Household spending accounts for around 60 per cent of the UK economy, and any weakening of the appetite for consumers to spend will be negative for overall GDP growth. The UK economy grew by 0.6 per cent in the third quarter of 2018 but GDP growth is likely to have fallen sharply in the final three months of the year as business investment and household spending fell.

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Good! Fewer cars!

British Car Production Slumps To Five-Year Low (G.)

British car production dropped to a five-year low in 2018, as manufacturers warned that fears of a no-deal Brexit have prompted a slump in new investment. UK car factories produced 1.52m vehicles last year, 9.1% fewer than 2017, according to figures published on Thursday by the Society of Motor Manufacturers and Traders (SMMT), the UK auto industry lobby group. Production for the British market fell by 16.3%. Investment into British car manufacturing almost halved during the year to £588.6m, a fall which the SMMT blamed on Brexit uncertainty.

Publicly announced investments were lower than in any year since 2012, the first year comparable data was collected. “Investment is effectively stalled,” said Mike Hawes, the SMMT’s chief executive. “Industry is waiting to see what happens. Business is sitting on its hands in terms of investment.” The global automotive industry is already struggling with multiple challenges. Car sales in China fell in 2018 for the first time since the 1990s, while demand for diesel vehicles in Europe has been rocked by the regulatory backlash to Volkswagen’s emissions-cheating scandal.

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CITGO is a Venezuelan refiner.

US Refiner CITGO Caught In Venezuela Political Upheaval (R.)

Citgo Petroleum Corp, the eighth largest U.S. refiner and Venezuela’s top foreign asset, is in the middle of a tug-of-war as the Trump administration tries to use the company as leverage to topple Venezuelan President Nicolas Maduro. Following the U.S. decision to impose sanctions on Venezuela’s oil industry this week, both sides have engaged in aggressive moves for control of Citgo, which has roots in the United States dating back 100 years, but has been owned by Venezuela’s state-owned Petroleos de Venezuela, or PVDSA, for three decades.

[..] As Guaido this week worked with Washington to wrest control of the company, Venezuela responded by ordering dozens of Citgo’s expatriate staff in the United States to return to Caracas by the end of February, people familiar with the matter said. Earlier in the week, Citgo sent a team of executives to Washington amid efforts by Guaido and the U.S. government to appoint a new board of directors for Citgo, the people said. PDVSA also has said it would pursue legal efforts to block a Citgo takeover. White House national security adviser John Bolton on Wednesday tweeted photos confirming the meeting with Citgo executives. “The United States is continuing to work to make sure that the economic benefits of Venezuela’s resources are not pilfered by Maduro and his cronies,” he wrote.

[..] The Houston-based company has accumulated cash and credit lines in recent months as dividends payments to Caracas have been blocked by U.S. sanctions imposed in 2017. [..] Citgo has been struggling to refinance a revolving line of credit, a task that must be completed by July

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Putin: So far, so soft.

Russia Vows To Defend Its Venezuelan Oil Assets (RT)

Russia will defend its interests in Venezuela within the international law using “all mechanisms available to us,” Dmitry Peskov, spokesman for Russia’s President Vladimir Putin, told Russian media on Tuesday. Russia has kept close ties with Venezuelan President Nicolas Maduro and has extended loans to Venezuela, including oil firm Rosneft lending money to Venezuela’s state-held firm PDVSA. Rosneft has extended $6 billion of loans to PDVSA, which needs to be fully redeemed in crude oil supplies by the end of this year. According to S&P Global Platts, as of November 2018, Venezuela had $3.1 billion outstanding loan to repay to Rosneft. The Russian company also has five joint upstream projects with PDVSA in Venezuela.

However, the US Treasury slapped another round of sweeping sanctions against PDVSA on Monday, in order to “help prevent further diverting of Venezuela’s assets by Maduro and preserve these assets for the people of Venezuela.” The US backed last week Juan Guaido, the chairman of the National Assembly, as the legitimate president of Venezuela, after Guaido declared himself interim president. “The path to sanctions relief for PdVSA is through the expeditious transfer of control to the Interim President or a subsequent, democratically elected government,” Secretary of the Treasury Steven T. Mnuchin said. The Kremlin considers the sanctions against PDVSA as “illegal”, a sign of “unfair competition” and an attempt to interfere with Venezuela’s internal affairs, Peskov said on Tuesday. Russia is assessing the potential consequences of the sanctions on PDVSA for Moscow, Peskov added.

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Dan Cohen and Max Blumenthal paint the picture.

US Regime Change Laboratory Created Venezuela’s Coup Leader

Before the fateful day of January 22, fewer than one in five Venezuelans had heard of Juan Guaidó. Only a few months ago, the 35-year-old was an obscure character in a politically marginal far-right group closely associated with gruesome acts of street violence. Even in his own party, Guaidó had been a mid-level figure in the opposition-dominated National Assembly, which is now held under contempt according to Venezuela’s constitution. But after a single phone call from from US Vice President Mike Pence, Guaidó proclaimed himself president of Venezuela. Anointed as the leader of his country by Washington, a previously unknown political bottom-dweller was vaulted onto the international stage as the US-selected leader of the nation with the world’s largest oil reserves.

Echoing the Washington consensus, the New York Times editorial board hailed Guaidó as a “credible rival” to Maduro with a “refreshing style and vision of taking the country forward.” The Bloomberg News editorial board applauded him for seeking “restoration of democracy” and the Wall Street Journal declared him “a new democratic leader.” Meanwhile, Canada, numerous European nations, Israel, and the bloc of right-wing Latin American governments known as the Lima Group recognized Guaidó as the legitimate leader of Venezuela. While Guaidó seemed to have materialized out of nowhere, he was, in fact, the product of more than a decade of assiduous grooming by the US government’s elite regime change factories.

Alongside a cadre of right-wing student activists, Guaidó was cultivated to undermine Venezuela’s socialist-oriented government, destabilize the country, and one day seize power. Though he has been a minor figure in Venezuelan politics, he had spent years quietly demonstrating his worthiness in Washington’s halls of power.

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Amid reports that at least 50% of its accounts are fake.

Facebook Reports Record Profit, Stock Surges 12% After Earnings (MW)

After weeks of controversy, Facebook Inc. reported record profits — about $1 billion more than any previous quarter — as the company beat Wall Street expectations for fourth-quarter earnings and revenue late Wednesday, sending shares soaring. Record profits, a growing user base and healthy top line suggest that Facebook’s base of advertisers is continuing to pour dollars into the social networking giant’s swath of apps and services that now attract 2.7 billion people a month around the world. The strong results cap weeks of negative news cycles that has evidently left Facebook relatively unscathed.“Facebook has had so much bad news — even this week,” Forrester analyst Brigitte Majewski said over the phone, referring to another scandal that surfaced this week.

“But you can’t deny the numbers. They’ve had an increase in daily active users, and growth in all regions.” The company reported $6.88 billion in net income for the fourth quarter, which amounts to $2.38 a share, up from $1.44 a share in the year-ago period. Analysts’ average estimates for fourth-quarter profits called for $2.18 a share, according to FactSet. Overall, Facebook logged sales of $16.91 billion, up from $12.97 billion in the year-ago period, beating Wall Street expectations for sales of $16.39 billion, according to FactSet. Facebook’s main source of revenue is ads, which brought in 93% of revenue, up from 89% in the year-earlier period.

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A few versions of the same thing, first CNBC and RT, different for obvious reasons, then Independent, who report what most others completely missed (NY Post is an exception), which is that Mueller claims the evidence was altered.

Mueller: Evidence Against Russian Firm Used In Disinformation Campaign (CNBC)

Special counsel Robert Mueller claimed Wednesday that evidence in one of his criminal cases related to Russian interference in the 2016 presidential campaign was recently used in an online disinformation campaign, apparently to discredit Mueller’s investigations. Mueller made that allegation in a court filing in his criminal case pending against Concord Management and Consulting, a Russian company owned by Yevgeny Prigozhin, the oligarch who is known as “Putin’s chef.” The special counsel charged Concord Management last year with funding a multimillion-dollar social media disinformation campaign to bolster the presidential campaign of Donald Trump.

Mueller’s filing Wednesday objects to Concord’s request that the special counsel be compelled to disclose documents he has deemed “sensitive” to the defendant and its employees as it prepares for trial.Concord wants to be able to send that information to Russia for review by company officers and employees. But Mueller said in his filing that doing so “unreasonably risks the national security interests of the United States.” The special counsel said that Concord should not be given such sensitive material because of alleged misuse in October by an unknown party of “non-sensitive” materials already in Concord’s possession as a result of the normal discovery process that litigants use to share information during a court case.

Mueller said that “sensitive” materials identifies individuals and entities that have not been criminally charged, but whom “the government believes are continuing to engage in operations that interfere with lawful U.S. government functions like those activities charged in the indictment.” [..] The special counsel said that, “On October 22, 2018, the newly created Twitter account @HackingRedstone published the following tweet: ‘We’ve got access to the Special Counsel Mueller’s probe database as we hacked Russian server with info from the Russian troll case Concord LLC v. Mueller. You can view all the files Mueller had about the IRA and Russian collusion. Enjoy the reading!'”

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What Mueller really wants is to stop Concord from fighting his probe. He never expected them to come to court. He thought they were just more anonymous Russians he could accuse of anything he wanted without being called on it.

Mueller Claims Evidence Shared Leaked To ‘Discredit Investigation’ (RT)

In an apparent bid to shield his case against alleged Russian trolls from legal challenge, special counsel Robert Mueller claimed some evidence previously provided was hacked and published to discredit his probe. On Wednesday, Mueller filed a motion to oppose discovery in case against Concord Management and Consulting LLC, which he indicted last February on charges of running the Internet Research Agency, also known as the “St. Petersburg troll factory.” “Sensitive” evidence in the case cannot be turned over to Concord’s lawyers, because that would make it accessible to their clients in Russia – and back in October, Mueller claimed, someone claimed to have hacked Concord’s computers and posted evidence previously handed over online “as part of a disinformation campaign aimed (apparently) at discrediting ongoing investigations into Russian interference in the US political system.”

It was that claim that got the attention of the media and the ‘Russiagate’ crowd. What Mueller actually alleges is less headline-worthy and far more tenuous. Namely, on October 22 last year, a Twitter account @HackingRedstone claimed to have gained “access to the Special Counsel Mueller’s probe database as we hacked Russian server with info from the Russian troll case Concord LLC v. Mueller,” offering “all the files Mueller had about the IRA and Russian collusion.” According to a footnote in the filing, Mueller’s team was informed of this by an unnamed reporter. However, the Twitter account referenced comes up as suspended, and aside from that notice there are no entries for it in the Internet Archive, making Mueller’s claim impossible to independently verify.

The webpage allegedly linked in the tweet is said to have contained “file folders with names and folder structures that are unique to the names and structures of materials… produced by the government in discovery.” Of the 300,000 files on the site, “over 1,000” matched the hashtag values of documents provided by Mueller to Concord, the filing said. Mueller argued these must have been obtained from Concord, because the FBI “found no evidence” that US government servers fell victim to any hack involving the files. Somewhat confusingly, the filing argued that many other file names used a reference to the Relativity database, which the US government “has not used” to store materials related to this case. Concord’s lawyers have informed the court that the company’s computers have not been hacked, but Mueller’s filing accused them of lying, saying that the webpage contained “actual discovery materials from this case.”

[..] To wit, Mueller is making an assertion based on a tweet and a webpage – that currently do not exist – to argue that it should not disclose further “sensitive” evidence to defendants in a Russiagate case.

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How did the majority of news outlets miss that Mueller claims the info was altered? They didn’t read it?

Mueller Says Russians Are Altering Evidence From Investigation (Ind.)

Russians have obtained evidence from special counsel Robert Mueller’s inquiry into Moscow’s interference in US politics and altered it in a bid to discredit the probe, federal prosecutors have claimed. The files were shared with attorneys working for Concord Management and Consulting, a Russian company that allegedly funded hacking operations by Russia’s Internet Research Agency (IRA), they said in a court filing. The sharing evidence and documents between prosecutors and defence lawyer as part of routine discovery is common legal practice. But the files shared by Mr Mueller’s investigation were later uploaded and disseminated on Twitter in October.

However, the files shared online, “appear to have been altered and disseminated as part of a disinformation campaign aimed (apparently) at discrediting ongoing investigations into Russian interference in the US political system,” the court filing states. A team had reviewed files to determine that roughly 1,000 files linked to by that account out of 300,000 available matched non-public evidence provided. “The fact that the file folder names and folder structure on the webpage significantly match the non-public names and file structure of the materials produced in discovery, and the fact that over 1,000 files on the webpage match those produced in discovery, establish that the person(s) who created the webpage had access to at least some of the non-sensitive discovery produced by the government in this case,“ the filing states.

Concord Management was among 13 Russian entities or people to be charged in connection with Mr Mueller’s investigation last February. Mr Mueller’s team has charged dozens of Russian individuals or entities for attempting to influence the 2016 presidential election, primarily through hacking Democratic Party email systems. The most recent filing argued that attorneys for Concord should not be given access to “sensitive” evidence gathered for the case. It said: “The person who created the webpage used their knowledge of the non-sensitive discovery to make it appear as though the irrelevant files contained on the webpage were the sum total evidence of ‘IRA and Russian collusion’ gathered by law enforcement in this matter in an apparent effort to discredit the investigation.”

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Amal Clooney told Greece in 2015 to take Britain to an international court. They didn’t.

The marbles stem from 2,500 years ago. Their splendor is unmatched, at least until the Romans, and the Middle Ages. They were stolen by Britain when the Ottomans had invaded Greece.

Acropolis Museum Director: British Museum Not Owner Of Parthenon Marbles (K.)

The British Museum is not the legal owner of the Parthenon Marbles and therefore the long-running dispute with Greece over their fate could only be resolved with their unconditional repatriation and not with a lending plan, the director of the Acropolis Museum, Dimitrios Pandermalis, reportedly told German public radio on Wednesday. “The full return of the Parthenon Marbles is the only solution. Everything that is inextricably linked to the monument must be reunited,” he was quoted as telling Deutschlandfunk, adding that the sculptures exhibited in London form an integral part of the monument. He also said his museum would gladly offer something to the British Museum in exchange for the marbles’ return, without going into details.

Pantermalis was responding to Hartwig Fischer, the director of the British Museum, who dismissed the possibility of returning them to Greece, arguing that their exhibition in London is in “a context of world cultures.” “The Trustees of the British Museum feel the obligation to preserve the collection in its entirety, so that things that are part of this collection remain part of this collection,” he was quoted as telling Greek daily Ta Nea in an interview published on January 26. Asked if that is the reason why the Museum will not permanently return the Sculptures, he replied: “Yes”. In another part of the same interview he said they are “in the fiduciary ownership of the Trustees of the Museum.”

Fischer also said that the removal of the marbles from Greece in the 19th century could be seen as “a creative act.” The sculptures are the work of great Athenian sculptor Phidias who added them to the Parthenon in the fifth century BC. In the early 19th century, men working for the 7th Earl of Elgin dismantled a large part of the frieze and shipped the sculptures back to London.

Read more …

Jan 122019
 
 January 12, 2019  Posted by at 10:52 am Finance Tagged with: , , , , , , , , , , , , , ,  


Pablo Picasso Landscape 1920

 

FBI Opened Inquiry Into Whether Trump Was Secretly Working For Russia (NYT)
Democratic Elites Reunite With Neocons (Greenwald)
Exasperated Democrats Try To Rein In Ocasio-Cortez (Pol.)
Fed Paid Banks $38.5 Billion in Interest on “Reserves” in 2018 (WS)
Fed Balance Sheet and Currency In Circulation (WS)
Retailers Are Slashing iPhone Prices Across China (CNBC)
Apple Plans To Launch Three New iPhones This Year (CNBC)
Unclear How Deep, Lasting Germany’s Economic Problems Are: ECB’s Nowotny (R.)
France Vows Tough Response As New ‘Yellow Vest’ Demos Loom (AFP)
Google Sued For Covering Up $90m Payout To Ex-Exec Accused Of Sexcrimes (AFP)
My Walk To Work Shows Me How Homelessness Is Transforming Britain (G.)

 

 

Trump fired Comey, and Comey’s friends opened an inquiry.

Trump called Russiagate a made-up story, and that was reason for the FBI to open an inquiry into Russiagate.

Outlets like the NYTimes look increasingly like Faust, who sold his soul to the devil for short-term gains.

FBI Opened Inquiry Into Whether Trump Was Secretly Working For Russia (NYT)

In the days after President Trump fired James B. Comey as F.B.I. director, law enforcement officials became so concerned by the president’s behavior that they began investigating whether he had been working on behalf of Russia against American interests, according to former law enforcement officials and others familiar with the investigation. The inquiry carried explosive implications. Counterintelligence investigators had to consider whether the president’s own actions constituted a possible threat to national security. Agents also sought to determine whether Mr. Trump was knowingly working for Russia or had unwittingly fallen under Moscow’s influence.

The investigation the F.B.I. opened into Mr. Trump also had a criminal aspect, which has long been publicly known: whether his firing of Mr. Comey constituted obstruction of justice. Agents and senior F.B.I. officials had grown suspicious of Mr. Trump’s ties to Russia during the 2016 campaign but held off on opening an investigation into him, the people said, in part because they were uncertain how to proceed with an inquiry of such sensitivity and magnitude. But the president’s activities before and after Mr. Comey’s firing in May 2017, particularly two instances in which Mr. Trump tied the Comey dismissal to the Russia investigation, helped prompt the counterintelligence aspect of the inquiry, the people said.

The special counsel, Robert S. Mueller III, took over the inquiry into Mr. Trump when he was appointed, days after F.B.I. officials opened it. That inquiry is part of Mr. Mueller’s broader examination of how Russian operatives interfered in the 2016 election and whether any Trump associates conspired with them. It is unclear whether Mr. Mueller is still pursuing the counterintelligence matter, and some former law enforcement officials outside the investigation have questioned whether agents overstepped in opening it.

[..] The second event that troubled investigators was an NBC News interview two days after Mr. Comey’s firing in which Mr. Trump appeared to say he had dismissed Mr. Comey because of the Russia inquiry. “I was going to fire Comey knowing there was no good time to do it,” he said. “And in fact, when I decided to just do it, I said to myself — I said, you know, this Russia thing with Trump and Russia is a made-up story. It’s an excuse by the Democrats for having lost an election that they should’ve won.”

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A remarkable turnaround. The peaceniks have turned into warmongers.

Democratic Elites Reunite With Neocons (Greenwald)

[..] what is remarkable about the new polling data on Syria is that the vast bulk of support for keeping troops there comes from Democratic Party voters, while Republicans and independents overwhelming favor their removal. The numbers are stark: Of people who voted for Clinton in 2016, only 26 percent support withdrawing troops from Syria, while 59 percent oppose it. Trump voters overwhelmingly support withdraw by 76 percent to 14 percent. A similar gap is seen among those who voted Democrat in the 2018 midterm elections (28 percent support withdrawal while 54 percent oppose it), as opposed to the widespread support for withdrawal among 2018 GOP voters: 74 percent to 18 percent.

Identical trends can be seen on the question of Trump’s announced intention to withdraw half of the U.S. troops currently in Afghanistan, where Democrats are far more supportive of keeping troops there than Republicans and independents. This case is even more stark since Obama ran in 2008 on a pledge to end the war in Afghanistan and bring all troops home. Throughout the Obama years, polling data consistently showed that huge majorities of Democrats favored a withdrawal of all troops from Afghanistan.

With Trump rather than Obama now advocating troop withdrawal from Afghanistan, all of this has changed. The new polling data shows far more support for troop withdrawal among Republicans and independents, while Democrats are now split or even opposed. Among 2016 Trump voters, there is massive support for withdrawal: 81 percent to 11 percent; Clinton voters, however, oppose the removal of troops from Afghanistan by a margin of 37 percent in favor and 47 percent opposed.

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They don’t understand AOC anymore then they understood Trump.

Exasperated Democrats Try To Rein In Ocasio-Cortez (Pol.)

Alexandria Ocasio-Cortez is already making enemies in the House Democratic Caucus — and some of its members are mounting an operation to bring the anti-establishment, democratic socialist with 2.2 million Twitter followers into the fold. The effort, described by nearly 20 lawmakers and aides, is part carrot, part stick: Some lawmakers with ties to Ocasio-Cortez are hoping to coax her into using her star power to unite Democrats and turn her fire on Republicans. Others simultaneously warn Ocasio-Cortez is destined for a lonely, ineffectual career in Congress if she continues to treat her own party as the enemy.

“I’m sure Ms. Cortez means well, but there’s almost an outstanding rule: Don’t attack your own people,” said Rep. Emanuel Cleaver (D-Mo.). “We just don’t need sniping in our Democratic Caucus.” Incumbent Democrats are most annoyed by Ocasio-Cortez’s threat to back primary opponents against members of their ranks she deems too moderate. But their frustration goes beyond that: Democratic leaders are upset that she railed against their new set of House rules on Twitter the first week of the new Congress. Rank and file are peeved that there’s a grassroots movement to try to win her a top committee post they feel she doesn’t deserve.

Even some progressives who admire AOC, as she’s nicknamed, told POLITICO that they worry she’s not using her notoriety effectively. “She needs to decide: Does she want to be an effective legislator or just continue being a Twitter star?” said one House Democrat who’s in lockstep with Ocasio Cortez’s ideology. “There’s a difference between being an activist and a lawmaker in Congress.” It’s an open question whether Ocasio-Cortez can be checked. She’s barely been in Congress a week and is better known than almost any other House member other than Nancy Pelosi and John Lewis. A media throng follows her every move, and she can command a national audience practically at will.

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Yes, we want fewer reserves, but don’t worry, we’ll just pay you more interest on what remains, so you’re fine.

Fed Paid Banks $38.5 Billion in Interest on “Reserves” in 2018 (WS)

The Fed reported its preliminary results this morning for the year 2018. The headline is that it sent $65.4 billion of its profits to the US Treasury Department in 2018, and that this amount had plunged by 18.5% from the remittances, as they’re called, in 2017, and by 44.1% from the peak of $117 billion in 2015. The Fed earns interest income on the huge pile of securities it holds. After covering operating expenses, interest expenses, and some other items, it is required to remit the rest to the Treasury Department – to the taxpayer. Therefore, the amounts in interest expense the Fed pays the banks on their “Excess Reserves” and “Required Reserves” comes out of the taxpayer’s pocket and its transferred to the banks to become bank profits, and thereby bank executive bonuses and stock holder dividends, funded by the dear taxpayers. And this amount was huge in 2018: $38.5 billion!

The $38.5 billion: This is what the Fed paid US banks and foreign banks in the US on their Excess Reserves and Required Reserves on deposit at the Fed. • Required Reserves are the amounts that banks have to keep on deposit at the Fed for liquidity purposes. This is relatively small, $192 billion at year-end, and was roughly flat in 2018. • Excess Reserves are the amounts that banks voluntarily deposit at the Fed to earn risk-free income. The amount peaked in September 2014 at $2.7 trillion and has since fallen to $1.5 trillion. Of that $1.2 trillion drop, $510 billion occurred in 2018.

The interest rate that the Fed paid on both types of reserves was 1.5% at the beginning of 2018, and was raised four times with each rate hike during the year, but less than the 1/4-point hikes of the Fed’s target range for the federal funds rate. At its December meeting, the Fed raised this rate to 2.4%. So the balances of Excess Reserves have plunged, and the interest rate the Fed pays on those reserve balances has jumped. Both factors combined caused the Fed to pay a record $38.5 billion to US banks and foreign banks in the US.

Here is the sordid history of this annual wealth transfer from taxpayers to the banks via the Fed:

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Wolf Richter has much more on this topic in the article, I just wanted to point out that, counterintuitively perhaps, the amount of US currency in circulation has surged. To the mattresses!

Fed Balance Sheet and Currency In Circulation (WS)

The Fed’s balance sheet would be “substantially smaller” after the Fed gets done with its QE unwind, Fed Chairman Jerome Powell said on Thursday. [..] “Don’t know the exact level. That would depend really on the public’s appetite for our liabilities, specifically currency. To us, that’s a liability. And the public has a large appetite for currency….” “So it will be substantially smaller than it is now,” he said. “But nowhere near what it was before, and the reason is, currency was well less than $1 trillion before quantitative easing started and now is moving up toward $2 trillion.” The line item on the Fed’s balance sheet called “currency in circulation” is composed of Federal Reserve Notes – as it says on the wrinkled and thinning wad of twenties in my pocket — and coins. In other words, hard cash.

And as Powell pointed out, this is a liability on the Fed’s balance sheet, not an asset. The Treasury Department produces the bills and coins. But the Fed manages the amounts in circulation via the banking system. Currency in circulation grows when there is a lot of demand for paper-dollar cash. There must always be enough paper-dollars in the banking system to satisfy the demand by customers for the physical dollars. And as Powell pointed out, “the public has a large appetite for currency.” This demand for dollars is on a global basis. People globally are hoarding this stuff, and some countries use it as their primary currency, or as an alternate currency alongside their own trashed currency. When the Financial Crisis set in, folks started hoarding more of it, and demand increased at a steeper rate. This chart shows currency in circulation. The amount more than doubled from $830 billion in February 2008 to $1.72 trillion now:

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$2000 for a phone. Get real. It’s a dead business model.

Retailers Are Slashing iPhone Prices Across China (CNBC)

Apple’s latest iPhone models are facing huge discounts in China as retailers try to sell the struggling devices. That comes as the top-of-the-line Apple smartphones have posted poor China sales on what experts say are too-high prices for the world’s largest smartphone market and a lack of innovative features compared to local competitors like Huawei. The technology giant itself acknowledged earlier this month that unexpectedly low sales in the Chinese market would likely lead to worse-than-anticipated first quarter revenues. One of the most recent iPhone cost cuts in the country came from Suning, a large Chinese retailer, which changed the price of the 128GB version of the iPhone XR from 6,999 yuan ($1,036) to 5,799 yuan ($858) — a 1,200 yuan ($178) discount.

Other third-party sellers on the site had the devices for even cheaper, offering flash sales to try to unload iPhones.[..] Apple’s issues in China are down to two major factors, experts and local consumers say: It got its pricing wrong, and it has failed to introduce features to excite consumers in a forward-thinking technology market. Now, analysts said, competitors have taken market share in the premium smartphone space. In a public letter released on Jan. 2, Apple CEO Tim Cook blamed the slowing Chinese economy and rising trade tensions with the U.S. as one of the key reasons for lowering first quarter sales guidance. Experts, however, told CNBC that much of the iPhone’s China problem comes down to the company setting the wrong prices.

[..] “The trade war is background noise and more of a scapegoat excuse with the real issues being iPhone XR demand and a mispriced product in a competitive Chinese market,” Daniel Ives, managing director of equity research at Wedbush Securities, told CNBC by email. “It’s time for Cook and Apple to look in the mirror, take their medicine around pricing and execution and move forward with the biggest installed base in the world to turn this ship around from this dark chapter in Cupertino,” he added.

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Of course, when your new phones don’t sell, you launch more new phones. Now with 3 cameras. Where’s Steve Jobs?

Apple Plans To Launch Three New iPhones This Year (CNBC)

Apple plans to unveil three new iPhone models this year, including a successor to the XR, The Wall Street Journal reported Friday. The tech giant’s new phones will include new camera features, the Journal reported, citing people familiar with the situation. The higher-end model will be fitted with a triple rear camera, while the lower-end models will have a double rear camera, the report said. One will feature a liquid-crystal display, the display that Apple’s lower-end iPhone XR model comes with. The XR has reportedly struggled to win over Chinese consumers. Apple recently lowered its revenue guidance for the first quarter, alarming investors, and cited lower-than-expected iPhone revenue “primarily in Greater China” as one of the main reasons behind its warning.

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Yeah, they’re not selling enough cars, i.e. they don’t create enough pollution: “What I find particularly unsettling are psychological factors. The whole diesel discussion, combined with the problems in the auto industry, increases uncertainty..”

Unclear How Deep, Lasting Germany’s Economic Problems Are: ECB’s Nowotny (R.)

It is unclear if Germany’s recent economic setbacks are a one-off or a more lasting phenomenon caused by structural problems, particularly in its car industry, European Central Bank policymaker Ewald Nowotny said in remarks published on Saturday. Struggling to adjust to new emission testing standards, Germany’s car manufacturing contracted in the third quarter, dragging overall economic growth into negative territory and raising fears that Europe’s five-year-old growth run may be coming to a premature end. The Bundesbank said in a monthly economic report last month that Germany’s dominant car industry may take longer than previously thought to recover from a slump, weighing on growth in the euro zone’s biggest economy.

“The most important economic question for Europe is whether these are one-off slowdowns or whether structural factors are behind them,” ECB’s Governing Council member Nowotny said in an interview with Austrian newspaper Der Standard, discussing the prospect of a second quarter of negative growth in Germany. “The fear is that particularly in the auto industry we have lasting changes that affect Germany especially,” said Nowotny, who is also governor of the Austrian National Bank. The Bundesbank said in its report last month that while a quick rebound in the auto sector had been forecast, fresh data was disappointing those hopes.

It added that the slump was exacerbated by an overall deterioration in sentiment as well as uncertainty over the future of diesel cars as cities contemplate bans to reduce pollution. “What I find particularly unsettling are psychological factors. The whole diesel discussion, combined with the problems in the auto industry, increases uncertainty,” Nowotny said. “If people defer the purchase of a car by just half a year, that causes a vast fall in demand. There would be lasting and dramatic consequences if there were real structural collapses in the export- and machinery-oriented economy. Germany could become vulnerable,” he said.

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Macron et al are clueless. They keep trying to separate the protesters from the ‘real French’, but they’re the same people.

France Vows Tough Response As New ‘Yellow Vest’ Demos Loom (AFP)

France braced for a fresh round of “yellow vest” protests across the country on Saturday, with the authorities vowing zero tolerance for violence after weekly scenes of rioting and vandalism in Paris and other cities over the past two months. [..] “Those who are calling to demonstrate tomorrow know there will be violence, and therefore they are in part responsible,” Interior Minister Christophe Castaner said in a Facebook interview Friday with Brut, a digital news site favoured by many yellow vests. “Those who think that, a few thousand people, can make us question our institutions, are wrong,” Castaner added later Friday.

Far-right National Rally leader Marine Le Pen, who has presented her party as the longstanding expression of many yellow vest demands, condemned the government’s reaction as “disturbing”. “To accuse all protesters of ‘complicity’ with the thugs: here is a new verbal provocation and legal ineptitude waiting to undermine our rule of law,” she wrote on Twitter. [..] Macron has called for a national debate on voters’ grievances, beginning next week, hoping to sate demands for more of a say in national law-making and tamp down the protesters’ anger. But the process risks being hobbled by record levels of distrust towards politicians and representatives of the state.

A poll by the respected Cevipof political sciences institute released Friday showed 77 percent of respondents thought politicians inspired “distrust”, “disgust” or “boredom”. And it’s uncertain if the public consultations will be enough, with many protesters calling for Macron’s resignation or an immediate referendum on his presidency. “I had some hope with this ‘great debate’, but it’s not looking good because they don’t want to talk about taxes, and they’re the ones who are deciding the subjects,” said Patrick Lerest, a 62-year-old protester in Nemours, southeast of Paris. “I want us to have a real debate,” he said.

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Damning no matter the outcome of the suit. Do no evil. Where is #MeToo?

Google Sued For Covering Up $90m Payout To Ex-Exec Accused Of Sexcrimes (AFP)

Google’s board of directors is being sued for approving a $90m (£70m) payout to a former executive and covering up allegations including that he forced a female employee to perform oral sex. The lawsuit, brought by shareholder James Martin, claims directors made the payment to stop details of the allegations becoming public. It also cites examples of alleged sexual misconduct by other former employees which Google directors kept private. Google’s founders Larry Page and Sergey Brin allowed Mr Rubin to “quietly resign” even after an internal investigation had found the allegations against him credible, the complaint filed in California alleges.

“The directors’ wrongful conduct allowed the illegal conduct to proliferate and continue,” the complaint states. “As such, members of Alphabet’s board were knowing and direct enablers of the sexual harassment and discrimination.” The lawsuit also cites allegations that while Mr Rubin was at Google he engaged in “human sex trafficking – paying hundreds of thousands of dollars to women to be, in Rubin’s own words, ‘owned’ by him”. Mr Page, Mr Brin and other top executives failed in their duty by allowing harassment to occur at their company, approving excessive severance payments and keeping details of the allegations private, the lawsuit alleges. David Drummond, the chief legal officer of Google’s parent company Alphabet, and investor Ram Shriram are named among others in the court filings.

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Why there’s Brexit.

My Walk To Work Shows Me How Homelessness Is Transforming Britain (G.)

Before Christmas, the housing secretary James Brokenshire insisted that the fact the number of people sleeping rough has more than doubled since 2010 has nothing to do with Tory policies. Rather, he said, it was due to drug addiction, family breakdown and the number of foreigners. Brokenshire has since rowed back from this palpably ludicrous claim, admitting that Tories “need to ask ourselves some very hard questions”. Anyone who has seen this for themselves – which is to say, everyone who lives in a British city – could have told him that, because what has really changed is not just the number of homeless people, but who these homeless people are.

At Shelter from the Storm, my local shelter, the co-founder Sheila Scott told me last week that, when she started a decade ago, the people who stayed were “town-square drinkers” and foreign itinerants. Now, half the inhabitants have regular jobs and three-quarters are British. Some leave every night at 2am to work at Amazon factories; some are Uber drivers who took out too many loans to buy their car to do their job. Most have been driven out of their properties by private landlords – and you have only to look at Caledonian Road to see the damage such landlords can do. Many of the shopkeepers have been driven out by what one described to me as “deliberately high rents”, their stores turned into expensive flats.

One private landlord, Andrew Panayi, owns 200 properties in the area, and even though he has been fined for renting substandard properties (one tenant called them “worse than prison cells”), he still keeps a tight grip on the street. These landlords exploit the real problem, which is a lack of social housing and the decimation of social services. Scott says councils now send people directly to her, as they have nowhere else to put them. But they will soon have to send them to a new address: Shelter from the Storm is moving, because a property developer has bought the lot they currently stand on; like so many of the people the charity helps, it is being pushed out of the area.

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Jan 112019
 
 January 11, 2019  Posted by at 10:16 am Finance Tagged with: , , , , , , , , , , , , ,  


Hieronymous Bosch The Haywain Triptych c.1516 (click to enlarge)

 

The Stock Market Just Got Off To Its Best Start In 13 Years (MW)
78% of US Workers Live Paycheck To Paycheck (CNBC)
Fed’s Powell Says He Is ‘Very Worried’ About Growing Amount Of US Debt (CNBC)
Trump Digs In As Shutdown Continues (BBC)
Michael Cohen To Testify Publicly Before Congress In February (G.)
China Set To Lower GDP Growth Target In 2019 (R.)
Can The Chinese Consumer Be Resurrected? (Jim O’Neill)
Why I Asked May If She Is On The Side Of Putin Or The People (Moran)
May’s Brexit Deal ‘Threat To National Security’ – Former MI6 Chief (Ind.)
May Begs Unions To Help Salvage Her Brexit Deal (Ind.)
US Defenses No Match For Russian Hypersonic Missiles – Retired US General (RT)
Bases, Bases, Everywhere… Except in the Pentagon’s Report (Turse)
Oceans Warming Faster Than Expected, Set Heat Record In 2018 (R.)
Julian Assange’s Living Conditions Deteriorate (Cassandra Fairbanks)

 

 

And there’s still people who claim the stock market reflects the economy.

The Stock Market Just Got Off To Its Best Start In 13 Years (MW)

Things are coming up roses in the stock market, lately. The Dow Jones Industrial Average, S&P 500 index and Nasdaq Composite Index are off to their best starts to a year since 2006 after a powerful series of gains. The Dow closed up 0.5% on Thursday, pushing its year-to-date gain to 2.89%, which would mark the best first seven days to a year since 2006, when stocks burst 3.04% higher over the same period. The S&P 500 rose 0.5% on the day and has returned 3.58% thus far this year, its best start since a 3.68% gain 13 years ago, while the Nasdaq Composite booked a 0.4% gain, enough for a 5.3% year-to-date advance, representing its best seven-session to kick off a year since its 5.72% rise also in 2006.

A late-session rally helped to solidify Thursday’s gains, coming after investors digested comments from Federal Reserve Chairman Jerome Powell, who pronounced at the Economic Club in Washington on Thursday afternoon that the economy is in good health, while adding that the central bank would be cognizant of stresses to financial markets amid rate hikes. The comments were a reiteration of Powell’s remarks last week during a broad panel discussion of current and former Fed bosses that helped to placate anxious investors and reverse what was shaping up to be another dismal year.

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Why is everybody quoting a 2017 report?

78% of US Workers Live Paycheck To Paycheck (CNBC)

The partial government shutdown, which began Dec. 22, has now stretched well into the new year. President Donald Trump said Friday that it would continue for “months or even years” until he receives the requested $5 billion in funding for a border wall. The shutdown has left approximately 800,000 federal workers in financial limbo. Around 420,000 “essential” employees are working without pay, while another 380,000 have been ordered to stay home, according to calculations provided to CNBC by Paul Light, a professor of public service at New York University. In some cases, the furloughs have forced government employees to tap into their savings, rely on credit cards or crowdsource funds to make ends meet.

Government workers are far from alone in feeling stressed about not getting paid. Nearly 80% of American workers (78%) say they’re living paycheck to paycheck, according to a 2017 report by employment website CareerBuilder. Women are particularly vulnerable: 81% of them report living paycheck to paycheck, compared with 75% of men. Tony Reardon, president of the National Treasury Employees Union, tells CNBC that the group has heard from hundreds of frantic federal employees. “They’re scared,” he says. “They don’t know how they’re going to put food on the table.” Various #ShutdownStories making that point have gone viral on Twitter.

It’s not merely those earning low wages who are struggling. CareerBuilder reports that nearly 10% of Americans with salaries of $100,000 or more live paycheck to paycheck as well. That means that many workers aren’t able to put anything significant into savings. More than 50% of respondents say that they save less than $100 per month. And a comparable 2017 survey from GOBankingRates found that 61% of Americans don’t have enough money in an emergency fund to cover six months’ worth of expenses. [..] more than 70% of all respondents say that they’re in debt, and a quarter of workers say they weren’t able to make ends meet at the end of every month of the past year.

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Which his own Fed has encouraged like nobody else could.

Fed’s Powell Says He Is ‘Very Worried’ About Growing Amount Of US Debt (CNBC)

Federal Reserve Chairman Jerome Powell is concerned about the ballooning amount of United States debt. “I’m very worried about it,” Powell said at The Economic Club of Washington, D.C. “From the Fed’s standpoint, we’re really looking at a business cycle length: that’s our frame of reference. The long-run fiscal, nonsustainability of the U.S. federal government isn’t really something that plays into the medium term that is relevant for our policy decisions.” However, “it’s a long-run issue that we definitely need to face, and ultimately, will have no choice but to face,” he added. The Fed chief’s comments came as the annual U.S. deficit reaches new sustained highs above $1 trillion, a fact many economists worry could spell trouble for future generations.

Annual deficits have topped $1 trillion before, but never during a time of sustained economic growth like now, raising concern about what would happen if a recession hits. Total U.S. debt is about $21.9 trillion, of which $16 trillion is owed by the public. In part because of continued rate increases under Powell, the interest cost on that debt could start to become a bigger and bigger burden. Wall Street’s “bond king” and respected financial prognosticator Jeffrey Gundlach said in December that the Fed seems to be on a “suicide mission,” raising rates while the government deficit increases as a share of GDP. Normally when the deficit is expanding, the Fed would be lowering interest rates.

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View from the MSM: Trump digs in, not the Dems.

Trump Digs In As Shutdown Continues (BBC)

US President Donald Trump has threatened again to declare a national emergency to fund a border wall without Congress’s approval. “I have the absolute right to declare a national emergency,” he told reporters. The White House has denied reports it is looking at diverting funds set aside for reconstruction projects. A political row over funding the wall has left the US government partially shutdown for 20 days, leaving about 800,000 federal employees without pay. President Trump has refused to sign legislation to fund and reopen the government if it does not include $5.7bn for a physical barrier along the US-Mexico border.

But budget talks have come to a standstill as Democrats – who control the House of Representatives – refuse to give him the money. Republican leaders insist the party stands behind the president, although some Republican lawmakers have spoken out in favour of ending the shutdown. On Thursday, Mr Trump visited a border patrol station in McAllen, in the Rio Grande Valley of Texas. He said that if Congress did not approve funding for the wall, he would “probably… I would almost say definitely” declare a national emergency to bypass lawmakers. But such a move is likely to face legal challenges. The money would also have to come from funds allocated by Congress for other purposes – which some Republicans would also oppose.

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Planning a huge media spectacle. Imagine all the readers and viewers… Trump keeps on giving. Bread and circuses it is.

Michael Cohen To Testify Publicly Before Congress In February (G.)

Donald Trump’s longtime lawyer and aide Michael Cohen says he has accepted an invitation from a top House Democrat to testify publicly before Congress next month. His testimony before the House oversight and reform committee on 7 February will be the first major public oversight hearing for Democrats, who have promised greater scrutiny of Trump after winning control of the House in the 2018 midterm elections. Cohen said in a statement: “I look forward to having the privilege of being afforded a platform with which to give a full and credible account of the events which have transpired.”

The New Yorker, who is to begin a three-year prison sentence in March, is a pivotal figure in investigations by the special counsel Robert Mueller into potential collusion between Russia and the Trump campaign, and by federal prosecutors in New York into campaign finance violations related to hush-money payments to two women who say they had sex with Trump. Elijah Cummings, the committee’s chair, said the panel would avoid interfering with Mueller’s investigation. “We have no interest in inappropriately interfering with any ongoing criminal investigations, and to that end, we are in the process of consulting with Special Counsel Mueller’s office,” Cummings said in a statement.

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But not to the 1.67% predicted by professor Xiang Songzuo, I’m sure.

China Set To Lower GDP Growth Target In 2019 (R.)

China plans to set a lower economic growth target of 6% to 6.5% in 2019 compared with last year’s target of “around” 6.5%, policy sources told Reuters, as Beijing gears up to cope with higher U.S. tariffs and weakening domestic demand. The proposed target, to be unveiled at the annual parliamentary session in March, was endorsed by top leaders at the annual closed-door Central Economic Work Conference in mid-December, according to four sources with knowledge of the meeting’s outcome. Data later this month is expected to show the Chinese economy grew around 6.6% in 2018 — the weakest since 1990. Analysts are forecasting a further loss of momentum this year before policy support steps begin to kick in.

“It’s very difficult for growth to exceed 6.5% (this year), and there could be trouble if growth dips below 6%,” said one source who requested anonymity due to the sensitivity of the matter. As the world’s second-largest economy loses steam, China’s top leaders are closely watching employment levels as factories could be forced to shed workers amid a trade war with the United States, despite a more resilient services sector, policy insiders said. Growth of about 6.2% is needed in the next two years to meet the ruling Communist Party’s longstanding goal of doubling gross domestic product and incomes in the decade to 2020, and to turn China into a “modestly prosperous” nation. [..] Local governments could be allowed to issue up to 2 trillion yuan worth of special bonds in 2019, up from 1.35 trillion yuan last year, they said.

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Goldman Sachs to the -image- rescue.

Can The Chinese Consumer Be Resurrected? (Jim O’Neill)

Last week, Apple published a letter to shareholders revising down its expected revenues for the first quarter of 2019, citing an economic slowdown in China, which has become an increasingly important market for iPhone, Mac, and iPad sales. Though tech industry analysts are debating whether internal dynamics at Apple might also explain the change, the company’s new guidance nonetheless adds to the evidence that Chinese consumption is slowing. A sustained decline in Chinese consumption would be even more worrying than the current US-China trade dispute.

Given that US trade policies and other external influences should not have much effect on domestic Chinese spending, the problem may be more deeply rooted in China’s economic model. To understand what is at stake, consider all that has changed just within the past decade. At the end of 2010, domestic consumption accounted for around 35.6% of Chinese GDP, according to official Chinese data. That was remarkably low compared to most other economies, not least the US, where consumption accounted for almost 70% of GDP. In nominal dollar terms, China’s domestic consumption thus was around $2.2tn, or almost five times lower than that of the US ($10.5tn).

Yet China’s high overall growth rate meant that Chinese consumers could potentially play a much larger role, with far-reaching benefits for global brands such as Apple, BMW, Burberry, Ford, and many others. As of 2017, Chinese consumption as a share of GDP had risen to 39.1%, representing just over $5tn in nominal dollar terms. That is an increase of almost $3tn in just seven years. And though Chinese consumer spending still lagged far behind that of the US ($13.5tn in 2017), the gap has narrowed. If China were to continue on the same trajectory in terms of nominal GDP growth and domestic consumption, its consumer spending could increase by another $2tn by 2020, putting it at around half that of the US. Chinese consumers would be more relevant to the global economy than anyone except Americans.

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From time to time you wonder what’s more hysterical, the Brexit mayhem or the UK’s fabricated Russophobia. This is pretty unbelievable, but it’s become normal.

Layla Moran is a Liberal Democrat MP for Oxford West and Abingdon.

Why I Asked May If She Is On The Side Of Putin Or The People (Moran)

For all the farcical invoking of Blitz spirit, Brexit isn’t merely an absurdist experiment in English nationalist nostalgia – it is the most audacious example yet of a futuristic Russian nationalism that seeks to divide and rule Europe. If we can be judged by our friends then Brexit has no stauncher ally than Vladimir Putin. After all, Donald Trump has proved unreliable. But Putin? It is hard to think of anyone who has done more for the cause (and that is not to take anything away from the years of Brexit monologues by Tory MP Bill Cash). Russian bot farms have been exposed as having supported the Leave campaign. This comes on top of allegations of iffy Russian money funding Brexit campaigns, and Arron Banks’ almost comical inability to explain his donations to Leave.

Comical, that is, if his scarcely thought through Brexit wasn’t driving Britain to what Hilary Clinton has called the single biggest act of deliberate self-harm a nation has ever committed. As if Russian interference in the original referendum was not shocking enough, it is still going on. The Channel 4 drama Brexit: The Uncivil War might have relegated Russian involvement to the briefest postscript, but in reality Putin is still in the trenches fighting for a hard Brexit. At a recent press conference Putin attacked the idea of a referendum on the deal, claiming the original result should be respected. Oh, the irony! Putin, the arch kleptocrat, giving advice on democracy. “Don’t steal Brexit,” he seemed to demand, while probably stealing (sorry, being gifted) another superyacht.

It should have been sufficiently chilling to make even Boris Johnson pause for thought. And all while using the Brexiteer message script of delivering the will of the people. As any student of Russian history could tell you, “the people” are often invoked by the Kremlin, including when justifying the mass murder of innocent people. But rarely does the Kremlin actually ask “the people” for anything so radical as an opinion. For Putin, “the people” are to be manipulated and even killed for his own ends. And Putin’s ends are clear. He wants a weak and divided EU. Ultimately, he seeks to break it up, with the Eastern bloc – brought into the European fold by Margaret Thatcher’s single market – dragged back into the lair of the Russian bear.

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And why not? If all else fails, scare them.

May’s Brexit Deal ‘Threat To National Security’ – Former MI6 Chief (Ind.)

The former head of MI6 has warned Theresa May’s Brexit deal will “threaten the national security of the country”, in a call for Tory MPs to reject it. The agreement would “place control of aspects of our national security in foreign hands”, claims Sir Richard Dearlove, in an extraordinary letter to Conservative associations. It has also been signed by Lord Guthrie, a former chief of the defence staff, in a bid to stiffen grassroots resistance, ahead of next Tuesday’s vote.= Sir Richard and Lord Guthrie, who are both prominent Leave supporters, write: “Please ensure that your MP votes against this bad agreement.” The prime minister, a former home secretary, has insisted her agreement would protect national security by retaining existing cooperation arrangements during the 21-month transition.

However, she was forced to acknowledge the UK was likely to lose direct access to vital EU security databases after 2012, under the proposed long-term arrangements. In their letter, the ex-security chiefs argue the deal is dangerous because it would weaken membership of Nato and existing “close” defence and intelligence ties with the US. “This withdrawal agreement, if not defeated, will threaten the national security of the country in fundamental ways,” it says. Downing Street hit back immediately, insisting the letter was “completely wrong” and that the Brexit deal offered the broadest security agreement the EU has with any of its partners. But both sides of the Brexit divide seized on the intervention, arch-Brexiteer Owen Paterson calling it a “devastating warning”.

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After Tuesday all bets are off.

May Begs Unions To Help Salvage Her Brexit Deal (Ind.)

Theresa May has called the leaders of Britain’s biggest unions for the first time since becoming prime minister in a desperate bid to find backing for her Brexit deal. The calls to Unite leader Len McCluskey and the GMB’s Tim Roache – whose unions are Jeremy Corbyn’s biggest financial backers – mark just how far she is being forced to go in the hope of finding support for the deal expected to be rejected by MPs next week. She was scorned by second referendum-backing Mr Roache, who joked after his call that he was “glad the prime minister finally picked up the phone”. The unprecedented move came as she also sought to convince Labour MPs to back her by promising new commitments to maintain workers’ rights in line with EU standards after Brexit.

But expectations that she is heading for a heavy defeat on Tuesday simply grew further, with some estimates suggesting that opposition has actually grown since she delayed the vote on her deal in December. Capitalising on the deep Tory divisions, Mr Corbyn instead invited Conservative MPs to back a motion of no confidence in the government which he is promising to table if Ms May’s plans are defeated. Downing Street confirmed the calls to Mr Roache, whose union has 620,000 members, and Mr McCluskey, representing more than 1.4 million, and admitted it was the first time she had spoken to either of them since her arrival at No 10. The Independent understands the prime minister also attempted to call Dave Prentis, leader of Unison which also has some 1.4 million members, but could not get through because Mr Prentis was travelling.

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Click here for the original Hill article.

US Defenses No Match For Russian Hypersonic Missiles – Retired US General (RT)

A retired general and chief of staff has warned that the US’ missile defense systems are “simply incapable” of stopping the latest generation of Russian hypersonic missiles – some of which fly at 27 times the speed of sound. Now retired, Maj. Gen. Howard ‘Dallas’ Thompson was once Chief of Staff at US Northern Command in Ohio. In a column published by The Hill on Thursday, Thompson argues that military leaders have neglected to develop proper defenses against the hypersonic threat. There have been some calls for the US to pursue hypersonic weapons in defense policy circles, but America has lagged behind China – which conducted more tests in the last year than the US has is a decade – and Russia, which successfully tested such a missile in December. The ‘Avangard’ missile flew at Mach 27, and will be deployed in 2019.

At present, the US Missile Defense Agency’s sensors and radars are designed for one purpose: to counter an intercontinental ballistic missile (ICBM) fired by an adversary like Iran or North Korea. ICBMs have a predictable flight path, and the US’ Patriot and Terminal High-Altitude Area Defense (THAAD) batteries stand a reasonable chance of intercepting and destroying any incoming missiles. Not so with hypersonics. Missiles like ‘Avangard’ fly low and fast, evading radar detection. They can also engage in evasive maneuvers to dodge surface-to-air rockets or missiles, further lowering the chances of a successful interception.

“The stark reality is that our current missile defense systems, as well as our operational mindset, are simply incapable versus this threat,” Thompson wrote. The retired General’s words are backed up by a recent report from the Government Accountability Office, which concluded that there are “no existing countermeasures” against the threat. Thompson claims that a massive collaborative program between the Department of Defense and arms companies is needed to counter Russian and Chinese advances. “Countering this threat will require U.S. investment in an extensive defensive architecture,” he wrote. “…a highly robust ‘family of systems’ that nonetheless must be envisioned, designed, developed and deployed in a completely holistic manner.”

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800 bases, of which 300 are unreported?!

Bases, Bases, Everywhere… Except in the Pentagon’s Report (Turse)

Within hours of President Trump’s announcement of a withdrawal of U.S. forces from Syria, equipment at that base was already being inventoried for removal. And just like that, arguably the most important American garrison in Syria was (maybe) being struck from the Pentagon’s books — except, as it happens, al-Tanf was never actually on the Pentagon’s books. Opened in 2015 and, until recently, home to hundreds of U.S. troops, it was one of the many military bases that exist somewhere between light and shadow, an acknowledged foreign outpost that somehow never actually made it onto the Pentagon’s official inventory of bases. Officially, the Department of Defense (DoD) maintains 4,775 “sites,” spread across all 50 states, eight U.S. territories, and 45 foreign countries.

A total of 514 of these outposts are located overseas, according to the Pentagon’s worldwide property portfolio. Just to start down a long list, these include bases on the Indian Ocean island of Diego Garcia, in Djibouti on the Horn of Africa, as well as in Peru and Portugal, the United Arab Emirates, and the United Kingdom. But the most recent version of that portfolio, issued in early 2018 and known as the Base Structure Report (BSR), doesn’t include any mention of al-Tanf. Or, for that matter, any other base in Syria. Or Iraq. Or Afghanistan. Or Niger. Or Tunisia. Or Cameroon. Or Somalia. Or any number of locales where such military outposts are known to exist and even, unlike in Syria, to be expanding.

[..] According to David Vine, author of Base Nation: How U.S. Military Bases Abroad Harm America and the World, there could be hundreds of similar off-the-books bases around the world. “The missing sites are a reflection of the lack of transparency involved in the system of what I still estimate to be around 800 U.S. bases outside the 50 states and Washington, D.C., that have been encircling the globe since World War II,” says Vine

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The reporting on the issue seems broken.

Oceans Warming Faster Than Expected, Set Heat Record In 2018 (R.)

The oceans are warming faster than previously estimated, setting a new temperature record in 2018 in a trend that is damaging marine life, scientists said on Thursday. New measurements, aided by an international network of 3,900 floats deployed in the oceans since 2000, showed more warming since 1971 than calculated by the latest U.N. assessment of climate change in 2013, they said. And “observational records of ocean heat content show that ocean warming is accelerating,” the authors in China and the United States wrote in the journal Science of ocean waters down to 2,000 metres (6,600 ft). Man-made greenhouse gas emissions are warming the atmosphere, according to the overwhelming majority of climate scientists, and a large part of the heat gets absorbed by the oceans.

That in turn is forcing fish to flee to cooler waters. “Global warming is here, and has major consequences already. There is no doubt, none!” the authors wrote in a statement. Almost 200 nations plan to phase out fossil fuels this century under the 2015 Paris climate agreement to limit warming. [..] Data due for publication next week will show “2018 was the warmest year on record for the global ocean, surpassing 2017,” said lead author Lijing Cheng, of the Institute of Atmospheric Physics at the Chinese Academy of Sciences. He told Reuters that records for ocean warming had been broken almost yearly since 2000. Overall, temperatures in the ocean down to 2,000 metres rose about 0.1 degree Celsius (0.18F) from 1971-2010, he said.

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Another issue on which reporting seems broken. We’re not getting anywhere.

Julian Assange’s Living Conditions Deteriorate (Cassandra Fairbanks)

I last visited Assange in March, days before the Ecuadorians placed the award-winning journalist in isolation for allegedly violating a draconian ban on all public political comments. [..] In order to visit the publisher last year, I simply organized it with him and his lawyer and went. This time I was required to provide details about my social media, my employer, and my reason for visiting in advance of my arrival and hope to be approved. If I wanted to bring my cell phone, I would have had to provide the brand, model, serial number, IMEI number and telephone number. Providing these details to a foreign nation with extreme surveillance seemed unwise, so I left it behind.

[..] Currently, Assange cannot even have a simple visit with a friend without it being monitored by some shadowy state actor. It’s like a scene from the Stasi spy drama The Lives of Others. While Ecuador presents this surveillance operation as a mission to “protect and support” Assange, this is contradicted by the fact that he isn’t even allowed to confidentially speak with a reporter and friend without being recorded. In May, the Guardian reported that there are “extraordinary reports” from these spies that include daily logs of Assange’s activities inside the embassy, even noting his “general mood.”

As John Pilger pointed out after his visit with Assange on New Year’s Eve, it could be any newspaper publisher or editor stuck in that embassy. For the crime of publishing journalism, Assange has not only had to give up his freedom, but also any semblance of privacy. It’s impossible to overstate how unsettling it feels to have multiple lenses pointed at you wherever you stand. Unable to speak privately, even with a noise machine attempting to muffle the microphones from picking up conversations, we resorted to passing notes. Assange is not only barred from sharing his views online under the new regulations — thanks to the constant surveillance, he can’t even do so among his friends in the embassy where he is arbitrarily detained.

If we value the principle of the freedom of speech — we must do something to stop this madness. While we do not know what Assange has been charged with by the U.S. as it remains under seal, we do know that it is related to his work as a publisher, the only publisher with a record of 100% accuracy. His dedication to truth is so profound that he has never once had to issue a correction or retraction.

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