Jul 032019
 


Happy birthday Julian

 

 

Response to Open Letter of 1 July 2019 (Nils Melzer)
France And Germany Eye Lagarde For ECB and Von Der Leyen For EC President (R.)
The Inconvenient Truth About Ursula Von Der Leyen (Pol.eu)
Trump To Nominate Judy Shelton, Christopher Waller To The Fed (CNBC)
The Death of the Liberal Idea (Dmitry Orlov)
Stagecraft (Kunstler)
Families Of 737 MAX Crash Victims Say Boeing Has Not Contacted Them (BI)
Chinese Border Guards Put Secret Surveillance App On Tourists’ Phones
Italian Judge Rules Sea Watch Captain Carried Out Duty To Protect Lives (EN)
Austria Becomes First EU Country To Ban Glyphosate (RT)
Cockroach ‘Superbugs’ Evolve To Resist Pesticides In One Generation (RT)
Deep-Sea Mining To Turn Oceans Into ‘New Industrial Frontier’ (G.)
The Seabed Should Be Off-Limits To Mining Companies (Chris Packham)

 

 

Julian first on his birthday. Here’s Nils Melzer’s response to the 200+ academics who didn’t like how he described the -empty- rape allegations against Assange. These are the last few paragraphs. A man of great integrity.

Response to Open Letter of 1 July 2019 (Nils Melzer)

Beyond questions of law, you also take issue with my tone, which you deem to be “insensitive to victims”. Please let me assure you that, in two decades of work with victims of war and violence, sometimes under very difficult and dangerous circumstances, I have seen and suffered too much myself to be intellectually or emotionally capable of “mocking” potential victims. The countless testimonies I have collected in prisons, camps and villages throughout the world have marked me deeply, and some of them keep haunting me to this day. Whatever misunderstandings may have resulted from my article, they certainly do not warrant accusing me of “insensitivity to victims” or even a “profound lack of understanding that does a disservice to the mandate”.

Though the tone of my critique may be harsh, it does not aim at the women, but at the gross arbitrariness of the “rape” narrative, which has been wrongly imposed by zealous officials not only on Assange, but also on the two concerned women themselves, and on the general public. The State not only ignored the women’s own experience and interpretation of events, but also consistently declined to take the necessary measures which would have allowed advancing this matter beyond the stage of preliminary investigation, where it has been so conveniently left to simmer for almost a decade. As is well documented, both the two women and Assange fully cooperated with the police and the prosecution from the outset, he was questioned both in Sweden (2010) and in London (2016), and the only reason he refused to be extradited to Sweden was that Sweden declined to guarantee against further extradition to the United States, where I am convinced he would be exposed to serious violations of his human rights.


More generally, I fully share your concerns that sexual allegations against powerful men are often dismissed as attention-seeking or part of a conspiracy to bring them down. I would point out, however, that Assange is not a powerful man shielded by impunity, but an isolated and frail political prisoner persecuted for exposing war crimes and corruption. So, while we all work to safeguard the rights of victims of sexual abuse, let us not blindly dismiss well-founded doubts as to the veracity and / or appropriateness of rape allegations, where there are indications of duress or documented third party interests influencing the process. This holds particularly true in a highly politicized case which, in all involved jurisdictions, is plagued with a pervasive mix of grave and persistent due process violations, concerted public mobbing, humiliation and intimidation, and counterfactual accusations of hacking, spying and even causing death and injury.

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Right. The EU nominates two women. One is accused of gross incompetence, the other was convicted of negligence in a case of misuse of public funds, but never sentenced, no criminal record. Highly doubtful she would be seen as “fit and proper” for a commercal bank job. The entire nomination process reminds us about Groucho Marx’ famous line “Those are my principles; if you don’t like them, I have others”. So we get: “Who needs a Spitzenkandidat when you can have a Homecoming Queen?”

France And Germany Eye Lagarde For ECB and Von Der Leyen For EC President (R.)

German defense minister Ursula von der Leyen may end up as European Commission President while IMF head Christine Lagarde may become new president of the European Central Bank following an agreement between France and Germany, said sources. One diplomatic source with knowledge of the matter said French President Emmanuel Macron had proposed to his German counterpart Angela Merkel that Lagarde should get the top ECB job. The source added that Merkel was “very positive” on the idea of Lagarde heading the ECB.

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“Von der Leyen is our weakest minister. That’s apparently enough to become Commission president..”

“..accusations that von der Leyen’s office circumvented public procurement rules in granting contracts worth millions of euros..”

The Inconvenient Truth About Ursula Von Der Leyen (Pol.eu)

A polyglot Brussels native who reared seven children and earned a medical degree on the side before storming to the top of German politics. News that this Wunderfrau — aka German Defense Minister Ursula von der Leyen — could become the Commission’s next president left European capitals abuzz on Tuesday. “Finally some good news” was the general tenor. Who needs a Spitzenkandidat when you can have a Homecoming Queen? At first glance, the affable 60-year-old minister with a camera-ready smile looks to be a perfect fit, with the requisite experience, political pedigree and personality to handle the EU’s toughest job. And yet a nagging question remains: Is she too good to be true?

In the German capital, the answer is clear. “Von der Leyen is our weakest minister. That’s apparently enough to become Commission president,” former European Parliament President Martin Schulz seethed in a tweet Tuesday evening. Though Schulz is a Social Democrat, his analysis of the minister’s record is shared by many of von der Leyen’s fellow Christian Democrats, though most are reluctant to criticize her publicly. Instead, they point to the state of the German military. “The Bundeswehr’s condition is catastrophic,” Rupert Scholz, who served as defense minister under Helmut Kohl, wrote last week before von der Leyen was nominated to the EU’s top post. “The entire defense capability of the Federal Republic is suffering, which is totally irresponsible.”


[..] In addition to problems surrounding the German military’s readiness, von der Leyen’s ministry also faces an investigation into suspected wrongdoing surrounding its use of outside consultants, including Accenture and McKinsey. The Bundestag, the German parliament, is currently holding hearings into the affair, including accusations that von der Leyen’s office circumvented public procurement rules in granting contracts worth millions of euros to the firms. Those hearings have taken a dramatic turn in recent days as testimony from key witnesses appeared to confirm suspicions of systematic corruption at the ministry.

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On our way to zero percent interest rates. Damn savings and pensions.

Trump To Nominate Judy Shelton, Christopher Waller To The Fed (CNBC)

President Donald Trump intends to nominate Christopher Waller, executive vice president at the Federal Reserve Bank of St. Louis, and Judy Shelton, an economic adviser to the president during his 2016 campaign, to the Federal Reserve’s board. The announcements, in a pair of tweets late Tuesday, come after Trump’s earlier nominees, Stephen Moore and Herman Cain, both withdrew from consideration. Moore, a conservative pundit, dropped out of consideration in May, citing public scrutiny of his professional and personal lives. Cain, the businessman and former GOP presidential candidate, dropped out of contention for the Fed in late April. Shelton was earlier speculated to be a pick for the Federal Reserve board.


Shelton has previously said that if appointed, she would lower interest rates to 0% in one to two years, echoing calls from Trump to lower rates. Waller has worked at the Federal Reserve Bank of St. Louis since 2009, and previously was a chair of economics at the University of Notre Dame and a chair in macroeconomics and monetary theory at the University of Kentucky. He has written about the dangers of an inverted yield curve, in which short-term Treasury yields outpace long-term yields. The 3-month bond yield topped 10-year yields in May, the widest yield curve inversion since the financial crisis. Some economists and investors believe the curve sends a warning about economic growth. Both nominees will need Senate confirmation.

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Interpreting Putin’s words.

The Death of the Liberal Idea (Dmitry Orlov)

The migrant crisis is a perfect example of how liberalism has outlived its usefulness. Liberalism offers two ways forward, both of which are fatal to it. One approach is distinctly illiberal: halt the influx of migrants by any means necessary; insist that the migrants already in the country either conform to a strict set of requirements, including demonstrated competency in the nation’s language, detailed knowledge of its laws and administrative systems, strict obedience to its laws and demonstrated preference and respect for the customs and culture of the native population—or be not so much deported as expelled. The other approach is liberal at first: allow the influx to continue, do not hinder the formation of foreign ghettos and enclaves which native citizens and officials dare not enter, and eventually surrender to Sharia law or other forms of foreign dictate—guaranteeing the eventual death of the liberal idea along with much of the native population.

Thus, the choice is between killing the liberal idea but saving the native population or letting the liberal idea die willy-nilly, taking the native population along with it. It offers no solution at all. “We all live in a world based on traditional Biblical values,” quoth Putin. “We don’t have to demonstrate them every day… but must have them in our hearts and our souls. In this way, traditional values are more stable and more important to millions of people than this liberal idea which, in my view, is ceasing to exist.” This is true not just of the believers—be they Christian, Moslem or Jewish—but of the atheists as well. To put it in terms that may shock and astound some of you, you don’t have to believe in God (although it helps if you do—to avoid cognitive dissonance) but if you aspire to any sort of social adequacy in a traditional society you have no choice but to sincerely think and act as if God exists, and that He is the God of the Bible—be He Yahweh, Elohim, Jesus and the Holy Trinity or Allah (that’s the Arabic word for “God”).


Putin capped off his argument by ever so gently and politely putting the boot in. He said that he has no clue about any of this “transformer-trans… whatever” stuff. How many genders are there? He has lost count. Not that he is against letting consenting adult members of various minority sexual groups do whatever they want among themselves—“Let everyone be happy!”—but they have no right to dictate to the rest. Specifically, Russian law makes homosexual propaganda among those who are under age illegal. Hollywood’s pro-LGBT mavens must be displeased: their choice is either to redact LGBT propaganda from the script, or to redact it from the finished film prior to its release in Russia (and China).

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Fun with Bob.

Stagecraft (Kunstler)

I can think of a few 90-mph sliders I’d like to pitch to Mr. Mueller, some of them already floated in the press: like, why did you allow the GI cell phones of Peter Strzok and Lisa Page to be destroyed shortly after you were informed about their unprofessional and compromising text exchanges, for which they were fired off your “team?” When did you learn that international men-of-mystery Stefan Halper and Josef Mifsud, whose operations spurred your prosecutions, were not Russian agents but rather in the employ of US and British government intel agencies? Your deputy, Andrew Weissmann, was informed by Deputy Attorney General Bruce Ohr in the summer of 2016, months before your appointment, that the predicating documents for your inquiry, known as the Steele Dossier, amounted to a Clinton campaign oppo research digest — when did he happen to tell you that?

You devoted nearly 20 pages of your report to the Trump Tower meeting between the president’s son, Donald, Jr., and two Russians, lawyer Natalia Veselnitskaya and lobbyist Rinat Akhmetshin. Why did you omit to mention that both Russians were in the employ of Glenn Simpson’s Fusion GPS company, candidate Clinton’s oppo research contractor, and met with Mr. Simpson both before and after the Trump Tower meeting? How did it happen that you hired attorney Jeannie Rhee for your team, knowing that she had previously worked as a lawyer for the Clinton Foundation? Under what legal standard did you pronounce Mr. Trump to be “not exonerated” in the obstruction of justice matter, considering you told the Attorney General, Mr. Barr, that it was not based on findings by the DOJ Office of Legal Counsel concerning presidential immunity from indictment?


[..] It’s just possible that Robert Mueller will not be reading chapter and verse from his sacred report, like an old-school Episcopal priest, but rather pleading the Fifth Amendment to avert his own potential prosecution.

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Lawyers tell them not to, in case they’d say something stupid. But bordering on criminal behavior.

Families Of 737 MAX Crash Victims Say Boeing Has Not Contacted Them (BI)

Families of those killed in two fatal crashes involving Boeing 737 Max planes say they have not received any contact from Boeing since the disasters, with no apology or offer of support from the manufacturer. The parents of a woman killed on one of the flights told Business Insider they had received “no condolences” and “no direct communication” from Boeing despite numerous public apologies by the plane maker and said Boeing CEO Dennis Muilenburg “talks to other people but not us, the victims’ families.” Nadia Milleron and Michael Stumo lost their 24-year-old daughter, Samya Stumo, when the Boeing 737 Max 8 jet operated by Ethiopian Airlines crashed in March, killing all 157 people on board.

It was the second crash of a 737 Max plane in five months after a Max 8 operated by the Indonesian carrier Lion Air crashed in the Java Sea in October, killing all 189 people on board. Investigations into both crashes have centered on a software issue that Boeing has since been working to fix, with all its Max aircraft grounded around the world in the meantime. Other attorneys representing more than 50 families of those killed in the crashes told Business Insider their clients’ experience was the same. The Chicago-based aviation attorney Joe Power, the Los-Angeles based attorney Brian Kabateck, and the Miami-based attorney Steve Marks said Boeing had not reached out to their clients.


Marks said that this response was not “unusual” from manufacturers after a crash, but he described Boeing’s reaction as “worse” than a typical response. He said Boeing “came out really quickly after the second tragedy, and said: ‘We own it, it’s our problem.'” But then, he said, the company “has since backed those comments off, in many different ways, which I think has only inflamed the situation, as far as the families are concerned.” Mike Danko, an aviation attorney who is not representing any families in the 737 Max crashes, told Business Insider that Boeing’s action in this case were “not unusual” and that manufacturers typically did not apologize or offer support after fatal plane crashes, but he noted its public apologies.

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Not surprising.

Chinese Border Guards Put Secret Surveillance App On Tourists’ Phones

Chinese border police are secretly installing surveillance apps on the phones of visitors and downloading personal information as part of the government’s intensive scrutiny of the remote Xinjiang region, the Guardian can reveal. The Chinese government has curbed freedoms in the province for the local Muslim population, installing facial recognition cameras on streets and in mosques and reportedly forcing residents to download software that searches their phones. An investigation by the Guardian and international partners has found that travellers are being targeted when they attempt to enter the region from neighbouring Kyrgyzstan.


Border guards are taking their phones and secretly installing an app that extracts emails, texts and contacts, as well as information about the handset itself. Tourists say they have not been warned by authorities in advance or told about what the software is looking for, or that their information is being taken.

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Maritime law. Don’t play with it.

Italian Judge Rules Sea Watch Captain Carried Out Duty To Protect Lives (EN)

An Italian judge ruled on Tuesday that the German captain of a rescue charity ship had not broken the law when she forced a naval blockade at the weekend, saying she had been carrying out her duty to protect human life. Carola Rackete, a 31-year-old German national, disobeyed Italian military orders and entered the port of Lampedusa on Saturday to bring some 41 African migrants to land in the Dutch-flagged Sea-Watch boat. She was immediately detained and placed under house arrest, but in a blow for Italy’s hardline interior minister, Matteo Salvini, Judge Alessandra Vella ruled that Rackete had been carrying out her duty and had not committed any act of violence.


Rackete still faces possible charges of helping illegal immigration, but Vella ordered her immediate release. Salvini said in a statement he had hoped for a tougher response from the Italian justice system and promised to expel Rackete as soon as possible. Rackete appeared before the Agrigento court on Monday and apologised for hitting the patrol boat, saying it had been an accident and explaining that her sole concern was the well-being of the migrants who had been at sea for more than two weeks.

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Question is: can they, or does EU law prevail?

Austria Becomes First EU Country To Ban Glyphosate (RT)

Austria has voted to ban glyphosate, the main ingredient in Bayer-Monsanto’s notorious Roundup weedkiller, becoming the first EU country to outlaw the chemical and creating a PR disaster for the troubled German company. “The scientific evidence of the plant poison’s carcinogenic effect is increasing. It is our responsibility to ban this poison from our environment,” Social Democratic Party leader Pamela Rendi-Wagner said in a statement on Tuesday. The resolution passed with the cooperation of her party, the right-wing Freedom Party and the liberal Neos Party, and remains only to be signed by President Alexander van der Bellen, a former Green Party leader, unless the upper house of Parliament objects.

“We want to be a role model for other countries in the EU and the world,” said Erwin Preiner, another Social Democrat MP who worked on the ban. Austria has embraced organic farming more than any other European country – nearly a quarter of its farmland is organic – and is thus not a major market for glyphosate-based herbicides, using only a few hundred tons per year. While a ban will have minimal direct impact on Bayer’s sales, the optics of the German company’s next-door neighbor nation exiling its flagship herbicide are likely to cause a few headaches at Bayer HQ.


Austria’s ministry for sustainability and tourism claims a total ban on glyphosate violates EU law, as the chemical is cleared for sale and use across the EU until 2022, but the bill’s backers have pointed to other examples of individual countries banning specific chemicals as proof of their right to legislate against the herbicide. France banned Roundup Pro 360, one type of Monsanto’s popular glyphosate weedkiller, earlier this year, and President Emmanuel Macron has pledged to phase out the use of glyphosate entirely within three years. “National bans on glyphosate-based plant protection products or restrictions on their use would be possible,” the European Commission declared in 2016, confirming that “the EU states do not have to hide behind the European Commission” in deciding whether or not to ban a particular formulation of an herbicide.

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“..cockroaches who survived treatment with one insecticide developed immunity not just to that chemical, but to other chemicals they hadn’t even been exposed to – increasing their resistance “four- to six-fold in just one generation..”

Cockroach ‘Superbugs’ Evolve To Resist Pesticides In One Generation (RT)

Cockroaches will soon be impossible to kill with standard pesticides, as they can develop cross-resistance to poisons they’ve never encountered within a single generation, an ominous new study has found.
German cockroaches – the small, quick-scurrying type whose traces can be found in 85 percent of US urban homes – are rapidly becoming impervious to pesticide chemicals, developing cross-resistance to a variety of insecticides within a single generation, a study published in Scientific Reports has demonstrated. And even the researchers who conducted the experiment are creeped out by the evolutionary capabilities of the ubiquitous six-legged pests. “We didn’t have a clue that something like that could happen this fast,” Michael Scharf, chair of the Entomology Department at Purdue University and co-author of the study, said in a statement last week.


“Cockroaches developing resistance to multiple classes of insecticides at once will make controlling these pests almost impossible with chemicals alone.” One experiment in which 10 percent of cockroaches started off resistant to a particular pesticide actually saw populations grow over the six months during which the researchers sprayed, a disconcerting result in itself. But it was the multi-chemical experimental groups that really caused a stir – cockroaches who survived treatment with one insecticide developed immunity not just to that chemical, but to other chemicals they hadn’t even been exposed to – increasing their resistance “four- to six-fold in just one generation,” Scharf marveled.

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N’importe quoi: “The industry has said deep-sea mining is essential to extract the materials needed for a transition to a green economy..”

Deep-Sea Mining To Turn Oceans Into ‘New Industrial Frontier’ (G.)

The world’s oceans are facing a “new industrial frontier” from a fledgling deep-sea mining industry as companies line up to extract metals and minerals from some of the most important ecosystems on the planet, a report has found. The study by Greenpeace revealed that although no mining had started on the ocean floor, 29 exploration licences had been issued covering an area five times bigger than the UK. Environmentalists said the proposed mining would threaten not only crucial ecosystems but the global fight against climate breakdown.

Louisa Casson, an ocean campaigner at Greenpeace, said: “The health of our oceans is closely linked to our own survival. Unless we act now to protect them, deep-sea mining could have devastating consequences for marine life and humankind.” The licences, issued by a United Nations body, the International Seabed Authority, have been granted to a handful of countries that sponsor private companies. They cover vast areas of the Pacific, Atlantic and Indian Oceans, totalling 1.3m sq km (500,000 sq miles). If the mining goes ahead, large machines will be lowered on to the seabed to excavate cobalt and other rare metals.


Campaigners said that, as well as destroying little understood regions of the ocean floor, the operations would deepen the climate emergency by disrupting carbon stores in seafloor sediments, reducing the ocean’s ability to store it. The industry has said deep-sea mining is essential to extract the materials needed for a transition to a green economy by supplying raw materials for key technologies including batteries, computers and phones. Its advocates say deep-sea mining is less harmful to the environment and workers than most existing mineral and mining operations.

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“They want to send gigantic bulldozers, decked out with rotating grinders and mammoth drills straight out of Robot Wars, into the deepest parts of the ocean, disturbing the home of unique creatures and churning up vital stores of carbon. ”

The Seabed Should Be Off-Limits To Mining Companies (Chris Packham)

When I was filming Blue Planet Live, I was struck by just how much of the ocean has been altered by humans. From industrial fisheries ensnaring ocean giants in kilometres-long lines, to finding our trash at some of the deepest parts of the ocean: it’s clear that however vast the seas are, we are causing profound harm. Yet at this point in history, when the oceans are facing more pressures than ever before, a secretive new industry is seeking to move into the deep sea, the largest ecosystem on the planet, to start mining for metals and minerals.

They want to send gigantic bulldozers, decked out with rotating grinders and mammoth drills straight out of Robot Wars, into the deepest parts of the ocean, disturbing the home of unique creatures and churning up vital stores of carbon. This is quite clearly an awful idea. As someone fascinated by weird and wonderful wildlife, the deep sea is a dream come true. Stoplight loosejaws, bearded sea-devils and vampire squid are just a few of the fantastically named creatures that make the deep ocean their home. On practically every mission down to the deep, scientists discover new species.


We know more about the surface of Mars and the moon than about the bottom of the ocean. Mining the deep sea sounds just as ludicrous as mining the moon. Far too often, industry has plundered the natural world before science has explored and understood its importance. Parts of the deep sea have already been ravaged by destructive fisheries. These ecosystems stand practically no chance of recovery if mining is allowed to start. Researchers who returned 30 years later to one mining test site on the Pacific sea floor could still see the wounds on the seabed – and warned of irreversible loss of some ecosystem functions.


A deep-sea blackdevil. Photograph: Alamy Stock Photo

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Jul 012019
 


Pablo Picasso Portrait of woman in wheelchair 1936

 

The Longest Economic Expansion On Record: What Happens Next? (ZH)
Surprise Collapse Of Regional Chinese Bank Sets Off Domino Effect (Salmon)
George Soros And Charles Koch Team Up To End Us ‘Forever War’ Policy (BG)
Europe Circumvents US Sanctions On Iran (Coppola)
Laffer: Federal Reserve Shouldn’t Be Independent From White House (NYP)
Hong Kong On Edge As Protests Erupt Ahead Of Handover Rally (R.)
Erdogan Says ‘Some People’ Paying ‘Serious Money’ To Bury Khashoggi Issue (R.)
Erdogan Says S-400 Systems Delivered Within 10 Days, No US Sanctions (R.)
Erdogan Says ‘Never Possible’ To Consider US Plan For Middle East (R.)
The Real Threat From Facebook’s Libra Coin (Coppola)
Goldman Sachs Has Given Itself A 150-Minute Miniseries (Cohan)
The Mythical Economic Data On Climate Change (Steve Keen)
Insects As A Whole Will Go Down The Path Of Extinction In A Few Decades (AFP)

 

 

I think we know the answer.

The Longest Economic Expansion On Record: What Happens Next? (ZH)

On July 1, the US economic expansion will become the longest on record, entering its 121st month since the end of the 2009 recession (which according to the NBER ended in June of that year), and surpassing the previous record – the March 1991 – March 2001 expansion – which ended with the bursting of the dot com bubble. As Deutsche Bank’s Jim Reid writes, since US business cycles have been tracked from 1854 there have been 34 expansions. The last four have all been long relative to the past and are all in the top six in terms of duration. The other two in this top six were the June 1938-cycle which was boosted by the WWII rearmament efforts, and the Feb 1961-cycle where the Fed were late to deal with ever increasing US inflation, leading to too loose monetary policy and an extended cycle.


As part of a recent analysis, Deutsche Bank explains why this cycle – and the past four – have been so long relative to history, show various economic and market indicators from this cycle relative to the past to put the record-breaking expansion in some context, and predict what may happen next. It may come as a surprise to exactly nobody, that there is a distinct correlation between the rising length of the US business cycle – and ensuing economic and market crashes which terminate said expansion – and the advent of the Federal Reserve. Oh, and globalization has a lot to do with everything too.

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When confidence disappears, what are you left with?

Surprise Collapse Of Regional Chinese Bank Sets Off Domino Effect (Salmon)

First it was China. The end of May saw the collapse of an obscure Inner Mongolian bank, Baoshang, which had about $90 billion in assets and which had seemed perfectly healthy. The government blamed misappropriation of funds by the bank’s owner, but the damage was done. The interbank lending market in China seized up, especially for smaller institutions. Small and medium-sized Chinese banks are collectively as big as the large players, and they’re very reliant on interbank funding. After Baoshang defaulted on its interbank obligations, it became very hard for smaller banks to convince larger ones that they were safe. The central bank ended up having to step in with $125 billion of emergency liquidity, and things still aren’t back to normal.


Next came investment funds. The GAM Greensill Supply Chain Finance fund, in Switzerland, imploded in early June, followed in short succession by Neil Woodford’s Equity Income fund in the U.K. Then came French asset manager H20 Asset Management, running into similar problems. Much like Chinese banks, funds that invest in illiquid securities suddenly find themselves under extreme scrutiny. Each bad apple seems to infect another. Be smart: This isn’t a financial crisis, although it’s very similar to how many crises start. Every bull market has a massive “bezzle,” to use J.K. Galbraith’s famous term. We’re seeing the beginning of a rise in skepticism, and a shrinking bezzle. That’s good for honesty; it’s less good for asset prices.

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It really says this: “The street cred they bring from both ends of the political spectrum ..”

George Soros And Charles Koch Team Up To End Us ‘Forever War’ Policy (BG)

Besides being billionaires and spending much of their fortunes to promote pet causes, the leftist financier George Soros and the right-wing Koch brothers have little in common. They could be seen as polar opposites. Soros is an old-fashioned New Deal liberal. The Koch brothers are fire-breathing right-wingers who dream of cutting taxes and dismantling government. Now they have found something to agree on: the United States must end its “forever war” and adopt an entirely new foreign policy. In one of the most remarkable partnerships in modern American political history, Soros and Charles Koch, the more active of the two brothers, are joining to finance a new foreign-policy think tank in Washington. It will promote an approach to the world based on diplomacy and restraint rather than threats, sanctions, and bombing.

This is a radical notion in Washington, where every major think tank promotes some variant of neocon militarism or liberal interventionism. Soros and Koch are uniting to revive the fading vision of a peaceable United States. The street cred they bring from both ends of the political spectrum — along with the money they are providing — will make this new think tank an off-pitch voice for statesmanship amid a Washington chorus that promotes brinksmanship. “This is big,” said Trita Parsi, former president of the National Iranian American Council and a co-founder of the new think tank. “It shows how important ending endless war is if they’re willing to put aside their differences and get together on this project. We are going to challenge the basis of American foreign policy in a way that has not been done in at least the last quarter-century.”

Since peaceful foreign policy was a founding principle of the United States, it’s appropriate that the name of this think tank harken back to history. It will be called the Quincy Institute for Responsible Statecraft, an homage to John Quincy Adams, who in a seminal speech on Independence Day in 1821 declared that the United States “goes not abroad in search of monsters to destroy. She is the well-wisher to the freedom and independence of all. She is the champion and vindicator only of her own.” The Quincy Institute will promote a foreign policy based on that live-and-let-live principle.

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Potential powder keg.

Europe Circumvents US Sanctions On Iran (Coppola)

Europe has found a way of circumventing U.S. sanctions on Iran. The governments of France, Germany and the United Kingdom have developed a special purpose vehicle (SPV) to enable European businesses to maintain non-dollar trade with Iran without breaking U.S. sanctions. That SPV, known as INSTEX, is now up and running. The three governments announced the successful implementation of INSTEX at a meeting of the Joint Commission of the Joint Comprehensive Plan of Action (JCPOA) on June 28, 2019. The meeting was chaired on behalf of the EU by the Secretary General of the European External Action Service (EEAS), Helga Schmid, and was attended by representatives of China, France, Germany, Russia, the United Kingdom, and Iran.

In a statement, Schmid said: “France, Germany and the United Kingdom informed participants that INSTEX had been made operational and available to all EU Member States and that the first transactions are being processed. Ongoing complementary cooperation with the Iranian corresponding entity (STFI), which has already been established, will speed up. They confirmed that some EU Member States were in the process of joining INSTEX as shareholders, the special purpose vehicle aimed at facilitating legitimate business with Iran. They are also working to open INSTEX to economic operators from third countries.”

JCPOA is better known as the “Iran nuclear deal.” The U.S. unilaterally withdrew from JCPOA in May 2018, when it reimposed sanctions on Iran’s oil export sector. But other countries, including EU member states, have so far declined to follow suit. They claim that Iran is complying with the terms of the deal, and the U.S.’s decision to reimpose sanctions was unjustified.

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Nuff said: “..was given the Presidential Medal of Freedom this month for his contributions to Republican economic theory, particularly the idea of “trickle down economics”

Laffer: Federal Reserve Shouldn’t Be Independent From White House (NYP)

Presidential Medal of Freedom recipient Arthur Laffer, an economist who served as an adviser to President Trump’s 2016 campaign, took some shots at the embattled Federal Reserve chairman as he also questioned the body’s autonomy. “The fed shouldn’t be independent of the administration. Never should be. None of those people were elected. They were appointed. And there’s no reason for them being appointed. It’s a policy tool that should be in the hands of the Congress and the President to make our country better,” Laffer told John Catsimatidis in an interview that aired Sunday on AM 970 New York. “Not in the hands of some Princeton professors who never worked a day in their lives except on an academic paper that’s far from reality. I don’t think there should be an independent Fed,” Laffer added.


Laffer also speculated that Jerome Powell, the chairman of the Federal Reserve who has been criticized by Trump, “feels very besieged.” “I’m sure Powell doesn’t feel good about Donald Trump,” Laffer said. “But, you know, it’s not his job to feel good or bad about Donald Trump.” Like Trump, Laffer encouraged Powell to be a “professional” and lower interest rates. The president has been frustrated by the fed’s interest rate hikes, though Powell backed off in late 2018. Laffer, an adviser to President Ronald Reagan, was given the Presidential Medal of Freedom this month for his contributions to Republican economic theory, particularly the idea of “trickle down economics” — that lower tax rates trickle down to the rest of the economy.

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Violent too.

Hong Kong On Edge As Protests Erupt Ahead Of Handover Rally (R.)

Thousands of demonstrators faced off with riot police early on Monday, the anniversary of Hong Kong’s return to Chinese rule, as authorities braced for more mass protests amid widespread anger over a controversial extradition bill. More than a million people have taken to the streets at times over the past three weeks to vent their anger and frustration at Hong Kong’s Beijing-backed leader Carrie Lam, posing the greatest popular challenge to Chinese leader Xi Jinping since he came to power in 2012. Opponents of the now-suspended extradition bill, which would allow people to be sent to mainland China for trial in courts controlled by the Communist Party, fear it is a threat to Hong Kong’s much-cherished rule of law and are demanding it be scrapped and Lam step down.


Police fired pepper spray to disperse some demonstrators, mostly black-clad students wearing hard hats and face masks, ahead of a flag-raising ceremony to mark the 22nd anniversary of Hong Kong’s handover from British to Chinese rule. Riot police with helmets and batons raced towards protesters at one point and held up red banners warning they would use force if the activists charged. The protesters once again paralyzed parts of the financial hub as they occupied roads after blocking them off with metal barriers and wooden planks.

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And he knows who they are.

Erdogan Says ‘Some People’ Paying ‘Serious Money’ To Bury Khashoggi Issue (R.)

Turkish President Tayyip Erdogan said “some people” were paying “serious money” to bury the issue of the murder of Saudi journalist Jamal Khashoggi, broadcaster NTV reported on Monday. Erdogan, who was speaking to reporters after the G20 summit in Osaka, Japan, did not elaborate. Speaking earlier at the summit, Erdogan said Saudi Arabia’s Crown Prince Mohammed bin Salman must uncover the killers of the Washington Post columnist, and added that some aspects of the murder were still being hidden.

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Really? You sure?

Erdogan Says S-400 Systems Delivered Within 10 Days, No US Sanctions (R.)

Turkish President Tayyip Erdogan said the first delivery of the Russian S-400 missile defense system would take place within 10 days, broadcaster NTV reported on Sunday, a day after he said there would be no U.S. sanctions over the deal. Turkey and the United States, NATO allies, have been at odds over Ankara’s decision to purchase the S-400s, with Washington warning of U.S. sanctions if the delivery took place. Turkey has dismissed the warnings, saying it would not back down. The United States says the S-400s will compromise its Lockheed Martin Corp F-35 fighter jets, of which Turkey is a producer and buyer. Washington has also formally started the process of expelling Turkey from the F-35 program, halting the training of Turkish pilots in the United States.


But on Saturday, Erdogan said U.S. President Donald Trump had told him there would be no sanctions over the Russian deal, after Trump said Turkey had been treated unfairly over the move. The White House said Trump “expressed concern” over the S-400 deal and “encouraged Turkey to work with the United States on defense cooperation in a way that strengthens the NATO alliance.” Speaking to reporters after the G20 summit in Japan, where he held bilateral talks with Trump, Erdogan said he believed the dispute over the S-400s would be overcome “without a problem” and added that his U.S. counterpart supported Turkey in the dispute. “In our phone calls, when we come together bilaterally, Mr Trump has not said so far: ‘We will impose these sanctions.’ On the S-400s, he said to me: ‘You are right.’ We carried this issue to a very advanced level,” Erdogan said, according to NTV.

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“.. the leaders of Russia, Iran and Turkey would hold a summit in July to discuss developments in Syria..”

Erdogan Says ‘Never Possible’ To Consider US Plan For Middle East (R.)

Turkish President Tayyip Erdogan said it was “never possible” for Turkey to positively consider the $50 billion U.S. peace plan for the Middle East, broadcaster NTV reported on Monday. The White House last week outlined a $50 billion Middle East economic plan that would create a global investment fund to lift the Palestinian and neighboring Arab state economies, and fund a $5 billion transportation corridor to connect the West Bank and Gaza. Speaking to reporters after the G20 summit in Japan, Erdogan also said that the leaders of Russia, Iran and Turkey would hold a summit in July to discuss developments in Syria, NTV said.

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Digital identities.

The Real Threat From Facebook’s Libra Coin (Coppola)

Facebook’s business model since its inception has been to harvest and monetize data. I see no reason to assume that this has changed. So when I find, buried in Libra’s whitepaper, two sentences that imply Facebook’s real aim in creating Libra is to set the standard for global digital identities, my hair stands on end. As Dave Birch, director of Consult Hyperion and an expert on digital identity, puts it: “There are no throwaway remarks in a Facebook white paper that has taken a year to put together. It’s in there for a reason. [Facebook] are actually going to try and fix the identity problem.”

Dave seems fairly sanguine about Facebook’s intention. But I am not. We now know just how damaging Facebook’s data harvesting can be. If Facebook became the standard setter for digital identities, it could gain access to all personal data. And that is what it wants. Not control of finance, control of data. And if you think your personal data would be digitally secure from harvesting simply because Facebook said so, you are the biggest sucker in the world.

From a financial perspective, Libra seems fairly harmless. Even if all 2bn of Facebook’s users adopted Libra for some transactions, and all 90m of its small businesses used Libra for purchases and sales, it is not going to pose a major threat to the financial system, let alone replace sovereign currencies. But Libra is in reality a vehicle for bringing about Facebook’s wider aim of becoming the standard setter for digital identity. And that is a much, much bigger issue. Facebook is the last organization on earth that should have anything to do with digital identity or standards setting. For that reason, Libra must be stopped.

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Accumulating power for 150 years.

Goldman Sachs Has Given Itself A 150-Minute Miniseries (Cohan)

Goldman Sachs is impeccably predatory, elegantly selfish. It’s harder to get into than Harvard. And when you do leave, there’s a good chance you’ll be Treasury secretary, national economic adviser, or the governor of New Jersey, as if the lucre were only a detour and not the whole point. In era after era of boom and bust, Goldman’s bankers never lost their shirts, even as all around them were losing theirs. Goldman is an inescapable American institution, a part of history, and now, like the Civil War and New York City and baseball, on the occasion of its 150th birthday, it has its own multipart documentary series directed by someone named Burns. Unlike those other institutions, though, it paid for the documentary itself, for what has to be an eight-figure sum (it declined to say how much it spent), given the luscious production values.

Among its other gifts, Goldman has always had a near-obsession for selling itself, its intelligence, its civic-mindedness. Goldman Sachs at 150 is the most expansive expression yet of this impulse. Goldman Sachs at 150 is a strange bit of filmmaking, hard to get one’s mind around. It’s obviously a piece of corporate marketing, so a viewer starts by resisting its conclusions—but its documentary tropes are so familiar that it wears you down. Current and former white male partners are interviewed in abundance, of course, but Burns—in this case Ric Burns, younger brother of Ken—also spends time with a number of Goldman’s female partners and partners of color, some of whom are also women. (In other words, a public relations home run.) It’s not exactly hagiography, because Goldman is clever enough to include in the film a number of instances in which it really messed up—and almost went out of business.

That makes the film, which is available on Amazon Prime, nearly credible as a piece of journalism, but only nearly so. More than anything it reveals both Goldman’s gargantuan superego and its immense—and justified—pride in making it to 150. (Among major American investment banks, only Brown Brothers Harriman (founded in 1818) and Lazard (founded in 1848) are older than Goldman.) Burns’s Goldman Sachs at 150 is mostly a story of Goldman’s glory. One cannot help thinking, while watching the film, that Goldman is Lake Wobegon on the Hudson: all the women are strong, all the men are good-looking, and all the children are above average. I’ve never seen so many polished, happy, prosperous well-dressed people (of all stripes) in one place at one time. I feel certain this was not an accident.

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Steve destroys William Nordhaus’s Nobel material.

The Mythical Economic Data On Climate Change (Steve Keen)

What this shows is that mainstream economists are generally climate change trivializers—not that they know anything meaningful about the magnitude of disruption to the globe’s ecological and economic systems that will result from climate change. The 30-times difference in expectations of serious disruption from climate change between scientists and economists should have been the takeaway from this survey, not the average of the expectations of damage. Nordhaus at least acknowledges one important flaw in this survey: with him asking the questions, people who weren’t experts in climate change—the majority, at 14 of the 19 respondents (if we count Nordhaus and Pearce as experts, at least in the sense that their own models would have given them a basis for their opinions)—could have been intimidated by Nordhaus’s own well-known position, to give answers that were similar to what Nordhaus himself would give. He framed the answers in effect, by being the one asking the questions:


“Two important methodological issues may contaminate the results. The first is the interviewer effect. I am known to the respondents as one who has developed estimates of the impact of climatic change that are modest compared with some of the scientific concerns and popular rhetoric, and this knowledge might have influenced the respondents (p. 46)” Therefore, the substantive content of this “data” is not the average temperature result from the opinions of 2 climate change experts and 16 others (mainly economists), but the huge difference between the climatic expert predictions and the guesses of the other 16 (where 2 of these, Nordhaus and Pearce, would have been influenced in their answers by the results of their own models—including earlier versions of the model Nordhaus was using this data point to calibrate).

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“Unless we change our ways of producing food,..”

Insects As A Whole Will Go Down The Path Of Extinction In A Few Decades (AFP)

[..] the total biomass of flying insects here has plummeted by 76 percent. To demonstrate the rapid decline, a lab technician holds up two bottles: one from 1994 contains 1,400 grammes of trapped insects, the newest one just 300 grammes. “We only became aware of the seriousness of this decline in 2011, and every year since then we have seen it get worse,” says Sorg, the man who sounded the alarm. At the time, the news didn’t make major waves outside ecological circles. Concern about biodiversity loss focused mostly on large charismatic mammal species, and environmental monitoring such as that in Krefeld was considered a quaint Sunday hobby, largely ignored by the scientific community.

Also in 2011, just across the Dutch border, ecology professor Hans de Kroon was working on the decline of birds in the region. He hypothesised that the birds suffered from a shortage of food, especially insects, but had no data to prove it. “Then our German colleagues from Krefeld got in touch and said, ‘we have the data, we’ve witnessed a strong decline, we are very concerned, could you analyse the data?’. “That’s how it all started.” In the search for the cause, the landscape around Krefeld provides some clues. In the distance, industrial chimneys billow smoke. On one side of the road lies a protected nature reserve. On the other, a sugar beet field is being sprayed with pesticides by an agricultural machine. “You see, protected reserves are not so protected,” says Sorg.

Across the border, Kroon says, “we must realise that here in western Europe our nature is getting smaller, the agriculture fields are very hostile to insects. There is no food, they get poisoned. “And nature areas are also more and more isolated. Insects can’t move from one place to another, it’s too far away.” Although the exact cause for the die-off is not yet clear, he says, “the cause is anthropogenic, there’s no doubt about it. “It is our greatest fear that a point of no return will be reached, which will lead to a permanent loss of diversity.” The Krefeld research played a central role in a meta-study published by Francisco Sanchez-Bayo and Kris Wyckhuys from the Australian universities of Sydney and Queensland.

In February, they published the first synthesis of 73 studies on entomological fauna around the world over the past 40 years, listing places from Costa Rica to southern France. They calculated that over 40 percent of insect species are threatened with extinction, and each year about one percent is added to the list. This is equivalent, they noted, to “the most massive extinction episode” since the dinosaurs disappeared. The main drivers appeared to be habitat loss and land conversion to intensive agriculture and urbanisation, followed by pollution, mainly from pesticides and fertilisers, invasive species and climate change. “The conclusion is clear,” they wrote. “Unless we change our ways of producing food, insects as a whole will go down the path of extinction in a few decades.”

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Jun 252019
 


Pablo Picasso Minotauromachie 1935

 

Interest Rates Don’t Need To Rise Much To Cause Recessions Now (Colombo)
The Federal Reserve Is About To Create A Lot More Zombies (MW)
The Solution to Trump’s Iran Mayhem (FFF)
Iran Says New US Sanctions “Permanent Closure” Of Diplomacy (AFP)
Oil Prices Drop Amid Demand Worries, But US-Iran Tensions Support (R.)
Provoking Iran Could Start a War, Crash the Entire World Economy (Pieraccini)
House Party (Jim Kunstler)
Three Years After The Brexit Referendum, What Has Changed? (Coppola)
Firms Fear For Deliveries In Shipping Pollution Shakeup (R.)
‘Climate Apartheid’: UN Expert Says Human Rights May Not Survive (G.)

 

 

The shadow Fed Funds rate is already rising sharply. Wiggle room approaches zero.

Interest Rates Don’t Need To Rise Much To Cause Recessions Now (Colombo)

As a result of debt growing faster than our underlying economy, America’s debt as a percent of GDP soared from just over 150% in the early-1980s to approximately 350% in recent years. This higher debt burden is the reason why our economy simply cannot handle interest rates as high as they were before 2008. Particularly worrisome is the fact that U.S. federal debt is at a record of over 100% of the GDP (vs. 62% before the Great Recession), which will make it a much greater challenge to keep the economy afloat in the coming recession:

As the Fed Funds rate chart below shows, the interest rate threshold necessary to trigger recessions (recessions are designated by the gray bars) keeps falling as our debt burden increases:

Though many optimists are quick to point out that the benchmark Fed Funds rate was only increased from 0% to 2.5% during the current tightening cycle, the reality is that the current tightening cycle is even more aggressive than the past several cycles when the Fed Funds rate is adjusted for quantitative easing (this is known as the shadow Fed Funds rate). According to this methodology, interest rates have increased by the equivalent of 5.41% in the current cycle versus just 3.62% before the 2001 recession and 4.26% before the Great Recession of 2007 to 2009:

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It’s like hearing my own echo.

The Federal Reserve Is About To Create A Lot More Zombies (MW)

Long-term interest rates just fell off a cliff. And if you think they can’t keep falling, think again. Albert Edwards, a strategist at SG Securities, pointed out in a recent note that none of the experts surveyed by the Wall Street Journal at the start of the year predicted 10-year Treasury yields would fall below 2.5%. Current level: 2%. I guess we can toss those forecasting models out the window. He adds that mainstream economists have been saying for years that long-term rates would never end up at zero percent. Yet rates in Europe are now negative. People are paying half a percent a year for the privilege of lending money to the government of Switzerland. Even in the U.S., 10-year rates adjusted for inflation are only 0.29%. A generation ago, they were typically 2% or better.

Western economists used to say that zero percent rates were a weird and unique thing you only saw in Japan — like people eating raw puffer fish and hoping not to die. It would never catch on over here, they said. But they already have. Today European rates are even lower than those in Japan. When U.S. rates first collapsed in 2011-2012, we were assured it was a freak one-off event and was never going to happen again. When it happened again in 2016, we were told it was, well, a “two-off” event that was certainly never going to happen a third time. Now it’s happening a third time, and I guess we’re waiting for the official line on why, once again, this is just a temporary derangement and nothing to worry about.

But the Bank for International Settlements says there is something to worry about, and it’s the reason that economic growth, inflation and interest rates can’t get off the ground: zombies. No, I’m not making this up. The BIS says there are way too many zombies around, and they’re killing the economy, and it’s all the fault of low interest rates. We’re talking “corporate zombies,” of course. The BIS found that, ever since the 1980s, falling interest rates have made it easier and easier for bad companies with lousy management and terrible products and dismal prospects to stay in business long after they should have gone the way of all flesh. These “zombie” companies can stay alive — or whatever the correct term is for zombies — if they can just keep borrowing.

And when money gets cheaper, that’s great for zombies. Lower interest rates are correlated with rising numbers of zombie companies, the BIS found. And there are a lot of zombies around. The BIS reckons no fewer than 12% of the non-financial companies on major developed stock markets could be “zombie” companies, at least by a loose definition. This is an epidemic. In the early 1990s, the figure was about 2%.

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“Restore America’s founding principles of a limited-government republic and its founding foreign policy of non-interventionism. That’s the way to restore peace, prosperity, morality, harmony, normality, fiscal responsibility, and freedom to our land.”

The Solution to Trump’s Iran Mayhem (FFF)

Should the Nobel Peace Prize be awarded to a man who resolves his own crises and then chooses to kill innocent people with sanctions rather than bombs as a way to achieve a political end? Even a blind man can see that Trump’s actions toward Iran have been entirely belligerent, all with the aim of squeezing the Iranian citizenry and bullying their government officials into complying with his dictates or else face a “defensive” U.S. bombing attack. It’s helpful to remind ourselves of what happened here. Iran entered into a deal with the U.S. government under the presidency of Barrack Obama. Pursuant to the deal, Iran would agree not to acquire nuclear weapons and the U.S. government would lift the brutal U.S. sanctions that were impoverishing and even killing the Iranian citizenry.

Complying with the agreement, Iran gave up its nuclear weapons programs, fully expecting the U.S. government to comply with its end of the bargain by lifting its sanctions. Then Donald Trump entered the presidency and proceeded to immediately tear up the deal, knowing full well that Iran had compiled with it with the expectation that the U.S. government would fulfill its end of the bargain. Not only did Trump not lift the sanctions, he doubled down and began enforcing them even more brutally than Obama had. In other words, Iran was double-crossed by the U.S. government operating under Trump. (I wonder if North Korean officials are noticing this.)

[..] The problems began when the U.S. government abandoned its founding policies of a limited-government republic and non-interventionism and instead became a national-security state and embraced a foreign policy of empire and interventionism. This is what gave the country a huge, permanent military establishment, both domestically and in foreign countries. It also gave the nation assassinations, torture, coups, regime-change operations, alliances with dictatorial regimes, installation of dictatorial regimes, sanctions, embargoes, illegal invasions and occupations, undeclared wars, wars of aggression, terrorism, a war on terrorism, out-of-control spending and debt, and, of course, the destruction of American liberty and privacy.

[..] There is but one solution to all this mayhem: Restore America’s founding principles of a limited-government republic and its founding foreign policy of non-interventionism. That’s the way to restore peace, prosperity, morality, harmony, normality, fiscal responsibility, and freedom to our land.

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Sanctions as a military tool. May not be that wise.

Iran Says New US Sanctions “Permanent Closure” Of Diplomacy (AFP)

Iran said Tuesday US sanctions on its leaders represent the “permanent closure” of diplomacy with Washington, after President Donald Trump tightened the screws on a nation he has threatened with “obliteration”. “Imposing fruitless sanctions against Iran’s supreme leader and the commander of Iran’s diplomacy is the permanent closure of the path to diplomacy with Trump’s desperate government,” ministry spokesman Abbas Mousavi said in a tweet. Washington imposed new sanctions against supreme leader Ayatollah Ali Khamenei Monday ahead of blacklisting Foreign Minister Mohammad Javad Zarif later this week, its latest salvo in a tense standoff that has raised fears of a regional conflict.


“Trump’s government is destroying all established international mechanisms for keeping global peace and security,” he added. Tehran and Washington broke off diplomatic relations in 1980 over the hostage crisis at the US embassy in Tehran following Iran’s Islamic revolution. US President Donald Trump also imposed new sanctions Monday against top Iranian military chiefs, pressuring the country it has threatened with “obliteration” if a war breaks out.

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Oil prices fall in this climate. That’s remarkable.

Oil Prices Drop Amid Demand Worries, But US-Iran Tensions Support (R.)

Oil fell on Tuesday amid concerns over the outlook for crude demand, but prices were supported after Washington announced new sanctions on Iran amid mounting tensions in the Middle East. Benchmark Brent crude futures were down 34 cents, or 0.5%, at $64.52 a barrel by 0639 GMT. They dropped 0.5% on Monday. U.S. crude futures were down 24 cents, or 0.4%, at $57.66 a barrel. The U.S. benchmark rose 0.8% in the previous session. Brent climbed 5% last week and U.S. crude surged 10% after Iran shot down a U.S. drone on Thursday in the Gulf, adding to tensions stoked by attacks on oil tankers in the area in May and June. Washington has blamed the tanker attacks on Iran, which denies having any role.


U.S. President Donald Trump targeted Iranian Supreme Leader Ayatollah Ali Khamenei and other top Iranian officials with sanctions on Monday, taking an unprecedented step to increase pressure on Iran after Tehran’s downing of the drone. “This would appear to effectively rule out any talks or negotiations to end the crisis,” said Tom O’Sullivan, founder of energy and security consultancy Mathyos Advisory.

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Derivatives and oil again.

Provoking Iran Could Start a War, Crash the Entire World Economy (Pieraccini)

As if the political and military situation at this time were not tense and complex enough, the two most important power groups in the United States, the Fed and the military-industrial complex, both face problems that threaten to diminish Washington’s status as a world superpower. The Fed could find itself defending the role of the US dollar as the world reserve currency during any conflict in the Persian Gulf that would see the cost of oil rise to $300 a barrel, threatening trillions of dollars in derivativesand toppling the global economy. The military-industrial complex would in turn be involved in a war that it would struggle to contain and even win, destroying the United States’ image of invincibility and inflicting a mortal blow on its ability to project power to the four corners of the world.

Just look at how surprised US officials were about Iran’s capabilities to shot down an advanced US Drone: “Iran’s ability to target and destroy the high-altitude American drone, which was developed to evade the very surface-to-air missiles used to bring it down, surprised some Defense Department officials, who interpreted it as a show of how difficult Tehran can make things for the United States as it deploys more troops and steps up surveillance in the region.” The US dollar-based economy has a huge debt problem caused by post-2008 economic policies. All central banks have lowered interest rates to zero or even negative, thus continuing to feed otherwise dying economies.

The central bank of central banks, the Bank for International Settlements, an entity hardly known to most people, has stated in writing that “the outstanding notional amount of derivative contracts is 542 trillion dollars.” The total combined GDP of all the countries of the world is around 75 trillion dollars. With the dimensions of the problem thus understood, it is important to look at how Deutsche Bank (DB), one of the largest financial institutions in the world, is dealing with this. The German bank alone has assets worth about 40 trillion dollars in derivatives, or more than half of annual global GDP. Their solution, not at all innovative or effective, has been to create yet another bad bank into which to pour at least 50 billion dollars of long-term assets, which are clearly toxic.

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Don’t know what to call it? No worries, mate, Jim can help.

“..as if Mr. Biden might have been mistaken for a waiter in the senators’ dining room, with its old fashioned-ways and renowned bean soup.”

House Party (Jim Kunstler)

As the first of 12 presidential debates blows in at mid-week like an evil patch of bad summer weather, twenty candidates vie for the position of Ole Massa on the Democratic Party plantation, and the air is gravid with bad vibes. One highly-favored entry, Mayor Pete (Buttigieg) of charming South Bend, Indiana, stepped into (and tripped over) a big fresh patty of mule poop over the weekend at a “town hall” meeting that was called to address the June 16 shooting of one Eric Logan, 54, by a police officer dispatched to check out “a suspicious individual going through cars” at 2:30 a.m. The officer said the suspect came at him with a knife. The officer failed to switch on his body-cam, or so the police department said. Conclusions were jumped to. Then, in the wee hours just before Mayor Pete’s June 24 town hall, another black man was killed and 10 other people wounded in the shoot-up of a watering hole called Kelly’s Pub.

God knows what that was about — no police were involved in the shoot-up — but Mayor Pete caught the blame for it, of course, and the Sunday town hall meeting turned into a shriek-in by outraged “community” members. He was hardly allowed to admit his failures, issue apologies, and promise to do better. After the ordeal, Mayor Pete struggled to hold in his tears talking to the media. No doubt he will be pressured to keep ‘splainin’ these matters until either his campaign folds up its tent or he is anointed at the national convention in Milwaukee.

Leader-of-the-Pack (in the polls, anyway) Joe Biden stepped into it perhaps even deeper than Mayor Pete last week when he bragged about how well he was able to work with the old southern segregationist fossils, Herman Talmadge (GA) and James O. Eastland (MS), who were still around in the senate when “Uncle Joe” first came on the scene decades ago. “We didn’t agree on much,” the former Veep said, “but we got things done.” What’s more, the candidate averred, going perhaps a bridge too far, Senator Eastland “never called me ‘boy,’ he always called me ‘son,’” as if Mr. Biden might have been mistaken for a waiter in the senators’ dining room, with its old fashioned-ways and renowned bean soup.

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The divide has widened enormously. So much so that Brexit has become very dangerous.

Three Years After The Brexit Referendum, What Has Changed? (Coppola)

No-one should be fooled by the British media’s attempts to present this contest as a presidential battle like that between Donald Trump and Hillary Clinton in 2016. It is nothing of the kind. The people of the U.K. will have no say in who leads them. That will be decided by about 160,000 Tory party members, mainly old, white, rich and male. Representative of the population of the U.K., they are not. Both leadership candidates have offered tax policies designed to please these people. Boris Johnson’s proposal to cut taxes for the very rich and pay for it by raising payroll taxes was described by The Economist as “a shameless bribe to the elderly and prosperous Tory party members who choose the leader.”

Jeremy Hunt’s approach is more subtle: lowering corporation tax to match Ireland’s rate is still a bung to the rich, but it can be dressed up in supply-side economic language to give the impression of benefiting wider U.K. society. Americans might recall that President Trump’s corporate tax cuts were advertised as benefiting middle-income people through trickle-down effects, though they have primarily benefited the very rich. The Economist – hardly a bastion of lefty economics – was decidedly lukewarm about Hunt’s proposal, pointing out that corporation tax had already been cut considerably and it might be better to tax cashflows rather than profits.

But this contest is really about Brexit. Tory party members are overwhelmingly in favour of leaving the EU, and very frustrated by what they see as May’s delay. They want Brexit now, even if that means leaving with no deal. And they will vote for the candidate they think is most likely to deliver that regardless of the consequences. A recent poll showed that most of them would accept the breakup of the U.K. and/or the death of their own party as the price of Brexit.

Boris Johnson set up this scene of him and his girlfriend after reports of police being called to a big fight the two had. And then someone added a few words. Priceless.

 

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“This is expected to push up the price of diesel fuel for trucks by as much as 100 percent.”

Excellent. Needless transport is our biggest scourge.

Firms Fear For Deliveries In Shipping Pollution Shakeup (R.)

U.S. furniture company RC Willey Home Furnishings is so concerned that new global clean air rules will cause transport disruption that it brought forward the shipment of arm chairs and sofas from China by two months. The tougher regulations, set by the United Nations shipping agency, the International Maritime Organization (IMO), come into force on Jan 1. Costs will rise for ships towards the end of this year and there will be a knock on effect for trucks and other transporters that move goods around the world. For shipping companies it is the biggest shakeup in decades and adds to the pressures of an economic slowdown and the threat of an escalating trade war between the United States and China.

While consumers are not expected to pay more for goods, higher transport bills and disruption to company deliveries could further dent economic growth. Ship owners must cut sulphur emissions to 0.5% from 3.5%. They can do this by using low-sulphur fuel, installing exhaust gas cleaning systems or opting for other, more expensive, clean fuels such as liquefied natural gas or traveling more slowly. Jeff Child, president of Berkshire Hathaway’s RC Willey Home Furnishings, moved the delivery of about 450 containers from September and October to July and August. He wants to avoid any disruption in the peak fourth quarter as ships prepare for the changes, including refitting equipment. “We just don’t want to get caught in a situation where it affects our inventory,” he told Reuters.

Analysts say the container industry, which transports consumer goods such as sofas, designer clothes and bananas, will be one of the worst hit with extra costs of about $10 billion. The world’s two biggest container shipping lines – Denmark’s Maersk and Swiss headquartered MSC – say they face annual extra costs of over $2 billion each. Twenty-five logistics company executives told Reuters they would pass along any IMO-related costs, such as ship upgrades or more expensive fuel, to customers. “The sulphur cap will further put pressure on ocean freight rates and we… will have to pass those costs on to remain competitive,” Peder Winther, global head of ocean freight with Swiss transportation company Panalpina Group said.

[..] “Higher fuel prices would result in higher transport costs,” said Peter Nagle, an economist with the World Bank’s Development Prospects Group. “This would have the potential to lead to slower economic growth and trade.” Trucking companies will also suffer. The IMO rules do not apply to them but they will face new competition from ships for lower sulfur fuel. This is expected to push up the price of diesel fuel for trucks by as much as 100 percent.

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But nobody listens to the UN anymore.

‘Climate Apartheid’: UN Expert Says Human Rights May Not Survive (G.)

The world is increasingly at risk of “climate apartheid”, where the rich pay to escape heat and hunger caused by the escalating climate crisis while the rest of the world suffers, a report from a UN human rights expert has said. Philip Alston, UN special rapporteur on extreme poverty and human rights, said the impacts of global heating are likely to undermine not only basic rights to life, water, food, and housing for hundreds of millions of people, but also democracy and the rule of law. Alston is critical of the “patently inadequate” steps taken by the UN itself, countries, NGOs and businesses, saying they are “entirely disproportionate to the urgency and magnitude of the threat”. His report to the UN human rights council (HRC) concludes: “Human rights might not survive the coming upheaval.”

The report also condemns Donald Trump for “actively silencing” climate science, and criticises the Brazilian president, Jair Bolsonaro, for promising to open up the Amazon rainforest to mining. But Alston said there were also some positive developments, including legal cases against states and fossil fuel companies, the activism of Greta Thunberg and the worldwide school strikes, and Extinction Rebellion. In May, Alston’s report on poverty in the UK compared Conservative party welfare policies to the creation of 19th-century workhouses. Ministers said his report gave a completely inaccurate picture, but Alston accused them of “total denial of a set of uncontested facts”.

Alston’s report on climate change and poverty will be formally presented to the HRC in Geneva on Friday. It said the greatest impact of the climate crisis would be on those living in poverty, with many losing access to adequate food and water. “Climate change threatens to undo the last 50 years of progress in development, global health, and poverty reduction,” Alston said. Developing countries will bear an estimated 75% of the costs of the climate crisis, the report said, despite the poorest half of the world’s population causing just 10% of carbon dioxide emissions.

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Jun 192019
 


Gustave Courbet The village maidens 1852

 

I intentionally start writing this mere minutes away from Fed chair Jay Powell’s latest comments. Intentionally, because the importance ascribed to those comments only means we have gotten so far removed from what capitalism and free markets are supposed to be about, that it’s pathetic. The comments mean something for rich socialists, but nothing for the man in the street. Or, rather, they mean that the man in the street will get screwed worse for longer.

And it’s not just the Fed, all central banks have it and do it. They play around with rates and definitions and semantics until the cows can never come home again. And they have such levels of control over their respective societies and economies that the mere use of the word “markets” should result in loud and unending ridicule. There are no markets, because there is no price discovery, the Fed and ECB and BOJ got it all covered. Any downside risks, that is.

But it doesn’t, because the people who pretend they’re in those markets hang on central banks’ every word for their meal tickets. These are the same people we once knew as traders and investors, but who today function only as rich socialists sucking the Fed’s teats for ever more mother’s milk.

Our economic systems have been destroyed by our central bankers. Who pretend they’re saving them. And we all eat it up hook line and sinker. Because the rich bankers and their media have no reasons to counter Fed or ECB actions and word plays, and because anyone who’s not a rich banker or investor is kept by the media from understanding those reasons.

 

What the Fed and ECB have done, and the BOJ, between Greenspan and Bernanke and Yellen and Powell and Draghi and Kuroda, is they have made it impossible for economies to let zombies go to die as they should. They have instead kept those zombies, banks, corporations, alive to the point where they are today a very big live threat to those economies, and growing. Look at Deutsche Bank.

How healthy do you think your economy can be if all the wealthy people are focused on whether Powell uses the word “patient” or not in his notes? Why would a vibrant company or entrepreneur give a flying damn about whether he does or not use a certain word? There is no reason.

But we have let our central banks take over, and that’s what they did. And it will be very hard to take back that power, but we will have to. Because central banks, while pretending to guard over the entire economy, in fact only protect the interests of commercial banks, and rich “investors”. And then tell you it’s the same difference.

There’s a case to be made that Paul Volcker was right when he raised US interest rate in the 1980s, but after Volcker it’s only been one big power and money grab for Wall Street, starting with Alan Greenspan and the housing bubble he blew. The Oracle my behind.

 

Japan is only just beginning to assess the damage Kuroda and Abenomics have done, and that’s at a point where both these men are still in power, and hell bent on doing more of the same. Something all central banks have in common; there are very few tools in their boxes, so they just repeat and repeat even as they fail. And that failure, by the way, is inevitable.

The Bank of Japan by now owns half the country, and they just want to do more. Kuroda’s plan to get rid of deflation was to force the Japanese to spend their money/savings. But the fully predictable result was that the grandmas did the exact opposite: they clued into the fact that if he wanted that, they had reason to be afraid, and so they sat on their money. And now it’s ten years later.

 

Draghi is going to leave in a few months’ time, and he’ll lower rates even more (towards 0º Kelvin), even if he knows that’s a really bad idea (it is), because at this point it’s about his legacy (after me, the flood). Same thing that Bernanke, Yellen did, clueless intellectuals who told themselves they had a grip on this. They never came near. That’s why they were elected, for being clueless. Wall Street doesn’t want Fed heads who know.

The pivotal moment was when Bernanke said they were running into “uncharted territory”, and then never looked back and started pretending he knew where he was. He didn’t and none of them ever did since. But they have academic degrees, and they’re willing to sell their souls for money, so there you are.

 

Central banks, or let’s say handing them the powers that we have, are the worst thing we have ever invented, and that’s saying something in the age of Pompeo and Bolton and Trump and the Clintons. The latter may take us into war with Iran, or any other country from a long list, but central banks are set to destroy our societies and economies from within.

It’s real simple: your central bank does NOT serve your interests. So get rid of it. Don’t wonder whether it’ll use the word “patient” or raise or lower rates by 25 or 50 points, get rid of the entire thing. There’s nothing there that benefits you, it only ever benefits bankers.

Now, of course, if you’re a banker…..

 

Note: I knicked the headline from something Tyler Durden said yesterday, that central banks are back to square minus zero. Too good to let go. Draghi back to square one, but then again not. Central banks should be abolished.

 

 

 

 

 

Jun 152019
 


Arnold Böcklin Mermaids at play 1886

 

Freeing Julian Assange: Part Two (Suzie Dawson)
Well Guess What? He Was Right Again! Free Julian Assange (CJ)
DOJ Bloodhounds on the Scent of John Brennan (Ray McGovern)
System To Circumvent US Sanctions On Iran Ready Soon: German FM (AlJ)
Jeremy Corbyn Challenges UK Government’s Iran Tanker Accusations (BBC)
Brexit Britain Wallows In Dangerous Talk Of National Humiliation (O’Toole)
All Eyes On Fed As Stock Market Pines For Rate Cut (R.)
US Commercial Real Estate Is Another Dangerous Bubble In The Making (Colombo)
The “Deficits Don’t Matter” Folly (Stockman)
Beijing Yields To Hong Kong’s Financial Clout (R.)
Meanwhile, over on Planet Japan (Simon Black)

 

 

Trump was merely added years after the Russia-WikiLeaks slander had started.

Freeing Julian Assange: Part Two (Suzie Dawson)

The public has been led to believe that the 2016 election and the resulting Mueller Report is the definitive evidence that WikiLeaks was somehow in cahoots with Russia, reinforcing the premise that they were in a political alliance with, or favoured, Donald Trump and his Presidential election campaign. Prominent Russiagate-skeptics have long pointed out the multitude of gaping holes inherent in those theories, including the advocacy group Veteran Intelligence Professionals for Sanity (VIPS) who have produced credible forensic work analysing the 2016 WikiLeaks releases, that resoundingly debunks officials claims.


In the course of researching this article, I stumbled across a major discovery that augments that: the false notion of WikiLeaks being a front for Russian intelligence isn’t new – it has been pushed by media since 2009. It turns out the circulation of the WikiLeaks-Russia myth was a tried and true diversionary, smear tactic that was simply regurgitated in 2016. Julian Assange believed that UK intelligence agencies were behind the pushing of that narrative, and he was publicly stating so at the end of last decade. He wouldn’t make such claims lightly, and other emerging facts support his suspicion.

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“Otherwise you are just the establishment’s PR firm.”

Well Guess What? He Was Right Again! Free Julian Assange (CJ)

“Today’s the day that journalism gets put on trial,” Dimmack said. “And it’s interesting that behind me there are this many cameras. There haven’t been this many cameras for quite a while. It’s interesting that when Julian was dragged out and kidnapped from within that Ecuadorian embassy, all of you guys had actually gone home, and it was a Russian TV station that actually caught it, Ruptly. It’s almost as if you don’t care.”

“For seven years you have smeared and slandered that man who is going to appear on video in that court in about fifteen minutes,” Dimmack told the mainstream press, right to their fucking faces. “You are all responsible for what has happened today! All of you in the media! Every one of you. You have got blood on your hands. When he released those documents that Chelsea Manning gave him, all he did was the job of a publisher. That’s it. Right now Julian Assange is going to court and put on trial for exposing war criminals as war criminals. And all of you for seven years have smeared and slandered him. You should be ashamed of yourselves.”

“You have all got a chance right now to actually do a U-turn and repair some of the damage that you have done over the last seven years,” Dimmack roared. “The Fourth Estate is extremely important. You know this. This is why journalism is such a noble profession; you are meant to hold power accountable, not to suck up to it sycophantically and just repeat propaganda. Otherwise you are just the establishment’s PR firm.” “Stand up for Julian Assange and tell the truth,” he continued. “Ask yourselves why is it for seven years you have printed lie after lie after lie about him? Why is it for seven years you have said that he went to the Ecuadorian embassy to escape a rape charge? No he didn’t! How many times have I said it? He went in there to escape extradition to the United States.” “Well guess what?” Dimmack concluded, gesturing to the courthouse. “He was right again! Free Julian Assange.”

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More Russiagate.

DOJ Bloodhounds on the Scent of John Brennan (Ray McGovern)

The New York Times Thursday morning has bad news for one of its favorite anonymous sources, former CIA Director John Brennan. The Times reports that the Justice Department plans to interview senior CIA officers to focus on the allegation that Russian President Vladimir Putin ordered Russian intelligence to intervene in the 2016 election to help Donald J. Trump. DOJ investigators will be looking for evidence to support that remarkable claim that Special Counsel Robert Mueller’s final report failed to establish. Despite the collusion conspiracy theory having been put to rest, many Americans, including members of Congress, right and left, continue to accept the evidence-impoverished, media-cum-“former-intelligence-officer” meme that the Kremlin interfered massively in the 2016 presidential election.

One cannot escape the analogy with the fraudulent evidence of weapons of mass destruction in Iraq. As in 2002 and 2003, when the mania for the invasion of Iraq mounted, Establishment media have simply regurgitated what intelligence sources like Brennan told them about Russia-gate. No one batted an eye when Brennan told a House committee in May 2017, “I don’t do evidence.” As we Veteran Intelligence Professionals for Sanity have warned numerous times over the past two plus years, there is no reliable forensic evidence to support the story that Russia hacked into the DNC. Moreover, in a piece I wrote in May, “Orwellian Cloud Hovers Over Russia-gate,” I again noted that accumulating forensic evidence from metadata clearly points to an inside DNC job — a leak, not a hack, by Russia or anyone else.

So Brennan and his partners, FBI Director James Comey and National Intelligence Director James Clapper were making stuff up and feeding thin but explosive gruel to the hungry stenographers that pass today for Russiagate obsessed journalists. With Justice Department investigators’ noses to the ground, it should be just a matter of time before they identify Brennan conclusively as fabricator-in-chief of the Russiagate story. Evidence, real evidence in this case, abounds, since the Brennan-Comey-Clapper gang of three were sure Hillary Clinton would become president. Consequently, they did not perform due diligence to hide their tracks.

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From Monday. A few days later, the tankers were attacked. And not with mines either.

System To Circumvent US Sanctions On Iran Ready Soon: German FM (AlJ)

A European payment system designed to circumvent US sanctions on Iran will be ready soon, Germany announced on Monday. German Foreign Minister Heiko Maas met Iranian President Hassan Rouhani and Foreign Minister Mohammad Javad Zarif in Tehran as part of European efforts to salvage the historic JCPOA nuclear pact and defuse rising US-Iranian tension. Iran and Germany held “frank and serious” talks on saving the 2015 deal with world powers, Zarif told a joint press conference. “Tehran will cooperate with EU signatories of the deal to save it,” Zarif said. Maas said earlier the payment system, known as INSTEX, (Instrument in Support of Trade Exchanges) will soon be ready to go after months of work.


“This is an instrument of a new kind so it’s not straightforward to operationalise it,” he said, pointing to the complexity of trying to install a totally new payment system. “But all the formal requirements are in place now, and so I’m assuming we’ll be ready to use it in the foreseeable future,” added Maas about the system for barter-based trade with Iran. A cautious thaw in relations between Tehran and Washington began in 2015 when the deal was struck between six world powers and Iran, limiting its nuclear activity. But tensions with the US have mounted since President Donald Trump withdrew Washington from the accord in 2018 and reimposed sweeping sanctions. Iran has criticised the European signatories of the JCPOA for failing to salvage the pact after Trump pulled the US out. “There is a serious situation in the region. An escalation of tension is becoming uncontrollable and military action wouldn’t be in line with the interests of any party,” Maas said.

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From Skripal to Iran.

Jeremy Corbyn Challenges UK Government’s Iran Tanker Accusations (BBC)

Jeremy Corbyn has questioned whether the government has “credible evidence” to show Iran is behind the attacks on two oil tankers in the Gulf of Oman. Foreign Secretary Jeremy Hunt said responsibility for Thursday’s attack in the Gulf of Oman “almost certainly” lies with the Iranian regime. But the Labour leader tweeted that there was no evidence for this. Mr Hunt responded that Mr Corbyn’s comments were “pathetic” and said he should back British intelligence. It is the second time in the past few weeks that tankers appear to have been attacked in the region and comes amid escalating tension between Iran and the United States.


The US military released video footage which it said proved Iran was behind Thursday’s attacks on the Norwegian and Japanese tankers – something Iran has categorically denied. The UK Foreign Office said it was “almost certain” that a branch of the Iranian military – the Islamic Revolutionary Guard Corps – attacked the two tankers on 13 June, adding that “no other state or non-state actor could plausibly have been responsible”. “These latest attacks build on a pattern of destabilising Iranian behaviour and pose a serious danger to the region,” Mr Hunt said. However, in a tweet Mr Corbyn questioned that assessment and said the UK should ease tensions in the region, not fuel a military escalation.

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And it works!

Brexit Britain Wallows In Dangerous Talk Of National Humiliation (O’Toole)

Launching his bid for the Tory leadership this week, Dominic Raab announced, histrionically: “We’ve been humiliated as a country.” For those of us who do not live on planet Brexit, this might have been mistaken for a belated reaction to the genuinely demeaning spectacle of Donald Trump’s state visit a week earlier. But, of course, like almost all of his fellow contenders to be the next prime minister, Raab was playing his part in a strange performance in which the national honour has been so horribly besmirched by the European Union that it can be salved only by taking the pain of a no-deal Brexit.

Perhaps if you keep acting out phoney feelings, you end up not being able to recognise the real thing. Brexit Britain has been wallowing in a hyped-up psychodrama of national humiliation. It is, indeed, one of the very few things that remainers and leavers still share, even if they feel mortified for very different reasons. In relation to the EU, this sense of humiliation is wildly overplayed. But when Trump comes to town and really does degrade Britain, the sense of wounded dignity that ought to be felt seems curiously absent.

[..] how come the idea of national humiliation has loomed so large in Brexit? Shortly before the missed departure date of 29 March, a Sky Data poll asked: “Is the way Britain is dealing with Brexit a national humiliation?” Ninety per cent of respondents said yes. This idea of collective abasement is everywhere in the Brexit narrative. A random sample of headlines from across the spectrum tells the story: “Brexit and the prospect of national humiliation” (Financial Times); “Voice of the Mirror: Theresa May’s Brexit is a national humiliation”; “A national humiliation: Never was so much embarrassment caused to so many by so few” (Telegraph); “‘Humiliating to have to beg’ for EU exit, says Arlene Foster” (Irish Times). And so, endlessly, on.

There is something hysterical in this constant evocation of humiliation. It is a cry of outraged self-regard: how dare they treat us like this? Yes, of course, the Brexit debacle has reduced Britain’s prestige around the world. And the withdrawal agreement negotiated by Theresa May is indeed a miserable thing when compared with the glorious visions that preceded it. But Britain has not been humiliated by the EU – the deal was shaped by May’s (and Arlene Foster’s) red lines. Britain did not get what the Brexiters fantasised about, but it did get what it actually asked for. That’s not humiliation.

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Markets my ass. The only thing that’s left is the Fed. Markets are dead.

All Eyes On Fed As Stock Market Pines For Rate Cut (R.)

The Federal Open Market Committee meeting next week is shaping up as a pivotal one for Wall Street, with stocks primed for a selloff should the Fed fail to take an even more dovish tilt after policymakers raised expectations for a rate cut in recent weeks. The benchmark S&P 500 has rallied more than 5% this month as softening economic data coupled with comments by Fed officials heightened expectations the Fed will cut rates by the end of the year and, at the very least, telegraph it is leaning toward a later rate cut at its June 18-19 meeting. Those gains came on the heels of a selloff in May of nearly 7% in the S&P, largely fueled by investor concerns that trade wars were escalating, slowing the economy and putting it at risk of falling into a recession.


Bets for a rate cut were amplified by comments from Fed Chairman Jerome Powell on June 4, who said the central bank will respond “as appropriate” to the risks from a global trade war and other developments, and after a weak May payrolls report on June 7. Bank of America Merrill Lynch Chief Economist Michelle Meyer expects the Fed’s “dot plots” projection of interest rates, which represents the anonymous, individual rate projections of Fed policymakers for the next few years, to shift lower as officials start to factor in cuts. However, “the median dot will signal a Fed on hold,” Meyer said in a note. “The market has somehow convinced themselves that we are in an easing cycle. I am not sure how we got so far ahead of ourselves,” said Art Hogan, chief market strategist at National Securities in New York.

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Virtual wealth in a virtual reality.

US Commercial Real Estate Is Another Dangerous Bubble In The Making (Colombo)

As a result of the Fed’s ZIRP and QE programs in the past decade, virtually all types of assets soared in value: stocks, bonds, art, classic cars, farmland, residential real estate, and commercial real estate. On average, U.S. commercial real estate prices have surged by 111%, or more than double, since their 2009 low. Interestingly, most people don’t realize that U.S. commercial real estate also experienced a bubble from 2004 to 2008 at the same time as the U.S. housing bubble. This early bubble inflated for many of the same reasons as the housing bubble, which were ultra-low borrowing costs and loose lending standards. From 2004 to 2008, commercial real estate prices rose 66%, but crashed by nearly 40% during the 2008 financial crisis. Commercial real estate prices have increased even more in the current bubble (111% vs. 66%), which means that the coming commercial real estate bust is likely to be even worse than the 2008 bust.

As discussed earlier, low interest rate environments often cause dangerous bubbles to develop by encouraging borrowing booms. Like the U.S. commercial real estate bubble of 2004 to 2008, commercial real estate lending has flourished during the current bubble. Since 2012, total commercial real estate loans at U.S. banks have increased by an alarming $700 billion or 50%.

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“There haven’t been any cataclysmic consequences, so why worry about it?”

The “Deficits Don’t Matter” Folly (Stockman)

Well, that was timely. The US Treasury just posted a record $207 billion deficit for May and record monthly spending of $440 billion. That brought the rolling 12 month deficit to just shy of the trillion dollar mark at $986 billion. The timely part is two-fold. First, it just so happens that May marked month #119 of the current expansion, making it tied for the duration record with the 1990s cycle. But even JM Keynes himself would be rolling in his grave in light of the chart below. To wit, even by the lights of hardcore Keynesians of yore, fiscal deficits were supposed to be falling sharply at the end of a business cycle or even moving into surplus as they did in 1999-2000, not erupting toward 5% of GDP as has now happened.

The second timely note, of sorts, is that the Wall Street Journal was Johnny on the Spot this AM with a front page story entitled, “How Washington Learned to Love Debt and Deficits”. The story’s quote from the current Dem Chairman of the House Budget Committee, John Yarmouth, says it all. There simply has never been such bipartisan complacency about the nation’s public finances in all of modern history – including during the biggest borrow and spend days of FDR, LBJ and every president since Gerald Ford: “Rep. John Yarmuth (D., Ky.), House Budget Committee chairman, says he rarely hears from constituents concerned about rising deficits and debt. Many voters’ attitudes, he says: “There haven’t been any cataclysmic consequences, so why worry about it?”

The WSJ story is a dog’s breakfast of rationalizations, non sequitirs, political double-talk and Keynesian tommyrot. What is the most telling, however, is that it was co-authored by Jon Hilsenrath, who was the paper’s long-time Fed reporter. Yet it contains not a single word about the role of central banks in fostering the utter collapse of fiscal responsibility described by his lengthy report. So for want of doubt, here is the culprit. The central banks of the world have expanded their balance sheets by upwards of $22 trillion since the turn of the century, thereby massively monetizing the erupting public debt of the US and most of the world via fiat credit snatched from thin air.

So did that massive $22 trillion “buy” order from the central banks weigh heavily on the supply of funds side of the scales in the fixed income market, thereby driving bond prices skyward and yields ever lower? Why, goodness gracious, yes it did!

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Really?

Beijing Yields To Hong Kong’s Financial Clout (R.)

Beijing has yielded to Hong Kong’s unique economic status. Carrie Lam, chief executive of the special administrative region, on Saturday indefinitely suspended a bill that would have allowed extradition to the mainland, responding to mass rallies and violent street protests that rocked the city. It’s a defeat for her, and leaves the central government embarrassed. But for the Chinese Communist Party, preserving Hong Kong’s financial role still trumps the desire for more political control. Lam took office in 2017, and is considered a reliable Beijing loyalist. Pushing through the extradition bill, however, came from her, she said. Either way, the central government endorsed it enthusiastically as well. Yet the strength and breadth of the protests caught both Lam and Beijing off guard.


The backlash was not confined to democracy advocates, much less to a radical minority that began calling for independence after the Occupy movement in 2014. It extended to anyone who distrusted the Chinese legal system. In the end, that seemed to be almost everyone. Some tycoons began moving funds out of Hong Kong to Singapore in advance of the bill’s passage, Reuters reported, a hint of the outflows before the 1997 handover from Britain. And not only did the pro-Beijing camp fail to mobilise against the demonstrations in force – as it did in 2014 – the conservative business community began expressing public doubts about the agenda almost immediately. Financial markets wobbled. Worse still, U.S. politicians threatened to re-evaluate Hong Kong’s unique status, which could affect everything from visas to trade.

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We’re all on planet Japan. Pension systems everywhere are imploding.

Meanwhile, over on Planet Japan (Simon Black)

It was only a few days ago that the Japanese government’s Financial Services Agency published its oddly-titled “Annual Report on Ageing Society”. (Like everything in Japan, English translations often hilariously miss the mark…) This is a report that the Ministry of Finance puts out every year. And as the name implies, the report discusses the state of Japan’s pension fund, and its future prospects for taking care of its senior citizens. Bear in mind that Japan has the oldest population in the world; Japan ranks #2 in the world for average age (46.9, just behind Monaco), #1 in the world for the greatest percentage of citizens over the age of 70, and #1 in the world for life expectancy. In a nutshell, this means that Planet Japan has more people collecting pension benefits, for more years, than anywhere else.

Yet at the same time, Japan’s pension fund is completely insolvent. There simply aren’t enough people paying into the system to make good on the promises that have been made. At present there are only 2 workers paying into the pension program for every 1 retiree receiving benefits in Japan. The math simply doesn’t add up, and it’s only getting worse. Planet Japan’s birth rate is infamously low, and the population here is actually DECLINING. So, fast forward another 10-15 years, and there will be even MORE people collecting pension benefits, and even FEWER people paying into the system. This year’s ‘Annual Report on Ageing Society’ plainly stated this reality; it was a brutally honest assessment of Japan’s underfunded pension program.

The report went on to tell people that they needed to save their own money for retirement because the pension fund wouldn’t be able to make ends meet. This terrified a lot of Japanese workers and pensioners. So the government stepped in to quickly solve the problem… by making the report disappear. Prime Minister Shinzo Abe apologized for the report, calling it “inaccurate and misleading.” And Finance Minister Taro Aso– himself a pensioner at age 78 (though in typical Japanese form he looks like he’s 45)– simply un-published the report.

Read more …

 

 

 

 

 

Jun 142019
 


Henri Matisse Woman with a hat 1905

 

US Consults Allies On How To Protect Shipping In Wake Of Tanker Attacks (R.)
Julian Assange Is Not On Trial, British Justice Is (Wight)
The Hitlerization of Jeremy Corbyn – Among Others (Hopkins)
US Retirement Savings Gap Grows By $3 Trillion Each Year (MW)
The Fed Is Pushing On A String
The State of the Canadian Debt Slaves (WS)
Canada Rejects Idea Of Halting Extradition Of Top Huawei Executive To US (R.)
Elizabeth Warren To Propose Cancelling Up To $50,000 In Student Debt (MW)
UK Government Blew Billions on “Help to Buy” Scheme (DQ)
Varoufakis, Kotzias And The Dwindling ‘Progressive Army’ (K.)
School’s Purpose is Indoctrination (Carbone)
Carnival Cruise Ships Pollute 10 Times More Than All Cars in Europe (D.)

 

 

There are Japanese ships in the Persian Gulf literally every moment of every day. But Iran only decides to attack them when the first Japanese PM ever(?!) visits the country. Bolton is dementing.

US Consults Allies On How To Protect Shipping In Wake Of Tanker Attacks (R.)

The United States is discussing with its allies a variety of options on how to protect international shipping in the Gulf of Oman in the wake of tanker attacks that Washington has blamed on Iran, senior Trump administration officials said on Thursday. Two officials, speaking to a small group of reporters on condition of anonymity, said the United States wants to ensure the freedom of navigation in the Strait of Hormuz and make sure international commerce is not disrupted. Two oil tankers were attacked on Thursday and left adrift in the Gulf of Oman. “We don’t think this is over,” one official said of the possibility of more such attacks. The official said options are being reviewed.


“We’re discussing and will be discussing with our partners and allies suggestions on how we collectively can take steps to ensure, one, that we maintain freedom of navigation and international commerce is not disrupted and, second, that we protect our forces’ interests and our commercial assets and those of our partners and allies,” the official said. The official said the attacks appeared “designed to have a political outcome” and suggested it could have been an attempt to disrupt a visit to Tehran by Japanese Prime Minister Shinzo Abe. “We are going to obviously evaluate our presence in the region and the growing threat and make subsequent decisions,” the official said. “We have to look at the threat, as we always do, to our personnel and our forces but the threat to a strategic chokepoint. There’s a significant amount of trade that transits the Strait of Hormuz every day.”

Read more …

Another hearing today.

Julian Assange Is Not On Trial, British Justice Is (Wight)

The most honest man in Britain today is Julian Assange, while the most dishonest are those who are engaged in his ongoing persecution. The latest instalment in that persecution is a court hearing in London on June 14, where details of the request for his extradition to the US, it is expected, will be revealed for the first time. The formal request for the extradition of the founder of WikiLeaks was made to the UK by US authorities earlier in the week – and with British Home Secretary Sajid Javid signing the relevant papers sanctioning it, the final decision on whether Julian Assange’s extradition to the US goes ahead now rests with the courts.

[..] In revealing to the world the beast of US hegemony that resides behind the velvet curtains of democracy and human rights, Julian Assange exposed the lie upon which this American Empire (and make no mistake, it is an empire) depends. It depends on it in order to persuade its supposed beneficiaries – i.e. people living in the West – to continue to suspend disbelief as to the reality of a system they’ve been conditioned to believe is rooted in values that emanate from the human heart rather than from the heart of the machine. The end result is that in exposing this lie, Assange and WikiLeaks became a bigger threat to the ability of US hegemony to function normally than a million bayonets. As such, it became imperative that he, as the founder and face of WikiLeaks, be destroyed.

Britain’s role in this process couldn’t be any more sordid or shameful. Its legal system and judiciary has effectively been turned into a subsidiary of its US counterpart; its function not to dispense justice but to deliver a man into the arms of injustice. The fate to befall Assange proves that there’s a world of difference between believing that you live in a free society and behaving as if you do. He is the canary down the coalmine of Western democracy, signalling the warning that its foundations are rotten to the core.

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“..American Hitler (i.e., Donald Trump) will “push back” (i.e., intervene) against British Hitler (i.e., Jeremy Corbyn)..”

The Hitlerization of Jeremy Corbyn – Among Others (Hopkins)

Apparently, American Hitler and his cronies are conspiring with some secret group of “Jewish leaders” to stop British Hitler from becoming prime minister and wiping out all the Jews in Great Britain. Weird, right? But that’s not the weird part, because maybe American Hitler wants to wipe out all the Jews in Great Britain himself, rather than leaving it to British Hitler … Hitlers being notoriously jealous regarding their genocidal accomplishments. No, the weird part is that everyone knows that American Hitler does not make a move without the approval of Russian Hitler, who is also obsessed with wiping out the Jews, and with destroying the fabric of Western democracy. So why would Russian Hitler want to let American Hitler and his goons thwart the ascendancy of British Hitler, who, in addition to wanting to wipe out all the Jews, also wants to destroy democracy by fascistically refunding the NHS, renationalizing the rail system, and so on?

It doesn’t make a whole lot of sense, does it? In any event, here’s the official story. In “a recording leaked to The Washington Post,” and then flogged by the rest of the corporate media, Reichsminister des Auswärtigen, Mike Pompeo, told a group of unnamed “Jewish leaders” that American Hitler (i.e., Donald Trump) will “push back” (i.e., intervene) against British Hitler (i.e., Jeremy Corbyn) to protect the lives of Jews in Great Britain if British Hitler becomes prime minister (and is possibly already doing so now). The identities of these “Jewish leaders” have not been disclosed by the corporate media, presumably in order to protect them from being murdered by Corbyn’s Nazi hit squad.

Whoever they were, they wanted to know whether American Hitler and his fascist cabinet were “willing to work with [them] to take on actions if life becomes very difficult for Jews” after Jeremy Corbyn seizes power, declares himself Führer of Communist Britannia, and orders the immediate invasion of France. To anyone who has been closely following the corporate media’s relentless coverage of Jeremy Corbyn’s Nazi Death Cult (i.e., the UK Labour Party) and the global Anti-Semitism Pandemic, it comes as no real surprise that this group of “Jewish leaders” (whoever they are) would want to stop him from becoming prime minister. I doubt that their motives have much to do with fighting anti-Semitism, or anything else specifically “Jewish,” but … well, I’m kind of old-fashioned that way. I still believe there’s a fundamental difference between “the Jews” and the global capitalist ruling classes.

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Thanks to the Fed.

US Retirement Savings Gap Grows By $3 Trillion Each Year (MW)

Many Americans haven’t saved as much money as they need for retirement — and the gap is expected to widen dramatically in the next 30 years. The retirement savings gap — between what people have and should have — was $28 trillion in the U.S. in 2015, but by 2050, it’s expected to swell to $137 trillion, according to the World Economic Forum, a Cologny-Geneva, Switzerland-based nonprofit that researched international financial affairs. The disparity grows $3 trillion every year in the U.S.

The organization calculated this gap assuming most individuals’ retirement income sources would include a combination of government-provided pensions (such as Social Security), employer pensions in the public or private workforce and individual savings. They also analyzed the level of savings across expectations of income needs and life expectancies, assuming individuals would retire between 60 and 70 years old, for countries including China, Canada, Japan and the United Kingdom. The gap is most pronounced in the U.S., followed by China and Japan tied for $11 trillion in 2015. China is also expected to see a significantly wider discrepancy in 2050, at $119 trillion, followed by India, with an $85 trillion gap. Overall, the eight countries the WEF analyzed will see a $400 trillion disparity.

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Velocity of money and inflation.

The Fed Is Pushing On A String (Roberts)

Historically, the reason the Fed cuts rates, and interest are falling, is because the Fed has acted in response to a crisis, recession, or both. [..] Secondly, after a decade of QE and zero interest rates inflation, outside of asset prices, (as measured by CPI), remains muted at best. The reason that QE does not cause “inflationary” pressures is that it is an “asset swap” and doesn’t affect the money supply or the velocity of money. QE remains confined to the financial markets which lifts asset prices, but it does not impact the broader economy.

Unfortunately, the Fed is still misdiagnosing what ails the economy, and monetary policy is unlikely to change the outcome in the U.S., just as it failed in Japan. The reason is simple. You can’t cure a debt problem with more debt. Therefore, monetary interventions, and government spending, don’t create organic, sustainable, economic growth. Simply pulling forward future consumption through monetary policy continues to leave an ever growing void in the future that must be filled. Eventually, the void will be too great to fill.

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Time to start defaulting?

The State of the Canadian Debt Slaves (WS)

Canadian households are known around the world for their uncanny ability to pile on debt. And American debt slaves, who’d gotten trampled during the Great Recession, turn out to be lackadaisical these days in comparison. The share of disposable income (total incomes from all sources minus taxes) that Canadian households spent on making principal and interest payments on their ballooning mortgage debts and non-mortgage debts reached a new record of 14.9% in the first quarter, despite still ultra-low interest rates and despite the highest disposable income ever, according to data released today by Statistics Canada:

[..] So how do Canadian debt slaves stack up against American debt slaves? Statistics Canada released a report on just this topic at the end of March perhaps because authorities in Canada should get a tad nervous. [..] The annualized data it provided included the household debt-to-disposable income ratios for Canada and for the US through 2018. The ratio shows how large debt is relative to disposable income. For Canada, this ratio was 175% annualized in 2018, one of the highest in the world, and rising. For the US, it was 103%, and declining:

Canada’s household debts have continued to surge since the year 2000 except for a brief dip during the Financial Crisis. But US household debts plunged during years of deleveraging after the Financial Crisis, in part by consumers defaulting on their mortgages and credit cards. Household debts didn’t start growing again until 2013. And it took until 2017 before they surpassed the pre-Financial Crisis peak. But over the decade since the Financial Crisis, the US population has grown, and the number of working people has grown, and the national disposable income has increased, and so the ratio of household debt to disposable income has continued to drop.

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“..could make Canadians around the world less safe..”

Canada Rejects Idea Of Halting Extradition Of Top Huawei Executive To US (R.)

Canadian Foreign Minister Chrystia Freeland on Thursday dismissed a suggestion that Ottawa block the extradition of a top executive from China’s Huawei Technologies Co Ltd to the United States, saying it would set a dangerous precedent. Huawei’s Chief Financial Officer Meng Wanzhou, who was arrested on U.S. fraud charges in Vancouver last December, will challenge Washington’s extradition request at hearings that are set to begin next January. China angrily demanded Canada release Meng and detained two Canadians on spying charges. It has also blocked imports of Canadian canola seed and Prime Minister Justin Trudeau has said he fears further retaliation.


The Globe and Mail newspaper on Thursday said former Canadian Prime Minister Jean Chretien had floated the idea of the government intervening to stop the extradition case and thereby improve ties with Beijing. “When it comes to Ms Meng there has been no political interference … and that is the right way for extradition requests to proceed,” Freeland told a televised news conference in Washington. “It would be a very dangerous precedent indeed for Canada to alter its behavior when it comes to honoring an extradition treaty in response to external pressure,” she added, saying to do so could make Canadians around the world less safe.

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And what about all the others?

Elizabeth Warren To Propose Cancelling Up To $50,000 In Student Debt (MW)

Elizabeth Warren’s proposal to cancel student debt will soon be one step closer to reality — even if she doesn’t become president. The Democratic Senator of Massachusetts plans to introduce legislation in the coming weeks that mirrors her presidential campaign proposal to cancel at least a portion of the student debt held by many of the nation’s 44 million borrowers, her Senate office announced Thursday. Rep. James Clyburn, Democrat of South Carolina and the house majority whip, will introduce companion legislation in the House of Representatives. Warren’s office hasn’t yet released a draft of the legislative text, but the bill is slated to propose cancelling up to $50,000 in student debt for the bulk of student loan borrowers, her office said.


Under the proposal Warren released as part of her presidential campaign in April, borrowers with a household income of less than $100,000 would have $50,000 of their student debt cancelled and borrowers with an income between $100,000 and $250,000 would be eligible for some student debt cancellation — though not the full $50,000. Borrowers earning $250,000 or more would receive no debt cancellation. Her campaign estimated the plan would cost $640 billion, which would be paid through a tax on the ultra-wealthy. The idea of student debt cancellation has been popular in some circles for years, but Warren’s campaign proposal nudged it into the mainstream. Sen. Bernie Sanders, a Vermont independent seeking the Democratic nomination, has vowed to cancel “massive amounts of student debt,” though hasn’t offered specifics.

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All governments blow housing bubbles.

UK Government Blew Billions on “Help to Buy” Scheme (DQ)

Here’s how the scheme works: First-time property buyers get to put down a deposit of as little as 5% on a new-build home worth as much as £600,000 ($761,000) and receive an “equity loan” from the government. The size of the loan varies depending on where borrowers live. In London, where the price of property is an order of magnitude higher than in most other places, buyers can receive as much as 40% of the property price. Across the rest of the country the upper limit is 20%. The rest of the financing is covered by a traditional mortgage. While Help to Buy may have had a limited effect in terms of making housing affordable for first time buyers who are genuinely priced out of the market, it has proven to be effective at sustaining the UK’s all-important housing bubble by jacking up the prices of new-build houses, resulting in even less affordable housing.


Since Help to Buy was first launched in 2013, average UK house prices have increased by 35%, from £167,000 to £226,000, according to the Office for National Statistics. Through the scheme, the government has so far issued around 211,000 loans worth £11.7 billion ($14.8 billion) to home buyers. According to the NAO, this has helped increase sales of new-build properties from 61,357 a year in 2013-14 to 104,245 a year in 2017-18. That, in turn, has helped fuel a spike in profits for the UK’s biggest home builders. The nine largest builders dished out £2.3 billion in dividends in their most recent financial year, 39 times greater than the £53 million they paid out in 2012, a year before the scheme was introduced.

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Greeks have had enough of ‘left’; look what it brought them.

Varoufakis, Kotzias And The Dwindling ‘Progressive Army’ (K.)

Prime Minister Alexis Tsipras has been blindsided and thrown completely off his game plan. His narrative of a “progressive army” and a fresh rally of forces for elections “that will determine the future” is coming under constant attack. The Progressive Alliance was intended to move SYRIZA closer to the center so that it could resonate more strongly with the broader “progressive” section of voters – though what constitutes progressive and conservative in today’s world is a matter of debate – and to more fully acquire the characteristics of one of the two pillars of the two-party system, pushing center-left Movement for Change to the sidelines.

Tsipras’ plan, however, has been scuppered by two developments in the broader area of the Left, which are of significant symbolic importance and may affect the balance of power. What he hopes to achieve in the next few weeks is to convince many of the voters who chose not to vote in the European elections and who are mainly former supporters of SYRIZA to return to the fold and put their weight behind the big battle against the “socially insensitive, neoliberal” Kyriakos Mitsotakis of the opposition New Democracy party. His path in this ambitious plan, however, is littered with obstacles. The first was the surprisingly strong performance of Yanis Varoufakis’ DiEM25 party in the European elections, which shook things up.

There is now a party to the left of SYRIZA that is pro-European and has a leader with what a leftist voter might see as a convincing position. Moreover, he is neither Zoe Constantopoulou nor Panagiotis Lafazanis. He is a TV star who is in a position to boost his popularity thanks to his strong social media presence. It is also quite likely, if not certain, that he will make it into Parliament next month, and not just by scraping by with 3 percent. You can say a lot about Varoufakis, but what is certain is that he represents the thinking of a significant portion of the people who voted for SYRIZA in January 2015. He exercises charm over this portion of voters, and this is something that will be evident at the polls.

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Has been true for a very long time. Still poorly written though.

School’s Purpose is Indoctrination (Carbone)

The near sole purpose of present-day academia is indoctrination. This is a fairly bold thesis, but the evidence is in its favor. The increasingly progressive leftist agenda is sweeping through academia and conservatives are passively watching it happen. The main indoctrination stories you hear are those of radical professors on college campuses, outlandish majors created to forward social justice movements, and, on occasion, a political outburst by a high school teacher. Although these issues need addressing, by far the biggest – and the one that should scare everyone the most – is the silent indoctrination.


Indoctrination is no longer dependent upon the political beliefs of teachers. We are now past that. Course material is blatant political propaganda. Not just the course material for gender studies and similar. The core curricula of grade school through college. Sciences, economics, literature – any core course you can think of is politically influenced. The only course that may still be an exception is mathematics. Unless you account for the left-wing system of common core – which is a complete disaster. If you don’t believe this, sit through a grade school math class or open up your child’s text book. Disaster.

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But who ever measures sulfur oxides?

Carnival Cruise Ships Pollute 10 Times More Than All Cars in Europe (D.)

Commercial cruise lines are some of the world’s worst polluters, and Carnival is near the top of that list according to a study of European cruise line operators. Research found that Carnival alone is responsible for almost 10 times as much sulfur dioxide release as all 260 million of Europe’s cars combined. The study from Transport & Environment says that the 203 cruise ships that operated in European waters in 2017 emitted a combined total of 62 kilotons of sulfur oxides (SOx), which form airborne gases known to cause lung cancer and acid rain. During the same period, Europe’s 260 million known registered vehicles let out just 3.2 kilotons, the study found.

Of these 62 kilotons of SOx, more than half allegedly were the product of the 47 ships operated by Carnival Cruise Lines or its subsidiaries. Of the 20 worst offenders, seven are Carnival properties, which together made up half of the industry’s SOx emissions in Europe. Carnival denied any wrongdoing when asked for comment by Fast Company, pointed the finger at the rest of the maritime transportation industry, and insinuated that the study’s methodology was unscientific. [..] This statement arrived days after Carnival agreed to a $20 million fine and undergo increased scrutiny of its plastic and sewage disposal practices, which included dumping both directly into the ocean in large quantities. Carnival allegedly tried to hide these activities from regulators by falsifying records or pressuring the United States Coast Guard to relax the terms of its environmental compliance agreement.

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Jun 132019
 


Caravaggio The Denial of St. Peter 1610

 

UK Government Signs Julian Assange’s Extradition Papers (SBS)
ABC Raids A Wake-Up Call To Journalists Who Left Assange Swinging (SMH)
The Thought Police Are Coming (Chris Hedges)
A Recession Shock Could Wipe 30% Off US Stocks – Oxford Economics (MW)
The Fed Can’t Save Us –John Rubino (USAW)
1/3 of Americans Need A “Side Hustle” To Make Ends Meet (SHTF)
Trump Says Foreign ‘Dirt’ Not Election Interference (ZH)
John Bolton’s Long Goodbye (Kiriakou)
UK Labour Loses Vote To Prevent Future Tory PM Forcing Through No Deal (Ind.)
Leaked Cabinet Note: UK Not Ready For No-Deal Brexit On October 31 (Ind.)
Macron Wants EU Ties With Moscow Independent of NATO & US (RT)
Australia Approves Vast Coal Mine Near Great Barrier Reef (AFP)
You May Be Eating A Credit Card’s Worth Of Plastic Each Week (R.)
Troubling Levels Of Glyphosate In Foods Marketed To Children (RT)

 

 

Does the UK still operate under the rule of law? Does any western nation?

UK Government Signs Julian Assange’s Extradition Papers (SBS)

British Home Secretary Sajid Javid told BBC Radio 4’s Today that he has signed Julian Assange’s extradition order. “The final decision is now with the courts,” Mr Javid said. It is unclear whether the WikiLeaks founder will be sent to Sweden or the US. It was earlier reported that the US had formally submitted an extradition request to the UK for the WikiLeaks founder. Mr Assange faces an 18-count indictment that accuses him of soliciting and publishing classified information and of conspiring with former Army private Chelsea Manning to crack a Defense Department computer password. That indictment, which includes Espionage Act charges, was issued by the Justice Department last month and is pending in a federal court in Alexandria, Virginia.


The extradition request had been expected ever since US authorities first announced a criminal case against Mr Assange. [..] The United States will detail all the charges against Mr Assange when it seeks his extradition in a London court on Friday, the editor of the whistleblowers’ website said on Tuesday. “The American authorities, the Department of Justice, will present the evidence in support of their extradition demand,” Kristinn Hrafnsson told reporters. The US Justice Department confirmed on Tuesday that it had submitted a formal extradition request. The 47-year-old Australian is not expected to attend Friday’s hearing but could take part from prison via video link, although it will be largely procedural. The “first real confrontation of arguments” in court will not be for several weeks or months, Mr Hrafnsson said.

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“Assange, the outsider, did much more than that, he laid the path for the future of journalism, where journalists would be expected to produce primary source documents, wherever possible, and horror of all horrors, share them with the public.”

ABC Raids A Wake-Up Call To Journalists Who Left Assange Swinging (SMH)

The federal police raid on the ABC last week produced an unexpected benefit. Journalists are being forced to decide: whose side are they on. And where do they stand on fundamental issues of disclosure and the public’s right to know? When the executive producer of Australia’s most highly regarded current affairs program Four Corners retweeted that WikiLeaks founder Julian Assange was “Putin’s bitch” – a tweet she later removed – it said much about the state of journalism in Australia. The re-post, echoing a view held by many Australian journalists, followed a Four Corners interview with Hillary Clinton in which she was given full rein to attack Assange. Clinton was angry that WikiLeaks had revealed through a series of leaked Democratic Party emails that the party executive had given her help to defeat her main rival Senator Bernie Sanders for the party’s nomination – and helped the campaign of Donald Trump.

While the former presidential candidate was challenged on emails relating to her controversial involvement with the Clinton Foundation, never once was it pointed out that the Democratic Party emails revealed how she had been an active beneficiary of deeply unethical behaviour inside the party. What state have we reached where Assange, a journalist, facing his next extradition hearing in London on Friday, should be so reviled? It is dangerous territory for journalism. The insults thrown by Trump that journalists were the enemy of the American people might have been self-serving, but clearly the old notion that journalists mainly represent ordinary people against the powerful is in many cases something of the past. Just as the political parties have shifted to the right, so too have many journalists.

What so enrages the journalists’ “club” is the challenge from those who question their power, journalists like Assange. His revelations threatened them. But Assange, the outsider, did much more than that, he laid the path for the future of journalism, where journalists would be expected to produce primary source documents, wherever possible, and horror of all horrors, share them with the public. The internet made this possible, but for those who were holding out against the inevitable rise of this new form of communications, it posed a huge threat to the old order. Assange was not interested in off-the-record briefings from government insiders. He wanted to show the original documents to practise what he called Scientific Journalism.

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Very strong from Chris Hedges. A talk Tuesday, June 11, at an event held in London in support of Julian Assange.

The Thought Police Are Coming (Chris Hedges)

Ask the Iraqi parents of Sabiha Hamed Salih, aged 15, and Ashwaq Hamed Salih, aged 16, who were killed by shrapnel in Baghdad on July 31, 2004, what they think of Julian Assange. Ask the man and his two young daughters who saw their wife and mother shot to death and were themselves wounded in a car fired upon by U.S. Marines in Fallujah on July 22, 2005, what they think of Julian Assange. Ask the parents of Huda Haleem, an 18-year-old girl, and Raghad Muhamad Haleem, a 5-year-old boy, shot dead by U.S. soldiers on June 2, 2006, in Iraq’s Diyala province what they think of Julian Assange. Ask the parents of the 15-year-old boy choked with a wire and then shot to death by U.S. Marines in Ramadi on Aug. 10, 2006, what they think of Julian Assange.

Ask the relatives of Ahmed Salam Mohammad, who was shot dead on Nov. 27, 2006, when U.S. troops attacked a wedding party near Mosul, an attack that also left four wounded, what they think of Julian Assange. Ask the families of the over one dozen people shot to death with .50-caliber machine guns by bantering U.S. Apache helicopter crews in east Baghdad in July 2007—the crew members can be heard laughing at the “dead bastards” and saying “light ’em up” and “keep shooting, keep shooting”—a massacre that included two journalists for Reuters—Namir Noor-Eldeen and Saeed Chmagh—what they think of Julian Assange. Ask the then 10-year-old Sajad Mutashar and his 5-year-old sister, Doaha, both wounded, whose 43-year-old father, Saleh, was shot to death from the air as he attempted to assist one of the wounded men in the Baghdad street what they think of Julian Assange.

There is nothing like the boot of the oppressor on your neck to give you moral clarity. None of these war crimes, and hundreds more reported to the U.S. military but never investigated, would have been made public without Julian, Chelsea Manning and WikiLeaks. That is the role of journalists—to give a voice to those who without us would have no voice, to hold the powerful to account, to give the forgotten and the demonized justice, to speak the truth. We have watched over the last decade as freedom of the press and legal protection for those who expose government abuses and lies have been obliterated by wholesale government surveillance and the criminalizing of the leaking and, with Julian’s persecution, publication of these secrets. The press has been largely emasculated in the United States. The repeated use of the Espionage Act, especially under the Obama administration, to charge and sentence whistleblowers has shut down our ability to shine a light into the inner workings of power and empire.

Governmental officials with a conscience, knowing all of their communications are monitored, captured and stored by intelligence agencies, are too frightened to reach out to reporters. The last line of defense lies with those with the skills that allow them to burrow into the records of the security and surveillance state and with the courage to make them public, such as Edward Snowden, Chelsea Manning and Jeremy Hammond, now serving a 10-year prison term in the United States for hacking into the Texas-based private security firm Strategic Forecasting Inc., or Stratfor. The price of resistance is high not only for them, but for those such as Julian willing to publish this information. As Sarah Harrison has pointed out: “This is our data, our information, our history. We must fight to own it.”

Even if Julian were odious, which he is not, even if he carried out a sexual offense, which he did not, even if he was a poor houseguest—a bizarre term for a man trapped in a small room for nearly seven years under house arrest—which he was not, it would make no difference. Julian is not being persecuted for his vices. He is being persecuted for his virtues.

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Make it an even 60%.

A Recession Shock Could Wipe 30% Off US Stocks – Oxford Economics (MW)

[..] they’ve got a couple of grim worst-case scenarios. One envisages the U.S. economy slowing sharply from the third quarter of this year, then falling into recession as corporate profits, hitting business and investor sentiment. The fallout from this could trigger a 30% drop in the S&P 500 in the third quarter. Within a year the U.S. would be in recession, with the Fed cutting interest rates aggressively to “stave off the worst of the shock,” says the economic forecasters. The other downbeat scenario pictures bleak fallout from a trade-war escalation.


The U.S. slaps a 25% tariff on China and Mexico imports, and a 10% blanket tariff on Europe goods, and 25% on non-North American cars. Based on those assumptions, U.S. stocks could be 15% lower by late 2019, the firm says. But let’s leave things on a happy note. Under yet one more scenario they predict further stimulus from China, de-escalation in trade tensions supportive policy from central banks and much improved investor sentiment across the globe. All that good news could mean a boost in the high single digit percentage ballpark by the first quarter of 2020.

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The Fed is not trying to save “us”.

The Fed Can’t Save Us –John Rubino (USAW)

“The next recession is overdue because this is the longest expansion on record. . . . We loaded up car buyers with sub-prime loans. Students now have $1.5 trillion of student debt. Credit card debt is at record levels. Government debt is at record levels. Corporate debt is at record levels. . . . All of these guys have borrowed more money than they ever have in history. So, the idea we are going to convince people to borrow a lot more money by lowering interest rates is at best problematic and at worst insane. We are headed that way because they have no other tools. So, when things slow down, they are going to start cutting again and printing money and buying up assets with that money. We’ll see if it works again. It shouldn’t have worked the last time. . . . We are in a range of unexplored numbers. . . . How much further can this go? Is there a limit out there? We are going to find out in the next recession.”


Rubino is not impressed with the Federal Reserve’s latest promise to slash interest rates and print money to save a teetering economy. Rubino contends, “The markets ought to be terrified by this, but in the U.S. because the rates are not yet zero, the market is not yet terrified. We are not far from 0%. . . . The Fed can’t save us. We’re at the point now where we would be at a 1930’s style depression or a Weimar Germany hyperinflation or something new and equally bad. We have taken on insane amounts of debt, more than any society in history has ever tried to take on. So, we just don’t know what is going to happen. If the central banks cannot stop the next recession, we will find out what happens when this much debt goes bad. . . . The Fed’s biggest fear is that things will spin out of control, and they won’t have the tools to stop it.”

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Is all income tax “theft”?

1/3 of Americans Need A “Side Hustle” To Make Ends Meet (SHTF)

Imagine a world in which you could keep every single penny that the fruits of your own labor produced. That would be a world without income taxation making it much easier for the average American to get by. Instead, we live in a world where nothing goes untaxed. About 1/3 of Americans say that their expenses are so high that after the theft of the federal government from their paychecks, they need a “side hustle” to make ends meet. According to Bankrate, side hustlers make $1,122 per month on average from their part-time work — up from $686 last year. But if Americans were given the right to no longer be stolen from, and got to keep their own money, most wouldn’t need a side hustle or part-time work to get by.


Nearly half, 45%, of U.S. workers earn additional income outside of their primary career, a recent Bankrate survey found. This includes 48% of millennials. The percentage of Gen Xers and baby boomers with a side hustle is slightly lower, coming in at 39% and 28%, respectively. “A lot of people are working side hustles because even though the economy is strong, wages are stagnant,” Amanda Dixon, an analyst at Bankrate, told MarketWatch. “For a lot of Americans, expenses are rising, but there are no raises at work.” And heaven forbid the government stops raiding our income. That won’t be a suggestion the lapdog media will toss around either. However, if humans own themselves, they have the right to the fruits of their labor regardless of the edicts of the political elitists.

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Not Tyler’s best headline. Why use the word ‘dirt’? ‘Info’ will do.

Trump Says Foreign ‘Dirt’ Not Election Interference (ZH)

President Trump told ABC News’s George Stephanopoulos in an Oval Office interview that he might not call the FBI if foreign governments offered damaging information against his rivals in the upcoming 2020 election. While initially suggesting it would be absurd to call the FBI instead of taking the information, Trump said “I think maybe you do both,” adding “I think you might want to listen, there isn’t anything wrong with listening.” “If somebody called from a country, Norway, [and said] ‘we have information on your opponent’ — oh, I think I’d want to hear it.”

Trump also pushed back on the notion that opposition research provided by a foreign government would be considered election interference – saying “It’s not an interference, they have information — I think I’d take it,” adding “If I thought there was something wrong, I’d go maybe to the FBI — if I thought there was something wrong.” President Trump lamented the attention on his son, Donald Trump Jr., for his role in the now-infamous Trump Tower meeting in June 2016. Stephanopoulos asked whether Trump Jr. should have taken the Russians’ offer for “dirt” on then-candidate Hillary Clinton to the FBI. “Somebody comes up and says, ‘hey, I have information on your opponent,’ do you call the FBI?” Trump responded.

“I’ll tell you what, I’ve seen a lot of things over my life. I don’t think in my whole life I’ve ever called the FBI. In my whole life. You don’t call the FBI. You throw somebody out of your office, you do whatever you do,” Trump continued. “Oh, give me a break – life doesn’t work that way.” -ABC News When Stephanopoulos pointed out that FBI Director Christopher Wray said that a candidate should call the FBI in regards to foreign-sourced oppo-research, Trump said: “The FBI director is wrong, because frankly it doesn’t happen like that in life,” adding “Now maybe it will start happening, maybe today you’d think differently.” Trump then claimed that “if you go talk honestly to Congressmen, they all do it, they always have,” adding “That’s the way it is, it’s called oppo-research.”

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“My people think there could have been a violation. I view it differently.”

John Bolton’s Long Goodbye (Kiriakou)

[Bolton] said in a Wall Street Journal podcast that he believes five countries are spreading “lies about dysfunction in the Trump administration.” Those countries are North Korea, Iran, Venezuela, Russia, and China. That’s laughable. What Bolton is saying is that there is a vast and incredibly well-coordinated international conspiracy that includes some of the most important countries in the world, the main purpose of which is to embarrass him. That sounds perfectly rational, right? Of course, a more rational person might conclude that Bolton has done a terrible job, that the people around him have done a terrible job, that he has aired his disagreements with Trump in the media, and that the President is angry about it. That’s the more likely scenario.

Here’s what my friends are saying. Trump is concerned, like any president is near the end of his term, about his legacy. He said during the campaign that he wanted to be the president who pulled the country out of its two longest wars. He wanted to declare victory and bring the troops back from Afghanistan and Iraq. He hasn’t done that, largely at the insistence of Bolton. Here we are three years later and we’re still stuck in both of those countries. Second, my friends say that Trump wants to end U.S. involvement in the Yemen war, but that Bolton has been insistent that the only way to guarantee the closeness of the U.S. relationships with Saudi Arabia and the United Arab Emirates is to keep providing those countries with weapons, aerial refueling planes, and intelligence support.

Third, the mainstream media has accused Bolton of being the reason behind the failure of Trump’s second summit with North Korean leader Kim Jong-un. Bolton towed a hard line, so much so that the North Korean media called him a “war monger” and a “human defect” once the summit ended. This week Trump told reporters gathered on the White House south lawn that Kim had “kept his word” on nuclear and missile testing. This was a direct contradiction of Bolton, who had said just hours earlier that the North Koreans had reneged on their commitments to the U.S. Trump said simply, “My people think there could have been a violation. I view it differently.”

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All it takes is 11 votes. Out of 607.

UK Labour Loses Vote To Prevent Future Tory PM Forcing Through No Deal (Ind.)

Opposition MPs have lost a critical vote on a bid to prevent a future Conservative prime minister from forcing through a no-deal Brexit. Labour introduced a motion paving the way for parliament to block a chaotic Brexit by seizing control of the Commons timetable on 25 June. But MPs rejected the cross-party effort by 309 votes to 298, in a blow to hopes of preventing a Brexiteer prime minister from taking the UK out of the EU without a deal in October. Eight Labour MPs voted against the cross-party motion and a further 13 did not vote. Ten Conservative backbenchers rebelled to back the motion. Jeremy Corbyn could be heard admonishing Tory MPs when the result was called, saying: “You won’t be cheering in September.”


The move came after several Tory leadership hopefuls refused to rule out suspending parliament to prevent MPs from blocking a no-deal Brexit in September. Dominic Raab, the former Brexit secretary, and Esther McVey, the ex-work and pensions secretary, have both said parliament could be prorogued to ensure the UK leaves by the 31 October deadline. Sir Keir Starmer, shadow Brexit secretary, said: “This is a disappointing, narrow defeat. “But this is just the start, not the end of our efforts to block no deal. Labour stands ready to use whatever mechanism it can to protect jobs, the economy and communities from the disastrous consequences of a no-deal Brexit.

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All they did was bicker for 3 years. Of course they’re not ready.

Leaked Cabinet Note: UK Not Ready For No-Deal Brexit On October 31 (Ind.)

It will take “six to eight months” to build up supplies of medicines for a no-deal Brexit, a leaked cabinet note says – undermining Boris Johnson’s threat to crash out of the EU on 31 October. The warning says the pharmaceutical industry needs that period of help from the government “to ensure adequate arrangements are in place to build stockpiles of medicines”. It also says that it would take “at least 4-5 months” to make traders ready for the new border checks that might be required, including incentives to register for fresh schemes. The note was revealed by The Financial Times as Mr Johnson – the overwhelming favourite to succeed Theresa May – launched his campaign on a pledge to leave the EU on 31 October “deal or no deal”.


It states that, while government departments had delivered around 85 per cent of their “core no-deal plans”, many of those provided only “a minimum viable level of capability”. Prepared for a cabinet discussion on 21 May, it was never circulated because Ms May was concentrating at the time on her doomed attempt to force through her withdrawal agreement. After that attempt collapsed, the prime minister announced her plans to resign – throwing the country into the uncertainty of the Tory leadership race. Ed Davey, the Liberal Democrat home affairs spokesman, seized on the note, saying: “This lays bare the utter cynicism of Boris Johnson and his ilk. “They are prepared to talk up crashing out of the EU to further their chances in the Tory leadership contest, despite government documents showing this would lead to shortages of medicines and chaos at our borders.”

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Europe must distance itself from NATO. A tall order. Trump just sent another 1,000 US troops to Poland from Germany.

Macron Wants EU Ties With Moscow Independent of NATO & US (RT)

Europe should think outside NATO dictates and restore relations with Russia, French President Emmanuel Macron stressed, calling for a “strategic debate” with Moscow over mutual areas of concern. “Europe… must build new rules of trust and security with Russia, and should not only agree with NATO,” Macron said in an interview with the Swiss television channel RTS. “It needs to build [relations] only between Europe and Russia.” While noting that disagreements between Moscow and Brussels do exist, in particular over Ukraine, Macron insisted that Russia’s role in world affairs cannot be underestimated.


Europe, the French president stressed, needs Moscow to solve major security issues, as Russia’s highly successful anti-terrorist campaign in Syria has shown. “We need to have a strategic debate, so this week I will have another, long and intense conversation with Vladimir Putin, as the president of France and the G7,” Macron stressed. “There is disagreement among us, but we work together.” “It would not be good to leave Russia to China,” he added, reminding that Europe should “never forget the price [the Soviet Union] paid” in World War II to free the continent from Nazi Germany.

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A lost people. A lost country. Nothing there.

Australia Approves Vast Coal Mine Near Great Barrier Reef (AFP)

Australia approved Thursday the construction of a controversial coal mine near the Great Barrier Reef, paving the way for a dramatic and unfashionable increase in coal exports. Queensland’s government said it had accepted a groundwater management plan for the Indian-owned Adani Carmichael mine — the last major legal hurdle before construction can begin. The project, fiercely debated for almost a decade, comes as investors and even energy companies are moving away from fossil fuels amid concern about the climate. Opponents warn it will create a new generation of coal exports — which will be burned in India and China — contributing to further degrade the planet.


The vast open cut mine is slated to produce up to 60 million tonnes of coal a year, boosting Australia’s already vast exports by around 20 percent. Coupled with the construction of a railway link, it could open up a swathe of Queensland to further exploitation and new mining projects. “If all the coal in the Galilee Basin is burnt it would produce 705 million tonnes of climate pollution each year, which is more than 1.3 times Australia’s annual pollution from all sources, including cars, industry, energy and agriculture,” said the Australian Conservation Foundation.


The Adani coal mine has been under fierce debate – and protest – for almost a decade (AFP Photo/PETER PARKS)

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“In the United States, 94.4 percent of tap water samples contained plastic fibers..” And bottled water is 20x worse.

You May Be Eating A Credit Card’s Worth Of Plastic Each Week (R.)

Plastic pollution is so widespread in the environment that you may be ingesting five grams a week, the equivalent of eating a credit card, a study commissioned by the environmental charity WWF International said on Wednesday. The study by Australia’s University of Newcastle said the largest source of plastic ingestion was drinking water, but another major source was shellfish, which tended to be eaten whole so the plastic in their digestive system was consumed too. “Since 2000, the world has produced as much plastic as all the preceding years combined, a third of which is leaked into nature,” the report said.


The average person could be consuming 1,769 particles of plastic every week from water alone, it said. The amount of plastic pollution varies by location, but nowhere is untouched, said the report, which was based on the conclusions of 52 other studies. In the United States, 94.4 percent of tap water samples contained plastic fibers, with an average of 9.6 fibers per liter. European water was less polluted, with fibers showing up in only 72.2 percent of water samples, and only 3.8 fibers per liter.

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We don’t give a damn about what happened to our kids. That’s just a pose.

Troubling Levels Of Glyphosate In Foods Marketed To Children (RT)

The Environmental Working Group has released findings of research showing “troubling levels of glyphosate, the cancer-causing ingredient in the herbicide Roundup” in food products including children’s breakfast cereals. The Washington, DC-based advocacy group said in a statement released June 12 that the chemical, was detected “in all 21 oat-based cereal and snack products sampled in a new round of testing.” Furthermore, all of the products but four were found to contain levels higher than EWG’s safety threshold for child consumption, which is 160 parts per billion (ppb). The products “Cheerios” and “Honey Nut Cheerios Medley Crunch” were found with the highest glyphosate levels with 729 ppb and 833 ppb respectively.


The findings follow two previous research studies conducted with independent labs conducted last year. Monsanto, the maker of Roundup, was acquired by the German agro-chemical giant Bayer in 2018. “The glyphosate levels in this report are far below the strict limits established by the Environmental Protection Agency (EPA) to protect human health,” a Bayer spokesman told RT when contacted for comment. “Even at the highest level reported by the EWG (833 ppb), an adult would have to eat 158 pounds of the oat-based food every day for the rest of their life to reach the strict limits set by the EPA.”

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Jun 102019
 
 June 10, 2019  Posted by at 9:54 am Finance Tagged with: , , , , , , , , , ,  7 Responses »


Georges Seurat Bathers at Asnières 1884

 

Stupidity, Evil and the Decline of the US (Doug Casey)
The Great Depression: A Real Estate Boom Gone Bust (Vague)
Game Over (Sven Henrich)
ECB Floats Rate Cut Trial Balloon (ZH)
Boris Johnson Pledges Major Tax Cut For Wealthy (Ind.)
Boris Johnson Is ‘Poisoning Our Politics’ – Tory Leadership Rival (Ind.)
Mike Pompeo Tells Jewish Leaders He Would ‘Push Back’ Against Corbyn (G.)
Tulsi Gabbard Pushes No War Agenda – And The Media Is Out To Get Her (SCF)
One Million March In Hong Kong To Protest China Extradition Bill (R.)
Hong Kong Plunged Into Political Crisis (R.)
Boeing 737 Max Seen as ‘Airplane Non Grata’ by Wary Travelers (BBG)
Boeing Used To Getting Its Way, Grip On Congress Is Legendary (Ralph Nader)
Chris Hedges Talks To UN Special Rapporteur About Assange (RT)

 

 

“To the Romans, virtues were things like fortitude, nobility and courage. Those virtues are true to the root of the word. When people think of virtues today they think of faith, hope, charity—which are not related to the word’s root meaning. ”

Stupidity, Evil and the Decline of the US (Doug Casey)

Regrettably, the US is no longer the land of the free and the home of the brave. It’s become the land of whipped and whimpering dogs that roll over on their backs and wet themselves when confronted with authority. Now, why are Americans this way? Let me give you two reasons—though there are many more. First, there’s a simple absence of virtue. Let’s look at the word virtue. It comes from the Latin vir, which means manly, even heroic. To the Romans, virtues were things like fortitude, nobility and courage. Those virtues are true to the root of the word. When people think of virtues today they think of faith, hope, charity—which are not related to the word’s root meaning. These may pass as virtues in a religious sense.

But, outside a Sunday school, they’re actually vices. This deserves a discussion, because I know it will shock many. But I’ll save that for another time. An absence of virtues and the presence of subtle vices is insinuated throughout society. Worse, overt vices like avarice and especially envy are encouraged. Envy, in particular will become a big vice in the years to come. It’s similar to jealousy, but worse. Jealousy says “You have something I want; I’ll try to take it from you”. Envy says “You have something I want. If I can’t take it from you, I’ll destroy it, and hurt you if I can.” Jealousy and envy seem to motivate most Democratic Party presidential candidates. No wonder America is in rapid decline.

A second reason is unsound philosophy. The reigning philosophy in the US used to be based on individualism and personal freedom. It’s now statism and collectivism. But most people don’t think about philosophy—or even have a consistent worldview. More than ever, they do what seems like a good idea at the time. The average American has problems. But his rulers are something else again. Most of the people running the US are either knaves or fools. How do we know if we are dealing with a knave or a fool? In other words, are you dealing with somebody who is evil or just stupid? To give a recent, but classic, example, are you dealing with a Dick Cheney or a George W. Bush? Do you prefer the knavish Obama, or the knavish Biden? The foolish Trump, or the foolish Pence. Not much of a real choice anywhere…

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Excerpt from A Brief History of Doom by Richard Vague.

The Great Depression: A Real Estate Boom Gone Bust (Vague)

Contrary to the explanation found in many histories of the Great Depression, that calamity was a massive real estate boom gone bust. Residential construction more than tripled, and the housing boom was every bit as large as in the Great Recession on a per capita basis. In Manhattan more skyscrapers were built in the late 1920s than during any other comparable span in its history, and the skylines of most major U.S. cities are still testimony to the excesses of that era: “The Great Depression brought a level of misery rarely seen in American history. … [and] was a massive residential and commercial real estate crisis. The financial records of the 1920s, which have largely been overlooked, indelibly show this. During the 1920s, annual housing and commercial real estate construction almost tripled — and nearly all of it was financed by debt.

“This explosion in residential and commercial construction lending, aug≠mented by lending for utilities and stock purchases, created the euphoria of the Roaring Twenties, the jazz age of robust spending and celebration. Com≠panies used the new money from loans to expand and employ more people. “The acceleration in construction resulted in such extensive overbuilding that by the final years of the decade, before the stock market crash, thousands of newly erected office buildings, houses, and apartments sat empty. Office vacancy rates rose, and residential mortgage foreclosures nearly doubled in the final years of the decade.’ As in other cases, this crisis was inevitable be≠fore it was obvious. The only question, and the only area where the president and the Federal Reserve could still have a discretionary impact, was the length and severity of that correction. …

“The iconic structures of American skylines form the silhouette of the Great Depression: New York’s Chrysler Building, Empire State Building, and RCA Building; Chicago’s Merchandise Mart, Wrigley Building, and Tribune Tower; Philadelphia’s PSFS Building; Los Angeles’s City Hall; Dallas’s Cotton Exchange Building; Detroit’s Fischer Building; and Houston’s Gulf Building. These are enduring architectural feats of the 1920s, vestiges of the real estate eruption that came before the fall. Many were speculative projects, unsupported by actual real estate demand; begun toward the end of the 1920s, when loans were still available; and finished after the crash, when lenders had little choice but to make funds available to complete construction or else see their entire loan go bad. None was financially successful for its original investors. They remained partly or largely empty for a decade or more after completion, as would hundreds of others.”

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“Everything every central banker has uttered last year was completely wrong. ”

Game Over (Sven Henrich)

Game over. The grand central bank experiment of the last 10 years has ended in utter and complete failure. The games of cheap money and constant intervention that have brought you record global debt to the tune of $250 trillion and record wealth inequality are about to embark on a new round of peddling blue meth again. Australia has already cut, so has India. The ECB is talking about it, markets are already pricing in multiple Fed cuts. The new global rate cutting cycle begins anew before the last one ever ended. Brace yourselves as no one, absolutely no one, can know how this will turn out. Absolutely staggering. We are witnessing a historic unraveling here. Everything every central banker has uttered last year was completely wrong.


Every projection they made over the last 10 years has been wrong. No wonder Jay Powell wants to toss the dot plot. It’s a public record of failure. Why place confidence in people who are staring at the ruins of the policies they unleashed on the world and are about to unleash again? All the distortions of 10 years of cheap money, debt, wealth inequality, zombie companies, negative debt, TINA, you name it, will all be further exacerbated by hapless and scared central bankers whose only solution to failure is to embark on the same cheap money train again. All under the banner to “extend the business cycle” at all costs. Never asking whether they should nor considering the consequences. But since they are not elected by the people and face zero consequences for failure they don’t have to consider the collateral damage they inflict.

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Take away their powers or else.

ECB Floats Rate Cut Trial Balloon (ZH)

Last week’s non-committal ECB announcement caught markets by surprise, with the Euro jumping despite Mario Draghi’s best attempts to signal further easing even as he hinted at growing “downside risks”, prompting speculation that the ECB may have lost the last shreds of its credibility and leading Rabobank to publish a piece titled “Whatever It Takes” > “Whatever”.” Not used to being spurred by markets, Mario Draghi refused to take such aggression against his legacy quietly – especially as the former Goldman partner is set to retire shortly – and on Sunday, the European Central Bank used its traditional trial balloon conduit, Reuters, which reported that ECB policymakers “are open to cutting the ECB’s policy rate again” if economic growth weakens in the rest of the year and a strong euro hurts a bloc already bearing the brunt of a global trade war, clearly hoping that this jawboning would be sufficient to slam the euro (it wasn’t with the EURUSD basically unchanged from its Friday close).

As a reminder, last Thursday the ECB said that its interest rates would stay “at their present levels” until mid-2020 but President Mario Draghi added rate setters had started a discussion about a possible cut or fresh bond purchases to stimulate inflation. This conflicting message failed to convince some investors, who saw it as too tenuous a commitment to more stimulus, sending the euro rallying to a nearly 3 month high of $1.1347 against the U.S. dollar. So in an attempt to convince the skeptics, Reuters cited its traditionally anonymous “two sources” familiar with the ECB’s policy discussions, who said a rate cut was firmly in play if the bloc’s economy was to stagnate again after expanding by 0.4% in the first quarter of the year.

“If inflation and growth slow, then a rate cut is warranted,” said one of the sources, who requested anonymity because the ECB’s deliberations are confidential. The problem is that no matter what Draghi says, or “floats”, the market is concerned that the ECB is approaching the end of its credible ammo: with the ECB’s deposit rate already negative 40 bps and Germany’s yield hitting all time low. In this context, countering the euro’s strength, rather than lowering already rock-bottom borrowing costs, would be the main reason for a further cut to that deposit rate, one of the sources said.

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Because the Tory members, and they’re wealthy, decide who is the next PM.

Boris Johnson Pledges Major Tax Cut For Wealthy (Ind.)

Boris Johnson has pledged to cut income tax for three million higher earners, in a move that would cost £9.6bn a year. The current frontrunner in the Tory leadership contest said he would raise the threshold for the 40p tax band from £50,000 to £80,000 if he becomes prime minister. The move would be paid for through money currently set aside for no-deal Brexit planning and by rises in National Insurance. Mr Johnson said: “We should be raising thresholds of income tax – so that we help the huge numbers that have been captured in the higher rate by fiscal drag.” But the announcement sparked immediate criticism, including from senior Conservatives.


Nicky Morgan, the chair of the Commons Treasury committee, said: “The question for Boris is why is this a priority when you could be obviously lifting more people out of paying income tax – the lower rate taxpayers – or you could be give people receiving child benefit an extra £15 a week.” And Amber Rudd, the work and pensions secretary, said: “If you want to badge yourself as a One Nation Conservative, you focus on tax cuts and investment in infrastructure to help the lowest paid and the people in most difficulty in all parts of this country. That’s not what he’s doing.”

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Can it be more severely poisoned yet?

Boris Johnson Is ‘Poisoning Our Politics’ – Tory Leadership Rival (Ind.)

Conservative leadership contender Rory Stewart has launched a furious broadside at rival Boris Johnson, accusing the former foreign secretary of not being honest about his Brexit plans and challenging him to rule out suspending parliament to force no deal through. Speaking to The Independent, Mr Stewart said the leadership front-runner was trying to “out-Farage Farage” with an undeliverable plan to renegotiate Theresa May’s withdrawal agreement which was designed to usher in no-deal Brexit but would instead trigger a disastrous general election. And he blasted Johnson’s “swaggering machismo” over Brexit, which he said risked poisoning the UK’s relations with Europe.

The verbal assault came ahead of the formal launch of the contest to replace Ms May at No 10, with the official line-up of candidates to be confirmed after nominations close on Monday. Previously-fancied Michael Gove found his campaign mired in controversy over his admission of past cocaine use, with the environment secretary forced to fend off allegations of hypocrisy and deny having lied on security forms when entering parliament and travelling to the US. He dismissed as “foolish” suggestions that he might be barred from going to the US as prime minister.

Meanwhile, Mr Johnson – who picked up backing from cabinet ministers Chris Grayling and Alun Cairns and former Tory deputy chair James Cleverly – broke his campaign silence with a Sunday Times interview in which he said he would withhold Britain’s £39 billion Brexit divorce bill until Brussels agreed better terms for the UK’s withdrawal from the EU. The threat brought an immediate response from France, where a source close to President Emmanuel Macron said it would be regarded as “a failure of international commitments equivalent to a sovereign debt default” – something that could send the UK’s credit rating tumbling.

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Guess they couldn’t get him with sex smears.

Mike Pompeo Tells Jewish Leaders He Would ‘Push Back’ Against Corbyn (G.)

Labour has accused Donald Trump’s top official, Mike Pompeo, of trying to stop Jeremy Corbyn becoming prime minister, after he was caught on tape telling Jewish leaders that he would “push back” against the party’s leadership. In a recording leaked to the Washington Post, the US secretary of state was asked what he would do if Corbyn were to be elected as prime minister, after sustained criticism over Labour’s handling of accusations of antisemitism within the party. The questioner said: “Would you be willing to work with us to take on actions if life becomes very difficult for Jews in the UK?” In response, Pompeo appeared to suggest that he would seek to intervene in the debate before Corbyn had a chance to become prime minister.

“It could be that Mr Corbyn manages to run the gauntlet and get elected,” he said on the recording. “It’s possible. You should know, we won’t wait for him to do those things to begin to push back. We will do our level best. It’s too risky and too important and too hard once it’s already happened.” A Labour spokesman said: “President Trump and his officials’ attempts to decide who will be Britain’s next prime minister are an entirely unacceptable interference in the UK’s democracy.” He added that the party was “fully committed to the support, defence and celebration of the Jewish community and is implacably opposed to antisemitism in any form”.

Pompeo’s comments emerged after Trump turned down Corbyn’s request for a meeting during his state visit to the UK last week, saying the leader was “somewhat of a negative force”. Corbyn joined protests outside Trump’s press conference with Theresa May, where he pledged to oppose the US president’s drive for greater access for US health companies to NHS contracts. The comments come at a time when Corbyn’s team are nervous about the latest attempts to oust him from within the party over the issues of antisemitism and Brexit, after several senior figures came out in support of a second referendum.

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No sex smears for Tulsi either, but Russia might do.

Tulsi Gabbard Pushes No War Agenda – And The Media Is Out To Get Her (SCF)

Tulsi Gabbard could well be the only genuine antiwar candidate that might truly be electable in the past fifty years, and that is why the war party is out to get her. Two weeks ago, the Daily Beast displayed a headline: “Tulsi Gabbard’s Campaign Is Being Boosted by Putin Apologists.” The article also had a sub-headline: “The Hawaii congresswoman is quickly becoming the top candidate for Democrats who think the Russian leader is misunderstood.” The obvious smear job was picked by ABC’s George Stephanopoulos, television’s best known Hillary Clinton clone, who brought it up in an interview with Gabbard shortly thereafter. He asked whether Gabbard was “softer” on Putin than were some of the other candidates.


Gabbard answered: “It’s unfortunate that you’re citing that article, George, because it’s a whole lot of fake news.” Politico the reported the exchange and wrote: “’Fake news’ is a favorite phrase of President Donald Trump…,” putting the ball back in Tulsi’s court rather than criticizing Stephanopoulos’s pointless question. Soon thereafter CNN produced its own version of Tulsi the Russophile, observing that Gabbard was using a Trump expression to “attack the credibility of negative coverage.” Tulsi responded “Stephanopoulos shamelessly implied that because I oppose going to war with Russia, I’m not a loyal American, but a Putin puppet. It just shows what absurd lengths warmongers in the media will go, to try to destroy the reputation of anyone who dares oppose their warmongering.”

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Impressive crowds.

One Million March In Hong Kong To Protest China Extradition Bill (R.)

Organizers said the turnout outstripped a demonstration in 2003 when 500,000 hit the streets to challenge government plans for tighter national security laws. Those laws were later shelved and a key government official forced to resign. Sunday’s outpouring was already raising the pressure on the administration of Hong Kong Chief Executive Carrie Lam and her official backers in Beijing. “She has to withdraw the bill and resign,” veteran Democratic Party lawmaker James To told crowds outside the city’s parliament and government headquarters on Sunday night. “The whole of Hong Kong is against her.” After To spoke, thousands were still arriving, having started the march five hours earlier, filling four lanes of a major thoroughfare.


Some sat in a nearby park singing “Hallelujah” while police increased their numbers around the area. Lam had yet to comment on the rally. The demonstration capped weeks of growing outrage in the business, diplomatic and legal communities, which fear corrosion of Hong Kong’s legal autonomy and the difficulty of ensuring basic judicial protections in mainland China. The protest descended into violence in the early hours of Monday as several hundred protesters clashed with a similar number of police outside the city’s parliament. Protesters charged police lines to try to force their way into the Legislative Council building, and police charged back, using pepper spray, after warning the protesters. The standoff ended in the early hours of Monday.

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What say you, Xi?

Hong Kong Plunged Into Political Crisis (R.)

Riot police surrounded Hong Kong’s parliament early on Monday after what had been a peaceful million-strong protest against an extradition bill descended into running clashes between police and protesters. Several hundred riot police armed with batons, shields, tear gas guns and pepper spray sealed off the Legislative Council as a similar number of protesters charged their lines shortly after midnight, Reuters witnesses said. Police used batons and fired pepper spray at protesters, who still managed to close off part of a nearby road. Several people on both sides appeared to be injured, and ambulances were called. Metal barriers were left twisted and torn in the clashes.


The Legislative Council is where debates will start on Wednesday to pass a new government bill that will allow suspects wanted in mainland China to be sent across the border for trial. Earlier on Sunday, hundreds of thousands had jammed Hong Kong’s streets to protest the bill in the biggest demonstration in years. Many said they feared it put the city’s vaunted legal independence at risk. The rallies — and the violence — plunge the global financial hub into a fresh political crisis, with marchers and opposition leaders demanding the bill be shelved and that the city’s Beijing-backed Chief Executive Carrie Lam resign. After seven hours of marching, organisers estimated 1,030,000 people took part, far outstripping a demonstration in 2003 when half that number hit the streets to successfully challenge government plans for tighter national security laws.

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“Travelers aren’t merely scared of the 737 Max, they’re terrified of it..”

Boeing 737 Max Seen as ‘Airplane Non Grata’ by Wary Travelers (BBG)

U.S. airlines have their work cut out for them in trying to coax frightened travelers back onto Boeing Co.’s 737 Max once a worldwide grounding ends. At least 20% of U.S. travelers say they will definitely avoid the plane in the first six months after flights resume, according to a study led by consultant Henry Harteveldt. More than 40% said they’d be willing to take pricier or less convenient flights to stay off the Max. A separate UBS Group AG survey found that 70% would hesitate today to book a flight on Boeing’s best-selling jet. “Travelers aren’t merely scared of the 737 Max, they’re terrified of it,” Harteveldt, president of Atmosphere Research Group, said in the report, which was released Tuesday.


“The 737 Max is, for now, an ‘airplane non grata’ — a plane passengers do not want to fly.” The surveys underscore the challenge looming for Boeing as it seeks to regain public trust after two deadly crashes and a global flying ban that’s nearing the three-month mark. Boeing is finalizing a software fix for a flight-control system malfunction linked to the accidents, as well as proposed new pilot training. Regulators in the U.S. and other countries say there’s no timeline for when the plane will resume flights. Only 14% of U.S. passengers would definitely fly on a 737 Max within six months of its return, according to the online study for Atmosphere of 2,000 U.S. airline passengers from April 27 to May 1.

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They have to fire the CEO and many others. Nader is not going away.

Boeing Used To Getting Its Way, Grip On Congress Is Legendary (Ralph Nader)

The Boeing-driven FAA is rushing to unground the notorious prone-to-stall Boeing 737 MAX (that killed 346 innocents in two crashes) before several official investigations are completed. Troubling revelations might keep these planes grounded worldwide. The FAA has a clearly established pro-Boeing bias and will likely allow Boeing to unground the 737 MAX. We must demand that the two top FAA officials resign or recuse themselves from taking any more steps that might endanger the flying public. The two Boeing-indentured men are Acting FAA Administrator Daniel Elwell and Associate FAA Administrator for Aviation Safety Ali Bahrami. Immediately after the crashes, Elwell resisted grounding and echoed Boeing claims that the Boeing 737 MAX was a safe plane despite the deadly crashes in Indonesia and Ethiopia.

Ali Bahrami is known for aggressively pushing the FAA through 2018 to further abdicate its regulatory duties by delegating more safety inspections to Boeing. Bahrami’s actions benefit Boeing and are supported by the company’s toadies in the Congress. Elwell and Bahrami have both acquired much experience by going through the well-known revolving door between the industry and the FAA. They are likely to leave the FAA once again for lucrative positions in the aerospace lobbying or business world. With such prospects, they do not have much ‘skin in the game’ for their pending decision.

[..] Boeing has about 5,000 orders for the 737 MAX. It has delivered less than 400 to the world’s airlines. From its CEO, Dennis Muilenburg to its swarms of Washington lobbyists, law firms, and public relations outfits, Boeing is used to getting its way. Its grip on Congress – where 300 members take campaign cash from Boeing – is legendary. Boeing pays little in federal and Washington state taxes. It fumbles contracts with NASA and the Department of Defense but remains the federal government’s big vendor for lack of competitive alternatives in a highly concentrated industry.

[..] Time is not on the side of the 737 MAX 8. A comprehensive review of the 737 MAX’s problems is a non-starter for Boeing. Boeing’s flawed software and instructions that have kept pilots and airlines in the dark have already been exposed. New whistleblowers and more revelations will emerge. More time may also result in the Justice Department’s operating grand jury issuing some indictments.

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One of Melzer’s many interviews. Where is the UN suppoort for him?

Chris Hedges Talks To UN Special Rapporteur About Assange (RT)

Chris Hedges discusses with UN Special Rapporteur on Torture Nils Melzer the conditions of Julian Assange’s detention, his psychological and physical health as well as the judicial proceedings against the WikiLeaks founder.

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Jun 072019
 
 June 7, 2019  Posted by at 9:44 am Finance Tagged with: , , , , , , , , ,  4 Responses »


René Magritte L’empire des lumières 1949

 

Assange Persecution Very Similar To Historic Witch-Hunts – Melzer (Can.)
Belmarsh Prison Inmate Provides Photos of Julian Assange (Cassandra)
Police Raids Raise Fears Of Australian Media Crackdown (G.)
The Fed Can’t Help Housing or Autos at This Point (DDMB)
Fed Signals It Will Use QE Aggressively To Fight Next Recession (MW)
That America Is Gone (PCR)
Key Figure Mueller Linked To Russia Was State Department Intel Source (Hill)
Putin Says Russia Prepared To Drop START Nuclear Arms Treaty (AFP)
Russia Must Change Behavior For Better Relations: UK PM May’s Spokeswoman (R.)
Next Tory PM Will Not Be Able To Suspend Parliament – Bercow (G.)
‘Surveillance Capitalism’: Toronto Urged To Abandon Smart City Project (G.)
Microplastics Have Invaded The Deep Ocean – And The Food Chain (NPR)

 

 

Excerpts from an interview the Canary had with UN torture expert Nils Melzer

Assange Persecution Very Similar To Historic Witch-Hunts – Melzer (Can.)

In today’s information age, the media have an extraordinary power to shape public opinion, and no one is exempt from their influence. The media are a veritable ‘fourth power’ in the state next to the traditional branches of government, controlling not only what is said and shown, but also what is not disseminated and, therefore, is withheld from the public. This enormous power comes with an equally enormous ethical responsibility. Many media outlets and individual journalists have shown a remarkable lack of critical independence and have contributed significantly to spreading abusive and deliberately distorted narratives about Mr Assange.

When the media find it more appropriate to spread humiliating jokes about Mr Assange’s cat, his skateboard and his faeces, than to challenge governments consistently refusing to hold their officials accountable for wars of aggression, corruption and serious international crimes, they demonstrate a deplorable lack of responsibility, decency and respect not only towards Mr Assange, but also towards their own readers, hearers and viewers, whom they are supposed to inform and empower. It is a bit like being served poisoned junk food at a restaurant – a betrayal of trust with potentially serious consequences.

[..] By making Mr Assange ‘unlikeable’ and ridiculous in public opinion, an environment was created in which no one would feel empathy with him, very similar to the historic witch-hunts, or to modern situations of mobbing at the workplace or in school. Once totally isolated, it would be easy to violate Mr Assange’s most fundamental rights without provoking public outrage. If the involved states get away with persecuting Mr Assange without ever prosecuting the crimes exposed by him, they will have established a dangerous precedent of impunity threatening freedom of press and opinion worldwide, and they will also have seriously undermined the accountability of government officials for crime and corruption under the rule of law. So there is much at stake here for every single one of us, and everyone should use the democratic means at their disposal to inform themselves, make their voice heard and hold their government accountable.

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• Note: the photos are from before Assange fell gravely ill.

• New charges vs Assange, to be filed on June 14, are to be based on testimony from a convicted pedophile, Sigi Thordarson, who stole $50,000 from WikiLeaks, then fled to the FBI when caught.

• Next hearing, planned for 12 June has now also been moved to 14 June. The hearing will be in Belmarsh Magistrates’ Court.

• Kim Dotcom on Twitter: “The US Department of Justice has nothing to do with Justice. Here’s just another example. After everything I’ve seen so far I can say with confidence that there will be no extradition of Julian Assange. The charges are ludicrous and the evidence is non-existent. Typical DOJ.”

Belmarsh Prison Inmate Provides Photos of Julian Assange (Cassandra)

The Gateway Pundit has obtained exclusive testimony, as well as photos, from a fellow inmate of imprisoned WikiLeaks founder Julian Assange inside London’s highest security prison. The inmate, who wishes to remain anonymous, sent multiple photos of Assange from inside Belmarsh maximum security prison and spoke to The Gateway Pundit about the WikiLeaks founder’s situation using a contraband phone he has inside. Along with the photos from inside the prison, the inmate pushed a fundraiser — causing supporters to worry that he was attempting to extort WikiLeaks or harm Assange by violating his privacy. The Gateway Pundit reached out to him to get his side of the story.

This reporter spoke to the inmate through a series of online messages and a phone call for multiple hours on Wednesday evening. At the beginning of the conversation I asked him if he was a prisoner or someone who works there — and if his motive was to extort money from the organization. “I’m in prison right now,” he said, sending a photo from inside his cell. “Extort him for what reason? He exposed the biggest scandals in the world. Whose side do you think someone in prison would be on? The government who have us locked up in here or a fellow prisoner who actually doesn’t deserve to be here?” The photos feature Assange prior to his illness and being moved to the prison’s hospital wing last month. We have not been able to verify if Assange is aware of the existence of the photographs.

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Does Australia have any laws at all?

Police Raids Raise Fears Of Australian Media Crackdown (G.)

Annika Smethurst, the political editor of Australia’s Sunday Telegraph newspaper, was preparing to leave her Canberra home shortly before 9am on Tuesday morning. When she heard a knock at the front door, she assumed it was her cleaner. Instead there were five federal police officers on the doorstep, pursuing evidence relating to a story she had written more than 12 months earlier. The police presented their warrants. The journalist told them she wanted a lawyer. Two legal representatives arrived at her house shortly afterwards. The search started in Smethurst’s bedroom. While that was under way, another two officers arrived with electronic equipment to go through her phone and computers. The police wanted access to all her electronic equipment.

They asked for her passwords, downloaded the contents of her phone on to their computer and used keyword searches to check the stored data. While the electronic dump was under way, police looked under Smethurst’s bed, through her clothes, handbags and sewing basket, through the spare room, through her cookbooks and stored Christmas decorations. They picked up 20 USBs in the house and checked them. The search spanned seven hours, with the group leaving about 4.30pm. “I felt shocked,” Smethurst told the Guardian. “I was very cooperative, and to be fair, they were too. They had a warrant. There was very little I could do apart from sitting down and watching them go through the search.

“But it’s a very confronting thing, watching somebody go through the house you’ve lived in for five years. It was uncomfortable. “I was very stressed when they were on my phone. Obviously as a journalist, my business model relies on people being able to ring me and talk to me anonymously, with that information not being seen by anyone else, then all of a sudden, police had access to it, and it was an incredible invasion of privacy.” Tuesday’s raid in Canberra, which came without any warning, was connected to a scoop revealing a plan by one of Australia’s surveillance agencies, the Australian Signals Directorate, to broaden its powers to spy on citizens without their knowledge. It was published in April 2018, and referred immediately for police investigation.

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Maxumum bubble has been reached.

The Fed Can’t Help Housing or Autos at This Point (DDMB)

Hopes are running high that potential interest rate cuts by the Federal Reserve will support the auto and housing sectors, two parts of the economy that are sensitive to borrowing costs. The risk, though, is rising that any relief won’t come until after these critical leaders of the current economic cycle have already fallen into contraction. Headed into the promotion-heavy Memorial Day weekend, analysts spoke of automakers finally succumbing to the need to spur car sales with deep discounts. What’s remarkable is the line manufacturers have been able to hold off on incentives, which fell for 11 straight months, according to TrueCar Inc.’s ALG data and analytics unit. While shareholders have applauded the safeguarding of profit margins as inventories piled up, the pressure to match supply and demand has given way to three months – and counting – of production cuts.

The rapid rate at which auto layoffs are rising suggest a spillover into the broader economy. Challenger, Gray and Christmas notes that the almost 20,000 announced layoffs in the first four months of the year were up 207% over the same period of 2018. “Job cuts in this sector are likely to continue, especially with the implementation of additional tariffs on Chinese goods,” Andrew Challenger, the firm’s vice president, wrote in a report. “Automakers and suppliers will feel the pressure, which may lead to more cuts.” It’s one thing to have a continuation of losses in the beleaguered retail sector, but the loss of high-paying jobs in both autos and industrials threaten to further hobble the housing market.

Connecting autos to housing isn’t a stretch. Fed officials have maintained that the recent slowdown in inflation would be “transitory” in nature. History, however, reminds us that one form of inflation is anything but passing once in nature. Home prices largely held their gains after recovering in the wake of the last recession. Recently, though, there’s been a downtick in the rate of those gains. Home price appreciation fell to an 11-month low in April, based on a three-month moving average of purchases using Federal Housing Finance Agency data.

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Just bonkers.

Fed Signals It Will Use QE Aggressively To Fight Next Recession (MW)

The Federal Reserve’s two-day Chicago strategy conference laid the groundwork for the aggressive use of asset purchases, known as quantitative easing, to counter the next recession, experts who attended the forum said. With short-term interest rates in a range of 2.25%-2.5%, the Fed does not have a lot of ammunition to fight the next downturn. In the past, the Fed was able to slash rates by 5 percentage points to stimulate the economy as needed. So the Fed is going to use “pretty aggressive, desperate, measures,” to stem the next recession, said Adam Posen, president of the Peterson Institute for International Economics. “If you thought you saw QE before, this is going to be QE squared,” Posen said. The Fed bought almost $4 trillion in assets during the Great Recession some 10 years ago to bring down long-term interest rates and stimulate the economy.


Posen and former Fed governor Randy Krozner said the Fed used the conference to prepare the public, lawmakers and the markets to the likely implementation again of this unconventional policy tool. Fed Chairman Jerome Powell and his top deputy, Vice Chairman Richard Clarida, want to short-circuit any political opposition and bottlenecks that greeted former Fed chief Ben Bernanke’s first use of asset purchases during the Great Recession. “The next time policy rates hit the effective lower bound [i.e. zero] — and there will be a next time — it will not be a surprise. We are now well aware of the challenges the ELB presents, and we have the painful experience of the global financial crisis and its aftermath to guide us,” Powell said in a speech opening the conference.

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“Corporate boards and executives achieved “performance” by reducing labor costs by moving jobs offshore and by using profits and borrowing in order to buy back the company’s shares..”

That America Is Gone (PCR)

As the Federal Reserve’s low interest rate policy has not served ordinary Americans or spurred investment in new plant and equipment, who has it served? The answer is corporate executives and shareholders. As the liquidity supplied by the Federal Reserve has gone mainly into the prices of financial assets, it is the owners of these assets who have benefited from the Federal Reserve’s policy. Years ago Congress in its unwisdom capped the amount of executive pay that could be deducted as a business expense at one million dollars unless performance related. What “performance related” means is a rise in profits and share price.

Corporate boards and executives achieved “performance” by reducing labor costs by moving jobs offshore and by using profits and borrowing in order to buy back the company’s shares, thus driving up the price. In other words, corporate leaders and owners benefited by harming the US economy, the careers and livelihoods of the American work force, and their own companies. This is the reason for the extraordinary worsening of the income and wealth distribution in the United States that is polarizing the US into a handful of mega-rich and a multitude of have-nots.

The America I grew up in was an opportunity society. There were ladders of upward mobility that could be climbed on merit alone without requiring family status or social and political connections. Instate college tuition was low. Most families could manage it, and the students of those families that could not afford the cost worked their way through university with part time jobs. Student loans were unknown. That America is gone. The few economists capable of thought wonder about the high price/earnings ratios of US stocks and the 26,000 Dow Jones when stock buy-backs indicate that US corporations see no investment opportunities. How can stock prices be so high when corporations see no growth in US consumer income that would justify investment in the US?

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It’s on. And don’t worry, you don’t have to choose a side.

Key Figure Mueller Linked To Russia Was State Department Intel Source (Hill)

In a key finding of the Mueller report, Ukrainian businessman Konstantin Kilimnik, who worked for Trump campaign chairman Paul Manafort, is tied to Russian intelligence. But hundreds of pages of government documents — which special counsel Robert Mueller possessed since 2018 — describe Kilimnik as a “sensitive” intelligence source for the U.S. State Department who informed on Ukrainian and Russian matters. Why Mueller’s team omitted that part of the Kilimnik narrative from its report and related court filings is not known. But the revelation of it comes as the accuracy of Mueller’s Russia conclusions face increased scrutiny.

The incomplete portrayal of Kilimnik is so important to Mueller’s overall narrative that it is raised in the opening of his report. “The FBI assesses” Kilimnik “to have ties to Russian intelligence,” Mueller’s team wrote on page 6, putting a sinister light on every contact Kilimnik had with Manafort, the former Trump campaign chairman. What it doesn’t state is that Kilimnik was a “sensitive” intelligence source for State going back to at least 2013 while he was still working for Manafort, according to FBI and State Department memos I reviewed. Kilimnik was not just any run-of-the-mill source, either. He interacted with the chief political officer at the U.S. Embassy in Kiev, sometimes meeting several times a week to provide information on the Ukraine government.

He relayed messages back to Ukraine’s leaders and delivered written reports to U.S. officials via emails that stretched on for thousands of words, the memos show. The FBI knew all of this, well before the Mueller investigation concluded. Alan Purcell, the chief political officer at the Kiev embassy from 2014 to 2017, told FBI agents that State officials, including senior embassy officials Alexander Kasanof and Eric Schultz, deemed Kilimnik to be such a valuable asset that they kept his name out of cables for fear he would be compromised by leaks to WikiLeaks.

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Worst idea ever.

Putin Says Russia Prepared To Drop START Nuclear Arms Treaty (AFP)

President Vladimir Putin said Thursday Russia was prepared to drop a nuclear weapons treaty with the US and warned of “global catastrophe” if Washington keeps dismantling an international arms control regime. Speaking to heads of international news agencies at an economic forum in the city of Saint Petersburg, Putin said Washington showed no genuine interest in conducting talks on extending the New START treaty which caps the number of nuclear warheads well below Cold War limits. “If no-one feels like extending the agreement — New START — well, we won’t do it then,” Putin said.


“We have said a hundred times that we are ready (to extend it),” Putin said. “There is no formal negotiating process.” The treaty was signed by US President Barack Obama and Russian counterpart Dmitry Medvedev in Prague in 2010. It expires in 2021. Together with another agreement known as the Intermediate-Range Nuclear Forces (INF) treaty, New START is considered a centrepiece of superpower arms control. Moscow suspended participation in the INF treaty in March after President Donald Trump’s White House announced it would ditch the key agreement for alleged Russian violations of the terms.

Putin said he was puzzled by the absence of a global discussion. “Will anyone think about it, speak up, show some concern?” the Russian leader said. “No — total silence.” Putin said he discussed the issue with Trump during their phone talks in early May. “Donald told me that he is also concerned,” Putin said, adding that US Secretary of State Mike Pompeo whom he hosted the same month also spoke “in a similar vein.” “If they think like this, then it is necessary to take practical steps towards joint work,” the Kremlin chief said. Putin said all nuclear powers — both officially recognised as possessing nuclear weapons and not — should take part in future talks. “We have to create a broad platform for discussions and decision-making,” Putin said. “That could be the light at the end of the tunnel.”

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Ha ha. Full of emptiness.

Russia Must Change Behavior For Better Relations: UK PM May’s Spokeswoman (R.)

Britain’s relationship with Russia can only change when Moscow changes its behavior, Prime Minister Theresa May’s spokeswoman said on Thursday, after President Vladimir Putin said he hoped for better relations under her successor. Putin said he hoped a new British prime minister would work toward improving bilateral relations, badly soured last year by the poisoning of a former Russian double agent in England that London blamed on Moscow. The spokeswoman told reporters: “We have been clear that Russia’s pattern of aggression and destabilizing behavior undermines its claims to be a responsible international partner. “We will continue to engage with Russia on matters of international security as this is in the UK’s national interest … however the PM has made clear on numerous occasions we can only have a different relationship if Russia changes its behavior.”

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Don’t like parliament? No problem.

Next Tory PM Will Not Be Able To Suspend Parliament – Bercow (G.)

John Bercow, the Speaker of the House of Commons, has said it is “blindingly obvious” that the new Conservative prime minister will not be able to suspend parliament to push through a no-deal Brexit. The Speaker said it would not be an option after outrage across the political spectrum when the leadership hopeful Dominic Raab suggested he might try to take that path. “That is simply not going to happen. It is just so blindingly obvious that it almost doesn’t need to be stated, but apparently, it does and therefore I have done,” he told MPs. Matt Hancock, another Tory leadership contender, called for all his rivals to rule out the possibility of ending the parliamentary session to stop MPs from voting on whether there should be a no-deal Brexit. He said it undermined parliamentary democracy and risked a general election.


Rory Stewart, another contender, called the suggestion “unconstitutional” and “undemocratic”, adding: “It wouldn’t work.” Andrea Leadsom and Boris Johnson are also among those who have said they would not pursue such an option in order to take the UK out of the EU without a deal on 31 October. Amid suggestions it could even be unconstitutional, Valerie Vaz, the shadow leader of the Commons, asked the government for clarity on whether prorogation to avoid a decision from parliament would be allowed. In response, Mel Stride, the leader of the Commons, said prorogation was “ultimately in the gift of the Queen”, adding: “What I would say is, that I do think Her Majesty should be kept out of the politics of our parliament.

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I guess it’s just that “smart city” sounds kinds good. Better than “surveillance city”.

‘Surveillance Capitalism’: Toronto Urged To Abandon Smart City Project (G.)

A “smart city” project in Canada has hit yet another snag, as mounting delays and privacy concerns threaten the controversial development along the Toronto’s eastern waterfront. The 12-acre Quayside project, a partnership between Google’s Sidewalk Labs and the city of Toronto, has come under increasing scrutiny amid concerns over privacy and data harvesting. This week, the US venture capitalist Roger McNamee warned that technology companies such as Google cannot be trusted to safely manage the data they collect on residents. “The smart city project on the Toronto waterfront is the most highly evolved version to date of … surveillance capitalism”, he wrote to the city council, suggesting Google will use “algorithms to nudge human behavior” in ways to “favor its business”.


McNamee, an early investor in Facebook and Google, is co-founder of Silver Lake Partners, one of the world’s largest technology investors. But in recent years, he has soured on many of the technology giants and their handling of data and privacy concerns. “No matter what Google is offering, the value to Toronto cannot possibly approach the value your city is giving up,” he wrote, pleading with officials to abandon the project. “It is a dystopian vision that has no place in a democratic society.”

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Literally everywhere.

Microplastics Have Invaded The Deep Ocean – And The Food Chain (NPR)

The largest habitat for life on Earth is the deep ocean. It’s home to everything from jellyfish to giant bluefin tuna. But the deep ocean is being invaded by tiny pieces of plastic — plastic that people thought was mostly floating at the surface, and in amounts they never imagined. Very few people have looked for microplastic concentrations at mid- to deep-ocean depths. But there’s a place along the California coast where it’s relatively easy: The edge of the continent takes a steep dive into the deep ocean at Monterey Bay. Whales and white sharks swim these depths just a few miles offshore. [..] “The deep ocean is the largest ecosystem on the planet,” says Van Houtan, “and we don’t know anything about the plastic in the deep ocean.”


Scientists do know about plastic floating on the surface, and have tried to measure how much there is. The Great Pacific garbage patch is just one of many giant eddies in the oceans where enormous amounts of plastic waste collects. But beneath the surface? Not much. So Ventana made several dives to collect water samples at different depths. Technicians filtered the water, looking for microplastic, the tiny fragments and fibers you can barely see. “What we found was actually pretty surprising,” Van Houtan says. “We found that most of the plastic is below the surface.” More, he says, than in the giant floating patches. And also to their surprise, they found that submerged microplastics are widely distributed, from the surface to thousands of feet deep.


The deep ocean is filled with sea creatures like giant larvaceans. They’re actually the size of tadpoles, but they’re surrounded by a yard-wide bubble of mucus that collects food — and plastic. Courtesy of the Monterey Bay Aquarium Research Institute

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Jun 062019
 
 June 6, 2019  Posted by at 9:54 am Finance Tagged with: , , , , , , , , , , ,  17 Responses »


Pablo Picasso Guitar 1925

 

The China Battle Has Just Started (Vague)
Beijing Warns US Farmers May Lose China Market For Good (SCMP)
Millennial Net Wealth Collapses (ZH)
Aftermath: Interview with James Rickards (Whalen)
Google, Facebook Have Tight Grip On Growing US Online Ad Market (R.)
For MMT (Mitchell/Fazi)
The Great Bilderberg Secret Of 2019 (Escobar)
Welsh Government Officially Switches To Campaign For Remain (TNE)
Fitch Downgrades Mexico And Moody’s Lowers Outlook (R.)
Fiat Chrysler Withdraws Merger Offer For Renault, Blames French Politics (R.)
Lavrov Says D-Day Memorials Are Part Of A ‘False’ History Of WWII (BI)
Russia to West: D-Day Wasn’t Decisive In Ending World War Two (R.)
People Eat At Least 50,000 Plastic Particles A Year (G.)

 

 

“It’s about wealth and power, not political systems or ideology.”

The China Battle Has Just Started (Vague)

Long-term, intense economic competition between China and the United States is inevitable. It’s simply a result of China’s new economic size. It’s about wealth and power, not political systems or ideology. Forget these two countries per se. Take any country that has been an uncontested economic leader for decades, add a rapidly rising country that is becoming an economic threat, and watch the battle for markets, trade, and intellectual property unfold. The current trade negotiations could get uglier and derail. But even if they don’t, both sides will likely feel they did not get what they needed, and future rounds could get worse. There’s almost never a situation where the two leaders in a market don’t get locked in a protracted, high-stakes struggle.

[..] It’s also worth noting the history of free trade. The United States was one of the most protectionist nations in history during most of the nineteenth and early twentieth centuries, the very period in which it rose to economic supremacy, with tariffs routinely as high as 50 percent. More politicians than not backed tariffs because they protected American industry. And supporters liked tariffs because they kept wages high. In addition, in the era before the income tax, tariffs were our chief source of revenue, and Washington relished the fact that they created a government surplus (and many a congressional debate of that era was about how to spend that surplus). The subject dominated the halls of Congress.

[..] Now that the United States has woken up, my best guess is that it is not going to sit idly and let China’s encroachment continue. Trump’s approach may be poorly conceived and ham-handed, but some kind of more assertive response was overdue. China’s raison d’être is its own wealth and preeminence, and it is not likely it will permanently stand down, even if it does so strategically from time to time. In fact, in discussing this trade negotiation, Xi is now invoking China’s almost mythic tale of heroic perseverance, the Long March. Absent a China implosion—a la Japan in the late 1990s—even occasional rapprochement won’t abate the ferocity of this competition. The only question is how polite or impolite, or even bellicose, it will be.

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Let China grow its own food. Nothing wrong with that.

Beijing Warns US Farmers May Lose China Market For Good (SCMP)

Farmers in the United States cannot afford to lose the Chinese market, but farmers in China will be able to withstand the impact of American tariffs, according to a top agriculture official in Beijing. Han Jun, vice-minister of agriculture and rural affairs, said China’s retaliatory tariffs on American products – the latest of which took effect on Saturday – now covered “virtually all US agricultural product exports to China”, warning that US farmers could lose the Chinese market for good. “If the US doesn’t lift all additional tariffs [levied on Chinese products], bilateral agricultural product trade between China and the US, including soybean trade, will never go back to normal,” Han told the official Xinhua news agency.

“If the US loses China’s market, it will be very difficult for the US to regain it.” Han, who is also a top policymaker as deputy head of the Office of the Central Leading Group for Rural Affairs, said the two rounds of aid offered by US President Donald Trump to American farmers would not be enough to cover their potential losses if they lost the Chinese market. But he said Chinese farmers would be able to weather the impact of American tariffs. In terms of the soybean trade, while China’s imports from the United States had plunged, it could find ways to diversify its sources, including encouraging Chinese farmers to grow more of the crop and buying more from other countries, Han said.

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Everybody gets poorer while the Fed pours trillions into the economy.

Millennial Net Wealth Collapses (ZH)

The net worth of millennials (18- to 35-year-old) has collapsed 34% since 1996, according to a new, shocking report from Deloitte. Millennials are financially worse off than any other generation before them. With student loans, auto and credit card debts, rising rents, and out of control, health-care costs have pushed their average net worth below $8,000. Deloitte told The Washington Post that their findings reveal that millennials are delaying home-buying and marriage because of massive debt loads and rising costs are making big ticketed items virtually unaffordable. “The narrative out there is that millennials are ruining everything, from breakfast cereal to weddings, but what matters to consumers today isn’t much different than it was 50 years ago,” chief retail officer Kasey Lobaugh told the Post.

“Generally speaking, there have not been dramatic changes in how consumers spend their money.” Lobaugh described the soaring wealth inequality gap as another reason why young adults have little or no net wealth. In a separate report, we highlighted in April that 60% of millennials don’t have $500 in savings. The Post said education expenses had climbed 65% in the past decade. Food prices have increased by 26%, health care costs are up 21%, housing jumped 16%, and transportation costs rose 11%. The study showed millennials had delayed the American dream of a house, family, and automobile because of their insurmountable debts. Since 2005, retail spending has increased by about 13%, to roughly $3 trillion per year, but Deloitte said much of that growth is due to population increase, not a robust consumer base.


In the past decade, the income growth of the top 10% of Americans jumped 1,305% more than the bottom 90% of Americans – which means millennials stuck in the gig-economy with multiple jobs and high debt loads will be trapped in a life of financial misery.

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“..the Fed has failed to distinguish between credit driven bubbles and mania driven bubbles..”

Aftermath: Interview with James Rickards (Whalen)

In the beginning of your book, you use the metaphor of The Odyssey to describe the choices facing the Federal Reserve Board going back to Alan Greenspan, who we knew as “Uncle Alan” in Washington years ago. You talk about how the Fed went from deflating bubbles before Greenspan, as with the “taking away the punch bowl” image, then to trying to maintain bubbles, and now overtly using monetary policy to stoke inflation and huge asset bubbles. Where does that leave us today?

Rickards: In the book I talk about how Greenspan defeated deflation in 2005 before he left office, but, this was a Pyrrhic victory. Low rates gave rise to the housing bubble and subprime debt crisis. Since 2008, we’ve had more of the same but a more extreme version of Greenspan’s anti-deflation medicine. If Greenspan’s three-year experiment with sub 2% rates gave rise to the Global Financial Crisis, what was the world to make of the Bernanke-Yellen policy of 0% for seven years? Bernanke’s Federal Reserve also engaged in a completely unprecedented money printing binge called quantitative easing.

[..] the Fed has failed to distinguish between credit driven bubbles and mania driven bubbles. The former are dangerous because they are connected with the credit system, the latter less so because people loose money but the crisis is not systemic. The 2000 dot.com bubble was speculative, but not credit driven so it did not turn into a systemic crisis when it popped. Of course 2008 was credit driven and it did metastasize throughout the system right up to the top of the food chain with large banks and the housing GSEs failing. When you are kicking around the idea of should I or should I not pop the bubble, this is a key distinction and the threshold question for policy.

[..] It’s one thing when loose monetary policy results in private credit extremes. The Fed can reign that in. But, what happens when public credit from the Fed is the source of the problem? The Bernanke choice of stoking asset price inflation via zero rates and QE is not something that can be reversed without a great deal of pain. Once you make that trade-off between promoting inflation and future market instability, you have no way out. You’re much better off taking the pain and accepting a lower level of economic growth in the short-run rather than deferring the pain but creating far larger asset bubbles down the road. There is no way out of the Bernanke policy choice without bigger bubbles and much larger market crash that results.

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Why they must be broken up.

Google, Facebook Have Tight Grip On Growing US Online Ad Market (R.)

The U.S. internet advertising industry is projected to hit $160 billion by 2023 from $107 billion last year, led by fast-growing categories like mobile video with Alphabet Inc’s Google and Facebook Inc firmly controlling the market, consultancy PwC said on Wednesday. The two tech giants together commanded nearly 60% of the U.S. internet advertising market in 2018, according to the report, up 3% from the previous year. Google’s YouTube dominates online video, while Facebook has been expanding its video product called Watch and adding advertising options. Google and Facebook are both currently under watch by U.S. regulators for possible antitrust concerns, as well as tech giants Apple Inc and Amazon.com Inc.


U.S. wireless carrier AT&T Inc despite spending $85 billion for media company Time Warner to transform into a media and advertising firm, has only managed to eke out single digit market share, according to PwC. Gaining market share is difficult because platforms must have features that are new and specific as well as some degree of emerging technology, said C.J. Bangah, a principal at PwC. An advantage the telecommunications companies like AT&T have over Google and Facebook is they will benefit from 5G, the next generation wireless network that is expected to bring technology like autonomous cars to reality.

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A discussion we will be having. Because what we have now has failed us.

For MMT (Mitchell/Fazi)

MMT is not a regime that you ‘apply’ or ‘switch to’ or ‘introduce’. Rather, it is a lens which allows us to see how our fiat monetary systems already work. How you decide to use that understanding depends on the value system or ideology you apply to it. It thus makes little sense to talk of ‘MMT-type prescription’ or an ‘MMT solution’. Indeed, governments already operate according to the framework offered by MMT, regardless of what they may claim in public (and the accounting smokescreens they may employ). Citizens are constantly told that the government cannot afford to invest more in education, healthcare, infrastructure, welfare and other public services.


Yet, there is never a lack of money when it comes tax cuts for the rich, bank bailouts, military activities and other programmes that benefit our political and economic elites. As of March 2006, approximately £4.5 billion had been spent by the UK in Iraq, enough to pay for the building of around 44 new hospitals and to fund the recruitment and retention of over 10,300 new teachers for ten years. Yet, there was never any debate about how the UK would ‘fund’ the war. Unfortunately, the mainstream macroeconomic narrative continues to plague large swathes of the left, particularly in Europe. Meadway’s article is representative. It concentrates ‘on the practical and political implications [of MMT], why they are wrong–and why Labour’s own economic programme makes more sense’. In that sense, he is really talking about a conception of the application of MMT according to a certain value set, rather than MMT itself.

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Pepe doesn’t convince me.

The Great Bilderberg Secret Of 2019 (Escobar)

The great Bilderberg secret of 2019 had to do with why, suddenly, the Trump administration has decided that it wants to talk to Iran “with no preconditions”. It all has to do with the Strait of Hormuz. Blocking the Strait could cut off oil and gas from Iraq, Kuwait, Bahrain, Qatar and Iran – 20% of the world’s oil. There has been some debate on whether this could occur – whether the US Fifth Fleet, which is stationed nearby, could stop Tehran doing this and if Iran, which has anti-ship missiles on its territory along the northern border of the Persian Gulf, would go that far. An American source said a series of studies hit President Trump’s desk and caused panic in Washington.

These showed that in the case of the Strait of Hormuz being shut down, whatever the reason, Iran has the power to hammer the world financial system, by causing global trade in derivatives to be blown apart. The Bank for International Settlements said last year that the “notional amount outstanding for derivatives contracts” was $542 trillion, although the gross market value was put at just $12.7 trillion. Others suggest it is $1.2 quadrillion or more. Tehran has not voiced this “nuclear option” openly. And yet General Qasem Soleimani, head of the Iranian Revolutionary Guards Corps’ Quds Force and a Pentagon bête noire, evoked it in internal Iranian discussions. The information was duly circulated to France, Britain and Germany, the EU-3 members of the Iran nuclear deal (or Joint Comprehensive Plan of Action), also causing a panic.

Oil derivative specialists know well that if the flow of energy in the Gulf is blocked it could lead to the price of oil reaching $200 a barrel, or much higher over an extended period. Crashing the derivatives market would create an unprecedented global depression. Trump’s former Goldman Sachs Treasury Secretary Steve Mnuchin should know as much. And Trump himself seems to have given the game away. He’s now on the record essentially saying that Iran has no strategic value to the US. According to the American source: “He really wants a face-saving way to get out of the problem his advisers Bolton and Pompeo got him into. Washington now needs a face-saving way out. Iran is not asking for meetings. The US is.”

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Quicksand. The entire country.

Welsh Government Officially Switches To Campaign For Remain (TNE)

Brexit minister Jeremy Miles said that efforts towards an acceptable Brexit had reached “the end of the road”. He said any Brexit deal must now be subject to a public vote, with remaining in the EU on the ballot paper. The Labour-led government, along with Plaid Cymru, had previously followed a 2017 policy outlined in the White Paper ‘Securing Wales’ Future’, that aimed to find “the least damaging kind of Brexit”, as Miles put it. But the government in Westminster have made this impossible, he said. “We as a government must recognise these realities and change course,” said Miles. “Parliament should now show the courage to admit it is deadlocked.” Although Wales voted to leave by 52%, public opinion has shifted towards Remain, said Miles.

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Strongarming?!

Fitch Downgrades Mexico And Moody’s Lowers Outlook (R.)

In a double blow for Mexico, credit ratings agency Fitch downgraded the nation’s sovereign debt rating on Wednesday, citing risks posed by heavily indebted oil company Pemex and trade tensions, while Moody’s lowered its outlook to negative. The Mexican peso weakened as much as 1.3% on the news. Cutting Mexico’s rating to BBB, nearing junk status, Fitch said the financial woes of state oil company Pemex were taking a toll on the nation’s prospects. Fitch said mounting trade tensions influenced its view, according to a statement issued shortly after the end of a meeting in the White House in which Mexican officials tried to stave off tariffs U.S. President Donald Trump has vowed to impose next week.


Following a surge in mostly Central American migrants arriving at the U.S. border, Trump threatened blanket tariffs on Mexican imports if it did not do more to stem the flow. “Growth continues to underperform, and downside risks are magnified by threats by U.S. President Trump,” Fitch said. Mexican President Andres Manuel Lopez Obrador took office in December with ambitious plans to build a $8 billion refinery, a decision ratings agencies and investors warned would divert funds from its more profitable production and exploration business. Lopez Obrador has said the ratings agencies were punishing Mexico for the “neo-liberal” policies of previous administrations. A Reuters analysis of Pemex accounts from the past decade shows debt increased by 75% during the term of Lopez Obrador’s predecessor, Enrique Pena Nieto, amid a landmark energy reform.

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The same governments that talk about going green own carmakers.

Fiat Chrysler Withdraws Merger Offer For Renault, Blames French Politics (R.)

Fiat Chrysler said it has abandoned its $35 billion merger offer for Renault, blaming French politics for scuttling what would have been a landmark deal to create the world’s third-biggest automaker. A source close to the French carmaker’s board said Fiat Chrysler made the move after France sought to delay a decision on the deal in order to win the support of Nissan Motor Co, Renault’s Japanese alliance partner. French government officials had pushed for Nissan to support the merger. Nissan had said it would abstain. The French government, which owns a 15% stake in Renault, had also pushed Fiat Chrysler for guarantees that France would not lose jobs, and for a dividend to be paid to Renault shareholders, including the government, people familiar with the talks said.


Fiat Chrysler’s original proposal offered no special dividend to Renault shareholders. “It has become clear that the political conditions in France do not currently exist for such a combination to proceed successfully,” Fiat Chrysler said in a statement issued early Thursday from London. Renault, in a separate statement, said its board was “unable to take a decision due to the request expressed by the representatives of the French state to postpone the vote to a later meeting.”

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Russia lost an entire generation of young men.

Lavrov Says D-Day Memorials Are Part Of A ‘False’ History Of WWII (BI)

Ahead of the 75th anniversary of the D-Day invasion of France, Russia’s foreign minister has written an article arguing that the commemorations of the event are part of a “false” history that belittles the contributions of the Soviet Union toward defeating Nazi Germany. Sergey Lavrov chastised Western powers in an article published in Russia’s International Affairs magazine on Tuesday, ahead of events in Europe to mark the D-Day landings on the Nazi-occupied Normandy coast. “False interpretations of history are being introduced into the Western education system with mystifications and pseudo-historical theories designed to belittle the feat of our ancestors,” Lavrov wrote.


“Young people are being told that the main credit in victory over Nazism and liberation of Europe goes not to the Soviet troops, but to the West due to the landing in Normandy, which took place less than a year before Nazism was defeated.” He added: “It was the peoples of the Soviet Union who broke the backbone of the Third Reich. That is a fact.” [..] Historians agree that the Soviets sustained the heaviest losses of all powers involved in World War II, placing the death toll for the Red Army at between 9 million and 11 million troops, part of an estimated 26 million Soviet citizens who died. Lavrov also wrote Russia had been falsely labeled as an aggressor in World War II. “Our detractors seek to diminish the role of the Soviet Union in World War II and portray it if not as the main culprit of the war, then at least as an aggressor, along with Nazi Germany,” he wrote.

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Quite the claim: “There was a wish to wait for the maximum weakening of Germany’s military power from its enormous losses in the east, while reducing losses in the west..”

Russia to West: D-Day Wasn’t Decisive In Ending World War Two (R.)

Russia told the West on Wednesday the Normandy landings on D-Day in 1944 did not play a decisive role in ending World War Two and that the Allied war effort should not be exaggerated. Moscow’s comments might irk war veterans in Britain where the 75th anniversary on Wednesday of the largest seaborne invasion in history was marked at a ceremony in Portsmouth attended by Queen Elizabeth and world leaders including Donald Trump and Angela Merkel. Speaking at a weekly news conference in Moscow, Foreign Ministry spokeswoman Maria Zakharova offered a tribute to those who died on the western front of World War Two and said Moscow appreciated the Allied war effort.

“It should of course not be exaggerated. And especially not at the same time as diminishing the Soviet Union’s titanic efforts, without which this victory simply would not have happened,” she said. The Soviet Union lost over 25 million lives in what it calls the Great Patriotic War, and Moscow under President Vladimir Putin has taken to marking victory in the war with a massive annual military parade on Red Square. “As historians note, the Normandy landing did not have a decisive impact on the outcome of World War Two and the Great Patriotic War. It had already been pre-determined as a result of the Red Army’s victories, mainly at Stalingrad (in late 1942) and Kursk (in mid-1943),” Zakharova told reporters.

More than 150,000 allied troops launched an air, sea and land attack on Normandy on June 6, 1944 that ultimately led to the liberation of western Europe from Nazi Germany. Moscow, which had been fighting German forces in the east for almost three years by the time of D-Day, and gradually pushing them back from early 1943, had been urging Britain’s Winston Churchill to open a second front as far back as August 1942. “There was a wish to wait for the maximum weakening of Germany’s military power from its enormous losses in the east, while reducing losses in the west,” she said.

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And we just keep making the stuff. And keep proclaiming we love our children.

People Eat At Least 50,000 Plastic Particles A Year (G.)

The average person eats at least 50,000 particles of microplastic a year and breathes in a similar quantity, according to the first study to estimate human ingestion of plastic pollution. The true number is likely to be many times higher, as only a small number of foods and drinks have been analysed for plastic contamination. The scientists reported that drinking a lot of bottled water drastically increased the particles consumed. The health impacts of ingesting microplastic are unknown, but they could release toxic substances. Some pieces are small enough to penetrate human tissues, where they could trigger immune reactions.

Microplastic pollution is mostly created by the disintegration of plastic litter and appears to be ubiquitous across the planet. Researchers find microplastics everywhere they look; in the air, soil, rivers and the deepest oceans around the world. [..] Most food and drink types have not been tested, however, meaning the study only assessed 15% of calorie intake. “We don’t know a huge amount. There are some major data gaps that need to get filled,” said Kieran Cox, at the University of Victoria in Canada, who led the research.

Other foods, such as bread, processed products, meat, dairy and vegetables, may well contain just as much plastic, he said. “It is really highly likely there is going to be large amounts of plastic particles in these. You could be heading into the hundreds of thousands.” Some of the best available data is on water, with bottled water containing 22 times more microplastic than tap water on average. A person who only drank bottled water would consume 130,000 particles per year from that source alone, the researchers said, compared with 4,000 from tap water.

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