Sep 272019
 


Salvador Dali Self-portrait in the studio 1919

 

These Once-Secret Memos Cast Doubt On Joe Biden’s Ukraine Story (Solomon)
Democrats Reveal the Real Purpose of the Impeachment Investigation (PCR)
Chelsea, Reality Hope New Approval Of Whistleblowers Will Set Them Free (Onion)
Wall Street To Dems: We’ll Sit Out, Or Back Trump, If Warren Nominated (CNBC)
Fed Will Need To Grow Its Balance Sheet ‘Permanently’ – Morgan Stanley (CNBC)
US Annual Health Insurance Costs Hit Record High Above $20,000 (BBG)
Quarter Of UK Rural Businesses ‘Could Be Bankrupted By No-Deal Brexit’ (G.)
China’s Giant $400 Billion Iran Investment Complicates US Options (F.)
Yemen’s Houthis Are Bringing Down A Goliath (Escobar)
Spanish Security Company Spied On Julian Assange In London For US (El Pais)
Trump Administration Proposes Historically Low Refugee Limit (AP)

 

 

John Solomon’s account is really important in the impeachment hearings.. And everything he says is documented.

Watched quite a lot of the House hearing yesterday, and thought: this is a circus. Everyone knows Trump is guilty or not before they’ve seen anything, just depending on what party they belong to. And no, no fan of Adam Schiff.

These Once-Secret Memos Cast Doubt On Joe Biden’s Ukraine Story (Solomon)

Former Vice President Joe Biden, now a 2020 Democratic presidential contender, has locked into a specific story about the controversy in Ukraine. He insists that, in spring 2016, he strong-armed Ukraine to fire its chief prosecutor solely because Biden believed that official was corrupt and inept, not because the Ukrainian was investigating a natural gas company, Burisma Holdings, that hired Biden’s son, Hunter, into a lucrative job. There’s just one problem. Hundreds of pages of never-released memos and documents — many from inside the American team helping Burisma to stave off its legal troubles — conflict with Biden’s narrative.

And they raise the troubling prospect that U.S. officials may have painted a false picture in Ukraine that helped ease Burisma’s legal troubles and stop prosecutors’ plans to interview Hunter Biden during the 2016 U.S. presidential election. [..] Some media outlets have reported that, at the time Joe Biden forced the firing in March 2016, there were no open investigations. Those reports are wrong. [..] the Ukraine Prosecutor General’s office still had two open inquiries in March 2016, according to the official case file provided me. [..] In a newly sworn affidavit prepared for a European court, Shokin testified that when he was fired in March 2016, he was told the reason was that Biden was unhappy about the Burisma investigation.

“The truth is that I was forced out because I was leading a wide-ranging corruption probe into Burisma Holdings, a natural gas firm active in Ukraine and Joe Biden’s son, Hunter Biden, was a member of the Board of Directors,” Shokin testified. “On several occasions President Poroshenko asked me to have a look at the case against Burisma and consider the possibility of winding down the investigative actions in respect of this company but I refused to close this investigation,” Shokin added.

Read more …

“..keeping him under investigation, at least through the November election, will increasingly erode the support of both Trump and the Republican party brand..”

Democrats Reveal the Real Purpose of the Impeachment Investigation (PCR)

The Democrats know that there is no impeachable offense. What they intend to do is to use the investigation to look into every aspect of Trump’s life and try to make dirt out of things unrelated to his talk with the Ukrainian president. This “impeachment investigation” is a political act to help their candidate win the next presidential election. Democrats themselves describe it in this way. For example, here is how Rob Kall, the director of one of the progressive Democrat websites, described the purpose of the investigation: “The idea should be to keep the impeachment going as long as possible, with new testimonies and new releases of disclosures of alleged corruption and treason on a regular basis.

“Looking at impeachment as a process for removing the president is the wrong way of thinking about it. Looking at it as a key that gives access to investigative tools is the smarter, more strategic, way of looking at it. “Ideally, it will get so bad for Trump that the Republicans will end up putting up someone else to run in the general election. “But keeping him under investigation, at least through the November election, will increasingly erode the support of both Trump and the Republican party brand, making a Democratic takeover of the Senate and the White House, and an increased control of the House even more likely.” In other words, it is a political power play.

The outcome depends on whether Americans see the impeachment investigation as another orchestrated hoax like Russiagate or whether they fall for the hoax as they iniatially did with the Russiagate investigation. The United States does not have a media. It has a propaganda ministry that helps the ruling elites control the explanations that Americans are given. Polls show that Americans have lost confidence in the media. If so, the impeachment investigation will backfire on the Democrats.

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Personally, I’m very much torn between tragedy and comedy.

Chelsea, Reality Hope New Approval Of Whistleblowers Will Set Them Free (Onion)

Following a CIA officer’s much-applauded decision to disclose evidence that President Trump urged his Ukrainian counterpart to interfere in the 2020 election, former intelligence analysts Chelsea Manning and Reality Winner expressed confidence Thursday that the nation’s newfound appreciation for whistleblowers would get them out of jail. “Now that everyone really seems to like it when wrongdoing is exposed, I’m sure it’s just a matter of time before they clear my name and let me go,” Winner said by phone from a federal prison in Texas, echoing the sentiments of Manning, who told reporters she expected not only to be released from jail but also to be allowed to return immediately to active duty in the Army.


“Americans recognize that what this anonymous whistleblower did was both courageous and patriotic, so I’m sure to be commended for releasing a report on interference in the 2016 election, right? I was ahead of my time, really. I’m not saying there will be a parade in my honor, but I sure wouldn’t be surprised. I’ll be out of here in a day or two, and then, who knows? Maybe I’ll even run for public office.” At press time, sources confirmed a chipper Edward Snowden had informed officials in the Justice Department that he was finally ready to leave Moscow and fly back home.

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The differences in fund-raising amounts are scary. The DNC is going to need Tulsi just for that.

Wall Street To Dems: We’ll Sit Out, Or Back Trump, If Warren Nominated (CNBC)

Democratic donors on Wall Street and in big business are preparing to sit out the presidential campaign fundraising cycle — or even back President Donald Trump — if Sen. Elizabeth Warren wins the party’s nomination. In recent weeks, CNBC spoke to several high-dollar Democratic donors and fundraisers in the business community and found that this opinion was becoming widely shared as Warren, an outspoken critic of big banks and corporations, gains momentum against Joe Biden in the 2020 race. “You’re in a box because you’re a Democrat and you’re thinking, ‘I want to help the party, but she’s going to hurt me, so I’m going to help President Trump,’” said a senior private equity executive, who spoke on condition of anonymity in fear of retribution by party leaders.

The executive said this Wednesday, a day after Speaker Nancy Pelosi announced that the House would begin a formal impeachment inquiry into Trump. During the campaign, Warren has put out multiple plans intended to curb the influence of Wall Street, including a wealth tax. In July, she released a proposal that would make private equity firms responsible for debts and pension obligations of companies they buy. Trump, meanwhile, has given wealthy business leaders a helping hand with a major corporate tax cut and by eliminating regulations. Warren has sworn off taking part in big money fundraisers for the 2020 presidential primary. She has also promised to not take donations from special interest groups.

She finished raising at least $19 million in the second quarter mainly through small-dollar donors. The third quarter ends Monday. Trump, has been raising hundreds of millions of dollars, putting any eventual 2020 rival in a bind as about 20 Democrats vie for their party’s nomination. Trump’s campaign and the Republican National Committee have raised over $100 million in the second quarter. A large portion of that haul came from wealthy donors who gave to their joint fundraising committee, Trump Victory. In August, the RNC raised just over $23 million and has $53 million on hand. The Democratic National Committee have struggled to keep up. The DNC finished August bringing in $7.9 million and has $7.2 million in debt.

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No Greyerz yesterday, MS today. People do understand. But nobody acts.

Fed Will Need To Grow Its Balance Sheet ‘Permanently’ – Morgan Stanley (CNBC)

The Federal Reserve’s asset purchases likely will total $315 billion over the next six months as it seeks to stabilize overnight funding markets and contain the movements of its target interest rate, according to projections from Morgan Stanley. Those permanent moves will be necessary because the current temporary purchases likely won’t be enough to stabilize the market for overnight purchase agreements, or repos, the bank said. The Fed just a month ago halted a process that saw a more than $600 billion reduction of the balance sheet, which consists mostly of Treasurys and mortgage-backed securities that it had acquired in its efforts to pull the U.S. economy out of the financial crisis.


“We maintain that these temporary repo operations will not prove to be a sufficient long-term solution to the recent funding pressure,” Morgan Stanley strategist Kelcie Gerson said in a note. “Ultimately, the Fed will need to increase the size of its balance sheet permanently.” The Morgan Stanley forecast is a bit smaller than one recently from Bank of America Merrill Lynch, which estimated balance sheet expansion at $400 billion this year. The balance sheet currently stands about $3.9 trillion, pushed by three rounds of asset purchases in a process known as quantitative easing. Starting in October 2017, the Fed started allowing some proceeds from its maturing bonds to roll off each month, with a corresponding decrease of bank reserves that has taken the total down to about $1.5 trillion, the lowest in more than eight years.

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Another issue that nobody acts upon.

US Annual Health Insurance Costs Hit Record High Above $20,000 (BBG)

The cost of family health coverage in the U.S. now tops $20,000, an annual survey of employers found, a record high that has pushed an increasing number of American workers into plans that cover less or cost more, or force them out of the insurance market entirely. “It’s as much as buying a basic economy car,” said Drew Altman, chief executive officer of the Kaiser Family Foundation, “but buying it every year.” The nonprofit health research group conducts the yearly survey of coverage that people get through work, the main source of insurance in the U.S. for people under age 65. While employers pay most of the costs of coverage, according to the survey, workers’ average contribution is now $6,000 for a family plan.


That’s just their share of upfront premiums, and doesn’t include co-payments, deductibles and other forms of cost-sharing once they need care. The seemingly inexorable rise of costs has led to deep frustration with U.S. health care, prompting questions about whether a system where coverage is tied to a job can survive. As premiums and deductibles have increased in the last two decades, the percentage of workers covered has slipped as employers dropped coverage and some workers chose not to enroll. Fewer Americans under 65 had employer coverage in 2017 than in 1999, according to a separate Kaiser Family Foundation analysis of federal data. That’s despite the fact that the U.S. economy employed 17 million more people in 2017 than in 1999.

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Yeah, it’s the Guardian, and yeah, it may be a little less bad than they say, but the Tories’ lack of preparedness for what they themselves promote is nuts regardless.

Quarter Of UK Rural Businesses ‘Could Be Bankrupted By No-Deal Brexit’ (G.)

As many as one in four rural businesses could be left facing bankruptcy in a no-deal Brexit, and the staunchly Conservative rural vote may be in doubt as a result, the head of the UK’s landowners’ group has warned on the eve of the Tory party conference. Farmers are particularly vulnerable to a no-deal Brexit because tariffs would be levied on exports, imports of cheap food could flood the market, and because decisions must be made now which will have an impact for the next year. Arable farmers are putting crops in the ground now for spring, and livestock farmers are preparing to breed sheep and other livestock for next year.


Tim Breitmeyer, president of the Country Land and Business Association, said farms and the rural businesses that rely on them were not in a position to absorb the shock of Brexit, and estimates suggested a large number would be in danger. “Agriculture is not making very much money. In many cases, they’re losing [money] without the single farm payment [subsidy]. If you have a tariff to add to your problems, if you have increased costs to add to your problems, it’s only going to make matters worse and tip some businesses over the top,” he told the Guardian. “Now I don’t know whether that’s 15% or 25% but I’m absolutely sure there will be quite a few farming businesses for which it actually just tips them into receivership.”

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China was never going to let Iran fall. But now Trump’s sanctions policies drive it straight into Beijing hands: “Chinese firms will maintain the right of the first refusal to participate in any and all petrochemical projects in Iran, including the provision of technology, systems, process ingredients and personnel required to complete such projects.”

China’s Giant $400 Billion Iran Investment Complicates US Options (F.)

Amidst historic U.S. – Iran tensions, Beijing is doubling-down on its strategic partnership with Tehran, ignoring U.S. efforts to isolate the Islamic Republic from global markets. Following an August visit by Iran Foreign Minister Mohammad Javad Zarif to Beijing, the two countries agreed to update a 25-year program signed in 2016, to include an unprecedented $400 billion of investment in the Iranian economy – sanctions be damned. The capital injection, which would focus on Iran’s oil and gas sector, would also be distributed across the country’s transportation and manufacturing infrastructure. In return, Chinese firms will maintain the right of the first refusal to participate in any and all petrochemical projects in Iran, including the provision of technology, systems, process ingredients and personnel required to complete such projects.


According to an exclusive interview with Petroleum Economist, a senior source in Iran’s petrochemical sector had this to say about the new agreement: “The central pillar of the new deal is that China will invest $280 billion developing Iran’s oil, gas and petrochemicals sectors… there will be another $120 billion investment in upgrading Iran’s transport and manufacturing infrastructure, which again can be front-loaded into the first five-year period and added to in each subsequent period should both parties agree.” This comes at a time when Washington is exerting its so-called ‘maximum pressure’ strategy against Iran, which aims to change its international behavior by bringing oil exports down to zero.

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Makes me think of how Britain fought back vs Germany, and Viernam vs the US. Once your entire economy moves into self-defense mode, -almost- anything is possible.

Yemen’s Houthis Are Bringing Down A Goliath (Escobar)

“It is clear to us that Iran bears responsibility for this attack. There is no other plausible explanation. We support ongoing investigations to establish further details.” The statement above was not written by Franz Kafka. In fact, it was written by a Kafka derivative: Brussels-based European bureaucracy. The Merkel-Macron-Johnson trio, representing Germany, France and the UK, seems to know what no “ongoing investigation” has unearthed: that Tehran was definitively responsible for the twin aerial strikes on Saudi oil installations. “There is no other plausible explanation” translates as the occultation of Yemen. Yemen only features as the pounding ground of a vicious Saudi war, de facto supported by Washington and London and conducted with US and UK weapons, which has generated a horrendous humanitarian crisis.

So Iran is the culprit, no evidence provided, end of story, even if the “investigation continues.” Hassan Ali Al-Emad, Yemeni scholar and the son of a prominent tribal leader with ascendance over ten clans, begs to differ. “From a military perspective, nobody ever took our forces in Yemen seriously. Perhaps they started understanding it when our missiles hit Aramco.” [..] “Past Yemeni governments had missiles, but after 9/11 Yemen was banned from buying weapons from Russia. But we still had 400 missiles in warehouses in South Yemen. We used 200 Scuds – the rest is still there [laughs].”

Al-Emad breaks down Houthi weaponry into three categories: the old missile stock; cannibalized missiles using different spare parts (“transformation made in Yemen”); and those with new technology that use reverse engineering. He stressed: “We accept help from everybody,” which suggests that not only Tehran and Hezbollah are pitching in. Al-Emad’s key demand is actually humanitarian: “We request that Sana’a airport be reopened for help to the Yemeni people.” And he has a message for global public opinion that the EU-3 are obviously not aware of: “Saudi is collapsing and America is embracing it in its fall.”

On the energy front, Persian Gulf energy traders that I have relied upon as trustworthy sources for two decades confirm that, contrary to Saudi Oil Minister Abdulazziz bin Salman’s spin, the damage from the Houthi attack on Abqaiq could last not only “months” but even years. As a Dubai-based trader put it: “When an Iraqi pipeline was damaged in the mid-2000s the pumps were destroyed. It takes two years to replace a pump as the backlogs are long. The Saudis, to secure their pipelines, acquired spare pumps for this reason. But they did not dream that Abqaiq could be damaged. If you build a refinery it can take three to five years if not more.

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“The secret probe is the consequence of a criminal complaint filed by Assange himself, in which he accuses Morales and the company of the alleged offenses involving violations of his privacy and the secrecy of his client-attorney privileges, as well as misappropriation, bribery and money laundering.”

Spanish Security Company Spied On Julian Assange In London For US (El Pais)

Undercover Global S. L., the Spanish defense and private security company that was charged with protecting the Ecuadorian embassy in London during the long stay there of WikiLeaks founder Julian Assange, spied on the cyberactivist for the US intelligence service. That’s according to statements and documents to which EL PAÍS have had access. David Morales, the owner of the company, supposedly handed over audio and video to the CIA of the meetings Assange held with his lawyers and collaborators. Morales is being investigated for this activity by Spain’s High Court, the Audiencia Nacional.

The judicial investigation into the director of UC Global S. L. and the activities of his company were ordered by a judge named José de la Mata, and they began weeks after EL PAÍS published videos, audios and reports that show how the company spied on the meetings that the cyberactivist held in the embassy. The secret probe is the consequence of a criminal complaint filed by Assange himself, in which he accuses Morales and the company of the alleged offenses involving violations of his privacy and the secrecy of his client-attorney privileges, as well as misappropriation, bribery and money laundering.

Morales, a former member of the military who is on leave of absence, stated both verbally and in writing to a number of his employees that, despite having been hired by the government of then-Ecuadorian President Rafael Correa, he also worked “for the Americans,” to whom he allegedly sent documents, videos and audios of the meetings that the Australian activist held in the embassy. “We are playing in another league. This is the first division,” he told his closest colleagues after attending a security fair in the US city of Las Vegas in 2015 where he supposedly made his first American contacts. Despite the fact that the Spanish firm – which is headquartered in the southern city of Jerez de la Frontera – was hired by Senain, the Ecuadorian intelligence services, Morales called on his employees several times to keep his relationship with the US intelligence services a secret.

The owner of UC Global S. L. ordered a meeting between the head of the Ecuadorian secret service, Rommy Vallejo, and Assange to be spied on, at a time when they were planning the exit of Assange from the Ecuadorian embassy using a diplomatic passport in order to take him to another country. This initiative was eventually rejected by Assange on the basis that he considered it to be “a defeat,” that would fuel conspiracy theories, according to sources close to the company consulted by this newspaper. The meeting took place on December 21, 2017 in the meeting room of the diplomatic building and was recorded both on video and audio by cameras installed by Morales’ employees.

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This is absolutely nuts. You need 100,000 at the very least, or mayhem will ensue. And the US can easily absorb those numbers. There are a million people coming, minimum, each year.

Trump Administration Proposes Historically Low Refugee Limit (AP)

The Trump administration wants to cap the number of refugees admitted into the United States to the lowest number since the resettlement program was created in 1980. A State Department proposal released Thursday would put a cap on the number of refugees at 18,000 for the fiscal year that starts Oct. 1. Of those refugee admissions spots, 5,000 would be set aside for persecuted religious minorities — an attempt to bolster President Donald Trump’s heightened focus on global religious freedom — and 1,500 would be set aside for nationals of Guatemala, Honduras and El Salvador, who are seeking asylum in the United States in far greater numbers.


Last year, the administration placed the cap at a record low of 30,000. The historically low limits have drawn protests from human rights groups as well as government officials. “To cut the number of refugees the U.S. will accept to this low of a number reflects nothing more than this administration’s attempts to further hate, division and prejudice in a country that once valued dignity, equality and fairness,” said Ryan Mace, Grassroots Advocacy and Refugee Specialist at Amnesty International USA. The group dismissed arguments that the U.S. lacks the capacity to adequately vet and settle refugees, calling this “a purely political decision.”

Read more …

 

Whistleblowers: WikiLeaks has never revealed a source.

 

 

 

 

 

Sep 182019
 
 September 18, 2019  Posted by at 9:40 am Finance Tagged with: , , , , , , , , , ,  10 Responses »


Henri Matisse Antibes 1908

 

Fed Concludes First Repo In A Decade Amid Liquidity Panic (ZH)
Big Banks Score Win As FDIC Proposes Easing Post-Crisis Derivatives Rules (R.)
Oil Steadies After Saudi Pledges To Restore Output Lost In Attacks (R.)
Without Accountability, There Can Never Be Trust in Our Government (Cates)
House Panel Asks Boeing CEO To Testify October 30 on 737 MAX (R.)
Ethiopian Crash Victims Want 737 MAX Documents From Boeing, FAA (R.)
Editorial Mistake My Ass (Mish)
Democrats Urge New Probe Of Kavanaugh, Impeachment Inquiry (R.)
Trudeau Reassures Allies Amid Alleged Spying Case (BBC)
Catastrophic Effects Of Working As A Facebook Moderator (G.)
US Government Is Suing Edward Snowden For His Book Profits (Verge)

 

 

Oh yeah, let’s save the bankers again….

Fed Concludes First Repo In A Decade Amid Liquidity Panic (ZH)

Update 4: It’s over: after a torrid 30 minutes in which the NY Fed first announced a repo operation, then announced the repo was canceled due to technical difficulties, then mysterious the difficulties went away just minutes later, at precisely 10:10am, the Fed concluded its first repo operation in a decade, which while not topping out at the $75 billion max, was nonetheless a significant $53.15 billion, split as follows: • $40.85BN with TSYs as collateral at a 2.1% stop out rate • $0.6BN with Agencies as collateral at a 3.0% stop out rate • $11.7BN with Mortgage-backed securities as collateral at a 2.1% stop out rate. While the Fed did not disclose how many banks participated in the operation, it is safe to say it was a sizable number.


Worse, the result from today’s unexpected repo operation, we can now conclude that in addition to $1.3 trillion in ‘excess reserves’, a Fed which is now cutting rates and will cut rates by 25bps tomorrow, the US financial system somehow found itself with a liquidity shortfall of $53 billion that almost paralyzed the interbank funding market. Oh, and for those wondering why the Fed did a repo, the answer is simple: it did not want to launch QE just yet. But make no mistake, once repo is insufficient, the Fed will have no choice but to escalate to the next step which is open market purchases. Which brings us to the bigger question of how long such overnight repos will satisfy the market, and how long before the next repo rate spike prompts the Fed to do the inevitable, and restart QE. At least president Trump will be delighted.

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And while we’re saving their multi-million bonuses, let’s throw them some more bones,..

Big Banks Score Win As FDIC Proposes Easing Post-Crisis Derivatives Rules (R.)

A U.S. banking regulator on Tuesday proposed easing a rule requiring banks to set aside cash to safeguard derivatives trades between affiliates, marking one of the biggest wins for Wall Street lenders under the business-friendly Trump administration. The proposal, by the Federal Deposit Insurance Corporation, could potentially free $40 billion across the nation’s largest banks, according to a 2018 survey by the International Swaps and Derivatives Association (ISDA), the global trade group that has been lobbying for the rule change for years.


The proposal is subject to public comment and will likely face resistance from Democratic lawmakers and consumer groups, who have warned that chipping away at regulations put in place following the 2007-2009 financial crisis could sew the seeds of the next one. Countries across the globe introduced a slew of rules to rein in the global over-the-counter derivatives market after big bets on credit swaps brought firms including Lehman Brothers and AIG to their knees.

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Was there any damage at all? Didn’t I read that they hit a bunch of empty tanks?

Oil Steadies After Saudi Pledges To Restore Output Lost In Attacks (R.)

Oil prices were little changed on Wednesday, steadying after Saudi Arabia said it will restore by the end of the month production lost in weekend attacks on its facilities. Prices plummeted 6% on Tuesday after Saudi Arabia’s energy minister said the country had managed to restore oil supplies to customers to where they stood before the attacks on its facilities that shut 5% of global oil output by drawing from its huge inventories. But tension in the region remained elevated after the United States said it believed the attacks on the world’s top oil exporter originated in southwestern Iran. Iran has denied involvement in the strikes.


Brent crude oil futures were flat at $64.55 a barrel by 0732 GMT. U.S. West Texas Intermediate (WTI) crude CLc1 futures were down 15 cents, or 0.1%, to $59.19 a barrel, after sinking 5.7% on Tuesday. “Considering limited spare (production) capacity outside Saudi Arabia and risks of renewed attacks on Saudi energy infrastructure, a risk premium is likely to stay on oil prices in the foreseeable future,” UBS analysts said in a note. Energy Minister Prince Abdulaziz bin Salman said on Tuesday that average oil production in September and October would be 9.89 million barrels per day and that the world’s top oil exporter would ensure full oil supply commitments to its customers this month.

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Not sure Bill Barr is your man.

Without Accountability, There Can Never Be Trust in Our Government (Cates)

The Watergate scandal, at its heart, was about political operatives working on behalf of the Nixon administration (informally known as “The Plumbers”) attempting to plant bugs in the phones of the Democratic National Committee (DNC) headquarters at the Watergate Hotel, so they could spy on key Democratic campaign communications. A little-remembered fact is that bugs had been successfully planted earlier; the burglars were returning to plant a new set in the phones because the first set never worked properly. It was during this second foray into DNC headquarters in the middle of the night that they were caught by an observant security guard.

So the Watergate scandal was based on an attempt to spy on political opponents, but no evidence ever surfaced that any successful spying was actually done. The first set of listening devices never functioned, and the operatives were caught while trying to replace them. That won’t be the case in the Spygate scandal, because this wasn’t an off-the-books dirty tricks group like The Plumbers running an operation against the Trump campaign. This was the federal government itself, making use of the official engines of its intelligence and law enforcement agencies and surveillance courts to spy on a political campaign and, then, a presidency. And it’s because this scandal is so much worse than Watergate that the persons responsible for it must be held accountable for their actions.

[..] The crimes here amount to a deliberate attempt to subvert the federal intelligence and law enforcement agencies and turn them into political engines of partisan policy to shield political friends and destroy political enemies. After covering up serious crimes committed by their political friends, these key government officials used their offices to manufacture crimes to use as a pretext to investigate and punish their political enemies. Unless this behavior is punished with the utmost severity, no one will ever be able to place trust in the federal government. The ball of accountability will soon end up in the court of U.S. Attorney General William Barr.

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I for one have little faith in Congress in this case. Not that I have much faith in Congress in general.

House Panel Asks Boeing CEO To Testify October 30 on 737 MAX (R.)

The U.S. House Transportation and Infrastructure Committee formally asked Boeing CEO Dennis Muilenburg on Tuesday to testify on the now grounded 737 MAX that has been involved in two deadly crashes since October 2018 that killed 346 people. The panel’s chair, Representative Peter DeFazio, also asked John Hamilton, the chief engineer of Boeing’s Commercial Airplanes division, to appear. Both executives have been asked to testify on Oct. 30. Last week, DeFazio asked Muilenburg to make several employees available for interviews as part of a congressional probe into the design, development and certification of 737 MAX aircraft. “Boeing has received the Committee’s invitation and is reviewing it now. We will continue to cooperate with Congress and regulatory authorities as we focus on safely returning the MAX to service,” a Boeing representative said in a statement.

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But will they get them? Boeing will just claim they would reveal company secrets.

Ethiopian Crash Victims Want 737 MAX Documents From Boeing, FAA (R.)

A lawyer for victims of Ethiopian Airlines Flight 302 said on Tuesday he wants Boeing Co and the U.S. Federal Aviation Administration to hand over documents about the decision to keep the Boeing 737 MAX in the air after a deadly Lion Air crash last October. A week after Lion Air Flight 610 nose-dived into the Java Sea, killing all 189 aboard, the FAA warned airlines that erroneous inputs from an automated flight control system’s sensors could lead the jet to automatically pitch its nose down, but the agency allowed the jets to continue flying. Five months later, the same system was blamed for playing a role when ET302 crashed on March 10, killing all 157 passengers and crew and prompting a worldwide grounding of the 737 MAX that remains in place.


“The decisions to keep those planes in service are key,” Robert Clifford of Clifford Law Offices, which represents families of the Ethiopian crash victims, said at a status hearing before U.S. Judge Jorge Alonso in Chicago. Nearly 100 lawsuits have been filed against Boeing by at least a dozen law firms representing families of the Ethiopian Airlines crash victims, who came from 35 different countries, including nine U.S. citizens and 19 Canadians. Families of about 60 victims have yet to file lawsuits but plaintiffs’ lawyers said they anticipate more to come. Most of the lawsuits do not make a specific dollar claim, though Ribbeck Law Chartered has said its clients are seeking more than $1 billion.

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The entire Kavanaugh thing is empty, just two women trying to sell a book. Trump said he should sue them. But as a Supreme Court judge, perhaps he shouldn’t.

Editorial Mistake My Ass (Mish)

As details emerge in the New York Times Kavanaugh scandal, it’s very clear the NYT repeatedly made serious errors On September 14, the New York Times resurrected unsubstantiated and graphic rumors about Supreme Court Justice Brett Kavanaugh in a purposeful smear article Brett Kavanaugh Fit In With the Privileged Kids. She Did Not. The article was by disgraced NYT authors Robin Pogrebin and Kate Kelly to promote their upcoming book “The Education of Brett Kavanaugh: An Investigation.” I do not normally report on sleaze but to understand what the NYT did, I have to. Here is one controversial paragraph: “We also uncovered a previously unreported story about Mr. Kavanaugh in his freshman year that echoes Ms. Ramirez’s allegation. A classmate, Max Stier, saw Mr. Kavanaugh with his pants down at a different drunken dorm party, where friends pushed his penis into the hand of a female student.”


The NYT later added this correction. “The book reports that the female student declined to be interviewed and friends say that she does not recall the incident. That information has been added to the article.” Making matters worse for itself, the NYT came out and blamed it all on an “editing error”. Reporters Robin Pogrebin and Kate Kelly said in an interview on MSNBC that they wrote in the draft of their Sunday Review piece that a woman who Kavanaugh was said to have exposed himself to while a student at Yale had told others she had no recollection of the alleged incident. Their editors, they say, removed the reference. “It was just sort of. . . in the haste of the editing process,” said Pogrebin.

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But this is where the non-story leads to. Kamala seeks a way to reinvent her campaign, the rest just follows.

Democrats Urge New Probe Of Kavanaugh, Impeachment Inquiry (R.)

U.S. Senator Kamala Harris on Tuesday urged a House of Representatives panel to investigate Supreme Court Justice Brett Kavanaugh, while a Democratic lawmaker filed an impeachment resolution in the wake of new allegations of sexual misconduct by the conservative judge when he was in college in the 1980s. The moves by Harris, one of 20 Democratic presidential candidates, and Representative Ayanna Pressley, a progressive on the left of the party, signaled impatience among some Democrats with congressional leaders unenthusiastic about pursuing Kavanaugh’s impeachment, though their efforts appeared unlikely to spur action.

Harris said in a letter to House Judiciary Committee Chairman Jerrold Nadler that the panel should “hold Mr. Kavanaugh accountable for his prior conduct and testimony.” Nadler on Monday faulted the FBI’s probe of prior sexual misconduct allegations against Kavanaugh ahead of his narrow confirmation by the Senate in October 2018, saying in a radio interview it “apparently was a sham.” But Nadler also said his panel had its “hands full” with investigating Republican President Donald Trump. In her letter to Nadler, Harris suggested the House Judiciary Committee could create a task force and retain outside counsel if it did not have the time or resources to pursue an inquiry of Kavanaugh now.

Harris and several other Democratic presidential candidates called for Kavanaugh’s impeachment after the New York Times published an essay over the weekend detailing what it described as a previously unreported incident of sexual misconduct by Kavanaugh. Others include former U.S. Housing and Urban Development Secretary Julian Castro; U.S. Senators Elizabeth Warren and Cory Booker; South Bend, Indiana Mayor Pete Buttigieg; and former U.S. Representative Beto O’Rourke.

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Only a Five Eyes spy chief. And whaddaya know, there’s Bill Browder again. See from yesteday: The Magnitskiy Myth Exploded.

Trudeau Reassures Allies Amid Alleged Spying Case (BBC)

Canadian Prime Minister Justin Trudeau has moved to reassure allies in the wake of an alleged spying case with possible international implications. A senior intelligence official was charged last week with violating national security laws. Cameron Ortis had access to information coming from Canada’s global allies, the RCMP national police force said. Canada is in close contact with its intelligence partners over the case, Mr Trudeau says. “We are in direct communications with our allies on security,” the prime minister said while campaigning in Newfoundland on Tuesday. “We are also working with them to reassure them, but we want to ensure that everyone understands that we are taking this situation very seriously.” Canada is a member of the Five Eyes – the intelligence alliance that also includes the US, UK, Australia and New Zealand.


Mr Ortis, who was a director general with the police force’s intelligence unit, is accused of breaching the Security of Information Act and the Criminal Code. The charges filed against him include the “unauthorised communication of special operational information”, possessing a device or software “useful for concealing the content of information or for surreptitiously communicating, obtaining or retaining information”, and breach of trust by a public officer. [..] Mr Ortis was looking into allegations that Russian tax fraudsters had laundered millions of dollars through Canada, a US financier told Reuters. Bill Browder, a high-profile critic of Russian President Vladimir Putin, said he had met Mr Ortis twice in Canada in 2017 after alerting the RCMP to the matter.

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What exactly would you say is Facebook’s role in our society? How about in your life?

Catastrophic Effects Of Working As A Facebook Moderator (G.)

They describe being ground down by the volume of the work, numbed by the graphic violence, nudity and bullying they have to view for eight hours a day, working nights and weekends, for “practically minimum pay”. A little-discussed aspect of Facebook’s moderation was particularly distressing to the contractors: vetting private conversations between adults and minors that have been flagged by algorithms as likely sexual exploitation. Such private chats, of which “90% are sexual”, were “violating and creepy”, one moderator said. “You understand something more about this sort of dystopic society we are building every day,” he added. “We have rich white men from Europe, from the US, writing to children from the Philippines … they try to get sexual photos in exchange for $10 or $20.”


Gina, a contractor, said: “I think it’s a breach of human rights. You cannot ask someone to work fast, to work well and to see graphic content. The things that we saw are just not right.” The workers, whose names have been changed, were speaking on condition of anonymity because they had signed non-disclosure agreements with Facebook. Daniel, a former moderator, said: “We are a sort of vanguard in this field … It’s a completely new job, and everything about it is basically an experiment.” John, his former colleague, said: “I’m here today because I would like to avoid other people falling into this hole. As a contemporary society, we are running into this new thing – the internet – and we have to find some rules to deal with it.

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Pay him in Bitcoin.

US Government Is Suing Edward Snowden For His Book Profits (Verge)

The Justice Department has filed a civil lawsuit against Edward Snowden that would recover all proceeds of his recently released memoir, the department announced on Tuesday. The charges coincide with the official publication of the book, which is titled Permanent Record. Snowden’s memoir was allegedly not submitted to the CIA or NSA for pre-publication review, a required practice among former employees of intelligence agencies. As such, the department considers the book a breach of Snowden’s fiduciary obligations, and names the publishers as co-defendants in the suit.


Given the still-classified programs and materials discussed in the memoir, it is unlikely that the book would have been approved for publication by the agencies. Snowden remains a de facto fugitive from the US government, and would likely face charges under the Espionage Act if he returned to the country. But the new civil case could nonetheless cause problems for Snowden, potentially enjoining his publishers from releasing any of the proceeds from the book. Crucially, the suit does not seek to block the release of Snowden’s memoir, as doing so would be illegal under the First Amendment.

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From Notes on the Next War, 1935

 

 

 

 

 

Sep 062019
 


Claude Monet Éretrat sunset 1882-3

 

The Trade War Is Smart Geopolitics (NR)
China’s Growth Is Slowing, but not Because of the Trade War (PIIE)
The Ugly Truth About The Trade War (Alt-M)
Fed QE Unwind Continues Via Sharp Drop In MBS (WS)
Trump Administration Backs Privatizing Fannie Mae And Freddie Mac (MW)
Is Armed Conflict Possible in Today’s Europe? (Spiegel)
Boris Johnson: I’d Rather Be Dead In a Ditch Than Delay Brexit (BBC)
Hong Kong Braces For More Protests As Merkel Calls For Peaceful Solution (R.)
The Pentagon Wants More Control Over the News. What Could Go Wrong? (Taibbi)
Germany Announces Plan to Ban Glyphosate (CD)
Targeting the Tongass National Forest for Amazon-like Destruction (CP)
They Want Him Dead As A Warning (Maurizi)

 

 

A bunch of views on the trade war. I’d say take your pick. Something for everyone.

The Trade War Is Smart Geopolitics (NR)

Why is our industrial supply chain located inside of an adversary? Why does our military readiness therefore depend on that adversary? Why are American companies allowed to transfer critical technologies to China in exchange for short-term market access? Why can Tesla build self-driving cars in Shanghai? Why can Google run an AI lab in Beijing after canceling an AI contract with the Pentagon? The free traders have an answer: because the market wills it. But of course, markets have no reason to prefer one global power over another, and there’s no market rule barring a surveillance state from winning the competition. In that competition, our ideological commitment to free trade is nearly as great a handicap as the Soviet Union’s commitment to central planning was during the Cold War.

Free trade with China means allowing its distortions into our market. Refusing to allow our government to “pick winners” by rejecting industrial-policy support to key sectors means that Beijing will pick winners for us. Depending on Ricardian comparative advantage to organize supply chains means, in effect, that we will watch helplessly as American innovations are transformed into growth-boosting industries elsewhere, as firms reap efficiency gains by locating their engineering and management operations next to their manufacturing. Inevitably, the innovation will depart too. A recent survey of 369 manufacturers found that American firms are moving their R&D operations to China not just to take advantage of lower costs, but to be in close proximity to their supply chains.

Some 50 percent of foreign R&D centers in China are now run by American companies, helping China achieve first place in market share for manufacturing R&D. If we remain neutral as to where supply chains are located, “we innovate, they build” will become “they innovate, they build.” China’s rise may be inevitable. But given the danger represented by that rise, America can choose to minimize its risk. It can reduce opportunities for China to erode the long-term competitive advantage of American firms through forced technology transfer and R&D migration, and reduce our dependence on Chinese manufacturing for crucial industrial and military supply chains. In a word: decoupling.

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China’s problem is the dollar. It’s not dependent on the US for its GDP, but that is a problem in itself. If exports to the US were larger, it would receive more dollars.

China’s Growth Is Slowing, but not Because of the Trade War (PIIE)

First, as is well known, US taxpayers, not Chinese consumers and companies, are bearing the burden of Trump’s tariffs. The president acknowledged as much when he postponed new tariffs on goods (such as toys and consumer electronics) likely to be purchased during the US holiday shopping season. US tariffs on imports from China will likely subtract about half a percentage point from US GDP growth in 2019.

But second, China’s growth began to slow long before the trade war started (see figure). The pace of growth has moderated from the double-digit pace of 2010 to only 6.2 percent in the most recent quarter. As for the assertion that the trade war has accelerated China’s economic decline, the facts show the opposite. As shown in the figure, the pace of the slowdown has moderated since the initial imposition of tariffs by the United States in July 2018. Most of the slowdown is the result of President Xi Jinping’s ill-advised policy choice of allocating credit and other resources to less efficient state firms rather than private firms. Moreover, since 2017, China has reduced the growth of credit overall in order to reduce financial risk at a time of growing corporate indebtedness, a trend that also contributes to slowing growth throughout the economy.

Third, properly measured, China’s dependence on exports to the United States is not as large as some, including President Trump, may think. China’s exports to the United States before tariffs were imposed ran at $500 billion annually, or 4 percent of its $12.25 trillion GDP, which in theory is a significant number. In fact, the percentage is far less. The potential impact of US tariffs on China’s growth needs to be adjusted to measure only value added by China. GDP is measured in value-added terms; US imports from China are measured in gross sales. The value-added share in US imports from China is about one-half, so the direct contribution to China’s GDP from its sales to the United States is approximately $250 billion or only 2 percent of China’s GDP.

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Brandon Smith doesn’t appear to fully agree with PIIE.

The Ugly Truth About The Trade War (Alt-M)

The US only comprises around 18% of Chinese exports. While this is a nice piece of the pie, it’s hardly enough leverage to bring down China’s economy. China would suffer profit losses in certain sectors as well as a recession, but not the kind of crisis that some in the alternative media are predicting. Around 40% of China’s GDP is generated domestically, and 80% of its GDP growth comes from private consumption. For quite some time I have warned that China was shifting its economic model from an export based system to a more self reliant domestic based system, and that this might be an indication of a coming economic war with the US. As it turns out, this is exactly what has happened. Since 2010, China’s domestic market has grown dramatically, indicating that China has no intention of relying on the US consumer as an economic pillar.

The US consumer is almost tapped out. While retail sales in certain areas remain steady and this has been used by the mainstream media and the Fed to promote the idea that the economy is still “going strong”, this is not the big picture. The reality is that US consumption is driven by historic levels of debt. Household debt is now FAR above levels last seen after the last financial crisis, with total debt at $1.2 trillion higher today than its last peak in 2008. The downturn in retail is more obvious in the steady closings of thousands of outlets in 2019 alone. This year has seen a 29% increase in store closings compared to 2018, even though 2018 saw a considerable spike in store shutdowns. Around 12,000 stores are slated to close this year.

So the question is, with the US consumer stretched thin by debt and US retail on the verge of a recessionary plunge, why would China feel threatened by the loss of the American consumer market? They are losing it already by attrition. The truth is they aren’t threatened, which is why, as I predicted last year, the trade war continues unabated despite the fact that so many people argued that China would “quickly fold” to Trump’s demands. I realize this is not what many people want to hear, but it is foolish to get caught up in a farcical mob mentality and ignore the fundamentals in the trade war. If you think that the US is going to “win” based on leverage, you are sorely mistaken. The US is in no better shape economically than China; in many ways we are much worse off.

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Close down the place before it can do even more harm.

Fed QE Unwind Continues Via Sharp Drop In MBS (WS)

In August, the Fed shed Mortgage Backed Securities (MBS) at a rate that exceeded its self-imposed “cap” of $20 billion for the fourth month in a row, but added some Treasury securities, with a new emphasis on short-term Treasury bills. Total assets on the Fed’s balance sheet fell by $20 billion, to $3.76 trillion, as of the balance sheet for the week ended September 4, released this afternoon. This brought the balance sheet to the lowest level since September 2013. So far this year, the Fed has shed $314 billion in assets. Since the beginning of the “balance sheet normalization” process, the Fed has shed $700 billion. Since peak-QE in January 2015, it has shed $738 billion:

During the month of August, $70 billion in Treasury securities in the Fed’s portfolio matured and were redeemed by the US Treasury Department. The Fed replaced all those with new Treasury securities. This replacement would have kept its holdings level. Per its new plan to replace its MBS securities with Treasury securities – more on that in a moment – it added about $15 billion in Treasury securities, bringing the total to $2.095 trillion. This was the first monthly increase since the end of 2017, bringing its Treasury holdings back to the level of last July, and just above the September 2013 level:

As part of its new regime to shorten the overall maturity of its holdings, the Fed’s holdings now include $3 billion in Treasury bills (maturing in one year or less), up from zero a few months ago. After “Operation Twist,” which was layered between QE-2 and “QE Infinity,” the Fed had not held any Treasury bills. About four months ago, it started dabbling in them again, but in August it got serious. These T-bills replaced some of the MBS that ran off its balance sheet.

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Trump giveth and the Fed taketh away. End the Fed AND Fannie and Freddie.

Trump Administration Backs Privatizing Fannie Mae And Freddie Mac (MW)

The Trump administration said it would support returning mortgage-finance giants Fannie Mae and Freddie Mac to private hands, a development that could keep the companies at the center of the housing market for decades to come. The principles announced Thursday represent a major reversal from what leaders of both parties over the past decade promised — to abolish the companies, which guarantee roughly half the U.S. mortgage market. The approach, which doesn’t require approval by Congress, would mark an important win for investors who have been betting politicians wouldn’t follow through on those promises. Treasury officials said they would aim to privatize the government-controlled firms without making it tougher and more expensive for people to get mortgages.


They generally avoided making specific policy recommendations on how to accomplish these goals in a report released Thursday. They said they would work with federal regulators to flesh out the details on how to put Fannie and Freddie on a sounder financial footing as well as to curtail the firms’ roles in housing finance. The process could take years to implement and won’t affect existing mortgages. “Our view is that the government footprint has become too big,” Treasury Secretary Steven Mnuchin said in an interview ahead of Thursday’s report. ”There are people in Washington who are happy to leave this the way it is for another 10 or 20 years, and that’s not us. We feel an obligation to try to fix this.”

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“The direction of European history would seem to have changed – shifting away from convergence and back to delineation.”

Is Armed Conflict Possible in Today’s Europe? (Spiegel)

“The war changed everything.” This statement by the late British historian Tony Judt contains the kernel of modern-day Europe. It was the war that made possible an extended period of peace. Things had to get extremely bad before they could get good again. For the last 75 years, there has been peace on the Continent, with just a few exceptions. Now, this Europe finds itself in crisis. It is no longer the Europe where national thinking is slowly dwindling. It is no longer the Europe that is growing together step by step. It is no longer the Europe in which all countries seem to be committed to democracy forever. The direction of European history would seem to have changed – shifting away from convergence and back to delineation.


What does that mean for the most important of all questions, the question of war or peace? At the moment, it doesn’t look at all as though the long period of peace is going to come to an end. There is no reason for alarm. But if the direction of European history is changing, we should take a close look at what that could mean. Not in the immediate future, but in the long term. History is a snail that persistently crawls along its path. Exactly 80 years ago, the war that changed everything began — on Sept. 1, 1939, with Adolf Hitler’s Germany invading neighboring Poland. Almost six years later, more than 60 million people around the world were dead as a result of the violence, huge portions of the Continent were destroyed, millions of Europeans had been forced from their homes and millions more were plunged into poverty. A state of shock reigned.

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When will he quit?

Boris Johnson: I’d Rather Be Dead In a Ditch Than Delay Brexit (BBC)

Boris Johnson has said he would “rather be dead in a ditch” than ask the EU to delay Brexit beyond 31 October. But the PM declined to say if he would resign if a postponement – which he has repeatedly ruled out – had to happen. Mr Johnson has said he would be prepared to leave the EU without a deal, but Labour says stopping a no-deal Brexit is its priority. The prime minister’s younger brother, Jo Johnson, announced earlier that he was standing down as a minister and MP. Speaking in West Yorkshire, Boris Johnson said Jo Johnson, who backed Remain in the 2016 referendum, was a “fantastic guy” but they had had “differences” over the EU.

Announcing his resignation earlier in the day, the MP for Orpington, south-east London, said he had been “torn between family loyalty and the national interest”. During his speech at a police training centre in Wakefield, the prime minister reiterated his call for an election, which he wants to take place on 15 October. He argued it was “the only way to get this thing [Brexit] moving”. “We either go forward with our plan to get a deal, take the country out on 31 October which we can or else somebody else should be allowed to see if they can keep us in beyond 31 October,” Mr Johnson said.

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Mutti? You here?

Hong Kong Braces For More Protests As Merkel Calls For Peaceful Solution (R.)

Hong Kong is bracing for more demonstrations this weekend, with protesters threatening to disrupt transport links to the airport, after embattled leader Carrie Lam’s withdrawal of a controversial extradition bill failed to appease some activists. Germany’s Chancellor Angela Merkel raised Hong Kong with Chinese premier Li Keqiang in Beijing on Friday, saying a peaceful solution is needed. “I stressed that the rights and freedoms for (Hong Kong) citizens have to be granted,” said Merkel. “In the current situation violence must be prevented. Only dialogue helps. There are signs that Hong Kong’s chief executive will invite such a dialogue. I hope that materializes and that demonstrators have the chance to participate within the frame of citizens’ rights,” she said during a visit to Beijing.


Li told a news conference with Merkel: “The Chinese government unswervingly safeguards ‘one country, two systems’ and ‘Hong Kong people govern Hong Kong people’”. He said Beijing supported the Hong Kong government “to end the violence and chaos in accordance with the law, to return to order, which is to safeguard Hong Kong’s long-term prosperity and stability”. Protesters plan to block traffic to the city’s international airport on Saturday, a week after thousands of demonstrators disrupted transport links, sparking some of the worst violence since the unrest escalated three months ago. Many protesters have pledged to fight on despite a withdrawal of the extradition bill, saying the concession is too little, too late.

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The Pentagon will protect you from “large-scale, automated disinformation attacks” by publishing “large-scale, automated disinformation attacks..”

The Pentagon Wants More Control Over the News. What Could Go Wrong? (Taibbi)

If there’s a worse idea than the Pentagon becoming Editor-in-Chief of America, I can’t remember it. But we’re getting there: From Bloomberg over Labor Day weekend: “Fake news and social media posts are such a threat to U.S. security that the Defense Department is launching a project to repel “large-scale, automated disinformation attacks,” as the top Republican in Congress blocks efforts to protect the integrity of elections.” One of the Pentagon’s most secretive agencies, the Defense Advanced Research Projects Agency (DARPA), is developing “custom software that can unearth fakes hidden among more than 500,000 stories, photos, video and audio clips.”

Once upon a time, when progressives still reflexively distrusted the military, DARPA was a liberal punchline, known for helping invent the Internet but also for developing lunatic privacy-invading projects like LifeLog, a program to “gather in a single place just about everything an individual says, sees, or does.” DARPA now is developing a semantic analysis program called “SemaFor” and an image analysis program called “MediFor,” ostensibly designed to prevent the use of fake images or text. The idea would be to develop these technologies to help private Internet providers sift through content. It’s the latest in a string of stories about new methods of control over information flow that should, but for some reason do not, horrify every working journalist.

From the Senate dragging Internet providers to the Hill to demand strategies against the sowing of “discord,” to tales of hundreds of Facebook sites zapped for “coordinated inauthentic behavior” following advice by government-connected groups like the Atlantic Council, it’s been clear the future of the information landscape is going to involve elaborate new forms of algorithmic regulation. Stories about the need for such technologies are always couched as responses to the “fake news” problem. Unfortunately, “fake news” is a poorly-defined, amorphous concept that the public has been trained to fear without really understanding.

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Why wait 4 years?

Germany Announces Plan to Ban Glyphosate (CD)

The German government announced Wednesday it had agreed on a plan to phase out the use of glyphosate—the key chemical in the weedkiller Roundup—with a total ban set to begin by the end of 2023. “Way to go, Germany!” tweeted the U.S.-based advocacy group Organic Consumers Association. Chancellor Angela Merkel’s cabinet agreed to the plan Wednesday. The proposal, reported Bloomberg, also says that the “government intends to oppose any request for the E.U. to renew the license to produce the weedkiller, according to a release by the environment ministry.” The European Commission, the E.U.’s rules and regulations body, in 2017 renewed the license for glyphosate in the bloc through the end of 2022.


Germany’s environment Minister, Svenja Schulze, framed the new move as necessary to protect biodiversity, and said that “a world without insects is not worth living in”. “What harms insects also harms people,” Schulze said at a press conference. “What we need is more humming and buzzing.” Glyphosate is no longer exclusive to Monsanto’s Roundup, as it “is now off-patent and marketed worldwide by dozens of other chemical groups including Dow Agrosciences and Germany’s BASF,” as Reuters noted. That’s despite the World Health Organization’s International Agency for Research on Cancer’s 2015 designation of glyphosate as a “probable carcinogen,” increasing concerns over its health effects, and mounting legal woes for Bayer, which acquired Monsanto last year, as multiple juries have found Roundup to have been a factor in plaintiffs’ cancers.

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Stop calling them conservatives.

Targeting the Tongass National Forest for Amazon-like Destruction (CP)

Alaskan politicians, the governor, Mike Dunleavy, and the two senators, Lisa Murkowski and Dan Sullivan, all Republican, convinced Trump to dismantle federal protections of the Tongass National Forest. The Trump administration ordered the Forest Service to approve this process of destruction. In March 16, 2019, the Forest Service designed a 15-year logging project in the Prince of Wales Island that included the opening of 164 miles of new roads in 67 square miles of land and the clearcutting of up to 23,000 acres of old-growth trees – trees several centuries old.

Environmental organizations like Earthjustice, Sierra Club, Alaska Wilderness League, Southeast Alaska Conservation Council, Alaska Rainforest Defenders, National Audubon Society, Natural Defense Council, Defenders of Wildlife, and the Center for Biological Diversity sued the Forest Service and the US Department of Agriculture for violating the National Environmental Policy Act and other environmental laws. They pointed out that such massive timber sale from the projected clearcutting of old growth trees was “wasteful, destructive, and a giveaway” to a timber industry contributing less than 1 percent to the economy of Alaska.

In addition, clearcutting 23,000 acres of ancient trees would harm the Alexander Archipelago wolf, flying squirrels, and birds like Goshawk. Why this violent attack on a forest these environmental organizations call the crown jewel of America? The Alaskan politicians, like Bolsonaro of Brazil, have a distorted and selfish vision: satisfy the landowners in Brazil and the timber barons in Alaska. Do these politicians, including Trump, ever think about the real bad effects, ecological and social, of their actions? They must have heard of the inferno in the Brazilian Amazon and its potentially horrific consequences on the planet. They cannot really assume or believe that adding quite a bit more carbon to the atmosphere from logging Tongass would be a good thing for America or the world? Or could they?

The only reasonable explanation of the murky world of Trump and the Republican politicians (of Alaska and the rest of the country) is that they reject science. Certainly, the Evangelicals do. These Christian Republicans support Trump. They make no secret they expect Jesus to rise up, thus signaling the end of life on Earth. This delusion gets scary as high officials of the Trump administration are its fervent believers.

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Long-time Assange confidant Stefania Maurizi talks to Roger Waters.

They Want Him Dead As A Warning (Maurizi)

He is one of the legends of rock famous for his progressive battles. At seventy-six, the Pink Floyd co-founder, Roger Waters, has not given up at all and does not hesitate to call his country, Great Britain, “disgusting” for its treatment of Julian Assange. Last Monday, Waters sang his great classic, “Wish You Were Here” in front of the UK Home Office in London in support of Assange, while the Australian journalist, John Pilger, explained the serious risk the WikiLeaks founder runs of being extradited to the US, and Assange’s brother, Gabriel, described an emotional meeting with Julian Assange. Roger Waters is currently in Venice to present his film “US + Them”. Repubblica interviewed him.


What made you go very public about Julian Assange’s situation? “Clearly, there has been a really powerful and international smear campaign, really since the Collateral Murder video. I have been watching it developing. Assange is the pet hate of Western governments, particularly the government of the United States, because he published evidence that shows the United States to have committed heinous war crimes, crimes against humanity in a big way. This smear campaign against him is all about getting him extradited to the US. They want him dead as a warning: they want to persuade any young person who might be thinking about the work of Julian Assange, or any whistleblower or any investigative journalist, that to pursue the path of truth-telling is extremely bad for your health. The message is: if you tell the truth, we will kill you, watch! The same with Chelsea Manning”.

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Withdrawing the extradition bill is no longer enough:

 

 

 

 

 

Aug 112019
 
 August 11, 2019  Posted by at 9:01 am Finance Tagged with: , , , , , , , , , , ,  8 Responses »


Pablo Picasso Man with straw hat and ice cream cone 1938

 

JPMorgan: The Fed Will Need To Restart QE Soon
How Jeffrey Epstein Got His Hooks Into Les Wexner (William D. Cohan)
These Are The Dying Days Of A Rancid Old Order (Hutton)
The Very Idea Of A United Kingdom Is Being Torn Apart By Toxic Nationalism (G.)
Cross-Party Schemes Drawn Up To Prevent A Johnson No-Deal Brexit (O.)
No 10 Cancels Staff Leave, Hinting At Likelihood Of Snap Election (G.)
Brexit Enforcer Cummings’ Farm Took €235,000 In EU Handouts (O.)
British Government’s Hong Kong Intervention Riles China (O.)
Trump’s Financial Carelessness Could Cost His Kids $1.3 Billion In Taxes
Squawkzilla (F.)

 

 

The Fed must drink all the poison it brewed.

JPMorgan: The Fed Will Need To Restart QE Soon

In the latest Flows and Liquidity report from JPMorgan’s Nikolaos Panigirtzoglou published late on Friday, the strategist analyzes various components of market liquidity and concludes that “liquidity will likely continue to tighten gradually in the US banking system even after the Fed has stopped its balance sheet shrinkage.” Specifically, the JPM analysis looks at the bank’s model of US excess money supply, which derives a medium-term money demand target based on 1) the transaction motive, which relates money to nominal incomes and 2) the portfolio motive, which relates money to the nominal values of other assets such as bonds and equities, and 3) the precautionary motive, proxied by US policy uncertainty, whereby agents wish to hold more cash during periods of elevated risk perceptions. This model suggests that this broad US excess liquidity evaporated during the course of 2018 and shifted further into negative or contractionary territory this year.

The last time this measure of US excess money supply had shifted into negative territory was during the euro debt crisis years of 2010- 2012, which prompted the Fed to launch QE2 (as well as Operation Twist and QE3) and also eventually resulted in the ECB violating Article 123 of the Maastricht treat, prohibiting monetary financing of states, and led to Draghi launching his own QE. As Panigirtzoglou further explains, the contraction in JPM’s measure of broad liquidity this year has been mostly more driven by a rise in demand and less by a fall in money supply (relative to US GDP). In particular the main drivers have been the rise in uncertainty and the rise in the stock of US financial assets, both of which depress excess money supply via boosting demand.

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Excellent from Cohan for Vanity Fair. Obviously written before the ‘apparent suicide’. About which there are a million articles, but let’s wait and see if we can get beyond speculation.

How Jeffrey Epstein Got His Hooks Into Les Wexner (William D. Cohan)

Lewis remembered that Wexner didn’t care about the numbers, which is more relevant than ever after Wexner released a letter on August 7 asserting that Jeffrey Epstein had “misappropriated vast sums of money” —at least $46 million—from him, and casting himself as just another of Epstein’s victims. “He didn’t understand the numbers,” Lewis said. “He’s never understood numbers. This is not his strength. This man is a genius at dressing women. This is a guy who feels what they feel. That’s his strength. And I figured that out when I first met him and I don’t know how he got that set up in his brain but in his soul, he has a sense of how people feel when they wear his clothing. And that’s a gift. That’s just what it is. Some guys write music, this guy knows how to dress women. He’s very, very talented.”

[..] Around the same time, Lewis became aware that Jeffrey Epstein had entered Wexner’s life, presumably to manage some of Wexner’s money, as has been widely reported. Lewis couldn’t figure out why Wexner had turned to Epstein to manage his money when Lewis already had an unparalleled track record managing some of Wexner’s money—returning more than 30% a year to his partners for 10 years. (Later, Lewis would find trouble with the Securities and Exchange Commission; he pleaded guilty to stock manipulation in 1989, and was barred from the securities industry. President Bill Clinton pardoned Lewis, and a federal court judge later said Mr. Lewis acted for all the right reasons. He was vindicated.)

Lewis says he thinks Epstein was a “con artist” who took advantage of Wexner’s personal weaknesses. “I can’t imagine, frankly, why a man of his intelligence would simply hand the controls over to another guy.” He said Wexner was always a lonely guy. “And this con artist, this fucking idiot, comes into his life,” he continued. “…My feeling is that he had been seduced. And I don’t mean seduced in a physical sense, I mean emotionally seduced out of his loneliness to trust this guy and he figures, he’s so fucking smart he can trust anybody.” Wexner, he said, was “a shy man who got taken” by Epstein.

Wexner was “so bright and so capable,” Lewis continued, “but the talents that he had, those kinds of talents are not financial talents. These are not numbers. He does not look at numbers. He doesn’t want to. What he’s thinking about is the art form of dressing a woman. That’s what he’s good at. That’s what he’s done.” Les Wexner, he said, “would not know a stock from a bond. He does not look at the markets. He does not look at futures or anything like that. That’s not what he does.” Lewis said that Wexner was looking for a friend. “I really believe that,” he said. “And I think that when you see a man who is as bright as he is and he is looking for a friend and he picks the wrong friend, then there’s all hell to pay.”

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Brits are waxing philosophical. Here’s one saying Woodstock led straight to Reagan/Thatcher and then to white supremacy. Fukcing hippies!

These Are The Dying Days Of A Rancid Old Order (Hutton)

Don’t despair. We may be living through an attempted rightwing revolution, but its foundations are rotten. There may be a counter-revolution, as there is after every revolution, and it will be built on much firmer ground. The charlatans may be in control in both Britain and the US, but their time is limited. Their programmes are self-defeating and destructive and they do not speak to the dynamic and increasingly ascendant forces in both our societies. What has happened in the US after the atrocities in El Paso and Dayton is instructive. It is a tipping point. The National Rifle Association may tell Donald Trump repeatedly that any attempt at gun control will not fly with his political base, but Trump can read the runes.

For the Republicans to become the party in de facto defence of what has suddenly become crystallised as white supremacist terrorism would be electoral suicide. The president has to move, not least because, faced with this reality, even his base is shifting. Too many Americans now fear becoming the victims of random murder. Few can dispute that, astonishingly, while the US has 5% of the world’s population, it has 35%-50% of civilian gun ownership, a trend that simply has to be reversed. Within a decade, I am sure, the debate will move on, as white supremacists continue their killing spree, from hardening background checks to debating the constitutional right to bear arms. This must and will happen and it will highlight the marginalisation of rightwing republicanism. And when the political wind changes in the US, it also changes in Britain.

Trump in the US and Boris Johnson in the UK are the extreme culmination of what Reagan and Thatcher began 40 years ago. It started as a legitimate if contestable desire to reframe the postwar settlement, limit the state, promote business and individual self-reliance. But as the great political scientist Samuel Beer famously argued, it was, paradoxically, supported culturally by the individualism, anti-state instincts and nonconformism of the Woodstock generation. Forty years on, continued rightwing political ascendancy has morphed into today’s menacing rightwing ideologies.

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“As the Second World War ended, George Orwell made a distinction between patriots who instinctively love their country and the opposite, a political nationalism that he defined as “power hunger tempered by self-deception..“

The Very Idea Of A United Kingdom Is Being Torn Apart By Toxic Nationalism (G.)

Boris Johnson’s government is hell-bent on conjuring up the absurd and mendacious image of the patriotic British valiantly defying an intransigent Europe determined to turn us into a vassal state. His soundbites, pledging token sums for the NHS and 20,000 more police on the street at some future date, cannot disguise a government driven not by the national interest but by a destructive, populist, nationalist ideology. And with Scottish nationalists pushing a more extreme form of separation and Northern Ireland’s unionists becoming, paradoxically, Northern Irish nationalists – digging in, even if it means, against all economic logic, a hard border with the Irish Republic – we are, at best, only a precariously united kingdom.

Johnson’s flying visits to all corners of the UK have done nothing to dispel the impression that under him the world’s most successful multinational state is devoid of a unifying purpose powerful enough to hold it together and to keep four nationalisms – Scottish, Irish, English and also a rising Welsh nationalism – at bay. Recent polling shows a majority of Scots support Scottish independence. In a new Hope Not Hate poll, many more – 60% – agree a no-deal Brexit will accelerate the demand for independence. Only 15% disagree. What is most worrying is not just that so many think the union will end but how at least for now so few appear to care. Only 30% of British Conservatives (and only 14% of Brexit party voters) would oppose Brexit if it meant the break-up of the union: 56% of Tories (and 78% of Brexit party voters) – in total 70% of Leavers – would go ahead regardless, even if the union collapsed.

[..] As the Second World War ended, George Orwell made a distinction between patriots who instinctively love their country and the opposite, a political nationalism that he defined as “power hunger tempered by self-deception”. He noted its defining features: unreality about the country’s prospects; introversion bordering on the xenophobic; and hate-filled obsessiveness that treats people solely in terms of their loyalty and utility. Orwell argued passionately that the descent into a narrow, chauvinistic nationalism could be halted only by what he called “moral effort”.

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The plotters. Cheap cigars, smoky backrooms and bad scotch.

Cross-Party Schemes Drawn Up To Prevent A Johnson No-Deal Brexit (O.)

Most MPs may now be on the beach, but for those worried about the chances of Britain crashing out of the EU with no deal it has not been the normal break in the sun. For a start, the holiday reading list has been less entertaining than normal. Standing order 24, paragraph 2.7 of the cabinet manual and section 2(3) of the Fixed-Term Parliaments Act have become the must-reads of the summer. Family outings have been interrupted by battles to find phone reception at various beauty spots to talk to opposition MPs. After a week that saw Boris Johnson and his key adviser Dominic Cummings make clear threats about leaving the EU whatever the cost at the end of October, concerned MPs have already begun to plan.

New governments, emergency legislation, breaches of convention and court cases are already being proposed by what several described as the “rebel alliance”. Many anti-no deal MPs are also concerned about the lack of coherence so far. All those who spoke to the Observer had doubts that no-deal Brexit could be avoided. “Everyone has to pull together, and that is never a guarantee,” said one former Tory minister trying to coordinate efforts. “We are trying to hold together an unholy coalition of moderate Labour, Labour frontbench, Lib Dems, Scottish Nationalists, minor parties, independents and moderate Tories. It’s difficult.” However, details of some of the plans are already emerging.

Senior figures within both the Labour and Conservative parties believe that the simplest way to stop no deal is through a new law, forcing the prime minister to ask for an extension to Britain’s EU membership. This is the focus of early efforts. The rebels see two possible routes. The easiest move is to hijack any legislation that the government proposes in the autumn. Yet the plotters know that the government may simply refuse to propose any new laws to avoid such an ambush. “The moment there is legislation, we can amend away,” said one plotter. “But their strategy is clearly not to legislate about anything and have endless debates in parliament about the colour green instead.”

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As the MPS are on the beach, the special advisers are not.

No 10 Cancels Staff Leave, Hinting At Likelihood Of Snap Election (G.)

Boris Johnson’s chief of staff cancelled all leave for government advisers until 31 October in a missive on Thursday night, raising further speculation the government is planning for a forced snap election in the aftermath of the UK leaving the EU with no deal. Special advisers were emailed by Johnson’s senior adviser Edward Lister on Thursday night, saying there was “some confusion about taking holiday”. They were told none should be booked until 31 October, with compensation considered “on a case by case basis” for those who had already booked leave, though the email said advisers were free to spend their weekends “as you wish”. “There is serious work to be done between now and October 31st and we should be focused on the job,” the email said.

The directive angered many recipients, who say staff are exhausted and are facing an unprecedented workload in September and October. One recipient described the email as “posturing” and said special advisers, known as “spads”, are being used as part of the PR war to convince the public the government is serious about no deal. Johnson himself also wrote to all members of the civil service telling them the government’s main focus was now to prepare for a no-deal Brexit. In the letter, Johnson said he wanted to underline that the UK would be leaving on 31 October “whatever the circumstances” and that the civil service must prepare “urgently and rapidly” as its top priority.

“I know many of you have already done a great deal of hard work in mobilising to prepare for a no deal scenario, so that we can leave on 31 October come what may,” the letter said. “Between now and then we must engage and communicate clearly with the British people about what our plans for taking back control mean, what people and businesses need to do, and the support we will provide.”

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“His blog clarified the claim, explaining “the Treasury gross figure is slightly more than £350m of which we get back roughly half, though some of this is spent in absurd ways like subsidies for very rich landowners to do stupid things”.

Brexit Enforcer Cummings’ Farm Took €235,000 In EU Handouts (O.)

Boris Johnson’s controversial enforcer, Dominic Cummings, an architect of Brexit and a fierce critic of Brussels, is co-owner of a farm that has received €250,000 (£235,000) in EU farming subsidies, the Observer can reveal. The revelation is a potential embarrassment for the mastermind behind Johnson’s push to leave the EU by 31 October. Since being appointed as Johnson’s chief adviser, Cummings has presented the battle to leave the EU as one between the people and the politicians. He positions himself as an outsider who wants to demolish elites, end the “absurd subsidies” paid out by the EU and liberate the UK from its arcane rules and regulations.

But his critics say the revelation that Cummings has benefited from the system he intends to smash underscores how many British farmers are reliant on EU money that would evaporate if the UK leaves. An Observer analysis of Land Registry documents and EU subsidy databases reveals that a farm in Durham, which Cummings jointly owns with his parents and another person, has received roughly €20,000 a year for most of the last two decades. The revelation opens Cummings up to charges of hypocrisy, as writing on his blog, he has attacked the use of agricultural subsidies “dreamed up in the 1950s and 1960s” because they “raise prices for the poor to subsidise rich farmers while damaging agriculture in Africa”.

He notoriously came up with the claim that leaving the EU would allow the UK to spend an extra £350m a week on the NHS. His blog clarified the claim, explaining “the Treasury gross figure is slightly more than £350m of which we get back roughly half, though some of this is spent in absurd ways like subsidies for very rich landowners to do stupid things”.

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The ‘one country, two systems’ deal runs untiil 2047.

British Government’s Hong Kong Intervention Riles China (O.)

China has lashed out at the British foreign secretary, Dominic Raab, after he spoke to Hong Kong’s leader about protests that have morphed from a campaign against a controversial extradition bill into rolling street demonstrations demanding electoral reforms. Raab spoke to Hong Kong’s chief executive, Carrie Lam, and stressed the need for “meaningful political dialogue and a fully independent investigation into recent events as a way to build trust” in the territory, the UK Foreign Office said. The former British colony has seen widespread protests in recent months which began with a campaign against a controversial extradition bill and has gone on to include a push for electoral reforms in the Chinese territory.


Hua Chunying, a spokeswoman for the Chinese foreign ministry, said the days where Britain ruled Hong Kong were “long gone … The UK has no sovereignty, jurisdiction or right of supervision over Hong Kong. Affairs of Hong Kong brook no foreign interference. It is simply wrong for the British government to directly call Hong Kong’s chief executive to exert pressure.” A UK foreign office spokesperson said: “The foreign secretary underlined the strength of the relationship between the UK and Hong Kong, noting our support for Hong Kong’s high degree of autonomy as provided for in the joint declaration and our commitment to the principle of ‘one country, two systems’.

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Humor.

Trump’s Financial Carelessness Could Cost His Kids $1.3 Billion In Taxes

Forbes estimates that Trump has paid each of his three eldest children—Donald Jr., Ivanka and Eric Trump—some $35 million in salary, commissions and bonuses for their work as executives at the Trump Organization, and he has given them modest stakes in a handful of relatively insignificant ventures. The rest of the first family—daughter Tiffany, son Barron and wife Melania—don’t seem to have received much at all. That leaves 73-year-old Donald Trump firmly in control of a $3.1 billion tax time bomb. Simply put, it’s bad planning. The president of the United States, one of the wealthiest people in America, appears to have one of the worst tax strategies in the country.


“It’s puzzling,” says Bruce Steiner, a New York estate lawyer who advises high-net-worth clients. “At death if he’s given away nothing, half of it disappears.” Then again, Donald Trump is also in position to relieve his family of much of the burden by simply repealing the federal estate tax altogether. It’s something he has already tried and failed to do once. Now, two years after the Trump tax cuts tweaked the estate tax rules, but not enough to impact the super-wealthy, Trump’s allies in Congress are trying to kill the tax once more. If they prove successful, it would likely save the Trump family more than $1 billion—enough to make it the most lucrative deal of Donald Trump’s life.

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A 40-inch parrot. Hey, the moa was 10 feet!

Squawkzilla (F.)

Palaeontologists announced they’ve discovered the largest parrot that ever lived, which they named after the Greek demi-god Heracles in reference to its enormous size and strength Islands are natural laboratories for a variety of fascinating avian evolutionary experiments, particularly islands that lack mammalian predators. New Zealand, for example, is home to a variety of peculiar parrots. There’s the mischievous Kea, the world’s only mountain-dwelling parrot who specializes in dismantling automobiles and re-arranging traffic cones, and the kakapo, a flightless nocturnal parrot that looks like a big green owl, and is the only living parrot that shags free-roaming zoologists.

Now there’s a weird new parrot in town, according to an international team of scientists from New Zealand and Australia. The researchers announced the discovery of the fossilized remains of the largest parrot yet identified, standing half as tall as a human adult with a massive beak that could bite through anything it liked. The researchers estimated the giant parrot was 1 meter (39 inches) tall, and weighed roughly 7 kilograms (15.5 pounds). This is approximately the size of the extinct dodo, and twice the size of New Zealand’s critically endangered kakapo, which is the largest and heaviest parrot alive today.

The researchers named the new parrot Heracles inexpectatus — Hercules the unexpected — in recognition of its Herculean size and strength and because its discovery was completely unexpected. Considering how destructive kea are, just imagine what this giant parrot could have chewed up.


Artist’s reconstruction of the giant parrot Heracles, dwarfing a bevy of 8cm high Kuiornis – small prehistoric wrens that lived 9–16 million years ago on New Zealand – scuttling about on the forest floor. Heracles may have eaten other, smaller, parrot species. (Credit: Brian Choo / Flinders University)

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Aug 052019
 


Piet Mondriaan Study for Blue Apple Tree Series 1908

 

Currency War Begins: China Crashes Yuan Past 7, Halts US Agri Imports (ZH)
China Lets Yuan Slump Past 7 Per Dollar For First Time In Over A Decade (R.)
Hong Kong Brought To A Standstill As City-Wide Strikes And Protests Hit (G.)
Job Growth In Trump Land Is Dead In The Water (MW)
10 Alarming Things About The Economy That Politicians Won’t Tell You (MW)
The Crashes That Cause Grown Men To Cry (Eric Peters)
Inside The Plunge Protection Team: Chaos (ZH)
Russiagate is the New 42 (Craig Murray)
Austerity Populism (G.)
Bellingcat Unloads 4,000-Word Hit Piece On Tulsi Gabbard (RT)
America’s Other Original Sin (Bacevich)

 

 

“..trade talks, even the fake kind, is now over, dead and buried..”

Currency War Begins: China Crashes Yuan Past 7, Halts US Agri Imports (ZH)

Update 2: – China’s central bank has confirmed that it is, indeed, on, saying that it is able to keep the yuan exchange rate at a reasonable and balanced level – whatever that means – while acknowledging that the Yuan plunging beyond 7 per dollar is due to market supply and demand, trade protectionism and expectations on additional tariffs on Chinese goods. Meanwhile, resorting to its old, tired and worn out tricks, Dow Jones reports that the PBOC will crack down on short-term Yuan speculation, and anchor market expectations. Which is great… if only the PBOC didn’t say exactly the same back in May, when it warned currenct traders that those “shorting the yuan will inevitably suffer from a huge loss.” Three months later, it’s currency traders 1 – Beijing 0.


Update 1 – China is firing all the big guns tonight, because just an hour after Beijing effectively devalued the yuan, when it launched the latest currency war with the US, Bloomberg reported that the Chinese government has asked its state-owned enterprises “to suspend imports of U.S. agricultural products after President Donald Trump ratcheted up trade tensions with the Asian nation last week.” China’s state-run agricultural firms have now stopped buying American farm goods, and are waiting to see how trade talks progress. Translation: trade talks, even the fake kind, is now over, dead and buried, and the only question is how Trump will react.

[..] in a dramatically unsettling move for global stability, China’s offshore yuan just collapsed below 7/USD — after the PBOC fixed the onshore yuan below 6.90 for the first time in 2019 — the currency plunging a stunning 12 handles to its weakest on record against the dollar as countless stop losses were triggered and thousands of traders were margined out.

“A break of 7 is quite shocking to the market, and close attention will be paid to how China would deal with this move,” says Tsutomu Soma, general manager of the investment trust and fixed-income securities at SBI Securities Co. in Tokyo in a phone interview. This is the weakest offshore yuan has ever been against the dollar…

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Beijing control over the yuan is worrisome. It also prohibits uptake of the currency in global trade.

China Lets Yuan Slump Past 7 Per Dollar For First Time In Over A Decade (R.)

China on Monday let the yuan tumble beyond the key 7-per-dollar level for the first time in more than a decade, in a sign Beijing might be willing to tolerate further currency weakness in the face of an escalating trade row with the United States. The sharp 1.4% drop in the yuan came after the People’s Bank of China set the daily mid-point of the currency’s trading band at 6.9225 per dollar, its weakest level since December 2018. “Today’s fixing was the last line in the sand,” said Ken Cheung, senior Asian FX strategist at Mizuho Bank in Hong Kong. “The PBOC has fully given the green light to yuan depreciation”. The shakeout in the yuan comes days after Trump stunned financial markets by vowing to impose 10% tariffs on the remaining $300 billion of Chinese imports from Sept. 1, abruptly breaking a brief month-long ceasefire in the bruising trade war.

After opening the onshore session at 6.9999 per dollar, the yuan had weakened to 7.0266 per dollar by 0351 GMT, down 1.2% on the day after earlier losing as much as 1.4% of its value. Monday marked the first time the yuan had breached the 7-per-dollar level since May 9, 2008. With the escalating trade war giving Beijing fewer reasons to maintain yuan stability, analysts said they expect the currency to continue to weaken. “In the short-term, the yuan’s strength would be largely determined by the domestic economy. If third-quarter economic growth stabilizes, the yuan could stabilize around 7.2 or 7.3 level,” Zhang Yi, chief economist at Zhonghai Shengrong Capital Management in Beijing.


Capital Economics senior China economist Julian Evans-Pritchard said the PBOC had probably been holding back against allowing a weaker yuan to avoid derailing trade negotiations with the United States. “The fact that they have now stopped defending 7.00 against the dollar suggests that they have all but abandoned hopes for a trade deal with the U.S.,” he said.

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Organizers swore peaceful protests. But a few agitators can take care of that.

Hong Kong Brought To A Standstill As City-Wide Strikes And Protests Hit (G.)

Hong Kong’s embattled leader, Carrie Lam, has warned that mass protests have pushed the region to the brink of a “very dangerous situation” as residents have gone on strike, paralysing the city. Lam, who has disappeared from public view for the past two weeks, gave a media briefing in which she condemned the protests for hurting Hong Kong’s economy and stability. “Such extensive disruptions in the name of certain demands or uncooperative movement have seriously undermined Hong Kong law and order and are pushing our city, the city we all love, and many of us helped to build, to the verge of a very dangerous situation,” she said.

On Monday, transport across Hong Kong was brought to a standstill and more than 150 flights out of the city were cancelled. Almost 100 outbound and 100 inbound flights were cancelled. Protesters also blocked key roads and stopped trains throughout the city. [..] Protesters have shifted tactics beyond only marches and protests in the streets. Civil servants from more than 30 government departments, as well as pilots, teachers, construction workers, engineers, and aviation staff all pledged to strike on Monday.


On Monday morning, several lines of the MTR, the rail network serving Hong Kong, were suspended as protesters, many wearing face masks and black clothing, blocked the doors of trains, preventing them departing the stations. There were also reports of discarded umbrellas being wedged in train doors to prevent them from closing, delaying services. Monday’s planned city-wide protest, which is aimed to disrupt peak-hour travel of commuters, is the fifth consecutive day of mass demonstrations in the city. Simultaneous rallies were planned for seven of Hong Kong’s 18 districts on Monday. Hong Kong has not held a general strike in more than 50 years.

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“Rural America is older, sicker, poorer and more dependent upon state aid than it was before.”

Job Growth In Trump Land Is Dead In The Water (MW)

Since the economy began adding jobs after the Great Recession nine years ago, about 21.5 million jobs have been created in the United States, the second-best stretch of hiring in the nation’s history, second only to the 1990s. But job growth isn’t being spread evenly across the land. Most of the new jobs have been located in a just a few dozen large and dynamic cities, leaving slower-growing cities, small towns and rural areas — where about half of Americans live — far behind. Along with climate change and racial justice, economic development is America’s biggest challenge over the next few decades. Inclusive growth is a must, or else our society will fall apart. The problem: No one — certainly not President Trump — has found the magic wand that will bring back jobs to rural and small-town America.

According to a study titled “The Future of Work in America” by the McKinsey Global Institute released in July, 25 cities that are home to about 30% of Americans will capture about 60% of the job growth between 2017 and 2030, just as they did between 2007 and 2017. Twelve are megacities (and their extended suburbs): Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, Philadelphia, Phoenix, San Francisco and Washington. Another 13 are high-growth hubs in smaller cities: Austin, Charlotte, Denver, Las Vegas, Minneapolis, Nashville, Orlando, Portland (Ore.), Raleigh, San Antonio, San Jose, Seattle, and Tampa. A few other smaller, fast-growing cities will also add jobs, while vast swaths of the South, Midwest and Plains will lose jobs.


The New York metro area, home to 20 million people, added more jobs over the past year than all the small towns and rural areas — with 46 million people — did combined. Anyone who’s been paying attention to the political map will recognize that the growth is mostly occurring in places that vote for Democrats, while the stagnation is mostly in places that vote for Republicans. Donald Trump has appealed to those who are the most fearful, the most resentful and the most despairing, but the situation hasn’t gotten any better since his election. Rural America is older, sicker, poorer and more dependent upon state aid than it was before.

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Feel lucky?

10 Alarming Things About The Economy That Politicians Won’t Tell You (MW)

Here are 10 remarkable forecasts and assumptions that Washington is making and isn’t telling you. These are all contained in the Congressional Budget Office’s most recent Long-Term Budget Outlook, the cornerstone document of government financial and economic planning.

1. We’re going to have a lot more immigrants. A lot. They’re expecting a net 22.5 million more immigrants to come to the U.S. over the next 20 years. By 2049, they’re expecting immigration to account for a stunning 87% of annual population growth.

2. We’re going to have a lot more illegal immigrants. Despite the current bluster and the scandals at the border, the CBO expects we’ll have 2.4 million more illegal immigrants (or “undocumented residents,” or whatever) in 20 years’ time than we have today.

3. We’re going to be up to our eyeballs in debt. The national debt is expected to skyrocket to an “unprecedented” 144% of GDP by 2049, or twice the level today. That would put the debt just under $100 trillion. The figure today: Around $18 trillion. As recently as 2000: $4 trillion. Oh, and this isn’t even the worst-case scenario: The national debt could exceed 200% of GDP in 30 years’ time, the CBO acknowledges.

4. We’re going to owe so much money that by 2049 the annual interest on the debt will be about 5% of GDP — roughly the share that we spend today on Social Security. And that’s even if interest rates stay low. Despite rising debt and federal spending, the government is expecting — or hoping — the average rate on federal debt will rise only from today’s lowly 2.4% to 4.2%, still modest by historic standards, by 2049.

5. This debt, and these deficits, will damage the economy. They will crowd private investment out of the debt markets, reducing income and growth, says the CBO. And as we’ll have to borrow more and more from abroad to finance the government, they’ll lead to bigger and bigger interest payments leaving the country.

6. Social Security, Medicare, other health programs and net interest are going to soak up so much of the budget that we’re going to have to slash everything else to the smallest share of the economy in 70 years — just 7%. The average over the past 50 years: 11%.

7. Just to keep the federal deficit to these levels, your taxes will go up. The Obama tax hike on “Cadillac” health-insurance plans will kick in starting in 2022, and the 2017 Trump tax cuts will expire in 2025.

8. Most working stiffs can say goodbye to any other tax cuts. Uncle Sam is explicitly relying on your taxes to go up thanks to “bracket creep,” where income-tax brackets rise only in line with inflation while your income — you hope — rises faster.

9. While tax rates go up for most people, they won’t for those earning the most. That’s because more and more of their income will be above the Social Security “cap,” saving them an effective 12.4% a year. The cap this year is $132,900.

10. Meanwhile, working stiffs will be taxed at twice the marginal rate of those who live on dividends. By 2049, says the CBO, labor income will be taxed at a marginal rate of 32%, compared to just 16% for capital income. Good to know, isn’t it? It would be great to see some of this stuff come up in the presidential race, wouldn’t it?

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“The Fed hiked 25bps to 3.25% in Feb 1994. Grown men cried on the trading floor. Salesmen. They were soon laid off. Their clients suffered staggering losses. They too were fired.”

The Crashes That Cause Grown Men To Cry (Eric Peters)

He started his career in 1989, with Fed Funds at 9.75%. The Fed slashed rates to 8.25% in Dec 1989 as the S&L Crisis unfolded. They continued cutting until Aug 1992, when rates hit a mindboggling low of 3.00%. The Fed kept money that cheap for 1.5 yrs. Investors had recently earned 9.75% for taking no risk and found themselves starved for returns. So banks structured complex products that offered enhanced yields by selling volatility – they were great, provided the Fed neither hiked nor cut rates. They flew off the shelves. Salespeople gouged their clients. The Fed hiked 25bps to 3.25% in Feb 1994. Grown men cried on the trading floor. Salesmen. They were soon laid off. Their clients suffered staggering losses. They too were fired.


And as their bosses and boards discovered the scale of their unbounded risk, they instructed the banks to get them out at the best price. Whenever that happened, the cost was far bigger than expected. And this in turn was reflexive. Those clients who had earlier assured themselves that they could stomach the ride – because they were long-term investors – were forced to vomit. They call that period The Great Bond Massacre. But it seemed like every few years, another great massacre would unfold in one thing or another. So he assumed that this is how the world worked. Of course, he wasn’t alone. Global central bankers also recognized this to be the case. So they strived to avoid new massacres. But their tools only worked when the mechanic applied greater leverage with each use. Massacre after massacre, they cranked away. By 2019, they had produced the longest economic expansion and equity bull market in American history.

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Is this enough to end the Fed?

Inside The Plunge Protection Team: Chaos (ZH)

Now, thanks to Bloomberg, we have a much more detailed look into what transpired at the trading desk of the “Plunge Protection Team”, and what we learn is that the past year said institution which forms the bedrock of support for the US capital market has been gripped by what at times is sheer chaos. Why? Perhaps it will not come as a surprise to anyone, that the reason for said chaos is another career economist, in this case the “new” president of the New York Fed, John Williams (no relation to the Star Wars guy). As Bloomberg details in a “must read” report, “an unusual level of internal tension broke out in recent weeks at the fortress-like Federal Reserve Bank of New York in lower Manhattan.”

This was prompted by the sudden departure of the two longtime officials mentioned above, which “shook staff, sank morale and drew attention to the leadership of the New York Fed under John Williams as he enters his second year at the helm.” And yes, this is the same John Williams who two weeks ago prompted a mini market tantrum following one of the most epic communication fuck ups by a central banker. As Bloomberg writes “the story involves Simon Potter, who ran the all-important markets desk, and Richard Dzina, head of the financial services group. Both were abruptly relieved of their roles in late May by Williams.


Little explanation was given, but according to current and former New York Fed employees, as well as those close to the bank, the nature of the exits, by fault or design, seemed to be a warning: fall in line.” It is not clear exactly what the two titans of US capital markets had to “fall in line” for, but two things are certain – i) Potter did not “resign”, he was fired by Williams, and ii) now that an economist with zero capital markets experience is in charge, and following his termination of Potter and Dzina, the world is one step closer to collapse as a clueless PhD hack is in charge of the most important market in the world.

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“Judge Koeltl concluded that, quite simply, the claims made as the basis of Russiagate are insufficient to even warrant a hearing.”

Russiagate is the New 42 (Craig Murray)

Douglas Adams famously suggested that the answer to life, the universe and everything is 42. In the world of the political elite, the answer is Russiagate. What has caused the electorate to turn on the political elite, to defeat Hillary and to rush to Brexit? Why, the evil Russians, of course, are behind it all. It was the Russians who hacked the DNC and published Hillary’s emails, thus causing her to lose the election because… the Russians, dammit, who cares what was in the emails? It was the Russians. It is the Russians who are behind Wikileaks, and Julian Assange is a Putin agent (as is that evil Craig Murray). It was the Russians who swayed the 1,300,000,000 dollar Presidential election campaign result with 100,000 dollars worth of Facebook advertising.

It was the evil Russians who once did a dodgy trade deal with Aaron Banks then did something improbable with Cambridge Analytica that hypnotised people en masse via Facebook into supporting Brexit. All of this is known to be true by every Blairite, every Clintonite, by the BBC, by CNN, by the Guardian, the New York Times and the Washington Post. “The Russians did it” is the article of faith for the political elite who cannot understand why the electorate rejected the triangulated “consensus” the elite constructed and sold to us, where the filthy rich get ever richer and the rest of us have falling incomes, low employment rights and scanty welfare benefits. You don’t like that system? You have been hypnotised and misled by evil Russian trolls and hackers. [Whether Trump and/or Brexit were worthy beneficiaries of the popular desire to express discontent is an entirely different argument and not one I address here].


Except virtually none of this is true. Mueller’s inability to defend in person his deeply flawed report took a certain amount of steam out of the blame Russia campaign. But what should have killed off “Russiagate” forever is the judgement of Judge John G Koeltl of the Federal District Court of New York. In a lawsuit brought by the Democratic National Committee against Russia and against Wikileaks, and against inter alia Donald Trump Jr, Jared Kushner, Paul Manafort and Julian Assange, for the first time the claims of collusion between Trump and Russia were subjected to actual scrutiny in a court of law. And Judge Koeltl concluded that, quite simply, the claims made as the basis of Russiagate are insufficient to even warrant a hearing. The judgement is 81 pages long, but if you want to understand the truth about the entire “Russiagate” spin it is well worth reading it in full. Otherwise let me walk you through it.

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Poverty as a means of getting rid of the unwanted.

Austerity Populism (G.)

In a recent book ostensibly focused on Jeremy Corbyn’s Labour party, but partly about recent British political history, the academics Matt Bolton and Frederick Harry Pitts explain the last decade in terms of “austerity populism”. Cuts, welfare crackdowns and the case for leave, they explain, were all sold to the public via the exclusion of supposedly unproductive undesirables: “scroungers” in the austerity narrative; “migrants” in the stories that swirled around the 2016 referendum. Both traded on a nostalgic idea of national struggle, keeping calm and carrying on, and some strange, latent belief that the country was in need of a purgative spell of pain akin to an imaginary version of the second world war.

In this vision, David Cameron’s election victory in 2015 and the leave side’s win a year later were watershed moments on the same national journey. But if austerity populism has so far been politically successful, it also comes with obvious risks. Trumpeting the wonders of slashing services and kicking around the poor only works for as long as the majority of people are largely untouched by those things – which is why Johnson is now partly changing tack and pledging to spend money (although our nasty, broken benefits system and countless imperilled public services will surely remain untouched).


By the same token, the romance of leaving the EU will only endure while its losers – sheep farmers, car industry workers, people who have come to the UK from central and eastern Europe – form a minority, and enough voters can still be persuaded that they will be winners in a Tory Brexit. Yet, however shambolic the opposition offered by Labour, the lived reality of no deal would surely risk tipping too many people into doubt and fear and away from the Conservatives, which is one reason why Johnson and his allies are in such an obvious hurry. The emotional side of me would simply describe this all as a very English tragedy, centred on a mean-spiritedness that the woman I met in Dover would instantly recognise. And at least until the end of this long, overheated summer and the start of an autumn of nightmares, millions of us will carry on behaving much as we have done for the last decade: not just passing by on the other side, but dancing as we do it.

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A weird propaganda tool. That we pay attention to it is a flashing red sign of where our societies are at.

Bellingcat Unloads 4,000-Word Hit Piece On Tulsi Gabbard (RT)

Running as an anti-war candidate in the US comes with a target painted on your back that draws fire from those rooting for foreign interventions. In case of Tulsi Gabbard, it includes a lengthy piece on chemical attacks in Syria. Gabbard, a Democratic presidential hopeful, became the most-googled candidate during the second primary debate – but the surge of public interest came with renewed attacks against her anti-interventionist agenda. In case you’ve missed it all, Gabbard has been branded a ‘Russian’ spoiler for whichever candidate is eventually picked, and, once again, an apologist for Syrian President Bashar Assad.

Joining the chorus of bashers on Sunday was Elliot Higgins, the founder of the UK-based ‘citizen investigation’ outlet Bellingcat, who wrote a whopping 4,000-word piece attacking Gabbard’s negative attitude toward regime change wars. In particular, Higgins didn’t like her skepticism over chemical weapons attacks in Syria reflected on her campaign website. The attacks were used by Washington to justify missile attacks against the country’s government – and by extension continued illegal US military presence in the country.


The mammoth piece starts with screenshots featuring logos of RT and InfoWars (Russian propaganda, dear readers, conspiracy theories!) and goes on to criticize anyone doubting the US-favored narrative about what happened in Syria. MIT Professor Theodore Postol gets an honorable mention, with whom Higgins no longer debates in person since their encounter in 2018. Back then, Higgins failed to address Postol’s technical criticisms of his investigations and instead resorted to mocking applauses and calling his opponent a tool of Russian propaganda.

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Always a sucker for a good history lesson.

America’s Other Original Sin (Bacevich)

Can there be more than one Original Sin? I’m guessing that may be a theological nonstarter, but as a basis for historical interpretation there is real merit in considering the possibility of multiple exiles from the Garden of Eden. That the arrival of the first African slaves to Jamestown 400 years ago this month qualifies as America’s Original Sin is now widely recognized. While holdouts remain, most agree that slavery and racism together have left an indelible stain on our nation. Many would argue that this awareness has arrived belatedly. I might even cite myself as an example.

As a kid growing up in Northwest Indiana in the middle of the last century, I judged slavery to have been an unfortunate mistake long since corrected. In the de facto segregated Calumet region where my family lived, race obviously remained a sensitive subject, but to my mind one best kept at arm’s length. I had more important things to worry about than the relationship between white people like me and those who were not white—why the Cubs were permanently stuck in or near the National League cellar being but one example. In the decades since, I’ve learned to see matters differently. So have many others.

But let me suggest the possibility of a Second Original Sin, not rising to the level of the first, but at least deserving far more attention than it has received. And that’s the sin committed in December 1898, when the United States laid claim to the Philippines. The history of this transaction, centering on a transfer of sovereign authority from Madrid to Washington, is both well known and almost entirely forgotten. As had been the case with race in East Chicago, Indiana, back in the late 1950s, the incorporation of the Philippines into an increasingly far-flung American empire has been written off. This, I have come to believe, is unfortunate, especially today when the American empire appears increasingly precarious.

The essential facts are these. In April 1898, the United States went to war with Spain. The war’s nominal purpose was to liberate Cuba from oppressive colonial rule. The war’s subsequent conduct found the United States not only invading and occupying Cuba, but also seizing Puerto Rico, completing a deferred annexation of Hawaii, scarfing up various other small properties in the Pacific, and, not least of all, replacing Spain as colonial masters of the Philippine Archipelago, located across the Pacific.


1898 US Political Cartoon: U.S. President William McKinley is shown holding the Philippines, depicted as a savage child, as the world looks on. The implied options for McKinley are to keep the Philippines, or give it back to Spain, which the cartoon compares to throwing a child off a cliff.

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Jul 202019
 


 

‘Looking to Break Status Quo,’ Iran Seizes UK Tanker (Defense One)
Deflationary Bust Baked in the Cake (Mish)
Fed’s Rosengren Doesn’t See The Case For A US Rate Cut (R.)
Market Needs Deep Rate Cut To Prevent Earnings Recession – Bianco (CNBC)
After Williams “Misguidance”, Fed Leaks No 50bps Rate Cut This Month (ZH)
Airlines Delay Boeing Max 737 Return Until November (G.)
Kids Could End Up In Foster Care Over Unpaid School Lunch Bills (USAT)
In a Crisis of Democracy, We Must All Become Julian Assange (Hayase)
Jim Acosta Won’t Condemn Espionage Act Being Used Against Julian Assange (CF)
Trump Was Oddly Reasonable About Plastic Straws (G.)
Germany’s Forests On The Verge Of Collapse (DW)

 

 

Lt. Gen. Robert Ashley, the director of the Defense Intelligence Agency, knows exactly what’s going on, and only narrowly shies away from blaming US and UK for the problems:

“They’re not looking to do something that is going to spiral out of control because war is not what they’re looking for.. But at the same time, their decision calculus is they’ve gotta do something in response.”

‘Looking to Break Status Quo,’ Iran Seizes UK Tanker (Defense One)

Iranian forces have seized a British-flagged oil tanker in the Strait of Hormuz, heightening the uncertainty in the region amid the disintegrating Iran nuclear deal and reigniting fears that simmering tensions with Iran could flare into conflict. A Liberian-flagged tanker was also seized, British officials said Friday. None of the captured crew are British citizens and it was not immediately apparent whether there were any casualties. Iran has protested the July 4 British seizure of one of its tankers in Gibraltar, which the U.K. said was carrying Iranian oil to Syria in violation of EU sanctions.

Asked on Friday whether Friday’s incident was a likely retaliation for the detention of their ship, Lt. Gen. Robert Ashley, the director of the Defense Intelligence Agency, said that Iran typically looks for “things that are proportional in nature” to respond to actions from other nations that it considers a threat. Broadly, Iran is seeking to “break the status quo” of the Trump administration’s so-called “maximum pressure” campaign of stifling sanctions, Ashley said. “They’re not looking to do something that is going to spiral out of control because war is not what they’re looking for,” Ashley told a small group of reporters at the Aspen Security Forum in Colorado. “But at the same time, their decision calculus is they’ve gotta do something in response.”

The Trump administration has warned since May that Tehran is carrying out an intensifying campaign of provocative actions. Last month, President Trump ordered and then canceled airstrikes in retaliation for the downing of a U.S. surveillance drone that Iran said was flying in its airspace. (The United States says that the drone was flying over international waters.) On Thursday, U.S. Marines destroyed a drone that the White House said was Iranian (Tehran denies it) and which Pentagon officials said was closing in on an amphibious assault ship operating in the region.


If the United States hadn’t ordered airstrikes in June, this latest episode might not have drawn as much attention, said Mara Karlin, a Brookings Institution fellow and former defense official. But now, she said, Trump’s flirtation with airstrikes in June makes it almost impossible to predict how the White House, which has made constraining Iran a key pillar of its foreign policy, might respond to the seizure of a ship flagged to its closest ally. “We’re now in a totally different landscape,” she said, where both Iran and U.S. allies like the U.K. don’t understand Trump’s “escalation ladder.”

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Rate cuts no longer matter, says Mish.

Deflationary Bust Baked in the Cake (Mish)

A number of Fed governors and economic writers want a big cuts for insurance purposes. These people are economic illiterates. Rate cuts now as economic insurance is like trying to buy insurance on your car after you wrecked it. The bubbles have been blown. Rate cuts cannot unblow economic bubbles any more than they can unblow a horn.The bottom line at this point is an economic recession is baked in the cake. The global economy is slowing and the US will not be immune. It’s possible the US is in recession already, but consumer spending does not point that way, unless it’s revised. It’s all moot. The Fed has been fighting the deflation boogeyman.


Yet, the BIS did a historical study and found routine deflation was not any problem at all. “Deflation may actually boost output. Lower prices increase real incomes and wealth. And they may also make export goods more competitive,” stated the study. In the Fed’s foolish attempt to stave off consumer price deflation, the Fed sowed the seeds of a very destructive set of asset bubbles in junk bonds, housing, and the stock market. The widely discussed “everything bubble” is, in reality, a corporate junk bond bubble on steroids sponsored by the Fed. A 50 or even 100 basis point cut won’t matter now. It’s too late to matter. The debt deflation horn has already sounded.

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But if rate cuts no longer matter, then neither does the Fed. Can’t have that.

Fed’s Rosengren Doesn’t See The Case For A US Rate Cut (R.)

Boston Federal Reserve President Eric Rosengren on Friday pushed back against expectations for an interest-rate cut when Fed policymakers meet later this month, saying the U.S. economy does not need a boost the way some other countries might. “It makes sense that if I was in Japan or if I was at the ECB (European Central Bank) that I would seriously be thinking about easing,” Rosengren said in an interview with CNBC. “The U.S. economy is not at that point, the economy is actually quite reasonable at this stage. So, if that were to change, I’d be happy to ease that point. But I don’t want to ease if the economy is doing perfectly well without that easing.”


In a separate interview, conducted Thursday and published Friday, Rosengren told the Wall Street Journal that economic data had improved since the Fed met in June, when it held rates steady. On Thursday, comments by New York Fed President John Williams stoked expectations that the U.S. central bank would cut rates by a half-percentage-point when it meets on July 30-31. But those expectations were deflated just hours later when a New York Fed representative said the comments were not meant to signal policy actions at the upcoming meeting. The Fed is widely expected to cut rates for the first time in a decade at its July meeting. Friday was the last day that investors will hear from Fed officials until they release their policy statement at the close of the July meeting.

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Imagine seeing your self as a ‘market guy’, but failing to see there is no market left.

Market Needs Deep Rate Cut To Prevent Earnings Recession – Bianco (CNBC)

Market researcher James Bianco believes Wall Street is teetering closer to an earnings recession. Unless the Federal Reserve intervenes with a bigger-than-expected 50 basis point cut, he’s worried that year-over-year earnings growth rates for the second and third quarters will go even lower. “The estimates for the third quarter are somewhere just below zero. This is not earnings growth. This is just struggling to stay at zero,” the Bianco Research president told CNBC’s “Trading Nation ” on Wednesday. Bianco is building his case on an ominous trend in the current quarter’s S&P 500 earnings expectations.


“The estimates have just gone negative in the last week or so,” said Bianco. “They’re only down a couple of 10ths, but they are negative. And, they’ve been in a downtrend of several months.” Bianco, who calls himself a “market guy,” has been firmly in the rate-cut camp. He has been calling for the Fed to slash rates four times over the next 12 months. He is concerned the longer the 10-year and 3-month U.S. Treasury yields are inverted, corporate profits could sustain more damage. “It’s telling you that money is too tight for four or five months,” Bianco said. “Better to go 50 [basis point cut] now and you can raise rates later.”

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I see a bunch of spoiled, undereducated and overpaid kids shouting out to hide their ignorance.

After Williams “Misguidance”, Fed Leaks No 50bps Rate Cut This Month (ZH)

How do you put the monetary genie back in the bottle? That is what the Federal Reserve is scrambling to figure out today after a day of unprecedented miscommunication by NY Fed president John Wiliams, who as we reported on Thursday, not only singlehandedly repriced market expectations for a 50bps rate cut on July 31, but went so far as to hint that ZIRP is coming back. The fact that even uber dove, St Louis Fed president James Bullard, afterwards said they were expecting 25bps at best, was their desperate attempt to reset market expectations back to 25bps, but by then it was too late, and as of moments ago, the market was pricing in roughly 40% odds of a 50bps rate cut in two weeks, down from 70% yesterday. In retrospect, Williams made a massive communication mistake.

As Bank of America explained earlier today in a note from chief economist Michelle Meyer titled “The 50bps head fake”, in which she wrote that “on Thursday NY Fed President Williams gave a speech titled “Living Life Near the ZLB” arguing for monetary policy to be proactive and aggressive when confronting an “adverse” outlook. He argued that when short-term interest rates are close to zero, policymakers shouldn’t “keep their powder dry” and that they could not afford to take an “`wait and see’ approach to gain additional clarity about potentially adverse economic developments.” Shortly after, in a TV interview, Vice Chair Clarida strongly argued that it is prudent to take preventative measures with monetary policy when close to the zero lower bound (ZLB). Together, these comments moved markets closer to a 50bp cut at the end of the month.”


However, in an unprecedented move, the NY Fed subsequently released a statement stating that President Williams’s speech on Thursday afternoon was not intended to send a signal that the Fed might make a large interest rate cut this month but rather it was “an academic speech on 20 years of research.” Why did the NY Fed do this? Simple: as BofA explains, “the FOMC was uncomfortable with the market moving toward a 50bp cut and wanted to push the market back to a 25bp baseline.” In other words, as Meyer puts it, “Williams unintentionally misguided the markets”.

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Like they have any say in the matter.

Airlines Delay Boeing Max 737 Return Until November (G.)

The swift return of Boeing’s 737 Max aircraft to the skies was put further in doubt this week with airlines signalling that they do not hope to operate the plane any time soon. With more than four months already elapsed since the plane was grounded by regulators, Southwest and American, two of the jet’s main US operators, followed United Airlines in saying they would be taking the Max out of their schedules until November. Ryanair, Europe’s biggest short-haul carrier, also announced it would have to curb expansion plans pinned on the arrival of its 737 Max orders and that some airport bases would have to shut as a result. Making the announcement on Tuesday, its chief executive, Michael O’Leary, said he remained committed to the plane: “We’ve described them as gamechangers – and they remain gamechangers.”


But O’Leary admitted even its biggest customers – Ryanair has ordered 135 models – have little visibility on its immediate future: “We’re still operating in the realms of considerable uncertainty … there are no guarantees.” [..] Elsewhere this week, it became clear that restoring trust among passengers could take longer than fixing the plane. In Washington, relatives of passengers who died in the Ethiopian disaster told Congressional hearings that Boeing had focused on profits “at the expense of human life”. In a blistering attack on the manufacturer and the US regulator, the Federal Aviation Authority (FAA), Paul Njoroge, who lost five family members including his wife and three children in the crash, warned that, without change, “another plane will dive to the ground, killing me, you”.

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“After complaints, district officials announced they plan to send out a less threatening letter next week.”

Kids Could End Up In Foster Care Over Unpaid School Lunch Bills (USAT)

A Pennsylvania school district is warning children could end up in foster care if their parents do not pay overdue school lunch bills. The letters sent recently to about 1,000 parents in Wyoming Valley West School District have led to complaints from parents and a stern rebuke from Luzerne County child welfare authorities. The district says that it is trying to collect more than $20,000, and that other methods to get parents to pay have not been successful. Four parents owe at least $450 apiece. The letter claims the unpaid bills could lead to dependency hearings and removal of their children for not providing them with food. “You can be sent to dependency court for neglecting your child’s right to food. The result may be your child being taken from your home and placed in foster care,” the letter read. After complaints, district officials announced they plan to send out a less threatening letter next week.

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This is good.

In a Crisis of Democracy, We Must All Become Julian Assange (Hayase)

The framers of the constitution wanted to have power over people. As a testimony to this, the original draft of the constitution did not have a Bill of Rights. They were added to the constitution as amendments. This didn’t come about without a struggle. The proponents of the Bill of Rights demanded them in order to safeguard individual liberty and challenged those who seek to preserve levers of control. Even after the constitution was ratified with a Bill of Rights, the existence of this unaccounted power was never truly addressed. The wording of the First Amendment reads:

“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.” Here, the First Amendment was aimed to restrict the governmental power. It was specifically addressing what Congress can’t do. However, the constitution didn’t ensure that corporations would not be able to circumvent laws and restrict freedom of speech. This lack of oversight made the system of governance vulnerable to corruption, as was observed by Thomas Jefferson, when he warned American people about a time when the American system of government would degenerate into a form of “elective despotism”.

The managed democracy relies on secrecy and deception to control the will of the populace. With the infiltration of commercial interests and the consolidation of media, the big business class has found a way to regulate free speech on their terms. The establishment of corporate media turned journalists’ First Amendment protection into a privilege that they can use against the public. Journalists, who have now become a new class of professionals, no longer share interests with ordinary people. They serve the agendas of the powerful state in maintaining an illusion of democracy, by restricting the flow of information and controlling narratives. For instance, the New York Times has publicly acknowledged that it sends some of its stories to the US government for approval from “national security officials” before publication.


With the merger of the state and corporations, the power of private companies to influence governments and erode civil liberty has increased. Transnational corporations can now revoke and restrict basic rights at any time, crossing the judicial boundaries on the borderless cyberspace. Tech giants like Google, Facebook and Twitter censor free speech online and, without warrant, spy and invade the privacy of users.

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Cassandra.

Jim Acosta Won’t Condemn Espionage Act Being Used Against Julian Assange (CF)

CNN talking head, and resident White House activist, Jim Acosta refused to condemn the Espionage Act being used against WikiLeaks publisher Julian Assange at an event where he was attempting to portray himself as a defender of the free press. Acosta’s book is titled, “The Enemy of the People: A Dangerous Time to Tell the Truth in America,” but do not let that headline fool you into thinking that he supports the freedom of the press. Acosta was asked about his thoughts on the subject by YouTuber Matt Orfalea at an event at the Newseum over the weekend titled, “The President and the Press: The First Amendment and the First 100 Days.”

The question asked by Orfalea was simple, “what do you think of the Trump administration’s use of the controversial Espionage Act to indict WikiLeaks founder Julian Assange for publishing classified information in the 2010s that exposed war crimes, informed the public, and didn’t harm anyone?” Assange has been charged for his release of the Iraq and Afghan War Logs which were provided to him by Chelsea Manning. He is not currently charged with anything related to the 2016 election, but that did not stop Acosta from trying to make a case for why he wants to see him punished for the 2010 release as payback for the completely unrelated publication of the Democratic National Committee emails.

“I am probably not gonna give you a satisfactory answer,” Acosta correctly began, “but I’m gonna do the best that I can. “I do think, and forgive me if you don’t agree with me on this, I do think what happened with us and my press pass case is slightly different than what happened with Julian Assange and WikiLeaks,” Acosta said. The CNN pundit was correct here, as Assange has published world changing information and has been nominated for the Nobel Peace Prize on seven occasions. Acosta simply attempts to insert himself into news cycles to go viral and keep his face on television.


“My understanding about the Julian Assange situation is that, you know, he is being charged not just for trying to speak truth to power, and trying to reveal things. He’s in trouble for other things. What we’ve seen during the 2016 campaign where there were contacts between WikiLeaks and Russian operatives — that I think takes WikiLeaks and Julian Assange into sort of a different category than just a straight news organization — straight publisher of news around the world,” Acosta stammered on, as if he himself is part of a “straight news organization.” Acosta added that he is not “rendering a verdict on Julian Assange” and that he should have his day in court.

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The Guardian struggles to agree with Trump on anything at all.

Trump Was Oddly Reasonable About Plastic Straws (G.)

[..] it was the question from a reporter who piped up after Trump had stonewalled a question on his felonious former fixer that was the last, well … “Are you in favor of banning plastic straws?” the reporter asked. “I do think we have bigger problems than plastic straws,” Trump responded. “You know, it’s interesting about plastic straws: so, you have a little straw, but what about the plates, the wrappers, and everything else that are much bigger and they’re made of the same material? So, the straws are interesting. Everybody focuses on the straws. There’s a lot of other things to focus on. But it’s an – it’s an interesting question.”

Trump’s response is largely remarkable for how reasonable it is. Straws are an interesting question that have garnered disproportionate focus, and other single-use plastics, such as cups, plates and wrappers, do need to be part of efforts to address our unsustainable addiction to plastic. [..] Plastic straws only make up about 1% of the plastic waste in the ocean, according to Jim Leape, co-director of the Stanford Center for Ocean Solutions. And while plastic straw bans alone will solve neither climate change nor plastic pollution, they have also been criticized by advocates for the rights of people with disabilities, who often need straws to drink. Kim Sauder, a PhD student in disability studies, has described such bans as “environmental theater”.

[..] Trump’s response is also surprising because, for once, he eschewed fanning the fire of a culture war that his campaign has been attempting to stoke. Plastic straw selfies were a mini-Maga meme last summer, with various rightwing pseudocelebrities photographed themselves wasting plastic for no reason other than to “own the libs” who care about sea turtles and sustainability. This week, Trump’s campaign manager Brad Parscale attempted to recapture the meme magic with a tweet comparing the efficacy of paper straws to “liberal progress”. “This is exactly what they would do to the economy as well,” he tweeted. “Squeeze it until it doesn’t work.”


The campaign website is also selling packs of 10 plastic straws “laser engraved” with Trump’s name for $15, with the tagline: “Liberal paper straws don’t work.” But if the campaign message was supposed to be “Vote for Trump because the libs are coming for your straws”, Trump himself failed to get the memo.

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Didn’t need the sensationalist headline. Issues are bad enough.

Germany’s Forests On The Verge Of Collapse (DW)

Germany’s forests are undoubtedly suffering as a result of climate change, with millions of seedlings planted in the hope of diversifying and restoring forests dying, warns Ulrich Dohle, chairman of the 10,000-member Bunds Deutscher Forstleute (BDF) forestry trade union. “It’s a catastrophe. German forests are close to collapsing,” Dohle added in an interview with t-online, a online news portal of Germany’s Ströer media group. Low rainfall last summer saw Germany’s rivers reach extreme lows, with some waterways still struggling and forests prone to fire. “These are no longer single unusual weather events. That is climate change,” said Dohle.

Helge Bruelheide, co-director of Germany’s Center for Integrative Biodiversity, warned: “if the trend prevails and the annual precipitation sinks below 400 millimeters (15.7 inches) then there will be areas in Germany that will no longer be forestable.” Lüdenscheid, a densely forested area in central Germany, was no exception, Bohle added. Its precipitation had slumped from one-meter (3.2-meters) in 2017 to only 483 millimeters last year. Catchments in central Europe collected only 10% more rainfall in the first half of 2019, compared to the same period in 2018, a trend exacerbated by uneven wet-then-dry months,Germany’s Institute of Hydrology (BFG) reported Thursday.


Low river levels “remain unchanged” in many parts of Germany, the BFG said, with only the Rhine River currently carrying sufficient water for shipping. It’s expected to fall in the coming weeks as dry, warmer weather returns. What Dohle of the forestry trade union termed “dramatic tree deaths” began with winter snow dumps in early 2018 which broke branches, weakening the trees’ natural defences and letting in fungal infections, “followed by drought and bark beetle infestation” that killed off European spruce trees. One million older trees have since died — not only heat susceptible spruces, but even Germany’s prized European Red Beech which had been widely planted over the past decade in the hope of creating climate stable forests, Dohle added.

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Picture Zero Hedge used with my article yesterday:

 

 

 

 

 

Jul 112019
 
 July 11, 2019  Posted by at 8:53 am Finance Tagged with: , , , , , , , , , , , , , ,  8 Responses »


Pablo Picasso Guernica 1937

 

Dollar Slips After Powell Bolsters Rate Cut Bets (R.)
AOC Is Making Monetary Policy Cool (and Political) Again (NYM)
Trump Tasks Aides To Find A Way To Weaken The US Dollar (CNBC)
Lock Him Up (Pinkerton)
Schumer Got Thousands In Donations From Jeffrey Epstein (NYP)
Democrat Rep. Stacey Plaskett To Donate Epstein Campaign Contributions (CNBC)
US Probing Deutsche Bank’s Dealings With Malaysia’s 1MDB (ZH)
Obama the Conservative vs Trump the Revolutionary (EH)
Former UK PM Major Vows To Block Brexit Parliament Suspension (R.)
OPCW’s New Chemical Weapons Team To Launch First Syria Investigations (R.)
UK, US Claim Iranian Boats Attempt To Seize Tanker In Strait Of Hormuz (ZH)

 

 

I’m getting so sick of this. Powelll wants to cut rates but it makes no sense if he’s to uphold Trump’s claim of a great US economy. So what does his spin team come up with? Cut rates because other countries are not doing so well. Cut the crap.

Dollar Slips After Powell Bolsters Rate Cut Bets (R.)

The dollar eased on Thursday after Federal Reserve Chairman Jerome Powell set the stage for a rate cut later this month, vowing to “act as appropriate” to ensure the world’s biggest economy will be able to sustain a decade-long expansion. In testimony to Congress, Powell pointed to “broad” global weakness that was clouding the U.S. economic outlook amid uncertainty about the fallout from the Trump administration’s trade conflict with China and other nations. “Chairman Powell sounded dovish on most dimensions. This is slightly surprising given benign trade developments following last month’s G20 meeting and the recent rebound in nonfarm payrolls,” said Michael Swell, co-head of global fixed income portfolio management at Goldman Sachs Asset Management.


“Overall, his comments around slowing growth against a backdrop of muted inflation and elevated uncertainties is consistent with ‘insurance rate cuts’ this year.” Adding to a generally dovish tone in his testimony, the minutes from the Fed’s previous policy meeting showed many policymakers thought more stimulus would be needed soon, reviving speculation of an aggressive rate cut.

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And AOC also wants low interest rates. Everyone wants the same thing, and nobody says: Wait a minute?!

AOC Is Making Monetary Policy Cool (and Political) Again (NYM)

Ocasio-Cortez : In early 2014, the Federal Reserve believed that the long run unemployment rate was around 5.4 percent. In early 2018, it as estimated that this was now lower, around 4.5 percent. Now, the estimate is around 4.2 percent. What is the current unemployment rate today?
Powell : 3.7 percent.

Ocasio: 3.7 percent…Unemployment has fallen about three full points since 2014 but inflation is no higher today than it was five years ago. Given these facts, do you think it’s possible that the Fed’s estimates of the lowest sustainable unemployment rate may have been too high?
Powell : Absolutely.

This exchange may sound dull and technical. But the congresswoman’s point has real human stakes. America’s central bank has a dual mandate: to promote full employment and price stability. How the Fed chooses to balance those two objectives has redistributive implications. The wealthy have far more to lose from inflation than they do from modest levels of unemployment. In fact, many business owners may actually prefer for the U.S. economy not to achieve full employment, since workers tend to be less demanding when jobs are scarce. By contrast, the most vulnerable workers in the U.S. — such as those with criminal records or little experience — will struggle to get a foothold in the labor market unless policy makers err on the side of letting unemployment fall “too low.”

And this is what AOC’s questions are implicitly about. If the Federal Reserve believes that the U.S. economy cannot sustain unemployment below 5 percent without suffering high inflation, then it will raise interest rates to cool off investment, thereby preventing too many workers from getting jobs. Ocasio-Cortez’s implication is that, by raising interest rates out of a fear of illusory inflation, the Fed may have needlessly hurt American workers. Powell’s concession on that point is significant, and suggests that the central bank will be less inclined to err on the side of hurting the vulnerable in the future.

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We’re all of us in the gutter… (but apparently there’s no-one left looking at the stars).

Trump Tasks Aides To Find A Way To Weaken The US Dollar (CNBC)

President Donald Trump has reportedly tasked aides to find a way to weaken the U.S. dollar in an effort to boost the economy ahead of the 2020 presidential election. The president also asked about the greenback while interviewing Federal Reserve board nominees Judy Shelton and Christopher Waller, people familiar with the matter told Bloomberg News. Those individuals also told Bloomberg that Trump’s chief economic advisor, Larry Kudlow, and Treasury Secretary Steven Mnuchin disapprove of the idea of government tampering to weaken the dollar. Traditionally, past administrations have always maintained publicly they were for a strong dollar because dollar assets like Treasurys are so widely held around the globe.


Trump has often bemoaned the relative strength of the U.S. dollar in foreign exchange markets, blaming foreign nations for devaluing their currencies and thereby inflating the American trade deficit. Last week, the president said in a tweet that the U.S. should match China and Europe’s “currency manipulation game.” “China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA,” Trump said on Twitter. “We should MATCH, or continue being the dummies who sit back and politely watch as other countries continue to play their games – as they have for many years!”

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About Epstein, but with a historical twist.

Lock Him Up (Pinkerton)

One landmark of American reform was the White-Slave Traffic Act, signed into law in 1910 (“white slavery,” we might note, is known today as “sex trafficking”). That law, aimed at preventing not only prostitution but also “debauchery,” is known as the Mann Act in honor of its principal author, Representative James R. Mann, Republican of Illinois, who served in Congress from 1897 to 1922. Mann’s career mostly coincided with the presidential tenures of two great reformers, Theodore Roosevelt and Woodrow Wilson. And it’s hard to overstate just how central to progressive thinking was the combatting of “vice.” After all, if the goal was to create a just society, it also had to be a wholesome society; otherwise no justice could be sustainable.

Thus when Roosevelt served as police commissioner of New York City in the mid-1890s, he focused on fighting vice, rackets, and corruption. Of course, Mann, Roosevelt, and Wilson had much more on their minds than just cleaning up depravity. They saw themselves as reformers across the board; that is, they were eager to improve economic conditions as well as social ones. So it was that Mann also co-authored the Mann-Elkins Act, further regulating the railroads; he also spearheaded the Pure Food and Drug Act, creating the FDA. It’s interesting that when Mann died in 1922, The New York Times ran an entirely admiring obituary, recalling him as “a dominating figure in the House…[a] leader in dozens of parliamentary battles.” In other words, back then, the Times was fully onboard with full-spectrum cleanup, on the Right as well as the Left.

To be sure, the Mann Act hardly eradicated the problem of sex-trafficking, just as Mann’s other legislative efforts did not put an end to abuses in transportation and in foods and drugs. However, we can say that Mann made things better. Of course, the Mann Act has long been controversial. Back in 1913, the African-American boxer Jack Johnson was convicted according to its provisions. (Intriguingly, in 2018, Johnson was posthumously pardoned by President Trump.) In 1944, film legend Charlie Chaplin, too, found himself busted on a Mann Act rap. Chaplin was accused of transporting a young “actress” across state lines; he was acquitted after a sensational trial, but not before it was learned that he had financed his lover’s two abortions. Chaplin’s career in Hollywood was effectively over.

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Schumer telling others what to do, but doing dick all himself. How much did the Clinton Foundation get?

Schumer Got Thousands In Donations From Jeffrey Epstein (NYP)

Sen. Chuck Schumer — who called on Labor Secretary Alexander Acosta to resign and said President Trump should “answer” for his friendship with Jeffrey Epstein — accepted thousands of dollars in donations from the alleged pedophile throughout the 1990s, The Post has learned. Federal Election Commission records show that Schumer received seven $1,000 donations from Epstein between 1992 and 1997, first as a U.S. congressman from New York and then when he was vying to be the state’s senator in 1998, an election he won. Epstein — who was arrested Saturday and charged with sex trafficking and a related conspiracy count for allegedly sexually abusing a vast network of underage girls — also gave $10,000 to “Victory in New York,” a joint fundraising committee established by Schumer and the Democratic Senatorial Campaign Committee.

Epstein gave an additional $5,000 to “Win New York,” a Schumer-associated joint committee that benefited the Liberal Party of New York State. Both of Epstein’s donations to the committees came in October 1998 — and look to have primarily benefited the DSCC and the Liberal Party of New York, as Epstein would have already met the $2,000 limit of donating individually to Schumer. At the time, donors could give $1,000 to a candidate per election — once in the primary and again in the general. That means Schumer and Schumer-linked entities received a combined $22,000.

On the Senate floor Tuesday, Schumer made three Epstein-related demands. He first called on Acosta to resign. [..] “Instead of prosecuting a predator and serial sex trafficker of children, Acosta chose to let him off easy,” Schumer said on the floor. “This is not acceptable. We cannot have, as one of the leading appointed officials in America, someone who has done this.” Schumer also asked that the Department of Justice’s Office of Professional Responsibility make public its review of Acosta’s handling of the case. Finally, Schumer said that Trump should paint a fuller picture of what he meant when he called Epstein a “terrific guy” in a 2002 article for New York Magazine.

An April 2011 court filing shows that Trump eventually barred Epstein from Mar-a-Lago “because Epstein sexually assaulted a girl at the club,” the documents allege. Trump didn’t officially launch a political career until June 2015. No FEC records show that Epstein was ever a Trump donor.

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So when will Schumer follow suit? And the rest of them?

Democrat Rep. Stacey Plaskett To Donate Epstein Campaign Contributions (CNBC)

Democratic congresswoman Stacey Plaskett has decided to reverse course and will give away the contributions she has received from Jeffrey Epstein, who is accused of child sex trafficking. The move comes a day after her team told CNBC that she was unlikely to return the campaign donations after Epstein’s arrest. “In light of new information and allegations that have been made against Jeffrey Epstein I have decided to make contributions to Virgin Islands organizations that work with women and children in the amount of his previous contributions,” Plaskett said in a statement Tuesday.

“My litmus test for accepting campaign contributions has been based on whether the donor’s money was made legally or by ill-gotten means and that the contributor will not ask of me or my Congressional office for any special favors. All my contributions have passed that test. In this case however, I am uncomfortable having received money from someone who has been accused of these egregious actions multiple times,” said Plaskett, who represents the U.S. Virgin Islands in the House as a delegate. Her spokesman Mike McQueery later noted the Epstein donations will be given to The Women’s Coalition and The Family Resource Center.

Her initial announcement led to an outcry on social media, with prominent Democratic strategists such as Adam Parkhomenko calling on Plaskett to give the money over to a nonprofit organization such as the Rape, Abuse & Incest National Network. Since Epstein pleaded not guilty Monday, Plaskett is the first politician to say she is giving away donations from Epstein.

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Deutsche severed ties with Epstein just months ago.

US Probing Deutsche Bank’s Dealings With Malaysia’s 1MDB (ZH)

When it rains inside the halls of Deutsche Bank, the flood is biblical. Just when it seemed that the biggest (if not for long) German bank, already reeling from the biggest mass layoffs since Lehman, couldn’t possibly bear any more bad news, along comes the US government with yet another potentially criminal investigation, this time over Deutsche Bank’s involvement with the sprawling, multibillion-dollar Malaysian development fraud scandal that toppled a prime minister, crippled Goldman Sachs stock and stretched from Hollywood to Wall Street. According to the WSJ, the DOJ is investigating whether the German bank violated foreign corruption or anti-money-laundering laws in its work for the 1Malaysia Development Bhd. fund, or 1MDB, which included helping the fund raise $1.2 billion in 2014 as concerns about the fund’s management and financials had begun to circulate.

So how did Deutsche Bank get thrown into yet another scandal? It turns out that DB was snitched out by former Goldman banker, Tim Leissner, the man who was ground zero in the original 1MDB scandal, and who ended up costing Goldman billions in dollar in market cap as its stock tumbled last year as its role in the biggest Malaysian corruption scandal got exposed, and according to some, cost Lloyd Blankfein his job. As it turns out, Leissner is now cooperating with authorities, and among his “good Samaritan” duties decided to throw the one bank that has more dirt on it than Goldman: Deutsche Bank. As we have reported extensively in the past, prosecutors have been investigating similar issues at Goldman, where Leissner, a former managing director, pleaded guilty last year and admitted to earlier helping siphon off billions of dollars from the fund.

[..] But wait, there’s more! Because roughly at the same time as DB’s potential role in the 1MDB scandal was exposed by the WSJ, both the NYT and Bloomberg reported that the German bank had extended relations with yet another, even more scandalous figure: Jeffrey Epstein. According to NYT, Epstein “appears to have been doing business and trading currencies through Deutsche Bank until just a few months ago.” But as the possibility of federal charges loomed, the bank ended its client relationship with Epstein. It is not clear what the value of those accounts were at the time they were closed. Bloomberg confirms, reporting that “Deutsche Bank severed business ties with Jeffrey Epstein earlier this year, just as federal authorities were preparing to charge the financier with operating a sex-trafficking ring of underage girls [..] “

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Nice take by Ed Harrison. I’m no big fan of these alleged sharp divisions between generations, though.

Obama the Conservative vs Trump the Revolutionary (EH)

I would argue that [Obama] ran for President in 2008 on a slogan – Change You Can Believe In – which very much fits his generation, late baby boom reaching across to the early Gen X’ers. “Change you can believe in” is a moniker designed to evoke a sense of technocratic tweaking, of taking a good system and making it more efficient and more fair for all citizens. It is not a call for revolution. What Obama was saying was essentially, “I am going to take the system we have – the best that man has created – and make it better.” He was not saying, “the system is rigged. The system is broken. And I’m going to burn it down and build up something better.”

Obama’s message was a conservative message. It was a message that was steeped in the status quo, with the change coming only at the margin. It meant continuity in policy and a bevy of tried and trusted policymakers to get us to the next destination. Even Obamacare is a tweak of the existing policy. It is not a fundamentally different healthcare system controlled by different healthcare providers. [..] Donald Trump doesn’t think that way. Norms only matter to him to the degree they move his personal agenda forward. He’s a pretty simple guy in this sense. If a policy choice or a norm helps Donald Trump, then he’s for it. If it hurts him, he’s against it. It’s as simple as that. But, that’s not conservative …at all. Trump may message “Make America Great Again”. But, his process is more about bending and breaking rules, damn the consequences.

None of this is to say that Millennials would support Trump over Obama because they want change. It’s more that Obama’s ‘change you can believe in’ approach was a very incremental, status quo-oriented conservative approach that has disappointed Millennials. They want still more change – not a bend and break the rule kind – but a fundamental systemic change. What does that mean about the next economic downturn? Personally, I think it means that — when people living in precarious at-will employment, with insufficient healthcare coverage, saddled by student debt, unable to purchase homes to build wealth feel the full bore of an economic downturn — they will be willing to burn the system down. They will have no allegiance to the status quo and will vote accordingly.

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Oh, c’mon, wouldn’t it be highly fitting if the Queen were to hammer the final nail into British democracy?

Former UK PM Major Vows To Block Brexit Parliament Suspension (R.)

Former British prime minister John Major vowed on Wednesday to go to court to block his party colleague Boris Johnson from suspending parliament and dragging the queen into a constitutional crisis to deliver a no-deal Brexit. Johnson, the favourite to win a Conservative leadership election and so become the next prime minister, has refused to rule out suspending, or proroguing, parliament to ensure Britain leaves the European Union on Oct. 31 — with or without a deal. That could provoke a constitutional crisis in one of the world’s oldest and most stable democracies because parliament is opposed to a disorderly exit, lacking a transition deal to ease the economic dislocation of leaving the bloc.

While it is essentially up to the prime minister to make the decision, Major, an opponent of Brexit who has not shied away for criticising his party on the issue, said it would require the queen’s blessing. “In order to close down parliament, the prime minister would have to go to Her Majesty the Queen and ask for her permission to prorogue,” he told BBC Radio. “If her first minister asks for that permission, it is almost inconceivable that the queen will do anything other than grant it. “She is then in the midst of a constitutional controversy that no serious politician should put the queen in the middle of. If that were to happen, there would be a queue of people who would seek judicial review. I for one would be prepared to go and seek judicial review.”

Major accused Johnson of hypocrisy for backing Brexit to secure more power for Britain’s parliament, only to propose to sideline lawmakers when it suited him. He said parliament had not been suspended since King Charles I did so during the English Civil War. Charles was eventually executed, in 1649.

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The OPCW killed its own credibility, thoroughly. Disband it.

OPCW’s New Chemical Weapons Team To Launch First Syria Investigations (R.)

A new team established by the global chemical weapons watchdog to attribute blame for the use of banned munitions in Syria will investigate nine alleged attacks during the country’s civil war, including in the town of Douma, sources briefed on the matter told Reuters. The Organisation for the Prohibition of Chemical Weapons (OPCW) was created in 1997 as a technical body to enforce a global non-proliferation treaty. Until now it had been authorised only to say whether chemical attacks occurred, not who perpetrated them. Last June, the Investigation and Identification Team (IIT) was established by the OPCW’s member states during a special session, a move that has brought deeper political division to the U.N. -backed agency.


Now it has identified the locations of its first investigations to be conducted in the coming three years. A document circulated to OPCW member states, a copy of which was seen by Reuters, said the team “has identified a non-exhaustive provisional list of incidents on which it intends to focus its investigative work” between 2014 and 2018. The British-led proposal creating the 10-member team was supported by the United States and European Union, but opposed by Russia, Iran, Syria and their allies. Syria has refused to issue visas to the team’s members or to provide it with documentation, OPCW chief Fernando Arias said in comments to member states published last month.

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Where’s the credibility in this case?

UK, US Claim Iranian Boats Attempt To Seize Tanker In Strait Of Hormuz (ZH)

With the Persian Gulf uncharacteristically quiet in recent days, without any material provocation either real or staged, late on Wednesday CNN reported that five armed Iranian Islamic Revolutionary Guard boats unsuccessfully tried to seize a British oil tanker in the Persian Gulf. There was no independent verification of the report, but instead it was once again sourced to those who stands to gain the most from a way with Iran, namely “two US officials with direct knowledge of the incident.” According to the report, the British Heritage tanker was sailing out of the Persian Gulf and was crossing into the Strait of Hormuz area when it was approached by the Iranian boats.


The Iranians ordered the tanker to change course and stop in nearby Iranian territorial waters, according to the officials. A US aircraft was overhead and recorded video of the incident, although so far a video has not been released. In addition to the US aircraft escort, the UK’s Royal Navy frigate HMS Montrose had been escorting the tanker, and during the confrontation, it trained its deck guns on the Iranians and gave them a verbal warning to back away, which they did. Montrose is equipped on the deck with 30 mm guns specifically designed to drive off small boats. The frigate was in the region performing a “maritime security role” according to a prior notification from UK officials.

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Seen at the inane Defend Media Freedom conference in the UK.

 

 

 

‘Man goes to a psychiatrist. He says, “I keep thinking I’m a dog.” Psychiatrist says, “OK, let’s get you on the couch.” Man says, “I’m not allowed on the couch.”‘

 

 

 

 

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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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.

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