Nov 152018
 
 November 15, 2018  Posted by at 10:17 am Finance Tagged with: , , , , , , , , , , ,  


Jean-Francois Millet In the Auvergne 1869

 

UK Brexit Secretary Dominic Raab resigns (BBC)
Final Say Referendum On Table As May Blows Debate Wide Open (Ind.)
Brexit: A Split Cabinet, A Split Party And A Split Nation (G.)
Theresa May’s Brexit Deal Solves Nothing: Open Warfare Is About To Begin (G.)
The Race To 6% Mortgage Rates (WS)
The Fed Will Continue Tightening Until Everything Breaks (Smith)
Amazon’s Long Game Is Clearer Than Ever (Taibbi)
Amazon’s Alexa Might Be A Key Witness In A Murder Case (Vox)
Lockheed Martin Awarded $22.7 Billion Pentagon Fighter Jet Contract (AFP)
Japan Cyber Security Minister Admits He Has Never Used A Computer (AFP)

 

 

UPDATE: Half an hour after I posted this Debt Rattle, two more ministers have evidently resigned: Esther McVey and Suella Braverman. That makes 4 so far today who have left the May government, and 22(!) over the past 2 years.

 

Inevitably, a lot of Brexit stuff today. Somewhat curiously, Mr. Raab ostensibly negotiated the deal May presented yesterday, and because of which he resigned this morning. He won’t be the last. He wasn’t the first either, junior Northern Ireland minister Shailesh Vara was ahead of him.

Meanwhile, May faces Parliament today and the EU has announced a meeting on November 25 to secure the deal. But who will represent the UK there? Because as prominent Tory Anna Soubry said: “Raab’s resignation marks the end of PMs Withdrawal Agreement. This is v serious the PM will clearly be considering her position.”.

UK Brexit Secretary Dominic Raab resigns (BBC)

Brexit Secretary Dominic Raab has resigned saying he “cannot in good conscience support” the UK’s draft Brexit agreement with the EU. Theresa May announced on Wednesday evening that she had secured the backing of her cabinet for the agreement, after a five hour meeting. But several ministers were understood to have spoken against it. And there are suggestions of moves among Conservative backbenchers to force a no-confidence vote in her. Mr Raab – a Leave supporter who was promoted to the cabinet to replace David Davis when he quit in protest at Mrs May’s Brexit plans – is among a group of senior ministers thought to be unhappy with the agreement.

He was closely involved in drafting the agreement, which sets out the terms of Britain’s departure from the EU. In his resignation letter, Mr Raab said he could not support it because the regulatory regime proposed for Northern Ireland “presents a very real threat to the integrity of the United Kingdom”. And, he added, the “backstop” arrangements aimed at preventing the return of a hard Irish border would result in the EU “holding a veto over our ability to exit”. “Above all, I cannot reconcile the terms of the proposed deal with the promises we made to the country in our manifesto at the last election,” he told the prime minister.

The BBC’s Norman Smith said Mr Raab’s departure puts pressure on other cabinet members to quit, raising the prospect of a “domino effect” that could end in the break-up of the cabinet. Remain-backing Conservative MP Anna Soubry tweeted: “Raab’s resignation marks the end of PMs Withdrawal Agreement. This is v serious the PM will clearly be considering her position. My own view is that we need a Govt of National Unity and we need it now.” Earlier on Thursday, Shailesh Vara quit as minister of state for Northern Ireland, saying he cannot support Mrs May’s agreement, which he said “leaves the UK in a halfway house with no time limit on when we will finally be a sovereign nation”.

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But this may turn out to be the main takeaway from May’s deal: opening up the option of a second vote.

Final Say Referendum On Table As May Blows Debate Wide Open (Ind.)

Theresa May has admitted Brexit can be stopped, with her senior officials accepting a new referendum on Britain’s departure from the EU is possible. The unprecedented admission from the top of government came as the prime minister revealed her cabinet had begrudgingly backed the draft Brexit deal struck by negotiators earlier this week. But speaking outside Downing Street, she issued a stark warning to Tory rebels that threats to tear down the proposals and her leadership could mean there is “no Brexit at all”. There are widespread claims that angry backbenchers are preparing to launch a bid to topple the prime minister within days, while speculation that cabinet ministers could still quit is rife.

Eurosceptics are likely to be further enraged by a clause in the 585-page draft deal allowing an unspecified extension to the Brexit transition – with the text simply saying it could run until “20XX”. Ms May emerged from the black door of No 10 to confirm tentative cabinet support following an intense five-hour cabinet meeting, at which almost 30 of her top ministers spoke. In a short statement she targeted a warning directly at those intent on bringing the deal down, saying: “When you strip away the detail, the choice before us is clear.

“This deal, which delivers on the vote of the referendum, which brings back control of our money, laws and borders, ends free movement, protects jobs, security and our union – or leave with no deal, or no Brexit at all.” Asked later how the PM felt there could be ‘no Brexit’, her spokesman said: “You should see that through the prism of parliament, in that the main opposition party has actively said that Brexit can be stopped, there is a People’s Vote movement which we have set out our opposition to, and any other number of important votes that will have to occur between now and the 29th of March.” It is the first time Downing Street has so clearly stated not only that Brexit is not a foregone conclusion, but that a new vote is possible.

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At what point can we label this “chaos”?

Brexit: A Split Cabinet, A Split Party And A Split Nation (G.)

Theresa May will launch a high-stakes battle to sell her Brexit deal to parliament on Thursday, after clinching the support of her deeply-divided cabinet during a fraught five-hour meeting in Downing Street. Emerging from No 10 on Wednesday night, May said she believed “with my head and my heart” that her deal was the best one for the UK – and the only alternatives were no deal, or no Brexit. She said her ministers had taken a “collective” decision, to press ahead with finalising the deal in Brussels, which she will then have to bring back to parliament for approval; but it was clear there had been significant dissent. There were a series of dissenting voices from Brexit supporting ministers, as the meeting overran its intended length by two hours.

One Whitehall source said the environment secretary, Michael Gove, had been the only leaver to speak in favour. “This is a decision that was not taken lightly, but I believe it is firmly in the national interest,” May said, adding that cabinet had held “a long, detailed and impassioned debate”. Cabinet sources said Esther McVey, the work and pensions secretary, made the most impassioned interventions against the draft agreement and warned of chaos should the government lose a meaningful vote in parliament. May twice refused a request from McVey to hold a vote in the room. One cabinet source said that McVey was “shouted down” by the cabinet secretary, Sir Mark Sedwill.

Liz Truss, the chief secretary to the Treasury, said they were “caught between the devil and the deep blue sea”. Up to 11 cabinet ministers were said to have spoken out against the deal. Supportive voices came from the communities secretary, James Brokenshire, and the education secretary, Damian Hinds. [..] The documents confirmed one key concession that has enraged Brexiters: the UK will not be able to unilaterally exit the Irish backstop. Instead that decision would rest with a joint, independent arbitration committee with an equal number of British and EU representatives, as well as outside members. The EU and the UK “decide jointly within the joint committee that [the backstop] … is no longer necessary,” the draft agreement said.

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“..May said that her deal would give us back “control of our money, laws and borders”, while protecting business and jobs. None of that is true. ”

Theresa May’s Brexit Deal Solves Nothing: Open Warfare Is About To Begin (G.)

Now the arm-twisting, the bribery and the for-the-good-of-the-country cajoling of every last MP begins in earnest. Pinned to the wall, each must finally reveal their true colours; some will be principled, some not: Tories must reckon if the future is with Theresa May and her deal, or with Brextremists in their constituencies. Any Labour would-be defector must reckon whether their local party could ever forgive them for voting to keep this government in power. Meanwhile, Brexit mis-selling continues unabated. In her statement this evening, May said that her deal would give us back “control of our money, laws and borders”, while protecting business and jobs. None of that is true. Nowhere is there any evidence to be found in the lengthy withdrawal deal.

For the foreseeable, we are in a customs union we cannot leave without EU permission and our borders are open to EU citizens. We are paying £39bn, business has no certainty for future investment and as for jobs – well, let’s just cross our fingers and hope. May pretends that some distant sunlit trade deal, hazily sketched, will one day emerge from the political declaration that accompanies the deal. Will it be in two years, 10 years, sometime, never? No one knows. All the devilish dilemmas remain. All the impossibilities are as impossible as they were on referendum day – but now they are solemnly written down on paper.

We can’t have frictionless EU trade without a customs union, but that stops us buccaneering the globe for those exclusive deals with Mauritania or wherever else Liam Fox chooses to turn to. Ireland stands where it did: preserving an open border, made possible by the Good Friday agreement, means the UK must stay close to the EU forever. Scotland is righteously rebelling: David Mundell, with his crucial 13 Scottish Tory votes in parliament, will not countenance continued EU rights to fish in our waters; Scotland’s first minister, Nicola Sturgeon, protests at Scotland being denied Northern Ireland’s competitive advantage of effectively staying in the single market – a special status the DUP also objects to. Today takes us closer to fracturing the union.

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Your guess is as good as the IMF’s. Contact your local bookmaker.

IMF Says No-Deal Brexit To Cause 8% Hit To UK Economy (Ind.)

The UK economy could face a long-run hit of up to 8 per cent of GDP in the event of a no-deal Brexit, the International Monetary Fund has warned. That’s the equivalent of around £6,000 per British household. “A scenario in which future trade between the UK and the EU is governed by [World Trade Organisation] rules is estimated to bring about output losses of around 5 to 8 percent compared to a no-Brexit scenario in the long run (with an average of about 6 per cent),” the IMF said. However its economists also warned that this assumed a smooth transition to WTO rules and that the impact of a chaotic no-deal Brexit in the short-term next March could be more severe, leading to a “sharp fall in asset prices”, a “hit to consumer and business confidence” and another sterling depreciation.

“Directors emphasised the importance of a timely agreement with the EU, accompanied by an implementation period to avoid a cliff-edge exit in March 2019 and to allow firms and workers time to adjust to the new relationship”. Delivering its full annual health check on the UK on Wednesday, the Washington-based Fund also said that the British economy would be around 3 per cent weaker even if it successfully secured a “Canada-style” free trade deal with the rest of the European Union “due to lower trade, migration and productivity”.

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6% is very low historically, and lethal today.

The Race To 6% Mortgage Rates (WS)

The average interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) and a 20% down-payment rose to 5.17% for the latest reporting week, according to the Mortgage Bankers Association (MBA) today. This is the highest average rate since September 2009 (chart via Investing.com): Many people with smaller down payments and/or lower credit ratings are already paying quite a bit more. Top-tier borrowers pay less. Thus, mortgage rates have moved a little closer to the next line in the sand, 6%, which is still historically low.

At that point, the interest rate would be back where it had been in December 2008, when the Fed was unleashing its program of interest rate repression even for long-dated maturities via QE that later included the purchase of mortgaged-backed securities (MBS), which helped push down mortgage rates further. Now the Fed is shedding Treasury securities and mortgage-backed securities, and we’re starting to see the impact on mortgage rates: The difference (spread) between the 10-year yield and the interest rate of the average 30-year fixed-rate mortgage has widened sharply.

Since the beginning of the year: The 30-year mortgage interest rate has risen 95 basis points, or nearly 1 percentage point (from 4.22% to 5.17%). The 10-year Treasury yield has risen 71 basis points (from 2.46% to 3.17%) The spread between the two has widened from 176 basis points on at the beginning of January to 200 basis points now. In other words, mortgage rates are climbing faster than the 10-year Treasury yield, now that the Fed has begun the shed mortgage-baked securities. This is expected. It’s part of the QE unwind – it’s part of the Fed exiting the mortgage market and pulling its support out from under it. But 6% is still low:

Home prices in many markets have risen far above the home prices back in 2008 and 2009, and far above even the local peaks during Housing Bubble 1 in those markets now that they have developed into a fully blooming Housing Bubble 2. Home prices as a whole averaged out across the US have surged 11.5% above the crazy peak of Housing Bubble 1:

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Good piece from Brandon Smith.

The Fed Will Continue Tightening Until Everything Breaks (Smith)

Fed propaganda asserts the lie that the bank is audited annually by the Government Accounting Office (GAO), but this is NOT an audit of Fed financial actions and policy initiatives. Rather, it is an audit of minor expenditures. Knowing how many pencils and desks the Fed purchases in a year does not help us to understand the bank’s influence over our economic security. All other audits of the Fed are done internally by the Fed’s own Board of Governors. This is hardly transparent or independent. The only time the public has gained access to even a partial government audit of Fed activities was during the audit of TARP. This alone exposed trillions of dollars in bailouts and overnight loans to various banks and corporations, many of which were foreign.

The GAO did nothing in terms of regulatory action against the Fed after it was revealed that they were funneling trillions in capital into foreign corporations. All they did was make a ledger of the transactions, and remained silent on the rest. I remind readers of this history and the conditions surrounding Fed actions because I want to drive the point home that, for now, the Fed and other central banks dictate the rules of the game. Some may say this has changed with the election of Donald Trump, but I disagree. If anything, as long as Trump is in office, the Fed will chase higher interest rates and steeper balance sheet cuts. They will not stop until markets break. And, the only solution (shutting down the Fed entirely) also comes with a set of extreme fiscal consequences.

There is a wall of cognitive dissonance when some in the public are confronted with this notion. They prefer to believe in a set of standard lies rather than accept that the Fed is a saboteur of our financial system.

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Big Tech’s ultimate power lies in their connections with US intelligence. Dangerous.

Amazon’s Long Game Is Clearer Than Ever (Taibbi)

The Washington Post seemed happy about Amazon’s decision to divide its new headquarters between New York and Crystal City, Virginia, outside of D.C., noting the amazing benefits both communities will receive by the arrival of the web-retail behemoth. The company expects to create 25,000 jobs in Northern Virginia by 2030, and generate $3.2 billion in tax revenue, in addition to investing $2.5 billion. Who better to trumpet the virtues of this job-creating, capital-investing deal than the richest person in modern history, Amazon CEO Jeff Bezos? He sounded pleased as heck to be part of all the wonderfulness.

“We are excited to build new headquarters in New York City and Northern Virginia,” Bezos told the Post — which he owns — adding: “The team did a great job selecting these sites, and we look forward to becoming an even bigger part of these communities.” Rather quickly after the “HQ2” announcement was made, MarketWatch ran a piece pointing out that moving to Northern Virginia might have other benefits for Amazon: HQ2 in the D.C. area could help Amazon snag a $10 billion Pentagon contract. Yes, the company has increased the odds that it will be awarded one of the all-time lucrative defense deals, the $10 billion Joint Enterprise Defense Infrastructure (JEDI) contract, providing cloud services and a platform for Department of Defense operations, instantly becoming one of the biggest federal contractors.

The deal has been a source of controversy for a while. In July, a pair of Republican members of Congress, Steve Womack of Arkansas and Tom Cole of Oklahoma, sent a letter to Glenn Fine, acting Inspector General of the Defense Department. In it, they claimed the contract was essentially pre-delivered to Amazon. Among other things, the JEDI award can only go to a provider that meets Defense Information Systems Agency Impact Level 6, a requirement that has to do with security/secrecy clearances. “The highest level of cloud security” is how one congressional source explained Level 6 to me. Although the lawmakers did not single out Amazon, they did say only one private provider meets that requirement, and numerous reports say that provider is Amazon Web Services.

Vanity Fair ran a piece this past summer noting other deal requirements — like a prerequisite of $2 billion in cloud revenue — ruled out all but a few competitors. “The deal appeared to be rigged in favor of a single provider,” the magazine wrote, adding that Amazon Web Services had ties to Trump Defense Secretary James Mattis. Amazon already had another recent win on the defense-contracting front with the passage of the so-called “Amazon Amendment,” which makes Amazon the go-to portal for the government’s online purchases. This was included in last year’s Defense Authorization Bill. That amendment will cover $53 billion in annual government purchases, enriching the firm even more.

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Why would anyone want one in their homes?

Amazon’s Alexa Might Be A Key Witness In A Murder Case (Vox)

Last week, a judge in New Hampshire ordered Amazon to hand over recordings of an Echo smart speaker found in the home where a double murder took place last year in Farmington. Authorities believe the recordings may provide information that could put the murderer behind bars. If Amazon does hand over the private data of its users to law enforcement, it won’t just involve the tech company in a murder case. It will also be the latest incident to raise serious questions about how much data tech companies collect about their customers with and without their knowledge, how that data can be used, and what it means for privacy.

Last January, Timothy Verrill was charged with first-degree murder by the New Hampshire attorney general in the deaths of two women, Christine Sullivan and Jenna Pellegrini. Police found the women’s bodies in the backyard of Sullivan’s boyfriend, Dean Smoronk, whom local New Hampshire media reported Verrill knew. Verrill was spotted on home surveillance video with both Sullivan and Pellegrini. He was also seen on video hours later buying cleaning supplies at a store and returning to the house. After Smoronk called 911 to report his girlfriend missing, police found the bodies and seized an Amazon Echo speaker in the kitchen, next to the spot where police believe Sullivan was killed.

According to AP, prosecutors believe the Echo might have useful information to make the case against Verrill, whose trial begins May 2019, including details about what happened during and after the murder, such as “possible removal of the body from the kitchen.” [..] While it’s entirely possible the Echo speaker will have nothing recorded that relates to the case, it also may very well have pertinent info. The speaker is initiated with four wake-up words — “Alexa”, “Echo,” “computer,” and “Amazon” — and records after hearing these words, even when it’s not being spoken to. These recordings are then stored on an Amazon server, accessible to the company, and to owners via the Alexa app.

There’s plenty of evidence that the devices record more than what Amazon says. After a woman in Portland found out that her Echo speaker had recorded a conversation she had with her husband and sent it to a random contact, Amazon admitted that its Alexa technology can misinterpret household noises like conversations, TV soundtracks, and music as wake-up calls and start recording. The speaker also starts recording a few seconds before a command is issued, meaning there’s likely more private information in the recordings than customers are aware of.

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US is preparing to sanction Turkey for not bying these boondoggles.

Lockheed Martin Awarded $22.7 Billion Pentagon Fighter Jet Contract (AFP)

The Pentagon on Wednesday announced it had awarded Lockheed Martin a $22.7 billion contract for 255 F-35 fighter jets. Of the aircraft, 106 are destined for the US military: 64 F-35As for the Air Force, 26 F-35Bs for the Marines, and 16 F-35Cs for the Navy, while the rest are destined for foreign customers, the department said in a statement. A major Pentagon supplier, Lockheed Martin will receive a $6 billion advance for the order, due to be completed in March 2023. Most of the work on the jets will be performed in the US, with some will be carried out in countries including Britain and Italy.

Launched in the early 1990s, the F-35 program is considered the most expensive weapons system in US history, with an estimated cost of some $400 billion and a goal to produce 2,500 aircraft in the coming years. Once servicing and maintenance costs for the F-35 are factored in over the aircraft’s lifespan through 2070, overall program costs are expected to rise to $1.5 trillion. According to Pentagon figures from early October, 320 F-35s have been delivered worldwide, including 245 in the US.

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Brilliant.

Japan Cyber Security Minister Admits He Has Never Used A Computer (AFP)

A Japanese minister in charge of cyber security has provoked astonishment by admitting he has never used a computer in his professional life, and appearing confused by the concept of a USB drive. Yoshitaka Sakurada, 68, is the deputy chief of the government’s cyber security strategy office and also the minister in charge of the Olympic and Paralympic Games that Tokyo will host in 2020. In parliament on Wednesday however, he admitted he doesn’t use computers. “Since the age of 25, I have instructed my employees and secretaries, so I don’t use computers myself,” he said in a response to an opposition question in a lower house session, local media reported.

He also appeared confused by the question when asked about whether USB drives were in use at Japanese nuclear facilities. His comments were met with incredulity by opposition lawmakers. “It’s unbelievable that someone who has not touched computers is responsible for cyber security policies,” said opposition lawmaker Masato Imai. And his comments provoked a firestorm online. [..] one Twitter user [..] joked that perhaps Sakurada was simply engaged in his own kind of cyber security. “If a hacker targets this Minister Sakurada, they wouldn’t be able to steal any information. Indeed it might be the strongest kind of security!”

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Nov 052018
 
 November 5, 2018  Posted by at 9:55 am Finance Tagged with: , , , , , , , , , ,  


Jean-Francois Millet The Young Shepherdess 1870-73

 

Iran Vows To ‘Proudly Bypass’ US Sanctions (AFP)
China Says Its Lawful Trade With Iran Should Be Respected (R.)
Iran Hardline Cleric: We’ll “Instantly” Create $400 Oil By Seizing Tankers (ZH)
The Global US Squeeze On Iran Has Started (EM)
Trump’s War on the Fed (Ellen Brown)
David Stockman: Epic Downturn Is Here, Brace For 40% Market Plunge (CNBC)
The Challenge for Deutsche Bank (Whalen)
The Real Economic Gamble Is Too Little Government Borrowing (Ind.)
Theresa May’s Chances Of Striking Irish Border Deal ’50-50′ – EU (G.)
1,400 UK Top Lawyers Call On May To Give Voters Final Say On Brexit Deal (Ind.)
Saudi Sent ‘Cover-Up Team’ To Dispose Of Khashoggi Body (AFP)
Khashoggi’s Sons Appeal For Return Of His Body (R.)
2nd Kavanaugh Accuser Admits She Lied (ZH)
Senate Judiciary Republicans Say No Evidence Found Against Kavanaugh (Hill)

 

 

Iran remembers the sjah, and US involvement in his reign, and the Savak. Americans forget at their own peril. Painting Iran as the aggressor while siding with the Saudi’s against it is not 100% credible, to say the least.

Iran Vows To ‘Proudly Bypass’ US Sanctions (AFP)

Iran’s President Hassan Rouhani said the Islamic republic “will proudly bypass sanctions” by the United States that took effect on Monday targeting the country’s oil and financial sectors. “I announce that we will proudly bypass your illegal, unjust sanctions because it’s against international regulations,” Rouhani said in a televised speech. “We are in a situation of economic war, confronting a bullying power. I don’t think that in the history of America, someone has entered the White House who is so against law and international conventions,” he added. The measures described by Washington as “the toughest sanctions ever” follow US President Donald Trump’s controversial decision in May to abandon the multi-nation nuclear deal with Tehran.

The latest tranche aim to significantly cut Iran’s oil exports – which have already fallen by around one million barrels a day since May – and cut it off from international finance. The United States has given temporary exemptions to eight countries – including India, Japan and Turkey – to continue buying oil in a bid to avoid disturbing their economies and global markets. But US Secretary of State Mike Pompeo vowed to push Iran’s oil sales to zero. “Watch what we do. Watch as we’ve already taken more crude oil off the market than any time in previous history,” he told CBS’s “Face the Nation” on Sunday.


Iranian General Qasem Soleimani posted this

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Clear and concise.

China Says Its Lawful Trade With Iran Should Be Respected (R.)

China said on Monday its lawful trade cooperation with Iran should be respected and expressed regret that the United States re-imposed sanctions on the Middle Eastern country. Speaking at a daily news briefing in Beijing, foreign ministry spokeswoman Hua Chunying did not directly comment on whether China had been granted exemption from the Iran sanctions by the United States. The restoration of U.S. sanctions on Monday targeting Iran’s oil sales and banking sector is part of an effort by U.S. President Donald Trump to force Iran to halt its nuclear and ballistic missile programmes outright, as well as its support for proxy forces in conflicts across the Middle East.

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“The UAE and Saudi Arabia will be destroyed in 60 minutes. After 90 minutes the U.S. will have nothing in this country. And we haven’t even started with Israel. Beware of the day we go after Israel, too.”

Iran Hardline Cleric: We’ll “Instantly” Create $400 Oil By Seizing Tankers (ZH)

Powerful Shia cleric Ayatollah Ahmad Alamolhoda is the Friday Prayer leader in Mashhad, considered Iran’s spiritual capital and among the holiest places in Shia Islam, and sits on the government’s “Assembly of Experts” but has no formal government role or decision-making ability. However, he’s a powerful leader and chief spiritual force behind Iran’s conservative faction who has long been at odds with President Hassan Rouhani. Iranian opposition sources report that Alamolhoda told his followers during his Friday prayer sermon: “If we reach a point that our oil is not exported, the Strait of Hormuz will be mined. Saudi oil tankers will be seized and regional countries will be leveled with Iranian missiles.”

The cleric is further reported to have declared that Iran has the power to “instantly” create conditions for $400 a barrel oil prices if it decides to act in the Persian Gulf. He said as reported in regional opposition media: “If Iran decides, a single drop of this region’s oil will not be exported and in 90 minutes all Persian Gulf countries will be destroyed. The UAE and Saudi Arabia will be destroyed in 60 minutes. After 90 minutes the U.S. will have nothing in this country. And we haven’t even started with Israel. Beware of the day we go after Israel, too. That’s why they want us to round up our missiles.”

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“General Qassem Soleimani has said to President Hassan Rouhani: “You walk and we stand ahead of you. Don’t respond to Trump’s provocations because he is insolent and not at your level. I shall face him myself“

The Global US Squeeze On Iran Has Started (EM)

Today the harshest and highest level economic and energy sanctions that can be imposed on any country are being imposed unilaterally on Iran. The US establishment will try its best to bring the Islamic Republic to its knees and Tehran will do its best to cross the US minefield. Whatever the outcome, Iran will never submit to Washington’s twelve conditions.Iran is not a fledgeling country ready to collapse at the imposition of the first tight sanctions, nor will Iran allow its oil exports to be frozen without reacting. In fact, US and UN sanctions against Iran date to the beginning of the Islamic Revolution and the fall of the Shah in 1979.No doubt the Iranian economy will be affected. Nevertheless, Iranian unity today has reached new heights.

President Trump has managed to bring reformists and radicals together under the same umbrella! Iranian General Qassem Soleimani has said to President Hassan Rouhani: “You walk and we stand ahead of you. Don’t respond to Trump’s provocations because he is insolent and not at your level. I shall face him myself”. Rouhani believes “US policy and its new conspiracy will fail”. All responsible figures in the Iranian regime are now united under the leadership of Imam Ali Khamenei against the US policy whose aim is to curb the regime. Under the previous worldwide sanctions regime, Iran began developing missile technology and precision weapons. Iran has never yielded in support of its allies because these alliances are an integral part of its ideology.

Today, Tehran is not standing alone against the US and is waiting to see what course global sanctions will take before reacting. Officials in Tehran, convinced that Trump will win a second term, are preparing for a long siege. Sayyed Ali Khamenei said his country will never strike any deal with the US and won’t be a party to any future agreement because the US is fundamentally untrustworthy. Iran relies on the unity of its own citizens and on the support of its partners in the Middle East, Europe (a crucial strategic ally), and Asia.

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End the Fed. Is that Trump’s endgame?

Trump’s War on the Fed (Ellen Brown)

[..] perhaps the president’s goal is not to subtly affect Fed behavior so much as to make it patently obvious who is to blame when the next Great Recession hits. And recession is fairly certain to hit, because higher interest rates almost always trigger recessions. The Fed’s current policy of “quantitative tightening”—tightening or contracting the money supply—is the very definition of recession, a term Wikipedia defines as “a business cycle contraction which results in a general slowdown in economic activity.” This “business cycle” is not something inevitable, like the weather. It is triggered by the central bank. When the Fed drops interest rates, banks flood the market with “easy money,” allowing speculators to snatch up homes and other assets.

When the central bank then raises interest rates, it contracts the amount of money available to spend and to pay down debt. Borrowers go into default and foreclosed homes go on the market at fire-sale prices, again to be snatched up by the monied class. But it is a game of Monopoly that cannot go on forever. According to Elga Bartsch, chief European economist at Morgan Stanley, one more financial cataclysm could be all that it takes for central bank independence to end. “Having been overburdened for a long time, many central banks might just be one more economic downturn or financial crisis away from a full-on political backlash,” she wrote in a note to clients in 2017. “Such a political backlash could call into question one of the long-standing tenets of modern monetary policy making—central bank independence.”

And that may be the president’s endgame. When higher rates trigger another recession, Trump can point an accusing finger at the central bank, absolving his own policies of liability and underscoring the need for a major overhaul of the Fed. Trump has not overtly joined the End the Fed campaign, but he has had the ear of several advocates of that approach. One is John Allison, whom the president evidently considered for both Fed chairman and treasury secretary. Allison has proposed ending the Fed altogether and returning to the gold standard, and Trump suggested on the campaign trail that he approved of a gold-backed currency.

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At some point David will be right.

David Stockman: Epic Downturn Is Here, Brace For 40% Market Plunge (CNBC)

David Stockman warns a 40 percent stock market plunge is closing in on Wall Street. Stockman, who served as President Reagan’s Office of Management and Budget director, has long warned of a deep downturn that would shake Wall Street’s most bullish investors. He believes the early rumblings of that epic downturn is finally here. It comes as the S&P 500 Index tries to rebound from its worst month since 2011. “No one has outlawed recessions. We’re within a year or two of one,” he said Thursday on CNBC’s “Futures Now.” He added that: “fair value of the S&P going into the next recession is well below 2000, 1500 — way below where we are today.” This is far from the first time he’s issued a dire warning. But this time, he suggests the latest leg down is an early tremor of the pain that lies ahead.

“If you’re a rational investor, you need only two words in your vocabulary: Trump and sell,” said Stockman, in a reference to President Donald Trump. “He’s playing with fire at the very top of an aging expansion.” According to Stockman, Trump’s efforts to get the Federal Reserve to put the brakes on hiking interest rates from historical lows is misdirected. “He’s attacking the Fed for going too quick when it’s been dithering for eight years. The funds rate at 2.13 percent is still below inflation,” he said. Stockman cited the trade war as another major reason why investors should brace for a prolonged sell-off. “The trade war is not remotely rational,” he said. If the dispute worsens, it “is going to hit the whole goods economy with inflation like you’ve never seen before because China supplies about 30 percent of the goods in the categories we import.”

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The world’s fattest zombie?!

The Challenge for Deutsche Bank (Whalen)

When we first heard news reports about a new investor in Deutsche Bank (DB), we of course assumed that this meant the purchase of new shares and thus an increase in capital. But no, it was merely an “activist investor” taking a stake in existing shares. Is this really news or merely a sign of a top in large bank stocks? The DB common is trading a hair over $10 or just 0.3x book value and has a beta of 1.5. Douglas Braunstein, founder and managing partner of Hudson Executive Capital and J.P. Morgan’s former CFO, said in an interview with CNBC that the firm has taken on the stake over the last few months after studying the stock for a year. We’ve been following DB for a lot longer than that and have great difficulty constructing a bull case for the name. But let’s take a look anyway.

First on the list of concerns is profitability. DB has been struggling for years to find a business strategy to deliver consistent profitability, the key measure of stability for any bank. Through the first nine months of the year, DB delivered net income of less than a €1 billion compared with €1.6 billion a year ago. For the full year 2017 the bank lost €750 million. As yet, no one on the management team – if we may so dignify DB’s executives – have been able to articulate a coherent plan to move forward. Second is capital. DB has just €61 billion or 4% capital to total assets of €1.5 trillion, one of the lowest simple leverage ratios of any major bank worldwide. The bank tries to hide this capital deficiency behind calculations that exclusively use “risk weighted “assets” of just €354 billion. In the bank’s non-GAPP disclosure, there is just €54 billion in tangible capital disclosed for a leverage ratio closer to 3%.

In the Q3 ’18 earnings call, when CEO Christian Sewing said that “we committed to conservative balance sheet management and maintaining a CET1 ratio above 13%,” he was referring to risk weighted assets, not total assets. If one assumes that the entire Basel III/IV framework is a confused mess when it comes to describing risk, then the leverage ratio is what matters. Risk weighted assets is a way to pretend that the rest of the banks in Europe and Asia are solvent. To be fair to DB, most European banks play the game of only referring to “risk weighted assets” in their financial disclosure to investors. The EU bank regulators are entirely complicit in this charade. Indeed, since the end of 2017 DB’s total capital has actually fallen 4%.

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Italy knows. Austerity is under justified pressure. With Merkel leaving, and Juncker too.

The Real Economic Gamble Is Too Little Government Borrowing (Ind.)

With his dad jokes and fetish for spreadsheets, Philip Hammond does not fit the stereotype of a “gambler”. But the Institute for Fiscal Studies (IFS) nevertheless argues that the chancellor rolled the dice in last week’s Budget and took a rather risky wager. Instead of using his lower borrowing projection “windfall” from the official independent forecaster to reduce the deficit more rapidly, Hammond essentially spent it all on the health service, while leaving the overall path of government borrowing more or less unchanged. He could have had a projected budget surplus in five years’ time, but instead there’s still set to be around £20bn of borrowing in 2023-24.

Virtually the entire UK news media took up this “gambler” theme in their headline coverage of the aftermath of the Budget. Yet we should be extremely wary of this framing. Because it obscures the crucial truth that, in economics, the gamble is sometimes borrowing too little, not too much. The IFS, to be fair, was using the phrase in a narrow sense of the chancellor jeopardising his chances of meeting his own self-imposed fiscal rules. Those Office for Budget Responsibility (OBR) borrowing downgrades – whose origins remain mysterious given the official forecaster hasn’t upgraded its nominal GDP or growth forecasts which would be the most obvious explanations for higher than expected tax receipts lately – could very well be reversed in future budgets.

Since 2010, most underlying borrowing revisions have been negative (implying more borrowing than previously expected) rather than positive for the public finances. What the lord of forecasting (in this case OBR director Robert Chote) giveth, he can also taketh away. He even warned as much last week. And what would happen then?

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if only she gives in she can have a deal yesterday.

Theresa May’s Chances Of Striking Irish Border Deal ’50-50′ – EU (G.)

The chances of Theresa May striking a deal with Brussels on the Irish border that she can sell to the cabinet and parliament are said by EU officials to be “50-50” as the fraught talks enter their final stretch. The British negotiating team and the European commission’s taskforce, led by Michel Barnier, are to enter a secretive phase known as the “tunnel” this week, but senior EU figures involved in the talks warned the competing redlines remain “incompatible” in key areas. The British government has set out its stall to make “decisive progress” on the issue of the Northern Ireland backstop by Friday, in the hope that Donald Tusk, the president of the European Council, could then call an extraordinary Brexit summit for the end of the month to seal the deal.

One Whitehall source said, should sufficient ground be made in the coming days, a tentative new date of 22 November is being floated for a meeting of the EU’s heads of state and government. Downing Street has insisted it does not have a deal ready for signoff, in response to reports over the weekend of there being an agreement in the making. “We are not sitting on powder keg knowledge that we have signed a secret deal,” the No 10 source said. “We are not on the cusp of some seismic shift.” Some at the highest levels of government fear that, unless progress is agreed by Tuesday when May sees her senior ministers and parliament breaks for recess, the cabinet may not have a direct input before a summit announcement is made.

“The reality is that we need a November summit more than the EU do,” a government source said. They suggested that a December deal would mean not only a later parliamentary vote but would require spending on no-deal planning and changes to the roles of hundreds of civil service.

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Hard to see how May can avoid a Final Say.

1,400 UK Top Lawyers Call On May To Give Voters Final Say On Brexit Deal (Ind.)

Fourteen hundred of the UK’s top lawyers have urged Theresa May and MPs to back a second Brexit referendum, saying that democratic government “is not frozen in time”. Labour peer Baroness Kennedy QC, former Court of Appeal judge Konrad Schiemann and David Edward, a former judge of the Court of Justice of the European Communities, are among those who have called for a people’s vote on EU membership. In a letter to Mrs May, they say parliament should not be bound by the 2016 vote any more than it should be by the 1975 referendum that took Britain into the EU, especially when there are question marks over its validity.

They wrote that voters are entitled to know what they are voting for, and said: “There was a key difference between 1975 and 2016. The earlier referendum was held after negotiations were complete, so voters knew what they were voting for. “In 2016, the nature of the negotiation process and its outcome were unknown. Voters faced a choice between a known reality and an unknown alternative. “In the campaign, untestable claims took the place of facts and reality.” Human rights specialist Jonathan Cooper, a barrister at Doughty Street Chambers, said: “The current state of the Brexit negotiations is worrying people throughout the UK and the legal profession is no exception to that. “We represent people from across industry and society and we see every day the way the prospect of a catastrophic Brexit deal is already causing real harm.

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First team of 15 to kill him, 2nd team of 11 to get rid of the body 9 days later. Question: what happened during those 9 days? The Turkish probably know.

Saudi Sent ‘Cover-Up Team’ To Dispose Of Khashoggi Body (AFP)

Saudi Arabia deployed a chemist and toxicology expert to Istanbul after the murder of journalist Jamal Khashoggi in an attempt to cover up evidence of the killing, a Turkish newspaper reported on Monday. The murder of the Saudi royal-insider-turned critic inside Saudi Arabia’s consulate in Istanbul has provoked widespread international outrage. Turkish authorities have released gruesome details of a killing that President Recep Tayyip Erdogan has said was a targeted hit. While Riyadh officials have admitted the murder was planned, they have so far declined to release details of the whereabouts of the 59-year-old journalist’s missing body.

According to Turkey’s pro-government Sabah daily, Saudi Arabia sent an 11-member “cover-up team” to Istanbul on October 11, nine days after the Washington Post contributor vanished after entering the diplomatic compound to obtain paperwork for his marriage. The paper said chemist Ahmad Abdulaziz Aljanobi and toxicology expert Khaled Yahya Al Zahrani were among “the so-called investigative team”, which visited the consulate every day until October 17, before leaving Turkey on October 20. Saudi Arabia finally allowed Turkish police to search the consulate for the first time on October 15.

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That might be a tad difficult. you know, between the bone saw and the acid…

Khashoggi’s Sons Appeal For Return Of His Body (R.)

The sons of slain Saudi journalist Jamal Khashoggi on Sunday issued an appeal for the return of their father’s body and said they wanted to return to Saudi Arabia to bury him. In an interview with CNN, Salah and Abdullah Khashoggi said that without their father’s body, their family is unable to grieve and deal with the emotional burden of their father’s death. “It’s not a normal situation, it’s not a normal death at all. All what we want right now is to bury him in Al-Baqi (cemetery) in Medina (Saudi Arabia) with the rest of his family,” Salah Khashoggi said. “I talked about that with the Saudi authorities and I just hope that it happens soon.”

[..] Khashoggi’s body has not been recovered, and Saudi authorities are conducting an official investigation. Saudi Arabian billionaire Prince Alwaleed bin Talal, an international businessman, said on Sunday that the probe will exonerate the country’s leader. Salah Khashoggi on Oct. 24 met in Riyadh with the crown prince and King Salman to receive condolences along with other Khashoggi family members. Salah departed for Washington a day later, and his CNN interview was his first public comments since then. He said King Salman assured him that those involved in Jamal Khashoggi’s murder would be brought to justice.

“We just need to make sure that he rests in peace,” Salah Khashoggi said of his father. “Until now, I still can’t believe that he’s dead. It’s not sinking in with me emotionally,” he said, adding that there has been a lot of “misinformation” about the circumstances of the death.

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At some point we must ask ourselves: what have we been watching?

2nd Kavanaugh Accuser Admits She Lied (ZH)

A Kentucky woman who accused Supreme Court Justice Brett Kavanaugh of rape has been referred to the Department of Justice after she admitted that she lied. The woman, Judy Munro-Leighton, took credit for contacting the office of Sen. Kamala Harris (D-CA) as “Jane Doe” from Oceanside, California. Jane Doe claimed – without naming a time or place – that Kavanaugh and a friend raped her “several times each” in the backseat of a car. Harris referred the letter to the committee for investigation. “They forced me to go into the backseat and took 2 turns raping me several times each. They dropped me off 3 two blocks from my home,” wrote Munro-Leighton, claiming that the pair told her “No one will believe if you tell. Be a good girl.”

Kavanaugh was questioned on September 26 about the allegation, to which he unequivocally stated: “[T]he whole thing is ridiculous. Nothing ever – anything like that, nothing… [T]he whole thing is just a crock, farce, wrong, didn’t happen, not anything close.” The next week, Munro-Leighton sent an email to the Judiciary committee claiming to be Jane Doe from Oceanside, California – reiterating her claims of a “vicious assault” which she said she knew “will get no media attention.” Upon investigation, the Judiciary Committee investigators found that Munro-Leighton was a left wing activist who is decades older than Judge Kavanaugh, who lives in Kentucky. When Committee investigators contacted her, she backpedaled on her claim of being the original Jane Doe – and said she emailed the committee “as a way to grab attention.”

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“The witnesses that Dr. Ford identified as individuals who could corroborate her allegations failed to do so, and in fact, contradicted her..”

Senate Judiciary Republicans Say No Evidence Found Against Kavanaugh (Hill)

Republicans on the Senate Judiciary Committee late Saturday released a 414-page report in which the panel members say they found no supporting evidence for any of the allegations of sexual misconduct made against Supreme Court Justice Brett Kavanaugh ahead of his confirmation. “Committee investigators spoke with 45 individuals and took 25 written statements relating to the various allegations made in the course of the #SCOTUS confirmation process,” the Senate Judiciary Committee tweeted Saturday. “In neither the committee’s investigation nor in the supplemental background investigation conducted by the FBI was there ANY evidence to substantiate or corroborate any of the allegations.”

The committee investigators “found no verifiable evidence that supported” Christine Blasey Ford’s allegation that Kavanaugh pinned her to a bed in the early 1980s and attempted to remove her clothes while covering her mouth with one hand. “The witnesses that Dr. Ford identified as individuals who could corroborate her allegations failed to do so, and in fact, contradicted her,” the report notes. It also states that committee investigators “found no verifiable evidence” to support Deborah Ramirez’s claim that Kavanaugh exposed himself to her at a party when they were both at Yale. The report additionally dismisses allegations from Julie Swetnick, forwarded by lawyer Michael Avenatti.

“Indeed, the evidence appears to support the position that Julie Swetnick and Mr. Avenatti criminally conspired to make materially false statements to the Committee and obstruct the Committee’s investigation,” the report writes. Avenatti and Swetnick have both been referred to the Department of Justice for potential criminal investigations into their behavior during Kavanaugh’s confirmation process. Avenatti has been referred a second time.

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Oct 282018
 
 October 28, 2018  Posted by at 9:32 am Finance Tagged with: , , , , , , , , , , , ,  


Salvador Dali City of drawers – The Anthropomorphic Cabinet 1936

 

OECD Countries’ Retirement Assets Surpass $43 Trillion In 2017 (PiO)
As The Housing Market Stagnates, American Homeowners Are Staying Put (MW)
Economist Slams ‘China Model’ That ‘Inevitably Leads To Confrontation’ (SCMP)
Rand Paul Seeks To Punish Saudi Arabia For Khashoggi Killing (Pol.)
Saudi Arabia Says It Is A Beacon Of Light Fighting ‘Dark’ Iran (G.)
EU To Make Contingency Plans For A Second Brexit Referendum (Ind.)
Germany’s Fragile Coalition Braced For More Upsets (G.)
Russia-Turkey-Germany-France Talks On Syria Kick Off (RT)
“My” Suspended Twitter Account (Paul Craig Roberts)
Mexico Honors Migrants At Day Of The Dead As Caravan Treks North (R.)

 

 

2/3(?!) of it is in the US.

OECD Countries’ Retirement Assets Surpass $43 Trillion In 2017 (PiO)

Retirement assets in OECD countries hit a record $43.4 trillion at the end of 2017, well above the pre-crisis level. The OECD said in its annual Pension Markets in Focus report that assets invested in all funded and private pension systems across 87 jurisdictions grew 12.1% over the year, and increased 53.9% compared with figures at the end of 2007. The report said assets are unevenly distributed worldwide, with less than $200 billion across 78% of the reporting countries, while 8% held more than $1 trillion each: the U.S. with about $28.2 trillion; the U.K. with $2.9 trillion; Canada at $2.6 trillion; Australia with $1.8 trillion; the Netherlands with $1.6 trillion; Japan at $1.4 trillion; and Switzerland with $1 trillion. The remaining 9% of assets, or about $3.9 trillion, are split among the other 29 OECD countries.

The largest amounts of assets are located in some of the biggest economies in the world and with a long history of retirement savings. High investment returns from equity markets partially explain the growth of these assets, said the report, with the real net investment rate of return on retirement assets exceeding 4% on average in 2017. U.S. retirement plans achieved a 7.5% real net investment rate of return in 2017, added the OECD. Funding levels for DB funds improved in the U.S., to 59.6% at end-2017 from 56% a year earlier; but worsened from 2007 figures of 68.6%. The funding ratio was calculated as the ratio of total investment and net technical provisions for occupational defined benefit plans using values reported by national authorities in the OECD template.

U.K. funding levels improved to 90.5% as of the end of 2017, up from 85.8% a year earlier, but down from 108.8% as of the end of 2007. Denmark had the highest funding level of OECD countries in the report, at 135.1%. However, that level was down from 146.1% a year earlier, but improved over the 127.4% funding level as of the end of 2007.

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Bad time to become a real estate agent.

As The Housing Market Stagnates, American Homeowners Are Staying Put (MW)

Housing-market headwinds are keeping American homeowners in their properties for the longest stretches on record, in a sharp distortion of the mobility Americans have for decades prized. Across the country, homes that sold in the third quarter of this year had been owned an average of 8.23 years, according to an analysis from Attom Data Solutions. That’s almost double the length of time a home sold in 2000, when Attom’s data begin, had been owned. It’s partly the long tail of the housing crisis that’s created stagnant conditions and a less dynamic housing market, Attom spokesman Daren Blomquist told MarketWatch.

As of the second quarter, 2.2 million homeowners were still underwater on their mortgages, meaning they owe more to their lending institution than the home is worth, according to data from CoreLogic. Another 550,000 have 5% equity or less, meaning that if that property were to be sold the transaction costs, such as a real-estate agent’s commission, would likely leave the homeowner with nothing. The hypercompetitive market that’s emerged from the wreckage of the crisis is also keeping people in place. Many homeowners have ample equity in their homes, but hesitate to list those homes because they’re worried about finding a property to buy if they do sell. A few others may be trapped by “rate lock” — enjoying the benefits of their ultralow mortgage rates, and unwilling to spend more on financing costs.

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Interesting that he gets to say it.

Economist Slams ‘China Model’ That ‘Inevitably Leads To Confrontation’ (SCMP)

Using the “China model” to explain the country’s economic success over the past four decades is wrong and dangerous, according to an influential Chinese economist, who says this misconception has inevitably led to antagonism between China and the West. Zhang Weiying, one of the most prominent liberal economists in the country and a professor at prestigious Peking University, made the comments in a lecture on October 14. An edited version of his speech was published on the university’s website on Wednesday. The speech is a wholesale negation of the “China model” theory that has gained traction in recent years, as the country becomes more confident in promoting its own development path under President Xi Jinping.

Zhang lashes out at those who attribute China’s economic growth to an exceptional “China model”, which includes a powerful one-party state, a colossal state sector and “wise” industrial policy, saying it is not only factually wrong, but also detrimental to the country’s future. “The theory of the ‘China model’ sets China as a frightening anomaly from the Western perspective, and inevitably leads to confrontation between China and the West,” he said. “The hostile international environment we face today is not irrelevant to the wrong interpretation of China’s achievement in the past 40 years by some economists.”

The economist’s rejection of the “China model” comes as debates about the country’s economic future are heating up. The world’s second largest economy is losing steam – growth is at its slowest pace since 2009 – as it marks 40 years since its market reforms. At home, it is grappling with a mountain of debt, plunging stocks and an ailing private sector. Abroad, tensions over the prolonged trade war with the United States appear to be spilling over into defence, diplomacy and politics. Zhang said the trade war not only reflected conflict between China and the US, but between China and the larger Western world. It also went beyond trade to reflect the clash over value systems, he said.

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Like his dad, strongly anti-war.

Rand Paul Seeks To Punish Saudi Arabia For Khashoggi Killing (Pol.)

Sen. Rand Paul says he’s not going to let Saudi Arabia off the hook after journalist Jamal Khashoggi was killed in Turkey by agents linked to the Saudi government. The Kentucky Republican said Saturday he’s intent on forcing another vote to block billions in arm sales to the autocratic Middle Eastern kingdom and won’t settle for targeted sanctions, seeking to capitalize on negative public sentiment surrounding the Oct. 2 killing. “Are we going to do fake sanctions? Are we going to pretend to do something by putting sanctions on 15 thugs. Or are we going to do something that hurts them?” Paul said in an interview here, explaining that he thinks Saudi Arabia is trying to wait him out until Khashoggi fades from the headlines before announcing the arms sale, which would allow him to try and stop it.

“They know if they have the vote they might lose. So they’re probably not going to make any announcement until this dies down,” Paul said. Rather than focusing simply on Khashoggi, Paul has made a broader critique of Saudi Arabia as supporting “violent Jihad” and a brutal civil war in Yemen. But he’s noticed a substantive shift in the way his colleagues are now talking about the country. [..] Paul, a longtime Saudi critic, has previously forced votes to block the arms sales, but they have failed given a strong hawkish wing in the Senate that wants to keep a key ally against Iranian influence in the Middle East. Paul says that has changed. “We would win the vote right now. It would be a very bad vote if 60, 65, or even 70 people voted to cut the arms sales for now and the president were to veto that, that would be bad,” he said.

President Donald Trump has been more circumspect when discussing arms sales, questioning the wisdom of canceling sales that he believes creates hundreds of thousands of jobs. Paul said he’s tried to convince the president to come to his position, but he’s not there yet. “He says he doesn’t want to disrupt the arm sales. And it’s something we have an honest disagreement on. I don’t think arms are jobs programs,” Paul said. He said their “discussions aren’t really that much that back and forth.” [..] Paul also broke further with the president on foreign policy. He called it a “terrible idea” for the United States to back away from nuclear and weapons agreements with Russia and said he’s asked Trump to appoint nuclear negotiators in a bid to preserve the NEW START treaty and the INF agreement.

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Not sure how this would help their case at this point.

Saudi Arabia Says It Is A Beacon Of Light Fighting ‘Dark’ Iran (G.)

Saudi Arabia’s foreign minister has described the kingdom as a “vision of light” in the region as it tries to control the fallout from Jamal Khashoggi’s killing – its biggest diplomatic crisis since the 9/11 attacks. After more than two weeks of international outrage over the journalist and dissident’s death, Adel al-Jubeir sought to portray the country as the moral beacon of the Middle East, in stark opposition to Iran, Saudi Arabia’s arch-rival. “We are now dealing with two visions in the Middle East,” Jubeir told a security summit in Bahrain on Saturday. “One is a [Saudi] vision of light … One is [an Iranian] vision of darkness which seeks to spread sectarianism throughout the region. History tells us that light always wins out against the dark.”

Condemning the media coverage of Khashoggi’s killing as “hysterical”, Jubeir rejected a call from Recep Tayyip Erdogan, the Turkish president, to try the 18 suspects in Turkey, stressing that they would be “held accountable” on Saudi soil. [..] Erdogan reiterated during an address to parliament on Friday that Riyadh must disclose the location of Khashoggi’s body and identify who ordered his killing – a sign that Ankara is willing to keep up the pressure on the beleaguered kingdom and its de facto ruler, the crown prince Mohammed bin Salman. [..] Jim Mattis, the US defence secretary, who also spoke at the summit in Manama, said that Khashoggi’s killing had “undermined regional stability”. Washington was considering additional punitive measures against those responsible after issuing visa bans for the suspects in the case, Mattis added.

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5 months left. Nothing decided on.

EU To Make Contingency Plans For A Second Brexit Referendum (Ind.)

The EU’s chief negotiator has been warned to make contingency plans for a second Brexit referendum, as pressure builds to give the public a final say on leaving. Prominent Remain politicians met with Michel Barnier in Brussels this week and said it was time to start “serious contingency planning”, as The Independent’s petition neared one million signatures and the future of Brexit looks increasingly uncertain. In a visit on Friday, Sadiq Khan, the mayor of London, told Mr Barnier that the negotiating period should be extended so Britain could have “time to have a referendum”. The warning comes after 700,000 people took to the streets of London last weekend to make the case for a vote on the final deal.

For there to be time to hold a referendum, the EU would likely have to extend the Article 50 negotiating period, which will automatically expire on 29 March 2019, leaving Britain to slide out with a no-deal Brexit. The calls for an extension came from across a number of parties. Liberal Democrat leader Vince Cable said following a meeting with Mr Barnier on Thursday: “My message to Michel Barnier was clear: it’s time to start serious contingency planning for a People’s Vote. We know the UK government has started making such plans as a result of the growing demand for such a vote, demonstrated by last weekend’s march. “The EU should do the same, because MPs who back the People’s Vote are fast forming the biggest and most cohesive bloc in Westminster.”

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This will have an increasing effect on Europe as a whole. Who’s going to listen to Merkel as she’s fading at home?

Germany’s Fragile Coalition Braced For More Upsets (G.)

[..] voters in the central state of Hesse have the power to deliver a second electoral upset within a fortnight to Germany’s embattled ruling parties, potentially plunging both into fresh crises. The regional election is seen as decisive for the future of Merkel’s rickety coalition government. Last-minute polling showed support plummeting for both her Christian Democrat Union (CDU) and coalition partner the Social Democrats (SPD) in a swing state traditionally seen as a bellwether for national politics. Both parties were predicted to drop 10 points each since the state’s last regional election in 2013. Such a trouncing would come on the heels of a disastrous result in Bavaria that was widely seen as a protest against the failings of the Berlin government.

“None of the parties are there for us,” said Müller, who has voted for both CDU and SPD in the past, but was still undecided. “What should I do? I have to vote, it’s my duty to stop the far right getting into power. But I also know I won’t be heard. I can vote for whoever I like; the politicians will still do whatever they want.” Hesse, home to Germany’s financial centre, Frankfurt, has been governed by CDU-led coalitions for the past two decades. But polls have the party nosediving to 28%, a result that would end the state’s CDU-Green coalition and leave a question mark over the future of CDU state premier and close Merkel ally Volker Bouffier.

With tensions running high in the CDU, mutinous members have implied that if Bouffier falls, it may cost the chancellor vital votes when she stands for re-election as party leader at its conference in early December. But Merkel, who joined Bouffier on the campaign trail last week, was at pains to play down the significance of the regional vote for her party, government and chancellorship. “Hesse, and what happens here, is being watched and considered from far beyond Germany’s borders,” Merkel told supporters on Thursday in Fulda. “I want to point out once again that on Sunday the vote is about Hesse. Afterwards we’ll talk again about Berlin.”

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The fighting in Idlib must cease. It’s the only outcome.

Russia-Turkey-Germany-France Talks On Syria Kick Off (RT)

Leaders of Russia, Turkey, Germany and France have gathered in Istanbul to discuss the Syrian peace process. While the outcome of such tricky talks is hard to predict, the new format appears to be, at least, quite refreshing. Russia’s President Vladimir Putin, his French counterpart Emmanuel Macron and German Chancellor Angela Merkel arrived in Istanbul on Saturday to talk Syrian reconciliation. The host, Turkey’s leader Recep Tayyip Erdogan, has put high expectations on the gathering. “The whole world is watching this meeting. I hope, that the hopes will be met,” Erdogan said, while opening the summit. The four leaders are also expected to be joined by UN Special Envoy to Syria Staffan de Mistura.

The four-way summit is an entirely new format of talks on the war-torn country, which has endured years-long conflict. The meeting is all about testing the waters and trying to bring about different formats of talks on Syria, as if the leaders were to “synchronize watches” rather than reach a breakthrough, Kremlin spokesman Dmitry Peskov said. Similar opinion was expressed by Germany, with Foreign Minister Heiko Maas stating that the summit effectively brings different sides together for the very first time. “There are Russians and Turks, who have been at the same format of talks with Iran. And on the other side, there are French and us, who partake in the so-called ‘Friends of Syria’ group,” Maas said ahead of the event, adding that having a “joint conversation” was a viable idea.

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Turns out, the story was a bit different than many reported.

“My” Suspended Twitter Account (Paul Craig Roberts)

Dear Readers:

It is all over the internet and international media that Twitter has suspended my account. This is not the case. I do not use social media. I discovered that a Twitter account was operating in my name. I requested that the account be taken down. I have no recollection of giving anyone permission to operate a Twitter account in my name. I am still extremely busy trying to help family relatives impacted by Hurricane Michael and could only quickly look at the Twitter postings. It seemed to be mainly innocuous, consisting of links or quotes from my posted columns.

However, there were other things, such as appeals that money be sent to Alex Jones InfoWars and other things. I have no objection to Alex Jones. However, my webmaster and I were concerned that things could be posted that would be dangerous for me, such as libel, death threats to others, and so forth. To repeat, the account was closed at my request. To repeat, I do not use social media.

Paul Craig Roberts

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There’s something cynical about this, but also beautiful.

Mexico Honors Migrants At Day Of The Dead As Caravan Treks North (R.)

Mexico City dedicated its Day of the Dead parade on Saturday to migrants, just as thousands of Central Americans were trekking from the country’s southern border toward the United States under pressure from U.S. President Donald Trump to disband. In an a twist on the traditional dancing skeletons and marigold-adorned altars making their way down the capital’s main thoroughfare, the parade also referenced Mexicans who emigrated as well as foreigners who settled in the capital. “The parade… is dedicated to migrants, who in their transit to other countries have lost their lives, and who in their passing through the country have contributed to a true ‘Refuge City,’” the Mexico City government said on Twitter.

In one segment, gray metallic panels representing the Mexico side of the U.S. border wall were stenciled with the phrase, “There are also dreams on this side.” Other presentations honored exiled Spaniards, Argentineans and Jews, Mexico City’s culture ministry said. The event ahead of Nov. 1 and 2, when Mexicans observe Day of the Dead in town squares, homes and cemeteries, coincided by chance with the journey of a migrant caravan traveling into Mexico, many fleeing violence and poverty in Honduras and Guatemala.

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