Feb 172022
 


Edouard Manet Osny, The road-menders, Rue de Berne 1878

 

Trudeau’s Full-Fledged Financial Warfare on Freedom Convoy Protesters (CHD)
Canada Says ‘Freedom Convoy’ Seeks Regime Change (RT)
Police Give Ultimatum To Freedom Convoy Truckers (RT)
Trudeau’s Emergency Powers Endanger Everyone’s Rights (Turley)
Legal Voices Have Big Concerns With What Trudeau Has Done (Furey)
16 Governors, 2 Canadian Premiers: Reinstate Truckers’ Vaccine Exemptions (JTN)
Russian Government Mocks Incursion Rumors On Twitter (JTN)
Putin Warns Of ‘Genocide’ (RT)
Kremlin Teases ‘Alternatives’ To SWIFT If Sanctioned, Including Crypto (ZH)
There Was No Exit Plan from “Slow the Spread” (Blumen)
Covid Vaccines During Pregnancy Impact Newborns (RT)
Ivermectin Bill Advances To South Dakota Senate After Passing House (DNN)
Idaho Bill To Protect Doctors, Nurses, Pharmacists On Covid Guidelines (ICS)
US Trending Toward China’s Social Credit System, Enabled by Big Tech (ET)

 

 

 

 

 

 

Oz camp

 

 

“If this is happening in your country, “you [clearly] don’t live in a free country..”

Trudeau’s Full-Fledged Financial Warfare on Freedom Convoy Protesters (CHD)

In a move that gives him “sweeping powers,” Canadian Prime Minister Justin Trudeau invoked — for the first time in history — Canada’s Emergencies Act in response to what political commentator Krystal Ball characterized as a “pretty much completely peaceful” protest. Those powers include giving Canadian banks the ability, without a court order, to “immediately freeze or suspend accounts” of any Canadians’ who have donated $25 or more to the trucker convoy fundraising accounts. In an episode of “Breaking Points With Krystal and Sagaar,” Ball’s co-host, Saagar Enjeti, said the Canadian government also will be “seizing any funds that go towards the protests, including cryptocurrency.”

With the powers granted to the government by the Emergencies Act “they can not only seize and suspend your driver’s license forever, they can also go and take money out of the owner of the truck’s bank account,” Enjeti said. “So we are looking at full-fledged financial warfare on the truckers.” Not all Canadian leaders are on board with this drastic move, said Ball, pointing to a Reuters report that the premiers of Alberta, Manitoba and Saskatchewan opposed the move. Quebec’s Premier François Legault also opposed the move, stating he feared it would “throw oil on the fire,” according to the Montreal Gazette.

Canada’s War Measures Act, the predecessor to Trudeau’s Emergencies Act, was last used in 1970, when Quebec separatists kidnapped French and Canadian diplomats and murdered one of them. “So that was the last time anything similar to this was invoked,” Ball said. “You have here the Canadian Prime Minister, who is our neighbor to the north, invoking the Emergencies Act, declaring all out financial warfare on his own citizens and suspending civil liberties … in a supposedly free and open society,” Enjeti said. If this is happening in your country, “you [clearly] don’t live in a free country,” he argued.

Read more …

Very dangerous bullshit.

Canada Says ‘Freedom Convoy’ Seeks Regime Change (RT)

A senior Canadian security official has said the anti-vaccine-mandate ‘Freedom Convoy’ protest is driven by a desire to overthrow the government, disputing demonstrators who insist they are fed up with the country’s pandemic restrictions. Speaking to reporters on Tuesday, Public Safety Minister Marco Mendicino questioned the protesters’ motives, suggesting that outrage over ongoing vaccine mandates is merely cover for a more sinister agenda. “There have been those who have tried to characterize these illegal blockades about vaccines and mandates and fatigue with the pandemic,” he said. “That is not what is driving this movement right now.”

What is driving this movement is a very small, organized group that is driven by an ideology to overthrow the government. While thousands of protesters have descended on the capital city of Ottawa and elsewhere to peacefully demand an end to the mandates, Mendicino cited a group of 11 demonstrators at a border crossing in Coutts, Alberta who were found to be carrying firearms and ammunition, calling the incident a “cautionary tale.” “The seizure of a significant number of illegal firearms by a group that is very committed to the cause is something that we need to be very sober about,” said Mendicino, an ex-federal prosecutor. The 11 individuals were reportedly taken into custody and charged with weapons offenses on Monday.

The minister’s warning of coup plotters comes one day after the federal government invoked the Emergencies Act for the first time in its history to crack down on the “illegal” protest, which some officials have described as a “blockade.” The Act grants authorities a number of temporary powers, including to compel tow-truck companies to remove the large numbers of semi-trucks now parked across the Canadian capital. To date, some firms have refused to haul away the vehicles.

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“..The official reason police cited for removing the truckers is that they are committing “mischief” by denying the people of Ottawa “the lawful use, enjoyment and operation of their property..”

Police Give Ultimatum To Freedom Convoy Truckers (RT)

On Wednesday, police in the Canadian capital Ottawa handed out flyers to the ‘Freedom Convoy’ truckers, ordering everyone to “leave now” or face arrest under PM Justin Trudeau’s emergency declaration. The truckers and their supporters have demonstrated for almost three weeks, demanding an end to strict Covid-19 mandates. “You must leave the area now. Anyone blocking streets, or assisting others in the blocking of streets, are committing a criminal offense and you may be arrested,” Ottawa police announced shortly before noon on Wednesday. Officers handed out fliers with the same message to the protesters and put them on the windshields of vehicles parked in front of the Canadian parliament.


Protesters face arrest, fines, jail, and could have their commercial or even private drivers’ licenses revoked, the police said. While the warning is almost the same as the one the city’s police issued last Wednesday, the new announcement includes language specifically referring to travel restrictions in the Federal Emergencies Act. The law was invoked by Trudeau on Monday, for the first time in Canadian history – and the law it replaced had only been used during the two world wars and a 1970 terrorism crisis. The crackdown comes just a day after Ottawa Police chief Peter Sloly resigned. The official reason police cited for removing the truckers is that they are committing “mischief” by denying the people of Ottawa “the lawful use, enjoyment and operation of their property” and “causing businesses to close.”

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“..it should not matter if you agree or disagree with the underlying cause..”

Trudeau’s Emergency Powers Endanger Everyone’s Rights (Turley)

For the first time in history, Canadian Prime Minister Justin Trudeau invoked the Emergencies Act to crackdown on what he has described as an attack on democracy itself in Canada. While civil libertarians in Canada have condemned the move as threatening core free speech and associational rights in the country, the American media and legal commentators have largely supported Trudeau in the use of these extreme measures. Indeed, I triggered a tsunami of outrage in stating that Canada could have used such powers to cut off donations for the Civil Rights Movement and arrest Martin Luther King today for such protests. Partly this was due to the distortion of my comments on MLK ever being arrested (as opposed to being subject to arrest under this law).

However, there was also an objection that there is no equivalency between the truckers and the Civil Rights Movement. Again, that is not the point of the reference: it should not matter if you agree or disagree with the underlying cause. The concern is that the Canadian government could declare such an emergency to crackdown on any group engaging in civil disobedience through blockades or occupation protests. It could even happen to Dr. King today if marchers sought to repeat historic marches in Canada. Without meaningful limits under the law, they could also be unilaterally declared threats to Canadian “sovereignty, security and territorial integrity” by Trudeau for acts of civil disobedience.

With the emergency powers, Trudeau can now prohibit travel, public assemblies, conduct widespread arrests, and block donations for the truckers. This also includes freezing bank accounts and ramping up police surveillance and enforcement.

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“..until it decided to invoke the Act, the federal government — along with their provincial and municipal counterparts — failed to do very much at all to attempt to disperse the Ottawa protest..”

Legal Voices Have Big Concerns With What Trudeau Has Done (Furey)

There is no downplaying the magnitude of the decision made by Prime Minister Justin Trudeau to invoke the Emergencies Act. It’s a move that’s never been done before, and it’s not a decision to be made lightly. And yet a growing chorus of legal analysis suggests that the PM did in fact make the decision lightly — that the situation just didn’t warrant it. “The federal government has not met the threshold necessary to invoke the Emergencies Act,” said a statement by Nao Mendelsohn Aviv, executive director of the Canadian Civil Liberties Association (CCLA). “This law creates a high and clear standard for good reason: the Act allows government to bypass ordinary democratic processes. This standard has not been met.” The CCLA added: “Emergency legislation should not be normalized. It threatens our democracy and our civil liberties.”

There are those who claim that civil liberties won’t be violated by Trudeau’s decision because any measures undertaken are subject to the Charter. But that’s not as reassuring as it may first sound. Now that the Emergencies Act has been invoked, a motion to confirm the emergency needs to appear before Parliament within seven sitting days. Until that time, there’s really nothing stopping Trudeau and cabinet from interpreting their new powers however they please. Here’s one of the new things Trudeau can now do: “Regulating and prohibiting public assemblies, including blockades, other than lawful advocacy, protest or dissent.” Now, whatever this means to you is irrelevant; it’s how Trudeau and the Prime Minister’s Office choose to interpret it that matters.

There’s no immediate adversarial review, and there’s no upfront judicial restraint. For example, the new powers Trudeau has given himself to mess with people’s banking who are suspected to be involved in the protests don’t require a court order like they would during usual times. It’s troubling that Trudeau would so readily reach for this lever. “The use of the Act is intended for crises where there are no other options on the table,” explains Aaron Wudrick, a lawyer who works with the Macdonald-Laurier Institute. “Yet until it decided to invoke the Act, the federal government — along with their provincial and municipal counterparts — failed to do very much at all to attempt to disperse the Ottawa protest, making it hard for them to claim they have exhausted all alternatives.”

“Wait, how would the Canadian government, let alone a Canadian bank, know if you voted for Donald Trump? How deep is this rabbit hole Trudeau just put a spotlight on?”

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Zero chance, and that is worrisome. For one thing, all these people have been elected too..

16 Governors, 2 Canadian Premiers: Reinstate Truckers’ Vaccine Exemptions (JTN)

Two Canadian premiers and 16 American governors asked President Joe Biden and Canadian Prime Minister Justin Trudeau on Wednesday to reinstate the vaccine and quarantine exemptions for cross border truck drivers. “We understand the vital importance of vaccines in the fight against COVID-19 and continue to encourage eligible individuals to get vaccinated,” Alberta Premier Jason Kenney wrote in the letter. “However, we are deeply concerned that terminating these exemptions has had demonstrably negative impacts on the North American supply chain, the cost of living, and access to essential products for people in both of our countries.”

Sixteen Republican governors signed the letter along with Saskatchewan Premier Scott Moe. The U.S leaders who signed were Alabama Gov. Kay Ivey, Alaska Gov. Mike Dunleavy, Arkansas Gov. Asa Hutchinson, Georgia Gov. Brian Kemp, Idaho Gov. Brad Little, Iowa Gov. Kim Reynolds, Mississippi Gov. Tate Reeves, Missouri Gov. Mike Parson, Montana Gov. Greg Gianforte, Nebraska Gov. Pete Ricketts, North Dakota Gov. Doug Burgum, South Carolina Gov. Henry McMaster, South Dakota Gov. Kristi Noem, Tennessee Gov. Bill Lee, Utah Gov. Spencer Cox and Wyoming Gov. Mark Gordon.

“The timing of your decision to terminate the vaccine and quarantine exemptions could not have been worse as North America already faces grave supply chain constraints,” the letter said. “These constraints, combined with increasing inflation, place significant burdens on the residents of Canada and the United States. Furthermore, transportation associations have informed us that the lack of exemptions will force thousands of drivers out of the trucking industry, which is already facing a significant workforce shortage. The removal of these exemptions is ultimately unnecessary, and we cannot afford to lose any more truck drivers who transport food and other vital supplies across the border.”

Doug Ford

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“See for yourselves what the collective Western media and officials’ words are worth.”

Russian Government Mocks Incursion Rumors On Twitter (JTN)

The Russian government has taken to Twitter to mock rumors that the country would invade Ukraine on Wednesday. While the Kremlin claimed it would withdraw some troops from near the border of Ukraine, a senior Biden administration official said that Russia has actually deployed about 7,000 troops to the border in addition to the estimated 150,000 already stationed there. The Embassy of Russia in South Africa tweeted a GIF of John Travolta in “Pulp Fiction” looking around an empty front St. Michael’s Monastery in Kiev, with the caption: “16 February 2022. Meanwhile in Ukraine.”

Russia’s Ministry of Foreign Affairs tweeted another GIF Wednesday of a tumbleweed. “Today we mark another day of the ‘start of war with Ukraine,’ which did not happen again, to the Western media outlets’ regret, no matter how hard they whip up the hysteria,” the ministry captioned the GIF. “See for yourselves what the collective Western media and officials’ words are worth.” The Foreign Ministry tweeted a photo with a “FAKE” stamp over a collage of websites claiming that Russia would invade Ukraine. “This week we witnessed the culmination of misinformation campaign, launched by the West, on Russia’s mythical ‘invasion’ of Ukraine,” the ministry wrote. “Meanwhile, [NATO] continues to pump weapons into Ukraine under the information cover they’ve created.”

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“..parliamentarians push for the Kremlin to recognize the independence of Donetsk and Lugansk.”

Putin has resisted this so far. Because of Minsk. But now Ukraine wants to change Minsk. Time for Berlin and Paris to speak out very clearly.

Putin Warns Of ‘Genocide’ (RT)

Fierce fighting that has killed thousands of people in eastern Ukraine, home to a large number of ethnic Russians, constitutes a genocide, President Vladimir Putin has claimed as parliamentarians push for the Kremlin to recognize the independence of Donetsk and Lugansk. Speaking on Tuesday at a press conference at the end of crunch talks with German Chancellor Olaf Scholz, the Russian leader weighed in on the heightened tensions unfolding in the war-torn region. “I can only add that what is happening in Donbass is genocide,” he said. When asked by reporters about whether the push for the recognition of the self-proclaimed Donetsk and Lugansk people’s republics was guided by public opinion and sympathy from Russians, and how such a move could impact a major peace plan, Putin said it was still possible to solve the problems in the region by applying the Minsk agreements.


“We have to do everything to resolve the problem of Donbass, but do it first and foremost based on the possibility of implementing the Minsk agreements,” he explained, adding that he hoped Berlin and Paris would be able to encourage Kiev to fulfill their side of the deal. Scholz, however, expressed concern at the prospect of Donetsk and Lugansk’s recognition, claiming that such a move would violate the protocols and lead to a “political catastrophe.” Putin’s remarks come shortly after lawmakers in his country’s parliament voted overwhelmingly in favor of a resolution, originally put forward by the Communist Party, calling for Putin to recognize the independence of the two regions. MPs said that the move would set the framework for ensuring guarantees and protecting the population, where ethnic Russians make up a large minority, from external threats.

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Russia has been preparing for this for decades.

Kremlin Teases ‘Alternatives’ To SWIFT If Sanctioned, Including Crypto (ZH)

NATO is now talking about Russia’s failure to withdraw troops from near Ukraine even though on Tuesday the Kremlin had announced the start of a draw down of some military units in the south. “Russia’s failure to withdraw can be confirmed through commercial satellite imagery,” NATO chief Jens Stoltenberg said Wednesday. His statement comes less than 24 hours after President Biden addressed the Ukraine situation in a televised speech wherein he alleged that a Russian attack on Ukraine is “still very much a possibility” and that the troop reduction is “not verified yet”. Biden took the opportunity to again warn of “overwhelming international condemnation” and unprecedented sanctions, including “export controls…methods we did not pursue when Russia took Crimea in 2014.”

As part of the “decisive response” the administration has said it has in its arsenal as a maximalist ‘nuclear option’ which would see Russia off from the international SWIFT payment settlement system. But Moscow was quick to respond Wednesday, with Finance Minister Anton Siluanov reaffirming his country has “prepared alternatives” which ensure such US sanctions while yet “unpleasant” would remain “not fatal”. He assured in an online briefing that Russia will fulfill all settlements, and further that “Any restrictions on energy exports will be compensated by corresponding price growth.” “Thank god we have enough forex liquidity and enough forex reserves,” Siluanov told reporters in the briefing. “They say we have a financial shield in the form of gold and forex reserves, budget surplus and [budget] rule, low debt.”

When it comes to the scenario of being cut off from SWIFT, which is being reported as possibly part of a sweeping sanctions package under preparation by US and European officials, Siluanov referenced the his country being able to withstand it, with plans being readied for a “Fortress Russia” approach: “We expect the country’s financial system to continue to focus inwards as part of the “Fortress Russia” strategy and advance digital and fintech sovereignty.” It was reported that as of early February, Russia possesses nearly $635 billion in gold and forex reserves. On the energy question, he affirmed that Russia stands ready to re-route to other markets. The comment about advancing “digital and fintech sovereignty” is particularly interesting in light of President Putin’s October 2021 statements wherein he rattled American financial officials after hinting that cryptocurrencies could be ‘weaponized’ as a dollar replacement.

https://twitter.com/crypto_relevant/status/1493969205523222530

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“..can’t work out what we’re even doing here, but he wants us to keep doing it.”

There Was No Exit Plan from “Slow the Spread” (Blumen)

If we are to believe that a worldwide pandemic grew from an outbreak of twelve people in Wuhan, China to infect nearly the entire world (even indigenous tribes in the Amazon jungle who are by definition quarantined) why would it not do the same when we emerged from our underground fallout shelters? What if through assiduously standing in small circles painted on the floor in grocery stores and wearing underwear on our faces, we succeeded in driving the number of Covid infections down to a very small number? To pick a number, for example, twelve people. Why would the contagion not, in the absence of broader acquired immunity, spread again from that new base of twelve, until eventually reaching all of those remaining uninfected?

It took me some time to give it a name. I settled on “suppression.” The fundamental reason that suppression is not a policy is that it has no exit. For a thing to work it must work within a limited time. If the measures to slow the spread succeeded in slowing it, then what? The nature of the off ramp is the answer to the question, “What happens when we stop doing it?” If the answer is, “It would go right back to what it was doing before,” then there is no exit. During 2020 I had people tell me that we could not end the lockdown because the epidemic would pick up right where it left off and millions would die AND (sometimes the same people ) that if we keep up the restrictive measures for a while then we could stop because the virus would not come back. A bit logic rules out the possibility that the virus could both come back and not come back.

Do we then spend the rest of our lives acting out Covid theater? Dr. Fauci said that he would never shake hands again. Blue check marks fret about quarantining their children. Jenin Younes reflected on a survey in which hypochondriac epidemiologists who are afraid to open their mail explain that they now consider a normal life to be dangerously reckless. Substack author Eugyppius writes about a medical journal editor who “can’t work out what we’re even doing here, but he wants us to keep doing it.”

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CDC claims vaccines protect the unborn.

Covid Vaccines During Pregnancy Impact Newborns (RT)

Babies born to mothers who took the Covid-19 vaccine during their pregnancy are likely to have some form of immunity against the virus, according to the latest research from the US Centers for Disease Control and Prevention (CDC), published on Tuesday. Researchers analyzed data from 379 hospitalized infants – 176 suffered from Covid-19 and 203 were admitted for other reasons. The children were all under six months old between July 2021 and January 2022. Their study found that hospitalization risks were reduced by 61% in children whose mothers were vaccinated during pregnancy. Protection increased to 80% when the mothers got their jabs later in their pregnancy (21 weeks to 14 days before delivery).


The effectiveness of the vaccinations dropped as low as 32% for babies whose mother was inoculated earlier during pregnancy. The authors cautioned people not to read too much into the study, given the small sample size used. “Right now we want to ensure that we are protecting both the mom and the infant,” CDC’s Dana Meaney-Delman told reporters. “So, as soon as a pregnant woman is willing to be vaccinated, she should so ahead and do so.” The CDC says that pregnant women are at greater risk of developing complications due to Covid-19, including risks to their own health, as well as preterm births and stillbirths. It is recommended that anyone expecting a baby or trying to get pregnant should keep up to date with their Covid shots.

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“Supporters say the bill doesn’t mandate medical professionals to prescribe ivermectin, just gives them permission to do so.”

Ivermectin Bill Advances To South Dakota Senate After Passing House (DNN)

The South Dakota House has passed a bill to allow medical professionals to prescribe ivermectin to patients suffering from COVID-19. House Bill 1267 passed Monday on a vote of 40 to 28, South Dakota Broadcasters Association Reports. Its prime sponsor is Rep. Phil Jensen (R, Rapid City). The bill gives medical professionals permission to prescribe ivermectin in accordance with accepted medical standards. If ivermectin is prescribed, medical professionals must provide patients with an information sheet about the drug and subsequent healthcare information.


Opponents of the bill argue the legislature should not be telling doctors what they can or cannot prescribe for their patients. Supporters say the bill doesn’t mandate medical professionals to prescribe ivermectin, just gives them permission to do so. Ivermectin is typically used to kill parasites in animals. Some have advocated for the drug to be used to treat COVID-19. However, the FDA says ivermectin should not be used in this way. The bill will go forward in the legislative process and will next be heard on the Senate floor.

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“.. the pandemic has made off-label use of ivermectin and other unproven drugs a matter of politics and, now, policy.”

Idaho Bill To Protect Doctors, Nurses, Pharmacists On Covid Guidelines (ICS)

A bill in the Idaho Legislature would protect the licenses of doctors, nurses and pharmacists who prescribe or dispense unproven medications for COVID-19. Rep. Gayann DeMordaunt, R-Eagle, presented the legislation Friday to the House Business Committee. The committee voted by a voice vote to introduce the bill. The bill would prohibit licensing boards from taking disciplinary action against doctors, physician assistants and advanced-practice registered nurses when the action is “based solely” on their recommendations to patients regarding COVID-19, including prescribing drugs that are not approved by the U.S. Food and Drug Administration to treat the coronavirus disease. The bill also says pharmacists could not “block or attempt to block” a patient’s access to that unapproved drug.


If a pharmacist does not want to dispense the medication, they could direct the patient to a willing pharmacist, the bill says. Pharmacists’ licenses couldn’t be jeopardized by dispensing the drugs, the bill says. In addition, the bill orders Idaho hospitals, nursing facilities and residential care or assisted living facilities to allow a patient to take the unapproved treatment “if a patient has requested and is prescribed” that drug. The FDA has approved some drugs for other uses — ivermectin for intestinal parasites, for example — but not for COVID-19. While “off label” prescribing is sometimes done by health care providers for other ailments, the pandemic has made off-label use of ivermectin and other unproven drugs a matter of politics and, now, policy.

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“It’s that integration of the government and big tech companies to police speech that I think is troubling and very evocative of the coming totalitarianism..”

US Trending Toward China’s Social Credit System, Enabled by Big Tech (ET)

Big tech companies are doing the bidding of the U.S. government in actions that mirror China’s social credit system, and Americans must recognize what’s happening and take action, according to Kara Frederick, a former Facebook intel analyst and a research fellow at the conservative Heritage Foundation. Frederick recently authored a Heritage Foundation report titled, “Combating Big Tech’s Totalitarianism: A Road Map,” which details how Big Tech has wielded its power to censor Americans. The report proposes a range of actions Americans can take to counter the situation. “It’s that integration of the government and big tech companies to police speech that I think is troubling and very evocative of the coming totalitarianism,” Frederick said on EpochTV’s “American Thought Leaders” program. She calls it a “symbiosis between the government and tech companies.”

She cited a few examples, including in earlier February, when White House press secretary Jen Psaki, at a press conference, urged Spotify and other major tech platforms to take further action to stamp out what the Biden administration deemed as “COVID-19 misinformation.” It’s not the first time Psaki told big tech companies what to do, Frederick noted. In July 2021, Psaki and Surgeon General Vivek Murthy at a press conference urged social media companies to combat what the Biden administration called “health misinformation.” At the time, Psaki singled out 12 people whom she said were “producing 65 percent of anti-vaccine misinformation on social media platforms.”

“All of [the 12 people] remain active on Facebook, despite some even being banned on other platforms, including Facebook—ones that Facebook owns,” Psaki said at the time. A day later, Psaki said, “You shouldn’t be banned from one platform and not others … for providing misinformation out there.” Frederick noted that within a month, all of the users and accounts were booted off the Facebook platform.

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No Spying

 

 

 

 

Mascot
https://twitter.com/fun4laugh/status/1493830290040844288

 

 

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Feb 152015
 


DPC Madison Street east from Fifth Avenue, Chicago Sep 1 1900

‘Finance Is The New Warfare’ Michael Hudson: Has the IMF Annexed Ukraine? (NC)
Ron Paul: ‘Get NATO, Foreign Countries Out Of Ukraine To End Civil War’ (RT)
In Ukraine, The New World Disorder Enters Europe (Observer)
Contrarian US Bond Manager Braces For Big Ukraine Losses (FT)
The War Next Door: Can Merkel’s Diplomacy Save Europe? (Spiegel)
Russia Shrugs Off US Envoy’s ‘Evidence’ Of Russian Troops In Ukraine (RT)
New Anti-Russia Sanctions to Enter Into Force Monday (Sputnik)
Igor Sechin: The Oil Man At The Heart Of Putin’s Kremlin (Independent)
Greece And Creditors Continue Talks Ahead Of Eurogroup Meeting (AFP)
Do Derivatives Make The World Safer? (Guillaume Vuillemey)
Derivatives No Longer Used For Hedging But For “Alpha Generation” (Zero Hedge)
Goldman Warns Over-Supply Means Oil Prices Will Be Much Lower (Zero Hedge)
Libya Warns of Complete Oil Shutdown as Attacks Escalate (Bloomberg)
Start Saving Those Pennies Now, Robert Shiller Warns Investors (CNBC)
UK Tories Told To Shun Wealthy Donors To Avoid Scandal (Guardian)
New York’s Streets Are Suddenly Safer. Why? (Guardian)
GMO Apples Win Approval For Sale In US (Reuters)
Germany Moves To Legalise Fracking (Guardian)
South Africa Bars Foreigners From Owning Land (Reuters)
Planet Earth Is The Titanic, Climate Change The Iceberg (Paul B. Farrell)
Punxsutawney Phil Wanted By Police, Offered Asylum At Ski Resort (ExpressTimes)

“There is no excuse for making this error – except that the error is deliberate, and is intended to lead to failure..”

‘Finance Is The New Warfare’ Michael Hudson: Has the IMF Annexed Ukraine? (NC)

Michael, in a recent interview published in The National Interest magazine, you said that most media covers Russia as if it is the greatest threat to Ukraine. History suggests the IMF may be far more dangerous. What did you mean by that?

HUDSON: First of all, the terms on which the IMF make loans require more austerity and a withdrawal of all the public subsidies. The Ukrainian population already is economically devastated. The conditions that the IMF’s program is laying down for making loans to Ukraine is that it must repay the debts. But it doesn’t have the ability to pay. So there’s only one way to do it, and that’s the way that the IMF has told Greece and other countries to do: It has to begin selling off whatever the nation has left of its public domain; or, to have your leading oligarchs take on partnerships with American or European investors, so that they can buy out into the monopolies in the Ukraine and indulge in rent-extraction. This is the IMF’s one-two punch.

Punch number one is: here’s the loan – to pay your bondholders, so that you now owe us, the IMF, to whom you can’t write down debts. The terms of this loan is to believe our Guiding Fiction: that you can pay foreign debt by running a domestic budgetary surplus, by cutting back public spending and causing an even deeper depression. This idea that foreign debts can be paid by squeezing out domestic tax revenues was controverted by Keynes in the 1920s in his discussion of German reparations. There is no excuse for making this error – except that the error is deliberate, and is intended to lead to failure, so that the IMF can then say that to everyone’s surprise and nobody’s blame, their “stabilization program” destabilized rather than stabilized the economy.

The penalty for following this junk economics must be paid by the victim, not by the victimizer. This is part of the IMF’s “blame the victim” strategy. The IMF then throws its Number Two punch. It says, “Oh, you can’t pay us? I’m sorry that our projections were so wrong. But you’ve got to find some way to pay – by forfeiting whatever assets your economy may still have in domestic hands. The IMF has been wrong on Ukraine year after year, almost as much as it’s been wrong on Ireland and on Greece. Its prescriptions are the same as those that devastated Third World economies from the 1970s onward. So now the problem becomes one of just what Ukraine is going to have to sell off to pay the foreign debts – run up increasingly for waging the war that’s devastated its economy.

One asset that foreign investors want is Ukrainian farmland. Monsanto has been buying into Ukraine – or rather, leasing its land, because Ukraine has a law against alienating its farmland and agricultural land to foreigners. And a matter of fact, its law is very much the same as what the Financial Times reports Australia is wanting to do to block Chinese and American purchase of farmland. The IMF also insists that debtor countries dismantle public regulations againstforeign investment, as well as consumer protection and environmental protection regulations. This means that what is in store for Ukraine is a neoliberal policy that’s guaranteed to actually make the situation even worse. In that sense, finance is war. Finance is the new kind of warfare, using finance and forced sell-offs in a new kind of battlefield.

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“There will be less of a civil war going on there because they will have to worry about their debt. This is an economic matter too. You have to realize that the country is totally bankrupt.”

Ron Paul: ‘Get NATO, Foreign Countries Out Of Ukraine To End Civil War’ (RT)

The best thing for Ukraine is to force NATO, the US, and regional players out of the country, former US congressman and presidential candidate Ron Paul said. Without foreign meddling in the civil war, Kiev will focus on the nation’s economic collapse. “Get the foreigners out of there [Ukraine], get the Europeans out, the US out, get NATO out, and get the Russians out,” Paul said at the International Students for Liberty Conference in Washington on Friday. “There will be less of a civil war going on there because they will have to worry about their debt. This is an economic matter too. You have to realize that the country is totally bankrupt.”

Paul’s speech followed the NSA surveillance whistleblower Edward Snowden’s presentation. “I’m not pro-Putin, I’m not pro-Russia, but I’m pro-facts,” Paul stressed when defending his stance. “Crimea is not exactly a foreign country, according to the Russians. But I’m neutral on that,” the former presidential candidate stated. Paul – a 79-year-old retired doctor who spent nearly three decades in the US Congress representing the state of Texas – reiterated his previous statements, noting that what happened in Ukraine last year was a “coup” that was planned by “NATO, EU” and western Ukrainians. “One thing for sure that we do know, is we [US] had the conversations between our State Department and our ambassador before the coup – who will we put in place. And they planned part of the coup.”

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“..in the foreseeable future there will be no common security system on the continent of Europe, no commonly agreed-upon norms and no rules of behaviour.”

In Ukraine, The New World Disorder Enters Europe (Observer)

After the ceasefire negotiated in Minsk, a peace settlement in eastern Ukraine remains distant. Most of the points in the agreement, including Ukraine’s constitutional reform and the resumption of Kiev’s control over the entire Ukrainian-Russian border, will probably never be implemented. The most one can hope for is that the conflict is frozen and people stop dying. Even that, however, cannot be taken for granted, as continued fighting ahead of the ceasefire’s formal entry into force suggests. If the truce sticks, it will be the first negotiated arrangement in a newly divided Europe, leaving Russia almost alone on the east, with much of the rest of Europe supporting Ukraine. This split can grow much worse if the conflict in Donbass continues. But even if it stops, reconciliation is not on the cards.

This means that in the foreseeable future there will be no common security system on the continent of Europe, no commonly agreed-upon norms and no rules of behaviour. The world disorder has entered the recently most stable and best-regulated part of the globe: Europe. The idea that a combination of western sanctions and the low oil price can bring a change in Kremlin policies, or a change in the Kremlin itself, has so far not been borne out by the facts. Putin remains defiant, the elites do not turn against him, and his popularity among the bulk of the Russian people, despite the hardships they have begun to feel, is at record levels.

These people are not ignorant of the dangers a continued conflict over Ukraine can pose to them, but lay the blame for these on Kiev, Washington and the European leaders. Putin, whether as war leader or a peacemaker, is their champion. At Minsk, he has achieved his minimal goal. Kiev has conceded the failure of its efforts to wipe out the Donbass rebels backed by Moscow. If the ceasefire becomes permanent, the “people’s republics” will be physically safe and can start turning themselves into functioning entities on the models of Transnistria. Russia will need to supply them with more than weapons and humanitarian assistance, straining its resources even more, but there’s hardly an alternative. For Putin, and most Russians, these are “our people”.

Yet, in Minsk, Putin reaffirmed Russia’s official position that Donbass should remain part of Ukraine. This is not a concession. Within a formally unified Ukraine, Donetsk and Lugansk are a protected centre of resistance to the political leadership in Kiev. The situation in the rest of the country permitting, they can expand their influence beyond Donbass and link up with those who, a year after the triumph of the Maidan, have become disillusioned with their government, which is woefully unable to tame corruption and improve the lives of ordinary Ukrainians. Indeed, if the truce in the east of the country holds, the future of Ukraine will depend on how it manages reform and popular discontent.

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Meanwhile, inside the casino…

Contrarian US Bond Manager Braces For Big Ukraine Losses (FT)

Ukraine is widely expected to impose a haircut on private sector creditors under the terms of a forthcoming bailout from the International Monetary Fund. If so, then one investor stands to lose more than any other: Michael Hasenstab, the fund manager renowned for taking unpopular bets on government debt. Through vehicles at Franklin Templeton, the big US money manager based in California, Mr Hasenstab owns more than $7bn of Ukrainian debt, making him the country’s biggest private bondholder. He has previously scored big rewards for his contrarian moves, which included a large purchase of Irish debt in the midst of the eurozone crisis and investments in Hungary and Uruguay.

But as the crisis in Ukraine has escalated his position has suffered, leaving his $69bn Templeton Global Bond Fund and others down approximately $3bn on the investment, according to Bloomberg data, encouraging a flood of client money to leave the fund at the end of last year. Alongside Mr Hasenstab, investments in Ukraine’s eurobonds are split between household financial names, including BlackRock, Allianz and Fidelity, most of which hold no more than 2.5% of any individual Ukrainian bond. In addition to its publicly traded bonds, Ukraine also owes $3bn to Russia, which is due to mature in December. But Mr Hasenstab, who began investing in Ukraine in 2010, clearly has the most at stake.

He was originally drawn by the country s relatively low level of debt to gross domestic product, its promising agricultural sector and high yields available on bonds. Over the years he has topped up his position, reiterating his belief in the long-term potential of Ukraine, thanks in part to its strategic position, geographically and geopolitically, at the crossroads of Europe and the east. In an interview with the Financial Times in June, he said the difficulties that the country faced were political, not economic, and he felt comfortable that tensions would be resolved. ‘Ukraine should have linkages with Europe .. but it should also have linkages with Russia and I think the Nato inclusion was probably one of the largest motivations of Putin’s military aggression and now that is taken off the table’, he said.

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“The situation in Debaltseve plunged the Ukrainian army into a desperate, almost hopeless, position, as the negotiators in Minsk well knew. Indeed, it was the reason the talks were so urgently necessary.” Note that on the map, Der Spiegel pits the Unrainian army vs the Russian one, not the rebels.

The War Next Door: Can Merkel’s Diplomacy Save Europe? (Spiegel)

The problem has four syllables: Debaltseve. German Chancellor Angela Merkel can now pronounce it without difficulties, as can French President François Hollande. Debaltseve proved to be one of the thorniest issues during the negotiations in Minsk on Wednesday night and into Thursday. Indeed, the talks almost completely collapsed because of Debaltseve. Ultimately, Debaltseve may end up torpedoing the deal that was worked out in the end. Debaltseve is a small town in eastern Ukraine, held by 6,000 government troops, or perhaps 8,000. Nobody wants to say for sure. It is the heart of an army that can only put 30,000 soldiers into the field, a weak heart. Until Sunday of last week, that heart was largely encircled by pro-Russian separatists and the troops could only be supplied by way of highway M03. Then, Monday came.

Separatist fighters began advancing across snowy fields towards the village of Lohvynove, a tiny settlement of 30 houses hugging the M03. The separatists stormed an army checkpoint and killed a few officers. They then dug in – and the heart of the Ukrainian army was surrounded. The situation in Debaltseve plunged the Ukrainian army into a desperate, almost hopeless, position, as the negotiators in Minsk well knew. Indeed, it was the reason the talks were so urgently necessary. Debaltseve was one of the reasons Merkel and Hollande launched their most recent diplomatic offensive nine days ago. The other reason was the American discussion over the delivery of weapons to the struggling Ukrainian army.

Debaltseve and the weapons debate had pushed Europe to the brink of a dangerous escalation – and the fears of a broader war were growing rapidly. A well-armed proxy war between Russia and the West in Ukraine was becoming a very real possibility. A conflict which began with the failure of the EU-Ukraine Association Agreement and the protests on Maidan Square in Kiev, and one which escalated with Russian President Vladimir Putin’s annexation of the Crimea Peninsula, has long since become the most dangerous stand-off Europe has seen in several decades. It is possible that it could ultimately involve the US and Russia facing each other across a line of demarcation.

Given the intensity of the situation, Germany and France together took the initiative and forced the Wednesday night summit in Minsk, Belarus. The long night of talks, which extended deep into Thursday morning, was the apex of eight days of shuttle diplomacy between Moscow, Kiev, Washington and Munich. With intense focus during dozens of hours of telephone conversations and negotiations across the globe, the German chancellor helped wrest a cease-fire from the belligerents. It is a fragile deal full of question marks, one which can only succeed if all parties dedicate themselves to adhering to it. Whether that will be the case is doubtful. The Minsk deal is brief respite. Nothing more. But it is a success nonetheless.

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“It’s no secret to anyone that fakes like this are made by a group of US counselors staying in the Kiev building of the Security Council, led by General Randy Kee..”

Russia Shrugs Off US Envoy’s ‘Evidence’ Of Russian Troops In Ukraine (RT)

The Russian Ministry of Defense has branded new claims by the US ambassador to Ukraine as “crystal ball gazing.” The ambassador tweeted pictures of what he said were Russian armed forces in Debaltsevo, eastern Ukraine. On Saturday, the US ambassador to Ukraine, Geoffrey Pyatt, posted on Twitter what he says are satellite photos proving there are Russian artillery systems stationed near the town of Lomuvatka, about 20 kilometers northeast of Debaltsevo. The images could not be immediately verified. Under the tweet, he said: “We are confident these are Russia military, not separatist systems.” The photographs were commissioned by the private Digital Globe satellite company.

“We have failed to understand how those grainy dark patches in the photos published by US Ambassador to Ukraine Geoffrey Pyatt on his Twitter feed could prove anything,” Major General Igor Konashenkov, a spokesman for the Russian Defense Ministry, told journalists later in the day. “Unlike the American intelligence services, Russia’s military [has] never considered crystal ball gazing a good way to check and confirm data.” Konashenkov also disregarded an earlier allegation by State Department spokeswoman Jennifer Psaki, saying he has not heard “anything new.” On Friday, Psaki declared that in addition to the artillery systems and multiple rocket launchers, Russia had also deployed air defense systems to the area near the surrounded railway hub.

“This is clearly not in the spirit of this week’s agreement. All parties must show complete restraint in the run up to Sunday,” Psaki told reporters. In late July, the Russian Ministry of Defense spoke out against images posted by Pyatt on his Twitter account, which alleged that Ukraine had been shelled from Russian territory. “These materials were posted to Twitter not by accident, as their authenticity is impossible to prove – due to the absence of the attribution to the exact area, and an extremely low resolution. Let alone using them as ‘photographic evidence,’” Konashenkov said at the time. “It’s no secret to anyone that fakes like this are made by a group of US counselors staying in the Kiev building of the Security Council, led by General Randy Kee,” he noted.

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Craziness.

New Anti-Russia Sanctions to Enter Into Force Monday (Sputnik)

Maja Kocijancic, European Commission’s spokesperson for foreign affairs, confirmed Friday that the EU will add 19 individuals, including five Russians, and nine entities to the list of sanctions over Ukraine on February 16. The statement was made a day after Russian President Vladimir Putin, together with the leaders of Germany, France and Ukraine, brokered a new deal on the crisis reconciliation in Minsk. “The political decision of additional listings has been taken on January 29. The [EU] Foreign Affairs Council on Monday adopted a legal act so it made it fulfilled this political commitment and has set to give the diplomatic efforts a chance that entering into force will happen on February 16, which is this coming Monday,” Kocijancic said.

The European Union, the United States and other countries have imposed several rounds of sanctions against Russia over its alleged role in the Ukrainian conflict. The restrictions target the country’s defense, energy and finance sectors, as well as a number of individuals. Moscow has repeatedly stressed that it is not militarily involved in Ukraine’s internal affairs. Following the Minsk talks, EU leaders convened for an informal meeting but a new-wave of anti-Russia sanctions was not on the agenda, European Council President Donald Tusk announced. Meanwhile European leaders agreed that the implementation of Thursday’s deal will become a touchstone for further relations with Russia.

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“..The EU imposed a ban in the European Court on accepting claims from Russian entities and individuals that have been subjected to sanctions. [This] has severe consequences, including for European democracy. Is there an independent rule of law?“

Igor Sechin: The Oil Man At The Heart Of Putin’s Kremlin (Independent)

Igor Sechin, the boss of Russian oil behemoth Rosneft and one of the most powerful men in Russia, has declared European sanctions against his giant state-controlled organisation are an illegal affront to democracy. In a rare interview, the man widely seen as being Vladimir Putin’s closest adviser said the world economy faced “severe consequences” as a result of the sanctions, which he said were “absolutely illegal and illegitimate”. He also spoke of how Rosneft – 20% owned by Britain’s BP – will cope with the collapse in the oil price, revealing that the company will be cutting its capital expenditure programme for this year by “approximately 30%”. That will represent a savage reduction on 2014’s spend, said in October to be $14bn-$16bn.

It follows cuts announced recently by other major firms around the world totalling $65bn. Although predicting continued volatility and saying he did not want to get into a “guessing game”, he said the oil price could start to rise again in the final quarter of this year. This was because the current oversupply of oil was insignificant compared with previous oil crises like 1985, so the fundamental supply and demand equation did not justify the current price slump. Moreover, demand is rising, primarily in Asia, and not falling like it was in 1985, he said. He repeatedly expressed his concerns that there could be a global shortage of oil if companies did not return to investing in production and output. If investment levels recovered, next year’s price would be $60-$80 a barrel, he said.

However, if they do not, and the supply-demand equation was not rebalanced, it could bounce back to $100-$110 as the lack of investment in drilling caused a shortfall in production. He talked for the first time of his close bond with the senior management of BP, particularly Bob Dudley, the US-born chief executive who famously fled Russia in fear of his safety during BP’s battle with the oligarch partners of its BP-TNK joint venture. And, speaking after Rosneft’s legal case against EU sanctions was sent from the High Court in London to the European Court of Justice, he declared: “We are fighting: the knot will be untied.” Mr Sechin said Rosneft was prepared for a long haul in its battle to overturn the sanctions, placed on both him and the company by the US and EU authorities in response to the Ukraine conflict.

Asked about the prospects of the time extension of the case’s move from London to the European Court, he said wryly: “Instead of three years, the case may be a year and a half… What can you do? I don’t know if the case will be tried on merit and our claims will be justly reviewed and evaluated.” He attacked the European authorities for the way the sanctions were applied in such a way to ban legal appeals against them: “That is what concerns me most… The EU imposed a ban in the European Court on accepting claims from Russian entities and individuals that have been subjected to sanctions. [This] has severe consequences, including consequences for European democracy. Is there an independent rule of law?”

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It doesn’t look good ahaed of tomorrow’s meeting.

Greece And Creditors Continue Talks Ahead Of Eurogroup Meeting (AFP)

Greek and EU officials met for talks Saturday ahead of a high-stakes show-down over Athens’ demands for a radical restructuring of its massive international bailout programme. “It is not a negotiation but an exchange of views to better understand each other’s position,» an EU official said of the final huddle before next week’s crunch meeting. “The talks are ongoing and the institutions are expected to report at the Eurogroup on Monday,» the official said, without giving further details. No discussions are scheduled for Sunday, with the parties reporting back to their governments to complete preparations for Monday’s meeting of the 19 eurozone finance ministers. The consultations began Friday after new hard-left Greek Prime Minister Alexis Tsipras laid out his plans to his peers, including Europes sceptical paymaster German Chancellor Angela Merkel, at his first EU summit.

Merkel recognised the need for compromise on all sides, but also called for Greece to respect the conditions of the bailout – a position that neatly encapsulated both sides in the stand-off. Dutch Finance Minister and Eurogroup head Jeroen Dijsselbloem said Friday he was «pessimistic» of any quick deal. “The Greeks have sky-high ambitions. The possibilities, given the state of the Greek economy, are limited”, Dijsselbloem said in describing the difficulties in finding common ground. “I don’t know if well get there by Monday,” he added. The EU and the International Monetary Fund bailed Greece out in 2010, and then again in 2012 to the tune of some €240 billion, plus a debt write-down worth more than €100 billion euros.

The rescue may have kept Greece in the eurozone, but it also left Athens with a mountain of debt worth about €315 billion that most analysts do not believe will ever be fully repaid. In return for the bailouts, the then centre-right Greek government agreed to a series of stinging austerity measures, and the much-resented oversight by the EU, IMF and ECB ‘troika to make sure Greece stuck to the terms. Tsipras campaigned and won elections last month on promises to ditch the programme, which he said had wrecked the economy, not helped it, and sent the jobless rate soaring. In a more conciliatory move, however, Athens also said it could live with 70% of the current programme, but that Greece must be allowed leeway on the rest so it can do more to boost the economy, including through additional spending.

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Sure.

Do Derivatives Make The World Safer? (Guillaume Vuillemey)

The interest rate derivatives market is the largest market in the world, with an aggregate notional exposure of 563 trillion USD as of June 2014. Its fast growth over the past 15 years (shown in Figure 1) has raised concerns from policymakers. Currently, no theory provides guidance regarding the effect of the use of derivatives on other decisions by financial intermediaries. In a recent paper, I develop a framework to show how hedging using interest rate derivatives affects:

• Risk management in banking,
• The response of bank lending (both to interest rate and real shocks), and
• The occurrence of bank defaults.

What are interest rate derivatives? Interest rate derivatives are contracts by which two parties commit to exchange future interest rate cash flows, computed as%ages of a given amount – the notional amount. The most popular of these contracts is the interest rate swap, which makes it possible to exchange a fixed rate against a floating rate until the maturity of the contract is reached. Derivative contracts have hedging properties: they make it possible to insure against some future realizations of the short rate, which would otherwise induce losses. One reason why banks are active in the interest rate derivatives market is because most of the cash flows they receive (e.g. loans) or pay (e.g. interbank borrowing) are interest rates whose maturities do not match: they tend to ‘borrow short’ and ‘lend long’. As a consequence of maturity mismatch, changes in interest rates either increase or decrease a bank’s profitability and possibly induce default.

Derivatives and risk management In my framework, hedging is motivated by the existence of financial constraints (as in Froot et al. 1993). Banks aim to manage internal funds so that they have sufficient resources at times profitable lending opportunities arise. A shortage of funds would imply turning to costly external financing sources. Banks optimally engage in risk management either by

• Preserving debt capacity – i.e. by not borrowing up to their collateral constraint and instead keeping cash – or
• Using derivatives to transfer resources to future states where large lending outlays will be optimal.
• My framework features two risks faced by a bank, which give rise to two opposite motives for risk management.

On the liability side, the risk is that the cost of debt financing will be high precisely in states where lending opportunities will be large. This risk gives an incentive to transfer resources from future states where the short rate is low to states where it is high. On the asset side, the risk is that for a given cost of debt financing, the bank will be unable to seize lending opportunities arising from a low short rate, as such states are typically associated with greater optimal lending. This risk gives an incentive to transfer resources from future states where the short rate is high to states where it is low. From the existence of these two opposite forces – which I call respectively the ‘financing’ and the ‘investment’ motives for risk management, – it follows that both pay-fixed and pay-float swaps may be used for hedging. In previous discussions, the fact that banks use pay-float positions – i.e. they get exposed to interest rate spikes – was usually considered a puzzle or as evidence of speculation. I show it is also consistent with genuine hedging.

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CDS are meant to hide losses and wagers.

Derivatives No Longer Used For Hedging But For “Alpha Generation” (Zero Hedge)

Maybe the pervasive “this time is always different” meme has been perpetuated to the point that the market actually believes it, or maybe it’s just old fashioned greed, but whatever the case, market participants (and this means central banks, retail investors, and everyone in between) have an extraordinary inclination towards Einsteinian insanity. Never mind, for instance, that the Fed’s attempts to “smooth out the business cycle” (breaking it in the process) have everywhere and always served only to create bigger and bigger bubbles that have led, invariably, to crashes that are ever more spectacular/devastating – what we need is more intervention by central planners bankers. Forget the fact that throughout the course of human history, minting endless amounts of fiat currency always fails – in the words of new BOJ board member Yutaka Harada, “we just need to print more money.”

And certainly pay no attention (despite the tendency for these types of discrepancies to self-correct) to the divergence between the S&P and trivial things like the U.S. macro picture and/or forward earnings estimates… … the U.S. economy is the cleanest dirty shirt and Jeremy Siegel is probably contemplating Dow 40K as we speak, so just hold your nose and buy.

Given this steadfast refusal to learn from yesterday’s mistakes, it isn’t any wonder that when Citi recently surveyed 43 banks, 29 asset managers, and 31 hedge funds regarding their outlook for the credit derivatives market in 2015, the consensus was that “there seems to be plenty of room and enthusiasm to use derivatives to take leveraged risk.” Phew: for a minute there it looked like leveraged risk taking with derivatives might go the way of the Dodo in the post-crisis world, making Bruno Iksil the last great example of how much fun one can have stomping around in off-the-run CDS indices with depositors’ money.

It’s also comforting to know that among those Citi surveyed, the general consensus was that “…there seems to have been a shift from using derivatives as a hedging tool, to using them more for alpha generation [as] most products are now used more for adding risk and directional views.” So investment professionals and sophisticated market participants are quite eager to take leveraged risk with derivatives with an eye not towards “hedging” (i.e. mitigating risk), but towards “alpha generation” and expressing “directional views” (i.e. gambling). In fact, nearly two-thirds of those surveyed listed either “alpha generation” or “adding risk” as the primary reason for trading single-name and index CDS

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Supply shock.

Goldman Warns Over-Supply Means Oil Prices Will Be Much Lower (Zero Hedge)

Via Goldman Sachs’ Sven Jari Stehn: US Daily: Oil Supply versus Demand: A Market Perspective:
• We use statistical techniques to explore the drivers of the sharp drop in oil prices since last summer. The idea behind our approach is to use the behavior of oil and equity prices to disentangle demand from supply shifts. Intuitively, we would expect that positive demand shocks should push both equity and oil prices up, while positive supply shocks should push equities up and oil prices down.

• Our model suggests that the vast majority of the decline in oil prices until November 2014 was driven by perceptions of improved supply. The continued sell-off in December and January was driven by perceptions of both improving supply and slowing demand. The latest rebound in oil–which started in late January–appears to be driven by a mix of demand and supply.

• Although our approach is subject to a number of caveats, the main conclusion is consistent with our commodities team’s views, who have argued that the decline in oil has been driven by an oversupplied global oil market.

Oil prices have fallen substantially since last summer. Crude West Texas Intermediate (WTI), for example, fell by about 60% between June and January, before starting to rebound somewhat in February. In today’s comment we use statistical techniques to explore the drivers of these changes in the oil price. The idea behind our approach is to use the behavior of oil and equity prices to disentangle demand from supply shifts. Intuitively, we would expect that positive demand shocks should push both equity and oil prices up, while positive supply shocks should push equities up and oil prices down. We therefore call anything that pushes oil and equities in the same direction a “demand” shock and anything that pushes them in opposite directions a “supply” shock.

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“Libya’s state-run oil company warned that it would shut production at all fields..” No it won’t.

Libya Warns of Complete Oil Shutdown as Attacks Escalate (Bloomberg)

Libya’s state-run oil company warned that it would shut production at all fields if authorities in the divided nation fail to contain an escalation of attacks on facilities that has cut crude output to a year-low. “If these incidents continue, National Oil Corp. will regrettably be forced to stop all operations at all fields in order to preserve the lives” of employees, the company said in a statement on its website. “National Oil Corp. urges the Ministry of Defense and the Petroleum Facilities Guard to take the appropriate measures to protect oil sites.” The North African nation’s oil production was reduced by 180,000 barrels a day after a fire at a pipeline that carries crude to the eastern Hariga port, National Oil spokesman Mohamed Elharari said by phone in Tripoli.

Hariga, near Tobruk, has oil left in storage for exports and the last ship to load there was the Greek-flagged Minerva Zoe, he said. Libya, holder of Africa’s largest oil reserves, was producing 350,000 barrels a day in January, Elharari said at the time. The nation may be producing less than 200,000 barrels a day after the pipeline fire. The previous lowest daily average was in March 2014, at 150,000 barrels. A member of OPEC, Libya was producing 1.6 million barrels a day before the 2011 rebellion that ended Muammar Qaddafi’s 23-year rule. National Oil Corp., or NOC as the company is known, has a majority stake in all of Libya’s oil and gas producing ventures. It has a 59% stake in the company that operates Bahi, an oil field that came under attack on Friday, with Marathon Oil, ConocoPhillips and Hess holding the remaining 41%, according to an NOC statement about the attack.

NOC has said it was neutral in the conflict, which is pitting the Islamist-backed government that captured Tripoli last year against the internationally-recognized government that fled to the eastern region. The Petroleum Facilities Guard is loyal to the internationally-recognized administration of Abdullah al-Thinni. The bombing of the pipeline followed attacks on fields in central Libya that Ali al-Hasy, a spokesman for the guards, blames on a local branch of Islamic State, the militants that have proclaimed a caliphate in parts of Iraq and Syria and is being fought by a U.S.-led coalition of Arab and Western nations.

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“Americans will have to rely more heavily on the piggy bank.” Whatever that means. And that’s still provided they have one.

Start Saving Those Pennies Now, Robert Shiller Warns Investors (CNBC)

Nobel Prize-winning economist Robert Shiller has a grim message for investors: Save up, because in the years ahead, assets aren’t going to give you the type of returns that you’ve become accustomed to. In his third edition of “Irrational Exuberance,” which will drop later this month, the Yale professor of economics warns about high prices for stocks and bonds alike. “Don’t use your usual assumptions about returns going forward.” Shiller recommended to investors in a Thursday interview on CNBC’s “Futures Now.” He says that stock valuations look rich.

In fact, Shiller’s favorite valuation measure, the cyclically adjusted price-earnings ratio (which compares current prices to the prior 10 years’ worth of earnings) is “higher than ever before except for the times around 1929, 2000, and 2008, all major market peaks,” he writes in his new preface to the third edition. “It’s very hard to predict turning points in markets,” Shiller said on Thursday. His CAPE measure of the S&P 500 “could keep going up. … But it’s definitely high. By historical standards, it’s up there.” Meanwhile, Shiller said that bond yields, which move inversely to prices, “can’t keep trending down” and “could [reach] a major turning point in coming years.” It’s no surprise, then, that Shiller expects little in the way of asset returns—meaning Americans will have to rely more heavily on the piggy bank.

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That’ll be the day.

UK Tories Told To Shun Wealthy Donors To Avoid Scandal (Guardian)

The Conservative party needs to break its dependence on millionaires, the former Tory chancellor Ken Clarke has told the Observer, amid a growing furore over the tax affairs of the party’s donors. After a week of some of the most intense fighting between the parties in recent years, Clarke said the Conservatives would be strengthened by loosening the hold of rich men on their financial survival. He called on David Cameron to cap political donations and increase state funding of political parties to put an end to damaging scandals and rows. The Conservatives have been rocked in the past week by a potentially toxic combination of allegations of tax evasion by clients of the HSBC bank, whose chairman, Lord Green, became a Tory minister; tax avoidance by party donors; and leaked details of the secretive black and white fundraising ball.

On Saturday, Green stepped down from a financial services lobby group, TheCityUK’s advisory council, in order to avoid “damaging the effectiveness” of its efforts “in promoting good governance”. Clarke said that while he believed the current row over donors and tax avoidance was “artificial and bogus”, such episodic rows over the funding of political parties were feeding into the growing cynicism and distrust of the British political system. He defended Cameron’s decision to attend the fundraising black and white ball in Mayfair, where guests included a series of controversial donors, but said the time had come for the prime minister “to put on his tin hat” and secure further state funding of parties, whatever the short-term public outcry.

Clarke, who was a cabinet minister until last July, said: “I think the Conservative party will be strengthened if it is less dependent on having to raise money from wealthy individuals. But there is no way any leader can avoid raising funds from large gatherings of that kind. “What happens is that the Conservatives attack the Labour party for being ever more dependent on rather unrepresentative leftwing trade union leaders, and the Labour party spends all its time attacking the Conservative party for being dependent on rather unrepresentative wealthy businessmen. In a way both criticisms are true. And the media sends both up. “The solution is for the party leaders to get together to agree, put on their tin hats and move to a more sensible and ultimately more defensible system.”

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Remarkable.

New York’s Streets Are Suddenly Safer. Why? (Guardian)

It is 15 below zero – using what US meteorologists call RealFeel temperature – in Brooklyn’s notorious Marcy Projects. The cold has driven the drug dealers off the streets; police, who have taken to patrolling in fours since two officers were gunned down in a police car last December, are scarce; and at the Ponce Funeral Home the trade is all of the natural-causes kind. Although there was an attempted murder in Queens on Friday that left a man on life-support, New York has enjoyed an almost unprecedented 12-day streak without a homicide. While many pointed to the weather, the embattled New York mayor, Bill de Blasio, sought to improve his strained relationship with the police department, attributing the lull to its hard work.

After months dominated by allegations that US law enforcement is reckless in the use of deadly force, especially when it comes to African-American men, there’s a new criminal-justice narrative: US crime rates are falling, often dramatically, even as incarceration rates begin to level off. The changes are apparent even in Marcy Projects, the neighborhood made famous by homeboy Shawn Carter, aka Jay-Z, who used to describe it in songs such as Murda Marcyville. “Thirty-some odd years ago I’d find dead people on my corner when I came to work,” recalls a community guard who gave her name only as Deborah. In 1990 there were 71 murders here; in 2012 there was just one. “It’s calmed down a lot. Mostly that’s ’cause of the police. They’re more present now.”

The fall in crime in this part of the Bedford-Stuyvesant district is mirrored across the metropolis. In 2014 there were 333 murders in New York City, half the number committed in 2000 and a quarter of the 1,384 recorded in 1985. While crime statistics are difficult to interpret – violent crimes such as rape and assault have not reduced so markedly – the trend overall is repeated across the US. From its peak in 1991, violent crime is down 51%; property crime 4% lower; and murder down 54%. During that same time, incarceration nearly doubled. The US prison population now stands at 2.4 million – up 800% since 1980 – or roughly a quarter of the world’s total. The cost? About $80bn a year. The overall cost of the US criminal justice system is placed at $240bn, or about half of the federal deficit.

But according to What Caused the Crime Decline?, a study published last week by the Brennan centre for justice at New York University school of law, there is no definitive link between falling crime and mass incarceration. The finding runs counter to previous studies claiming that incarceration accounts for as much as a third of the fall in crime. Once violent criminals were taken off the streets in the 1990s, the study claims, an additional 1.1 million low-level or non-violent offenders were jailed without any further benefit. “The rate of incarceration has passed even the point of diminishing returns and now makes no effective difference,” said Oliver Roeder, one of the study’s three authors.

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“This whole thing is just another big experiment on humans for no good reason..”

GMO Apples Win Approval For Sale In US (Reuters)

US regulators have approved what would be the first commercialised biotech apples, rejecting efforts by the organic industry and other GMO critics to block the new fruit. The US Department of Agriculture’s animal and plant health authority, Aphis, approved two genetically engineered apple varieties designed to resist browning that have been developed by the Canadian company Okanagan Specialty Fruits. Okanagan plans to market the apples as Arctic Granny and Arctic Golden, and says the apples are identical to their conventional counterparts except the flesh of the fruit will retain a fresh appearance after it is sliced or bruised. The company’s president, Neal Carter, called the USDA approval “a monumental occasion”.

“It is the biggest milestone yet for us and we can’t wait until they’re available for consumers,” he said. Arctic apples would first be available in late 2016 in small quantities but not widely distributed for some years, Carter said. The new Okanagan apples have drawn broad opposition. The Organic Consumers Association (OCA), which petitioned the USDA to deny approval, says the genetic changes that prevent browning could be harmful to human health and pesticide levels on the apples could be excessive. The OCA would pressure food companies and retail outlets not to use the fruit, said its Director Ronnie Cummins. “This whole thing is just another big experiment on humans for no good reason,” he said.

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Those pesky green Germans do it again…

Germany Moves To Legalise Fracking (Guardian)

Germany has proposed a draft law that would allow commercial shale gas fracking at depths of over 3,000 metres, overturning a de facto moratorium that has been in place since the start of the decade. A new six-person expert panel would also be empowered to allow fracks at shallower levels Shale gas industry groups welcomed the proposal for its potential to crack open the German shale gas market, but it has sparked outrage among environmentalists who view it as the thin edge of a fossil fuel wedge. Senior German officials say that the proposal, first mooted in July, is an environmental protection measure, wholly unrelated to energy security concerns which have been intensified by the conflict in Ukraine. “It is important to have a legal framework for hydraulic fracturing as until now there has been no legislation on the subject,” Maria Krautzberger, president of Germany’s federal environment agency (UBA), told the Guardian.

“We have had a voluntary agreement with the big companies that there would be no fracking but if a company like Exxon wanted, they might do it anyway as there is no way to forbid it,” she said. “This is a progressive step forward.” The draft law would only affect hydraulic fracturing for shale oil and tight gas in water protection and spring healing zones. The tight gas industry made up around 3% of German gas production before the moratorium, and, under the new proposals, could resume fracking in the Lower Saxony region where it is concentrated. Commercial fracking for shale gas and coal bed methane would be banned at levels below 3,000 metres, but allowed for exploration purposes at shallower levels, subject to the assessment of the expert panel.

Environmentalists, however, were alarmed that half of the experts belong to institutions that signed the Hanover Declaration, calling for increased exploration of shale gas in Germany as a way of increasing energy security. “It is clear what these people are going to say,” José Bové, the French Green MEP, told the Guardian. “The panel is not going to be independent, but exactly what the companies are looking for. You don’t need a panel to tell you that shale gas is dangerous. We can see the problems with water pollution, earthquakes and methane emissions. We need people to protest about it before the exploration begins.”

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Nobody should ever be allowed to own land in a foreign country. The land belongs to the people.

South Africa Bars Foreigners From Owning Land (Reuters)

Foreigners will be barred from owning land in South Africa and no individual will be able to own more than 12,000 hectares, the equivalent of two farms, under legislation currently in the works, President Jacob Zuma said on Saturday. Giving more details of a Land Holdings Bill announced this week in a State of the Nation address, Zuma said foreign individuals and companies would be restricted to long-term leases of between 30 and 50 years. If any South Africans owned more than 12,000 hectares, the excess would be liable for seizure by the state, Zuma said, in comments that are likely to upset the large – and still predominantly white-owned – commercial farming sector. “If any single individual owns above that limit, the government would buy the excess land and redistribute it,” he said in a statement.

However, the law will not be applied retroactively for fear of falling foul of the constitution. The legislation would be sent to cabinet for approval soon, after which it will be opened for public consultation and then submitted parliament, Zuma added. Land remains a highly emotive issue in South Africa, where 300 years of colonial rule and white-minority government have left the vast majority of farmland in the hands of a tiny, mainly white, minority. Since the end of apartheid in 1994, the ruling African National Congress has tried to redress the balance through a ‘willing seller, willing buyer’ scheme, but has fallen well short of its target of transferring a third of farmland to blacks by last year.

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“The Koch Empire’s already pledged $889 million to win 2016 election for GOP lobbyists, backed by “No Climate Tax Pledges” that GOP members in Congress must sign to get Koch campaign cash in 2016..”

Planet Earth Is The Titanic, Climate Change The Iceberg (Paul B. Farrell)

Yes, the world is sinking. And the band keeps playing: On the Titanic, first violinist, Big Oil’s Koch Empire. For them capitalism is the solution to everything. Second chair, world’s moral authority, Pope Francis warning that capitalism is the “root cause of the world’s problems.” No harmony. And playing a mean solo flute, Mother Nature, she doesn’t care what the Kochs do, nor what Francis says. Abandon ship? Surrender to the Koch-GOP siren song? Maybe. Pope Francis’s tune is not persuasive enough to win the fight for climate change. True, the pope is the world’s moral authority. But morality — doing what’s right — will never trump the Koch Bros $100 billion bankroll in time to avoid the icebergs we’re all denying. The Koch Empire’s already pledged $889 million to win 2016 election for GOP lobbyists, backed by “No Climate Tax Pledges” that GOP members in Congress must sign to get Koch campaign cash in 2016. They’ve got a winning hand.

Yes, money always trumps morality in today’s raging capitalist society. Yes, your democracy really is for sale to the highest bidder. And yes, everyone has a price … especially senators. But can’t Pope Francis, the world’s moral conscience, lead a resistance movement against Big Oil and the Koch Empire? Save the world? True, he does lead a powerful army of 1.2 billion Catholics worldwide … and, yes, he will soon issue a historic warning in his papal encyclical, making official his position that climate change and global warming are indeed manmade … that capitalism is the root cause of all the world’s deteriorating physical and social environment … that humans are killing their planet.

In recent months the pope has travelled the world warning us capitalism is the enemy of Planet Earth: In capitalism the “worship of the ancient golden calf has returned in a new and ruthless guise in the idolatry of money … lacking a truly human purpose” … our “constant assaults on the natural environment” are “the result of unbridled consumerism” … having “serious consequences for the world economy” … capitalism is morally destructive of the world’s soul and your soul … capitalism will eventually self-destruct the planet and itself.

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“He told several people that Winter would last 6 more weeks, however he failed to disclose that it would consist of mountains of snow!”

Punxsutawney Phil Wanted By Police, Offered Asylum At Ski Resort (ExpressTimes)

Pennsylvania’s most famous forecaster appears to be a controversial figure in New Hampshire, but his supporters are stepping up. The tongue-in-cheek drama appears to have started with a Facebook post Tuesday from police in Merrimack, N.H., saying there is a warrant out for Punxsutawney Phil’s arrest. “We have received several complaints from the public that this little varmint is held up in a hole, warm and toasty,” says the post, which has been shared more than 9,000 times. “He told several people that Winter would last 6 more weeks, however he failed to disclose that it would consist of mountains of snow!”

Merrimack Police Chief Mark Doyle said the joke campaign to get Phil was an attempt to lighten the mood after a series of snowstorms that have buried New England, according to The Associated Press. Others are playing along. Gunstock Mountain Resort in Gilford, N.H., issued a news release Saturday offering asylum to Phil, saying the resort is “thrilled” with snowy conditions it describes as “some of the best snow New Hampshire has seen in years.” “We are concerned with the sensationalist attack on one of America’s true winter heroes,” the release says, adding the resort will work with local authorities to secure the groundhog’s safe passage.

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