Mar 172019
 


M.C. Escher Gravitation 1952

 

Steele Admits He Used Unverified Information In Dossier (CNN)
Even A Vacuous Mueller Report Won’t End ‘Russiagate’ (Stephen Cohen)
The Blind Leading the Deaf and Dumb (Kunstler)
EU War-Gaming For Fall Of May’s Government (O.)
Disbelief In Europe At Another Lost Brexit Week (G.)
‘White Men Are Considered Everyone’: Ocasio-Cortez (G.)
Deadly Air In Our Cities: The Invisible Killer (O.)
Good Enough To Eat? The Toxic Truth About Modern Food (G.)

 

 

Travel day yesterday, back to Athens. So timing’s a bit skewed. And the content. Just the essentials today. And there was raki last night, and friends. Lots of both. In a city that is fast turning, like Barcelona, Amsterdam et al, into Disneyland. Because of Airbnb. Stories of Greek people getting evicted from their apartments because the Greek owner sold the building to a Chinese who will Airbnb it, not rent out to locals. And then a good friend saying that’s good because renting out his apartment this way is the only way to pay for his aunt’s health care bills. Apartment prices have tripled in 2 years, but you can’t even find one.

A city is nice because of the people who live there. Airbnb chases them out. And then you wind up with an empty shell. Disneyland.

 

Saw a sign held up in a demo concerning Christchurch that said: “We won’t tolerate hate”. And I thought: maybe you should. Maybe, if you protest intolerance, the response is not more intolerance. Like Martin Luther King could have said: You can hate me, but I refuse to hate you back.

 

 

It’s Alice and the looking glass. The entire Mueller probe was based on a dossier based on nothing but a bunch of nutcase comments at a CNN site. And this is CNN commenting on that. The dossier was paid for by the losing Democrat party, and there are close links to FBI and DOJ. And you think Trump’s the bad guy in this story.

On top of that, Steele hadn’t been in Russia in many years, and used equally unverified ‘info’ from Moscow. And the US hunts its own president for 2 years based on it.

“Steele says he used unverified information to support details about web company in dossier..”

Steele Admits He Used Unverified Information In Dossier (CNN)

A newly released snippet of a deposition with the ex-British spy behind the Trump-Russia dossier describes some of the steps he took to verify information he collected for it in 2016, including pulling from a user-generated citizen journalism initiative by CNN, iReport, which no longer operates. Christopher Steele admitted during a lawsuit deposition that he used internet searches and unverified information to support details he had gathered about a web company mentioned in the dossier, according to select pages of his deposition transcript that a federal court unsealed this week.

But Steele limited his answers about how he verified information about the web companies who claimed they were defamed. He would not explain, for instance, what else he did or sources he used to verify information in the dossier about Webzilla, its parent company XBT and their Russian founder Aleksej Gubarev, who were named in the dossier. He did not have to describe during the deposition all the steps he took to collect or check the information because of terms set by the court.

But he could talk about web searches — and how he didn’t realize one article he found in his research was a submission from a “random person,” as an attorney pointed out, rather than a news report. Steele testified that he used a 2009 article from the crowdsourced news site CNN iReport, for instance, to check information he learned about Webzilla, one of the three related entities that had sued BuzzFeed for defamation. BuzzFeed published the dossier in full — explaining they hadn’t verified it — on January 10, 2017, after CNN reported that President Barack Obama and President-elect Donald Trump had been briefed about it.

Read more …

Yes, that Stephen Cohen. Who is still America’s no. 1 expert on Russia, professor emeritus of Russian studies, history, and politics at New York University and Princeton University. That Stephen Cohen

Even A Vacuous Mueller Report Won’t End ‘Russiagate’ (Stephen Cohen)

Too many reputations and other interests are vested in the legend for it to vanish from American politics anytime soon. Russiagate allegations that the Kremlin has a subversive hold over President Trump, and even put him in the White House, have poisoned American political life for almost three years. Among other afflictions, it has inspired an array of media malpractices, virtually criminalized anti–Cold War thinking about Russia, and distorted the priorities of the Democratic Party. And this leaves aside the woeful impact Russiagate has had in Moscow—on its policymakers’ perception of the US as a reliable partner on mutually vital strategic issues and on Russian democrats who once looked to the American political system as one to be emulated, a loss of “illusions” I previously reported.

• The story of a “Kremlin puppet” in the White House is so fabulous and unprecedented it is certain to become a tenacious political legend, as have others in American history despite the absence of any supporting evidence.

• The careers of many previously semi-obscure Democratic members of Congress have been greatly enhanced—if that is the right word—by their aggressive promotion of Russiagate. (Think, for example, of the ubiquitous media coverage and cable-television appearances awarded to Representatives Adam Schiff, Eric Swalwell, and Maxine Walters, and to Senators Mark Warner and Richard Blumenthal.) If Mueller fails to report “collusion” of real political substance, these and other Russiagate zealots, as well as their supporters in the media, will need to reinterpret run-of-the-mill (and bipartisan) financial corruption and mundane “contacts with Russia” as somehow treasonous. (The financial-corruption convictions of Paul Manafort, Mueller’s single “big win” to date, did not charge “collusion” and had to do mainly with Ukraine, not Russia.) Having done so already, there is every reason to think Democrats will politicize these charges again, if only for the sake of their own careers. Witness, for example, the scores of summonses promised by Jerrold Nadler, the new Democratic chair of the House Judiciary Committee.

• Still worse, the top Democratic congressional leadership evidently has concluded that promoting the new Cold War, of which Russiagate has become an integral part, is a winning issue in 2020. How else to explain Nancy Pelosi’s proposal—subsequently endorsed by the equally unstatesmanlike Senate Republican leader Mitch McConnell, and adopted—to invite the secretary general of NATO, a not-very-distinguished Norwegian politician named Jens Stoltenberg, to address a joint session of Congress? The honor was once bestowed on figures such as Winston Churchill and at the very least leaders of actual countries.

Trump has reasonably questioned NATO’s mission and costs nearly 30 years after the Soviet Union disappeared, as did many Washington think tanks and pundits back in the 1990s. But for Pelosi and other Democratic leaders, there can be no such discussion, only valorization of NATO, even though the military alliance’s eastward expansion has brought the West to the brink of war with nuclear Russia. Anything Trump suggests must be opposed, regardless of the cost to US national security. Will the Democrats go to the country in 2020 as the party of investigations, subpoenas, Russophobia, and escalating cold war – and win?

Read more …

“..a Democratic Party Bereavement Ritual..”

The Blind Leading the Deaf and Dumb (Kunstler)

In his new book, Peak Trump, David Stockman called the RussiaGate affair “a Democratic Party Bereavement Ritual,” an excellent diagnosis. The breast-beating and garment-rending has gone on for more than two years, inducing a generalized hysteria that has made it impossible for this country to govern itself, and opening the door to some really serious mischief as the party’s new Jacobin wing sets up for the advent of an American failed state.

All of this is a prelude to equally serious tribulation roaring down the two-lane pike of finance and economy that will combine with the engineered destruction of institutional authority from RussiaGate to bring on the greatest crisis since the Civil War. The money is not there to perform any of the miracles of redistribution promised by AOC and Bernie Sanders — unless the Federal Reserve is coerced into printing a whole lot more money out of thin air, in which case the consequence will be that everybody gets to have a lot of worthless money that has lost its value.

If congress wants to play committee games, it might want to investigate how the USA is going to rack up another $2 trillion in debt to finance its operations before the 2020 election. They’re the ones who will have to vote to allow that to happen. The disorders of money coming down in the months ahead, RussiaGate aside, are sure to discredit both political parties. I doubt that Mr. Trump will survive it politically and the revenant Republican Party behind him is so devoid of credible leadership that it could dissolve altogether like an evening mist preceding the cold darkness of night. By then, the whole American political establishment will be, as Mencken quipped, like a blind man stumbling around a dark cellar looking for a black cat that isn’t there.

Read more …

If war-gaming is the same as preparing, sure. Maybe May should war-game a bit more.

EU War-Gaming For Fall Of May’s Government (O.)

The EU is war-gaming for the fall of Theresa May amid a complete collapse in confidence in the prime minister after a week of chaos over Brexit, a leaked document seen by the Observer reveals. In the run-up to a crucial summit of EU leaders where May will ask for a delay to Brexit, Brussels fears there is little hope that she will succeed in passing her deal this week and is preparing itself for a change of the guard in Downing Street. A diplomatic note of a meeting of EU ambassadors and senior officials reveals an attempt to ensure that any new prime minister cannot immediately unpick the withdrawal agreement should May be replaced in the months ahead. Some hardline Brexiters want to replace her with a leader who will back a harder split with Brussels.

According to the minutes, the European commission’s secretary general, Martin Selmayr, who is known as a master of strategy, asked: “Imagine that they have a new Brexit secretary or prime minister – what then? Article 50 has been agreed and the process has ended. It must be clear that the starting point is not a renegotiation of the withdrawal agreement.” The moves in Brussels come before another critical and highly unpredictable week in the Brexit process in which May is expected to launch her third attempt to secure support for her beleaguered deal. The Observer understands that Labour will use the opportunity to offer its most strident support yet for a second referendum, by voting for a plan drawn up by two Labour backbenchers to put May’s deal to a public vote.

Cabinet ministers remained locked in talks this weekend with the Northern Irish Democratic Unionist party, who are seen as vital in building a narrow majority for May’s deal and who said on Saturday that there were “still issues to be addressed”. And more Tory MPs currently opposing May’s Brexit deal have told party whips they would back it if the prime minister announced she would quit this summer.

Read more …

They are way past disbelief.

Disbelief In Europe At Another Lost Brexit Week (G.)

It was the week in which the EU’s governments had hoped that British common sense might seal the deal, putting a painful first chapter of the Brexit psychodrama to bed. By Wednesday the French daily Le Monde had concluded that the hoarseness of the prime minister’s throat “symbolised the state of a supposedly pragmatic country left voiceless by its incapacity to accept compromise with its neighbours”. For all the forlorn hopes that things might be different this time, leaders across Europe and senior EU officials in their offices in Brussels, watched on with a sinking heart as Theresa May’s deal was rejected again on Tuesday evening, this time by 149 votes, the fourth largest defeat for a sitting government.

The Commons subsequently voted to delay Brexit by at least three months. Mark Rutte, the Dutch prime minister, who has described himself as Britain’s best friend among the 27 EU heads of state and government, was left asking reporters: “What’s the point of whining on for months on end while we have been going around in circles for two years?” There had never been great optimism among the British officials close to the negotiations that things would slot into place, given the EU’s refusal to make changes to the withdrawal agreement, and the over-optimistic goals set by the prime minister in the Commons for the latest talks. But there had been a plan.

Read more …

Convince me she’s wrong on this. And I’m a white man. You’ll have a hard time getting rid of her, America. Thing is, you don’t need to agree with Trump, or AOC, to recognize their value and their role in the grander scheme of things.

‘White Men Are Considered Everyone’: Ocasio-Cortez (G.)

Alexandria Ocasio-Cortez criticized media coverage of her latest polling results on Saturday, noting her net favorability among all women and all non-white Americans, even as some commenters suggested that “Americans” now viewed her negatively. “So older, conservative white men are considered ‘everyone’ and everyone else is discounted as an exception,” the progressive New York congresswoman tweeted. “Cool.” The freshman Democrat blamed Fox News’ round-the-clock negative coverage for increasing the number of Republicans and white Americans who know who she is –and who view her unfavorably.

“The reason people know more is bc Fox News has turned into ‘AOC TMZ’ (no offense to TMZ),” she wrote, referencing the celebrity tabloid site. She also called Fox News a “propaganda machine” that “will be aimed at any Dem[ocrat] they want”. Since September, two months before the 29-year-old was elected, the number of Americans who say they have never heard of her or that they have no opinion has dropped by 21%, according to the Gallup poll results from February. Now, more than two-thirds of respondents have an opinion.But such visibility appears to have brought more negative reactions than positive ones. Overall, Gallup found, 31% of respondents now view Ocasio-Cortez favorably and 41% unfavorably. Her net favorability ratings are down 8%.

There were sharp partisan and racial divides in this response. Since September, Ocasio-Cortez’s net favorability dropped most sharply among Republicans (-21), white Americans (-15), men (-11) and Americans over 55 (-10). At the same time, net favorability increased among nonwhite Americans (+9) and Democrats (+8). A majority of women and Americans ages 18 to 34 still have a favorable opinion of the congresswoman, Gallup found. Her favorability has dropped slightly among such voters groups since September, but remains net positive. In presenting the poll results, Gallup noted that Republicans were more likely to have an opinion about Ocasio-Cortez than members of her own party, which “helps explain her overall net-negative rating”.

Some headlines announcing the Gallup results did not emphasize the racial and party-line divides reflected in the statistics. “Alexandria Ocasio-Cortez polls like Donald Trump: Poorly,” CNN reported, while US News and World Report summarized the news as: “Alexandria Ocasio-Cortez’s Unfavorable Rating Climbs.” Fox News covered the poll results with the headline: “Ocasio-Cortez’s ‘unfavorable’ rating skyrockets, with most people viewing her negatively.”

Read more …

Europe is one of the worst places in air quality. Happy driving.

Deadly Air In Our Cities: The Invisible Killer (O.)

In 2014, like Kylie and Shazia, I didn’t know much about air pollution. I had just become a father when, living in London at the time, an Evening Standard headline caught my eye: Oxford Street had the worst diesel pollution in the world. This came as a surprise: the shopping street where I took my daughter to pick out her first pram had some of the most polluted air on Earth. Where were the health warnings, the public information signs, the protesters marching? All I could see were happy, oblivious shoppers. Weeks later came another headline: “Oxford Street pollution levels breached EU annual limit just four days into 2015.”

We had sleepwalked into a public health crisis. And not just in the UK, but across the world. The 2015 smog in Beijing was so bad that it was dubbed the “Airpocalypse”. Pictures circulated on social media of Beijing students sitting their exams so couched in smog that they could barely see the neighbouring table. The toxic smog that covers Delhi every Diwali now lasts for months at a time. Eventually, in the summer of 2016, my young family and I left London and moved to semi-rural Oxfordshire. I felt the relief of escape. I could breathe easy. The first time my daughter went out into our new garden at night, she asked what all the lights in the sky were. Twinkle Twinkle Little Star was no longer an abstract concept. But I also felt a sense of defeat. Had I taken the easy way out? Shouldn’t I have stayed and fought for change?

Read more …

The more food we produce, the worse it gets. Supreme irony. Because with all that food, we could grow our numbers with no limits. So we build in a limit.

Good Enough To Eat? The Toxic Truth About Modern Food (G.)

For most people across the world, life is getting better but diets are getting worse. This is the bittersweet dilemma of eating in our times. Unhealthy food, eaten in a hurry, seems to be the price we pay for living in liberated modern societies. Even grapes are symptoms of a food supply that is out of control. Millions of us enjoy a freer and more comfortable existence than that of our grandparents, a freedom underpinned by an amazing decline in global hunger. You can measure this life improvement in many ways, whether by the growth of literacy and smartphone ownership, or the rising number of countries where gay couples have the right to marry. Yet our free and comfortable lifestyles are undermined by the fact that our food is killing us, not through lack of it but through its abundance – a hollow kind of abundance.

[..] What we eat now is a greater cause of disease and death in the world than either tobacco or alcohol. In 2015 around 7 million people died from tobacco smoke, and 2.75 million from causes related to alcohol, but 12m deaths could be attributed to “dietary risks” such as diets low in vegetables, nuts and seafood or diets high in processed meats and sugary drinks. This is paradoxical and sad, because good food – good in every sense, from flavour to nutrition – used to be the test by which we judged the quality of life. A good life without good food should be a logical impossibility.

Where humans used to live in fear of plague or tuberculosis, now the leading cause of mortality worldwide is diet. Most of our problems with eating come down to the fact that we have not yet adapted to the new realities of plenty, either biologically or psychologically. Many of the old ways of thinking about diet no longer apply, but it isn’t clear yet what it would mean to adapt our appetites and routines to the new rhythms of life. We take our cues about what to eat from the world around us, which becomes a problem when our food supply starts to send us crazy signals about what is normal. “Everything in moderation” doesn’t quite cut it in a world where the “everything” for sale in the average supermarket has become so sugary and so immoderate.

Read more …

Feb 062019
 
 February 6, 2019  Posted by at 2:52 pm Finance Tagged with: , , , , , , , , , , , , , ,  


Salvador Dali Portrait of Gala with Two Lamb Chops Balanced on Her Shoulder 1933

 

 

Ilargi: It’s been quite a while since we last heard from Dr. D. He was probably busy growing stuff. But he’s back now, and with something dear to my heart: the craziness of our food production systems. Answers to which are not always what most people think, to put it mildly.

 

 

Dr. D:

Eat less meat to save the planet – report (1)
The new diet that could save the planet (2)
What to eat to save the planet: Report urges ‘radical changes’ to world’s diet – less meat, more veggies (3)

 

These headlines, likely sourced from a recent article from “The Lancet” (4) are a regular feature of our time, in diet, in environmentalism, and in global warming. They are well-researched, sourced by the world’s experts, and put forward with the highest intentions. However, they are also completely wrong – dangerously, ignorantly wrong.

Like most industries, agriculture and food production is a specialty, with its own language and details. I don’t attempt to tell the Lancet how to perform heart surgery, for to do so would be ridiculous, dangerous, outside of my expertise. I wouldn’t tell a geologist how to interpret the magnetic layers of rock, or how oceanographers should properly interpret sea water samples to guide us on fishing or pollution. Yet this is what they do for farmers.

The primary drive of most such articles is that, with so many people, and so much hunger, we find that it takes “2,500 gallons of water, 12 pounds of grain, 35 pounds of topsoil and the energy equivalent of one gallon of gasoline to produce one pound of feedlot beef.” that “64% of US cropland produces livestock feed.” (5) That it takes “20 pounds corn [to make] 1 pound beef.” (6) Or that you can get 15lbs of beef per acre, but 263lbs of soybeans. (7) Also that cattle are the primary reason for deforestation, and a major cause of methane.

From these numbers, it’s simple to see that meat, particularly cattle, is anti-environmental, and even anti-human, and it would be the pinnacle of irresponsibility to encourage or even allow them to be eaten. It is a direct affront to the poor, the hungry, and even other citizens in developed countries like ourselves, even though we may be able to afford such things. Simple. A lock. Slam-dunk. No further research required.

Setting aside that we waste half our food, the food we do have is maldistributed, and that we haven’t tapped a fraction of the land we did in say, WWII Britain, setting aside that the water doesn’t vanish, but returns to the water table to be used again, setting aside that the methane released does not contribute to global warming since it is exclusively carbon captured by the grass earlier that year, setting aside that the argument is the same one Malthus had, 250 years wrong, or that removing cattle would amount to the permanent extinction of more than a thousand breeds of animals with a lineage thousands of years old … even all that aside, their argument shows they don’t know anything about land, food, or the process of creating it.

Some other major concerns of economists and environmentalists are 1) environmental destruction from drilling 2) peak oil, 3) production of toxic waste, 4) plastics packaging, 5) dependence on imported energy, 6) CO2 from cars and transportation, and 7) BTUs per calorie of food eaten, as popularized in Kunstler’s “3,000 mile Caesar salad” (8) and this is where our story starts.

 


Deck Family Farm

 

On a farm, one of the major input costs every year is fertilizer, nitrogen, and this is presently produced almost exclusively from a feedstock of natural gas. That is to say, food in the modern agricultural system is literally the eating of unsustainable oil wells. And it’s even worse than that: agriculture is so dependent on synthesized, centralized petroleum fertilizer that it’s no exaggeration to say that without massive, uninterrupted supplies of cheap oil and gas there would be no food. Yields could easily drop by 30%, causing an unprecedented human catastrophe.

What’s more, another of the environmentalists’ grave concerns, topsoil loss and soil depletion would immediately come to the fore, as the only thing keeping today’s depleted fields in production are the artificial inputs directly from oil fields, mostly imported. –And that’s ABOVE the oil needed for the tractors, for the harvesters, for the delivery, for the centralized plant, for the parts, the buildings, food wrapping, for the creation of pesticides, herbicides, the centralized seed production, centralized grain mills…no. For the purposes of this article, we are only talking about cows.

Of course, mankind didn’t start this way, unable to eat a lettuce leaf without a 10,000-mile chain of energy use from foreign, occupied nations and the unwavering support of the worldwide industrial society that supports it. Originally the cows stood on the very grass they ate, eating contentedly, and were butchered and sent to market locally, using not a drop of oil. They did not disturb the fields but indeed enriched them with their foot-traffic and manure. So how did we go from a 0 mile, 0 grain, 0 cost, 0 oil food source to a food that reportedly starves continents and will destroy the world? That is, if cows were good and worked before, maybe the problem lies not with the meat or the cow, but with rabid industrialism?

If petroleum-based fertilizer is our major weakness, the single import that can be shut off to kill billions, surely it’s our duty — a national security emergency even — to close this weakness and find ecological alternatives. And for fertilizer, we have two: one, you can rotate crops to keep fields fallow in rotation, or two, you can replace synthetic fertilizer with animal manure. In fact, synthetic fertilizer is but a poor, harmful replacement for the manure farmers have used for 5,000 years – it has only nitrogen, potassium and potash, and nothing of the thousand other nutrients required of healthy soil.

 

It has no biosphere, no heat, no water, and no organic matter. The resulting soil depletion is a prime cause of desertification and topsoil loss, to say nothing of constantly lower yields. Its very use destroys the soil in the way steroids destroy health while giving the illusion of strength. They should probably be banned not for environmental reasons, but for long-term efficiency and national security. And there is only one replacement for this toxic, destructive, unreliable, expensive input: animal manure.

Worse, this cannot be chicken, sheep, or pig, adequate as they are. Pig and chicken are too concentrated and toxic and require other petroleum processes to dilute and deliver. Sheep is too mild and not in quantity, for sheep do not favor containment. Home composting could never produce a fraction of the volume needed for the world’s fields without the same massive petroleum inputs in tractors, trucks, chippers, conveyors, and all the factories, railways, and steel mills that create them. That leaves largely one source: cattle.

So in this new ecological world we imagine, we would have to grow cattle simply for the required fertilizer. And these cattle cannot be far! Unlike synthetic fertilizer, manure is wet, heavy, and dilute. It cannot be centralized into today’s poisonous sewage ponds, nor shipped coast to coast: it must be created near the fields that require it. As the world is enormously varied, you must also have breeds attuned to each locality’s weather and needs, perhaps creating a thousand unique varieties.

Tiny Kerry cattle for the bogs of Ireland, bony Longhorns for the deserts of Texas, Alpine Braunvieh for the steep mountains of Switzerland, or a hearty Fjäll for the frozen lands of Sweden. Nor can the farms be concentrated or specialized: without mass inputs of machinery or petroleum, and lacking harmful dry fertilizer, the farms must be small, dispersed, and varied, local in scope, diverse in production, specializing in their region and feeding only people nearby. Once you can’t ship mass quantities virtually for free, from reliable, nearly free energy, there is no other way.

 


Earth Repair Corps

 

Now you can’t get that fertilizer for nothing, and we don’t get it for nothing now. You have to have input costs for our fertilizer factory. And for cattle that input is grass; fields and fields of it, probably near 1-2 acres per cow. Is that bad? Irresponsible? How does that compare to drilling in ANWAR, and delivering via the Exxon Valdez? How is the sourcing from Iraq, transported via Syria, or the digging of tar with a payloader in the freshwater swamps of Alberta?

Now you can get 1, 2, even 3 cuttings a year of hay in temperate climates, and the cow is happily producing this valuable fertilizer all the time, without embargoes, financial disruptions, or delivery costs. But nevertheless, 25% of your fields will be put out of service in order to environmentally, sustainably source this necessary input for next year’s grain.

But not to fear! You know what? You can EAT the components of this essential, life sustaining fertilizer production factory! Yes, you can! Even better, you can eat butter, cheese, yogurt and yes, even ice cream! These very things you would NOT have without running this fertilizer mill that you would be forced to run even if they did nothing at all. Even more, you can down-stream the whey from your milk-preservative process to feed pigs! I’m not making this up!

Yes, by the very fact of creating fertilizer you had to produce in any case, you can also eat bacon! And you essentially have to, because otherwise this valuable milk-byproduct will go to waste. Nor can the pigs be far. You must have farms that are small in scale, varied in production, and local to the community. This will, of course, make them especially resilient to every challenge: financial, ecological, or human, be it from global warming or global warring.

The diverse, smaller-scale of these farms unfortunately require smaller business units to run them, such as the millions of local families presently unemployed, and sadly force cattle and other animals to free-range on the fields in the sunshine, as their ancestors did. But we all make sacrifices.

 

More, this small, diverse, decentralized food production system cannot aggregate mass quantities for mass market. Cows are not all the same, arriving by tens of thousands in the same 100-acre slaughterhouse, but because dissimilarity hampers assembly-line processes, the food would be produced in smaller batches, closer to home, more directly, without the wasting fuel and CO2 to ship them worldwide, and without the 31 flavors of plastics packaging which don’t make economic sense at this scale. –The French market model, as it were, local in the streets of your own town, fresh and unique.

You see, what they didn’t ask and forgot to research is that in order to grow those 263lbs of soybeans, you have no alternative but to have 1:4 of your fields fallow, resting, doing nothing. That’s now 197lbs per acre. Neither can you do that every year without input, so using another field to add this fertilizer, you have 131lbs/acre, really. The fallow land required of a world without oil inputs means 1/2 of the world’s production is offline at any given time, starving people.

What a drag! But you COULD, if you’re very clever, plant a wild, nitrogen-fixing plant on that fallow ground, creating both green manure for next year’s soybeans, AND running your cattle-driven fertilizer factory at no additional cost! Not only do you get the ONE field green-manured, and ANOTHER field cow-manured, but you could, if you’re very smart, get that otherwise useless, fallow field to grow ANOTHER crop of milk and beef, and downstream, chickens and pigs, absolutely FREE! THREE fields for the price of one.

What would you expect to pay for this richness, this agricultural, ecological magic trick? $1 trillion? $5 trillion for our green-energy, planet-saving, CO2-reducing “Green New Deal”? One that’s proven and can actually work because it follows the laws of thermodynamics? Surely it’s worth any cost if it saves the planet and takes a huge chunk off oil drilling, oil wars, and global warming.

Answer is: nothing. What I’ve just described is western agriculture, as developed since the 1500s. Anyone who’s ever looked at a farm, read a wikipedia entry, or took a history class knows this. Every medieval peasant knows this. Every hillbilly farmer from Iowa knows this. Except for all the modern journalists and The Lancet, all of whom all eat these very foods every day without the slightest spark of where they come from.

 


Night Owl Farm

 

You see, it doesn’t matter if cows are less efficient than soybeans, they exist in a SYSTEM, and that system has many inputs and many parameters. Reading a statistic doesn’t grow a plant to market any more than my reading about scalpels makes me a surgeon. There are many other possibilities, requirements, inputs: they speak of overgrazing, such as dry lands in Africa, when in fact, rotational OVERgrazing replenishes the soil and INCREASES the yields.

What’s more, a very great deal of the reported “arable” land on earth is not productive. It is too dry, such as Texas; too steep, such as Colorado; too variable cold, like Montana; or too far from market, like Afghanistan. You can’t grow soybeans or corn there even if you wanted, and you couldn’t ship kale from Kabul to London at cost, so their “statistics” about arable land and production mean nothing. …Worse than nothing, as they are so misleading as to be completely wrong.

Wrong in the way that enormous, world-changing decisions, subsidies, and wars are made, wrong in the way Stalin thought to modernize and mechanize agriculture in the Ukraine to get it out of the 1500s, and killed 7 million people in a single year. Wrong because not every square mile of land is equivalent, and only the crop that grows and has enough value to ship can be produced there. That’s why they make whiskey in the Appalachians and cheese in the Alps: the value to market has to be so much higher, high enough to transport, or no food will be produced at all.

 

That’s why they grow wild pigs in the Dehesa of Spain: because otherwise those forests would feed no one. But scientists and journalists don’t know this, even though it’s on the Food Channel each night.

What’s more, their scientific white-room system is orders of magnitude less efficient than the medieval method. Hundreds of random foods are wasted on the farm. Should they be dropped, as the labor cost/hour is too high to economically recover them? Should we waste the time and petrol to compost them into biogas? No. Farm waste, and waste through every warehouse, rail car, grocer, and restaurant can be eaten by chickens. Then not only do you get the compost anyway, in manure, not only do you also get a lifetime of eggs, for free, YOU GET A CHICKEN. All from the grass, the seeds, the bugs…and the food waste they already abandon.

But this doesn’t come without a cost. Brace yourself for this, people, because in order to achieve this level of bounty and efficiency, you will have to EAT these animals rather than let them die of old age and disease and be eaten by dogs and beetles. You, yes you, if you want an ecological, happy-animal, local-economy, sustainable, anti-CO2, food-producing world, not only CAN eat meat, but you are REQUIRED to. …As did a thousand generations of your ancestors, back to the very first day of man, slashing and clearing a field so the deer would come.

So try to be at least as smart as an illiterate medieval peasant and grow your food the natural way: locally, seasonally, independently, with happy animals in a rich green world of fields, trees and farms enriched with thousands of subvarieties of biodiversity in hedgerows so rich they have yet to be fully cataloged. A far cry from the hardened, drilled, paved, expensive, destructive, unsustainable, dangerous, lethal, impoverished way promoted by the scientific experts and the journalists who cover them.

 

 

Mar 262018
 


Dorothea Lange Gravestone St. George, Utah 1953

 

There are numerous ways to define the Precautionary Principle. It’s something we can all intuitively understand, but which many parties seek ways to confuse since it has the potential to stand in the way of profits. Still, in the end it should all be about proof, not profits. That is exactly what the Principle addresses. Because if you first need to deliver scientific proof that some action or product can be harmful to mankind and/or the natural world, you run the risk of inflicting irreversible damage before that proof can be delivered.

In one of many definitions, the 1998 Wingspread Statement on the Precautionary Principle says: “When an activity raises threats of harm to human health or the environment, precautionary measures should be taken even if some cause and effect relationships are not fully established scientifically.”

Needless to say, that doesn’t easily fly in our age of science and money. Cigarette makers, car manufacturers and oil companies, just to name a few among a huge number of industries, are all literally making a killing while the Precautionary Principle is being ignored. Even as it is being cited in many international treaties. Lip service “R” us. Are these industries to blame when they sell us our products, or are we for buying them? That’s where governments must come in to educate us about risks. Which they obviously do not.

Nassim Nicholas Taleb -of Black Swan and Antifragile fame- has made the case, in his usual strong fashion, for applying the Precautionary Principle when it comes to GMOs. His argument is that allowing genetically modified organisms in our eco- and foodsystems carries unknown risks that we have no way of overseeing, and that these risks may cause irreversible damage to the very systems mankind relies on for survival.

Taleb is not popular among GMO producers. Who all insist there is no evidence that their products cause harm. But that is not the point. The Precautionary Principle, if it is to be applied, must turn the burden of proof on its head. The absence of evidence is not evidence of absence. Monsanto et al must prove that their products do no harm. They can not. Which is why they have, and need, huge lobbying, PR and legal departments.

 

But I didn’t want to talk about GMOs today, and not about Precautionary Principle alone. I wanted to talk about this: Paragraph 2 of article 191 of the European Union’s Lisbon Treaty (2009) states that:

“Union policy on the environment shall aim at a high level of protection taking into account the diversity of situations in the various regions of the Union. It shall be based on the precautionary principle and on the principles that preventive action should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay.”

In other words, the EU has committed itself to the Precautionary Principle. Well, on paper, that is. However, then we get to a whole series of reports on wildlife in Europe, and they indicate all sorts of things, but not that Brussels cares even one bit about adhering to the Precautionary Principle, either for its people or its living environment. One voice below calls it a “state of denial”, but I would use some other choice words. Let’s start with the Guardian this morning, because they have an interesting perspective:

Most Britons remain blithely unaware that since the Beatles broke up, we have wiped out half our wildlife…

since the fall of the Berlin Wall in 1989, the number of flying insects on nature reserves in Germany had dropped by at least 76% – more than three-quarters…

Things like ‘since you were born’, ‘since man landed on the moon’, ‘since the wall came down’ or ‘since 9/11’ may be a bit clearer than 100 years, or 25 years. Moreover, I read somewhere that since Columbus landed in 1492, America has lost on third of all its biodiversity, but that doesn’t yet explain the rate of acceleration that is taking place.

In October last year, the Guardian had this:

 

Three-Quarters Of Flying Insects In Germany Have Vanished In 25 Years

The abundance of flying insects has plunged by three-quarters over the past 25 years , according to a new study that has shocked scientists. Insects are an integral part of life on Earth as both pollinators and prey for other wildlife and it was known that some species such as butterflies were declining. But the newly revealed scale of the losses to all insects has prompted warnings that the world is “on course for ecological Armageddon”, with profound impacts on human society.

The new data was gathered in nature reserves across Germany but has implications for all landscapes dominated by agriculture, the researchers said. The cause of the huge decline is as yet unclear, although the destruction of wild areas and widespread use of pesticides are the most likely factors and climate change may play a role. The scientists were able to rule out weather and changes to landscape in the reserves as causes, but data on pesticide levels has not been collected.

“The fact that the number of flying insects is decreasing at such a high rate in such a large area is an alarming discovery,” said Hans de Kroon, at Radboud University in the Netherlands and who led the new research. “Insects make up about two-thirds of all life on Earth [but] there has been some kind of horrific decline,” said Prof Dave Goulson of Sussex University, UK, and part of the team behind the new study. “We appear to be making vast tracts of land inhospitable to most forms of life , and are currently on course for ecological Armageddon. If we lose the insects then everything is going to collapse.”

[..] When the total weight of the insects in each sample was measured a startling decline was revealed. The annual average fell by 76% over the 27 year period, but the fall was even higher – 82% – in summer, when insect numbers reach their peak. Previous reports of insect declines have been limited to particular insects, such European grassland butterflies, which have fallen by 50% in recent decades. But the new research captured all flying insects, including wasps and flies which are rarely studied, making it a much stronger indicator of decline.

Then last week from AFP:

 

France’s Bird Population Collapses As Pesticides Kill Off Insects

Bird populations across the French countryside have fallen by a third over the last decade and a half, researchers have said. Dozens of species have seen their numbers decline, in some cases by two-thirds, the scientists said in a pair of studies – one national in scope and the other covering a large agricultural region in central France. “The situation is catastrophic,” said Benoit Fontaine, a conservation biologist at France’s National Museum of Natural History and co-author of one of the studies. “Our countryside is in the process of becoming a veritable desert,” he said in a communique released by the National Centre for Scientific Research (CNRS), which also contributed to the findings.

The common white throat, the ortolan bunting, the Eurasian skylark and other once-ubiquitous species have all fallen off by at least a third, according a detailed, annual census initiated at the start of the century. A migratory song bird, the meadow pipit, has declined by nearly 70%. The museum described the pace and extent of the wipe-out as “a level approaching an ecological catastrophe”. The primary culprit, researchers speculate, is the intensive use of pesticides on vast tracts of monoculture crops, especially wheat and corn. The problem is not that birds are being poisoned, but that the insects on which they depend for food have disappeared.

“There are hardly any insects left, that’s the number one problem,” said Vincent Bretagnolle, a CNRS ecologist at the Centre for Biological Studies in Chize. Recent research, he noted, has uncovered similar trends across Europe, estimating that flying insects have declined by 80%, and bird populations has dropped by more than 400m in 30 years. Despite a government plan to cut pesticide use in half by 2020, sales in France have climbed steadily, reaching more than 75,000 tonnes of active ingredient in 2014, according to EU figures. “What is really alarming, is that all the birds in an agricultural setting are declining at the same speed, even ’generalist’ birds,” which also thrive in other settings such as wooded areas, said Bretagnolle.

Not that it’s just Europe, mind you. Still ‘ove’ this one from Gretchen Vogel in ScienceMag, about a year ago, on a phenomenon most of you stateside will have noticed too:

 

Where Have All The Insects Gone?

Entomologists call it the windshield phenomenon. “If you talk to people, they have a gut feeling. They remember how insects used to smash on your windscreen,” says Wolfgang Wägele, director of the Leibniz Institute for Animal Biodiversity in Bonn, Germany. Today, drivers spend less time scraping and scrubbing. “I’m a very data-driven person,” says Scott Black, executive director of the Xerces Society for Invertebrate Conservation in Portland, Oregon. “But it is a visceral reaction when you realize you don’t see that mess anymore.”

Some people argue that cars today are more aerodynamic and therefore less deadly to insects. But Black says his pride and joy as a teenager in Nebraska was his 1969 Ford Mustang Mach 1—with some pretty sleek lines. “I used to have to wash my car all the time. It was always covered with insects.” Lately, Martin Sorg, an entomologist here, has seen the opposite: “I drive a Land Rover, with the aerodynamics of a refrigerator, and these days it stays clean.”

Though observations about splattered bugs aren’t scientific, few reliable data exist on the fate of important insect species. Scientists have tracked alarming declines in domesticated honey bees, monarch butterflies, and lightning bugs. But few have paid attention to the moths, hover flies, beetles, and countless other insects that buzz and flitter through the warm months. “We have a pretty good track record of ignoring most noncharismatic species,” which most insects are, says Joe Nocera, an ecologist at the University of New Brunswick in Canada.

After all those numbers, and before they get worse -which they will, it’s already baked in the cake-, you would expect the EU to remember the Precautionary Principle all its member nations signed on to for the Lisbon Treaty. You would expect wrong. Instead Brussels vows to continue with the exact same policies that have led to its mind-boggling biodiversity losses.

 

EU In ‘State Of Denial’ Over Destructive Impact Of Farming On Wildlife

Europe’s crisis of collapsing bird and insect numbers will worsen further over the next decade because the EU is in a “state of denial” over destructive farming practices, environmental groups are warning. European agriculture ministers are pushing for a new common agriculture policy (CAP) from 2021 to 2028 which maintains generous subsidies for big farmers and ineffectual or even “fake” environmental or “greening” measures, they say. In a week when two new studies revealed drastic declines in French farmland birds – a pattern repeated across Europe – the EU presidency claimed that the CAP continued to provide safe food while defending farmers and “protecting the environment”.

“The whole system is in a state of denial,” said Ariel Brunner, head of policy at Birdlife Europe. “Most agriculture ministers across Europe are just pushing for business as usual. The message is, keep the subsidies flowing.” Farm subsidies devour 38% of the EU budget and 80% of the subsidies go to just 20% of farmers , via “basic payments” which hand European landowners £39bn each year.

Because these payments are simply related to land area, big farmers receive more, can invest in more efficient food production – removing hedgerows to enlarge fields for instance – and put smaller, less intensive farmers out of business. France lost a quarter of its farm labourers in the first decade of the 21st century, while its average farm size continues to rise.

A smaller portion – £14.22bn annually – of EU farm subsidies support “greening” measures but basic payment rules work against wildlife-friendly farming: in Britain, farmers can’t receive basic payments for land featuring ponds, wide hedges, salt marsh or regenerating woodland. Signals from within the EU suggest that the next decade’s CAP [..] will continue to pay farmers a no-strings subsidy, while cash for “greening”, or wildlife-friendly farming, may even be cut. Birdlife Europe said the “greening” was mostly “fake environmental spending” and wildlife-friendly measures had been “shredded” by “loophole upon loophole” introduced by member states.

[..] This week studies revealed that the abundance of farmland birds in France had fallen by a third in 15 years – with population falls intensifying in the last two years. It’s a pattern repeated across Europe: farmland bird abundance in 28 European countries has fallen by 55% over three decades, according to the European Bird Census Council. Conservationists say it’s indicative of a wider crisis – particularly the decimation of insect life linked to neonicotinoid pesticides.

20% of farmers work 80% of the land in Europe. That is used as an argument to single them out to pay them billions in subsidies. But it simply means these 20% use the most detrimental farming methods, most pesticides, most chemicals. The subsidies policy guarantees further deterioration of an already disastrous situation. The polluter doesn’t pay, as the Lisbon Treaty demands, but the polluter gets paid.

And even that is apparently still not enough for the fast growing bureaucracy. In a move perhaps more characteristic of the EU than anything else, it approved something last week that a million people had vehemently protested: the Bayer-Monsanto merger. The European parliament may have thrown out all Monsanto lobbyists recently, and voted to ban Roundup, but the die has been cast.

A million citizens can protest in writing, many millions in France and Germany and elsewhere may do the same on the street, none of it matters. The people who brought you WWII nerve gases and Agent Orange can now come together to take over your food supply.

 

EU Approves Buyout Of Monsanto By German Chemical Firm Bayer

German conglomerate Bayer won EU antitrust approval on Wednesday for its $62.5bn (£44.5bn) buy of US peer Monsanto, the latest in a trio of mega mergers that will reshape the agrochemicals industry. The tie-up is set to create a company with control of more than a quarter of the world’s seed and pesticides market. Driven by shifting weather patterns, competition in grain exports and a faltering global farm economy, Dow and Dupont, and ChemChina and Syngenta had earlier led a wave of consolidation in the sector. Both deals secured EU approval only after the companies offered substantial asset sales to boost rivals.

Environmental and farming groups have opposed all three deals, worried about their power and their advantage in digital farming data, which can tell farmers how and when to till, sow, spray, fertilise and pick crops based on algorithms. The European Commission said Bayer addressed its concerns with its offer to sell a swathe of assets to boost rival BASF [..] “Our decision ensures that there will be effective competition and innovation in seeds, pesticides and digital agriculture markets also after this merger,” European Competition Commissioner Margrethe Vestager said in a statement. “In particular, we have made sure that the number of global players actively competing in these markets stays the same.”

[..] Vestager said the Commission, which received more than a million petitions concerning the deal, had been thorough by examining more than 2,000 different product markets and 2.7 million internal documents to produce a 1,285-page ruling. [..] Online campaigns group Avaaz criticised the EU approval. “This is a marriage made in hell. The Commission ignored a million people who called on them to block this deal, and caved in to lobbying to create a mega-corporation which will dominate our food supply,” Avaaz legal director Nick Flynn said.

Dow-Dupont, ChemChina and Bayer Monsanto have a lot more political influence than a million Europeans, or ten million Americans. They have even convinced numerous, if not most, people that without their products the world would starve. That their chemicals are needed to feed a growing human population. Farming based on algorythms.

They are not ‘seed companies’. They are ‘seeds-that-need-our-chemicals-to-grow’ companies. And they are out to conquer the entire world. A 100-times worse version of Facebook. And our governments subsidize the use of their products. As we not-so-slowly see our living world be massacred by those products.

We don’t know how bad GMOs will turn out to be. Which is in itself a very good reason to ban them. Since once they spread, they can’t be stopped anymore. Then the chemical boys will own all of our food. But we do know how bad the pesticides and other chemicals they produce are. And we’re not even banning those. We just eat all that sh*t and shut up.

It’s a failure to understand what science is: that you must proof harm first before banning stuff. The only real science is the one that has adopted the Precautionary Principle. Because science is supposed to be smart, and there’s nothing smart about destroying your own world. Because science should never be used to hurt people or nature. Science can only be good if it benefits us. Not our wallets, but our heads and hearts and forests, and our children. Do no harm.

Yeah, I know, who am I fooling, right?

 

 

Dec 212016
 
 December 21, 2016  Posted by at 7:15 pm Food Tagged with: , , , , , , , ,  


Konstantinos Polychronopoulos, Athens December 2016

 

Apologies, but I have to talk one more time before Christmas about why I’m in Greece, again. Some of what I am about to say will repeat earlier articles, but I promise, there’s plenty of new things. Because I’m coming to grips with the situation I’m in here, seeing the landscape, seeing things in their perspective.

I never had much use for -humanitarian- aid, I always had the same suspicion of what was going on in the field that just about everyone else has (where does the money go?). But then when I first went to Athens in June 2015, and asked Automatic Earth readers if they wanted to donate a little something for the poor in Greece, and that little something became $12,000 before I knew it, that all changed.

It meant I had to dig deeper and look closer, because this was me handing out other people’s money, and a lot of it. That’s how I met Konstantinos Polychronopoulos in July 2015, and I have since focused on him and his “O Allos Anthropos (The Other Human) ‘movement’, because in my view he represents the ideal fashion in which aid should be delivered. No overhead that gets subtracted from donations -other than equipment-, no salaries for anyone, just one on one aid.

There are about a dozen articles I’ve written over the past year and a half about him and his people at O Allos Anthropos, linked at the bottom of this article. And yes, I will also ask you once more to please donate to the Automatic Earth Fund for Athens (Paypal widget, top left hand column). Much as I don’t like asking anyone for anything when it comes to me, I simply can’t afford to be shy when it comes to this Greek Social Kitchen project.

Problem is, Konstantinos receives hardly any funding, except for the Automatic Earth. A bigger problem, as I’ve found out, is there’s a direct link between providing the most effective aid and not getting funded, strange as that may sound. And that’s what I want to talk about right here. That and what you and I could make possible for Konstantinos in 2017.

Look, I never cared for this kind of thing. I always felt that humanitarian aid is the responsibility of a government (still do, really). Not that I want a government to move into every nook and cranny of people’s lives, but when people in a society fall through the cracks and live in hunger or other forms of misery, their government should be there for them. It’s what we pay taxes for.

Moreover, I always thought that if you do get involved as a citizen, aid should be something you do close to where you live. And I don’t live in Athens. Where I do live is up for grabs, but it’s not Athens. Still, what I have become involved in here is a rare instance of what aid should be, and then it’s much less important where it takes place; besides, there’s a lot more need here than there is in either Holland or Canada, the closest I get to calling any place home.

 

 

In thinking about why it’s so hard to get proper funding for Konstantinos, as I told you end November, in The Other Human Needs Your Help This Christmas, a large role is reserved for the fact that aid has become an industry like so many others. And that is really unfortunate, for many reasons.

But the past few days something else cropped up in my mind as well, which I feel defines the problem even better. That is the concept of “institutionalization” as forwarded by Austrian philosopher and priest -in New York and Mexico- Ivan Illich in the 1970’s. What Illich meant was that ‘institutions’ in society monopolize entire fields within that society.

Schools, colleges, universities have a monopoly on education (doctors and hospitals have a similar monopoly on health care). Only the degrees that educational institutions hand out recognize you as being smart -or fit for a job-, and the only people who hand out these degrees are those who have spent years wrecking their brains to get such degrees themselves. You’re not smart because you have a brain, you’re smart because you follow a program preset by people who have followed -very- similar programs. That’s “Institutionalization”.

A few quotes from Illich’s book 1971 book “Deschooling Society” (please stick with me, you’ll see where I’m going):

“Institutional wisdom tells us that children need school. Institutional wisdom tells us that children learn in school. But this institutional wisdom is itself the product of schools because sound common sense tells us that only children can be taught in school. Only by segregating human beings in the category of childhood could we ever get them to submit to the authority of a schoolteacher.”

You couldn’t lock up adults in classrooms the way we do kids. But what can kids do, they’re largely defenseless.

“Schools are designed on the assumption that there is a secret to everything in life; that the quality of life depends on knowing that secret; that secrets can be known only in orderly successions; and that only teachers can properly reveal these secrets. An individual with a schooled mind conceives of the world as a pyramid of classified packages accessible only to those who carry the proper tags.”

Your teachers went through the same brain-deafening torture that you now do, and they’re not about to admit that this was time wasted. Even if they realize it.

“A second major illusion on which the school system rests is that most learning is the result of teaching. Teaching, it is true, may contribute to certain kinds of learning under certain circumstances. But most people acquire most of their knowledge outside school, and in school only insofar as school, in a few rich countries, has become their place of confinement during an increasing part of their lives.”

Why do children learn in school? Only because they’re locked up in them umpteen hours a day. They could -and would- learn wherever they go (children learn, period, they couldn’t help it if they tried), but they’re not allowed to go ‘anywhere’.

“School appropriates the money, men, and good will available for education and in addition discourages other institutions from assuming educational tasks. Work, leisure, politics, city living, and even family life depend on schools for the habits and knowledge they presuppose, instead of becoming themselves the means of education.”

You’re not supposed to learn at home or in the world around you, learning is the monopoly of the schooling institutions. Of course you learn most of what’s valuable and useful outside of school, but we don’t talk about that.

Illich was equally clear about medicine:

“Modern medicine is a negation of health. It isn’t organized to serve human health, but only itself, as an institution. It makes more people sick than it heals. We must rediscover the distinction between hope and expectation. Effective health care depends on self-care; this fact is currently heralded as if it were a discovery.”

This monopoly our societies have provided to schools, teachers, doctors and hospitals has gotten ‘certified’ by the fact that they are the only ones in their fields who are funded by society, leaving any and all others too poor to even challenge them for their monopoly positions. It’s a closed circle.

In short, institutionalization is good for institutions, but never for those people they are supposed to be serving.

 

 

So how does this connect to Greece, to Konstantinos, and to all the people he’s trying to -devoted his whole life to- feed, and help in other ways? Here’s how: aid has been institutionalized too. There’s a set of rules, and if you don’t comply, you don’t qualify for funding. The funds then go to less efficient sources who do comply.

Konstantinos and I sat down for another talk last week, always interrupted by his incessantly ringing phone, and always accompanied by our dear friend and translator Tassos, because I wanted to know what these guys see as their future, what they want 2017 to bring that 2016 hasn’t yet.

One of the things that was said, and that’s what reminded me of Illich and institutionalization, is that if Konstantinos would want O Allos Anthropos to be registered as an NGO, and apply for funding through ‘official channels’, not only would he face ream upon ream of paperwork, he would also be forced to demand that every single person he and his people all across Greece serve a meal to, show them an ID. Or else be refused, hungry or not.

And not only would that go against everything Konstantinos stands for, and every reason he wants to serve “Free Food For All” (the main English-language slogan they have), it would mean he’d be from then on in part of the ‘framework’, the ‘institution’. And that framework, as we have seen in earlier articles, is not functioning anywhere near the way it should.

If you see pictures of long waiting lines for food, that’s because of that ID obligation. Sign here please, so the NGO can cash in another $5 or $7 per meal (O Allos Anthropos does it for less than $1 per person, and their meals are better).

Aid for the poorest and most miserable has been institutionalized. The priority has become whether those providing the services follow the rules of the ruling institution (in this case the EU), not whether those services are the best and/or most efficient they can be. Not only is it a giant waste of taxpayer money, Brussels has turned this, as it has done with many things concerning Greece, into a power game.

Tsipras want to help pensioners and underfed schoolchildren for Christmas? How dare he. Meanwhile, new stats this week said 9 out 10 unemployed Greeks get no support from the state, and 350,000 families have no wage earner. 300,000 educated Greeks have emigrated to find work. Scorched earth.

 

 

The EU has transferred hundreds of millions of euros to dozens of NGOs, but conditions in refugee camps around Greece, and personal conditions of people who are either inside these camps or elsewhere, are often still deplorable. Part of the blame rests with the Greek government, undoubtedly, but they can’t even take care of their own people, and the EU gives them very little to deal with the refugees.

The official line is that the government in Athens is not efficient enough when dealing with the issue. But the reality is the government feels it’s easier to comply with Brussels, and the city of Athens feels it’s easier to comply with the government. And they’re all fine, thank you, the PM and the mayor live in nice abodes. But they leave the homeless and refugees in no man’s limbo.

This is the huge void in which Konstantinos operates. Trying to help those people that others can’t or too often won’t. To at the very least feed them, and do what he can in other ways. Which without funding is an impossibly frustrating thing to do.

Not that he will ever show it, anymore than I want to make this sound like some kind of lament. Let’s instead turn to the future. Because there are of course plenty of plans. How we’re going to pay for them is a whole other story…

 

 

But first, a few maps I made. The first one shows the -5- places where there were ‘kitchens’ (in pink) when I hooked up with Konstantinos in July 2015, with no. 1 the ‘Big House’ on Plateon Street, as well as the -‘subsidiary’- locations (in red) where food was served with assistance from the Big House. I left the island of Lesbos off the map, because it’s so out of the way. It’s one the second map though.

 


click map for full navigable version

 

The second map shows the 39(!) locations where food is served now (green are kitchens, yellow are ‘subsidiaries’), plus 9 other ones they would like to add in 2017 (in blue) . Click on the maps for a full, navigable version. I couldn’t embed them, sorry.

I should add that these are not all places where food is served 7 days a week, there is no money to do that. Often, unfortunately, it’s just once a week.

 


click map for full navigable version

 

This, I hope, gives you an idea of where your money has gone: the difference between the first map and the second is to a large extent due to your donations. Your money helps to feed people, in a very direct manner.

But that’s not nearly all yet. In the past few months, Konstantinos has traveled to Perugia, Italy, and to Barcelona, Spain. According to him, Social Kitchens are being set up as we speak in Barcelona and Alicante.

For 2017, he has invitations to visit – and help set up kitchens in- Manchester and London in the UK, The Hague in Holland, the Lebanon, Gaza -to let Israelis and Palestinians cook together, and a camp with 1 million refugees in Jordan. All with the Free Food For All principle in mind, not the Present Your ID or You’ll Go Hungry idea that the EU and NGOs adhere to.

 


Konstantinos in Barcelona: El Otro Hombre

 

2017: In Greece, as I said, 9 more kitchens are waiting to be opened. Moreover, there are advanced plans, for which again there is no money, to start a -mobile- medical (and food) service for elderly Greeks in remote areas, where there are no facilities that are ‘reasonably accessible’ to them. All the necessary volunteers, doctors, nurses, you name it, everyone is on board.

But it will still take €8,000 to arrange for a vehicle that is properly equipped. Yeah, that’s all, surprised me too; I don’t know how he does it, but Konstantinos is confident he can do it for that. Donated equipment, volunteer crew, just paying cost for the moderate conversion of the vehicle. He’s a master at shoestring.

Once that is done, of course Konstantinos is dreaming of adding more such vehicles. Greece is a large enough country, and ever fewer people have access to health care. Then after that, one Big House will not be enough if instead of the 5,000 meals now served daily, the amount would, say, double (which it really should). So he also dreams of more Big Houses, central kitchens.

One sad detail that was mentioned is that the present -only- Big House is also a facility where many people, mainly homeless, go to take a shower, and do laundry, make sure their kids get properly educated, etc etc. But per address in Greece, water is one price up to a limit; if you use more, you pay a lot more for that. So offering laundry and shower facilities for those who have none, ends up costing an arm and a leg. One of many problems.

I must admit I have no idea where we’re going to go from here. But I’m not going to stop trying to keep this movement moving. I may fail, but it won’t be for a lack of effort. Because Konstantinos and his people deserve that I do that, and all the people they help, deserve it even more. I’ll be sure to keep you posted in the new year.

 

Both Konstantinos and myself -and all the other volunteers at O Allos Anthropos- want to thank you so much for all the help you’ve given over the past year -and in 2015-. We’re around $30,000 for 2016 alone, another $5000 since my last article 4 weeks ago. I swear, for as long as I live, this will never cease to amaze me.

And then of course what happens is people start thinking and dreaming about what more they can do for those in peril. Wouldn’t you know…

A Merry Christmas to all of you, to all of us. Very Merry. God bless us, every one. Thank you for everything.

If I may make a last suggestion, please forward this ‘dream’ to anyone you know -and even those you don’t-, by mail, Twitter, Facebook, Instagram, word of mouth, any which way you can think of. Go to your local mayor or town council, suggest they can help and get -loudly- recognized for it.

There may be a dream involved for 2017, but that was our notion a year ago as well, and look what we’ve achieved a year later: it is very real indeed.

And anyone, everyone can become part of that reality for just a few bucks. If the institutions won’t do it, perhaps the people themselves should. That doesn’t even sound all that crazy or farfetched. There’s a lot of us.

 

 

For donations to Konstantinos and O Allos Anthropos, the Automatic Earth has a Paypal widget on our front page, top left hand corner. On our Sales and Donations page, there is an address to send money orders and checks if you don’t like Paypal. Our Bitcoin address is 1HYLLUR2JFs24X1zTS4XbNJidGo2XNHiTT. For other forms of payment, drop us a line at Contact • at • TheAutomaticEarth • com.

To tell donations for Kostantinos apart from those for the Automatic Earth (which badly needs them too!), any amounts that come in ending in either $0.99 or $0.37, will go to O Allos Anthropos. Every penny goes where it belongs, no overhead. Guaranteed. It’s matter of honor.

 

Please give generously.

 

 

A list of the articles I wrote so far about Konstantinos and Athens.

June 16 2015

The Automatic Earth Moves To Athens

June 19 2015

Update: Automatic Earth for Athens Fund

June 25 2015

Off to Greece, and an Update on our Athens Fund

July 8 2015

Automatic Earth Fund for Athens Makes First Donation

July 11 2015

AE for Athens Fund 2nd Donation: The Man Who Cooks In The Street

July 22 2015

AE Fund for Athens: Update no. 3: Peristeri

Nov 24 2015

The Automatic Earth -Finally- Returns To Athens

Dec 25 2015

Help the Automatic Earth Help the Poorest Greeks and Refugees

Feb 1 2016

The Automatic Earth is Back in Athens, Again

Mar 2 2016

The Automatic Earth for Athens Fund Feeds Refugees (Too)

Aug 9 2016

Meanwhile in Greece..

Nov 28 2016

The Other Human Needs Your Help This Christmas

 

 


Konstantinos and a happy refugee

Nov 292016
 
 November 29, 2016  Posted by at 7:17 pm Finance Tagged with: , , , , , , , , , ,  


Andrea Bonetti Konstantinos Polychronopoulos 2015

 

To anyone who reads this, please send it to as many of your friends and family and others as you can. Tweet and retweet, post and share on Facebook, do whatever you can to make Christmas a better time and place for the poorest Greeks and refugees. And, of course, please donate!

 

 

It’s 4 weeks before Christmas and it’s time. Time for me to go back to the basics, the streets, the people of Athens – the people of Greece as a whole. Back to my friends at the O Allos Anthropos (The Other Human) Social Kitchen who by now serve 5,000 meals a day every day spread over a dozen+ locations on -less than- a shoestring, to the poorest Greeks and to refugees. To my dear friend Konstantinos Polychronopoulos, the little engine that could, and does, drive the entire ‘intervention’.

It’s time also to announce a Christmas/New Year’s fund raiser for these people here at the Automatic Earth, to coincide with our usual annual fundraiser for the Automatic Earth itself. As always, please donate through the Automatic Earth’s Paypal widget at the top left hand side of our pages. If you don’t fancy Paypal, there’s an address for checks and money orders on our Store and Donations page.

Donations that end in $0.99 or $0.37 all go straight to O Allos Anthropos. In fact, I will deliver them in person, something that is necessary because of continuing capital controls in Greece. And no, don’t worry, I don’t pay my travel and stay in Athens from the donations for O Allos Anthropos. Every donated penny goes where it belongs. Guaranteed.

 

I never intended to get involved in aid, I have as many reservations about institutionalized aid as so many people tell me they have. All I wanted to do initially was to donate a few dollars when I first visited Greece in June 2015. But things have taken off from there, both because of Automatic Earth readers’ generosity (over $30,000!) , and because I found what I have come to regard as the perfect vehicle to deliver aid.

O Allos Anthropos is that vehicle, because it does not fit the mold the ‘aid industry’ has built. The flipside of this is that it has a hard time getting funded. It’s mighty ironic that the one ‘organization’ that is by far the most efficient in delivering aid, should also be the one that has by far the hardest time getting support to do that.

‘The Other Human’ Social Kitchen does not rely on government contacts and contracts, as the established aid industry does. It also doesn’t pay hefty salaries (no salaries at all) or have huge overhead. It’s a loosely organized group of dedicated poor Greeks, often homeless themselves, caring for and feeding other poor Greeks and refugees, helping where they can as far as the funding allows.

It’s the difference between top down and bottom up. And yes, it’s crazy that such a difference should exist even in delivering basic needs to the most needy among us, but it’s there.

 


From Human-The Movie, Yann Arthus-Bertrand

 

There is a list of about a dozen articles with links at the bottom of this page that I’ve written about my visits to Athens over the past 15 months. And there are 4 new videos of Konstantinos and the O Allos Anthropos ‘movement’ inserted in the article. Do watch them, together they paint a great picture.

But first, please allow me to explain why I support the Greek people the way I do. There are several reasons.

 

Number one is the state of the Greek economy. The effects of austerity policies on Greek society were front page news a year and a half ago, but since then, the world has largely left the country alone (15 minutes of fame only) while things have gotten worse fast, and an additional issue, that of the refugees, was added.

The treatment of Greece by its creditors continues to be scandalous, the EU, ECB and IMF behave like a nest of boa constrictors. In a nutshell, it has intentionally been made impossible for the Greek economy to recover. No matter what else you may read, it is a cruel joke to even suggest that an economy and society in which 25% of adults, and over 50% of young people, have been unemployed for years on end, could ‘recover’. If you read headlines like ‘Greece Edges Out Of Recession’, you’re being played.

Add to the mix that consumer spending makes up some 60% of GDP in Greece, but many of those who do have jobs work for €100-€400 a month, and pensions have been cut to less than €700 for 60% of pensioners (basic pension is about €380), and 52% of households -must- live off pensions of elderly family members because most unemployed get nothing. 7 out of 10 jobless are long time unemployed, and get nada. Close to half of pensioners live below the poverty line. Never ending tax raises have put the cost of living beyond reach for millions.

Moreover, tens of thousands of the best educated young Greeks (and 1000 doctors a year) have left the country because there are no jobs and no prospects. The education system was once as highly touted globally as the health care system, but both have been gutted so dramatically now it’s hard to see how either could ever be rebuilt. 15 months ago I donated some money to social clinics, now I receive long and detailed lists of medicine that is simply no longer available. With a cry for help.

Under these circumstances, spending can only go down, and that means GDP growth is mathematically impossible. Nor has a bottom been reached; the situation will deteriorate until conditions allow for spending to rise, and no such thing is in sight. The Troika parties keep hammering on more ‘reforms’ -advertized as an investment in the future-, which invariably make matters worse, while they keep quarreling about, and delaying, debt relief. Boa constrictor. Slow strangulation. In the latest talks, the creditors are demanding additional austerity measures for 2019-2020… That is the reality for Greece.

 


From Destination: Utopia

 

Number two is the refugee situation. When I first got to Athens, refugees were not yet a major concern, the Greeks themselves were. Much has changed since then. After the initial large wave, most of which ended up in Germany and other countries, borders were shut and Greece was left to deal with those who remained. Promises to ‘fairly’ resettle refugees in the rest of the EU were largely ignored. There are presently about 60,000 refugees in Greece, and they’re stuck where they don’t want to be, in a country that doesn’t have the means to take care of them.

Brussels refuses for Greece to move the refugees stuck in camps on the islands, to the mainland, for fear they will try and travel north. Still, 60,000 should never be the problem that it is. However, the EU never sent the personnel it once promised to deal with asylum applications. Greek Immigration Minister Mouzalas said last week: “We had an agreement for 400 staffers. Just 35 have arrived. We had a new agreement for another 100 and are still waiting..”. Of course, when the applications are delayed, so is the need for Brussels to resettle the refugees. Convenient when there are elections coming in Holland, France and Germany.

But it is Greece that gets the blame for this; Athens should move faster, is the word. And because it doesn’t, Brussels doesn’t send the humanitarian funds it makes available, to the Greek government; it sends them to international NGOs instead. Which leads us to:

 


From Chris Gal

 

Number three is the reality of humanitarian aid. First, let me say I don’t mean to sound -overly- negative about this. But at the same time I feel obliged to explain to you why I’m asking for your support despite the aid that’s already flowing through ‘official’ channels. To put it mildly: things don’t work the way they could. There is aid that reaches the target groups, and there are many well-intentioned people involved, but the overall efficiency with which that happens leaves much to be desired.

Many people are reluctant to donate to large (i)NGOs because they are suspicious of their culture(s). I am not an expert on this, but from what I have heard and seen over the past while, that suspicion does not look so crazy. What it comes down to is that humanitarian aid has become an industry. In the Greek situation, this means that the about €300 million (reported numbers vary) dispersed by the EU so far (€700 over 3 years) to assist Greece and Italy with their refugee influx, has by and large been divided over some 150 NGOs and other aid organizations.

But the stories about underfed, poorly housed and overall miserable refugees and migrants keep rolling in. And more often than not, the Greek government gets the blame. However, if €300 million is not enough for NGOs and aid organizations to make sure 60,000 are properly fed and in general taken care of, what is?

What I had heard and observed on the ground was confirmed in September – in one of these ‘glad it’s not just me’ moments – by a series in the Guardian called Secret Aid Worker. An anonymous aid worker with experience in multiple countries wrote this:

Secret Aid Worker: Greece Has Exposed The Aid Community’s Failures

At the time of writing, the number of refugees in Greece is approximately 60,000. The problem is not overwhelming. This time we are in an EU country. I feel safe wherever I am – this means I can conduct a visit to monitor the impact of a programme or ensure I am consulting refugees about what they want. But I don’t, because it is something we have talked about but not done for many years, and there is little pressure to change.

The disconnect between the sector’s standards and the reality on the ground is more stark here than in any other mission I’ve been involved in. We have historically been unaccountable, failing to sufficiently consult and engage affected communities. In Greece we are continuing to operate in the same ways as before, but without the traditional excuses to rely on.

When we have enabling infrastructure, a socio-political context that is easy to operate in, access to Wi-Fi, technology and adequate funds, and yet are failing to meet the refugees’ basic needs (even for something as simple as safe accommodation), reduce serious threats (such as the prevalence of sexual violence), or to be accountable or innovative, it suggests we are disinterested or incompetent. Perhaps both.

In Greece the aid community is being exposed. Our exposure is further compounded when we are unfavourably compared to organised and efficient groups of volunteers who work with less and achieve more. In comparison INGOs and the UNHCR seem money-orientated, bloated, bureaucratic and inefficient.

Across Greece there are volunteers working both independently and as organised groups, meeting needs and filling gaps. They take over abandoned buildings to ensure refugees have somewhere to sleep, provide additional nutrition to pregnant and breastfeeding women, organise and manage informal education programmes, including setting up schools inside camps.

All of this while INGO staff sip their cappuccinos in countless coordination meetings – for cash distribution, protection, water, sanitation and hygiene, food distribution and child-protection. Often to avoid engaging meaningfully in the discussions, we furiously take notes. If any response has called into question whether the humanitarian sector is still fit for purpose, it’s the response to the refugee crisis in Greece.

A good example of this is that it was O Allos Anthropos that was asked last year by the lady who ran the Moria refugee facilities on Lesbos, to run the food supply (the kitchen still operates). The NGOs and their millions in funding failed to do it. Konstantinos did, after he organized food donations by the people living on the island, and after I gave him some of your donations, so he could pay for transport etc. needed to make it possible.

O Allos Anthropos doesn’t fit the model developed by the industry that aid has become. In many aspects, that’s a good thing. But it also means it’s a daily struggle to do even the most basic good. And yes, we need to try and change that. But breaking the aid industry mold will not be easy. And in the meantime, the need will continue to be there, and it will keep growing, and Konstantinos will keep trying to fill it.

 


From Solidarity Networks 1: the mini doc series

 

One thing that struck me about the aid industry was reading that British politician David Milliband makes $600,000 a year as head of IRC, the International Refugee Committee. And when he makes that kind of money, so do others involved in the ‘industry’.

And then there are people like Konstantinos, who doesn’t make a penny, who has devoted his entire life to helping people in need, and the contrast is so big it borders on insane. Of course Konstantinos is not alone in this; there are many people who work to aid others without asking for anything in return.

Konstantinos doesn’t want to try and fit O Allos Anthropos into the established -international- aid mold. He doesn’t want to fill out paperwork on a constant basis, and rely on permissions, approval or validation from governments and other ‘high-up’ bodies. He wants by the people for the people. But he has come to realize since we met that if he wants to address the ever growing demands made on him, he can’t do it with no money at all.

Recently, he was invited, and traveled to Perugia, Italy, where people want to start their own version of O Allos Anthropos. This week, he is in Barcelona, where the same questions have been asked. And unless he starts saying No to ever more people, he will need funding.

I mentioned a long list of drugs and medical paraphernalia that social pharmacies are asking him for help in acquiring. People die in Greece, they suffer pain, they tumble into misery, from afflictions that just a few years ago were easy to treat. That’s how bad things have gotten. Earlier this year, Konstantinos told me he had an idea to set up a service to deliver food and drugs to old people in villages in the Greek countryside, in the mountains, remote villages that today often house only older people because the young have all left. A great idea, but how is he going to pay for it?

On December 4, O Allos Anthropos will have a party to celebrate its 5th anniversary, and 2 million meals served. By far most of those were served after the Automatic Earth got involved and your donations made it possible to expand the Social Kitchen to the 17 or so locations across the country, and the islands, where aid is delivered under the O Allos Anthropos banner.

In the first few years, it all operated by people donating food directly. But food donations have fallen by 50% or more this year, because ever fewer Greeks can afford to donate. It is time for the rest of the world to step in. And that doesn’t have to cost millions. The $30,000 you have donated over the past 15 months have achieved miracles already.

In an ideal scenario, I would like to be able to collect $50,000 a year for Konstantinos to do his work. More than $100,000 would not be needed, unless things take a dramatic turn for the worse. Talking of which, any of you who work in the medical field and would like to help alleviate the medicine shortages, drop me a line at Contact • at • TheAutomaticEarth • com, and I’ll tell you what’s most needed.

 

Please, those of you who have been involved on location or otherwise in delivering aid, understand that I don’t mean to insult you. Most of you come with the best intentions, and many do great work, often against the grain. But I think the account of the Secret Aid Worker above cannot sound entirely unfamiliar to you. So much goes wrong that it must be plain for most of you to see.

And it’s perhaps good to wonder whether international volunteers are the best option to deliver aid in countries where locals are available, and willing, to do the same work. The difference is one gets funding and the other does not. Maybe that, more than anything, should change.

But for now, because it’ll soon be Christmas and because we want to give Konstantinos and his people a wonderful Yuletide and a positive start to the new year, please help us by donating generously.

Because whatever economic and/or political and/or election issues you may have gotten worked up about lately, in the end, and certainly at Christmas time, it is about people. Indeed, it is about helping strangers.

 

 

For donations to Kostantinos and O Allos Anthropos, the Automatic Earth has a Paypal widget on our front page, top left hand corner. On our Sales and Donations page, there is an address to send money orders and checks if you don’t like Paypal. Our Bitcoin address is 1HYLLUR2JFs24X1zTS4XbNJidGo2XNHiTT. For other forms of payment, drop us a line at Contact • at • TheAutomaticEarth • com.

To tell donations for Kostantinos apart from those for the Automatic Earth (which badly needs them too!), any amounts that come in ending in either $0.99 or $0.37, will go to O Allos Anthropos.

Please give generously.

 

 

I made a list of the articles I wrote so far about Konstantinos and Athens.

June 16 2015

The Automatic Earth Moves To Athens

June 19 2015

Update: Automatic Earth for Athens Fund

June 25 2015

Off to Greece, and an Update on our Athens Fund

July 8 2015

Automatic Earth Fund for Athens Makes First Donation

July 11 2015

AE for Athens Fund 2nd Donation: The Man Who Cooks In The Street

July 22 2015

AE Fund for Athens: Update no. 3: Peristeri

Nov 24 2015

The Automatic Earth -Finally- Returns To Athens

Dec 25 2015

Help the Automatic Earth Help the Poorest Greeks and Refugees

Feb 1 2016

The Automatic Earth is Back in Athens, Again

Mar 2 2016

The Automatic Earth for Athens Fund Feeds Refugees (Too)

Aug 9 2016

Meanwhile in Greece..

 

 


Konstantinos and a happy refugee

 


Jodi Graphics What Greece lost in one year, 2014

 

 

Aug 092016
 
 August 9, 2016  Posted by at 12:21 pm Finance Tagged with: , , , , , , ,  


Jodi Graphics 2014

Everyone gets 15 minutes of fame. Greece had its spot in the limelight last year. It is now no longer famous. We have all moved on to bigger dramas, or so we think. The French feel they are the victims because of terrorist attacks, the British because of Brexit, Americans because of Trump.

Warhol’s 15 minutes of fame line is as much about the average human being’s attention span as it is about anything else, like the proliferation of media. The data in the picture at the top of this article are from 2014. They are what moved Greeks to elect Syriza in early 2015. But the Greeks found out within 6 months that this made no difference; the Troika called the shots, not the Greek people, not its government.

Every single one of the numbers in that pic has gotten worse over the past two years since it was released, often by a lot. There are hundreds of thousands of Greeks who make anywhere from €100 to €500 a month working the only part time jobs they can find. 1.2 million workers must wait anywhere from 3-15 months for their salaries to be paid.

But they’re the lucky ones; at least they have jobs. There are millions who don’t make any money at all. 3 million Greeks have no health care coverage because of this. That’s 30% of the population. A related quote I first put up last year is: “..if you are sick in Greece now, you have an expiration date.”

The IMF report I wrote about recently in Why Should The IMF Care About Its Credibility? states unambiguously that the IMF itself, in cahoots with the EU, is to blame for all this misery. But we haven’t seen one single word that would indicate there are plans to rectify this gross injustice.

The austerity measures forced upon Greece by the EU and IMF squeeze the country itself, and the people who inhabit it, into ever growing desolation, with no way out at all on the horizon. A country and its economy cannot heal or recover when it has a 25% unemployment rate, and 50-60% for its young people. And has seen hundreds of thousands of its best educated people leave the country.

Moreover, with pensions, on which a large part of the overall population depends just to survive, having been cut for the umpteenth time (supplementary pensions were cut between 21% and 46% on August 1), while a wide range of taxes keep rising across the board, consumption is being strangulated, which leads to more companies and stores closing, more unemployment, rinse and repeat. You can find it in the dictionary under ‘vicious circle’. Or in the Greek one under ‘Schäuble’ or ‘Dijsselbloem’.

And then Angela Merkel had the gall not long ago to claim the EU had found the ‘right mixture’ of policies with regards to Greece. These people are so -willingly- blind, and they care so little about what their policies do to people, they couldn’t find a ‘right mixture’ if it drove over them in a truck.

Greece is being ritually slaughtered, and the Brexit referendum has not taught Brussels one single lesson. They’re not going to understand until it’s too late and the EU blows up, but that may still take some years, while for the Greeks it’s already too late now.

The Troika should really -certainly after the IMF report- be forced to repeal their ‘policies’ versus Greece, but who’s going to force them? They’re not accountable to anyone. Well, except for the IMF executive board, but they are just a bunch of …. And the other Troika side, the EU, is a lost case.

On top of the country’s internal problems, there are now 57,000 refugees stuck in Greece. 21,000 of them have requested asylum. Plans to relocate them through the EU have been miserable failures. Most of the refugees live in one of dozens of improvised camps in below-par conditions. Those who don’t have papers are often de facto prisoners.

More misery is on the way. The Troika has forced through a law that will make it much easier to foreclose on homeowners who can no longer pay their mortgages. It’s not hard to see that there are many of them. The country must therefore prepare for another epidemic of homelessness, a scary prospect for a society that’s already been hit so hard.

 

 

As you will know if you’re a regular reader of the Automatic Earth, I started the “Automatic Earth for Athens Fund” last spring when I first went to Greece to see what the Syriza ‘revolution’ would bring (we now all know what it brought). The donations from Automatic Earth readers into the fund went far beyond what I could have dreamed of.

After donating some of it to two volunteer clinics and am institute for streetchildren (see links to articles below), I decided to focus on donating the funds to O Allos Anthropos (which means The Other Human), a group of impoverished Greeks who feed other poor Greeks, and do so by cooking in the street. The movement is led by someone who has become a dear friend, Konstantinos (Kostas) Polychronopoulos.

 


Konstantinos (Kostas) Polychronopoulos

 

I have been back in Athens for a few months now, talked to Kostas quite a bit, and donated more of your money. So much so that there is nothing left. I paid the rent for the ‘nerve center’ in May (€2,054 per 3 months) and a total of €2,500 in May and June to repair Kostas’ car, without which the entire organization would grind to a halt. And then paid the rent again this Thursday, another €2,054.

My administration indicates that you have donated $24,370 to date, and I have given away $26,694. The numbers can’t be exact, because donations come in in USD, EUR and CAD, and exchange rates vary. Also, Paypal takes ‘its share’, which also varies. But one’s thing’s sure: the money’s been spent, and well spent. Actually, two things are sure, the second being that more money is needed.

 


Kostas was so happy to have his car running again, and you made that possible. It’s taken him ‘twice around the whole country’ in the past year. 13 different cities. It costs €500 to get a return ticket on the ferry to Lesbos with the car…

 

I am hesitant to ask the same people repeatedly to donate, but I will, because at this moment I have no choice. After I paid the rent two days ago Kostas told our friend and translator Tassos that he had two euros left in his pocket. And that’s not good. Of course I’ve known all along that the money could run out, but also that it won’t be for my lack of trying. And yes, this has become personal over the past year.

And now, not only will there be another wave of homelessness, other things deteriorate as well. A few weeks ago Kostas told me that donations of food, his by far most important kind of donations, are down by over 40%. People in Greece simply don’t have the money anymore to afford donations. While he has 13 ‘social kitchens’ running all over Greece which together prepare 3-5000 meals every day, and would like to do more, but can’t because he doesn’t have the means.

Another issue too has raised its head. Volunteer clinics like the ones I donated to a year ago are now coming to Kostas to see if he can get them medicine and various medical accessories. So he’s looking into that, with doctors to guide the process. There are people who donate unused medication, it’s starting up and the need there is great too.

Meanwhile, increasingly people come to O Allos Anthropos to be fed, who used to donate food themselves. Society is changing for the worse rapidly. The ‘nerve center’ I paid the rent for a few times allows some 100 homeless people every day to get a shower, have breakfast, do laundry, and have their children get help with schoolwork, often with pens and paper and books and schoolbags that are also donated.

According to Kostas, there are 155 NGOs operating in Greece. And while some undoubtedly do some good, it’s hard not to wonder what most of them do. Some of the issues with NGOs coming to Greece are obvious: for the big ones it’s their corporate structure, and for many it’s that they come from abroad and don’t know the culture. Though I don’t want to say anything negative about this, fact is there must be millions of euros flowing through this ‘industry’, and it’s hard to see where it‘s going.

It’s precisely because of such issues that I have chosen to support Kostas and O Allos Anthropos. They are Greek, they don’t make money from their involvement, so every penny goes towards those who need it most, and they are themselves as poor as those they help. And Kostas is the little engine that could who holds it all together, and holds everyone together.

 

 

Here is a video featuring Kostas from 2 years ago. What struck me when seeing it again is that he’s proud of going from handing out 20 to 200 meals per day. Since then, he’s gone to 5000 per day. And yes, I also do get the irony in the role that your donations to the Automatic Earth for Athens fund have played in making that development possible. I would deeply regret having to bow out now, and leave Kostas to himself. Not that he wouldn’t make it, but we, you and me, have made a big difference. But I can’t do it alone, it has to be as much of a community effort as O Allos Anthropos itself is. So please help.

 

 

 

I’ll get back to you about this soon. I’ve been breaking my head trying to figure out how to collect more funds to continue supporting O Allos Anthropos, lying awake at night over it. Yeah, we could turn to crowdfunding perhaps, but I think it’s important that it would have to be done right, and this is not my expertise.

Kostas is a bit of a difficult ‘customer’ to work with, but for good reasons in my eyes. He doesn’t want the group to become an official organization, he doesn’t want to become an NGO, and he doesn’t want to apply for government support. Because all these things would lead away from what he thinks is essential: people helping people.

He refused an award from the EU last year saying ‘you guys are responsible for this mess and this misery, I want nothing from you’. ‘Official’ support comes with conditions, with people wanting to tell you what to do and how to do it. But yes, it makes it harder to keep things afloat, and to help where help is needed.

Kostas has many ideas for how he would like to change and expand his operations, but for now just holding on to the basics is a battle. He was talking the other day about villages in the mountains where mostly older people live, isolated and in dire need of food and medication, of how he would like to set up a way to reach out to them.

I’ll leave this here for now. If anyone has ideas about for instance a crowdfunding campaign, please contact me at contact •at• TheAutomaticEarth •dot• com. For anyone in the medical profession, if you have ideas about how to get medication here from abroad, please let me know. There is a great need for insulin, various cancer drugs are not available in the country at all anymore, and then there are things like blood pressure tests, blood sugar tests, hearing aids and wheelchairs.

I’ll get a full list from one of the hospitals soon. Everything medical will run through them too.

 

 

For donations to Kostas and O Allos Anthropos, the Automatic Earth has a Paypal widget on our front page, top left hand corner. On our Sales and Donations page, there is an address to send money orders and checks if you don’t like Paypal. Our Bitcoin address is 1HYLLUR2JFs24X1zTS4XbNJidGo2XNHiTT.

To tell donations for Kostas apart from those for the Automatic Earth (which badly needs them too!), any amounts that come in ending in either $0.99 or $0.37 (don’t ask), will go to ‘The Other Human’.

Please give generously.

 

 

I made a list of the articles I wrote so far about Konstantinos and Athens. Not sure if it’s complete.

June 16 2015

The Automatic Earth Moves To Athens

June 19 2015

Update: Automatic Earth for Athens Fund

June 25 2015

Off to Greece, and an Update on our Athens Fund

July 8 2015

Automatic Earth Fund for Athens Makes First Donation

July 11 2015

AE for Athens Fund 2nd Donation: The Man Who Cooks In The Street

July 22 2015

AE Fund for Athens: Update no. 3: Peristeri

Nov 24 2015

The Automatic Earth -Finally- Returns To Athens

Dec 25 2015

Help the Automatic Earth Help the Poorest Greeks and Refugees

Feb 1 2016

The Automatic Earth is Back in Athens, Again

Mar 2 2016

The Automatic Earth for Athens Fund Feeds Refugees (Too)

 

 

 

 

Jul 172016
 
 July 17, 2016  Posted by at 4:08 pm Finance Tagged with: , , , , , , , , , ,  


Ben Shahn Daughter of Virgil Thaxton, farmer, near Mechanicsburg, Ohio 1938

Recently, I posted a two-tear old article on facebook.com/TheAutomaticEarth that was shared so many times it seems to make sense to use it for an Automatic Earth article as well. The article asks how toxic the wheat we eat is – or Americans, more specifically-, and why that is.

But first I would like to touch on a closely connected issue, which is Nassim Nicholas Taleb’s ‘war’ on GMOs. Taleb, of Black Swans fame, has been at it for a while, but he’s stepped up his efforts off late.

In 2014, with co-authors Rupert Read, Raphael Douady, Joseph Norman and Yaneer Bar-Yam, he published The Precautionary Principle (with Application to the Genetic Modification of Organisms), an attempt to look at GMOs through a ‘solidly scientific’ prism of probability and complex systems. From the abstract:

The precautionary principle (PP) states that if an action or policy has a suspected risk of causing severe harm to the public domain (affecting general health or the environment globally), the action should not be taken in the absence of scientific near-certainty about its safety. Under these conditions, the burden of proof about absence of harm falls on those proposing an action, not those opposing it. PP is intended to deal with uncertainty and risk in cases where the absence of evidence and the incompleteness of scientific knowledge carries profound implications and in the presence of risks of “black swans”, unforeseen and unforeseable events of extreme consequence.

[..] We believe that the PP should be evoked only in extreme situations: when the potential harm is systemic (rather than localized) and the consequences can involve total irreversible ruin, such as the extinction of human beings or all life on the planet. The aim of this paper is to place the concept of precaution within a formal statistical and risk-analysis structure, grounding it in probability theory and the properties of complex systems. Our aim is to allow decision makers to discern which circumstances require the use of the PP and in which cases evoking the PP is inappropriate.

This puts into perspective the claims made by Monsanto et al that since no harm has ever been proven to arise from the use of GMOs, they should therefore be considered safe. Which is the approach largely taken over by American politics, and increasingly also in Europe and other parts of the world. In their paper, Taleb et al say the approach does not meet proper scientific standards.

This is very close to my personal opinion, expressed in many articles in the past, that GMOs pose such risks on such a wide scale to the food supply of every human being on earth -as well as a much wider selection of organisms- that they should not be legalized before perhaps 100 years of tests have been done by large and independent teams of specialists.

Note that if you, as an individual farmer, as a community or even as a nation, want to ban GMOs but your neighbors do not, you will in the case of many crops not stand a chance of keeping your plants GMO free. For which you can subsequently be sued by the ‘owner’ of the genetically altered plants and seeds.

Also, I think it is irresponsibly dangerous to give a handful of companies (Monsanto, Bayer, DuPont, Syngenta), who all happen to be chemical giants dating back to the 20th century interbellum, and all with questionable pasts, a quasi-monopoly over the -future of- world’s food. Because that is where things will go unless proper principles are applied, both scientific and legal.

One of the main arguments proponents of GMOs use is that through thousand of years mankind has altered crops through selection ‘anyway’, so talking about anything ‘pure’ or ‘natural’ in this regard is not relevant. Taleb put the difference between altering a staple through this ‘generational’ selection on the one hand and the modifying of genes in a lab into a sketch:

The sketch was later annotated by Rahul Goswami, approved and shared by Taleb:

I think it is obvious that ‘generational’ selection through breeding is localized, can be rejected by nature. Genetic modification is something completely different, it takes a much bigger step (a giant leap) and forces itself -as a more or less alien body- onto a much larger eco-system.

It’s not about trying to figure out what works, but about forcing itself upon the world and its inhabitants regardless of the consequences. The precautionary principle is missing where it is most needed.

A few examples of Taleb’s tweets on the topic in the past few days make his stance abundantly clear.

“GMO issue is ignorance of the properties of complex systems/fattails (Monsanto’s 107 Nobels, 80 y.o. are 50 y behind)”

“Anyone pro-GMOs on “scientific” grounds is 50 years behind, ignorant of complexity, or just stupid”

“Monsanto pulled no stop trying to discredit me: 1000 mails to Univ (!),>1000 shill posts. Nada. F***you money works.”

Then, on to the article I started talking about above. As I said, it was written some two years ago by Sarah at the Healthy Home Economist. From the reactions to my posting it on Facebook -a huge number of shares- I surmise that many people A) had no idea that what Sarah describes is common practice, and B) have a profound interest in the topic.

Note: while a fair number of people said they had never heard of this, and/or doubted it was true at all, quite a few confirmed it as common where they live, and not just stateside, but in Scotland, Argentina etc.

Let’s see how we get through this. I don’t want to just post the whole thing, but I’ll need large portions of it.

The Real Reason Wheat is Toxic

The stories became far too frequent to ignore. Emails from folks with allergic or digestive issues to wheat in the United States experienced no symptoms whatsoever when they tried eating pasta on vacation in Italy. Confused parents wondering why wheat consumption sometimes triggered autoimmune reactions in their children but not at other times.

In my own home, I’ve long pondered why my husband can eat the wheat I prepare at home, but he experiences negative digestive effects eating even a single roll in a restaurant. There is clearly something going on with wheat that is not well known by the general public. It goes far and beyond organic versus nonorganic, gluten or hybridization because even conventional wheat triggers no symptoms for some who eat wheat in other parts of the world.

What indeed is going on with wheat? For quite some time, I secretly harbored the notion that wheat in the United States must, in fact, be genetically modified. GMO wheat secretly invading the North American food supply seemed the only thing that made sense and could account for the varied experiences I was hearing about. I reasoned that it couldn’t be the gluten or wheat hybridization. Gluten and wheat hybrids have been consumed for thousands of years.

It just didn’t make sense that this could be the reason for so many people suddenly having problems with wheat and gluten in general in the past 5-10 years.

Finally, the answer came over dinner a couple of months ago with a friend who was well versed in the wheat production process. I started researching the issue for myself, and was, quite frankly, horrified at what I discovered. The good news is that the reason wheat has become so toxic in the United States is not because it is secretly GMO as I had feared (thank goodness!).

The bad news is that the problem lies with the manner in which wheat is grown and harvested by conventional wheat farmers. You’re going to want to sit down for this one. I’ve had some folks burst into tears in horror when I passed along this information before.

Common wheat harvest protocol in the United States is to drench the wheat fields with Roundup several days before the combine harvesters work through the fields as the practice allows for an earlier, easier and bigger harvest

Pre-harvest application of the herbicide Roundup or other herbicides containing the deadly active ingredient glyphosate to wheat and barley as a desiccant was suggested as early as 1980. It has since become routine over the past 15 years and is used as a drying agent 7-10 days before harvest within the conventional farming community.USDA pesticides applied to wheat.

According to Dr. Stephanie Seneff of MIT who has studied the issue in depth and who I recently saw present on the subject at a nutritional Conference in Indianapolis, desiccating non-organic wheat crops with glyphosate just before harvest came into vogue late in the 1990’s with the result that most of the non-organic wheat in the United States is now contaminated with it.

Seneff explains that when you expose wheat to a toxic chemical like glyphosate, it actually releases more seeds resulting in a slightly greater yield: “It ‘goes to seed’ as it dies. At its last gasp, it releases the seed” says Dr. Seneff. According to the US Department of Agriculture, as of 2012, 99% of durum wheat, 97% of spring wheat, and 61% of winter wheat has been treated with herbicides. This is an increase from 88% for durum wheat, 91% for spring wheat and 47% for winter wheat since 1998.

Wheat farmer Keith Lewis: “I have been a wheat farmer for 50 yrs and one wheat production practice that is very common is applying the herbicide Roundup (glyphosate) just prior to harvest. Roundup is licensed for preharvest weed control. Monsanto, the manufacturer of Roundup claims that application to plants at over 30% kernel moisture result in roundup uptake by the plant into the kernels. Farmers like this practice because Roundup kills the wheat plant allowing an earlier harvest.

A wheat field often ripens unevenly, thus applying Roundup preharvest evens up the greener parts of the field with the more mature. The result is on the less mature areas Roundup is translocated into the kernels and eventually harvested as such. This practice is not licensed. Farmers mistakenly call it “dessication.”

Consumers eating products made from wheat flour are undoubtedly consuming minute amounts of Roundup. An interesting aside, malt barley which is made into beer is not acceptable in the marketplace if it has been sprayed with preharvest Roundup. Lentils and peas are not accepted in the market place if it was sprayed with preharvest roundup….. but wheat is ok.. This farming practice greatly concerns me and it should further concern consumers of wheat products.”

This practice is not just widespread in the United States either. The Food Standards Agency in the United Kingdom reports that use of Roundup as a wheat desiccant results in glyphosate residues regularly showing up in bread samples. Other European countries are waking up to to the danger, however. In the Netherlands, use of Roundup is completely banned with France likely soon to follow.

Using Roundup on wheat crops throughout the entire growing season and even as a desiccant just prior to harvest may save the farmer money and increase profits, but it is devastating to the health of the consumer who ultimately consumes the glyphosate residue laden wheat kernels.

The chart below of skyrocketing applications of glyphosate to US wheat crops since 1990 and the incidence of celiac disease is from a December 2013 study published in the Journal Interdisciplinary Toxicology examining glyphosate pathways to autoimmune disease. Remember that wheat is not currently GMO or “Roundup Ready” meaning it is not resistant to its withering effects like GMO corn or GMO soy, so application of glyphosate to wheat would actually kill it.

While the herbicide industry maintains that glyphosate is minimally toxic to humans, research published in the Journal Entropy strongly argues otherwise by shedding light on exactly how glyphosate disrupts mammalian physiology. Authored by Anthony Samsel and Stephanie Seneff of MIT, the paper investigates glyphosate’s inhibition of cytochrome P450 (CYP) enzymes, an overlooked component of lethal toxicity to mammals.

The currently accepted view is that glyphosate is not harmful to humans or any mammals. This flawed view is so pervasive in the conventional farming community that Roundup salesmen have been known to foolishly drink it during presentations! However, just because Roundup doesn’t kill you immediately doesn’t make it nontoxic. In fact, the active ingredient in Roundup lethally disrupts the all important shikimate pathway found in beneficial gut microbes which is responsible for synthesis of critical amino acids.

Friendly gut bacteria, also called probiotics, play a critical role in human health. Gut bacteria aid digestion, prevent permeability of the gastrointestinal tract (which discourages the development of autoimmune disease), synthesize vitamins and provide the foundation for robust immunity. In essence:

Roundup significantly disrupts the functioning of beneficial bacteria in the gut and contributes to permeability of the intestinal wall and consequent expression of autoimmune disease symptoms

In synergy with disruption of the biosynthesis of important amino acids via the shikimate pathway, glyphosate inhibits the cytochrome P450 (CYP) enzymes produced by the gut microbiome. CYP enzymes are critical to human biology because they detoxify the multitude of foreign chemical compounds, xenobiotics, that we are exposed to in our modern environment today.

As a result, humans exposed to glyphosate through use of Roundup in their community or through ingestion of its residues on industrialized food products become even more vulnerable to the damaging effects of other chemicals and environmental toxins they encounter! What’s worse is that the negative impact of glyphosate exposure is slow and insidious over months and years as inflammation gradually gains a foothold in the cellular systems of the body.

The consequences of this systemic inflammation are most of the diseases and conditions associated with the Western lifestyle: Gastrointestinal disorders, Obesity ,Diabetes, Heart Disease, Depression, Autism, Infertility, Cancer, Multiple Sclerosis, Alzheimer’s, etc.

In a nutshell, Dr. Seneff’s study of Roundup’s ghastly glyphosate which the wheat crop in the United States is doused with uncovers the manner in which this lethal toxin harms the human body by decimating beneficial gut microbes with the tragic end result of disease, degeneration, and widespread suffering

[..] The bottom line is that avoidance of conventional wheat in the United States is absolutely imperative even if you don’t currently have a gluten allergy or wheat sensitivity. The increase in the amount of glyphosate applied to wheat closely correlates with the rise of celiac disease and gluten intolerance.

Dr. Seneff points out that the increases in these diseases are not just genetic in nature, but also have an environmental cause as not all patient symptoms are alleviated by eliminating gluten from the diet. The effects of deadly glyphosate on your biology are so insidious that lack of symptoms today means literally nothing. If you don’t have problems with wheat now, you will in the future if you keep eating conventionally produced, toxic wheat!

I guess we can leave it at that for now. Do go to the original article for more. Whether you look at it from a scientific viewpoint, as Taleb et al do, or from a common sense one, as Sarah does, the common thread seems obvious: Monsanto and other rich chemical giants seek to be the sole providers -even owners- of the world’s food, handed to us for free by nature and generations of our ancestors.

And to achieve that magnitude of power -and riches- they are more than willing to literally drive over sick and dead bodies. Once again, Taleb:

The precautionary principle (PP) states that if an action or policy has a suspected risk of causing severe harm to the public domain (affecting general health or the environment globally), the action should not be taken in the absence of scientific near-certainty about its safety. Under these conditions, the burden of proof about absence of harm falls on those proposing an action, not those opposing it.

That is not what’s happening, and there’s not much time left to start applying it before it’s too late. Because GMOs, once they’ve been introduced in a large enough environment, are near impossible to get rid of.

To end on a somewhat happier note, Taleb thinks that Monsanto is doing quite poorly these days, financially. Then again, that’s why Bayer wants to buy them, and that would only mean a continuation or even increase of the present practices.

What we need is decision makers who understand the science of complex systems, probability and the precautionary principle. And I don’t know about you, but when I look at who’s vying to be the leaders of the US, UK and many other nations, I think we’re a long way away from that.

Only Putin seems to get it. His stated goal is to make Russia the largest producer of organic food in the world. So maybe there is still hope.

Jul 132016
 
 July 13, 2016  Posted by at 8:33 am Finance Tagged with: , , , , , , ,  


Tim McKulka Elderly Woman Receives Emergency Food Aid, Sudan 2008

Markets Are In The Twilight Zone, Get Ready For New New Deal (AFR)
BOE Governor Carney Accused Of ‘Peddling Phoney Forecasts’ Over Brexit (G.)
Carney Should Stop Being So Gloomy About Brexit (Ashoka Mody)
German Leaders Demand Brexit Clarity From New British PM (R.)
British Pensions £383 Billion Underwater As Liabilities Hit Record (Tel.)
Ireland’s Economists Left Speechless by 26% Growth Figure (BBG)
Losing Australia’s AAA Rating To Make Losers of Mortgage Holders (BBG)
The Richest Generation in US History Just Keeps Getting Richer (BBG)
A Year After Bailout, Greece Struggles For Brighter Future (AFP)
EU Development Aid To Finance Armies In Africa (EuO)
Global Arms Race Escalates As Sabres Rattle In South China Sea (AEP)
Economic Theory as Ideology (Zaman)
Half Of All US Food Produce Is Thrown Away (G.)

 

 

Thought we were already there.

Markets Are In The Twilight Zone, Get Ready For New New Deal (AFR)

Macquarie analysts have likened the bizarre and inherently contradictory moves in markets to a “twilight zone” which is leading investors to a world where free-market economic thinking will be overtaken by the “nationalisation of credit” and state-sponsored growth. Think about that. Monetary policy is beating a path to a world where conventional market signals such as credit spreads and the price of risk will “finally perish” and be unseated by one where states are the drivers of credit, and spending and capital formation is the domain of central banks. “It would take the form of state-sponsored stimulation of consumption, investment, [research and development] and rescuing what essentially is a bankrupt financial superstructure (ie banks, insurance, life and pensions),” the Macquarie report, authored by Hong Kong-based analyst Viktor Shvets, said.

“Whilst similar to FDR’s New Deal, it would be a far more distorted world than either the 1930s or the 1960s-70s, with brand new investment signals.” [..] The unusual commentary from Macquarie says this “state driven paradise” will be brought on by ongoing high levels of volatility and “discontinuities” similar to what markets are grappling with today. “We don’t believe these conditions are yet satisfied, but the chances are high that they would be over the next 12-18 months. In the meantime, we still expect half-hearted ‘stop and go projects’. Japan is likely to be the first to ‘jump’ and wholeheartedly embrace this merger of fiscal, income support and monetary policies but others would eventually follow. It is just a matter of time.”

The Bank of Japan and re-elected Japan Prime Minister Shinzo Abe have signalled a fiscal-led stimulus package in excess of ¥10 trillion ($98 billion) is under consideration. The contradiction that Macquarie is referring to is the way markets have behaved since Brexit, where assets historically linked to “risk-on” and “risk-off” moods have inexplicably rallied in unison. Equities, a classic risk asset, have recovered all of their losses since the Brexit vote on the belief that central banks will step in and lift asset prices by doing stimulus and ignore sound fears about asset bubbles.

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His role is questionable. Shirked far too close to influencing politics.

BOE Governor Carney Accused Of ‘Peddling Phoney Forecasts’ Over Brexit (G.)

Mark Carney has agreed to hand notes of private meetings he had with the chancellor in the run-up to the EU referendum to MPs, after a Treasury select committee hearing where the governor of the Bank of England faced questions about whether he had “peddled phoney forecasts” about the risks of a vote for Brexit. In his first appearance at the Treasury select committee since the referendum, the Bank’s governor faced questions about whether he had tried to scare the electorate by warning of the economic shock – and possible recession – that a vote to leave the EU would cause. Andrew Tyrie, the committee’s chairman, citing two former chancellors and two former leaders of the Conservative party, said the Bank had also been accused of “startling dishonesty”.

Tyrie, a Conservative MP, told Carney that the accusations, if true, would be a “very robust assault on the Bank’s credibility” and also of the independence from government it was granted in 1997 that could not be recovered under the Canadian’s tenure. Carney said he had held private meetings with George Osborne before the 23 June vote. He agreed that the MPs could appoint someone to review the notes of those meetings but said he would be reluctant for them to be made public. Carney was also asked by Jacob Rees-Mogg, a prominent Brexit campaigner, whether the Bank should be, like Caesar’s wife, beyond suspicion in terms of being influenced by politicians. The governor, who said politicians had sought to inform him rather than influence him, replied: “Those who cast it [the independence] into question should consider their motivations and their judgments.”

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That would mean Stage Five: Acceptance. It’ll take a while. In the meantime, the ‘gloom’ is driven by politics, not economics. And yes, Carney is the champ, hoping for a self-fulfilling process. The Leave camp, which won (remember?), should perhaps ask for him to step down.

Carney Should Stop Being So Gloomy About Brexit (Ashoka Mody)

Few have been more downbeat about the outlook for the U.K. economy than the country’s own central bank governor, Mark Carney. If he wants to help mitigate the consequences of the vote to leave the European Union, he should send a more encouraging message by holding back on monetary stimulus. People charged with managing economies usually try to be optimistic, on the logic that their positive attitude will give people and businesses the confidence to spend and invest, ultimately making the optimism self-fulfilling. The rhetoric surrounding Britain’s vote on EU membership has been a glaring exception. In a bid to influence the vote, a chorus of global policymakers predicted dire consequences. That chorus has sadly persisted.

After voters chose to leave, the secretary general of the Organisation for Economic Cooperation and Development, Angel Gurria, reiterated forecasts of higher unemployment and permanent damage to household incomes. Christine Lagarde, managing director of the IMF, said that the decision was “casting a shadow over international growth.” Yet Brexit’s shadow is hard to discern amid the broader global decline in output growth and interest rates that began in early 2014. Perhaps no one, though, has been as active as Carney in stoking feelings of gloom and doom – a particularly notable feat, given that central bank governors rarely make predictions of economic and financial turmoil, especially when it concerns their own currency.

As far back as May, the Bank of England said that the possibility of Brexit was already weighing on the British pound, even though much of the decline in sterling’s value had happened earlier, when the polls – and especially the betting markets – showed a clear lead for the “Remain” campaign. The currency actually stabilized during the brief period when polls showed the “Leave” campaign gaining ground. Markets have come to anticipate Carney’s public appearances as harbingers of bad news. The pound began to decline in the hours before his first major post-Brexit speech on June 30, and he did not disappoint: Brexit-induced uncertainty, he insisted, had caused “economic post-traumatic stress disorder amongst households and businesses, as well as in financial markets.”

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Or else what?

German Leaders Demand Brexit Clarity From New British PM (R.)

German leaders stepped up the pressure on Britain’s incoming prime minister Theresa May on Tuesday by demanding she swiftly spell out when she will launch divorce proceedings with the European Union. “The task of the new prime minister … will be to get clarity on the question of what kind of relationship Britain wants to build with the EU,” Chancellor Angela Merkel told a news conference. Her finance minister Wolfgang Schaeuble said clarity was needed quickly to limit uncertainty after Britain’s shock choice for ‘Brexit’, which has rocked the 28-nation bloc and thrown decades of European integration into reverse. May, 59, will on Wednesday replace David Cameron, who is resigning after Britons rejected his advice and voted on June 23 to quit the EU.

On arriving and departing from Cameron’s last cabinet meeting, she waved a little awkwardly from the doorstep of 10 Downing Street, shortly to become her home. She will face the enormous task of disentangling Britain from a forest of EU laws, accumulated over more than four decades, and negotiating new trade terms while limiting potential damage to the economy. The pound was up 1.2% against the dollar at around $1.3150, boosted by the appointment of a new prime minister weeks earlier than expected after May’s main rival dropped out. But it remains more than 12% below the $1.50 it touched on the night of the June 23 referendum, reflecting concerns that Brexit will hit trade, investment and growth.

The German leaders spoke after May’s ally Chris Grayling appeared to dampen any hopes among Britain’s EU partners that her rapid ascent might accelerate the process of moving ahead with the split and resolving the uncertainty hanging over the 28-nation bloc.

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Which of course can be blamed on Brexit again. But it’s really just a Ponzi scheme dying a natural death.

British Pensions £383 Billion Underwater As Liabilities Hit Record (Tel.)

Britain’s gold-plated pensions now have record-breaking liabilities of £1.75 trillion after the EU referendum triggered a rout in their core gilt and equity holdings, highlighting the difficulty of funding the UK’s retirement needs. The country has almost 6,000 defined benefit schemes, which are obliged to pay their members an amount in retirement often tied to their final salary. Just 950 of these schemes were in surplus on June 30, with the rest hoping to make up the shortfall from long-term investment returns. In total, defined benefit funds are £383.6bn underwater, compared to £294.6bn just a month ago, as the tumbling UK government bond yields added to liabilities while global stock markets wiped value from the schemes’ equity investments.

Around 78pc of the long-term liabilities of the schemes are funded, down from 81.5pc within a month. While these figures are merely a snapshot, the data from the Pension Protection Fund highlights the precarious position of numerous schemes. “Companies are having to divert profits into schemes to make good on their promises, which means less investment capital to help businesses grow and less money available to invest in the pensions of younger workers,” said Tom McPhail, head of retirement policy at Hargreaves Lansdown. “Accrued pension rights have to be respected and investors have to be able to trust the system, however there is also a growing argument for the Government to look at finding a more balanced approach to the retirement funding needs of UK workforce.”

UBS analysts have estimated that a 1pc fall in real yields on government bonds results in a 10pc rise in pension liabilities, although this varies by scheme depending on how many bonds they hold. Gilts have jumped in price, lowering their yields, as global investors seek out safe havens. Industrial companies have the largest pension burdens, amounting to 77pc of their overall market value of the businesses, according to UBS’s research, while telecoms firms have liabilities worth 56pc of their value and utilities’ liabilities have reached 54pc.

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Hilarious.

Ireland’s Economists Left Speechless by 26% Growth Figure (BBG)

In three days, Jim Power is due in London to brief the British-Irish Trade Association on the state of the Irish economy. Now, he has no idea what he is going to say. The economy grew 26% in 2015, officials from the Central Statistics Office told a stunned room full of economists and reporters in Dublin on Tuesday. Previously, they had estimated growth of 7.8%. “I’m not going to stand up and say the economy grew by 26%,” Power, an independent economist, said after the release. “It’s meaningless – we would be laughing” if these numbers came out of China, he said. The figure is mostly explained by the open nature of Ireland’s economy and its attraction to U.S. companies seeking access to a 12.5% tax rate.

Among firms that have inverted to Ireland, mostly through acquisitions, are Perrigo and Jazz Pharmaceuticals. Corporations with assets overseas of €523 billion were headquartered in Ireland in 2014, up from €391 billion in 2013, according to the statistics office. “We are a very small economy, and if we get a big increase in assets, this is what happens,” Michael Connolly, an official at the CSO, said on Tuesday. Once explained the numbers are “believable,” he said. In a statement, Finance Minister Michael Noonan pointed out that growth numbers cut Ireland’s debt and deficit ratios. Trouble is, they carry downsides too. For one, tax inversions artificially inflate the size of Ireland’s economy.

When the headquarters of a group of companies becomes resident in Ireland, all of its global profits may be counted as part of the nation’s gross national income, according to the ministry. Since 2008, that gauge has been boosted by about 7 billion euros thanks to corporate relocations, without accompanying substance or employment, the ministry has said. This in turn drives up the country’s contribution to the European Union budget, which is based on the size of the economy. For a second thing, it leaves self-described “baffled” analysts like Power at a loss to explain the state of the Irish economy. Power says he’ll look at indicators like employment growth and tax revenue for a better gauge, and guesses Ireland’s underlying economic growth was 5.5% last year.

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A world of pain.

Losing Australia’s AAA Rating To Make Losers of Mortgage Holders (BBG)

The biggest losers after Prime Minister Malcolm Turnbull scraped through to win Australia’s fractious elections could be homebuyers facing higher costs on their A$1.6 trillion ($1.2 trillion) in mortgages. The price to protect bonds issued by the nation’s banks climbed seven basis points last week after S&P Global Ratings cut its outlook on Australia’s AAA grade to negative on concern government deficits will persist without “more forceful” decisions to rein in shortfalls. It also put the nation’s biggest lenders on notice. Stephen Miller, BlackRock’s head of fixed income for Australia, said Wednesday there’s a “real risk” Australia loses its top debt score.

“An increase in funding costs relating to a ratings downgrade will impact bank margins, but banks may choose to offset this via loan pricing,” said Anthony Ip at Citigroup in Sydney, adding that any increase in funding costs will be significant but manageable. “At the end of the day it’s still a competitive lending market.” Australia’s largest lenders – Australia & New Zealand Banking, Commonwealth Bank of Australia, National Australia Bank and Westpac Banking – rely on offshore bond markets for a fifth of their funding requirements, central bank data show. If their rankings were lowered after a sovereign downgrade, that would increase borrowing costs as much as 20 basis points, prompting them to slap mortgagees with higher interest rates, according to Citigroup.

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I smell a timebomb.

The Richest Generation in US History Just Keeps Getting Richer (BBG)

Baby boomers started turning 65 in 2011, marking the unofficial beginning of their retirement years. The timing could not have been better for older boomers, who are already part of the wealthiest generation in U.S. history. Since then, the broad S&P 500-stock index is up 91%, including dividends. U.S. stocks hit a record high yesterday. Market performance in the early years of retirement is a crucial worry for anyone living off a nest egg. In the worst-case scenario, stocks crash just as retirees start spending their savings, leaving them in a hole they can no longer earn their way out of. Older boomers have experienced what is arguably the best-case scenario: The S&P 500 has returned 269% since its March 2009 low.

As a recent study in the Journal of Financial Planning shows, wealthy retirees can be very cautious about spending down their savings. This instinct, along with the stock market’s new record, suggests that many boomers are likely to end up with far more money than they know what to do with. Researchers followed the spending and investing behavior of 65- to 70-year-olds from 2000 to 2008. The poorest 40% of the survey respondents generally spent more than they earned, according to the study, which was funded by Texas Tech University. Those in the middle were able to keep their spending at about 8% below what they could have safely spent from pensions, investments, and Social Security.

The wealthiest fifth, meanwhile, had a gap of as much as 53% between their spending and what they could have spent. The authors wrote: “Retirees in the top quintile of financial wealth were spending nowhere near an amount that would place them in danger of running out of money. In fact, the average financial assets of wealthy retirees increased during this period and most retirees spent less than their income.” In other words, these affluent Americans retired and then continued to get richer. That’s quite a feat when you’re no longer working, particularly against the backdrop of the mediocre stock market of the early 2000s.

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Conditions in Greece are getting worse, fast. I’ll soon have more on that, firsthand. Meanwhile, another 4 refugees died this morning off Lesbos.

A Year After Bailout, Greece Struggles For Brighter Future (AFP)

A year after it fought and lost a tug-of-war with its creditors, Greece remains a country that seems adrift, and many of its citizens view the present as joyless and the future as grim. Summer 2015 saw Greece’s youthful left-wing Prime Minister Alexis Tsipras wage an extraordinary battle between the mighty European Union, the European Central Bank and the IMF. Over five months, Tsipras and his firebrand finance minister, Yanis Varoufakis, took Greece and Europe to the brink as they demanded the creditors ease reforms imposed under two previous bailouts agreed since 2010. As the EU, ECB and IMF took a hard line, Greece’s financial flows shrank and a bank crisis loomed – but Tsipras, instead of buckling, stunned the world by announcing a referendum on the new deal proposed by creditors.

On July 5, 62% of voters rejected the package. But even with the mandate of the Greek people behind him, Tsipras backed down: the risk of seeing Greece thrown out of the eurozone was too much. Instead, in a dramatic U-turn, he let go of Varoufakis, replaced him with the more moderate Euclid Tsakalotos – and just over a week later, signed the third bailout. The deal was worth €86 billion over three years and laden with conditions, such as tax hikes and pension reforms, considered by critics to be so tough that social media buzzed with talk of a coup d’etat. Since then, Greece has soldiered on, weathering popular unrest and the consequences of the 2015 migration crisis, while Tsipras strives to defend his leftwing credentials.

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Brussels is completely lost. Time to end its misery.

EU Development Aid To Finance Armies In Africa (EuO)

The EU commission wants to finance foreign armies as part of a larger effort to stop people from fleeing to Europe, including in countries with patchy human rights. A commission draft proposal released on Tuesday (5 July) spells out reasons why it is “necessary to provide assistance to the militaries of partner countries”. Some €100 million that were initially slated for development aid will be diverted to finance military-led border control exploits and other initiatives like mine-clearing The EU money can also be used to finance anything from troop transport vehicles to uniforms and surveillance equipment. Even furniture, stationary and “sport facilities” are covered. The EU has already contracted out some €1 billion from 2001 to 2009 when it came to things like law enforcement and border management.

But this is the first time it will pump money directly into a foreign military structure. “The direct financing of the military is not possible [at the moment]. Due to exceptional circumstances in some partner countries, it was important to close this gap,” notes the document, a joint communication to the European Parliament and EU Council. The document attempts to quell some concerns over how the money will be used. It notes, for instance, that it won’t fund “recurrent military expenditure”, weapons and ammunition, and combat training. But such limitations are unlikely to be taken seriously by critics. “This proposal is nothing short of scandalous,” said German Green deputy Reinhard Butikofer.

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No Ambrose, not the International Court of Justice. The ruling was by the Permanent Court of Arbitration. And your conclusion is fit for the National Enquirer: “The world has not been in such peril since the Cuban Missile Crisis.”

Global Arms Race Escalates As Sabres Rattle In South China Sea (AEP)

The South China Sea has become the most dangerous fault-line in the world. Beijing and Washington are on a collision course over these contested waters, the shipping lane for 60pc of global trade. As expected, the International Court of Justice in The Hague has ruled that China has no “historic title” to areas of this sea stretching all the way to the ‘nine dash line’ – deep into the territorial waters of a ring of South East Asian states. Equally expected, Beijing has dismissed the verdict with scorn, accusing the tribunal of “shamelessly abusing its authority”. The state media said the country “must be prepared for any military confrontation” with the US, and must not flinch from war if provoked.

It is the latest in a series ominous developments in Asia and Europe that are rapidly subverting the Western international system and setting off a global rearmament race with strong echoes of the late-1930s. Tensions are flaring up across so many spots in East Asia that global investment funds are actively betting on defence stocks and technology companies linked to military expansion. Nomura has launched an “Asian Arms Race Basket” as a hedge against potential conflicts in the East China Sea, the Straits of Taiwan, and the South China Sea. Among the companies listed are Mitsubishi Heavy Industry and Sumitomo Precision in Japan, China Shipbuilding and AVIC Aircraft in China, Korea Aerospace and the explosives group Hanwha, as well as Reliance Defence and Bharat Electronics in India.

The Stockholm International Peace Research Institute says China spent $215bn on defence last year, a fivefold increase since 2000, and more than the whole of the European Union combined. It is developing indigenous aircraft carriers. US experts say its “Two-Ocean Strategy” implies a fleet of five or six aircraft carrier battle groups to project global power. Japan has upgraded its once invisible Self-Defence Force to a full-fledged fighting machine with a humming new headquarters and an air of determined alertness. The country has been increasing military spending for the last four years, especially under its nationalist leader Shinzo Abe, commissioning its largest warship since the Second World War, an 800-ft DDH-class helicopter carrier.

Rearmament has paradoxical effects. It acts as a form of Keynesian stimulus, as it did in the late 1930s. The spending might absorb some of the Asian savings glut and eat into excess industrial capacity, lifting the world out of secular stagnation, but it is a lethal way to do it. A parallel process is underway in Europe where defence spending has been shooting up since the Russian invasion of Crimea, ending years of neglect and austerity budgets. Outlays are expected to rise by 20pc in Central and Eastern Europe this year, and 9.2pc in South-Eastern Europe, according to the French think-tank IRIS.

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Not terribly smart people.

Economic Theory as Ideology (Zaman)

[..] For a very long time, economists refused to take results from experiments seriously, because these were in direct conflict with axioms at the heart of economic theories. The empirical failure of economic axioms led to the creation of “Behavioral Economics,” which studies actual behavior of human beings. In any scientific field, “behavioral economics” would be the center of attention, since it matches the observational evidence about human behavior. Furthermore, the axiomatic theory, which is contradicted by the empirical evidence, would be a long forgotten idea belonging to the primitive history of economic science. Surprisingly, mainstream economic textbooks, used all over the planet, continue to teach axiomatic theories of human behavior as if they are true, while behavioral economics remains neglected and ignored.

Why do economists maintain an ideological commitment to patently false theories of human behavior? Certainly it is not because these theories are noble and elevating. In fact, many observers have argued that these theories create immoral behavior, by teaching that selfishness, without concern for morality or society, is rational for everyone, and good for society. For example, Nobel Laureate Milton Friedman taught that businesses should maximize profits, without any concern for social responsibility. Given this license, multinational corporations have gone on a rampage, exploiting natural resources by using methods which threaten to destroy the planet. The easiest way to make a profit is to appropriate a priceless natural treasure, like a rainforest, and chop it down for timber.

The losses from industrial wastes are changing the composition of the atmosphere, oceans, lakes and rivers, and inflicting costs on all human beings, but creating profits for corporate coffers. This strategy is called ‘socializing the losses and privatizing the gains.’ With massive profits, it is easy to buy politicians to prevent environmental concerns from getting in the way. The book Merchants of Doubt documents a well funded campaign to create doubt about climate change, so that corporations can continue to make profits while destroying the planet. The persistence of economic theories which celebrate and glorify these poisonous ideologies of personal greed and social irresponsibility can be traced to corporate funding of think-tanks and research which promote “free markets”. The charms of “freedom” propagated by economic ideologies conceal the ugly reality of corporate freedom and wage slavery of the masses.

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The glory of mankind.

Half Of All US Food Produce Is Thrown Away (G.)

Americans throw away almost as much food as they eat because of a “cult of perfection”, deepening hunger and poverty, and inflicting a heavy toll on the environment. Vast quantities of fresh produce grown in the US are left in the field to rot, fed to livestock or hauled directly from the field to landfill, because of unrealistic and unyielding cosmetic standards, according to official data and interviews with dozens of farmers, packers, truckers, researchers, campaigners and government officials. From the fields and orchards of California to the population centres of the east coast, farmers and others on the food distribution chain say high-value and nutritious food is being sacrificed to retailers’ demand for unattainable perfection.

“It’s all about blemish-free produce,” says Jay Johnson, who ships fresh fruit and vegetables from North Carolina and central Florida. “What happens in our business today is that it is either perfect, or it gets rejected. It is perfect to them, or they turn it down. And then you are stuck.” Food waste is often described as a “farm-to-fork” problem. Produce is lost in fields, warehouses, packaging, distribution, supermarkets, restaurants and fridges. By one government tally, about 60m tonnes of produce worth about $160bn, is wasted by retailers and consumers every year – one third of all foodstuffs. But that is just a “downstream” measure.

In more than two dozen interviews, farmers, packers, wholesalers, truckers, food academics and campaigners described the waste that occurs “upstream”: scarred vegetables regularly abandoned in the field to save the expense and labour involved in harvest. Or left to rot in a warehouse because of minor blemishes that do not necessarily affect freshness or quality. When added to the retail waste, it takes the amount of food lost close to half of all produce grown, experts say. “I would say at times there is 25% of the crop that is just thrown away or fed to cattle,” said Wayde Kirschenman, whose family has been growing potatoes and other vegetables near Bakersfield, California, since the 1930s. “Sometimes it can be worse.”

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Feb 052016
 
 February 5, 2016  Posted by at 10:08 am Finance Tagged with: , , , , , , , , , ,  


Harris&Ewing “Congressional baseball game. President and Mrs. Wilson.” 1917

Dollar Tumbles As Fed Rescues China In The Nick Of Time (AEP)
SocGen: China Only Months Away From Depleting Its Currency Reserves (MW)
China Foreign Reserves Head for Record Drop on Yuan Defense (BBG)
Citi: ‘We Should All Fear Oilmageddon’ (BBG)
Just 0.1% Of Global Oil Output Has Been Halted By Low Prices (BBG)
US Running Out Of Space To Store Oil (CNN)
Obama Proposes $10-a-Barrel Oil Tax (MW)
IMF Honing Tools To Rescue EMs From China Spillover (Reuters)
BOJ Board Among Those Surprised By Negative Interest Rate Plan (Reuters)
US Banks Targeted By Activist Investors (Reuters)
Two Anonymous Whistleblowers Are Pounding on the SEC’s Door Again (Martens)
Europe’s Ports Vulnerable As Ships Sail Without Oversight (FT)
Portugal’s Anti-Austerity Budget Provokes Brussels Showdown (FT)
Saudis Say Cash Crunch Won’t Derail an Ambitious Foreign Agenda (BBG)
World Food Prices Tumble Near 7-Year Low (CNBC)
Julian Assange Should Be Freed, Entitled To Compensation: UN Panel (AP)

But that won’t last.

Dollar Tumbles As Fed Rescues China In The Nick Of Time (AEP)

The US dollar has suffered one of the sharpest drops in 20 years as the Federal Reserve signals a retreat from monetary tightening, igniting a powerful rally for commodities and easing a ferocious squeeze on dollar debtors in China and emerging markets. The closely-watched dollar index (DXY) has fallen 3pc this week to 96.44 and given up all its gains since late October. This has instant effects on the world’s inter-connected financial system, today more geared to the US exchange rate and Fed policy than at any time in modern history. David Bloom, from HSBC, said the blistering dollar rally of the past three years is largely over and may go into reverse as weak economic figures in the US force the Fed to pare back four rate rises loosely planned for this year.

A more dovish Fed and a weaker dollar is a bitter-sweet turn for the Bank of Japan and the ECB as they try to push down their currencies to stave off deflation. Their task has become even harder. The euro has rocketed by more than 3pc this week to $1.12 against the dollar. In trade-weighted terms the euro is 5pc higher than it was in March, when the ECB began quantitative easing, showing just how difficult it has become for authorities to drive down their exchange rates. Everybody is playing the same game. Yet a halt to the dollar rally is a huge relief for companies and banks around the world that have borrowed a record $9.8 trillion in US currency outside the US, up from $2 trillion barely more than a decade ago. These debtors have faced a double shock from the rising dollar and a jump in global borrowing costs.

RBS calculates that more than 80pc of the debt of Alibaba, CNOOC, Baidu and Tencent is in US dollars, with Gazprom, Vale, Lukoil and China Overseas close behind. China’s central bank (PBOC) can breathe easier as it burns through foreign reserves to defend the yuan against capital flight. Wei Yao, from Societe Generale, said China’s holdings have fallen by $800bn to an estimated $3.2 trillion and are just months away from the danger zone. She warned that markets are likely to become “transfixed” on the rate of decline once reserves near $2.8 trillion, testing the credibility of the PBOC and raising the risk that Beijing will be forced to let the currency slide – with drastic global consequences. If so, only a change of course by the Fed can buy time for China to get a grip and avert a drift into dangerous waters.

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Luckily it’s Lunar New year now.

SocGen: China Only Months Away From Depleting Its Currency Reserves (MW)

China is burning through its foreign-currency reserves at such a blistering pace that the country will run down its cushion in a few months, forcing the government to wave the white flag and float the yuan, says Société Générale global strategist Albert Edwards. “The market remains content that massive firepower remains to support the renminbi. It does not,” Edwards, a perma-bear with a propensity for doom-and gloom-prognoses, said in a report published Thursday. Société Générale, using the IMF’s rule of thumb on reserve adequacy, estimates that China’s foreign-currency reserves are at 118% of the recommended level. But that cushion is likely to evaporate soon on a combination of capital flight and the continuing effort by financial authorities to stem a dramatic drop in the currency.

China’s reserves totaled $3.33 trillion in December, according to official government data. Edwards estimated that China’s foreign-exchange reserves fell by about $120 billion in January, a trend that is likely to continue in the foreseeable future. “When foreign exchange reserves reach $2.8 trillion—which should only take a few more months at this rate—foreign exchange reserves will fall below the IMF’s recommended lower bound,” he said. That is likely to trigger a “tidal wave of speculative selling,” which in turn will force the People’s Bank of China to allow the yuan to freely float within six months. The yuan currently moves within a trading band set by the People’s Bank of China that the central bank can change at will.

“We estimate that if capital outflows maintain their current pace, the PBoC would be unable to defend the yuan for more than two to three quarters,” Wei Yao, Société Générale’s China economist, said in a report published earlier this month. “China’s reserves have already fallen by $663 billion from mid-2014, and a further decline of this scale would start to severely impair the Chinese authorities’ ability to control the currency and mitigate future balance of payments,” she said. Against this backdrop, Société Générale is projecting the yuan to sink to 7.5 against the U.S. dollar this year, significantly weaker than 7 yuan to the buck predicted by most economists. The dollar is currently at 6.56 yuan.

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Lowball du jour: “The economy itself cannot turn this around.”

China Foreign Reserves Head for Record Drop on Yuan Defense (BBG)

China’s foreign-exchange reserves, already at a three-year low, are poised to post a second consecutive record monthly drop as policy makers intervene to support the yuan. The central bank will say Sunday that the currency hoard fell by $118 billion to $3.2 trillion in January, according to economists’ estimates in a Bloomberg survey. That would exceed a record $108 billion decline in December, which brought last year’s total draw-down to more than half a trillion dollars and capped the first annual decrease in the reserves since 1992. Policy makers are burning through billions of dollars to hold up a weakening currency amid flagging growth and $1 trillion in capital outflows last year. The yuan sank to a five-year low last month as the People’s Bank of China set the reference rate at an unexpectedly weak level, a signal that it’s more tolerant of depreciation as growth slows.

“China is facing a significant capital outflow problem,” said Krishna Memani at Oppenheimer in New York. “It’s an astounding reduction in their capital account position. This is an issue they’ve been aware of, and they have to find a way of managing it. The economy itself cannot turn this around.” The draw-down has accelerated since the central bank’s surprise devaluation of the currency in August. Reserves tumbled $94 billion that month, a record at the time. Another cut to the yuan’s reference rate last month spurred a stock sell-off that has helped push the Shanghai Composite Index down 21 percent this year and into a bear market.

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The benefits of low prices…

Citi: ‘We Should All Fear Oilmageddon’ (BBG)

Markets are currently in a well-oiled “death spiral,” according to Citigroup analysts led by Jonathan Stubbs. “It appears that four inter-linked phenomena are driving a negative feedback loop in the global economy and across financial markets,” the analysts write, citing the resilient U.S. dollar, lower commodities prices, weaker trade and capital flows, and declining emerging market growth. “It seems reasonable to assume that another year of extreme moves in U.S. dollar (higher) and oil/commodity prices (lower) would likely continue to drive this negative feedback loop and make it very difficult for policy makers in emerging markets and developing markets to fight disinflationary forces and intercept downside risks,” the analysts add.

“Corporate profits and equity markets would also likely suffer further downside risk in this scenario of Oilmageddon.” Their case is bolstered by a collection of charts showing the linkages between the four factors cited above, including the importance of lofty oil prices to the ready supply of petrodollars circulating in the world economy and flowing to financial assets. Oil exporters have enjoyed more than $6 trillion flowing into their current accounts, according to Citi’s estimates, implying some $4 trillion of capital in sovereign wealth funds (SWFs).

“But, the collapse in oil/commodity prices and sharp fall in the pace of world trade means that these same economies will likely experience an aggregate current account deficit for the first time since 1998,” says Citi. “In turn, this is likely to put pressure on SWF and broader emerging market liquidity as governments and emerging market economies would need to ‘lean’ on reserves in order to maintain economic, political and social stability. This has clear feedback loops across emerging markets.” Accordingly, the impact of the feedback loop is being felt far and wide in financial markets, extending even to U.S. inflation expectations. Where once 10-year inflation breakevens had little relationship with the price of oil they have for the past two years moved in tandem.

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Pump and Jump.

Just 0.1% Of Global Oil Output Has Been Halted By Low Prices (BBG)

After a year of low oil prices, only 0.1% of global production has been curtailed because it’s unprofitable, according to a report from consultants Wood Mackenzie that highlights the industry’s resilience. The analysis, published ahead of an annual oil-industry gathering in London next week, suggests that oil prices will need to drop even more – or stay low for a lot longer – to meaningfully reduce global production. OPEC and major oil companies like BP and Occidental Petroleum are betting that low oil prices will drive production down, eventually lifting prices. That’s taking longer than expected, in part due to the resilience of the U.S. shale industry and slumping currencies in oil-rich countries, which have lowered production costs in nations from Russia to Brazil.

The Wood Mackenzie analysis provides an estimate for the amount directly impacted by low prices – to the tune of 100,000 barrels a day since the beginning of 2015 – rather than output affected as new projects build up and aging fields decline. Canada, the U.S. and the North Sea have been affected the most by closures related to low prices. The International Energy Agency does estimate year-over-year change, and says global production in the fourth quarter was 96.9 million barrels a day. It forecast that outside OPEC, output will fall this year by 600,000 barrels a day, the largest annual decline since 1992. Last year, non-OPEC output rose 1.4 million barrels a day. “Since the drop in oil prices last year there have been relatively few production shut-ins,” according to the report.

The company, which tracks production and costs at more than 2,000 oilfields worldwide, estimates that another 3.4 million barrels a day of production are losing money at current prices, of about $35 a barrel. It cautioned against expecting further closures, because “many producers will continue to take the loss in the hope of a rebound in prices.” For major oil companies, a few months of losses may make more sense than paying to dismantle an offshore platform in the North Sea, or stopping and restarting a tar-sands project in Canada, which may take months and cost millions of dollars. “There are barriers to exit,” said Robert Plummer at Wood Mackenzie.

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China must have the same issue.

US Running Out Of Space To Store Oil (CNN)

The U.S. now has nearly 503 million barrels of commercial crude oil stockpiled, the Energy Information Administration said on Wednesday. It’s the highest level of supply for this time of the year in at least 80 years. The sky-high inventories are the latest sign that the U.S. oil boom is still alive and kicking. U.S. oil production is near all-time highs despite the epic crash in oil prices from $107 a barrel in June 2014 to just $30 a barrel now. Sure, domestic oil production has slowed – but just barely. Oil stockpiles are so high that certain key storage locations are now “bumping up against storage and logistical constraints,” according to Goldman Sachs analysts. In other words, these facilities are nearly overflowing. Cushing, Oklahoma is the delivery point for most of the oil produced in the U.S. This key trading hub is currently swelling with 64 million barrels of oil.

That represents a near-record 87% of the facility’s total storage capacity as of November, according to the EIA. “There is a fear of tank topping in Cushing. We’re seeing it get to its brims,” said Matthew Smith at ClipperData. Cushing has had to ramp up its storage capabilities in recent years just to deal with all this oil. If this key hub ran out of room to stockpile oil, that crude would have to be diverted elsewhere – and that would hurt oil prices. “There would be a ripple effect across the U.S. that would impact prices everywhere,” said Smith. Global inventories also remain high, with the International Energy Agency recently saying the world is “drowning” in oil. The agency is bracing for oversupply of 1.5 million barrels per day in the first half of 2016.

Wall Street is nervously watching supply constraints since they can have dramatic repercussions on prices. More so than other commodities, oil is vulnerable to so-called “operational stress” due to the expensive and sophisticated infrastructure that is needed for storage. “Each time the market brushes up against infrastructure constraints, oil prices will likely spike to the downside to make oil supplies back off,” Goldman wrote. By comparison, it’s relatively easy to pile up unwanted metals in an open space like a warehouse. “Aluminum only needs a grassy field,” Goldman wrote. To put these storage issues into context, Goldman estimates $1 billion of gold would fit into a bedroom closet. Crude oil of the same value would require 17 supertanker ships that can hold about 2 million barrels of oil each.

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Timing, sir?

Obama Proposes $10-a-Barrel Oil Tax (MW)

President Barack Obama is proposing a $10-a-barrel tax on oil to pay for clean transportation projects, the White House said Thursday. The tax, which will be part of the budget request Obama unveils next week, would be paid for by oil companies and gradually phased in over five years. It would apply to imported oil, not exported U.S. oil, White House National Economic Council Director Jeff Zients told reporters. Obama’s proposal lands in the midst of the 2016 election campaigns, and is likely to be harshly criticized by both Republican presidential candidates and lawmakers. In past years, Obama has proposed eliminating subsidies for the oil-and-gas industries. But those efforts have never made it through Congress. House Majority Whip Steve Scalise of Louisiana said the proposal could be Obama’s worst idea ever.

The tax would add roughly 25 cents to a gallon of gasoline, at current prices. The White House said Obama’s plan would boost investments in clean transportation by about 50%. Zients said the administration recognized oil companies would “likely pass on some of these costs” to consumers. But he added that the U.S.’s “crumbling infrastructure imposes a huge cost on American families,” by reducing competitiveness and by adding time and fuel costs to workers who are stuck in traffic. Brian Milne, energy editor and product manager at Schneider Electric, said the tax would “definitely” increase gasoline prices. “Maybe the president thinks because oil and gasoline prices are low, he can slip the tax through that will eventually be passed on to consumers without many realizing that they’re paying the government more to fuel their vehicles and warm their houses,” Milne said in an email. “However, I don’t think it will have enough support to move through Congress.”

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IMF sees great opportunities for power grabs. Pennies on the dollar. Or the SDR, rather.

IMF Honing Tools To Rescue EMs From China Spillover (Reuters)

China can avoid a “hard landing” if Beijing pursues reforms to state enterprises and sticks to a more market-driven and well-communicated exchange rate policy, IMF Managing Director Christine Lagarde said on Thursday. But Lagarde said spillovers from China’s transition to a slower, more sustainable growth rate would continue to pressure oil and commodity exporters around the globe, increasing demands for financing help from the IMF and other international institutions. She told an online media briefing that the IMF wanted to be ready to handle any emerging market difficulties with new and improved financing tools.

“China is going through that massive, multi-faceted transition and we do not expect a hard landing of China as has been talked about for many years,” Lagarde said. She noted that China’s transition will still be difficult and create market volatility, however. Oil and metals prices, now two thirds below their most recent peaks in 2014, will likely stay low for some time. As a result, the international financial safety net “needs to be strong and needs to be readily available to face any circumstances,” Lagarde said.

The IMF will be working in coming months to improve existing financing instruments, such as credit and liquidity lines, as well as new instruments to address their situations. Lagarde’s remarks came as several oil and commodity exporters, including Peru, Nigeria, Angola and Azerbaijan, are in talks with the World Bank on financing to cope with widening budget deficits. In a speech earlier on Thursday at the University of Maryland, Lagarde said a larger and more robust financial safety net would reduce the need for many emerging market countries to hold large foreign exchange reserves, freeing up funds for investments in infrastructure and education.

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The smell of Abenomics in the morning. This kind of decision making kills so much trust it can’t possibly be worth the price paid. But Abe gets to kick the can a while longer…

BOJ Board Among Those Surprised By Negative Interest Rate Plan (Reuters)

Just days before the Bank of Japan stunned financial markets with its radical adoption of negative interest rates, members of the central bank’s own policy board had also been taken by surprise by the move. Most of the nine board members were only told of the scheme in the week leading up to last Friday’s rate review, according to interviews with more than a dozen officials familiar with the deliberations. The startling speed and secrecy with which such a major policy shift was executed suggest its intent was more about delivering a shock to markets that would weaken the yen, than about maximising the stimulative impact of further easing. That would be in keeping with the single-minded style of central bank Governor Haruhiko Kuroda, people who know him well or have worked with him say, but could risk entrenching divisions between BOJ policymakers.

“If you’re a board member, you’re told about the plan at the last minute,” said a former board member, speaking on condition of anonymity. “It’s hard to argue against it or draft a counter proposal when there’s so little time left.” Kuroda had been saying for months that taking rates below zero was not a timely option, a position he had repeated as recently as Jan. 21. But the global market turbulence that greeted the start of 2016 had been threatening two planks of Prime Minister Shinzo Abe’s reflationary agenda – rising asset prices and a cheap yen. Before leaving for the annual World Economic Forum in Davos on Jan. 22, Kuroda instructed his staff to come up with options for further easing of the BOJ’s already ultra-loose policy, and report back to him when he returned to Tokyo three days later.

Expanding the bank’s massive asset purchasing programme, known as “quantitative and qualitative easing” (QQE), by 10-20 trillion yen ($83-$167 billion) was one option, sources said, though it was quickly ruled out as too weak to shock markets. Something more arresting was needed, and few investors were predicting negative rates. “The key was to show people that the BOJ will really do anything to achieve 2% inflation,” said a BOJ official. The complex plan, formulated by four top officials from the monetary affairs department, drew on studies of negative interest rate policies in Denmark, Switzerland and Sweden. By charging interest on just a fraction of banks’ deposits with the BOJ, they hoped to ease the pain on financial institutions and get around one of the big problems of twinning negative interest rates with QQE – that the central bank is force-feeding lenders cash it then penalises them for holding.

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Thinking bailouts?

US Banks Targeted By Activist Investors (Reuters)

Activist investors are putting the U.S. banking sector in their crosshairs, betting that headwinds whipping through the industry will accelerate consolidation among lenders. While these activist hedge funds have already targeted some major financial companies, such as insurer AIG and auto loan lender Ally Financial, banks have historically stayed out of their sights. Activists launched 97 campaigns last year aimed at the U.S. financial sector, around triple the amount from 2009, according to Thomson Reuters Activism data. Of those campaigns, 22 were aimed at banks, up from eight in 2009, the data show. The number has increased every year since the 2008 financial crisis.

Hedge funds such as Ancora Advisors, Clover Partners and Seidman & Associates are buying up stakes in lenders across the U.S., from community banks to large regional lenders. Driving these investments is the view that ultra-low interest rates, lagging returns on equity and tough regulations will push more banks to merge, with buyers willing to pay a hefty multiple to a bank’s tangible book value. Activist investors interviewed by Reuters say another factor is exposure to energy-related loans, which is driving down the valuations of certain banks and making them all the more vulnerable to a takeover. “Bigger banks are back in the market doing deals,” said Ralph MacDonald at law firm Jones Day. U.S. bank mergers and acquisitions volume rose 58% last year to $34.5 billion, according to Thomson Reuters data.

Last week alone saw two mergers. Huntington Bancshares said it would acquire FirstMerit for $3.4 billion in stock and cash, combining two Ohio-based lenders. And Chemical Financial said it was merging with Talmer Bancorp in an all-Michigan transaction that will create a bank with $16 billion in assets. To be sure, activists’ bets on banks are not without risk – especially if they get the timing wrong. The S&P 500 Financials index is down 14% since mid-December on fears that the Federal Reserve will take longer than previously expected to raise interest rates, hurting banks’ profitability. Another worry is that oil prices drop further, making a bank’s energy loan book more of a liability than an opportunity.

A takeout by a larger rival is also never a guarantee, but that is a risk activists are willing to take. On Monday, Hudson Executive Capital, a New York-based hedge fund, announced it had acquired a $56 million stake in Dallas-based Comerica Bank, a lender with $71 billion in assets under management. Among the banks that could buy Comerica is North Carolina-based BB&T Bank, according to activist investors who spoke to Reuters. [..] Zions Bancorporation, a Salt Lake City lender with $60 billion in assets, is another bank that activists said is vulnerable to an approach.

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And will be ignored again.

Two Anonymous Whistleblowers Are Pounding on the SEC’s Door Again (Martens)

Last night ABC began its two-part series on the Bernie Madoff fraud. Viewers will be reminded about how investment expert, Harry Markopolos, wrote detailed letters to the SEC for years, raising red flags that Bernie Madoff was running a Ponzi scheme – only to be ignored by the SEC as Madoff fleeced more and more victims out of their life savings. Today, there are two equally erudite scribes who have jointly been flooding the SEC with explosive evidence that some Exchange Traded Funds (ETFs) that trade on U.S. stock exchanges and are sold to a gullible public, may be little more than toxic waste dumped there by Wall Street firms eager to rid themselves of illiquid securities. The two anonymous authors have one thing going for them that Markopolos did not.

They are represented by a former SEC attorney, Peter Chepucavage, who was also previously a managing director in charge of Nomura Securities’ legal, compliance and audit functions. We spoke to Chepucavage by phone yesterday. He confirmed that two of his clients authored the series of letters. Chepucavage said further that these clients have significant experience in trading ETFs and data collection involving ETFs. Throughout their letters, the whistleblowers use the phrase ETP, for Exchange Traded Product, which includes both ETFs and ETNs, Exchange Traded Notes. In a letter that was logged in at the SEC on January 13, 2016, the whistleblowers compared some of these investments to the subprime mortgage products that fueled the 2008 crash, noting that regulators and economists were mostly blind to that escalating danger as well. The authors wrote:

“The vast majority of ETPs have very low levels of assets under management and illiquid trading volumes. Many of these have illiquid underlying assets and a large group of ETPs are based on derivatives that are not backed by physical assets such as stocks, bonds or commodities, but rather swaps or other types of complex contracts.

Many of these products may have been designed to take what were originally illiquid assets from the books of operators, bundle them into an ETP to make them appear liquid and sell them off to unsuspecting investors. The data suggests this is evidenced by ETPs that are formed, have enough volume in the early stage of their existence to sell shares, but then barely trade again while still remaining listed for sale. This is reminiscent of the mortgage-backed securities bundles sold previous to the last financial crisis in 2008.”

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If you look beyond the obvious play on fearmongering, this is still curious.

Europe’s Ports Vulnerable As Ships Sail Without Oversight (FT)

As Europe’s politicians struggle to control a deepening migrant crisis and staunch the rising threat of Islamist terrorism on their borders, little attention is being paid to the continent’s biggest frontier: the sea. New data highlight the extent to which smuggling, bogus shipping logs, unusual coastal stop-offs and inexplicable voyages are increasing across the Mediterranean and Atlantic for ships passing through Europe’s ports — with little or nothing being done to combat the trend. There is currently no comprehensive system to track shipments and cargos through EU ports and along its approximately 70,000km of coastline — a deficiency that has long been exploited by organised criminals and which could increasingly prove irresistible to terrorists too, say European security officials.

“So far, the thing about maritime security, and particularly terrorists exploiting weaknesses there, is that it’s the dog that’s not barked,” says former Royal Navy captain Gerry Northwood, chief operating officer of Mast, a maritime security company, and commander of the counter-piracy task force in the Indian Ocean. “But the potential is there. The world outside Europe – North Africa for example – is awash with weapons. If you can get a bunch of AK47s into a container, embark that container from Aden then you could get them into Hamburg pretty easily. A whole armoury’s worth.” In January, 540 cargo ships entered European ports after passing through the territorial waters of terrorist hotspots Syria and Libya, as well as Lebanon, for unclear or uneconomic reasons during the course of their voyages.

The number of vessels using flags of convenience — using the ensign of a state different to that in which a ship’s owners reside to mask identity or reduce tax bills — is also rising. Of the 9,000 ships that passed through European waters last month, 5,500 used flags of convenience.

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“We have to be demanding and disciplined [over the budget], but Portugal is not a pupil. There are no professor-states or student-states in the EU.”

Portugal’s Anti-Austerity Budget Provokes Brussels Showdown (FT)

Portugal’s new Socialist government faces an embarrassing rejection of its first “anti-austerity” budget by the European Commission on Friday after eleventh-hour talks failed to break a stalemate over additional cuts needed to bring Lisbon in line with EU deficit rules. Portuguese officials expressed confidence they would overcome objections from the commission, which last week warned Lisbon it risked “serious non-compliance” with the bloc’s fiscal rules. At the same time, they continued to show defiance, insisting they would not return to the spending policies of the previous centre-right administration. “We cannot continue following a path of blind austerity,” Augusto Santos Silva, Portugal’s foreign minister, told RTP television on Wednesday.

“We have to be demanding and disciplined [over the budget], but Portugal is not a pupil. There are no professor-states or student-states in the EU.” The commission announced it would hold a special meeting on Friday afternoon to decide whether Portugal’s 2016 budget — submitted three months late after protracted post-election coalition negotiations — would be rejected. If it is, it would mark the first time a eurozone government has had its spending plan vetoed by Brussels since the new crisis-era rules went into effect in 2011. Lisbon’s tussle with Brussels calls into question the government’s ability to deliver on election pledges to roll back years of austerity by cutting taxes and increasing public sector wages without running foul of the EU’s strict budgetary rules.

After Portugal emerged from its bailout in 2014, it was supposed to bring its deficit under the EU ceiling of 3% of economic output by 2015. But economic forecasts published by Brussels on Thursday, which take into account the government’s initial budget plan, show Lisbon with a 4.2% deficit in 2015 — and deficits above 3% in both 2016 and 2017. The 3.4% deficit projected for 2016 is in sharp contrast to the 2.6% Lisbon has forecast. Lisbon, however, said the commission’s forecasts do not take into account revisions to its budget proposals made over the past week. Under eurozone rules, a country that misses its deficit target must at least demonstrate it is undertaking significant economic reforms. But the Portuguese budget reins back such measures, prompting a warning from Brussels that its efforts were “well below” target.

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Desperate regime.

Saudis Say Cash Crunch Won’t Derail an Ambitious Foreign Agenda (BBG)

Saudi Arabia won’t let the plunge in oil prices derail a regional agenda that includes waging war in Yemen and funding allies in Syria and Egypt, Foreign Minister Adel al-Jubeir said in an interview. “Our foreign policy is based on national security interests,” al-Jubeir said on Thursday at the Ministry of Foreign Affairs headquarters in the kingdom’s capital, Riyadh. “We will not let our foreign policy be determined by the price of oil.” The world’s largest oil exporter, traditionally a cautious actor on the Middle Eastern stage, has become more assertive during the 13-month reign of King Salman. Saudi Arabia is fighting in Yemen against Shiite rebels it says are backed by Iran. It’s also sending billions of dollars to Egypt, to fend off instability in the most populous Arab country, and arming the increasingly beleaguered rebels in Syria’s civil war.

That’s a costly agenda to finance with Brent crude at the lowest in more than a decade. The oil shock left Saudi Arabia with a budget deficit of about $98 billion last year, pushing the kingdom to cut spending on energy subsidies and building projects. It’s also considering selling sovereign bonds and shares in its giant state oil company. The return to world markets of Iran, Saudi Arabia’s regional rival, is set to add to global supply. Sanctions on the Islamic Republic “are being lifted and will be removed as long as Iran complies with the terms of the nuclear agreement,” al-Jubeir said. “We believe there is sufficient room in the market for countries who produce oil.” Tensions between the two OPEC members have undermined efforts to end the war in Syria, where Saudi Arabia supports mainly Sunni militant groups trying to overthrow President Bashar al-Assad, who’s backed by Iran.

The countries are also at loggerheads over Yemen, though Western diplomats have played down Saudi claims about Iran’s involvement on the Houthi rebel side there. The Saudi-led intervention in Yemen, which began with airstrikes in March last year and has escalated to include ground troops, “was a war that nobody wanted to wage,” al-Jubeir said. “This was a war to protect Yemen from collapsing and to protect the kingdom from the dangers of a militia that is armed with ballistic missiles and in possession of an air force that is allied with Iran and Hezbollah.” Saudi Arabia said this week that 375 of its civilians have been killed by missile strikes around the border with Yemen. The United Nations says about 6,000 Yemenis have died in the conflict.

While the U.S. has expressed support for the Saudi engagement in Yemen, in other areas the longstanding alliance between the countries has shown signs of fraying. Saudi officials have expressed concerns about last year’s U.S.-backed nuclear agreement with Iran, and were angered when the U.S. called for former Egyptian President Hosni Mubarak to step down in 2011.

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Deflation.

World Food Prices Tumble Near 7-Year Low (CNBC)

World food prices fell to almost a seven-year low at the start of the year on the back of sharp declines in commodities, particularly sugar, according to the latest data from the UN. The Food Price Index, published by the UN’s Food and Agriculture Organization (FAO), averaged 150.4 points in January, down 16% from a year earlier and registering its lowest level since April 2009. The trade-weighted index tracks international market prices for five key commodity groups – major cereals, vegetable oils, dairy, meat and sugar – on a monthly basis. In January, the Sugar Price Index showed the largest declines having fallen 4.1% from December, its first drop in four months. The FAO said the drop was down to improved crop conditions in Brazil, the world’s leading sugar producer and exporter. The second largest declines were seen in the FAO’s Dairy Price Index which dropped by 3.0% in the same time period “on the back of large supplies, in both the EU and New Zealand, and torpid world import demand,” the FAO noted.

The Cereals and Vegetable Oils indices both saw declines of 1.7% in January from the previous month and the Meat Price Index fell 1.1%. The main factors underlying the lingering decline in basic food commodity prices are “the generally ample agricultural supply conditions, a slowing global economy, and the strengthening of the U.S. dollar,” the FAO noted. Food commodities are not the only ones suffering from demand failing to keep up with a glut in supply with oil prices suffering a similar fate with a steady decline since mid-2014. Signaling no let-up in production, the food agency raised its forecasts for worldwide cereal crops in 2016. “As a result of the upgraded production and downgraded consumption forecasts, world cereal stocks are set to end the 2016 seasons at 642 million tons, higher than they began,” the agency noted.

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Far from over. Pyrrhic.

Julian Assange Should Be Freed, Entitled To Compensation: UN Panel (AP)

A UN human rights panel says WikiLeaks founder Julian Assange has been “arbitrarily detained” by Britain and Sweden since December 2010. The UN Working Group on Arbitrary Detention said his detention should end and he should be entitled to compensation. Swedish prosecutors want to question Assange over allegations of rape stemming from a working visit he made to the country in 2010 when WikiLeaks was attracting international attention for its secret-spilling ways. Assange has consistently denied the allegations but declined to return to Sweden to meet with prosecutors and eventually sought refuge in the Ecuadorean embassy in London, where he has lived since 2012.

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Sep 042015
 
 September 4, 2015  Posted by at 9:35 am Finance Tagged with: , , , , , , , , ,  


John Vachon Houses in Atlanta, Georgia May 1938

A Global Deleveraging On A Scale The World Has Never Experienced (CNBC)
Foreigners Flee Japan Stocks at Fastest Pace Since at Least 2004 (Bloomberg)
Europe Responds To Desperate Refugees With Razor Wire And Racism (WaPo ed.)
Hungarian Police And Refugees In Standoff After Train Returns To Camp (Guardian)
Greek Government Says €1 Billion Needed To Tackle Refugee Crisis (Kath.)
Greece Wants EU Funding To Tackle Migrant Influx (Reuters)
UN Calls For 200,000 Refugees To Be Distributed Across EU (AFP)
The Refugee Crisis That Isn’t (Kenneth Roth, Human Rights Watch)
Germany Presses Europe Into Sharing Refugees (Guardian)
Refugees Brave Europe’s Deadly Seas Over Wealthy Arab Neighbors (Bloomberg)
Cameron’s EU Dilemma Grows With Bigger Refugee Crisis and Bills (Bloomberg)
Refugee Crisis: Much More Must Be Done, And Not Just By The UK (Guardian Ed.)
The US Dollar Is Stronger Than Steel (Bloomberg)
The Oil-Sands Glut Is About to Get a Lot Bigger (Bloomberg)
Australia PM’s Decision To Drop Bank Tax ‘Bizarre’ (Afr)
A Secretive Agency Hunts for China’s Crooked Officials Worldwide (Bloomberg)
New York’s Pension Fund Pact With the Devil (HuffPo)
EU Parliament Claims Role In Greek Bailout Supervision (EUObserver)
Varoufakis: I Don’t Think Tsipras Believes In Bailout (CNBC)
Food Sovereignty (Beppe Grillo)
Regenerative Agriculture: The Popular Face Of Permaculture (Lebo)

“.. markets do not like uncertainty and investors tend to shoot first and ask questions later. Therefore we are probably in for a lot more volatility. This global deleveraging is the cause of all the market turmoil, including the problems in China…”

A Global Deleveraging On A Scale The World Has Never Experienced (CNBC)

Everyone is blaming China for the recent stock-market rout, but this blame is misguided. China was the beneficiary of global expansion of money supply at the hands of activist central banks. In fact, my view is that Chinese leadership had little to do with the growth “miracle” it experienced over the last decade. As central banks in the U.S., Japan and Europe eased policy, money sought a higher-yielding home in China. This capital inflow was the cause of the growth “miracle” and now that the expansionary monetary policy is ending, it is only natural that the Chinese economy would begin to slow. Unfortunately, this “search for yield” has created the largest shadow banking system the world has even seen … and it could be in trouble.

According to the Bank for International Settlements (BIS), since 2010 the amount of U.S. dollar-denominated debt issued by foreign companies has grown by 50% from $6 trillion to $9 trillion. The proximate cause of this debt buildup was the impact of U.S. Federal Reserve quantitative easing on bond yields — as the Federal Reserve bought bonds, yields were pushed lower and investors were forced to search globally for higher-yielding financial instruments. This demand for yield fueled a credit binge of unprecedented scale. The epicenter of this pro-cyclical expansion of credit was the fast-growing emerging markets. Investors perceived that investing in countries like China, Brazil and Turkey was worth the risk, especially if emerging-market companies were offering higher yields.

Some of the credit extended to emerging-market companies was used for real economic projects, but a BIS report released in late August concludes that most of the money was simply invested in higher yielding shadow-banking instruments. This is the so-called global carry trade. The global carry trade works like this: An emerging-market company issues bonds denominated in U.S. dollars; critically, the yield on these bonds is above the yield of U.S. corporate bonds but BELOW the yield on shadow-banking instruments within the emerging markets. The relatively higher yielding bonds attract investors searching for yield; at the same time, the emerging-market company can invest the proceeds of the bond sale into higher yielding instruments. The emerging-market company earns the difference between its low yielding U.S. dollar bonds and its high yield emerging-market investments. This is financial engineering by another name.

The global carry trade works especially well under three conditions: 1) There is a large interest-rate differential between the U.S. and the emerging country, 2) The emerging country’s currency is rising, and 3) Currency volatility is very low. All three of these conditions have been present since 2010 and have been fuel for this massive build in debt. However the economic slowdown in China coupled with the U.S. Federal Reserve ending quantitative easinghas resulted in a strong U.S. dollar (weak emerging-market currencies) and tremendous currency volatility — thereby significantly reducing the attractiveness of the carry trade. The credit expansion of the carry trade resulted in emerging-market money supply growth that was the basis for economic growth.

In fact, it was the virtuous spiral of credit/money growth fueling economic growth that produced investor demand for emerging market bonds. Now, I fear, that process is beginning to reverse. The reversal of this process means a reversal of the capital flows from emerging market back to the United States. The strength of the U.S. dollar and weakness in emerging market currencies is a reflection of the process reversing. What this means is that the world is beginning a global deleveraging on a scale that it has never experienced. One of the knock-on effects of this global deleveraging is a slowdown in China. I do not mean to suggest that the sky is falling, but markets do not like uncertainty and investors tend to shoot first and ask questions later. Therefore we are probably in for a lot more volatility. This global deleveraging is the cause of all the market turmoil, including the problems in China.

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Deleveraging.

Foreigners Flee Japan Stocks at Fastest Pace Since at Least 2004 (Bloomberg)

Global investors are pulling money out of Japan’s equity market at the fastest pace since at least 2004, according to Mizuho. Foreigners last week sold a net 1.85 trillion yen ($15.4 billion) of Japanese stocks and equity index futures, the biggest combined outflow since Mizuho began tracking the data more than a decade ago, said Yutaka Miura, a Tokyo-based senior technical analyst at the brokerage. Investors are fleeing amid concern about China’s economic outlook and the prospect of higher interest rates in the U.S., he said. “This is a result of investors dumping global risk assets,” said Miura. “Japanese stocks have performed well since the start of the year, so similar to what’s happening in Europe, we’re seeing people take profits.”

The Topix index is down 13% from its Aug. 10 high, paring its 2015 advance to 4.8%. The nation’s shares are among the world’s worst performers since China unexpectedly devalued the yuan last month, roiling markets worldwide and intensifying concern about the outlook for Japan’s biggest trading partner. Foreigners dumped 1.43 trillion yen of Japanese equities in the three weeks through Aug. 28, Tokyo Stock Exchange data updated Thursday show. That’s the most for any three-week span on record, overtaking the period when Bear Stearns Cos. collapsed in 2008.

Net stock sales totaled 707 billion yen last week, and investors also reduced positions in index futures by 1.14 trillion yen, exchange data show. Cumulative flows for 2015 are still positive, with foreigners buying a net 1.1 trillion yen of equities through last week. Andrew Clarke at Hong Kong brokerage Mirabaud Asia said investors who needed to reduce positions in Asia and couldn’t offload stocks in China because of share suspensions turned to Tokyo instead. “The sell-off started in China,” Clarke said. “Investors couldn’t sell there in the end so selling spread to Asia, and Japan especially as it has a greater liquidity. This eventually spread to Europe and the U.S.”

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Orban is a loose cannon, easy pickings. But Orban did not order that train to halt. Merkel did.

Europe Responds To Desperate Refugees With Razor Wire And Racism (WaPo ed.)

The wrenching photographs of Aylan Kurdi , the 3-year-old Syrian boy whose body washed ashore on a Turkish beach this week, are an emblem of the moral and legal abdication of Western nations in the face of the worst refugee crisis the world has seen in decades. Hundreds of thousands of desperate Syrians, Afghans, Iraqis, Somalis and others have embarked this summer on dangerous voyages across the Mediterranean or arduous treks through southeastern Europe in the hope that rich, democratic nations will grant them safe harbor, in keeping with international law and their own commitments. To a shocking degree, they have been met with indifference, disregard or the cold hostility of razor wire and racism.

According to published reports, Aylan s family was denied a refugee visa by the Canadian government and an exit visa by Turkey, propelling it into the overcrowded boat that capsized while attempting to reach Greece. The boy was one of more than 2,600 refugees who have died trying to reach Europe this spring and summer, a toll driven by the abject failure of the European Union to create safe and legal means for refugees to seek asylum. The response to the crisis from leaders whose nations boast of their humanitarianism almost beggars belief. Britain has resettled just more than 200 of the 4 million Syrians who have fled the country, yet Prime Minister David Cameron this week claimed his government was taking its fair share.

So far this year, Hungary has granted asylum to 278 out of 148,000 applicants, according to the United Nations, even though two-thirds or more of those applying are fleeing war zones and have a right to refuge under international conventions. While Aylan s body was washing ashore, another disgraceful drama was playing out at Budapest s main train station, where authorities refused to allow thousands of refugees to board trains for Germany even though German authorities stood ready to receive them. Hungarian Prime Minister Viktor Orban has built a razor-wire fence along his country s southern border and promised to dispatch troops to stop asylum seekers. He has been shockingly blunt about his motivations: to defend Europe’s Christian culture from an influx of Muslims.

Such attitudes reveal the deeper stakes of the refugee crisis for the West. If intolerant demagogues such as Mr. Orban are allowed to prevail, then the EU’s identity as a community of states committed to human rights and the rule of law will be shattered. As German Chancellor Angela Merkel put it on Monday, “If Europe fails on the question of refugees, if this close link with universal civil rights is broken, then it won’t be the Europe we wished for”.

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Blame Germany. All these people could have been safe by now.

Hungarian Police And Refugees In Standoff After Train Returns To Camp (Guardian)

Hundreds of people remained on a train in the Hungarian town of Bicske over Thursday night following a botched attempt by authorities to move on some of the thousands gathered in Budapest’s main railway station. The Hungarian authorities earlier appeared to trick hundreds of people into taking a train to a refugee camp outside Budapest in an attempt to end a two-day standoff at the station where thousands have been trying to get to western Europe. There was confusion at Keleti rail terminus in the morning when departures were initially cancelled and then passengers piled on to a newly arrived train they hoped would take them to Austria or Germany.

Instead, the train stopped in the town of Bicske, outside the capital, where riot police were waiting to take the refugees to an overcrowded facility that many had left a few days earlier in the hope of finding sanctuary in Germany. There were chaotic scenes at the station when one man pulled his wife and child on to the tracks, begging police not to force them to go to the camp. “We won’t move from here,” he shouted repeatedly. The man was later handcuffed and taken away by officers. A large group of people was surrounded in a hot and cramped underpass leading out of the station, chanting “no camp, no camp”. Other passengers clashed with police and forced their way back on to the train to begin a standoff in the sweltering heat.

Police brought water but many of the migrants refused to take the bottles, vowing to go on hunger strike. Later, volunteers tried to offer them food but people refused to eat. “We don’t need food and water. Just let us go to Germany,” one said from an open train window. Hungarian police declared the area an “operation zone” and removed reporters from the station. Later, reporters were allowed to gather on a platform. About 100 people were on the opposite platform and about 50 riot police blocked the route across the tracks. The travellers on the train resorted to holding signs up against the train windows, which said “no camp for children” and “save our souls, we are children”.

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They’re not going to get it.

Greek Government Says €1 Billion Needed To Tackle Refugee Crisis (Kath.)

Greece is to make an immediate request for more funding from the European Commission to tackle the refugee crisis on the eastern Aegean islands but this will only represent a fraction of the €1 billion that the caretaker government believes it needs to address the situation. Kathimerini understands that the Greek police will on Friday request €6 million in emergency funding from Brussels to cover the cost of new equipment and sending more personnel to islands such as Lesvos, Kos, Samos and Chios, where around 2,000 refugees a day are landing in dinghies that set sail from Turkey. Police chiefs want to send a significant number of officers to these islands to help register refugees and migrants who arrive there. However, they also need more equipment, including fingerprint scanners.

The Commission approved an emergency transfer of €2.8 million to the Greek coast guard earlier this summer. However, the extra funds will fall well short of the total that Athens believes it needs to deal with the refugee crisis. Speaking at a news conference with several other cabinet members, Economy Minister Nikos Christodoulakis said that Greece needs around €1 billion but cannot be sure that it will receive this amount. “The minimum sum Greece needs is €400 million from the [EU] asylum fund and €330 million from the fund for the poor to tackle urgent infrastructure needs,” he said. His comments came as European Commission Vice President Frans Timmermans and European Commissioner for Migration Dimitris Avramopoulos arrived in Athens.

“We are here today to discuss with the Greek government the best way that we can quickly implement the decisions that are necessary for us to be able to assist financially and with people and material so that the situation becomes better,” said Timmermans after talks with caretaker Prime Minister Vassiliki Thanou. The EU officials are due to visit the eastern Aegean islands on Friday.

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Betcha EU is going to bring up trust issues.

Greece Wants EU Funding To Tackle Migrant Influx (Reuters)

Greece will ask the European Union for about 700 million euros to build infrastructure to shelter the hundreds of refugees and migrants arriving on its shores daily, the government said on Thursday. The cash-strapped country has seen a rise in the number of refugees and migrants – mostly from Syria, Iraq and Afghanistan – arriving on rubber dinghies from nearby Turkey. Aid agencies estimate about 2,000 people cross over to Greek islands including Kos, Lesbos, Samos and Chios every day. The interim government said it planned to set up a new operations centre and take steps to improve conditions at existing refugee centers.

Economy Minister Nikos Christodoulakis said the country will seek EU funds earmarked to address the crisis. “There is a major funding issue which should be addressed urgently,” Christodoulakis told a news conference. “The minimum sum Greece needs is €400 million from the asylum fund and €330 million from the fund for poor to tackle urgent needs for infrastructure.” Frans Timmermans, first vice president of the European Commission and EU Commissioner for Migration Dimitris Avramopoulos, are in Athens to meet Greek officials. They will meet police and coast guard officials on Kos on Friday. Christoudoulakis said Greece will also provide financial help to the many eastern Greek islands that are feeling the pressure from the migrants influx.

“Many northern and southern Aegean islands have faced a dive in tourist traffic in recent months,” he said. “If we don’t address that, we will have a new domestic wave of unemployed and poor.” He also called Greek ship-owners to offer vessels as temporary accommodation for refugees and blamed Europe for a lukewarm response to the migration issue. “These difficult problems cannot be solved at the sitting rooms in Europe or in other countries but at the piers and at the shores who receive scores of refugees every day,” he said.

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How many will go to America?

UN Calls For 200,000 Refugees To Be Distributed Across EU (AFP)

The UN High Commissioner for Refugees called Friday on the European Union to admit up to 200,000 refugees as part of a “mass relocation programme” that would be binding on EU states. “People who are found to have a valid protection claim… must then benefit from a mass relocation programme, with the mandatory participation of all EU member states,” Antonio Guterres said in a statement. “A very preliminary estimate would indicate a potential need to increase relocation opportunities to as many as 200,000 places,” he added. His call came ahead of a meeting later Friday of EU foreign ministers to discuss the continent’s refugee crisis, of which Syrian toddler Aylan Kurdi, whose lifeless body was found face down in the surf on a Turkish beach on Wednesday, has become a searing symbol. Referring to the pictures of the dead child, which “had stirred the hearts of the world public”, Guterres said: “Europe cannot go on responding to this crisis with a piecemeal or incremental approach.”

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No, true, it’s a Europe crisis.

The Refugee Crisis That Isn’t (Kenneth Roth, Human Rights Watch)

European leaders may differ about how to respond to the asylum-seekers and migrants surging their way, but they seem to agree they face a crisis of enormous proportions. Germany’s Angela Merkel has called it “the biggest challenge I have seen in European affairs in my time as chancellor.” Italian Foreign Minister Paolo Gentiloni has warned that the migrant crisis could pose a major threat to the “soul” of Europe. But before we get carried away by such apocalyptic rhetoric, we should recognize that if there is a crisis, it is one of politics, not capacity. There is no shortage of drama in thousands of desperate people risking life and limb to reach Europe by crossing the Mediterranean in rickety boats or enduring the hazards of land journeys through the Balkans.

The available numbers suggest that most of these people are refugees from deadly conflict in Syria, Afghanistan, Iraq and Somalia. Eritreans – another large group – fled a brutally repressive government. The largest group – the Syrians – fled the dreadful combination of their government’s indiscriminate attacks, including by barrel bombs and suffocating sieges, and atrocities by ISIS and other extremist groups. Only a minority of migrants arriving in Europe, these numbers suggest, were motivated solely by economic betterment. This “wave of people” is more like a trickle when considered against the pool that must absorb it. The EU population is roughly 500 million. The latest estimate of the numbers of people using irregular means to enter Europe this year via the Mediterranean or the Balkans is approximately 340,000.

In other words, the influx this year is only 0.068% of the EU’s population. Considering the EU’s wealth and advanced economy, it is hard to argue that Europe lacks the means to absorb these newcomers. To put this in perspective, the U.S., with a population of 320 million, has some 11 million undocumented immigrants. They make up about 3.5% of the U.S. population. The EU, by contrast, had between 1.9 and 3.8 million undocumented immigrants in 2008 (the latest available figures), or less than 1% of its population, according to a study sponsored by the EC. Put another way, nearly 13% of the U.S. population (some 41 million residents) are foreign-born – twice the proportion of non-EU foreign-born people living in Europe.

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Playing the good cop and getting away with it. But we know better.

Germany Presses Europe Into Sharing Refugees (Guardian)

The German chancellor, Angela Merkel, looks set for victory in her campaign to press Europe into a new system of sharing refugees after France caved in to a proposed new quotas system and Brussels unveiled plans to quadruple the number of people spread across most of the EU. In a major policy speech on Europe’s worst migration emergency, Jean-Claude Juncker, the president of the European commission, is to table proposals next Wednesday for the mandatory sharing of 160,000 refugees between 25 of the EU’s 28 countries. Britain, Ireland and Denmark are exempted from having to take part, but Dublin has already agreed to participate and David Cameron is under increasing pressure for Britain to pull its weight as the migration crisis escalates with scenes of chaos and misery on Europe’s borders.

Berlin and Paris have sought to maintain a common position for weeks, but the French equivocated on the key issue of binding quotas. On Thursday, the president, François Hollande, aligned himself with Merkel’s drive for compulsory EU sharing of refugees. Merkel announced from Switzerland that both sides had agreed a common platform and Hollande said there should be a “permanent and obligatory mechanism” for receiving refugees in the EU. “The president and the chancellor have today decided to forward joint proposals on the organisation of the reception of refugees and a fair sharing in Europe,” said the Élysée Palace. Germany, along with the European commission, has been pushing hard for a new mandatory system since May when Juncker tabled much more modest proposals for the compulsory sharing of 40,000 bona fide asylum-seekers over two years.

A summit of EU leaders in June rejected the quotas, saying they could only be voluntary and eventually agreeing to share only 32,000. The east European countries and Spain were the main opponents. Four east European prime ministers are to meet on Friday to consider their positions. Mariano Rajoy, the Spanish prime minister, reiterated his opposition to quotas in Berlin this week. But the speed of developments on the ground is dictating political responses. Donald Tusk, who chairs EU summits as president of the European council, said the EU should agree to share at least 100,000 refugees. In June, he opposed the quotas system. The proposed figures – 100,000 to 160,000 – refer merely to a mandatory quotas system, beyond the much higher numbers of asylum claims that the countries will have to process in any case. Germany alone expects 800,000 this year.

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Our friends the Saudis.

Refugees Brave Europe’s Deadly Seas Over Wealthy Arab Neighbors (Bloomberg)

Searching for a new home, Yassir Batal says Germany and its unfamiliar voices and customs are more enticing for his wife and five children than the wealthy Arab states whose culture, religion and language they share. Like so many other Syrians who have escaped civil war, the 36-year-old has ruled out heading south through Jordan to Saudi Arabia or beyond. They wouldn’t be welcomed the same way, he said. “In Europe, I can get treatment for my polio, educate my children, have shelter and live an honorable life,” said Batal, as he left a United Nations office in Beirut, the city that’s been the crossroads for more than a million refugees since the violence started in March 2011. “Gulf countries have closed their doors in the face of Syrians.”

Stories of fellow refugees suffocating in trucks or small children drowning in the Mediterranean Sea are doing little to tarnish the allure of Europe and the struggle to get there. As countries argue over how to cope with the scale of the tide of humanity, safer routes to the Gulf states remain blocked because of the difficulties gaining entry and concern over how migrants would be treated there. Gulf countries have been active in the Syrian conflict and millions of dollars raised in some states have found their way to rebel groups, including extremists. While they also spent billions of dollars of aid to displaced people in camps in Jordan and Lebanon, they maintain strict controls on who can cross their borders. Most of the migrants fleeing the war are Sunni Muslim, like most Gulf citizens.

“I’m most indignant over the Arab countries who are rolling in money and who only take very few refugees,” Danish Finance Minister Claus Hjort Frederiksen said in an interview this week at his office in Copenhagen. “Countries like Saudi Arabia. It’s completely scandalous.”

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Whichever way the wind blows, that’s where you’ll find David.

Cameron’s EU Dilemma Grows With Bigger Refugee Crisis and Bills (Bloomberg)

Europe is giving David Cameron a migraine. Accused of not caring about the refugee crisis, the prime minister is struggling yet again to navigate Britain’s ever-problematic relationship with the European Union following confirmation that his country had quietly paid a bill he once derided as “appalling” to the bureaucrats in Brussels. The U.K.’s unwillingness to take the same share of refugees threatens to undermine Cameron’s efforts to whip up support among his Europeans peers to win back powers from the 28-nation bloc ahead of a referendum on membership brought on by a growing tide of euroskepticism. In his quest to re-write terms for the U.K., Cameron heads to Spain and Portugal on Friday to meet with leaders.

“He’s quite clearly got a perception problem and has soured his relationships,” said Raoul Ruparel, co-director at the Open Europe think-tank. “There is a risk that will have an impact on what he’s trying to do in terms of renegotiation.” The 48-year-old Conservative leader is on the defensive. He said Thursday that the U.K. would fulfill its duty in helping asylum seekers as lawmakers from both sides of the aisle joined a global chorus of voices demanding he do more. After British newspapers ran a photograph of a dead child on a Turkish beach, Cameron was forced to respond. “Britain is a moral nation that always fulfills its moral obligations,” he said in a pooled television interview. “We are taking thousands of people and we will take thousands of people.”

Following a comfortable re-election in May that left the opposition in shambles, Cameron’s tact in handling the worst humanitarian crisis since World War II has been brought to task as the EU borders buckle under the weight of migrant flows from Syria and other troubled spots in Africa and the Middle East. EU governments now need to house at least 100,000 refugees, a far larger number than what had been envisaged, EU President Donald Tusk said on Thursday. Several countries have balked at an earlier proposal to redistribute 40,000, whittling that number down to 32,000. The U.K. did not participate at all.

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“What appears on our TV screens as a sudden emergency is really the culmination of years of failure..” Ongoing.

Refugee Crisis: Much More Must Be Done, And Not Just By The UK (Guardian Ed.)

Britain cannot open its borders to everyone fleeing war anywhere in the world, but this does not excuse the government’s shameful determination to keep our borders closed to as many refugees as possible. Our international treaty obligations, as well as the promptings of our collective conscience, entail a duty to offer meaningful sanctuary when a humanitarian catastrophe unfolds before our eyes. The prime minister surely understands this. He is personally capable of compassion, but his political instincts have been conditioned by defensive parochialism: fear of alienating those parts of the press and the electorate where hostility to foreigners is visceral. His reluctance to engage with pan-European efforts to accommodate refugees stems from a refusal to articulate any circumstances in which national questions should be answered at continental level.

This makes his argument for focusing on the causes of mass displacement, above all the war in Syria, sound disingenuous – hard-heartedness camouflaged as strategy. But the underlying point is valid. What appears on our TV screens as a sudden emergency is really the culmination of years of failure to confront Syria’s bloody collapse. This, sadly, is symptomatic of a more profound myopia in European security policy. Not only Britain is responsible for European paralysis. There is a wide arc of conflict-ridden, repressive and failed states running from the Middle East, round the Horn of Africa and along the southern Mediterranean coast. There are tens of millions of people living in that region who might reasonably decide that the only future for them and their families lies in Europe.

There is little sign that European leaders have even begun to engage with each other or with their electorates on the questions this raises for the security, legitimacy and stability of the European Union. Although it is essential in discussion of the current crisis to remember the legal distinction between refugees – seeking sanctuary from imminent danger – and the wider category of people who migrate in search of a better future for themselves and their families, it is also important to acknowledge that, in places where economic activity, law and order are breaking down, the line between the two categories is technically and ethically hard to draw.

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Much stronger.

The US Dollar Is Stronger Than Steel (Bloomberg)

When John Pierpont Morgan bought Andrew Carnegie’s steel business and combined it with two competitors to create U.S. Steel in 1901, the result was the world’s first billion-dollar corporation. Its roughly $1.4 billion market value would translate into about $33 billion in current dollars. But the company is worth less than a tenth of that today, at just under $2.5 billion. While the steel industry has been fading in the U.S. for decades, things have gotten worse recently. A strong U.S. dollar, combined with a slowing Chinese economy, is bringing unprecedented amounts of cheap, foreign steel to the U.S., swamping domestic producers. Average monthly imports spiked by almost 1 million metric tons in 2014, a 38% increase from 2013. Through June of this year, steel imports averaged 3.3 million metric tons a month, roughly the same as last year.

A lot of that is coming from China, the world’s largest producer. Although its economy has cooled, leading to the first dip in steel demand there in a generation, China’s mills have kept chugging along. Much of the excess output is being shipped overseas. In the first half of this year, China’s steel exports rose 28% compared with the same period in 2014. The recent devaluation of the yuan could make Chinese steel even more attractive to U.S. buyers. Exports from Brazil and Russia have also jumped as the real and ruble have fallen sharply against the greenback. U.S. producers have had no choice but to pull back. Andrew Lane, an analyst at Morningstar, expects U.S. steel production to come in at around 85 million metric tons this year, down from 98 million in 2007. “I don’t think we’ll get back to that level until 2020,” Lane says.

Things are particularly hard for U.S. Steel, the country’s No. 2 producer after Nucor. The company lost money in the first two quarters of this year and has laid off more than 1,700 employees, shaving its total workforce to 34,000. “The strong dollar is the icing on the cake,” says Mario Longhi, U.S. Steel’s Brazilian-born chief executive officer. Longhi says foreign producers have been unfairly dumping steel in the U.S. for several years, and trade laws need to be revamped to deal with the problem. “Our laws have not caught up to the 21st century,” he says. Since June, U.S. steel producers have filed three trade cases with the Department of Commerce, alleging that countries including Brazil, China, Japan, and South Korea are either benefiting from government subsidies or selling steel abroad for cheaper than they do at home, in violation of international trade laws.

Although a strong dollar is particularly bad for companies at the beginning of the supply chain, such as steel producers, it’s weighing on the entire U.S. industrial sector. After growing faster than the rest of the economy during the early years of the recovery, manufacturing activity, as measured by the ISM Manufacturing Index, dropped to its lowest level in two years in August. Manufacturing is on pace to post a record trade deficit for the third straight year. That’s dampened some of the enthusiasm around the “reshoring” trend of companies bringing outsourced factory jobs back to the U.S. Rising wages in China have helped make U.S. workers more competitive. But a stronger dollar, coupled with a slowing China, could blunt those gains..

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Who is financing this madness, and why?

The Oil-Sands Glut Is About to Get a Lot Bigger (Bloomberg)

The last place oil producers want to be when prices plummet to profit-demolishing lows is midstream on a billion-dollar project in one of the costliest parts of the planet to extract crude. Yet that’s exactly where half a dozen oil sands operators from Suncor to Brion find themselves with prices for Canadian oil now hovering around $30 a barrel. While all around them projects have been postponed or canceled, their investments were judged too far along when the oil game suddenly moved from offense to defense. These projects will add at least another 500,000 barrels a day – roughly a 25% increase from Alberta – to an oversupplied North American market by 2017.

For companies stuck spending billions in a downturn, the time required to earn back their investments will lengthen considerably, said Rafi Tahmazian at Canoe Financial. “But the implications of slowing down a project are worse,” said Tahmazian, who helps oversee about C$1 billion ($758 million) in energy funds at the Calgary investment firm. A general rule of thumb says new plants require a West Texas Intermediate price of $80 a barrel to break even. Western Canada Select, a blend of heavy Alberta crude, is currently selling at a discount of about $14 a barrel to the WTI benchmark. This differential for Alberta’s oil, based on such factors as quality and pipeline capacity, has ranged from $7 to $20 this year and exceeded $40 a barrel in late 2012 and part of 2013.

Cenovus Energy a Calgary-based producer that uses steam technology to melt bitumen and pump it to the surface, has postponed two new projects until the oil price recovers. But it’s pressing ahead with expansions started before the downturn that will add 100,000 barrels of capacity by next year. “We do not want short-term pricing to dictate our investment in long-life, high-return oil sands projects,” Cenovus Chief Executive Officer Brian Ferguson told analysts in July, when WTI was trading near $50. Oil companies plan for price variations during the lives of long-term projects. Cenovus “stress tested” its expansion down to a price of $50 a barrel, a level that will allow it to continue paying a reduced dividend and fund some further growth, Ferguson said in July.

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Abbott is bizarre, period.

Australia PM’s Decision To Drop Bank Tax ‘Bizarre’ (Afr)

So let me get this straight. After the four peak government agencies that oversee Australia’s financial system recommended taxpayers should receive a proper fee for the free default insurance they provide for $750 billion of bank deposits, Tony Abbott rolled his Treasurer’s correct call on the matter because he doesn’t want another “Labor tax”? “The last way to make our banks strong, the last way to protect depositors, is to hit banks with more taxes,” Abbott dissembled. “That’s the Labor way. It’s not the Coalition’s way.” The truth is that the policy principle of not giving away public insurance to banks for free has been embraced by pretty much every developed economy in the world, and was explicitly advocated in writing by the Council of Financial Regulators and only then belatedly backed by Labor’s Treasurer, Chris Bowen.

Contrary to Abbott’s misleading claims, this is neither a tax nor a Labor proposal. We are talking about a premium for free deposit insurance that was advised by our best bureaucrats because it minimises the “moral hazards” that arise when you give bankers a “heads we win, tails taxpayers lose” incentive structure. The Liberal Party is meant to reflexively support policies that remove or minimise public subsidies of private companies and here we have Abbott giving a free kick to the world’s most profitable banks. The decision is demonstrably bizarre on at least four levels. First, it was always going to be popular with main street. Holding the big banks to account and justifiably transferring wealth from the oligarchs and their shareholders back to taxpayers’ coffers would be welcomed by most.

Second, there was no political battle to be had here – Labor was not going to oppose an initiative it had already backed. Third, Abbott’s decision undermined his own Treasurer, who privately agrees with the idea of pricing free public insurance and eliminating moral hazards. This only reinforces the impression the Liberals are a divisive, clueless bunch of amateurs that struggle with rational action. Finally, the revenue generated by pricing the deposit insurance would have raised tens of billions of dollars over time that could have helped reduce Australia’s net debt, which is inflating every day towards dangerous (non-AAA rated) levels as the economy decelerates, care of the commodity price slump and a sharp contraction in Asian demand. Enough said.

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Xi is one desperate puppy.

A Secretive Agency Hunts for China’s Crooked Officials Worldwide (Bloomberg)

Qiao Jianjun seemed a model bureaucrat: strict on expense accounts, a stickler for rules. But the director of a sprawling state enterprise that controlled grain stockpiles for a chunk of Henan province had a secret, Chinese officials say: He was embezzling millions. In October 2011, he abandoned his government-issue black sedan at a local airport and disappeared — apparently headed for a favorite destination among China’s wayward party members: the U.S. China’s government released a list of 100 fugitives in April; Qiao was among 40 suspected of being in America. As President Xi Jinping’s nationwide corruption hunt has punished more than 100,000 officials over three years, many of those who’ve found bolt-holes abroad have remained frustratingly out of reach.

Rounding them up, in an operation called “Sky Net,” falls to China’s much feared Central Commission for Discipline Inspection (CCDI). In a rare interview in May with Bloomberg Businessweek, Sky Net’s leaders discussed their work with the U.S. in catching and returning fugitives. Despite a recent success – a U.S. indictment against Qiao, the grain official – such collaboration remains fraught with sensitivities, adding to tensions ahead of Xi’s U.S. trip this month. CCDI traces its origins to 1927, when the young Chinese Communist Party established a commission to monitor its members’ behavior. Its headquarters now occupy a cement-and-glass rectangle of a building behind a massive stone gateway in central Beijing, not far from the Forbidden City.

While there’s no sign on the gate, the traditionally secretive Party disciplinary arm has embraced a more public profile under Xi. Its website debuted in 2013; this year, it released an app that makes it a cinch to snitch using a mobile phone. The Xi-era drive to crack down on corruption has meant more work and growth for CCDI, including the expansion of its inspection offices to 12 from eight. The agency doesn’t publish staff numbers, but Chinese media reports estimate its size at up to 1,000. Job postings advertise for candidates with good computer skills, preferably with a degree from a top university. Party membership is mandatory.

If Sky Net sounds like a James Bond film, the role of M. could be played by Fu Kui, 53, CCDI’s head of international cooperation until last month when he was put in charge of the agency’s Hunan province operations. He’s square-headed and blunt-looking in a white button-down with no tie, and smokes as he talks. “Our work is about winning people’s hearts for the party,” Fu said in the May interview, in a conference room lined with world maps. “Now that we’re starting to hunt them down, the public is happy to see it.”

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Ridiculous.

New York’s Pension Fund Pact With the Devil (HuffPo)

I did some digging around and, confirmed that a recent New Yorker article by Pulitzer nominee Jennifer Gonnerman was true. I found that both the New York City and New York State pension funds have a direct stake in corporations that are second cousins to slavery, the private prison industry. This is a shocking revelation. I know and respect the stewards of these funds, Tom Dinapoli and Scott Stringer. They both have impressive civil rights records. As members of the New York State Assembly, the two were loyal supporters of the grassroots movement to repeal the racist Rockefeller Drug Laws. It is hard to believe that two of the most progressive elected officials in New York would take workers’ wages and invest them into such an inhumane enterprise.

The only explanation I could come up with is that they must have not have known that their respective pension funds were directly connected to such a repulsive operation. I brought my concerns to the attention of both men weeks ago, and, as of this writing, nothing has changed. Well, it’s one thing not to know, it’s quite another matter not to care. As Michelle Alexander put it in “The New Jim Crow,” mass incarceration in the United States has emerged as “a stunningly comprehensive and well-disguised system of racialized social control that functions in a manner strikingly similar to Jim Crow.” Investing in companies that profit from this system is morally indefensible. I know both Dinapoli and Stringer have voiced opposition to mass incarceration.

Yet in order to realize an increased value in the private prison portion of their equity portfolio, they must hope for what they claim to oppose — the expansion of the private prison system and the growth of mass incarceration. But it’s not just morally reprehensible to invest in prisons, it is also fiscally irresponsible. Two of the private prison stocks the city and state have wagered sacred pension fund money on, the GEO Group and Correctional Corporation of America (CCA), companies that control approximately 75% of the prison market, are heading south, daily hitting new 52 week lows. From President Obama’s recent spate of pardons, to pending state and federal legislation to cut prison sentences for low level, non-violent offenders, to the #BlackLivesMatter movement calling for an end to the Prison Industrial Complex, the writing is on the wall. Prisons are no longer a growth industry.

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Lest we forget: “..the sole European institution with a direct popular mandate..”

EU Parliament Claims Role In Greek Bailout Supervision (EUObserver)

The European Parliament and the European Commission are set to discuss the parliament’s role in the supervision of the Greek bailout programme after parliament leaders gave the green light to proceed.( ( Parliament president Martin Schulz received a mandate on Thursday (3 September) from the leaders of the assembly’s political groups to “explore” with commission president Jean-Claude Juncker “the possibilities” of such an involvement. An agreement could be announced as soon as next week, when Juncker participates in the parliament’s plenary session in Strasbourg. Juncker will attend the conference of presidents, the group that gave Schulz the green light. The parliament’s move comes in response to a request sent by former Greek PM Alexis Tsipras on 20 August.

Tsipras wrote to Schulz, asking for “the direct and full involvement of the European Parliament in the regular review process regarding the implementation of the loan agreement” between Greece and its creditors – the European Commission, the ECB, the European Stability Mechanism (ESM), and the IMF. “I deem it politically imperative that the sole European institution with a direct popular mandate acts as the ultimate guarantor of democratic accountability , Tsipras wrote. The basis of the discussion between the two presidents will be the so-called two-pack regulation, which sets up a monitoring and surveillance mechanism of eurozone countries.

In his letter, Tsipras mentioned article 3 of the two-pack, which says parliament should be kept informed and provides possibilities for exchanges of views with officials from the commission or the member state under surveillance. “There was large agreement between political groups , a parliament source told EUobserver. “It is not a surprise , Schulz said, “because the troika report at the end of the parliament’s last mandate already asked for a permanent structure of accompaniment on a parliamentarian level [of] all the actions of the institutions in the framework of the programme. The discussion between Schulz and Juncker could lead to a mechanism that gives the parliament more than the right to be simply informed about implementation of the bailout programme, but less than a deciding role in the monitoring of it.

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Lots of media.

Varoufakis: I Don’t Think Tsipras Believes In Bailout (CNBC)

Yanis Varoufakis, the controversial former Greek finance minister, has told CNBC that he doesn’t think Alexis Tsipras, who is currently campaigning for re-election as its Prime Minister, believes in the conditions of the country’s third bailout. “He considers it to be unreliable, as does the IMF,” Varoufakis said on Friday. Tsipras was still a personal friend and an “excellent politician”, the economist, who resigned as finance minister this summer after a brutal six months attempting to re-negotiate the austerity conditions of Greece’s bailout by international creditors, added. Varoufakis became the focal point for criticism of Greece for not accepting the austerity program, despite other programs being accepted by bailed-out countries like Portugal and Spain.

Tsipras eventually accepted another bailout with controversial austerity conditions, as the threat of Greece having to leave the euro zone in a disorderly fashion loomed. The third bailout is “unviable on an economy which is in this great depression and debt spiral,” Varoufakis said. Tsipras has recently called new elections in Greece, the second within a year. “I cannot look my electors in the eye and say to them that our party is capable now of stabilizing the economy,” Varoufakis added.

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“Food is the weapon of the future, not bombs.”

Food Sovereignty (Beppe Grillo)

Does Italy still exist, or is it, as Metternich puts it, a geographic expression? By joining the Euro, it lost its monetary sovereignty. It lost its territorial sovereignty after its defeat in the second world war with occupation by the Americans who have never left since then. It lost its military sovereignty as it is now reduced to taking orders from the USA and organising pretend peace missions in Afghanistan and in Iraq, and bombing Libya (thanks also to grandpa Napolitano)/ The fall of Gaddafi is the cause of the immigration of biblical proportions – from that country that no longer has connections with Italy What’s still left of this devastated country where the words “Patria” {fatherland} and “Nazione “ {nation} are considered to be offensive? If a country has no sovereignty and has leaky borders, can it still call itself a country?

Among the many types of sovereignty that have been lost, there’s also food sovereignty. Food sovereignty implies control by the people in relation to the production and consumption of food. The countries must be able to define their own agricultural and food policies on the basis of their own needs. In the period from 1971 to 2010, Italy lost five million hectares of agricultural land because people were abandoning the land, because of hydrological disturbances and because of “cementification”. Unless there are policies providing incentives for agriculture, people will continue to abandon the land. There are whole areas of Italy that are becoming depopulated with young people fleeing towards the cities. That’s something that started after the second world war and it has never let up. The total area of land now used for agriculture has reduced by 28% in 40 years. Our ability to provide our own food is approaching 80% and it is going down all the time. Only 20 years ago it was 92%.

Italy is the third country in Europe and the fifth in the world as regards the lack of land. It’s a country that is over-populated (we have roughly the same population as France with only half the area of usable land.) To cover our food needs, another 61 million hectares are needed. Every day, 100 hectares of land is being built on, that’s 10 square metres every second. An Italian-style suicide. The Great Public Works are given precedence. But the only thing about them that’s “great” are the associated kickbacks. Instead there should be a long-term plan to put an end to the hydrogeological disruption and to clean up the terrain that has been polluted by every type of waste product. The paradox of Expo 2015 is that it focuses on “Feeding the planet“ and yet to bring it into being, a million (yes – one million) square metres of agricultural land has been used. That’s beyond belief. Food is the weapon of the future, not bombs.

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From our friend Nelson in Wanganui.

Regenerative Agriculture: The Popular Face Of Permaculture (Lebo)

“Hippy farms always fail.” These were the words of Chuck Barry, a small-scale organic farmer I met in Montrose, Colorado about ten years ago. Chuck made a comfortable living growing high quality vegetables on two acres in a dry and seasonally cold environment that may be compared with Central Otago high country. His comment was based on observations of some people going into farming with good intentions but little understanding of the amount of work involved and inadequate business sense. There is popular, quaint, romantic notion among many people about growing food organically. But at the end of the day, when faced with actually doing it, most hippies opt out because it turns out to be just too hard.

On the other end of the spectrum – as we have been hearing recently in the news – many conventional farms also fail. Conventional farming wisdom over the last decade goes something like this: 1) borrow lots of money from the bank; 2) convert to dairy; 3) borrow more money; 4) rely on ever-increasing dairy pay outs; 5) borrow more money; 6) rely on ever-increasing land prices; 7) get rich; 8) what could possibly go wrong? Well, now we know. Dairy pay outs have fallen through the floor and many farmers are pushed to the wall. On one hand I feel sorry for those famers who have to sell because of their now un-payable debts. But on the other hand, I question why they bought into the paradigm described above in the first place, which appears to me to be very risky.

Alongside financial debt, many conventional farms also run a large soil debt. We see it every day flowing past our city and out into the Tasman Sea. Like financial debt, soil debt is difficult to repay but not impossible. Rebuilding soil fertility while growing food is sometimes called regenerative agriculture. Regenerative agriculture can include organic farming practices, some biodynamic techniques, and holistic range management. All three of these fall within the scope of the eco-design system known as permaculture. I see permaculture as the middle ground between failed hippy farms and failed conventional farms.

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