Jan 132020
 


G.G. Bain Three-ton electric sign blown into Broadway, New York. 1912

 

‘I’m Spending All My Money To Get Rid Of Trump’: Michael Bloomberg (R.)
What If @realDonaldTrump Is Brilliant? (Papachelas)
Warren, Sanders Campaigns Spar In Rare Show Of Discord (R.)
How Bad Can The Climate Crisis Get If Trump Wins Again? (G.)
Avoid UK Recession By Kickstarting Green Economy, Says Thinktank (G.)
China Is Really Worried About Unemployment, Social Unrest (CNN)
Ford’s China Vehicle Sales Drop 26% In Third Straight Year Of Decline (R.)
Downing of PS-752 Already Being Used To Smear MH-17 Skeptics (OffG)
Bolivia Exiled Ex-President Morales Calls On Radio For Armed Militias (R.)
Somebody Snuck A Potato Into CES 2020 (F.)

 

 

All of the money, none of the prospects. Will he be the first to spend a full billion? Don’t change your station.

‘I’m Spending All My Money To Get Rid Of Trump’: Michael Bloomberg (R.)

U.S. presidential candidate Michael Bloomberg told Reuters he is ready to spend much of his vast fortune to oust Republican President Donald Trump from the White House in 2020, rejecting criticism from rivals for the Democratic nomination that the billionaire is trying to buy the U.S. election. Ranked by Forbes as the eighth-richest American, Bloomberg has flooded U.S. airwaves and social media feeds with messages that he stands the best chance to beat Trump, spending more on campaign ads since he launched his campaign in November than his main Democratic rivals have over the last year.

“Number one priority is to get rid of Donald Trump. I’m spending all my money to get rid of Trump,” Bloomberg told Reuters aboard his campaign bus on Saturday, during a nearly 300-mile (483-km) drive across Texas, one of the 14 states that will vote on Super Tuesday on March 3. “Do you want me to spend more or less? End of story.” U.S. Senator Elizabeth Warren, one of the leading Democratic presidential contenders who has vowed to get money out of politics, blasted Bloomberg when he launched his campaign with a $37-million TV advertising blitz, accusing the former New York City mayor of trying to buy American democracy. “These are just political things they say, hoping they catch on and they don’t like me doing it, because it competes with them, not because it’s bad policy,” Bloomberg said.


After entering the race late and missing the first six Democratic debates, Bloomberg generally sits fifth in national public opinion polls behind Joe Biden, Bernie Sanders, Warren and Pete Buttigieg. But not just the two liberal standard-bearers of Warren and Sanders, all of the four are too liberal to beat Trump, Bloomberg said. “One of the reasons I’m reasonably confident I could beat Trump is I would be acceptable to the moderate Republicans you have to have,” said Bloomberg, a former Republican who made his fortune selling financial information to Wall Street firms. “Whether you like it or not, you can’t win the election unless you get moderate Republicans to cross the line. The others are much too liberal for them and they would certainly vote for Donald Trump.”

Read more …

No, I don’t think Trump is brilliant, thank you. Just funny to see this coming from Greece.

What If @realDonaldTrump Is Brilliant? (Papachelas)

History is often written by those who don’t follow the rules or, rather, by those who ostentatiously throw them onto the trash heap of history. Donald Trump is one of those people, whether we like it or not. In an era where political correctness and slick public relations are the norm in politics and beyond, Trump came along with his own unique style and turned everything on its head. This started during his candidacy for president. A one-time close associate of his described how his team tried to convince him to start using prepared speeches, reading from a teleprompter. He didn’t like the idea at all but he agreed to give it a go.

When the moment came for his first public speech, he started reading from the teleprompter, darting looks to his left and right, clearly uncomfortable with the whole process. At one point, his patience at an end, he petulantly threw down the screen and blamed his awkwardness on his team, declaring that he preferred making speeches without teleprompters. His associates were aghast for a few minutes. But after seeing the rave reception of the move by Trump’s supporters, they realized that his instinct and political brilliance was probably beyond them.

He pulled it off in domestic politics; could he also do it in foreign policy? All the relevant literature, handbooks and collected wisdom of experts far and near suggest that such a feat is impossible. What is essentially a negotiating tactic from the Manhattan real estate world cannot work in the forum of international politics. The art of pushing someone to the end of their tether and then making a deal at the last minute would be rejected as unenforceable. But that’s exactly what Trump is testing now. The assassination of Iranian General Qasem Soleimani in Iraq by American forces was a very extreme act which all Trump’s predecessors had avoided, as had even successive Israeli governments. Trump did it.

And by doing so he simultaneously sent a clear message to the Middle East that the USA is no longer dependent on its oil and natural gas reserves. Iran responded in a relatively reasonable fashion. In a few weeks, it will become clear whether those who believe that Iran will hit back harder – albeit under or over the radar – are right, or whether a new balance of power will finally emerge that puts it “in its place” and possibly leads to a new deal. That’s when a lot of so-called experts will be banging their heads against the wall.

Read more …

Prepare for 11 months of this, getting uglier as we go along.

Warren, Sanders Campaigns Spar In Rare Show Of Discord (R.)

A rare sign of discord emerged on Sunday between progressive Democratic presidential contenders Elizabeth Warren and Bernie Sanders over a report that Sanders’ campaign volunteers had called her a candidate of the elite in conversations with voters. “I was disappointed to hear that Bernie is sending his volunteers out to trash me,” Warren told reporters after a campaign event in Marshalltown, Iowa, which will hold the nation’s first nominating contest on Feb. 3. “I hope Bernie reconsiders and turns his campaign in a different direction.” Warren and Sanders, who are friends, fellow U.S. senators and their party’s progressive standard-bearers, agreed early in the nominating contest to an informal non-aggression pact and have largely avoided criticizing each other.


Politico reported late on Saturday that Sanders’ campaign had distributed talking points for volunteers on what to say to voters who are thinking of supporting his main rivals – former Vice President Joe Biden, Pete Buttigieg, the former mayor of South Bend, Indiana, and Warren. The guidance suggested that volunteers argue Warren was supported by “highly-educated, more affluent people who are going to show up and vote Democratic no matter what,” rather than motivating people who do not normally vote, Politico reported. Sanders said on Sunday he did not approve the negative talking points about other candidates. “We have over 500 people on our campaign. People do certain things. I’m sure that on Elizabeth’s campaign people do certain things as well,” Sanders told reporters after a rally in Iowa.

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Blaming Trump for a process that has taken centuries to develop is as silly as it is lazy. There is no government anywhere that is willing to commit anything other than lip service to this.

How Bad Can The Climate Crisis Get If Trump Wins Again? (G.)

Climate pollution in the US is up under Donald Trump and threatens to undermine international efforts to stall the crisis, especially if he wins re-election this year and secures a second term in the White House. While US climate emissions fell 2.1% in 2019, they rose significantly in 2018, according to estimates from the economic analysis firm Rhodium Group. On net, emissions are slightly higher than in the beginning of 2017, when Trump’s administration began enacting dozens of environment rollbacks aimed at helping the oil and gas industry. Trump is still working to further weaken bedrock standards. This week he proposed to allow major projects like pipelines and highways to bypass reviews of how they will contribute to global warming.

The draft rule is unlikely to become final before the November election, but it is yet another reason industries weighing climate choices might delay significant action. “What they have done is created confusion within the business community and the environmental world as to what are going to be the standards,” said Christine Todd Whitman, who led the Environmental Protection Agency under the Republican president George W Bush. “Essentially every regulation the agency promulgates gets a lawsuit that goes with it, almost inevitably … that’s the only good thing you can say about it.” Whitman called the approach “mindless” and said “whoever is a bigger donor gets to tell them what the environmental policy should be, it seems”.

In the absence of any federal climate action, states, cities and businesses have pledged their own efforts, seeking to encourage other big emitters like China and India to continue to slow their growing climate pollution. Andrew Light, a climate negotiator for President Barack Obama’s state department, said the world is taking note of those efforts, but if Trump is re-elected “you are going to see a lot of people who are worried anew about what the US can do.” Americans choosing Trump would send the signal that they don’t care about the climate, Light said.

America’s Pledge, a project to quantify ongoing US emissions reductions, estimates that non-federal actors – like states and cities – could cut climate pollution 37% below 2005 levels by 2030. A Democrat in the White House could increase that to 49% with what Light described as modest, politically achievable policy changes. Experts are increasingly calling for the US to halve its emissions by 2030 and neutralize them by 2050.

Read more …

Next up: $50 trillion. You’re being had.

Avoid UK Recession By Kickstarting Green Economy, Says Thinktank (G.)

The government fightback against the next recession should include pumping as much as £50bn into green projects, in a move that would help reboot the economy and tackle the climate emergency, according to a left-leaning thinktank. Against a backdrop of concern among economists that Britain is ill-equipped to combat another downturn on the scale of the 2008 financial crisis, the New Economics Foundation thinktank said a green plan to beat a future slump was required. In the event of a recession, it said the government should spend at least 2% of GDP, or around £30bn, to decarbonise the economy, by investing in renewable energy projects, planting trees, transport infrastructure, electric vehicles, and retrofitting homes with new insulation.

For a larger economic shock, as much as 3% of GDP, or around £50bn, could be spent. Leading economists including former US Treasury secretary Larry Summers and the former chief economist at the International Monetary Fund, Olivier Blanchard, have called on governments around the globe to prepare for future economic shocks with readily available blueprints to raise government spending. It comes as central banks, including the Bank of England, have limited capacity to provide support because interest rates remain close to the lowest levels on record more than a decade after the financial crisis. Mark Carney, the Bank’s governor, has hinted that Threadneedle Street could cut rates soon, while warning that it is running out of ways to combat recessions.


The foundation said that raising investment in green infrastructure was required regardless of whether Britain was facing a recession or not. However, it said that a plan for fighting a future downturn should have decarbonisation at its core. [..] It said that spending around £10.5bn on a mass insulation programme for homes – equivalent to only a third of the coalition government’s tax cuts between 2010 and 2013 – would have enabled residential emissions to fall by around 30% by 2018.

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Why would CNN run a piece like this, at this point in time?

China Is Really Worried About Unemployment, Social Unrest (CNN)

The Chinese government wants to do whatever it can to protect the economy in 2020. It’s got an enormous task ahead of it. Beijing has made clear that the world’s second largest economy cannot spiral into a slump and risk mass layoffs as it tangles with rising debt, cooling domestic demand and an ongoing trade war with the United States. That’s particularly important this year because it marks the conclusion of the government’s 13th Five-Year Plan, during which it promised to establish a “moderately prosperous society” and end poverty. Senior members of the Communist Party’s Politburo — the seven most powerful men in China — said last week that all efforts must be taken to achieve those goals in 2020.

In recent weeks, the government has bombarded the economy with a wave of stimulus measures, from tariff reductions that could help soothe the pain from rising prices, to rate cuts that could fuel more bank lending. Authorities are also amping up the language they’re using to describe the situation. China’s State Council last month called on local governments to “go to all lengths” to prevent massive job losses this year — what it characterized as the country’s top policy priority. The chief administrative office even warned that the country could face “massive unexpected incidents” if unemployment balloons — a euphemism in China widely understood to refer to social unrest and riots, and one that is rare in public government documents.

In recent years, the government has said it has to create 11 million new jobs annually to keep employment on track. While China’s official unemployment data has barely budged over the last several years, hovering between 4% and 5%, Beijing’s messaging suggests that it is unusually worried about the slowing economy and the challenges that the year could bring. “Beijing is much more worried about social unrest than about ballooning local debt, which at one point seemed to be a priority, ” said David Zweig, director of Transnational China Consulting Limited and a professor emeritus at the Hong Kong University of Science and Technology. Huge protests, after all, have for months consumed Hong Kong, which local officials said last November would sink into its first annual recession in a decade.

The protests have focused on calls for greater democracy, but economic factors such as the soaring cost of housing and an increasingly competitive labor market have been fueling a growing sense of dissatisfaction, particularly among the city’s young people. Social unrest might be the “black swan” risk facing the country, Zweig added, using a phrase that Chinese President Xi Jinping himself uttered last year to describe an improbable but chaotic event. “2020 is going to be very difficult, and mass unemployment may be the most feared problem,” said Frank Ching, a China political commentator and adjunct associate professor at the Hong Kong University of Science and Technology. “It’s not just an economic issue — it could develop into a political one. “

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And 15% for GM. Who’s taking over? Reuters doesn’t say.

Ford’s China Vehicle Sales Drop 26% In Third Straight Year Of Decline (R.)

Ford Motor Co’s China vehicle sales fell for a third consecutive year, by 26.1%, as it battles a prolonged overall sales decline in its second-biggest market that has hit demand for its mass-market Ford brand and sports utility vehicles. The U.S. automaker delivered 146,473 vehicles in China in the fourth quarter, down 14.7% year-on-year, Ford said in a statement. In total, it sold 567,854 vehicles over 2019. Ford has been trying to revive sales in China after its business began slumping in late 2017. Sales sank 37% in 2018, after a 6% decline in 2017. Anning Chen, president and chief executive of Ford Greater China, said that while 2019 was a “challenging” year for the automaker, it saw its market share in the high-to-premium segment stabilize and its sales decline in the value segment start to narrow in the second-half of the year.


“The pressure from the external environment and downward trend of the industry volume will continue in 2020, and we will put more efforts into strengthening our product lineup with more customer-centric products and customer experiences to mitigate the external pressure and improve dealers’ profitability.” The automaker plans to launch more than 30 new models in China over the next three years of which over a third will be electric vehicles. It has also said it would localize management teams by hiring more Chinese staff and aimed to improve relationships with joint venture partners. [..] Its larger U.S. rival General Motors last week said its sales in China fell 15% from a year earlier to 3.09 million vehicles in 2019, its second year of decline.

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Waiting for the Belingcat “analysis”.

Downing of PS-752 Already Being Used To Smear MH-17 Skeptics (OffG)

Many have noted that Iran’s honorable decision to take responsibility for the catastrophe is in sharp contrast with Washington’s response in 1988 when the U.S. Navy shot down Iran Air Flight 655 scheduled from Tehran to Dubai over the Strait of Hormuz in the Persian Gulf, killing all 290 occupants, after failing to cover it up. Just a month later, Vice President George H.W. Bush would notoriously state he would “never apologize for the United States of America. Ever. I don’t care what the facts are.” Although he was not directly referring to the incident, one can only imagine what the reaction would be if Iranian President Hassan Rouhani were to say the same weeks after shooting down the Ukrainian plane, let alone an American one.

Predictably, Tehran’s transparency has gone mostly unappreciated while the Trump administration is already trying to use the disaster to further demonize Iran. Oddly enough, Ukrainian International Airlines is partly owned by the infamous Ukrainian-Israeli oligarch, politician and energy tycoon Igor Kolomoisky, who was notably one of the biggest financiers of the anti-Russian, pro-EU coup d’etat which overthrew the democratically elected government of Viktor Yanukovych in 2014. Kolomoisky is also a principal backer of current Ukrainian President Volodymyr Zelensky whose dubious phone call with Trump resulted in the 45th U.S. president’s impeachment last month.

In another astounding coincidence, Kolomoisky’s Privat Group is believed to control Burisma Holdings, the Cypress-based company whose executive board 2020 presidential candidate Joe Biden’s son Hunter was appointed to following the Maidan junta. The former Vice President admitted that he bribed Ukraine into firing its top prosecutor who was looking into his son’s corruption by threatening to withhold $1 billion in loan guarantees. Kolomoisky, AKA “the Chameleon”, is one of the wealthiest people in the ex-Soviet country and was formerly appointed as governor of an administrative region bordering Donbass in eastern Ukraine following the 2014 putsch.

He has also funded a battalion of volunteer neo-Nazi mercenaries fighting alongside the Ukrainian army in the War in Donbass against Russian-speaking separatists which the military aid temporarily withheld by the Trump administration that was disputably contingent upon an investigation of Biden and his son goes to. In 2014, another infamous plane shootdown made international headlines when Malaysian Airlines Flight 17 (MH17) scheduled from Amsterdam to Kuala Lumpur was shot down over the breakaway Donetsk People’s Republic (DPR) in eastern Ukraine, killing all 298 passengers and crew.

Read more …

Can Evo make a come-back?

Bolivia Exiled Ex-President Morales Calls On Radio For Armed Militias (R.)

Bolivia’s exiled former president Evo Morales on Sunday defended a call he made for the formation of armed groups, a recording of which was leaked on public radio. Speaking exclusively to Reuters on Sunday night in Argentina where he is in exile, the defiant former president confirmed his was the voice in a recording played on Bolivian radio calling for creation of armed militias “as in Venezuela”. He said people have a right to defend themselves if the new government was attacking them. He said he had not meant armed with guns and was referring to citizen defense groups that had always loosely existed. “In Bolivia, if the armed forces are shooting the people, killing the people, the people have the right to organize their security,” he said in the interview with Reuters.


“We´re not talking arms, more like slingshots,” he said. “In some times (these groups) were called militias, in other times they were called union security or union police and in some places it is called communal guard. It is not new.” In the recording released by radio station Kawsachun Coca Tropico, Morales said he and his supporters had been “too trusting” ahead of last year´s presidential election, and should have had a “Plan B.” “If between now and in a little while… I were to return (to Bolivia) or someone else goes back, we must organize as in Venezuela armed militias of the people,” Morales said in the recording. “We were too trusting. The blunder: we did not have a ‘Plan B’.”

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Is all innovation positive? Given how it’s promoted, one might think so. But that’s just because of the money involved.

Somebody Snuck A Potato Into CES 2020 (F.)

I almost walked right by it. But then I realized the object the young man was holding up, apparently thrilling the small crowd gathered around his tiny CES 2020 booth, was a potato. The vegetable in question looked like an ordinary, chunky Idaho spud, although protruding out of one side was some kind of antenna, a black plastic appendage bent upward. Close to the potato’s surface, the exterior of the antenna became a thin, blade-like electrode that pierced the skin, clearly doing… something. The man was regaling the crowd with his incredible smart product, which he said was finally unlocking the awesome decision-making power of the potato. The antenna, which he called the NeuraSpud, tapped into the potato’s “artificial intelligence.”

Once you connected your smartphone over Bluetooth to the device and launched the accompanying app, you could ask the potato anything — with your voice, no less — and it would spout an answer on the screen, the digital-vegetable equivalent of a Magic Eight Ball. If the smart potato sounds like a big, stupid stunt, that’s because it is. The man behind the idea, Nicholas Baldeck from France, told me he brought his admittedly ridiculous “invention” to CES to make a point about the torrent of smart gadgets at the show, many of which don’t really solve problems at all. “This product has way more chance of success than 60% of the startups here,” Baldeck says. “I am skeptical of this idea of ‘connected everything.’


Now it looks like innovation is about putting a chip into any object. I’m not sure the word ‘smart’ makes more sense before the word toothbrush than the word potato.” Baldeck went to a lot of trouble to make his point. His booth cost $1,000, and he spent about $4,000 in travel, equipment and marketing. Plus the electrode-driven antenna he brought really works, he says — though “works” in this context is somewhat fungible, since what the electrode is “reading” from the juices inside the potato to create the answers is probably just random junk. He also had to buy a bunch of potatoes.

Read more …

 

 

 

Include the Automatic Earth in your 2020 charity list. Support us on Paypal and Patreon.

 

Dec 042018
 


Sirkka-Liisa Konttinen Kendal Street, Byker, Newcastle 1969

 

Yield Curve: What Bond Market Most Feared Is Starting To Happen (CNBC)
UK Government Accused Of Holding Parliament In Contempt On Legal Advice (G.)
Four Million British Workers Live In Poverty (G.)
1.5 Million Demands For Second Referendum Handed To Downing Street (Ind.)
Europe’s Top Court To Rule On Whether The UK Can Cancel Brexit (CNBC)
‘Death Threats’ Halt France Protest Summit (BBC)
Mueller Withheld “Details That Would Exonerate Trump” (ZH)
Jerome Corsi Legal Ethics Complaint Against Robert Mueller (Klayman)
Manafort Tried to Broker Deal With Ecuador to Hand Assange Over to US (NYT)
Ford’s Restructuring Could Slash More Jobs Than GM’s – Morgan Stanley (MW)
Future Of Auto Industry Lies In Car Sharing – Chinese Execs (CNBC)
US-China Trade Talks: Forced Tech Transfers, Intellectual Property Theft (CNBC)
Bitcoin Drops 8% To Kick Off December (CNBC)
David Attenborough: Collapse Of Civilisation Is On The Horizon (G.)

 

 

Powell, Draghi and Kuroda to the rescue!

Yield Curve: What Bond Market Most Feared Is Starting To Happen (CNBC)

The bond market sees storm clouds on the horizon, despite the trade ceasefire between President Donald Trump and China. But not all strategists agree with the dire warnings, though they do note some unusual behavior. On Monday, the difference between the 10-year Treasury yield, at 2.97 percent, and the 2-year yield, at 2.82 percent, dramatically narrowed by 5 basis points, the biggest one day move since late March. Traders have been watching the difference between the yields on various Treasurys for months, along what is called the yield curve between the longer and shorter-term bonds.

And in this time, the longer duration 10-year yield has gotten closer and closer to the yield on the 2-year. If the two should flip, and the 2 -year yield actually rises above the benchmark 10-year, that inversion would be a signal of a recession. The two yields are currently just under 15 basis points apart, the narrowest since around the time they last inverted in June 2007. What’s worrisome for some is that on Monday, the difference between the yields on the 3-year and 5-year, and those of the 2-year and 5-year, inverted.

Read more …

Final warning.

UK Government Accused Of Holding Parliament In Contempt On Legal Advice (G.)

A senior minister is at risk of being suspended from the House of Commons after Labour and the Democratic Unionist party were allowed to submit an emergency motion accusing the government of holding parliament in contempt for failing to publish the full Brexit legal advice. John Bercow, the Speaker, allowed Labour, the DUP and four other opposition parties to lay down a motion that will be voted on Tuesday, immediately before before the start of the five-day debate on the Brexit deal. The motion, submitted late on Monday, calls on MPs to find “ministers in contempt for their failure to comply” and is signed by the shadow Brexit secretary, Sir Keir Starmer; the DUP’s Westminster leader, Nigel Dodds; and the Scottish National party, Liberal Democrats, Plaid Cymru and the Green party.

No penalty is spelled out in the motion, which is intended to act as a final warning, but Labour said that if it was passed on Tuesday and not still complied with then the party would seek further sanctions. The party indicated it would then seek to hold a senior minister – likely to be either the Cabinet Office minister, David Lidington, or the attorney general, Geoffrey Cox – in contempt and seek their suspension from the Commons. Bercow ruled in the evening that he would accept a contempt motion after the six parties wrote to him jointly complaining that the summary Brexit legal advice released on Monday did not comply with a Commons resolution agreed on 13 November.

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Holding Parliament in contempt is one thing, holding your people in contempt is another one altogether.

Four Million British Workers Live In Poverty (G.)

More than 500,000 British workers have been swept into working poverty over the past five years, according to a report that shows the number of people with a job but living below the breadline has risen faster than employment. In the latest sign that the link between entering work and making ends meet has become increasingly frayed in 21st-century Britain, the Joseph Rowntree Foundation (JRF) said that the number of workers in poverty hit 4 million last year, meaning about one in eight in the economy are now classified as working poor. Nearly all of the increase comes as growing numbers of working parents find it harder to earn enough money to pay for food, clothing and accommodation due to weak wage growth, an erosion of welfare support and tax credits and the rising cost of living.

Half a million more children have become trapped in poverty over the past five years as a direct consequence, reaching 4.1 million last year, the charity’s report added. It means that in a typical classroom of 30 children, nine would come from a household in poverty. Campbell Robb, chief executive of the JRF, said: “We are seeing a rising tide of child poverty as more parents are unable to make ends meet, despite working. This is unacceptable.” In the findings of JRF’s report, UK Poverty 2018, the number of children who slipped into poverty from a working family rose more steeply than at any time for 20 years.

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There is no time for a second round of talks even if the people demand it.

1.5 Million Demands For Second Referendum Handed To Downing Street (Ind.)

Campaigners for a new referendum have handed in petitions carrying almost 1.5 million names to Downing Street, demanding the British public be given a final say on the outcome of Brexit. The group representing The Independent’s Final Say campaign and the People’s Vote initiative handed over the petitions as Theresa May prepared for what is set to be a bruising five-day Commons debate on her Brexit deal. Pressure for a new referendum is increasing ahead of the vote that will come at the end of that debate next week, with the prime minister looking at a heavy personal defeat if MPs reject the deal she agreed with the EU. Anger over her deal increased on Monday, when the government published a legal paper confirming that under Ms May’s plan, the UK will be indefinitely locked in to the controversial ‘backstop’ arrangement.

Campaigners carrying EU flags and placards chanted calls for a new referendum as they met outside the Churchill War Rooms in Westminster, before marching to No10 to deliver the petitions on Monday morning. Conservative ex-cabinet minister Justine Greening said: “Britain has choices ahead of it. The key issue that we’re saying today, and that’s why we’re delivering a petition signed by a million people in this country, is that those choices are ones that should be made by the British people. “Parliament is gridlocked … This is no way to decide the most fundamental question facing Britain for the next 10, 20, 30, 40, 50 years.”

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Again dependent on Europe. Reuters headline just now: “Britain can revoke Brexit unilaterally, EU court adviser says”. Court decision expected to take a few more weeks.

Europe’s Top Court To Rule On Whether The UK Can Cancel Brexit (CNBC)

The legal advisor for the European Union’s top court will publish his opinion Tuesday on whether the U.K. can cancel Brexit without asking anybody else for permission. A group of Scottish lawmakers have sought a legal ruling on if and how the U.K.’s request under Article 50 to leave the European Union could be unilaterally revoked before the Brexit deadline of March 29, 2019. Article 50 allows a country to trigger the process that takes them out of Europe’s political and economic union. U.K. Prime Minister Theresa May invoked the exit clause in March 2017. Backed by a crowdfunding appeal, the case has been put together by a cross-party group of Scottish politicians, along with the high-profile barrister Jolyon Maugham QC.

The final ruling on whether Article 50 could be canceled without input from the EU’s other 27 countries will be granted by the Court of Justice of the European Union (CJEU). [..] The EU is worried that allowing a country to trigger Article 50 and then reverse the decision with no additional input could become a tool for those unsatisfied with the policies of Brussels. For the U.K. government and pro-Brexit politicians, there are likely concerns it could pave the way for a second referendum, giving the public an option of remaining in the EU.

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Macron is cornered. Many in France say he’s done.

‘Death Threats’ Halt France Protest Summit (BBC)

Protesters from France’s “gilet jaunes” (yellow vests) movement have pulled out of a meeting with PM Edouard Philippe scheduled for Tuesday. Some members of the group said they had received death threats from hardline protesters warning them not to enter into negotiations with the government. The PM is due to make a major statement possibly as early as Tuesday. The yellow vests oppose a controversial fuel tax but now reflect more widespread anger at the government. A spokeswoman for the movement, Jacline Mouraud, said: “The meeting today at Matignon [the prime minister’s office] has been cancelled in the face of threats.

“There are calls to prevent us from going. If I were to get on a train, I would run the risk of being recognised.” Three people have died since the unrest began and the resulting violence and vandalism – notably when statues were smashed at the Arc de Triomphe last Saturday – have been widely condemned. [..] The French president held an urgent security meeting on Monday. Ministers said that while no options had been ruled out, imposing a state of emergency had not been discussed during the talks. Mr Macron has also cancelled a planned trip to Serbia to concentrate on the crisis. Culture Minister Franck Riester told reporters that Mr Philippe would announce “a strong conciliatory gesture in the coming days”, without giving details. AFP news agency reports that the prime minister will announce a moratorium on fuel tax.

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Color me unsurprised.

Mueller Withheld “Details That Would Exonerate Trump” (ZH)

It appears that special counsel Robert Mueller withheld key information in its plea deal with Trump’s former attorney, Michael Cohen, which would exonerate Trump and undermine the entire purpose of the special counsel, according to Paul Sperry of RealClearInvestigations. Cohen pleaded guilty last week to lying to the Senate intelligence committee in 2017 about the Trump Organization’s plans to build a Trump Tower in Moscow – telling them under oath that negotiations he was conducting ended five months sooner than they actually did. Mueller, however, in his nine-page charging document filed with the court seen by Capitol Hill sources, failed to include the fact that Cohen had no direct contacts at the Kremlin – which undercuts any notion that the Trump campaign had a “backchannel” to Putin.

“On page 7 of the statement of criminal information filed against Cohen, which is separate from but related to the plea agreement, Mueller mentions that Cohen tried to email Russian President Vladimir Putin’s office on Jan. 14, 2016, and again on Jan. 16, 2016. But Mueller, who personally signed the document, omitted the fact that Cohen did not have any direct points of contact at the Kremlin, and had resorted to sending the emails to a general press mailbox. Sources who have seen these additional emails point out that this omitted information undercuts the idea of a “back channel” and thus the special counsel’s collusion case.” -RCI

Page 2 of the same charging document offers further evidence that there was no connection between the Trump campaign and the Kremlin; an August 2017 letter from Cohn to the Senate intelligence committee states that Trump “was never in contact with anyone about this [Moscow Project] proposal other than me,” an assertion which Mueller does not contest as false – which means that “prosecutors have tested its veracity through corroborating sources” and found it to be truthful, according to Sperry’s sources. Also unchallenged by Mueller is Cohen’s statement that he “ultimately determined that the proposal was not feasible and never agreed to make a trip to Russia.”

“Though Cohen may have lied to Congress about the dates,” one Hill investigator said, “it’s clear from personal messages he sent in 2015 and 2016 that the Trump Organization did not have formal lines of communication set up with Putin’s office or the Kremlin during the campaign. There was no secret ‘back channel.’” “So as far as collusion goes,” the source added, “the project is actually more exculpatory than incriminating for Trump and his campaign.” -RCI”

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Court document (PDF). For one thing, the Mueller team demands that Corsi keep any plea agreement secret and under seal, which would ‘criminally and civilly violate’ Corsi’s obligations as a securities dealer.

Jerome Corsi Legal Ethics Complaint Against Robert Mueller (Klayman)

On or about May 17, 2017, Robert Swan Mueller III (“Special Counsel Mueller”) was appointed as a Special Counsel for a limited purpose investigation as defined by the order of Deputy Attorney General Rod Rosenstein. A copy of Robert Mueller’s appointment as Special Counsel is attached as Exhibit A. Dr. Corsi has been investigated by Special Prosecutor Mueller and the attorneys whom he hired to serve as prosecutors under him [..] This Complaint concerns the politically-motivated criminal investigation of Dr. Corsi, an investigative journalist, whose activities are protected by the First Amendment to the U.S. Constitution.

Dr. Corsi has been threatened with immediate indictment by Mueller’s prosecutorial staff unless he testifies falsely against Roger Stone and/or President Donald Trump and his presidential campaign, among other false testimony. Dr. Corsi is placed in an impossible, no-win scenario and is in immediate legal jeopardy. If he were to lie under oath to testify as the Special Prosecutor and his prosecutorial staff demand, some later prosecutor could accuse Dr. Corsi of perjury and/or violating any plea deal. The Special Prosecutor and his prosecutorial staff have already accused Dr. Corsi of lying when Dr. Corsi is in fact telling the truth and told the truth. Either way, Dr. Corsi remains at risk of a perjury prosecution without the relief demanded. Dr. Corsi is being investigated for the “crime” of doing his job as a foreign policy and national security journalist.

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WikiLeaks: “Ecuador’s president Lenin Moreno tried to sell Assange to U.S. in exchange for cash loans as early as May 2017..”

Manafort Tried to Broker Deal With Ecuador to Hand Assange Over to US (NYT)

In mid-May 2017, Paul Manafort, facing intensifying pressure to settle debts and pay mounting legal bills, flew to Ecuador to offer his services to a potentially lucrative new client — the country’s incoming president, Lenín Moreno. Mr. Manafort made the trip mainly to see if he could broker a deal under which China would invest in Ecuador’s power system, possibly yielding a fat commission for Mr. Manafort. But the talks turned to a diplomatic sticking point between the United States and Ecuador: the fate of the WikiLeaks founder Julian Assange. In at least two meetings with Mr. Manafort, Mr. Moreno and his aides discussed their desire to rid themselves of Mr. Assange, who has been holed up in the Ecuadorean Embassy in London since 2012, in exchange for concessions like debt relief from the United States, according to three people familiar with the talks, the details of which have not been previously reported.

They said Mr. Manafort suggested he could help negotiate a deal for the handover of Mr. Assange to the United States, which has long investigated Mr. Assange for the disclosure of secret documents and which later filed charges against him that have not yet been made public. Within a couple of days of Mr. Manafort’s final meeting in Quito, Robert S. Mueller III was appointed as the special counsel to investigate Russian interference in the 2016 election and related matters, and it quickly became clear that Mr. Manafort was a primary target. His talks with Ecuador ended without any deals. Mr. Moreno’s team increasingly looked to resolve their Assange problem by turning to Russia.

In the months after Mr. Moreno took office, the Ecuadorean government granted citizenship to Mr. Assange and secretly pursued a plan to provide him a diplomatic post in Russia as a way to free him from confinement in the embassy in London. (That plan was ultimately dropped in the face of opposition from British authorities, who have said they will arrest Mr. Assange if he leaves the embassy.)

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10 years after Detroit bailouts, Ford too is in trouble. It’s industry wide.

Ford’s Restructuring Could Slash More Jobs Than GM’s – Morgan Stanley (MW)

Ford Motor Co.’s restructuring would be “more extensive” than GM’s and could involve laying off tens of thousands of employees around the world, analysts at Morgan Stanley said in a note Monday. The analysts used Ford’s planned expenses as part of their calculations and compared them to General Motors’s expenses in the latter’s planned restructuring announced last week. Regardless, Ford is likely “next in line” in announcing layoffs as GM’s move “reflects an industrywide phenomenon” with potentially larger cuts, the analysts said. Ford last October announced an $11 billion restructuring plan, with a cash cost around $7 billion, but has not provided any details yet.

GM is spending as much as $ 2 billion of cash (up to $3.8 billion of total charges) to close seven plants and lay off about 14,000 workers. “Extrapolated to Ford’s planned expenditure, this could imply 20 plants and up to (50,000) employees,” the Morgan Stanley analysts said. “Our estimate of Ford’s restructuring plan involves as many as (25,000) head count reductions globally.” “A large portion” of Ford’s restructuring actions will likely be focused on Ford Europe, they said.

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Might as well move to public transit then?! The Chinese don’t have a car dependent society like the US, they can take a wider view.

Future Of Auto Industry Lies In Car Sharing – Chinese Execs (CNBC)

Several Chinese auto and transportation industry leaders are preparing for a future in which people share cars, rather than own them individually. “(The new generation), they’re not interested in the ownership. They’re probably more interested in accessibility,” Freeman Shen, founder and CEO of Chinese electric car company WM Motor, said last week at CNBC’s East Tech West conference in the Nansha district of Guangzhou, China. Technological advances in the last several years have aided the rise of multibillion-dollar ride-hailing giants such as Uber and Didi. They, in turn, have challenged the traditional taxi driver system and cultivated a habit of on-demand car services for tens of millions of users globally despite ongoing safety concerns.

Traditional automakers, many already trying to navigate rising interest in the electric vehicle market, are paying close attention to the ride sharing trend. Notably, General Motors is testing the waters with its own rental program. In China, Feng Xing Ya, general manager of Guangzhou-based automaker GAC, also said the future of the auto industry lies in car sharing. “(It’s) a challenge for the auto industry because people may buy fewer cars,” Feng said in Mandarin, according to a CNBC translation, during a Nov. 27 conference session. Without giving much detail on a plan, Feng said he favored a strategy of entering — rather than avoiding — the car sharing economy, which he said can still generate a lot of income for a company.

However, such a rapid change in consumer tastes could give start-ups an advantage. Shen, formerly a director at Fiat Chrysler and Chinese automaker Geely, said traditional automakers are too focused on selling cars rather than improving user experiences. He said his company’s focus on software and newness to the market means he has everything to gain and little to lose from a shift to ride sharing.

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It’s about much more than tariffs.

US-China Trade Talks: Forced Tech Transfers, Intellectual Property Theft (CNBC)

Two contentious issues were notably downplayed in the deal between Donald Trump and Xi Jinping at the G-20 summit over the weekend: China’s alleged practice of forcing technology transfers and apparent theft of intellectual property from American companies. U.S. concerns over forced technology transfers in China, intellectual property violations and cyber-crime issues will likely become a central focus going forward, as trade negotiations between both countries continue, experts told CNBC on Monday. However, they added, a resolution may not be immediately forthcoming. “It is interesting to note that IP/cyber was only mentioned in paragraph four of the White House statement, reflecting Trump’s focus on trade deficits,” Steven Okun at McLarty Associates told CNBC on Monday.

“Still, this does not mean this is not core to the U.S. tariffs.” [..] One expert, however, said that downplaying those issues could reflect the reality of what to expect from ongoing negotiations — that there are no quick fixes to the complexities of forced technology transfers and intellectual property violations. “I have argued for some time that there is no quick resolution to these issues, so there is no simple win for the Trump Administration here,” Adam Posen, president of the Peterson Institute of International Economics said. “The downplaying could therefore be a welcome dose of realism from the Trump Administration about what to expect from negotiations.” Or, it could represent a desire to calm things down with China, he added. “Either way, this issue is not going to go away,” Posen told CNBC by email.

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Try the brave face.

Bitcoin Drops 8% To Kick Off December (CNBC)

Bitcoin is kicking off the last month of 2018 with another downward drop. After ending November deeply in the red, the world’s largest cryptocurrency fell as much as 8 percent on Monday to a low of $3,790.96, according to data from CoinDesk. At this time last year, bitcoin was beginning its climb to almost $20,000 and ended last December up 40 percent. It entered its hot streak just after Thanksgiving last year, surging in price largely because retail investors were buying in. But the tail end of this year has been a different story: Bitcoin is now down 73 percent since the beginning of January. Twenty-four-hour trading volumes are down 56 percent since Jan. 1, while the entire cryptocurrency market capitalization has fallen 80 percent.

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World ‘leaders’, no matter how much lip service they pay, are the very last people you should trust to bring about change. The statement by UN secretary general António Guterres says all you need to know on that. You can’t buy your way out of this one, but that’s the only trick they’ve learned. And their power depends on that. They’ll announce trillions in investment, and matters will only get worse. This is all about the production side of things, aimed at keeping consumption levels the same. But those have to come down drastically.

David Attenborough: Collapse Of Civilisation Is On The Horizon (G.)

The collapse of civilisation and the natural world is on the horizon, Sir David Attenborough has told the UN climate change summit in Poland. The naturalist was chosen to represent the world’s people in addressing delegates of almost 200 nations who are in Katowice to negotiate how to turn pledges made in the 2015 Paris climate deal into reality. As part of the UN’s people’s seat initiative, messages were gathered from all over the world to inform Attenborough’s address on Monday. “Right now we are facing a manmade disaster of global scale, our greatest threat in thousands of years: climate change,” he said. “If we don’t take action, the collapse of our civilisations and the extinction of much of the natural world is on the horizon.”

“Do you not see what is going on around you?” asks one young man in a video message played as part of a montage to the delegates. “We are already seeing increased impacts of climate change in China,” says a young woman. Another woman, standing outside a building burned down by a wildfire, says: “This used to be my home.” Attenborough said: “The world’s people have spoken. Time is running out. They want you, the decision-makers, to act now. Leaders of the world, you must lead. The continuation of civilisations and the natural world upon which we depend is in your hands.”

[..] António Guterres, the UN secretary general: “Climate change is running faster than we are and we must catch up sooner rather than later before it is too late,” he said. “For many, people, regions and even countries this is already a matter of life or death.” Guterres said the two-week summit was the most important since Paris and that it must deliver firm funding commitments. “We have a collective responsibility to invest in averting global climate chaos,” he said. He highlighted the opportunities of the green economy: “Climate action offers a compelling path to transform our world for the better. Governments and investors need to bet on the green economy, not the grey.”

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Apr 262018
 


James McNeill Whistler Miss Ethel Philip Reading 1894

 

Debt-Enabled Asset Bubbles On Crash Course With Demographics (Park)
‘Grotesque’ Leverage and Rising Rates Already Causing Damage – SocGen (BBG)
‘Big Bear Market’ For Stocks Appears To Have Begun (MW)
Market Is Obsessed With 10-Year Yield, Should Be Watching The 2-Year (CNBC)
Deutsche Bank Plans ‘Significant’ Job Cuts After Sharp Drop In Profits (CNBC)
Ford Kills Most US Cars (BBG)
Yield Shock On Wall Street, Conservative Default In Washington (Stockman)
Democrats Have a Plan to Save the Post Office – and Kill Payday Lenders (NYMag)
The Democratic Party Is Paying Millions For Hillary Clinton’s Email List (IC)
Finland Denies Claims Basic Income Experiment Has Fallen Flat (Ind.)
NATO Think-Tank Expert: Russia Is ‘Comfortable’ Using Nuclear Weapons (RT)
North Korea Nuclear Test Site Has Collapsed Beyond Use – Chinese Study (G.)
President Trump Will Personally Review Documents In Cohen Case (ABC)
UK Businesses Make World-First Pact To Ban Single-Use Plastics (Ind.)
Is The World’s Most Drastic Plastic Bag Ban Working? (G.)

 

 

A useful summary fo many things we’ve said many times.

Debt-Enabled Asset Bubbles On Crash Course With Demographics (Park)

If finance had not been able to ‘securitize’ debts (turn them into assets) and sell them to speculators/investors over the past two decades, then debt creation could not have gone to such extremes and consumers would not have been able to borrow and spend themselves so far into financial ruin. If western consumers had not been able to borrow themselves so far into ruin, they would also not have been able to buy so many goods from Asia and other developing nations for a time.

Asia and developing nations would not then have been able to mint so many new millionaires and billionaires in their governments and businesses who then funneled capital into western property markets, and western property markets would not have appreciated so far beyond domestic income gains. If property prices had not increased so far beyond income gains, then households would not have had to borrow so much just to get a roof over their heads or a post-secondary education. If they had not been able to borrow so much, property prices, education and related services would never have been able to rise so much for so long, and become so unaffordable for the masses. But they did.

[..] The old need the young to drive productivity and innovation, pay taxes and support the social safety net. They also need the young to buy their assets (real estate, securities, businesses) when they wish to downsize and raise liquidity. If the young are broke: under-employed, over-indebted and under-saved, they cannot get a footing and the social contract is undone. Twenty years of central bank and government-enabled debt-driven asset bubbles, have broken long-standing laws of financial and social equilibrium. A secular global repricing cycle is necessary to break the impasse and reboot the system. The status quo is unraveling, as it must.

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The same as above.

‘Grotesque’ Leverage and Rising Rates Already Causing Damage – SocGen (BBG)

The fear over 10-year U.S. Treasury yields breaking through 3 percent has been a long time coming, according to Societe Generale. “Interest rates are already doing damage, people just haven’t noticed,” Andrew Lapthorne, the firm’s global head of quantitative strategy, said in an interview Tuesday. “Leverage in the U.S. is grotesque for this stage of the cycle. At the moment you’ve got peak leverage at peak prices. It’s not like you have to dig deep to find a problem.” The number-one conversation Societe Generale’s having with clients right now is about the correlation between bonds and equities. But risks to corporate balance sheets is a bigger problem at the moment, particularly in the U.S. and China.

Lapthorne said he worries about volatility in debt because of the impact it can have on the economy, particularly how it weighs on businesses and the job market. Credit markets may get choppier due to triggers like high-profile bankruptcies, such as Toys ‘R’ Us, or if corporate buybacks drop, Lapthorne said. While Credit Suisse anticipates fewer share repurchases this year, they’re an outlier. JPMorgan Chase estimates they’ll rise to a record $800 billion from $530 billion last year. Bank of America said if the current pace continues there may be as much as $850 billion in 2018, while Goldman Sachs sees buybacks becoming “less constructive” in 2019. [..] He has further concerns about the direction of the markets as well. “Instead of the usual market driver of economic growth, this bull market has been driven by valuation growth,” Lapthorne said, adding that confidence in asset prices is deteriorating as volatility has risen.

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“..a technical indicator using exponential moving averages of closing price data..”

‘Big Bear Market’ For Stocks Appears To Have Begun (MW)

The “big bear market” for stocks that market timer Tom McClellan has been expecting appears to have begun, as Tuesday’s broad selloff turned a key technical indicator down from an already negative position to convey a “promise” of lower lows. McClellan, publisher of the McClellan Market Report, said there could be a pause in the downtrend this week, as his market-timing signals point to a minor top due on Friday. But with his “price oscillator” turning lower following the Dow Jones Industrial Average 425-point drop, and the S&P 500 1.3% slide on Tuesday, he turned bearish for short- and intermediate-term trading styles. He has been bearish for long-term trading styles since Feb. 28.

“I have been looking for a big downturn in late April….We appear to have gotten that downturn now,” McClellan wrote in a note to clients. He said it is possible that the big down move pauses briefly in honor of the minor top signal due Friday, “but it should be a lasting and painful downtrend, heading down toward a bottom due in late August.” His bearishness for all trading styles was a result of the McClellan Price Oscillator, a technical indicator using exponential moving averages of closing price data, turning down after it was already in negative territory, as the chart below shows. “Turning down a Price Oscillator while it is still below zero conveys the promise of a lower closing low on the ensuing move,” McClellan wrote. Since “promise” isn’t the same as a “guarantee,” he said the indication can get revoked if the Price Oscillator turns up right away.

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Central bank control is an illusion. Naked emperors.

Market Is Obsessed With 10-Year Yield, Should Be Watching The 2-Year (CNBC)

The government’s benchmark debt instrument saw its yield pass 3% Tuesday, a four-year high that ostensibly helped to trigger a violent stock market reversal that saw the Dow industrials close lower by about 425 points. The calculus behind fear of the 3% yield seems obvious: With the S&P 500 dividend yield at 1.9%, a risk-free investment like U.S. Treasurys yielding 3% makes more sense in a volatile environment. But that reasoning is weak. The play assumes holding the bond to duration and clipping coupons, and the stock market has never shown inflation-adjusted returns that low over a 10-year period. Absent a major crash and a deep recession it likely won’t over the next decade as well.

The next two years, though? That could be a different story. While everyone on Wall Street is pounding the table over the rising 10-year yield, the 2-year note rose above 2.5% Wednesday, a level it last closed at August 2008, just a month before the financial crisis imploded with the collapse of Lehman Brothers. A risk-free investment with a 2.5% yield over two years? That seems a little more reasonable. Investors who bought the 2-year in mid-2006 would have gotten it at 5%, ahead of a stock market that was about to drop 60%. “As much as every investor knows market timing is very difficult, that’s the sort of case study that resonates just now,” Nick Colas, co-founder of DataTrek Research, said in his daily note Wednesday.

Investors have been testing the waters over the past month, yanking $868 million out of U.S. equity ETFs while pouring $5.2 billion into funds that invest in fixed income with duration of less than three years, Colas said, citing XTF data. The iShares Short Treasury Bond fund, which focuses on fixed income with duration between one and 12 months, alone has pulled in $3.4 billion over the past month, according to FactSet.

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This can’t be good. How much longer?

Deutsche Bank Plans ‘Significant’ Job Cuts After Sharp Drop In Profits (CNBC)

Deutsche Bank posted first-quarter net profits of 120 million euros ($146 million) Thursday, a 79% fall from last year’s figure. The bank announced plans to significantly reduce its workforce through the rest of 2018, particularly in its corporate and investment bank and infrastructure functions. It also aims to scale back operations in bond sales and equities trading, particularly in the United States and Asia.

The net profit number was significantly lower than a Reuters poll prediction of 376 million euros. The Frankfurt-based lender has been under scrutiny from shareholders for posting three consecutive years of losses, including a 497 million euro loss for 2017. Revenues for the quarter were down by 5% on the prior year period at 7 billion euros, pressured by the appreciation of the euro against the dollar and lower corporate and investment bank revenues, which fell 13% year-on-year to 3.8 billion euros. Revenues for all businesses were lower year-on-year.

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Oh, good, everyone will drive a truck. These things are 40x your weight, not just 20x.

Ford Kills Most US Cars (BBG)

Ford Motor is sharpening its knives to cleave another $11.5 billion from spending plans and cut several sedans, including the Fusion and Taurus, from its lineup to more quickly reach an elusive profit target. The automaker expects to save $25.5 billion by 2022, Chief Financial Officer Bob Shanks told reporters Wednesday as Ford reported first-quarter earnings per share and revenue that beat estimates. The company now anticipates reaching an 8 percent profit margin by 2020, two years ahead of schedule. The cuts are aimed at kick-starting a turnaround effort almost one year after Ford’s board ousted its chief executive officer.

New CEO Jim Hackett has been trying to convince investors that betting on a rebound is a worthwhile wager by laying out plans to get rid of slow-selling, low-margin car models and refocusing the company around more lucrative sport utility vehicles and trucks. “We’re going to feed the healthy part of our business and deal decisively with areas that destroy value,” Hackett said on an earnings call Wednesday. “We aren’t just exploring partnerships; we’ve now done them. We aren’t just talking about ideas; we’ve made decisions.” Ford finds itself on a road similar to the route Fiat Chrysler followed to pass Ford in North American profitability. Fiat Chrysler CEO Sergio Marchionne now wants to eclipse General Motors before his retirement in 2019.

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“..they have had virtually no role in real governance since the Gipper last nodded in their direction decades ago..”

Yield Shock On Wall Street, Conservative Default In Washington (Stockman)

[..] capitalist prosperity depends upon keeping the state and its central banking branch at bay and out of the way. And once upon a time that pretty much happened because the conservative party in Washington adhered reasonably well to the pillars of sound money, fiscal rectitude, free markets at home and non-intervention abroad. In the last three decades, however, the GOP has either jettisoned these pillars of capitalist prosperity or relegated them to ritual incantation. Either way, they have had virtually no role in real governance since the Gipper last nodded in their direction decades ago. What has happened, instead, is that the neocons hijacked the GOP and turned it into the party of Empire—the very opposite of Robert Taft’s notion of homeland security and non-intervention.

Likewise, the supply siders spread the insidious lie that deficits don’t matter and that you can grow your way out of unfinanced tax cuts. So, too, the devotees of Alan Greenspan and the Wall Street lobbies buried the storied idea of sound money–supplanting it with the new ideology of monetary central planning and stock market bailouts. Stated differently, the GOP in Washington today is essentially useless because it has abandoned the pillars of prosperity and has become an opportunistic gang of neocons, social cons, tax cons and Wall Street hand maidens. As a result, we now have a financial system that is flying blind toward a monumental monetary/fiscal crack-up.

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Makes too much sense.

Democrats Have a Plan to Save the Post Office – and Kill Payday Lenders (NYMag)

Generally speaking, advancing economic justice is neither cheap nor easy. The Democratic Party has assembled a long list of worthwhile economic reforms — almost all of which, for all their considerable virtues, pose either a significant budgetary cost, or policy-design challenge, or political risk (universal child-care costs money; the federal job guarantee is complicated and untested; and Medicare-for-all is disruptive … and complicated, and costs money). But Kirsten Gillibrand’s new plan to establish a public option for banking is an exception to the rule: By requiring the post office to provide basic financial services, Gillibrand’s bill would significantly mitigate the economic exploitation of America’s most vulnerable people, punish predatory lenders — and increase federal revenue — all without requiring policy wonks to navigate uncharted territory, or even break a sweat.

The stagnation of working-class wages in the U.S. combined with the rising cost of housing, and declining value of welfare benefits have left millions of American families dependent on short-term loans to make ends meet. And payday lenders have mined their financial desperation for hefty profits. A parent with a gap in employment and a hungry child is liable to accept a loan no matter how usurious the interest rate. Thus, the average annualized interest rate on a payday loan is 390%. And the average American household that uses alternative forms of credit earns just $25,500 a year — and spends nearly 10% of that meager salary on interest and fees, according to a 2011 KPMG study.

But the post office — with its economies of scale, and freedom from avaricious shareholders — could offer America’s working class access to short-term credit at a fraction of the present cost. Under the current system, billions of dollars move from the pockets of the poor into the coffers of payday lenders each year. Postal banking could redirect those funds — saving low-income borrowers billions on fees and interest, while plowing the (non-usurious) interest payments they do still make into the post office’s trust fund. According to a 2014 study by the Postal Service Inspector General, if just 10% of the money that working Americans currently spend on high-risk financial products were instead spent on loans from the post office, the agency could offer said loans at 90% less than the current market cost — and gain nearly $9 billion in annual revenue in the process.

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This, too, are the Democrats. A deeply troubled party. The power of email lists, reminiscent of Facebook.

The Democratic Party Is Paying Millions For Hillary Clinton’s Email List (IC)

Heading Into The 2018 midterms, with Democrats hoping to take back the House of Representatives and even make a run at the Senate, the party has spent more than $2 million worth of campaign resources on payments to Hillary Clinton’s new group, Onward Together, according to Federal Election Commission filings and interviews with people familiar with the payments. The Democratic National Committee is paying $1.65 million for access to the email list, voter data, and software produced by Hillary for America during the 2016 presidential campaign, Xochitl Hinojosa, a spokesperson for the DNC, told The Intercept. The Democratic Congressional Campaign Committee has paid more than $700,000 to rent the same email list.

Clinton is legally entitled to rent her list to the party, rather than hand it over as a gift, but in 2015, Barack Obama gave his email list, valued at $1,942,640, to the DNC as an in-kind contribution. In 2013 and 2014, OFA had similarly made in-kind contributions exceeding $3.4 million for uses of the list that cycle. Obama’s list was at one point considered to be the most valuable in politics and raised more than twice as much money for the 2012 Obama campaign as Clinton’s did for hers in 2016. The DNC agreement with the Clinton campaign calls on the debt-ridden organization to fork the money over to an entity of Clinton’s choosing, which wound up being Onward Together, the operation she formed after her campaign ceased to exist.

Former DNC Chair Donna Brazile told The Intercept the deal was the result of “tough negotiations between the Clinton campaign and the DNC. I wanted to bring back our assets. I wanted to get as much from them as they got from us,” she said. “Under the terms I worked out, we had to pay quarterly for items that the DNC acquired. The final payment would have been in February of this year.” The DNC announced in April 2017 that Clinton had turned over her email list and related data and tools as an in-kind contribution to the party, with no suggestion that payments would later be made for it. “[P]utting the DNC on a strong footing is something that she’s been very focused on since the campaign, when she set out to leave the DNC in the black and did so,” said Clinton spokesman Nick Merrill at the time.

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The biggest problem is people don’t understand the issue, as illustrated by the original headline, which said universal basic income. That’s not what Finland is doing.

Finland Denies Claims Basic Income Experiment Has Fallen Flat (Ind.)

Finland has denied widespread claims its basic income experiment has fallen flat. A series of media reports said the Finnish government had decided not to expand its trial – a version of events which has been repudiated by officials. Miska Simanainen, a social affairs official, said the trial, where about 2,000 unemployed people aged 25-58 are being paid a tax-free €560 monthly income with no questions asked, was “proceeding as planned.” The €20m programme, which seeks to reform Finland’s social security system, ends in December, at which point Prime Minister Juha Sipila’s centre-right government will assess initial results.

Reports have said the government social affairs agency has requested up to €70m in extra funding this year, something Mr Simanainen says is false. Finland became the first country in Europe to start the basic income experiment in January 2017. Supporters of basic income argue it would help get unemployed people into temporary jobs, rather than forcing them to remain unemployed to qualify for benefits. They say it would provide a safety net, address insecurities associated with workers not having full-time staff contracts, and help boost mobility in the labour market as people would have a source of income between jobs.

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Sheer insanity.

NATO Think-Tank Expert: Russia Is ‘Comfortable’ Using Nuclear Weapons (RT)

Russia is more willing to run the risk of nuclear war than the West and NATO must pour more money into developing new capabilities to deter Moscow’s nuclear aggression, according to Atlantic Council analysts.
In a lengthy discussion on preparing for nuclear war with Russia, analysts from the neocon think tank lobbied for the US and NATO to spend more money on low-yield nuclear weapons and other methods of deterrence in order to dissuade Russia from using a limited nuke strike in order to “de-escalate” a conflict using the scare factor. The panel argued that Russia has adopted a policy of “escalate to de-escalate” which lowers the bar for nuclear weapons use.

Under this policy, Russia would respond to a large-scale conventional military attack by employing a limited nuclear response in order to deter further aggression against itself. Matthew Kroenig, the deputy director for strategy at the Atlantic Council’s Scowcroft Center for Strategy and Security, went further by suggesting that Russia is simply “more comfortable using and threatening nuclear weapons” than the West. Russia’s so-called “escalate to de-escalate” policy was even referred to in the latest Nuclear Posture Review from the Trump administration. But while the Atlantic Council and White House are seemingly adamant that Russia is almost looking for excuses to use nuclear weapons, others have argued that the West has actually misunderstood Russia’s policy on nuclear use.

There is weak evidence that Russia has actually dropped its threshold for nuclear use at all. [..] Russia’s 2014 doctrine actually introduced the term “system of non-nuclear deterrence,” which is explained as a focus on preventing aggression “primarily through reliance on conventional (non-nuclear) forces.” It is more than likely that the Atlantic Council and its members are fully aware of this, which leads to the question: are they misleading people on Russia’s intentions in order to lobby for more military spending in Eastern Europe?

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We sort of knew that already. But yeah, makes one wonder what Kin is giving up.

North Korea Nuclear Test Site Has Collapsed Beyond Use – Chinese Study (G.)

North Korea’s main nuclear test site has partially collapsed under the stress of multiple explosions, possibly rendering it unsafe for further testing and leaving it vulnerable to radiation leaks, a study by Chinese geologists has shown. The findings could cast doubt on North Korea’s sincerity in announcing last weekend that it would stop testing nuclear weapons at the site ahead of Friday’s summit between the country’s leader, Kim Jong-un, and the South Korean president, Moon Jae-in. The test site at Punggye-ri, in a mountainous area in North Korea’s north-east, has been the location for all six of the regime’s nuclear tests since 2006.

The findings, by scientists at the University of Science and Technology of China, suggest the partial collapse of the mountain that contains the testing tunnels, as well as the risk of radiation leaks, have potentially rendered the site unusable. The study was published soon after Kim said his country would stop testing nuclear weapons and ballistic missiles, and close down Punggye-ri before his meeting with Moon just south of the countries’ heavily armed border. Nuclear explosions release enormous amounts of heat and energy, and the North’s largest test, in September last year, was believed early on to have rendered the site – a network of tunnels beneath Mount Mantap – unstable.

The Chinese scientists collected collected data for their study following the most powerful of the North’s six nuclear tests, on 3 September. The controlled explosion, which caused an initial magnitude-6.3 tremor, is believed to have triggered four more earthquakes over the following weeks. The study concluded that eight-and-a-half minutes after the test, there was “a near-vertical on-site collapse towards the nuclear test centre”.

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Obvious. But he won’t be the only one.

President Trump Will Personally Review Documents In Cohen Case (ABC)

In a filing Wednesday afternoon, attorneys for President Donald Trump told the federal judge overseeing the investigation of his personal attorney, Michael Cohen, that Trump would, as necessary, personally review documents to ensure that privileged information is not revealed accidentally to the FBI or prosecutors. “…Our client will make himself available, as needed, to aid in our privilege review on his behalf,” wrote attorneys Joanna Hendon, Christopher Dysard and Reed Keefe in their filing. The filing is part of the ongoing effort by Cohen and Trump to get the first crack at reviewing records seized earlier this month from Cohen’s home, hotel and office.

So far, US District Judge Kimba Wood has ruled against Cohen and Trump, though she has said she would be willing to consider their backup request to have an independent third-party review record before prosecutors and agents do. Trump’s attorneys made their submission late Wednesday in advance of a Thursday status meeting in US District Court in Manhattan. The issue of document review arose after the FBI raids and the subsequent public confirmation that Cohen has been under federal investigation for months. The probe is focused both on Cohen’s private business dealings as well as his work for and on behalf of Trump.

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May and her government are behind this? And Windrush at the same time?

UK Businesses Make World-First Pact To Ban Single-Use Plastics (Ind.)

More than 40 major businesses have pledged to eradicate single-use plastics from packaging in an effort to tackle the global pollution crisis. The launch of the UK Plastics Pact comes amid concerns over the impact such waste is having on the environment as it pervades the world’s land, oceans and waterways. With members across major food and non-food brands – including Sainsbury’s, Nestlé and Coca-Cola – the pact’s participants are collectively responsible for more than 80% of the UK’s supermarket plastic packaging. As the first initiative of its kind in the world, it is hoped the pact will serve as a template for other countries and spark a “global movement for change”.

The pact, which was welcomed by government ministers and environmental campaigners, consists of a series of targets that the industry as a whole will aim to meet by 2025. These include the complete elimination of “problematic or unnecessary” single-use plastic packaging by developing new designs and alternative delivery methods. Other targets include all plastic packaging being reusable, recyclable or compostable, and ensuring that at least 70% of packaging that is used actually makes it to recycling or composting facilities. There is also a commitment to ensuring 30% of the content of all plastic packaging comes from recycled sources by the target date.

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Contact ourman in Kenya about this: “Yes it happened last year. About 300 factories were shut down, about 6 months notice was given. BUT there is still a black market for low quality black plastic bags amongst smaller vendors in rural areas and small towns.  In the major supermarkets plastic has been entirely phased out, though please note that Kenya has a much lower number and density of supermarkets vs Europe. We’re looking at 120/150 major supermarkets country wide and 300-500 mini marts and mostly thousands of smaller kiosks. 

Also plastic packaging has not been phased out yet. But they are targeting for the conversion of plastic to paper packaging in products. And also to phase out plastic water bottles if a national recycling scheme is not put in place.  They’ve also banned forest logging as the tree cover of the nation is under 6-7%. So we will have to import trees and paper now instead of oil for plastic. [..] There’s been a large number of bans on all sorts of things since last year, we’re in a very weird phase politically. “

Is The World’s Most Drastic Plastic Bag Ban Working? (G.)

Waterways are clearer, the food chain is less contaminated with plastic – and there are fewer “flying toilets”. A year after Kenya announced the world’s toughest ban on plastic bags, and eight months after it was introduced, the authorities are claiming victory – so much so that other east African nations Uganda, Tanzania, Burundi and South Sudan are considering following suit. But it is equally clear that there have been significant knock-on effects on businesses, consumers and even jobs as a result of removing a once-ubiquitous feature of Kenyan life. “Our streets are generally cleaner which has brought with it a general ‘feel-good’ factor,” said David Ong’are, the enforcement director of the National Environment Management Authority.

“You no longer see carrier bags flying around when its windy. Waterways are less obstructed. Fishermen on the coast and Lake Victoria are seeing few bags entangled in their nets.” Ong’are said abattoirs used to find plastic in the guts of roughly three out of every 10 animals taken to slaughter. This has gone down to one. The government is now conducting a proper analysis to measure the overall effect of the measure. The draconian ban came in on 28 August 2017, threatening up to four years’ imprisonment or fines of $40,000 (£31,000) for anyone producing, selling – or even just carrying – a plastic bag.

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May 162017
 
 May 16, 2017  Posted by at 8:25 am Finance Tagged with: , , , , , , , , , ,  1 Response »


Fred Stein Chinatown 1944

 

White House: Report Trump Shared Classified Info With Russians is ‘False’ (RT)
Trump’s Classified Disclosure Is Shocking But Legal (BBG)
The ‘Soft Coup’ of Russia-Gate (Robert Parry)
China’s Silk Road Vision: Cheap Funds, Heavy Debt, Growing Risk (R.)
China Banking Regulator Tightens Rules On WMPs, Flags More Curbs (R.)
New Zealand Housing Market Most at Risk of Bust – Goldman (BBG)
Snowden & Chomsky Lead Calls To Drop DOJ Case Against WikiLeaks (RT)
Large Hedge Funds Moved Out Of Financial Stocks In First Quarter (R.)
Ford To Cut North America, Asia Salaried Workers By 10% (R.)
How High Should Congress Let Flood Insurance Rates Rise? (USAT)
Macron Wins Merkel Backing For Bid To Shake Up Europe (AFP)
Germany Must Decide: Budget Rigour Or Europe’s Future (R.)
The Euro Area – A Simple Model Of Savings, Debt & Private Spending (Terzi)
Greek Economy Pays for Drawn-Out Talks With Return to Recession (BBG)

 

 

And here we are: The WaPo, left with almost zero credibility after so many anti-Trump and anti-Russia opinions more often than not disguised as factual reports, can only find a willing ear anymore inside its echo chamber. As usual, the WaPo article is based on anonymous sources. America is trapped inside it own narrative.

White House: Report Trump Shared Classified Info With Russians is ‘False’ (RT)

Multiple White House officials, including National Security Advisor H.R. McMaster, are refuting a Washington Post story claiming that President Donald Trump revealed highly classified information to Russian officials in the Oval Office last week. But some believe McMaster’s statement contained holes. On Monday evening, National Security Advisor McMaster called a report published earlier in the day by the Washington Post “false.” The report that went viral cited unverifiable sources, unnamed current and former US officials, who claimed that Trump disclosed to Russian Foreign Minister Sergey Lavrov and Ambassador to the US Sergey Kislyak “code-word information” relating to Islamic State during a May 10 meeting in the Oval Office at the White House.

The intelligence was reportedly from “a US partner through an intelligence-sharing arrangement” and not authorized to be shared with Russia, US allies or even within much of the US government. “I was in the room. It didn’t happen,” McMaster told reporters outside the White House. Deputy National Security Adviser Dina Powell also called the story “false” Monday. “The president only discussed the common threats that both countries faced,” Powell said. Secretary of State Rex Tillerson, who was also at the meeting, denied the allegation. McMaster told reporters that Trump did discuss civil aviation threats with Lavrov and Kislyak. [..] The Russian Embassy in DC had no comment on the media claim, according to a representative.

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Besides, the WaPo article doesn’t describe anything illegal. But it’ll take a while before that sinks in, if ever.

Trump’s Classified Disclosure Is Shocking But Legal (BBG)

Oh for the days when Donald Trump wasn’t taking the presidential daily brief – and didn’t know highly classified information that he could give to the Russians. But a bit bizarrely, Trump’s reported disclosure of Islamic State plans to two Russian officials during an Oval Office visit last week wasn’t illegal. If anyone else in the government, except possibly the vice president, had revealed such classified information that person would be going to prison. The president, however, has inherent constitutional authority to declassify information at will. And that means the federal laws that criminalize the disclosure of classified secrets don’t apply to him. If this doesn’t make much sense to you, I feel your pain.

To understand the legal structure of classification and declassification requires a brief journey into the constitutional law of separation of powers. That’s not always especially fun. But at this juncture in U.S. history, it’s essential. Not since Richard Nixon’s administration has separation of powers been so central to the fate of the republic. The authority to label facts or documents as classified rests with the president in his capacity as a commander in chief. Or at least that’s what the U.S. Supreme Court said in a 1988 case, Department of the Navy v. Egan. Justice Harry Blackmun, who wrote the opinion, said that the executive’s “authority to classify and control access to information bearing on national security … flows primarily from this constitutional investment of power in the President and exists quite apart from any explicit congressional grant.”

Blackmun’s idea that the president has an inherent right to decide who gets access to classified information seems to imply the converse: that the president has the inherent authority to declassify information, too. Although there’s no case on this point, scholars took that view during the years of the George W. Bush administration, when the president was thought to have declassified some information that was leaked to the news media by White House aide I. Lewis “Scooter” Libby. It makes sense. If it is up to the president to decide what can’t be disclosed, it should be up to him to decide what can be.

[..] If you’re following closely, you’ll have noticed an anomaly: The president can classify and declassify. But the president can’t send people to prison for disobeying his order. That requires a federal law passed by Congress, and a conviction before a judge. Thus, under the separation of powers, the president has inherent authority to fire his own employees for disclosing classified information, but lacks the power to punish them criminally without Congress and the courts. That law exists: 18 U.S. Code Section 798, if you care to look it up. It makes it a federal crime to communicate “classified information” to an “unauthorized person.” The catch is that the law defines classified information as information determined classified by a U.S. government agency, and similarly defines an unauthorized person as someone not determined authorized by the executive branch. That puts Trump in the clear insofar as he has an inherent authority to declare information unclassified.

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And Robert Parry can tell you why things like that WaPo ‘report’ get so blown up.

The ‘Soft Coup’ of Russia-Gate (Robert Parry)

I realize that many Democrats, liberals and progressives hate Donald Trump so much that they believe that any pretext is justified in taking him down, even if that plays into the hands of the neoconservatives and other warmongers. Many people who detest Trump view Russia-gate as the most likely path to achieve Trump’s impeachment, so this desirable end justifies whatever means. Some people have told me that they even believe that it is the responsibility of the major news media, the law enforcement and intelligence communities, and members of Congress to engage in a “soft coup” against Trump – also known as a “constitutional coup” or “deep state coup” – for the “good of the country.”

The argument is that it sometimes falls to these Establishment institutions to “correct” a mistake made by the American voters, in this case, the election of a largely unqualified individual as U.S. president. It is even viewed by some anti-Trump activists as a responsibility of “responsible” journalists, government officials and others to play this “guardian” role, to not simply “resist” Trump but to remove him. There are obvious counter-arguments to this view, particularly that it makes something of a sham of American democracy. It also imposes on journalists a need to violate the ethical responsibility to provide objective reporting, not taking sides in political disputes. But The New York Times and The Washington Post, in particular, have made it clear that they view Trump as a clear and present danger to the American system and thus have cast aside any pretense of neutrality.

The Times justifies its open hostility to the President as part of its duty to protect “the truth”; the Post has adopted a slogan aimed at Trump, “Democracy Dies in Darkness.” In other words, America’s two most influential political newspapers are effectively pushing for a “soft coup” under the guise of defending “democracy” and “truth.” But the obvious problem with a “soft coup” is that America’s democratic process, as imperfect as it has been and still is, has held this diverse country together since 1788 with the notable exception of the Civil War. If Americans believe that the Washington elites are removing an elected president – even one as buffoonish as Donald Trump – it could tear apart the fabric of national unity, which is already under extraordinary stress from intense partisanship.

That means that the “soft coup” would have to be carried out under the guise of a serious investigation into something grave enough to justify the President’s removal, a removal that could be accomplished by congressional impeachment, his forced resignation, or the application of Twenty-fifth Amendment, which allows the Vice President and a majority of the Cabinet to judge a President incapable of continuing in office. That is where Russia-gate comes in. The gauzy allegation that Trump and/or his advisers somehow colluded with Russian intelligence officials to rig the 2016 election would probably clear the threshold for an extreme action like removing a President. And, given the determination of many key figures in the Establishment to get rid of Trump, it should come as no surprise that no one seems to care that no actual government-verified evidence has been revealed publicly to support any of the Russia-gate allegations.

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China wants to own the new Silk Road, and to be the leader. The original one knew neither ownership nor leadership.

China’s Silk Road Vision: Cheap Funds, Heavy Debt, Growing Risk (R.)

Behind China’s trillion-dollar effort to build a modern Silk Road is a lending program of unprecedented breadth, one that will help build ports, roads and rail links, but could also leave some banks and many countries with quite a hangover. At the heart of that splurge are China’s two policy lenders, China Development Bank (CDB) and Export-Import Bank of China (EXIM), which have between them already provided $200 billion in loans throughout Asia, the Middle East and even Africa. They are due to extend at least $55 billion more, according to announcements made during a lavish two-day Belt and Road summit in Beijing, which ends on Monday. Thanks to cheaper funding, CDB and EXIM have helped to unblock what Chinese president Xi Jinping on Sunday called a ‘prominent challenge’ to the Silk Road: the funding bottleneck.

But as the Belt and Road project grows, so do the risks to policy banks, commercial lenders and borrowers, all of whom are tangled in projects with questionable business logic, bankers and analysts say. EXIM, seeking to contain risk, says it has imposed a debt ceiling for each country. CDB says it has applied strict limits on sovereign borrowers’ credit lines and controls the concentration of loans. “For some countries, if we give them too many loans, too much debt, then the sustainability of its debt is questionable,” Sun Ping, vice governor of EXIM, told reporters last week. For now, funds are cheap and plentiful, thanks to Beijing. Belt and Road infrastructure loans so far have been primarily negotiated government to government, with interest rates below those offered by commercial banks and extended repayment schedules, bankers and analysts said.

[..] 47 of China’s 102 central-government-owned conglomerates participated in 1,676 Belt and Road projects, according to government statistics. China Communications Construction alone has notched up $40 billion of contracts and built 10,320 kilometres of road, 95 deepwater ports, 10 airports, 152 bridges and 2,080 railways in Belt and Road countries. China’s central bank governor Zhou Xiaochuan is among those to warn that this reliance on cheap loans raises “risks and problems”, starting with moral hazard and unsustainability. China has been caught out before; it is owed $65 billion by Venezuela, now torn by crisis. “The jurisdictions where many of these loans are going are places that would have difficulty getting loans from Western commercial banks – their credit ratings are not very good, or the projects in question often are not commercially viable,” said Jack Yuan at Fitch in Shanghai. “The broader concern is that capital continues to be mis-allocated by Chinese banks.”

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We’ll believe it when the bankruptcies start accumulating.

China Banking Regulator Tightens Rules On WMPs, Flags More Curbs (R.)

China’s banking regulator is tightening disclosure rules on lenders’ wealth management products (WMP) as it tries to track risky lending practices in the shadow banking sector, the latest in a series of steps by Beijing aimed at defusing financial risks. The China Banking Regulatory Commission (CBRC) said in a notice late on Monday it plans to launch 46 new or revised rules this year, part of which targets risks related to shadowbanking activities. Authorities are trying to better regulate 30 trillion yuan ($4.35 trillion) of WMPs, much of it sitting off-balance sheet in the shadowbanking sector. The WMPS have been used to channel deposits into risky investments, often via many layers of asset management schemes to skirt lending and capital rules.

The CBRC will now require that banks report the underlying assets and liabilities of their WMPs, as well as all layers of investment schemes, on a weekly basis. Previously, banks were required to hand in less detailed information, and on a monthly basis. The new rules – published by a WMP management platform under CBRC – reflect regulators’ desire to have a full picture of banks’ activities, and could slow the growth of WMPs. In March, China’s newly appointment banking regulator Guo Shuqing, vowed to strengthen supervision of the lending sector, underscoring Beijing’s determination to fend off financial risks and push reforms this year. Separately, CBRC unveiled a long list of rules it aims to publish this year, many of these related to risk-management. The rules are to “ensure that (risk) does not become systemic,” CBRC said.

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Useless numbers from Goldman Sachs.

New Zealand Housing Market Most at Risk of Bust – Goldman (BBG)

New Zealand’s housing market is the most over-valued among the so-called G-10 economies and the most at risk of a correction, according to Goldman Sachs. In research published this week, the investment bank said there is about a 40% chance of a housing “bust” in New Zealand over the next two years, which it defines as house prices falling 5% or more after adjustment for inflation. The report looks at housing markets in the G-10 countries – those with the 10 most-traded currencies in the world – and finds they are most elevated in small, open economies such as New Zealand, where house prices have rocketed in recent years. In Auckland, the nation’s largest city, the average price has surged 91% since 2007 to more than NZ$1 million ($688,000).

Goldman compares house-price levels across economies using three standard metrics: the ratio of house prices to rent, the ratio of house prices to household income and house prices adjusted for inflation. “Using an average of these measures, house prices in New Zealand appear the most over-valued, followed by Canada, Sweden, Australia and Norway,” it said. “According to the model, the probability of a housing bust over the next five to eight quarters is the highest in Sweden and New Zealand at 35 to 40%.” A graph in the report shows that New Zealand’s probability of a housing bust is just above 40%, while Sweden’s is just above 35%. The risk of a bust in Australia is about 25%.

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Chelsea Manning is free as of tomorrow.

Snowden & Chomsky Lead Calls To Drop DOJ Case Against WikiLeaks (RT)

Former intelligence officers, journalists and artists are among more than 100 signatories of an open letter calling on President Trump to close the Grand Jury investigation into WikiLeaks and drop any planned charges against the whistleblower group.
The letter released Monday by the Courage Foundation includes NSA whistleblower Edward Snowden and renowned scholar and activist Noah Chomsky among the original signatories. A significant number of former personnel from US intelligence agencies are backing the letter. Among them are former senior NSA officials Thomas Drake, William Binney and Kirk Wiebe. Daniel Ellsberg, the former State and Defense Department official who released top secret Pentagon Papers in 1971 and retired FBI Special Agent and former Minneapolis Division Legal Counsel Coleen Rowley also signed the letter.

The plea to President Trump is in response to comments made by US Attorney General Jeff Sessions last month, in which he confirmed that the arrest of WikiLeaks founder Julian Assange was a “priority” for the US government. Fears are growing that charges including conspiracy, theft of government property and violating the Espionage Act are being considered against members of WikiLeaks. Several artists are also pushing the call for Trump to drop any proposed charges against the whistleblower organization. Among the big names are Oliver Stone, Ken Loach, Pamela Anderson, Patti Smith, PJ Harvey and Vivienne Westwood.

The letter acknowledges that the Obama administration prosecuted more whistleblowers than all previous presidents combined and opened a Grand Jury investigation into WikiLeaks that had no precedent. “It now appears the US is preparing to take the next step — prosecuting publishers who provide the “currency” of free speech, to paraphrase Thomas Jefferson,” the document states. “A threat to WikiLeaks’ work — which is publishing information protected under the First Amendment — is a threat to all free journalism. If the DOJ is able to convict a publisher for its journalistic work, all free journalism can be criminalized.”

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They know something you don’t.

Large Hedge Funds Moved Out Of Financial Stocks In First Quarter (R.)

Several big-name hedge fund investors trimmed their stakes in financial companies in the first quarter as hopes for immediate tax cuts and loosening of regulations after President Donald Trump’s victory in November began to fade. Adage Capital Management cut its position in Wells Fargo, which has come under fire for its sales practices, by 3.9 million shares, according to regulatory filings, while John Burbank’s Passport Capital cut its stake in the company by 947,000 shares. Third Point cut its stake in JPMorgan Chase by 28%, to 3.75 million shares, while Suvretta Capital Management sold all of its shares of Morgan Stanley, JPMorgan and Citigroup. Overall, financial companies in the S&P 500 were up 2.1% in the first quarter, compared with 5.5% for the index as a whole.

Financials significantly outperformed the broad market following Trump’s Nov. 8 election. Trump had pledged to do a “big number” on the landmark Dodd-Frank financial reform law, which raised banks’ capital requirements and restricted their ability to make speculative bets with customers’ money. The Treasury Department is still filling vacancies and will not be able to complete a review of the law by Trump’s June deadline, sources told Reuters. Quarterly disclosures of hedge fund managers’ stock holdings, in what are known as 13F filings with the U.S. Securities and Exchange Commission, are one of the few public ways of tracking what the managers are selling and buying. But relying on the filings to develop an investment strategy comes with some risk because the disclosures come out 45 days after the end of each quarter and may not reflect current positions.

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Lean and efficient, and losing sales.

Ford To Cut North America, Asia Salaried Workers By 10% (R.)

Ford plans to shrink its salaried workforce in North America and Asia by about 10% as it works to boost profits and its sliding stock price, a source familiar with the plan told Reuters on Monday. A person briefed on the plan said Ford plans to offer generous early retirement incentives to reduce its salaried headcount by Oct. 1, but does not plan cuts to its hourly workforce or its production. The move could put the U.S. automaker on a collision course with President Donald Trump, who has made boosting auto employment a top priority. Ford has about 30,000 salaried workers in the United States.

The cuts are part of a previously announced plan to slash costs by $3 billion, the person said, as U.S. new vehicles auto sales have shown signs of decline after seven years of consecutive growth since the end of the Great Recession. The Wall Street Journal reported Monday evening that Ford plans to cut 10% of its 200,000-person global workforce, but the person briefed on the plan disputed that figure. The source requested anonymity in order to be able to discuss the matter freely. Ford declined to comment on any job cuts but said it remains focused on its core strategies to “drive profitable growth”. “Reducing costs and becoming as lean and efficient as possible also remain part of that work,” it said in a statement. “We have not announced any new people efficiency actions, nor do we comment on speculation.”

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FEMA rules!

How High Should Congress Let Flood Insurance Rates Rise? (USAT)

Congress is considering dramatic changes to the National Flood Insurance Program, which has a $25 billion debt that its director says cannot be repaid. But as a Sept. 30 deadline looms for the program to be renewed, disagreements remain over how much homeowners should be forced to pay for flood insurance to make the program more solvent. If Congress can’t reach an agreement, a lapse in the Federal Emergency Management Agency’s legal authority to write new policies could disrupt real estate sales in flood-prone areas around the country.

Republican Sen. Bill Cassidy of Louisiana and Democratic Sen. Kirsten Gillibrand of New York are circulating draft legislation to renew the program, but it contains provisions – such as vouchers to help low-income homeowners keep the cost of premiums and fees from getting too high — that are not in a draft that Republicans on the House Financial Services Committee plan to release this week. Disputes also remain over how to address wrongdoing by insurance companies and affiliated contractors in the wake of Superstorm Sandy and last year’s floods in Louisiana, and whether older properties that flood repeatedly should still receive discounts. Many in Congress also want to encourage more private insurers to enter the market, but some warn the government could be left with only the riskiest properties.

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Macron has to focus on France. and will do so until well after Merkel is re-elected. Still, these new views could have prevented Brexit.

Macron Wins Merkel Backing For Bid To Shake Up Europe (AFP)

France’s new President Emmanuel Macron secured backing Monday from key ally Chancellor Angela Merkel for his bid to shake up Europe, despite scepticism in Berlin over his proposed reforms. Travelling to the German capital to meet the veteran leader in his first official trip abroad, Macron used the opportunity to call for a “historic reconstruction” of Europe. During his campaign, Macron had thrown up ideas on reforming the eurozone, noting that the currency bloc cannot go on as it is if it wanted to avoid falling prey to protest and populism. Among reforms he wants to see are setting up a separate budget for the 28-member group, as well as giving it its own parliament and finance minister. But the proposals have sent alarm bells ringing in Berlin, and initial relief about his victory against far-right leader Marine Le Pen had quickly given way to fears about his reform plans.

Finance Minister Wolfgang Schaeuble warned that such deep-reaching reforms would require treaty changes, which were “not realistic” at a time when Europe is hit by a surge of anti-euro populism. Saturday’s edition of weekly news magazine Der Spiegel featured a cover picture of Macron with the headline “expensive friend”. But at a joint press conference following their talks, Merkel adopted a conciliatory tone and offered what appeared to be a key concession. “From the German point of view, it’s possible to change the treaty if it makes sense,” she said. “If we can say why, what for, what the point is, then Germany will be ready.” Merkel’s approach underlined her view that it was crucial not only for France, but for Germany, to help Macron succeed – a point that she has repeatedly stressed.

Yet it remains to be seen if her approach would go down well in Germany, which is deeply adverse to shouldering burdens of eurozone laggards. Macron sought to bat away German fears on debt, saying he was opposed to mutualising “old debt” between eurozone countries. However, he signalled readiness to look at sharing future burdens. “I am not a promoter of the mutualisation of old debt” within the eurozone, said Macron after meeting Merkel, adding however that the joint financing of future projects should be considered. Underlining the concerns over Macron’s proposals, Germany’s biggest selling daily Bild warned ahead of the French leader’s meeting with Merkel that before seeking deeper EU integration, “France must once again be at the same level as Germany politically and economically”. “Only then can the EU be reformed or develop deeper integration,” it said.

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Ye olde ‘there is stil time’ delusion: there is still time to make Germany change its stance on the EU, in the same way that there is still time to save the planet. No, there isn’t, if you include the time it will take to turn around what has been the ‘normal’. You need a revolution, not a change.

Germany Must Decide: Budget Rigour Or Europe’s Future (R.)

After Emmanuel Macron’s victory in France’s presidential election, Germany must decide whether it wants to continue its single-minded focus on budget rigour or work with him to ensure the future of the European project, a German diplomat said. In an interview with Reuters hours before the new French president travels to Berlin to meet Chancellor Angela Merkel, Wolfgang Ischinger, chairman of the Munich Security Conference, pushed back against German politicians who have picked holes in Macron’s ideas for Europe since his election win. Among those are Finance Minister Wolfgang Schaeuble, who has come to personify Berlin’s focus on the “Schwarze Null”, or balanced budget. He has suggested Macron’s plans to create a budget and finance minister for the euro zone are unrealistic.

“My wish is that this issue is not used in the (German) election campaign, but that we have a serious discussion over the question: ‘What is more important to us? The Schwarze Null as a categoric imperative or the future of Europe?'” Ischinger said. “If compromises are necessary and make sense, then I would support compromise rather than categorical imperatives.” Mainstream parties in Germany applauded Macron’s victory over far-right leader Marine Le Pen earlier this month. But since then, conservative politicians and media have criticized his plans, suggesting they would lead to a “transfer union” in which German money would be used to pay for uncompetitive member states that are reluctant to reform. Schaeuble has suggested some of Macron’s more ambitious plans would require politically thorny changes to the EU treaty. But Ischinger, a former German ambassador to Britain and the United States, said much could be done on an intergovernmental basis.

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The illusion that the ECB can manage the EU economy.

The Euro Area – A Simple Model Of Savings, Debt & Private Spending (Terzi)

In 2010, with the first casualty (Greece) in the emergency room and the first economic adjustment programme (with financial package) approved, the Eurosystem eventually became an occasional buyer of government debt. Two years later, with three more casualties (Ireland, Portugal, and Spain) and a systemic collapse in sight, the ECB added the newly crafted Outright Monetary Transactions (OMT) to its toolbox. This meant that the ECB had formally become ready to be an unlimited, albeit conditional, outright buyer in the secondary market for Eurozone government debts. The introduction of OMTs was the way to restore systemic liquidity buffers in a monetary system that had become unsustainable, while remaining consistent with the monetary financing prohibition laid down in the Treaty.

As events during the crisis unfolded, and depending on the narrative about its causes, several different meanings have been attached to the notion of the Eurozone crisis. This has been seen, alternatively, as the unwinding of intra-euro lending and borrowing, the consequence of private credit bubbles, the product of unsustainable public debt, the failure of inadequately supervised banking and financial institutions, and, most notably, as a double-dip recession followed by an unusually weak expansion combined with a visibly inadequate policy (and political) response. Today, six years after the crisis erupted, and notwithstanding the modified ECB practice that saved the day, the Eurozone is still visibly failing to enact sustainable policies that can effectively restore economic prosperity.

Accordingly, there have been two distinct phases in the Eurozone crisis. Between 2010 and 2012 the monetary union was in jeopardy of undergoing an operational breakdown up until the change in the operational practice in the market for public sector securities, complemented by the banking union reform. Since 2012, the problems have been the continuing sluggishness of the real economy, the acute lack of demand, vulnerability to internal and external shocks, and, ultimately, the risk of a political implosion. While the ECB has successfully reclaimed one indispensable tool to operationally manage the euro, the deflationary bias of the euro area has not gone away. Effectively, Europe’s economic performance has been vastly disappointing ever since the launch of the euro.

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Greece has no way to escape recession, drawn out talks have nothing to do with it.

Greek Economy Pays for Drawn-Out Talks With Return to Recession (BBG)

Greece’s economy returned to recession in the first quarter as delays in concluding talks between the government and its creditors raised the specter of another debt drama. GDP contracted 0.1% in the first three months of the year after shrinking 1.2% in the previous quarter, the Hellenic Statistical Authority said in a statement on Monday. The seasonally adjusted contraction was 0.5% from a year earlier. Talks between creditors on easing the country’s debt load are accelerating after Greece and officials from the IMF and euro-area institutions ended a months-long impasse over the austerity measures the government needs to take. While that’s prompted a rally in Greek stocks and bonds this month, the delay has taken a toll on the economy. That cost led the government to cut its GDP growth forecast for this year to 1.8% from 2.7% on Saturday. The European Commission reduced its estimate to 2.1% last week.

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