Jun 282017
 


James Dean in a photobooth 1949

 

All Companies Hit By Ransomware Attack Used Bootleg Or Unpatched Software (WS)
Yellen: Banks Very Much Stronger; No Financial Crisis In Our Lifetime (CNBC)
There Is No Excuse For Janet Yellen’s Complacency (Steve Keen)
Yellen: “I Don’t Believe We Will See Another Crisis In Our Lifetime” (ZH)
Trio of Fed Speakers Warn on Valuations With Eyes on Tightening (BBG)
Car Loans, Credit Card Debt Push UK Back Towards Another Credit Crisis (Tel.)
UK Banks Ordered To Hold More Capital As Consumer Debt Surges (G.)
ECB VP: Slack In European Economy Looks Worse Than We Thought (CNBC)
Chinese Satellite Data Hint At Ominous Manufacturing Slowdown (ZH)
UK Government Refuses To Pay For Fireproof Cladding (Ind.)
Democrats The Only Thing Standing In The Way Of Single-Payer In California (CP)
Democrats The Only Thing Standing In The Way Of Single-Payer In California (CP)
The Human Tragedy Of Drug Abuse And Car Crashes (BBG)
Search Results Show Why Europe Is Mad at Google (BBG)
‘Google, Facebook Are Super Monopolies On The Scale Of Standard Oil’ (CNBC)
Greeks Work 203 Days Out Of The Year To Pay Taxes (K.)
Greek Garbage Collectors Reject Compromise As Trash Piles Up (AP)
At Least 24 Migrants Die Off Libya in 48 Hours, More Than 8,000 Rescued (R.)

 

 

Wolf Richter explains what happened yesterday. They’re all either thieves or extremely stupid/negligent.

Merck, Rosneft, Ukraine government, Ukraine International Airport, Maersk, WPP (world’s largest advertising agency), Mondelez etc. They’ve all been found to either use bootleg software or not having patched their systems with a readily available Microsoft patch.

All Companies Hit By Ransomware Attack Used Bootleg Or Unpatched Software (WS)

The Petya ransomware attack infected over 2,000 computer systems across the world as of midday today, according to Kaspersky Lab, cited by Reuters. Russia and Ukraine were most affected. Other victims were in Britain, France, Germany, Italy, Poland, and the US. When China starts up its computers, it will suffer the consequences for not staying in bed. The malware includes code known as “Eternal Blue,” which was also used in the WannaCry attack in May. Experts believe the code was purloined from NSA. The ransomware encrypts hard drives of infected machines and then demands $300 in bitcoin in order for the user to regain access. Petya takes advantage of the same vulnerability in Windows as WannaCry. But Microsoft released a patch to fix this vulnerability on March 14.

Patched computers were not affected by WannaCry, and are not affected today. The Windows Malicious Software Removal Tool detects and removes the malware automatically during the updating process. But that update isn’t available for bootleg copies of Windows – hence China’s disproportionate problems with the attack in May. And computers that are running legitimate versions of Windows but hadn’t been updated for whatever reason are vulnerable. Amazingly, when WannaCry hit, plenty of companies were mauled because some dude hadn’t updated their machines. Corporate and government networks were hit. You’d think after the hue and cry in May, all legit corporate systems would be updated, and bootleg copies of Windows would be replaced either by a legit copy of Windows or another operating system. But no. Rinse and repeat.

[..] These are big sophisticated companies, many of them with global operations, and therefore with global IT networks, not mom-and-pop operations. And yet the Windows machines in their networks hadn’t been updated and had remained vulnerable, or were using bootleg copies of Windows that couldn’t be updated, even after all the hoopla in May about this vulnerability. Just sitting here and shaking my head.

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Grandma goes nuts.

Yellen: Banks Very Much Stronger; No Financial Crisis In Our Lifetime (CNBC)

Fed Chair Janet Yellen said Tuesday that banks are “very much stronger” and another financial crisis is unlikely anytime soon. Speaking during an exchange in London with British Academy President Lord Nicholas Stern, the central bank chief said the Fed has learned lessons from the financial crisis and has brought stability to the banking system. Banks last week passed the first round of the Fed’s stress tests to see how they would perform under adverse conditions like a 10% unemployment rate and turbulence in commercial real estate and corporate debt. “I think the public can see the capital positions of the major banks are very much stronger this year,” Yellen said. “All of the firms passed the quantitative parts of the stress tests.”

She also made a bold prediction: that another financial crisis the likes of the one that exploded in 2008 was not likely “in our lifetime.” The crisis, which erupted in September 2008 with the implosion of Lehman Brothers but had been stewing for years, would have been “worse than the Great Depression” without the Fed’s intervention, Yellen said. Yellen added that the Fed learned lessons from the financial crisis and is being more vigilant to find risks to the system. “I think the system is much safer and much sounder,” she said. “We are doing a lot more to try to look for financial stability risks that may not be immediately apparent but to look in corners of the financial system that are not subject to regulation, outside those areas in order to try to detect threats to financial stability that may be emerging.”

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Steve explains that Yellen knows Minsky, but prefers to ignore him.

There Is No Excuse For Janet Yellen’s Complacency (Steve Keen)

Janet Yellen has been reported by Reuters as saying in London yesterday that “she does not believe that there will be a run on the banking system at least as long as she lives”: “Would I say there will never, ever be another financial crisis? You know probably that would be going too far but I do think we’re much safer and I hope that it will not be in our lifetimes and I don’t believe it will be,” Yellen said at an event in London. The only word I can use to describe this belief is “delusional”. The only way in which her belief could be justified would be in financial crises were truly random events, caused by something outside the economy—or just by a very bad throw of the economic dice. This is indeed the perspective of mainstream “Neoclassical” economic theory, in which Yellen was trained, and because of which she was deemed eligible—and indeed eminently suitable—to Chair the Federal Reserve.

This is the theory that led the OECD to proclaim, two months before the crisis began in August 2007, that “the current economic situation is in many ways better than what we have experienced in years”, and that they expected that “sustained growth in OECD economies would be underpinned by strong job creation and falling unemployment.”. It is the theory that led her colleague David Stockton, then the Director of the Division of Research and Statistics at the Fed, to dismiss the possibility of a recession after the crisis had begun, in December 2007—the very month that the recession is now regarded as having commenced: “Overall, our forecast could admittedly be read as still painting a pretty benign picture: despite all the financial turmoil, the economy avoids recession and, even with steeply higher prices for food and energy and a lower exchange value of the dollar, we achieve some modest edging-off of inflation.” (FOMC, Dec 2007)

So what we are getting from her is not merely her own personal complacency, but the complacency of an approach to economics which has always been grounded in the beliefs that (a) capitalism is inherently stable, (b) that the financial sector can be ignored—yes that’s right, ignored—when doing macroeconomics, and (c) that the Great Depression was an anomaly that can also be ignored, because it can only have been caused either by an exogenous shock or bad government policy, both of which cannot be predicted in advance.

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It’s a really crazy thing to say. Does she expect to be fired soon?

Yellen: “I Don’t Believe We Will See Another Crisis In Our Lifetime” (ZH)

If there was any confusion why the Fed intends to keep hiking rates, even in the face of negative economic data and disappearing inflation, it was put to rest over the past 2 days when not one, not two , not three, but four Fed speakers, including the three most important ones, made it clear that the Fed’s only intention at this point is to burst the asset bubble. First there was SF Fed president John Williams who said that “there seems to be a priced-to-perfection attitude out there” and that the stock market rally “still seems to be running very much on fumes.” Speaking to Australian TV, Williams added that “we are seeing some reach for yield, and some, maybe, excess risk-taking in the financial system with very low rates. As we move interest rates back to more-normal, I think that that will, people will pull back on that,

Then it was Fed vice chairman Stan Fischer’s turn, who while somewhat more diplomatic, delivered the same message: “the increase in prices of risky assets in most asset markets over the past six months points to a notable uptick in risk appetites…. Measures of earnings strength, such as the return on assets, continue to approach pre-crisis levels at most banks, although with interest rates being so low, the return on assets might be expected to have declined relative to their pre-crisis levels–and that fact is also a cause for concern.” Fischer then also said that the corporate sector is “notably leveraged”, that it would be foolish to think that all risks have been eliminated, and called for “close monitoring” of rising risk appetites.

All this followed the statement by Bill Dudley, who many perceive as the Fed’s shadow chairman, who yesterday warned that rates will keep rising as long as financial conditions remain loose: “when financial conditions tighten sharply, this may mean that monetary policy may need to be tightened by less or even loosened. On the other hand, when financial conditions ease—as has been the case recently—this can provide additional impetus for the decision to continue to remove monetary policy accommodation.” And finally, it was Yellen herself, who speaking in London acknowledged that some asset prices had become “somewhat rich” although like Fischer, she hedged that prices are fine… if only assumes record low rates in perpetuity:

“Asset valuations are somewhat rich if you use some traditional metrics like price earnings ratios, but I wouldn’t try to comment on appropriate valuations, and those ratios ought to depend on long-term interest rates,” she said. It was not all doom and gloom. Responding to a question on financial system stability, Yellen said post-crisis regulations (and $2.5 trillion in excess reserves which just happen to be fungible and give the banks the impression that they are safe) had made financial institutions much “safer and sounder.” “Will I say there will never, ever be another financial crisis? No, probably that would be going too far. But I do think we’re much safer and I hope that it will not be in our lifetimes and I don’t believe it will.”

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There were smokescreeens a-plenty too.

Trio of Fed Speakers Warn on Valuations With Eyes on Tightening (BBG)

When a trio of Federal Reserve officials delivered remarks on Tuesday, the state of U.S. financial markets came in for a little bit of criticism. When all was said and done, U.S. equities sank the most in six weeks, yields on 10-year Treasuries rose and the dollar weakened to the lowest level versus the euro in 10 months. Fed Chair Janet Yellen said that asset valuations, by some measures “look high, but there’s no certainty about that.” Earlier, San Francisco Fed President John Williams said the stock market “seems to be running very much on fumes” and that he was “somewhat concerned about the complacency in the market.” Fed Vice-Chair Stanley Fischer suggested that there had been a “notable uptick” in risk appetite that propelled valuation ratios to very elevated levels.

The Fed officials’ comments came amid a torrent of events that buffeted financial markets Tuesday, from an IMF cut to its U.S. growth forecast, Google suffering the biggest ever EU antitrust fine, a fresh blow to the Republican agenda in Washington and a global cyberattack. Still, selling in U.S shares accelerated around 1:30 p.m. as Yellen delivered her assessment of the market since the central bank raised interest rates June 14. “Asset valuations are somewhat rich if you use some traditional metrics like price earnings ratios, but I wouldn’t try to comment on appropriate valuations, and those ratios ought to depend on long-term interest rates,” Yellen said during a speech in London.

Investors are on guard for signs of a change in its economic outlook that could delay rate increases or when it will begin shrinking its $4.5 trillion balance sheet. Yellen said the Fed’s plans for the balance sheet were “well understood” by financial markets. Officials have said they intend to begin allowing the portfolio to roll off this year. In the end, Yellen made it pretty apparent that that her plans for continued monetary policy tightening haven’t shifted. “We’ve made very clear that we think it will be appropriate to the attainment of our goals to raise interest rates very gradually,” Yellen said.

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All the credit was the only thing that kept the country going.

Car Loans, Credit Card Debt Push UK Back Towards Another Credit Crisis (Tel.)

Banks are “forgetting the lessons” of the financial crisis, increasing the risk of reckless lending which could land them — and the wider economy — in trouble later, Mark Carney has warned. Credit card lending is booming and the Bank of England fears that banks are becoming complacent, assuming the relatively good economic times will continue indefinitely. As a result lenders are cutting down the amount of capital they put aside to keep them safe if those loans turn bad — something that could leave them in financial trouble if there is a recession and customers cannot pay back their debts. “I think it is forgetting some of the lessons of the past, or not fully learning the lessons of the past,” said Mr Carney, the Bank of England’s Governor. He said that the economy overall is performing well and total lending is not getting out of hand, but consumer credit is growing by more than 10pc per year, with credit cards and car loans growing particularly fast.

“Most financial stability indicators are neither particularly elevated nor subdued. Nevertheless, there are pockets of risk that warrant extra vigilance,” he said at the publication of the latest Financial Stability Report. “Consumer credit has increased rapidly. Lending conditions in the mortgage market are becoming easier. And lenders may be placing undue weight on the recent performance of loans in benign conditions.” As well as holding more capital against credit card debt and consumer loans, banks have also been warned that next month the Financial Conduct Authority and the Prudential Regulation Authority will also publish new affordability rules to make sure customers are likely to be able to repay their debts.

The situation is deemed relatively urgent — one part of an annual assessment of the losses which banks could make in a hypothetical recession has been brought forwards this year. Instead of publishing the results in November, the consumer credit part of the so-called stress tests will be revealed in September. That decision reflects the short-term nature of consumer loans. Short-term loans can also pose a threat to financial stability because households take them less seriously than mortgages. Consumer debts only amount to one-seventh of the total of mortgage debt, but they account for 10-times the amount of bad loans which banks write off.

That also has implications for the wider economy — a household in financial trouble will cut spending deeply to make sure it can still pay the mortgage, but is less worried about credit cards. Mortgage lending standards are also under the spotlight. The Financial Policy Committee told banks in 2014 that they should assess whether borrowers could still afford their mortgages if the Bank of England’s base rate went up by three%age points. Most banks calculated this by adding 3%age points to their standard variable rates, but some lenders said that in this scenario they might not pass the full cost onto customers. Officials reject this interpretation and have ordered banks to add the full 3 points to their rates when judging the affordability.

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First you lower rates, then you take measures against the fully predictable consequences.

UK Banks Ordered To Hold More Capital As Consumer Debt Surges (G.)

The Bank of England is to force banks to strengthen their financial position in the face of a rapid growth in borrowing on credit cards, car finance and personal loans. The intervention by Threadneedle Street means banks will need to set aside as much as £11.4bn of extra capital in the next 18 months and is intended to protect the financial system from the 10% rise in consumer lending over the year. The Bank is also bringing forward the part of the annual stress tests on banks that scrutinises their exposure to consumer credit by two months to September. The Bank’s Prudential Regulation Authority and the City regulator, the Financial Conduct Authority, will also publish next month how they expect lenders to treat borrowers in the consumer credit market.

The Bank’s half-yearly assessment of risk to financial markets also set out measures to rein in the riskiest mortgage lending, highlighted the risks associated with the UK’s exit from the EU and said commercial property prices were “at the top end of sustainable valuations”. While the Bank found risks to financial stability were neither “particularly elevated nor subdued” it warned that there “pockets of risk that warrant vigilance”. “Consumer credit has increased rapidly. Lending conditions in the mortgage market are becoming easier. And lenders may be placing undue weight on the recent performance of loans in benign conditions,” said Mark Carney, governor of the Bank of England.

Carney said the decision to call on banks to hold more capital – which is largely a rejig of their current resources rather than raising new funds – was taken after domestic risks returned to “standard” levels. A year ago, after the Brexit vote, the Bank had relaxed regulatory requirements on banks – using new tools it was given after the financial crisis – and is now reversing that decision.

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“..if we adopt, as in the U.S., a broader concept of unemployment (which in the U.S. they call U6) then unemployment in the euro area is at 18% whereas it is at 9% in the case of the U.S..”

ECB VP: Slack In European Economy Looks Worse Than We Thought (CNBC)

The difference between current and potential levels of output in the euro area economy could be greater than the ECB originally thought, its vice president, Vitor Constancio, warned on Tuesday. “What we see, what we observe is that domestic factors of inflation starting with wage and cost developments and then also price decisions are not responding the way we would expect in view of our more common estimates of this slack. So we have to ask ourselves – are these measures of the slack of the economy correct?,” explained Constancio, speaking to CNBC from the ECB Forum on central banking in Sintra. The board had therefore begun to ask themselves whether other variables should instead be considered to establish a more accurate view of the current economic situation.

“The unemployment rate now is 9.3% according to the normal international standard of measuring employment …. But if we adopt, as in the U.S., a broader concept of unemployment (which in the U.S. they call U6) then unemployment in the euro area is at 18% whereas it is at 9% in the case of the U.S. which would imply that the slack is then bigger than we could judge some time ago,” he noted. “That being the case it justifies fully what the president (Mario Draghi) said at the end of his speech (on Tuesday) that we need persistence. If we want to bring inflation to our target of below but close to 2% then we have to persist in the type of monetary policy that we been adopting,” he added.

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Earlier, we saw Yellen vs Minsky. Here’s China’s Minsky moment.

Chinese Satellite Data Hint At Ominous Manufacturing Slowdown (ZH)

A reading published by San Francisco-based SpaceKnow Inc. which uses commercial satellite imagery to monitor activity across thousands of industrial sites signaled deterioration in the country’s manufacturing sector for the first time since August. The gauge, known as the China Satellite Manufacturing Index, fell to 49.6, below the 50 break-even level. The index incorporates satellite data from thousands of industrial sites across China. Satellite imagery has often proved eerily presceint in the recent past: In the US, satellite data analyzing activity in retailers’ parking lots pointed to significant activity weakness at core US retail locations, even as sentiment indicators were suggesting an uptick in sales following the election. Meanwhile, small- and medium-sized enterprises showed the lowest level of confidence in 16 months, and conditions in the steel business remained lackluster, according to Bloomberg.

Some other indicators have been slightly more sanguine: sales-manager sentiment stayed positive, and outlook of financial experts recovered. Still, data suggest that output in China’s economy slowed during the second quarter after a strong start to the year, with investment slowing, some credit becoming tighter and signs that curbs on the country’s property market are starting to have an impact. Should growth continue to slow, China’s leaders would find themselves in an awkward position, with the country’s twice-a-decade leadership transition expected to occur this fall when the 19th Party Congress convenes to appoint its new senior leadership. It’s widely believed that China’s President Xi Jinping will begin serving his second five-year term.

[..] [That] could be the spark that ignites China’s “Minsky moment” – the financial cataclysm that Kyle Bass and other perma-china-bears have been waiting for when China’s overleveraged market crumbles to dust – might finally be in the offing. Indeed, though China’s markets have been relatively calm recently, the PBOC’s attempts to tighten liquidity have sparked some instability in recent months. Back in March, the central bank had to engage in mini bailouts when a jump in interbank rates caused some small regional lenders to default on their interbank loans after money market rates shot higher. Meanwhile, China’s weakening credit impulse should give any China bulls pause.

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Completely nuts. Feels like they’re looking to get tossed out.

UK Government Refuses To Pay For Fireproof Cladding (Ind.)

Councils face bills running to hundreds of millions of pounds to make tower blocks safe after the Government said it would not guarantee extra money to pay for vital work to prevent a repeat of the Grenfell disaster. Ninety-five high-rise buildings in 32 local authority areas have failed safety tests, the Department for Communities and Local Government (DCLG) said yesterday, with hundreds more blocks still to be tested. The findings prompted Theresa May to announce a “major national investigation” into the use of cladding on high-rise blocks, with every sample so far tested in the wake of the Grenfell found to be unsafe. But despite emergency fire safety checks being carried out nationwide under central government direction, councils will not be reimbursed for refurbishment work carried out.

A DCLG spokesperson said there was “no guarantee” of central government funding and that it would be “up to local authorities and housing associations to pay” for the work needed to ensure residents’ safety. The spokesperson said financial support would be considered on a “case by case” basis for those that could not afford to carry out the necessary work, but did not clarify what the criteria for that consideration would be. The announcement was met with severe criticism from some of the councils affected, with local authorities already having their budgets severely squeezed after years of austerity measures. Julie Dore, leader of Sheffield City Council, which is among the authorities to have discovered unsafe cladding, said “starved” councils would be forced to make cuts to other areas, including schooling, if central government did not help with costs.

“Local authorities have been starved of money over the past seven years. Our spending power has decreased,” she said. “There is no way we can afford to reclad our tower blocks. If we have to find that money, it will come from other projects, from investing in the fabric of our schools, capital investment in our infrastructure, the money has to come out of that. And it can’t really be done. “I say absolutely, categorically that the Government should pay. If they can find £1bn to send to Northern Ireland, that gets more spending per capita than anywhere else, to buy 10 votes, then these people, living in high-rise towers, deserve better.”

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There is no serious press left in the US to get to the bottom of this.

Democrats The Only Thing Standing In The Way Of Single-Payer In California (CP)

Nothing better illustrates the political bankruptcy of the Democratic Party—for all progressive intents and purposes—than California State Assembly Speaker Anthony Rendon’s announcement on Friday afternoon that he was going to put a “hold” on the single-payer health care bill (SB 562) for the state, effectively killing its passage for at least the year. The Democratic Party finds itself in a bind in California. They hold the governorship and a supermajority in both houses of the legislature, so they can pass any bill they want. SB 562 had passed the Senate 23-14. There was enormous enthusiasm among California progressive activists, who [..] were working tirelessly, and hopeful of success. After all, Bernie’s people were taking over the California party from the bottom since the election.

I recall a night of drinking last year with an old friend who has been spearheading that effort, as he rebuffed my skepticism, and insisted that this time there would be a really progressive takeover of the California party, and single-payer would prove it. After all, once enough progressive pressure was been put on the legislators, the bill would be going to super-progressive Democratic Governor, Jerry Brown, who had made advocacy of single-payer a centerpiece of his run for President in 1992, saying: “We treat health care not as a commodity to be played with for profit but rather the right of every American citizen when they’re born.” Bernie foretold. Unfortunately, today that Governor is, according to Paul Song, co-chair of the CHC, “doing everything he can to make sure this never gets on his desk.”

And it won’t. Unfortunately, all the Democrats like Rendon, who “claims to be a personal supporter of single-payer,” will make sure that their most progressive governor is not put in the embarrassing position of having to reject what he’s been ostensibly arguing for for twenty-five years, of demonstrating so blatantly what a fraud his, and his party’s, progressive pretensions are. Thus unfolds the typical Democratic strategy: Make all kinds of progressive noises and cast all kinds of progressive votes, while carefully managing the process so that the legislation the putatively progressives putatively support never gets enacted. Usually, they blame Republican obstructionism, and there certainly is enough of that, and where there is, it provides a convenient way for Democrat legislator to “support” legislation they know will be blocked and wouldn’t really enact themselves if they could.

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Phones are as addictive as opioids.

The Human Tragedy Of Drug Abuse And Car Crashes (BBG)

More than 130,000 Americans are killed annually by preventable causes, and the number has been climbing at a faster rate recently because of opioid abuse and car crashes involving drivers distracted by mobile devices. The death count jumped more than 7% in 2015 to about 146,600, according to a report by the National Safety Council Tuesday. The council said lawmakers often overlook simple solutions that could avoid deaths on the roads or in people’s homes, while public attention is focused on events that are relatively rare in the U.S., like terrorist attacks or plane crashes. Vehicle mishaps and poisonings, driven by opioid abuse, killed more than 80,000 people combined in 2015. Preventable accidents cost society about $850 billion a year, according to the group.

“Culturally, we’re numb to these things,” NSC President Deborah Hersman said in a phone interview. “Why are these deaths any less tragic or important? We should be talking about these things every day because they affect our families.” The toll from opioids is worsening, partly because so many patients become dependent on painkillers, often turning to street drugs like heroin. Almost one in four people on Medicaid, the U.S. health program for the poor, received powerful and addictive opioid pain medicines in 2015, Express Scripts Holding Co. said this month. The council said lawmakers should tighten oversight of the distribution of prescription medications and improve access to drugs that can reverse overdoses and treat addiction.

[..] “We need to make distracted driving socially unacceptable,” Tom Goeltz, whose daughter Megan was killed in a car crash last year, said at a news conference held by the NSC Tuesday. “This tragedy could have easily been prevented.” Goeltz, a Minnesotan who works to help industrial companies avoid accidents, said his daughter was pregnant when her car was struck by a distracted driver. “As a safety consultant with over 30 years of experience, I was powerless to save my daughter,” he said. “We all know people that have been killed on our roads. We all know somebody. How is this acceptable to us? We need to do more. You don’t want to be a part of this club.”

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“..Google has 90 days to come up with its own solution [..]. If it doesn’t do that, the EU will fine it up to 5% of the entire company’s daily global revenue.”

Search Results Show Why Europe Is Mad at Google (BBG)

Europe hit Alphabet’ Google with a $2.7 billion fine on Tuesday, saying it broke antitrust laws by favoring one of its search services over rival websites. The case centers around Google Shopping ads, which place color pictures, prices and links to products that consumers have typed into its search engine. The EU’s Competition Chief Margrethe Vestager said Google’s search algorithms should treat its own Shopping service the same way as other price-comparison sites. What exactly does this look like in practice? Here’s a walk-through of what the EU is so upset about. This is for desktop computer searches. On phones, there’s less digital real estate, leaving even less space for competitors. Before we start, it’s important to note that Google argues customers aren’t that interested in clicking through to other price comparison sites and want to go directly to retailers’ sites from Google. It denies any wrongdoing and is considering an appeal.

Google Shopping Today: The screenshot below shows results for a search in Germany for “gas grill.” Five Google Shopping ads take up the most valuable part of the page at the top. No other comparison shopping websites show up in the first couple of links. Scrolling down, you see the first result for a competing price comparison service – Idealo – come in at number six. There’s another at number 11, Moebel24. But that link is listed as an ad, meaning Moebel24 had to pay for that placement, even though it’s near the bottom of the page. The EU says this is bad because consumers click far more often on results appearing higher up in Google’s search results. Even on a desktop computer, the top ten results on page 1 generally get about 95% of all clicks on generic search results (with the top result receiving about 35% of all clicks), the European Commission said on Tuesday.

2014 Proposal: The EU’s Google investigation has been going for years. Vestager’s predecessor tentatively struck a deal with Google in 2014 for a hybrid model that set aside space in those top Shopping search boxes for other price comparison websites. But the agreement fell apart when competitors realized they had to pay for that placement. [..] What could Google do to satisfy Europe’s demands this time? Vestager said Google has 90 days to come up with its own solution, as long as it gives equal treatment to competing price comparison sites. If it doesn’t do that, the EU will fine it up to 5% of the entire company’s daily global revenue. [..] Google would have to sacrifice space currently occupied by its own Shopping ads to make the latter idea work, cutting into a highly profitably and growing revenue stream.

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US anti-trust laws are strong enough to counter this. But you need politicians to apply them.

‘Google, Facebook Are Super Monopolies On The Scale Of Standard Oil’ (CNBC)

Google shareholders won’t be phased by the EU’s $2.7 billion fine against the company for competition abuses related to its shopping business, Elevation Partners co-founder Roger McNamee told CNBC on Tuesday. “As a shareholder of Google you’re looking at this and saying: ‘We won again,'” McNamee said. The venture capitalist spoke hours after EU regulators fined Google a record €2.4 billion ($2.7 billion), ruling that the search-engine giant violated antitrust rules for its online shopping practices. Google said it will consider appealing the decision to the highest court in Europe. “Google, Facebook, Amazon are increasingly just super-monopolies, especially Google and Facebook. The share of the markets they operate in is literally on the same scale that Standard Oil had … more than 100 years ago – with the big differences that their reach is now global, not just within a single country,” he said on “Squawk Alley.”

The fine is not large enough to change Google’s behavior, he added. “The only thing that will change it is regulations that actually say you can or can’t do something.” McNamee said Google’s business model isn’t structured in a way that allows for competition. “The way that Google’s product works makes its anti-competitive behavior much more obvious — but do not underestimate how powerful Facebook’s monopoly has been to boosting Instagram and WhatsApp,” he said. The competition issue with the big tech companies extends beyond the EU into the U.S., he said. “They do stifle innovation. They stifle entrepreneurship. … You can see this even in Silicon Valley it’s very hard for any of the unicorn generation of companies to actually reach successful critical mass because, you know, one of their competitors gets acquired by Google and Facebook and then the category is over,” said McNamee. “I think it’s a big policy question the world is going to have to deal with over the next few years,” he said.

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The problem is not even the duration, France and Belgium are worse. The problem is what Greeks are left with after taxes are paid, which is much less than the others.

Greeks Work 203 Days Out Of The Year To Pay Taxes (K.)

Greeks will work an average of 203 days this year to pay taxes to the state and social insurance contributions, according to research conducted by the Dragoumis Center for Liberal Studies (KEFIM) to raise awareness about tax freedom day – the first day of the year in which a country has theoretically earned enough income to pay its taxes. In the case of Greece, this day will be on July 23, which means that Greeks will have worked 15 days more than last year, when tax freedom day arrived on July 7. The only two European Union countries in which tax freedom day will arrive after that in Greece are France and Belgium. Cyprus celebrated its tax freedom day on March 29, while Malta and Ireland did the same on April 18 and 30 respectively. Bulgaria was next on May 18 before Finland on June 22.

KEFIM, which conducted research into the topic for a third straight year, said citizens are working an increasing number of days each year to meet their tax obligations and, compared to 2006, Greeks now work two months more to this end. Referring to the results of the research, financial analyst and member of KEFIM’s scientific council Miranda Xafa said the “government managed to achieve a primary surplus by tax hikes and not through spending cuts.” Xafa also said that for every 100 euros a self-employed professional makes, 82 go toward tax and and other contributions. New Democracy vice president Adonis Georgiadis said that Greece had “lost another month because of overtaxation.” “Our aim when we become the government is to reverse the trend,” he said.

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Today is day 12 of the garbage strike. Weekend weather forecast up to 44ºC (111ºF). Some judge needs to declare a public health emergency, if Tsipras is too scared to do it.

Greek Garbage Collectors Reject Compromise As Trash Piles Up (AP)

Greece’s municipal garbage collectors on Tuesday rejected a government compromise offer and decided to continue an 11-day protest that has left mounds of festering refuse piled up across Athens amid high temperatures during the key summer tourism season. Municipal workers union head Nikos Trikas said the protest will go on as planned until Thursday at least, after an inconclusive meeting with Prime Minister Alexis Tsipras. The union is pressing the left-led government to honor a pledge to provide permanent jobs for long-term contract workers, and rejected Tsipras’ proposals as a “slight” but unsatisfactory improvement on past offers. Greek authorities have warned that the uncollected trash poses a public health risk ahead of a heat wave forecast for later this week.

Tourism Minister Elena Kountoura urged the union to reconsider, arguing that the protest “endangers public health, and is bad for tourism as well as the country’s international image.” The Athens Trade Association has also called on the two sides to reach a compromise, warning that piles of garbage would discourage tourists from traveling to the Greek capital. Tourism is a vital source of revenue for Greeces battered economy. Although not technically on strike most of the time, municipal workers have been blockading garages where municipal trash collection trucks operate from, as well as landfill sites across the country. Trikas said that unions will review their position Thursday, when they have called a 24-hour strike. He also pledged to increase emergency crews that the union has on duty to ensure that the garbage mounds do not mushroom out of all control.

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Where are Merkel and Macron? Why are their voters not demanding they tackle the issue?

At Least 24 Migrants Die Off Libya in 48 Hours, More Than 8,000 Rescued (R.)

Red Crescent volunteers recovered the bodies of 24 migrants on Tuesday that were washed up in an eastern suburb of the Libyan capital, Tripoli, as large-scale rescues were made in the Mediterranean. Residents in Tajoura district said the bodies had begun washing up at the end of last week. Several had been partially devoured by stray dogs, according to a local coast guard official. The toll was expected to increase as the flimsy boats used to carry migrants as far as international waters normally carry more than 100 people. Three migrants died in the Mediterranean on Monday night, a German aid group said, during Italian-led rescue operations in which thousands more were pulled to safety.

About 5,000 migrants were picked up off the Libyan coast by emergency services, Italy’s navy, aid groups and private boats on Monday, and rescues were continuing on Tuesday, according to an Italian coastguard spokesman. “Despite all efforts, three people died from a sinking rubber boat” and rescue boats in the area are struggling to cope, German humanitarian group Jugend Rettet said on Facebook. Jugend Rettet (Rescuing Youth) is one of about nine aid groups patrolling seas into which people traffickers have sent more than half a million refugees and migrants on highly dangerous voyages towards Europe over the past four years. “We reached the capacity limit of our ship, while our crew is seeing more boats on the horizon. Currently, all vessels are overloaded,” Jugend Rettet added.

About 72,000 migrants arrived in Italy on the perilous route from Libya between Jan. 1 and June 21, roughly 20% more than in 2016, and more than 2,000 died on the way, according to the International Organization for Migration.

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Dec 242016
 
 December 24, 2016  Posted by at 9:23 am Finance Tagged with: , , , , , , , , , ,  Comments Off on Debt Rattle Christmas Eve 2016


Alfred Palmer Annette del Sur in salvage campaign, Douglas Aircraft Co., Long Beach, CA 1942

The Connection Between Work and Dignity (B.)
2016 Year In Review: A Clockwork Orange (Dave Collum)
A Week On Jury Duty With Rex Tillerson (Roden)
Putin Shrugs Off Trump’s Nuclear Plans, Says Democrats Sore Losers (R.)
President Xi Open to Growth in China Falling Below 6.5% (BBG)
Barclays Refuses To Settle With US DoJ Over ‘Craptacular Loans’ (G.)
Greek PM in Open Confrontation With German FinMin (GR)
Greece Takes Dig At Lenders With Scrooge Christmas Card (R.)
Is A Big Change Underway In Global Capitalism? (Parramore/Chanos)
Shanghai Water Supply Hit By 100-Tonne Wave Of Garbage (G.)
3.5 Trillion Insects Migrate Over Southern Britain Each Year (CSM)
One of Earth’s Most Dangerous Supervolcanoes Is Rumbling (NatGeo)
Mediterranean Death Toll Is Record 5,000 Refugees, Migrants This Year (R.)

 

 

Best ever case for basic income. And then he doesn’t even mention it!

The Connection Between Work and Dignity (B.)

If we work hard and produce something of tangible value, we tend to feel a sense of self-worth when society rewards us for it with a decent, middle-class life. This was the essence of Franklin Roosevelt’s New Deal – if you work, you eat. The continuing power of this idea is visible everywhere. Witness Albuquerque, New Mexico, where the city gave homeless people jobs and it made them feel “human again.” Or look at the Job Corps program, where giving poor people jobs made them more likely to get married. If you give people work with tangible, visible value, you give them dignity. This, of course, is a reason the U.S.’s falling labor participation rate is such a concern – so many Americans are out of the workforce and are missing out on the dignity that comes with a job:

So is there work to be done in the U.S. that produces tangible, visible value? Of course there is. To realize this, just take a one-week trip to Japan. Where American sidewalks are cracked and uneven, Japanese ones are neat and beautiful. Where tables in American Starbucks are littered with crumbs and dirt, Japanese Starbucks tables get wiped down after every customer leaves. Where American cities like Chicago and Detroit are full of broken windows and crumbling facades, Japanese cities are clean and modern, with well-maintained, reliable public transit. Before we start complaining about make-work, let’s make the U.S. look like that. Let’s fix the sidewalks and renovate – or knock down and rebuild – all the old buildings. Let’s wipe down every Starbucks table, build quality public-transit systems and hire the workers to make them run on time.

And let’s take care of our people as well as our cities. Let’s provide child care for working moms, and elder care for old people. Let’s hire more teachers to reduce class sizes. These are all jobs that produce real, tangible results. When you fix up a building or build a train station, you can see the fruits of your labors. When you take care of an old person, you can see a real human being benefit. The value created by these jobs is a lot more tangible and clear than the value created by a lot of activities that the market rewards much more, such as high-frequency trading. The free-market age has made the economy more efficient, but it has come at a dramatic price – lost dignity for so many. The U.S. has moved away from the idea of a social compact with work at its core. That’s something that deserves to be reversed.

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I warn you, don’t do it. Don’t even start reading. This innocent-enough looking ‘organic chemical professor’ with his cultivated hobo-under-the-bridge look has one thing in mind, and one only: to ruin your holidays. Being holed up with his review means no valuable and precious time left to spend with your families, letting the turkey burn in the oven (oh, would he like that!) and having no eyes for the beautiful snowy landscape out there. Talk about the Grinch who stole Christmas!

2016 Year In Review: A Clockwork Orange (Dave Collum)

With some notable exceptions, the mainstream media has degenerated into a steaming heap of detritus that is so bad now that it gets its own section. A congenital infobesity has morphed into late-stage disinfobesity. Enter social media—the fever swamp—to fill the void. As we shall see, however, all is not well there either. I sift and pan, looking for shiny nuggets of content that reach the high standards of a rant. Shout-outs to bloggers would have to include Michael Krieger, Charles Hugh Smith, Peter Boockvar, Bill Fleckenstein, Doug Noland, Jesse Felder, Tony Greer, Mike Lebowitz, Mish Shedlock, Charles Hugh Smith, and Grant Williams.

News consolidators and new-era media include Contra Corner, Real Vision, Heatstreet, and Automatic Earth. A carefully honed Twitter feed is a window to the world and the road to perdition. My actions speak to my enthusiasm for Chris Martenson and Adam Taggart at Peak Prosperity. However, if you gave me one lens through which to view the world, I would have to choose Zero Hedge (or maybe LadySonya.com).

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Nice story. Don’t demonize the man. Give him a chance.

A Week On Jury Duty With Rex Tillerson (Roden)

Nine years ago, I showed up to the Denton County Courthouse for jury duty and got myself picked for the job. A young girl had accused her mom’s boyfriend of sexual assault, and the case was being brought to trial. If you’ve ever served on a jury trial before, you understand the almost immediate yet very temporary bond that ties 12 strangers together who are randomly chosen from each of their private lives to fulfill a solemn public purpose. One of our first tasks was to choose our jury foreman. Perhaps it was his business suit, his impressive stature, or his charisma, but almost everyone in that jury room suggested that this middle-aged man with graying hair was likely the most fit for the task. Thanks, but I decline. I’m not interested in the spotlight, he told us. I didn’t think anything of it.

I had just bought my first BlackBerry and used my breaks to catch up on all the emails I was missing from my week at the courthouse. I recall leaving the jury room on a break with this man and remarking how busy I was and how much work I had to do. He smiled as he sat and read the paper. From the first day of jury selection, we all noticed another suited man always present in the courtroom. His presence was intriguing due to the ear piece in his ear. While grabbing lunch at Denton County Independent Hamburger on the square the second day of the trial, we noticed this mysterious man dining with our fellow juror who’d declined the foreman spot. The intrigue grew, and it was the talk of the jury: Who were these men? Finally, during a break in the jury room, one juror had the nerve to ask: “Who are you? And what do you do?”

Our fellow jury member was reading the paper again and pointed out an article with Exxon in the headlines. I work for them, he said humbly. There are a lot of people in this world who hate me for what I do, so they give me and my family guys like that to protect me. I immediately felt embarrassed for complaining about how much work I had to do. It didn’t take long before a few internet searches revealed that I was serving on this jury with the CEO of Exxon Mobil, Rex Tillerson. The trial concluded, and it was time for the jury to deliberate. The story was heartbreaking, and the facts of the case were clear enough to make the majority of the jury convinced of the guilt of this sexual offender of a little girl. But the defense did a good enough job to create a couple of hold-outs. As our deliberations came to a close, it appeared we might have a hung jury.

That’s when Tillerson began to speak. Humbly, delicately and without an ounce of condescension toward those who disagreed, he began walking us all through the details of the case. I even recall being moved by his thorough explanation about the nature of doubt and the standards set forth by our justice system. With great patience, this man who strikes multibillion-dollar deals with foreign heads of state brought our scrappy jury together — to bring a sexual predator to justice and to deliver justice for a scared and deeply wounded little girl. A local nonprofit was instrumental in fostering that young girl through this process, providing her counseling and legal help. I was so struck by their mission that I toured their facility the week after the case to learn how I could donate and volunteer to their cause.

On a whim, I decided to reach out to Tillerson to encourage him to do the same. I found an email for him online and sent him a note, touting the role this agency played in our trial and urging him to consider supporting the great work they do. To my surprise, I received an email back thanking me for my note and my jury service, and ensuring me that he would contact the agency. I later received a call from the director of that nonprofit to let me know that Tillerson followed through and gave a generous donation.

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Putin was impressive. Among many other things, he announced cuts in defense spending from 4.7% of GDP in 2016, to 3.3%, and 2.8% in 2019. “If anyone is unleashing an arms race it’s not us … We will never spend resources on an arms race that we can’t afford.”

Putin Shrugs Off Trump’s Nuclear Plans, Says Democrats Sore Losers (R.)

Russia’s Vladimir Putin said on Friday he was unfazed by President-elect Donald Trump’s plans to boost the U.S. nuclear arsenal, praising Trump for being in touch with U.S. public opinion while branding the Democrats sore election losers. Speaking at his annual news conference in Moscow, the Russian president said earlier comments he had made about his country’s own military modernization had been misunderstood in the United States and that he accepted that the U.S. military, not Russia’s, was the most powerful in the world. Putin said on Thursday Russia’s military was “stronger than any potential aggressor”. Trump later tweeted that the United States “must greatly strengthen and expand its nuclear capability until such time as the world comes to its senses regarding nukes.”

Asked to clarify his comments on Friday, MSNBC reported that Trump had said: “Let it be an arms race. We will outmatch them at every pass and outlast them all.” But Putin said he did not regard the United States as a potential aggressor and had only been talking about countries he thought might realistically launch an attack on Russia. “I was a bit surprised by the statements from some representatives of the current U.S. administration who for some reason started to prove that the U.S. military was the most powerful in the world,” Putin said, referring to State Department comments from Thursday. “Nobody is arguing with that.” Putin said he saw nothing new or remarkable about Trump’s own statement about wanting to expand U.S. nuclear capabilities anyway. “In the course of his election campaign he (Trump) spoke about the necessity of strengthening the U.S. nuclear arsenal, and strengthening the armed forces. There’s nothing unusual here,” said Putin.

“If anyone is unleashing an arms race it’s not us … We will never spend resources on an arms race that we can’t afford.” [..] Putin dismissed suggestions Moscow had helped Trump to victory in any way however. “It’s not like that,” he said. “All of this (the accusations) speaks of the current administration’s systemic problems.” Putin, who spoke positively of Trump before his election win, said that only Moscow had believed in his victory however. “Trump understood the mood of the people and kept going until the end, when nobody believed in him,” Putin said, adding with a smile. “Except for you and me.” Putin said he would be willing to visit the United States if Trump invited him and expected U.S.-Russia ties to return to normal now, particularly in the security and economic spheres.

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Xi finds an opening to blame lower growth on something other than himself, and dives right in.

President Xi Open to Growth in China Falling Below 6.5% (BBG)

President Xi Jinping isn’t wedded to China’s 6.5% economic growth objective due to concerns about rising debt and an uncertain global environment after Donald Trump’s election win in the U.S., according to a person familiar with the situation. Xi told a meeting of the Communist Party’s financial and economic leading group this week that China doesn’t need to meet the objective if doing so creates too much risk, said the person, who asked not to be named because the discussions were private. Leaders at the gathering agreed that the $11 trillion economy would remain stable with slower growth as long as employment stays firm, the person said.

Below-target growth would be in line with analyst projections that the expansion will keep decelerating in coming years from an estimated pace of 6.7% in 2016. The slowdown coincides with the nation’s broad shift from an export-led economy to services, which accounted for more than half of growth last year for the first time, and domestic consumption. Last year, policy makers pledged an annual growth rate of at least 6.5% for five years through 2020. Some economists criticize the growth objective for motivating officials to take risks that may jeopardize financial stability. The IMF is among those that have recommended a lower target.

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Who came up with that word?

Barclays Refuses To Settle With US DoJ Over ‘Craptacular Loans’ (G.)

Barclays is refusing to settle with the US Department of Justice over allegations it deliberately sold mortgage bonds to investors that it knew contained “craptacular loans”. The DoJ’s legal filing outlines an array of colourful descriptions of the types of mortgages that it alleges were used by Barclays to package up in bonds – known as residential mortgage bond securities – which could be sold on to investors. It accuses Barclays of selling investors RMBS “backed by loans it knew were made to borrowers who were not creditworthy and which were supported by house appraisals it knew were inflated”. The DoJ said Barclays was not lending to customers itself but using loans from mortgage lenders Fremont, New Century, WMC, Countrywide, and IndyMac as the basis of the bonds it was selling.

To support its case the DoJ published conversations between bankers which it claimed proved they knew they were selling poor investments. They included: • One Barclays banker in charge of reviewing the deals observed that one loan pool was “about as bad as it can be”. • On another occasion, the same banker said this “scares the shit out of me”. He also remarked about a package of loans from Wells Fargo that “we have to eat their shit loans”. • A Barclays salesperson described “the deluge of Fremont garbage being put out there”, the DoJ said. Barclays, becoming the first major lender to fail to reach a settlement with the DoJ, said it rejected the claims made in the complaint. “Barclays considers that the claims made in the complaint are disconnected from the facts. We have an obligation to our shareholders, customers, clients, and employees to defend ourselves against unreasonable allegations and demands. Barclays will vigorously defend the complaint and seek its dismissal at the earliest opportunity,” the bank said.

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“No matter how big fiscal surpluses some countries manage, they will never reach the surplus of soul that Greek people have..”

Greek PM in Open Confrontation With German FinMin (GR)

“Those who are not at peace with their souls can not cope with the problems of their country, neither Europe’s nor the world’s,” Greek Prime Minister Alexis Tsipras said on Thursday. The prime minister had in mind the German Finance Minister Wolfgang Schaeuble, who said that he can’t show any understanding to the Greek prime minister for accusing the German government of hurting Greek pensioners. Tsipras spoke in Greek parliament in an event dedicated to unescorted refugee children. “Those who shake the finger at us in the name of the agreements, and address Greek people in a condescending way, they must honor their commitments first before they turn to criticize us,” Tsipras said. Schaeuble has repeatedly said in the past that Greece is not implementing the reforms needed to help the economy to recover. “Our efforts aim to Greece so that it stands on its feet again,”he said.

Then the German minister explained further: “Solidarity can only be justified when the aid is limited and leads to change something in a positive direction. In Ireland, Portugal, Spain and Cyprus that was evident. After implementing the program, their economies are growing, rapidly for some. Greece is the third program and without the financial help of billions of euros would be bankrupt long ago. Then the Greek citizens would suffer much more.” The Greek prime minister said during his speech that the compassion and solidarity Greece showed during the refugee crisis is more important than state budgets and fiscal targets. “We now open our arms — and I believe this reflects the feelings of the vast majority of the Greek people — to these weak people. Despite our difficulties we keep our dignity and this is much greater wealth and much larger surplus of all budget surpluses. No matter how big fiscal surpluses some countries manage, they will never reach the surplus of soul that Greek people have,” Tsipras said.

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That’ll go down well.

Greece Takes Dig At Lenders With Scrooge Christmas Card (R.)

Greece’s Finance Ministry took a page out of Charles Dickens’s classic “A Christmas Carol” to have a dig on Friday at the international lenders who have imposed unpopular austerity on the country. An e-card from the press office of the Greek Finance Ministry, sent to journalists, showed a picture of a frail, stingy Ebenezer Scrooge warming by the fire during a visit of his former business partner Jacob Marley, the ghost of Christmas Past shackled in chains. “Perhaps all Christmas stories feature a terrifying Ebenezer welcoming the spirits of Christmas in his desolate loneliness, and perhaps our Christmas story is no exception,” the e-card reads. “But dear friends and colleagues, our wishes will prevail over all the Ebenezers of this world. A very happy new year, with health and love focused on those all around us.”

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Lynn Parramore talks to Jim Chanos.

Is A Big Change Underway In Global Capitalism? (Parramore/Chanos)

Jim Chanos: Bush was the MBA president who was going to be pro-business, cut taxes, and deregulate. Meanwhile, he had two recessions on his watch, less employment than when he started, and two bear markets in the stock market — probably the worst president for business since Herbert Hoover. The business guy! Yet, he did tighten up the Justice Department and go after corporate crime. The Ashcroft Justice Department, as bad as it was in lots of other things, went after corporate fraud and accounting fraud, criminally. In 2002, we got Sarbanes-Oxley to curb fraud. I don’t know that all this was Bush’s predilection — remember, his biggest supporter was Enron. But because of Enron and the other dot-com era scandals, he got backed into a corner to go hard on them.

I’ve joked that the only person who put more corporate executives in jail than George W. Bush was his father during the Savings and Loan Crisis. On these issues, I’d rather have Bush any day of the week than Obama. Both Eric Holder and Lanny Breuer of Obama’s Justice Department said in TV interviews and testimony that they factored in non-judicial aspects as to whether to mount prosecutions. I think that this had political costs to the Democrats. The crony capitalism still bothers people — the idea that Wall Street got off scot-free and they are still struggling. That lack of justice applied equally under the law was corrosive, not necessarily for Obama personally, but certainly for the party following him.

LP: How do you see a Trump presidency in this light? JC: You and I have talked about how it has become a cost calculus for lots of corporations and financial institutions to cheat. “If I get caught,” they say, “I’m just going to pay a fine.” How does this change with new faces in Washington? You still have this very pro-corporate group on Capitol Hill whose main bailiwick, in my opinion, is to protect the corporate class and the very wealthy. You’ve got what ostensibly is a proto-populist in the White House with a cabinet that is a mélange of different types, so who knows?

In my overall view, stuff happens to change people. If we go back to Bill Clinton, his “Putting People First” manifesto in ’92 was quite left-of-center, but he didn’t govern that way. If you look at things like NAFTA, Welfare reform, and cutting capital gains taxes — well, in many ways, Ronald Reagan would have been proud of him. Events conspire to derail our perceptions of presidents. When we look at their platforms, we think we know where things are headed. But in modern times, the only two presidents that I can think of who really got their ideas and platforms enacted wholesale were FDR and Reagan. Everybody else has gotten compromised, or has had events overwhelm them.

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“This is so sad, just humanity digging its own grave..”

Shanghai Water Supply Hit By 100-Tonne Wave Of Garbage (G.)

Medical waste, broken bottles and household trash are some of the items found in more than 100 tonnes of garbage salvaged near a drinking water reservoir in Shanghai. The suspected culprits are two ships that have been dumping waste upstream in the Yangtze river. It has then flowed downstream to the reservoir on Shanghai’s Chongming island which is also home to 700,000 people. The reservoir at the mouth of the river is one of the four main sources of drinking water for the country’s largest city, according to local media. China has struggled with air, soil and water pollution for years during its economic boom, with officials often protecting industry and silencing citizens that complain. China’s cities are often blanketed in toxic smog, while earlier this year more than 80% of water wells used by farms, factories and rural households was found to be unsafe for drinking because of pollution.

Officials dispatched more than 40 workers to clean up the mess, but the area around the reservoir will take about two weeks to clear, the Shanghai Daily reported. Shanghai’s water authority claims supplies are still safe to drink, but has stopped the flow coming in while it continues testing, the paper said. Videos circulating on social media showed beaches and wetlands covered in a rainbow of plastic bags. “There’s enough trash to cover several football fields,” a local resident can be heard saying in one video. Catheter bags and used IV sacks are pulled from the water, and in some places only a sea of trash can be seen, completely obscuring the river water. “This is so sad, just humanity digging its own grave,” one commenter on Twitter-like Sina Weibo said.


A tourist surrounded by rubbish on a beach in China. Photograph: Feature China / Barcroft Media

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“..Britain’s overhead populations are probably “close to minimum values” because of the area’s cold and dry climate. The warm, moist skies of the Amazon – or southern California, for example – likely see far more than 3.5 trillion insects each year.”

3.5 Trillion Insects Migrate Over Southern Britain Each Year (CSM)

Three and a half trillion. That’s how many insects migrate over southern Britain in one year, according to a study published Friday in the journal Science. To put that number in perspective, that’s the equivalent of more than 54 bugs for every person in Britain. The team of scientists from Britain, China, and Israel spent a decade tracking insect migration at altitudes between 492 and 3,937 feet using entomological radar and an aerial insect-catching net. “High-altitude aerial migration of insects is enormous,” University of Exeter entomologist and co-author Jason Chapman told Reuters. “These aerial flows are an unappreciated aspect of terrestrial ecosystems, equivalent to the oceanic movements of plankton which power the oceanic food chains.” And the vast quantity was not the only surprising aspect of their study.

The researchers also discovered that insects migrate north and south seasonally (just like birds), and can reach speeds between 18 and 37 miles per hour by choosing wind patterns that are blowing in their chosen direction, Ars Technica reports. The trillions of migrating insects weigh a combined total of 3,200 tons – the equivalent of more than 636 elephants flying overhead each year. But if hundreds of elephants’ worth of bugs were flying overhead each year, wouldn’t we know about them already? No, say scientists: the vast majority of these bugs are super small. Take the marmalade hoverfly, for example. “It’s only about a centimeter long, it’s orange with black stripes, but it’s a hugely abundant migrant, and it actually does some very important jobs” such as pollinating crops and wildflowers, Dr. Chapman told NPR.

And the authors say Britain’s overhead migration is likely modest compared to other regions of the world. In fact, Chapman tells the Los Angeles Times that Britain’s overhead populations are probably “close to minimum values” because of the area’s cold and dry climate. The warm, moist skies of the Amazon – or southern California, for example – likely see far more than 3.5 trillion insects each year. While some bug-averse people might find this study chilling, it is really quite encouraging, say scientists. Healthy insect populations are crucial for a productive environmental landscape. “We could not function without them,” Chapman tells Reuters. The insects pollinate plants, feed birds and bats, and promote healthy soil through decomposition and other important processes.

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Does ‘volatile’ capture it?

One of Earth’s Most Dangerous Supervolcanoes Is Rumbling (NatGeo)

A long-quiet yet huge supervolcano that lies under 500,000 people in Italy may be waking up and approaching a “critical state,” scientists report this week in the journal Nature Communications. Based on physical measurements and computer modeling, “we propose that magma could be approaching the CDP [critical degassing pressure] at Campi Flegrei, a volcano in the metropolitan area of Naples, one of the most densely inhabited areas in the world, and where accelerating deformation and heating are currently being observed,” wrote the scientists—who are led by Giovanni Chiodini of the Italian National Institute of Geophysics in Rome. A sudden release of hot magmatic gasses is possible in the near future, which could trigger a large eruption, the scientists warn. Yet the timing of any possible eruption is unknown and is currently not possible to predict.

In response to the news, Italy’s government has raised the volcano’s threat level from green to yellow, or from quiet to requires scientific monitoring. In other words, the government is urging a measured response to the study, followed by additional scientific work. Campi Flegrei means “burning fields” in Italian. The volcanic region is also known as the Phlegraean Fields. Like other supervolcanoes—such as the one responsible for the geothermal features of Yellowstone—it is not a single volcanic cone. Rather, it’s a large complex, much of it underground or under the Mediterranean Sea, that includes 24 craters, as well as various geysers and vents that can release hot gas. Supervolcanoes are usually characterized by a large caldera, or depression, that formed from past explosive eruptions. Campi Flegrei’s depression, just west of Naples, is more than seven miles across.

Campi Flegrei is thought to have formed hundreds of thousands of years ago. A massive eruption 200,000 years ago spewed so much ash that it darkened the skies around the planet, triggering a “volcanic winter.” That event is thought to have been the largest volcanic episode in the history of Europe over that time. The volcano erupted again 35,000 and 12,000 years ago. An eruption about 40,000 years ago might have contributed to the extinction of the Neanderthals, a 2010 study suggested, although that report has been debated. The volcanic area was also known by the ancient Greeks.

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14 per day, every single day. Before you know it, you’re talking real loss of life.

Mediterranean Death Toll Is Record 5,000 Refugees, Migrants This Year (R.)

A record 5,000 migrants are believed to have drowned in the Mediterranean Sea this year, following two shipwrecks on Thursday in which some 100 people, mainly West Africans, were feared dead, aid agencies said on Friday. Two overcrowded inflatable dinghies capsized in the Strait of Sicily after leaving Libya for Italy, the International Organization for Migration (IOM) and the U.N. refugee agency UNHCR said. “Those two incidents together appear to be the numbers that would bring this year’s total up to over to 5,000 (deaths), which is a new high that we have reported during this crisis,” IOM spokesman Joel Millman told a Geneva briefing. The Italian coast guard rescued survivors and had recovered eight bodies so far, he said. IOM staff were interviewing survivors brought to Trapani, Italy, he added.

Just under 3,800 migrants perished at sea during all of 2015, according to IOM figures. UNHCR spokesman William Spindler said the “alarming increase” in deaths this year appeared to be related to bad weather, the declining quality of vessels used by smugglers, and their tactics to avoid detection. “These (reasons also) include sending large numbers of embarkations simultaneously, which makes the work of rescuers more difficult,” he said. The UNHCR appealed to states to open up more legal pathways for admitting refugees. Resettlement programmes, private sponsorship, family reunification and student scholarships would help “so they do not have to resort to dangerous journeys and the use of smugglers”, Spindler said.

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