Jul 092019
 
 July 9, 2019  Posted by at 8:45 am Finance Tagged with: , , , , , , , , , , ,  


Pablo Picasso Guernica [Study] III 1937

 

Carnage At Deutsche Bank (Coppola)
Gold Is At A Historical Low (Von Greyerz)
Trump Hits Out At May After Leak Of Damning Cables (AFP)
Barr Talks 2020 Citizenship Question, Recuses Self From Epstein Case (ZH)
I Hear That Train a’Comin’ (Kunstler)
How Syriza Let The Greek Right Escape The Dustbin Of History (Varoufakis)
Hong Kong Leader Carrie Lam: Extradition Bill ‘Is Dead’ (CNBC)
Almost Half Of Brits Are Stockpiling Food, Medicine And Clothes (BI)
Russia Prepares S-400 Systems For Delivery To Turkey (AP)
Russia-Gate Blossoms Into Deep-State-Gate (McGovern)
Russia’s RT and Sputnik Barred From UK Conference On Media Freedom (G.)
Juror Urges US Judge To Uphold $80 Million Roundup Verdict Against Bayer (R.)

 

 

No, we’re not going to feel sorry for bankers.

Carnage At Deutsche Bank (Coppola)

The outlook for many of the terminated staff is grim, particularly in the U.K. where Brexit uncertainty is casting a considerable shadow. Not that anyone outside the finance industry cares, much. The British haven’t forgotten the financial crisis of 2008. The business that Deutsche Bank is closing down is bigger than Nissan’s automobile manufacturing plant in Sunderland, the uncertain future of which has hit headlines and led to questions in the U.K. Parliament. But no-one is going to lose any sleep over unemployed investment bankers – even if there are more of them than there are workers at the Sunderland plant. The silence from British politicians about the prospect of up to 8,000 British workers losing their jobs is deafening.

But the woes of terminated staff don’t concern Deutsche Bank’s Chief Executive, Christian Sewing. He has a bank to rescue, and investors to placate. His letter to staff had a distinctly ruthless tone: “I am very much aware that in rebuilding our bank, we are making deep cuts. I personally greatly regret the impact this will have on some of you. In the long-term interests of our bank, however, we have no choice other than to approach this transformation decisively.” “I weep for you, I really do…” while dishing out the redundancy notices. Sewing has all the personnel skills of a crocodile.

Just how little concern Sewing has for the feelings of the staff he is letting go became apparent at 9.30 am London time. While hundreds of staff in the London office were being sacked, executive management held a conference call – from the London office. During that call, the Chief Executive, Christian Sewing, announced that the bank still plans to maintain a large presence in London. In fact it is intending to move into shiny new offices on Moorgate. It is not hard to imagine how the sacked staff felt about this. It amounted to rubbing their noses in it.

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“..the peak price for gold in 1980 at $850, today would be $18,160 adjusted for inflation.”

Gold Is At A Historical Low (Von Greyerz)

[..] when we entered our physical gold investment in 2002, I had certainly been “sitting” for a very long time. Gold started the current bull market in 1971 at $35, made a temporary top in 1980 at $850 and then spent 20 years correcting. But the gold bull certainly hadn’t finished, central banks saw to that. They continued their irresponsible monetary policy, leading to a chronic credit expansion, debasement of currencies and thereby permanently underwriting the gold price. Looking at gold on an inflation adjusted basis, 2000 was the lowest point since 1971 when the price was $35 per ounce (based on Shadow Government Statistics inflation calculation).


The gold chart below, adjusted for real inflation, shows this amazing insurance can be bought today at an all-time historical low. Gold priced currently at $1,400 is cheaper than in 2000 at $280, cheaper than in 1970 when gold was $35 or in 1780 when gold was traded in London at £4 per ounce. What the chart also shows is that the peak price for gold in 1980 at $850, today would be $18,160 adjusted for inflation. There is no reason why gold wouldn’t reach that level in the next few years, especially as the gold paper market implodes.

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Which government is more inept?

Trump Hits Out At May After Leak Of Damning Cables (AFP)

Donald Trump launched an extraordinary attack Monday on outgoing British premier Theresa May, following the leak of diplomatic cables highly critical of his presidency. London has been scrambling to stem the damage caused by the weekend release of confidential telegrams in which its envoy to Washington, Kim Darroch, described the US leader as “inept” and his White House as “uniquely dysfunctional.” Visibly angered by May’s continuing support for her ambassador — which Downing Street reiterated on Monday — Trump assailed the prime minister over her handling of fraught Brexit negotiations, and welcomed her impending departure from office.


“What a mess she and her representatives have created,” Trump fumed in a series of tweets. “I told her how it should be done, but she decided to go another way.” “The good news for the wonderful United Kingdom is that they will soon have a new Prime Minister,” he wrote. As for London’s man in Washington, Trump declared he would have no further contact with him. “I do not know the Ambassador, but he is not liked or well thought of within the U.S,” the president said, doubling down on weekend comments claiming his administration were “not big fans” of Darroch. “We will no longer deal with him,” Trump vowed. But even after Trump’s remarks, a government spokesman said that “Sir Kim Darroch continues to have the prime minister’s full support.”

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“..he used to work for one of the law firms representing Epstein “long ago..”

Nothing else about Epstein for now, but I find the reports interesting about no-one knowing where his money comes from. Financiers leave traces of their work, he did not.

Barr Talks 2020 Citizenship Question, Recuses Self From Epstein Case (ZH)

Attorney General William Barr said on Monday that the Trump administration can legally add a citizenship question to the 2020 census, which had been excluded for the first time in US history by President Obama. Barr told the Associated Press that he has been in regular contact with President Trump over the matter. “I agree with him that the Supreme Court decision was wrong,” said Barr – referring to the USSC’s June Decision to block the citizenship question, adding that there is “an opportunity potentially to cure the lack of clarity that was the problem and we might as well take a shot at doing that.” According to the report, President Trump is likely to issue a presidential memorandum to the Commerce Department over the next several days ordering it to include the citizenship question.

Last week the Justice Department appeared to cave to legal pressure to keep the question off the census, only for President Trump to reverse course the next day – tweeting that the efforts to print the question would move forward. “The tweet this morning was the first I had heard of the president’s position on this issue, just like the plaintiffs and Your Honor. I do not have a deeper understanding of what that means at this juncture other than what the president has tweeted,” DOJ attorney Joshua Gardner told a federal judge during a Wednesday teleconference, adding “But obviously, as you can imagine, I am doing my absolute best to figure out what’s going on.” The DOJ on Sunday also announced that it would be replacing its entire legal team dealing with the citizenship issue – replacing them with other government attorneys.

On Monday, Barr told reporters that he had recused himself from the case involving billionaire pedophile Jeffrey Epstein, who was arrested over the weekend on charges of sex-trafficking minors, according to the Washington Times. Barr says that he used to work for one of the law firms representing Epstein “long ago,” though he did not name the firm.

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Didn’t Jim used to be a Democrat?

I Hear That Train a’Comin’ (Kunstler)

The Republican Party is a train of booby-trapped freight cars that can blow at any time. The engine is running on the fumes of the financialized economy. The engineer, Mr. Trump, only has his eye on the gauge that represents the stock market, which produces the gaseous emanations running his train. But the tank cars are leaking. The vapors are highly flammable. Any little spark can set it off, and surely will.

The Democratic Party is carrying seventeen gondola cars of the worst political scandal in US history: RussiaGate, the attempted coup d’état by national gaslighting, which will expose dozens of party officers and foot-soldiers in an actual criminal conspiracy, and subject them to ignominious prosecution in the heart of the election year. The damage could run as high as former President Obama when all is said and done, with Mrs. Clinton dragged under the wheels in the ensuing train wreck. It will be ugly and embarrassing to the max.

The Dem’s train also includes the circus cars of its identity politics hustlers, Reps AOC, Ilhan Omar, Rashida Tlaib, and Ayanna Pressley plus the sideshow of so-far-suppressed Joe Biden scandals concerning massive cash payoffs from Ukraine and China to his entrepreneurial son, Hunter — conveniently arranged during his Dad’s official trips to those places as Vice-president. There is reason to believe that a majority of voters are good and goddam sick of identity hustling and the tiresome racket of political correctness that spawned it. They see its bottomless appetite for grievance and complaint — against a reality in which life is difficult for everybody, not just self-proclaimed victims of oppression.

They smell the odor of bad faith in the party’s campaign for an open border with Mexico and its abject refusal to legislate immigration law reform — while grandstanding about the alleged mistreatment of people who cross the border illegally. Most of all, they are sick of the endless moral instruction and coercion, especially over “gender” issues and sexual boundary-stretching, the parades of freaks in dog masks, ball gags, and S & M get-ups, not to mention the utter insanity of the drag queen story hour, in which men perform as monstrous caricatures of women for impressionable six-year-olds. That is what it’s come to for the party of Franklin Roosevelt and Jack Kennedy.

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“..on one side, apparatchiks connected to vulture funds and failed banks and, on the other, ultra-nationalist former fascists.”

How Syriza Let The Greek Right Escape The Dustbin Of History (Varoufakis)

The Greek right is back: greedier, uglier and more focused than ever. The incoming New Democracy government is determined to reclaim full control of the state on behalf of the most parasitic segment of Greece’s oligarchy and, of course, of our country’s ruthless creditors. Kyriakos Mitsotakis, the new prime minister, is a scion of one of the dynasties responsible for Greece’s perpetual bankruptcy, corruption and subservience to the Atlanticist oligarchy-without-borders. Tellingly, he has surrounded himself with, on one side, apparatchiks connected to vulture funds and failed banks and, on the other, ultra-nationalist former fascists.

Together, Mr Mitsotakis’ motley reactionaries plan to unleash a fresh class war against a people who have already lost almost everything, against minorities, against our environment, against common decency. How did this happen? Four short years ago, Greek voters gave Syriza, the party of the radical left, a mandate to unseat the oligarchs and confine New Democracy to its rightful place — the dustbin of history. On 25 January 2015, caught up in the moment’s excitement, I quoted from Dylan Thomas to convey a message of hope to progressives across the globe: “Greek democracy,” I wrote, “today chose to stop going gently into the night. Greek democracy resolved to rage against the dying of the light.”

So, what went wrong? What was it that allowed the restoration of an authoritarian, incompetent regime that wrecked Greece before turning it into a harsh debtor’s prison from which emigration was, and remains, the only escape? When did my fellow Greeks stop raging against the long night of our debt bondage? The answer is: the night of Sunday 5 July 2015.

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But she won’t withdraw it.

Hong Kong Leader Carrie Lam: Extradition Bill ‘Is Dead’ (CNBC)

Hong Kong leader Carrie Lam said Tuesday that the controversial extradition bill that has led to mass protests in the city is “dead.” Addressing the weeks-long drama during a news conference, she reiterated that there is no plan to restart the legislation. She described the work to amend the bill as a “total failure.” Lam, meanwhile, said she took full responsibility for what has happened in the city, according to a translation of her address. Political tensions in Hong Kong have risen in recent weeks amid protests over an extradition bill that would have allowed some arrested in the city to be sent for trial in mainland China.


The bill had been suspended after a first round of demonstrations, but protesters continued taking to the street with calls for it to be withdrawn completely. “I have almost immediately put a stop to the (bill) amendment exercise, but there are still lingering doubts about the government’s sincerity, or worries whether the government will restart the process in the legislative council, so I reiterate here: There is no such plan, the bill is dead.” Notably, Lam did not say that she is officially withdrawing the bill, raising questions about to what extent the measure could be revived in the future.

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Halloween is less than 4 months away.

Almost Half Of Brits Are Stockpiling Food, Medicine And Clothes (BI)

Four out of ten Brits are stockpiling items including food, medicine and clothes in preparation for the growing prospect of the United Kingdom leaving the European Union without a Brexit deal later this year. 40% of people in the UK have started stockpiling goods in fear that there will be shortages in a no-deal Brexit scenario, according to research into consumer behaviour carried out by intelligence company, Blis. The most commonly stockpiled item is food. 56% of those Brits who are stockpiling are doing so with food items. 44% are building up supplies of household items, and well over a third (37%) are doing so with medicine. The public is even stockpiling clothing. Over a quarter of Brits (28%) have bought extra clothes and shoes to prepare for shortages and higher prices in aftermath of the UK leaving the EU without a deal on October 31.


Both candidates to replace Theresa May as prime minister, Boris Johnson and Jeremy Hunt, have promised to take the UK out of the EU this year, with or without a deal, with Johnson insisting that leaving on October 31 is “do or die.” The revelation that nearly half of British people are stockpiling goods like food and medicine in their own homes comes as British businesses ramp up preparations for a possible no-deal Brexit on October 31. Business Insider reported earlier this year that there was an even greater risk of supermarket shelves going empty due to shortages in October, than there was in the run-up to the original Brexit deadline in March. That’s because most of the warehouse space that companies used to stockpile goods in the run-up to March is not available in October, as it’s already booked up for the busy Christmas period when demand for goods rockets.

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How big will this blow up?

Russia Prepares S-400 Systems For Delivery To Turkey (AP)

Turkish President Recep Tayyip Erdogan has said Russia’s S-400 air defense missiles are currently being prepared to be flown to Turkey. Speaking to reporters before leaving for Bosnia on Monday, Erdogan wouldn’t say, however, when the Russian missile defense system would reach Turkey or where they will be deployed. The delivery of the systems could bring Turkey closer to US sanctions. US officials have warned that Turkey would face economic sanctions as well as being expelled from a program to produce the F-35 fighter jets. Turkey has refused to pull back from the deal. Erdogan said: “The preparations for the journey, the loading [of the S-400] is continuing … The S-400 will arrive by planes. May it be beneficial for our country, our region and especially for the world.”

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“And sure enough, now, three months later, where are the criminal referrals?”

Russia-Gate Blossoms Into Deep-State-Gate (McGovern)

That the Deep State retains formidable power can be seen in the repeated Lucy-holding-then-withdrawing-the-football-for-Charlie Brown treatment experienced by House Intelligence Committee Ranking Member, Devin Nunes (R-CA). On April 5, 2019, in the apparent belief he had a green light to go on the offensive, Nunes wrote that committee Republicans “will soon be submitting criminal referrals on numerous individuals involved … in the abuse of intelligence for political purposes. These people must be held to account to prevent similar abuses from occurring in the future.”

On April 7, Nunes was even more specific, telling Fox News that he was preparing to send eight criminal referrals to the Department of Justice “this week,” concerning alleged misconduct during the Trump-Russia investigation, including leaks of “highly classified material” and conspiracies to lie to Congress and the FISA court. It seemed to be no-holds-barred for Nunes, who had begun to talk publicly about prison time for those who might be brought to trial. Except for Fox, the corporate media ignored Nunes’s explosive comments. The media seemed smugly convinced that Nunes’s talk of “referrals” could be safely ignored — even though a new sheriff, Barr, had come to town. And sure enough, now, three months later, where are the criminal referrals?

There is ample evidence that President Trump is afraid to run afoul of the Deep State functionaries he inherited. And the Deep State almost always wins. But if Attorney General Barr leans hard on the president to unfetter Nunes, IG Horowitz, Durham and like-minded investigators, all hell may break lose, because the evidence against those who took serious liberties with the law is staring them all in the face.

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Clowns.

Russia’s RT and Sputnik Barred From UK Conference On Media Freedom (G.)

Russia’s RT and Sputnik news organisations have been banned by the Foreign Office from attending a global conference on media freedom in London because of their “active role in spreading disinformation”. Some 60 ministers and 1,000 journalists and members of civil society are expected to attend the meeting, co-hosted with Canada, on Wednesday and Thursday. “We have not accredited RT or Sputnik because of their active role in spreading disinformation,” a Foreign Office spokeswoman said. “While it’s not possible to accommodate all requests for accreditation, journalists from across the world’s media are attending the conference, including from Russia.”


The Russian embassy previously condemned the decision relating to RT as “direct politically motivated discrimination” and said it had complained to the Foreign Office. In a statement on Friday, it said RT had been told there was no space for its journalists at the conference. After the Foreign Office comments on Monday, RT said in a statement: “It takes a particular brand of hypocrisy to advocate for freedom of press while banning inconvenient voices and slandering alternative media.” In December, British media regulator Ofcom found that RT had broken impartiality rules with several programmes broadcast after the nerve agent attack in the English city of Salisbury. Moscow has denied claims by London that it approved the attack on a former Russian double agent in March last year.

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Interesting legal arguments. Juror tells judge what the law actually says. And Monsanto getting personal about jurors.

Juror Urges US Judge To Uphold $80 Million Roundup Verdict Against Bayer (R.)

A juror who was part of a panel that delivered an $80 million award against Bayer AG after finding that its glyphosate-based weed killer Roundup caused a man’s cancer has urged the presiding judge to uphold the decision. A letter from the juror written on July 4 was posted to the court docket on Monday as part of legal filings by Bayer. The company accused the juror of bias and called on the judge to disregard the letter in his decision making. In the letter, the unidentified juror told U.S. District Judge Vince Chhabria in San Francisco that the $80 million in awards “were no accident” and the result of “meticulous planning” by the jury.


The letter was a response to statements by Chhabria during a court hearing last week, when the judge said he would have to reduce the $75 million punitive damages portion of the award on constitutional grounds. Following a four-week trial, a federal jury on March 27 awarded $5 million in compensatory and $75 million in punitive damages to Edwin Hardeman, who was diagnosed with non-Hodgkin’s lymphoma in 2014. U.S. Supreme Court rulings limit the ratio of punitive to compensatory damages to 9 to 1, which in this case would put the maximum for punitive damages at $45 million. In the letter, the juror said higher damages ratios were allowed in extraordinary cases, echoing arguments Hardeman’s lawyers made during Tuesday’s hearing, when they urged Chhabria to affirm the total award.

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Jun 262019
 
 June 26, 2019  Posted by at 9:46 am Finance Tagged with: , , , , , , , , , , , ,  


Pablo Picasso The muse 1935

 

Iran Says It Will Never Pursue A Nuclear Weapon (ZH)
Iran Foreign Minister Accuses Bolton Of Plotting For War (R.)
NATO Calls On Russia To Destroy New Missile, Warns Of Response (R.)
Mueller To Testify Before Two House Committees July 17 (AFP)
A. Gary Shilling Says The US Is Already In A Recession
Housing Market Slump Could Drive Global Growth To A Decade Low (MW)
Merrill Lynch Caught Criminally Manipulating Precious Metals Market (ZH)
Apple Doubles Down On Buybacks (Axios)
Italy’s Gold Now Belongs To The ECB (ZH)
Investors With $34 Trillion Demand Urgent Climate Change Action (R.)

 

 

“How many people have you killed with a nuclear weapon? How many generations have you wiped out with these weapons?”

Iran Says It Will Never Pursue A Nuclear Weapon (ZH)

Following Iran’s statement that diplomacy with the United States is “closed forever” after Washington sanctioned the Supreme Leader and other key officials, including on the foreign minister himself – making it practically hard to actually “do” diplomacy given sanctions also have the impact of restricting travel for the nation’s top diplomat – FM Javad Zarif slammed America’s track record with nukes. “You were really worried about 150 people? How many people have you killed with a nuclear weapon? How many generations have you wiped out with these weapons?” Zarif said Tuesday in reference to Trump’s calculus that he refrained from ordering last Thursday night’s readied military strike against Iran when informed 150 people would die.


“It is us who, because of our religious views, will never pursue a nuclear weapon,” Zarif added. Indeed it’s been long understood that since Iran’s Islamic revolution the Ayatollahs have been consistently against nuclear weapons on moral grounds, citing Koranic principles. The US remains the only country in the world to have ever deployed nuclear weapons in a wartime situation, dropping two on Japan at the end of WWII. Though scholars generally agree that the overwhelming destruction on Hiroshima and Nagasaki made counting impossible, conservative estimates tend to be at over 200,000 dead and wounded total wrought by the twin atom bombs dropped over those cities. And of course, the overwhelming majority of the Japanese dead and wounded were civilians.

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How dare he.

Iran Foreign Minister Accuses Bolton Of Plotting For War (R.)

Iran’s Foreign Minister Mohammad Javad Zarif accused U.S. National Security Adviser John Bolton of plotting for war against Iran in a tweet on Tuesday. “Wanna know why those with proven record of detesting diplomacy are suddenly interested in talks? Just read @AmbJohnBolton’s 2017 recipe for destroying the #JCPOA,” Zarif wrote, adding a link to a 2017 article written by Bolton in the National Review. The Joint Comprehensive Plan of Action, or JCPOA, is the landmark 2015 nuclear deal Iran signed with world powers. “Iran never left the negotiation table. #B_Team dragged the U.S. out, while plotting for war,” Zarif added. Zarif has in the past said that a “B-team” including Bolton, an ardent Iran hawk, and Israeli Prime Minister Benjamin Netanyahu, could goad Trump into a conflict with Tehran.

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An excuse for more rockets on Russia’s border.

NATO Calls On Russia To Destroy New Missile, Warns Of Response (R.)

NATO urged Russia on Tuesday to destroy a new missile before an August deadline and save a treaty that keeps land-based nuclear warheads out of Europe or face a more determined alliance response in the region. NATO defense ministers will discuss on Wednesday their next steps if Moscow keeps the missile system that the United States says would allow short-notice nuclear attacks on Europe and break the 1987 Intermediate-range Nuclear Forces Treaty (INF). “We call on Russia to take the responsible path, but we have seen no indication that Russia intends to do so,” Secretary-General Jens Stoltenberg told a news conference. “We will need to respond,” Stoltenberg said.


He declined to go into more details. But diplomats said defense ministers will consider more flights over Europe by U.S. warplanes capable of carrying nuclear warheads, more military training and the repositioning U.S. sea-based missiles. The United States and its NATO allies want Russia to destroy its 9M729/SSC-8 nuclear-capable cruise missile system, which Moscow has so far refused to do. It denies any violations of the INF treaty, accusing Washington of seeking an arms race. Without a deal, the United States has said it will withdraw from the INF treaty on Aug. 2, removing constraints on its own ability to develop nuclear-capable, medium-range missiles.

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Brought to you by the Trump 2020 re-election committee.

Mueller To Testify Before Two House Committees July 17 (AFP)

Former US special counsel Robert Mueller is to testify in public about his report into Russian electoral interference, paving the way for a historic television moment in which Democrats will attempt to make the case for President Donald Trump’s impeachment before the American people. The scrupulously tight-lipped Mueller will appear at back-to-back hearings on July 17 of the House Judiciary and Intelligence Committees, which announced Tuesday that the prosecutor had agreed to abide by subpoenas for his testimony. “Russia attacked our democracy to help Trump win. Trump welcomed and used that help,” House Intelligence Committee chairman Adam Schiff said on Twitter.


“As Mueller said, that should concern every American. And now, every American will get to hear directly from Mueller.” Trump’s apparent response to the announcement came swiftly in a two-word tweet in which he complained, without referring to Mueller, of “Presidential Harassment!” The Mueller report released in April outlined numerous contacts between Trump’s 2016 election campaign and government-linked Russians, as well as evidence that the president tried on several occasions to stymie the investigation. The Democrats have been split on whether to launch impeachment proceedings against the Republican president but — fearing that much of the country is unaware of the Mueller report’s contents — have been asking major figures in the probe to testify in public on its findings.

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He says it will be mild.

A. Gary Shilling Says The US Is Already In A Recession

Gary Shilling, an economist and financial analyst who is credited with predicting several recessions over the past 40 years, thinks the U.S. is in a relatively mild slump. “I think we’re probably already in a recession but I think it will probably be a run-of-the-mill affair, which means real GDP would decline 1.5% to 2%, not the 3.5% to 4% you had in the very serious recessions,” Shilling, president of economic and financial research firm A. Shilling & Co., said in a recent interview broadcast this week by Real Vision. In such a tempered slide, he says, “Stocks probably wouldn’t fall” but if they did, they likely would tumble about 22% — similar to other recent recessions. That, he says, would take the Standard and Poor’s 500 index about 200 points below it’s Christmas Eve nadir of 2,351.


His view is at odds with the vast majority of economists who expect the economy to grow a solid 2% to 2.5% this year after expanding at about a 3% clip last year and in the first quarter. Shilling points to: • Declining industrial production, a result of a weak global economy and the Trump administration’s trade war with China. • Feeble job growth of 75,000 in May, along with downward revisions to prior months. • The Federal Reserve Bank of New York’s recession probability chart, which shows about a 30% chance of a downturn the next 12 months, up from about 10% early this year. That data is based on an inversion of the yield curve, which has shown rates on 3-month Treasury bonds topping 10-year notes recently – a sign that investors don’t have much faith in the longer-term outlook. Inversions do herald recessions but often two years in advance.

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China: $6.8 trillion in household debt, a 70% rise in personal debt from just three years ago.

Housing Market Slump Could Drive Global Growth To A Decade Low (MW)

The global housing market is showing cracks. Those fissures could spread throughout the world-wide economy, potentially sending world-wide gross domestic product, or GDP, to its lowest annual pace of in 10 years, according to research from Oxford Economics, led by economists Adam Slater, and John Payne in a research report dated June 24. “A combined slump in house prices and housing investment in the major economies could cut world growth to a 10-year low of 2.2% by 2020 – and to below 2% if it also triggered a tightening in global credit conditions.” the Oxford Economics researchers wrote.

A decade since the 2008-09 U.S. housing bubble imploded, sparking a global financial crisis, worries about the health of the global housing market persist. An Oxford Economics’ proprietary gauge of housing conditions in the globe shows that home prices have declined by 10% and investments in houses have shrunk by 8%. Housing prices across the globe have come in to focus as a protracted tariff squabble between the U.S. and China ripples throughout the global economy, compelling a number of central bankers to entertain the idea of lowering benchmark borrowing costs in an effort to stimulate, or just maintain, economic expansion.

The Federal Reserve last Wednesday signaled a willingness to lower federal-funds rates, currently at 2.25%-2.50%, if financial conditions worsen. In China, a decade long housing boom has sent home values to the lofty levels, with buying in the region underpinned by some $6.8 trillion in household debt, according to the Bank for International Settlements, a 70% rise in personal debt from just three years ago, with much of that tied to residential mortgages. Oxford Economics says data show that residential investment in China is slowing as are starts for new construction also ebb

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Nopbody goes to jail, nobody even pays a fine. A broken system indeed.

Merrill Lynch Caught Criminally Manipulating Precious Metals Market (ZH)

On Tuesday after the close, the CFTC announced that Merrill Lynch Commodities (MLCI), a global commodities trading business, agreed to pay $25 million to resolve the government’s investigation into a multi-year scheme by MLCI precious metals traders to mislead the market for precious metals futures contracts traded on the COMEX (Commodity Exchange Inc.). The announcement was made by Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office. In other words, if the Merrill Lynch Commodities group was an individual, he would have gotten ye olde perp walk.

As MLCI itself admitted, beginning in 2008 and continuing through 2014, precious metals traders employed by MLCI schemed to deceive other market participants by injecting materially false and misleading information into the precious metals futures market. They did so in the now traditional market manipulation way – by placing fraudulent orders for precious metals futures contracts that, at the time the traders placed the orders, they intended to cancel before execution. In doing so, the traders intended to “spoof” or manipulate the market by creating the false impression of increased supply or demand and, in turn, to fraudulently induce other market participants to buy and to sell futures contracts at quantities, prices and times that they otherwise likely would not have done so.

Over the relevant period, the traders placed thousands of fraudulent orders. Of course, since we are talking about a bank, and since banks are in charge of not only the DOJ, and virtually every other branch of government, not to mention the Fed, nobody will go to jail and MLCI entered into a non-prosecution agreement and agreed to pay a combined – and measly – $25 million in criminal fines, restitution and forfeiture of trading profits.

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Stock manipulation

Apple Doubles Down On Buybacks (Axios)

Apple again led S&P 500 companies in buybacks, spending a new record $23.8 billion in Q1, more than doubling its spend from the previous quarter, data from S&P Global shows. Apple has long been a buyback behemoth. The company holds 8 of the 10 all-time records for quarterly buybacks, and has spent more than $75 billion on buybacks over just the past year. It has spent $234.7 billion over the most recent 5-year period, and $284.3 billion over the last 10-year period. Apple accounted for 23% of share buybacks made by the top 20 S&P 500 companies. The big picture: While Apple has increased its buyback spending, other S&P 500 companies have slowed from 2018’s record pace.


Companies bought back just $205.8 billion worth of their own shares, a 7.7% decline from Q4 2018, S&P reported. That ended the streak of 4 consecutive quarters of record buybacks. Yes, but: Buybacks rose 8.9% from Q1 2018, which set a record at the time. Outside analysis of the broader stock market, beyond just the S&P, shows announced buyback spending was higher in Q1 2019 than Q4 2018. Ratings agency Moody’s warned last month that companies are spending more on share buybacks and dividends than they were paying in taxes before the 2017 tax cut. The tax savings “can be wiped out entirely by even a modest change in share buybacks,” Christina Padgett, senior vice president at Moody’s, told Axios at the time.

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Italy has quite a lot of it.

Italy’s Gold Now Belongs To The ECB (ZH)

As the squabbling over Italy’s populist government’s plans to blow out its budget deficit to finance an agenda of tax cuts and social spending (including a ‘citizen’s income’ that’s essentially UBI-lite) crowded the headlines, the issue of who owns the 2,451 metric tons of gold reserves held by the Bank of Italy has been quietly ignored – at least, outside of Italy. But that might be about to change. On Tuesday, the ECB asked the League, the dominant party in Italy’s ruling coalition, to remove a reference to the Bank of Italy holding gold as an “exclusive title of deposit” according to Bloomberg. Translation? If Italy is not allowed to have title to Italian gold, then Italy’s gold now belongs to the ECB.

Today’s escalation over Italy’s gold “title” comes two months after the WSJ reported that Italy’s ruling populists pushed ahead with efforts to seize control of the central bank and its gold reserves. Complaining that hundreds of thousands of small individual investors lost billions of dollars after several Italian banks failed in recent years, the current Italian government depicted the central bank as a symbol of a technocratic elite aloof from the needs of ordinary Italians. “We need a change of course at the Bank of Italy if we think about what happened in the last years,” said Deputy Prime Minister Luigi Di Maio, leader of the 5 Star Movement. Shortly thereafter, 5 Star lawmakers asked parliament to pass two draft laws.

One law would instruct the central bank’s owners, most of them private banks , to sell their shares to the Italian Treasury at prices from the 1930s.The other law would declare the Italian people to be the owners of the Bank of Italy’s reserve of 2451.8 metric tons of gold, worth around $102 billion at current prices. “The gold belongs to the Italians, not to the bankers,” said Giorgia Meloni, leader of the Brothers of Italy, a far-right opposition party that supports both bills. “We are ready to battle everywhere in Italy and to bring Italians to the streets if necessary.” So far there has been no fighting but if indeed Draghi just told Italy that its gold now belongs to the Frankfurt-based central bank we expect that to change..

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So how much are they willing to pay?

Investors With $34 Trillion Demand Urgent Climate Change Action (R.)

Investors managing more than $34 trillion in assets, nearly half the world’s invested capital, are demanding urgent action from governments on climate change, piling pressure on leaders of the world’s 20 biggest economies meeting this week. In an open letter to the “governments of the world” seen by Reuters, groups representing 477 investors stressed “the urgency of decisive action” on climate change to achieve the Paris Agreement target. Almost 200 nations agreed in Paris in 2015 to limit the global average temperature rise to well below 2 degrees Celsius above pre-industrial times. Current policies put the world on track for at least a 3C rise by the end of the century.


The letter comes ahead of a June 28-29 G20 summit in Japan and as United Nations Secretary-General Antonio Guterres urges countries to back more ambitious climate goals. “There is an ambition gap… This ambition gap is of great concern to investors and needs to be addressed, with urgency,” a statement from the investors accompanying the letter said. Governments were urged to strengthen their Paris Agreement targets by 2020; phase out thermal coal power and fossil fuel subsidies by set deadlines; set a robust global carbon price by 2020 and improve climate-related financial reporting. “It is vital for our long-term planning and asset allocation decisions that governments work closely with investors to incorporate Paris-aligned climate scenarios into their policy frameworks and energy transition pathways,” the statement said.

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Arundhati Roy:

 

 

 

 

 

Apr 082019
 


Pablo Picasso Young girl throwing a rock 1931

 

British Voters Say Give Us A Strong Leader Willing To Break The Rules (R.)
May Faces Intense Cabinet Pressure Over Prospect Of Lengthy Brexit Delay (G.)
Labour Jewish Members Declare Party’s Leadership ‘Antisemitic’ (Ind.)
Sorry Is The Easiest Word – But Should Democrats Stop Their Apology Tour? (G.)
Mulvaney Says Democrats Will ‘Never’ See Trump Tax Returns (AFP)
US Urges Immediate Halt To Military Operations In Libya (R.)
Gold Is Moving Back Into The Center Of The Financial System – Rubino (USAW)
Facebook Are ‘Morally Bankrupt Liars’ – New Zealand Privacy Commissioner (G.)
Chelsea Manning’s ‘Don’t Tread on Me’ Moment (Kiriakou)
Midwest Floods Hammer US Ethanol Industry (R.)
Greek Pensioners Have Become The Biggest Single Group Of Taxpayers (K.)
Pain-Care Specialist Agrees To Testify Against Purdue (R.)
Drinks Bottles Now Biggest Plastic Menace For Waterways (G.)

 

 

History rhymes.

British Voters Say Give Us A Strong Leader Willing To Break The Rules (R.)

British voters want a strong leader who is willing to break the rules and force through wide scale reform after three years of Brexit crisis pushed confidence in the political system to a 15-year low. The 2016 referendum revealed a United Kingdom divided over much more than EU membership, and has sparked impassioned debate about everything from secession and immigration to capitalism, empire and what it means to be British. Yet more than a week since the United Kingdom was originally supposed to leave the EU on March 29, nothing is resolved: it remains uncertain how, when or if it ever will.


Research by the Hansard Society found that 54 percent of voters want a strong leader who is willing to break the rules while 72 percent said the system needs “quite a lot” or “a great deal” of improvement. Confidence in the system at the lowest level in the 15-year history of the survey, lower even than after the 2009 expense scandal when lawmakers were shown to have charged taxpayers for everything from an ornamental duck house to cleaning out a moat. [..] “People are pessimistic about the country’s problems and their possible solution, with sizeable numbers willing to entertain radical political changes.” Just a quarter of people had confidence in lawmakers’ handling of Brexit.

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They had people vote for something, and then spent 3 years haggling over what that something was. At the very least that’s the wrong way around.

May Faces Intense Cabinet Pressure Over Prospect Of Lengthy Brexit Delay (G.)

Theresa May is facing intense cabinet pressure to avoid the prospect of a long Brexit delay, amid increasing expectations that last ditch cross-party talks on a compromise departure plan will not produce anything concrete. Before a crucial EU summit later this week, the prime minister is facing a fast-diminishing range of options that could split the Conservative party and prompt a mass cabinet walkout, or could result in the UK crashing out of the EU without a deal on Friday. May’s only response on Sunday was a homespun video that called for a compromise solution, but while praised for its conversational style, it lacked any fresh detail on proposals to break the Brexit impasse.

With Labour reiterating it had yet to learn even the basics of concessions May might offer after her dramatic call last week for consensus, the timetable looked tight to agree anything before the European council gathering on Wednesday evening. Under the terms of the previous brief extension agreed with the EU, if Brussels does not agree another delay, a no-deal Brexit will happen on Friday. May has requested a pause until 30 June, but Brussels is keen on a wait of up to a year, which could be broken earlier if a solution is found. On Monday, the EU’s chief Brexit negotiator, Michel Barnier, will hold talks with the Irish Taoiseach, Leo Varadkar.

At the weekend, Varadkar said his own preference was for a longer extension than 30 June. Also on Monday, Jeremy Corbyn is due to hold meetings with Sinn Fein’s leaders in London. The party’s president, Mary Lou McDonald, is expected to tell Corbyn that Irish interests must be protected whatever the outcome of his Brexit negotiations with Theresa May.

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Corbyn talks to May and very predictably this drivel comes out again. Corbyn’s no anti-semite, but he defends Palestinians. That’s why there’s this.

But at the same time, he’s the one who allows this to happen. The Labour Party should be talking about what’s happening to Julian Assange in the heart of London, not be in some nonsense war on alleged anti-semitism.

Labour Jewish Members Declare Party’s Leadership ‘Antisemitic’ (Ind.)

Jewish Labour members have branded the party leadership as antisemitic in a fresh blow to Jeremy Corbyn. The Jewish Labour Movement (JLM) passed the damning motion at its annual general meeting on Sunday, accusing Mr Corbyn of having “condoned antisemitism and antisemites”. The group said the Labour leader was “unfit to be prime minister” and that a government he led “would not be in the interests of British Jews”. JLM is Labour’s only official Jewish affiliate and has been part of the party for almost 100 years. One source at the meeting told The Independent the decision to approve the motion of no confidence in Mr Corbyn was “almost unanimous”.


It reads: “The leadership of the Labour Party have demonstrated that they are antisemitic, and have presided over a culture of antisemitism in which they have failed to use their personal and positional power to tackle antisemitism, and have instead used their influence to protect and defend antisemites. “Jeremy Corbyn is directly responsible, whether through his own actions, where he appears to have condoned antisemitism and antisemites, or through his inaction to tackle the wider problem within the party.” The motion said JLM “has no confidence in Jeremy Corbyn’s ability to understand, respond to or solve the problem” and claimed “his leadership of the Labour Party combined with his past actions and associations shows a complete disregard for the Jewish community in Britain”.

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Why the Democrats are toast: long article on tons of apologies, but not a word about what they really should apologize for: Russiagate.

Sorry Is The Easiest Word – But Should Democrats Stop Their Apology Tour? (G.)

For Joe Biden, it was his discomfiting touching of women. For Pete Buttigieg, his use of the phrase “all lives matter”. For Tulsi Gabbard, her comments about homosexuality. For Kirsten Gillibrand, her positions on immigration. For Kamala Harris, her record on criminal justice. For Beto O’Rourke, his jokes about his wife and children. For Bernie Sanders, his staff perpetrating sexual harassment in the last campaign. For Elizabeth Warren, her claim to Native American ancestry. Democrats running for president in 2020 are on an “apology tour”, seeking to atone for past political sins. Some voters welcome it as an antidote to Donald Trump, an overdue attempt to set the social and political bar higher for the 21st century. Others are anxious that the candidates’ supporters will try to tear each other down with “wokeness” tests that could leave the party hopelessly divided.

[..] In February, comedian Bill Maher urged viewers of his HBO show: “No more swiping left on presidential candidates. Let’s give them a chance. Let’s not eat our own the way we nitpicked Hillary [Clinton] to death over her emails and other bullshit.” Maher added: “Kamala Harris has already had to play defence because it’s come out, when she was a prosecutor, she prosecuted people. Not very progressive. She should have found a way to apply more forgiveness, and the fact that she didn’t is unforgivable. Elizabeth Warren claimed to be Native American – so what? Trump claimed to be human.”

Republicans sense an opportunity to frame Democrats as consumed by identity politics and virtue signalling. Rich Lowry, editor of the National Review, wrote in February: Democrats are about to ≠embark on the first woke primary, a gantlet of political correctness that will routinely wring abject apologies out of candidates and find fault in even the most sure-footed. The passage of time will be no defense. Nor the best of intentions. Nor anything else.

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“If the Democrats want to know “if the IRS is doing its job auditing the president, they could ask the IRS..”

Mulvaney Says Democrats Will ‘Never’ See Trump Tax Returns (AFP)

A formal request from a Democratic committee chairman to see six years of Donald Trump’s tax returns was forcibly rejected Sunday by a top presidential aide, who said Democrats would “never” see the documents. Trump is the first US president since Richard Nixon to refuse to divulge his tax information. Representative Richard Neal, chairman of the House Ways and Means Committee, sparked a contentious battle on Wednesday when he made the request using a little-known provision in the tax code, saying, “It is critical to ensure the accountability of our government and elected officials.” But when Trump’s acting chief of staff, Mick Mulvaney, was asked Sunday whether Democrats would ever see the returns, he was unequivocal. “Never,” he said on “Fox News Sunday.” “Nor should they.”

Mulvaney asserted that since voters knew ahead of the 2016 election that Trump would not reveal his returns and then elected him anyway, the matter was “already litigated.” He said that while there are legal provisions for the Internal Revenue Service to turn tax papers over to the Ways and Means Committee – the chief tax-writing committee in the House – a “political” attack is not a valid reason. Separately, Jay Sekulow, a private attorney for Trump, argued that the Democratic-controlled House was trying to move beyond its constitutionally mandated role of oversight into the realm of law enforcement. If the Democrats want to know “if the IRS is doing its job auditing the president, they could ask the IRS,” he said on ABC’s “This Week.”

“A Ways and Means hearing about IRS enforcement as a way to get to the president’s private individual and business tax returns makes no sense, both constitutionally and statutorily,” Sekulow said. But Dan Kildee, a Democratic member of Ways and Means, took strong exception. “We’re looking very carefully as to whether or not the IRS is properly auditing and enforcing tax law on the president of the United States, and we’re considering legislative changes toward that end,” he said on ABC.

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Thank you, Hillary and Obama.

US Urges Immediate Halt To Military Operations In Libya (R.)

The United States called on Sunday for an immediate halt to military operations in Libya as the Libyan National Army headed by Khalifa Haftar advanced on the capital, Tripoli. Secretary of State Mike Pompeo said in a statement that Washington was “deeply concerned about fighting near Tripoli” and urged talks to end the fighting. “We have made clear that we oppose the military offensive by Khalifa Haftar’s forces and urge the immediate halt to these military operations against the Libyan capital,” Pompeo said in urging de-escalation. Eleven people were killed and 23 wounded in clashes in southern Tripoli, the Health Ministry of the U.N.-backed Libyan government of National Accord said late on Sunday.


The ministry gave no details of whether the casualties were civilians or fighters. Lawless since 2011 when Muammar Gaddafi was toppled by rebels backed by NATO air strikes, Libya has become the transit point for hundreds of thousands of migrants trekking across the Sahara in hopes of crossing the Mediterranean Sea to reach Europe. Haftar, 75, who casts himself as a foe of Islamist extremism but is viewed by opponents as a new dictator in the mold of Gaddafi, enjoys the backing of Egypt and the United Arab Emirates, which see him as a bulwark against Islamists and have supported him militarily, according to U.N. reports.

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“.. in the next recession, we will be taking on huge amounts of new debt at an accelerating rate.”

Gold Is Moving Back Into The Center Of The Financial System – Rubino (USAW)

The end part of this story is how good all this is for gold. . . . The next thing from the Fed will be a rate cut, and it will increase and not decrease its balance sheet. . . . We are going to go preemptively to monetary easing, and that’s really new. This is very, very new. You normally don’t do this. You wait until you see a bear market and a slowdown in the economy that gets people laid off before you start aggressively easing. Apparently, we are going to do that stuff before that stuff starts happening. Who knows what the impact of that will be? If it works the way they want, more people will get hired, wages will pick up and we’ll have inflation in the 4% or 5% range before you know it.”

So, with near record low yields on bonds and near record high prices for stocks, Rubino has just one question. Rubino says, “What’s cheap? Gold and silver. What is down and what is cheap relative to the fundamentals. It’s not just the price of gold and silver, it’s how much gold and silver exists relative to how much paper wealth is in the world. The amount of gold and silver that we are bringing out of the ground is growing at 1% or 2% per year. The amount of paper wealth in the world is growing exponentially. . . .Gold is moving back into the center of the global financial system.”

Another big factor to consider is debt. Rubino says, “Every big country is running deficits that are dramatically bigger than they were five years ago. In the U.S., we are back to $1 trillion a year deficits, which is Obama Administration post Great Recession kind of numbers, and we are doing it 10 years into an expansion. . . . So, in the next recession, we will be taking on huge amounts of new debt at an accelerating rate.

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Now we’re talking.

Facebook Are ‘Morally Bankrupt Liars’ – New Zealand Privacy Commissioner (G.)

New Zealand’s privacy commissioner has lashed out at social media giant Facebook in the wake of the Christchurch attacks, calling the company “morally bankrupt pathological liars”. The commissioner used his personal Twitter page to lambast the social network, which has also drawn the ire of prime minister Jacinda Ardern for hosting a livestream of the attacks that left 50 dead, which was then copied and shared all over the internet. “Facebook cannot be trusted,” wrote Edwards. “They are morally bankrupt pathological liars who enable genocide (Myanmar), facilitate foreign undermining of democratic institutions.


“[They] allow the live streaming of suicides, rapes, and murders, continue to host and publish the mosque attack video, allow advertisers to target ‘Jew haters’ and other hateful market segments, and refuse to accept any responsibility for any content or harm. “They #dontgiveazuck” wrote Edwards. He later deleted the tweets, saying they had prompted “toxic and misinformed traffic”. Edwards was responding to an interview given by Facebook co-founder Mark Zuckerberg to America’s ABC network, in which he failed to commit to any changes to the Facebook live technology, including a time delay on livestreams. Zuckerberg said incidents like the live streaming of the Christchurch mosque attacks were the result of “bad actors”; not bad technology and a time delay would disrupt the enjoyment of users who broadcast events like birthday parties or group hangouts.

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Pete Seeger did in the 1950’s what Chelsea is doing today.

Chelsea Manning’s ‘Don’t Tread on Me’ Moment (Kiriakou)

Contrary to popular belief, President Obama did not pardon Manning in the final days of his administration. Instead, he commuted her sentence, simply releasing her from prison. The conviction still stands and Manning is still in legal jeopardy. Prosecutors could still decide to charge her with crimes related to the original charges. With that said, was Manning’s subpoena a ham-fisted attempt to get her to contradict herself in new testimony, thus inviting another felony charge for perjury or making a false statement? Were prosecutors trying to get Manning to implicate herself in some process felony? Or were they simply trying to force her to turn rat on Julian Assange?

Again, Manning could have simply answered each question with “I don’t recall.” She would have been home in time for dinner. Instead, she made a political point—one that all of us should want to emulate. That point is “Don’t tread on me.” That point is “I’m willing to jeopardize my freedom to protect yours.” I say often that in my time at the CIA, I learned that CIA culture is such that employees are taught that everything in life is a shade of gray. But that is simply not true. Some things are black and white, right or wrong. This is one of those things. It’s the government that’s the enemy here, not Manning or Assange.

Remember, the American people own the information that Manning and Assange are accused of releasing. We have a right to know what our government is doing in our name. We have a right to know whether the government is covering up crimes. We have a right to know when—and why—those Americans who commit war crimes or crimes against humanity are not being prosecuted. The mainstream media doesn’t tell us. But Wikileaks does. We wouldn’t know about some of the most egregious war crimes of the past two decades without Chelsea Manning and Julian Assange. You don’t have to like them. You don’t have to share their politics. You don’t have to want to go out and have a beer with them. But you do have to respect what they’ve done.

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Stupid industry anyway.

Midwest Floods Hammer US Ethanol Industry (R.)

The March floods that punished the U.S. Midwest have roiled the ethanol industry, hammering prices and trapping barrels in the country’s interior while the U.S. coasts suffer from shortages of the biofuel. The historic March floods have dealt a series of blows to large swaths of an ethanol industry that was already struggling with high inventories and sluggish domestic demand growth. And the ethanol shortages are one factor pushing gasoline prices in Los Angeles and Southern California to the highest in the nation and they could top $4 a gallon for the first time since 2014, according to tracking firm GasBuddy.


Benchmark price for ethanol used in most supply contracts initially jumped on news of the floods but has been hobbled by rising waters around the Chicago hub that have halted barges and sales. That stands in contrast to prices on the coasts, which rose dramatically – drawing in heavy imports from Brazil, the main U.S. ethanol competitor. The floods inflicted billions of dollars in damage to crops and homes in the U.S. Midwest, and knocked out roughly 13% of ethanol capacity. U.S. ethanol is made from corn and required by the government to be blended into the nation’s fuel supply to reduce emissions. While some ethanol plants were flooded, the primary effect of the rising waters was to shut rail lines that serve as the main arteries for corn and ethanol deliveries.

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Q: how long can you keep an economy running that has more pensioners than workers?

Greek Pensioners Have Become The Biggest Single Group Of Taxpayers (K.)

Pensioners constitute the biggest single group of taxpayers in Greece, confirming the ominous predictions about the impact of an aging population on growth and state finances. The number of pensioners expanded since the starts of the financial crisis more than any other group, coming to outnumber even salaried workers. The relevant data from the Independent Authority for Public Revenue are impressive, showing that in nine out of the country’s 13 regions, pensioners make up the biggest group of taxpayers, ahead of salaried workers, farmers and freelance professionals. In certain regions both the number of pensioners and their declared incomes are above those of the other groups.

For instance, in the region of Western Greece, pensioners account for 40.1% of taxpayers and 40% of the total declared income. Statistical data processing reveals that since end-2014 the number of pensioners in Greece has shot up by 233,000. Going back to the outbreak of the crisis at the start of the decade, there is an additional 588,360: From 1,667,428 pensioners in 2010 there are now 2,255,788. The active population is therefore declining at a rapid rate: Before the economic crisis broke out, pensioners accounted for 29% of taxpayers, while today their share has climbed to 35.4%. However, the same data also reveal the dramatic shrinking of pensioners’ incomes during the crisis: Back in 2010 their declared annual income amounted to 27 billion euros, as each one of them declared an average 16,228 euros per year; today the yearly declared income of pensioners comes to just 11,175 euros, reduced by 31.13%.

The regional data are quite astonishing in terms of the growing dominance of pensioners among taxpayers: In Attica, by far the country’s most populated region, salaried workers come to 935,955 and pensioners are 804,755. The annual income of pensioners is 10.3 billion euros, according to 2018 figures, while that of salaried workers is 15.2 billion. In Western Greece, the region that includes Patra – Greece’s third city – pensioners dwarf salaried workers, as there are 153,452 of the former against just 111,979 of the latter.

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Well, actually he’s a company shill trying to stay out of jail.

Pain-Care Specialist Agrees To Testify Against Purdue (R.)

A physician ally of Purdue Pharma LP whose views helped drive the explosive growth in the use of addictive pain relievers for common aches and pains in the United States has agreed to testify against the OxyContin maker and other drug companies, newly disclosed court records show. Dr. Russell Portenoy, a professor at the Albert Einstein College of Medicine, was an early advocate for the use of opioids for chronic pain, a position he shared in medical journal articles, with regulators, at physician conferences and in other forums. He also was named as a defendant in some of the lawsuits filed by cities, counties and states seeking to hold opioid makers – including Endo and Mallinckrodt Plc – and their distributors liable for the cost of the U.S. opioid epidemic.


But Portenoy began talking to plaintiffs’ lawyers as early as January 2018 and later struck a deal with the plaintiffs to serve as a cooperating witness, the records show. In exchange for his dismissal from the suits, Portenoy provided the plaintiffs with documentation of opioid makers’ payments to him over the years, as well as a 36-page declaration that lays out what he would say on the witness stand. Portenoy’s previously confidential cooperation agreement and declaration were made public Friday as a part of a discovery ruling by David Cohen, a special master in the federal court in Cleveland, Ohio, where hundreds of the opioid lawsuits have been consolidated. In an email, Cohen said it was possible the records should have been filed under seal out of public view.

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Is it bad enough yet to call it hopeless?

Drinks Bottles Now Biggest Plastic Menace For Waterways (G.)

Plastic bottles, the detritus of our throwaway water and soft drinks habits, are the most prevalent form of plastic pollution in European waterways, according to a new report. Food wrappers, including crisp and sweet packets, were the second biggest form of plastic pollution in rivers, followed by cigarette butts. All of these forms of litter can cause problems for wildlife and fish, and are hard to clean up once they have found their way into the water. Plastic bags were found to make up only 1% of plastic rubbish in freshwater, reflecting years of efforts to reduce their use, including charges on them in the UK and many other European countries.

Consumers should be more aware of what they can do to prevent the fouling of waterways, from using cotton buds with paper sticks to binning wet wipes instead of flushing them, and bringing their own receptacles for food takeaways, according to the Plastic Rivers report from Earthwatch Europe and Plastic Oceans UK. “The products we buy every day are contributing to the problem of ocean plastic,” said Jo Ruxton, chief executive of Plastic Oceans UK. “Our discarded plastic enters rivers from litter generated by our on-the-go lifestyle and items we flush down toilets. This throwaway approach is having much more serious consequences and the report shows really simple ways to avoid this problem and stop plastic pollution.”

Although most attention on the plastic scourge has focused on the plight of oceans, about 80% of plastic rubbish flows into them from rivers. Many experts believe that focusing on the clean-up of rivers is the best way to choke off the flow of existing rubbish into seas, while the ultimate source of the problem – our dependence on throwaway plastic products – is tackled.

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Feb 022019
 
 February 2, 2019  Posted by at 10:53 am Finance Tagged with: , , , , , , , , , , , , ,  


Pablo Picasso The bathers 1918

 

Russia Suspends INF Treaty In ‘Mirror Response’ To US – Putin (RT)
US Payrolls Surge By 304,000, Smashing Estimates Despite Shutdown (CNBC)
Big Trouble in Little China (Schmid)
How Fast Housing Markets in Sydney & Melbourne Are Coming Unglued (WS)
Venezuela To Sell Gold Reserves To UAE Without Russia’s Help (RT)
Italy Rejects Guaido, Says Venezuela is a Sovereign State (Telesur)
Whitehall Begins ‘Serious Work’ On Customs Union With EU (Ind.)
Judge Considers Gag Order On Roger Stone And Prosecution (BBC)
America’s Kurdish Allies Risk Being Wiped Out – By NATO (Graeber)
Rigging the Science of GMO Ecotoxicity (Latham)

 

 

US arms producers eye their ultimate bid for trillions in development fees. But Russia is not fazed at all.

“Let’s wait until our partners mature sufficiently to hold a level, meaningful conversation on this topic..”

Russia Suspends INF Treaty In ‘Mirror Response’ To US – Putin (RT)

President Vladimir Putin says Moscow is halting its participation in the Cold War-era INF nuclear agreement after Washington’s decision to suspend it. Russia will develop missiles previously forbidden under its terms. “Ours will be a mirror response. Our US partners say that they are ceasing their participation in the treaty, and we are doing the same,” the Russian president said in Moscow on Saturday in reference to the Intermediate-Range Nuclear Forces Treaty (INF). “They say that they are doing research and testing [on new weapons] and we will do the same thing,” Putin said during a meeting with Foreign Minister Sergey Lavrov and Defense Minister Sergey Shoigu.

The Russian leader emphasized that while Moscow’s offers on modernizing the 1987 treaty and making it more transparent “are still on the table,” no more talks should be initiated with the Americans to try and save it. “Let’s wait until our partners mature sufficiently to hold a level, meaningful conversation on this topic, which is extremely important for us, them, and the entire world,” Putin said. In December, the Trump administration threatened to quit the agreement, which limits nuclear and conventional land-launched missiles with a range between 500 and 5,500km within 60 days, unless Russia stopped allegedly violating it with its 9M729 missile, which Washington claims exceeds the permitted range.

Moscow denied that it had broken the treaty, and offered additional mutual inspections during failed talks in Geneva last month. On February 1, Washington officially confirmed that the bilateral agreement signed by Mikhail Gorbachev and Ronald Reagan will be suspended for 180 days. Washington also signaled intentions to entirely withdraw from it afterwards. During the meeting in front on the cameras on Saturday, Lavrov insisted that Moscow “attempted to do everything we could to rescue the treaty.” This included “unprecedented steps going far beyond our obligations,” he said, accusing Washington of systematically undermining the INF Treaty at least since the late 1990s.

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“December’s big initially reported gain of 312,000 was knocked all the way down to 222,000..”

US Payrolls Surge By 304,000, Smashing Estimates Despite Shutdown (CNBC)

Job growth in January shattered expectations, with nonfarm payrolls surging by 304,000 despite a partial government shutdown that was the longest in history, the Labor Department reported Friday. The unemployment rate ticked higher to 4 percent, a level where it had last been in June, a likely effect of the shutdown, according to the department. However, officials said federal workers generally were counted as employed during the period because they received pay during the survey week of Jan. 12. On balance, federal government employment actually rose by 1,000. Economists surveyed by Dow Jones had expected payrolls to rise by 170,000 and the unemployment rate to hold steady at 3.9 percent.

In all, it was a powerful performance at a time when economists increasingly have said they expect growth to slow in 2019. January marked 100 months in a row of positive job creation, by far the longest streak on record. Stock futures and Treasury yields jumped in response to the better-than-expected report. The news was not all good, though, as data revisions pushed previous numbers lower. December’s big initially reported gain of 312,000 was knocked all the way down to 222,000, while November’s rose from 176,000 to 196,000. On net, that took the two months down by 70,000, bringing the three-month average to 241,000. That’s still well above the trend that would be common this far into an economic expansion dating back 9 1/2 years.

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“Real GDP fell by 1.7 percent and 0.6 percent in Q3 and Q4 respectively compared with the official figures showing growth of 6.4 percent and 6 percent..”

Big Trouble in Little China (Schmid)

There are those who think “China will take over the world” with its technocratic central planning. Then there are those who say its debt bubble is so gigantic, the economy will crash and burn. The truth, probably, lies somewhere in the middle. And it looks like we are getting closer to know the truth. Official GDP growth, is of course on track at 6.6 percent for the year 2018, stellar among industrial and even emerging economies. But nobody believes these figures, even though they are the worst since 1990. “Real GDP fell by 1.7 percent and 0.6 percent in Q3 and Q4 respectively compared with the official figures showing growth of 6.4 percent and 6 percent,” Enodo Economics chief economist Diana Choyleva wrote in a note to clients about the annualized growth during the past two quarters of 2018. According to Choyleva, China is experiencing an unofficial recession.

While this doesn’t mean the crash and burn scenario is unavoidable, the flurry of official and unofficial economic indicators flashing red make the “take over the world” scenario quite unbelievable for the intermediate future. No matter which official indicator you look at, the Chinese economy is in decline. Retail sales growth is barely above 5 percent, the lowest level since 2003 with automobile sales crashing 13 percent. Total imports in U.S. dollar terms are down 7.6 percent in December of 2018 as compared to the year before.

The main problem of the Chinese economy is debt and overcapacity. Debt has blown up to 300 percent of GDP through the state-controlled banking system. The financing went into building trains, roads, airports, apartments, shipyards, anything that can be built. And while some of the stuff is undoubtedly useful, a lot of it is not. If it’s not useful or sustainable, it won’t generate the returns necessary to service said debt. This problem could have been nipped in the bud, but Chinese central planners wanted ever more steel mills and high speed trains and push back the day of reckoning when most of the unprofitable companies would go bankrupt. So in order to keep the gravy train running, more debt had to be issued to build more stuff.

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How Fast Housing Markets in Sydney & Melbourne Are Coming Unglued (WS)

“Can we still describe this as an orderly slowdown in housing conditions?” mused CoreLogic Asia Pacific’s head of research Tim Lawless about the Australian housing market today. Over the last three months, the index for Sydney dropped 4.5%, and the index for Melbourne 4.0%, the “largest rolling quarterly fall since at least the 80’s.” Across the metro area of Sydney, prices of all types of homes combined, according to CoreLogic’s Daily Home Value Index, fell 1.35% in January from December, the third month in a row with a monthly decline of over 1%. The 4.5% decline over the past three months pencils out to an annual rate of decline of 17%. The index is now down about 12% from its peak in July 2017. Note the accelerating decline over the past three months:

The 12% drop from the peak in July 2017 pushed the index back where it been in July 2016 – which shows how crazy and unsustainable the price boom had been on the way up. Now it is getting unwound at a slightly slower pace on the way down. Over the 12-month period through January, the index fell 9.7%, with house prices down 10.9% and condo prices down 6.9%. At the same time, the number of homes of all types listed for sale in the Sydney metro jumped by 24%. [..] In the Melbourne metro, the second largest market in Australia, the housing bust is also taking on momentum, instead of slowing down, but started about four months behind Sydney’s. According to the CoreLogic Daily Home Value Index, since the peak in November 2017, prices of all types of homes fell about 9%, which pushed prices back to January 2017 levels. Note the acceleration over the past three months:

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US sanctions deprive Maduro of food and medicine. Seen as a way to create a revolt.

Venezuela To Sell Gold Reserves To UAE Without Russia’s Help (RT)

Caracas plans to sell 29 tons of gold to the United Arab Emirates in return for euro in cash, Reuters cites a senior government official as saying. The money is needed to provide liquidity for imports of basic goods.
According to the official, the sale of the nation’s gold began with the shipment of 3 tons on January 26, following the export last year of $900 million in unrefined gold to Turkey. The source denied Moscow’s involvement in the operation after rumors circulated this week that mysterious Russian-operated airplanes arrived in the country and planned to leave with Venezuelan gold on board. That is incorrect, according to the official. Caracas reportedly needs cash for imports of basic products that it sells to the population at subsidized prices.

A possible explanation for the payment for the gold in euros is US sanctions, which restrict Venezuela’s use of the dollar. Venezuela’s central bank reportedly began to sell gold reserves to allied countries after supplies of unrefined gold from small mines began to run low. The bank held 150 tons of gold in January 2018. By the end of November holdings had fallen to 132 tons between the central bank’s vaults and the Bank of England, according to central bank data. The Bank of England has refused to return an estimated 31 tons of Venezuelan gold worth $1.2 billion. Bankers in Britain are allegedly concerned that Venezuelan officials would sell state-owned gold “for personal gain.”

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“..this same mistake was made in Libya, and everyone today recognizes it. We must prevent the same thing happening in Venezuela.”

Italy Rejects Guaido, Says Venezuela is a Sovereign State (Telesur)

On Thursday the Italian Government withdrew from the position assumed by the European Parliament and informed that it does not recognize Juan Guaido as “president in charge” of Venezuela. “Italy does not recognize the self-proclaimed President Juan Guaido,” Italy’s Undersecretary of Foreign Affairs, Manlio Di Stefano, said. The senior official explained that Italy is “totally against” that a country or a group of countries “can determine the internal policies” of a sovereign State. “This is called the principle of non-intervention and is enshrined by the United Nations,” Di Stefano said. He also expressed the Italian Government’s concern to prevent a warlike confrontation in the South American nation and stressed that “this same mistake was made in Libya, and everyone today recognizes it. We must prevent the same thing happening in Venezuela.”

Last Wednesday the Italian Prime Minister, Giuseppe Conte, warned the international community that it is not “prudent” to support one of the opposing parties in Venezuela, since “an invasive attitude would generate more division in the world.” “We do not consider it opportune to rush to recognize investitures that have not gone through an electoral process,” said Conte. Nevertheless, violating international law, and adding to the U.S.-driven coup d’état, the European Parliament approved a resolution Thursday that recognizes Juan Guaido as Venezuela’s “interim president.”

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With just 56 days left, great moment to start.

Whitehall Begins ‘Serious Work’ On Customs Union With EU (Ind.)

Whitehall officials have begun “serious work” on the UK staying in a permanent EU customs union as a route to rescuing the Brexit deal, despite Theresa May ruling out the move, The Independent can reveal. Preparations are underway at a high level, amid a belief the beleaguered prime minister will be forced to offer the potentially crucial compromise to Labour. Ms May has repeatedly rejected a customs union – fearing a further revolt by anti-EU Tories – but some cabinet ministers are pushing her to accept that the red line will have to be dropped if her deal is to be rescued. They believe it could tempt scores of Labour MPs to back the deal when it returns to the Commons, even if Jeremy Corbyn himself still refuses to drop his opposition.

Now a well-placed Whitehall source has told The Independent: “There is serious work going on about a customs union. We need to be prepared, so we are ready if the politics moves in that direction.” Although the prime minister has not yet been won over, she will come under fierce pressure if, as expected, the EU rejects her plea to replace the backstop – before fresh Commons votes in just 12 days’ time. The concession of a customs union is unlikely to be enough to persuade Mr Corbyn to throw his weight what he is determined to brand “a Tory Brexit”, but many Labour MPs are expected to switch sides. Furthermore, despite inevitable Tory outrage, some Conservative MPs could be persuaded that a customs union would make it less likely the Irish backstop they oppose – designed to guarantee an open border – will ever be needed.

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“To storm my house with greater force than was used to take down (Osama) bin Laden or El Chapo or Pablo Escobar, to terrorise my wife and my dogs, is unconscionable..”

Judge Considers Gag Order On Roger Stone And Prosecution (BBC)

The judge overseeing the criminal case against ex-Trump campaign adviser Roger Stone says she is considering a gagging order on both him and the prosecution. Judge Amy Berman Jackson said the case was “a criminal proceeding and not a public relations campaign”. Mr Stone has been charged on seven counts by special counsel Robert Mueller, including witness tampering and lying to Congress. He denies any wrongdoing and has made frequent jibes against Mr Mueller. Mr Stone, 66, a longstanding ally of the president, has previously vowed to resist any gagging order, saying on Tuesday: “I will fight and the deep state is in panic mode.”

Mr Mueller is overseeing an investigation into alleged Russian meddling in the 2016 presidential election and whether Donald Trump’s campaign conspired with Moscow. President Trump denies collusion, calling the investigation “a witch hunt”, and the Kremlin denies any meddling. At a court hearing in Washington on Friday, Judge Jackson cited a number of “extrajudicial statements by the defendant”. She said that if a gagging order was imposed, Mr Stone would still be able to talk to the media about issues not connected to the case. She asked both sides to respond to the possible order by 8 February. The charges against Mr Stone are linked to an alleged Russian-led hack into the emails of Democratic Party officials. The information contained in the emails was released by Wikileaks during the 2016 campaign.

Since his arrest, Mr Stone has given a string of media interviews. He has been highly critical of his arrest, describing it as political theatrics. “To storm my house with greater force than was used to take down (Osama) bin Laden or El Chapo or Pablo Escobar, to terrorise my wife and my dogs, is unconscionable,” he told reporters. He has accused Mr Mueller of running a politically motivated “inquisition”. In an interview with Reuters, Mr Stone dismissed the charges as “process crimes” with no intentional lies. He said any failure to disclose emails or texts had been an “honest mistake”. In a phone interview with conspiracy theorist Alex Jones on his radio programme Infowars, Mr Stone said he intended to “fight for my life”.

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“This not only means they are supplied with state-of-the-art weaponry; it also means those weapons are being maintained by other Nato members. ”

America’s Kurdish Allies Risk Being Wiped Out – By NATO (Graeber)

Remember those plucky Kurdish forces who so heroically defended the Syrian city of Kobane from Isis? They risk being wiped out by Nato. The autonomous Kurdish region of Rojava in Northeast Syria, which includes Kobane, faces invasion. A Nato army is amassing on the border, marshaling all the overwhelming firepower and high-tech equipment that only the most advanced military forces can deploy. The commander in chief of those forces says he wants to return Rojava to its “rightful owners” who, he believes, are Arabs, not Kurds. Last spring, this leader made similar declarations about the westernmost Syrian Kurdish district of Afrin. Following that, the very same Nato army, using German tanks and British helicopter gunships, and backed by thousands of hardcore Islamist auxiliaries, overran the district.

According to Kurdish news agencies, the invasion led to over a 100,000 Kurdish civilians being driven out of Afrin entirely. They reportedly employed rape, torture and murder as systematic means of terror. That reign of terror continues to this day. And the commander and chief of this Nato army has suggested that he intends to do to the rest of North Syria what he did to Afrin. I am speaking, of course, of president Recep Tayyip Erdogan, who is, increasingly, Turkey’s effective dictator. But it’s crucial to emphasize that these are Nato forces. This not only means they are supplied with state-of-the-art weaponry; it also means those weapons are being maintained by other Nato members. Fighter jets, helicopter gunships, even Turkey’s German-supplied Panzer forces – they all degrade extremely quickly under combat conditions.

The people who continually inspect, maintain, repair, replace, and provide them with spare parts tend to be contractors working for American, British, German or Italian firms. Their presence is critical because the Turkish military advantage over Northern Syria’s “People’s Defense Forces” (YPG) and “Women’s Defense Forces” (YPJ), those defenders of Kobane that Turkey has pledged to destroy, is entirely dependent on them. That’s because, aside from its technological advantage, the Turkish army is a mess. Most of its best officers and even pilots have been in prison since the failed coup attempt in 2016, and it’s now being run by commanders chosen by political loyalty instead of competence. Rojava’s defenders, in contrast, are seasoned veterans. In a fair fight, they would have no more problem fending off a Turkish incursion than they had driving back Turkish-backed Jihadis in the past.

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Precautionary principle. The only response.

Rigging the Science of GMO Ecotoxicity (Latham)

Researchers who work on GMO crops are developing special “artificial diet systems”. The stated purpose of these new diets is to standardise the testing of the Cry toxins, often used in GMO crops, for their effects on non-target species. But a paper published last month in the journal Toxins implies a very different interpretation of their purpose. The new diets contain hidden ingredients that can mask Cry toxicity and allow them to pass undetected through toxicity tests on beneficial species like lacewings (Hilbeck et al., 2018). Thus the new diets will benefit GMO crop developers by letting new ones come to market quicker and more reliably. Tests conducted with the new diets are even being used to cast doubt on previous findings of ecotoxicological harm.

The resulting crops are usually called Bt crops. Cry toxins kill insects that eat the GMO crop because the toxin punches a hole in the membranes of the insect gut when it is ingested, causing the insect to immediately stop feeding and eventually die of septicaemia. Cry toxins are controversial. Although the biotech industry claims they have narrow specificity, and are therefore safe for all organisms except so-called ‘target’ organisms, plenty of researchers disagree. They suspect that Cry toxins may affect many non-target species, even including mammals and humans (e.g. Dolezel et al., 2011; Latham et al., 2017; Zdziarski, et al., 2018).

The Cry toxin mode of action, we and others have noted, does not necessarily discriminate between species. Any organism with a membrane-lined gut is, in principle, vulnerable if it consumes the GMO Bt crop. In these Bt crops the leaves, straw, roots, nectar, and pollen, all typically contain Cry toxins. Therefore, most organisms in agricultural landscapes will at some point in their life-cycle be exposed to GMO plant material. As pollinator declines and a more generalised insect apocalypse have revealed, the question of the effects of such crops on biodiversity is far from trivial.

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GMO Cry toxins
Cry toxins are a family of highly active protein toxins originally isolated from the gut pathogenic bacterium Bacillus thuringiensis (Latham et al., 2017). They confer insect-resistance and up to six distinct ones are added to GMO corn, cotton, and other crops (Hilbeck and Otto, 2015).

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Feb 012019
 


Vincent van Gogh Outskirts of Paris: Road with Peasant Shouldering a Spade 1887

 

Death Of 95% Of Indigenous People In Colonization Of America Cooled Earth (RT)
Who Bought the Gigantic $1.5 Trillion of New 2018 US Government Debt? (WS)
Central Bank Gold Buying Hits Highest Level In Half A Century (CNBC)
Refusal To Return Venezuelan Gold Means End Of Britain As Financial Center (RT)
Brexit Could Be Delayed Because Government Is Not Ready (Ind.)
What Corbyn Must Do To Rescue Britain From Its Brexit Torture (Varoufakis)
UK Homeless Crisis Is Worse Than Ever (Ind.)
US Home Sales to Get Even Uglier in Near Future (WS)
US New Home Prices Drop 12% as Supply Surges (WS)
Trump Says Border-Wall Talks ‘A Waste Of Money And Time’ (MW)
With World Bank and IMF In Crisis, Time To Push Radical New Vision (DiEM25)
Apple Punishes Facebook, Google Over App Rules (BBC)
Greece Raises Minimum Wage By 11% (K.)
25% of Greeks Cannot Afford To Heat Their Homes (K.)

 

 

The Great Dying of the Indigenous Peoples of the Americas. 95% of them, 56 million, had died by 1600. But who knows this? The history we’ve been told about is white man’s history, almost exclusively. In his lovely books 1491 and 1493, Charles Mann describes this from a different view. First, he says as many people lived in North America as in Europe when Columbus came 500 years ago. Second, the image of roaming herds of buffalo was not accurate then: there was no place for them, the land was farmed. Only after the people had died did the buffalo take over and multiply.

Death Of 95% Of Indigenous People In Colonization Of America Cooled Earth (RT)

European colonization of the Americas contributed to the advent of the 17th century ‘Little Ice Age,’ a new study says. As some 55 million indigenous people were wiped out, their farmland turned into forest and sucked out CO2. Much of the continental US may feel like it is living through a ‘mini ice age’ due to the polar vortex weather pattern. But while this will come and go, there was a proper global drop in temperatures about four centuries ago, which is commonly called the ‘Little Ice Age.’ A team of scientists from University College London says that humans were partially to blame for it – particularly Europeans traveling to the New World for treasure and new life. While there were some natural reasons behind the oddball phenomenon, much of it remains veiled in mystery.

The British researchers argue that they have found a missing link – the “Great Dying” of indigenous people as result of the European conquest. The scientists found that some 56 million hectares of land were abandoned by the native population of the Americas as they fled or died due to epidemics, war, slavery and subsequent famine. Those lands were reclaimed by forests that, in turn, absorbed so much carbon dioxide that the process cooled Earth. “The resulting terrestrial carbon uptake had a detectable impact on both atmospheric CO2 and global surface air temperatures in the two centuries prior to the Industrial Revolution,” according to the study, published in the Quaternary Science Reviews.

Using a combination of counting methods, the researchers found that prior to the arrival of Europeans in 1492, the Americans were inhabited by some 60.5 million people. About 95 percent of them, or 56 million, had died by 1600. Some 55.8 million hectares (138.3 million acres) of what was previously farmland was reclaimed by the forests and led to a 7.4 pentagram carbon uptake, according to the paper. One pentagram (Pg) of carbon is equivalent to a billion metric tons. “These changes show that the Great Dying of the Indigenous Peoples of the Americas is necessary for a parsimonious explanation of the anomalous decrease in atmospheric CO2,” the paper notes.

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Treasuries stay at home. Foreigners no longer want them. Japan, China, Russia are all selling.

Who Bought the Gigantic $1.5 Trillion of New 2018 US Government Debt? (WS)

Under the impact of a stupendous spending binge peppered with juicy tax cuts, the Treasury Department has had to issue a flood of Treasury securities to fund the cash outflow. So, over the past 12 months, the US gross national debt has ballooned by $1.5 trillion to $22 trillion as of January 30, according to Treasury Department data. And these are the good times when the economy is hopping. At the next recession, this is going to get cute. But who the heck is buying all this debt? That question will grow increasingly important and worrisome as we move forward with this gigantic ballooning debt, fueled by deficits that Fed chairman Jerome Powell calls “unsustainable” at every chance he gets:

So, who bought all this debt? US government debt, as expensive as it is in terms of interest payments for US taxpayers, is a mildly income-producing asset for the creditors of the US. Somebody has to buy it, every last dollar of it. The US relies on it. So, who bought this pile of debt that got issued in 12 months? China, Japan, other foreign investors? Nope. They’re gradually unloading this debt. All foreign investors combined slashed their holdings of marketable Treasury securities in November by $105 billion from November a year earlier, to $6.2 trillion, according to the Treasury Department’s TIC data released today.

The Treasury Department divides these foreign investors into two categories: “Foreign official” holders (foreign central banks and government entities) cut their holdings by $144 billion over the 12 months, to $3.9 trillion at the end of November. But private-sector investors (foreign hedge funds, banks, individuals, etc.) increased their holdings by $52 billion, to $2.3 trillion. The two largest foreign creditors of the US — China and Japan — have both been unloading their Treasury securities: • China’s holdings fell by $55 billion from a year earlier to $1.12 trillion. • Japan’s holdings fell by $47 billion from a year earlier to $1.04 trillion, having now reduced its stash by 16% since the peak at the end of 2014 ($1.24 trillion).

[..] American banks (very large holders), hedge funds, pension funds, mutual funds, and other institutions along with individual investors in their brokerage accounts or at their accounts with the US Treasury were huge net buyers, while nearly everyone else was selling, increasing their holdings by $1.36 trillion over the 12-month period. These American entities combined owned the remainder of the US gross national debt, $7.5 trillion, or 34.4% of the total!

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It’s mostly Russia really: The Russian central bank sold almost all of its U.S. Treasury stock to buy 274.3 tons of gold in 2018.

Central Bank Gold Buying Hits Highest Level In Half A Century (CNBC)

The amount of gold bought by central banks in 2018 reached the second highest annual total on record, according to the World Gold Council (WGC). Central banks bought the most gold by volume since 1967, according to the industry research firm, which also highlighted it was the largest amount since former U.S. President Nixon Richard’s decision to end the dollar’s peg to bullion in 1971. Central bank net purchases reached 651.5 metric tons in 2018, 74 percent higher than in the previous year when 375 tons were bought. The WGC has estimated that central banks now hold nearly 34,000 tons of gold. The Federal Reserve is reported to hold the most, amounting for almost three quarters of the nation’s foreign-exchange reserve pot.

Taking the current spot price of $1,321.15 per troy ounce, gold purchases by central banks in 2018 amounted to a $27.7 billion spending splurge on the precious metal. “Heightened geopolitical and economic uncertainty throughout the year increasingly drove central banks to diversify their reserves and re-focus their attention on the principal objective of investing in safe and liquid assets,” said the report released on Thursday. The WGC said the bulk of the buying was carried out by a handful of central banks with Russia leading the way as it looks to swap out dollars from its portfolio. The Russian central bank sold almost all of its U.S. Treasury stock to buy 274.3 tons of gold in 2018.

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Every country should hold its own gold. What’s the problem with that?

Refusal To Return Venezuelan Gold Means End Of Britain As Financial Center (RT)

The freezing of Venezuelan gold by the Bank of England is a signal to all countries out of step with US interests to withdraw their money, according to economist and co-founder of Democracy at Work, Professor Richard Wolff.
He told RT America that Britain and its central bank have shown themselves to be “under the thumb of the United States.” “That is a signal to every country that has or may have difficulties with the US, [that they had] better get their money out of England and out of London because it’s not the safe place as it once was,” he said. The Bank of England is currently withholding $1.2 billion in gold from Venezuelan President Nicolas Maduro’s government, but is being urged by Washington to release it to the chairman of the National Assembly, Juan Guaido.

Last week, the US backed Guaido as the legitimate president of Venezuela, after he declared himself interim president. According to Professor Wolff, control of Venezuela’s oil has always been an urgent issue for Washington. He also said that the collapse of Britain as a global power, which was accelerated by Brexit, is now about to take another step. “One of the few things left for Britain is to be the financial center that London has been for so long. And one of the ways you stay a financial center is if you don’t play games with other people’s money,” he said.

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Pretty much a given now.

Brexit Could Be Delayed Because Government Is Not Ready (Ind.)

Jeremy Hunt has said Brexit could be delayed as the government may need “extra time” to pass key legislation if Theresa May can agree a deal at the eleventh hour. The foreign secretary admitted that a technical delay to the Article 50 process could be necessary to prepare for Britain’s exit from the EU, which is legally due to take place on 29 March. MPs ordered the prime minister to go back to Brussels to renegotiate a key part of her Brexit deal after her plan was resoundingly defeated in the Commons earlier this month. But despite the Tory truce, Ms May faces an uphill battle to convince the EU to reopen talks on the withdrawal agreement, with European leaders lining up to rebuff her efforts.

Asked about Britain’s exit date, Mr Hunt told the Today programme: “I think that depends on how long this process takes. “I think it is true that if we ended up approving a deal in the days before 29 March then we might need some extra time to pass critical legislation. But if we are able to make progress sooner, then that might not be necessary. “We can’t know at this stage exactly which of those scenarios would happen.” There is growing concern among ministers that there is not enough time to pass the necessary legislation before exit day, amid reports that the February recess could be cancelled to give Ms May more time to win over the EU.

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Ironically, Varoufakis points out exactly why Corbyn is too late (all he’s done is wait):

“Irresolute princes, to avoid present dangers, generally follow the neutral path, and are generally ruined” – Niccolò Machiavelli, The Prince

What Corbyn Must Do To Rescue Britain From Its Brexit Torture (Varoufakis)

Britain’s prime minister has been remarkable in resolutely following a ruinous path that she keeps insisting remains the least perilous road to Brexit. Theresa May’s first crime against logic was to trigger Article 50 without a plan of what to do on 29 March 2019 if no deal had been struck with Brussels. Her second was to forfeit any bargaining power she had by accepting Michel Barnier’s two-phase negotiation (first London delivers all that Brussels demands, then Brussels considers what London wants). May’s two colossal errors combined to allow a gloating European Commission to dictate to her a withdrawal agreement that, independently of whether one is pro-Leave or pro-Remain, resembles the kind of treaty imposed upon a nation defeated at war.

Unsurprisingly, Brexit has turned into a process tearing Britain apart while revealing its constitutional inadequacies. The next few weeks are depressingly predictable. The prime minister will continue to run down the clock putting all the pressure on Remainers, both Tory and Labour, to avert a no-deal Brexit by accepting hers. That was the point of backing the Brady amendment on Tuesday: to take Brexit revocation off the table, gain two weeks during which to pretend to negotiate with a European Commission that does not have the mandate to negotiate and then take a version of the same withdrawal agreement, possibly with some pointless addenda, to parliament. If her blackmail fails again, she will apply for an extension of Article 50 until 1 July to start the same war of attrition anew.

It is imperative that May is prevented from following this path. Those who can stop her and fail to do so will not be forgiven by at least one generation of Britons. Which brings me to my friend and comrade Jeremy Corbyn and his team. Labour’s leadership understands that, with weeks to go before the cliff’s edge, Niccolò Machiavelli’s counsel applies just as much to them too. “Irresolute princes, to avoid present dangers, generally follow the neutral path, and are generally ruined” – Niccolò Machiavelli, The Prince

Until now it was right and proper for Labour to avoid distracting a Tory government while it was making a mess of things. Jeremy Corbyn’s critics were wrong to chastise him for delaying to call a vote of no confidence or for not backing a second referendum. Labour just did not have the numbers to win such votes. However, the time has come for Jeremy Corbyn to give a speech of hope for Britain, one that contains a clear vision of a country that heals itself after two years of wanton destruction by a short-sighted, clueless prime minister thinking solely of the unity of her divided government and party.

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Why Brexit?!

UK Homeless Crisis Is Worse Than Ever (Ind.)

Housing charities have criticised government claims of falling numbers of rough sleepers as homeless shelters across Britain report unprecedented demand. Communities secretary James Brokenshire said his department’s strategy was “starting to have an effect” as official figures showed that, on a “snapshot night in autumn”, the number of people sleeping on the street had dropped to 4,677 from 4,751 the year before. But Jon Sparkes, the chief executive of charity Crisis, said the count was widely believed to be an “unreliable” source which “significantly underestimated” the number of people experiencing the devastation of sleeping rough.

Shelters in England, Wales and Scotland contacted by The Independent all reported record levels of demand as temperatures in parts of the country dropped as low as -14C. On the snapshot count, Mr Sparkes said: “The problem is, these counts and estimates inevitably miss a significant number of people, including those not rough sleeping on that particular night, those hidden from view and who aren’t bedded down for the night.” Figures published by his organisation in December revealed levels of rough sleeping in the UK – including sleeping on public transport and in tents – had doubled in five years, rising by 20 per cent to 24,000 in just 12 months.

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Lawrence Yun still has a job. Amazing.

US Home Sales to Get Even Uglier in Near Future (WS)

What will home sales look like in January and February? Very, very lousy, according to pending home sales, a measure that counts how many contracts were signed. Contract signings run roughly one or two months ahead of when the sales close and are reported as sales. The measure of pending home sales for December projects actual home sales in January and February. To that tune, the National Association of Realtors (NAR) said that its Pending Home Sales Index for December fell to the lowest level since April 2014. “It’s been dripping down, down, down,” NAR chief economist Lawrence Yun said in the interview.

“Frustrating that the housing market is not recovering.” Compared to December a year earlier, contract signings dropped 9.8%, the 12th month in a row of year-over-year declines, and the worst year-over-year decline since the days of housing and mortgage crisis. To show the acceleration of the declines of contract signings toward the end of the year, I marked October, November, and December in red. The NAR’s report blamed the stock market swoon that had sapped consumer confidence, unaffordable home prices – that, after years of price gains had far outgrown wage gains – and mortgage rates. The latter is an interesting theory because mortgage rates, after a peak in early November, were falling starting in mid-November and fell throughout December.

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Let’s see the Fed tackle this one.

US New Home Prices Drop 12% as Supply Surges (WS)

The Commerce Department has reopened for business, and the good folks there are now in hyperdrive to put together and release the data that was blocked during the partial government shutdown that had also shut down the Commerce Department. This morning, it released the sales data for new homes whose sales closed in November. This report had originally been scheduled for the end of December. In the near future, the Commerce Department will further catch up and release the new-home sales data for December, which had been scheduled for last week. So, time to catch up, and here we go. The median prices of new single-family houses that sold across the US in November 2018 fell 11.9% from November 2017 to $302,400, the lowest median price since October 2016, and in the same range as the median price in November and December 2014:

This new-home sales data – produced jointly by the Census Bureau and the Department of Housing and Urban Development – is very volatile, and subject to revisions in the following months. But after a while, and despite the jumpiness of the data, as the above chart shows, the trend becomes clear. The year-over-year decline of 11.9% was the third months in a row of year-over-year declines, and the largest year-over-year decline since Housing Bust 1. Note the many double-digit year-over-year price increases in prior years, which attest to the boom in prices that has now outrun what the market can bear:

Just how far prices have ballooned before they began to deflate becomes apparent in this long-term chart of the median price of new houses. At the price peak in December 2017 ($343,300), the median price was 31% above the crazy bubble peak in March 2007, before it all blew apart:

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Pelosi will have to come with something. Does she understand this?

Trump Says Border-Wall Talks ‘A Waste Of Money And Time’ (MW)

Negotiations with Congress are a waste of time if Democrats won’t discuss border-wall funding, President Donald Trump said Thursday, vowing to build a wall with or without congressional approval. In a wide-ranging Oval Office interview published Thursday night by the New York Times, Trump also said he’s done playing nice with House Speaker Nancy Pelosi, expressed optimism over reaching a trade deal with China and issued numerous denials related to special counsel Robert Mueller’s investigation. Pelosi has adamantly opposed any funding to build a wall along America’s southern border, and the specter of another government shutdown looms in two weeks, when a temporary funding deal expires.

“If she doesn’t approve the wall, the rest of it’s just a waste of money and time and energy.” A 17-member panel of lawmakers has been tasked with reaching a border-funding compromise. Trump suggested in the interview that an emergency order could be issued if Congress won’t allocate the $5.7 billion that he’s demanded for the wall. “I’ll continue to build the wall, and we’ll get the wall finished,” he told the Times. “Now whether or not I declare a national emergency — that you’ll see.” About Pelosi, Trump said: “I’ve actually always gotten along with her, but now I don’t think I will any more. . . . I think she’s doing a tremendous disservice to the country.”

When asked about a number of other subjects, Trump said he ”never did” speak to Roger Stone about WikiLeaks during his campaign; denied he was tampering with witnesses through his tweets; and said testimony by his intelligence chiefs earlier this week was mischaracterized by the media, despite the fact that video of the hearing was shown, along with a 42-page written transcript. He also called being president a “loser” job, financially. “I lost massive amounts of money doing this job,” he said. “This is not the money. This is one of the great losers of all time. You know, fortunately, I don’t need money.”

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Varoufakis and David Adler. Personally, when someone says we need $8 trillion a year for a Green New Deal, I think: forget it. People think in terms of keeping present energy use levels alive, just switching to different sources. But the No. 1 issue should be to use less energy.

With World Bank and IMF In Crisis, Time To Push Radical New Vision (DiEM25)

“Prosperity, like peace, is indivisible,” said the US treasury secretary, Henry Morgenthau, in his inaugural speech to the Bretton Woods conference, which gave birth to the World Bank (then the International Bank for Reconstruction and Development) and to the IMF. “We cannot afford to have it scattered here or there among the fortunate or enjoy it at the expense of others.” The original Bretton Woods plan was for exchange rates to be fixed, with the IMF helping heavily indebted countries restructure their debt and a stabilization fund curbing capital flight. Meanwhile, the World Bank would offer development finance and an international commodity stabilization corporation would “bring about the orderly marketing of staple commodities at prices fair to the producer and consumer alike”.

Finally, the whole system would be dollar-denominated, with the greenback being the only currency exchangeable for gold at a fixed rate. John Maynard Keynes, the chief British negotiator at Bretton Woods, was worried that the new system could only rely on the dollar as long as America had a trade surplus. The moment the United States became a deficit country, the system would collapse. So, Keynes suggested that instead of building the new world order on the dollar, all major economies would subscribe to a multilateral International Clearing Union (ICU). While keeping their own currencies, and central banks, countries would agree to denominate all international payments in a common accounting unit, which Keynes named the bancor, and to clear all international payments through the ICU.

Once set up, the ICU would tax persistent surpluses and deficits symmetrically so as to balance out capital flows, volatility, global aggregate demand and productivity. Had it been instituted, the ICU would have worked alongside the World Bank to keep the global economy in balance and build shared prosperity worldwide. But Keynes’s ICU was rejected. The United States was unwilling to replace the dollar as the anchor of the new monetary system. And so the IMF was downgraded to a bailout fund, the World Bank was limited to lending from its own reserves (contributed by stressed member states) and, crucially, any possibility of the IMF leveraging the World Bank’s investments (like a central bank might have done) was jettisoned.

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They got young people ‘volunteering’ to be spied upon to an even higher degree than they already were.

Apple Punishes Facebook, Google Over App Rules (BBC)

Apple revoked Google’s ability to offer its employees internal-only iPhone apps, likely causing significant disruption to the search giant. Apple was punishing its rival for breaking its developers’ policy, a day after it took the same action against Facebook. The move came after both firms used special access for market research. Apple restored Google’s access to the software by the end of the working day on Thursday. After more than 24 hours of disruption, Facebook had its access restored earlier on Thursday. “We are in the process of getting our internal apps up and running” a spokeswoman told the BBC. “To be clear, this didn’t have an impact on our consumer-facing services.”

Apple allows companies the ability to exert special control over employee devices in order to add additional security and control. Many firms use this to distribute apps that might contain private information to employees but not the wider public. Some firms also distribute test or beta versions of apps the firm is working on such as, in Google’s case, Maps, Hangouts and Gmail. Both firms use internal iOS apps to help employees access services such as travel. However, Apple explicitly prohibits firms from using this access on regular consumers. On Monday it was revealed that Facebook had used its enterprise access to distribute a market research app to the public, including teenagers. On Tuesday it became known that Google was doing something similar with its own app, Screenwise.

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The Troika is not happy.

Greece Raises Minimum Wage By 11% (K.)

An 11 percent increase in Greece’s minimum wage and the abolition of the so-called subminimum wage paid to young employees which were announced by Prime Minister Alexis Tsipras during a cabinet meeting early this week came into effect on Friday. “Today, a new era begins for the country’s young employees. An era with more rights, more dignity,” Labor Minister Effie Achtsioglou told state-run news agency ANA-MPA. “With the increase in the minimum wage and the abolition of the sub-minimum wage, we restore part of what austerity policies deprived employees of. And this is an act of justice.” The hike, the first such wage change in the country in almost a decade, raises the minimum wage from €586 to €650. The measure, however, has generated concern on the part of Greece’s creditors during their recent visit to the country to assess its post-bailout compliance.

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Why those minimum wage were raised. Imagine if Greece were further north.

25% of Greeks Cannot Afford To Heat Their Homes (K.)

Almost one in four Greeks cannot afford to heat their home sufficiently, according to Eurostat data collected as part of the annual EU survey on income and living conditions in the bloc. Based on the report, 25.7 percent of Greeks said they were not able to keep their home adequately warm due to their economic condition. Greeks buy heating oil at an average price of 1,025 euros per liter when the average price for the whole of the European Union is 0.794 euros per litre and 0.781 euros in the eurozone. The largest share of people who shared the same view was recorded in Bulgaria (37 pct), followed by Lithuania (29 pct), Greece, Cyprus (23 pct) and Portugal (20 pct).

In contrast, the lowest shares – close to 2 percent – were recorded in Luxembourg, Finland, Sweden, the Netherlands and Austria. In 2017, eight percent of the EU population said in an EU-wide survey that they could not afford to heat their home sufficiently. This share peaked in 2012 with 11 percent, and has fallen continuously in subsequent years.

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Jan 292019
 


Giuseppe Arcimboldo Four elements – Earth 1566

 

 

Over Two Thirds Of UK Public Don’t Feel Represented By Political Parties (Ind.)
Risk Of Accidental No-Deal Brexit ‘Very High’ – Key EU Negotiator (G.)
Will UK MPs Take Control Of Brexit? (RT)
Theresa May In Fresh Crisis After Anti-EU Tories Reject ‘Plan B’ (Ind.)
Bank Of England Urged To Give Juan Guaidó Venezuela’s Gold (G.)
US Announces Sanctions Against Venezuela State Oil Company (G.)
Why Did John Bolton’s Notepad Say “5,000 Troops To Colombia”? (ZH)
Stone Cold (Kunstler)
Mueller Investigation Close To Being Completed – Acting AG Whitaker (CNBC)
Sarah Huckabee Sanders To Media: You’re No Better Than WikiLeaks (VF)
Facebook To Create ‘War Room’ To Fight Fake News (G.)
Supermassive Black Holes Reveal Universe Expands Faster Than Thought (Ind.)
British Museum Chief: Taking The Parthenon Marbles Was ‘Creative’ (G.)

 

 

This is true all over the western world. But finding alternatives is daunting. And that’s how you get to pitchforks.

Over Two Thirds Of UK Public Don’t Feel Represented By Political Parties (Ind.)

More than two thirds of the British public feel they are not represented by the main political parties, according to a new report on the divisions caused by Brexit. Research by campaign group Hope Not Hate found that the disconnect had increased from 60% to 67% over the last six months as Theresa May negotiated the EU withdrawal agreement. The poll of nearly 33,000 people and results from focus groups also revealed that many felt they were being left in the dark or were “overwhelmingly bored” by the process. It has also seen an increase in the proportion of the public feeling pessimistic about the future – with very few believing that Brexit will address the frustrations and inequalities that lay behind the vote to leave the EU in 2016.

More people also believe that Brexit is feeding prejudice and division and taking the UK “backwards”, up from 57% in July 2018 to 62% last month. Just 20% of people said they could trust the government to deliver a “good Brexit”. Almost as many Leavers (66%) as Remainers (75%) said they do not trust the government to deliver a Brexit that works for them. None of the options being considered by parliament have consensus support across the UK, according to the report, and 42% of people think that it would be sensible to delay leaving the EU by a few months so we can agree a better deal with the EU or hold a Final Say vote.

Hope Not Hate suggested the deadlock could be broken by holding “citizens’ assemblies”, which have been used successfully in Ireland and Iceland. They are made up of a randomly chosen representative group of up to 1,500 people and hear evidence and argument on a subject before making recommendations to their political representatives. Citizens’ assemblies are “a less polarising choice” the report states, with 39% of people, including both Leave and Remain supporters, saying they would back this process given the political deadlock.

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“..we need to have a stable majority to ensure the ratification. That’s quite a big challenge. There’s no negotiation between the UK and EU – that’s finished.”

Risk Of Accidental No-Deal Brexit ‘Very High’ – Key EU Negotiator (G.)

The risk of accidentally crashing out of the EU without a deal has been described as “very high” by a key EU architect of the Brexit deal, with parliamentary backing for changes to the backstop likely to be met with a brick wall in Brussels. Senior Conservative MPs are seeking to form a majority in a Commons vote on Tuesday calling for Theresa May to demand an alternative plan to the Irish backstop for avoiding a hard border on the island of Ireland. But on Monday, EU officials and diplomats said the amendment tabled by the Tory MP Graham Brady, and backed by Downing Street, failed to offer any clue as to what alternative arrangement parliament could support.

With the votes on Tuesday unlikely to offer any clarity on what MPs can unite behind, the EU’s deputy chief negotiator, Sabine Weyand, offered a sober analysis of the chances of a deal being ratified in Westminster. She said: “We need to have a majority that doesn’t just get agreement over hurdle of a meaningful vote by a narrow majority but we need to have a stable majority to ensure the ratification. That’s quite a big challenge. There’s no negotiation between the UK and EU – that’s finished.

“There’s no point beating about the bush – the agreement was defeated with a two-thirds majority in the House of Commons. That’s a crushing defeat by any standards. It’s quite a challenge to see how you can construct out of the diversity of opposition a positive majority for a deal.” Weyand said of the two years of talks due to end on 29 March: “There’s a very high risk of a crash out not by design, but by accident. Perhaps by the design of article 50, but not by policymakers.” “We think we can handle it,” Weyand said. “I’m less sure about UK side. For us it’s about EU-UK trade relationship and disruption to supply chains. For the UK a no deal would mean that a part of the regulatory and supervisory structure of economy breaks away – a much bigger challenge.”

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British people must be so sick of this. More ‘key’ votes today, and no end in sight.

Will UK MPs Take Control Of Brexit? (RT)

Later on Tuesday, backbench MPs will try to seize control of Brexit as they vote on a set of amendments to alter – or even stop – the UK’s exit from the bloc after PM Theresa May failed to get her deal through parliament.
Speaker John Bercow reportedly received 14 amendments to May’s Brexit deal, with half a dozen of them expected to be put to a vote in order to achieve Brexit Plan B. Voting is scheduled to start at 7pm and may go on until around 8.30pm. By that time, it’ll likely become clear whether Brexit will be paused, possibly indefinitely, or whether the embattled prime minister will be sent back to Brussels for more talks with the EU.

Proposals to prevent a NO-DEAL Brexit One of the most important amendments comes from Labour’s Yvette Cooper, which requires May to delay Brexit and extend Article 50 if she’s unable get parliamentary support for her deal by February 26. Another notable one is much softer and non-binding in nature. Tory MP Caroline Spelman and her Labour counterpart, Jack Dromey, are pushing for the “no-deal” concept to be rejected in principle.

Anti-backstop amendments The two key proposals here are from Tory backbenchers, Andrew Murrison and Graham Brady, chair of the influential 1922 Committee, responsible for hiring and firing Conservative leaders. They call for the contentious Irish backstop to expire by December 2021 or be removed from the Brexit deal altogether. The backstop is a safety net to avoid a hard border between Northern Ireland and the Republic of Ireland if there’s no Brexit trade deal.

Indicative vote amendments These are focused on ensuring that MPs get more parliamentary time to discuss the kind of Brexit they want to see agreed. Labour MP Hilary Benn has one amendment explicitly demanding indicative votes on Brexit options, including Norway Plus, a Second referendum, a “managed” no-deal, or a Labour Brexit. Prominent Tory Remainer, Dominic Grieve, is also calling for six days in February and March to be set aside for debates on motions not selected by the government. May’s spokesman said on Monday that talks on changing the deal to make it satisfactory for the MPs were ongoing. The PM was also willing to give the parliament another opportunity to vote for the Brexit deal as soon as possible. He didn’t name the exact date, buy the Sky News sources claim it may happen on February 13.

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The people’s interest?!

Theresa May In Fresh Crisis After Anti-EU Tories Reject ‘Plan B’ (Ind.)

Theresa May has been plunged into a fresh Brexit crisis after anti-EU Tories rejected her ‘plan B’ attempt to rescue her deal and threatened to inflict another Commons defeat on Tuesday. The prime minister took the extraordinary step of urging her MPs to back an amendment that “requires the Northern Ireland backstop to be replaced” – even though it effectively rips up her own agreement with the EU. However, just 30 minutes earlier – in a dramatic underlining of her weakness – the hardline 60-strong European Research Group (ERG) rejected the wording as too vague. Without ERG support, the amendment, tabled by Tory backbenchers’ leader Graham Brady, appeared doomed to fail – wrecking No 10 hopes that it would persuade the EU to give way.

Even before the setback, Brussels made clear it would, in any case, never accept a UK demand to replace the backstop, insisting the EU was “not going to reopen the agreement”. Heidi Allen, a leading pro-EU Tory, said the prime minister was “dreaming” if she believed her strategy could succeed, telling The Independent: “She is doing nothing other than pandering to the ERG again.” Despite the continuing stalemate, Ms May told the emergency meeting of Tory MPs that she wanted to stage a second “meaningful vote” on her deal by 13 February. No 10 saw it as a mechanism of sending a clear message about the concessions the EU needed to make if the thumping 230-vote defeat on the divorce deal, a fortnight ago, is to be overturned.

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The UK government, who obviously have nothing better to do, wants to confiscate Venezuela’s gold. Time for every country to repatriate their gold. Or it can and will be used against you.

Bank Of England Urged To Give Juan Guaidó Venezuela’s Gold (G.)

A UK foreign office minister has suggested that the Bank of England grant access to £1.2bn in Venezuelan gold reserves to the self-proclaimed interim leader Juan Guaidó rather than Nicolás Maduro. In a statement to British MPs, Sir Alan Duncan said the decision was a matter for the Bank and its governor, Mark Carney, and not the government. But he added: “It is they who have to make a decision on this, but no doubt when they do so they will take into account there are now a large number of countries across the world questioning the legitimacy of Nicolás Maduro and recognising that of Juan Guaidó.” Guaidó has already written to Theresa May asking for the funds to be sent to him.

The former chair of the foreign affairs select committee Crispin Blunt said the current Venezuelan central bank president was not legitimate, since he had not been appointed by the country’s national assembly. Blunt has sent letters to the foreign secretary, Jeremy Hunt, and to the chancellor, Philip Hammond, urging a decision. Duncan said Hunt would be discussing the next steps in the European Union’s efforts to support Guaidó in Bucharest on Thursday. Key EU states including France, Germany, Spain and the UK on Saturday urged Maduro to call free and fair elections within eight days or else see Guaidó recognised as interim president by the international community. The EU stance was backed by the SNP and the Liberal Democrats in the Commons.

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Bolton: “Now is the time to stand for democracy and prosperity in Venezuela..” Straight faced.

US Announces Sanctions Against Venezuela State Oil Company (G.)

The Trump administration has tightened the screws on Venezuela’s embattled president, Nicolás Maduro, announcing sanctions against the country’s state-owned oil giant PDVSA in what the US national security adviser admitted was partly an attempt to counter strategic threats from Cuba and Iran. At a briefing in the White House, the US treasury secretary, Steve Mnuchin, told reporters the sanctions would help punish “those responsible for Venezuela’s tragic decline” and boost Juan Guaidó, the opposition leader who last week declared himself Venezuela’s rightful interim president and was recognized by the United States. “It is a complete tragedy to have a humanitarian crisis in a country that has very rich resources,” Mnuchin said.

The sanctions – which represent the US’s toughest economic move against Maduro to date – come five days after Guaidó’s dramatic declaration sparked Venezuela’s latest political crisis. The national security adviser, John Bolton, said $7bn of PDVSA assets would be immediately blocked as a result of the sanctions while the company would also lose an estimated $11bn in export proceeds over the coming year. Bolton said the sanctions were an attempt to alleviate “the poverty and the starvation and the humanitarian crisis” currently gripping the South American nation and stop “Maduro and his cronies” looting the assets of the Venezuelan people. “Now is the time to stand for democracy and prosperity in Venezuela,” he said, calling on “all responsible nations” to back Guaidó.

However, he also conceded US strategic interests were in play, including concerns about the presence and activities of US foes in the region. “We think stability and democracy in Venezuela are in the direct national interests of the United States right now,” Bolton told reporters. “The authoritarian regime of Chávez and Maduro has allowed the penetration by adversaries of the United States, not least of which is Cuba.” He added: “Some call the country ‘Cubazuela’, reflecting the grip that Cuba’s military and security forces have on the Maduro regime. We think that is a strategic significant threat to the United States and there are others as well, including Iran’s interest in Venezuela’s uranium deposits.”

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Wonder what Putin and Xi are thinking. And doing.

Why Did John Bolton’s Notepad Say “5,000 Troops To Colombia”? (ZH)

During a Monday White House press briefing national security adviser John Bolton was photographed carrying a notepad — presumably as he was fresh out of a national security meeting — and one of the things which appears to be handwritten on the pad is “5,000 troops to Colombia”. The contents of the notepad were spotted almost immediately by multiple journalists online after an NBC news release featuring the AP photo was published. More precisely the full contents appear to read: “Afghanistan -> Welcome the Talks. 5,000 troops to Colombia.” And a closer look, per one of the first journalists to examine the photograph and writing, who noted that “if confirmed this would be a pretty terrible OPSEC [operations security] breach”.

Bolton during the White House presser revealed that President Trump is “leaving open the possibility of a U.S. military intervention to protect opposition leader Juan Guaidó, members of the nation’s assembly and American diplomatic personnel,” according to NBC. “The president has made it clear that all options are on the table,” Bolton told reporters while holding the yellow notepad. “We also today call on the Venezuelan military and security forces to accept the peaceful, democratic and constitutional transfer of power,” Bolton said. But could, as the notepad suggests, this involve plans to send 5,000 American troops to neighboring Colombia, a close US ally in Latin America?

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“.. in reopening it for three weeks, does this allow for the confirmation of William Barr as Attorney General?”

Stone Cold (Kunstler)

As I often point out here, history is a trickster, too. Things fly out of left field from it all the time. Pink elephants, black swans, honeybadgers, World Wars, flash crashes, and Roger Stone. I have a theory that Mr. Stone, in his twisted way, will turn out to be a sort of unlikely hero in this subplot of the Mueller inquisition. How might that work? Despite the attempt to squeeze him on charges that will bankrupt him and send him off to die in the federal cooler, Mr. Stone will do what he said on the courthouse steps: he won’t bear false witness against Mr. Trump. What that really means is something else: he is willing to step into a court-of-law and face down Mr. Mueller’s prosecutors.

Mr. Mueller does not want this case to be tried in court, I assure you. In the event, an awful lot of dark evidence will emerge from the defense side of the room about the criminal malfeasance among the Mueller Team, and their reliance on the Clinton network of fixers, grifters, and rogues who cooked up the years-long Russian Meddling-and-Collusion flimflam in the FBI going way back to the spring of 2016. Mr. Stone’s case is not unlike the case against General Mike Flynn, who was sent to the doghouse for three months in December by Federal Judge Emmet Sullivan to reconsider his guilty plea. Judge Sullivan may know that the charges against Gen. Flynn amount to prosecutorial misconduct by Mueller, and Sullivan is interested in trying the case to see what might come out. It will be March before anyone knows whether Gen Flynn got his mind right in the matter.

[..]I’m wondering about something else. Of course, Mr. Trump eventually caught hell on the government shutdown. But in reopening it for three weeks, does this allow for the confirmation of William Barr as Attorney General? And when that happens, might it change the flow of events in the RussiaGate show?

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If Stone’s indictment is any clue, there will be zero collusion reported. Well, at least not with any sort of proof.

Mueller Investigation Close To Being Completed – Acting AG Whitaker (CNBC)

Special counsel Robert Mueller’s investigation is “close to being completed,” acting Attorney General Matthew Whitaker said Monday. “I hope that we can get the report from Director Mueller as soon as possible,” Whitaker said during a Department of Justice news conference announcing indictments against Huawei officials. While there were reports that the special counsel probe was wrapping up, Whitaker’s remark is the first indication from a Justice Department official suggesting that Mueller could deliver his report soon. Mueller’s team of investigators is examining Russian interference in the 2016 election. The special counsel is also probing for possible collusion by Donald Trump’s campaign and whether or not the president obstructed justice.

The acting attorney general’s comment comes after Roger Stone, a longtime political advisor to President Donald Trump, was arrested in Florida on Friday. Stone faces seven counts, including allegations of witness tampering, obstruction of justice and making false statements to Congress. Whitaker’s appointment as acting attorney general sparked concern that he might try to stifle Mueller’s investigation. Before joining the Justice Department, Whitaker was critical of the special counsel probe. In a 2017 op-ed, Whitaker argued that if Mueller examined the Trump family finances “without a broadened scope in his appointment, then this would raise serious concerns that the special counsel’s investigation was a mere witch hunt.”

Whitaker addressed his critics during the Monday news conference, saying he has now been “fully briefed” on the investigation and is looking forward to Mueller’s report. “I really am not going to talk about an open and ongoing investigation otherwise, but you know, sort of the statements that I made were as a private citizen only with publicly available information,” Whitaker said.

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“When asked whether working with WikiLeaks should be considered a crime..”

Sarah Huckabee Sanders To Media: You’re No Better Than WikiLeaks (VF)

Last week, Roger Stone, one of Donald Trump’s longest and most loyal advisers, was indicted on several counts of lying to investigators regarding his interactions with WikiLeaks, the quasi-journalistic organization accused by U.S. intelligence of being in cahoots with the Russian government. Perhaps most dangerous for the president, the indictment against Stone alleged that a senior campaign official “was directed” by an unknown someone to ask Stone about “additional releases” from WikiLeaks, which had already dumped stolen D.N.C. e-mails all over the Internet. After Stone was arrested by the F.B.I., White House press secretary Sarah Huckabee Sanders was quick out of the gate with the standard statement: “This has nothing to do with the president, and certainly nothing to do with the White House,” she said.

“This is something that has to do solely with that individual, not something that affects us in this building.” But on Monday, as she presided over the first official White House press briefing in 41 days, she was pressed to provide a more detailed response. She denied that the White House and Trump had any contact with WikiLeaks, and brushed off the possibility that Trump would issue Stone a pardon. When asked whether working with WikiLeaks should be considered a crime, however, she went a step further. “I think every single outlet that you all represent looked for and searched for information that WikiLeaks was providing,” she said. “Most of you reported on that information. I think you’re just as accountable as anybody else in that process.” In other words, if seeking information from WikiLeaks is a crime, the media is full of criminals.

In fact, by the end of 2016, certain media outlets engaged in some earnest hand-wringing over whether the extent of their reporting on the leaked WikiLeaks documents, including the e-mails of Democratic officials like John Podesta and Debbie Wasserman Schultz, had thrown the election in Trump’s (and Russia’s) favor. Stone’s connections to the Julian Assange-run organization, however, are of a different nature entirely. Stone, a one-man political goon squad, had long publicly flaunted his connections with WikiLeaks, selling himself to the Trump campaign as someone with inside knowledge of the organization.

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This is your future. A bunch of call-center type ops in cheap labor nations will decide, using handbooks, what you are allowed to see.

Facebook To Create ‘War Room’ To Fight Fake News (G.)

Facebook will tackle political misinformation in the run-up to the EU elections this May with a new “war room” based in Dublin, the company’s incoming communications chief, Nick Clegg, has announced. In his first speech as Facebook’s top public face, Clegg said the company would be setting up an “operations centre focused on elections integrity, based in Dublin, this spring”. The centre will build on the company’s previous experience running an “elections war room” in its US office, where it coordinated efforts to police the platform during the US midterm and Brazilian presidential elections. “This approach will help boost our rapid response efforts to fight misinformation, bringing together dozens of experts from across the company – including from our threat intelligence, data science, engineering, research, community operations and legal teams,” Clegg said.

“They will work closely with the lawmakers, election commissions, other tech companies, academics and civil society groups to continue the fight against fake news, prevent the spread of voter suppression efforts and further integrate the large number of teams working on these important issues across Facebook, Instagram and WhatsApp.” In his speech, made to an audience of European policymakers in Brussels and livestreamed on Facebook, Clegg accepted that the company had erred in the past, but said it was on a path of improvement. “What I have seen in my short time at Facebook is a young company – only 15 years old next month – which has grown at a startling pace, has undoubtedly made mistakes and is now entering a new phase of reform, responsibility and change.”

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Why? “Dark energy is evolving – with a density that increases as time passes.”

Supermassive Black Holes Reveal Universe Expands Faster Than Thought (Ind.)

Supermassive black holes in the depths of space have been used for the first time to measure the universe growing, yielding intriguing results. Astronomers found the universe appears to be expanding faster than previously thought, a discovery that suggests a whole new set of rules is required to understand the cosmos. The rate of universe expansion is known as the Hubble constant, named after the American astronomer who also gave his name to the famous space telescope. It has proved a tricky value to pin down, because while the cosmos has been getting bigger since the Big Bang, the rate seems to vary depending on where astronomers look and how they measure it.

In a new study published in the journal Nature Astronomy, scientists used black holes sitting at the core of distant galaxies as reference points by which to measure the speed of growth. These bodies constantly spew out radiation, placing them among the brightest points in the universe. “Black holes are the most luminous persistent sources of the universe and allow us to measure its expansion rate at very early times,” explained Dr Elisabeta Lusso from Durham University. Using data collected from 1,600 supermassive black holes as the universe expands and they move away from each other, the scientists were able to record the rate of this expansion.

Previous efforts had used the light produced by exploding supernovae to measure the growth of the universe, but such measurements could only go back so far in time. The luminous black holes allowed Dr Lusso and her colleague Dr Guido Risaliti to peer back further, providing a clearer picture of early universe expansion. The discrepancy they recorded matched the contradictory results previously obtained by the European Space Agency and Nasa. These results suggest the early expansion of the universe is different from that predicted by the standard model of cosmology, which describes the age, history and contents of the universe. [..] Dr Risaliti, of the Università degli Studi di Firenze, said if this dark energy is evolving – with a density that increases as time passes – this could provide an explanation for their results.

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A land of ordinary thieves.

Dull is the eye that will not weep to see
Thy walls defac’d, thy mouldering shrines remov’d
By British hands
– Lord Byron

British Museum Chief: Taking The Parthenon Marbles Was ‘Creative’ (G.)

The director of the British Museum has provoked anger by suggesting the removal of the Parthenon marbles from Greece in the 19th century could be seen as “a creative act”. Hartwig Fischer gave an interview to the Greek newspaper Ta Nea in which he ruled out returning the 2,500-year-old sculptures, which many people in Greece and elsewhere regard as stolen. Greece desperately wants the sculptures, popularly known as the Elgin marbles, back but has been rebuffed repeatedly by the British Museum. Asked about the argument that it should be seen more as a rejoining of the sculptures than a return, Fischer said the British Museum offered a different way of interacting with the marbles, “posing different questions because the objects are placed in a new context”.

He added: “We should appreciate this opportunity. You could, of course, be saddened by the fact that the original environment has disappeared. When you move a cultural heritage to a museum, you move it outside. However, this shifting is also a creative act.” The same could be said for the Acropolis Museum created in Athens, said Fischer. “Nothing that we admire at the Acropolis Museum was created for the Acropolis Museum. They are close to the original environment, but they have again moved away from it and have been transformed through this act.”

There are many who will not see the early 19th-century removal from Greece of the marbles by agents of the 7th Earl of Elgin as “creative”. Lord Byron likened it to vandalism, lamenting in verse in Childe Harold’s Pilgrimage: “Dull is the eye that will not weep to see / Thy walls defac’d, thy mouldering shrines remov’d / By British hands.” George Vardas, the secretary of the International Association for Reunification of Parthenon Sculptures, tweeted: “Seriously. What was so creative in the destruction of the temple and looting and pillage of a nation’s keys to its ancient history?” He called it “astonishing historical revisionism and arrogance”, and added: “The imperial condescension of the British Museum knows no bounds.”


Photograph: Matthew Fearn/PA

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Jan 282019
 
 January 28, 2019  Posted by at 11:29 am Finance Tagged with: , , , , , , , , , , , ,  


Pablo Picasso Bust of woman with arms raised 1922

 

US Sanctions On Venezuela Are Killing Citizens – Former UN Rapporteur (Ind.)
PBOC Fixes Yuan Dramatically Stronger Following Gold Spike (ZH)
China’s Real Estate Loan Growth Slows Further In 2018 (CNBC)
Britain’s Biggest Lender To Offer 100% Mortgages To First-Time Buyers (G.)
UK Cannot Simply Trade On WTO Terms After No-Deal Brexit (G.)
May To Seek Binding Changes To Irish Backstop – Boris Johnson (R.)
Ireland Stresses It Will Not Yield On Brexit Backstop (G.)
UK Military Bases Stockpiling To Prepare For No-Deal Brexit (Sky)
Brexit Exposes Growing Fractures In UK Society (G.)
In Germany’s Plan To Phase Out Coal, A Big Polluter Will Benefit (BBG)

 

 

Picked up these numbers last week on Twitter. Chavez announced cancer in late 2012, died early 2013. Oil prices only explain a smal part of it. Economic warfare does the rest.

@spectatorindex – Venezuela GDP growth.
2012: 5.6%
2013: 1.3%
2014: -3.9%
2015: -6.2%
2016: -17%
2017: -15%
2018: -16%

US Sanctions On Venezuela Are Killing Citizens – Former UN Rapporteur (Ind.)

The first UN rapporteur to visit Venezuela for 21 years has told The Independent the US sanctions on the country are illegal and could amount to “crimes against humanity” under international law. Former special rapporteur Alfred de Zayas, who finished his term at the UN in March, has criticized the US for engaging in “economic warfare” against Venezuela which he said is hurting the economy and killing Venezuelans. The comments come amid worsening tensions in the country after the US and UK have backed Juan Guaido, who appointed himself “interim president” of Venezuela as hundreds of thousands marched to support him. European leaders are calling for “free and fair” elections. Russia and Turkey remain Nicolas Maduro’s key supporters.

Mr De Zayas, a former secretary of the UN Human Rights Council (HRC) and an expert in international law, spoke to The Independent following the presentation of his Venezuela report to the HRC in September. He said that since its presentation the report has been ignored by the UN and has not sparked the public debate he believes it deserves. “Sanctions kill,” he told The Independent, adding that they fall most heavily on the poorest people in society, demonstrably cause death through food and medicine shortages, lead to violations of human rights and are aimed at coercing economic change in a “sister democracy”. On his fact-finding mission to the country in late 2017, he found internal overdependence on oil, poor governance and corruption had hit the Venezuelan economy hard, but said “economic warfare” practised by the US, EU and Canada are significant factors in the economic crisis.

In the report, Mr de Zayas recommended, among other actions, that the International Criminal Court investigate economic sanctions against Venezuela as possible crimes against humanity under Article 7 of the Rome Statute. The US sanctions are illegal under international law because they were not endorsed by the UN Security Council, Mr de Zayas, an expert on international law and a former senior lawyer with the UN High Commissioner for Human Rights, said. “Modern-day economic sanctions and blockades are comparable with medieval sieges of towns. “Twenty-first century sanctions attempt to bring not just a town, but sovereign countries to their knees,” Mr de Zayas said in his report.

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Xi remains nervous.

PBOC Fixes Yuan Dramatically Stronger Following Gold Spike (ZH)

PBOC fixed the yuan dramatically stronger against the dollar overnight, sending offshore yuan surging to its strongest against the dollar in six months. While the Chinese currency is reportedly strengthening on the heels of trade talks optimism (which is entirely the opposite of the rhetoric coming out of Washington), we note that this was the biggest positive shift in the yuan fix in 19 months…

Notably, the yuan is strengthening considerably more against the dollar than it is against the broad basket of trade partner currencies…Shanghai Accord 2.0? And coincidentally, the surge in yuan comes the day after gold prices broke out higher… Perhaps the PBOC’s aggressive action was prompted to manage the Yuan peg against gold back into balance?

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If you look closer, nothing seems very dramatic. But real estate has become such a huge part of the economy that Beijing must weigh curbing risks vs continued growth.

It’s also the speed with which this has happened. 10 years ago Chinese didn’t borrow for homes. It’s literally been used to mitigate the financial crisis.

China’s Real Estate Loan Growth Slows Further In 2018 (CNBC)

Loans to China’s property sector grew at a slower pace in 2018 as Beijing tightened home-purchase rules to curb bubble risk, but lending to property developers expanded slightly faster than the year before, central bank data showed on Friday. Outstanding yuan property loans grew 20% from a year earlier to 38.7 trillion yuan ($5.72 trillion) by end-December, compared with 20.9% growth in 2017, the PBOC said in a quarterly financial report. Outstanding mortgage lending climbed 17.8% year-on-year to 25.75 trillion yuan by the end of 2018, below a 22.2% rise in 2017, central bank data showed.

Policymakers have vowed to ensure “stable and healthy” development of the property market, repeatedly emphasizing that homes are for living in, not speculative investment. The government’s sustained drive to reduce debt risks in the economy has cooled the property market but a continued downturn in credit growth in the sector could add to growing pressures on the world’s second-largest economy. The real estate sector is a key driver of economic growth, so any further weakness could influence the pace and scope of fresh stimulus steps expected from Beijing this year.

Property investment is also looking wobbly, with analysts waiting to see if the government will risk loosening restrictions on home buyers that have kept speculation in check. Real estate investment in December rose 8.2% from a year earlier, down from 9.3% in November, according to Reuters calculations based on data released by the National Bureau of Statistics. That was just ahead of the slowest pace of growth last year at 7.7% recorded for October. Developers raised their borrowings last year though, with loans extended for property development up 22.6% in 2018 versus growth of 21.7% in 2017, the report showed. The central bank also said outstanding household loans jumped 18.2% to 47.9 trillion yuan by end-2018.

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How much can Brexit hurt the British? A lot, we must assume. Then again, if you fall for this stuff at this moment in time, maybe you deserve what’s coming. How about a crisis worse than the 1930s?

Britain’s Biggest Lender To Offer 100% Mortgages To First-Time Buyers (G.)

Britain’s biggest lender is to offer 100% mortgages to first-time buyers in a return to lending last seen before the financial crash – but only if the buyer has family that can stand behind the loan. Under the new Lloyds Bank “Lend A Hand” deal, a first-time buyer will be able to borrow up to £500,000 for a new home, without putting down a penny of deposit. The Lloyds move marks a major expansion into the first-time buyer market, as most other mainstream lenders demand a minimum deposit worth 5% of the property purchase price, although Barclays has offered a similar “family springboard” deal. Lloyds has priced the mortgages to undercut the Barclays offer.

The deal – part of what Lloyds said is a £30bn commitment to help first-time buyers – will reopen concern about a two-tier market where buyers with well-off families can elbow aside those without. Saving for a deposit is usually cited by first-time buyers as the biggest hurdle to home ownership. Lloyds said the average deposit put down by first-time buyers has climbed to £33,211, and a staggering £110,182 in London. The Lloyds deal requires that a member of the family – such as parent, grandparent or close relative – helps out. The bank will only grant the 100% mortgage if the family member puts a sum equal to 10% of the value of the property into a Lloyds savings account.

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“The anticipated recession will be worse than the 1930s, let alone 2008.”

UK Cannot Simply Trade On WTO Terms After No-Deal Brexit (G.)

The UK will be unable to have frictionless, tariff-free trade under World Trade Organization rules for up to seven years in the event of a no-deal Brexit, according to two leading European Union law specialists. The ensuing chaos could double food prices and plunge Britain into a recession that could last up to 30 years, claim the lawyers who acted for Gina Miller in the historic case that forced the government to seek parliament’s approval to leave the EU. It has been claimed that the UK could simply move to WTO terms if there is no deal with the EU. But Anneli Howard, a specialist in EU and competition law at Monckton Chambers and a member of the bar’s Brexit working group, believes this isn’t true. “No deal means leaving with nothing,” she said. “The anticipated recession will be worse than the 1930s, let alone 2008.

It is impossible to say how long it would go on for. Some economists say 10 years, others say the effects could be felt for 20 or even 30 years: even ardent Brexiters agree it could be decades.” The government’s own statistics have estimated that under the worst case no-deal scenario, GDP would be 10.7% lower than if the UK stays in the EU, in 15 years. There are two apparently insurmountable hurdles to the UK trading on current WTO tariffs in the event of Britain crashing out in March, said Howard. Firstly, the UK must produce its own schedule covering both services and each of the 5,000-plus product lines covered in the WTO agreement and get it agreed by all the 163 WTO states in the 32 remaining parliamentary sitting days until 29 March 2019. A number of states have already raised objections to the UK’s draft schedule: 20 over goods and three over services.

To make it more complicated, there are no “default terms” Britain can crash out on, Howard said, while at the same time, the UK has been blocked by WTO members from simply relying on the EU’s “schedule” – its existing tariffs and tariff-free trade quotas. The second hurdle is the sheer volume of domestic legislation that would need to be passed before being able to trade under WTO rules: there are nine statutes and 600 statutory instruments that would need to be adopted. The government cannot simply cut and paste the 120,000 EU statutes into UK law and then make changes to them gradually, Howard said. “The UK will need to set up new enforcement bodies and transfer new powers to regulators to create our own domestic regimes,” she said.

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Fast and loose with Good Friday.

May To Seek Binding Changes To Irish Backstop – Boris Johnson

Prime Minister Theresa May will seek legally binding changes to the Irish backstop from the European Union in an attempt to break the deadlock over Brexit, lawmaker Boris Johnson wrote in The Telegraph on Sunday, citing senior government sources. The PM is looking to change the text of the agreement to insert either a sunset clause or a mechanism for the UK to escape without reference to the EU, Boris Johnson said in The Telegraph. The contentious backstop arrangement is designed to prevent a hard border between Ireland and the UK province of Northern Ireland by requiring Britain to keep some EU rules if it was unable to agree a trade deal with the bloc. Ireland said earlier on Sunday it would not accept any changes to the backstop agreement.

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The backstop will be May’s major point of contention this week. Stop her! There’s already talk of reinserting issues in the deal that have already been thrown out.

Ireland Stresses It Will Not Yield On Brexit Backstop (G.)

Ireland has launched a last-minute effort to warn Theresa May off any attempt to unravel the backstop, two days before a crucial Commons debate that may decide the next move for the UK’s rudderless Brexit policy. Simon Coveney, the Irish foreign minister and deputy prime minister, insisted the backstop – the mechanism to ensure there will be no hard border between the Irish Republic and Northern Ireland if Britain and the EU fail to strike a free trade deal – was “part of a balanced package that isn’t going to change”. In a forceful interview, he insisted it was only part of the withdrawal agreement because of the UK’s red lines.

On Tuesday Tory Brexiters may get the chance to vote for amendments that would signal their willingness to back May’s Brexit deal subject to the backstop’s either being removed or time-limited. Ministers have not formally backed any of the anti-backstop amendments, which are incompatible with the deal that May agreed with UK leaders, but if one were to pass by a majority, she would be able to present the EU with a firm idea of what changes might get her deal through parliament – something that as yet remains unclear to Brussels. In an interview with BBC One’s The Andrew Marr Show, Coveney said he did not see the need for further compromise because “the backstop is already a compromise”.

Although originally Northern Ireland-specific, it was made UK-wide at the request of May, he said. “And the very need for the backstop in the first place was because of British red lines that they wanted to leave the customs union and single market,” he said.

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Many Brits are so poor they can’t even think of stockpiling.

UK Military Bases Stockpiling To Prepare For No-Deal Brexit (Sky)

Britain has begun stockpiling food, fuel, spare parts and ammunition at military bases in Gibraltar, Cyprus and the Falklands in case of a no-deal Brexit, Sky News has learnt. Extra supplies are also being built up at bases in the UK to reduce the risk of the armed forces running short and being unable to operate if it suddenly becomes much harder to import and export day-to-day goods after 29 March. Military chiefs have spent at least £23m on what is being described as “forward-purchased” goods, Sky News understands. The move is part of contingency planning by the government – codenamed Operation Yellowhammer – to reduce disruption if Britain departs from the European Union without an agreement, according to three defence sources.

“An army marches on its stomach. If supply lines breakdown they struggle,” one source said. Any blockage in the flow of food and other vital items to Britain’s military bases overseas could impact on operations and affect thousands of soldiers, sailors and airmen. There is a concern that supplies delivered to British troops in the rest of Europe – the UK has a permanent presence in Cyprus and a base on the British overseas territory of Gibraltar, which shares a border with Spain – could be impacted, according to the sources.

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We haven’t seen any of it yet.

Brexit Exposes Growing Fractures In UK Society (G.)

Britons have become angrier since the referendum to leave the EU, according to a survey which suggests there is widespread unhappiness about the direction in which the country is heading. 69 per cent of respondents said they felt their fellow citizens had become “angrier about politics and society” since the Brexit vote in 2016, according to the Edelman Trust Barometer, a long-established, annual survey of trust carried out across the globe. 40 per cent of people think others are now more likely to take part in violent protests, the UK results from the survey show, even though violent political protest in Britain is rare.

One person in six said they had fallen out with friends or relatives over the vote to leave the bloc, the survey found. Edelman, which said the findings exposed a “disUnited Kingdom”, found widespread concern about where the government was heading, particularly among those who voted remain, and those who backed Labour. Overall, about 65% of Britons think the country is “on the wrong track”, the survey suggests. Amongst remain voters the figure is 82%, but even among leave voters the figure is 43%. Some 60% of people who identify with the Conservatives think the country is heading in the right direction, but among Labour identifiers, the figure is just 20%.

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The coal phase-out is part of a 500 billion-euro switch away from fossil fuels and toward renewables..

Compensating coal-mining regions & consumers for higher electricity prices expected to cost German taxpayer up to €78bn.

But across the border lies Italy, and next to it Greece. How are they going to pay for such a switch? And if they don’t, what’s the use of Germany doing it?

In Germany’s Plan To Phase Out Coal, A Big Polluter Will Benefit (BBG)

A proposal to stop Germany from using coal for power generation within two decades may leave an unexpected beneficiary: The company that burns the most of the fuel. While RWE AG was quick to say it’s “too soon” to shed all fossil fuel plants by 2038, the recommendations outlined this weekend by a panel advising Chancellor Angela Merkel called for compensation for the utilities and 40 billion euros ($45.6 billion) for regions coping with the transition. Together, the measures would significantly soften the blow on industry from Merkel’s vow to scale back greenhouse gases. They show how far the government has moved away from a quick clampdown on the most polluting fossil fuel and give more certainty for the future of some of RWE’s most valuable assets.

And while the proposals could yet be watered down by politicians, they signal a longer life for many of the utility’s plants than environmentalists had hoped for. “We believe that clarity, compensation payments, and a relatively long phase-out period should trigger a re-rating for the company’s conventional power generation,” said Guido Hoymann, an analyst at the private bank B. Metzler Seel. Sohn & Co. KGaA who added RWE to a list of top 10 German stocks.

Germany’s 120 or so remaining coal and lignite plants have a combined capacity of about 45 gigawatts. That’s enough to feed 40 percent of the nation’s power demand or about 32 million homes. Germany is already falling short on its targets to slash greenhouse gas emissions and sees closing coal plants as one of the most important ways to make the reductions needed. The coal commission includes members from the main political parties, environmental groups and industry charged with developing a consensus that Germany can live with for years to come.

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Jan 192019
 
 January 19, 2019  Posted by at 10:40 am Finance Tagged with: , , , , , , , , , , ,  


Pablo Picasso Guitar on a table 1922

 

Mueller Shoots Down Buzzfeed’s Latest Russiagate Scoop With Rare Dismissal (RT)
US Asked Ecuadorean Officials About Alleged Assange-Manafort Meeting (R.)
56% Majority Of Britons Now Want To Remain In The EU – Poll (DM)
Extending The Brexit Deadline Could Clash With Coming EU Elections (CNBC)
EU Loves British Money More Than It Loves Democracy (Clark)
UK Patients Stockpile Drugs In Fear Of No-Deal Brexit (G.)
UK Shoppers Rein In Spending As Fears Grow Over Economy (G.)
Rising Credit-Card Use Shows US Consumers Are Strapped (DDMB)
Tesla Cuts 7% Of Workforce, Musk Sees ‘Very Difficult’ Road Ahead (CNBC)
Tesla Has $920 Million In Debt Coming Due, A Third Of Company’s Cash (CNBC)
Russia Outshines China To Become World’s 5th Biggest Holder Of Gold (RT)
French Court Cites Precautionary Principle To Cancel Monsanto Permit (R.)

 

 

Is this the worst day for fake news to date? It’s hard to keep track. It’s just that this one was taken up by so many hoping for -finally!- impeachment. Please Lord make it stop.

Two reasons why Mueller issued his statement: 1) the credibility of the Special Counsel itself (since every outlet ran with the -false- BuzzFeed story), 2) members of Congress were calling for investigations based on the story (would have been even more embarrassing than making the statement).

One Shimon Prokupecz on Twitter: “We cannot underestimate the statement disputing Buzzfeed’s story from the special counsel. I’m sure it pained them to do this. I’m sure this went through many levels at the DOJ and FBI. They don’t talk. This is massive.”

Trump on Twitter: “Remember it was Buzzfeed that released the totally discredited “Dossier,” paid for by Crooked Hillary Clinton and the Democrats (as opposition research), on which the entire Russian probe is based! A very sad day for journalism, but a great day for our Country!”

Mueller Shoots Down Buzzfeed’s Latest Russiagate Scoop With Rare Dismissal (RT)

Special Counsel Robert Mueller has poured cold water on BuzzFeed’s latest Russiagate “bombshell” with a rare public statement calling the article, which claims Trump told his ex-lawyer Cohen to lie to Congress, “not accurate.” BuzzFeed reported that President Donald Trump directly instructed his former attorney, Michael Cohen, to lie to Congress about his plans to build a Trump Tower property in Moscow, citing two anonymous “federal law enforcement officials” as sources that the president had suborned perjury – which, being an actual crime, triggered talk of impeachment “walls closing in” among the anti-Trump “Resistance.”

While half of Congress took to Twitter to wave the story as the long-awaited proof of Collusion, the BuzzFeed reporters could not seem to agree on their own sourcing. Anthony Cormier admitted to CNN he hadn’t seen the proof directly but had two “law enforcement” sources claiming they had seen it, while Jason Leopold told MSNBC they had in fact seen the documents themselves. The smoking gun du jour collapsed further when word came down from Mueller himself – via spokesman Peter Carr – that Buzzfeed’s “description of specific statements to the Special Counsel’s Office, and characterization of documents and testimony obtained by this office, regarding Michael Cohen’s Congressional testimony” were “not accurate.”

Mueller has been extremely tight-lipped about the numerous previous “Russiagate” scoops, and considering the time and effort involved in his own ongoing crusade to take Trump down, his dismissal of BuzzFeed’s would-be bombshell knocked the legs out from under a story whose vague sourcing had already raised questions.

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And this fits in seamlessly with the Mueller/BuzzFeed thing: The Guardian story has been thoroughly discredited, but 2 months later, US officials are still chasing it. What’s new to me is that it’s the first time I see a Guardian response: “The Guardian has defended the article and said it “relied on a number of sources.” Lame poppycock. And the same thing Buzzfeed says.

US Asked Ecuadorean Officials About Alleged Assange-Manafort Meeting (R.)

U.S. officials spoke with officials from Ecuador’s British embassy on Friday about an alleged meeting there between President Donald Trump’s former campaign manager, Paul Manafort, and WikiLeaks founder Julian Assange, an Ecuadorean government source said. The Guardian newspaper reported the meeting in November, alleging the two met at least three times, including in 2016, just before WikiLeaks released damaging emails about Trump’s rival in the 2016 presidential elections, Hillary Clinton. Manafort and Assange have both previously denied meeting each other at the embassy.

WikiLeaks, in a statement on Friday entitled the “U.S. interrogation of Ecuadorian diplomats,” accused Ecuador’s government of assisting the United States in prosecuting Assange, who first sought asylum in the embassy in 2012. The source said the embassy officials, at the request of the U.S. Justice Department, provided testimony in Quito at facilities provided by Ecuadorean authorities. [..] Part of Mueller’s probe has involved looking into whether Trump associates may have had advance notice before WikiLeaks published emails stolen by Russian hackers from Democratic computer networks to damage Clinton. WikiLeaks called the Guardian’s story “indisputably fabricated” and said it was being used as a pretext for the United States to prosecute Assange. The Guardian has defended the article and said it “relied on a number of sources.”

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But neither one of the two main parties do. How screwed up is that? Nobody represents the majority.

56% Majority Of Britons Now Want To Remain In The EU – Poll (DM)

A majority of Britons now say they want to stay in the EU after Theresa May’s Brexit plan suffered a massive defeat, a new poll published today has found. A YouGov survey asked 1,070 voters how they would vote in a second Brexit referendum if it were held today – and found Remain has stretched out a 12-point lead over Leave, with 56% saying they would vote to stay in the EU versus 44% in favour of leaving. The voters were questioned the day after the PM’s Brexit plan suffered a crushing defeat – leaving the machinery of government deadlocked and with the bitter divisions among MPs offering no clear way ahead.

Ministers are now at war over Brexit, openly clashing over whether Britain should be willing to crash out without a deal on March 29, or back a softer Brexit or second referendum. The Prime Minister must make a statement on Monday where she will lay out her ‘next steps’ on a Brexit ‘plan B’ before a week of debate on the various options. The following week, MPs will vote on their preferred course of action, putting huge pressure on the Prime Minister to adopt it. With Westminster gripped by chaos, the new poll suggests voters are losing faith in Brexit with growing numbers now backing Remain. The survey for The Times found that 56% of those polled would now back staying in the EU, while the same proportion back a second referendum. And voters were even more likely to want to stay in the bloc if the only other option was the PM’s Brexit deal, with Remain leading by 65% to 35%.

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If Article 50 were extended, which looks pretty sure, Britain will have to vote in European elections. But their seats have already been given out to others.

Extending The Brexit Deadline Could Clash With Coming EU Elections (CNBC)

Extending the official Brexit deadline for the U.K. could bring a wave of extra logistical and political problems for the EU. The ongoing deadlock has sparked a debate on the potential extension of Article 50 — the legal means by which the U.K. leaves the EU. However, there is strong opposition from some European lawmakers over giving more time to the U.K. to sort out its domestic politics. The U.K. is set to leave the EU on March 29 — but this could change if the U.K. asks for an extension and the other 27 member nations accept the request. Extending the departure beyond the agreed date would likely clash with European parliamentary elections that are set to take place between May 23 and 26. The chamber is made of lawmakers from all 28 European member countries, including the U.K., and is responsible for approving European policies, such as the Union’s total budget.

“What we will not let happen, deal or no deal, is that the mess in British politics is again imported into European politics. While we understand the U.K. could need more time, for us it is unthinkable that Article 50 is prolonged beyond the European Elections,” Guy Verhofstadt, a member of the European Parliament and its representative in Brexit negotiations, said on Twitter on Wednesday. [..] Seb Dance, member of the European Parliament for the U.K. Labour party, said the prospect of having Brexit and the European elections clashing “is a logistical headache.” “The impact of delaying Brexit on the EU elections is certainly troublesome logistically speaking,” he said, “but politically speaking it shouldn’t make a difference as it is entirely possible that elections take place in the other member states without needing to take place in Britain.”

[..] According to a Brussels-based European official, who did not want to be named due to the sensitivity surrounding the Brexit talks, an extension would likely mean that the U.K. would have to participate in the vote. This is because it would still technically be a member of the European Union. Zsolt Darvas, senior fellow at Bruegel, reiterated this point in an email to CNBC Friday. “If the extension goes beyond the elections, the U.K. would have to elect members of the European Parliament. Not expecting this, the European Parliament has already agreed on how to allocate the U.K. seats after Brexit. That agreement will have to be revised, or perhaps its implementation be postponed after the actual, delayed Brexit date.”

“From the U.K. side, it might look awkward to elect members of the European Parliament when people expect that the U.K. will leave the EU not much after the European elections; plus the U.K. would need to act quickly to make the European Parliament election possible, which would also involve some costs.”

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“..the Common Fisheries Quota has for the past 34 years given 84% of the cod in the English Channel to France and just 9% to the UK..”

EU Loves British Money More Than It Loves Democracy (Clark)

The European establishment is desperate for Britain to reconsider Brexit. Internationalist ideals about ‘preserving European unity’, don’t come in to it, this is all about protecting income streams. Consider a few facts. If Britain does leave without a deal, then the EU as an institution would be considerably worse off. The UK has consistently been one of the top three countries that puts most into the EU budget (after Germany and France). It is one of ten countries that puts more into the EU than it gets out. In 2017, the UK’s net contribution was £9bn. If Britain leaves, the EU faces a financial shortfall. In 2016, 16 countries were net receivers, including Donald Tusk’s Poland. Little wonder that he regards Britain staying as “the only positive solution”.

The very generous financial remuneration packages of EU officials might also be threatened by British withdrawal. In December, it was reported that the EU’s top civil servants would be paid over €20,000 a month for the first time, and that Tusk and Juncker would see their packages rise to €32,700 a month. Austerity? Not in Brussels, mon ami! The EU is a fabulous gravy train once you are on board. But the gravy train relies on its richest members not leaving, otherwise who’s going to foot the bill? If Britain leaves with ‘No Deal’, it’s not just the EU budget which will take a hit. In 2017, EU countries sold around £67 billion more in goods and services to the UK, than the UK sold to them. Europe needs full and unfettered access to British markets, much more than Britain needs full and unfettered access to European markets.

[..] The country that would lose out the most with Brexit is Germany. Britain’s trade deficit with Germany is higher than with any other country, even higher than China, whose products are everywhere in our shops! In 2016, the year of the EU referendum, Britain imported around £26 billion more from Germany than it exported. [..] We also have to discuss fishing. The other EU countries do extremely well out of the Common Fisheries Policy, which provides them with access to UK waters. Belgian fleets get around half their catch from British waters! As reported in the Independent, the Common Fisheries Quota has for the past 34 years given 84% of the cod in the English Channel to France and just 9% to the UK. Overall, EU vessels take out around four times as much fish out of UK waters as British vessels take out of EU waters.

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Is it Brexit or just the overall state of affairs as the Tories dismantle the NHS?

UK Patients Stockpile Drugs In Fear Of No-Deal Brexit (G.)

Ministers have been urged by top doctors to reveal the extent of national drug stocks, amid growing evidence patients are stockpiling medication in preparation for a no-deal Brexit. The Royal College of Physicians (RCP), which represents tens of thousands of doctors, urged the government to be more “transparent about national stockpiles, particularly for things that are already in short supply or need refrigeration, such as insulin”. Prof Andrew Goddard, the RCP president, said: “Faith in the system will be created by openness and regular updates to trusts and clinicians; this will allow clinicians to reassure patients.” The Pharmaceutical Services Negotiating Committee (PSNC) has warned medical shortages have increased in recent months.

Generic drugs are usually bought through nationally set tariff prices. However, pharmacies can apply for price concessions under which the NHS will temporarily pay more when the drugs are in short supply. The number of concessions the PSNC applied for went up from 45 in October, to 72 in November and 87 in December. The Guardian has also found evidence some patients are stockpiling drugs, against official guidance. They said they were doing so by ordering drugs from abroad, and by asking their GPs for emergency prescriptions. One diabetic patient has been stockpiling insulin for four months, ordering twice the amount he needs for each of his drugs from the pharmacist.

Robin Hewings, the head of policy at Diabetes UK, backed calls for more transparency from the government about current stock levels to reassure patients. “There is a level of concern that has risen quite a lot [in the last few months] and people with diabetes are talking about stockpiling. The government needs to be more transparent about insulin supplies.”

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Only, not really: “..sales grew by 2.7% last year, compared with a growth rate of 2% in 2017.”

UK Shoppers Rein In Spending As Fears Grow Over Economy (G.)

British consumers reined in their spending in December after splashing out during November on Black Friday promotions, according to official figures that confirmed the tough festive shopping period on the high street. The Office for National Statistics said the quantity of goods bought last month fell by 0.9% compared to November, when Black Friday deals encouraged shoppers to bring forward some of their Christmas spending. All sectors except food and petrol declined on the month, the figures showed, coming after the British Retail Consortium said the key Christmas shopping period had been the worst for retailers since the financial crisis a decade ago.

James Smith, an economist at the City bank ING, said: “After another bumpy week for Brexit, today’s UK retail sales data is a timely reminder that all is not particularly well in the UK economy.” Figures for the three months to December, highlighting the wider trend for consumer spending, showed that the quantity of goods bought dropped by 0.2%. [..] Despite the downturn last month, the latest snapshot showed that retail sales growth for 2018 as a whole was above the level recorded a year earlier. Although significantly below the peak growth rate of 4.7% seen before the Brexit vote in 2016, sales grew by 2.7% last year, compared with a growth rate of 2% in 2017.

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Or does it show that they are more confident? Always a nice puzzle. A popular industry POV: people get deeper in debt because they feel so great.

Rising Credit-Card Use Shows US Consumers Are Strapped (DDMB)

Even though evidence is mounting that the U.S. economy may be soon heading into a recession, there are plenty of analysts who say that the surge in credit card borrowing is a sign of strong confidence among households. That’s hardly the case. In fact, households’ confidence in the future growth of their incomes has been cooling since late last summer, which means borrowers will only reach for what’s in their wallet to compensate for what their paychecks will not cover. Many working adults have no recollection of credit card borrowing not being a mainstay among their financing options. But then, few would be able to identify a Diners Club card, which was a popular brand during the 1980s “yuppie” era when Americans first began to embrace credit card spending in earnest.

These days, consumers are not keen to lean on credit cards, partly due to a cultural and financial shift in the industry. The financial crisis arguably altered households’ views on charging beyond their means. It didn’t hurt that the availability of subprime credit all but disappeared for a few years or that the interest rate on credit cards remained in double-digit territory despite the Federal Reserve’s zero interest rate policy. That said, the idea of frugality re-entered many households’ thinking in the wake of the severe hardship the foreclosure crisis brought to bear on millions of working Americans. Debit cards became the predominant form of plastic used at the checkout.

And yet, consumer credit likely rounded out 2019 at a new $4 trillion milestone as runaway higher educationand car-price inflation coupled with ridiculously looser lending standards pushed households to take on record levels of student loan and auto debt. At roughly $1 trillion, credit cards are but a co-star in a star-studded, full-length feature film. A long history of credit card borrowing suggests that we would have multiples of today’s $1.04 billion in outstanding balances had the growth rate of spending on plastic maintained the headier double-digit paces clocked in the 1980s and 1990s.

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Shares down 13%.

Tesla Cuts 7% Of Workforce, Musk Sees ‘Very Difficult’ Road Ahead (CNBC)

Tesla is cutting its full-time staff headcount by about 7 percent, as it ramps up production of its Model 3 sedans, CEO Elon Musk said Friday. The announcement follows recent cost-cutting measures the company has made in a bid to reduce the price of its products and boost margins. Tesla shares fell 13 percent by the end of trading Friday. In an email to employees, Musk said the company faces a “very difficult” road ahead in its long-term goal to sell affordable renewable energy products, noting the company is younger than other players in the industry. “Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months,” Musk said.

“Attempting to build affordable clean energy products at scale necessarily requires extreme effort and relentless creativity, but succeeding in our mission is essential to ensure that the future is good, so we must do everything we can to advance the cause.” The exact number of employees who will be laid off has not been disclosed. However in an October tweet, Musk said Tesla had a staff count of 45,000. If still true today, that would mean 3,150 layoffs. Musk said Friday that Tesla faces “an extremely difficult challenge” in making its electric vehicles and solar products a competitive alternative to traditional vehicles and energy products that rely on fossil fuels.

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Plunging share prices are the last thing Tesla needs.

Tesla Has $920 Million In Debt Coming Due, A Third Of Company’s Cash (CNBC)

Tesla has a billion dollar debt coming due, and it could wipe out nearly a third of the company’s cash if the stock price doesn’t improve. About $920 million in convertible senior notes expires on March 1 at a conversion price of $359.87 per share. But Tesla’s stock hasn’t traded above $359 for weeks. If the shares are about $359.87, then Tesla’s debt converts into Tesla shares. If not, Tesla will have to pay the debt in cash. Tesla reported cash and cash equivalents of $3.37 billion at the end of its September quarter. The company continues to reveal pressure to maintain profitability, and announced Friday it would cut 7 percent of its full-time workforce. Shares fell more than 10 percent Friday following the announcement to trade around $310 per share.

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If only because of the sanctions.

Russia Outshines China To Become World’s 5th Biggest Holder Of Gold (RT)

The Central Bank of Russia reported purchasing 8.5 million troy ounces of gold in January-November 2018. With its 67.6 million ounces of gold Russia is now the world’s fifth largest holder behind the US, Germany, France and Italy. China dropped to sixth place as it reported an increase in gold reserves just once in more than two years – to 59.6 million ounces in December 2018 from 59.2 million ounces in October 2016. Industry sources told Reuters that Western sanctions against Russia lifted the country’s gold buying to record highs in 2018. One of the reasons Russia’s Central Bank was betting on the yellow metal was because it could not be frozen or blacklisted, sources explained.

“It seems that there is an aim to diversify from American assets,” said a source in one of Russia’s gold producers, referring to the Central Bank’s holdings. While purchases of the precious metal by Russia jumped last year the country continued getting rid of US Treasury securities. Earlier this month, Russia’s Central Bank reported that it cut the share of the US dollar in the country’s foreign reserves to a historic low, transferring nearly $100 billion into the euro, the Japanese yen and the Chinese yuan. The step came as a part of a broader state policy on eliminating reliance on the greenback. According to sources, the Central Bank has been purchasing a significant portion of Russia’s domestic gold production, which is also rising.

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As the EU promotes Roundup, this court has the only right attitude, referring to “a precautionary principle in French law.” All GMO crops should be banned because of that principle. The risks are too great, and there’s likely no way back. You can’t put the onus of proof on society at large, Monsanto will have to prove there is no risk or damage at all, not the other way around. Nassim Taleb is the only person I’ve seen who also says this as the most important thing concerning GMO.

French Court Cites Precautionary Principle To Cancel Monsanto Permit (R.)

A French court canceled the license for one of Monsanto’s glyphosate-based weedkillers on Tuesday over safety concerns, placing an immediate ban on Roundup Pro 360 in the latest legal blow to the Bayer-owned business. Germany’s Bayer, which bought Monsanto for $63 billion last year, faces thousands of U.S. lawsuits by people who say its Roundup and Ranger Pro products caused their cancer. A court in Lyon in southeast France ruled that the approval granted by French environment agency ANSES in 2017 for Roundup Pro 360 had failed to take into account potential health risks. Bayer, which said it disagreed with the decision and was considering its legal options, has cited regulatory rulings as well as scientific studies that found glyphosate to be safe.

The firm is appealing a first U.S. court ruling that awarded $78 million in damages to a school groundskeeper from California. “Bayer disagrees with the decision taken by the Administrative Court of Lyon to cancel the marketing authorization for RoundUp Pro 360,” it said in a statement. “This product formulation, like all crop protection products, has been subject to a strict evaluation by the French authorities (ANSES), an independent body and guarantor of the public health security.” The French court said ANSES had not respected a precautionary principle in French law, notably by not conducting a specific evaluation of health risks for Roundup Pro 360.

“Despite the European Union’s approval of the active substance (glyphosate), the court considered that scientific studies and animal experiments showed Roundup Pro 360 … is a potentially carcinogenic product for humans, suspected of being toxic for human reproduction and for aquatic organisms,” the court said in a summary of its ruling. ANSES said it was still examining the court ruling, but that the decision was effective immediately. “As a consequence, the sale, distribution and use of RoundUp Pro 360 are banned as of today,” the agency said in an email.

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Nov 082018
 
 November 8, 2018  Posted by at 10:35 am Finance Tagged with: , , , , , , , , , , , ,  


Pablo Picasso Juan-Les-Pins 1920

 

White House Pulls CNN’s Jim Acosta’s Media Credentials (ZH)
Will Mueller Use “Constructive Discharge” To Challenge Sessions Replacement?
Big Investors Sue 16 Banks In US Over Currency Market Rigging (R.)
The United States Is Going Broke (Rickards)
Japan Machinery Orders Hit By Worst-Ever Slump In September (R.)
China October Exports Surprisingly Strong In Race To Beat US Tariffs (R.)
EU’s Vestager Says Probe Into Google AdSense Case Nearing End (R.)
Italy’s Enria Wins Race To Head ECB Banking Watchdog (R.)
The Making of an Opioid Epidemic (G.)
EU Backtracks On Total Ivory Ban (Ind.)

 

 

I could use any report about what happened yesterday, I’ll stick with Tyler Durden. Because everything I read from major news outlets is about freedom of the press being violated by Trump and his staff. I saw the press conference, and that was not my impression. After Jim Acosta has asked multiple questions, in antagonistic fashion, Trump said it was enough. Then Acosta tried to turn it into the Jim Acosta show.

Access to a president’s press-ops does not mean permission to be obnoxious, nor does it mean a journalist gets to set the rules, which the president would then have to abide by. You’ve had multiple questions, there are dozens of other reporters, that’s it for you. Refusing to hand over the mic at that point means denying your peers their own freedom of the press. Also of course, there’s history here: Acosta and CNN have been hounding Trump for over 2 years now. Not objectively, not impartial, but with an agenda. And now they get to play the victims again.

White House Pulls CNN’s Jim Acosta’s Media Credentials (ZH)

Following the disturbing behavior in this morning’s White House press conference, when a journalist from CNN refused to hand his mic back to a White House aide… White House spokesperson Sarah Sanders announced that CNN’s Jim Acosta has had his media credentials pulled: “President Trump believes in a free press and expects and welcomes tough questions of him and his Administration. We will, however, never tolerate a reporter placing his hands on a young woman just trying to do her job as a White House intern… This conduct is absolutely unacceptable. It is also completely disrespectful to the reporter’s colleagues not to allow them an opportunity to ask a question. President Trump has given the press more access than any President in history. ”

Sanders continued: “Contrary to CNN’s assertions there is no greater demonstration of the President’s support for a free press than the event he held today. Only they would attack the President for not supporting a free press in the midst of him taking 68 questions from 35 different reporters over the course of 1.5 hours including several from the reporter in question. The fact that CNN is proud of the way their employee behaved is not only disgusting, it‘s an example of their outrageous disregard for everyone, including young women, who work in this Administration. As a result of today’s incident, the White House is suspending the hard pass of the reporter involved until further notice.”

While some have questioned whether he “acosta’d her”, the CNN reporter has just confirmed it via tweet… “I’ve just been denied entrance to the WH. Secret Service just informed me I cannot enter the WH grounds for my 8pm hit” Shortly after the press briefing debacle, Rawstory reports that CNN President Jeff Zucker attempted to rally the network’s reporters… “I want you to know that we have your backs,” Zucker said a memo to employees that was obtained by The Hollywood Reporter. “That this organization believes fiercely in the protections granted to us by the First Amendment, and we will defend them, and you, vigorously, every time.” Although not even CNN probably expected this level of escalation. Which is why we wonder, how long before a) the rest of the press corps boycotts the White House briefings, and b) the hashtag #BringBackAcosta starts trending?

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Funny, I was doing a podcast with Jim Kunstler yesterday, and as soon as we finished there were the Acosta and Sessions events (would have been prominent material in our conversation). The Sessions firing was obvious well before the midterms. Whatever you think of it, Sessions left Trump in a hole when he first accepted the AG job and recused himself in the Mueller files right after. A dependable AG is crucial for any president, and even more for Trump, who’s been under investigation(s) from day one. There’s an assumption that Mueller will now be fired, but everyone understands that can only be done with solid reasoning. That the Mueller investigation should be wrapped up is clear to everyone except those who like it hanging over Trump’s head.

Will Mueller Use “Constructive Discharge” To Challenge Sessions Replacement?

Special Counsel Robert Mueller could use a legal concept known as “constructive discharge” to challenge the appointment of Matt Whitaker, the acting Attorney General, by arguing that Attorney General Jeff Sessions was forced out as opposed to voluntarily leaving, reports Bloomberg, citing a former federal prosecutor. “Mueller could argue in court that Trump effectively fired Sessions after months of verbal abuse, a legal concept known as a constructive discharge, said Renato Mariotti, a former federal prosecutor. Under the Federal Vacancies Reform Act, Trump can appoint an acting official without Senate confirmation if he replaces someone who has been incapacitated or resigned. It doesn’t apply if the previous official was fired.”-Bloomberg

Whitaker was appointed to run the DOJ after Sessions submitted his resignation Wednesday at Trump’s request. While Sessions had recused himself from the Trump-Russia probe, Whitaker will now control oversight of the investigation – a duty which has fallen on the shoulders of Deputy Attorney General Rod Rosenstein – despite the fact that he himself was involved in the FISA warrant process to spy on the Trump campaign. Sessions’ resignation letter begins with “At your request,” making it unambiguous that Trump fired him. “The question is whether he was constructively fired, which means he didn’t resign from his post,” Mariotti said. “I don’t know the answer as to how the courts would view that.”

Challenging Whitaker’s appointment “could be Mueller himself,” said Mariotti, adding “That would be one obvious person.” “Legal experts agree it would be difficult to remove Whitaker from a post he can hold for seven months under the law. He can’t be appointed permanently, and Trump said he would appoint someone at a later date.” -Bloomberg “It’s not clear whether a firing would allow Trump to appoint him as an interim,” said former federal prosecutor Barbara McQuade, who teaches law at the University of Michigan. If Sessions voluntarily resigned, “it’s permissible for Trump to make this interim appointment.”

“I don’t see any reason why Whitaker would not be the one to supervise the Mueller investigation and take it out of the hands of Rod Rosenstein,” she added. Rosenstein appeared at the White House on Wednesday for a previously unscheduled appointment. Meanwhile, Bloomberg notes that special counsels can be removed under the law for “misconduct, dereliction of duty, incapacity, conflict of interest, or for other good cause.” Whitaker is on record saying that if Mueller investigates the Trump family finances beyond anything to do with Russia, “that goes beyond the scope of the special counsel.”

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“..allegedly done through chat rooms with such names as “The Cartel,” “The Mafia” and “The Bandits’ Club,” through tactics with such names as “front running,” “banging the close,” “painting the screen” and “taking out the filth.”

Big Investors Sue 16 Banks In US Over Currency Market Rigging (R.)

A group of large institutional investors including BlackRock and Allianz’s Pacific Investment Management Co has sued 16 major banks, accusing them of rigging prices in the roughly $5.1 trillion-a-day foreign exchange market. The lawsuit was filed on Wednesday in the U.S. District Court in Manhattan by plaintiffs that decided to “opt out” of similar nationwide litigation that has resulted in $2.31 billion (£1.76 billion) of settlements with 15 of the banks. Those settlements followed worldwide regulatory probes that have led to more than $10 billion of fines for several banks, and the convictions or indictments of some traders. The banks being sued are: Bank of America, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan Chase, Morgan Stanley, Japan’s MUFG Bank, Royal Bank of Canada, Royal Bank of Scotland, Societe Generale, Standard Chartered and UBS.

Investors typically opt out of litigation when they hope to recover more by suing on their own. The plaintiffs in Wednesday’s lawsuit accused the banks of violating U.S. antitrust law by conspiring from 2003 to 2013 to rig currency benchmarks including the WM/Reuters Closing Rates for their own benefit by sharing confidential orders and trading positions. This manipulation was allegedly done through chat rooms with such names as “The Cartel,” “The Mafia” and “The Bandits’ Club,” through tactics with such names as “front running,” “banging the close,” “painting the screen” and “taking out the filth.” “By colluding to manipulate FX prices, benchmarks, and bid/ask spreads, defendants restrained trade, decreased competition, and artificially increased prices, thereby injuring plaintiffs,” the 221-page complaint said.

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What can be done with gold.

The United States Is Going Broke (Rickards)

The Fed could actually cause inflation in about 15 minutes if it used it. How? The Fed can call a board meeting, vote on a new policy, walk outside and announce to the world that effective immediately, the price of gold is $5,000 per ounce. They could make that new price stick by using the Treasury’s gold in Fort Knox and the major U.S. bank gold dealers to conduct “open market operations” in gold. They will be a buyer if the price hits $4,950 per ounce or less and a seller if the price hits $5,050 per ounce or higher. They will print money when they buy and reduce the money supply when they sell via the banks. The Fed would target the gold price rather than interest rates.

The point is to cause a generalized increase in the price level. A rise in the price of gold from today’s roughly $1,230 per ounce to $5,000 per ounce is a massive devaluation of the dollar when measured in the quantity of gold that one dollar can buy. There it is — massive inflation in 15 minutes: the time it takes to vote on the new policy.

Don’t think this is possible? It’s happened in the U.S. twice in the past 80 years. The first time was in 1933 when President Franklin Roosevelt ordered an increase in the gold price from $20.67 per ounce to $35.00 per ounce, nearly a 75% rise in the dollar price of gold. He did this to break the deflation of the Great Depression, and it worked. The economy grew strongly from 1934-36. The second time was in the 1970s when Nixon ended the conversion of dollars into gold by U.S. trading partners. Nixon did not want inflation, but he got it. Gold went from $35 per ounce to $800 per ounce in less than nine years, a 2,200% increase. U.S. dollar inflation was over 50% from 1977-1981. The value of the dollar was cut in half in those five years.

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Abenomics keeps on giving…

Japan Machinery Orders Hit By Worst-Ever Slump In September (R.)

Japan’s core machinery orders tumbled by the most on record in September after a severe earthquake and typhoons disrupted business activity, with economists now also worried about a fall in overseas orders. The 18.3 percent slump in machinery orders far outpaced the median market estimate for a 10.0 percent decline and follows a 6.8 percent increase in August. September’s 12.5 percent decline in overseas machinery orders, the biggest such fall in more than two years, could signal sustained weakness in export demand. Japan’s economy is forecast to contract in July-September, and the machinery orders slump suggests any rebound in the following quarters is likely to be weak if exports and business investment lose momentum.

Manufacturers surveyed by the government expect core machinery orders to rise 3.6 percent in October-December after a 0.9 percent increase in July-September, but some economists worry this forecast is overly optimistic. “I was already expecting capital expenditure to be weak in July-September, but the fall in overseas orders makes me worried about demand from China,” said Hiroaki Muto, economist at Tokai Tokyo Research Center. “Japan’s economy will resume expansion from the fourth quarter, but I’m worried the pace of growth will wane.”

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Watch the rest of the year.

China October Exports Surprisingly Strong In Race To Beat US Tariffs (R.)

China reported much stronger-than-expected exports for October as shippers rushed goods to the United States, its biggest trading partner, racing to beat higher tariff rates due to kick in at the start of next year. Import growth also defied forecasts for a slowdown, suggesting Beijing’s growth-boosting measures to support the cooling economy may be slowly starting to make themselves felt. The upbeat trade readings from China offer good news for both those worried about global demand and for the country’s policymakers after the economy logged its weakest growth since the global financial crisis in the third quarter. October was the first full month after the latest U.S. tariffs on Chinese goods went into effect on Sept. 24, in a significant escalation in the tit-for-tat trade battle.

But analysts continue to warn of the risk of a sharp drop in U.S. demand for Chinese goods early in 2019, with all eyes now on whether presidents Donald Trump and Xi Jinping can make any breakthroughs on trade when they meet later this month. China’s exports rose 15.6 percent last month from a year earlier, customs data showed on Thursday, picking up from September’s 14.5 percent and beating analysts’ forecasts for a modest slowdown to 11 percent. “The strong export growth in October was buoyed by front-loading activities by exporters…,” said Iris Pang, Greater China Economist at ING in Hong Kong, noting the month is traditionally quieter due to long holidays. “We expect exports to remain strong towards the end of the year as businesses are afraid of a failure in the Trump-Xi meeting, which could lead to broader tariffs on more Chinese goods from the U.S.” Pang said.

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The edge of monoply.

EU’s Vestager Says Probe Into Google AdSense Case Nearing End (R.)

EU regulators are close to wrapping up their third case against Alphabet unit Google involving its AdSense advertising service, Europe’s antitrust chief said on Wednesday, suggesting the company may soon be hit with another hefty fine. The comments by European Competition Commissioner Margrethe Vestager come four months after she levied a record 4.34 billion euro ($5 billion) fine against Google for using its popular Android mobile operating system to block rivals. That followed a 2.4 billion euro fine imposed on the company last year after it thwarted rivals of shopping comparison websites. The European Commission in 2016 opened a third case when it accused Google of preventing third parties using its AdSense product from displaying search advertisements from Google’s competitors. Vestager can fine companies up to 10 percent of their global turnover for breaching EU rules.

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Europe’s finances in all Italian hands.

Italy’s Enria Wins Race To Head ECB Banking Watchdog (R.)

Italian Andrea Enria was picked on Wednesday to head the European Central Bank’s supervisory arm, overseeing a bloated, 21 trillion euro banking sector still troubled by a legacy of bad debt from the euro zone’s financial crisis. Defeating Ireland’s Sharon Donnery in a hotly-contested run-off, Enria will now head the Single Supervisory Mechanism, covering the euro zone’s 118 top lenders, with many still reeling from the last recession and facing new challenges from hacking to fintech. The ECB’s Governing Council selected Enria in a secret ballot, and his appointment must now be approved by the full European Parliament and relevant ministers.

Enria, who has chaired the London-based European Banking Authority since 2011, has played a major role in shaping the European Union’s new financial rulebook in the aftermath of the crisis. A former supervisor at the Bank of Italy and the ECB, he is viewed as politically neutral and ruffled some feathers at home for what was seen as an overly tough stance on unpaid bank loans and credit to small companies. “If approved by the Parliament and confirmed by the Council of the European Union, Mr Enria will succeed Danièle Nouy as Chair of the Supervisory Board on 1 January 2019,” the ECB said in a statement.

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Long read. The origins are curious. And extremely misguided. How can you deny that opium is addictive after seeing Britain’s opium trade laying siege to large swaths of China?

“One theory, promoted by Dr David Haddox, was that patients genuinely experiencing pain could not become addicted to opioids because the pain neutralised the euphoria caused by the narcotic…”

The Making of an Opioid Epidemic (G.)

Jane Ballantyne was, at one time, a true believer. The British-born doctor, who trained as an anaesthetist on the NHS before her appointment to head the pain department at Harvard and its associated hospital, drank up the promise of opioid painkillers – drugs such as morphine and methadone – in the late 1990s. Ballantyne listened to the evangelists among her colleagues who painted the drugs as magic bullets against the scourge of chronic pain blighting millions of American lives. Doctors such as Russell Portenoy at the Memorial Sloan Kettering Cancer Center in New York saw how effective morphine was in easing the pain of dying cancer patients thanks to the hospice movement that came out of the UK in the 1970s.

Why, the new thinking went, could the same opioids not be made to work for people grappling with the physical and mental toll of debilitating pain from arthritis, wrecked knees and bodies worn out by physically demanding jobs? As Portenoy saw it, opiates were effective painkillers through most of recorded history and it was only outdated fears about addiction that prevented the drugs still playing that role. Opioids were languishing from the legacy of an earlier epidemic that prompted President Theodore Roosevelt to appoint the US’s first opium commissioner, Dr Hamilton Wright, in 1908. Portenoy wanted to liberate them from this taint. Wright described Americans as “the greatest drug fiends in the world”, and opium and morphine as a “national curse”. After that the medical profession treated opioid pain relief with what Portenoy and his colleagues regarded as unwarranted fear, stigmatising a valuable medicine.

These new evangelists painted a picture of a nation awash in chronic pain that could be relieved if only the medical profession would overcome its prejudices. They constructed a web of claims they said were rooted in science to back their case, including an assertion that the risk of addiction from narcotic painkillers was “less than 1%” and that dosages could be increased without limit until the pain was overcome. But the evidence was, at best, thin and in time would not stand up to detailed scrutiny. One theory, promoted by Dr David Haddox, was that patients genuinely experiencing pain could not become addicted to opioids because the pain neutralised the euphoria caused by the narcotic. He said that what looked to prescribing doctors like a patient hooked on the drug was “pseudo-addiction”.

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Guess where most of the world’s ivory is traded? It’s very clear what Europeans want, but Brussels again simply slips them the finger.

EU Backtracks On Total Ivory Ban (Ind.)

Politicians and campaigners have expressed dismay that the European Union (EU) appears to be holding back on further restrictions on the continent’s ivory trade, despite enormous global pressure. Europe is the largest domestic market for ivory products in the world and research has demonstrated that illegally poached ivory often makes its way into the legal market. In 2017, the European Commission banned the export of raw ivory, but many still think the only way to make a dent in demand for products made of the material is to ban the domestic trade entirely. China, the US and the UK have already moved to halt such trade in an effort to make elephants a less lucrative target for poachers and to stamp out the corruption and organised crime the trade supports.

Despite the backing of African leaders and scores of European politicians, a new report outlining efforts to curb wildlife trafficking in Europe has removed a pledge to further restrict the trade. [..] Besides the consultation respondents calling for tougher rules, 32 African nations have joined together in calling for an EU-wide ban, including a complete shutdown of the domestic market. Further support has come from over 100 MEPs who wrote to the environment commissioner Karmenu Vella in July urging a total ban. Responding to the discrepancy between different versions of the report, chair of interest group MEPs for Wildlife, Catherine Bearder said: “The EU is a major transit point for illegal wildlife products being shipped to the Far East and other global destinations. Elephants are being pushed to the brink of extinction and for what? For useless trinkets the world doesn’t need.”

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Oct 292018
 
 October 29, 2018  Posted by at 9:24 am Finance Tagged with: , , , , , , , , , , , ,  


Vincent van Gogh Roofs of Paris 1886

 

Volcker Rebukes Bernanke and Yellen Feds (Whalen)
China Takes Delivery Of Massive Amount Of Gold From London, New York (Greyerz)
Getting Out: A Godfather Story (Ben Hunt)
Why Do Investors Hate Everything? Maybe Paranoia (BBG)
Desperate IBM Buys Red Hat For $34 Billion In Largest Ever Acquisition (ZH)
The IMF Has Learned Nothing From The Greek Crisis (Coppola)
Greece Reiterates €288 Billion Claim For Damages Under Nazi Occupation (G.)
There Aren’t Enough Lifeboats For Everyone (CHS)
Thousands Of Ships Could Dump Pollutants At Sea To Avoid Dirty Fuel Ban (G.)
Big Food’s Poisonous Propaganda (Lustig)
EU Air Pollution Improves, Causes Only 500,000 Early Deaths A Year (AFP)
Race Doesn’t Come Into It (LRB)

 

 

There goes Yellen’s reputation.

“By pulling tomorrow’s home sales and other economic activity forward via various policy manipulations, tomorrow is now light in terms of growth..”

Volcker Rebukes Bernanke and Yellen Feds (Whalen)

Yellen worries that the rhetorical attacks on the central bank by President Donald Trump is “whittling away the legitimacy and stature of institutions the public has traditionally had some confidence in. I feel it ultimately undermines social and economic stability.” She then goes on to say that “Trump has the potential to undermine confidence in the Fed.” Former Chairman Alan Greenspan, the most politically astute Fed chief in half a century, puts such worries in perspective: “I don’t know a single President, and I worked for a lot of them, who don’t want lower interest rates. Now, obviously that’s not possible. You keep lowering them down to zero, where do you go from there?”

Like Yellen, many observers worry that criticism of the Fed will make it difficult for the central bank to act when necessary. The dual, conflicted political mandate of full employment and price stability created by the Humphrey Hawkins law is not possible to achieve in practice, thus the FOMC lurches from one extreme to the other, causing enormous collateral damage. Consider the effects of QE and Operation Twist on housing. Think about the thousands of people in the mortgage industry, for example, that have lost their livelihoods because the boom and bust policies followed by the Fed since 2008 and even before. Think about the millions of American families today that cannot afford to buy a home because asset prices have skyrocketed over the past five years.

By pulling tomorrow’s home sales and other economic activity forward via various policy manipulations, tomorrow is now light in terms of growth. Tomorrow also carries hidden market and credit risks caused by the Fed’s past actions. As we watch mortgage lending and home building volumes fall next year and thereafter thanks to the property price inflation created by the FOMC under Bernanke and Yellen, remember that Fed policy was explicitly meant to “help” the housing sector.

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“..in normal times, the gold used to stay in London and New York. Now that gold is going via Switzerland to China and India and it will never come back.”

China Takes Delivery Of Massive Amount Of Gold From London, New York (Greyerz)

“They’re all into gold. Absolutely. Yes, virtually all of them own gold. That’s what’s so interesting. The Chinese buying is continuously going up and up and up without stopping. The Chinese know what is happening. They know it and they will continue to buy gold. And one day that’s going to have a major influence on the gold price. And when the paper market breaks, and China dominates the gold market, it’s going to be very interesting because I really look forward to the West failing in their manipulation of the gold price through the various paper markets and through the interbank market. Again last month we saw imports of gold into Switzerland and then exports to Asia and India. Last month, over 70% of the gold import figures (into Switzerland) came from London and the United States.

We again see that Switzerland is buying the 400 ounce bars from the UK and US bullion banks and converting them into 1 kilo bars and then shipping them on to Asia. Last month there was hardly any buying from the mines. It all came out of London and New York. And that proves again, Eric, that central banks are either leasing their physical gold into the market or selling it covertly. And that gold that’s coming into the market in London and New York, before it used to stay in London and stay in New York and it would be traded between the various banks, these banks now get the gold from the central banks and then they give the central bank an IOU. Again, in normal times, the gold used to stay in London and New York. Now that gold is going via Switzerland to China and India and it will never come back. China is never going to send it back, nor is India.

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One of my fave themes: of all the people who say they made so much money over the past 10 years, the very vast majority will be too late to get out.

Getting Out: A Godfather Story (Ben Hunt)

“Just when I thought I was out, they pull me back in!” It’s one of the most famous quotes in movies, as Michael Corleone rages in Godfather III over the assassination he narrowly avoided and his inability to steer the family into legit businesses. Michael is what I like to call a coyote, someone who is VERY smart and VERY strategic. Actually, too smart and too strategic for his own good, what a Brit would call too clever by half. That’s in sharp contrast to his father, Vito Corleone, who is no less smart and no less strategic, but is somehow far less conniving and far more beloved. You see this difference in character most clearly in the deaths of Vito and Michael. How does Vito Corleone die? Playing in his vegetable garden with his grandson. At home. Surrounded by life and laughter and plenty of bottles of Chianti.

Vito got out. How does Michael Corleone die? Sitting in a stony Sicilian courtyard as two skinny dogs scurry around. Struggling to peel an orange. All dressed up and no place to go. Alone. Utterly alone. For all his smarts and strategy and cleverness, Michael NEVER got out. How did Vito get out, while Michael failed? I think it’s the whole too-clever-by-half coyote thing. Michael never trusted ANYONE in the way that Vito did. Michael was obsessed with finding the Answer, an impossibility in the game of organized crime. Or the game of markets. Michael was a maximizer. Which is another way of saying that, like most coyotes, he wasn’t very good at the metagame. Do you want OUT from the game of markets? I do.

Am I good at the game? Yeah. Do I enjoy it? Not really. I used to. But ever since Lehman it’s been mostly a drag. And that’s okay! The game of markets is a means to an end. It’s a really big, important game, but it’s only one of several big important games within the larger metagame of life and doing. My goal in doing is to have a happy ending. I want the Vito ending, not the Michael ending. How do we get there? We keep our eye on the prize – the happy ending – and we work backwards. We maintain our vision on the metagame and its outcome even while we play the immediate game. My goal as an investor is NOT to maximize my investment returns or to maximize my personal wealth. That’s myopic thinking. That’s coyote thinking. That’s the sort of thinking that ruined Michael.

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Remember: we don’t have functioning markets.

Why Do Investors Hate Everything? Maybe Paranoia (BBG)

Only during the 1970s stagflation period and the global financial crisis have so many asset classes had negative returns in a year. The latter may have a lot to do with why it’s happening again. Investors now overreact to even modest changes late in cycles after not foreseeing the financial crisis, JPMorgan Chase & Co. strategists led by John Normand wrote in a note Friday. Other plausible explanations could be that the global economy and earnings have reached a turning point, or that the Federal Reserve is committing a policy error, they added. “The percentage of asset classes that has generated positive returns this year is only 20 percent, a share that has never been so low outside of 1970s stagflation episodes and the Global Financial Crisis,” the strategists wrote.

“Every market but the Nasdaq, Commodities and U.S. Leveraged Loans has underperformed USD cash in 2018.” The strategists have “no argument with the obvious statement” that markets are tumbling because global growth and U.S. earnings are peaking. However, they said slower growth on those fronts, at least if it remains around long-term-average levels, usually hasn’t been a sufficient condition for investors to turn defensive. “We had expected outperformance for another two to three quarters given near-neutral Fed policy, record share buybacks and significant deleveraging” by some equity investors before earnings season began, the strategists wrote. “This month markets clearly don’t share our time-limited optimism, perhaps given growing fear that the Fed is committing a policy mistake by tightening to restrictive levels eventually.”

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When dinosaurs invest.

Desperate IBM Buys Red Hat For $34 Billion In Largest Ever Acquisition (ZH)

The bad news is that in its desperation for growth at what amounts to be any price, IBM is almost certainly overpaying for Red Hat. This was confirmed by Rometty’s preemptive defense, telling Bloomberg that IBM “paid a very fair price. This is a premium company. If you look underneath, this is strong revenue growth, strong profit strong free cash flow” she said, adding that IBM will not cut jobs as a result of the deal: “this is an acquisition for revenue growth, this is not for cost synergies.” Perhaps, but the bigger question is what the deal means for IBM’s balance sheet. In the press release, IBM said that “the company has ample cash, credit and bridge lines to secure the transaction financing. The company intends to close the transaction through a combination of cash and debt.” In other words, no IBM stock, which is already at the lowest level this decade.

So let’s do the math: IBM ended Q3 with cash of $14.7 billion, and a record $46.9 billion in debt. Which means that IBM will likely incur at least $20 billion in additional debt, and as a result IBM’s already shaky A+/A1 rating could soon be downgraded to BBB. So what is IBM buying for this $34 billion and $20 billion in debt? According to its LTM financials, Red Hat has $3.2BN in revenue and $603MM in EBITDA. These numbers are expected to grow to $3.9BN by 2020, when EBITDA will hit $1 billion. In other words, on an EV basis, IBM is paying roughly 31x (net of $2.2BN in cash) Red Hat’s 2020 forward EBITDA.

Of course, if one assumes continued EBITDA growth for the foreseeable future, this acquisition could make sense. The problem is that between the threat of a recession in the next few years, and aggressive competition from Amazon, Microsoft and others for cloud market share, this is a very aggressive assumption. Meanwhile, in exchange for this $1 billion in EBITDA, IBM’s net debt will grow from $32.5 billion currently to $52 billion, almost doubling IBM’s net leverage from 1.7x level to a whopping 3.2x, and well on its way to a BBB rating if not worse. Which is why IBM promise that it will “target a leverage profile consistent with a mid to high single A credit rating” is, with all due respect, laughable.

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“Harsh adjustment programs do not make unsustainable debt sustainable. They just create misery for the population while making the debt burden even worse.”

The IMF Has Learned Nothing From The Greek Crisis (Coppola)

The IMF has just published a new review of Argentina’s economy. It is grim reading. Argentina is in trouble: economic conditions have worsened considerably since the last IMF review, back in June 2018. But the review also reveals that the IMF could be in even bigger trouble. It is repeating the same mistakes it made in the Greek crisis – but with a much larger amount of money at stake. Argentina has been struggling all year. A drought has severely curtailed agricultural production, widening the current account deficit and triggering a mild recession. Concurrently, Fed interest rate rises and a booming U.S. economy have driven up the U.S. dollar, making it ever more expensive for Argentina to obtain the dollars needed to pay interest on its massive dollar-denominated debt pile.

The central bank has been printing money to finance the government’s growing deficit, but this has helped to fuel inflation that now runs at over 40%. In June, the IMF agreed a standby credit arrangement of $50 billion with Argentina, the largest in the Fund’s history. $15 billion would be drawn immediately and the remainder would be made available as needed over the next three years. Half of the $15 billion would be used for government budget support. But it quickly became apparent that, enormous though this financing agreement was, it would be nowhere near enough. In September, as the peso crashed and Argentina stared default in the face, the IMF hastily agreed to front-load the credit arrangement, so that the Argentine government could immediately draw an additional $13.4 billion (making a total of $28.4 billion).

A further $22.8 billion would be drawn in 2019 and $5.9 billion in 2020-21. This is no longer a “standby” arrangement. It is a full financing agreement. Argentina has now become dependent on IMF funding – and the IMF has committed to lend by far the largest amount of money in its history. [..] The fundamental problem that the IMF made in Greece was lending to an insolvent country. Harsh adjustment programs do not make unsustainable debt sustainable. They simply create misery for the population while making the debt burden even worse. The IMF should not have lent to Greece at all. It should have faced down Greece’s creditors and insisted on orderly debt restructuring right from the start.

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Greece wants over 1000 times what Germany has paid.

Greece Reiterates €288 Billion Claim For Damages Under Nazi Occupation (G.)

Greece says it will pursue its quest for second world war damages and repayment of a loan forcibly extracted during Nazi occupation with renewed zest, despite Germany openly rejecting the claims. Less than two weeks after German president, Frank-Walter Steinmeier, used a state visit to apologise for atrocities committed by his forefathers, Athens vowed to relaunch the campaign while hailing the onset of a new era in bilateral ties. “This is an issue that psychologically still rankles, and as a government we are absolutely determined to raise it,” said Costas Douzinas, who heads the Greek parliament’s defence and foreign relations committee.

“Obviously Greece couldn’t do that when it was in a [bailout] programme receiving loans from the EU and Berlin. It would have been totally contradictory.” The leftist-led government is expected to press ahead with the claims after MPs debate what has been described as the first all-inclusive parliamentary inquiry into the damage wrought under Nazi occupation. The report, compiled by a cross-party committee over several years, estimates that compensation of €288bn (£256bn) remains outstanding for the destruction Greece sustained between 1941 and 1944, the years the country was subject to Third Reich rule. It also calculates that a further €11bn is owed for a 476m Reichsmark loan Hitler’s forces seized from the Greek central bank in 1943.

[..] Greeks put up heroic resistance to their German occupiers, but the price was heavy. Tens of thousands were killed in reprisals for a guerrilla campaign against the Wehrmacht, and at least 300,000 died of famine. About 40,000 people are thought to have starved to death in the first year of occupation alone, and Greece’s Jewish community was almost entirely wiped out. “Germany has never properly assumed its historical responsibility for the wholesale destruction of the country,” said Stelios Koulouglou, who represents Greece’s governing Syriza party in the European parliament. “It was a catastrophe that was so complete it played a major part in delaying our country’s development as a modern European state.”

[..] The German government strenuously rejects charges that it owes anything to Greece, or Poland which also suffered greatly, for the wartime horrors. It says the chapter was closed in 1960 when it paid Athens 115m deutschmarks, roughly equivalent to £205m today.

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Ain’t that the truth.

There Aren’t Enough Lifeboats For Everyone (CHS)

[..] the status quo is fragile, and everyone’s grip on the crumbling cliff-edge of “prosperity” is precarious–and we all sense it. The security we all took for granted is turning to sand as the system breaks down. Job security–you’re joking, right? Pension security–you take us for chumps? Sure, your bank account is guaranteed by the FDIC, but nobody’s guaranteeing your income, your purchasing power or the security of your grasp on the good life. Everyone knows the markets are as precarious as the rest of the status quo, and the rational response is to limit exposure to risk by selling at the first signs that the herd is nervous.

Switching metaphors, we all know the global economy scraped alongside an iceberg in 2008, and those who look beneath the reassuring rah-rah know that the hull of the global economy was sliced open just like the Titanic’s. Central banks have created the illusion that the damage was limited by printing money and using the freshly created currency to buy bonds and stocks to prop up the markets.

But even the passengers who accept the authorities’ reassurances sense something is wrong with the ship. The bow is slowly sinking, the engines are straining to power the pumps, the First Class passengers are either already in lifeboats or huddling nervously by the davits, and the ship’s officers are openly wielding pistols to control panic. Nobody dares discuss it openly for fear of triggering a panic, but there aren’t enough lifeboats for everyone. A great many passengers are going to find themselves in the icy waters when the great global economic ship finally founders, and humanity’s finely tuned instinct is alerting us to the restless nervousness of the herd.

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A fully adequate picture of my faith in mankind. It costs $2-4 million per ship to cheat the system, and it’s worth it.

Thousands Of Ships Could Dump Pollutants At Sea To Avoid Dirty Fuel Ban (G.)

Thousands of ships are set to install “emissions cheat” systems that pump pollutants into the ocean to beat new international rules banning dirty fuel. The global shipping fleet is rushing to meet a 2020 deadline imposed by the International Maritime Organization (IMO) to reduce air pollution by forcing vessels to use cleaner fuel with a lower sulphur content of 0.5%, compared with 3.5% as currently used. The move comes after growing concerns about the health impacts of shipping emissions. A report in Nature this year said 400,000 premature deaths a year are caused by emissions from dirty shipping fuel, which also account for 14 million childhood asthma cases per year. But the move to cleaner fuel could see harmful pollutants increasingly dumped at sea.

According to industry analysis seen by the Guardian, between 2,300 and 4,500 ships are likely to install an exhaust gas cleaning system known as a scrubber to meet the regulations on low-sulphur fuel instead of buying the more expensive clean fuel. The scrubbers allow ship owners to continue buying cheaper high-sulphur fuel, which is washed onboard in the scrubber. In the case of the most used system, known as open loop, the waste water is discharged into the ocean. Although expensive at around $2-4m per ship fitting, the cost of buying and fitting a scrubber would be recovered in the first year, the industry analysis says. Cleaner low-sulphur fuel is likely to cost between $300 and $500 more a tonne, according to analysts.

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Sugar addiction.

Big Food’s Poisonous Propaganda (Lustig)

Human brain scans demonstrate that glucose activates the cerebral cortex (the “cognitive” part of our brains), while fructose suppresses that signal and instead lights up the limbic system (your “lizard” brain). Moreover, while sugar does not exhibit classic withdrawal symptoms, it does lead to tolerance and dependence that can cause bingeing, craving, and cross-sensitization to narcotics. These are some of the reasons why the World Health Organization and the US Department of Agriculture recommend that people reduce the amount of sugar in their diets. The addictive qualities of sugar are embedded in its economics. Like coffee, sugar is price-inelastic, meaning that when costs increase, consumption remains relatively constant.

Purchases of soft drinks and other sweetened foods are not dramatically affected by taxes or fluctuating prices. Not everyone who is exposed to sugar becomes addicted; but, as with alcohol, many do. While refined sugar is the same compound found in fruit, it lacks fiber and has been crystallized for purity. It is this process that turns sugar from a “food” into a “drug,” allowing the food industry to “hook” unsuspecting consumers. The evidence is visible in every aisle of every grocery store, where a staggering 74% of all food items are spiked with added sugar. In fact, sugar’s allure is a big reason why the processed food industry’s current profit margin is 5% (up from 1%), and why so many of us are sick, fat, stupid, broke, depressed, and just plain miserable.

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One queston: why?

EU Air Pollution Improves, Causes Only 500,000 Early Deaths A Year (AFP)

Air pollution is slowly easing in EU countries but still causes nearly half a million early deaths each year, the European Environment Agency (EEA) said in its annual report published Monday. Although pollution levels dropped slightly in 2015, they remain far higher than standards set by both the EU and the World Health Organization, the report said. The findings come just weeks after an EU watchdog said most member states fail to meet the bloc’s air quality targets, warning that the toll on health in eastern European countries was even worse than in China and India. The EEA said on Monday that exposure to fine pollution particles known as PM2.5 was responsible for around 391,000 premature deaths in the 28-nation bloc in 2015.

The report also found that 76,000 early deaths were linked to nitrogen dioxide and some 16,400 to ground-level ozone in EU countries in the same year. Fine pollution particles have been linked to respiratory illnesses and heart problems, with PM2.5, the smallest, posing the greatest health risks as they can penetrate deep into the lungs. The EEA said a wider assessment included in the report found that early deaths each yer due to PM 2.5 have been cut “by about half a million” since 1990.

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Book review. How much do you know about genes?

Race Doesn’t Come Into It (LRB)

Before I got pregnant, I thought I understood how DNA works: parents pass on some combination of their DNA, which codes for various heritable traits, to their children, who pass on some combination to their children, and so on down the neat branching lines of the genealogical tree. What I didn’t know was that women can also receive DNA from their children. During pregnancy, foetal cells get into the mother’s bloodstream, mixing freely with her own cells and resulting in what scientists call a ‘microchimera, a single organism harbouring a small number of cells from another individual. Microchimerism is the reason doctors can use my blood to do genetic testing that looks for markers of disease in the DNA of the growing foetus.

And while the number of foetal cells in my bloodstream will drop after birth, some could stay there for decades, even for the rest of my life. These foetal cells may even sense the tissues around them and develop into the same types of cell, becoming an integral part of my body, which may have both positive and negative effects on my health – a sort of backwards inheritance. Foetal cells have been shown to regenerate a mother’s diseased thyroid gland and to help her body fight breast cancer. If a virus enters her body, even years after pregnancy, cells from the foetus may be among the first to attack it. But they may also make her more vulnerable to autoimmune diseases such as arthritis and scleroderma.

And this DNA transfer works both ways: a pregnant woman’s cells – with her complete set of DNA – can enter the foetus, eventually becoming part of her child’s body and living on long after her own death. With a second pregnancy, foetal cells from the first could colonise the new foetus, turning the second infant who emerges blinking into the sharp light of a new day into a microchimera of mother, father and sibling. So much for the neat branching lines of vertical heredity.

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