Oct 092018
 
 October 9, 2018  Posted by at 9:02 am Finance Tagged with: , , , , , , , , , , ,  


Ford Madox Brown Finding of Don Juan by Haidee 1873

 

 

World Leaders ‘Have Moral Obligation To Act’ After UN Climate Report (G.)
US Economists Win Nobel Memorial For Work On Climate And Growth (G.)
Nobel Prizes in Economics, Awarded and Withheld (NC)
The End Of The World Will Save Theresa May From Brexit (Ind.)
Stock Markets Stage Sharp Sell-Off Amid Fear Of Italy-EU Budget Fight (G.)
QE Party Is Drying Up, Even at the Bank of Japan (WS)
Higher Rates Will Hurt Stocks Far More Than You Think (SA)
Pakistan Seeks Bailout From IMF (WSJ)
IMF Not Concerned About China’s Ability To Defend The Yuan (R.)
Sharp Slowdown In Consumer Spending Cools UK Retail Sales (G.)
Google Drops Out Of Bidding For $10 Billion Pentagon Data Deal (R.)

 

 

Groundhog Day. They just want to get (re-)elected. Which won’t happen if they tell people to cut their driving and flying.

World Leaders ‘Have Moral Obligation To Act’ After UN Climate Report (G.)

World leaders have been told they have moral obligation to ramp up their action on the climate crisis in the wake of a new UN report that shows even half a degree of extra warming will affect hundreds of millions of people, decimate corals and intensify heat extremes. But the muted response by Britain, Australia and other governments highlights the immense political challenges facing adoption of pathways to the relatively safe limit of 1.5C above pre-industrial temperatures outlined on Monday by the IPCC. With the report set to be presented at a major climate summit in Poland in December, known as COP24, there is little time for squabbles. The report noted that emissions need to be cut by 45% by 2030 in order to keep warming within 1.5C.

That means decisions have to be taken in the next two years to decommission coal power plants and replace them with renewables, because major investments usually have a lifecycle of at least a decade. Mary Robinson, a UN special envoy on climate, said Europe should set an example by adopting a target of zero-carbon emissions by 2050. “Before this, people talked vaguely about staying at or below 2C – we now know that 2C is dangerous,” she said. “So it is really important that governments take the responsibility, but we must all do what we can.” The UK, which has gone further than most nations by cutting its annual emissions by 40% since 1990, will need to step up if the more ambitious goal is to be reached.

Read more …

Both think adapting to climate change is easy.

US Economists Win Nobel Memorial For Work On Climate And Growth (G.)

Two American economists at the forefront of work on climate change and the role of governments in boosting growth have been jointly awarded the prestigious Nobel Memorial prize for economics. The Royal Swedish Academy of Sciences said William Nordhaus and Paul Romer were being honoured for their research into two of the most “basic and pressing” economic issues of the age. Nordhaus made his name by warning policymakers during the first stirrings of concern about climate change in the 1970s that their economic models were not properly taking account of the impact of global warming and he is seen as one of the pioneers of environmental economics.

The Yale economist was honoured a day after the latest UN warning on global warming said that urgent and unprecedented changes were needed to keep climate change to a maximum of 1.5C (2.7F). The co-winner – Romer – is seen as the prime mover behind the endogenous growth theory, the notion that countries can improve their underlying performance if they concentrate on supply-side measures such as research and development, innovation and skills. [..] Responding to news of his award, Romer said it was perfectly possible for global warming to be kept to a maximum of 1.5C, in line with the latest recommendation of the UN Intergovernmental Panel on Climate Change. “Once we start to try to reduce carbon emissions, we’ll be surprised that it wasn’t as hard as we anticipated. The danger with very alarming forecasts is that it will make people feel apathetic and hopeless.

“One problem today is that people think protecting the environment will be so costly and so hard that they want to ignore the problem and pretend it doesn’t exist. Humans are capable of amazing accomplishments if we set our minds to it.” [..] Nordhaus has been a prominent advocate of the use of a uniformly applied carbon tax as the best way to put a true cost on the use of burning fossil fuels and so reducing greenhouse gas emissions. The committee that awarded the prize said he was the first person to design “simple but dynamic and quantitative models of the global economic-climate system, now called integrated assessment models (IAMs). “His tools allow us to simulate how the economy and climate would co-evolve in the future under alternative assumptions about the workings of nature and the market economy, including relevant policies.”

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This is useful h/t Yves. Peter Dorman on how Martin Weitzman, who has a far more aggressive take on economics and climate, was snubbed so Nordhaus’ light version would get the attention.

Nobel Prizes in Economics, Awarded and Withheld (NC)

Nordhaus was widely expected to be a winner for his work on the economics of climate change. For decades he has assembled and tweaked a model called DICE (Dynamic Integrated Climate-Economy), that melds computable general equilibrium theory from economics and equations from the various strands of climate science. His goal has been to estimate the “optimal” amount of climate change, where the marginal cost of abating it equals the marginal cost of undergoing it. From this comes an optimal carbon price, the “social cost of carbon”, which should be implemented now and allowed to rise over time at the rate of interest. In his first published work using DICE, from the early 1990s, he recommended a carbon tax of $5 a tonne of CO2, inching slowly upward until peaking at $20 in 2085. His “optimal” policy was expected to result in an atmospheric concentration of CO2 of over 1400 ppm (parts per million) at the end of this planning horizon, yielding global warming in excess of 3º C. (Nordhaus, 1992)

Over time Nordhaus has become slightly more concerned with the potential economic costs of climate change but also more sanguine about the prospects for decarbonized economic growth, even in the absence of policy. In his latest work he advocates a carbon tax of $31 per tonne in 2015, increasing at 3% per year over the following century. This too would result in more than 3º warming. To give a sense of how modest his suggestion is, consider that, in the same paper, Nordhaus calculates that the most efficient carbon tax to limit warming to 2.5º is between $107-184 per tonne depending on assumptions. The target of the Paris Accord is 2º, and most scientists consider this an upper bound for the amount of warming we should permit.

What do these “optimal” tax numbers mean? Based on the carbon content of gas, each $1 carbon tax translates into a one cent tax on a gallon of gas at the pump. If we adopted Nordhaus’ suggestion for carbon pricing, the result would be minuscule compared to the year-to-year fluctuations in energy prices due to other causes. In other words, while his prize is being trumpeted as a statement from the Swedish bankers on the importance of climate change, in fact he is a key spokesman for the position, rejected by nearly all climate scientists, that the problem is modest and can be solved by easy-to-digest, nearly imperceptible adjustments to energy prices. If we go down his road we face a significant risk of a climate apocalypse.

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The benefits of climate change.

The End Of The World Will Save Theresa May From Brexit (Ind.)

Brexit has been in its “something will turn up phase” for some time now and possibly, at last, something has. This is meant to be Theresa May’s “Hell Week”, with important post-Brexit proposals to be published in both Brussels and the UK, both of which will of course necessitate demented rows within her own party (current “strategies” include threatening to vote down the Budget), but Hell Week could hardly have got off to a better start. The most sensible reading of Hell Week is that it looks likely to end with May agreeing to keep the UK in the EU’s customs union until 2022. In the circumstances, the prime minister will not have failed to notice that, according to this morning’s report from the UN’s IPCC, that is a mere eight years before all of the planet’s inbuilt life preserving systems are currently scheduled to turn against humanity in act of vengeance that will be swift and total.

To borrow briefly from the probability-based lexicon of the climate science community, let’s take a look at the likelihood of Brexit being concluded by then in any meaningful way. Even in the unlikely event of Britain voting to leave the European Union, right up until around 8am on 24 June 2016, the latest point at which it was all meant to have been sorted out was 24 June 2018. But when David Cameron decided not to trigger the two-year Article 50 process “straight away” as he had consistently claimed he would, but resigned instead, that date was eventually pushed back by May to 29 March 2019, expanding Brexit by 37.5 per cent.

Then, in March 2018, the Brexit “transition period” was agreed to last until until 31 December 2020, and now, just seven months later, that deadline has been extended until the next general election in 2022, a further eighteen months. At the most conservative estimate, that gives Brexit a rate of expansion of around two hundred per cent, or four years for every two. If the depth to which it can be kicked into the long grass can be maintained on this exponential gradient, May has every reason to be optimistic that tornadoes of sulphuric gas will be moving freely over the Irish border long before she has to deliver any acceptable proposals for how to avoid the reintroduction of customs infrastructure across it.

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Not the only issue.

Stock Markets Stage Sharp Sell-Off Amid Fear Of Italy-EU Budget Fight (G.)

Global stock markets staged a sharp sell-off on Monday amid growing concerns over a budget showdown between Italy and the EU and the prospect of weaker growth in the Chinese economy. Italian borrowing costs jumped and the euro dropped on foreign exchanges as the war of words between Rome and Brussels escalated, while shares on Wall Street and other major international markets declined amid growing concerns over the US-China trade war. Italian bond yields jumped by as much as 30 basis points to the highest levels since early 2014 after the Italian deputy prime minister, Matteo Salvini, attacked the European commission president, Jean-Claude Juncker, and the economics commissioner, Pierre Moscovici, as enemies of Europe.

Speaking at a news conference with the French far-right leader Marine Le Pen, he said the country would not cave to pressure from the financial markets or retreat from its plan for government spending. “We are against the enemies of Europe — Juncker and Moscovici — shut away in the Brussels bunker,” he said. Brussels has told Italy it is concerned over the plan because it would mean the nation running a larger budget deficit – the gap between income from taxes and government spending – than previously planned for the next three years. Rome is to submit its draft budget to the commission, the EU’s executive arm, which will check whether it is in line with EU rules by 15 October.

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When the easy money goes, how do we keep the bubbles inflated?

QE Party Is Drying Up, Even at the Bank of Japan (WS)

As of September 30, total assets on the Bank of Japan’s elephantine balance sheet dropped by ¥5.4 trillion ($33 billion) from a month earlier, to ¥537 trillion ($4.87 trillion). It was the fourth month-over-month decline in a series that started in December. This chart shows the month-to-month changes of the balance sheet. Despite all the volatility, the trend since mid-2016 is becoming clear: Abenomics became the economic religion of Japan in later 2012, and “QQE” (Qualitative and Quantitative Easing) was an integral part of it. So has the “QQE Unwind” commenced? Are central bankers, even at the Bank of Japan, getting cold feet about the consequences?

At BOJ policy meetings, concerns have been voiced over the “sustainability” of the stimulus program, according to the minutes of the July meeting, released on September 25. So the BOJ staff “proposed measures to enhance the sustainability of the current monetary easing while taking into consideration, for example, their effects on financial markets.” And “flexibility” has been proposed as solution to those concerns. The minutes reiterated that the BOJ would continue to buy Japanese Government Bonds (JGBs) in “a flexible manner” so that its holdings would increase by about ¥80 trillion a year. But this is precisely what has not been happening, in line with this “flexibility.”

Over the past 12 months, the BOJ’s holdings of JGBs rose by “only” ¥26.2 trillion – not ¥80 trillion. And they declined in September from the prior month (more in a moment). Shortly after the minutes had been released, BOJ Governor Haruhiko Kuroda, once the most reckless among the money printers, changed his tune and said in a speech that, “in continuing with powerful monetary easing, we now need to consider both its positive effects and side-effects in a balanced manner.” The Fed has already whittled down its balance sheet by $285 billion since it started its QE unwind last October. The ECB has tapered its QE from a peak of buying €85 billion a month to buying €15 billion currently and will end it altogether in December. The discussion has switched to raising rates and unwinding QE.

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Like the graph.

Higher Rates Will Hurt Stocks Far More Than You Think (SA)

Federal Reserve Chair Jerome Powell thinks the economy is awesome. And he has no problem telling us so. What Powell will never discuss, however, is the “way-too-low-for-way-too-long” stimulus that the central bank engaged in to get here. In particular, the Fed has kept the neutral rate of interest far beneath the rate of inflation (CPI) for an entire decade. Consumers, corporations and Uncle Sam predictably borrowed as if there’d never be consequences. What consequences? Asset bubbles. Stocks, bonds, real estate, collectibles, cryptos, alternatives, everything. Straight across the Ouija board.

Perhaps ironically, we have seen this streaming video before. “Too-low-for-to-long” rate policy in the previous economic expansion (11/01-12/07) created an environment whereby the quality and the quantity of household mortgage debt became toxic. Granted, mortgage debt is less of an issue in the current credit cycle. Nevertheless, total household debt levels may not be sustainable at higher average interest costs. Meanwhile, the federal government is making households look downright responsible.

Long after the Great Recession ended, the country averaged $1.07 trillion in deficits (2010-2017). We’ve now hit $21.5 trillion in our national debt. Uncle Sammy’s bar tab won’t be getting smaller anytime soon. The new tax law, which has provided a near-term kick start for economic growth (GDP), will keep the trillion-dollar deficit train running for years to come. None of this would be so ominous were it not for the rapid-fire advance of interest expense. Interest expense alone accounts for 11% of the federal budget. Just interest. No debt repayment. Tack on higher interest rates to new borrowing needs? Pretty soon interest expense will surpass the money that goes to the Department of Defense (13.6%).

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Belt and Road. Silk Road.

Pakistan Seeks Bailout From IMF (WSJ)

Pakistan, the flagship country for China’s global infrastructure building initiative, said Monday that it needed a bailout from the International Monetary Fund, amid growing concerns that Beijing’s program is pushing recipient countries into financial crisis. The fiscal constraints of an IMF program would also undercut the promises made by Prime Minister Imran Khan’s new government, which include millions of new jobs and the establishment of a welfare state.

But a ballooning trade deficit and fast-depleting foreign exchange reserves left the Pakistani government no other choice, officials said, after markets were spooked by the government’s recent suggestions that it might try to make do without the fund. “Uncertainty was growing and the stock market was falling,” said Chaudhry Fawad Hussain, the Information Minister. “We decided to end the uncertainty.” The Pakistani request for an IMF loan could further test already-strained U.S.-China relations. In July, U.S. Secretary of State Mike Pompeo warned that the U.S. didn’t want to see any IMF lending to Pakistan “go to bail out Chinese bondholders or—or China itself.”

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Growing at 6.9%(?) and still in need of pretty extreme support. I’d be concerned.

IMF Not Concerned About China’s Ability To Defend The Yuan (R.)

IMF Chief Economist Maurice Obstfeld said on Tuesday that he was not concerned about the Chinese government’s ability to defend its currency despite the recent depreciation of the yuan. “No, I don’t think it’s a problem,” Obstfeld said when asked about the issue on the sidelines of a news conference at the IMF and World Bank annual meetings in Bali. But Obstfeld also told the news conference that Beijing would face a “balancing act” between actions to shore up growth and ensure financial stability. China’s yuan currency has faced strong selling pressure this year, losing over 8% between March and August at the height of market worries, though it has since pared losses as authorities stepped up support.

On Tuesday, China’s central bank fixed the yuan’s official mid-point for trading at 6.9019 per dollar, edging close to the psychologically important 7.0 barrier and helping to send Asian stocks to a 17-month low. A U.S. Treasury official on Monday repeated that the Trump administration was concerned about the yuan’s recent weakening as the department prepares a semi-annual report on currency manipulation due out next week. Obstfeld said financial markets have overly emphasized short-term movements in China’s currency, adding that the yuan has often quickly recovered from periods of volatility in recent years.

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Reading this, I kept thinking: what sharp slowdown? Where is it? Not in the numbers…

Sharp Slowdown In Consumer Spending Cools UK Retail Sales (G.)

Britain’s retailers experienced a sharp slowdown in consumer spending last month, bringing to a close the World Cup-inspired summer spree on the high street. According to the British Retail Consortium (BRC) and the accountancy firm KPMG, growth in total sales dropped to the weakest level in almost a year. Total sales grew at an annual rate of 0.7% in September, compared with 2.3% growth during the same month a year ago. The BRC said this was the lowest growth rate since October 2017. Excluding new store openings, like-for-like sales dropped by 0.2% in the year to September, compared with a 19.9% increase for the same period a year ago.

The latest snapshot for the retail sector comes before the important autumn and winter shopping periods, vital for industry profits, when sales of gifts and electrical goods are lifted by the Black Friday sales event in November and shoppers buying Christmas presents. Retailers have been hit hard by a combination of problems that have led to job cuts and store closures across Britain. The ongoing shift to online shopping has increased competition, while sluggish wage growth and high levels of inflation have damaged the spending power of British households. Sales of stationery, footwear and clothing fell last month, while retailers sold more computers, jewellery, furniture, home accessories and food.

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If this doesn’t scare you…

Google Drops Out Of Bidding For $10 Billion Pentagon Data Deal (R.)

Alphabet Inc’s Google said on Monday it was no longer vying for a $10 billion cloud computing contract with the U.S. Defense Department, in part because the company’s new ethical guidelines do not align with the project, without elaborating. Google said in a statement “we couldn’t be assured that [the JEDI deal] would align with our AI Principles and second, we determined that there were portions of the contract that were out of scope with our current government certifications.” The principles bar use of Google’s artificial intelligence (AI) software in weapons as well as services that violate international norms for surveillance and human rights.

Google was provisionally certified in March to handle U.S. government data with “moderate” security, but Amazon.com Inc and Microsoft Corp have higher clearances. Amazon was widely viewed among Pentagon officials and technology vendors as the front-runner for the contract, known as the Joint Enterprise Defense Infrastructure cloud, or JEDI. Google had been angling for the deal, hoping that the $10 billion annual contract could provide a giant boost to its nascent cloud business and catch up with Amazon and fellow JEDI competitor Microsoft. That the Pentagon could trust housing its digital data with Google would have been helpful to its marketing efforts with large companies. But thousands of Google employees this year protested use of Google’s technology in warfare or in ways that could lead to human rights violations.

Read more …

Sep 222018
 
 September 22, 2018  Posted by at 9:21 am Finance Tagged with: , , , , , , , , , , ,  


René Magritte Memory of a voyage 1955

 

Rosenstein Proposed Secretly Recording Trump, Invoking 25th Amendment (ZH)
NY Times, McCabe Give Trump Perfect Cover To Fire Rosenstein, Sessions (Hill)
Grassley Extends Deadline On Kavanaugh Accuser’s Decision To Testify (Pol.)
Ding Dong…. (Jim Kunstler)
Theresa May Demands European Leaders Show UK Respect (Ind.)
Legal Action To Revoke Article 50 Referred To European Court Of Justice (G.)
UK PM May Facing Ministerial Resignations Over Brexit Plan (R.)
Russia, Turkey Agree Borders Of Syria Demilitarised Zone (AFP)
Google Suppresses Memo Revealing Plans To Track Search Users In China (IC)
French Court Orders Psychiatric Assessment of Marine Le Pen (Sp.)
Russia’s Secret Plan To Help Julian Assange Escape From UK (G.)
Ecuador Pledged to Not Kick Out Assange – Lawyer (RT)
Ecuador Reportedly Mulled Sending Assange As A Diplomat To Russia (RT)

 

 

The New York Times now helps Trump, or do they think this hurts him?

Rosenstein Proposed Secretly Recording Trump, Invoking 25th Amendment (ZH)

[..] the NYT recounted on Friday an aborted mutiny attempt organized by Rosenstein, who allegedly tried to organize members of Trump’s cabinet to invoke the 25th amendment to oust Trump from office. In an attempt to persuade the clearly reluctant members of Trump’s cabinet, Rosenstein suggested that he or other officials should secretly tape Trump “to expose the chaos” he said was engulfing the West Wing. According to NYT, the sources were either briefed on Rosenstein’s plans, or learned about it from the files of former FBI Deputy Director Andrew McCabe, who was fired after being disgraced by an inspector general investigation. ABC News, which also reported the story, cited sources familiar with McCabe’s files. A grand jury is also weighing whether to press charges against McCabe for allegedly misleading the inspector general.

“Mr. Rosenstein made the remarks about secretly recording Mr. Trump and about the 25th Amendment in meetings and conversations with other Justice Department and F.B.I. officials. Several people described the episodes, insisting on anonymity to discuss internal deliberations. The people were briefed either on the events themselves or on memos written by F.B.I. officials, including Andrew G. McCabe, then the acting bureau director, that documented Mr. Rosenstein’s actions and comments. None of Mr. Rosenstein’s proposals apparently came to fruition. It is not clear how determined he was about seeing them through, though he did tell Mr. McCabe that he might be able to persuade Attorney General Jeff Sessions and John F. Kelly, then the secretary of homeland security and now the White House chief of staff, to mount an effort to invoke the 25th Amendment.”

[..] Mr. Rosenstein disputed this account. “The New York Times’s story is inaccurate and factually incorrect,” he said in a statement. “I will not further comment on a story based on anonymous sources who are obviously biased against the department and are advancing their own personal agenda. But let me be clear about this: Based on my personal dealings with the president, there is no basis to invoke the 25th Amendment.”

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Yeah, strange things are happening…

NY Times, McCabe Give Trump Perfect Cover To Fire Rosenstein, Sessions (Hill)

It has been a year of ironies: President Trump’s personal lawyer, Michael Cohen, once said he would take a bullet for Trump and now seeks to destroy him (and to do so pro bono). Sen. Ted Cruz (R-Texas) once denounced Trump for suggesting Cruz’s father was a presidential assassin but now politically relies on and praises the man who called him “Lying Ted.” The greatest irony of all, however, could be how the newspaper that Trump loves to call “the failing New York Times” succeeded in delivering to him what he has long wanted: a clean shot at firing Attorney General Jeff Sessions and Deputy Attorney General Rod Rosenstein, and then installing a new AG to oversee special counsel Robert Mueller.

To make this more bizarre, Trump could rely for all this on the man he publicly called on to be fired and possibly prosecuted — former FBI Acting Director Andrew McCabe. The Times dropped a bombshell story late Friday that Rosenstein discussed secretly recording Trump and seeking cabinet support to force him out of office as being incapacitated under the 25h Amendment. Rosenstein denies the story as “inaccurate and factually incorrect,” insisting “there is no basis to invoke the 25th Amendment.” However, McCabe reportedly wrote memos stating that Rosenstein did discuss the possibility of taping and entrapping the president. Trump has previously referred to McCabe’s memos as “fake.”

At least one source has said the comments about secret taping were made in jest. Of course, joking about secretly taping your boss or forcing him from office is not a huge improvement, particularly when you are technically controlling a special counsel’s investigation of the president. Even in jest, it fulfills Trump’s long narrative of a Justice Department set against him from the outset. So how could the Times clear the way for Trump to clean house at Justice and end up with Mueller directly controlled by an attorney general of his choosing? Simple.

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The Kavanaugh story tries hard to be even more absurd than the Rosenstein one.

Grassley Extends Deadline On Kavanaugh Accuser’s Decision To Testify (Pol.)

[..] late Friday, Grassley tweeted: “Five times now we hv granted extension for Dr Ford to decide if she wants to proceed w her desire stated one wk ago that she wants to tell senate her story Dr Ford if u changed ur mind say so so we can move on I want to hear ur testimony. Come to us or we to u.” Minutes later, he added: “Judge Kavanaugh I just granted another extension to Dr Ford to decide if she wants to proceed w the statement she made last week to testify to the senate She shld decide so we can move on I want to hear her. I hope u understand. It’s not my normal approach to b indecisive.”

Grassley followed with a candid lament that he was being outmaneuvered by Democrats: “With all the extensions we give Dr Ford to decide if she still wants to testify to the Senate I feel like I’m playing 2nd trombone in the judiciary orchestra and [Senate Minority Leader Chuck] Schumer is the conductor.” Grassley and other Republicans want Ford to appear on Wednesday, though Ford has requested a Thursday appearance. They accepted some of Ford’s requests after holding a conference call on Friday morning such as allowing one camera in the room, making sure Kavanaugh and Ford aren’t in the same hearing room at the same time and giving Ford breaks during testimony as well as security from the U.S. Capitol Police.

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“Fourth Turning horror show with whipped cream and a cherry on top…”

Ding Dong…. (Jim Kunstler)

This might come as a shock to readers, but the time is not far off when the remaining not-insane cohort of adult Americans gets good and goddamn sick of political sex bombing. Especially given this case of shuck-and-jive. Consider that the same CNN this week produced an entire segment about the shape and size of the President’s generative organ (as reported by an expert in these matters, the porn star and prostitute known as Stormy Daniels). It must be a subject of extraordinary interest to CNN’s Anderson Cooper. On the other flank of the news this week is the much more perilous showdown between the Department of Justice (and the FBI), and Mr. Trump, the cis-hetero-white Golem who happens to be president.

He has ordered these agencies to produce a set of un-redacted documents pertaining to the long-running Russia investigation, set into motion by personnel at these very places. It’s his prerogative under the constitution to do that. In turn, these agencies are being egged on by possibly culpable characters in this melodrama, such as former CIA Director John Brennan and Congressman Adam Schiff (D-Cal), to stonewall the Golem. If I were president — and I may get there yet — I’d send federal marshals into Rod Rosenstein’s office to seize these documents before they are mysteriously “lost.” A tremendous tension hangs over this transaction. Imagine the awful possibility that Mr. Trump may have to declare some kind of martial law to roust out these seditious rascals and clean up their departments. There’s your Fourth Turning horror show with whipped cream and a cherry on top.

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There are plenty other plans. She just doesn’t like them.

Theresa May Demands European Leaders Show UK Respect (Ind.)

Theresa May has demanded EU leaders show Britain respect, branding their public rejection of her Brexit proposals “not acceptable”. In a statement at Downing Street, the prime minister hit out at the way European Council President Donald Tusk discarded her plans without giving a detailed explanation or offering alternatives. Ms May said neither of the options previously offered by the EU were acceptable, stated that talks are now at an “impasse” and underlined her willingness to walk away if needs be – finishing with the words “we stand ready”. But the prime minister also made a new pledge to guarantee the rights of EU citizens living and working in the UK, even in the event of a no-deal Brexit.

Her intervention won approval from cabinet Brexiteers and to an extent from MPs on Conservative benches, steadying a volatile political situation which hours earlier had seen critics predicting the collapse of her strategy. Mr Tusk had surprised British officials by making an unexpectedly strong statement at the end of a summit in Salzburg this week, saying Ms May’s proposals for Brexit “will not work” and following it up with a social media post mocking her negotiating strategy. With pressure mounting, Ms May acknowledged from inside No.10 that Mr Tusk said the UK proposals would undermine the single market, but added: “He didn’t explain how in any detail or make any counter-proposal. So we are at an impasse.”

She said: “Throughout this process, I have treated the EU with nothing but respect. The UK expects the same. A good relationship at the end of this process depends on it. “At this late stage in the negotiations, it is not acceptable to simply reject the other side’s proposals without a detailed explanation and counter proposals. “So we now need to hear from the EU what the real issues are and what their alternative is so that we can discuss them. Until we do, we cannot make progress.”

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Someone in Scotland’s been digging into the law.

Legal Action To Revoke Article 50 Referred To European Court Of Justice (G.)

A legal action to establish whether the UK can unilaterally stop Brexit has been referred to the European court of justice by the court of session in Edinburgh. The case was brought by a cross-party group of six Scottish MPs, MEPs and MSPs, who want the ECJ to offer a definitive ruling on whether the UK can halt the article 50 process without needing the approval of all other 27 EU member states. Rejecting the argument put forward by lawyers for the UK government, that ministers have repeatedly made it clear they have no intention of stopping the Brexit process, even if there were no deal with the EU, Scotland’s most senior judge, Lord Carloway, said: “It seems neither academic nor premature to ask whether it is legally competent to revoke the notification and thus to remain in the EU.”

Carloway, one of three judges to consider the case on appeal after it was initially rejected in June as “academic and hypothetical”, noted that the Commons would be required to vote on whether to ratify any Brexit deal before 29 March 2019, “a date which is looming up”, and that a judgment from the ECJ would “have the effect of clarifying the options open to MPs in the lead-up to what is now an inevitable vote”. Lord Menzies said: “There will have to be a vote, and it appears to me to be legitimate for those who are involved in that vote to know, by means of a judicial ruling, the proper legal meaning of article 50, and in particular whether a member state which has given notification of its intention to withdraw from the EU may revoke that notification of intention unilaterally before the expiry of two years after the notification.”

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Monday could be good. New plans are demanded, but there’s no time for them.

UK PM May Facing Ministerial Resignations Over Brexit Plan (R.)

Some of British Prime Minister Theresa May’s ministers will demand a “Plan B” on her Brexit proposal next week and could quit if she does not change course, the Telegraph newspaper reported late on Friday, citing unnamed sources. Ministers will demand an alternative plan to her “Chequers” proposal at a Cabinet meeting on Monday, the Telegraph said. That plan had already been savaged by European Union leaders in Salzburg earlier in the week, prompting May to defiantly challenge leaders of the bloc to come up with its own plans. Pro-Brexit members of May’s party on Friday had welcomed her defiant tone, but her Chequers proposal has many domestic critics, too.

The Telegraph said there was “speculation” that work and pensions minister Esther McVey might walk out of Monday’s meeting if no new proposal was presented, while international development minister Penny Mordaunt was also tipped as a possible resignation candidate, though the newspaper said friends denied she would resign. Earlier on Friday, Mordaunt said that the EU’s attitude was increasing support within Britain for an exit from the bloc, even if it meant leaving without a deal. .

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Let’s hope Russia got this one right.

Russia, Turkey Agree Borders Of Syria Demilitarised Zone (AFP)

Russia and Turkey have agreed on borders of a demilitarised zone in northern Syria, Russia’s top diplomat said Friday, part of a deal that could check an assault on the last rebel enclave in Idlib. “Just yesterday or the day before, the militaries of Russia and Turkey agreed the concrete frontiers of the demilitarised zone,” Russian Foreign Minister Sergei Lavrov said after talks with his Bosnian counterpart Igor Crnadak. Moscow says the demilitarised zone would help stop attacks from Idlib on Syrian army positions and Russia’s military bases in the region. Russian President Vladimir Putin and Turkish counterpart Recep Tayyip Erdogan agreed the establishment of the 15 to 20 kilometre (9.3-12 miles) buffer zone on Monday after talks that lasted more than four hours.

Security in the zone, which includes parts of Idlib and neighbouring provinces including the city of Aleppo, will be overseen by Turkish contingents and Russian military police. The agreement will prevent military action against the city of Idlib, Russia’s defence minister said. “It’s an intermediate step… but a necessary step,” Lavrov said of the zone. “By mid-October, all (fighters of the Al-Nusra Front) must leave this demilitarised zone, and all heavy military equipment must be pulled out of there,” he said.

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Practising for the west?

Google Suppresses Memo Revealing Plans To Track Search Users In China (IC)

Google bosses have forced employees to delete a confidential memo circulating inside the company that revealed explosive details about a plan to launch a censored search engine in China, The Intercept has learned. The memo, authored by a Google engineer who was asked to work on the project, disclosed that the search system, codenamed Dragonfly, would require users to log in to perform searches, track their location — and share the resulting history with a Chinese partner who would have “unilateral access” to the data. The memo was shared earlier this month among a group of Google employees who have been organizing internal protests over the censored search system, which has been designed to remove content that China’s authoritarian Communist Party regime views as sensitive, such as information about democracy, human rights, and peaceful protest.

According to three sources familiar with the incident, Google leadership discovered the memo and were furious that secret details about the China censorship were being passed between employees who were not supposed to have any knowledge about it. Subsequently, Google human resources personnel emailed employees who were believed to have accessed or saved copies of the memo and ordered them to immediately delete it from their computers. Emails demanding deletion of the memo contained “pixel trackers” that notified human resource managers when their messages had been read, recipients determined.

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For posting ISIS execution pictures.

French Court Orders Psychiatric Assessment of Marine Le Pen (Sp.)

The request is connected with a series of images she posted on Twitter showing Daesh* executions. France’s National Rally party leader Marine Le Pen took to Twitter to express her anger with the court order. “I thought I had been through it all: well, no! For denouncing the horrors of Daesh (Isis) with tweets, the “justice system” has referred me for a psychiatric assessment. How far will they go?!” she said. “This regime is really starting to be frightening,” Le Pen added. Le Pen noted that, contrary to French media reports, the procedure was not customary. According to a decision made on September 11, which Le Pen posted on Twitter, the purpose of the psychiatric assessment was to answer the question: “Can she [Le Pen] understand the statements and answer the questions.”

In the list of questions given to the experts, there were eight points, among which were: “whether she acted under the influence of forces or circumstances of force majeure” as well as “is she in a dangerous state from the standpoint of psychiatry or forensic science, and what is the forecast,” among others. The National Assembly (lower house of parliament) of France in November 2017, at the request of the Nanteré Prosecutor’s Office, deprived Le Pen of parliamentary immunity in connection with the publication on Twitter. If the French court finds her guilty, the leader of the party may face up to three years in prison and a fine of 75,000 euros.

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More Guardian smear, sources that are known have long been discredited, Mueller’s allegations have been keelhauled, anonymous sources are suspect.

Russia’s Secret Plan To Help Julian Assange Escape From UK (G.)

Russian diplomats held secret talks in London last year with people close to Julian Assange to assess whether they could help him flee the UK, the Guardian has learned. A tentative plan was devised that would have seen the WikiLeaks founder smuggled out of Ecuador’s London embassy in a diplomatic vehicle and transported to another country. One ultimate destination, multiple sources have said, was Russia, where Assange would not be at risk of extradition to the US. The plan was abandoned after it was deemed too risky. The operation to extract Assange was provisionally scheduled for Christmas Eve in 2017, one source claimed, and was linked to an unsuccessful attempt by Ecuador to give Assange formal diplomatic status.

The involvement of Russian officials in hatching what was described as a “basic” plan raises new questions about Assange’s ties to the Kremlin. The WikiLeaks editor is a key figure in the ongoing US criminal investigation into Russia’s attempts to sway the outcome of the 2016 presidential election. Robert Mueller, the special counsel conducting the investigation, filed criminal charges in July against a dozen Russian GRU military intelligence officers who allegedly hacked Democratic party servers during the presidential campaign. The indictment claims the hackers sent emails that embarrassed Hillary Clinton to WikiLeaks. The circumstances of the handover are still under investigation. According to Mueller, WikiLeaks published “over 50,000 documents” stolen by Russian spies. The first tranche arrived on 14 July 2016 as an encrypted attachment. Assange has denied receiving the stolen emails from Russia.

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Very promising.

Ecuador Pledged to Not Kick Out Assange – Lawyer (RT)

Despite widespread speculation a few months ago that WikiLeaks founder Julian Assange may be kicked out of the Ecuadorian embassy by the country’s new leadership, his asylum seems to be safe for now, his lawyer told RT. In July, there were numerous reports that Ecuador’s president, Lenin Moreno, may revoke the political asylum given to Assange by his predecessor, Rafael Correa, as part of an effort to establish closer ties with the US. The threat never materialized, but his long-time lawyer said “anything could happen at any time.” “Ecuador has made it clear in the past few months – after this wide-spread speculation that he would be forced to leave – that they will respect the asylum,” she said.

Assange remains cut off from all communications and kept in what is effectively solitary confinement with no access to outdoor areas. His health is deteriorating, and the UK authorities have made sure that he won’t get treatment without leaving the embassy, she said. Assange was granted asylum in August 2012, skipping bail in the UK justice system. At that time, he was fighting extradition to Sweden, where he faced prosecution over a now-closed case over alleged sex offenses. He said he had to seek Ecuador’s protection because if forced to go to Sweden, he could be extradited to the US and face serious charges over his actions as WikiLeaks founder.

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Would have been a good solution.

Ecuador Reportedly Mulled Sending Assange As A Diplomat To Russia (RT)

London refused to grant WikiLeaks founder Julian Assange diplomatic immunity so he could escape the confinement of the Ecuadorian embassy in the UK and relocate to Russia, Reuters reports, citing government communications. The persona of Julian Assange has become a thorn in Ecuador’s president Lenin Moreno’s side and, ever since assuming office in May of last year, Moreno has made every effort to make sure the Australian’s stay at Ecuador’s embassy in London comes to an end as soon as possible. To shift the responsibility for Assange’s protection against US persecution, Ecuador allegedly mulled offering the WikiLeaks founder a diplomatic post in Russia, which the country hoped would enable him –protected by diplomatic immunity– to finally leave the embassy after six years of arbitrary detention.

London, however, refused to honor Moreno’s move to authorize “special designation” for 47-year-old to carry out diplomatic functions in Moscow, and declined to grant the whistleblower a free passage out of the country, Reuters reports, citing a letter by Ecuador’s foreign ministry to opposition legislator Paola Vintimilla. According to the letter, Quito abandoned its idea to relocate the whistleblower to Moscow after the UK Foreign Office refused to recognize Assange’s special status, or any privileges and immunities awarded under the Vienna Convention on Diplomatic Relations. The “special designation” status awarded by the Ecuadorian president would allow Assange to hold diplomatic posts abroad even if the whistleblower is not career diplomat. However, under English law, the 47 year-old can only enjoy diplomatic privileges, such as immunity, only if his credentials are accepted by the Foreign Office.

[..] Citing at least four, traditionally anonymous, sources, the Guardian wrote that Moscow was plotting to smuggle Assange out of London on Christmas eve last year, but dropped the plan because it was “deemed too risky.” The paper, claimed that Ecuador’s former London consul, Fidel Narvaez, was in talks with Russian diplomats and in constant contact with a ‘Russian businessman’ who coordinated the proposed operation with the Kremlin. It took the newspaper a mere five paragraphs of its 1,000-word report to bring up “questions about Assange’s ties to the Kremlin” in the context of the notorious Mueller probe and alleged ‘Russian hacking’ of the US elections.

Read more …

Sep 212018
 
 September 21, 2018  Posted by at 1:35 pm Finance Tagged with: , , , , , , , , , , , , ,  


M. C. Escher The Tower of Babel 1928

 

Two thirds of Americans get at least some of their news on social media. Google and Facebook receive well over 70% of US digital advertising revenues. The average daily time spent on social media is 2 hours. Just a few factoids that have at least one thing in common: nothing like them was around 10 years ago, let alone 20. And they depict a change, or set of changes, in our world that will take a long time yet to understand and absorb. Some things just move too fast for us to keep track of, let alone process.

Those of us who were alive before the meteoric rise of the hardware and software of ‘social’ media may be able to relate a little more and better than those who were not, but even that is not a given. There are plenty people over 20, over 30, that make one think: what did you do before you had that magic machine? When you walk down the street talking to some friend, or looking at what your friends wrote on Facebook, do you ever think about what you did in such situations before the machine came into your life?

 


From 10% to 75% in 10 years

 

We’re not going to know what the hardware and software of ‘social’ media will have done to our lives, individually and socially, for a very long time. But in the meantime, their influence will continue to shape our lives. They change our societies, the way we interact with each other, in very profound ways; we just don’t know how profound, or how, period. There can be little question that they change us as individuals too; they change how we communicate, and in such a way that there is no way they don’t also change our very brain structures in the process.

Someone who walks down a street talking to someone else 10, 100, 1000 miles away, or sees messages from such a person come in in virtual real time, experiences things that were not available ever in human history. Our brains must adapt to these changes, or we will be left behind. And while for the over-20, over-30 crowd this takes actual adaptation, for those younger than that it comes quasi pre-cooked: they’ve never known anything else. Still, their brains were formed in completely different times too. Think hunter-gatherers. And that’s just the human part of the brain.

There are too many aspects to this development to cover here. One day someone will write a book, or rather, many someones will write many books, and they will all be different. Some will focus on people’s lives being saved because their smartphones allow them to either receive or send out distress signals. Others will tell stories of teenagers committing suicide after being heckled on ‘social’ media. With yin comes yang. Millions feel better with new-found ‘friends’, and millions suffer from abuse even if they don’t kill themselves.

 

With new media, especially when it goes from 1 to 100 in no time flat, it should be no surprise that the news it delivers changes too. We went from a few dozen TV- and radio stations and newspapers to a few hundred million potential opinions in the US alone. The media are no longer a one-way street. The first effect that has had is that the chasm between news and opinion has narrowed spectacularly. If their readers post their views of what they read and see, journalists feel they have the right to vent their opinions too.

And then these opinions increasingly replace the news itself. The medium is again the message, in a way, a novel kind of way. A hundred million people write things without being restricted by due diligence or other journalistic standards, and we see journalists do that too. They will come up with lies, half-truths, innuendo, false accusations, and moreover will not retract or correct them, except when really hard-pressed. After all, who has the time when you post a hundred+ tweets a day and need to update your Facebook pages too?

Obviously, Donald Trump is an excellent example of the changing media environment. His use of Twitter was a major factor in his election victory. And then his detractors took to Twitter to launch a huge campaign accusing him of collusion with Russia to achieve that victory. They did this moving in lockstep with Bob Mueller’s investigation of that collusion accusation. But almost two years after the election, neither Mueller not the media have provided any evidence of collusion.

That, ironically, is the only thing that is actually true about the entire narrative at this point. Sure, Mueller may still have something left in his back pocket, but if he had solid proof he would have been obliged to present it. Collusion with a foreign government is too serious not to reveal evidence of. Therefore, it’s safe to conclude that in September 2018, Mueller has no such evidence. But what about the thousands of printed articles and the millions of Tweets and Facebook posts claiming collusion that were presented as true?

Funny you asked. What they prove is not collusion, but the changing media landscape. The anti-Trump echo-chamber that I’ve written about many times has been going strong for two years and shows no signs of abating. There are still lots of people posting a hundred (re-)tweets etc. daily who are being read by many others, all of them confirming their biases in a never fulfilled feeding frenzy.

This is not about Trump. And I’m not a Trump supporter. This is instead about the media, and the humongous difference interactivity has made. And about the fact that it hasn’t just added a hundred million voices, it has also altered the way traditional media report the news, in an effort to keep up with those hundred million.

 

The thing here that is about Trump, is that he’s everybody’s favorite meal ticket. He confirms everyone’s opinion, whether for or against him, by the way he uses media. And most importantly, they all make a lot of money off of him. The New York Times and WaPo and MSNBC would be in deep financial trouble without Trump. Like they were before he came along. Polarization of opinions saved them. Well, not the WaPo, Jeff Bezos can afford to run 1000 papers like that and lose money hand over fist. But for the NYT and many others a Trump impeachment would be disastrous. Funny, right?

Another thing that is obvious is that one thing still sells above all others: sex. The smear campaign against Julian Assange has been successful in one way only, and it’s been a smash hit: the rape allegations. Completely false, entirely made up, dragged out as long as possible, and turning millions, especially women, against him.

The accusations against Supreme Court candidate Brett Kavanaugh haven’t been around long enough to be discredited. Maybe they will be, maybe they won’t. But read through newspaper articles, watch TV shows, follow Twitter, and you see countless voices already convinced ‘he did it’. And that ‘it’ is often labeled ‘rape’, though that’s not the accusation.

But it’s part of the Anti-Trump train, and the echo-chamber has gone into overdrive once again. Even if everyone understands that a 36-year old accusation must be handled with care. The accusing woman’s lawyer says the FBI must investigate, and everyone says: FBI! FBI!. Conveniently forgetting that the FBI has been far from impartial with regards to Trump, and the White House is not exactly waiting for another FBI role.

What’s wrong with waiting till you know the facts? Why judge a situation you know nothing about other than a woman accuses a man of assault 36 years ago, and doesn’t remember time, location etc.?

 

And that’s the thing all along, isn’t it? That people, both readers and journalists, all 200 million Americans of them, think they have acquired the right to judge any person, any situation they read a few lines about, just because they have purchased a smartphone. A faulty notion fed on a daily basis by the fact there are millions who think just like them.

We may want to rethink the terms ‘social’ media and ‘smart’ phone. They sound good, but they don’t cover the true nature of either. It’s hard to say where all this is going, but the sharply increasing polarization of society is certainly not a good sign. People feeling they have the right to accuse others without knowing facts, people building a Russiagate narrative without evidence, these are not things a society should welcome, whether they’re profitable or not.

Meanwhile, there are two people (there are many more, of course) who were banned from the platforms so many others use to draw baseless conclusions and spout empty accusations. And we miss them both, or we should: Alex Jones and Julian Assange. Have they really used ‘social’ media in worse ways than those 200 million Americans? Or were they banned because millions of Americans were following and reading their non-mainstream views?

We better get a grip on this, and on ourselves, or we won’t get another chance. What we have seen so far is that it’s not that hard to shape people’s opinions in a world with information overload. And that process is about to get a whole lot more intense. Until all you’re left with is the illusion that your opinion is actually your own.

 

 

Sep 132018
 
 September 13, 2018  Posted by at 8:45 am Finance Tagged with: , , , , , , , , , , ,  


Henri Matisse Landscape with a bench 1918

 

This Will Be The Mother Of All Minsky Moments (Mauldin)
Leaderless World Is Sleepwalking Into A Financial Crisis – Gordon Brown (G.)
UK PM May Calls Special Meeting To Discuss ‘No-Deal’ Brexit (CNBC)
EU Can ‘Certainly Not’ Accept Theresa May’s Single Market Plan – Juncker (Ind.)
Juncker Calls On EU To Seize Chance To Become Major Sovereign Power (G.)
Poland Says It Will Block Any EU Sanctions Against Hungary (R.)
Leaked Video Shows Distraught Google Execs Grappling With Hillary’s Loss (ZH)
John Kerry Accused Of Violating Logan Act In Secret Iran Talks (ZH)
US Destroyer Arrives In Mediterranean As Syria Tensions Rise (RT)
No NGO Rescue Boats Currently In Central Mediterranean (G.)
Two More Potential ‘Garbage Patch’ Zones In World’s Oceans Identified (Ind.)
Florence To Slow Down, Hammer Carolinas and Appalachia for Days (Weather.com)

 

 

The mother of all debt loads.

This Will Be The Mother Of All Minsky Moments (Mauldin)

Dr. Hyman Minsky points out that stability leads to instability. The more comfortable we get with a given condition or trend, the longer it will persist. And then when the trend fails, the more dramatic the correction. Long-term stability produces unstable financial arrangements. If we believe that tomorrow will be the same as last week, we are more willing to add debt or postpone savings in favor of current consumption. Thus, says Minsky, the longer the period of stability, the higher the potential risk for even greater instability when market participants must change their behavior.

[..] I think the mother of all Minsky moments is building. It will not be an instant sandpile collapse, but instead take years because we have $500 trillion of debt to work through. Remember, that debt just can’t be pooped away. It is both money somebody owes and an asset on somebody else’s balance sheet. We can’t just take that away without huge consequences to culture and society.

Read more …

All these people responsible for the last crisis are now advising on what to do with the next one.

Leaderless World Is Sleepwalking Into A Financial Crisis – Gordon Brown (G.)

“It is very difficult to say what will trigger it [the next crisis] but we are at the latter end of the economic cycle where people take greater risks. There are problems in emerging markets.” Brown said one area of concern should be heavy commercial and industrial lending by lightly or unregulated shadow banks at a time when US interest rates are rising. “It could arise in Asia because of the amount of lending through the shadow banking system.” He added: “In an interconnected world there is an escalation of risks. We have had a decade of stagnation and we are now about to have a decade of vulnerability.”

Recalling the freezing up of the financial markets a decade ago, Brown said governments had sought to compensate for the lack of trust between banks by cooperating more closely. “In the next crisis a breakdown of trust in the financial sector would be mirrored by breakdown in trust between governments. There wouldn’t be the same willingness to cooperate but rather a tendency to blame each other for what’s gone wrong.

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Waking up at last?

UK PM May Calls Special Meeting To Discuss ‘No-Deal’ Brexit (CNBC)

The U.K. government is set to meet Thursday morning for three-hours to discuss the eventuality of a “no-deal” Brexit. The meeting takes place at a time when the government is also releasing more than 20 documents, outlining some more preparations in case the U.K. leaves the European Union in March 2019 without a deal. This is not the first set of papers outlining what will happen in case the U.K. and the EU do not reach a deal. In late August, the U.K. government said that businesses should prepare for higher barriers to trade, more red tape and potentially higher costs too, if Brexit talks collapse.

All these steps are part of a wider attempt to step up works for the worst-case scenario. The EU has also strengthened its preparations in case the U.K. leaves the bloc abruptly. The U.K.’s Brexit chief, Dominic Raab, warned on Wednesday that the U.K. will not pay the so-called divorce bill, if there is no final deal over Brexit. Raab wrote in the Daily Telegraph that the £39 billion ($50.82 billion) the U.K. owes to the EU, due to previous policy agreements, will not be repaid if there is no deal.

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We know.

EU Can ‘Certainly Not’ Accept Theresa May’s Single Market Plan – Juncker (Ind.)

Jean-Claude Juncker has given his clearest signal yet that the EU will not accept Theresa May’s plan to keep Britain in the single market for goods after Brexit. In his annual state of the union address in Strasbourg, the European Commission president said parts of the single market could “certainly not” be jettisoned for countries outside the bloc. But he said the Chequers proposals could be a “starting point” for the future relationship and that Britain would “never be an ordinary” country for the EU. “We respect the British decision to leave our union, even though we continue to regret it deeply,” he told MEPs. “But we also ask the British government to understand that someone who leaves the union cannot be in the same privileged position as a member state.

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Bigger is better?!

Juncker Calls On EU To Seize Chance To Become Major Sovereign Power (G.)

In his state of the union speech, titled The Hour of European Sovereignty, the European commission president appealed to MEPs and heads of government to give the EU the powers and characteristics traditionally restricted to states. Explaining his expansive vision, Juncker said the EU should aim to surpass the dominance of the dollar in the world economy and challenge China in its attempts to become the ascendant influence in Africa. The EU should be “a global player” as well as a “global payer”, Juncker said, with foreign policy decisions made on the basis of a qualified majority vote in which the will of 55% of member states would win the day.

Through trade deals, the EU’s standards and labour conditions were being exported across the world, he said, and it was time for the continent to further use its “clout” to mould the future. “The geopolitical situation makes this Europe’s hour: the time for European sovereignty has come,” Juncker told the European parliament in Strasbourg. “It is time Europe took its destiny into its own hands. It is time Europe developed what I coined Weltpolitikfähigkeit – the capacity to play a role, as a union, in shaping global affairs. Europe has to become a more sovereign actor in international relations.”

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A crumbling fortress.

Poland Says It Will Block Any EU Sanctions Against Hungary (R.)

Poland, the biggest former communist country in the European Union, said it will oppose any sanctions imposed by the bloc on fellow member Hungary, accused of floating EU rules on democracy. “Every country has its sovereign right to make internal reforms it deems appropriate,” Poland’s foreign ministry said in a statement late on Wednesday. “Actions aimed against member states serve only deepening divides in the EU, increasing citizens’ current lack of confidence to European institutions.” The European Parliament voted on Wednesday to sanction Hungary for neglecting norms on democracy, civil rights and corruption in a first bid to launch the punitive process of the EU treaty’s Article 7.

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AI to save their day?

Leaked Video Shows Distraught Google Execs Grappling With Hillary’s Loss (ZH)

Days after Google was exposed trying to help Hillary Clinton win the 2016 election, a leaked “internal only” video published by Breitbart Senior Tech correspondent Allum Bokhari reveals a panel of Google executives who are absolutely beside themselves following Hillary Clinton’s historic loss. The video is a full recording of Google’s first all-hands meeting following the 2016 election (these weekly meetings are known inside the company as “TGIF” or “Thank God It’s Friday” meetings). Sent to Breitbart News by an anonymous source, it features co-founders Larry Page and Sergey Brin, VPs Kent Walker and Eileen Naughton, CFO Ruth Porat, and CEO Sundar Pichai. -Breitbart

In the video, Brin can be heard comparing Trump supporters to fascists and extremists – arguing that like other extremists, Trump voters suffered from “boredom” which has, he claims, historically led to fascism and communism. He then asks his company what they can do to ensure a “better quality of governance and decision-making.” And according to Kent Walker, VP for Global Affairs, those who support populist causes like the MAGA movement are motivated by “fear, xenophobia, hatred and a desire for answers that may or may not be there.” He later says that Google needs to fight to ensure that populist movements around the world are merely a “blip” and a “hiccup” in the arc of history that “bends towards progress.”

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A dark-grey area at best.

John Kerry Accused Of Violating Logan Act In Secret Iran Talks (ZH)

Though he previously denied it when allegations first surfaced last Spring, former Secretary of State John Kerry has now disclosed he’s personally had semi-frequent face to face contact with top Iranian officials to discuss US-Iran relations since Trump entered office. Kerry confirmed and explained in detail his recent meetings with Iranian Former Minister Javad Zarif in an interview with radio host Hugh Hewitt to promote his new memoir, Every Day Is Extra.

During the interview Kerry disclosed that he met with Zarif “three or four times” and discussed political issues and challenges between the United States and Iran in what could constitute a significant and clear violation of the Logan Act. Though it’s almost never been enforced, the 1799 Logan Act states that unauthorized diplomacy with foreign powers by private American citizens is a crime. Notably, two Trump-connected individuals that prominent Liberals and editorials demanded be prosecuted under the Logan Act include former national security advisor Michael Flynn and Trump senior adviser and son-in-law Jared Kushner.

When asked point blank during the radio show about his rumored meetings with top Iran officials, Kerry admitted, “I think I’ve seen him three or four times,” but attempted to claim he was not trying to “coach” Iran on how to navigate President Trump’s pullout of the Iran nuclear deal. Kerry is of course now a private citizen out of government but holds significant clout and influence with the Iran FM as the two hammered out the details of the JCPOA brokered under President Obama in the first place.

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I wouldn’t be too sure Russia will back down again.

US Destroyer Arrives In Mediterranean As Syria Tensions Rise (RT)

With the arrival of another guided missile destroyer to the Mediterranean, the US may have 200 ‘Tomahawks’ ready for a strike on Syria, as Russia warns that jihadist groups in Idlib are planning a fake chemical attack. The USS Bulkeley (DDG-84), an Arleigh Burke-class destroyer, entered the Mediterranean through the Straits of Gibraltar on Wednesday, the Russian news agency Interfax reported citing international maritime monitoring data. A Gibraltar-watcher confirmed the destroyer’s transit on September 12.

With the arrival of the Bulkeley, the US forces in the region have up to 200 ‘Tomahawk’ cruise missiles available to strike targets in Syria if ordered to do so, Interfax reported. Last week, the attack submarine USS Newport News (SSN-750) arrived in the Mediterranean as well. Last week, Russia conducted massive naval maneuvers off the Syrian coast, culminating in marine landing drills and missile launches. The presence of Russian ships in the area was seen as a possible deterrent to further US military action against Syria.

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If a tree falls in a forest…

No NGO Rescue Boats Currently In Central Mediterranean (G.)

Thousands of migrants risk dying at sea because of a clampdown on NGO rescue ships, aid agencies have warned, in what has been their longest period of absence from the central Mediterranean since they began operating in late 2015. Since 26 August, no NGO rescue vessel has operated on the main migration routes between north Africa and southern Europe. Anti-immigration policies by the Maltese and Italian governments, which have closed their ports to the vessels, have driven the sharp decrease in rescue missions. People seeking asylum are still attempting the risky crossing – but without the boats, shipwrecks are likely to rise dramatically.

The last time the Mediterranean was without NGO rescue boats was from 28 June to 8 July 2018, and in those days more than 300 migrants died at sea. The death toll has fallen in the past year, but the number of those drowning as a proportion of arrivals in Italy has risen sharply in the past few months, with the possibility of dying during the crossing now three times higher.

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When we create truly lasting legacies.

Two More Potential ‘Garbage Patch’ Zones In World’s Oceans Identified (Ind.)

Much attention has focus on the plastic floating on the surface, but this accounts for less than 1 per cent of the total plastic thought to be in ocean. To trace the likely fate of the remaining 99 per cent, scientists at Newcastle University used computer models and identified two likely locations for accumulation zones that had previously slipped under the radar. The Gulf of Guinea region and the East Siberian Sea may be hosting large quantities of plastic that cannot be easily viewed from the water surface, as up to 70 per cent of plastic debris is thought to sink and remain on the sea floor.

“There’s a need to find the unaccounted for plastic in the ocean mainly because if we don’t know the extent of the problem, then there’s no way of knowing the potential implications it has,” explained Alethea Mountford, a PhD Student at Newcastle University who led the study. “Once the plastics reach the water column, the greatest impact would be on marine organisms through ingestion and entanglement,” she said.

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A lot of storms. Mangkhut is about to hit the Philippines.

Florence To Slow Down, Hammer Carolinas and Appalachia for Days (Weather.com)

Hurricane Florence continues to expand in size. Hurricane-force winds now extend outward up to 80 miles the center and tropical-storm-force winds extend outward up to 195 miles from the center. This expansion in size only increases the hurricane’s energy and potential for significant storm surge. The National Hurricane Center noted Wednesday evening that while Florence has weakened some, “the wind field of the hurricane continues to grow in size. This evolution will produce storm surges similar to that of a more intense, but smaller, hurricane, and thus the storm surge values seen in the previous advisory are still valid.” Previous large Category 2 hurricanes have done enormous amounts of damage along the U.S. coast.

Read more …

Sarah Kendzior tweets:

The best workaround I’ve found to Twitter’s horrible new algorithm is putting this in the search bar:

filter:follows -filter:replies include:nativeretweets

You will get your old chronological timeline back with no “likes” and with retweets from people you actually follow.

Sep 122018
 
 September 12, 2018  Posted by at 1:17 pm Finance Tagged with: , , , , , , , , , ,  


Winslow Homer Salt Kettle, Bermuda 1899

 

In the wake of a number of the Lehman and 9/11 commemorations in America, and as a monster storm is once again threatening to cause outsize damage, we find ourselves at a pivotal point in time, which will decide how the country interacts with its own laws, its legal system, its Constitution, its freedom of speech, and indeed if it has sufficient willpower left to adhere to the Constitution as its no. 1 guiding principle.

The main problem is that it all seems to slip slide straight by the people, who are -kept- busy with completely different issues. That is convenient for those who would like less focus on the Constitution, but it’s also very dangerous for everyone else. Americans should today stand up for freedom of speech, or it will be gone, likely forever.

The way it works is that president Trump is portrayed as the major threat to ‘the rule of law’, which allows other people, as well as companies and organizations, to drop below the radar and devise and work on plans and schemes that threaten the country itself, and its future as a nation ruled by its laws.

Bob Woodward’s book “Fear: Trump in the White House” and the anonymous op-ed published in the NYT a day later serve as a good reminder of these dynamics. If you succeed in confirming people’s idea that Trump is such an unhinged idiot that an unelected cabal inside the White House is needed to save the nation from the president it elected, you’re well on your way.

Well on your way to separate the country from its own laws, that is. Not on your way to saving it. You can’t save America by suspending its Constitution just because that suits your particular political goals or points of view.

 

Late last night, Michael Tracey wrote on Twitter: “Trump’s preference to pull out of Afghanistan is depicted in the Woodward book as yet another crazy impulse that the “adults in the room” successfully rein in.” “We’re going to save you from yourselves, thank us later!” Nobody voted for those adults in the room anymore than anyone voted for the Afghanistan ‘war’ to enter year 17.

Meanwhile Infowars said: “Several people within Trump’s inner circle know the threat to the mid-terms and his re-election chances that social media censorship poses, including Donald Trump Jr. and Brad Parscale, his 2020 campaign manager. However, older members of the administration are completely unaware of the fact that banning prominent online voices and manipulating algorithms can shift millions of votes and are oblivious to the danger. This ignorance has placed a temporary block on Trump taking action, despite the president repeatedly referring to Big Tech censorship in tweets and speeches over the last few weeks.”

Yes, Infowars, I know, everybody loves to hate Alex Jones. And perhaps for good reasons, at least at times. But does that mean he can be banned from a whole slew of internet platforms without this having been run by and through the US court system? Without even one judge having examined the ‘evidence’, if it even existed, that leads to such banning, blocking and shadowbanning?

Alex Jones is an ‘easy example’ because he’s so popular. Which is also, undoubtedly, why all the social media platforms ban him so easily, and all at the same time. ‘He’s a terrible person’, say so many of their readers. But that’s not good enough, far from it. Twitter and Facebook should never be allowed to ban anyone, using opaque ‘Community Standards’ or ‘Terms and Conditions’ interpreted by kids fresh out of high school.

These platforms have important societal functions. They are for instance the new conduits governments, police, armies use to warn people in case of emergencies and disasters. You can’t ban people from those conduits just because a bunch of geeks don’t like what they say. If you can at all, it will have to be done through the legal system.

That this is not done at present poses an immense threat to that legal system, and to the Constitution itself. But Americans, and indeed Congressmen and Senators, have been trained in a Pavlovian way to believe that it’s not Google and Facebook who threaten the Constitution, but that it’s Trump and his crew.

 

Meanwhile, Trump is being put through Bob Mueller’s Special Counsel legal wringer 24/7, while Alphabet, Jack Dorsey and Mark Zuckerberg escape any such scrutiny at all. That discrepancy, too, is eating away at the foundations of American law.

And like it or not, Trump had it right when he said “You look at Google, Facebook, Twitter and other social media giants and I made it clear that we as a country cannot tolerate political censorship, blacklisting and rigged search results..”

America as a country cannot tolerate a few rich companies deciding whose voice can be heard, and whose will be silenced. It is entirely unacceptable. That goes for voices Trump doesn’t want to hear as much as it does for whoever Silicon Valley doesn’t. That’s why neither should be in charge of making such decisions. It kills the Constitution.

None of the above means that everyone should be free to post terrorist sympathies or hate speech on social media platforms. But it does mean that legislative and judicial systems must define what these things mean, that this not be left up to arbitrary ‘Community Standards’ interpreted by legally inept Silicon Valley interns, nor should it be left to secret algorithms to decide what news you see and what not.

America itself hangs in the balance, and so do many other western countries. What exactly is the difference between China’s overt internet censorship and America’s hidden one? That is what needs to be defined, and that can only be done by the legal system, by Congress, by the courts, by judges and juries.

And it’s not something that has to be invented from scratch, it can and must be tested against the Constitution. That is the only way forward. That social media have taken over the country by storm, and nary a soul has any idea what that means, can never be an excuse to leave banning and silencing voices over to private parties, whoever they are.

 

It’s not a unique American problem. In Europe there are all sorts of attempts to ban ‘hate speech’, but there are very few proposals concerning who will define what that is. And since Europe has no Constitution, but instead has 27 different versions of one, it will be harder there. Then again, it will also be easier to get away with all sorts of arbitrary bannings etc.

Hungary will be inclined to ban totally different voices than for instance Denmark and so on. And nobody over there has given any sign of understanding how dangerous that is. Banning ‘hate speech’ doesn’t mean anything if the term hasn’t been properly defined. But that also allows for banning voices someone simply doesn’t like. To prevent that from happening, we have legal systems.

It’s essential, it’s elementary, Watson. But it’s slipping through our fingers because our politicians are either incapable of, or unwilling to, comprehending the consequences. Why stick out your neck when nobody else does? It’s like the anti-thesis of what politics means: stay safe.

So the social media’s industry’s own lobbying has a good shot at getting its way: they tell Washington to let them regulate themselves, and everything will be spic and dandy. That would be the final nail in the Constitution’s coffin, and it’s much closer than you think. Do be wary of that.

 

In the end it comes down to two things i’ve said before. First, there is no-one who’s been as ferociously banned and worse the way Julian Assange has. His ban goes way beyond Silicon Valley, but it does paint a shrill portrait of how far the US, CIA, FBI, is willing to go, and to step beyond the Constitution, to get to someone they really don’t like.

But has Assange ever violated and US law, let alone its Constitution? Not that we know of. Mike Pompeo has called WikiLeaks a ‘hostile intelligence service’, and the DOJ has said the 1st Amendment, and thereby of necessity the entire US Constitution, doesn’t apply to Assange because he’s not an American, but both those things are devoid of any meaning, at least in a court of law.

Bob Woodward has an idea of what Assange faces, and he’d do much better to focus on helping him than trying to put Trump down through anonymous sources. And that also leads me to why I, personally, have at least some sympathy for Alex Jones, other than because he’s being attacked unconstitutionally: Jones ran/runs a petition for Trump to free Julian Assange.

Come to think of it: it’s when that petition started taking off that Jones’s ‘real trouble’ started. Given how closely interwoven Silicon Valley and the FBI and CIA have already become, I’m not going to feign any surprise at that.

And before you feel any wishes and desires coming up to impeach Trump, do realize that he may be the only person standing between you and a complete takeover of America by the FBI/NSA/CIA/DNC and Google/Facebook/Twitter, which will be accompanied by the ritual burial of the Constitution.

Think Trump is scary? Take a step back and survey the territory.

 

 

 

 

Sep 092018
 
 September 9, 2018  Posted by at 9:36 am Finance Tagged with: , , , , , , , , , , ,  


Vincent van Gogh A Restaurant at Asnieres 1887

 

The ‘Most Striking Development’ In 40 Years Of The US Economy (BI)
This Insider Betrayal Is A Sorry Precedent (Observer ed.)
Argentina, Turkey, Mexico … Fear Of Contagion Haunts Emerging Markets (G.)
No-Deal Brexit Could Lead To “Military On The Streets” (Ind.)
Brexit Talks At Risk Of Collapse (Ind.)
Bombshell Poll Reveals Heavy Union Backing For Second Brexit Vote (G.)
YouGov Poll Shows Support For A People’s Brexit Vote Is Solid (G.)
Fresh From End Of Bailout, Greek PM Announces Tax Breaks (R.)
Protect Assange From US Extradition, Amnesty International Tells UK (RT)
The Latest Incarnation of Capitalism (Jacobin)
What’s The Biggest Influence On The Way We Think? (G.)

 

 

This is going spectacularly wrong. Somone better stop it.

The ‘Most Striking Development’ In 40 Years Of The US Economy (BI)

French economist Thomas Piketty is one of the world’s leading researchers of global income and wealth inequality, and became well-known in the United States when the English translation of his book “Capital in the 21st Century” became a surprise bestseller. For the past year, Piketty has been speaking about the 2018 World Inequality Report, published by the Paris School of Economics’ World Inequality Lab last December. Piketty coauthored the report alongside Facundo Alvaredo, Lucas Chancel, Emmanuel Saez, and Gabriel Zucman. In his talks in the US, Piketty has paid special attention to the following chart, which shows what he and his coauthors called “perhaps the most striking development in the United States economy over the last four decades.”

The authors write that “the incomes of the top 1% collectively made up 11% of national income in 1980, but now constitute above 20% of national income, while the 20% of US national income that was attributable to the bottom 50% in 1980 has fallen to just 12% today.” Further, “while average pre-tax income for the bottom 50% has stagnated at around $16,000 since 1980, the top 1% has experienced 300% growth in their incomes to approximately $1,340,000 in 2014. This has increased the average earnings differential between the top 1% and the bottom 50% from 27 times in 1980 to 81 times today.”

Read more …

The Guardian/Observer, leading anti-Trump voice, has a piece ‘Unfit for President, but…” Look, just like the NYT, you no longer are a voice, because you’ve spent two years 24/7 denouncing the man with rumors and half-truths -like you did with Corbyn being anti-semite. You can’t now turn around and be a voice for democracy. You’re done.

This Insider Betrayal Is A Sorry Precedent (Observer ed.)

[..] the president’s discomfort, and his detractors’ glee, should not obscure more serious issues raised by this affair and by similarly critical revelations contained in a new exposé by the celebrated Watergate reporter Bob Woodward. Whatever one’s opinion of Trump, it is a matter of concern that unelected, unnamed officials are apparently willing and able to act in ways contrary to an elected president’s stated wishes and calculated to thwart his policies. Trump’s worst instincts must undoubtedly be resisted, as Barack Obama, rejoining the fight last week, has declared. The best way to achieve that, as ever in a democracy, is through public scrutiny and open debate. Every leader needs candid advisers.

But who are these self-described “adults in the room” to clandestinely decide what is in the best interests of the country? Their motives may be sound, but their illicit actions, boasted of publicly, set a worrisome precedent. They have also gifted Trump a golden opportunity to peddle his favourite narrative of an establishment conspiring against him, aided and abetted by media organisations – which he terms “enemies of the people”. Speaking in Montana on Thursday, he seized his chance. “Unelected, deep state operatives who defy the voters to push their own secret agendas are truly a threat to democracy itself,” he declared.

The anonymous writer tried to provide reassurance that things in the White House are not as bad as they seem. Woodward’s new book, Fear, suggests the exact opposite: they are worse. It describes a “Crazytown” of tantrums, endless crises, serial lying, unhinged behaviour, and an administration in a recurring state of nervous breakdown.

Read more …

It’s not so much dominoes falling one by one, it’s the USD that crashes down everything.

Argentina, Turkey, Mexico … Fear Of Contagion Haunts Emerging Markets (G.)

In the past six months, some of the world’s fastest-growing economies have found themselves flat on the floor, gasping for breath and, in one case, seeking help from the global financial rescue centre otherwise known as the IMF. Argentina’s $50bn bailout by the Washington-based lender of last resort is the most extreme event so far, but it sits alongside the dramatic collapse of the Turkish lira, a recession in South Africa and dire economic predictions for the Philippines, Indonesia and Mexico. Making matters worse, the US is poised to slap tariffs as high as 25% on as much as $200bn worth of Chinese goods. If the US goes ahead, Beijing has already threatened to retaliate, which would only incense President Donald Trump further.

This tit-for-tat might only end when tariffs are applied to the entire $500bn of Chinese goods imported by America each year. In response, the stock markets of many developing nations have slumped in value, leaving investors to ask themselves whether they are witnessing an emerging-markets meltdown akin to the Asian crisis of 1997: a panic that wrecked the finances of several hedge funds and proved to be an hors d’oeuvre before the dotcom crash of 1999 and the global financial crisis of 2008. Investors have run for safety to such an extent that the MSCI Emerging Markets index, which measures the value of shares in emerging economies, has tumbled by more than 20% since the beginning of the year.

That slump appeared to be over in July, when Turkey and Argentina were seen as being isolated, and more importantly ringfenced, economic trouble spots. But figures last week showing that the US economy is steaming along like a runaway train – underlining the likelihood of more US interest rate rises – have sent the currencies and stock markets of most emerging-market economies tumbling again. Lukman Otunuga, research analyst at currency dealer FXTM, says that a sense of doom is lingering in the financial markets as fears of contagion from the “brutal emerging-market sell-off” rattle investor confidence. “More pain seems to be ahead for emerging markets as the combination of global trade tensions, prospects of higher US interest rates and overall market uncertainty haunt investor attraction,” he says.

Read more …

Now we’re talking.

No-Deal Brexit Could Lead To “Military On The Streets” (Ind.)

A no-deal Brexit could lead to the “real possibility” of police calling upon the military to help with civil disorder, a leaked document claims. Contingency plans are being drawn up by police chiefs if there is chaos on the streets due to shortages of goods, food and medicine, The document prepared by the National Police Co-ordination Centre (NPoCC) warns of traffic queues at ports with “unprecedented and overwhelming” disruption to the road network. Concerns around medical supplies could “feed civil disorder”, while a rise in the price of goods could also lead to “widespread protest”, the document obtained by the Sunday Times said.

The potential for a restricted supply of goods raised concerns of “widespread protest which could then escalate into disorder”. It could also trigger a rise in non-Brexit-related acquisitive crime such as theft. The document, set to be considered by the National Police Chiefs’ Council (NPCC) later this month, also sets out concerns of increased data costs, loss of warrant cards and queues at ports and docks around the country. Shadow police minister Louise Haigh lashed out at the Government’s handling of the situation. “This is the nightmare scenario long feared; according to the UK’s most senior police officers a no-deal Brexit could leave Britain on the brink,” she said.

Read more …

May keeps pushing the same button after it’s failed 1000 times. The EU won’t give.

Brexit Talks At Risk Of Collapse (Ind.)

Brexit talks are at risk of collapse as a planned EU compromise on the critical question of the Irish border has been branded “unacceptable” by British cabinet ministers. The Independent has learnt that EU officials believe they have struck upon “the only way” to bring the two sides together on the Irish border in a bid to secure a withdrawal agreement later this year. But their proposal has already been outright rejected by at least two cabinet ministers, with one going further and branding the EU’s suggestion “bollocks”. The impasse over the Irish border threatens to bring the talks crashing down with Theresa May’s beleaguered Chequers proposal already lacking support both in Europe and among her own MPs in Westminster.

The Independent now understands that the EU will try to break the deadlock in negotiations by offering the UK a vague political declaration on the future UK-EU relationship in return for a deal on the Irish border. A well-placed Brussels source said: “This may well prove the only way to respect the EU’s red lines and allow Theresa May to win approval for a deal in the UK parliament. “The political declaration holds the key to reaching a deal.” Since the start of Brexit talks Brussels has insisted the UK sign up to a legally binding “backstop”, which would come into play if no arrangement to avoid a hard border in Northern Ireland is found before Brexit day. It would see Northern Ireland effectively remain in the EU’s customs union and single market, creating a customs border down the Irish sea – something both Ms May and her DUP partners say is unacceptable.

[..] The strength of opposition indicates Ms May could face a further round of cabinet resignations if she were to consider agreeing to such a proposal, with Boris Johnson and David Davis having already quit earlier this year. A government spokesman said: “We don’t comment on speculation. The proposals we have put forward for our future relationship would allow both sides to meet our commitments to the people of Northern Ireland in full and we are working hard to get a deal on that basis. “But we are clear the EU backstop proposals are unacceptable.”

Read more …

The Tories are thinking: we got rid of unions, didn’t we?

Bombshell Poll Reveals Heavy Union Backing For Second Brexit Vote (G.)

Members of Britain’s three biggest trade unions now support a new referendum on Brexit by a margin of more than two to one, according to a bombshell poll that will cause political shockwaves on the eve of the party conference season. The survey of more than 2,700 members of Unite, Unison and the GMB by YouGov, for the People’s Vote campaign, also finds that a clear majority of members of the three unions now back staying in the EU, believing Brexit will be bad for jobs and living standards. The poll comes as union delegates gather in Manchester for the annual TUC conference, where Brexit will be debated on Monday, and two weeks before the Labour party conference in Liverpool, where delegates are expected to debate and vote on Brexit policy. They will also consider calls to keep open the option of a fresh referendum on any deal Theresa May may strike on the UK’s exit from the EU.

In an interview with the Observer before the poll findings were released, shadow chancellor John McDonnell said his preferred option was still for voters to be offered a say on the government’s handling of Brexit – and any deal brought back from Brussels by May – in a general election. But he said that if Labour was unable to force one in the coming months, he wanted to “keep all options open”, including supporting a new referendum. McDonnell said he was sure there would be a full debate, and votes, on Brexit at the Labour conference. And he went out of his way to praise the People’s Vote campaign, which he said had been very “constructive” and had made clear that its attempts to influence Labour policy should not be seen “as an attack on Jeremy Corbyn or positioning around the leadership. It should be a constructive debate and that is right.”

The poll found that members of Unite, the country’s biggest union, and Labour’s largest financial backer, now support a referendum on the final Brexit deal by 59% to 33% and support staying in the EU by 61% to 35%. GMB’s members support putting the issue back to the people by 56% to 33% and its members want the UK to stay in the EU by 55% to 37%. Unison members back another referendum by 66% to 22% and would opt to stay in the EU by 61% to 35%.

Read more …

That second vote will come, or else…

YouGov Poll Shows Support For A People’s Brexit Vote Is Solid (G.)

Thirty years ago this week, Jacques Delors came to Bournemouth to urge Britain’s trade unions to change their stance on Europe. The president of the European commission told TUC delegates that the EU was good for workers’ jobs, workers’ rights and workers’ living standards. It was a decisive moment in the union movement’s relationship with Brussels. This week could be equally decisive for the TUC – perhaps even more so – given the precarious balance of forces at Westminster. And the clear message from YouGov’s poll of more than 2,700 members of the TUC’s three biggest unions is that most trade union members think Brexit is bad for jobs; they want a fresh public vote and the chance to keep the UK in the EU.

Can we be sure that YouGov’s figures are right? Do the people it polled accurately reflect the views of all the members of the three big unions? I recall the same questions being asked when YouGov first showed Jeremy Corbyn well ahead in the race for the Labour leadership three years ago. Nonsense, said the critics. YouGov’s respondents, they claimed, were hopelessly biased towards leftwing activists. When it came to it, Corbyn won by almost precisely the majority reported in the final poll. And the methods YouGov used in the latest union survey are essentially the same as it used in Labour’s leadership election three years ago.

It’s not that trade union members are indulging in gesture politics or ideological breast-beating. They are worried about the impact of Brexit on jobs, taxes, living standards and the NHS. They fear a Brexit Britain would find it harder to sell products and services abroad. Their attitudes to immigration are especially significant. In the 2016 referendum, one of the arguments for Brexit was that immigrant workers were undercutting the pay of low-paid British workers. Brexit, so the argument ran, would allow Britain to stop this. As a result, there would be more, and better-paid, jobs for British workers.

Many Unite, Unison and GMB members earn below-average wages. They might be expected to support that part of the Brexit agenda. They don’t. Overwhelming majorities, ranging from 74% to 85%, want EU citizens either to have complete freedom of movement to come to the UK, or the freedom to settle here if they have a job or university place lined up.

Read more …

Tsipras is trying to create the impression that he decides and is bold. He has no say at all.

Fresh From End Of Bailout, Greek PM Announces Tax Breaks (R.)

Greek Prime Minister Alexis Tsipras on Saturday unveiled plans for tax cuts and pledged spending to heal years of painful austerity, less than a month after Greece emerged from a bailout program financed by its EU partners and the IMF. Tsipras, who faces elections in about a year’s time, used a keynote policy speech in the northern city of Thessaloniki to announce a spending spree that he said would help fix the ills of years of belt-tightening, and help boost growth. But he said Athens was also committed to sticking to the fiscal targets and reforms promised to its lenders. Greece has agreed to maintain an annual primary budget surplus – which excludes debt servicing costs – of 3.5 percent of GDP up to 2022.

So far, it has outperformed on fiscal goals and the economy has returned to growth. “We will not allow Greece to revert to the era of deficits and fiscal derailment,” he told an audience of officials, diplomats and businessmen. He said would beat its primary surplus target again this year and, following a debt relief deal in June, he could “safely plan its post-bailout future”. Government officials have put this year’s fiscal room at 800 million euros. Tsipras promised a phased reduction of corporate tax to 25 percent from 29 percent from next year, as well as an average 30 percent reduction in a deeply unpopular annual property tax on homeowners, rising to 50 percent for low earners.

Read more …

Amnesty’s Aussie branch. Timing?!

Protect Assange From US Extradition, Amnesty International Tells UK (RT)

Amnesty International has backed calls to not extradite WikiLeaks founder Julian Assange to the United States, arguing that this would put his human rights at serious risk of abuse. The statement, issued Friday by the group’s Australian branch, backed Assange’s lawyers and supporters’ claim that if he is sent to the US, “he would face a real risk of serious human rights violations due to his work with WikiLeaks.” Amnesty said that Assange could face several human rights violations in the event that he is extradited to the US, including: violation of his right to freedom of expression; right to liberty; right to life if the death penalty were sought; and being held in conditions that would violate his right to humane treatment.

While Amnesty said it took “no position” on Ecuador’s decision to grant, and then withdraw, Assange’s diplomatic asylum, it did call on the UK government to recognize the “need for international protection vis-a-vis the USA” in relation to the whistleblower’s case. Amnesty has joined several other humanitarian organizations by backing Assange and denouncing any extradition attempt. These include the UN Human Rights office, Human Rights Watch, and the Inter-American Court of Human Rights.

Read more …

How cheap money saved and doomed the world at the same time.

The Latest Incarnation of Capitalism (Jacobin)

Financialization — “the increasing importance of financial markets, financial motives, financial institutions, and financial elites in the operation of the economy” — is a process that began in the 1980s with the removal of barriers to capital mobility. Global capital flows rose from about 5 percent of world GDP in the mid-1990s to about 20 percent in 2007. This is about three times faster than world trade flows. Increases in capital mobility helped facilitate the emergence of large imbalances between creditor countries with large current account surpluses and debtors with large current account deficits. According to textbook economic theory, these imbalances should be self-correcting.

When a country runs a deficit, currency is flowing out of the country. If this currency does not return in the form of capital inflows, the resulting increase in supply will exert downward pressure on the currency. A less valuable currency makes your exports cheaper to international consumers and should therefore increase demand for those exports. Played out over the scale of the global economy, this should lead to equilibrium. In the lead-up to the crisis, the fact that this equilibrium was not forthcoming puzzled some economists. Deficit countries should have been experiencing large currency depreciations, given the size of their current account deficits. These depreciations should, in turn, then have increased the competitiveness of their goods.

Ben Bernanke, then chairman of the Fed, accused a number of emerging economies of “hoarding” savings to protect themselves from future crises, preventing the global economy from reaching equilibrium. In fact, deficit countries were able to maintain strong currencies because, even though there was relatively little demand for their goods, there was strong demand for their assets — particularly financial assets. The main reason for the high demand for UK and US assets was the financial deregulation undertaken by neoliberal governments in these states in the 1980s, which facilitated a dramatic expansion in the provision of private credit to individuals, businesses, and financial institutions.

In the UK, consumer debt — primarily composed of mortgage lending — reached 148 percent of household disposable incomes in 2008, the highest it has ever been. While UK banks’ lending to the non-financial economy rose 50 percent between 2005-8, their lending to other financial institutions rose by 260 percent. Capital from the rest of the world flowed into banks in the UK and the US, which were generating significant returns from this lending.

Read more …

Google shapes are thought and we have no idea.

What’s The Biggest Influence On The Way We Think? (G.)

Google search is in a different league from earlier tools, and so the consequences of being dependent on it are more serious and far-reaching – for two inter-related reasons. The first is that it can influence what you think you know and shape the way you think because it knows more about you than you realise. And secondly, it’s not a passive tool that you own and control, but the property of a huge corporation that has acquired strange – and in some ways unprecedented – powers. Ten years ago, Nicholas Carr published a striking article – “Is Google Making Us Stupid?” – in the Atlantic. The title was misleading because the thrust of the piece was actually about how the internet might be messing with our brains, and in that sense Carr was using Google as a proxy for the technology in general.

Which is a pity because there are plenty of important questions to be asked about Google’s impact on the way we think. Its search results, for example, are heavily influenced by how many websites it finds that are supposedly relevant to a query. Sometimes, that’s fine. But sometimes it’s toxic – yet many people think it provides the “truth”. And because people’s search queries can sometimes be very revealing, the company knows more about people’s innermost secrets, fears and fantasies than even their friends or partners. We ask Google questions that we would not breathe to any living soul.

So Google, as philosopher Benjamin Curtis points out, is anything but a passive cognitive tool. Its current offerings, boosted by machine learning algorithms, are increasingly suggestive. Its Maps not only provide navigational help but give us “personalised location suggestions that it thinks will interest us”. Gmail makes helpful suggestions about what to type in a reply and Google News highlights stories that it believes we will find interesting. “All of this,” says Curtis, “removes the very need to think and make decisions for ourselves.” It “fills gaps in our cognitive processes, and so fills gaps in our minds”.

In two short decades, therefore, Google has gone from being a geeky delight to something that influences the way we think. All of which brings to mind something that John Culkin, a buddy of Marshall McLuhan, said many years ago: “We shape our tools and then our tools shape us.” Amen to that. And you can Google him to check the quote.

Read more …

Sep 052018
 
 September 5, 2018  Posted by at 9:18 am Finance Tagged with: , , , , , , , , , , , ,  


Henri Matisse Luxury, calm and pleasure 1904

 

JP Morgan Warns Next Crisis To Have Flash Crashes And Social Unrest (CNBC)
Share Buybacks Boost Earnings (Roberts)
Mueller To Accept Written Answers From Trump In Russia Probe (Ind.)
Senior Diplomat Exposes US Meddling In Russian Election (ZH)
Google Bosses Expected To Snub Senate (BBC)
Mervyn King Attacks ‘Incompetent’ Brexit Approach (BBC)
Angela Merkel Admits Collapse Of Brexit Talks Cannot Be Ruled Out (G.)
Mark Carney Willing To Stay On As BoE Governor To Help ‘Smooth’ Brexit (Ind.)
US ‘Could Have Forced A Greek Debt Haircut’ – Ashoka Mody (K.)
Eight Bird Species Are First Confirmed Avian Extinctions This Decade (G.)

 

 

Yeah, I know, the Woodward book. No objective views available. Lots of sensational quotes subject to interpretation. Tons of voices saying for instance that Trump wanted Mattis to kill Assad, even ordered him to. But Woodward writes that Trump said: “Let’s fucking kill him! Let’s go in. Let’s kill the fucking lot of them..”. That doesn’t sound like an order. That’s a first reaction from someone who’s been fooled by his own staff into believing Assad was responsible. Normal first reaction. Not an order. We’ll get some more balance, but it won’t come from the MSM.

 

Liquidity, volatility, fighting in the streets.

JP Morgan Warns Next Crisis To Have Flash Crashes And Social Unrest (CNBC)

Sudden, severe stock sell-offs sparked by lightning-fast machines. Unprecedented actions by central banks to shore up asset prices. Social unrest not seen in the U.S. in half a century. That’s how J.P. Morgan Chase’s head quant, Marko Kolanovic, envisions the next financial crisis. The forces that have transformed markets in the last decade, namely the rise of computerized trading and passive investing, are setting up conditions for potentially violent moves once the current bull market ends, according to a report from Kolanovic sent to the bank’s clients on Tuesday. His note is part of a 168-page mega-report, written for the 10th anniversary of the 2008 financial crisis, with perspectives from 48 of the bank’s analysts and economists.

Kolanovic, a 43-year-old analyst with a Ph.D. in theoretical physics, has risen in prominence for explaining, and occasionally predicting, how the new, algorithm-dominated stock market will behave. The current bull rally, the longest in modern history by some measures, has been characterized by extended periods of calm punctuated with spasms of selling known as flash crashes. Recent examples include a nearly 1,600 point intraday drop in February and a 1,100 point decline in August 2015. “They are very rapid, sharp declines in asset values with sharp increases in market volatility,” Kolanovic, the bank’s global head of macro quantitative and derivatives research, said in a recent interview. But those flash crashes occurred during a backdrop of a U.S. economic expansion; the new market hasn’t been tested in the throes of a recession, he said.

“If you have these liquidity-driven sharp sell-offs that come at the end of the cycle, or maybe even causes the end of the cycle, then I think you can have a much more significant asset price correction and even more significant increase in market volatility,” Kolanovic said. [..] Kolanovic closes his report on an ominous note: “The next crisis is also likely to result in social tensions similar to those witnessed 50 years ago in 1968.”

Read more …

Tyler labeled it the graph of the decade. That may be a bit much, but it’s good to point out that earnings rise ONLY because there are so many fewer outstanding shares. Buybacks don’t only raise share prices, they raise earnings numbers too.

Share Buybacks Boost Earnings (Roberts)

[..] while top line SALES fell, bottom line revenue expanded as share buybacks and accounting gimmickry escalated for the quarter. The question is whether sales dramatically expanded in Q2? Given some of the recent economic data, we have our doubts and expect a smaller increase. (I will update this chart when S&P updates the sales/share figure for Q2) As shown in the chart below, the biggest support for earnings expansion in Q2 continues to be the dramatic decline in shares outstanding.

Of course, such should not be a surprise. Since the recessionary lows, much of the rise in “profitability” have come from a variety of cost-cutting measures and accounting gimmicks rather than actual increases in top-line revenue. While tax cuts certainly provided the capital for a surge in buybacks, revenue growth, which is directly connected to a consumption-based economy, has remained muted. Since 2009, the reported earnings per share of corporations has increased by a total of 353%. This is the sharpest post-recession rise in reported EPS in history. However, the increase in earnings did not come from a commensurate increase in revenue which has only grown by a marginal 44% during the same period and declined from 49% in Q1.

The reality is that stock buybacks create an illusion of profitability. If a company earns $0.90 per share and has one million shares outstanding – reducing those shares to 900,000 will increase earnings per share to $1.00. No additional revenue was created, no more product was sold, it is simply accounting magic. Such activities do not spur economic growth or generate real wealth for shareholders. However, it does provide the basis for with which to keep Wall Street satisfied and stock option compensated executives happy.

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if Mueller does anything in the public eye before the mid terms are over, expect chaos.

Mueller To Accept Written Answers From Trump In Russia Probe (Ind.)

Special Counsel Robert Mueller will accept written answers from President Donald Trump on whether his campaign conspired with Russia to interfere in the 2016 US election, but Mr Mueller is not ruling out a follow-up interview on that issue, Mr Mueller’s offer to accept written responses from the president on questions about possible collusion was contained in a letter that Mr Trump’s lawyers received on Friday, a person familiar with the matter said on Tuesday. Mr Trump’s legal team and Mr Mueller’s investigators have been negotiating for months over whether the president will be formally interviewed in the probe.

The president’s team have not yet answered the letter. After receiving the written responses, Mr Mueller’s investigators would decide on a next step, which could include an interview with Mr Trump, the person said. The letter was first reported by the New York Times. It was not immediately clear what those conditions mean for other avenues Mr Mueller is exploring, including whether the president sought to obstruct the Russia investigation through actions such as the firing last year of former FBI Director James Comey.

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And there is Google.

Senior Diplomat Exposes US Meddling In Russian Election (ZH)

As Russian citizens prepare to head to the polls on Sunday to vote in regional elections, a senior Russian diplomat has revealed that Moscow has uncovered a US interference effort involving a Silicon Valley tech giant and activists opposed to the government of Russian President Vladimir Putin. Following a briefing on the matter, senior Russian diplomat Andrey Nesterenko told Russia’s Interfax news agency that the US “certainly does” meddle in the Russian electoral processes, as RT reported. The revelation followed reports that Russia has resumed a major airstrike of a reputed terrorist stronghold in Idlib province over the objections of President Trump, who warned that such a strike would be a humanitarian disaster.

“Our collective opinion is that electoral sovereignty is a principle that all civilized nations should respect” the diplomat said, adding that Moscow will notify “our American partners that the actions of their media outlets allow us to state that they are close to breaking Russian law.” Specifically, Nesterenko was referring to a possible violation of Russian election laws by Google parent Alphabet, which hosted advertisements for an illegal campaign rally organized by Russian opposition leader Aleksey Navalny. Navalny is calling for protests to denounce the vote, which he believes is biased. To help spread the word, Navalny’s public movement is using paid ads on Google services like YouTube. However, holding an event dedicated to an election campaign on the same day as the vote goes against Russian law.

The Russian Central Election Commission, media watchdog Roskomnadzor, and the Russian Anti-monopoly Service have reportedly informed Google about these illegal activities being carried out on its platform. “Living in a proper law-abiding nation, we expect every actor to play by the rules. Especially an informed player. If the opposite happens, I believe we have tools at our disposal [to address that],” Andrey Kashevarov, the deputy head of FAS, said.

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It’s like an all-out power game.

Google Bosses Expected To Snub Senate (BBC)

When Silicon Valley companies once again appear in front of the US Senate on Wednesday, there will be one major absentee: Google. The Senate Intelligence Committee wanted to hear from Sundar Pichai, Google’s chief executive, or his boss Larry Page, the chief executive of Google’s parent firm, Alphabet. Barring a dramatic, last-minute change of plan, the BBC understands neither will attend. It would mark the first time a technology firm has refused to comply with the wishes of Congress since the wide-reaching inquiries into misinformation and meddling began in the wake of the 2016 election. Google had instead hoped to send Kent Walker, one of its top lawyers. The offer was abruptly shut down by the committee.

Its vice chairman, the Democratic Senator Mark Warner, said an empty chair would be left out to represent Google’s non-appearance. Eventually, senators may issue a subpoena, forcing an appearance under the threat of prosecution. “If Google thinks we’re just going to go away, they’re sadly mistaken,” said Senator Warner, speaking to Wired magazine. The hearing, scheduled to begin at 09:30 (13:30 GMT), is entitled “Foreign Influence Operations’ Use of Social Media Platforms”. As well as Google, Twitter and Facebook have been called to appear. Twitter will be represented by its chief executive, Jack Dorsey, while Facebook is sending its chief operating officer, Sheryl Sandberg. It will be the first time either executive has faced a congressional committee.

[..] The affair risks becoming a public relations crisis for Google, which just last week was doing its best to bat back claims from President Donald Trump that it was censoring conservative news outlets in its search results. The White House did not provide any evidence to support the president’s complaints, but the topic may well come up at Wednesday’s hearing. “I don’t know if it’s because [Page] wants to avoid being asked about those things or because they think they’re so important and so powerful that they don’t need to provide congressional testimony,” said Republican Senator Marco Rubio, speaking to the Washington Post. He also told the newspaper: “They should be careful with that. When a company gets too big to become accountable, they become a monopoly.”

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No kidding.

Mervyn King Attacks ‘Incompetent’ Brexit Approach (BBC)

Former Bank of England governor Lord King has blasted Brexit preparations as “incompetent”. The Brexit supporter said it “beggared belief” that the world’s sixth-biggest economy should be talking of stockpiling food and medicines. This left the government without a credible bargaining position, he said. “A government that cannot take action to prevent some of these catastrophic outcomes illustrates a whole lack of preparation,” he said. “It doesn’t tell us anything about whether the policy of staying in the EU is good or bad, it tells us everything about the incompetence of the preparation for it.” Lord King said the 11th-hour preparation for a no-deal Brexit had undermined the government’s negotiating position.

He added: “We haven’t had a credible bargaining position, because we hadn’t put in place measures where we could say to our colleagues in Europe, ‘Look, we’d like a free-trade deal, we think that you would probably like one too, but if we can’t agree, don’t be under any misapprehension, we have put in place the measures that would enable us to leave without one.'” He predicts that we will find ourselves with what’s been dubbed as Brino – Brexit in name only – which he said was the worst of all worlds. It’s also a state of affairs that he fears could drag on for years. “I think the biggest risk to the UK, and this is what worries me most, is that this issue isn’t going to go away, you know the referendum hasn’t decided it, because both camps feel that they haven’t got what they wanted.”

Lord King expressed regret and surprise that it was more difficult for a single country to present a united front than the other 27 EU members. He said: “They must have been really worried that they had 27 countries to try to corral, how could they have a united negotiating position, they were dealing with a country that was one country, made a clear decision, voted to leave, it knew what it wanted to do, how on earth could the EU manage to negotiate against this one decisive group on the other side of the Channel? “Well, the reality’s been completely the opposite. The EU has been united, has been clear, has been patient and it’s the UK that’s been divided without any clear strategy at all for how to get to where we want to go.”

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Maybe at this point Merkel should be more outspoken?

Angela Merkel Admits Collapse Of Brexit Talks Cannot Be Ruled Out (G.)

Angela Merkel has warned her country’s business leaders that the Brexit negotiations are in danger of collapse. With talks in Brussels at an impasse with just months to go before a deal needs to be agreed, the German chancellor made a rare intervention at a conference in Frankfurt. She told major players in the world of German finance on Tuesday: “We don’t want the discussions to break down. We will use all our force and creativity to make sure a deal happens. We don’t want these negotiations to collapse. But we also can’t fully rule that out because we still have no result.” The EU says it needs a deal to be struck on the withdrawal agreement covering citizens’ rights, the £39bn divorce bill and the Irish border, along with the political declaration on the future deal, by November at the latest.

The German chancellor has generally played a backseat role in the talks, preferring to intervene only at crunch points at EU summits. EU leaders are due to meet in Brussels in October, but an emergency summit is being pencilled in for 13 November in case the negotiations require an extra few weeks for agreement to be made. The leaders will be gathering at a summit in Salzburg later this month where the EU27 are planning a “carrot and stick” approach to Brexit, offering Theresa May warm words on the Chequers proposals to take to the Conservative conference alongside a sharp warning that they need a plan for Northern Ireland within weeks.

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Using the words ‘Brexit’ and ‘smooth’ in one sentence is just comedy. Wonder what they had to promise him. Knighthood?

Mark Carney Willing To Stay On As BoE Governor To Help ‘Smooth’ Brexit (Ind.)

Mark Carney told MPs on Tuesday that he was willing to stay on as governor of the Bank of England beyond his planned departure date in order to “smooth” the Brexit process. Mr Carney had planned to step down in June 2019 after six years in Threadneedle Street’s top job, two years fewer than BoE governors normally serve. But, asked by MPs on the Treasury Committee whether he would stay, Mr Carney said: “Even though I have already agreed to extend my time to support a smooth Brexit, I am willing to do whatever else I can in order to promote both a smooth Brexit and effective transition at the Bank of England.”

“The chancellor and I have discussed this. I would expect an announcement to be made in due course.” The comments come after mounting speculation in recent days that the Treasury would like Mr Carney to stay on in his role, providing more continuity during uncertain economic times. There are fears that few candidates will put themselves forward for the job as the Brexit negotiations reach a critical stage.

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“What was the basic demand of SYRIZA? To tie debt repayments to GDP and so reduce the level of austerity. Any good economist will tell you that was a very reasonable starting point for the negotiation.”

US ‘Could Have Forced A Greek Debt Haircut’ – Ashoka Mody (K.)

“The fundamental reason why the Greek crisis lasted so long was the extreme level of austerity that was imposed.” That is the verdict of Ashoka Mody, visiting professor in International Economic Policy at Princeton University, a former deputy director of the IMF’s European Department and one of the most eloquent critics of the policies of the troika in Greece and elsewhere. Mody, who recently published a long-form version of these critiques in his book “EuroTragedy: A Drama in Nine Acts”, spoke to Kathimerini about the Greek crisis and those to blame for it. We began by discussing what many consider the original sin of the bailout period: the decision not to restructure Greece’s debt in May 2010. What should the IMF have done?

“It should have insisted, it should have made the restructuring a condition of its participation,” the Indian-born economist said, mentioning that the staff report all but admitted the debt was unsustainable and that Dominique Strauss-Kahn later said he was in favor of debt relief. “The reason it didn’t happen was the ideological opposition of the European Central Bank – in this case supported by the US Treasury. Strauss-Kahn did not want to offend either the Americans or the Europeans. The stance of the US Treasury was critical – if its representative on the Executive Board had come out in favor of a restructuring, it would have happened. Instead, it sided completely with the European viewpoint – the Treasury secretary, Tim Geithner, believed that there should never be a restructuring in the midst of a crisis.”

Regarding the argument that the problem in Greece (compared with other bailout countries) was there was no ownership of reforms, Mody said: “It is indeed the case that IMF programs only succeed when there is ownership. The question is what were Greeks asked to own. The arithmetic of austerity was relentless, cruel. Whatever the Greeks did, with austerity on such a scale they could not have escaped the collapse in gross domestic product. And then things became even worse, because the recession led to targets being missed, which led to more measures! The IMF published studies at the time showing what a terrible idea it was to impose further austerity in a recession, how it worsens the debt-to-GDP ratio. Yet the IMF kept doing it in Greece, ignoring all its internal studies!”

[..] The conversation turned to 2015. How does he think the creditors should have handled SYRIZA differently? “Look, even before SYRIZA came to power, Wolfgang Schaeuble said that elections do not matter. On January 31, 2015, six days after the election, Erkki Liikanen, the head of the Finnish central bank, says that if the new government does not accept the program, the ECB will cut liquidity support for Greek banks. Four days later, the ECB withdraws the waiver [which allowed the banks to borrow cheaply from it, using Greek government bonds as collateral]. And in June, the Europeans close down the banks. What was the basic demand of SYRIZA? To tie debt repayments to GDP and so reduce the level of austerity. Any good economist will tell you that was a very reasonable starting point for the negotiation.”

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More of my friends are leaving every day. Some don’t even say goodbye.

Eight Bird Species Are First Confirmed Avian Extinctions This Decade (G.)

Spix’s macaw, a brilliant blue species of Brazilian parrot that starred in the children’s animation Rio, has become extinct this century, according to a new assessment of endangered birds. The macaw is one of eight species, including the poo-uli, the Pernambuco pygmy-owl and the cryptic treehunter, that can be added to the growing list of confirmed or highly likely extinctions, according to a new statistical analysis by BirdLife International. Historically, most bird extinctions have been small-island species vulnerable to hunting or invasive species but five of these new extinctions have occurred in South America and are attributed by scientists to deforestation.

Stuart Butchart, BirdLife International’s chief scientist, said the new study highlighted that an extinction crisis was now unfolding on large continents, driven by human habitat destruction. “People think of extinctions and think of the dodo but our analysis shows that extinctions are continuing and accelerating today,” he said. “Historically 90% of bird extinctions have been small populations on remote islands. Our evidence shows there is a growing wave of extinctions washing over the continent driven by habitat loss from unsustainable agriculture, drainage and logging.” More than 26,000 of the world’s species are now threatened, according to the latest “red list” assessment, with scientists warning that humans are driving a sixth great extinction event.


The Brazilian Spix’s macaw, as seen in the children’s movie Rio, is one of the eight birds to become extinct Photograph: Al Wabra Wildlife Preservation

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Aug 292018
 


Salvador Dali The burning giraffe 1937
Dali: “The only difference between immortal Greece and our era is Sigmund Freud who discovered that the human body, which in Greek times was merely neoplatonical, is now filled with secret drawers only to be opened through psychoanalysis.”

 

An ancient Latin saying goes: “Quod licet Iovi, non licet bovi” (what is permissible for Jupiter, is not for an ox). It feels very much on topic when social media are concerned. And as the heat over their censorship is turned up, it may well be the decisive factor.

Reuters reiterates today that on May 23, Manhattan US District Judge Naomi Reice Buchwald ruled that Donald Trump’ Twitter account is a public forum and blocking Twitter users for their views violates their right to free speech under the First Amendment. The same, says the ruling, applies to other government officials’ accounts.

On August 10, the Knight First Amendment Institute at Columbia University sent the Justice Department a list of 41 accounts that remained blocked. Since, at least 20 have been unblocked. Interestingly, the same Justice Department has stated that the ruling was “fundamentally misconceived” arguing Trump’s account “belongs to Donald Trump in his personal capacity and is subject to his personal control, not the control of the government.”

Potentially even more interesting is that “the Internet Association, a trade group that represents Twitter, Facebook Inc, Amazon.com, and Alphabet Inc, filed a brief in the case earlier this month that did not back Trump or the blocked users but urged the court to “limit its decision to the unique facts of this case so that its decision does not reach further than necessary or unintentionally disrupt the modern, innovative Internet.” “

Yeah, they would like that, to make this about Trump only. But that would be strange, because the First Amendment doesn’t only apply to Trump (and/or government officials). It applies to everyone, including Twitter, Facebook, Amazon, and Alphabet. Or does it? Well, not according to the Internet Association:

“Despite any First Amendment status that this court might find in the ‘interactive spaces’ associated with President Trump’s account, Twitter retains authority to revoke access to both his account and the account of any user seeking to comment on President Trump’s account.”

Hmm. So Trump can’t block people from his own Twitter account, but Twitter can do whatever it wishes to that same account. Apart from, you know, banning him, even though many in the ‘left-leaning’ company would like to do just that. Then again, Trump’s 54 million followers make it a profitable account for Twitter. Still, this can obviously not stand. There are no different constitutions for different parties. And they’re not done:

“..there is a considerable risk that any decision that may recognize isolated public forums on Twitter will be misunderstood to hold that Twitter, too, can be subject to First Amendment scrutiny. …Twitter itself is not a state actor when it blocks or withdraws access to its account-holders or users, and it is therefore not subject to the First Amendment’s restraints.”

See? According to the Internet Association, the First Amendment doesn’t apply to its ‘members’, it applies to state actors only. It feels encouraged to make such statements directly by the wording of Judge Buchwald’s ruling. Put differently, Donald Trump’s Twitter account is a public forum but all the rest of Twitter is not (except for other officials).

Now, I’m not a lawyer, but it seems obvious that these people may well be shooting themselves in the foot after first having put it in their mouths. To date, the Internet Association’s members have been able to picture themselves as private enterprises not under the same rules as public ones.

 

But how much longer is that a feasible attitude? As I said recently, Twitter and Facebook have become the no. 1 warning system in cases of emergencies and disasters, and banning or blocking people from it is as dangerous, life threatening even, as banning people from having radio’s, phones or TVs.

When the first radio’s, phones, TVs were introduced, other warning systems were in place. But over time they became the warning system. As I put it earlier, first you’re an entity, and then you become a utility. And the US judicial system has acted decisively on this in the past, though by no means perfectly.

Twitter, Facebook, Google seek to find the magic sweetspot where they can do whatever they damn well want while raking in billion after billion. But they’re as much behind the curve as the political and legislative systems are. They have already fallen victim to their own success, but they either don’t realize it or try to obfuscate it.

Meanwhile, they’re still banning, shadowbanning and blocking to their heart’s content. They should understand that cannot go on. They’re not some Harvard hobby club anymore. They’re killing off the very legal protection they claim to be protected by, because their position in society shifts. It takes a while, largely because their rise has been meteoric, but politics will catch up; it has to.

Former UK ambassador to Uzbekistan Craig Murray wrote yesterday:

Facebook has deleted all of my posts from July 2017 to last week because I am, apparently, a Russian Bot. For a while I could not add any new posts either, but we recently found a way around that, at least for now. To those of you tempted to say “So what?”, I would point out that over two thirds of visitors to my website arrive via my posting of the articles to Facebook and Twitter. Social media outlets like this blog, which offer an alternative to MSM propaganda, are hugely at the mercy of these corporate gatekeepers.

As for us, the Automatic Earth, Facebook closed our 9-year account a while back without one word of warning or explanation. We asked many times why, but never received an answer. Sent documents to prove who we are, nothing. Gone 1000s of followers, gone traffic, gone revenues. It’s simply too much power for a bunch of geeks, now aligned with the Atlantic Council, to have. It must be broken up.

Murray on the Atlantic Council: “..extreme neo-con group part funded by NATO and whose board includes serial war criminal Henry Kissinger, Former CIA Heads Michael Hayden and Michael Morrell, and George Bush’s chief of Homeland Security Michael Chertoff, among a whole list of horrors.”

The companies could try and hide behind the fact that they’re international, and can’t be defined by US law only, but that would be a risky proposition. Julian Assange has by and large been denied his First Amendment rights by the current administration because he’s not an American, while Christopher Steele was granted his despite not being an American. Wobbly ground, that.

But yes, stay American and Baby Bells loom in your future. Not that this is the only issue Silicon Valley’s legal teams will have to tackle with:

Sammy Ketz, AFP’s Baghdad bureau chief, wrote yesterday:

.. it is not the news organisations who reap the profits but internet platforms, which help themselves to our reporting without paying a cent. [..] The media have endured a lot of pain for a long time before reacting to the financial drain, struggling with the consequences rather than the cause. They have laid off staff almost to the point of absurdity. Now they are demanding that their rights are respected so they can carry on reporting the news. [..]

We can no longer swallow the lie spread by Google and Facebook that an EU directive on such rights would threaten people’s ability to access the internet for free. Free access to the web will endure because the internet giants, which now use editorial content for free, can reimburse the media without asking consumers to pay.

Difficult? Impossible? Not at all. Facebook made $16bn in profits in 2017 and Alphabet (Google’s parent company) $12.7bn. They simply have to pay their dues. That is how the media will survive and the internet titans will be contributing to the diversity and freedom of the press they claim to support.

The Internet Association members don’t appear to get it yet, but their opportunity windows are fast shuttering. There is no way for them to keep on doing what they have, as they have, for much longer. They’ve drawn the ire of Donald Trump, and though they may tend to focus more on denouncing him, they’d better pay attention.

Because they don’t hold the cards. Or rather, they’ve been overplaying them. We know they’ve been meeting with the explicit goal of coming up with a general strategy for the November US mid-term elections. We also know they are left-leaning. And that they’ve banned and blocked many accounts.

All it takes is for a judge or the president to label them a utility, and put them in the same legal frame as a phone company or broadcaster. Because if they can’t be objective, while they are the no. 1 source of news for many people, the potential influence of their secret algorithms and obvious political bias is just too great.

And that is obstruction of democracy, and in the end, justice. As I wrote last week in The Shape of Trump to Come:

Trump will end the ‘monopolies’ of Facebook, Google, Twitter et al. [..] .. you simply can’t have a few roomfuls of boys and girls ban and shadowban people with impunity from networks that span the globe and reach half of the world’s population on the basis of opaque ‘Terms and Conditions’ that in effect trump the US constitution the way they are used and interpreted. Whether they are private companies or not will make no difference in the end.

I have the impression that they think they can fight this. All those billions buy good lawyers. But in the end, you can’t have the president under one set of constitutional rights, and Jack Dorsey or Mark Zuckerberg under another.

Sure, the intelligence community may protest whatever ‘solution’ the White House or DOJ comes up with. But they, too, must realize that elections that are very obviously skewed towards one side are a huge danger to America. And social media have obtained the power to skew them. Much more than a few bucks worth of Russian ads on their podium, that whole story is entirely insignificant compared to America’s ‘own’ social media.

Trump can simply say: if my account must be open, let that be true for everybody else’s too. Forbid any and all banning and blocking unless and until a judge permits it on constitutional grounds, on a case by case basis.

Judge Buchwald has opened that door by declaring Trump’s Twitter account a public forum. That speaks to the status of Twitter -and Facebook et al- in American society. She can’t take that back.

 

 

Aug 292018
 
 August 29, 2018  Posted by at 9:17 am Finance Tagged with: , , , , , , , , , , ,  


Pablo Picasso In “Le Lapin Agile” or harlequin with a glass 1905

 

Almost Half Of Americans Can’t Pay For Their Basic Needs (CBS)
White House Probes Google After Trump Accuses It Of Bias (R.)
Trump Unblocks More Twitter Users After US Court Ruling (R.)
Facebook Censorship, Mad Ben Nimmo and the Atlantic Council (Craig Murray)
The Greatest Fake Bull Ever (Stockman)
China’s Building-Boom Hits A Wall As Shadow-Banking System Collapses (ZH)
A Senator Masquerading as a Gas Station (Dmitry Orlov)
Brazil Sends Army To Border As Venezuelans Flee Crisis At Home (R.)
Syria Ready To Take One Million Returning Refugees – Moscow (AFP)
Just 10 Rivers Carry 95% Of All Plastic Into The Ocean (BT)
Bees Develop Preference For Pesticides (PA)

 

 

Now imagine a shrinking economy thrown in.

Almost Half Of Americans Can’t Pay For Their Basic Needs (CBS)

Four in 10 Americans are struggling to pay for their basic needs such as groceries or housing, a problem even middle-class households confront, according to a new study from the Urban Institute. Despite the U.S. economy being near full employment, 39.4 percent of adults between 18 and 64 years old said they experienced at least one type of material hardship in 2017, according to the study, which surveyed more than 7,500 adults about whether they had trouble paying for housing, utilities, food or health care. The findings surprised researchers at the Urban Institute, who had expected to find high levels of hardship among poor Americans but hadn’t predicted so many middle-class families would also struggle to meet their basic needs.

That may illustrate that a middle-class income “is no guarantee” of protection from hardship, said Michael Karpman, research associate at the Urban Institute’s health Policy Center and a co-author of the report. Against the backdrop of President Donald Trump’s boasting about low unemployment and strong economic growth, the research adds nuance to the problems facing American families. Middle-class households tend to struggle with paying their health care bills rather than utilities, for instance. Health care costs have outpaced wages and inflation, pushing more Americans into high-deductible plans, which can backfire when serious health problems arise.

“A lot of people are looking at the fact that wages aren’t keeping up with household costs as one reason families are having difficulty making ends meet,” Karpman said. “Even for families with health insurance, they may be facing high deductibles that leave them facing high costs.”

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The bias is obvious. How to fight it is not.

White House Probes Google After Trump Accuses It Of Bias (R.)

U.S. President Donald Trump on Tuesday accused Google’s search engine of promoting negative news articles and hiding “fair media” coverage of him, vowing to address the situation without providing evidence or giving details of action he might take. Trump’s attack against the Alphabet Inc unit follows a string of grievances against technology companies, including social media Twitter Inc and Facebook Inc, which he has accused of silencing conservative voices, and Amazon.com Inc, which he has said is hurting small businesses and benefiting from a favorable deal with the U.S. Postal Services. He frequently berates news outlets for what he perceives as unfair coverage.

Google denied any political bias, saying in a statement that its search engine is “not used to set a political agenda and we don’t bias our results toward any political ideology.” Trump said in several tweets on Tuesday that Google search results for “Trump News” were “rigged” against him because they showed only coverage from outlets like CNN and not conservative publications, suggesting the practice was illegal. “I think Google is really taking advantage of our people,” Trump said on Tuesday in the Oval Office. “Google, and Twitter and Facebook, they are really treading on very, very troubled territory, and they have to be careful. It’s not fair to large portions of the population.”

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A pattern emerges. Trump violates 1st amendment when blocking users, but Twitter “retains authority to revoke access”. That cannot stand.

Trump Unblocks More Twitter Users After US Court Ruling (R.)

U.S. President Donald Trump on Tuesday unblocked some additional Twitter users after a federal judge in May said preventing people from following him violated individuals constitutional rights. U.S. District Judge Naomi Reice Buchwald in Manhattan ruled on May 23 that comments on the president’s account, and those of other government officials, were public forums and that blocking Twitter Inc users for their views violated their right to free speech under the First Amendment of the U.S. Constitution. The Knight First Amendment Institute at Columbia University on August 10 sent the Justice Department a list of 41 accounts that had remained blocked from Trump’s @RealDonaldTrump account. The seven users who filed suit had their accounts unblocked in June.

The 41 blocked users include a film producer, screenwriter, photographer and author who had criticized President Trump or his policies. At least 20 of those individuals said on Twitter that Trump had unblocked them on Tuesday. The 41 users were not a comprehensive list of those blocked by Trump. Rosie O’Donnell, a comedian, said on Twitter late Tuesday that she remained blocked. [..] The ruling has raised novel legal issues. The Internet Association, a trade group that represents Twitter, Facebook Inc, Amazon.com, and Alphabet Inc, filed a brief in the case earlier this month that did not back Trump or the blocked users but urged the court to “limit its decision to the unique facts of this case so that its decision does not reach further than necessary or unintentionally disrupt the modern, innovative Internet.”

[..] The Internet Association said the court “should make clear that this case does not implicate the overwhelming majority of social media accounts throughout the Internet.” “Despite any First Amendment status that this court might find in the ‘interactive spaces’ associated with President Trump’s account, Twitter retains authority to revoke access to both his account and the account of any user seeking to comment on President Trump’s account,” the group said.

Read more …

Facebook deletes posts from a former UK ambassador.

Facebook Censorship, Mad Ben Nimmo and the Atlantic Council (Craig Murray)

Facebook has deleted all of my posts from July 2017 to last week because I am, apparently, a Russian Bot. For a while I could not add any new posts either, but we recently found a way around that, at least for now. To those of you tempted to say “So what?”, I would point out that over two thirds of visitors to my website arrive via my posting of the articles to Facebook and Twitter. Social media outlets like this blog, which offer an alternative to MSM propaganda, are hugely at the mercy of these corporate gatekeepers.

Facebook’s plunge into censorship is completely open and admitted, as is the fact it is operated for Facebook by the Atlantic Council – the extreme neo-con group part funded by NATO and whose board includes serial war criminal Henry Kissinger, Former CIA Heads Michael Hayden and Michael Morrell, and George Bush’s chief of Homeland Security Michael Chertoff, among a whole list of horrors.

The staff are worse than the Board. Their lead expert on Russian bot detection is an obsessed nutter named Ben Nimmo, whose fragile grip on reality has been completely broken by his elevation to be the internet’s Witchfinder-General. Nimmo, grandly titled “Senior Fellow for Information Defense at the Atlantic Council’s Digital Forensic Research Lab”, is the go-to man for Establishment rubbishing of citizen journalists, and as with Joseph McCarthy or Matthew Clarke, one day society will sufficiently recover its balance for it to be generally acknowledged that this kind of witch-hunt nonsense was not just an aberration, but a manifestation of the evil it claimed to fight.

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“..the generational fiscal catastrophe that looms in the 2020s as 80 million baby-boomers pile onto the social security/medicare wagon.”

The Greatest Fake Bull Ever (Stockman)

the Wall Street stock indices have vastly out-run the meager gains in the main street economy since the pre-crisis peak; and that at this late stage of the business cycle—merely 10 months from the prior record—there is absolutely no plausible risk/reward equation left. That’s because earnings will plummet in the next recession—by 40% or more if history is any guide. And that’s likely to be conservative in view of the elephant in the casino that Wall Street stubbornly refuses to acknowledge. To wit, back in June 2007, the S&P 500 earnings peaked at $85 per share, but that reflected fully $55 per share of after-tax interest expense. Fast forward to the LTM period ending in December 2017 when earnings per share posted at $110 per share, but reflected only $19 per share of after-tax interest expense.

In other words, more than 100% of the gain over the past 11 years was due to the drastic financial repression of the central banks and its impact on corporate interest expense. Yet the central banks of the world—led belatedly by the Fed—have made an epochal pivot to QT (quantitative tightening) and interest rate normalization, even as the value of the interest expense deduction has been reduced to chump change owing to the new effective tax rate of about 15%. So interest expense is marching back up the hill, and it’s not remotely priced-in—not any more than the next recession or the generational fiscal catastrophe that looms in the 2020s as 80 million baby-boomers pile onto the social security/medicare wagon.

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Xi has let the shadows grow to fake the growth, and will have a hard time tackling them now.

China’s Building-Boom Hits A Wall As Shadow-Banking System Collapses (ZH)

Beijing wants to shore up growth without inundating the economy with cheap credit. But, as WSJ’s Walter Russell Mead pointed out previously, it’s not easy… “Chinese leaders know that their country suffers from massive over-investment in construction and manufacturing, that its real-estate market is a bubble that makes the Dutch tulip frenzy look restrained, that both conventional debt and debt in the shadow-banking system are too large and growing too rapidly. But even as the Communist Party centralizes power and clamps down on dissent, it dithers when it comes to the costly and difficult work of shifting China’s economic development onto a sustainable track. Chinese authorities have tried to tackle some of these problems, but often retreat when reforms start to bite and powerful interests push back.”

To see how hard that will be, The Wall Street Journal’s Nathaniel Taplin takes a look at China’s roads and railways. “China is the 800-pound gorilla of global infrastructure. Its building prowess has permeated popular culture, as in the disaster movie “2012” where China constructs giant ships to help humankind escape rising seas. Recently, however, China’s infrastructure build has all but ground to a halt.” Here’s why… The central government last year started to crack down on unregulated, opaque – so-called ‘shadow-bank’ borrowing – alarmed at its vast scale, and potential for corruption.

For five straight months, the shadow banking system has contracted under this pressure, sucking the malinvestment lifeblood out of economic growth and construction booms as Chinese local governments, which account for the bulk of such investment, set up as so-called local-government financing vehicles (off balance sheet), or LGFVs, and have seen an unprecedented net $19 billion outflow in recent months. As WSJ’s Talpin notes, these days Beijing prefers that local governments borrow on-the-books, through the now legal municipal bond market. The problem is that lower-rated and smaller cities are mostly shut out, even though they do most actual capital spending. As a result, investment has kept slowing even though China’s net muni bond issuance in July was three times higher than it was in March.

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“Other Americans just marched around ineffectually, waving banners and shouting antiwar slogans, but not McCain!”

A Senator Masquerading as a Gas Station (Dmitry Orlov)

John McCain is dead, and many people are celebrating whereas they should be sad. He wasn’t a friend of mankind—he was its enemy, but a really bad one. But with such grossly incompetent enemies—who needs friends? McCain did a great deal to destroy America. He devoted his entire lifetime to American destruction. To start with, he was quite effective as a protester against America’s genocidal war on the people of Vietnam. Other Americans just marched around ineffectually, waving banners and shouting antiwar slogans, but not McCain! His own father had a lot to do with starting that war, but McCain made up for that by destroying 26 American war planes. That’s quite something! If every American flyer crashed as many planes, countless innocent lives would have been saved.

Of course, he could have done even better—and he did try. He almost managed to destroy the US aircraft carrier Forrestal by setting it ablaze. To top off his illustrious military career, he surrendered to the enemy and spent five years in a Vietnamese prison. This made him a hero—in Americans’ eyes only, while the rest of the world saw in him a murderer of Vietnamese children. His “martyrdom” as a POW helped pave his way to a political career, first in Congress, then in the Senate. During his obscenely long career in national politics, McCain did what he could to make American “democracy” look like a complete joke and to hasten America’s collapse. This, by the way, wasn’t a tall order: American “democracy” had long been a cesspool—a playground for lobbyists and political technologists based on a fully gerrymandered system of fake elections. But he did his thing, and is therefore twice the hero.

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Fast getting out of hand.

Brazil Sends Army To Border As Venezuelans Flee Crisis At Home (R.)

Brazil said it was sending armed forces to keep order near the Venezuelan border area, while Peru declared a health emergency, as a regional crisis sparked by thousands of Venezuelans fleeing economic collapse escalated on Tuesday. In Brazil, where residents rioted and attacked Venezuelan immigrants in a border town earlier this month, President Michel Temer signed a decree to deploy the armed forces to the border state of Roraima. He said the move was aimed at keeping order and ensuring the safety of immigrants. Peru, meanwhile, declared a 60-day health emergency in two provinces on its northern border, citing “imminent danger” to health and sanitation.

The decree, published in the government’s official gazette, did not give more details on the risks, but health authorities have previously expressed concerns about the spread of diseases such as measles and malaria from migrants. The exodus of Venezuelans to other South American countries is building toward a “crisis moment” comparable to events involving refugees in the Mediterranean, the United Nations said this week. Temer blamed the socialist Venezuelan government of President Nicolas Maduro for the migration crisis. “The problem of Venezuela is no longer one of internal politics. It is a threat to the harmony of the whole continent,” Temer said in a televised address.

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If the US lets Syria rebuild.

Syria Ready To Take One Million Returning Refugees – Moscow (AFP)

Russia’s defence minister said on Tuesday that war-torn Syria would be ready to accept one million returning refugees, following Moscow-backed reconstruction work. “Since 2015, when towns and villages gradually started to be freed, more than one million people have returned home,” Sergei Shoigu said in comments reported by Russian news agencies. “Now every opportunity has been created for the return of roughly one million (more) refugees,” he told journalists. “Huge infrastructure reconstruction work is ongoing, the rebuilding of transport routes and security points so that Syria can begin accepting refugees.”

Russia, a long-time ally of Syria, launched a military intervention in 2015 to support the embattled regime of President Bashar al-Assad, a move that changed the course of the war. Assad and his allies have since recovered swathes of territory and the government is turning its attention to post-conflict reconstruction, with the aid of Moscow. The war that erupted in 2011, one of the most devastating conflicts since World War II, has displaced more than half of Syria’s population, including more than five million beyond its borders. Most of them fled to neighbouring countries, particularly Turkey, Jordan and Lebanon.

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It’ll take a gargantuan effort to stop this.

Just 10 Rivers Carry 95% Of All Plastic Into The Ocean (BT)

Cheap, durable and multifunctional, plastic is one of humanity’s most successful inventions. From the 1950s to 2015, we’ve produced 8.3 billion metric tons of the stuff. By now, it’s everywhere. It’s also non-biodegradable. And that’s devastating the environment. Only 9% of all plastic waste has been recycled, and another 12% has been incinerated. That means that almost 80%—nearly 6.3 billion tons—has turned into waste with no half-life to speak of: condemned to an eternity as landfill, litter or ocean-clogging junk. Every year, plastic kills around 1 million seabirds, 100,000 sea mammals and inestimable numbers of fish. The volume of plastic trash in the world’s oceans is currently estimated to be around 150 million tons. No less than eight million tons are added to that every year—that’s one truckload every minute.

Between 0.5 and 2.75 million tons come from rivers alone. Large rivers are particularly efficient conveyors of plastic waste to the oceans, especially in countries lacking a well-developed waste management infrastructure. Up to 95% of river-borne plastic comes from just 10 rivers, scientists at the Helmholtz Center for Environmental Research in Leipzig, Germany have found. The scientists analysed data on both microplastic debris (<5mm) such as beads and fibres, as well as microplastic objects (plastic bottles, bags, etc.) from 79 sampling sites on 57 of the world’s largest rivers, singling out the 10 mapped out here as the biggest culprits, due to “mismanagement of plastic waste in their watersheds”.

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Nicotine addiction.

Bees Develop Preference For Pesticides (PA)

Bumblebees acquire a taste for pesticide-laced food that can be compared to nicotine addiction in smokers, say scientists. The more of the nicotine-like chemicals they consume, the more they appear to want, a study has shown. The findings suggest that the risk of potentially harmful pesticide-contaminated nectar entering bee colonies is higher than was previously thought. In a series of studies, a team of British researchers offered bumblebees a choice of two sugar solutions, one of which was laced with neonicotinoid pesticides. They found that over time the bees increasingly preferred feeders containing the pesticide-flavoured sugar.

Dr Richard Gill, from the Department of Life Sciences at Imperial College London, said: “Given a choice, naive bees appear to avoid neonicotinoid-treated food. However, as individual bees increasingly experience the treated food they develop a preference for it. “Interestingly, neonicotinoids target nerve receptors in insects that are similar to receptors targeted by nicotine in mammals. “Our findings that bumblebees acquire a taste for neonicotinoids ticks certain symptoms of addictive behaviour, which is intriguing given the addictive properties of nicotine on humans, although more research is needed to determine this in bees.” Controversial neonicotinoid pesticides are chemically similar to nicotine, the addictive compound in tobacco.

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Aug 172018
 
 August 17, 2018  Posted by at 9:37 am Finance Tagged with: , , , , , , , , , , ,  


Pablo Picasso Brick factory at Tortosa 1909

 

Emerging Markets and US Treasuries (Albert Edwards)
Asia the Next Source of Downside Systemic Risk for Financial Markets (WS)
Trump Says US ‘Will Pay Nothing’ To Turkey For Release Of Detained Pastor (R.)
Lira Rallies As Turkey Pledges Spending Cuts To Avoid IMF Bailout (G.)
Turkish Tremors Will Cause Shocks In Britain (Times)
$125,000: The Pension Debt Each Chicago Household Is On The Hook For (WP)
Russian Oil Industry Would Weather US ‘Bill From Hell’ (R.)
NATO Repeats the Great Mistake of the Warsaw Pact (SCF)
Italy’s NATO Racket… A Bridge Too Far (SCF)
Google Staff Tell Bosses China Censorship Is “Moral And Ethical” Crisis (IC)
Jury in Paul Manafort’s Case Asks Judge to Redefine ‘Reasonable Doubt’ (BBG)

 

 

From an email sent to Mish.

Emerging Markets and US Treasuries (Albert Edwards)

Turkey has discovered that high and rising foreign-denominated debt never sits well with a huge current account deficit and a reluctance to raise interest rates. The problem though is that this is not about Turkey or even EM. It is as always, about the Fed. When the most important person in the free world starts lobbing macro hand-grenades in an effort to drain the swamp, the financial markets will always eventually react badly. No, I am not talking about President Trump with his tweets about imposing tariffs on Turkey. I am actually talking about Fed Chair Jerome Powell draining the global liquidity swamp.

Make no mistake, whatever the macro-idiosyncrasies of Turkey, the key to the current turmoil that is spreading into EM generally, is Fed tightening and the strong dollar. As we have repeated ad infinitum, since 1950 there have been 13 Fed tightening cycles, 10 of them ended in recession and the others usually saw the EM blow up – such as the 1994 collapse in the Mexican peso. The Fed always tightens until something breaks. It is usually its own economy, but sometimes it is the EM’s. And when the liquidity tide goes out we always find out who is swimming naked. If it hadn’t been Turkey it would eventually have been someone else.

To be sure the unfolding EM crisis has been building for many years. And just as investors ignored the naysayers in the run-up to the Global Financial Crisis (GFC), they have ignored the IMF and BIS, who have been cautioning for some years about the explosive build-up in EM debt and especially dollar-denominated debt. According to the BIS, total dollar-denominated debt outside the U.S. reached $10.7 trillion in the first quarter of 2017, and about a third of this debt is owed by the EM nonfinancial sector. EM specialists, the Institute of International Finance (IIF), have also warned about this build-up in EM foreign-denominated debt. They too note that the EM corporate sector has been leading the explosion of debt, with Turkey standing out for the increase in its exposure since the GFC. Turkey has never managed to escape membership of ‘The Fragile Five’ EM country club.

 

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Dollar shortages.

Asia the Next Source of Downside Systemic Risk for Financial Markets (WS)

“Except for an expected short-term reprieve, we expect these tighter USD conditions to remain in place for the rest of the year,” the strategists write. “That is unless policy makers react soon to stimulate financial markets with liquidity.” “Southeast Asia stands out again as in 1997/8, with a large amount of USD denominated debt outstanding,” the write. “The only difference is then Asia had fixed exchange rates and now they are floating! We believe Asia will be the next source of downside systemic risk for financial markets.” The chart below shows dollar-denominated debt in the EMs, in trillion dollars. This does not include euro-denominated debt which plays a large role in Turkey. The fat gray area represents Asia without China:

Asia’s dollar-denominated debt, relative to its foreign exchange reserves and exports, has risen significantly since 2009, they note. The chart below shows the ratio between dollar-denominated debt and foreign exchange reserves in Asia, with China (green line) and without China (black dotted line). Values over 50% mean that there is more dollar-debt than foreign exchange reserves:

“This leaves these nations susceptible to a shortage in USDs,” they write: “Notably, the Asian nations that have amassed record amounts of USD debt are also home to the largest technology companies i.e. Tencent (China), Alibaba (China), TSNC (Taiwan), Samsung (South Korea). The tech sector is now 28% of the MSCI EM index. The rally in the US Dollar, dented global growth prospects, credit growth in China slowing down and escalating political tensions from the US leaves these nations very exposed to a shortage in USDs.”

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More sanctions. Yesterday’s relief is gone.

Trump Says US ‘Will Pay Nothing’ To Turkey For Release Of Detained Pastor (R.)

U.S. President Donald Trump said on Thursday the United States “will pay nothing” to Turkey for the release of detained American pastor Andrew Brunson, who he called “a great patriot hostage.” “We will pay nothing for the release of an innocent man, but we are cutting back on Turkey!” Trump said on Twitter. The U.S. warned Turkey on Thursday to expect more economic sanctions unless it hands over Brunson, as relations between the two countries took a further turn for the worse. U.S. Treasury Secretary Steven Mnuchin assured Trump at a Cabinet meeting that sanctions were ready to be put in place if Brunson was not freed. “We have more that we are planning to do if they don’t release him quickly,” Mnuchin said during the meeting.

The United States and Turkey have exchanged tit-for-tat tariffs in an escalating attempt by Trump to induce Turkish President Tayyip Erdogan into giving up Brunson, who denies charges that he was involved in a coup attempt against Erdogan two years ago. “They have not proven to be a good friend,” Trump said of Turkey during the Cabinet meeting. “They have a great Christian pastor there. He’s an innocent man.” Trump’s national security adviser, John Bolton, had issued a blunt warning to Turkish ambassador Serdar Kilic when he met him on Monday at the White House, an administration official said on Thursday. When Kilic sought to tie conditions to Brunson’s release, Bolton waved them aside and said there would be no negotiations.

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But that was yesterday. Today, the lira’s lost 4% already.

Lira Rallies As Turkey Pledges Spending Cuts To Avoid IMF Bailout (G.)

Turkey’s finance minister sparked a recovery in the lira after he addressed thousands of international investors, pledging to protect beleaguered local banks and cut public spending to prevent the country defaulting on its loans. Berat Albayrak, who has faced criticism for failing to tackle the country’s growing financial crisis, spoke to around 6,000 investors on a conference call to rebuff concerns that a funding squeeze on Turkey’s banks and a damaging trade war with the US would force him to seek a rescue bailout from the IMF. Albayrak, who was appointed as finance minister last month by his father-in-law, president Recep Tayyip Erdogan, said Turkey will not hesitate to provide support to the banking sector, which was capable of accessing funds itself during the current turmoil in financial markets.

He added that deposit withdrawals by panicked investors remained low and manageable. “We are experiencing unfavourable conditions but we will overcome,” he said. The Turkish lira was up 4% against the US dollar following the conference call and after reassuring words from the French president, Emmanuel Macron, and Germany’s chancellor, Angela Merkel, that Turkey’s stability was important. However, Albayrak’s attempt to shore up confidence in the lira was quickly undermined by the US Treasury secretary, Steve Mnuchin, who reportedly told president Donald Trump in a cabinet meeting that he was preparing further sanctions against Ankara. The lira slipped back to settle at just 1% up on the previous day.

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It’s not Spain or Italy. It’s Britain.

Turkish Tremors Will Cause Shocks In Britain (Times)

There are many strange things about Recep Tayyip Erdogan, but one of the oddest is his pet theory about interest rates. The Turkish president believes that high borrowing costs produce high inflation. “The interest rate is the cause and inflation is the result,” he said a few months ago. “The lower the interest rate is, the lower inflation will be.” No, you didn’t misread that. In defiance of economic orthodoxy (not to mention centuries of experience) which says that high interest rates tend to reduce inflation, President Erdogan believes the opposite. As one economist put it, this is a little like believing that umbrellas cause rain.

The Turkish president’s eccentric attitude towards monetary policy is not the only reason his country is now facing an economic crisis, but it is at least part of the explanation. Over the past decade or so, Turkey became one of the great bubbles of the modern era. Housing bubble? Check. Debt binge? Check. Yawning current account deficit? Check. Runaway inflation? Check. These traits alone qualified the Turkish economy for crisis candidacy some time ago. But as always, saying a country is due a crunch is far simpler than predicting when and how. And Turkey may well have muddled through a little longer were it not for four critical ingredients.

[..] Who is most exposed to this looming crisis? Conventional wisdom says Spain and Italy, whose banks have Turkish subsidiaries. However, this slightly misses the point, since much of that lending is in lira. Those banks should be able to survive even the loss of their stakes. The real question is: who has been lending Turkish companies all this foreign exchange debt? That brings us to the sting in the tail. For when you dig through Turkish treasury data, as the Deutsche Bank economist Oliver Harvey has, you discover that the country that lent most to Turkey, both short and long term, was the UK. That’s right: Britain, or more specifically the City of London, is by far the most exposed to a collapse in the Turkish economy.

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Creative accounting 101.

$125,000: The Pension Debt Each Chicago Household Is On The Hook For (WP)

Chicagoans have no idea how much pension debt Illinois politicians have saddled them with. Officially, Windy City residents are on the hook for $70 billion in total pension shortfalls from the city and its sister governments plus a share of Cook County and state pensions. But listen to Moody’s Investors Service, the rating agency that’s been most critical of Chicago’s finances, and you’ll get a different picture. Moody’s pegs the total pension debt burden for Chicagoans at $130 billion, nearly double the official numbers. (Yes, by chance the number is eerily similar to the official shortfall of $129 billion facing the five state-run pension funds. But don’t confuse the two.)

That’s scary news for Windy City residents. Barring real reforms, concessions from the unions or bankruptcy, Chicagoans can expect to be hit with whatever series of tax hikes politicians will try to enact to reduce that debt. That $130 billion is the total Moody’s calculates when adding up the direct pension debt owed by the city government, Chicago Public Schools, the park district and Chicago’s share of various Cook County governments and the five state pension funds. Moody’s takes a more realistic approach to investment assumptions than the city and county governments take.

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Russia’s had time to prepare.

Russian Oil Industry Would Weather US ‘Bill From Hell’ (R.)

Stiff new U.S. sanctions against Russia would only have a limited impact on its oil industry because it has drastically reduced its reliance on Western funding and foreign partnerships and is lessening its dependence on imported technology. Western sanctions imposed in 2014 over Russia’s annexation of Crimea have already made it extremely hard for many state oil firms such as Rosneft to borrow abroad or use Western technology to develop shale, offshore and Arctic deposits. While those measures have slowed down a number of challenging oil projects, they have done little to halt the Russian industry’s growth with production near a record high of 11.2 million barrels per day in July – and set to climb further.

Since 2014, the Russian oil industry has effectively halted borrowing from Western institutions, instead relying on its own cash flow and lending from state-owned banks while developing technology to replace services once supplied by Western firms. Analysts say this is partly why Russian oil stocks have been relatively unscathed since U.S. senators introduced legislation to impose new sanctions on Russia over its interference in U.S. elections and its activities in Syria and Ukraine. The measures introduced on Aug. 2, dubbed by the senators as the “bill from hell”, include potential curbs on the operations of state-owned Russian banks, restrictions on holding Russian sovereign debt as well as measures against Western involvement in Russian oil and gas projects.

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Too expensive.

NATO Repeats the Great Mistake of the Warsaw Pact (SCF)

Through the 1990s, during the terms of US President Bill Clinton, NATO relentlessly and inexorably expanded through Central Europe. Today, the expansion of that alliance eastward – encircling Russia with fiercely Russo-phobic regimes in one tiny country after another and in Ukraine, which is not tiny at all – continues. This NATO expansion – which the legendary George Kennan presciently warned against in vain – continues to drive the world the closer towards the threat of thermonuclear war. Far from bringing the United States and the Western NATO allies increased security, it strips them of the certainty of the peace and security they would enjoy if they instead sought a sincere, constructive and above all stable relationship with Russia.

It is argued that the addition of the old Warsaw Pact member states of Central Europe to NATO has dramatically strengthened NATO and gravely weakened Russia. This has been a universally-accepted assumption in the United States and throughout the West for the past quarter century. Yet it simply is not true. In reality, the United States and its Western European allies are now discovering the hard way the same lesson that drained and exhausted the Soviet Union from the creation of the Warsaw Pact in 1955 to its dissolution 36 years later. The tier of Central European nations has always lacked the coherence, the industrial base and the combined economic infrastructure to generate significant industrial, financial or most of all strategic and military power.

[..] When nations such as France, Germany, the Soviet Union or the United States are seen as rising powers in the world, the small countries of Central Europe always hasten to ally themselves accordingly. They therefore adopt and discard Ottoman Islamic imperialism. Austrian Christian imperialism, democracy, Nazism, Communism and again democracy as easily as putting on or off different costumes at a fancy dress ball in Vienna or Budapest. As Russia rises once again in global standing and national power, supported by its genuinely powerful allies China, India and Pakistan in the Shanghai Cooperation Organization, the nations of Central Europe can be anticipated to reorient their own loyalties accordingly once again.

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Case in point: the cost of NATO and Russiagate.

Italy’s NATO Racket… A Bridge Too Far (SCF)

What should be a matter of urgent public demand is why Italy is increasing its national spending on military upgrades and procurements instead of civilian amenities. As with all European members of the NATO alliance, Italy is being pressured by the United States to ramp up its military expenditure. US President Donald Trump has made the NATO budget a priority, haranguing European states to increase their military spending to a level of 2 per cent of GDP. Trump has even since doubled that figure to 4 per cent. Washington’s demand on European allies predates Trump. At a NATO summit in 2015, when Barack Obama was president, all members of the military alliance then acceded to US pressure for greater allocation of budgets to hit the 2 per cent target.

The alleged threat of Russian aggression has been cited over and over as the main reason for boosting NATO. Figures show that Italy, as with other European countries, has sharply increased its annual military spending every year since the 2015 summit. The upward trend reverses a decade-long decline. Currently, Italy spends about $28 billion annually on military. That equates to only about 1.15 per cent of GDP, way below the US-demanded target of 2 per cent of GDP. But the disturbing thing is that Italy’s defense minister Elisabetta Trenta reportedly gave assurances to Trump’s national security advisor John Bolton that her government was committed to hitting its NATO target in the coming years. On current figures that translates roughly into a doubling of Italy’s annual military budget. Meanwhile, the Italian public have had to endure years of economic austerity from cutbacks in social spending and civilian infrastructure.

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But the company’s become a secret service.

Google Staff Tell Bosses China Censorship Is “Moral And Ethical” Crisis (IC)

Google employees are demanding answers from the company’s leadership amid growing internal protests over plans to launch a censored search engine in China. Staff inside the internet giant’s offices have agreed that the censorship project raises “urgent moral and ethical issues” and have circulated a letter saying so, calling on bosses to disclose more about the company’s work in China, which they say is shrouded in too much secrecy, according to three sources with knowledge of the matter. The internal furor began after The Intercept earlier this month revealed details about the censored search engine, which would remove content that China’s authoritarian government views as sensitive, such as information about political dissidents, free speech, democracy, human rights, and peaceful protest.

It would “blacklist sensitive queries” so that “no results will be shown” at all when people enter certain words or phrases, leaked Google documents disclosed. The search platform is to be launched via an Android app, pending approval from Chinese officials. The censorship plan – code-named Dragonfly – was not widely known within Google. Prior to its public exposure, only a few hundred of Google’s 88,000 employees had been briefed about the project – around 0.35 percent of the total workforce. When the news spread through the company’s offices across the world, many employees expressed anger and confusion. Now, a letter has been circulated among staff calling for Google’s leadership to recognize that there is a “code yellow” situation – a kind of internal alert that signifies a crisis is unfolding.

The letter suggests that the Dragonfly initiative violates an internal Google artificial intelligence ethical code, which says that the company will not build or deploy technologies “whose purpose contravenes widely accepted principles of international law and human rights.” The letter says: “Currently we do not have the information required to make ethically-informed decisions about our work, our projects, and our employment. That the decision to build Dragonfly was made in secret, and progressed with the [artificial intelligence] Principles in place, makes clear that the Principles alone are not enough. We urgently need more transparency, a seat at the table, and a commitment to clear and open processes: Google employees need to know what we’re building.”

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Don’t be surprised if he’s aquitted.

Jury in Paul Manafort’s Case Asks Judge to Redefine ‘Reasonable Doubt’ (BBG)

A Virginia jury deliberating the fraud charges against President Donald Trump’s former campaign manager Paul Manafort sent a note with four questions to the judge in the case. Near the end of the first day of deliberations on Thursday, the jury asked whether a report of foreign bank and financial accounts, known as an FBAR, needed to be filed by a person with less than a 50 percent ownership. Manafort is charged with four counts of failing to file FBARs for offshore companies. The jury also asked about the definition of a shelf company.

U.S. District Judge T.S. Ellis III replied that the jurors should rely on their collective memory. The jury also requested that the judge redefine “reasonable doubt.” Ellis replied that the government wasn’t required to prove its case beyond “all doubt,” just to the extent that a person would consider reasonable. Finally, the jury asked if the exhibit list could be amended to include the indictment. The jury was excused for the day and is to return Friday to continue deliberations.

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