Sep 022022
 
 September 2, 2022  Posted by at 8:30 am Finance Tagged with: , , , , ,  59 Responses »


Marc Chagall The soldier drinks 1912

 

These Are The Leaders Of Biden’s Revolution (Tucker Carlson)
Biden’s Most Enduring Legacy? (Rickards)
German FM Made ‘Fantastic Admission’ – Lavrov (RT)
Ukrainian Troops Captured During Raid On Nuclear Plant – Official (RT)
Ukraine Suffers Heavy Losses In Failed Offensive – Moscow (RT)
Ukraine Planned To Use IAEA Team As ‘Human Shields’ – Russia (RT)
Getting it Wrong on Ukraine (Scott Ritter)
More Ukraine Military Aid Coming, White House Says (RT)
Wholesale Gas Prices Fall On Europe’s Plan To Avert Winter Energy Crisis (G.)
Sanctions Hinder Russian Gas Flow To EU – Gazprom (RT)
Dead of Winter (Doomberg)
Which Crime Syndicate Murdered Darya Dugina? (Escobar)
A Story for Children (Batiushka)
Greece’s Slide Toward Authoritarianism (Spiegel)
How Mikhail Gorbachev Became the Most Reviled Man in Russia (CP)

 

 

An American president attempting to incite a civil war. Never seen such a thing.

 

 

Tucker Biden

 

 

 

 

 

 

Facebook fact check

 

 

 

 

Nothing accidental about the decor. But very wrong at the same time.

These Are The Leaders Of Biden’s Revolution (Tucker Carlson)

If you’re watching this right now, you are missing a rare primetime address from Joe Biden. Biden doesn’t give a lot of those for obvious reasons, but tonight’s topic is worthy of the occasion. America, ladies and gentlemen, is under attack and not from our usual enemies. The threat we face tonight is existential, but it’s not coming from barefoot religious extremists living in caves. It’s not the Chinese government. It’s not even Vladimir Putin himself, the most diabolically evil man in history. No, ladies and gentlemen, this threat is worse than all of that and it’s homegrown. As they say in the horror movies, it’s coming from inside the house. The single greatest threat to America today is Republican voters, all 75 million of them. They are Nazis and destroyers of democracy. They must be stopped. That is the message of Joe Biden’s speech.

Just moments ago, he referred to MAGA forces who are apparently marshaling at Red Lobster near you, ready to take over this country. Now, to underscore how deeply Joe Biden means all of this, tonight’s address in Philadelphia is not being categorized as a campaign event ahead of the midterm elections, which is what it looks like. No. Instead, this speech has the full sponsorship of the White House. In other words, what Joe Biden is saying right now is the official position of the entire executive branch of the U.S. government. That would include the Justice Department, the various Intel agencies and the world’s most powerful standing military. Think about that. Does it make you nervous? You don’t have to be a Trump voter to see a speech like this as a turning point in American history. For hundreds of years, the U.S. has had a political system comprised of two competing parties. If you were to declare one of those parties criminal and illegitimate, what would you be left with?

Well, you will be left with a one-party state and that is what Joe Biden is calling for tonight, a one-party state. It’s shocking. You may have trouble believing it’s even happening and yet it is live on television right now, and yet and here’s what we’re here to tell you, believe it or not, there is an upside to this catastrophe. Even as you watch your beloved country take a turn you never imagined possible, there is reason for hope. American liberals may have obvious dictatorial ambitions. There’s no question they do. Only would-be dictators fear free speech and an armed population. But just because liberals long for a one-party state doesn’t mean they’re going to get one. They won’t. In the end, they don’t have the skills to pull that off. Liberals are too incompetent to overthrow democracy, and that’s obvious from history.

Tucker Biden

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No, he trumped that last night.

Biden’s Most Enduring Legacy? (Rickards)

What are the advantages of a central bank digital currency? Well, the advantages are speed, cost, security and ease of use. Assume you buy a candy bar at a convenience store. You pay for it with a credit card, which begins a payment process involving maybe five parties including the merchant, the credit card company, the bank and an intermediary called a merchant acquirer (no need to list the details here, but it’s complicated). Ultimately the bank that issues your credit card sends you a bill and you pay it. You also pay a fee, maybe 3%, all to buy a candy bar. But with a central bank digital currency, you could simply pay for the candy bar with an account you have at the Fed. You would disintermediate the merchant acquirer, the banks and the credit card company. It would eliminate the fees we currently face. In a nutshell, the payment system will be faster, cheaper, easier, more streamlined and more secure.

The question is why are they doing this? Well, the banks and the government will tell you that it’s cheaper, faster and safer, so it makes sense. And that’s true, as far as it goes, but there are a lot of hidden agendas here. The first one is to eliminate cash. If you didn’t like the central bank digital currency system for privacy reasons, you might say, “Hey, I feel like I’m under surveillance. This is intrusive. I just don’t trust it. Where’s my alternative?” Particularly if they eliminate the traditional credit card payment system, you might buy your candy bar with cash. But if you’re the government and you want the central bank digital currency to succeed, you have to eliminate cash because it’s your competition. The government hates cash because it’s not traceable. If you spend it, they don’t know that you spent it or how you spent it. They can’t put you under surveillance with cash.

The other thing the government wants is the ability to impose negative interest rates. Instead of earning interest on your money in the bank, you’d be charged to keep it there. Cash stands in the way of negative interest rates because cash doesn’t have a negative interest rate. Assume you bury $100,000 in cash in your backyard. You come back a year later, you still have $100,000. You might not earn any interest on your money, but at least the government can’t take it away. But if all your money is in digital form within the banking system, they can impose negative interest rates on it. The government wants to use the banking system for a lot of other things. They might want to freeze your account, they might want to seize your assets, they might also want to put an expiration date on your money. sImagine you get paid and the government tells you, “That money is going to evaporate or disappear if you don’t spend it in the next six months.” How’s that for a stimulus program?

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How can this woman still have a job this morning?

German FM Made ‘Fantastic Admission’ – Lavrov (RT)

Russia’s Foreign Minister Sergey Lavrov has described as “fantastic” a recent comment by his German counterpart, Annalena Baerbock, about Berlin’s commitment to backing Kiev. The German official said on Wednesday that her country’s government would stand by Ukraine regardless of what German voters think about it. On Thursday, Lavrov delivered a speech at the Moscow State Institute of International Relations marking the start of the academic year. In it, he said that many Western politicians are in the grip of a “Russophobic obsession.” As a case in point, the minister cited Baerbock’s remark, which she made in Prague on Wednesday. According to Lavrov, what the German official said effectively boiled down to the following: “Yes, our citizens are suffering but they will have to suffer more because we will be supporting Ukraine no matter what.”

The Russian foreign minister described Baerbock’s statement as a “fantastic admission.” Speaking at a conference named ‘Democracy’s Clear and Present Danger: How Do We Respond?’ organized by the NGO Forum 2000, the top German diplomat said: “If I give the promise to people in Ukraine – ‘We stand with you, as long as you need us’ – then I want to deliver. No matter what my German voters think, but I want to deliver to the people of Ukraine.” Baerbock acknowledged that dissatisfaction with the German government among the country’s population would likely increase come winter. She did go on to explain that Berlin would not remain completely deaf to its citizens, though, promising “social measures” for those who “cannot pay [the] energy prices.”

However, the official made it clear that the “sanctions [against Russia] will stay also in winter time, even if it gets really tough for politicians.” Since the start of Russia’s military offensive against Ukraine in late February, and in light of the Western sanctions against Moscow that followed, energy prices in Europe have climbed to historic highs. This has pushed inflation up significantly across the EU, and in Germany in particular. On Wednesday, gas prices surged again on the spot market after the operator of the Nord Stream 1 gas pipeline announced the beginning of a three-day shutdown for maintenance.

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Will Schryver @imetatronink:

“The AFU clown show in southern Ukraine scales new heights. In arguably the most embarrassing debacle of the war yet for Ukraine, they apparently permitted themselves to attempt an MI6-designed and directed commando operation to seize the Zaporozhye nuclear power plant. The would-be commandos, 64 in number, recently “trained” in the UK, set out across the Kakhovskoye reservoir in seven high-speed boats, landed on the opposite shore 3 km from the NPP, where they were immediately met by a Russian ambush.”

“Apparently Russian intelligence was fully aware of their plans and had monitored the debutante commandos from the time they left Poland to pursue their ostensibly glorious operation – allegedly advocated by the corpulent Boris Johnson himself in his recent visit to Kiev.” “Of the 64 “commandos”, at least 47 are now dead, a few wounded, and a dozen trapped with no means of escape, all seven of their boats having been destroyed. The entire undertaking has been an unmitigated amateurish disaster.”

“Apparently, there were also two barges with 320 additional troops that attempted to cross the reservoir, but were sunk en route — all presumably drowned. In fact, some Ukrainian Telegram channels reported that 700 troops were involved. A joke of military planning / execution.”

Ukrainian Troops Captured During Raid On Nuclear Plant – Official (RT)

Three Ukrainian soldiers, who participated in a botched attempt to capture the Russian-controlled Zaporozhye Nuclear Power Plant on Thursday morning, have been taken alive, Vladimir Rogov, a council member in the Moscow-allied administration of Ukraine’s Zaporozhye Region, has claimed. Of the three, two have been injured and are in serious condition, the official said in an interview with Russian television. Doctors are fighting to save them, he added. An estimated 12 Ukrainian troops are still fighting against Russian forces, he claimed. The Russian Defense Ministry previously claimed that early in the morning, Kiev launched an operation apparently aimed at taking the nuclear site ahead of an inspection by the International Atomic Energy Agency (IAEA).


Some of the Ukrainian troops failed to reach the southern bank of the Dnepr when their vessels were hit and sank, the ministry stated. Up to 60 commandos used speedboats to make a landing, before Russian forces engaged them, the report said. The power plant and the surrounding city of Energodar have been under Russian control since March. Throughout August, it came under regular fire, which Kiev and Moscow blamed on each other. Ukrainian officials also accused Russia of stationing heavy weapons at the nuclear facility. The IAEA’s fact-finding mission is expected to arrive in Energodar later in the day, though there were reports that their progress was interrupted by military activity. Russia and Ukraine have accused each other of attempting to derail the inspection.

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“..I felt sorry for them and I started wondering if this was worth doing at such a cost,” the WSJ quoted a doctor in an intensive care unit as saying..”

Ukraine Suffers Heavy Losses In Failed Offensive – Moscow (RT)

Kiev’s attempts to take the initiative and advance in the south of the country have failed and resulted in heavy losses, the Russian Defense Ministry reported on Thursday. The Ukrainian forces lost over 350 personnel, as Russian warplanes and artillery were used for kinetic action against Kiev’s forces over the last 24 hours, the ministry’s spokesman said during a daily briefing. Kiev also lost 31 tanks, 22 infantry fighting vehicles, 18 of other types of armored vehicles, eight armed pickup trucks, and 17 of other types of military vehicles, the statement said. This week, Ukraine launched a long-touted offensive to reclaim territories in the south of the country controlled by Russia. Kiev reported capturing some villages, but officials were mostly tight-lipped about the details of the operation, including its cost, citing secrecy.


The Russian side described the action as disastrous for Kiev. A previous Russian military briefing on Wednesday said Ukraine lost over 1,200 soldiers and dozens of pieces of military hardware to Russian fire in a single day. The fact that Ukraine was paying a heavy toll was corroborated by some Western news outlets, including the Wall Street Journal. The newspaper spoke to some of the Ukrainian soldiers injured on the battlefield and medics treating them to glimpse into the situation on the frontline. “When they started bringing in such a large number of wounded, then, honestly, I felt sorry for them and I started wondering if this was worth doing at such a cost,” the WSJ quoted a doctor in an intensive care unit as saying.

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“..we fully understand the complete silence of all Western sponsors of the Zelensky regime..”

Ukraine Planned To Use IAEA Team As ‘Human Shields’ – Russia (RT)

Kiev forces wanted to seize the Zaporozhye Nuclear Power Plant in a daring military raid and use the personnel of the UN nuclear watchdog as “human shields” to maintain control over the facility, the Russian Defense Ministry claimed on Thursday. The botched raid came shortly before a team of experts with the International Atomic Energy Agency (IAEA) – including the organization’s head, Rafael Grossi – arrived at the plant for an inspection. According to the Russian military, multiple Ukrainian “saboteur groups” crossed the Kakhovka Reservoir in speedboats and barges near the plant early in the morning, but were intercepted and destroyed by Russian troops and National Guard forces.

“Obviously, if the operation of the Kiev regime to seize the station was a success, the head of the IAEA, [Rafael] Grossi, and the experts of the mission would become a ‘human shield’ for Ukrainian saboteurs to prevent any attempts to destroy them by the Russian armed forces,” the Russian MoD said in a statement. The operation aimed at capturing the nuclear power plant appears to have been “planned in advance by Zelensky’s regime,” the Russian military suggested. Moreover, the delay in Grossi’s visit to the installation, originally planned for August 31, stemmed from the Ukrainians’ need for more time to get ready for that “military provocation,” it alleged.

The ultimate goal of the operation was seizing control of the plant, while the presence of the IAEA team would have allowed the “saboteurs”to not only take cover from any potential Russian actions, but also to cement the new “status quo,” the military said. The success of the operation would have likely been reinforced by a “new wave of loud statements from Washington and European capitals, calling upon Russia to establish a ‘demilitarized zone’ around the nuclear plant, with IAEA observers guarded by Ukrainian troops,” it asserted. “In this regard, we fully understand the complete silence of all Western sponsors of the Zelensky regime, which de-facto confirms their tacit participation in the preparation of today’s provocation at the Zaporozhye plant,” the military concluded.

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“..neither Arkin nor his editorial bosses at Newsweek felt any need to explain how Russia could be losing the war twice..”

Getting it Wrong on Ukraine (Scott Ritter)

Six months into Russia’s “Special Military Operation,” fact-challenged reporting that constitutes Western media’s approach to covering the conflict in Ukraine has become apparent to any discerning audience. Less understood is why anyone would sacrifice their integrity to participate in such a travesty. The story of William Arkin is a case in point. On March 30 (a little more than a month into the war), Arkin penned an article which began with the following sentence: “Russia’s armed forces are reaching a state of exhaustion, stalemated on the battlefield and unable to make additional gains, while Ukraine is slowly pushing them back, continuing to inflict destruction on the invaders.” Arkin went on to quote a “high-level officer of the Defense Intelligence Agency,” who spoke on condition of anonymity, who declared that “The war in Ukraine is over.”

A little less than three months later, on June 14, Arkin wrote a piece for Newsweek with the headline: “Russia Is Losing the Ukraine War. Don’t Be Fooled by What Happened in Severodonetsk.” Apparently neither Arkin nor his editorial bosses at Newsweek felt any need to explain how Russia could be losing the war twice. Anyone who has been following what I’ve been writing and saying since the beginning of Russia’s “Special Military Operation” in Ukraine knows I hold the exact opposite view. Russia, I maintain, is winning the Ukraine conflict, in decisive fashion. But I don’t write for Newsweek. William Arkin does.

Arkin proclaims that Russia is losing though it had, at the time the article was published, just taken the strategic city of Severdonetsk, killing and capturing thousands of Ukrainian forces, and rendering thousands more combat ineffective since they had to abandon their equipment to flee for their lives. (Russia has since captured all of the territory encompassing the Lugansk People’s Republic, including the city of Lysychansk, inflicting thousands of additional casualties on the Ukrainian military.) “The Russian army’s so-called victory,” Arkin proclaimed at the time, “is the latest installment in its humiliating military display and comes with a crushing human cost.” The humiliating display instead is Arkin’s lack of acumen in conducting an independent assessment of the military situation on the ground in Ukraine.

This was again reinforced last week when Arkin penned another article in which he helps disseminate the outlandish claims of his Pentagon sources. “[F]rom late February through August, with only a moderate infusion of weapons from the West, some supportive declarations from Western leaders and a smattering of ‘We Stand with Ukraine’ signs on U.S. lawns,” Arkin writes, Ukraine has been able to “hold at bay the mighty Russian military,” something apparently none thought it could do.

Putin global inflation

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More death coming.

More Ukraine Military Aid Coming, White House Says (RT)

US National Security Council spokesman John Kirby said on Wednesday that the Biden administration was preparing to announce more packages of military aid for Kiev’s beleaguered forces. Kirby’s statement came a week after US President Joe Biden authorized a record arms shipment worth nearly $3 billion. “There will be announcements of future security assistance in coming days,” Kirby said at a press conference. The upcoming packages will likely be drawn from the $40 billion allocated to Ukraine in a military and economic aid bill passed by Congress in May. The US has doled out this aid in near-weekly installments since the bill’s passage, with last week’s package the largest yet, totaling $2.98 billion. President Biden has promised to keep bankrolling Ukraine’s military for “as long as it takes,” although the US’ end goal in the conflict is unclear.


While Biden wrote earlier this summer that the US does “not want to prolong the war just to inflict pain on Russia,” he has spoken of a desire to affect regime change in Moscow, and his own secretary of defense has stated that weakening Russia is a core US objective. Furthermore, Biden’s officials said that they are willing to risk “a global recession and mounting hunger” just to oppose Russia, the Washington Post stated in June. It is unclear to what extent the supply of American weapons has helped Ukraine hold off Russian forces. A long-awaited counter-offensive in the south of the country ended in dismal failure for Ukraine earlier this week, with Moscow claiming to have destroyed more than 130 Ukrainian tanks and armored vehicles and killed more than 1,200 troops in a single day.

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“There is work on emergency measures on electricity prices. There might be also something on demand reduction for electricity.”

Wholesale Gas Prices Fall On Europe’s Plan To Avert Winter Energy Crisis (G.)

Wholesale gas prices have tumbled amid signs that European leaders’ plans to avert a winter energy crisis are taking shape. The price of gas for delivery on Friday dropped 21% from last night’s price of 405p per therm to 320p, as the European Commission confirmed it is working on “emergency measures” and the German government said it is “prepared” for the winter. The British wholesale gas price for delivery next week fell 9% to 350p while the month-ahead price fell 6% to 431p on Thursday. Earlier this week the day-ahead price fell from 447p a therm after the European Commission said it was working “flat out” on an emergency package as well as examining structural reform of the electricity market.

The European Commission said on Thursday it was looking into options to cap energy prices and cut electricity demand as part of its upcoming proposals to tackle soaring energy costs. Mechthild Wörsdörfer, deputy director general of the commission’s energy department, told a meeting of European parliament’s energy committee: “There is work on emergency measures on electricity prices. There might be also something on demand reduction for electricity.” The European Commission chief, Ursula von der Leyen, will outline the commission’s ideas on capping energy prices in a speech on 14 September. European countries have rushed to fill up gas storage facilities after Russia cut supplies into Europe. Germany is among the nations most exposed to potential shortages of gas and there are fears that – if the Kremlin switched off supplies altogether – its economy could tumble into recession.

[..] Gas market traders are on tenterhooks to see whether Russia state-owned gas giant Gazprom returns the Nord Stream 1 pipeline under the Baltic Sea back to service after a three-day maintenance shut down, which began on Wednesday. European gas storage facilities are now almost 80% full on average, nearing an EU target for countries to hit 80% full by 1 November. Researchers at Wood Mackenzie predicted high natural gas prices will drive down European demand to 7% below the five-year average in the months through to March, leaving a “best-case scenario” of storage levels at 31% at winter’s end.


Russian gas journey to Europe… Same gas as before, but now liquefied, and routed via China, at much higher price and transport costs…

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“Our opponents have issued so many sanctions-related documents that they created a situation which could be called sanctions confusion..”

Sanctions Hinder Russian Gas Flow To EU – Gazprom (RT)

Western sanctions could obstruct Siemens Energy from carrying out regular maintenance of equipment for the Nord Stream 1 gas pipeline, Gazprom CEO Alexey Miller said on Wednesday. “Our opponents have issued so many sanctions-related documents that they created a situation which could be called sanctions confusion,” Miller told Russia 1 TV. “And today Siemens has practically no opportunity to provide regular major overhauls of our gas-pumping equipment. Siemens simply has nowhere to carry out this work.” German manufacturer Siemens Energy, which normally services the turbines, said earlier on Wednesday it was not involved in the latest maintenance work being carried out by Gazprom at the compressor station. Russian gas flows via the Nord Stream 1 pipeline to Germany have been suspended from August 31 until September 3 for repairs.


Since July, the Nord Stream 1 pipeline has been operating at reduced capacity due to the shutdown of several gas turbines. One of them was sent to Montreal for repairs and became stuck there due to Canadian sanctions on Russia over the conflict in Ukraine. At Germany’s request, Ottawa announced an exemption for the turbines in July, and sent one of them over, but Gazprom refused to take delivery, citing irregularities in the documentation. Gazprom has cited faulty or delayed equipment as the main reason for the 80% reduction of deliveries via the pipeline. The Kremlin said on Tuesday that only sanctions prevent Nord Stream 1 from working at full capacity.

Putin EU

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“There cannot be a crisis next week. My schedule is already full.” – Henry Kissinger

Dead of Winter (Doomberg)

In the United Kingdom, a grassroots protest movement has broken out in response to the ongoing energy crisis. With the bill from its failed national policies coming due, ordinary citizens are organizing campaigns to ensure they are not the ones left holding the bag. The mission of Don’t Pay UK is to gather at least one million commitments from Her Majesty’s loyal subjects to simply stop paying their energy bills as of October 1, 2022. At the time of this writing, Don’t Pay UK has passed 130,000 signatures. We expect that number to grow. In reading a recent profile of the movement by Euronews Green, we were struck by the framing of the crisis by some of the movement’s organizers. This quote from the piece and the photo we have reproduced below caught our attention (emphasis added throughout):

“Lewis Ford, an organiser from Hull, agrees the movement is ‘a lot about solidarity’, especially for those forced to choose between heating their home and feeding their family. ‘We’re already talking about the idea of setting up warm banks, which is an absolutely preposterous idea,’ the 31-year-old IT consultant tells Euronews Green. ‘We’re one of the richest nations. So, it’s not like there’s no money, it’s the fact that the money is being kept in one space.’” Sadly for Mr. Ford and the well-intended but totally naïve young woman holding out hope that the unicorn concept of “cheaper cleaner greener” energy is actually a thing, they are both victims of insidious propaganda. As reality will soon demonstrate, if a country can’t afford to keep its citizens warm during the winter, then that country is poor, not rich. And if the proposed solution to this crisis is to double down on the same crazy policies that caused it in the first place, then we should expect the problem to get worse, not better.

As longtime readers of Doomberg will know, we’ve been fascinated by the European energy situation for the better part of the past year, long before the true potential for a crisis was considered acceptable mainstream thought. In re-reading a piece we wrote last October called “Putin’s Fools Rush In,” we correctly predicted who held the real power in the developing conflict. We also badly overestimated the willingness of Western political leaders to recognize reality. Here are two quotes revealing the miscalculation: “The prize Putin will soon collect is the inevitable go-ahead by Germany to begin operating the Nord Stream 2 pipeline, an act that will decisively and irreversibly conclude a years-long struggle between the United States and Russia in Putin’s favor.” s“Energy is life. Those projects will get developed. The geopolitical power vacuum we are creating will get filled. We might not be serious, but our enemies are ruthlessly so. They raise a toast to our self-inflicted demise.”

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“The hit on the Moskva was a NATO operation, ordered by the US. The Russian Ministry of Defense knows – and the Americans know they know. Retaliation will come – in the time and place of Moscow’s choosing.”

Which Crime Syndicate Murdered Darya Dugina? (Escobar)

Disclosure: I prize my friendship with Alexander Dugin – we met in person in Iran, Lebanon and Russia: a towering intellectual and extremely sensitive spirit, eons away from the crude stereotype of “Putin’s brain” or worse, “Putin’s Rasputin” slapped on him by Western media sub-zoology specimens. His vision of Eurasianism should be granted the merit of an ample intellectual discussion, a real dialogue of civilizations. But obviously the current woke incarnation of the collective West lacks the sophistication to engage in real debate. So he’s been demonized to Kingdom Come. Darya, who I had the honor to meet in Moscow, was a young, shining star with an ebullient personality who graduated in History of Philosophy at Moscow University: her main research was on the political philosophy of late Neoplatonism.

Obviously that had nothing to do with the profile of a ruthless operative capable of “compromising” money flows. She did not seem to understand finance, much less “dark” financial ops. What she did understand is how the Ukrainian battlefield mirrored a larger than life clash of civilizations: globalism against Eurasianism. Back to the assertions by the Russian intel agent, they cannot be simply dismissed. For instance, at the time he came up with the definitive version of the hit on the Moskva – the flagship of the Russian Black Sea fleet. As he emailed to a select audience, “the destruction of the flagship of the fleet was planned as a strategic task. Therefore, the operation of delivering the PKR [anti-ship missile] to Odessa took place in strict secrecy and under the cover of electronic warfare. As the ‘killer’ of the cruiser, they chose the PKR, but not the Neptune, as spread by Ukrainian propaganda, but the fifth-generation NSM PKR (Naval Strike Missile, range of destruction 185 km, developed by Norway-USA).

The NSM is able to reach the target along a programmed route thanks to the GPS-adjusted INS, independently find the target by flying up to it at an altitude of 3-5 meters. When reaching the target, the NSM maneuvers and puts electronic interference. A highly sensitive thermal imager is used as a homing system, which independently determines the most vulnerable places of the target ship. A stationary container installation secretly delivered to Ukraine was used as a launcher. Thus, after the damage to the cruiser Moskva, which led to its flooding (…) the Black Sea Fleet, unfortunately, no longer has a single ship with a long-range anti-aircraft missile system. But not everything is so bad. A three-band radar ‘Sky-M’ is located in Crimea, which is capable of tracking all air targets at a range of up to 600 km.” So there you go. The hit on the Moskva was a NATO operation, ordered by the US. The Russian Ministry of Defense knows – and the Americans know they know. Retaliation will come – in the time and place of Moscow’s choosing.

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“..and took all the money and the lands of the little prince and broke all the guns that the Kingdom of the West had sent him.”

A Story for Children (Batiushka)

Once upon a time there was a world where there were four Kingdoms. These were called the Kingdom of the North, the Kingdom of the East, the Kingdom of the South and the Kingdom of the West. Now the smallest Kingdom by far was the Kingdom of the West, which was only a tiny part of the whole. But it was by far the richest of the four Kingdoms. This was because it kept stealing things with guns and with cunning from the other three Kingdoms. But it turned out to be by far the stupidest Kingdom. This was because it loved itself so much that it could no longer see in front of its nose. Now it all happened in this way.

First of all, the wizards of the Kingdom of the West created a nasty illness called a Pestilence. They wanted to kill the people in the other three Kingdoms. In fact, the other three Kingdoms threw off the Pestilence. And because they were cowards, the rulers of the Kingdom of the West scared themselves and made themselves very ill and very poor instead. Then the Kingdom of the West said: ‘We will start a War with the Kingdom of the North because that is the Kingdom that is the closest to us. Then we will be able to take all their lands and all their money. And in that way we shall get back all the money we lost in our Pestilence and we will all be happy again’. So the Kingdom of the West found a little prince in the Kingdom of the North, whose country was next to the Kingdom of the West. And they paid him and all the rich people there lots of money and sent them lots of guns to fight against the very big Kingdom of the North.

And then the Kingdom of the West added, ‘To make sure we win, we will not buy any things from the Kingdom of the North any more and so they will have no money, but we will be richer and richer’. However, made blind by their love for themselves, the Kingdom of the West had not seen that the Kingdom of the North was much bigger, much richer and much stronger than it was. And as well as that, the Kingdom of the North was helped by the Kingdom of the East and the Kingdom of the South. And those two Kingdoms very much wanted all the things the Kingdom of the North had to sell. So the Kingdom of the North sold all its things to the Kingdom of the East and the Kingdom of the South and became rich. Then the Kingdom of the North conquered the little prince, making his rich people run away, and took all the money and the lands of the little prince and broke all the guns that the Kingdom of the West had sent him.

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Don’t piss off the German media. You can’t afford to.

Greece’s Slide Toward Authoritarianism (Spiegel)

Once again this summer, millions of Europeans were able to experience the pleasant side of Greece: the sun, the beaches and the hospitality. Greece is, with good reason, a favorite destination for holidaymakers in Europe. Which perhaps helps explain why governments in other European capitals seem happy to overlook the more unpleasant aspects of their EU partner. The European Commission and various courts have long been focused on the erosion of democracy in Hungary and Poland. But thus far, nobody in Brussels, Berlin or Paris has seemed particularly concerned that Greece, under the leadership of Prime Minister Kyriakos Mitsotakis, has also been increasingly drifting toward autocracy.

Mitsotakis poses as a liberal reformer who has improved his country’s financial and economic prospects. But he isn’t quite as fond of talking about the countless legal violations that Greek civil servants have committed on his watch. In migration policy, especially, the Greek government has essentially abrogated international and European law. In the last two years, Greek security personnel have intercepted thousands of refugees and violently forced them to return to Turkey. They have also used other migrants as slaves to assist in these illegal pushbacks. In other instances, Greek officials have towed asylum-seekers out to sea and abandoned them on unsafe inflatable rafts. Almost never is a Greek official forced to answer for crimes committed on the country’s borders. What does frequently happen, by contrast, is that those who document such crimes come under intense pressure.

The NGO Josoor, for example, a group that has spent two-and-a-half years helping pushback victims, recently suspended operations after months of harassment by Greek agencies. Members of other aid groups have been persecuted as migrant smugglers. And DER SPIEGEL reporter Giorgos Christides has been vilified as a Turkish agent in pro-government Greek media outlets. After DER SPIEGEL published a report last week about Greek officials declining to provide any assistance to a five-year-old Syrian girl who lay dying on an island in the Evros River, which demarcates part of the Turkish-Greek border, the government in Athens eschewed any self-criticism. Instead, they assailed Christides for allegedly using illegal methods to establish contact with the victim’s parents. It is precisely this kind of guilt reversal that has become common practice in Athens.

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“Gorbachev’s spouse, Raisa, asserted the resulting deaths of 200 Armenian protestors in a crackdown ordered by Gorbachev left him tormented and never the same.”

How Mikhail Gorbachev Became the Most Reviled Man in Russia (CP)

[..] it was not only in the economic realm that Gorbachev’s reforms caused chaos. Liberated from decades of control from an overbearing state, Gorbachev’s perestroika untied the heretofore tightly wrapped package of nationalism that Lenin and Stalin previously contained. Nationalists in the republics came to hate Gorbachev for his attempt at retaining the USSR, even a democratized one with autonomous republics. Meanwhile, Great Russian chauvinists despised Gorbachev for letting the Soviet system unwind and failing to use state power to keep the empire intact. One notable exception on the latter was in Armenia, where protests were causing an uncontrolled opening of the Soviet border with Iran. Gorbachev’s spouse, Raisa, asserted the resulting deaths of 200 Armenian protestors in a crackdown ordered by Gorbachev left him tormented and never the same.


Yet, this limited use of force in Armenia was largely the exception to Gorbachev’s refusal to use violence against protestors. The Balts were also having none of Gorbachev’s attempts to reform the Soviet system. Gorbachev’s reforms gave them an opening to bolt for the exit, and they ran. Ukrainian, along with Russian, nationalists also awoke under Gorbachev. Many in the Russian and Ukrainian republics also backed independence from the USSR for economic reasons. Why? Russians assumed they were rich and were held back by parasite Soviet republics draining their wealth. Likewise, Ukrainians pitched independence as the road to milk and honey. Ukraine’s vast black earth belt and formidable industry in the Donbas surely would make it rich once liberated from the Soviet Union, so they thought.

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Walls closing in

 

 

 

 

Tucker Desmet

 

 


“Are you happy with the Chancellor’s work?” Find the trick.

 

 

Hanson Smollett

 

 

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Dec 192019
 
 December 19, 2019  Posted by at 10:50 am Finance Tagged with: , , , , , , , , , ,  16 Responses »


Jack Delano Residents of Miss Disher’s rooming house for rail workers, Clinton, Iowa 1943

 

Pelosi Threatens To Delay Senate Impeachment Trial (Pol.)
Mueller Report Was Based On CIA-Fabricated “Evidence” (Bill Binney)
Manafort’s Fraud Case In New York Dismissed (R.)
Democratic Debate: Seven Candidates To Face Off A Day After Impeachment (G.)
US Concedes Defeat On Russia’s Nord Stream 2 Pipeline (ZH)
US Is Bent On ‘Absolute Military Supremacy’ – Mikhail Gorbachev (NW)
Afghanistan War – The Crime of the Century (Ron Paul)
The Final Act (Dmitry Orlov)

 

 

The Democrats have unleashed powers yesterday (and the previous 3-4 years) that they cannot control.

Not long ago Pelosi said “We must hurry and impeach Donald Trump because he is a risk to National Security.” Not a priority anymore?

Paul Sperry: “The longer Democrats drag out the impeachment process, the longer Durham has to bring indictments, declassify documents, expose new evidence Trump was justified asking Ukraine to help investigate how Obama/Biden/Clinton sabotaged his 2016 campaign..”

Pelosi Threatens To Delay Senate Impeachment Trial (Pol.)

Speaker Nancy Pelosi refused to commit Wednesday to delivering articles of impeachment to the Senate, citing concerns about an unfair trial on removing President Donald Trump from office. Senior Democratic aides said the House was “very unlikely” to take the steps necessary to send the articles to the Senate until at least early January, a delay of at least two weeks and perhaps longer. “So far we haven’t seen anything that looks fair to us,” Pelosi told reporters at a news conference just moments after the House charged Trump with abuse of power and obstructing congressional investigations. “That would’ve been our intention, but we’ll see what happens over there.”

Pelosi’s comments, which echo suggestions raised by other Democrats throughout the day, inject new uncertainty into the impeachment timetable and send the House and Senate lurching toward a potential institutional crisis. Though the House adopted two articles of impeachment charging Trump with abuse of power and obstruction of congressional investigations, it must pass a second resolution formally naming impeachment managers to present the case in the Senate. That second vehicle triggers the official transmission of articles to the Senate. By delaying passage of that resolution, Pelosi and top Democrats retain control of the articles and hope to put pressure on Senate Majority Leader Mitch McConnell to adopt trial procedures they consider bipartisan.

McConnell has boasted that he has closely coordinated the planning of the trial with the White House and has repeatedly predicted Trump would be acquitted. He’s also suggested Democrats shouldn’t be allowed to call new witnesses as they attempt to present their case. The White House lashed out at the move. “House Democrats have run a fatally flawed process with fake facts, and now they want to deny the President his day in court with another procedural maneuver that proves anew they have no case,” said Eric Ueland, Trump’s top congressional liaison to Congress.

Read more …

Can we say the same about impeachment?

Mueller Report Was Based On CIA-Fabricated “Evidence” (Bill Binney)

[..] In other words, it looked like the CIA did this, and that it was a matter of the CIA making it look like the Russians were doing the hack. So, when you look at that and also look at the DNC emails that were published by Wikileaks that have this FAT-file format in them, all 35,813 of these emails have rounded off times to the nearest even second. That’s a FAT-file format property; that argues that those files were, in fact, downloaded to a thumb drive or CD-rom and physically transported before Wikileaks posted them. Which again argues that it wasn’t a hack. So, all of the evidence we’re finding is clearly evidence that the Russians were not in fact hacking; it was probably our own people.

It’s very hard for us to get this kind of information out. The mainstream media won’t cover it; none of them will. It’s very hard. We get some bloggers to do that and some radio shows. Also, I put all of this into a sworn affidavit in the Roger Stone case. I did that because all of the attack on him was predicated on him being connected with this Russian hack which was false to being with. All the evidence we’re accumulating clearly says and implies, the US government — namely the FBI, CIA, the DOJ, and of course State Department — all these people involved in this hack, bought a dossier and all of the information going forward to the FISA court. All of them knew that this was a fake from the very beginning, because this Guccifer 2.0 character was fabricating it.

They were using him plus the Internet Research Agency [IRA] as “supposed trolls of the Russian government”. Well, when they sent their lawyers over to challenge that in a court of law, the government failed to prove they had any connection with the Russian government. They basically were chastised by the judge for fabricating a charge against this company. So, if you take the IRA and the trolls away from that argument, and Guccifer 2.0, then the entire Mueller report is a provable fabrication; because it’s based on Guccifer 2.0 and the IRA. Then the entire Rosenstein indictment is also a fabrication and a fake and a fraud for the same reasons. The judges seem to be involved in trying to keep this information out of the public domain.

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Double jeopardy.

Manafort’s Fraud Case In New York Dismissed (R.)

Paul Manafort, U.S. President Donald Trump’s former campaign chairman, on Wednesday won the dismissal of New York state fraud charges, in a defeat for the Manhattan district attorney’s efforts to hold him accountable even if pardoned by Trump. Justice Maxwell Wiley of the state Supreme Court in Manhattan said at a hearing that letting the district attorney, Cyrus Vance, prosecute Manafort would violate Manafort’s protection against double jeopardy, or being prosecuted twice for the same conduct. “We will appeal today’s decision and will continue working to ensure that Mr. Manafort is held accountable for the criminal conduct against the People of New York that is alleged in the indictment,” Vance’s spokesman Danny Frost said in a statement.


Vance, a Democrat, announced the indictment of Manafort on 16 felony counts including residential mortgage fraud on March 13, less than an hour after Manafort was ordered to spend 7-1/2 years in prison on various federal charges. Those charges stemmed from former U.S. Special Counsel Robert Mueller’s probe into Russian interference in the 2016 U.S. presidential election, and resulted in Manafort’s August 2018 conviction on tax evasion and bank fraud. Manafort, 70, has been serving his sentence at a federal prison in Pennsylvania, but was hospitalized last week for what his lawyer called a cardiac incident. He did not attend Wednesday’s hearing but his lawyer, Todd Blanche, said “obviously, we are very happy” with the dismissal. Manafort had pleaded not guilty. “This indictment should never have been brought, and today’s decision is a stark reminder that the law and justice should always prevail over politically motivated actions,” Blanche said..

Read more …

Leave it to the Guardian to say: “Looming over the high-stakes debate are those who won’t be in attendance”, and then not mention Tulsi Gabbard.

Democratic Debate: Seven Candidates To Face Off A Day After Impeachment (G.)

The final Democratic presidential debate of the year is bringing seven 2020 candidates to the stage in California one day after the House voted to impeach Donald Trump for abuse of power and obstruction. Facing off in Los Angeles on Thursday are the former vice president Joe Biden and senators Bernie Sanders and Elizabeth Warren; the South Bend, Indiana mayor, Pete Buttigieg; Senator Amy Klobuchar, the entrepreneur Andrew Yang and the billionaire environmental activist Tom Steyer. Looming over the high-stakes debate are those who won’t be in attendance. The Democratic National Committee said candidates had to hit at least 4% in four national polls or at least 6% in two early-state polls in the weeks leading up to the event in order to qualify.


The candidates also had to attract at least 200,000 donors. That leaves no black or Latino candidates among the nearly all-white lineup of Democratic frontrunners. Senator Cory Booker and the former housing secretary Julián Castro both failed to qualify for the debate, and Senator Kamala Harris recently ended her campaign amid polling showing her far behind in California, her home state. Also absent from the event will be Michael Bloomberg, the former New York City mayor and billionaire who made a late entrance into the race last month and has poured an estimated $13.5m into TV ads in California. Steyer, the other billionaire in the race, has spent roughly $1.6m on ads in the state.

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A Merkel win.

US Concedes Defeat On Russia’s Nord Stream 2 Pipeline (ZH)

A new Bloomberg headline reads “U.S. Concedes Defeat on Gas Pipeline It Sees as Russian Threat” just following new sanctions included in the House and Senate passed 2020 National Defense Authorization Act (NDAA) this week. But two administration officials tell Bloomberg it’s too little too late, despite Trump’s heightened rhetoric of calling Germany “a captive to Russia” and charging Berlin with essentially giving “billions” of dollars to Russia: Senior U.S. administration officials, who asked not to be identified discussing the administration’s take on the project, said sanctions that passed Congress on Tuesday as part of a defense bill are too late to have any effect. The U.S. instead will try to impose costs on other Russian energy projects, one of the officials added.

The Bloomberg report sees this as a rare admission of defeat: “The admission is a rare concession on what had been a top foreign-policy priority for the Trump administration and highlights how European allies such as Germany have been impervious to American pressure to abandon the pipeline. It also shows how the U.S. has struggled to deter Russia from flexing its muscles on issues ranging from energy to Ukraine to election interference.” The resolution contained in the defense spending bill, expected to be immediately signed into law by Trump, are measures which specifically target companies assembling the pipeline — a last ditch US effort to block the controversial 760-mile, $10.2BN project that would allow Russia to export natural gas directly to Germany, depriving Ukraine of badly needed gas transit fees along the current route for Russian supplies.

Washington’s position has long been that it weakens European energy security, while Merkel’s Germany has rejected Trump’s “meddling” in European energy affairs, which the Europeans have lately sought to diversify. Secretary of State Mike Pompeo during a February visit to Poland said Nord Stream 2 ultimately “funnels money to Russians in ways that undermine European national security.”

Read more …

‘Their obsession with weapons is crazy’

US Is Bent On ‘Absolute Military Supremacy’ – Mikhail Gorbachev (NW)

Former Soviet premier Mikhail Gorbachev has urged President Donald Trump’s administration to re-engage with Russia on landmark arms control treaties, warning that the collapse of Cold War-era nuclear weapon limits threatens global catastrophe. Speaking with Japanese newspaper The Asahi Shimbun, Gorbachev lamented America’s withdrawal from two key arms control treaties signed during the Cold War—the Anti-Ballistic Missile Treaty (ABMT) during President Geroge W. Bush’s tenure, and the more recent withdrawal from the Intermediate-Range Nuclear Forces (INF) Treaty.

Russia has also since suspended participation in the INF Treaty, prompting concerns of a new arms race. The infographic below, provided by Statista, shows the estimated global nuclear weapons arsenals as of December 2017. Gorbachev is a prominent advocate of nuclear disarmament. He told the Asahi he is “still praying for” the destruction of all nuclear weapons, noting that the number of warheads in Russia and the U.S. has reduced by more than 80 percent since the peak years of the Cold War. But he warned that this “peace dividend” is now at risk with the collapse of the ABMT and INF Treaty. It is also unclear whether New START (Strategic Arms Reduction Treaty)—the successor to START I that Gorbachev helped craft—will be renewed when it expires in 2021.

The Trump administration said last year that it would ditch the 1987 INF Treaty, which banned ground-launched nuclear and conventional missiles with ranges from 310 miles 3,417 miles. The White House accused Russia of violating the deal by developing the SSC-8 missile. But Gorbachev blamed Washington for the development. “The decision by the United States to withdraw from the INF threatens to unleash a sequence of events that would move to undo” the post-Cold War peace dividend, he said. “Out of the three principal pillars of global strategic stability—the ABMT, INF and START—only one is left,” he added, noting that the future of New START is far from certain.

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“.. the mainstream media has shown literally no interest in what should be the story of the century.”

Afghanistan War – The Crime of the Century (Ron Paul)

“We were devoid of a fundamental understanding of Afghanistan. We didn’t know what we were doing.” So said Gen. Douglas Lute, who oversaw the US war on Afghanistan under Presidents Bush and Obama. Eighteen years into the longest war in US history, we are finally finding out, thanks to thousands of pages of classified interviews on the war published by the Washington Post last week, that General Lute’s cluelessness was shared by virtually everyone involved in the war. What we learned in what is rightly being called the “Pentagon Papers” of our time, is that hundreds of US Administration officials – including three US Presidents – knowingly lied to the American people about the Afghanistan war for years. This wasn’t just a matter of omitting some unflattering facts. This was about bald-faced lying about a war they knew was a disaster from almost day one.

Remember President Bush’s Defense Secretary Donald Rumsfeld? Remember how supremely confident he was at those press conferences, acting like the master of the universe? Here’s what he told the Pentagon’s special inspector general who compiled these thousands of interviews on Afghanistan: “I have no visibility into who the bad guys are.” It is not only members of the Bush, Obama, and Trump Administrations who are guilty of this massive fraud. Falsely selling the Afghanistan war as a great success was a bipartisan activity on Capitol Hill. In the dozens of hearings I attended in the House International Relations Committee, I do not recall a single “expert” witness called who told us the truth. Instead, both Republican and Democrat-controlled Congresses called a steady stream of neocon war cheerleaders to lie to us about how wonderfully the war was going.

Victory was just around the corner, they all promised. Just a few more massive appropriations and we’d be celebrating the end of the war. Congress and especially Congressional leadership of both parties are all as guilty as the three lying Administrations. They were part of the big lie, falsely presenting to the American people as “expert” witnesses only those bought-and-paid-for Beltway neocon think tankers. What is even more shocking than the release of this “smoking gun” evidence that the US government wasted two trillion dollars and killed more than three thousand Americans and more than 150,000 Afghans while lying through its teeth about the war is that you could hear a pin drop in the mainstream media about it. Aside from the initial publication in the Washington Post, which has itself been a major cheerleader for the war in Afghanistan, the mainstream media has shown literally no interest in what should be the story of the century.

Read more …

The dollar?!

The Final Act (Dmitry Orlov)

Another net benefit for Trump is the never-ending impeachment saga. It has kept him in the media limelight and has allowed him to pretend that he is prevailing heroically against great odds while making his opposition look ridiculous in the eyes of his supporters. After the “Russian meddling” fable unraveled, an even more preposterous rationale for impeachment has taken its place. An attempt to impeach Trump for refusing to cooperate with a congressional investigation is in the process of failing, since anyone with more intelligence than a bucket of California penis fish should know that it is up to the courts, not up to the legislature, to resolve disputes between the legislature and the executive.

All that remains now is an alleged abuse of power by Trump. Apparently, it is a no-no for a US president to ask a foreign leader to investigate a US presidential candidate for a variety of crimes such as corruption, bribery and money-laundering. This may all seem quite ridiculous, but it serves a purpose: it allows Trump to clean up on free publicity and to continue fiddling (tweeting, in his case) as Rome burns. But what has set fire under Rome is not the decrepitating state of US society, or the permanent and permanently worsening trade imbalance with China, or the never-ending impeachment farce. It is the incipient failure of the US dollar.

For those who have been paying careful attention, the surreal nature of the procedings, and the fact that results no longer matter—only appearances do—have become perfectly obvious, but they are a tiny minority. What has allowed the politicians and the media to exploit the general public’s innate normalcy bias and to keep the media replay loop going without too many people catching on to what’s really happening was (note the past tense!) the ability of the US government (with the assistance of the Federal Reserve, which is a government-linked but essentially private entity) to paper over the gaping chasm in the nation’s finances by issuing debt, in the form of US Treasury paper.

Read more …

 

 

 

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Dec 082019
 
 December 8, 2019  Posted by at 9:04 pm Finance, Primers Tagged with: , , , , , , , , ,  12 Responses »


Saul Leiter 463 1956

 

Ronald Reagan and Mikhail Gorbachev first met in Geneva in 1985, in a summit specifically designed to allow them to discuss diplomatic relations and the -nuclear- arms race. At the time, the Soviet Union had started to crumble, but it was still very much the Soviet Union. They met again in 1986 in Reykjavik, in a summit set up to continue these talks. There, they came close to an agreement to dismantle both countries’ nuclear arsenals.

They met once again in Washington in 1987. That was the year Reagan made his famous “Mr. Gorbachev, tear down this wall” speech about the Berlin wall. Then they held a next summit in 1988 in Moscow, where they finalized the Intermediate-Range Nuclear Forces Treaty (INF) after the US Senate’s ratification of the treaty in May 1988.

Reagan’s successor George H.W. Bush met with Gorbachev first in December 1989 in Malta, and then the two met three times in 1990, among others in Washington where the Chemical Weapons Accord was signed, and in Paris where they signed the Treaty on Conventional Armed Forces in Europe. They met three more times in 1991, with one of their meetings, in Moscow, resulting in the signing of the Strategic Arms Reduction Treaty (START I).

One of the most interesting things agreed on during the Bush-Gorbachev meetings was that Russia would allow Germany to re-unite after the wall came down, in exchange for the promise that NATO would not try to expand eastward.

 

I’ve been re-researching this a bit because it feels like it’s high time that people should realize what US foreign policy was like not that long ago. Even as it involved Reagan and Bush sr., not exactly the peace-mongers of their times. The one thing that was clear to all parties involved is that it was crucial to keep meeting and talking. And talk they did. But look at us now. When was the last summit of a US president with Vladimir Putin?

This came to mind again when I read Elizabeth Warren’s piece in the Guardian today, which made me wonder if she’s for real, if she is really as ignorant as she appears to be when it comes to foreign policy, to Russia, to Trump and to NATO. It would seem that she is, and that makes her a hazard. Not that I see her as a serious candidate, mind you, but then again, I do not see any other one either.

In her article, which reads more than anything like some nostalgic longing for the good old times when she was young, just watch her get all warm and fuzzy over the success of NATO:

 

Donald Trump Has Destroyed American Leadership – I’ll Restore It

For seven decades, America’s strength, security and prosperity have been underpinned by our unmatched network of treaty alliances, cemented in shared democratic values and a recognition of our common security. But after three years of Donald Trump’s insults and antics, our alliances are under enormous strain. The damage done by the president’s hostility toward our closest partners was on full display at this week’s gathering of NATO leaders in London, which should have been an unequivocal celebration of the 70th anniversary of the most successful alliance in history.

The success of NATO was not inevitable, easy or obvious. It is a remarkable and hard-won accomplishment, and one based on a recognition that the United States does not become stronger by weakening our allies. But that is just what Trump has done, repeatedly and deliberately. He treats our partners as burdens while embracing autocrats from Moscow to Pyongyang. He has cast doubt on the US commitment to NATO at a moment when a resurgent Russia threatens our institutions and freedoms. He has blindsided our partners on the ground in Syria by ordering a precipitate and uncoordinated withdrawal.

[..] he has wrecked US credibility by unilaterally tearing up our international agreements on arms control, non-proliferation and climate change. This reckless disregard for the benefits of our alliances comes at a perilous moment, when we face common threats from powerful adversaries probing the weaknesses of our institutions and resolve. Longstanding allies in Asia are doubting our reliability and hedging their bets. Russia’s land grab in Ukraine has upended the post-1989 vision of a Europe “whole, free, and at peace”. The chaotic Brexit process has consumed our closest partners, while sluggish growth and rising xenophobia fuel extremist politics and threaten to fracture the European Union.

 

To start with that last point, no. That “post-1989 vision of a Europe “whole, free, and at peace” was destroyed by NATO’s eastward expansion, executed in spite of US, EU and NATO promises that it wouldn’t. Moreover, you can talk about a resurgent Russia, but the country has hardly recovered economically from the 1980’s and 90’s today, and it has no designs on countries to its west.

Just look at the military budgets of the respective countries, where Russia has maybe 10% of the expenditure of the US, let alone the rest of NATO, and you get the picture. Is Russia getting more bang for its buck, because it doesn’t have to maintain a long running Pentagon-Boeing/Raytheon link? Yes, it does. But a 10 to 1 difference is still way out there. It’s not as if they spend half of what the US does, they spend just 10%.

This is because not only Russia doesn’t have to satisfy the desires and needs of Pentagon-Boeing/Raytheon, it’s also because they have no desire to conquer any territory that is not at present Russian.

Russia “annexed” Crimea through fair elections, and it knew that “we” knew that it would never let go of its only warm water port, Sevastopol. When “We” tried to take it away regardless, it did the only thing it could do. And it did it very intelligently. As for Eastern Ukraine, everyone there is Russian, whether by blood or by passport. And there are a lot of strong ties between them and Russians in Russia proper.

If Putin would have volunteered to let these Donbass Russians be shot to bits by the Ukraine neo-nazis that helped the US and EU in the Maidan coup, he would have had either a civil war in Russia, or an all-out war in the Donbass, with perhaps millions of casualties. Putin did what he could to prevent both. Back to Warren:

 

A mounting list of global challenges demand US leadership and collective action. As president, I will recommit to our alliances – diplomatically, militarily and economically. I will take immediate action to rebuild our partnerships and renew American strategic and moral leadership, including by rejoining the Paris climate accord, the United Nations compact on migration, and reaffirming our rock-solid commitment to NATO’s Article 5 provisions.


But we must do more than repair what Trump has broken. Instead we need to update our alliances and our international efforts to tackle the great challenges of our age, from climate change and resurgent authoritarianism to dark money flows, a weakening international arms control regime and the worst human displacement crisis in modern history.

 

Wait, what exactly has Trump broken in the foreign policy field? There have been dozens at the very least who have called for NATO to be disbanded, Ron Paul et al, because its sole purpose was to counter the Soviet Union, which no longer exists. In fact, when Emmanuel Macron labeled NATO “brain-dead” last week, it was Trump who defended the alliance.

And sorry, Elizabeth, but to hold Trump responsible for “the worst human displacement crisis in modern history” is just not right. That started way before he arrived at the scene. Obama and Hillary carry the burden and blame for that, along with Bush jr. and Dick Cheney. They shot the crap out of Iraq, Lybia etc. Trump only dumped a few bombs in a desert. He didn’t invade any country, he didn’t go “We Came, We Saw, He Died”. That was not Trump.

And before we forget, the military aid for Ukraine Trump allegedly held back for a few weeks had been refused by Obama for years. I’ve been wondering for ages now why the Democrats are so eager to make things up while ignoring simple facts, but I think at least it’s time to start pointing out these issues.

This is not to make Trump look better in any sense, but to try and make people understand that he did not start this thing. Though yeah, I know, it’s like talking to a wall by now. The political divide has turned into such a broad and yawning one, you can’t not wonder how it could ever be broached.

But, you know, it might help if people like Elizabeth Warren don’t ONLY talk about Trump like he’s the antichrist, or a Putin tool, if they engage with him in conversation. But sadly, it feels like we’re past that point. Like if she would even try, and I don’t know if she would want to, her party would spit her out just for trying to build a single bridge. Like Tulsi Gabbard seems to have tried; and look at how the DNC treats her.

 

This means revitalizing our state department and charging our diplomats to develop creative solutions for ever more urgent challenges. It means working with like-minded partners to promote our shared interest in sustained, inclusive global economic growth and an international trade system that protects workers and the environment, not just corporate profits. And it means reducing wasteful defense spending and refocusing on the areas most critical to our security in years to come.

 

Well, apart from the fact that we’ve seen some of those diplomats in the Schiff hearings, and they seemed like the least likely people to develop anything “creative” -other than their opinions-, and the boondoggle of “sustained, inclusive global economic growth”, it’s probably best to forget about that entire paragraph. It’s nicer to Warren too.

 

Alliances are not charities, and it’s fair to ask our partners to do their share. I will build on what President Obama started by insisting on increased contributions to NATO operations and common investments in collective military capabilities. But I will also recognize the varied and significant ways that European states contribute to global security – deploying troops to shared missions, receiving refugees, and providing development assistance at some of the highest per capita rates in the world.

 

The problem appears to be that the partners don’t increase their contributions. Just this March, Germany refused to do just that. And if Berlin refuses, why would other countries spend more?

 

The next president must tackle our common problems using the lessons of common defense. Together, we can counter terrorism and proliferation. We can make common cause in constructing new norms and rules to govern cyberspace. We can dismantle the corruption, monopolies and inequality that limit opportunity around the world and take on the increasingly grave threats to our environment. We can and will protect ourselves and each other – our countries, our citizens and our democracies.

 

Now we’re getting into entirely nonsensical territory, with words and sentences designed only to make people feel good about things that have no substance whatsoever. Anyone can go there, anyone can do that.

In the meantime, the neverending investigations into Trump, Russia, Ukraine, taxes, have had one major effect: he hasn’t had a chance to have a summit with Putin. And that, to go back to how I started out this essay, is the worst idea out there. If Reagan and Bush sr. did those summits all the time, then why do we now think such summits are the work of the devil?

And yeah, we get it, we got it again last week from alleged law expert Pamela Karlan in the House, who let ‘er rip on the dangers Putin poses to all of humanity, and of course she would never trust Trump to hold any such summit because he’s Putin’s puppet.

What Pamela, and all the MSM, and the Dems, and the FBI/CIA, appear to refuse to see, though, is that Trump was democratically elected by the American people to be the only one who can have any such conversation. Karlan again talked about how Russia would attempt to attack American soil unless “we” keep them from doing that.

Now I can say that is absolute bollocks, and it is, but how many -potential- Democratic voters will recognize that at this point? They’ve been trained to believe it. That Russia wants one US presidential candidate over another, or one UK one, or fill in your country, and therefore they want to invade the US, UK, etc. In reality, Russia has plenty problems of its own, and it’s slowly trying to solve them.

The two countries need to start talking to each other again, and the sooner the better. That it will happen under Elizabeth Warren, however, is very unlikely. First because she has her mind made up about Russia, and second because the likelihood of her becoming president is very low. What do you think, is that a good thing?

If for some reason -who can tell- she would end up winning 11 months from now, do you think she’s likely to establish a peace treaty with Russia? You know, given what she wrote here? And if not, why would you vote for her? Don’t you want peace? Do you think antagonizing Putin forever is a good idea? While Russia continues to outperform America in arms development, and in just about any field? While Russia only wants peace?

Good questions, ain’t they, as we move into 2020?!

 

 

 

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Nov 092018
 


Paul Henry Altan Lough, Donegal 1933-34

 

Larry King: CNN Stopped Doing News A Long Time Ago. They Do Trump (ZH)
Democrats Want Healthcare Protected – And Trump Impeached (R.)
The Fed Stands Pat on Thursday, What’s Next? (Street)
US Sues UBS, Alleges Crisis-Era Mortgage Securities Fraud (R.)
Frail Mikhail Gorbachev Warns Against Return To The Cold War (R.)
Corbyn Advisor Economist Mariana Mazzucato Has UK Residency Bid Rejected (G.)
As Renewables Drive Up Energy Prices US, Asia & Europe Opt For Nuclear (F.)
US Court Halts Construction Of Keystone XL Oil Pipeline (AFP) <
World’s First AI News Anchor Unveiled In China (G.)
UN Envoy Meets UK Food Bank Users (G.)
‘Remarkable’ Decline In Global Fertility Rates (BBC)
Stopping Antimicrobial Resistance Would Cost Just $2 Per Person A Year (OECD)

 

 

Not that I need vindication, but it’s good to see that Larry King says the same I’ve been saying: CNN – like NYT, Wapo etc.- is in it for the money only, not for the news. Think of that as the recount stories start spreading.

Larry King: CNN Stopped Doing News A Long Time Ago. They Do Trump (ZH)

HOST RICK SANCHEZ: You know it’s interesting. As I listen to you I’m thinking that both you and I are old enough to remember that there was a lot of antagonism during the 1960s. There was a lot of antagonism during Watergate. There was certainly antagonism during the Clinton years. But there is something, maybe it’s an undercurrent, that is different now. Can you put your finger on it? What is it?

KING: Two things, Rick — the internet and cable news. Could you imagine cable news in Watergate? And they don’t do news anymore. In fact, RT is one of the few channels doing news. RT does news. CNN stopped doing news a long time ago. They do Trump. Fox is Trump TV and MSNBC is anti-Trump all the time. You don’t see a story — there was vicious winds and storms in the Northeast the other day – not covered on any of the three cable networks, not covered. Not covered! So when CNN started covering Trump — they were the first — they covered every speech he made and then they made Trump the story.

So, Trump is the story in America. I would bet that ninety-eight percent of all Americans mention his name at least once a day. And when it’s come to that, when you focus on one man, I know Donald 40 years — I know the good side of Donald and I know the bad side of Donald — I think he would like to be a dictator. I think he would love to be able to just run things. So, he causes a lot of this. Then his fight with the media and fake news. I’ve been in the media a long time, like you — longer than you, Rick. And at all my years at CNN, in my years at Mutual Radio, I have never seen a conversation where a producer said to a host “pitch the story this way. Angle it that way. Don’t tell the truth.” Never saw it. Never saw it.

SANCHEZ: You know it’s funny, just quick because you know these producers are telling me you guys have to start wrapping this up … you said something interesting about how CNN played along with Trump. I think they only played along or at least gave him that much airtime in many ways because they didn’t think he was going to win, correct?

KING: I guess it’s to their regret. But, they covered him as a character. They carried every speech he made. They carried him more than Fox News, at the beginning. And so they built the whole thing up and the Republicans had a lot of candidates and they all had weaknesses. When I saw Senator Cruz hug Donald Trump the other day I said, “this is what America has become.” He said that Cruz’s father helped kill Kennedy!

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Healthcare good. Impeachment painfully dumb. These people should go looking for trustworthy news stories, not blindly parrot MSM.

Democrats Want Healthcare Protected – And Trump Impeached (R.)

Democrats have a clear message for party leaders who will take control of the U.S. House of Representatives next year, according to a Reuters/Ipsos national opinion poll: Protect their healthcare and impeach President Donald Trump. The poll released on Thursday found that 43 percent of people who identified as Democrats want impeachment to be a top priority for Congress. That goal was second in priority only to healthcare, which played a major role in Democratic campaigns’ closing arguments before Tuesday’s elections.

They may be disappointed: Party leaders on Wednesday vowed to use their newly won majority to impose a new level of scrutiny on the Trump White House, but said impeachment would require evidence of action to subvert the Constitution that was so overwhelming that it would trouble even Trump’s supporters. Democratic Party leaders had practical reasons for caution. While they were poised to gain at least 30 House seats, more than the 23 they needed for a majority, Republicans strengthened their control of the U.S. Senate, which has the power to determine guilt or innocence in an impeachment proceeding. [..] The American public at large was far less supportive of impeachment proceedings, with just 24 percent of overall respondents listing it among their top three goals for the new Congress.

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A raise next month is what’s next.

The Fed Stands Pat on Thursday, What’s Next? (Street)

In an unsurprising move, Fed chair Jerome Powell kept rates flat on Thursday. “The committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labor market conditions and inflation near the committee’s symmetric 2 percent objective over the medium term,” the Fed said following its regularly scheduled two-day meeting to discuss interest rates. “Risks to the economic outlook appear roughly balanced.” TheStreet Founder and Action Alerts portfolio manager Jim has been adamant that the pause was necessary given a “collapse in oil” and a “collapse in housing.” He noted that Powell’s pause, and potentially an extended pause, could change that.

[..] Powell has paused, but the market seems to be slow off the starting line so far as major indices finished Thursday down slightly. So what’s next? “People have to remember that this November meeting is the last lame duck meeting,” Quill Intelligence CEO and former Federal Reserve Bank of Dallas advisor Danielle DiMartino Booth told TheStreet. “imagine all of the drama with Trump castigating Powell.” She added that a raise is very likely in December and speculated that rates could possibly be raised again in January, which would surprise the markets. “I don’t think he has any qualms about having the market make monetary policy for him,” Dimartino Booth said. “He’s not afraid of the stock market.”

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Why did that take 10 years? And what are the odds an actual person will be held accountable?

US Sues UBS, Alleges Crisis-Era Mortgage Securities Fraud (R.)

The U.S. government on Thursday filed a civil fraud lawsuit accusing UBS, Switzerland’s largest bank, of defrauding investors in its sale of residential mortgage-backed securities leading up to the 2008-09 global financial crisis. UBS was accused of misleading investors about the quality of more than $41 billion of subprime and other risky mortgage loans backing 40 securities offerings in 2006 and 2007, the Department of Justice said in a complaint filed with the federal court in Brooklyn. The lawsuit came after UBS rejected a government proposal that it pay nearly $2 billion to settle, according to a person familiar with the talks who was not authorized to speak publicly about them.

While UBS was not a big originator of U.S. residential home loans, U.S. Attorney Richard Donoghue in Brooklyn said investors suffered “catastrophic losses” from the bank’s failure to fully disclose the risks of mortgage securities it helped sell. [..] U.S. officials faulted UBS for having a business culture that placed a higher priority on profits than full disclosure to investors, who were deprived of crucial information about the quality of the loans underlying the securities they bought. Thursday’s lawsuit quoted a UBS trader who in a 2006 instant message said “our crack due diligence effort is a joke,” and a UBS mortgage employee who the same year complained to his bosses about the bank’s ethics, including that “Lying is ok.”

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His last warning?

Frail Mikhail Gorbachev Warns Against Return To The Cold War (R.)

Mikhail Gorbachev, the last Soviet leader, warned on Thursday against rising tensions between Russia and the United States and said there should be no return to the Cold War. The frail 87-year-old was physically helped by aides to a cinema hall to watch the premiere in Russia of a new documentary about his life, his Soviet reforms in the 1980s and his arms control drive that helped end the Cold War. His legacy has come under a pall as ties between Moscow and Washington have fallen to post-Cold War lows, following Russia’s annexation of Crimea in 2014 and rows over sanctions, election meddling and the poisoning of a spy in England.

He spoke briefly to a cinema hall in Moscow after “Meeting Gorbachev”, a new documentary directed by filmmakers Werner Herzog and Andre Singer, and was asked if the world would hold back from a new Cold War. “We must hold back,” he said. “And not just from the Cold War. We have to continue the course we mapped. We have to ban war once and for all. Most important is to get rid of nuclear weapons.” Reviled by many Russians as the man whose reforms ultimately led to the Soviet breakup, Gorbachev is lauded in the West as the man who helped end the Cold War. Gorbachev, whose visibly ailing health was in stark contrast to the vigorous reformist figure he cut in the 1980s, said the world was moving dangerously closer to a new arms race.

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This happened last year. Even university professors with 4 British kids are not safe.

Corbyn Advisor Economist Mariana Mazzucato Has UK Residency Bid Rejected (G.)

The London-based international economist Mariana Mazzucato has said her application for permanent residency in the UK was turned down, prompting renewed anger about the government’s immigration policy. Mazzucato, the founding director of University College London’s Institute for Innovation and Public Purpose and the author of several influential books on the economy, was born in Italy but has lived in the UK for 20 years. She applied for permanent residency in 2017, a few months after the UK voted to leave the EU. On Thursday she tweeted that her application had been refused and her Italian passport kept by the Home Office for six months. Immigration officials blamed a credit card problem with her application fee, she said, adding that there was no problem with her card.

A spokesman for University College London said Prof Mazzucato did not want to elaborate on her Twitter update. Later, after her tweet prompted widespread outrage, it clarified that she was referring to an incident in 2017. Mazzucato joined Jeremy Corbyn’s Economic Advisory Committee in 2015 and 2016 alongside other big name economists, including Joseph Stiglitz and Thomas Piketty. She is a member of the Scottish government’s Council of Economic Advisers. Her attempt to secure permanent residency ran into problems over a mixup about single digit on her 85-page application. “My ‘big’ error was making 4 look like 9 in my credit card number,” she tweeted in May 2017. At the time she said her application had to be resubmitted.

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No, we are not a smart species.

As Renewables Drive Up Energy Prices US, Asia & Europe Opt For Nuclear (F.)

Voters in the U.S., Asia, and Europe are increasingly opting for nuclear power in response to rising electricity prices from the deployment of renewables like solar panels and wind turbines. By a more than two-to-one margin (70% to 30%), voters in Arizona on Tuesday rejected a ballot initiative (proposition 127) that would have resulted in the closure of that state’s nuclear power plant and in the massive deployment of solar and wind. In Taiwan, momentum is building for a repeal of that nation’s nuclear energy phase-out. Grassroots pro-nuclear advocacy inspired a former president to help activists gather over 300,000 signatures so voters could vote directly on the issue on November 24.

And after a coalition of grassroots groups rallied in Munich, Germany last month to protest the closure of nuclear plants, a wave of mostly positive media coverage spread across Europe, inspiring a majority of Netherlands voters, and the nation’s ruling political party, to declare support for building new nuclear reactors. Now, in the wake of rising public support for nuclear energy, a longstanding foe of nuclear power, the U.S.-based Union of Concerned Scientists, has reversed its blanket opposition to the technology and declared that existing U.S. nuclear plants must stay open to protect the climate.

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The never ending battle continues. Just let interest rates bankrupt shale, and we’re good.

US Court Halts Construction Of Keystone XL Oil Pipeline (AFP)

A federal judge on Thursday halted construction of the Keystone XL oil pipeline, arguing that President Donald Trump’s administration had failed to adequately explain why it had lifted a ban on the project. The ruling by Judge Brian Morris of the US District Court for the District of Montana dealt a stinging setback to Trump and the oil industry and served up a big win for conservationists and indigenous groups. Trump granted a permit for the $8 billion conduit meant to stretch from Canada to Texas just days after taking office last year. He said it would create jobs and spur development of infrastructure. In doing so the administration overturned a ruling by then president Barack Obama in 2015 that denied a permit for the pipeline, largely on environmental grounds, in particular the US contribution to climate change.

The analysis of a cross-border project like this is done by the State Department. The same environmental analysis that the department carried out before denying the permit in 2015 was ignored when the department turned around last year and approved it, the judge argued. “An agency cannot simply disregard contrary or inconvenient factual determinations that it made in the past, any more than it can ignore inconvenient facts when it writes on a blank slate,” Morris wrote. He added: “The department instead simply discarded prior factual findings related to climate change to support its course reversal.” The judge also argued that the State Department failed to properly account for factors such as low oil prices, the cumulative impacts of greenhouse gases from the pipeline and the risk of oil spills.

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Who’ll know the difference?

World’s First AI News Anchor Unveiled In China (G.)

China’s state news agency Xinhua this week introduced the newest members of its newsroom: AI anchors who will report “tirelessly” all day every day, from anywhere in the country. Chinese viewers were greeted with a digital version of a regular Xinhua news anchor named Qiu Hao. The anchor, wearing a red tie and pin-striped suit, nods his head in emphasis, blinking and raising his eyebrows slightly. “Not only can I accompany you 24 hours a day, 365 days a year. I can be endlessly copied and present at different scenes to bring you the news,” he says.

Xinhua also presented an English-speaking AI, based on another presenter, who adds: “The development of the media industry calls for continuous innovation and deep integration with the international advanced technologies … I look forward to bringing you brand new news experiences.” Developed by Xinhua and the Chinese search engine, Sogou, the anchors were developed through machine learning to simulate the voice, facial movements, and gestures of real-life broadcasters, to present a “a lifelike image instead of a cold robot,” according to Xinhua.

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Britian’s reality.

UN Envoy Meets UK Food Bank Users (G.)

At Britain’s busiest food bank in Newcastle’s west end people loaded carrier bags with desperately needed groceries as unemployed Michael Hunter, 20, took his chance to spell out to one of the world’s leading experts in extreme poverty and human rights just how tight money can get in the UK today. Previous destinations for Philip Alston, the United Nations rapporteur on the issue, have included Ghana, Saudi Arabia, China and Mauritania. But now his lens is trained on Britain, the fifth richest country in the world, and he listened as Hunter explained an absurdity of the government’s much-criticised universal credit welfare programme.

Users have to go online to keep their financial lifeline open, but computers need electricity – and with universal credit leaving a £465 monthly budget to stretch across the three people in Michael’s family (about £5 each a day), they can barely afford it with the meter ticking. “I have to be quick doing my universal credit because I am that scared of losing the electric,” he said. Alston mentally logged the situation, ahead of a report ruling on whether Britain is meeting its international obligations not to increase inequality. But it was not just the computer that was too expensive to power. “I am hungry sometimes,” Michael said. “I’m scared to eat sometimes in case we run out of food.”

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Maybe mankind CAN solve some of its problems?!

‘Remarkable’ Decline In Global Fertility Rates (BBC)

There has been a remarkable global decline in the number of children women are having, say researchers. Their report found fertility rate falls meant nearly half of countries were now facing a “baby bust” – meaning there are insufficient children to maintain their population size. The researchers said the findings were a “huge surprise”. And there would be profound consequences for societies with “more grandparents than grandchildren”. The study, published in the Lancet, followed trends in every country from 1950 to 2017. In 1950, women were having an average of 4.7 children in their lifetime. The fertility rate all but halved to 2.4 children per woman by last year. But that masks huge variation between nations. The fertility rate in Niger, west Africa, is 7.1, but in the Mediterranean island of Cyprus women are having one child, on average.

Whenever a country’s average fertility rate drops below approximately 2.1 then populations will eventually start to shrink (this “baby bust” figure is significantly higher in countries which have high rate of deaths in childhood). At the start of the study, in 1950, there were zero nations in this position. Prof Christopher Murray, the director of the Institute for Health Metrics and Evaluation at the University of Washington, told the BBC: “We’ve reached this watershed where half of countries have fertility rates below the replacement level, so if nothing happens the populations will decline in those countries. “It’s a remarkable transition. “It’s a surprise even to people like myself, the idea that it’s half the countries in the world will be a huge surprise to people.”

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Apparently for the OECD, these are equal issues: ..handwashing and more prudent prescription of antibiotics. Though they know full well that simply putting a ban on antibiotics in agriculture would solve the issue in no time.

Stopping Antimicrobial Resistance Would Cost Just $2 Per Person A Year (OECD)

Superbug infections could cost the lives of around 2.4 million people in Europe, North America and Australia over the next 30 years unless more is done to stem antibiotic resistance. Yet, three out of four deaths could be averted by spending just USD 2 per person a year on measures as simple as handwashing and more prudent prescription of antibiotics, according to a new OECD report. Stemming the Superbug Tide: Just A Few Dollars More says that dealing with antimicrobial resistance (AMR) complications could cost up to USD 3.5 billion a year on average across the 33 countries included in the analysis, unless countries step up their fight against superbugs.

Southern Europe risks being particularly affected. Italy, Greece and Portugal are forecast to top the list of OECD countries with the highest mortality rates from AMR while the United States, Italy and France would have the highest absolute death rates, with almost 30,000 AMR deaths a year forecast in the US alone by 2050. A short-term investment to stem the superbug tide would save lives and money in the long run, says the OECD. A five-pronged assault on antimicrobial resistance — by promoting better hygiene, ending the over-prescription of antibiotics, rapid testing for patients to determine whether they have viral or bacterial infections, delays in prescribing antibiotics and mass media campaigns — could counter one of the biggest threats to modern medicine.

Investment in a comprehensive public health package encompassing some of these measures in OECD countries could pay for themselves within just one year and end up by saving USD 4.8 billion per year, says the OECD. While resistance proportions for eight high-priority antibiotic-bacterium combinations increased from 14% in 2005 to 17% in 2015 across OECD countries, there were pronounced differences between countries. The average resistance proportions in Turkey, Korea and Greece (about 35%) were seven times higher than in Iceland, Netherlands and Norway, the countries with the lowest proportions (about 5%).

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Jul 102016
 
 July 10, 2016  Posted by at 8:42 am Finance Tagged with: , , , , , , , , , , ,  6 Responses »


G.G. Bain Political museums, Union Square, New York 1909

Bank Earnings Loom Large As Stocks Near Record on Wall Street (R.)
The Epic Collapse Of The World’s Most Systemically Dangerous Bank (ZH/VC)
Bank of England Considers Curbs On Property Funds (R.)
China June Inflation Eases Further, More Policy Stimulus Anticipated (R.)
China Healthcare Costs Forcing Patients Into Crippling Debt (R.)
Gorbachev: ‘The Next War Will Be the Last’ (Sputnik)
Blair’s Deputy PM Says Iraq Invasion Broke International Law (BBC)
Families Of Soldiers Killed In Iraq Vow To Sue Blair For ‘Every Penny’ (Tel.)
Australia’s Other Great Reef Is Also Screwed (Atlantic)
10,000 Hectares Of Mangroves Die Across Northern Australia (ABC.au)
Global Insect Populations Fall 45% In Past 40 Years (e360)

 

 

Markets are now completely divorced from reality.

Bank Earnings Loom Large As Stocks Near Record on Wall Street (R.)

The focus on Wall Street will shift to corporate earnings next week after a strong June jobs report on Friday gave investors confidence that the U.S. economy was on stable footing and left the S&P 500 within a whisper of a new closing record high. Earnings next week are expected from big banks JPMorgan, Citigroup and Wells Fargo as well as other financial companies such as BlackRock and PNC Financial Services. Earnings for the sector are expected to decline 5.4%. If bank earnings come in better than expected, the S&P 500 is likely to push through its record highs set in May 2015 after several failed attempts, as Friday’s jobs number helped push the benchmark index to less than one point from its closing record high of 2,130.82.

“Banks are definitely in the spotlight,” said Tim Ghriskey, CIO of Solaris Group in Bedford Hills, New York. “There is some trepidation in the market going into this earnings season, the quarter economically was not particularly strong.” Financials have been the worst performing of the 10 major S&P sector groups this year, down nearly 6%, as they were hit by reduced expectations for a U.S. interest rate hike by the Federal Reserve and uncertainty in the wake of “Brexit.” Second-quarter earnings overall are expected to decline 4.7%, according to Thomson Reuters data, the fourth straight quarter of negative earnings, but up slightly from the 5% decline in the first quarter.

Investors will be looking for confirmation this quarter that earnings are starting to turn, with analysts anticipating a return to growth in the back half of the year, starting with expectations for a 1.8% increase in the third quarter.

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Two things still stuck in German media (Google translate for them is awful) as I write this: the chief economist for Deutsche Bank calls for a €150 billion bailout for European banks, and German top-economist Hans-Werner Sinn says Finland will be next to leave EU and first to leave eurozone.

The Epic Collapse Of The World’s Most Systemically Dangerous Bank (ZH/VC)

It’s been almost 10 years in the making, but the fate of one of Europe’s most important financial institutions appears to be sealed. After a hard-hitting sequence of scandals, poor decisions, and unfortunate events,Visual Capitalist’s Jeff Desjardins notes that Frankfurt-based Deutsche Bank shares are now down -48% on the year to $12.60, which is a record-setting low. Even more stunning is the long-term view of the German institution’s downward spiral. With a modest $15.8 billion in market capitalization, shares of the 147-year-old company now trade for a paltry 8% of its peak price in May 2007.

If the deaths of Lehman Brothers and Bear Stearns were quick and painless, the coming demise of Deutsche Bank has been long, drawn out, and painful. In recent times, Deutsche Bank’s investment banking division has been among the largest in the world, comparable in size to Goldman Sachs, JP Morgan, Bank of America, and Citigroup. However, unlike those other names, Deutsche Bank has been walking wounded since the Financial Crisis, and the German bank has never been able to fully recover. It’s ironic, because in 2009, the company’s CEO Josef Ackermann boldly proclaimed that Deutsche Bank had plenty of capital, and that it was weathering the crisis better than its competitors.

It turned out, however, that the bank was actually hiding $12 billion in losses to avoid a government bailout. Meanwhile, much of the money the bank did make during this turbulent time in the markets stemmed from the manipulation of Libor rates. Those “wins” were short-lived, since the eventual fine to end the Libor probe would be a record-setting $2.5 billion. The bank finally had to admit that it actually needed more capital. In 2013, it raised €3 billion with a rights issue, claiming that no additional funds would be needed. Then in 2014 the bank head-scratchingly proceeded to raise €1.5 billion, and after that, another €8 billion. In recent years, Deutsche Bank has desperately been trying to reinvent itself.

Having gone through multiple CEOs since the Financial Crisis, the latest attempt at reinvention involves a massive overhaul of operations and staff announced by co-CEO John Cryan in October 2015. The bank is now in the process of cutting 9,000 employees and ceasing operations in 10 countries. This is where our timeline of Deutsche Bank’s most recent woes begins – and the last six months, in particular, have been fast and furious. Deutsche Bank started the year by announcing a record-setting loss in 2015 of €6.8 billion. Cryan went on an immediate PR binge, proclaiming that the bank was “rock solid”. German Finance Minister Wolfgang Schäuble even went out of his way to say he had “no concerns” about Deutsche Bank. Translation: things are in full-on crisis mode.

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Just in time delivery?!

Bank of England Considers Curbs On Property Funds (R.)

The Bank of England is considering curbs on withdrawals from property investment funds after Britain’s vote to leave the EU roiled the sector, the Sunday Telegraph newspaper said late on Saturday. The paper said it understood that the BoE was considering “enforced notice periods before redemptions, slashing the price for investors who rush to the door, or additional liquidity requirements for funds”. Andrew Bailey, the head of Britain’s Financial Conduct Authority, told a BoE news conference on Tuesday that the structure of open-ended real estate funds needed to be reviewed, as investors rushed to cash in their investments.

The BoE – where Bailey was deputy governor until he moved to the FCA this month – last year expressed concern about funds that invest in assets which can become illiquid in a crisis, but allow investors to withdraw funds without notice. On Friday the FCA issued guidance to property funds to avoid disadvantaging investors who had not sought to redeem funds. The Telegraph said regulators were considering requiring funds to ask investors to give a notice period of 30 days to six months for redemptions, or to hold more liquid assets to meet withdrawals, such as cash or shares and bonds in property-related companies. More than six British property funds suspended withdrawals last week to tackle a tide of redemptions after the June 23 vote to leave the EU unnerved investors who are worried that the uncertainty will hit demand to rent and buy commercial property.

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As I said, China’s entered deflation.

China June Inflation Eases Further, More Policy Stimulus Anticipated (R.)

China’s June consumer inflation grew at its slowest pace since January as increases in food prices eased, while producer prices extended their decline, reinforcing economists’ views that more government stimulus steps will be needed to support the economy. The consumer price index (CPI) rose 1.9% in June from a year earlier, compared with a 2.0% increase in May, the National Bureau of Statistics said on Sunday. Analysts had expected a 1.8% gain, a Reuters poll showed. Consumer inflation has remained low compared with the official target of around 3% for this year, indicating persistently weak demand in the world’s second-largest economy. Food prices were up 4.6% in June, compared with a 5.9% gain in the previous month.

Prices of China’s staple meat pork rose 30.1%, compared with a 33.6% increase in May. But recent flooding in China “is likely to push vegetable and fruit prices higher in the coming months,” ANZ economists Raymond Yeung and Louis Lam wrote in a research note. Non-food prices inched up 1.2% in June versus May’s 1.1% gain. “In our view, while China reiterates the importance of supply-side reform due to debt and overcapacity concerns, the authorities still need to stimulate demand in order to achieve its growth target,” Zhou Hao, senior Asia emerging market economist at Commerzbank in Singapore, said in a note. The People’s Bank of China last cut interest rates on Oct. 23, the seventh time since late 2014, as the government took steps to counter slowing economic growth.

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Hmmm. Which other country does this remind you of? Official data show up to 44% of families pushed into poverty were impoverished by illness. Does that sound like communism to you?

China Healthcare Costs Forcing Patients Into Crippling Debt (R.)

As China’s medical bills rise steeply, outpacing government insurance provision, patients and their families are increasingly turning to loans to pay for healthcare, adding to the country’s growing burden of consumer debt. While public health insurance reaches nearly all of China’s 1.4 billion people, its coverage is basic, leaving patients liable for about half of total healthcare spending, with the proportion rising further for serious or chronic diseases such as cancer and diabetes. That is likely to get significantly worse as the personal healthcare bill soars almost fourfold to 12.7 trillion yuan ($1.9 trillion) by 2025, according to Boston Consulting Group estimates. For many, like Li Xinjin, a construction materials trader whose son was diagnosed with leukemia in 2009, that means taking on crippling debt.

Li, from Cangzhou in Hebei province, scoured local papers and websites for small lenders to finance his son’s costly treatment at a specialist hospital in Beijing, running up debts of more than 1.7 million yuan, about 10 times his typical annual income. “At that time, borrowing money and having to make repayments, I was very stressed. Every day I worried about this,” said Li, 47, adding that he and his wife had at times slept rough on the streets near the hospital. “But I couldn’t let my son down. I had to try to save him,” he said. Li’s boy died last year. The debts will weigh him down for a few more years yet. Medical loans are just part of China’s debt mountain – consumer borrowing has tripled since 2010 to nearly 21 trillion yuan, and in eight years household debt relative to the economy has doubled to nearly 40% – but they are growing.

That is luring big companies like Ping An Insurance, as well as small loan firms and P2P platforms, as China’s traditional savings culture proves inadequate to the challenge of such heavy costs. The stress is particularly apparent in lower-tier cities and rural areas where insurance has failed to keep pace with rising costs, said Andrew Chen, Shanghai-based healthcare head for consultancy Parthenon-EY. “It’s a storm waiting to happen where patients from rural areas will have huge financial burdens they didn’t have to face before,” he said, adding people would often take second mortgages on their homes or turn to community finance schemes.

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“..In the current situation…all political, economic, diplomatic and cultural forces should be engaged to pacify the world..”

Gorbachev: ‘The Next War Will Be the Last’ (Sputnik)

Former Soviet President Mikhail Gorbachev declared in an interview with radio station Echo Moskvy that if the crisis escalates to another war, this war will be the last. NATO leaders agreed on Friday to deploy military forces to the Baltic states and eastern Poland while increasing air and sea patrols to demonstrate readiness to defend eastern members against the alleged ‘Russian aggression.’ Mikhail Gorbachev reportedly said after the summit that the decisions made at NATO summit in Warsaw should be regarded as a preparation for a hot war with Russia. On Saturday, Gorbachev told Echo Moskvy in an interview that he sticks to what he had said earlier and that he considers NATO decisions short-sighted and dangerous.

“Such steps lead to tension and disruption. Europe is splitting, the world is splitting. This is a wrong path for the global community” He said. “There are too many global and individual crises to abandon cooperation. It is essential to revive the dialogue.” According to the ex Soviet President, by irresponsibly deploying four multinational battalions to Russian borders, “within shooting distance”, the alliance draws closer another Cold War and another Arms Race. “There are still ways to…avoid military action.” Gorbachev stressed. “I would say that UN should be called upon on that matter.” He also called on Moscow not to respond to provocations but to come to the negotiating table. “In the current situation…all political, economic, diplomatic and cultural forces should be engaged to pacify the world. Mind you, the next war will be the last.”

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Closing the net on Tony.

Blair’s Deputy PM Says Iraq Invasion Broke International Law (BBC)

John Prescott, who was deputy prime minister when Britain went to war with Iraq in 2003, says the invasion by UK and US forces was “illegal”. Writing in the Sunday Mirror, he said he would live with the “catastrophic decision” for the rest of his life. Lord Prescott said he now agreed “with great sadness and anger” with former UN secretary general Kofi Annan that the war was illegal. He also praised Labour’s Jeremy Corbyn for apologising on the party’s behalf. Lord Prescott also said Prime Minister Tony Blair’s statement that “I am with you, whatever” in a message to US President George W Bush before the invasion in March 2003, was “devastating”.

“A day doesn’t go by when I don’t think of the decision we made to go to war. Of the British troops who gave their lives or suffered injuries for their country. Of the 175,000 civilians who died from the Pandora’s Box we opened by removing Saddam Hussein,” he went on. Lord Prescott said he was “pleased Jeremy Corbyn has apologised on behalf of the Labour Party to the relatives of those who died and suffered injury”. He also expressed his own “fullest apology”, especially to the families of British personnel who died. The former deputy PM said the Chilcot report had gone into great detail about what went wrong, but he wanted to identify “certain lessons we must learn”.

“My first concern was the way Tony Blair ran Cabinet. We were given too little paper documentation to make decisions,” he wrote. No documentation was provided to justify Attorney-general Lord Goldsmith’s opinion that action against Iraq was legal, he added.

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…and taking all his money too…

Families Of Soldiers Killed In Iraq Vow To Sue Blair For ‘Every Penny’ (Tel.)

Tony Blair will be pursued through the courts for “every penny” of the fortune he has earned since leaving Downing Street, the families of soldiers killed in Iraq vowed. Mr Blair faces a civil law suit over allegations he abused his power as prime minister to wage war in Iraq. The damages, according to legal sources close to the case, are unlimited. A well-placed source told The Telegraph that the Chilcot report appeared to provide grounds for the launch of a lawsuit. “It gives us a lot of threads to pursue and those threads make a powerful rope to catch him,” said the source. So far 29 families of dead soldiers have asked the law firm McCue & Partners to pursue a claim against Mr Blair. Others are expected to come on board.

The firm is looking at bringing a civil case of misfeasance in public office, which would see Mr Blair dragged through the courts for the first time over his decision to take the UK to war. Legal sources say for any case to be successful, lawyers would have to show that Mr Blair “had acted in excess of his powers” and that in doing so “harm has been caused and that the harm could have been predicted”. Sir John Chilcot, in his findings published on Wednesday, said Mr Blair should have seen the problems that resulted from the invasion in 2003 and came as he could to suggesting the military action was illegal.

Mr Blair has earned a fortune estimated at as much as £60 million since resigning as prime minister in 2007, largely through a complex network of companies that offers investment and strategic advice to private companies and international governments. Reg Keys, whose son Tom was one of six Royal Military Police killed at Majar al-Kabir in 2003, said: “Tony Blair has made a lot of money from public office which I believe he misused. He misused the powers of that office and has gone on to make a lot of money after leaving that office, a lot of it from the contacts he made while in Downing Street.”[..] “I would like to see him stripped of every penny he has got. I would like to see him dragged through the civil courts.”

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Runs along the entire south coast of the continent.

Australia’s Other Great Reef Is Also Screwed (Atlantic)

Imagine arriving at a region famed for its forests—the Pyrenees or the Rockies, perhaps—and discovering that all the trees had vanished. Where just a few years ago there were trunks and leaves, now there is only moss. That’s how Thomas Wernberg and Scott Bennett felt in 2013, when they dropped into the waters of Kalbarri, halfway up the western coast of Australia.

They last dived the area in 2010. Then, as in the previous decade, they had swum among vast forests of kelp—a tagliatelle-like seaweed whose meter-tall fronds shelter lush communities of marine life. But just three years later, the kelps had disappeared. The duo searched for days and found no traces of them. They only saw other kinds of seaweed, growing in thin, patchy, and low-lying lawns. “We thought we were in the wrong spot,” says Bennett. “It was like someone had bulldozed the reef. It was like a moonscape underwater—scungy, brown, and empty.”

The culprit—surprise, surprise—is climate change. The waters near western Australia were already among the fastest-warming regions in the oceans before being pummeled by a recent series of extreme heat waves. In the summer of 2011, temperatures rose to highs not seen in 215 years of records, highs far beyond what kelps, which prefer milder conditions, can tolerate. As a result, the kelp forests were destroyed. Before the heat wave, the kelps stretched over 800 kilometers of Australia’s western flank and cover 2,200 square kilometers. After the heat wave, Wernberg and Bennett found that 43% of these forests disappeared, including almost all the kelps from the most northerly 100 kilometers of the range. “It was just heartbreaking,” says Bennett.

“It really brought home to me the impact that climate change can have on these ecosystems, right under our noses.” “They have provided alarming and detailed evidence for one of the most dramatic climate-driven ecosystem shifts ever recorded,” adds Adriana Verges from the University of New South Wales.

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Soon, Australia will have only barren coasts left.

10,000 Hectares Of Mangroves Die Across Northern Australia (ABC.au)

Close to 10,000 hectares of mangroves have died across a stretch of coastline reaching from Queensland to the Northern Territory. International mangroves expert Dr Norm Duke said he had no doubt the “dieback” was related to climate change. “It’s a world-first in terms of the scale of mangrove that have died,” he told the ABC. Dr Duke flew 200 kilometres between the mouths of the Roper and McArthur Rivers in the Northern Territory last month to survey the extent of the dieback. He described the scene as the most “dramatic, pronounced extreme level of dieback that I’ve ever observed”.

Dr Duke is a world expert in mangrove classification and ecosystems, based at James Cook University, and in May received photographs showing vast areas of dead mangroves in the Northern Territory section of the Gulf of Carpentaria. Until that time he and other scientists had been focused on mangrove dieback around Karmuba, Queensland, at the opposite end of the Gulf. “The images were compelling. They were really dramatic, showing severe dieback of mangrove shoreline fringing — areas just extending off into infinity,” Dr Duke said. “Certainly nothing in my experience had prepared me to see images like that.”

Dr Duke said he wanted to discover if the dieback in the two states was related. “We’re talking about 700 kilometres of distance between incidences at that early time,” he said. The area the Northern Territory photos were taken in was so remote the only way to confirm the extent and timing of the mangrove dieback was with specialist satellite imagery. With careful analysis the imagery confirmed the mangrove dieback in both states had happened in the space of a month late last year, coincident with coral bleaching on the Great Barrier Reef. “We’re talking about 10,000 hectares of mangroves were lost across this whole 700 kilometre span,” Dr Duke said.

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It doesn’t get much scarier than this, without insects mankind doesn’t stand a chance: ”..out of 3,623 terrestrial invertebrate species on the International Union for Conservation of Nature [IUCN] Red List, 42% are classified as threatened with extinction.”

Global Insect Populations Fall 45% In Past 40 Years (e360)

Every spring since 1989, entomologists have set up tents in the meadows and woodlands of the Orbroicher Bruch nature reserve and 87 other areas in the western German state of North Rhine-Westphalia. The tents act as insect traps and enable the scientists to calculate how many bugs live in an area over a full summer period. Recently, researchers presented the results of their work to parliamentarians from the German Bundestag, and the findings were alarming: The average biomass of insects caught between May and October has steadily decreased from 1.6 kilograms (3.5 pounds) per trap in 1989 to just 300 grams (10.6 ounces) in 2014.


According to global monitoring data for 452 species, there has been a 45% decline in invertebrate populations over the past 40 years.

“The decline is dramatic and depressing and it affects all kinds of insects, including butterflies, wild bees, and hoverflies,” says Martin Sorg, an entomologist from the Krefeld Entomological Association involved in running the monitoring project. Another recent study has added to this concern. Scientists from the Technical University of Munich and the Senckenberg Natural History Museum in Frankfurt have determined that in a nature reserve near the Bavarian city of Regensburg, the number of recorded butterfly and Burnet moth species has declined from 117 in 1840 to 71 in 2013. “Our study reveals, through one detailed example, that even official protection status can’t really prevent dramatic species loss,” says Thomas Schmitt, director of the Senckenberg Entomological Institute.

Declines in insect populations are hardly limited to Germany. A 2014 study in Science documented a steep drop in insect and invertebrate populations worldwide. By combining data from the few comprehensive studies that exist, lead author Rodolfo Dirzo, an ecologist at Stanford University, developed a global index for invertebrate abundance that showed a 45% decline over the last four decades. Dirzo points out that out of 3,623 terrestrial invertebrate species on the International Union for Conservation of Nature [IUCN] Red List, 42% are classified as threatened with extinction.

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Nov 092014
 


DPC League Island Navy Yard, Philadelphia. USS Brooklyn spar deck 1898

Fed to Markets: Brace for Volatility (WSJ)
Central Banks Warn of Possible Bumpy Ride for Markets (Bloomberg)
US Earnings Outlook Might Be Less Rosy Than Investors Think (Reuters)
Gorbachev Warns US, Allies Put World On ‘The Brink Of A New Cold War’ (FT)
Hungary Under ‘Great Pressure’ From US Over Its Energy Deals With Russia (RT)
Kuroda Sprang Easing Surprise To Head Off Damaging Inflation Forecast (Reuters)
It’s a Bad Time to Be a Saver in Europe (Bloomberg)
We Can Control Risks Facing The Economy, Says China’s Xi Jinping (Reuters)
Sweden Grapples With Massive Household Debt As Rates Hit Zero (Reuters)
UK Condemned Over Arms Sales To Repressive States (Observer)
It’s Official: Spain is Unraveling (Don Quijones)
Catalans Prepare to Open the Polls in Defiance of Spain (Bloomberg)
The Albanian World Cup Gambler Who Robbed The National Vault (Reuters)
Prepare For An Invasion From The North: “Polar Vortex, The Sequel” (CBS)
Harsh Winter Outlook Made More Dire by Siberia Snow (Bloomberg)
Bird Decline Poses Loss Not Just For Environment, But Human Soul (Guardian)

As rate hikes come.

Fed to Markets: Brace for Volatility (WSJ)

Federal Reserve officials are warning investors and foreign central bankers to brace for market turbulence as the Fed prepares to raise short-term interest rates next year. In a speech to central bankers Friday in Paris, Fed Chairwoman Janet Yellen said rate increases, when they materialize in advanced economies, “could lead to some heightened financial volatility.” New York Fed President William Dudley, at the same conference, issued a more detailed alert. “This shift in policy will undoubtedly be accompanied by some degree of market turbulence,” he said of future rate increases in the U.S. “Moreover, it could create significant challenges for those emerging market economies that have been the beneficiaries of large capital inflows in recent years.”

They offered their warnings as the Labor Department released new data showing the U.S. job market is improving faster than the Fed expects. The unemployment rate, at 5.8% in October, was below the 6.3% to 6.6% range the Fed projected last December for the end of 2014. In September, the Fed revised that projection to 5.9%-6.0%, still higher than the October rate. Other metrics being watched closely by the Fed showed continued gains. For instance, the percentage of the U.S. population that is employed rose to 59.2%, its highest level since July 2009. This employment-to-population ratio increased one percentage point from a year earlier, its largest one-year gain since March 1995. The Fed is eyeing rate increases as unemployment declines and slack in the economy slowly diminishes. Higher rates will be aimed at preventing the economy from overheating.

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“Normalization could lead to some heightened financial volatility .. ”

Central Banks Warn of Possible Bumpy Ride for Markets (Bloomberg)

Global central bankers said financial markets could suffer a bout of turbulence – again – when they begin to withdraw monetary stimulus. Janet Yellen and William Dudley of the Fed, Mexico’s Agustin Carstens and Bank of England Governor Mark Carney were among those to use a Paris conference of policy makers yesterday to talk about potential fallout from the eventual shift from record-low interest rates used to revive growth since the global financial crisis in 2008. “Normalization could lead to some heightened financial volatility,” Yellen told the gathering convened by the Bank of France. Carney said “the transition could be bumpy.” The comments suggest central bankers are trying to prepare better for the global effects of any withdrawal than in 2013, when then-Chairman Ben S. Bernanke unexpectedly signaled the Fed could soon start reducing bond purchases. That pushed up yields and rattled investors worldwide in the so-called taper tantrum.

Fed Chair Yellen and Dudley, president of the Fed Bank of New York, recognized the importance of U.S. officials being clear in their plans. “The Federal Reserve will strive to clearly and transparently communicate its monetary policy strategy in order to minimize the likelihood of surprises that could disrupt financial markets,” Yellen said. [..] Given a likely increase in U.S. rates next year will “undoubtedly be accompanied by some degree of market turbulence,” Dudley said the central bank has an obligation to provide global stability. “It is clear in retrospect that our attempts in the spring of 2013 to provide guidance about the potential timing and pace of tapering confused market participants,” Dudley said. With that episode in mind, Carstens said there is a “potential for financial market disruption” amid the unwinding of unconventional monetary policy.

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They’re hot air.

US Earnings Outlook Might Be Less Rosy Than Investors Think (Reuters)

With the U.S. Q3 earnings season almost at an end, many investors are breathing a sigh of relief as more companies surpassed profit expectations than in any quarter since 2010. But some analysts say investors may be brushing off their worries about corporate profits a little too soon. While most S&P 500 companies beat analysts’ expectations for third-quarter earnings, many just barely topped estimates, said Pankaj Patel at Evercore ISI in New York. Of the S&P 500 companies that had reported results as of early this week, 66% exceeded expectations, according to Evercore’s data analysis. But that figure falls to just 43% after stripping away companies that beat expectations by 5% or less, Patel’s research shows. The figure excluding beats of 5% or less is also well below the%age of beats according to data based on Thomson Reuters polls of analysts. On that data, 74% of S&P 500 companies so far have exceeded analysts’ expectations, which is the highest for any quarter since the second quarter of 2010.

Results have come in from 88% of the S&P 500. The results could mean that an increasing number of companies are trying to “manage their beat rate,” possibly to mask profit weakness, Patel said, noting that companies that exceed expectations by 5% or less typically see their share prices decline in the three days following results. “The beat rate is artificially high, but people still watch that %,” Patel said. “They keep buying and the market goes higher.” The S&P 500 has risen more than 3% since Oct. 8, roughly when this earnings season began. The index is up 9.1% from its Oct. 15 low. In addition, analysts’ keep trimming their profit forecasts. Estimates for fourth-quarter earnings are down from the start of the quarter, along with estimates for the first part of 2015. Earnings growth for the fourth quarter now is estimated at 7.6% compared with an Oct. 1 forecast for 11.1% growth, Thomson Reuters data showed. For the 2015 first quarter, profit growth is seen at 8.8%, down from an Oct. 1 forecast for 11.5% growth.

Moreover, the magnitude by which Q4 estimates are falling has increased compared with the previous quarter, said Nick Raich, chief executive officer of The Earnings Scout, a research firm specializing in earnings trends. In outlooks given by companies themselves – done by only a minority of companies – the news is not good. Negative outlooks outnumber positive ones for Q4 so far by a ratio of 3.9 to 1, up from the third quarter’s ratio of 3.3 to 1, Thomson Reuters data showed. “That’s a worsening trend,” Raich said. “The outlooks have gotten a little bit worse this quarter.” Outlooks could become even dimmer if lackluster demand overseas translates into weak results for the fourth quarter. “The United States clearly is the bright spot in the world,” said Uri Landesman, president of Platinum Partners in New York. “The rest of the world isn’t nearly as strong, so demand coming from certain places is weaker, and the currency is going to have an enormous impact going forward.”

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How many western officials have you seen trying to address Gorby’s accusations?

Gorbachev Warns US, Allies Put World On ‘The Brink Of A New Cold War’ (FT)

Former Soviet Union leader Mikhail Gorbachev warned on Saturday that the Ukraine crisis had brought the world to “the brink of a new Cold War”. “The world is on the brink of a new Cold War. Some say it has already begun, ” said the 83-year-old former Kremlin chief in a sombre speech delivered in Berlin at an event to mark the 25th anniversary of the fall of the Berlin Wall this weekend. He was speaking as reports from eastern Ukraine suggested that Kiev’s troops and the Russia-backed rebels may be preparing for renewed fighting. Agency reporters in eastern Ukraine said they saw more than 80 unmarked military vehicles on the move on Saturday in rebel-controlled areas of eastern Ukraine. The apparent escalation threatens the fragile ceasefire agreed in Minsk in early September and increases the danger of further pressure on east-west relations.

Speaking at a conference within a few metres of the iconic Brandenburg Gate, Mr Gorbachev accused the west, led by the US, of “triumphalism” after the fall of the Berlin Wall ended Soviet dominance in eastern Europe. Trust between Russia and the west had “collapsed” in the last few months, he said, highlighting the damage done by the Ukraine crisis. He called for new initiatives to restore trust, including a lifting of personal sanctions imposed by the US and the EU on top Russian officials in response to Moscow’s actions in Ukraine. Mr Gorbachev clearly sees the west as the culprit in the crisis, having given his unequivocal backing to Mr Putin last week. He said, before arriving in Germany, that he was “absolutely convinced that Putin protects Russia’s interests better than anyone else.”

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Hungary PM Orban is an interesting man. The country is doing quite well, relatively.

Hungary Under ‘Great Pressure’ From US Over Its Energy Deals With Russia (RT)

Washington is exerting heavy pressure on Hungary over the country’s decision to give a green light for the construction of the South Stream gas pipeline and expedite the construction by allowing companies without licenses to participate in the project. “The US is putting Hungary under great pressure fearing Moscow’s rapprochement with Budapest,”Hungarian media cited Prime Minister Viktor Orban saying in Munich, Germany after a meeting with Bavarian state premier Horst Seehofer. Orban said that Hungary’s relations with Russia have become “entangled in geopolitical and military and security policy issues,” AFP reports. The PM said that US is retaliating for Budapest’s willingness to endorse the South Stream gas pipeline development as well as a deal that would see Russia’s Rosatom expand Hungary’s nuclear power.

Under a deal worth up to €10 billion Rosatom will build a 2,000 megawatt addition to Hungary’s state-owned nuclear power plant MVM Paksi Atomeromu. Russia is Hungary’s largest trade partner outside of the EU, with exports worth $3.4 billion in 2013. Also it is highly dependent on Russian energy. “We don’t want to get close to anyone, and we don’t intend to move away from anybody,” Orban said.“We are not pursuing a pro-Russian policy but a pro-Hungarian policy,” as expansion of the nuclear plant was the “only possible means” to lower dependence on external energy resources. The PM remained firm that “cheap energy is key in strengthening Hungary’s competitiveness” as he also defended the law which gave a green light for the construction of the South Stream pipeline that would bypass Ukraine as a transit nation in EU gas supply chain. It “ensures Hungary gas supplies by eliminating risks posed by situation in Ukraine,” Orban said.“Even if South Stream does not diversify gas sources, it diversifies delivery routes.”

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A forecast based on slumping oil prices.

Kuroda Sprang Easing Surprise To Head Off Damaging Inflation Forecast (Reuters)

The Bank of Japan Governor not only surprised the markets with his latest splurge of monetary easing. He sprang it on his own board members just two days earlier, jolted into action to stop them making a low-ball forecast that might have sunk his flagship inflation target. To achieve maximum effect for the shock decision, Haruhiko Kuroda and right-hand man Masayoshi Amamiya kept only a handful of elite central bank bureaucrats in the loop as they laid the ground for the expansion of their quantitative and qualitative easing (QQE) program. They didn’t even give the usual forewarning to senior bureaucrats at the Ministry of Finance, according to interviews with nearly a dozen insiders and government sources with knowledge of the bank’s deliberations.

No leaks reached the media, and the announcement at the Oct. 31 policy meeting pushed the Nikkei stock average to seven-year highs and the yen to seven-year lows against the dollar. The market reaction will have been welcome news to Kuroda, but the impact he wanted above all was to alter inflation expectations in a country that has struggled with crippling deflation for two decades. Timing was critical – and not of his choosing. At the policy meeting the board would also issue a new consumer inflation forecast for the next fiscal year, based on the median estimate from the nine members. But two days before publication, the preliminary estimate was only around 1.5%, three of the sources said. That was well below the 1.9% forecast made in July, and if published could have been fatal to his key goal of hitting 2% from April next year.

Since price expectations play a key role in the consumer behaviours that ultimately determine prices, doubts about the target could be self-fulfilling. There were other triggers for action, including October’s plunge in oil prices and the fact that an easing burst would have more market impact in the week the U.S. Federal Reserve decided to turn its own liquidity taps off. But it was the inflation forecast that convinced Kuroda and his aides to go for another burst of stimulus, three sources said. Board members would then have to revisit their estimates in light of the new action.

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“If you’re a central bank, it’s not a good sign when institutions actively seek to deter customers from owning your currency.”

It’s a Bad Time to Be a Saver in Europe (Bloomberg)

In the post-crisis economic environment, with record-low interest rates in many countries, it’s better to be a borrower than a lender, despite Shakespeare’s admonition to be neither. These days, however, it’s even worse to be a saver. Since the European Central Bank in June sought to prod banks to lend more – by imposing negative interest rates on banks’ ECB deposits – savers are discovering that banks aren’t the only ones paying for the privilege of having cash on hand. At least three banks – State Street Corp., Bank of New York Mellon, and Deutsche Skatbank – have introduced negative rates for large euro deposits. It makes financial sense for the banks: If the ECB is charging them 0.2% for holding their cash, banks have a fiduciary duty to try to recoup that cost.

The result is that depositors suffer the consequences of the ECB’s interest-rate tyranny. They would do better to stash their money in mattresses. The ECB addressed the implications of its monetary-policy shift on its website after it cut its deposit rate below zero. It asked the question: “Do I now have to pay my bank to keep my savings for me? What is the effect of this negative deposit rate on my savings?” And then it answered itself:

There will be no direct impact on your savings. Only banks that deposit money in certain accounts at the ECB have to pay. Commercial banks may of course choose to lower interest rates for savers. The ECB’s interest rate decisions will in fact benefit savers in the end because they support growth and thus create a climate in which interest rates can gradually return to higher levels.

So the first sentence turned out to be incorrect. And the final sentence provides scant comfort to a depositor whose hard-earned cash is dribbling away and is too pessimistic about the future of the European economy to find more productive uses for the money, such as spending it or investing it. We’ve been here before, including in 2012 when depositors fled the euro and piled into other currencies. Credit Suisse imposed negative rates on Swiss franc cash balances, for example, and said it would “invite our customers to keep cash balances as low as possible to avoid negative credit charges.” State Street also imposed negative rates on Danish kroner deposits. If you’re a central bank, it’s not a good sign when institutions actively seek to deter customers from owning your currency.

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Sure.

We Can Control Risks Facing The Economy, Says China’s Xi Jinping (Reuters)

The risks faced by China’s economy are “not so scary” and the government is confident it can head off the dangers, president Xi Jinping told global business leaders on Sunday to dispel worries about the world’s second-largest economy. In a speech to chief executives at the Asia Pacific Economic Cooperation (Apec) CEO summit, Xi said even if China’s economy were to grow 7%, that would still rank it at the forefront of the world’s economies. China’s economy, the world’s second-largest, has had a rocky year. Growth slid to a low not seen since the 2008/09 global financial crisis in the third quarter dragged by a housing slowdown, softening domestic demand and unsteady exports. “Some people worry that China’s economic growth will fall further, can it climb over the ridge?” Xi said. “There are indeed risks, but it’s not so scary.

“Even at growth of around 7%, regardless of speed or volume, (we) are among the best in the world,” he said, noting that China’s economy remained “stable”. The remarks from Xi came a day after data showed annual growth in Chinese exports and imports cooled in October, in another sign of fragility in the economy that could prompt policymakers to take further action to stoke growth. To shore up activity, policymakers have loosened monetary and fiscal policies since April to ensure that the economy can grow by around 7.5% this year. A marked slowdown in growth would hit countries all over the world, but especially commodity producers such as Australia, Indonesia and Brazil that have benefited from strong Chinese demand.

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This will not end well. There are limits.

Sweden Grapples With Massive Household Debt As Rates Hit Zero (Reuters)

Sweden’s new center-left government and its financial authorities are under huge pressure when they meet on Tuesday to tackle a mountain of household debt that is casting a long shadow over one of Europe’s few economic bright spots. Having slashed rates to zero to fight the risk of deflation, top Swedish officials are now in a quandary over how to rein in borrowing and house price rises without sending the real estate market into a downward spiral. The country’s AAA-rated economy is still one of Europe’s strongest, with low public debt, sound state finances and banks among the best capitalized and most profitable in Europe. But consumers, barely touched by the financial crisis, have loaded up on cheap mortgages and caused Swedish property prices to triple over the last 20 years, prompting a warning from the IMF that the market is 20% overvalued. Adding to the problem: Sweden has built too few houses for the last 20 years and its capital Stockholm is one of Europe’s fastest growing cities.

Critics say the former center-right government added fuel to the fire by slashing real estate taxes and leaving 30% mortgage tax relief untouched. Meanwhile, Sweden’s household debt-to-income ratio has risen to above 170% – among Europe’s highest. The worry is that private consumption, nearly half of GDP, would suffer if rates rose or property prices fell. “The longer we wait, the bigger the imbalances are,” said Bengt Hansson, analyst at the Swedish National Board of Housing Planning and Building. “We already have a bubble, but we will avoid an even bigger bubble.” It will be hard to dissuade bullish Swedish consumers. In Stockholm’s frenzied housing market, buyers make multi-million crown offers to snap up flats they may only have seen in photographs. And cranes and scaffolding are common sights in suburbia as householders take advantage of generous tax breaks for home improvements.

“We don’t think it will crash badly,” said Peter, a 47 year-old investment advisor, who with his wife Maria has just bought a house in Stockholm for around 12 million Swedish crowns ($1.62 million). “It might stop going up for a while, but over the longer term we expect it to go up,” he added, suggesting the lack of housing and population growth in Stockholm would support prices. Attempts by regulators so far to slow credit growth – squeezing banks by making them put aside more capital and draw up voluntary mortgage pay-down plans – have not worked because interest rates have continued to fall. Last week the central bank cut rates to zero in an attempt to answer criticism that it is not doing enough to tackle another economic risk – deflation – even while it acknowledged the problem that would create in containing household debt. “There is a fairly large consensus that household debt is a concern,” Swedish central bank chairman Stefan Ingves said after the cut. “If households continue to borrow, we could end up with very big problems later on, and this is what we want to avoid.”

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They all do it. We have no morals left.

UK Condemned Over Arms Sales To Repressive States (Observer)

The government has been accused of dishonesty over arms sales as new figures reveal that the value of British weapons sales to “countries of concern” has already hit £60m this year. Former Tory defence minister Sir John Stanley, who chairs the Commons committees on arms export controls, says ministers failed to come clean on a “significant change in policy” that makes it easier to export arms to countries with a poor human rights record. He said in a recent parliamentary debate that the government has not acknowledged that such a change has taken place, and it “should consider most carefully whether they should now offer an apology to the committees”.

The government used to reject arms export licences where there was concern they might be used for “internal repression”, but now a licence will be refused only if there is a “clear risk” that military equipment might be used in violation of international law. Former Foreign Office minister Peter Hain, who established the strict criteria on arms sales, last night demanded that the government be transparent about the change and called for parliament to be allowed a vote. He said: “The present government has run a coach and horses through our arms export controls, circumventing the legislation we put in place by putting a particular spin on it. It has enabled them to sell arms to countries and for purposes that should not be allowed under the legislation.

“There is a clear policy in the legislation that arms should only be sold to countries for defensive purposes and not for internal suppression or external aggression. In the case of Gaza over the summer, that has clearly been flouted. Bahrain is another example.” Data from the Department for Business, Innovation and Skills reveals that in the first six months of 2014 the UK granted licences worth £63.2m of arms sales to 18 of the 28 states on its official blacklist, countries about which the Foreign Office has the “most serious wide-ranging human rights concerns”. Israel, Saudi Arabia, the Central African Republic, Sri Lanka and Russia were among the countries that Britain approved military equipment for.

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How much corruption can one government shake off?

It’s Official: Spain is Unraveling (Don Quijones)

Since taking office in late 2011, Rajoy’s government has been embroiled in one sordid political scandal after another. In the latest episode, the Punica Affair, more than 100 politicians have been arrested and charged with varying acts of white collar crime, including taking kick backs from private sector companies. Payment often came in the form of cash-stuffed envelopes although, as El Confidencial reports, it could also include completely free-of-charge construction work on a politicians’ property, luxury holidays, hunting trips and even an intimate evening or two with a high-class prostitute. Most of the politicians involved in the scandal are – or at least were – members of the governing Popular Party. The rest belong – or at least belonged – to the other partner in Spain’s (until now) two-party system, the not-really-socialist-at-all party, the PSOE.

The good news is that some of Spain’s corrupt politicians and business figures are finally seeing the sharp (or at least not entirely blunt) end of the law. Scores have been arrested and some are even going down. The bad news is that Rajoy’s scandal-tarnished government of self.serving mediocrities still stands, albeit more precariously than ever. In El Pais‘ latest poll of voters’ intentions in next year’s general election, the Popular Party (PP) was, for the first time in decades, relegated to third place. Indeed, the two incumbent parties – the PP and PSOE – were unable to muster 50% of the vote between them. The most popular party in the poll was Podemos, a stridently left-wing political movement founded just at the beginning of this year. In May’s European elections the party picked up five seats; now, six months later, it is apparently the hottest contender for the spoils in next year’s general election, picking up 27% of the votes polled – 6%% more than PP and one more than PSOE.

Lead by Pablo Iglesias, a firebrand (or as the right-wing media like to call him “demagogic”) 35-year-old professor of political science, Podemos has masterfully exploited the general public’s disaffection with a political establishment that serves no one’s interests but its own – and, of course, those of the country’s biggest businesses and banks. The political establishment is quite rightly blamed for stoking and feeding the country’s biggest ever real estate bubble. Thanks to a change in the property laws enacted in 1997 by the Aznar government, local and regional administrations were encouraged to part-finance themselves through granting authorization for ever larger public and private construction projects, many of which turned out to be white elephants (empty toll roads, high-speed train stations planted slap bang in the middle of nowhere, ghost airports…).

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That same corrupt government demands the moral high road when it comes to Catalunya.

Catalans Prepare to Open the Polls in Defiance of Spain (Bloomberg)

In more than 900 towns across Catalonia, an army of volunteers is preparing to open polling stations today and offer compatriots a vote on independence in defiance of Spain’s central government and its highest court. The informal ballot, stripped of legal validity by a Constitutional Court ruling in September, poses two questions: Do you want Catalonia to be a state? And should that state be independent? Separatists led by regional president Artur Mas aim to win a majority in favor of breaking up Spain and use that mandate to force Prime Minister Mariano Rajoy to negotiate. The runup to the vote has been marked by legal salvos: Rajoy’s government reminded public officials in Catalonia of their obligation to respect the Constitutional Court ban as Mas had an appeal to that ruling thrown out by the Supreme Court.

The Catalan government talked of filing a lawsuit against Spain in an international court while an activist group in Madrid responded with its own suit to state prosecutors demanding police halt the balloting. “The Spanish government is being really short-sighted,” said Alex Quiroga, a lecturer in Spanish history at Newcastle University in England. “Continually saying ‘no’ and appealing to the Constitutional Court doesn’t help. It’s clear that only through negotiation can they solve the problem.” Spain’s prosecutor’s office in Catalonia asked regional police to report on any public-sector premises such as schools being used for the vote and to gather information about the persons responsible for allowing their use, according to an e-mailed statement from the prosecutor. It also requested Catalonia’s Education Department to explain whether it asked principals to allow the schools to be used for the vote.

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Great story. “All three keys needed to access the vault were kept in his personal safe.”

The Albanian World Cup Gambler Who Robbed The National Vault (Reuters)

In the end, it wasn’t the security cameras or the audit inspections in the vault of Albania’s central bank that brought down Ardian Bitraj. It was the high blood pressure and lack of sleep, the burden of a multi-million-dollar secret. Sitting down with his boss this July, Bitraj confessed his deception: over a four-year period he had stolen the equivalent of $6.5 million from the vault, covering his tracks by stuffing the empty cash boxes with books and balls of string. The revelation brought down the central bank governor, led to the arrest of 18 employees and tarnished the reputation of an institution once lauded for its professionalism. And all for the sake of a gambling habit that led to massive losses, culminating in a series of fatal bets on the soccer World Cup.

The full story of the Balkan bank heist is only just emerging, gleaned by Reuters in interviews with bankers, investigators and others involved, and from legal documents including a transcript of Bitraj’s confession. It started in May 2010, when Bitraj, who had risen to become head of the cash processing department at the bank, first opened the metal and plastic clasps to the wooden boxes that hold its cash reserves in the cryptically named X Building on the outskirts of the capital Tirana. Bitraj, 45, had a penchant for placing bets on soccer matches, so roughly once a month he would wait for his co-workers to leave the room and swipe up to 2 million leks, roughly $18,000, according to the confession.

Choosing carefully how he returned the boxes, Bitraj would make sure those he had tampered with were not in line for delivery to Albania’s commercial banks, nor likely to be picked on in the regular random audit of the vault. As the thefts mounted, he would stuff the boxes with packaging, balls of string and books to replace the weight of the cash. All three keys needed to access the vault were kept in his personal safe. In statements to police, bank employees said they had not received any directive on how or where to store the keys. Bitraj says auditors checked only 2% of the cash boxes in the vault. Fired governor Ardian Fullani says it was 5%, maintaining that checks in the former communist country were comparable with other central banks in Europe.

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Beware the US economy, or rather the reports and excuses that will be written on the cold.

Prepare For An Invasion From The North: “Polar Vortex, The Sequel” (CBS)

Prepare yourself for an invasion from the north. A blast of polar air is about to send temperatures plunging in the heart of America. It’s the return of the polar vortex that brought misery a year ago. A mass of whirling cold air will dip southward this weekend, sending the mercury plunging. As the cold air moves south and east, it has the potential to affect as many as 243 million people with wind chills in the single digits in some places and snow. It’s all triggered by a Super Typhoon named Nuri. Images from the European Space Station show that Nuri is a growing meteorological bomb blanketing the Bering Sea. The 50-foot waves and 100 mile-an-hour winds will make conditions similar to those we had two years ago, and could make Nuri the biggest storm of the year.

But it would be wrong to think that it will affect only Alaska’s far-flung Aleutian Islands or those famous fishermen who work in the North Pacific. WBBM’s meteorologist Megan Glaros in Chicago explains. “The remnants of Super Typhoon Nuri will create a big buckle in the jet stream,” Glaros says. “And in several days time, it’s going to mean a big dip in the jet which will connect us with a big mass of Arctic air – taking temperatures east of the Rockies down to 10 to 30 degrees below average.” Say “a big mass of arctic air” to anyone who lives in the Midwest and it conjures painful memories of the dreaded polar vortex that hit the region last winter.

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“A rapid advance of Eurasian snow cover during the month of October favors that the upcoming winter will be cold across the Northern Hemisphere …”

Harsh Winter Outlook Made More Dire by Siberia Snow (Bloomberg)

Remember how evidence was mounting last month that early snowfall was accumulating across Siberia? And remember how there’s a theory that says this snowfall signals a cold winter? So in the two and a half weeks since, the news for the winter-haters has, unfortunately, only gotten worse. About 14.1 million square kilometers of snow blanketed Siberia at the end of October, the second most in records going back to 1967, according to Rutgers University’s Global Snow Lab. The record was in 1976, which broke a streak of mild winters in the eastern U.S. In addition, the speed at which snow has covered the region is the fastest since at least 1998. Taken together they signal greater chances for frigid air to spill out of the Arctic into more temperate regions of North America, Europe and Asia, said Judah Cohen, director of seasonal forecasting at Atmospheric and Environmental Research in Lexington, Massachusetts, who developed the theory linking Siberian snow with winter weather.

“A rapid advance of Eurasian snow cover during the month of October favors that the upcoming winter will be cold across the Northern Hemisphere,” Cohen said in an interview yesterday. “This past October the signal was quite robust.” There are a few steps to get from the snows of Siberia to the chills in New York City. Cold air builds over the expanse of snow, strengthening the pressure system known as a Siberian high. The high weakens the winds that circle the North Pole, allowing the cold air to leak into the lower latitudes. The term Polar Vortex actually refers to those winds, not the frigid weather.

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The connection between our souls and our living world was lost in our heads long ago. 147 million fewer sparrows, a drop of 62% of their total population, since 1980; starling numbers have fallen by 45 million or 53%; skylarks are down by 37 million (46%).

Bird Decline Poses Loss Not Just For Environment, But Human Soul (Guardian)

‘That’s a buzzard!” says Richard Gregory, gesturing at a tall birch tree stump 50 metres or so away, from which a flapping streak of brown and white has just disappeared. “That was a buzzard. That’s one of the ones I was telling you about. It’s back.” When Gregory was a young child, toddling around the green bits of Cheshire with a monocular, a glimpse of a buzzard made for a thrilling day out – though he was mad about birds by the age of four, he was in his teens before he ticked the large raptor off his list. Now, though, thanks to reintroduction projects and legal protections, its number and that of several other birds of prey is on the up in Britain.

We glimpse another one, as it happens, a few minutes later, and while I suppose there is just a possibility it was the same bird on a second swoop, I’m counting that as a double sighting. The recovery in recent decades of Britain’s raptor population is welcome for a number of reasons. Firstly, it means I was right after all that time I spotted a red kite while driving up the A1 and everyone else in the car said I was talking rubbish. Secondly, it’s a snatch of good news in what could otherwise seem an unrelentingly grim picture. These are bad days to be a bird. A study released this week found that the most common birds in Europe are declining at an alarming rate, and that is not an idle term.

By studying 30 years of data across 25 countries, conservationists estimated that there are now a brain-boggling 421 million fewer birds flapping across the continent’s skies than were around in 1980. House sparrows alone account for a third of that decline, with 147 million fewer birds, a drop of 62% of their total population; starling numbers have fallen by 45 million or 53%; skylarks are down by 37 million (46%). Yes, the marsh harrier has recovered a bit, and feral pigeons and ring necked parakeets are doing well in cities, but overall, concluded the report, “global biodiversity is undergoing unprecedented decline”, and some of the species taking the hardest hit are birds which were once, not so long ago, abundant in our skies.

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Nov 072014
 
 November 7, 2014  Posted by at 12:53 pm Finance Tagged with: , , , , , , , , , ,  6 Responses »


DPC H.A. Testard Bicycles & Automobiles, New Orleans 1910

EU Dream Unravels 25 Years After The Wall Came Down (Bloomberg)
Not All QE Is Created Equal as U.S. Outpunches ECB And BOJ (Bloomberg)
Asian Currencies Set For A Beating (CNBC)
Could A Strong Dollar Derail Wall Street’s Rally? (CNBC)
Miners Facing ‘Bloodbath’ If Gold Sinks To $1,000 (Telegraph)
Gold Firms Plan Drastic Cuts As Bullion Sinks (Reuters)
Abenomics Pushes Japan Corporate Earnings Toward Record (Bloomberg)
Draghi Stokes Speculation ECB Set to Intensify Stimulus (Bloomberg)
US Investor Sentiment At Highest Level Of 2014 (MarketWatch)
Congress Is In No Hurry To Wind Down Fannie And Freddie (MarketWatch)
Eurozone Governments Look for Spending Boost (Bloomberg)
China Central Bank Pledges Policy Support As Risks To Growth Rise (Reuters)
China Central Bank Confirms New Liquidity Tool as It Holds Off Easing (Bloomberg)
Yuan Bears Say Record Chinese Dollar Debt to Fuel Decline (Bloomberg)
Europe’s Shrinking Conglomerates (Bloomberg)
Luxembourg And Juncker Under Pressure Over Tax Avoidance Deals (Guardian)
EU Auditors Refuse To Sign Off Over £100 Billion Of Its Own Spending (Telegraph)
Gorbachev: Putin Protects Russia’s Interests Better Than Anyone Else (DW)
Ukraine Lurches Back Toward Open War on East Fighting (Bloomberg)

Bloomberg attempts to blame Europe’s troubles on Putin. Unbelievable. Have you no shame? How about journalistic standards?

EU Dream Unravels 25 Years After The Wall Came Down (Bloomberg)

Europe’s post-Cold War order is fraying and there’s no consensus over how to stitch it back together. Some blame the European debt crisis for exposing the folly of the drive for economic unification. Some point to Vladimir Putin for redrawing the map by force and sending his warplanes to buzz NATO borders. For others, the vision of a peaceful, post-national Europe died off with the World War II generation. The makers of European memory will ponder those questions this weekend, marking on Sunday the anniversary of the fall of the Berlin Wall in 1989 and the ensuing euro-euphoria. The lessons of the intervening quarter-century are more sobering. “The easy assumption was that the international liberal order was prevailing,” said Nick Witney, a former head of the European Defence Agency, who is now with the European Council on Foreign Relations in London. “The fact is that those who don’t share those values are coming back. We’re not somehow riding the wheel of history any more than communism was.”

A few of the original builders of the post-Cold War European Union and euro are still at it. The European Commission’s new president, Jean-Claude Juncker of Luxembourg, traces his career back past the 1991 negotiations in Maastricht, the Netherlands that paved the way to the single currency. Juncker’s mission as the EU’s top civil servant is primarily defensive. The turn-of-the-century notion that Europe could export its economic model to places like China, India and Latin America has given way to renewed global power politics with Europe’s heft much diminished. The EU’s stuttering recovery from the debt crisis underlines that weakness. The euro economy will muster 0.8% growth in 2014 after two years of contraction, the commission said this week. It last outperformed the U.S. in 2008 at the start of the financial crisis.

[..] there’s more than enough nationalism to go around in the European heartland. Parties with grievances against immigration, the euro, the EU and a sense of lost identity have made electoral inroads in Britain, France, Greece, Denmark, the Netherlands, Finland, Austria – and even Germany, long seen as immune to bouts of populism. As a result, the map is in flux. While Scotland voted to stay part of the U.K. in a September referendum, all British citizens will have the opportunity to vote themselves out of the EU in 2017 if Prime Minister David Cameron is re-elected next year. Spain is nagged by a separatist movement in Catalonia, its largest regional economy. “This is the worst possible time for geopolitical risk to be hitting the European continent,” Ian Bremmer, head of Eurasia Group, a New York-based risk consultancy, said this week on “Bloomberg Surveillance.” “On the one hand, you have an external environment that is much worse for the Europeans than anyone else. On the other hand, you have internal populism that’s going to make the Europeans grow farther apart.”

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The limited utility of QE outside the US.

Not All QE Is Created Equal as US Outpunches ECB And BOJ (Bloomberg)

It turns out not all quantitative easing is created equal. New stimulus measures at the Bank of Japan and European Central Bank may lack the global punch of the U.S. Federal Reserve, which last week ended its third round of quantitative easing. So investors should pay more attention to the source of the extra cash sloshing around the financial system than to the amounts. “It is unlikely that increased asset purchases by the BOJ and the ECB will be able to provide a full offset to the end of Fed purchases,” says David Woo, head of global rates and currencies at Bank of America Merrill Lynch in New York. His calculations, contained in a Nov. 3 report, show the Bank of Japan’s surprise decision last week to boost its monetary base faster than previously planned will help add another $730 billion to its balance sheet in the next year. Meantime, the ECB’s buying of asset-backed securities and covered bonds should add $410 billion to its accounts annually.

So even with the Fed no longer buying $85 billion a month of assets, the aggregate liquidity provided each month by the three major central banks will next year return to this year’s peak of a little more than $150 billion. That may help cap any climb in market interest rates in 2015, yet won’t be enough to fully soothe markets as when Fed Chair Janet Yellen and colleagues were writing the checks, according to Woo. Woo argues that the Fed’s influence lies in the benchmark role of the dollar and U.S. Treasuries. Secondly, the Bank of Japan’s latest salvo is more about domestic issues such as reforms of the Government Pension Investment Fund than a signal that it wants to make up for U.S. withdrawal. Finally, Japanese and German bond yields are already so close to zero that the effect of purchases by their central banks will be limited. The upshot is that even with the ECB and BOJ spending, investors will probably now treat bad U.S. data such as a weak jobs report more harshly than when they thought economic deterioration spelled more monetary stimulus.

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Thailand, Malaysia, Indonesia: the emerging markets eaten alive by the taper. It’s all going according to plan.

Asian Currencies Set For A Beating (CNBC)

Currencies across Asia are set for a beating, buffeted by a combination of the G3 central banks, a stronger U.S. dollar and newly volatile Chinese yuan, HSBC said. “It will be slim pickings in terms of which Asian currencies to like next year. Even the yuan will be predisposed to bouts of higher volatility, which could further upset the region’s currencies,” HSBC said in a note Thursday. “While we had expected most Asian currencies to trade on the back foot against the U.S. dollar, some are now even starting to underperform the euro.” Many of Asia’s currencies have had a tough week since the Bank of Japan (BOJ) announced a fresh batch of stimulus, with the Singapore dollar shedding 1.5% against the U.S. dollar, the Thai baht losing 1.1%, the Malaysian ringgit dropping 2.2% and Indonesia’s rupiah slipping 0.7%.

Currencies with sound external balances, such as the yuan, Korean won, Taiwan dollar and Singapore dollar, were expected to hold up better against the Federal Reserve’s tapering of its asset purchases this year, HSBC said. But it added, “It has become steadily clearer that Asian currencies are held hostage to more than just the Fed. The ECB has become increasingly important and suddenly so too has the Bank of Japan.” ECB President Mario Draghi this week indicated the central bank may take further aggressive stimulus measures, with many analysts expecting a quantitative easing program, including bond-buying, is in the works. The ECB is already buying asset-backed securities.

Draghi’s comments followed the Bank of Japan’s surprise move last Friday to expand an already large stimulus program by increasing asset purchases. It plans to increase purchases of Japanese government bonds (JGBs) to 80 trillion yen annually from the current 50 trillion yen as well as tripling purchases of exchange-traded funds (ETFs) to 3 trillion yen and tripling Japanese real-estate investment trust (REIT) purchases to 90 billion yen. “This muddies the picture as to which Asian currencies should outperform,” HSBC said. “It only fuels a stronger U.S. dollar and even those Asian currencies with sound external balances (the Korean won, the Singapore dollar and the Taiwan dollar) cannot ride out the storm. It is all proving to be a nasty combination for many Asian currencies.”

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The rally will end anyway, independent of dollar levels.

Could A Strong Dollar Derail Wall Street’s Rally? (CNBC)

A stronger greenback will ultimately hinder the U.S. stock market’s performance as domestic exporters receive less cash for their products abroad, according to Capital Economics. The U.S. dollar hit multi-year highs against several currencies this week, including a seven-year high against the Japanese yen, after Republicans gained control over both chambers of Congress for the first time since 2006, raising hopes of more pro-business policies. At the same time, U.S. stocks have been powering higher. The S&P 500 and Dow Jones hit record highs on Thursday, and are up 9.48% and 5.48% year to date, respectively. “Although the U.S. stock market has rebounded in recent weeks, its upside could by limited if, as we forecast, the rally in the dollar continues,” Capital Economics analysts said.

A stronger greenback means U.S. exporters will be faced with a conundrum: cut profit margins by keeping the foreign currency price of its exports unchanged or risk losing market share by hiking prices abroad. Either way, the dollar’s rise will prove a hindrance, Capital Economics said. Companies selling goods at home, that compete with imports from foreign countries, will also lose out, Capital Economics said. Foreign companies can cut the dollar price of their exports without hurting the value of profits in their home currency, putting them at an advantage and increasing their market share. “Finally, fluctuations in the dollar’s value also affect the earnings of U.S. companies’ foreign affiliates, which are very sizeable… As the dollar rises, those overseas earnings are worth less in U.S. currency,” the analysts added.

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PR to make people buy gold, fearing it will go up in price?

Miners Facing ‘Bloodbath’ If Gold Sinks To $1,000 (Telegraph)

The boss of the largest London-listed gold miner said his industry is suffering and is facing a “bloodbath” if the price of the precious metal sinks to $1,000 an ounce. Mark Bristow, chief executive of Randgold Rresources, said: “The [gold mining] industry is clearly stuffed at $1,140 and it will be a bloodbath at $1,000.” The price of gold is testing four-year lows. It fell again today – down 0.4pc to $1,142.8 per ounce at midday. Mr Bristow, who was speaking at his company’s third quarter results presentation in London, said demand for gold is as strong as ever. However, he beleives that the industry has failed to learn the lessons from a cyclical market and is “pumping out” unprofitable gold into the market after years of expansion.

He believes that the business plans of many companies are based on the price of gold being around $1,300 per ounce. This did not look outlandish when the price hit $1,900 in 2011 but is making things difficult now. Mr Bristow said he doesn’t expect the price of gold to recover any time soon: “Gold at $1,300 is history and big players wil struggle to repay their debts at current prices.” Randgold Resources said third-quarter pre-tax profits were down to $79.6m from $126.6m in the same period last year. The company’s own cash costs for gold production were $692 per ounce during the period, one of the lowest in the industry. “Our business is designed to make profits at $1,000 per ounce, not just survive,” Mr Bristow said.

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“..three quarters of gold mining companies burn cash at spot prices just below $1,200 on an all-in cost basis.”

Gold Firms Plan Drastic Cuts As Bullion Sinks (Reuters)

Struggling gold producers plan increasingly drastic measures such as scrapping dividends, cutting jobs, halting projects and shutting mines to survive the latest price plunge, but not all of them will make it. Gold tumbled to a more than four-year low of $1,137.40 an ounce this week, rekindling memories of last year’s 28% drop to $1,196. That fall put an abrupt end to years of over-spending on expansion projects and forced producers to cut costs. Gold prices recovered early in 2014, but the slide in the past three months to new lows will force companies to step up their efforts to cope. According to Citi analysts, about three quarters of gold mining companies burn cash at spot prices just below $1,200 on an all-in cost basis, which includes head office, interest, permitting and exploration costs. Buenaventura, Medusa and Iamgold are among the highest-cost producers with all-in costs well above $1,300, a Citi note to investors said.

“Everyone has started now to appreciate that the music has stopped and there are only so many chairs,” Mark Bristow, chief executive of gold miner Randgold, said in an interview. He said he was frustrated that not much high-cost production had been shut down so far. “It is questionable whether, without injection of liquidity, the leading companies in our industry can manage their businesses going forward. Everyone is trying to survive in hope that the gold price will go up.” Unlike prices for most other commodities, the gold price does not hinge mostly on demand and supply fundamentals. Instead, it is tied more to global economic factors such as interest rates and inflation and is more subject to investor sentiment, which make its moves more difficult to predict. And gold equities are historically even more volatile than the metal. After outperforming the bullion price for most of this year, gold mining shares have given up all gains to sink much deeper than gold itself.

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It works!

Abenomics Pushes Japan Corporate Earnings Toward Record (Bloomberg)

Japanese companies are headed toward their highest profits ever, as the falling yen boosts exporters from Toyota to Uniqlo-operator Fast Retailing. Aggregate net income at 195 of the largest listed companies will expand 10% to a record 17.5 trillion yen ($153 billion) this fiscal year, based on analyst estimates compiled by Bloomberg. Executives are catching up to such lofty expectations, with Toyota this week raising its profit forecast to an unprecedented 2 trillion yen.

As the earnings season winds down in Japan — almost all companies will have reported results by next week — exporters are emerging as one of the biggest beneficiaries of Prime Minister Shinzo Abe’s economic policies. For investors, the weaker currency is outweighing slumps in wages and local consumption, prompting them to push up the Nikkei 225 Stock Average to levels last seen seven years ago. “Profits were pushed up somewhat surprisingly by the exchange rate recently,” said Tomohiro Okawa, a Japan equities strategist at UBS AG in Tokyo. “Still, there’s not much more that monetary policies can do, and structurally, nothing has changed for these companies.”

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Forget it.

Draghi Stokes Speculation ECB Set to Intensify Stimulus (Bloomberg)

Mario Draghi is stoking investor bets that he’ll intensify stimulus for the euro area after indicating he has the backing of policy makers to do so. With the European Central Bank president yesterday downplaying dissent within his 24-member Governing Council, new preparations for more-expansive action and a €1 trillion ($1.2 trillion) target for boosting the institution’s balance sheet suggest momentum is shifting toward a proposal for broader bond-buying, perhaps in December. The euro fell and southern European bonds rose as Draghi said policy makers are united in trying to revive inflation and highlighted how they’re stepping up their efforts as the U.S. Federal Reserve pulls back. Corporate bonds could be the next target before more-controversial sovereign debt, economists said. “Draghi signaled that additional monetary easing was in the pipeline,” said Nick Kounis, head of macro and financial markets research at ABN Amro Bank in Amsterdam. “Further action could be announced as soon as next month’s meeting.”

The euro area’s central bankers met yesterday in Frankfurt amid claims that Draghi often acts without the backing of them all, and just days after the Bank of Japan ramped up its own stimulus campaign. The question from investors is how much more he can do to boost an economy that risks sliding into its third recession in six years and where inflation is close to becoming deflation. Having already cut interest rates to record lows and saying they can go no lower, Draghi is now focused on boosting the ECB’s balance sheet. He told reporters that he expects to increase assets back toward March 2012 levels, a clearer commitment than previously. That means a goal of €3 trillion, or about €1 trillion more than the current level. The ECB has issued long-term loans to banks and started buying covered bonds in the hope of flooding the economy with enough liquidity to ease credit constraints. Purchases of asset-backed securities are due to start this month.

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Accurate contrarian indicator.

US Investor Sentiment At Highest Level Of 2014 (MarketWatch)

A scary selloff in U.S. stocks that gripped markets last month may seem like a gauzy memory, by now. Major U.S. stock benchmarks are hurtling to new heights. So, have the halcyon days for stocks returned? At first glance, the answer appears to be, yes. Eyeballing the most recent investor-sentiment survey from The American Association of Individual Investors indicates that optimism is at its highest level since Dec. 26, 2013, while pessimism fell to a nine-year low. More than half of people surveyed are optimistic that markets will rise over the next six months, while only 15% expect markets to fall, as the chart included shows.

It’s important to note that many market watchers use the AAII survey as a contrarian indicator. Meaning high optimism can signal that it’s not the best time to be a buyer because the markets are hopped up on a major dose of irrational exuberance. After all, if everyone is already bullish, who’s left to buy? At current levels, optimism is unusually high and pessimism is unusually low, AAII wrote, in a report accompanying its survey results, adding that “historically, such occurrences have been followed by lower-than-average levels of market gains.” The number of people feeling bullish has been rising for the past five weeks, according AAII survey. That’s despite the nasty selloff last month, which reached its nadir in the middle of October. Fueling some of this newfound euphoria has been the cessation of the Federal Reserve’s bond-purchasing program and solid corporate earnings. However, investors may be too late to the stock party, if the AAII survey is an accurate contrarian indicator.

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How to keep home prices at elevated levels.

Congress Is In No Hurry To Wind Down Fannie And Freddie (MarketWatch)

Looking for a reason why U.S. lawmakers might not rush to push through an overhaul of the U.S. housing-finance system that would involve winding down Fannie Mae and Freddie Mac? You’re in luck: There are billions of reasons, according to the companies’ quarterly earnings reports released Thursday. By the end of 2014, the government-sponsored enterprises will have delivered $38 billion more in dividend payments to the U.S. Treasury than they received in bailout money. “The GSEs are a dedicated source of revenue for the federal government and that is unlikely to change anytime soon,” said Isaac Boltansky, an analyst at Compass Point Research & Trading, a Washington-based investment firm. Fannie and Freddie started taking federal bailout funds in 2008, and maxed out at a cumulative total of almost $190 billion several years ago. Due to a legal arrangement, the companies can’t narrow their debt to the government, but they do send periodic payments.

By the end of 2014 Fannie and Freddie will have sent the U.S. Treasury Department a cumulative total of about $225 billion in dividend payments. A strengthening housing market, large tax benefits and legal settlements in recent years have pumped up Fannie and Freddie’s earnings. Because of a controversial amendment to the government’s agreement to help the once-flailing companies, Fannie and Freddie are unable to build capital. Instead, they send their profits to the U.S. Treasury. While U.S. lawmakers may pay lip service to the idea of replacing the two mortgage-finance giants — together Fannie and Freddie back about half of new U.S. mortgages – Congress may dawdle when it comes to slaughtering the cash cows. “GSE earnings today could delay the debt ceiling deadline tomorrow,” Boltansky said.

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They all think governments can make up for the decline in cosumer spending. Fatal flaw.

Eurozone Governments Look for Spending Boost (Bloomberg)

Euro-area governments brainstormed over how to boost the bloc’s flagging recovery as European Central Bank President Mario Draghi urged countries to do more to make their economies more competitive. “The sense of urgency has to become a lot stronger,” Dutch Finance Minister Jeroen Dijsselbloem said at a conference in Brussels today before talks among his euro-area counterparts. “Politicians also have to shape up and get some of the tougher things done to really create an investment climate in Europe which we badly need.” Finance ministers from the 18-nation euro bloc are beginning to converge over the need to fire up investment as growth in the region’s largest countries stagnates and inflation is predicted to remain at less than half the ECB goal of just under 2% this year and next. Draghi today said he’ll be ready to provide more ECB stimulus, while pressuring member states to do their part.

While accommodative monetary policy, such as the unprecedented stimulus measures that the ECB has already pushed through, can help economic activity, “implementation of product and labor-market reforms, as well as actions to improve the business environment for firms, need to gain momentum in several countries,” Draghi told reporters at his monthly press conference after the ECB Governing Council met in Frankfurt today. “Insufficient progress in structural reforms in euro-area countries constitutes a key downward risk to the economic outlook.” Italy, the third-largest euro-area economy in its third recession in six years, is already taking steps to make its economy more competitive, Finance Minister Pier Carlo Padoan, said at the Brussels conference. “In order to have more investment and therefore more growth we need more resources,” he said. This needs “bringing into the field other investors alongside banks, institutional investors, pension funds, insurance companies and so forth, but also leveraging and making the most of the instruments we already have.”

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Why not come clean?

China Central Bank Pledges Policy Support As Risks To Growth Rise (Reuters)

China’s central bank pledged on Thursday to maintain modest policy support to help the world’s second-largest economy weather increasing headwinds in the near term but stressed that it will not flood markets with cash. Yet at the same time, the central bank also said publicly for the first time that it had pumped 769.5 billion yuan ($125.91 billion) worth of three-month loans into banks via a “medium-term lending facility” (MLF) to keep interest rates low. The disbursement of loans was slightly more than the 700 billion yuan expected by many in the market and underscored the risks faced by China’s economy, where third-quarter growth fell to a low not seen since the 2008/09 global financial crisis.

“During the process of economic adjustment, China will see rising downward pressure in its economy and increasing chances of exposure to potential risks in a certain period of time,” the People’s Bank of China said. It promised to stick to its “prudent” stance, fine-tune policy in a timely manner to support the economy, and maintain appropriate liquidity conditions to keep reasonable growth in credit and social financing. Indeed, to protect a wobbly economy from any painful rises in borrowing cost, the central bank said the 769.5 billion yuan worth of loans that were extended to banks in September and October were issued at an interest rate of 3.5%.

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$126 billion in two months.That just go ‘poof’.

China Central Bank Confirms New Liquidity Tool as It Holds Off Easing (Bloomberg)

China’s central bank has published details on its latest tool to provide liquidity as it refrains from across-the-board cuts to benchmark interest rates. The People’s Bank of China confirmed it pumped 769.5 billion yuan ($126 billion) into the country’s lenders in the last two months through a newly-created Medium-term Lending Facility. The PBOC injected 500 billion yuan in September and another 269.5 billion yuan in October via the facility — all termed at three months with an interest rate of 3.5%. The announcement, included in the PBOC’s quarterly monetary policy statement, is the first official confirmation of earlier reports on the injections. Goldman Sachs Group Inc. said every 500 billion yuan in funds from the central bank is similar to a 50-basis-point cut in the required reserve ratio.

“It shows the central bank is very reluctant to loosen monetary policy, but it has to reduce financing costs for end borrowers,” said Guan Qingyou, chief macro-economic researcher with Minsheng Securities Co. in Beijing. “It doesn’t mean the new tools can replace traditional tools forever.” The operations “affected mid-term interest rates while providing liquidity to guide commercial banks to lower their lending rates and overall social-financing costs,” the central bank said in the report published yesterday. “As liquidity generated from capital inflows eases, MLF has played a role of covering the liquidity gap and maintaining a neutral and appropriate liquidity situation.”

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Time to lose the dollar peg?

Yuan Bears Say Record Chinese Dollar Debt to Fuel Decline (Bloomberg)

Yuan bears have added Chinese companies’ record dollar borrowings to the list of reasons why the currency may weaken. Chinese firms raised $196 billion from loans and bonds this year, 11 times more than the $17.7 billion of 2008, data compiled by Bloomberg show. Societe General SA, Daiwa Capital Markets and Royal Bank of Canada predict the yuan, which is headed for its first annual decline in five years, will drop further in coming months as the outlook for rising U.S. interest rates and a weakening Chinese economy exposes the risk of overseas liabilities. The People’s Bank of China engineered a 2.6% decline in the yuan in the first quarter to cut one-way bets on the currency and prepare companies for the risk of exchange-rate weakness.

Daiwa Capital Markets estimates that, in addition to foreign-currency borrowing, $1 trillion of hot money has flooded into China since the Federal Reserve started quantitative easing in 2008, including through shadow-banking channels such as export financing and metals purchases. “Leverage does place China in the higher risk category in the Asian region,” Sue Trinh, a senior currency strategist at Royal Bank of Canada in Hong Kong, said by phone yesterday. “China is making continued progress in reducing reliance on credit and in particular the shadow-banking sector,” she said, adding that the effort “will likely limit the extent to which the yuan will be able to gain.”

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Remnants of times long gone.

Europe’s Shrinking Conglomerates (Bloomberg)

Europe’s biggest conglomerates are slimming down, discarding units that either don’t make enough money or don’t fit with how they see the future. It makes sense to concentrate on fewer industries: There’s no obvious synergy between building power stations and selling hearing aids, or between engineering more fertile seeds and making polycarbonate car parts. It just might herald the start of a second European industrial revolution. It’s certainly set off a massive mergers-and-acquisitions wave. Germany’s Siemens is leading the charge. It has discarded at least five businesses this year to focus on what it calls “electrification, automation and digitalization.” And that’s after more divestments last year than any European industrial company, according to Bloomberg Intelligence. Both Germany’s Bayer and Royal Philips of the Netherlands are abandoning their century-old business roots in a burst of Schumpeterian creative destruction.

Siemens is allowing partner Robert Bosch to take over its appliance business by selling Bosch a 50% stake for €3 billion ($3.75 billion). Siemens is also selling a health data unit for $1.3 billion, a clinical microbiology division for an undisclosed sum, an alarms-and-video surveillance maker, and a hearing-aids business for €2.2 billion. On the acquisitions side, Siemens is muscling up in the markets on which it wants to focus. It paid $7.6 billion for Dresser-Rand Inc. in September to bolster the oil-field equipment division, and $1.3 billion in May for a unit making gas turbines and compressors from Rolls-Royce Holdings. It missed out on the energy assets of France’s Alstom SA, beaten by U.S. giant General Electric’s $17 billion bid. (GE is also slimming down by offloading a consumer appliance business to Sweden’s Electrolux for $3.3 billion earlier this year.)

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Time to lie, Jean-Claude.

Luxembourg And Juncker Under Pressure Over Tax Avoidance Deals (Guardian)

French, German and Dutch finance ministers have rounded on Luxembourg for allowing multinational companies to create complicated structures to avoid billions of dollars of tax. Pressure is also mounting on Jean-Claude Juncker, the new president of the European commission and former long-serving prime minister of Luxembourg, who oversaw the introduction of laws that helped turn the tiny European country into a magnet for multinationals who are seeking to reduce their tax bills. The calls for Luxembourg to stop arranging special deals that help corporations avoid tax came after a vast cache of 28,000 leaked tax papers from the Grand Duchy revealed the country had been rubber-stamping tax avoidance on an industrial scale. Details of the documents were revealed by 80 journalists in 26 countries working with the International Consortium of Investigative Journalists (ICIJ), including the Guardian.

Wolfgang Schäuble, Germany’s finance minister, said the revelations about Luxembourg’s secret tax deals showed that the Grand Duchy had “a lot to do” to meet global standards. The French finance minister, Michel Sapin, said such deals were “no longer acceptable for any country”. He added: “I wish that in a few years we never have to talk about something like this again.” The Netherlands finance minister, Jeroen Dijsselbloem, who is also chair of the Eurogroup of all 18 finance ministers in the eurozone, said that Luxembourg was breaching international tax standards. “Many countries make agreements with companies to provide security. But these agreements need to comply with international standards. We still have some work here.” At Westminster, Margaret Hodge, chair of the Commons public accounts committee, said: “[Juncker has] just taken over the European commission, [yet] he’s presided over the biggest exploitation of European nations in his own little country for decades.”

Despite the criticism, Juncker was said to be “very serene” and “cool”. Juncker, who took over as president of the commission on Saturday after serving 19 years as premier of Luxembourg, was scheduled to take part in a public debate on Thursday in Brussels. But he pulled out on Wednesday night as news organisations prepared to publish the leaked tax documents. Many of the tax deals – secured for companies including Ikea, Pepsi, Burberry, FedEx and Procter & Gamble – were aided by laws written during Juncker’s term of office. The Danish tax minister, Benny Engelbrecht, said the revelations were “shocking”. “Tax payments are down to%ages that are so crazy that you can almost not even describe the challenges that they create for other countries,” Engelbrecht told the Danish paper Politiken.

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“… the Brussels accounts have not been given the all clear for 19 years running.” How insane would you like it?

EU Auditors Refuse To Sign Off Over £100 Billion Of Its Own Spending (Telegraph)

The European Union is accused of “breathtaking hypocrisy” for continuing to demand that David Cameron pays a £1.7 billion bill despite its own auditors failing to give a clean bill of health to more than £100 billion of spending by Brussels According to the annual report of the European Court of Auditors, seen by The Telegraph, £5.5 billion of the EU budget last year was misspent because of controls on spending that were deemed to be only “partially effective” by experts. The audit found that £109 billion out of a total of £117 billion spent by the EU in 2013 was “affected by material error”. It means that the Brussels accounts have not been given the all clear for 19 years running. Treasury sources said that the disclosure shows why the EU needs “urgent reform”. Mr Cameron has said he will refuse to pay “anything like” the £1.7 billion on December 1, despite being threatened with fines by the EU.

The damning finding by the auditors emerged as senior figures in Brussels criticised Mr Cameron for refusing to pay the bill, which was demanded because of the success of Britain’s economy. The audit concluded that the European budget needed better management at a time of “continuing pressure on EU and national finances”. “More can and should be done to ensure money is spent according to rules,” it said. Among the examples of misspent money was funding used to buy helicopters to help Spain defend Europe’s borders against entry by illegal immigrants. “[Auditors] examined a project in Spain which consisted of the purchase of four helicopters, to be used 75% of their operating time for EU border surveillance and control. However, the ECA found the helicopters were only used 25% of the time for this purpose,” said the report. In another case, the commission handed out £1.4 million in funding for social development in Moldova “for which no underlying expenditure had been incurred”.

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Gorbachev was never a big fan of Putin’s. But he knows the US “.. have different plans, they need a different situation, one that would allow them to meddle everywhere.”

Gorbachev: Putin Protects Russia’s Interests Better Than Anyone Else (DW)

Former Soviet leader Mikhail Gorbachev said he will defend Russia’s policy in Ukraine and President Vladimir Putin when he meets with top German officials this week, for the festivities marking the 25th anniversary of the fall of the Berlin Wall. “I am absolutely convinced that Putin protects Russia’s interests better than anyone else,” Gorbachev said. The last leader of the USSR is set to meet German Chancellor Angela Merkel and President Joachim Gauck during the ceremony, which comes at a time of bitter confrontation between Russia and the West. Gorbachev also said that the current Ukraine crisis provided an “excuse” for the United States to pick on Russia.

“Russia agreed to new relations, [and] created new cooperation structures. And everything would be great but not everyone in the United States liked it,” he said in an interview with the Interfax news agency on Thursday. “They have different plans, they need a different situation, one that would allow them to meddle everywhere. Whether it will be good or bad, they don’t care,” Gorbachev said, referring to Washington. The 83-year-old is widely praised for his decision not to use force to stop the wave of changes in Eastern Europe during the final years of the Cold War. He is also credited for the reforms of glasnost (openness) and perestroika (restructuring) after coming to power in 1985, and allowing the Wall to fall in 1989, thus effectively ending the Cold War. He has often criticized Vladimir Putin for his authoritarian style of government. A quarter century after the fall of the Iron Curtain, many former Soviet officials say they feel betrayed by the West.

Several politicians from that era have told the AFP news agency that the reunification of Germany was allowed only under the condition that NATO would not expand to the east, into an area traditionally considered a Russian sphere of influence. Former Gorbachev advisor Anatoly Chernyaev swears that he personally witnessed a pledge from Washington to the Soviet leader not to enlarge NATO. “With my own ears, I heard Secretary of State James Baker promise Gorbachev on February 9, 1990 in the Kremlin’s Catherine the Great hall that NATO would not extend ‘even an inch’ to the east if we accepted the entry of a unified Germany into the alliance,” he said. Western leaders from the same period have rejected claims that such a deal with the Kremlin ever existed.

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The west is not interested in peace.

Ukraine Lurches Back Toward Open War on East Fighting (Bloomberg)

Ukraine’s east lurched back toward open war as the government in Kiev and pro-Russian rebels accused each other of starting major offensives in the region. The Ukrainian government said there were 26 outbreaks of fighting yesterday between its forces and separatists in the east, while the rebels said the Kiev government’s troops had gone on a large-scale military push there. The standoff is coming to a head after Ukraine and its allies accused separatists of undermining peace efforts with Nov. 2 elections in Donetsk and Luhansk. Russian President Vladimir Putin said Nov. 5 that Ukraine’s “civil war” isn’t subsiding as cities continue to come under shelling and the civilian death toll rises.

“Both Ukrainian government and separatist forces must immediately stop carrying out indiscriminate attacks in violation of the laws of war,” said John Dalhuisen, Europe and Central Asia director of Amnesty International in a report posted on the human rights group’s website yesterday. “They have killed and injured civilians, and destroyed civilian homes, and there would appear to be little impetus on both sides to end these violations.” Ukrainian troops are sticking to the cease-fire worked out two months ago and are “staying at their previous positions,” the military press office said in a statement on its Facebook page. It said three Ukrainian servicemen were killed yesterday. Russia’s RIA Novosti state news agency quoted Andrei Purgin, deputy premier of the self-proclaimed Donetsk People’s Republic, as saying that Ukraine had begun a large-scale offensive against the separatists in the east. Purgin said he sees “all-out war” and claimed Ukrainian forces had broken the Sept. 5 truce, according to RIA.

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