Feb 022017
 
 February 2, 2017  Posted by at 11:01 am Finance Tagged with: , , , , , , , , , ,  2 Responses »
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Pablo Picasso The Bull state VII 1945


200 Years of US Immigration Data Put Trump’s Ban Into Context (Stat)
Australia PM Turnbull Denies Trump ‘Hang Up’ (Sky)
Will Donald Trump Reverse The War On Cash? (IM)
Problems ‘Resolved’ For German Dual Citizens Under Trump’s Travel Ban (Loc.)
German Current Account Surplus To Hit Record, World’s Largest In 2016 (R.)
Switzerland’s Record Surplus Raises Questions Amid Trump Trade Agenda (WSJ)
Dutch Will Count All Election Ballots By Hand To Thwart Hacking (AFP)
Renegotiating NAFTA Is A Good Idea – For Mexico (Coppola)
Trump Is Being Sabotaged by the Pentagon (PCR)
US Veterans: Dakota Pipeline Won’t Get Completed. Not On Our Watch (CNBC)
Turkish Air Force Jets Violate Greek Air Space 138 Times In One Day (IBT)

 

 

Wonderful graph even like this. Click the link to see the larger interactive one.

200 Years of US Immigration Data Put Trump’s Ban Into Context (Stat)

President Trump’s temporary ban on immigration from seven Muslim-majority nations — Iran, Iraq, Libya, Somalia, Syria, Sudan, and Yemen — is big news right now. And its effects are being felt widely throughout the worlds of science and medicine. Observing the fervid debate as someone who has recently had firsthand experience with the immigration system, I was interested in seeing as much of the larger immigration trends as government data permitted. In the interactive data visualization below, each country or region of last residence is represented by color, in a stream whose thickness represents the number of people arriving from that area in a given year. Immediately, two things stand out: boom and bust in the immigration rate (it’s easy to assume that it has always been increasing) and the new diversity of immigrants after World War II.

Immigration collapsed after the 1924 Immigration Act, which restricted entrants from Southern and Eastern Europe, severely limited African immigration, and prohibited it from East Asia, India, and the Arab world. The Immigration and Nationality Act of 1965, which removed national origins quotas imposed by the 1924 act, led to the diversity of the immigrant population that we see to this day. That diversity is reflected in the data visualization in the flowering of a completely new range of colors directly after the act was passed. Regardless of the political moves ahead, nearly 200 years of immigration suggests that no one leader or piece of legislation is capable of staunching the diverse flow of immigrants to the US.

The x axis displays years, the y axis displays the number of immigrants (in millions), and each country or region of last residence is represented by its own color and stream whose thickness represents the number of people from that area becoming legal permanent residents in a given year.

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Oz media say Turnbull stood his ground. Lots of ‘reports’ by people who were not present.

Australia PM Turnbull Denies Trump ‘Hang Up’ (Sky)

Donald Trump has blasted as ‘dumb’ a refugee deal between Australia and the United States, but Prime Minister Malcolm Turnbull is confident the president won’t backflip on their agreement. An explosive tweet from Mr Trump has once again cast doubt on the deal, in which the US would take refugees currently held on Manus Island and Nauru in return for Australia accepting refugees from Central America. ‘Do you believe it? The Obama Administration agreed to take thousands of illegal immigrants from Australia. Why? I will study this dumb deal!’ the US president tweeted on Thursday. Mr Turnbull said despite the president’s tweet, he had received multiple assurances from Mr Trump, his press secretary and the US embassy the deal would be progressed. ‘This is not a deal that he would’ve done or that he would regard as a good deal,’ Mr Turnbull told Fairfax radio. ‘But the question is, will he commit to honour the deal? And he has given that commitment.’

The prime minister wouldn’t tell Sydney radio Macquarie Radio whether Mr Trump had labelled the deal dumb or otherwise in their phone conversation on Sunday, but has denied reports the call ended abruptly or in anger. ‘I want to make one observation about it, the report the president hung up is not correct, the call ended courteously,’ he said. The US president reportedly told Mr Turnbull he was ‘going to get killed’ politically and accused Australia of seeking to export the ‘next Boston bombers’, according to senior US officials quoted by The Washington Post. Mr Turnbull said the deal with the former president was always for the Americans to use their own vetting processes and determine how many of the people on Nauru and Manus Island would be resettled. ‘It wasn’t a commitment to take everybody sight unseen,’ he said. ‘It is possible they could take a smaller number or a larger number – it will depend on the assessments.’

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That would be a no. The discussion is more about globalism than Trump or cash.

Will Donald Trump Reverse The War On Cash? (IM)

Jason Burack : It seems that globalism may be on the retreat. What’s your opinion about that, in light of Brexit, Donald Trump winning, and the Italian referendum failing?
Nick Giambruno : I think you’re right, Jason. Right now globalism is on the decline. But let’s define “globalism” before I explain why. This word gets thrown around a lot. But most people don’t really know what it means. It’s very simple. Globalism is the centralization of power into a couple of global institutions: the EU, the United Nations, the IMF, the World Bank, NAFTA, NATO, and so on. It’s really just a polite way of describing world government, or what George H.W. Bush termed the New World Order. I think globalism and the centralization of power is always a bad thing. People who value individual freedom and economic freedom… really, freedom in general, should oppose it. It’s an interesting moment in history. Those three things you just mentioned—Brexit, Trump, and the failure of the Italian referendum—are clear signs that globalism is losing steam. Whether it’s a sort of one step back, two steps forward thing or the ideology of globalism is really on its way out remains to be seen.

[..] Italy hasn’t had any real economic growth since it joined the euro in 1999. That’s pretty profound. The Italian economy is in the same place it was 17 years ago. A lot of that is because the euro makes Italy uncompetitive with countries like Germany. The next Italian government could be a coalition of anti-EU populist parties. If that happens, there’s an excellent chance Italy could leave the euro. Keep in mind that Italy is a core member of the euro. If it leaves, France would probably leave, too. And if that happens, the euro is finished.

Jason : Without the euro, what’s left holding the EU together?
Nick Giambruno : Almost nothing. The euro is the main glue. Without it, the whole EU could unravel. We’re still early in the process. But it doesn’t look good for the globalists and the Eurocrats. I think historians will look back at the failure of the December 4 Italian referendum as a crucial tipping point. With globalism failing, I’m not sure what happens next. No one does. We could see a rise of nationalism, which wouldn’t be a good thing. Or political power could diffuse even further, which would be a better outcome. Decentralization is good for individual and economic freedom.

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Canada, Australia, Germany, who’s next?

Problems ‘Resolved’ For German Dual Citizens Under Trump’s Travel Ban (Loc.)

American President Donald Trump’s travel ban initially looked to block more than 100,000 German dual citizens from entering the US, but now the two allies say they have found a solution. Acting commissioner of US Customs and Border Protection, Kevin McAleenan, said on Tuesday that travelers would be evaluated based on the passport they present rather than their dual citizen status, even if they have citizenship in one of the seven predominantly Muslim countries with temporary blocks. This was the first clarification about what the bans mean for people with dual citizenship, after US embassies, including Berlin’s, issued statements indicating that dual citizens were included in the bans.

The update on Tuesday means that people who are citizens of one of the seven countries as well as another country not named in the ban will be able to enter the US. EU migration commissioner Dimitris Avramopoulos explained that this applies to people with European citizenship. “[I am] glad that issue of EU dual nationals is resolved,” Avramopoulos wrote on Twitter. Trump’s executive order issued on Friday suspends all refugee admissions into the United States for 120 days, bars all Syrians indefinitely, and blocks citizens of seven mostly Muslim countries for 90 days. German politicians were concerned about what it would mean for the more than 130,000 dual citizens, including the Green party’s German-Iranian representative Omid Nouripour, who is the vice chair of a German-American parliamentary group.

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The victims of this German economic imperialism are not in the US, but in southern Europe.

German Current Account Surplus To Hit Record, World’s Largest In 2016 (R.)

Germany’s current account surplus is expected to have hit a new record of $297 billion in 2016, overtaking that of China again to become the world’s largest, the Munich-based Ifo economic institute said on Monday. This would be equivalent to 8.6% of total output, which means it would once again breach the European Commission’s recommended upper threshold of 6%. In 2015 the current account surplus stood at $271 billion. The European Commission and the United States have urged Germany to lift domestic demand and imports to help reduce global economic imbalances and fuel global growth, including within the euro zone. Germany rejects such criticism, saying it already lifted domestic demand by introducing a national minimum wage in 2015 and agreeing on a strong hike in pension entitlements in 2016. In addition, the government has increased state spending on roads, digital infrastructure and asylum seekers while sticking to its goal of keeping a balanced budget.

Asked about Ifo’s estimate, a spokeswoman for the economy ministry said the government views the surplus as high but the imbalance was not excessive. “The federal government shares the view of the European Commission that the German current account surplus has to be assessed as high – but it doesn’t represent an excessive imbalance,” spokeswoman Tanja Alemany Sanchez de Leon said. She added that Germany’s current account surplus with other euro zone countries halved to some 2% of GDP in 2015 from roughly 4% in 2007. “That shows there is a reduction of trade imbalances within the euro zone,” the spokeswoman said, adding that 44% of Germany’s current account surplus was due to business relations with the United States and Britain. Ifo estimated China’s current account surplus at $245 billion last year due to weaker exports. By contrast, the United States is predicted to have the world’s largest capital imports, with a deficit of $478 billion for 2016, Ifo said.

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But Switzerland doesn’t count.

Switzerland’s Record Surplus Raises Questions Amid Trump Trade Agenda (WSJ)

Switzerland’s exports to the U.S. surged last year to a record high, pushing the trade surplus higher and putting the Alpine export powerhouse in a potentially uncomfortable position amid rising protectionist sentiment in the U.S. The figures come alongside heightened attention brought by President Donald Trump to bilateral trade balances and the policies countries have pursued to weaken their currencies against the dollar to gain a competitive edge. Switzerland has largely escaped much focus in the U.S. and is unlikely to be in the new administration’s crosshairs now, given its relatively small size. Still, its swelling surplus, and the Swiss National Bank’s multiyear efforts to weaken the franc, could at a minimum raise questions as to why the U.S. may treat some countries like China and Mexico more harshly than others down the road when it comes to trade.

Switzerland’s overall trade surplus was 37.5 billion Swiss francs ($37.6 billion) last year, the country’s customs office said Thursday, up one billion francs from 2015 and an all-time high. Nearly half of that surplus—17.2 billion francs—came from the U.S., as Swiss exports there jumped 15% to 31.5 billion francs. Switzerland ran smaller trade surpluses with Japan and the Middle East, while it had trade deficits with Germany and China. “Looking forward if this is truly Donald Trump’s agenda to level the playing field, Switzerland has to be on that list,” said Peter Rosenstreich at Swissquote Bank. [..] Switzerland’s current account surplus was 9% of GDP in 2016, according to IMF estimates, well above the 3%-of-GDP level the Treasury considers material. Meanwhile, Switzerland has in recent years engaged in one-way interventions to weaken the franc, thereby making Swiss exports more competitive in world markets. The Swiss National Bank has for years said the franc was significantly overvalued.

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There we go. The fear of Russia goes a long way.

Dutch Will Count All Election Ballots By Hand To Thwart Hacking (AFP)

Dutch authorities will count by hand all the votes cast in next month’s general elections, ditching “vulnerable” computer software to thwart any cyber hacking bid, a senior minister has said. “I cannot rule out that state actors may try to benefit from influencing political decisions and public opinion in the Netherlands,” interior minister Ronald Plasterk said in a letter to parliament on Wednesday. On 15 March, the Netherlands kicks off a year of crucial elections in Europe which will be closely watched amid the rise of far-right and populist parties on the continent. Dutch officials are already on alert for signs of possible cyber hacking following allegations by US intelligence agencies that Russia may have meddled in November’s US presidential polls to help secure Donald Trump’s victory.

Plasterk told parliament that fears over “the vulnerabilities of the software” used by the country’s election committee “had raised questions about whether the upcoming elections could be manipulated”. He insisted in a letter to MPs that “no shadow of a doubt should hang over the results” of the parliamentary polls, which some analysts predict could result in a five-party coalition. Therefore the interior ministry and the election committee had decided “to calculate the results based on a manual count”. Plasterk told broadcaster RTL that possible external actors included Russia. “Now there are indications that Russians could be interested, for the following elections we must fall back on good old pen and paper,” he said.

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NAFTA increased immigration.

Renegotiating NAFTA Is A Good Idea – For Mexico (Coppola)

[..] perhaps there just aren’t that many jobs going across the border. Certainly not enough to occupy all the Mexicans looking for work. Yet we know significant numbers of jobs HAVE relocated to Mexico: employment in automobile manufacture, for example, has quadrupled since 1994. Clearly something is very wrong. The figures just don’t make sense. Jobs have gone from the U.S. to Mexico, but people continue to migrate from Mexico to the US in search of work, though the rate has slowed dramatically in recent years. In fact Mexico has become somewhat dependent on its migrants: it now receives more foreign currency from migrant remittances than it does from exports of crude oil. This is mainly because of falling oil prices and production since 2014. But it also reflects a distorted and unhealthy economic relationship between Mexico and the U.S.

The truth is that NAFTA has been a rotten deal, not for the U.S. but for Mexico. Firstly, NAFTA did not establish a level playing field for agricultural production. It ended tariffs, but not subsidies. Mexico opened its borders to American agricultural exports, particularly corn. But America continued to subsidize the production of corn: between 1995-2014, corn subsidies totaled nearly $95bn. Coupled with America’s higher productivity, the subsidies made it impossible for Mexican farmers to compete. Agricultural employment dropped 19% between 1994 and 2007, a loss of about 2 million jobs, mostly in family farms. There was a corresponding increase in seasonal work, as agricultural production shifted to fruit and vegetable production, so the unemployment figures perhaps did not rise as much as might have been expected.

But Americans mourning the loss of steady well-paid manufacturing jobs surely should be the first to appreciate that seasonal work is no substitute for steady family farm employment. Unsurprisingly, Mexicans headed for the border. Between 1994 and 2000, emigration to the U.S. rose by 79%, though it slowed somewhat due to recession and increased border security after the 9/11 attacks. Secondly, NAFTA has rendered the Mexican economy entirely dependent on the U.S. Over 80% of Mexico’s exports go to the U.S., and about half of its imports come from there. Mexico is deeply integrated in U.S. supply chains, particularly manufacturing production. The IMF observes that Mexican and American industrial production are co-integrated and follow a common cycle. Increases in American economic output are transmitted one-for-one to Mexican output.

[..] Mexico is thus highly sensitive to changes in US policy and unable to protect itself from U.S.-generated economic shocks: the 2008 financial crisis in the US caused a shock to trade which knocked 6% out of the Mexican economy in 2009, though it bounced back quickly. Any attempt by the U.S. to decouple itself from Mexico through trade tariffs and impediments to financial flows would be likely to have a dramatic impact on the Mexican economy. This toxic dependence is to a large extent caused by NAFTA. Indeed, we might say that it was NAFTA’s primary purpose. And it unquestionably benefits the U.S. more than Mexico. Any small supplier to a giant corporation could tell you that being completely dependent on a single buyer is not a good situation. Diversification is strength. This is true for countries as much as businesses. By discouraging diversification, NAFTA has done Mexico no favors.

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By NATO.

Trump Is Being Sabotaged by the Pentagon (PCR)

President Trump says he wants the US to have better relations with Russia and to halt military operations against Muslim countries. But he is being undermined by the Pentagon. The commander of US forces in Europe, General Ben Hodges, has lined up tanks on Poland’s border with Russia and fired salvos that the general says are a message to Russia, not a training exercise. How is Trump going to normalize relations with Russia when the commander of US forces in Europe is threatening Russia with words and deeds? The Pentagon has also sent armored vehicles to “moderate rebels” in Syria, according to Penagon spokesman Col. John Dorrian. Unable to prevent Russia and Syria from winning the war against ISIS, the Pentagon is busy at work derailing the peace negotiations.

The military/security complex is using its puppets-on-a-string in the House and Senate to generate renewed conflict with Iran and to continue threats against China. Clearly, Trump is not in control of the most important part of his agenda—peace with the thermo-nuclear powers and cessation of interference in the affairs of other countries. Trump cannot simultaneously make peace with Russia and make war on Iran and China. The Russian government is not stupid. It will not sell out China and Iran for a deal with the West. Iran is a buffer against jihadism spilling into Muslim populations in the Russian Federation. China is Russia’s most important military and economic strategic ally against a renewal of US hostility toward Russia by Trump’s successor, assuming Trump succeeds in reducing US/Russian tensions.

The neoconservatives with their agenda of US world hegemony and their alliance with the military-security complex will outlast the Trump administration. Moreover, China is rising, while the corrupt and dehumanized West is failing. A deal with the West is worth nothing. Countries that make deals with the West are exposed to financial and political exploitation. They become vassals. There are no exceptions. Russia’s desire to be part of the West is perplexing. Russia should build its security on relations with China and Asia, and let the West, desirous of participating in this success, come to Russia to ask for a deal. Why be a supplicant when you can be the decider?

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They mean business. So does the other side.

US Veterans: Dakota Pipeline Won’t Get Completed. Not On Our Watch (CNBC)

A group of U.S. military veterans has vowed to block completion of the hotly disputed Dakota Access pipeline, despite the secretary of the Army giving the project the green light. “We are committed to the people of Standing Rock, we are committed to nonviolence, and we will do everything within our power to ensure that the environment and human life are respected. That pipeline will not get completed. Not on our watch,” said Anthony Diggs, a spokesman for Veterans Stand. Diggs added that the group hopes to raise enough funds “to have a larger, solid boots-on-the-ground presence.” The secretary of the Army instructed the U.S. Army Corps of Engineers to grant Energy Transfer Partners the easement it needs to complete the final stretch of its $3.7 billion pipeline, Sen. John Hoeven and Rep. Kevin Cramer, both of North Dakota, said Tuesday.

President Donald Trump last week signed executive actions to advance construction for Dakota Access and another disputed pipeline. Veterans Stand has raised $37,000 since launching a GoFundMe campaign last week. Part of that money will go to “basic transport of supplies and personnel,” Diggs told CNBC. The Standing Rock Sioux tribe also on Tuesday vowed to mount a legal challenge claiming the Corps lacks the statutory authority to stop an environment review and issue the easement. The tribe opposes construction, saying the pipeline passes beneath a source for its drinking water and construction would disrupt sacred land. Their campaign has drawn thousands of protesters to camps near Cannon Ball, North Dakota, in recent months. To abandon the study “would amount to a wholly unexplained and arbitrary change based on the president’s personal views and, potentially, personal investments,” the tribe said in a statement.

It’s difficult to argue that the secretary of the Army lacks the authority to grant the easement, said Bruce Huber, an associate professor of law at the University of Notre Dame who specializes in environmental law. However, any halt to the environmental study will face a high burden proof, he said. That’s because the Army’s assistant secretary for civil works is on the record as saying other routes should be explored and an environmental study is the best way to do that. In December, the Corps denied the easement and said the best path forward would be to consider alternative routes for the project by conducting an environmental review with public input and analysis. “That’s an unclear bit of law there, whether the process can simply be terminated,” Huber said. “You can bet your bottom dollar it will be litigated.”

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Merkel’s in Turkey today. She better put a stop to this while she has the chance. She cannot risk war in the region.

Turkish Air Force Jets Violate Greek Air Space 138 Times In One Day (IBT)

Greece intercepted 138 incursions into its air space by Turkish air forces on Wednesday (1 February) amid mounting tensions between the neighbouring countries. The unusually high number of incursions took place over islands in the central and southern Aegean and were condemned by Greek Defence Minister Panos Kammenos as reckless. “We want peace, we are not looking for a fight or for trouble in the Aegean, but there won’t be an aircraft which will not be intercepted,” Reuters quoted him as saying. Long-time regional rivals – notably over Cyprus – Greece and Turkey almost went to war in 1996 over two islets, Imia and Kardak, situated west of Bodrum and north of Kos in the Aegean Sea. On Wednesday (Feb 1) Kammenos flew over the area and threw a wreath in the sea to commemorate the death of three Greek officers in a helicopter crash in the 1996 incident.

The gesture followed Turkish military chiefs paying respects on Sunday (Jan 29). During the incident, a Turkish admiral reportedly refused to sink Greek ships. This time however a senior Turkish politician warned Turkey would respond with force if Greece started “playing games” over the disputed islets. According to Hurriyet, Justice and Development (AKP) Izmir deputy Hüseyin Kocabıyık warned: “I am warning Greece: You were saved owing to a cowardly [Turkish] admiral in 1996. Do not play the Kardak game with us. We will shoot you!”. The two countries are also at loggerheads over an asylum claim by eight Turkish military officers accused of involvement in the attempted coup in July 2016. A Greek court has blocked the extradition of the men back to Turkey, with Supreme Court judge Giorgos Sakkas ruling on Thursday (26 January) that they would not receive a fair trial in their homeland.

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Jan 102017
 
 January 10, 2017  Posted by at 11:07 am Finance Tagged with: , , , , , , , ,  4 Responses »
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Jack Delano Truck service station on U.S. 1, NY Avenue, Washington, DC 1940


Pity the Sad Legacy of Barack Obama (Cornel West)
State Dep.: Presenting Evidence Of Russian Hacking Would Be Irresponsible (ZH)
Breakaway Senate Republicans Push to Delay Obamacare Repeal (BBG)
If Trump Tries To Lower Drug Prices, God Help Him: Top Medicare Official (MW)
Democrats Seek 9/11-Style Commission To Investigate Russian Hacking (G.)
Jeremy Corbyn: UK Can Be Better Off Out Of The EU (G.)
Britain’s Dangerous Post-Brexit Borrowing Binge (BBG)
Shadow Lending Leaves Chinese Banks Looking Exposed (BBG)
Thousands Of US Troops Arrive In Europe (ZH)
Top Economists Grapple With Public Disdain (WSJ)
The Harsh Reality (Kath.)
European Commission: ‘Untenable’ Situation In Greek Refugee Camps (AP)

 

 

“..a depressing decline in the highest office of the most powerful empire in the history of the world.”

Pity the Sad Legacy of Barack Obama (Cornel West)

Eight years ago the world was on the brink of a grand celebration: the inauguration of a brilliant and charismatic black president of the United States of America. Today we are on the edge of an abyss: the installation of a mendacious and cathartic white president who will replace him. This is a depressing decline in the highest office of the most powerful empire in the history of the world. It could easily produce a pervasive cynicism and poisonous nihilism. Is there really any hope for truth and justice in this decadent time? Does America even have the capacity to be honest about itself and come to terms with its self-destructive addiction to money-worship and cowardly xenophobia?

Ralph Waldo Emerson and Herman Melville – the two great public intellectuals of 19th-century America – wrestled with similar questions and reached the same conclusion as Heraclitus: character is destiny (“sow a character and you reap a destiny”). The age of Barack Obama may have been our last chance to break from our neoliberal soulcraft. We are rooted in market-driven brands that shun integrity and profit-driven policies that trump public goods. Our “post-integrity” and “post-truth” world is suffocated by entertaining brands and money-making activities that have little or nothing to do with truth, integrity or the long-term survival of the planet. We are witnessing the postmodern version of the full-scale gangsterization of the world. The reign of Obama did not produce the nightmare of Donald Trump – but it did contribute to it. And those Obama cheerleaders who refused to make him accountable bear some responsibility.

A few of us begged and pleaded with Obama to break with the Wall Street priorities and bail out Main Street. But he followed the advice of his “smart” neoliberal advisers to bail out Wall Street. In March 2009, Obama met with Wall Street leaders. He proclaimed: I stand between you and the pitchforks. I am on your side and I will protect you, he promised them. And not one Wall Street criminal executive went to jail. We called for the accountability of US torturers of innocent Muslims and the transparency of US drone strikes killing innocent civilians. Obama’s administration told us no civilians had been killed. And then we were told a few had been killed. And then told maybe 65 or so had been killed. Yet when an American civilian, Warren Weinstein, was killed in 2015 there was an immediate press conference with deep apologies and financial compensation. And today we still don’t know how many have had their lives taken away.

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Because the 9/11 commission was so successful?

Democrats Seek 9/11-Style Commission To Investigate Russian Hacking (G.)

Democratic members of the US Congress called on Monday for the creation of an independent commission to investigate Russia’s attempts to intervene in the 2016 election, similar to the September 11 panel that investigated the 2001 attacks on the United States. Their “Protecting our Democracy Act” would create a 12-member, bipartisan independent panel to interview witnesses, obtain documents, issue subpoenas and receive public testimony to examine attempts by Moscow and any other entities to influence the election. The panel members would not be members of Congress. The legislation is one of many calls by lawmakers to look into Russian involvement in the contest, in which Republican Donald Trump defeated Democrat Hillary Clinton in the White House race, confounding opinion polls.

Republicans also kept control of the Senate and House of Representatives by larger-than-expected margins. US intelligence agencies on Friday released a report saying that President Vladimir Putin of Russia ordered an effort to help Trump’s electoral chances by discrediting Clinton. Russia has denied the hacking allegations. A Kremlin spokesman said on Monday they were “reminiscent of a witch-hunt”. “There is no question that Russia attacked us,” Senator Ben Cardin, the top Democrat on the Senate foreign relations committee, told a news conference. Versions of the bill were introduced in both the Senate and House. In the Senate it has 10 sponsors. In the House it is backed by every member of the Democratic caucus, said Representative Elijah Cummings, the top Democrat on the House oversight committee. However, no Republicans currently back the bill, so its prospects are dim, given Republican control of both houses of Congress.

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And then after that commission is done investogating, they won’t tell anyone?

State Dep.: Presenting Evidence Of Russian Hacking Would Be Irresponsible (ZH)

One recurring lament throughout the theatrically dramatic campaign involving reports and emotional appeals by US intelligence agencies such as the CIA (whose primary function is the creation of disinformation) to ordinary Americans, that Russia had “hacked the US presidential election” is that for all the bluster and “conviction”, there has been zero evidence. And, as it turns out, there won’t be any, because according to the US State Department, US intelligence agencies were right to not reveal evidence of their proof that Russia interfered in US elections, and comparisons with intelligence reports that Iraq had WMDs were not relevant in the current year.

Asked by RT’s Gayane Chichakyan if Friday’s public intelligence report should have contained any proof of Russian intervention, State Department spokesman John Kirby said that no one should be surprised that US intelligence agencies were keeping evidence secret in order to protect sources and methods. “Most American people understand that they have the responsibility to protect their sources and methods,” Kirby said, adding it would be “irresponsible” to do otherwise. Actually, with the Iraq WMD fiasco strill fresh in “American people’s” minds, it is irresponsible to think most Americans are still naive idiots who will believe whatever the “intelligence agencies” will tell them.

Alas, none of that has filtered through to the appropriate authorities, and Kirby said that it was “up to the agencies to decide which information they share with the public. We rely on them to make that determination for themselves.” And, in this case, it meant sharing no information at all. The assessment in Friday’s report was made “by all 17 intelligence communities. All of them came to the same basic conclusion: that Russia interfered in the US election,” Kirby said. “All of our intelligence communities came to the same basic conclusion, over and over again.” They just couldn’t prove it, instead hoping that by repeating the same statement over and over would be sufficient.

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Get an alternative is place first, makes sense.

Breakaway Senate Republicans Push to Delay Obamacare Repeal (BBG)

A breakaway group of five moderate Senate Republicans pushed Monday to delay a bill repealing Obamacare until March — potentially enough pressure to force the party’s leadership to comply. The step is the latest sign of some Republicans’ growing uneasiness about their leadership’s plan to repeal the law with no consensus on a replacement as part of an effort to deliver swiftly on one of President-elect Donald Trump’s top campaign promises. Senators Bob Corker of Tennessee, Rob Portman of Ohio, Susan Collins of Maine, Bill Cassidy of Louisiana and Lisa Murkowski of Alaska offered an amendment Monday to the budget resolution that would extend the target date for the committees to write an Obamacare repeal bill to March 3 from Jan. 27.

“As President-elect Trump has stated, repeal and replace should take place simultaneously, and this amendment will give the incoming administration more time to outline its priorities,” Corker said in a statement. “By extending the deadline for budget reconciliation instructions until March, Congress and the incoming administration will each have additional time to get the policy right.” With Democrats opposed to a straight repeal bill, Republicans can lose no more than one backer if they want to fast-track their approach before Trump takes office. Republican leaders in the Senate are hoping to adopt the budget resolution – which would allow an Obamacare repeal bill to pass with 50 votes and escape a Senate filibuster – early Thursday after a marathon session of amendment votes.

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The power of the US pharmaceutical industry is scary.

If Trump Tries To Lower Drug Prices, God Help Him: Top Medicare Official (MW)

President-elect Donald Trump said on the campaign trail that Medicare should negotiate for lower drug prices. “God help him,” Acting Centers for Medicare and Medicaid Administrator Andy Slavitt said at the JP Morgan Health Care Conference in San Francisco on Monday. “He’s not wrong, but you need a lot of … to coin a phrase that’s been used, a fair amount of stamina if you are going to deal with the pharmaceutical industry on this topic.” Drug-pricing talk has been in the air at the JP Morgan conference, with a new administration about to take office and adding tremendous regulatory uncertainty to this sector. Despite critical comments made during election season, the president-elect has largely been seen by pharmaceutical and biotechnology companies as a positive, deregulatory force for their industry.

But the issue, still very much in the public eye, may not be off the table. Trump vowed to “bring drug prices down” in December comments to Time. The U.S. pays far more than other countries for pharmaceutical drugs, and has for a long time. “If [Trump] has the stamina he will see two things… the American public is being taken advantage of. And secondly, we are funding the R&D for free riders across the world,” Slavitt said. “And I don’t think the president-elect… is going to take too well to that.” While other countries use government negotiations to bring down drug costs, the tactic is often seen as anathema to the American free-market system. But, “this is a topic that will eventually be dealt with,” Slavitt predicted. “It’s easier to deal with this in 2017 than it will be in 2021 or 2022, when it is crippling the finances of health care.”

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Too many people are already invested in the opposite idea.

Jeremy Corbyn: UK Can Be Better Off Out Of The EU (G.)

Jeremy Corbyn will use his first speech of 2017 to claim that Britain can be better off outside the EU and insist that the Labour party has no principled objection to ending the free movement of European workers in the UK. Setting out his party’s pitch on Brexit in the year that Theresa May will trigger article 50, the Labour leader will also reach for the language of leave campaigners by promising to deliver on a pledge to spend millions of pounds extra on the NHS every week. He will say Labour’s priority in EU negotiations will remain full access to the European single market, but that his party wants “managed migration” and to repatriate powers from Brussels that would allow governments to intervene in struggling industries such as steel.

Sources suggested that the economic demands were about tariff-free access to the single market, rather than membership that they argued did not exist. Corbyn’s speech and planned media appearances represent the first example of a new anti-establishment drive designed by strategists to emphasise and spread his image as a leftwing populist to a new set of voters. They hope the revamp will help overturn poor poll ratings across the country, particularly with a looming byelection in Copeland, Cumbria. Speaking in Peterborough, chosen because it is a marginal Tory seat that voted heavily in favour of Brexit, and which Labour is targeting, Corbyn will lay into May’s failure to reveal any Brexit planning, and say that Labour will not give the government a free pass in the negotiations.

After comparing the prime minister’s refusal to offer MPs a vote on the final Brexit deal to the behaviour of Henry VIII in a Guardian interview, Corbyn will say: “Not since the second world war has Britain’s ruling elite so recklessly put the country in such an exposed position without a plan.”

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This should scare people.

Britain’s Dangerous Post-Brexit Borrowing Binge (BBG)

For the U.K. economy, the good news is that following the Brexit vote, the sky hasn’t fallen as many predicted; on the contrary, it’s been a period of unexpected fair weather. The bad news is that the benign outlook is encouraging a surge in borrowing, leaving households vulnerable if the Bank of England decides to tighten monetary policy. Andy Haldane, the chief economist at the central bank, said last week that as far as the British consumer is concerned, “it’s almost as though the referendum had not taken place.” That, he says, helps explain why the central bank’s gloomy prognosis of what a vote to leave the European Union would do to the economy has thus far turned out to be wrong. The nation appears to have been in celebratory mood this Christmas.

Credit-card company Visa said on Monday that U.K. spending jumped 2.6% in December from a year earlier, led by a 7.3% jump in hotels, restaurants and bars. In the final three months of 2016, overall spending posted its strongest growth in two years, Visa said. Britons have been loading up on debt. At the start of 2000, households had debts about equivalent to their disposable income. The ratio surged in the following years, peaking at 160% in the first quarter of 2008. As the financial crisis took its toll, people scaled back on borrowing, and the ratio had dropped to about 137% by September 2015. But it then rose for four consecutive quarters, with the most recently available figures showing a jump to 143% in the third quarter of last year:

As the chart shows, Brits are more indebted than their peers in either the U.S. or the euro zone. Perhaps unsurprisingly, while British households are still making their payments on secured loans such as mortgages, defaults on unsecured loans surged as the total debt burden climbed:

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“Of late [..] liquidity in China has been a mere accounting artifact.”

Shadow Lending Leaves Chinese Banks Looking Exposed (BBG)

In their obsession with China’s falling foreign-exchange reserves, investors may be ignoring a more painful Catch-22: a growing shortage of bank deposits. Left unaddressed, the lenders’ liquidity squeeze could leave them dangerously exposed to fickle wholesale financing, while trying to ease the shortage could worsen capital flight. Take Bank of Jinzhou. With just 0.3% of the $22 trillion in assets of the 35 publicly traded Chinese lenders, the bank appears remarkably liquid. Its 57% loan-to-deposit ratio in June was below the median reading of 67%. The Hong Kong-listed institution’s 200 billion yuan ($30 billion) deposit base offered ample support to a loan portfolio only a little higher than half that amount.

Of late, however, liquidity in China has been a mere accounting artifact. Customers’ deposits aren’t sufficient to finance Bank of Jinzhou’s 213 billion yuan in shadow loans, which are debt securities that the lender classifies as receivables. To make up the shortfall, it has borrowed 142 billion yuan from other financial institutions. Of this, as much as 78% is short-term financing. After adjusting for shadow lending, S&P Global Ratings pegged Bank of Jinzhou’s loan-to-deposit ratio at the end of 2015 at 153%. Bank of Jinzhou is hardly the only Chinese bank flirting with illiquidity: Almost all are sitting on a pile of debt masquerading as receivables.

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Nobel Peace Prize.

Thousands Of US Troops Arrive In Europe (ZH)

Just days after we reported that the US had begun deploying some 2,800 tanks, trucks and other military equipment to Germany, from where they would be transported by rail and road to Eastern Europe as part of a buildup of NATO reinforcements against “Russian expansion”, the next US deployment has made its way to Europe over the weekend, when some 4,000 US troops arrived in the German port of Bremerheven, on their way to Wroclaw, Poland under a planned NATO operation to “reassure the alliance’s Eastern European allies” in the face of what NATO has dubbed mounting Russian aggression. The American soldiers landed in Wroclaw, home to a key Nato and Polish air base in south-west Poland.

The troops will be followed by the roughly 2,800 tanks and other pieces of military equipment which are currently en route from Germany. The delivery of US Abrams tanks, Paladin artillery, and Bradley fighting vehicles, as well as supporting troops, marks a new phase of America’s continuous presence in Europe, which will now be based on a nine-month rotation. Why provoke Russia with yet another mass deployment? Because as NATO Major General Timothy McGuire told reporters, last week, when asked if the large deployment was meant to send a message to Russia, “The best way to maintain the peace is through preparation.” And while we are quoting, here is another good line from the movie Spice Like Us: “A weapon unused is a useless weapon.” The US military industrial complex is doing everything in its power to make sure a lot of weapons are used in the future.

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The priesthood is aghast.

Top Economists Grapple With Public Disdain (WSJ)

The nation’s leading economists are suffering an identity crisis as many of the institutions they helped build and causes they advanced have come in for public scorn and rejection at the ballot box. The angst was on display this weekend at the annual conference of the American Economic Association, the profession’s largest gathering. The conference is a showcase for agenda-setting research, a giant job fair for the nation’s most promising young economists and, this year, the site of endless discussion about how to rebuild trust in the discipline. Many academic economists have been champions of free trade and globalization, ideas under assault among rising populist movements in advanced economies around the world.

The rise of President-elect Donald Trump, with his fierce rhetoric against elites, in particular, left many at this conference questioning their place in the world. “The economic elite did many things to undermine their credibility while people’s economic fortunes were taking a turn for the worse,” said Steven Davis, an economist at the University of Chicago. But a road map for regaining trust is elusive. “I used to think facts and analysis will ultimately carry the day but now I’m not quite sure.” [..] Surveys from the Pew Research Center have documented dwindling support for free trade. In 2014, 60% of Democratic voters and 55% of Republican voters supported such trade agreements. In an October survey, however, support among Democrats had fallen to 56% and support among Republicans had nose-dived to 24%.

Over a billion people moved out of poverty in developing countries in the last 25 years, lifted in part by global trade and other economic prescriptions, but those same policies created winners and losers in the West. Another Pew study last year compared views of whether it was good for the U.S. to be so involved in the global economy: 86% of scholars said it was good, and just 2% bad. Among the general public, 49% thought it was bad, and just 44% good.

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A lot of snow in Athens overnight. Very cold too. It’s worse on the islands. And all we get is blame games.

The Harsh Reality (Kath.)

The refugees and migrants, thousands of people from Asia and Africa who are wintering in Greece in the hope that their dream will come true and that they will move on to central and northern Europe (imagined as hospitable by need) are harboring no illusions about this country. Greece is a country with real problems: economic, social and now weather-related. These people have to put up with the same problems as we do but the place where they are doing it from is far more difficult: They have no safe accommodation, no money and limited freedom. The additional shows of solidarity that may have come with the holiday season (even if mere publicity stunts designed for the television cameras) were soon to be wiped out by the cold snap, which also affected the islands of the Aegean. There will be no such thing as halcyon days for these people.

Official assurances by government officials that the authorities managed to provide warm and safe shelter for all asylum seekers and migrants offer little comfort, as no amount of political will, or plain desire for that matter, can reverse the situation on the ground. The problems faced by the refugee population are not tackled by prohibiting photographers from documenting the situation inside the Moria camp on Lesvos island. You cannot remedy reality by banning its representation. Is it that we do not want to taint the nation’s image in the eyes of our European partners? But the image of Greece is only part of the bigger European image. What is now happening at Moria, or any other migrant camp in Greece or Italy, is not disconnected from the values and priorities in the rest of Europe, in Poland, Austria, Slovakia or Denmark.

European Union countries, which had pledged to take in 160,000 people from Greece and Italy, have so far absorbed below 5% of that figure. Just 6,212 lucky few have been relocated from Greece and 1,950 from Italy, making a total of 8,162. The inaction, the indifference and the amoralistic policy of Europe (which is also fed by electoral concerns and growing far-right intolerance) should not serve as an alibi for the Greek government. In dealing with the migrant crisis, the SYRIZA-led administration has reacted without a clear plan or good coordination with other governments. And one last thing: The decision of Lesvos’s hoteliers to close their doors to refugees and migrants is barely in line with all the idealized rhetoric about a community’s obligations toward a supplicant – and it seems even more out of line under the existing circumstances.

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The EU hands 10s of millions in taxpayer funds to NGOs. As these fail to do what they receive the money for, it’s back to blaming Greece.

European Commission: ‘Untenable’ Situation In Greek Refugee Camps (AP)

The European Commission says conditions for refugees on Greek islands and in other camps where they are housed in tents despite severe cold weather, is “untenable.” Heavy snowfall has hit large swaths of Greece, including the eastern Aegean islands where thousands of refugees are stranded. Giorgos Kyritsis, spokesman for the government’s crisis committee on migration, told Greece’s Skai television that just under 1,000 people remain housed in tents on the islands. The severe weather had been forecast well in advance, and the government has come under fire for not acting fast enough to ensure all refugees are adequately housed. Commission spokeswoman Natasha Bertaud said the commission “is aware that the situation is currently untenable, but we also have to be clear” that conditions in reception centers are the responsibility of Greek authorities.


January 10 : homeless man sleeps on Athens beach Photo: Eurokinisi

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Jan 012017
 
 January 1, 2017  Posted by at 11:29 am Finance Tagged with: , , , , , , , , , ,  3 Responses »
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Claude Monet The Japanese Bridge 7 1924


Trump Leaves Open Possible Taiwan Meet, Questions Russia Hacking (R.)
Was Claim by DHS and FBI About Russian Hacking Fake News? (Spring)
Is the “Trump Trade” Already Unwinding? (WS)
Senator McCain Says US Stands With Ukraine Against Russia (R.)
Here’s How Much Each EU Nation Puts In And Takes Out Of The EU Budget (BI)
Universal Basic Income Trials Being Considered In Scotland (G.)
China’s Xi Offers Populist Message In New Year’s Eve Address (AP)
Narendra Modi Just Dug Himself a Great Big Hole (Varadarajan)
Turkish Policy Sets Syria On New Path (Sayigh)
Humanity May Self-Destruct, But The Universe Can Cope Perfectly Without Us (G.)

 

 

Trump’s been -partially- briefed: ”I also know things that other people don’t know so we cannot be sure..”. And he’s obviously not convinced, to say the least.

Trump Leaves Open Possible Taiwan Meet, Questions Russia Hacking (R.)

U.S. President-elect Donald Trump on Saturday left open the possibility of meeting with Taiwan’s president if she visits the United States after he is sworn in on Jan. 20 and also expressed continued skepticism over whether Russia was responsible for computer hacks of Democratic Party officials. In remarks to reporters upon entering a New Year’s Eve celebration at his Mar-a-Lago estate, Trump said, “We’ll see,” when pressed on whether he would meet Tsai Ing-wen, Taiwan’s president if she were to be in the United States at any point after he becomes president. Taiwan’s president will be in transit in Houston on Jan. 7 and again will be in transit in San Francisco on Jan. 13. Beijing bristled when Trump, shortly after his Nov. 8 victory, accepted a congratulatory telephone call from the Taiwan leader and has warned against steps that would upset the “one-China” policy China and the United States have maintained for decades.

Talk of a stop-over in the United States by the Taiwan president has further rattled Washington-Beijing relations. On another foreign policy matter, Trump warned against being quick to pin the blame on Russia for the hacking of U.S. emails. The Washington Post also reported on Friday that Moscow could be behind intrusion into a laptop owned by a Vermont electric utility. U.S. intelligence officials have said that they are confident Russia was behind the hacks, which could have played a role in Trump’s defeat over Democratic presidential candidate Hillary Clinton. “I think it’s unfair if we don’t know. It could be somebody else. I also know things that other people don’t know so we cannot be sure,” Trump said. Asked what that information included, the Republican President-elect said, “You will find out on Tuesday or Wednesday.” He did not elaborate.

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Seems to depend on who reports on it.

Was Claim by DHS and FBI About Russian Hacking Fake News? (Spring)

An important research principle is to follow the money. People around the world need to ask themselves who has the money and technical ability to be running hundreds and perhaps thousands of real servers and real IP addresses from fake corporations using fake websites in fake locations in more than 40 nations around the world? What agency has already been proven to be running mass surveillance on billions of people in more than 40 nations all around the world? Whose military cyber budget is more than 10 times larger than the cyber warfare budget of the rest of the world combined? There is certainly an elephant in the room – but it is not a Russian elephant. At a televised press conference in April 2016, former NSA agent Edward Snowden asked the Russian leader Vladimir Putin if the Russian government engaged in mass surveillance of millions of people in a manner similar to the NSA.

Putin replied that Russian law prohibited the Russian government from engaging in mass surveillance. Putin then pointed out that the Russian military budget was less than 10% of the US military budget. So even if they wanted to engage in mass surveillance, they simply did not have the money. People also need to ask themselves why the FBI/DHS chose to place their evidence in a CSV file and XML file rather than a normal document or spreadsheet. If this were real evidence, it would have been placed directly in the PDF report for everyone to read – not hidden away in a file the general public has little ability to read. Finally, for the FBI or the DHS to claim that the XML-CSV file contains evidence or even indicators of Russian hacking is simply a false statement. It is a perfect example of fake news. Any news agency promoting this claim without doing even the most basic of research that would easily confirm it is false should be listed as a fake news agency.

The real question that we should all be asking is why the DHS and FBI would destroy their reputation by posting such a fake report? Several years ago, our CIA claimed that Iraq had weapons of mass destruction. We now know that Iraq had no weapons of mass destruction – meaning that we went to war and spent over a trillion dollars on a fake report. Is this new fake report a pretext for launching a cyber war against Russia? Is it intended to justify increasing US military spending? It is hard to say what the real purpose of this fake DHS-FBI report is. But the fact that this silly list of IP addresses was the best evidence they could provide should be a strong indication that there really is no evidence of Russian hacking. Instead, it is more likely that Wikileaks is telling the truth in stating that they got the emails from a disgruntled Democratic Party insider.

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There’s so much downside there it’s scary.

Is the “Trump Trade” Already Unwinding? (WS)

The S&P 500, after having ended 2015 down 0.7%, ended 2016 up 9.5%, including a big swoon early in the year. From February 11, when it bottomed out at 1,810, it has surged 23.6%. And bonds went on a wild ride. The 10-year Treasury yield ended 2016 at 2.445% up from 2.273% at end of 2015. It hit 2.57% at peak Trump Trade, up over a full percentage point from the summer. Over the fourth quarter, the yield jumped 84 basis points, the largest quarterly jump since 1994. And prices, which move inverse to yields, clobbered bondholders. But note the decline in yield since December 20:

And stocks partied. Since the election, financials surged, bringing the gain for the year to 29.1%, the best-performing sector in the S&P 500. Goldman Sachs, whose ex-executives are now heavily represented in the Trump administration, shot up 36% since the election and 51% since the beginning of October when Trump’s victory became more than just a possibility. GS was one of the best Trump Trades out there. Alas, it too has started to peter out. GS is now down 2.5% from peak Trump-Trade, and other banks have followed. Insiders at the banks were preparing for it, it seems, because on December 9, just before bank stocks started losing ground, we found…

Mortgage rates have soared from around 3.4% for much of the summer to 4.32%, according to Freddie Mac. This is now reverberating through the housing market in multiple ways, with some people rushing to buy to lock in the rates before they go even higher, and others waiting for rates to come down and not buying, and still others being completely priced out by mortgage rates that are nearly a percentage point higher than they’d been a few months ago, and the first red flags on home sales are now cropping up:

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Oh, go away!

Senator McCain Says US Stands With Ukraine Against Russia (R.)

Republican U.S. Senator John McCain promised on Saturday continued support for Kiev in the face of aggression from Moscow, as he spent New Year’s Eve on the front line in Ukraine’s eastern conflict zone. McCain was one of a bipartisan group of 27 U.S. senators who sent a letter to President-elect Donald Trump in December, urging him to take a tough line against Russia over what they termed its “military land grab” in Ukraine. “I send the message from the American people – we are with you, your fight is our fight and we will win together,” McCain was quoted as saying by Ukrainian President Poroshenko’s press service. “In 2017 we will defeat the invaders and send them back where they came from. To Vladimir Putin – you will never defeat the Ukrainian people and deprive them of their independence and freedom,” McCain said after a visit to a military base in the southeastern town of Shyrokyne.

Trump signaled during his campaign that he might take a softer line in dealings with Moscow, repeatedly praising Russian President Putin’s leadership. Trump’s election caused jitters in Ukraine but officials in Kiev hope that the incoming president’s policies, influenced by Republican hawks and a Republican-voting Ukrainian diaspora, will be friendlier towards Ukraine than his campaign rhetoric might have suggested. Ukraine has relied on Western support and economic aid since street protests in 2014 which toppled a Kremlin-backed president and were followed by a war with pro-Russian separatists and Russia’s annexation of the Crimea peninsula from Ukraine.

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The enormous amounts going to France, Spain, Italy, Belgium are something to be very concerned about.

Here’s How Much Each EU Nation Puts In And Takes Out Of The EU Budget (BI)

One of the biggest political stories of 2016 has been Brexit and much of the debate both before and after June’s vote to leave the EU has focused around whether Britain will be financially better or worse off after leaving the EU. The “Vote Leave” campaign famously emblazoned their battle bus with a figure of £350 million, claiming that was what the UK sent to Brussels each week and that sum could be spent on the NHS instead. The figure was subsequently discredited, as it was a gross sum and didn’t take into account the fact that Britain also benefits from EU grants and funding. However, a recent House of Commons briefing paper on the UK’s funding from the EU shows that Britain does, in fact, put more into the EU budget than it takes out.

The UK has averaged around €12 billion in EU funding each year between 2011-15 but over that same period made an average net contribution of €15 billion. Britain is one of nine EU members that are net contributors to the European Union’s budget (meaning they put in more money than they take out.) Here’s the House of Commons chart showing each member states net contributions against their EU funding:EU funding House of Commons Briefing Paper The fact that Britain is a net contributor means that, in theory, the UK could stand to gain money after it leaves the EU. However, this does not account for any potential economic fluctuations as a result of Brexit — if the economy suffers then any gains from not paying into the budget could easily be wiped out by falling tax receipts.

There is also a very real possibility that the UK may have to keep paying into the EU budget if it wants to maintain access to the EU Single Market. The UK will also have to continue paying into the EU budget until it formally leaves the EU and senior European negotiators have signalled they will try and make Britain pay up to €60 billion to leave, to cover previous budget commitments, pension liabilities, and other costs. In other words, while on paper it might look like leaving the EU will give Britain more money for inward investment, Brexit could end up costing the UK just as much as EU membership — or worse, more.

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I’m all for a good basic income trial. But I’m very afraid that none of them will be adequate, and that this will be used to discredit the entire idea. And please don’t use the term universal for small scale experiments, it’s misleading.

Universal Basic Income Trials Being Considered In Scotland (G.)

Scotland looks set to be the first part of the UK to pilot a basic income for every citizen, as councils in Fife and Glasgow investigate trial schemes in 2017. The councillor Matt Kerr has been championing the idea through the ornate halls of Glasgow City Chambers, and is frank about the challenges it poses. “Like a lot of people, I was interested in the idea but never completely convinced,” he said. But working as Labour’s anti-poverty lead on the council, Kerr says that he “kept coming back to the basic income”. Kerr sees the basic income as a way of simplifying the UK’s byzantine welfare system. “But it is also about solidarity: it says that everyone is valued and the government will support you. It changes the relationship between the individual and the state.”

The concept of a universal basic income revolves around the idea of offering every individual, regardless of existing welfare benefits or earned income, a non-conditional flat-rate payment, with any income earned above that taxed progressively. The intention is to provide a basic economic platform on which people can build their lives, whether they choose to earn, learn, care or set up a business. The shadow chancellor, John McDonnell, has suggested that it is likely to appear in his party’s next manifesto, while there has been a groundswell of interest among anti-poverty groups who see it as a means of changing not only the relationship between people and the state, but between workers and increasingly insecure employment in the gig economy.

Kerr accepts that, while he is hopeful of cross-party support in Glasgow, there are “months of work ahead”, including first arranging a feasibility study in order to present a strong enough evidence base for a pilot. “But if there is ever a case to be made then you need to test it in a place like Glasgow, with the sheers numbers and levels of health inequality. If you can make it work here then it can work anywhere.”

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Now Xi is designated populist too, because he said: “On this new year, I am most concerned about the difficulties of the masses: how they eat, how they live, whether they can have a good New Year, or a good Spring Festival..” And I thought when incumbents say these things, that’s not populist. I may never understand.

China’s Xi Offers Populist Message In New Year’s Eve Address (AP)

Chinese President Xi Jinping said Saturday that his government would continue to focus on poverty alleviation at home and resolutely defending China’s territorial rights on the foreign front. Xi made the televised remarks in his annual New Year’s Eve address, in which he touted China’s scientific accomplishments, highlighting its large new radio telescope and space missions, and the country’s growing role as a leader in global affairs. Standing before a mural of the Great Wall, Xi said his administration successfully hosted a G-20 summit, pushed forward with China’s “One Belt One Road” pan-Eurasian infrastructure project and established the Asian Infrastructure Investment Bank.

China has upheld its peaceful development while resolutely defending its territorial sovereignty and maritime rights, Xi said, making a reference to an international tribunal ruling last summer against China’s claims in the contested South China Sea. “If anyone makes this an issue of question, the Chinese people will never agree!” he said, one of the few points in his 10-minute address when his voice rose noticeably. For most of his address, Xi struck a populist tone, saying he was above all concerned about the living conditions of the people and vowed that improving employment, education, housing and health care would be a responsibility that his ruling Communist Party would never shirk from. China lifted 10 million people out of poverty in 2016, Xi said.

“On this new year, I am most concerned about the difficulties of the masses: how they eat, how they live, whether they can have a good New Year, or a good Spring Festival,” Xi said, as the television broadcast cut to footage of his visits this year to impoverished rural areas. Xi also promised to shore up Communist Party discipline and “unwaveringly” maintain his anticorruption campaign against high- and low-ranking officials alike. He said that “supply-side” economic reforms were making progress and that the party would continue to push reform and rule by law during the 19th National Congress, scheduled for late 2017. “As long as the party forever stands with the people, we will be able to walk the long march of our generation,” he said.

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A Lakh is one hundred thousand. Still confusing as f**k.

Narendra Modi Just Dug Himself a Great Big Hole (Varadarajan)

It was a speech of not just shifting goalposts but vanishing playing fields, and yet Narendra Modi couldn’t resist making a rhetorical point about black money that might well prove costly for him by the time 2019 comes around. “I wish to share some information with you, which will either make you laugh, or make you angry,” he said, with a flourish half-way through his speech. This was the point where everyone expected him to reveal how many old Rs 500 and 1000 notes had become ‘worthless paper’ thanks to demonetisation but he had another number in mind: “According to information with the government, there are only 24 lakh people in India who accept that their annual income is more than 10 lakh rupees. Can we digest this? Look at the big bungalows and big cars around you… If we look at any big city, it would have lakhs of people with annual income of more than 10 lakh.”

Until then, the prime minister had sought to sweep the growing public concerns about the effects of his demonetisation decision under a fraying carpet of nationalism. But by drawing attention to a stark statistic in an attempt to provide some justification for the chaos he has unleashed in the lives of hundreds of millions of poor Indians, Modi has unwittingly laid down a new metric by which the success or failure of his supposed drive against black money must be judged: will he manage to add the “lakhs of people” who have an income of more than Rs 10 lakh to the list of those who pay income tax? If he doesn’t, then what was the point of subjecting the whole country to so much disruption and pain? Finance minister Arun Jaitley initially claimed that a certain proportion of the demonetised notes would remain outside the banking system and get extinguished, thus providing a blow to the black economy and a fiscal boost to the government.

When they realised there was unlikely to be significant extinguishing and that most of the high denomination notes in circulation would probably end up getting deposited, Modi and Jaitley claimed the income tax authorities would be able to track down the owners of black money since their funds had entered the banking system. Now that it is apparent the IT department will not find it that easy to undertake such a massive exercise – its inefficiency is the reason the list of those with official incomes of Rs 10 lakh and over is just 24 lakh to begin with and is unlikely to grow – Modi has tried to sell another bizarre idea to the public about why the cashless hardship they are putting up with is in the national interest.

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Putin is tightening his grip on Erdogan. Who held a speech yesterday proclaiming that Turkey is in the first independence war in 93 years, or something like that. But that’s strictly for domestic use.

Turkish Policy Sets Syria On New Path (Sayigh)

Turkish policy has been evolving at a quickening pace. The decision to lean on the opposition to allow thousands of its fighters to abandon the effort to lift the regime siege of eastern Aleppo in order to spearhead a Turkish-backed push against Kurdish-held areas to the north last August ensured the fall of one of the most important opposition strongholds in Syria four months later. Remaining opposition forces in the northwest have significant stockpiles of weapons and ammunition, but are wholly dependent on Turkey for further military resupply and for the flow of trade and international humanitarian assistance. Turkey has not abandoned the opposition completely, but it is clearly working to a new set of policy assumptions and objectives in Syria.

That these include a strategic decision to abandon the effort to force Assad from power is already plain. Talk of setting up a safe zone in northern Syria has never been credible, despite considerable bluster. Moscow insiders claim Turkish President Recep Tayyip Erdogan is also abandoning his categorical rejection of significant Kurdish autonomy in northern Syria, so long as he can block the same thing in Turkey. With President-Elect Donald Trump about to take office in the US, there is little reason for Turkey to expect to counter-balance Russian policy proposals on Syria. These calculations prompted Turkey to accept the fate of Aleppo – which it had long presented as a “red line” that the Assad regime should not cross – and then to broker a ceasefire with Russia immediately after its fall.

The alacrity with which the main political and military opposition groupings have announced their support for the latest ceasefire is the surest measure of the extent of the shift in Turkey’s policy and of its determination to enforce compliance, whatever the provocations from the government side. The real question, then, is not whether the latest ceasefire will hold, but how far Turkey will go in making the Syrian opposition accept what comes next, should the peace talks jointly sponsored by Russia and Turkey take place within the next month as officially scheduled. Indeed, even if the ceasefire fails or if the talks are unsuccessful – or not held at all – Turkish policy towards Syria is set on a new path.

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Destruction as a religious comfort zone. Oh well, people go for what feels good.

Humanity May Self-Destruct, But The Universe Can Cope Perfectly Without Us (G.)

In a Scandinavian hotel a few years ago, I came across a documentary I didn’t expect to watch for more than a minute or two, but at least it was in English. It was past time to go to bed, but I ended up watching the whole thing. Aftermath: Population Zero imagines that overnight humanity vanishes from the planet. You may have seen it. The immediate effects of human departure are sentimentally saddening: pets die, no longer competent to fend for themselves. Some livestock fares poorly, though other domesticated animals romp happily into the wild. Water cooling fuel rods of nuclear power plants evaporate, and you’d think that would be the end of everything – but it isn’t. Radioactivity subsides. Mankind’s monuments to itself decay, until every last skyscraper has rusted and returned to dirt.

Animals proliferate, flora thrive, forests rise. Bounty, abundance and beauty abound. Antelopes leap from wafting golden grasses. It was all very exhilarating, really. I went to sleep that night with a lightened heart. Ever since, that wafting grasses image has been a comforting touchstone. We speak often of “destroying the planet” when what we mean is destroying its habitability for humans. The humblingly immense else-ness of what is, in which our species is collectively a speck, extant for an eye blink, lets us off the hook. Global warming, Syrian civil war, domestic violence, Donald Trump? This too shall pass.

I’m not a religious person. Chances are that the universe neither treasures nor regrets us. It permits us, with a marvellous neutrality, and later it may permit artificial intelligence, humanity 2.0, or a lot more bugs instead. We can’t comprehend all that phantasmagorical stuff out there, but we also can’t kill it. That gives me hope. Although we’re a remarkably successful biological manifestation – and so is mould – our aptitude for annihilation is largely limited to wiping ourselves out. The gift of self-destruction is a minor, not to mention stupid, power, and apparently humanity’s suicide would be relatively safe, like a controlled explosion. The universe would get on perfectly well without us once we’d gone.

I strongly associate the notion of aftermath with TC Boyle’s short story Chicxulub. While relating the intimate, personal account of learning that his teenage daughter has been hit, perhaps fatally, by a car, the narrator digresses to explain the shockingly high likelihood that our planet will be hit by an asteroid large enough to extinguish our species. For the narrator, his daughter’s death and the end of the world are indistinguishable. The text is shot through with a piercing sorrow, over all our pending losses – of children, of the world we’ve made together as a race. This, too, gives me hope – that I’m not a misanthrope after all. I would miss my brother, my husband; with all our shortcomings, I would also miss the family of man. The capacity for grief, the flipside of love, consoles me as much as the detached long view of aftermath.

Read more …

Oct 212016
 
 October 21, 2016  Posted by at 9:43 am Finance Tagged with: , , , , , , , , , ,  Comments Off on Debt Rattle October 21 2016
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Lewis Wickes Hine Game of craps. Cincinnati, Ohio 1908

 

 

NICOLE FOSS is the keynote speaker tonight, October 21, at the

Community Solutions Conference
McGregor Hall, Antioch College
Yellow Springs, Ohio
7.30 pm

 

 


Dollar Near 7-Month High As Euro Slides, Asia Slips (R.)
Another Thing Trump, Hillary Get Wrong In This Election: The National Debt (F.)
Trump’s Candidacy – the Good and the Bad of It (Stockman)
China Property Prices Rise At Fastest Pace On Record In September (CNBC)
Yuan Hits Record Low Against Dollar in Offshore Trading (WSJ)
China’s Property Frenzy Spurs Risky Business (WSJ)
China’s Local Governments Are Getting Into The Venture Capital Business (BBG)
The Sharing Economy is Creating a Dickensian World (Das)
‘Lions Hunting Zebras’: Ex-Wells Fargo Bankers Describe Abuses (NYT)
Washington Foreign Policy Elites Not Sorry To See Obama Go (WaPo)
Hacking Democracy (ZH)
Italy Shields Russia From EU Sanctions Threat (EUO)
Draghi Says Athens Should Focus On Reforms, And The Eurozone On Debt (Kath.)
126,956 Greeks Work In Private Sector For €100 Per Month (KTG)

 

 

“The European Central Bank removed a source of immediate risk for traders by revealing that it did not discuss tapering its QE program at this month’s meeting..”

Dollar Near 7-Month High As Euro Slides, Asia Slips (R.)

Asian stocks were mostly lower on Friday as the dollar climbed to seven-month highs against a basket of currencies and dragged down crude oil prices, cooling investor risk appetite. The greenback was boosted by a fall in the euro after the ECB shot down talk it was contemplating tapering its monetary easing – sending the common currency to its lowest since March. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.3%. South Korea’s Kospi lost 0.4% and Australian stocks shed 0.1%, weighed down by a retreat in energy shares. Singapore fell 0.4% while Shanghai added 0.3%. Japan’s Nikkei rose 0.3% , brushing a six-month high, as the yen weakened against the dollar.

U.S. stocks ended a choppy session on Thursday slightly lower as investors digested the latest round of earnings, with a sharp drop in telecoms offset by gains in healthcare. The ECB left its ultra-loose monetary policy unchanged on Thursday but kept the door open to more stimulus in December, with ECB President Mario Draghi dousing recent market speculation that the central bank may begin tapering its €1.7 trillion asset-buying program. “The European Central Bank removed a source of immediate risk for traders by revealing that it did not discuss tapering its QE program at this month’s meeting,” wrote Ric Spooner, chief market analyst at CMC Markets. “Decisions are being deferred until December pending the outcome of research – meaning that meeting will be a key focus for markets.”

Read more …

Debt explained in the vein of Steve Keen.

Another Thing Trump, Hillary Get Wrong In This Election: The National Debt (F.)

As if there aren’t enough things to be upset about as it is, here’s another: neither candidate’s position on the debt and the deficit makes economic sense (something they each reinforced in last night’s Las Vegas debate). If they act on their campaign promises, we will most certainly be facing an economic downturn, if not an outright disaster. 1. Public sector deficits must, by definition, be private sector surpluses. If one entity spends more than it earns (the public sector) then another must earn more than it spends (you and me). This is an inescapable accounting identity. 2. Public sector debt must, by definition, be a private sector asset. If one entity adds liabilities, another adds assets–another inescapable law of accounting. 3. It is impossible for a nation to be forced to default in debt denominated in its own currency. Not unlikely, not improbable, but impossible. This is not my opinion, it’s a fact, albeit a poorly known one.

4. U.S. public debt to foreign countries like China has nothing to do with the budget deficit. It’s a result of the trade deficit. The federal government’s budget could have been in surplus for the past 100 years, but whenever we buy more from China than we sell to them, they have leftover cash which they use to buy our financial assets. These may include but are not limited to Treasury Bills. No amount of budget balancing will affect debt to China. 5. The private sector cannot consistently generate sufficient demand to create jobs for everyone who wants one. As technology and productivity have increased, so it has become more difficult. Entrepreneurs cannot be blamed for adding self-checkout lanes, they have families and stockholders. But it means the store can sell the same volume of output with fewer employees–unemployment therefore rises.

Hence, we need the public sector to spend in deficit so that a.) the private sector can net save and b.) jobs are created to supplement those generated by the market system. And it creates neither a default risk nor inflation–unless we are already at full-employment, which means we don’t need to be spending that much in the first place! It is noteworthy that when, in the midst of the Great Depression, the government decided to try to reduce the deficit, unemployment jumped from 14% (after having fallen from nearly 25%) to 19%. Once WWII hit, however, any worries about government spending went right out the window and unemployment plummeted to 1.9%. There’s no reason we can’t be there right now. Only bad policy can stand in our way.

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Dave’s new book, Trumped, is out. “God help America if she becomes president.

Trump’s Candidacy – the Good and the Bad of It (Stockman)

America is heading for a devastating financial collapse and prolonged recession that will make the last go-round look tame by comparison. The entire recovery is one giant Potemkin village of phony economics and egregious financial asset inflation. It isn’t even a mixed or debatable story. Beneath the “all is awesome” propaganda of the establishment institutions is a broken system hurtling toward ruin. For example, during the month of July 2016, when the Democrats were convening in Philadelphia to confirm a third Obama term and toast 25-years of Bubble Finance, exactly 98 million Americans in the prime working ages of 25 to 54 years had jobs, including part-time gigs and self-employment. That compares to 98.1 million during July 2000. That’s right. After 16 years of the current regime we have 5 million more prime working age Americans and not a single one of them with a job.

At the same time, the number of persons in households receiving means-tested benefits has risen from 50 million to 110 million. Even as the economic wagon has faltered and become loaded with dependents, however, the financial system has grown by leaps and bounds. For example, during those same 16 years public and private debt outstanding in America has risen from $28 trillion to $64 trillion. The value of publicly traded equity has increased from $25 trillion to $45 trillion. And the net worth of the Forbes 400 has nearly doubled from $1.2 trillion to $2.4 trillion. In a word, the U.S. economy is a ticking time bomb. Main Street economics and Wall Street finance have become radically and dangerously disconnected owing to the reckless falsification of financial markets by the Fed and Washington’s addiction to endless deficits and crony capitalist bailouts and boodle.

There is not a remote chance that this toxic brew can be sustained much longer. Under those circumstances the very last thing America will need in 2017–18 when it hits the fan is a lifetime political careerist and clueless acolyte of the state who knows all the right words and harbors all the wrong ideas. Indeed, during the coming crisis America will need a brash disrupter of the status quo, not a diehard defender. Yet when the Dow index drops by 7,000 points and unemployment erupts back toward double digits, Hillary Clinton’s only impulse will be to double down. That is, to fire-up the printing presses at the Fed from red hot to white heat, plunge the nation’s fiscal equation back into multi-trillion deficits and crank-out Washington’s free stuff like never before.

A combination of a Clinton White House and the devastating day of reckoning just ahead would result in Big Government on steroids. It would also tilt the Imperial City toward war in order to distract the nation’s disgruntled voters in their tens of millions. Indeed, her prospective war cabinet — including Victoria Nuland and Michéle Flournoy — is comprised of the actual architects of Washington’s unprovoked NATO siege on Russia’s own doorsteps. God help America if she becomes president.

Read more …

And Beijing keeps pretending they want to cool it down.

China Property Prices Rise At Fastest Pace On Record In September (CNBC)

China property prices rose at the fastest pace on record in September, fueling fears of a market bubble in the world’s second-largest economy. Property prices climbed 11.2% on-year in September in 70 major cities while prices were up 2.1% from August, according to Reuters calculations using data from the National Bureau of Statistics. In August, prices rose 9.2% from a year ago. Home prices in the second-tier city of Hefei recorded the largest on-year gain at 46.8%, compared with on-year gains of 40.3% in August. Top August performer Xiamen posted an on-year rise of 46.5% against an increase of 43.8% in August. Prices in Shenzhen, Shanghai and Beijing rose 34.1%, 32.7% and 27.8% on an annual basis respectively, according to Reuters.

Underpinning the strong growth was simply “debt” said independent analyst, Fraser Howie, who is also co-author of “Red Capitalism” and “Privatizing China.” “A decade ago you could make a case for strong property in China (with) genuine demand and relatively low leverage in the sector. This is certainly not the case now. You are seeing a lot of leverage in the property sector, both retail and commercial,” he told CNBC’s “Squawk Box”. The quick gains in property prices in China came after the Chinese government introduced measures aimed at boosting home sales earlier this year to reduce large inventories in an effort to limit an economic slowdown. Recent fears of overheating, however, prompted local governments in China to announce a flurry of property market cooling measures in recent weeks. Any impact from those measures was not reflected in the latest data.

Despite the property cooling measures, Howie said the broad theme of how the Chinese government was responding to the situation was recurrent. “For five to six years or so, you have on-again-off-again cooling measures in the property market, trying to make property more affordable and it’s still nowhere near affordable,” he added. The Chinese government, he said, “has no clear plan”. “It’s just a bubble, they try to pull it back; they rein it in a bit, they let it go again when it impacts the real economy.”

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It’s gettiing time for the IMF to comment on this.

Yuan Hits Record Low Against Dollar in Offshore Trading (WSJ)

The yuan hit a record low against the U.S. dollar in offshore trading Friday after strong earnings on Wall Street and weakness in the euro boosted the strength of the greenback. The dollar reached a high of 6.75651 against the Chinese currency, which trades freely around the clock in offshore markets such as Hong Kong, its biggest trading center. It was last trading up 0.2% at 6.7582. The yuan has been traded outside China since 2010. Hong Kong’s markets are closed today as a typhoon lashes the city, with the yuan breaching its previous record around 7.41 a.m. local time, typically a time when market liquidity is thin. The People’s Bank of China later set its daily reference rate for the yuan traded in mainland China at 6.7558 against the U.S. dollar.

Onshore, the yuan is allowed to trade 2% either side of this level. The currency last traded at 6.7519 against the greenback, while its offshore counterpart weakened further after the fixing. “Overnight we saw a broadly stronger U.S. dollar,” says Qi Gao, Asia foreign exchange strategist at Scotiabank. He anticipates further strength in the greenback in the weeks running up to the U.S. Federal Reserve’s December meeting, at which the central bank may deliver its first rate increase in a year.

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“This is actually what we’re told by banks’ client managers to do to meet [regulatory] requirements.”

China’s Property Frenzy Spurs Risky Business (WSJ)

Xiong Meifang was about $30,000 short two months ago for a 30% down payment on an $895,000 apartment in the southern part of Beijing. To make up the difference, the 31-year-old graphic designer took out a line of credit from a national bank. She said the bank told her she could use the loan however she wanted. China bans borrowing for down payments. A surge in such financing offered by nonbank lenders earlier this year led to a regulatory clampdown. But as banks increasingly turn to mortgage lending, there are new signs of risky practices. In some instances, banks offer credit lines to borrowers buying apartments with few questions asked. In others, banks work with independent loan brokers or property agents to funnel money into down-payment financing.

Data released Tuesday showed medium- and long-term household loans, almost all of which are mortgages, made up 60% of all new loans created in the third quarter, up from 47% in the second quarter and 23% in the first. Easy credit has fanned a property-buying craze in many Chinese cities this year, helping shore up an otherwise weak economy. Government data on Wednesday showed GDP expanded by 6.7% from a year earlier in the third quarter, matching expectations, largely on the strength of the hot property market and loose monetary policies. In the past two weeks, two dozen cities have asked banks to tighten home-lending standards. Financial regulators are seeking to rein in the relatively new practice of banks working with brokers and others, such as developers, to help home buyers come up with down payments.

[..] On paper, the purpose of the loan can’t be for the home purchase itself. But the company could help arrange a contract with, say, a decorator, to show a bank that the loan would be for home decoration, the representative said, adding that ultimately the bank can’t check how the money is used. [The broker] charges a 3% flat fee on the amount of any loans it helps arrange. “It’s all legal, of course,” said the representative. “This is actually what we’re told by banks’ client managers to do to meet [regulatory] requirements.”

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While they have huge debts with the shadow banks. What could go worng?

China’s Local Governments Are Getting Into The Venture Capital Business (BBG)

China’s next billion-dollar startup could have backing from an investor with more money than Warren Buffett and a knack for promoting spicy duck-neck delicacies. The Hubei provincial government is armed with 547 billion yuan ($81 billion) earmarked for investments that can diversify a job base dependent on steel, mining and cars. And the bureaucrats in the heartland region along the Yangtze River are letting professionals do the work – allocating the money to investment houses Sequoia Capital, TCL Capital and CBC Capital. Local governments across China are getting into the venture-capital business, deploying a combined 3 trillion yuan as the Communist Party resolves to modernize the economy and reduce debt-fueled spending on infrastructure. The money is meant to spur development of biotechnology, internet and high-end manufacturing companies that can replace the stumbling heavy industries sapping economic growth.

“Our focus is more on the sector than the return,” said Wang Hanbing, who oversees $6 billion as chairman of the Yangtze River Industry Fund, one of several using Hubei government money. “We encourage people to bring real jobs back to Hubei.” China is grappling with a profusion of economic difficulties such as declining exports, surging home prices and skyrocketing corporate debt. The State Council signaled last month it had a bigger appetite for venture capital, urging local administrations to play a leading role and promising to level the playing field for foreign VC funds. Policy makers want to curb the proliferation of borrowing by regional authorities to pay for infrastructure projects that prop up growth. Local government financing vehicles borrow on behalf of governments, which often are barred from doing so. Through September, the debt issued by more than 1,600 such vehicles soared 47% from a year ago to 1.5 trillion yuan.

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The same effect as globalization: bring down wages..

The Sharing Economy is Creating a Dickensian World (Das)

Cheerleaders frame the sharing economy in lofty utopian terms: The sharing economy isn’t business but a social movement, transforming relationships between people in a new form of internet intimacy and humanitarianism. Exchanges are economic. Buyers are primarily concerned about access to services at low costs rather than social objectives. Providers are motivated by money, using their assets and labor to get by in an unforgiving and poor economic environment.

The major financial backers of the sharing economy aren’t philanthropists. They are Wall Street and Silicon Valley’s 1%, related venture-capital firms and a few institutional investors, such as sovereign-wealth funds. The amount of capital provided is substantial. Given the normal five-to-seven-year cycle for such investments, the pressure to deliver results will increase, bringing it into conflict with the social or altruistic objectives espoused. Ultimately, the sharing economy will influence how traditional businesses operate. Traditional automobile makers could offer a car-sharing service, such as BMW’s Drive Now. Users can access a car as needed, paying only for usage. These types of changes may decrease rather than increase revenue as it substitutes hiring arrangements for outright purchases.

But perhaps the real issue is that the sharing economy reverses progress in labor markets. Whatever the gains from increased efficiency, it recreates a Dickensian world for a part of the population. Formal employment protects labor from exploitation and deprivation to varying degrees. The sharing economy transfers the risk of economic uncertainty from the employer to the employee with potentially tragic consequences. Most important, the underlying economic premise is false. Consumption constitutes 60%-70% of activity in advanced economies. In 1914, Henry Ford doubled his workers’ pay from $2.34 to $5 a day, recognizing that paying people more would enable them to afford the cars they were producing. Reduction of income levels and employment security ultimately reduces consumption and economic activity, impoverishing most within societies.

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They should take the lot of them, everyone involved, and ban them from ever working in banking or finance again.

‘Lions Hunting Zebras’: Ex-Wells Fargo Bankers Describe Abuses (NYT)

Mexican immigrants who speak little English. Older adults with memory problems. College students opening their first bank accounts. Small-business owners with several lines of credit. These were some of the customers whom bankers at Wells Fargo, trying to meet steep sales goals and avoid being fired, targeted for unauthorized or unnecessary accounts, according to legal filings and statements from former bank employees. “The analogy I use was that it was like lions hunting zebras,” said Kevin Pham, a former Wells Fargo employee in San Jose, Calif., who saw it happening at the branch where he worked. “They would look for the weakest, the ones that would put up the least resistance.”

Wells Fargo would like to close the chapter on the sham account scandal, saying it has changed its policies, replaced its chief executive and refunded $2.6 million to customers. But lawmakers and regulators say they will not let it go that quickly, and emerging evidence that some victims were among the bank’s most vulnerable customers has given them fresh ammunition. This week, three members of the Board of Supervisors in San Francisco, Wells Fargo’s hometown, introduced a resolution calling on the city to cut all financial ties with the bank. They cited both the recent scandal and past cases — particularly the $175 million that Wells Fargo paid in 2012 to settle accusations that its mortgage brokers had discriminated against black and Hispanic borrowers.

Read more …

You may not like Trump, but do you like war any better?

Washington Foreign Policy Elites Not Sorry To See Obama Go (WaPo)

There is one corner of Washington where Donald Trump’s scorched-earth presidential campaign is treated as a mere distraction and where bipartisanship reigns. In the rarefied world of the Washington foreign policy establishment, President Obama’s departure from the White House – and the possible return of a more conventional and hawkish Hillary Clinton — is being met with quiet relief. The Republicans and Democrats who make up the foreign policy elite are laying the groundwork for a more assertive American foreign policy, via a flurry of reports shaped by officials who are likely to play senior roles in a potential Clinton White House. It is not unusual for Washington’s establishment to launch major studies in the final months of an administration to correct the perceived mistakes of a president or influence his successor.

But the bipartisan nature of the recent recommendations, coming at a time when the country has never been more polarized, reflects a remarkable consensus among the foreign policy elite. This consensus is driven by a broad-based backlash against a president who has repeatedly stressed the dangers of overreach and the need for restraint, especially in the Middle East. “There’s a widespread perception that not being active enough or recognizing the limits of American power has costs,” said Philip Gordon, a senior foreign policy adviser to Obama until 2015. “So the normal swing is to be more interventionist.” In other instances, the activity reflects alarm over Trump’s calls for the United States to pull back from its traditional role as a global guarantor of security.

“The American-led international order that has been prevalent since World War II is now under threat,” said Martin Indyk, who oversees a team of top former officials from the administrations of Obama, George W. Bush and Bill Clinton assembled by the Brookings Institution. “The question is how to restore and renovate it.”

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Very clear video. But then, it was of course always a stupid thing to claim that US elections cannot be rigged.

Hacking Democracy (ZH)

“Those who cast the votes decide nothing. Those who count the votes decide everything.” – Joe Stalin.

With the mainstream media lambasting Trump for daring to suggest the election process is rigged – despite hard evidence – this is the hack that proved America’s elections can be stolen using a few lines of computer code. The ‘Hursti Hack’ in this video is an excerpt from the feature length Emmy nominated documentary ‘Hacking Democracy’. The hack of the Diebold voting system in Leon County, Florida, is real. It was verified by computer scientists at UC Berkeley.

Read more …

Brussels is as crazy as the US Democrats.

Italy Shields Russia From EU Sanctions Threat (EUO)

Italy has shielded Russia and Syria from a threat of new sanctions, amid warnings by some leaders that Russia was trying to “weaken” the EU. EU leaders said in a joint statement in Brussels on Thursday (20 October) that: “The EU is considering all available options, should the current atrocities [in Syria] continue.” They also urged “the Syrian regime and its allies, notably Russia” to “bring the atrocities to an end”, referring to Russian and Syrian airstrikes on the city of Aleppo in Syria that have caused severe civilian casualties. Germany, France, and the UK had wanted to threaten sanctions more explicitly.

“The EU is considering all options, including further restrictive measures targeting individuals and entities supporting the regime, should the current atrocities continue”, they had suggested saying. Italian prime minister Matteo Renzi led opposition, also shared by some other states, to the threat, diplomats said. He said while leaving the summit that “if we want to speak with Russia then we have to leave the door open”. He also said he did not think “that the difficult situation in Syria could be solved by additional sanctions on Russia”.

Read more …

Europe has but one purpose: to humiliate Greece. Britain better watch out.

Draghi Says Athens Should Focus On Reforms, And The Eurozone On Debt (Kath.)

European Central Bank President Mario Draghi on Thursday called on the Greek government to focus its efforts on implementing reforms agreed with the country’s creditors, noting that the ECB will examine the issues of Greece’s debt sustainability and its possible involvement in the Central Bank’s quantitative easing program when the time is right. “Discussions on the sustainability of the Greek debt continued” at an ECB meeting earlier in the day, he said. “We expressed concern, and steps should be taken.” Draghi said the ECB will conduct its own independent assessment of Greece’s debt.

“When the time comes we will examine independently the issue of the debt sustainability,” Draghi said, adding that “until then it is premature to speculate and weave scenarios,” an apparent reference to Greek calls for inclusion in the ECB’s QE program. Draghi appeared to indicate that the ECB would proceed with its assessment of Greece’s debt once there has been action from both sides: work from Athens in implementing reforms and action from Greece’s eurozone partners in lightening its debt burden. The timing of Draghi’s comments was significant. They came a day before Greek Prime Minister Alexis Tsipras is to meet with German Chancellor Angela Merkel on the sidelines of an EU leaders’ summit in Brussels for talks that are expected to touch on Greece’s debt problem and the progress of reforms.

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As supermarket prices are as high as in the rest of Europe.

126,956 Greek Workers Earn €100 Per Month, 343,760 Between €100 and €400 (KTG)

When it comes to escape the nightmare of unemployment, one may grab all possible and impossible opportunities and even accept jobs with wages that let you come home with a loaf of bread, two tomatoes and a tiny piece of cheese. The data released by the Labor Ministry are shocking: 126,956 employees in the private sector are paid a gross monthly salary of €100. 343,760 employees are paid monthly salaries between €100 and €400 gross. This category of workers have part-time or rotating work contracts. Working time: 2-3 days per week or even a few hours a week. €100 per month gross could be €55-60(?) net – enough to cover transport cost and make a living at €1 per day. PS a friend recently got a job for €300 gross – net should be around €250-230. Working hours are 4 hours per day, four days per week. She has been jobless for 4 years.

Read more …

Aug 082015
 
 August 8, 2015  Posted by at 9:37 am Finance Tagged with: , , , , , , ,  4 Responses »
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NPC Auto races, Rockville Fair, Montgomery County, Maryland 1923


China Exports Fall 8.3% From A Year Earlier (Bloomberg)
The Commodity Slump Is Killing Hedge Funds (Bloomberg)
“The Top’s In”: David Stockman Warns Of “Epochal Deflation” (ZH)
Gross Sees September Rate Rise, Global Economy In Deflation (Bloomberg)
Shadow Banking Draws Canadians Where US Banks Are Warned Away (Bloomberg)
Europe Moves to Cut Risk in $505 Trillion Derivatives Market (Bloomberg)
Economic Reality Now Catching Up To Market Fantasy (Smith)
EU Told Greece On Track For Possible Bailout Deal Next Week (Reuters)
James Galbraith: ‘Not Even Schäuble Thinks It’s a Good Solution’ (Spiegel)
Acting On Varoufakis Claim, Greek Police Find No Hacking Signs (Kathimerini)
Europe’s Neo-Liberal Road Began At Mont Pélerin (Luciano Gallino)
The US Is Destroying Europe (Eric Zuesse)
Bank Shares Become Latest Thorn for Australia’s Market (WSJ)
Economists Think Brazil Will Get Downgraded to Junk in the Next Few Years (Bloomberg)
Dutch Pension Fund Demands Full Fee Disclosure From Private-Equity Firms (WSJ)
Merkel’s War on Germany’s Press and Parliament (Spiegel)
Tourists and Refugees Cross Paths in the Mediterranean (Spiegel)
UNHCR Warns Of Deepening Refugee Crisis In Greece, Calls For Action (UNHCR)
Greek PM Calls EU For Help On Migrants Crisis (Reuters)
‘If We Don’t Help, Then Who Will?’ (Kathimerini)

And the economy is supposed to grow at 7%?!

China Exports Fall 8.3% From A Year Earlier (Bloomberg)

China’s exports declined more than expected in July, hobbled by a strong yuan and lower demand in the European Union, and adding pressure on Premier Li Keqiang to stabilize growth. Overseas shipments fell 8.3% from a year earlier in dollar terms, the customs administration said. The reading was well below the estimate for a 1.5% decline in a Bloomberg survey and compared with an increase of 2.8% in June. Imports dropped 8.1%, widening from a 6.6% decrease in June, leaving a trade surplus of $43 billion. Along with weak domestic investment, subdued global demand is putting China’s 2015 growth target of about 7% at risk.

The government has rolled out fresh pro-expansion measures, including special bond sales to finance construction, but has held off weakening the yuan as China seeks reserve-currency status. “Exports are no longer an engine for China growth – no matter what the government does, it’s just impossible to see strong export growth as in the past,” said Bank of Communications economist Liu Xuezhi. “It means additional slowdown pressure, and it requires the government to be more aggressive in the domestic market.” Liu said China is likely to accelerate infrastructure spending as fixed-asset investment is the “the most immediate and effective” way to stimulate growth.

Read more …

All they can do is short everything in sight.

The Commodity Slump Is Killing Hedge Funds (Bloomberg)

When even Cargill, the world’s largest grain trader, decides to liquidate its own hedge fund, that’s a sign that commodity speculators are in trouble. Hedge funds focused on raw materials lost money on average in the first half, the Newedge Commodity Trading Index shows. Diminishing investor demand spurred Cargill’s Black River Asset Management unit to shut its commodities fund last month. Others enduring redemptions include Armajaro Asset Management, which closed one of its funds, Carlyle Group’s Vermillion Asset Management and Krom River Trading. While hedge funds are designed to make money in both bull and bear markets, managers have a bias toward wagering on rising prices and that’s left them vulnerable in this year’s slump, said Donald Steinbrugge of Agecroft Partners.

The Bloomberg Commodity Index tumbled 29% in the past year and 18 of its 22 components are in a bear market. “No one wants to catch a falling knife, and demand for commodity-oriented hedge funds is very low,” said Steinbrugge, whose company helps funds find investors. The amount of money under management by hedge funds specializing in commodities stands at $24 billion, 15% below the peak three years ago, according to data from Hedge Fund Research. The Newedge index, which tracks funds betting on natural resources, suggests managers have lost money for clients during much of the past four years. A dollar invested in the average commodity hedge fund in January 2011, when values reached a reached a record, had shrunk to 93 cents by the end of June. Investing in the S&P 500 index would have returned 80%, including dividends.

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Maybe people should have listened to the Automatic Earth all along? That’s not to say that Stockman isn’t worth listening to, but …

“The Top’s In”: David Stockman Warns Of “Epochal Deflation” (ZH)

The truth hurts… especially permabullish CNBC anchors. But when David Stockman explained why “the top is in,” and warned that the world is overdue for an “epochal deflation, like nothing it has ever seen,” one should listen. The “debt supernova” of the last decade or two has created massive over-capacity and this commodity deflation “is not temporary, it’s the end of the central bank bubble.” The catalyst has already happened -“It’s China,” Stockman exclaims, “China is the most lunatic pyramid of credit and speculation.. and capital is now fleeing the swaying towers of the China ponzi.” Well worth the price of admission…

Read more …

More deflation.

Gross Sees September Rate Rise, Global Economy In Deflation (Bloomberg)

Bill Gross, money manager at Janus Capital, said the global economy is “dangerously close to deflationary growth.” Once there is a “whiff of deflation, things tend to reverse and go badly,” Gross said Friday in a Bloomberg Radio interview with Tom Keene. Gross pointed to how the CRB Commodity Index isn’t just at a cyclical low, but lower than in 2008 when Lehman Brothers went bankrupt. The commodity markets tell a truer story of what is happening in the economy because they are subject to real-time supply and demand, Gross said. Oil, metals and crops have plunged as China’s economy has decelerated and gluts in multiple markets have further depressed prices.

Gross, who joined Janus in September after abruptly leaving PIMCO, manages the $1.5 billion Janus Global Unconstrained Bond Fund. He said the Federal Reserve will raise interest rates next month by 25 basis points. “September is the number for sure,” said Gross, who used to manage the world’s largest bond fund. The Fed is “mentally committed to moving before year end,” he said, despite the Bank of England’s Monetary Policy Committee this week voting 8-1 to keep its key rate at a record low and talking about changing policy next year. A move in September is “not unanimous” but is the “majority opinion” now, Gross said. Any increase will likely be 25 to 50 basis points. A 50 basis point move would “scare the market,” he added.

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More bad news for Canada.

Shadow Banking Draws Canadians Where US Banks Are Warned Away (Bloomberg)

Canada’s largest money managers are joining the ranks of America’s shadow banks. Public Sector Pension Investment Board, Canada’s fifth-largest pension plan, said last month it intends to open a loan-origination business in New York by year-end. That follows the Canada Pension Plan Investment Board’s $12 billion deal to acquire General Electric’s business that lends to smaller companies. The Canadians are part of a wave of institutions unencumbered by U.S. regulation searching for higher returns in the market for risky loans to American companies. Bank supervisors there are pressuring the biggest lenders to pull back from deals that load up companies with too much debt, seeking to avoid a credit bubble that could damage the U.S. economy.

“Whenever you have regulatory constraints and it closes down a market, it provides opportunities for those who fall outside the regulatory constraints,” said Alan White, professor of investment strategy at University of Toronto’s Rotman School of Management. The Canadian funds, which have pioneered the strategy of using alternative investments in pensions, are joining private-equity giants KKR and Apollo Global and other nonbank firms in seeking to profit from high-yield credit as central banks around the world suppress interest rates. Canada’s biggest private-equity firm, Onex Corp., has also moved deeper into the U.S. market, ramping up its business packaging the debt as securities with an eye to doubling that unit’s assets in two years.

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Take this with 800 pounds of salt.

Europe Moves to Cut Risk in $505 Trillion Derivatives Market (Bloomberg)

Banks and investors in the European Union will have to send trades of some interest-rate swaps to a third party under new rules intended to make financial markets safer. The banks and major investors that hold the derivatives will have to use a third party called a clearinghouse to process their trades, the European Commission, the EU’s executive arm, said in a statement on Thursday. “There’s been quite a long delay in getting the European Union to the end point in mandatory clearing,” said Emma Dwyer at law firm Allen & Overy in London. “People should be reasonably content with this. It hasn’t changed the scope of contracts that are covered and the compromises that were worked out along the way have been largely observed.”

The Group of 20 nations in 2009 mandated clearing for many swaps contracts in an attempt to reduce the damage that would be caused by a major financial institution defaulting on its payments. “Today we take a significant step to implement our G-20 commitments, strengthen financial stability and boost market confidence,” said Jonathan Hill, the EU commissioner for financial services. “This is also part of our move toward markets that are fair, open and transparent.” Banks have traditionally traded interest-rate swaps between themselves in over-the-counter, or off-exchange, transactions. By redirecting these transactions to a clearinghouse, the derivatives market should become safer. If a counterparty goes bust, the clearinghouse will spread the losses incurred between all its member firms.

Companies have to post collateral with clearinghouses to use them. Financial institutions held OTC swaps with a notional value of $505 trillion at the end of 2014, according to a survey from the Bank for International Settlements. The real value of the contracts is far smaller because firms often hold contracts which cancel each other out. The commission has made clearing compulsory for plain vanilla interest-rate derivatives, basis swaps, forward-rate agreements and overnight index swaps traded within the EU. It said that the mandate would be phased in over three years. The estimated daily turnover in the EU of OTC interest-rate derivative contracts denominated in so-called G4 currencies – dollar, euro, yen and pound – was more than €1.5 trillion as of April 2013, according to the commission.

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“China is a litmus test for the fiscal health of the rest of the world.”

Economic Reality Now Catching Up To Market Fantasy (Smith)

Asia is the biggest story right now, with Chinese markets in veritable free fall despite all attempts by the communist government to quell stock selling and shorting, to the point of threatening arrest and imprisonment for some net short sellers. China’s Shanghai Stock Exchange has experienced a 30% drop in market value in a month’s time. The mainstream argument meant to marginalize this fact is that less than 2% of China’s equities are owned by foreign investors; therefore, a crash there will not affect us here. This is, of course, pure idiocy. China is the largest importer/exporter in the world; and it’s set to become the world’s largest economy within the next two years, surpassing the United States. China’s economy is a production economy, and the nation is a primary supplier for all consumer goods everywhere.

Thus, China is a litmus test for the fiscal health of the rest of the world. When Chinese companies are struggling, when exporters are seeing steady overall declines and when manufacturing begins to crawl, this is not only a reflection of China’s economic instability, but also a reflection of the collapsing demand in every other nation that buys from China. Collapsing demand means collapsing sales and collapsing market value. For a global economic system so dependent on ever growing consumption, this is a death knell. In the U.S., markets have experienced a delayed reaction of sorts, due in great part to the Federal Reserve’s constant injections of fiat fantasy fuel since the credit crisis began.

This kind of artificial support for markets has become an expected and essential part of market psychology, resulting in utter dependency on easy money siphoned into big banks that then use it to bolster equities through massive stock buybacks (among other methods). Now, however, QE has been tapered and ZIRP is nearing the chopping block. The stock buyback scam is nearing an end. Already, U.S. stocks are beginning to feel the pain as reality slowly nibbles away once dependable gains. There is a good reason for this – Wages are in constant decline; manufacturing is in steady decline; retail sales are in decline, and government and personal debts continue to rise. We are not immune to the financial chaos of other nations exactly because we have been railroaded into a highly interdependent global economic system. In fact, much international fiscal uncertainty is tied directly to the fall of the American consumer as a reliable cash cow and economic engine.

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Germany could still kill it, and go for more emergency loans.

EU Told Greece On Track For Possible Bailout Deal Next Week (Reuters)

Greece is on track to complete a draft deal with international creditors on a third bailout by next Tuesday with a possible first disbursement by Aug. 20, a source familiar with a conference call of senior EU finance officials on Friday said. Talks are proceeding smoothly and may be completed over the weekend, the source said. If a draft memorandum of understanding and an updated debt sustainability analysis are ready as planned on Tuesday, the Greek government and parliament would be expected to approve them by Thursday. Euro zone finance ministers could then meet or hold a teleconference on Friday to endorse an up to €86 billion three-year loan programme for Athens, the source said.

Greece would be expected to enact another package of reform legislation before Aug. 20, in parallel with national ratification procedures so it could receive a first aid payment in time to meet a crucial bond payment to the ECB on Aug. 20, the source added. “Everyone is working on Plan A – a deal with disbursement by Aug. 20,” the source said. The negotiations began on July 20, a week after euro zone leaders agreed at an acrimonious all-night summit on stringent conditions for opening negotiations with Greece on a third bailout to save it from bankruptcy and keep it in the euro zone.

The source said no major differences had emerged among creditor nations on the one-hour call of the Economic and Financial Committee of deputy finance ministers, partly because there was nothing immediate to decide. Some countries, led by Germany, were keen to nail down more specific long-term reform commitments in addition to the immediate actions to be implemented, the source added.

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“..it is fair to say that the political imperatives and economic commitments of Mr. Schäuble are incompatible with the pressing needs of the Greek economy..”

James Galbraith: ‘Not Even Schäuble Thinks It’s a Good Solution’ (Spiegel)

American economist James Galbraith was one of ex-Greek Finance Minister Yanis Varoufakis’ advisors. He speaks with SPIEGEL about secret plans to return to the drachma and the role played by German Finance Minister Wolfgang Schäuble.

SPIEGEL: Was the mission Varoufakis embarked on ultimately impossible?

Galbraith: As finance minister, Yanis Varoufakis gave everything he had for five months to the cause of achieving a compromise that would permit some hope for economic stabilization in Greece and recovery from the extreme debacle of the past five years. It is very disappointing that there was, in fact, no flexibility in the position of the creditors.

SPIEGEL: Varoufakis’ primary adversary was German Finance Minister Wolfgang Schäuble. How would you assess the role he played?

Galbraith: Along with Yanis Varoufakis, I have a great deal of respect for the German finance minister. But it is fair to say that the political imperatives and economic commitments of Mr. Schäuble are incompatible with the pressing needs of the Greek economy. And it could prove a tragedy for Europe that no way has been found to bridge those differences.

SPIEGEL: Is the latest agreement between Greece and Europe a good one?

Galbraith: I don’t believe even Minister Schäuble thinks it is a good solution. And of course we know that there remain very strong differences between the IMF and the European creditors, especially the German government, over the question of debt relief. So the agreement is not yet in place -= and the question of whether it will come into place remains unsettled.

SPIEGEL: Do you believe that a Grexit would be better for Europe’s future?

Galbraith: This is a difficult question. The issue is the costs of making the transition, on the one side, against the advantages and risks of having an independent currency, eventually, on the other. Ultimately that judgment is better made by the political authorities in Greece and in Europe, who are the ones who will have to take the responsibility.

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That’s all the opposition parties and western media could wring out of the narrative?!

Acting On Varoufakis Claim, Greek Police Find No Hacking Signs (Kathimerini)

During the course of an investigation into claims by ex-Finance Minister Yanis Varoufakis, Kathimerini understands police computer experts have found no signs that anyone has hacked into a government database of tax registration numbers. Four members of the Cyber Crimes Unit were assigned the task of checking the General Secretariat for Public Revenues database to see if anyone had attempted to copy tax identification codes, known as AFMs in Greece. The probe was ordered after it emerged that Varoufakis claimed in a conversation with investors on July 16 that he talked to a ministry employee about hacking into the general secretariat’s online system during alleged attempts to create a scheme that would help the government overcome liquidity problems. Varoufakis did not clarify whether this breach took place. However, his claims prompted internal and judicial investigations.

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Highly interesting.

Europe’s Neo-Liberal Road Began At Mont Pélerin (Luciano Gallino)

When I open the windows in the morning these days, my gaze inevitably falls on Mont Pélerin, beyond the lake. It is a hill a few kilometres from Switzerland’s Montreux, known since the twenties for good hotels and a good climate. It is also the birthplace of the Mont Pélerin Society in 1947, when neoliberalism began the long march to a totalitarian hegemony over the economy and politics of Europe. Today we are experiencing the dramatic consequences. Gramsci would have been fascinated by the strategy adopted by the Mont Pélerin Society to win hegemony, which the father of Italian communism saw as a power exercised with the consent of those subject to it. Rather than being yet another foundation or a think tank specializing in promoting this or that branch of the economy, the Mont Pélerin Society chose to build a large-scale “collective intellectual”.

When Friedrich Hayek in 1947 called together a small group of economists and other intellectuals (including Maurice Allais, Walter Eucken, Ludwig von Mises, Milton Friedman and Karl Popper) to found the society, there were only 38 members, for the most part European. In the late 90s they had become a thousand, scattered throughout the world, although the majority continued to come from Europe. Rooted mostly in academia, this collective intellectual did not draft ambitious manifestos (the intent formulated in 47 at the time of its foundation amounted to just one page, you can also read it today on the website of Mont Pélerin Society ), or large projects of institutional reforms.

Instead it produced thousands of essays and books, many to a remarkable level, which all revolve around the issues that members of the society saw as the essence of neo-liberalism: the free movement of capital; the unquestioned superiority of the free market; the brutal reduction of the role of the state to the builder and guardian of the conditions that allow the widest possible dissemination of both. Thanks to this vast and detailed work, around 1980 economic doctrines and neo-liberal policies became embedded in universities and governments. It was not of course only the Mont Pelerin Society which was responsible for this, but its role has been overwhelming. The neo-liberal historian Dieter Plehwe was not exaggerating when, years ago, he called the society “one of the most powerful bodies of knowledge of our time”.

However, its members did not limit themselves to publishing articles and books. Many of them have come to occupy central positions in the apparatus of the governments of a number of countries. At the time of the Reagan presidency (1981-88), about more than a quarter of the eighty economic advisers of the President were members of the Mont Pélerin Society. The financial liberalization decided by the Thatcher government in the first half of the 1980s, which has changed the face of the British economy, were developed largely by the Institute of Economic Affairs, a subsidiary of the society founded and directed by two partners, Antony Fisher and Ralph Harris. The captains of industry in France and Germany have always been numerous among the ranks of the Mont PElerin Society, entertaining close relationships with members in the world of politics.

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It’s all about Russia.

The US Is Destroying Europe (Eric Zuesse)

Obama’s top goal in international relations, and throughout his military policies, has been to defeat Russia, to force a regime-change there that will make Russia part of the American empire, no longer the major nation that resists control from Washington. Prior to the U.S. bombings of Libya in 2011, Libya was at peace and thriving. Per-capita GDP (income) in 2010 according to the IMF was $12,357.80, but it plunged to only $5,839.70 in 2011 — the year we bombed and destroyed the country. (Hillary Clinton famously bragged, “We came, we saw, he [Gaddafi] died!”) (And, unlike in U.S. ally Saudi Arabia, that per-capita GDP was remarkably evenly distributed, and both education and health care were socialized and available to everyone, even to the poor.)

More recently, on 15 February 2015, reporter Leila Fadel of NPR bannered “With Oil Fields Under Attack, Libya’s Economic Future Looks Bleak.” She announced: “The man in charge looks at production and knows the future is bleak. ‘We cannot produce. We are losing 80% of our production,’ says Mustapha Sanallah, the chairman of Libya’s National Oil Corporation.” Under instructions from Washington, the IMF hasn’t been reliably reporting Libya’s GDP figures after 2011, but instead shows that things there were immediately restored to normal (even to better than normal: $13,580.55 per-capita GDP) in 2012, but everybody knows that it’s false; even NPR is, in effect, reporting that it’s not true.

The CIA estimates that Libya’s per-capita GDP was a ridiculous $23,900 in 2012 (they give no figures for the years before that), and says Libya’s per-capita GDP has declined only slightly thereafter. None of the official estimates are at all trustworthy, though the Atlantic Council at least made an effort to explain things honestly, headlining in their latest systematic report about Libya’s economy, on 23 January 2014, “Libya: Facing Economic Collapse in 2014.” Libya has become Europe’s big problem. Millions of Libyans are fleeing the chaos there. Some of them are fleeing across the Mediterranean and ending up in refugee camps in southern Italy; and some are escaping to elsewhere in Europe.

And Syria is now yet another nation that’s being destroyed in order to conquer Russia. Even the reliably propagandistic New York Times is acknowledging, in its ‘news’ reporting, that, “both the Turks and the Syrian insurgents see defeating President Bashar al-Assad of Syria as their first priority.” So: U.S. bombers will be enforcing a no-fly-zone over parts of Syria in order to bring down Russia’s ally Bashar al-Assad and replace his secular government by an Islamic government — and the ‘anti-ISIS’ thing is just for show; it’s PR, propaganda. The public cares far more about defeating ISIS than about defeating Russia; but that’s not the way America’s aristocracy views things. Their objective is extending America’s empire — extending their own empire.

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What did anyone expect?

Bank Shares Become Latest Thorn for Australia’s Market (WSJ)

In the span of a week, Australian stocks have wiped out all gains from July, making the index’s best month since February look like an anomaly. Australia’s S&P ASX 200 fell 2.4% Friday, its biggest one-day%age drop since May 18, 2012. The index closed the week with a loss of 3.9%, and has narrowed its gains for the year so far to 1.2%. The August moves mark a sharp reversal, after the benchmark last Friday briefly broke above 5700, rising 4.4% for the month. A deepening rout in commodities including oil, copper and iron ore, Australia’s biggest export, have dented resources stocks in recent months. But those firms aren’t the latest culprits. Bank shares, which account for a large chunk of the market, are leading losses this week.

In the last two days, shares in the country’s largest banks have fallen sharply after one of Australia’s biggest, Australia and New Zealand Banking Group, announced plans to raise 3 billion Australian dollars ($2.2 billion). The money would help meet the industry regulator’s call for big banks to increase the level of capital held against potential home-loan losses. It follows an announcement late last month of plans to sell a finance unit to help build a cash cushion. Thursday’s move stoked concerns that others among Australia’s “Big Four” banks— Westpac Banking Corp., National Australia Bank Ltd. and Commonwealth Bank of Australia—would also tap investors for cash, leading them to dump shares.

The ASX 200 basket of financial stocks fell 5.1% this week. Australia’s four largest banks are also four of the largest stocks by market capitalization, so losses have an outsize impact on the broader index. Declines in three of those banks on Thursday—with ANZ halted because of its announcement—accounted for slightly more than half of the stocks’ daily fall, Commonwealth Securities estimated. When ANZ resumed trading on Friday, its shares fell as much as 8.5%. Shares ended Friday down 7.5% at A$30.14.

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Try 2016.

Economists Think Brazil Will Get Downgraded to Junk in the Next Few Years (Bloomberg)

From another economic recession to a juicy corruption scandal embroiling President Dilma Rousseff, Brazil has had a tough 2015. It’s now looking down the barrel of another likely event: a junk rating of its government bonds. Latin America’s largest economy has a 70% chance of losing its investment grade rating in the next few years, according to the median estimate in a Bloomberg News survey of economists. Standard & Poor’s said last week it may downgrade the country’s rating and revised its outlook to negative from stable. Brazil’s bonds are currently rated BBB- which is one step away from junk. The company cited Brazil’s political and economic challenges amid an ongoing probe into kickbacks at the country’s state-owned oil company, Petrobras, which President Rousseff chaired at the time.

Inflation has ballooned to 9.25% in mid-July, more than double the central bank’s goal of 4.5%, according to the IBGE. Inflation won’t come back down to the target level until 2017, according to 70% of respondents in the survey. Policy makers have raised the key interest rate seven times since the end of 2014 to a nine-year high of 14.25% in an effort to taper prices by the end of 2016. All but one of 15 economists surveyed see the central bank cutting rates next year, with 60% saying the easing will start at the March or April meeting.

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Why does this take so long?

Dutch Pension Fund Demands Full Fee Disclosure From Private-Equity Firms (WSJ)

A Dutch pension fund running €186.6 billion ($204 billion) is to cease investing in outside money managers, including private-equity firms, that don’t fully disclose their fees, a move that echoes concerns raised by a host of U.S. investors. In a document seen by The Wall Street Journal, Dutch fund PGGM sets out for the first time what it deems to be acceptable compensation for money managers. It is worried that the pensions of its clients—social workers and nurses—are being undermined by high fees. “The interests of our beneficiaries and the interests of the asset management industry are not always aligned,” Ruulke Bagijn, PGGM’s CIO for private markets, said. “We are on the side of pension funds and we no longer want to turn a blind eye on difficult subjects like fees and compensation.”

Ms. Bagijn oversees investments including private equity, which accounts for a high proportion of the fees PGGM pays to managers, especially when compared with the amount invested in the asset class. Most of the money that PGGM manages is on behalf of the PFZW pension fund. More than half of PFZW’s €811 million fee bill in 2014 went to private equity. Yet private equity only accounts for 5.6% of PFZW’s €162 billion of assets. PGGM’s determination to reduce fees coincides with a Securities and Exchange Commission investigation into the private equity industry which has focused on expenses. The SEC has been helpful in highlighting the issue, Ms. Bagijn said. In addition to annual management fees and keeping a share of profits, private-equity firms sometimes charge less-visible administration and transaction fees. In July, a group of U.S. state and city officials wrote to urge the SEC to require private-equity firms to make better disclosure of expenses.

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“In reality, senior government officials and intelligence agency heads in Germany have long been pursuing a policy of intimidating and deterring journalists and their sources.”

Merkel’s War on Germany’s Press and Parliament (Spiegel)

When former German Federal Prosecutor Harald Range greeted SPIEGEL journalists for an interview at the end of July, he seemed combative. The 67-year-old recalled his oath of office as a young public prosecutor in the university town of Göttingen, to investigate “independent of a person’s standing.” He also said he refused to allow his position to be influenced by politics in any way, adding that he “had so far” not been given any orders by the government. “I am free in my decisions,” he said. But did he already suspect at that point that an investigation into two journalists would soon rock both his office and the government in Berlin?

Two weeks after the interview, Range stood in front of his admiring staff in Karlsruhe, where the federal prosecutor’s office is headquartered. It was the day after he had challenged the federal government, which he accused of an “intolerable intervention” into his work. And it was a few hours after he had been terminated. He said it was more important to him to be able to look in the mirror than in a newspaper. “I did it for myself and I did it for the agency,” he said. His staff showered him with applause. The mood in Berlin was quite a bit different. In an almost unprecedented show of unity, Chancellor Angela Merkel and her cabinet distanced themselves from Range. They acted as though they had nothing at all to do with the investigation that cost Range his job – an investigation that marked the first time the state had probed journalists for treason since the government of West Germany sought to prosecute DER SPIEGEL journalists 53 years ago.

Range is now gone, but what remains is a mess that could still lead to other politicians, ministers or agency chiefs getting pushed out. Within the course of just a few days, questions have arisen in Berlin that are fundamental to the meaning of democracy. And so far, the answers to those questions have been insufficient. How do prosecutors and members of Germany’s domestic intelligence agency, the Office for the Protection of the Constitution (BfV), perceive freedom of the press? How independent is Germany’s judiciary system? And are parliamentarians charged with oversight of the country’s intelligence agencies able to do their jobs?

In recent days, the chancellor, Justice Minister Heiko Maas and Interior Minister Thomas de Maizière have santimoniously thrown their support behind freedom of the press. But reality often looks different. In reality, senior government officials and intelligence agency heads in Germany have long been pursuing a policy of intimidating and deterring journalists and their sources. Leaks and whistleblowers are being hunted down and criminalized. Treason, a word that had hardly been heard for decades, is once again being used as part of the repertoire of politicians in Berlin – and all in the alleged name of protecting the common good.

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A strange world.

Tourists and Refugees Cross Paths in the Mediterranean (Spiegel)

It’s quiet on the beach. Vacationers are still sleeping in their hotels, and the only sound to be heard is of a few dogs barking. Dawn is breaking over Kos. Rasib Ali drags his body out of the water with the last of his strength. His arms and legs are shaking, his lips are blue and his wet jeans and shirt cling to his body. The Greek island of Kos is only a few nautical miles from the Turkish coast. Ali, an 18-year-old migrant from Pakistan, left Turkey in a rubber boat the night before. He traveled alone, unable to afford the cost of a spot on board a smugglers’ ship. Not far from Kos, his boat capsized. Though he can’t swim, Ali somehow he managed to make it to the beach.

Some Greek fishermen hurry over, pull Ali’s clothes off and wrap him in a jacket. “Don’t be afraid, boy, you’re safe now,” they say. Ali stares at the sea. “Thank you,” he stammers, “thank you.” Three hours later, at around 7 a.m., the first hotel guests shuffle out to the shore for an early-morning yoga class, and by noon the beach is full. Families spread out their towels, retirees play bocce and children build sand castles. Tourists snorkel in the exact same spot where Ali almost drowned a few hours earlier. It’s high season once again, and millions of people are flocking to Mediterranean beaches this summer, from Sicily to the Aegean Sea – vacationers from the north and refugees from the south. The sunny weather promises relaxation and fun to some.

To others, those seeking protection from bombs, hunger or poverty, it offers a less dangerous crossing than in fall or winter. Dazzling white yachts glide across the turquoise-blue water alongside jet-skiers, guests at beach bars sip chilled rosé and tanned Germans, Swedes and Britons model the latest beach fashion along the waterside promenades. But those same waters are also the scene of a gruesome drama with no end in sight. This year alone, more than 1,800 people have already drowned in the Mediterranean while trying to reach Europe. There are few places in Europe where rich and poor stand in such sharp contrast as in the vacation spots of the Mediterranean.

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The UN should call out Brussels on this, not Greece.

UNHCR Warns Of Deepening Refugee Crisis In Greece, Calls For Action (UNHCR)

The UNHCR Directors of the Bureau for Europe and of Emergency, Security and Supply, visited Greece last week to assess the refugee crisis in the country, where some 124,000 refugees and migrants have arrived by sea this year – as of 31 July – mainly to the islands of Lesvos, Chios, Kos, Samos and Leros. This represents a staggering increase of over 750% compared to the same period in 2014. In July alone, 50,000 new arrivals have been reported, 20,000 more than the previous month (an increase of almost 70%). This humanitarian emergency is happening in Europe, and requires an urgent Greek and European response. The vast majority of those coming to Greece are from countries experiencing conflict or human rights violations, mainly Syria, Afghanistan, and Iraq.

While Syrians made up 63% of all arrivals since the beginning of the year, in July alone Syrians reached 70% of arrivals. Many are in need of urgent medical assistance, water, food, shelter and information. All are exhausted. The reception infrastructure, services and registration procedures are falling far short of real needs. The Director of the Bureau for Europe, Vincent Cochetel, highlighted: “Such a level of suffering should and can be avoided. The Greek authorities need to urgently designate a single body to coordinate response and set up an adequate humanitarian assistance mechanism. As Greece faces financial challenges the country needs help, European countries should support Greece on these efforts.”

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“The EU is being tested on the issue of Greece. It has responded negatively on the economic front – that’s my view. I hope it will respond positively on the humanitarian front..”

Greek PM Calls EU For Help On Migrants Crisis (Reuters)

Greek Prime Minister Alexis Tsipras asked Europe to help in handling tens of thousands of refugees coming in from Syria, Afghanistan and other war zones, saying yesterday his cash-strapped country could not deal with them alone. The influx has piled pressure on Greece’s services at a time when its own citizens are struggling with harsh cuts and its government is negotiating with the EU and the IMF for fresh loans to stave off economic collapse. Boatloads of migrants arriving every day had triggered a “humanitarian crisis within the economic crisis,” Tsipras said after a meeting with ministers. “The EU is being tested on the issue of Greece. It has responded negatively on the economic front – that’s my view. I hope it will respond positively on the humanitarian front,” he said.

The comments came as the UN refugee agency (UNHCR) called on Greece to take control of the “total chaos” on Mediterranean islands, where thousands of migrants have landed. About 124,000 have arrived this year by sea, many via Turkey, according to Vincent Cochetel, UNHCR director for Europe. “The level of suffering we have seen on the islands is unbearable. People arrive thinking they are in the EU. What we have seen was not anything acceptable in terms of standards of treatment,” Cochetel said after visiting the Greek islands of Lesbos, Kos and Chios. “I have never seen a situation like that. This is the EU and this is totally shameful,” he added.

At a makeshift refugee centre at Kara Tepe, a hilltop about 5km north of Lesbos island’s main town of Mytilene, about 50 white tents provided by the local council struggled to accommodate the waves of people coming in daily. Rubbish littered the area and locals said 16 toilets were frequently blocked despite attempts by authorities to keep the area clean. Up to 10 people could be seen sharing one of the tents, while others lay on pieces of cardboard, jostling for space under the shade of olive trees in sweltering heat. “The government had battles on plenty of fronts and probably could not give as much attention to the problem,” the island’s mayor Spiros Galinos said. The UNHCR’s Cochetel said Greece had to step up its response.

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When I can go back, I’ll try and find them.

‘If We Don’t Help, Then Who Will?’ (Kathimerini)

The founding members of Melissa, a new network of migrants who live in Greece, did not hold a special council or vote on the issue. They simply asked themselves during a normal conversation one afternoon a couple of weeks ago: “If not us, then who? If we, who are women, mothers and immigrants, don’t give a helping hand to the children of Pedion to Areos, who will?” They got to work the very next day to provide some relief to the Afghan and Syrian children living among hundreds of refugees in a makeshift camp in the downtown Athens park.

Maria Ifechukude Ohilebo from Nigeria, Debbie Carlos Valencia from the Philippines, Click Ngwere from Zimbabwe and the other women from Asia, Africa and the Balkans, all active members of their respective communities who came together to establish Melissa with the aim of building networks of communication with their host communities, noticed the situation at the park long before the authorities did. Over a month ago, Victoria Square, where Melissa has its new office, was occupied by Syrian refugees. Pedion to Areos, which many of the network’s women walked through every day, started filling with newcomers too – entire families, mothers traveling alone with their children and unaccompanied minors among them.

Their numbers became too high for the Melissa ladies to do something for all of them, but they could do something for the children at least. Starting about 10 days ago, they began preparing 170 to 220 servings of nutritious breakfast, with a different menu every day: biscuits, carrot, banana or orange cake, fritters, sandwiches, muesli bars, etc. “It’s fascinating to watch them work,” an anthropologist who helps the network, Nadina Christopoulou, tells Kathimerini. “These are women who start their day at 5.30 a.m., work a 10-hour shift and then go home, where they prepare breakfasts for the Pedion tou Areos children. These are incredibly resourceful women who make something out of nothing.”

The food is prepared every evening at one of the network members’ houses, packaged along with a piece of fruit at the Victoria Square office and then distributed the following morning – and the entire cost is covered by Melissa’s members. It is a spontaneous initiative that has not been registered with any official authorities and is therefore not entitled to apply for any funding. As the women of Melissa say, they simply couldn’t stand by and do nothing for the children – who could just as easily have been their own. The symbolism is powerful: In the middle of a full-blown crisis, among the first to extend a helping hand to the refugees in the park, at a time when even the European Union is acting simply as an observer, themselves count among society’s most vulnerable.

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