Sep 142024
 


Vincent van Gogh Autumn landscape 1885

 

No More Debates – Trump (RT)
No More Debates, No More Mistakes (Quoth the Raven)
What You Don’t Know Might Surprise You (Kunstler)
The Trump-Kamala “Debate” Left Untouched What Is Really At Stake (PCR)
Russia Warns NATO of ‘Direct War’ Over Ukraine (RT)
Putin’s Warning Heard Loud And Clear – Kremlin (RT)
War Is Upon Us or Will Putin Blink Again (Paul Craig Roberts)
Musk Channels Star Wars Over WWIII Threat (RT)
Ukraine a Non-Sovereign State Ruled by ‘Political Frankenstein’ Zelensky (Sp.)
NATO Plans to Send Troops to Ukraine to Force Russia Into Talks – Moscow (Sp.)
‘Negotiation’ Only Way To End Ukraine, Gaza Conflicts – Beijing (RT)
The Big Collapse Awaits (Paul Craig Roberts)
Brazil Seizes Musk’s Money (RT)
The Folly of Criminalizing “Hate” (Njoya)

 

 

 

 

He wants them all to see
https://twitter.com/i/status/1834372286184570982

 

 

Hat

 

 

Overtime

 

 

Bongino
https://twitter.com/i/status/1834350085909741738

 

 

Blumenthal
https://twitter.com/i/status/1834436362046472646

 

 

Jesse

 

 

Girdusky

 

 

 

 

She/they sort of seemed to have a lead there for a fleeting second, but handed the baton right back to him. Now it’s his call, not theirs.

NOTE: They should have a debate on X.

No More Debates – Trump (RT)

Former US President Donald Trump has ruled out another debate with Kamala Harris, comparing the vice president to a boxer who lost a fight and wants a rematch. Harris, who rejected two earlier debate offers from Trump, said the two candidates “owe it to the voters” to face off again. Harris was widely regarded as winning Tuesday night’s ABC News debate against Trump, although subsequent polls have shown little change in voter attitudes and several informal surveys found undecided voters backing Trump after the primetime showdown. The vice president’s campaign immediately called for a second debate, and Trump appeared open to the idea, telling Fox News on Wednesday that he would take part, but only if the debate was hosted by “a fair network.” In a post to his Truth Social platform on Thursday, however, the Republican announced that he wouldn’t debate his Democratic rival again.

“When a prizefighter loses a fight, the first words out of his mouth are, ‘I WANT A REMATCH’,” Trump wrote.“Polls clearly show that I won the debate against Comrade Kamala Harris, the Democrats’ radical left candidate, on Tuesday night, and she immediately called for a second debate.” “She was a no-show at the Fox Debate, and refused to do NBC and CBS,” Trump continued, concluding: “KAMALA SHOULD FOCUS ON WHAT SHE SHOULD HAVE DONE DURING THE LAST ALMOST FOUR YEAR PERIOD. “We owe it to the voters to have another debate,” Harris’ campaign wrote on X on Thursday. Trump initially asked Harris to agree to three debates: one hosted by Fox News on September 4, another hosted by ABC on September 10, and a third hosted by NBC News on an unconfirmed date.

Harris’ campaign only agreed to the ABC debate, although Trump wavered about committing to this showdown, accusing the network of “ridiculous and biased” coverage of him. Throughout the debate, Trump was repeatedly interrupted and fact-checked by ABC hosts David Muir and Linsey Davis, the latter of whom was a member of Harris’ sorority in Howard University in Washington. Harris was not subjected to the same fact-checking, despite both candidates making misleading claims. “So many things I said were debunked, like totally debunked,” Trump told Fox News on Wednesday. “But she could say anything she wanted. My stuff was right, but they would correct you,” he continued, calling the debate “totally rigged.”

Fact check

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“..news networks don’t deserve the ratings of another debate or the trust of the American people..”

No More Debates, No More Mistakes (Quoth the Raven)

Strategically, I think the Trump campaign is making the right decision by saying there will not be a third debate. It could be strategy to get terms he wants for another debate, but I’m hoping it is what it appears to be on its face, closing the book on further debates. Trump didn’t “win” the first debate, but I don’t think that’s why he’s not agreeing to another debate. And I know a lot of people are going to write this off as Trump being scared to debate Kamala Harris again, but I think we all know that’s not the case. I believe this is the right move, likely being made for multiple strategic reasons which I want to explain. First, let’s not forget that Kamala Harris has had ample opportunity to agree to another debate already but has chosen not to do so. She declined offers from networks like NBC and Fox in advance of the first debate and only brought up the idea of another debate after the last one. Her lack of courage and indecision in not agreeing to another debate should rightfully come back to bite her in the ass. Harris wants another bite at the apple because she didn’t do as badly as everybody thought she would, and now she can’t have it because she didn’t believe in herself enough to agree to terms ahead of time. Tough rocks for her.

Second, not doing a debate pigeonholes Harris to the poor policy explanations and reasoning she put forth in the last debate. The entire world watched both candidates this week, and though Harris may have performed better artistically, she came up light on policy prescriptions and details on her plans are for crucial issues like the economy and immigration. This was reflected in several post-debate interviews, including ones from Reuters and CNN, where independent voters were not swayed to her side. She was given a chance to talk policy and thought it would be far more useful to take jabs at Donald Trump instead. As I noted the night of the debate, this may have been a short-term success, but as the hours turn to days after the last debate and independent-minded critical thinkers start looking for more substance, it’s going to backfire.

Third, Harris’s team was asking for provisions and rule changes up to the very last minute of the debate. Putting aside the fact that Trump already did another debate with an entirely different candidate before knocking him out of the race after agreeing to the rules set by the Democratic Party, Harris tried to change the rules of the ABC debate all the way up until the last minute, asking for mics to be live on the day of. As I’ve commented before, Democrats are obsessed with micromanaging every last detail of these debates and their candidate because they lack significant substance on policy. Harris’ appearance was more of a successful public relations event than it was an opportunity to explain her policy positions to the American people. Trump, so far, has done two debates on enemy territory, CNN and ABC, and has not been shy about taking interviews or holding press conferences throughout his entire campaign. Putting policy aside in favor of nitpicky tactics of trying to modify every last detail so the opposing airhead candidate has her best chance to deliver some type of catchphrase or polish on her flip flops is simply not something Republicans need to put up with again.

Fourth, the next debate will be the vice presidential debate, and JD Vance is far more articulate in explaining policy positions than Donald Trump is. If policy is going to rule the day, I’m certain Vance will out-joust Tim Walz. I’m basing this on watching both of their media appearances over the last month or so and common-sense policy prescriptions that I think most Americans in the middle are looking for. Not having another presidential debate shows the Republicans’ confidence in JD Vance, and frankly, I think he’s going to do a significantly better job than Trump did. It’ll make the vice presidential debate the official sendoff for both sides heading into the general election. Tim Walz can brush up on how best to spin his way through sounding like his administration actually has policy ideas, but I’m not sure there’s anything he can do to keep pace with Vance in a debate.

Finally, news networks don’t deserve the ratings of another debate or the trust of the American people, whether Democrats know it or not. The previous debate was so blindingly biased towards Harris, both in the lines of questioning and in how the moderators interjected on her behalf, that network news in general doesn’t deserve to be trusted with another debate. Megyn Kelly said it best in her post-debate analysis when she stated that Republicans should never agree to another debate after what took place this week. As I’ve noted, I think the American public will see the objective truth that this was an ambush on Donald Trump and not an objective forum for two candidates to debate each other on the merits.

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“Prepare to duck-and-cover, or possibly to put your head between your legs and kiss your ass goodbye.”

What You Don’t Know Might Surprise You (Kunstler)

Now, as for the Harris-Trump debate, otherwise, and given the rigged features of the exercise, it’s obvious that Mr. Trump muffed several major scoring opportunities. When Ms. Harris dredged up the notorious hoax about “very fine people on both sides” in Charlottesville, Mr. Trump could have addressed the moderators, David Muir and Linsey Davis and asked them why they did not “fact-check” the utterance, which had been thoroughly debunked by the Left-wing site Snopes.com, advertising itself as “the definitive Internet reference source for researching urban legends, folklore, myths, rumors, and misinformation.” Nor did they fact check the likewise debunked “suckers and losers” hoax about US soldiers supposedly uttered by Mr. Trump at the Normandy D-Day cemetery. Actually, Muir and Davis “fact-checked” Mr. Trump over thirty times and Ms. Harris hardly at all.

In any case, Mr. Trump blew many other chances to pin Ms. Harris with her own lies and hypocrisies — like, failing to state plainly that in nearly four years she never actually visited the Mexican border (whatever her designated title was: “Border Czar,” “Root Causes Detective”) . . . failing to clarify that the president has been removed from the abortion debate altogether and has no role in telling women what to do with their own bodies under current law. . . that Ms. Harris’s voteless selection as nominee was a paradigmatic affront to “our democracy” that even her own fellow party members ought to recognize . . . that the War in Ukraine was actually started in early 2014 by Barack Obama, Victoria Nuland, and the CIA, not by Mr. Putin . . . and omitting to state that all — every last one — of the 2020 election lawsuits across the nation were dismissed on procedural grounds and not on the merits of their arguments, which were never heard in court.

That’s just a short list. It is also rumored that Ms. Harris got the debate questions beforehand, since her husband, Hollywood lawyer Doug Emhoff, is a close friend of Dana Walden, Co-chair of the Disney Corporation board of directors (Disney owns ABC-News.) Anyway, that much-awaited event is over now and we are into the homestretch of this election. Kamala Harris has still shown no disposition to meet the press, to answer any questions impromptu and unscripted. The voting public seems to be losing patience with that. Her poll numbers are sinking, despite her admirable ability to speak in declarative sentences and lead joyful laugh-fests.

What remains for our sore-beset country beyond that vortex of nefarious blobbery and balloting lawfare is the interesting development that our government is now pressing to commence World War Three before the election can happen. “Joe Biden,” of course, is lately as absent from the public consciousness as Rutherford B. Hayes, but whoever acts in the president’s name these days just gave permission for Ukraine to strike targets inside Russia with long-range missiles. So far, the UK and the Netherlands have officially jumped in on that decision. Note that the Ukrainians have no ability to actually do the targeting of said missile themselves, which involves satellite technology, meaning whatever missiles happen to get fired into Russia will be done by NATO personnel. Mr. Putin has made it clear that such action will have consequences. We might infer that means Russia will strike back at some NATO targets. I must imagine his primary target will be NATO headquarters in Brussels. Other targets would probably follow, perhaps even in the USA. Prepare to duck-and-cover, or possibly to put your head between your legs and kiss your ass goodbye.

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“It is about who controls the US government–the people or the ruling elites.”

The Trump-Kamala “Debate” Left Untouched What Is Really At Stake (PCR)

What we need to understand about American presidential elections is that normally the candidates of both parties are chosen by the ruling elites. Therefore, it matters not to them who is elected. Trump is hated by the ruling elites because he took the nomination away from their list of approved Republican candidates in 2016, and they have been trying to get rid of him ever since. Trump is dangerous to the ruling establishment because he says he stands with the people against them. In other words, this is not an election contest between Republicans and Democrats. It is about who controls the US government–the people or the ruling elites.

I can say with complete confidence that for many decades the universities and law schools have undermined Americans’ beliefs in the US Constitution and in the belief system that is the basis of the United States. This undermining has had an effect on the American population. Democrat members of the population are convinced that white Americans, especially if they are southerners, are racists who have oppressed black Americans. They are also convinced that men oppress women. They are also convinced that the concept of sexual perversion is bigotry. The Democrats project all these alleged faults of white people not on their own white selves but onto Republican voters–“Trump deplorables” in Hillary Clinton’s words. So, Trump has two targets on his back. The ideological one of being a white male who oppresses blacks and women and the upstart who challenges the rule of the military/security complex, Wall Street, Big Pharma, and the other interest groups including the Israel Lobby whose money elects the members of the House and Senate.

Very few, including Trump, dare to admit the Israel Lobby’s control of the US government. That control is manifest in Netanyahu, a war criminal with a policy of genocide, being invited to address the House and Senate and being received with 53 standing ovations. The members of the House and Senate understand that they are in office due to the campaign contributions of their donors. Therefore, they are responsive to the donors whose money elects them, not to the people who vote. They understand that if they take issue with official narratives, they will lost office. As Kamala has not challenged the ruling establishment and as she is female and part black, she is immune to the ideological denunciation. Trump is at the disadvantage, because accused of being a racist and a misogynist, he proves the point when he attacks Kamala, who is free to sit there and gaslight the American public.

CNN’s “instant poll” following the Trump-Kamala “debate” assigns victory to Kamala by a 63% to 37% margin. In actual fact, there is no debate. There is a carefully constructed list of questions prepared by a partisan media that representatives of the presstitute media ask the candidates. The questions are artfully constructed to aid the preferred candidate. Sometimes the questioners even jump in and aid the favored candidate in “correcting” the unfavored candidate. It is likely that the favored candidate is provided with the questions in advance. The entire purpose of the “debate” is to aid the theft by boosting the image of the preferred candidate. The reason RINO Republicans such as Republican Senate Leader Mitch McConnell are opposed to Trump is that they prefer a candidate that is as acceptable to the ruling elites as the Democrat candidate. Be sure to understand that what you are seeing in the Trump-Kamala contest is the ruling elite’s determination to have its candidate in office, not the people’s candidate.

Of course, many American voters are too insouciant to understand the process and the stakes, and enough of them vote for the candidate of the ruling elite to keep the ruling elite in power and the people out of power. This is what Trump is up against. Possibly, Trump has gained more realization than voters of how elections are rigged whether or not votes are stolen. What is at stake is not a political party’s platform. What is at stake is who rules–the people or the elites. The answer is seldom the people. Even when the elite’s candidate loses, they continue to rule by filling up the winning candidate’s administration with their people, as they did Trump, and they continue to control majorities in the House and Senate, irrespective of party. Trump is not perfect. My view is that if the people do not support him, never again will a candidate of either party dare speak for the people. If Trump is again denied office, what has been done to Trump for the last eight years will be a lesson for all future political candidates: Get on the wrong side of the elite, and you will be crucified–and the people will not come to your aid.

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“If such a decision is made, that means NATO countries are starting an open war against Russia..”

Russia Warns NATO of ‘Direct War’ Over Ukraine (RT)

Granting Kiev permission to use Western-supplied weapons would constitute direct involvement in the Ukraine conflict by NATO, Russia’s envoy to the UN, Vassily Nebenzia, has said. Moscow will treat any such attack as coming from the US and its allies directly, Russian President Vladimir Putin said on Thursday, explaining that long-range weapons rely on Western intelligence and targeting solutions, neither of which Ukraine is capable of. NATO countries would “start an open war” with Russia if they allow Ukraine to use long-range weapons, Nebenzia told the UN Security Council on Friday.

“If such a decision is made, that means NATO countries are starting an open war against Russia,” Moscow’s envoy said. “In that case, we will obviously be forced to make certain decisions, with all the attendant consequences for Western aggressors.” “Our Western colleagues will not be able to dodge responsibility and blame Kiev for everything,” Nebenzia added. “Only NATO troops can program the flight solutions for those missile systems. Ukraine doesn’t have that capability. This is not about allowing Kiev to strike Russia with long-range weapons, but about the West making the targeting decisions.”

Russia considers it irrelevant that Ukrainian nationalists would technically be the ones pulling the trigger, Nebenzia explained. “NATO would become directly involved in military action against a nuclear power. I don’t think I have to explain what consequences that would have,” he said. The US and its allies placed some restrictions on the use of their weapons, so they could claim not to be directly involved in the conflict with Russia, while arming Ukraine to the tune of $200 billion. Multiple Western outlets have reported that the limitations might be lifted this week, as US Secretary of State Antony Blinken and British Foreign Secretary David Lammy visited Kiev. Russia has repeatedly warned the West against such a course of action.

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“..if the West allows Kiev to hit targets deep inside Russia, “this will mean that NATO countries, the US, European countries are fighting against Russia..”

Putin’s Warning Heard Loud And Clear – Kremlin (RT)

The West has received and understood the latest warning by Russian President Vladimir Putin, Kremlin spokesperson Dmitry Peskov said on Friday. Putin stated earlier that allowing Ukraine to use Western-supplied weapons to hit targets deep inside Russia would make these countries directly involved in the conflict. The UK was the first country to announce the shipment of its own long-range missiles to Ukraine in May 2023, followed by France several months later. Washington revealed that it had supplied Kiev with ATACMS missiles this spring. However, Kiev’s backers have publicly prohibited Ukraine from using the weapons against targets located deep inside internationally recognized Russian territory. Kiev has been demanding that these limitations be lifted since at least May. Several media outlets have suggested that Washington and London will soon do so, or secretly have already.

Speaking to reporters on Friday, Peskov described Putin’s latest warning as “very important.” The Russian president’s statement was “clear, unequivocal, and doesn’t lend itself to multiple interpretations,” the spokesman said. He added that “we have no doubt that this statement has reached its recipients.” On Thursday, Putin explained that the Ukrainian military lacks the capabilities to use Western long-range systems and requires intelligence from NATO satellites and Western military personnel to operate them. In light of this, if the West allows Kiev to hit targets deep inside Russia, “this will mean that NATO countries, the US, European countries are fighting against Russia,” he said.

“Their direct participation [in the Ukraine conflict], of course, significantly changes the very essence, the very nature” of the hostilities, the president stressed. Putin added that Russia will “make the appropriate decisions based on the threats facing us.” Ahead of their visit to Kiev earlier this week, US Secretary of State Antony Blinken and UK Foreign Secretary David Lammy hinted that their countries could give Ukraine the green light for long-range strikes on Russian territory with British and American missiles.

Putin

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“The insane recklessness of Collective Biden..”

https://gilbertdoctorow.substack.com/p/the-insane-recklessness-of-collective

War Is Upon Us or Will Putin Blink Again (Paul Craig Roberts)

Gilbert Doctorow, a cautious commentator, has arrived at a position similar to my own. On September 10, Doctorow wrote in his article, “The insane recklessness of Collective Biden,” that “I cannot say how close we are to midnight on the nuclear war watch. But a Third World War fought at least initially with conventional weapons is now just days, at most weeks away.” What has pushed the cautious Dr. Doctorow to my position “is the near certainty that the United States and Britain have just agreed to give the Zelensky regime permission to use the long-range missiles which have been delivered to Ukraine, certainly including Storm Shadow and likely also the 1500 km range stealth missile known as JASSM to strike deep into the Russian heartland, and so ‘to bring the war to Russia’ as the Zelensky gang put it.” Doctorow reasons that Russia’s destruction of Ukraine’s army has prompted the neoconned Biden regime into one last desperate and reckless act of trying to deprive Russia of its victory “by escalating the conflict to a world war.”

Simultaneously with this US idiocy of underwriting missile attacks deep into Russia, Doctorow believes that “the United States has given Israel the go-ahead to launch a full-blown war on Lebanon.” This despite the fact that Lebanon has Iran’s protection, and Iran has Russia’s protection. So, we have at hand two prospects for the outbreak of major wars that will go nuclear. Extraordinary, isn’t it, that there is no discussion whatsoever of this duel crisis in the Western media or in the “debate” between Trump and Kamala. It is as if the US has no foreign policy experts and no Russian experts, but only supporters of the official narrative. The controlled narrative world in which we live makes us blind to reality. Indeed, it does seem that we do live in The Matrix in which there are no explanations other than the fraudulent ones protected by “fact checkers” in the official narratives.

Doctorow concludes that “a presently localized conflict in the Middle East can in a flash become a regional war that in a further flash becomes a second front to the war between the United States and Russia which I foretold above when speaking about Ukraine.” Doctorow is a person with whom I can agree. But I have a doubt. Just as for eight years Putin was lost in his delusion about the Minsk Agreement and failed to prepare for the coming conflict, and just as Putin seems yet to realize that he is at war with NATO, not conducting a “limited military operation in Donbas,” and just as Putin has refused to realize that by conducting a never-ending war he has permitted the West to become totally involved, thus changing the character of the conflict and vastly expanding it, can it be that Putin is still in denial of reality and does not see the war that is unfolding, partly because of his own inaction?

With the Russian media itself reporting that the Chinese are cooperating with Washington’s sanctions against Russia and refusing to handle Russian/Chinese financial transactions, thus accepting Washington’s wedge into the purported Chinese-Russian alliance, perhaps Washington will prevail over those who challenged the American hegemonic order but were unwilling to move forward with their challenge. Putin’s problem is that he is a mid-20th century American liberal who believes in good will. His Western opponent is operating on the Marxist principle that violence is the only effective force in history.

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“..X account Wall Street Silver, which warned that the US is “expected to launch WW3 this weekend and authorize attacks deep in Russian territory.”

Musk Channels Star Wars Over WWIII Threat (RT)

US entrepreneur Elon Musk has reacted with foreboding to President Vladimir Putin’s warning to NATO about the consequences of potential long-range strikes against Russia with weapons provided by the US-led military bloc. Putin said on Thursday that Ukraine would depend on satellite intelligence and programming by NATO specialists to enable long-range strikes deep into Russia. Any such attacks “will mean that NATO nations, the US and European countries, are at war with Russia,” he stated. Musk shared a video of Putin’s remarks posted by the popular X account Wall Street Silver, which warned that the US is “expected to launch WW3 this weekend and authorize attacks deep in Russian territory.”

“I have a bad feeling about this,” the billionaire commented, using a catchphrase popularized by the Star Wars character Han Solo upon seeing the Death Star space station. Ukraine has been asking for the capability to strike targets deep inside Russia with Western weapons for months, claiming that the lack of permission to do so has undermined its positions on the front line. UK Prime Minister Kier Starmer is meeting with US President Joe Biden in Washington on Friday, where they will discuss relaxing restrictions on Ukraine’s use of long-range Western weapons.

The meeting comes after US Secretary of State Antony Blinken visited Kiev with his British counterpart, David Lammy. Both NATO members have provided long-range weapons to Ukraine, which have been used against targets inside territories that Kiev claims, but not inside internationally-recognized Russian territory. The original post with Putin’s remarks attribute personal responsibility for a possible outbreak of a world war to Biden and US Vice President Kamala Harris, who is also the Democratic Party’s nominee in the upcoming presidential election. Musk is a supporter of Republican candidate Donald Trump. The former president has accused his opponents of putting the world at risk of a nuclear war during his campaign.

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The opposition. What’s left of it.

Ukraine a Non-Sovereign State Ruled by ‘Political Frankenstein’ Zelensky (Sp.)

Chairman of the Council of the Other Ukraine movement Viktor Medvedchuk gave an interview to EADaily on September 12 about the causes of the Ukrainian crisis, Russia’s mission and the destructive influence of the collective West. “For a long time an independent Ukraine has not been existing politically, economically, or legally,” Ukrainian opposition politician and Chairman of the Council of the Other Ukraine movement Viktor Medvedchuk told EA Daily. “The country is ruled by an illegitimate president who has usurped power, becoming a dictator.” The Western-backed Euromaidan coup d’etat of 2014 dealt a heavy blow to Ukrainian sovereignty and legitimate power. For 30 years the West has fuelled anti-Russian sentiment, distorted history and facilitated the rise of Nazism in Ukraine.

The Minsk agreements of 2015 corresponded to EU interests, but the UK and US, who sought to start a war, deliberately disrupted the settlement process. Washington’s plan was “to destabilize the situation on Russia’s borders, and then inside Russia. The first step succeeded, the second did not. The US managed to break Ukraine and Europe, but not Russia.” In 2020 Ukraine got a chance to nullify the adverse consequences of the 2014 regime change through democratic means. “Our party ‘Opposition Platform – For Life’ won local elections in 2020, after we were ranked second in the 2019 parliamentary elections, and began to lead in polls across the country,” Medvedchuk said.

But in February 2021 the Zelensky regime illegally blocked broadcasting of opposition channels, slapped sanctions on Medvedchuk and his wife, groundlessly accused him of treason and arrested him in May 2021. Other Ukrainian opposition politicians were also subjected to persecution. The special military operation in Ukraine would not have begun if Zelensky had abandoned the idea of joining NATO.The situation in Ukraine and in the world will improve after the West stops pouring billions into propping up Zelensky, who is a “political Frankenstein”.

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They mean talks on Zelensky’s “peace plan.” Not going to happen.

But you just wait till the first German and French troops come home in body bags. That’ll change the mood at home.

NATO Plans to Send Troops to Ukraine to Force Russia Into Talks – Moscow (Sp.)

NATO countries are making plans to send their troops to Ukraine in order to ensure conditions to force Russia to hold talks in line with Kiev’s formulas, Russian Deputy Defense Minister Alexander Fomin said at the opening of the 11th Xiangshan Security Forum in Beijing. “In order to ensure conditions for forcibly coercing Russia into negotiations in line with Kiev’s formulas, NATO countries are making plans to send their troops to Ukraine. This is a dangerous game that could lead to a direct military clash between nuclear powers,” Fomin said.

Russian weapons have proven their effectiveness in combat conditions, Alexander Fomin said. “Russian weapons have fully proven their effectiveness in combat conditions, while Western weapons systems, which allegedly have high tactical and technical characteristics… burn perfectly on the battlefield with no chance of recovery,” Fomin said. The United States is actively working on a new version of its nuclear doctrine, in which the threshold for the use of nuclear weapons can be significantly lowered, Fomin said.

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“..nations should “never interfere in other countries’ internal affairs, never violate other countries’ rights and interests.”

‘Negotiation’ Only Way To End Ukraine, Gaza Conflicts – Beijing (RT)

Negotiating is the only solution to the Ukraine and Gaza conflicts, Chinese Defense Minister Dong Jun said at the opening ceremony of the Beijing Xiangshan Forum on defense and security. The annual event is hosting around 20 defense ministers and 700 delegates from around 100 countries this year, including representatives from Moscow and Kiev. The senior official called on world powers to promote peace through facilitating political settlements of conflicts. “To resolve hotspot issues such as the crisis in Ukraine and the Israeli-Palestinian conflict, promoting peace and negotiation is the only way out. There is no winner in war and conflict, and confrontation leads nowhere,” Dong said, calling on all countries to promote “peaceful development and inclusive governance.”

The more acute the conflict, the more we cannot give up dialogue and consultation. The end of any conflict is reconciliation. According to Dong, in order to solve regional tensions, neighboring countries should “seek strength through unity,” and on the global scale, nations should “never interfere in other countries’ internal affairs, never violate other countries’ rights and interests.” “Major countries must take the lead in safeguarding global security, abandon a zero-sum mindset, and refrain from bullying the small and the weak,” he stated. China has repeatedly said that the conflict between Russia and Ukraine must be resolved through negotiations.

This May, along with BRICS partner Brazil, it presented a six-point proposal on a diplomatic settlement to the crisis. The plan highlighted diplomacy as the sole means to bring about peace and advocated for an international summit that both Russia and Ukraine would attend. A previous conference in Switzerland this summer was held without Russia and focused solely on Kiev’s demands, which Moscow has outright rejected. Russia, which has often expressed eagerness to resolve the Ukraine conflict diplomatically, had previously signaled that it would welcome the Chinese-Brazilian plan as a foundation for a potential peace settlement. Kiev, however, refused to consider the initiative. Speaking to Metropoles news outlet earlier this week, Ukrainian leader Vladimir Zelensky called the proposal “destructive,” and accused Beijing and Brasilia of “colluding” with Russia.

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“..the Federal Reserve, where there has never been any intelligence. Today there is no sign of intelligence anywhere in the US government..”

The Big Collapse Awaits (Paul Craig Roberts)

In the 1970s when I served in the congressional staff and in the 1980s when I served in the executive branch, there was still some intelligence in the US government, with the exception of the Federal Reserve, where there has never been any intelligence. Today there is no sign of intelligence anywhere in the US government. That fact is documented every day on my website. As I recently reported, about 900,000 new jobs that had been claimed over the preceding year have just disappeared in a revision. A further downward revision could follow. These non-existent jobs were the Federal Reserve’s evidence for a hot inflation-prone economy justifying high interest rates. All the time the Fed was preaching inflation, the Fed was contracting the money supply, a contraction that has been underway for 2.5 years. This in itself is proof that the “inflation” was really higher prices caused by the shortages the senseless Covid lockdowns caused.

In other words, the higher prices were due to mandated shortages, not to inflation. A central bank too stupid to recognize this is too stupid to justify its existence. Whenever the Fed contracts the money supply recession follows. If the contraction is too large and lasts too long, as it was following the 1929 stock market crash, the result is a decade of depression and high unemployment. A contraction in the money supply means that the same level of economic activity and employment cannot be maintained at the same level of prices. Either economic activity and employment fall or prices fall. Historically, it has been economic activity and employment that fall first, and prices follow. Generally, that means profits fall. Now that it has dawned on the dummies at the Fed that they have set a recession in place, the talk is interest rate reductions. Wall Street is salivating over a possible half of one percent beginning.

For Wall Street, a reduction in interest rates means an increase in money, and it is liquidity increases that drive stock prices higher. What usually happens is that stock prices rise in expectation of the Fed loosening, but by the time the Fed loosens the economy is in a recession. So stock prices rise while profits fall, with the market banking on recovery to bring profits up to the level implied by the stock prices that have jumped the gun. Things, however, can go wrong. Expectations of lower interest rates is a signal to start up home building. But if a recession is in place, who is going to be purchasing homes? If the builders’ loans are due before the houses sell, the builder goes bust. In today’s immigrant-invader overrun America, there is a new consideration. According to even presstitute media reports, in blue cities immigrant invader gangs are seizing homes and apartment buildings, and soon, if not already, newly constructed homes.

If you are sufficiently stupid to live in a blue city, you can go to the grocery store and return to find your home occupied by immigrant-invaders. The police will not remove them. If you are stupid enough to live in a blue city, what this means is that you cannot risk going shopping, or to a medical appointment, or to pick up your kids from the school that indoctrinates them unless you hire a security service to occupy your home in your absence. You cannot possibly risk your home by going on a vacation. Builders will have to provide armed security for nearly finished homes, apartments, or any type of structure. No, I am not delusional. This is what is already happening. Keep in mind also my reports on The Great Dispossession. Federal regulators have taken away your ownership of your investments and bank account and given them, in the event that your depository institution enters financial difficulties, to the creditors of your depository institution.

This is what is meant by a “bail-in.” If you thought you didn’t need to read my articles, you made a mistake. Use the search feature and find them. To be clear, we already own nothing if there is another financial difficulty. Given the Federal Reserve’s record, such a difficulty is certain. Will it be this time, or the next time, or the one after?

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Theft.

“..He also froze Starlink’s assets, calling it part of a “de facto economic group” with X..”

Brazil Seizes Musk’s Money (RT)

The Brazilian Supreme Court has unblocked the bank accounts of X and Starlink, only to withdraw $3.3 million from them in order to enforce a fine levied against Elon Musk’s social media platform. Judge Alexandre de Moraes banned X’s operations in Brazil at the end of August. He also froze Starlink’s assets, calling it part of a “de facto economic group” with X. “With the full payment of the amount due, [de Moraes] considered that there was no longer any need to keep the bank accounts blocked and ordered the immediate unblocking of the bank accounts/financial assets, motor vehicles and real estate of the aforementioned companies,” the court said in a statement on Friday. According to the court, a total of 18.35 million Brazilian reals (around $3.3 million) was withdrawn from both accounts, of which 11 million was from Starlink and the rest from X.

The companies were fined “for not removing content after an order from the [court] in ongoing investigations, in addition to having removed its legal representatives from Brazil,” the court said. Musk has not yet commented on the seizure of the funds. Earlier this month, he said the blocking of Starlink’s accounts was “absolutely illegal” since it was a separate company with different shareholders. The tech magnate also threatened to go after Brazilian state assets in retaliation. “Unless the Brazilian government returns the illegally seized property of X and SpaceX, we will seek reciprocal seizure of government assets too,” Musk wrote at the time. “Hope Lula enjoys flying commercial,” he added, referring to Brazilian President Luis Ignacio Lula da Silva. De Moraes has also threatened a fine of 50,000 Brazilian reals ($8,874) per day against anyone who used a virtual private network (VPN) to access X.

There have been no reports of the fine being enforced, however, and multiple prominent Brazilians – including several political parties – have continued posting on the platform. The dispute between the US entrepreneur and Brazilian authorities began in April, when de Moraes ordered X to delete the accounts of several supporters of former President Jair Bolsonaro, accusing them of spreading “disinformation” about himself and the court. Musk refused, saying this would violate Brazilian laws. X’s Global Government Affairs team has said that de Moraes had threatened their Brazilian legal representative with imprisonment and froze all of her bank accounts even after she resigned. The judge then cited lack of counsel as the reason for the fine and the ban on the platform’s operations. “Unlike other social media and technology platforms, we will not comply in secret with illegal orders,” X said in a statement at the time.

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“..the only goal of these types of “hate” laws is to create a special category of crime based entirely on the identity of the victim. Identity politics is now part of criminal law…”

The Folly of Criminalizing “Hate” (Njoya)

Many people were shocked when over 1,000 protesters were arrested in the UK and jailed for various offenses including “violent disorder” and stirring up racial hatred. Most shocking were the cases of those arrested for posting social media comments on the riots, despite not being present at the scene and there being no evidence that anybody who joined in the riots had read any of their comments.

In societies which uphold the value of individual liberty, the only purpose of the criminal law should be to restrain and punish those who commit acts of aggression against other people or their property. The criminal law should not be used to prevent people from “hating” others or to force them to “love” each other. In announcing yet another raft of laws “to expand the list of charges eligible to be prosecuted as hate crimes,” New York Governor Kathy Hochul said that “During these challenging times, we will continue to show up for each other. We are making it clear: love will always have the last word in New York.” To that end, she introduced “legislation to significantly expand eligibility for hate crime prosecution.”

Attempts to promote love between different racial or religious groups in society, for example, by charging people with stirring up “hate” when they protest against immigration, misunderstands the role of the criminal law. Threats to public order entail violating the person or property of others—as happens in a violent riot—not merely the exhibition of “hate” towards others. Yet increasingly, public order offenses are linked to hate speech or hate crimes.

Laws prohibiting hate speech and hate crimes typically define “hate” as hostility based on race, sex, gender, sexual orientation, or religion. Often, hostility is understood simply as words that offend others. For example, in the UK, the Communications Act 2003 prohibits sending “a message or other matter that is grossly offensive or of an indecent, obscene or menacing character.” The Online Safety Act 2023 targets illegal content online including both “inciting violence” and the publication of “racially or religiously aggravated public order offenses.” Conduct online includes writing posts or publishing blogs or articles on websites.

Given that inciting violence is already a crime—“conduct, words, or other means that urge or naturally lead others to riot, violence, or insurrection”—there seems to be no discernible purpose in adding the concept of “hate” to such crimes. To give an example, writing “burn down the store” on social media might be seen as inciting violence, but writing “burn down the Muslim store” in the same circumstances would be categorized as a hate crime. Arson (actually burning down the store) is a crime, but based on the racial or religious identity of the store owner arson is deemed to be a “worse” crime—a hate crime—even though the harm in both cases and the loss suffered by store owners who are victims of arson does not vary based purely on their race or religion.

Therefore, no “hateful conduct” laws are needed to further “criminalize” what is already a crime. The conclusion is inescapable that the only goal of these types of “hate” laws is to create a special category of crime based entirely on the identity of the victim. Identity politics is now part of criminal law. “Hate” based on race or religion is now a priority in criminal law enforcement with resources increasingly diverted towards it. For example, New York has devoted a budget of $60 million to “fight hate.”

Events in the UK over the past week chillingly illustrate the consequences of an identity-based approach to law enforcement. In the ongoing police purge of rioters, those who wrote “hate speech” posts on social media platforms were charged with “inciting racial hatred” and sentenced to prison terms of up to two to three years. Far from fighting against “hate,” this is likely only to further fuel resentment and racial antagonism.

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RFK Gates

 

 

RFK portal

 

 

Top gear

 

 

Hug
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Friday
https://twitter.com/i/status/1834466374594241022

 

 

Cub and pup

 

 

 

 

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Aug 222017
 
 August 22, 2017  Posted by at 8:35 am Finance Tagged with: , , , , , , , , ,  6 Responses »


Pierre Bonnard Nude in an Interior c1935

 

Periods Of Re-Pricing Are Usually Quick And Brutal (Roberts)
US House Price Bubbles 2.0 (Hanson)
QE Is Like Heroin, Says Former UK Treasury Official (G.)
UK Credit Card Lending Booms As Real Wages Fall (Ind.)
Cash is Not The Curse (Mark GB)
US Gross National Debt to Spike by $800 Billion in October? (WS)
Why Peter Costello Is Not Even Half Right On Housing (ND)
Diminishing Returns (Jim Kunstler)
What Would A US Civil War Look Like? (Copley)
Hate is the New Sex (Greer)
Greece Concerns Peak Amid Sudden Spike In Refugee Arrivals (K.)
US Farmers Confused By Monsanto Weed Killer’s Complex Instructions (R.)
UK Blasted Over ‘Shocking’ Export Of Deadly Weedkiller To Poorer Countries (G.)
The Blue Dogs of Mumbai (G.)

 

 

And the longer re-pricing is postponed, through QE etc., the steeper the fall will be.

Periods Of Re-Pricing Are Usually Quick And Brutal (Roberts)

1. Stock prices run in cycles. Periods of re-pricing are usually quick and powerful.

7. Your first loss will often be your best loss. No one is right all the time and you don’t have to be. There are market participants that are immensely profitable by being right only 30% of the time. It is good to have conviction in your investment thesis, but discipline should always trump conviction.

8. Optimism and pessimism in the stock market are contagious. Investor psychology often loses its logic and become emotional. The news media and the most recent price action play a particularly important role in developing moods of mass optimism or pessimism.

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Debt slaves.

US House Price Bubbles 2.0 (Hanson)

A big problem with house prices experiencing even a “moderate” correction of 10% to 20% — already underway in many of the most over-priced regions — is with between 40% and 50% of all house purchases for years being of the “less than 10% down” variety — and because it takes 8% to 10% equity to sell plus the 3% to 10% down payment on the new house — it doesn’t take much downside to swamp the nation in “NEGATIVE EQUITY” once again. And we know for certain that many homeowners rather pay their credit cards and car payments before their mortgage when they are underwater.

ITEM 1) Household income INCREASE needed to Buy the Median Priced House in Key Cities. Bottom Line: On a “national” basis the divergence isn’t too bad…6%. But, in the key cities that drive the US economy, Bubble 2.0 has blown large. This represents significant downside, especially in the sand states, just like in Bubble 1.0.

ITEM 2) DIVERGENCE between Actual Household Income & Income Needed to Buy the Median Priced House. Bottom Line: Here too, on a “national” basis the divergence isn’t too bad…-6%. But, in the key cities that drive the US economy, Bubble 2.0 has blown large.

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It’s worse, actually. Heroin cold turkey is doable though hard. QE cold turkey is definitely not.

QE Is Like Heroin, Says Former UK Treasury Official (G.)

A former senior Treasury mandarin has compared quantitative easing to heroin and called for an end to almost a decade of electronic money printing by central banks. Nick Macpherson was permanent secretary to the Treasury when Bank of England officials started buying UK government bonds to stimulate the economy following the financial crisis. On Monday, he said it was “time to move on” from QE, which is credited with helping Britain into recovery but remains in use nine years later amid concerns over Brexit. Threadneedle Street initially began pumping £200bn into the gilt market in 2009 to boost the economy, before expanding the programme to £435bn, including an extra £60bn following the EU referendum. The bond buying scheme is similar to massive stimulus packages used by other countries, such as the Fed’s $4.5tn of asset purchases (£3.5tn) and the ECB ’s €2.3tn (£2.1tn) plan.

Lord Macpherson’s call comes as pressure mounts on the world’s central bankers to give more clues about how they intend to exit QE in a process known as “normalisation” almost a decade on from the crash. Some indications could be given at a meeting of senior officials at Jackson Hole in the US later this week. Mario Draghi, the ECB governor, is expected to be the star turn at the event watched by global investors, although he is not thought to be preparing to announce the end of QE just yet. While QE is credited with lowering borrowing costs and helping banks to lend more to consumers and businesses, critics say such schemes inflate assets owned by the richest in society, while punishing savers without large amounts of wealth. Macpherson did not single out the specific bond-buying programme of a particular central bank. “QE like heroin: need ever increasing fixes to create a high. Meanwhile, negative side effects increase. Time to move on,” he wrote on Twitter.

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And after all the QE, people are poorer than before.

UK Credit Card Lending Booms As Real Wages Fall (Ind.)

UK consumers are increasingly purchasing goods on plastic with the number of transactions on credit and debit cards jumping 12% in the last year. The increase was the fastest annual rise in the number of card transactions since 2008 and comes after warnings from the Bank of England about the growth of personal debt. Shoppers spent 7.2% more on all types of cards in the year to the end of June, despite real wages falling over the period, data from industry body UK Finance showed. The total value of credit and charge card purchases increased 6.9% over the 12 months with credit card lending accelerating in April, May and June to an annual growth rate of 9%. During those three months, the number of people defaulting on their credit card bills and personal loans “increased significantly”, the Bank of England said in a recent report.

The rise comes as official figures show real earnings have declined. Average pay rose at an annual rate of 2.1% in the three months to June – well below the inflation rate of 2.6% in the year to the end of June. Overall consumer spending was up 1.3% in the year to July, the Office for National Statistics said in a separate release this month. Peter Tutton, head of policy at StepChange debt charity, expressed concern at the findings. “With our research estimating 3.2 million people are using credit cards to pay for everyday household expenses, the growing stock of credit card debt should focus attention on households in financial difficulties,” he said. Mr Tutton said the growth in credit card cash advances was particularly worrying. This type of borrowing is expensive and can be a warning sign that borrowers are facing financial difficulty.

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More on Ken Rogoff and Larry Summers’ crazy ideas of power over people’s money.

Cash is Not The Curse (Mark GB)

There’s a pub in the Welsh hills, not far from where I live, called ‘The Tylers Arms’ – pronounced ‘tillers’. The name originated, I believe, in the 18th century. The local villagers, who all worked on the land, would go there to pick up their wages in the form of ‘tyles’ – some of which would be immediately exchanged for beer, and thus returned to the landowner…who also owned the pub…and the local store. Thus, the ‘tyles’ circulated regularly, providing employment & cheap produce for the villagers, a steady and almost ‘captive’ profit for the landowner, and stability for the community. As the industrial revolution progressed some of the larger UK manufacturers adopted a similar system, but using fiat currency – e.g. there is a ‘village’ in Birmingham known as Bourneville, which was built by the Cadbury family.

Now before anyone thinks I’ve got unresolved baggage on feudalism, a ‘downer’ on capitalism, or a yearning for socialism…hold your horses please…this is about something far more serious than the ‘isms’. This is about who controls the money. The folks who do that…can, and do, call the tune for the rest of us. And that’s what I want to talk about here.

These days our monetary masters are much more sophisticated – our ‘tyles’ are pieces of paper backed by government fiat. You can work for pretty much whomever you like, and you can buy from whomever you like, but one way or another the government will take a cut of everything you earn and everything you spend. You can do the odd ‘swapsie’ with your pals but you can’t pay taxes with home grown tomatoes – the IRS don’t do vegetables – they can’t digitise them or create them with a keystroke so veggies would confuse the poor dears.

What happens next is technical and varies between territories, so let’s just deal with the ‘myth’: The taxman’s ‘cut’ is used to boost the economy on your behalf by spending it on useful things like building roads and bridges. It also includes an ever-growing list of things that you didn’t even realise you need, like cruise missiles & other stuff that goes ‘BANG’, along with other seemingly ‘essential’ services like bribing foreign governments and funding ‘moderate rebels’ to remove the foreign governments that can’t be bribed. Clearly we’ve come a long way from tyles, especially in the case of the dollar, which can used to bribe governments on seven continents. The chap who owned the Tillers never dreamt of such power – this is considered to be progress…

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Now that Goldman rules the White House, default risk is definitely down.

US Gross National Debt to Spike by $800 Billion in October? (WS)

“There is zero chance, no chance we won’t raise the debt ceiling,” swore Senate Majority Leader Mitch McConnell (R., Ky.) at an event in Louisville, Kentucky, on Monday. He who couldn’t get his Republican ducks all lined up in a row to get any major legislation passed this year was confident that the Senate would pass a bill that would raise the debt ceiling so that the government could continue to pay for things that Congress told the Government to pay for, and so that the government could service its debts, rather than default on them. Treasury Secretary Steven Mnuchin was there with him, pleading once again for a “clean” debt-ceiling increase, according to the Wall Street Journal. His “magic super Treasury powers” that allow the government to conserve cash to avoid having to issue more debt will expire at the end of September, he said.

“This is not about spending money,” he said. “This is about paying for what we’ve spent, and we cannot put the credit of the United States on the line.” The debt ceiling is just under $20 trillion. While the government can issue bonds to redeem maturing bonds – and it does this all the time – it cannot allow the gross national debt to go beyond the debt ceiling. But because it has to continue to pay for things that Congress mandated in its various spending bills over the years, the Treasury scrounges up the money from other government accounts, robbing Peter to pay Paul, so to speak. For example it temporarily short-changes the Civil Service Retirement and Disability Fund. These “extraordinary measures,” as they’re called, or the “magic super Treasury powers,” as Mnuchin called it, run out after a while.

Mnuchin said in his last letter to Congress that the out-of-money-date is September 29. But as in the past, the real out-of-money date can probably be stretched into October. These shenanigans make the entire world shake its collective head and pray that Congress, after going through its charade, will for the umpteenth time raise the debt limit. The other option is a US default. Its global consequences are too ugly to even imagine. But this charade has some peculiar effects, beyond its entertainment value: for months on end, it covers up the true extent of US government debt, and the current surge of this debt. This chart shows the gross national debt going back to 2011, including the last two debt-ceiling fights. Note the long flat lines leading into October or November, followed each time by an enormous spike:

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A good example of exatly how stuck governments and central banks are after blowing housing bubbles. There was an Australian tycoon this week who said the Oz bubble won’t pop because people are too heavily invested in property…

Why Peter Costello Is Not Even Half Right On Housing (ND)

When former treasurer Peter Costello called on Monday for interest rates to be ‘normalised’ upwards to stop Australia’s credit bubble getting any larger, he was very nearly half right. As long as the Reserve Bank keeps the official cash rate at the record low of 1.5%, the economy will become increasingly “unbalanced”, as he put it. And although struggling families will protest that they can’t afford higher mortgage repayments, the other side of that coin is that each successive wave of first home owners is taking on even higher debts. The longer that super-low rates persist, the more debt the banks will be able to balance on the shoulders of new home buyers. That has already created huge property-based inequality. But Mr Costello’s comments weren’t focused on that imbalance – he’s worried about the impact that unstable house prices or teetering banks could have on economic growth more generally.

He told The Australian that “once [the price of] money returns to more normal levels” Australia could face a “big problem” with asset prices and the housing market. Quite right, but what could prevent that? A gradual increase in rates will not, in itself, ‘fix’ the housing market. To do that, two other abnormalities need to be addressed. The one mentioned most by Mr Costello’s side of politics is the availability of suitable dwellings – the ‘supply problem’. That is a wildly misunderstood problem, so I will look at it separately in coming days. But bigger than either low rates or the supposed ‘supply problem’ is the abnormality that Mr Costello himself created – tax laws that reward investors for making annual losses in the housing market, so as to reap lightly-taxed capital gains years down the track.

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“..an impenetrable smokescreen of legal blather in the service of racketeering.”

Diminishing Returns (Jim Kunstler)

These two words are the hinge that is swinging American life — and the advanced techno-industrial world, for that matter — toward darkness. They represent an infection in the critical operations of daily life, like a metabolic disease, driving us into disorder and failure. And they are so omnipresent that we’ve failed to even notice the growing failure all around us. Mostly, these diminishing returns are the results of our over-investments in making complex systems more complex, for instance the replacement of the 37-page Glass-Steagall Act that regulated American banking, with the 848 page Dodd-Frank Act, which was only an outline for over 22,000 pages of subsequent regulatory content — all of it cooked up by banking lobbyists, and none of which replaced the single most important rule in Glass-Steagall, which required the separation of commercial banking from trafficking in securities.

Dodd-Frank was a colossal act of misdirection of the public’s attention, an impenetrable smokescreen of legal blather in the service of racketeering. For Wall Street, Dodd-Frank aggravated the conditions that allow stock indexes to only move in one direction, up, for nine years. During the same period, the American economy of real people and real stuff only went steadily down, including the number of people out of the work force, the incomes of those who still had jobs, the number of people with full-time jobs, the number of people who were able to buy food without government help, or pay for a place to live, or send a kid to college. When that morbid tension finally snaps, as it must, it won’t only be the Hedge Funders of the Hamptons who get hurt. It will be the entire global financial system, especially currencies (dollars, Euros, Yen, Pounds, Renminbi) that undergo a swift and dire re-pricing, and all the other things of this world priced in them.

And when that happens, the world will awake to a new reality of steeply reduced possibilities for supporting 7-plus billion people. The same over-investments in complexity have produced the racketeering colossus of so-called health care (formerly “medicine”), in case you’re wondering why the waiting room of your doctor’s office now looks exactly like the motor vehicle bureau. Meanwhile, it’s safe to say that the citizens of this land have never been so uniformly unhealthy, even as they’re being swindled and blackmailed by their “providers.” The eventual result will be a chaotic process of simplification, as giant hospital corporations, insurance companies, and overgrown doctors’ practices collapse, and the braver practitioners coalesce into something resembling Third World clinics.

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“..such a conflict – physical or political – could, equally, lead to a victory for nationalism over globalism, and to the protection of currencies and values.”

What Would A US Civil War Look Like? (Copley)

There is little doubt that the US, despite the evidence that economic recovery is at hand, could spiral into a self-destructive descent of dysfunction, dystopia, and anomie. The path toward a “second civil war” has significant parallels with the causes of the first US Civil War (1861-65). Both events — the 19th Century event and a possible 21st Century one — saw the polarization of a fundamentally urban, abstract society against a fundamentally regional, traditional society. In some respects, it is a conflict between people with long memories (even if those memories are flawed and selective) and people to whom memories and history are irrelevant. Equally, it is a conflict between identity and materialism, with the abstract social groups (the urban populations) the most preoccupied with short-term material gain.

I have covered the US for 50 years, and my earliest view of it was, a half century ago, that its populations would inevitably polarize into protective islands of self-interest, surrounded by seas of unthinking locusts. What is ironic is that the present islands of wealth and power — the cities — have come to represent short-term materialism, as cities have throughout history. But what is interesting is that, despite the global attention on the political/geographic polarizations occurring in the US and other parts of the Western world, there has been a reversion in other parts of the world to a sense of Westphalian or pre-Westphalian nationalism. The fact that “the West” may have ring-fenced Iran, Russia, and so on, with sanctions and other forms of isolation may well be what ensures their enduring status.

They have avoided the contagion of globalism. Russia, indeed, recovered from the Soviet form of globalism in 1991. An urban globalist “victory” over Trump and Brexit would trigger that meltdown toward a form of civil societal collapse – civil war in some form or other – as the regions disavow the diktats of the cities. That would, in turn, bring about the global economic uncertainty which could impact the PRC and then the en-tire world. But such a conflict – physical or political – could, equally, lead to a victory for nationalism over globalism, and to the protection of currencies and values. We have seen this cycle repeated for millennia. It is the eternal battle.

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The Archdruid from a few weeks ago.

Hate is the New Sex (Greer)

It occurred to me the other day that there’s a curious disconnect between one of the most common assumptions most of us make about how to make the world better, on the one hand, and the results that this assumption has had when put into practice, on the other. It’s reminiscent of the realization that led James Hillman and Michael Ventura to title a once-notorious book of theirs We’ve Had A Hundred Years Of Psychotherapy And The World’s Getting Worse. In this case as in that one, something that’s supposed to make things better doesn’t seem to be doing the trick—in fact, quite the opposite—and it’s time that we talked about that. You know the assumption I have in mind, dear reader. It’s the conviction that certain common human emotions are evil and harmful and wrong, and the way to make a better world is to get rid of them in one way or another.

That belief is taken for granted throughout the industrial societies of the modern West, and it’s been welded in place for a very long time, though—as we’ll see in a moment—the particular emotions so labeled have varied from time to time. Just now, of course, the emotion at the center of this particular rogue’s gallery is hate. These days hate has roughly the same role in popular culture that original sin has in traditional Christian theology. If you want to slap the worst imaginable label on an organization, you call it a hate group. If you want to push a category of discourse straight into the realm of the utterly unacceptable, you call it hate speech. If you’re speaking in public and you want to be sure that everyone in the crowd will beam approval at you, all you have to do is denounce hate.

At the far end of this sort of rhetoric, you get the meretricious slogan used by Hillary Clinton’s unsuccessful presidential campaign last year: LOVE TRUMPS HATE. I hope that none of my readers are under the illusion that Clinton’s partisans were primarily motivated by love, except in the sense of Clinton’s love for power and the Democrats’ love for the privileges and payouts they could expect from four more years of control of the White House; and of course Trump and the Republicans were head over heels in love with the same things. The fact that Clinton’s marketing flacks and focus groups thought that the slogan just quoted would have an impact on the election, though, shows just how pervasive the assumption I’m discussing has become in our culture.

Now of course most people these days, when confronted with the sort of things I’ve just written, are likely to respond, “Wait, are you saying that hate is good?”—as though the only alternatives available are condemning something as absolutely bad or praising it as absolutely good. Let’s set that simplistic reaction to one side for the moment, and ask a different question: what happens when people decide that some common human emotion is evil and harmful and wrong, and decide that the way to make a better world is to get rid of it?

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Watch Erdogan. German elections coming up.

Greece Concerns Peak Amid Sudden Spike In Refugee Arrivals (K.)

A sudden spike in the number of undocumented migrants arriving from neighboring Turkey has led to concern on the part of Greek authorities, who expect the next few days to reveal whether the rapid increase is a random occurence or the beginning of a new trend. A total of 643 migrants who had set out from the Turkish coast landed on the islands of the eastern Aegean between Friday and Monday morning, according to government figures. Another 114 people arrived in two separate smuggling boats later on Monday, putting authorities on alert.

Early on Monday, a vessel belonging to the European Union’s border monitoring agency Frontex spotted a smuggling boat off the coast of Chios and intercepted the 53 migrants who had been aboard. Later in the day another 61 migrants were found in a boat that had reached Samos and were also detained. Tensions are already high in reception centers on several Aegean islands. Most of the facilities are at around twice their capacity as hundreds of migrants and refugees await the outcome of asylum applications or deportation orders. Tolerance has been tested in several island communities as dozens of migrants continue to arrive daily from nearby Turkish shores. There are currently more than 14,400 migrants living on camps on Lesvos, Chios, Samos, Kos and Leros.

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Confused? The instructions are impossible to follow, not confusing.

US Farmers Confused By Monsanto Weed Killer’s Complex Instructions (R.)

With Monsanto’s latest flagship weed killer, dicamba, banned in Arkansas and under review by U.S. regulators over concerns it can drift in the wind, farmers and weed scientists are also complaining that confusing directions on the label make the product hard to use safely. Dicamba, sold under different brand names by BASF and DuPont, can vaporize under certain conditions and the wind can blow it into nearby crops and other plants. The herbicide can damage or even kill crops that have not been genetically engineered to resist it. To prevent that from happening, Monsanto created a 4,550-word label with detailed instructions. Its complexity is now being cited by farmers and critics of the product. It was even singled out in a lawsuit as evidence that Monsanto’s product may be virtually impossible to use properly.

At stake for Monsanto is the fate of Xtend soybeans, it largest ever biotech seed launch. Monsanto’s label, which the U.S. Environmental Protection Agency (EPA) reviewed and approved, instructs farmers to apply the company’s XtendiMax with VaporGrip on its latest genetically engineered soybeans only when winds are blowing at least 3 miles per hour, but not more than 15 mph. Growers must also spray it from no higher than 24 inches above the crops. They must adjust spraying equipment to produce larger droplets of the herbicide when temperatures creep above 91 degrees Fahrenheit. After using the product, they must rinse out spraying equipment. Three times. “The restriction on these labels is unlike anything that’s ever been seen before,” said Bob Hartzler, an agronomy professor and weed specialist at Iowa State University. The label instructions are also of interest to lawyers for farmers suing Monsanto, BASF and DuPont over damage they attribute to the potent weed killer moving off-target to nearby plants.

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It’s not ‘shocking’, it’s criminal.

UK Blasted Over ‘Shocking’ Export Of Deadly Weedkiller To Poorer Countries (G.)

Paraquat, a pesticide so lethal that a single sip can be fatal, has caused thousands of accidental deaths and suicides globally, and was outlawed by EU states in 2007. But Swiss pesticide manufacturer Syngenta is exporting thousands of tonnes of the substance to other parts of the world from an industrial plant in Huddersfield. Campaigners have condemned the practice as an “astonishing double standard”, while a UN expert said it was deeply disquieting that the human rights implications of producing a substance for export that is not authorised in the EU were being ignored. “The fact that the EU has decided to ban the pesticide for health and environmental reasons, but they still export it to countries with far weaker regulation and far weaker controls, is shocking to me,” said Baskut Tuncak, the UN special rapporteur on toxic wastes.

Syngenta is responsible for 95% of Europe’s exports of paraquat, which it sells under the brand name Gramoxone. The substance can be absorbed through the skin and has been linked with Parkinson’s disease. Syngenta has exported 122,831 tonnes of paraquat from the UK since 2015, an average of 41,000 tonnes a year, according to export licensing data analysed by the Swiss NGO Public Eye and shared with the Guardian. Since 2015, when a facility in Belgium stopped exporting paraquat, all EU exports of the pesticide have come from Syngenta’s UK base, according to Public Eye. Almost two-thirds of these exports by volume – 62% – go to poor countries, including Brazil, Mexico, Indonesia, Guatemala, Venezuela and India. A further 35% is exported to the US, where paraquat can only be applied by licensed users.

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We are a brilliant species.

The Blue Dogs of Mumbai (G.)

Authorities in Mumbai have shut down a manufacturing company after it was accused of dumping untreated industrial waste and dyes into a local river that resulted in 11 dogs turning blue. The group of strangely coloured canines was first spotted on 11 August, according to the Hindustan Times, prompting locals to complain to the Maharashtra Pollution Control Board about dyes being dumped in the Kasadi river, where the animals often swim. Footage shows the animals roaming the streets with bright blue fur. “It was shocking to see how the dog’s white fur had turned completely blue,” said Arati Chauhan, head of the Navi Mumbai Animal Protection Cell, told the Times. “We have spotted almost five such dogs here and have asked the pollution control board to act against such industries.”

Chauhan had posted images of the blue dogs on the group’s Facebook page, saying the “pollutants from Taloja Industrial area not only ruining the water bodies affecting humans there but also affecting animals, birds, reptiles”. The board investigated, shutting down the company on Wednesday after confirming that canines were turning blue due to air and water pollution linked to the plant. An animal welfare agency managed to capture one of the dogs and wash some of the blue dye off. The group concluded that animal seemed unharmed in all other ways. The Kasadi River flows through an area with hundreds of factories.

Read more …

Oct 112016
 
 October 11, 2016  Posted by at 8:42 am Finance Tagged with: , , , , , , , , , ,  Comments Off on Debt Rattle October 11 2016


NPC Grand Palace shoe shining parlor, Washington DC 1921

“How Do You Have Capitalism Without Any Cost Of Capital?” (BBG)
7 in 10 Americans Have Less Than $1,000 In Savings (MF)
After Becoming Debt Slaves, Millennials Get Blamed for Lousy Economy (WS)
S&P 500 Triangle Chart Pattern ‘Warns Of A Big Selloff’ (MW)
The Bank of Mom and Dad is Australia’s Fastest-Growing Housing Lender (BBG)
Goldman Warns China’s Outflows May Be Worse Than They Look (BBG)
‘Why Do They Hate Us So?’-A Western Scholar’s Reply to a Russian Student (SC)
Remainers, Brexit, Racism and a Self-Fulfilling Prophecy (Hannan)
Greece Gets Fresh Loan Payout as Euro Area Looks to Help on Debt (BBG)
Brazil Votes To Amend Constitution, Ban Spending Increases For 20 Years (BBG)
Global Clean Energy Investment Dropped 43% in Worst Quarter Since 2013 (BBG)
Russia’s Rosneft Boss Sechin Says No To OPEC Oil Cut/Freeze (R.)
Britain’s Nuclear Cover-Up (NYT)

 

 

Titans of finance gather and sulk.

“How Do You Have Capitalism Without Any Cost Of Capital?” (BBG)

Mary Callahan Erdoes, one of JPMorgan Chase’s most senior executives, summed up her industry’s mood like this: “There is no excitement,” she told throngs of bankers gathered in Washington. “There is a lot of handwringing.” Again and again, speakers at the Institute of International Finance’s three-day meeting in Washington, which wrapped up Saturday, bemoaned the inability of central banks to rev up economic growth, as well as the drag of tougher regulations and the looming impact of Brexit. Concerns over Deutsche Bank’s mounting legal costs deepened the gloom. Slow growth is leaving companies little reason to expand, fueling the public’s frustration and giving rise to extreme political views and nationalism, said Erdoes, 49, who runs JPMorgan’s asset-management operations.

Low interest rates – instead of better fiscal stimulus – are taking a toll on the entire system, she said. “We had a very smart economist at JPMorgan ask me the following question: How do you have capitalism without any cost of capital? And therein lies the problem.” [..] Goldman Sachs President Gary Cohn called the world’s central banks an “ineffective cartel,” as actions in Europe and Japan lead to negative rates and hamstring other policy makers. The outlook for low growth is long-term, he said. “I don’t see this changing,” Cohn said Friday. “We keep saying we’re getting closer to the end, but I don’t think we’re getting closer to the end.”

Read more …

I’m not sure how one writes an article like this and completely fails to mention that for millions of Americans, it’s not a matter of bad saving habits, but of spending everything on the basics.

7 in 10 Americans Have Less Than $1,000 In Savings (MF)

The U.S. is often referred to as the land of economic opportunity. Apparently, it’s also the land of consumption and “spend everything you’ve got.” We don’t have to look far for confirmation that Americans are generally poor savers. Every month the St. Louis Federal Reserve releases data on personal household savings rates. In July 2016, the personal savings rate was just 5.7%. Comparatively, personal savings rates in the U.S. 50 years ago were double where they are today, and nearly all developed countries have a higher personal savings rate than the United States. In other words, Americans are saving less of their income than they should be — the recommendation is to save between 10% and 15% of your annual income — and they’re being forced to do more with less in terms of investing.

However, new data emerged this week from personal-finance news website GoBankingRates that shows just how dire Americans’ savings habits really are. Last year, GoBankingRates surveyed more than 5,000 Americans only to uncover that 62% of them had less than $1,000 in savings. Last month GoBankingRates again posed the question to Americans of how much they had in their savings account, only this time it asked 7,052 people. The result? Nearly seven in 10 Americans (69%) had less than $1,000 in their savings account. Breaking the survey data down a bit further, we find that 34% of Americans don’t have a dime in their savings account, while another 35% have less than $1,000. Of the remaining survey-takers, 11% have between $1,000 and $4,999, 4% have between $5,000 and $9,999, and 15% have more than $10,000.

Furthermore, even though lower-income adults struggle with saving money more than middle- and upper-income folks, no income group did particularly well. Some 29% of adults earning more than $150,000 a year, and 44% making between $100,000 and $149,999, had less than $1,000 in savings. Comparatively, 73% of the lowest income adults (those earnings $24,999 or less annually) had less than $1,000 in their savings account. There was even minimal difference between multiple generations of Americans. From seniors aged 65 and up to young millennials aged 18 to 24, between 62% and 72% of Americans had less than $1,000 in a savings account.

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Great little piece by Wolf Richter.

After Becoming Debt Slaves, Millennials Get Blamed for Lousy Economy (WS)

Over the past few days, the Diamond Producers Association launched its first new ad campaign in five years after watching retail sales of diamond jewelry slow down, as Millennials built on the habit pioneered by prior generations of delaying or not even thinking about marriage, and thus not being sufficiently enthusiastic about buying diamond engagement rings. The campaign, according to Adweek, is designed to motivate Millennials “to commemorate their ‘real,’ honest relationships with diamonds, even if marriage isn’t part of the equation.” Mother New York, the agency behind the campaign, spent months interviewing millennials, according to Quartz, and learned that they associated diamonds with a “fairytale love story that wasn’t relevant to them.”

So the premium jewelry industry, seeing future profits at risk, needs to do something about that. A year ago, it was Wall Street – specifically Goldman Sachs – that did a lot of hand-wringing about millennials. “They don’t trust the stock market,” Goldman Sachs determined in a survey. Only 18% thought that the stock market was “the best way to save for the future.” It’s a big deal for Wall Street because millennials are now the largest US generation. There are 75 million of them. They’re supposed to be the future source of big bonuses. Wall Street needs to figure out how to get to their money. The older ones have seen the market soar, collapse, re-soar, re-collapse, re-soar…. They’ve seen the Fed’s gyrations to re-inflate stocks. They grew up with scandals and manipulations, high-frequency trading, dark pools, and spoofing.

They’ve seen hard-working people get wiped out and wealthy people get bailed out. Maybe they’d rather not mess with that infernal machine. And today, the Los Angeles Times added more fuel. “They’re known for bouncing around jobs, delaying marriage, and holing up in their parents’ basements,” it mused. Everyone wants to know why millennials don’t follow the script. Brick-and-mortar retailers have been complaining about them for years, with increasing intensity, and a slew of specialty chains have gone bankrupt, a true fiasco for the industry, even as online retailers are laughing all the way to the bank. “For starters, millennials are not big spenders, at least not in the traditional sense,” the Times said. Yet most of them spend every dime they earn, those that have decent jobs. But much of that spending goes toward their student-loan burden and housing.

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Trying to fit human behavior into triangles.

S&P 500 Triangle Chart Pattern ‘Warns Of A Big Selloff’ (MW)

The S&P 500 is moving fast toward an impending breakout that could be bad news for investors. “And it’s gonna be big, by all accounts,” said Carter Braxton Worth, a technical analyst at research firm Cornerstone Macro. The S&P 500 has been trading within a “symmetrical triangle” on a number of time scales, as the index traced out a pattern of rising lows and falling highs. Since the upper and lower boundary lines are narrowing to a point, it’s just a matter of time before the S&P 500 breaks above or below one of them. “It is a circumstance where buyers and sellers are matched off so evenly that purchases being made by those who like a particular security are in the same order of magnitude as the selling being done by those who dislike the security,” Worth wrote in a note to clients.

His research suggests that the resolution of these standoffs is usually “aggressive,” with the index moving past the declining or rising trendlines “in a meaningful way.” Many technicians believe triangles represent continuation patterns, or periods of pause in a bigger trend, which means they should eventually be resolved in the direction of the preceding trend. In the S&P 500’s case, that would mean a big rally is coming. But Worth said that based on his interpretation of the charts, the S&P 500’s triangle looks more like a reversal pattern. “We believe the current formation is a setup for a move lower,” Worth said.

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Hoping that just this once it’s different.

The Bank of Mom and Dad is Australia’s Fastest-Growing Housing Lender (BBG)

Beset by lending curbs and bubble-esque prices, first-time home buyers in Australia are turning to a rapidly growing source of finance: The Bank of Mom and Dad. More parents are taking advantage of record-low interest rates to refinance their properties and help their grown-up kids onto the housing ladder amid sky-rocketing house values. Digital Finance Analytics estimates the number of Aussies getting help from their parents has soared to more than half of first-home buyers from just 3% six years ago. Australia’s housing rally has favored baby-boomers and locked out youth, compounding an inter-generational shift of wealth.

As the number of bank loans to first-time buyers dwindles, the average slice of cash handed to them by parents has almost quadrupled in the past six years, DFA says. The downside: a market that the Reserve Bank of Australia is already wary of may get further inflated. First-time buyers are “being infected by the notion that property is about wealth building, rather than somewhere to live,” said Martin North, Principal at DFA. That “may be tested if interest rates rise later, or property prices fall from their current illogical stratospheric levels.” [..] The boom is turning some homes into cash dispensers. More than two thirds of owners that refinanced houses worth more than A$750,000 did so to extract capital for reasons including helping their kids. Near the start of 2010, the average helping hand from parents was about A$23,000; today, it’s more than A$80,000.

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“..they don’t have a strong willingness to hold the yuan due to depreciation expectations..” Does that rhyme with the SDR basket thing?

Goldman Warns China’s Outflows May Be Worse Than They Look (BBG)

China’s currency outflows may be bigger than they look, with Goldman Sachs warning that a rising amount of capital is exiting the country in yuan rather than in dollars. While the nation’s foreign-exchange reserves have stabilized and lenders’ net foreign-exchange purchases for clients have fallen close to a one-year low, official data show that $27.7 billion in yuan payments left China in August. That’s compared with a monthly average of $4.4 billion in the five years through 2014. Such large cross-border moves can’t be explained by market-driven factors and need to be taken into account when measuring currency outflows, according to MK Tang, Hong Kong-based senior China economist at Goldman Sachs.

Any sign of increased capital outflows could disturb a recent calm in China’s foreign-exchange market, adding to pressure from a potential Federal Reserve interest-rate increase and denting the yuan’s image as the world’s newest global reserve currency. The yuan fell to a six-year low on Monday, adding to outflow pressures. “There is some window guidance from the central bank that limits companies’ dollar conversion onshore, so they need to move the money overseas in yuan,” said Harrison Hu, chief Greater China economist at RBS in Singapore. “But they don’t have a strong willingness to hold the yuan due to depreciation expectations, so they sell it to offshore banks. This pressures the offshore yuan’s exchange rate.”

[..] Goldman Sachs started including yuan funds in its analysis of outflows in July, after noting that cross-border movement of the currency masked actual pressures. The bank estimates that 56% and 87% of outflows took place through the offshore yuan market in July and August, respectively.

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Do read the whole thing for a good history lesson.

‘Why Do They Hate Us So?’-A Western Scholar’s Reply to a Russian Student (SC)

In 2000 when Putin was elected president, he publically promoted security and economic cooperation with Europe and the United States. After 9/11, he offered real assistance to Washington. The United States accepted the Russian help, but continued its anti-Russian policies. Putin extended his hand to the west, but on the basis of five kopeks for five kopeks. This was a Soviet policy of the interwar years. It did not work then and it does not work now. In 2007 Putin spoke frankly at the Munich conference on Security Policy about overbearing US behaviour. The “colour revolutions” in Georgia and the Ukraine, for example, and the Anglo-American war of aggression against Iraq raised Russian concerns. US government officials did not appreciate Putin’s truth-telling which went against their standard narrative about «exceptionalist» America and altruistic foreign policies to promote «democracy».

Then in 2008 came the Georgian attack on South Ossetia and the successful Russian riposte which crushed the Georgian army. It’s been all down-hill since then. Libya, Syria, Ukraine, Yemen are all victims of US aggression or that of its vassals. The United States engineered and bankrolled a fascist coup d’état in Kiev and has attempted to do the same in Syria reverting to their “Afghan policy” of bankrolling, supplying and supporting a Wahhabi proxy war of aggression against Syria. Backing fascists on the one hand and Islamist terrorists on the other, the United States has plumbed the depths of malevolence. President Putin and Russian foreign minister Sergei Lavrov have made important concessions, to persuade the US government to avert catastrophe in the Middle East and Europe.

To no avail, five kopeks for five kopeks is not an offer the United States understands. Assymetrical advantages is what Washington expects. One cannot reproach the Russian government for trying to negotiate with the United States, but this policy has not worked in the Ukraine or Syria. Russian support of the legitimate government in Damascus has exposed the US-led war of aggression and exposed its strategy of supporting Al-Qaeda, Daesh, and their various Wahhabi iterations against the Syrian government. US Russophobia is redoubled by Putin’s exposure of American support for Islamist fundamentalists and by Russia’s successful, up to now, thwarting of US aggression. Who does Putin think he is? From my observations, I would reply that President Putin is a plain-spoken Russian statesman, with the support of the Russian people behind him.

For five kopeks against five kopeks, he will work with the United States and its vassals, no matter how malevolent they have been, if they adopt less destructive policies. Unfortunately, recent events suggest that the United States has no intention of doing so. After one hundred years of almost uninterrupted western hostility, no one should be under any illusions. So then, the question is “Why do they hate us so?” Because President Putin wants to build a strong, prosperous, independent Russian state in a multi-polar world. Because the Russian people cannot be bullied and will defend their country tenaciously. “Go tell all in foreign lands that Russia lives!» Prince Aleksandr Nevskii declared in the 13th century: «Those who come to us in peace will be welcome as a guest. But those who come to us sword in hand will die by the sword! On that Russia stands and forever will we stand!”

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Yeah, Daniel Hannan has lots of stuff wrong with him. But Britain must have this conversation regardless of that. I picked this piece up on Twitter, with this accompanying comment: “No aspect of Brexit is Remain voters’ fault in any way, or to any extent at all.” I don’t know if that was meant sarcastically, but I would certainly hope so. Without that conversation things can only get worse. Remainers must try harder to understand why Brexit happened. If nothing else, I would think they’re at least ‘guilty’ of not seeing it coming. And perhaps also of seeing Brexit as the problem, not a mere symptom.

Remainers, Brexit, Racism and a Self-Fulfilling Prophecy (Hannan)

Shortly after the EU referendum, several thousand young people marched through London demanding a rerun. I happened to be sitting next to three of them on a train as I travelled into the capital that morning. They evidently recognised me right away as an Evil Tory Leaver, but we were past Clapham Junction before one of them plucked up the courage to talk to me. “Are you Daniel Hannan? I just wanted to say that what you’ve done is terrible. We’re not a racist country. You’ve taken away our future.” “Is that so? Out of interest, can you tell me who the President of the European Commission is?” “No. What’s that got to do with it?” “Can you name a single European Commissioner, come to that? Do you know what our budget contribution will be this year? Or what the difference is between a Directive and a Regulation?”

She was affronted by the questions. So were her two friends with their “I [heart] EU” placards. They weren’t interested in details. For them, it was about values. Are you a decent, internationalist, compassionate person? Or are you a selfish bigot? Let’s leave aside the fact that no one would ever vote on any ballot paper for a “selfish bigot” option. Their determination to approach the issue in terms of character, rather than cost-benefit, explains why they were so upset – and why, even now, some Remain voters struggle to accept the outcome. In my experience, the 48% who voted Remain fall into two categories. There are those who were making a judgement as to where Britain’s best options lay. They could see that the is EU flawed.

They were well aware of the corruption, the lack of democracy, the slow growth. But they took the view that, on balance, the disruption of leaving would outweigh the gains. These people, by and large, now want to make a success of things, and are keen to maximise our opportunities. Then there were those like my companions on South West Trains, for whom the issue was not financial but somehow moral. For them, the EU wasn’t the grubby and self-interested body that exists in reality; rather, it was a symbol of something better and purer, an embodiment of the dream of peace among nations. They never heard, because they never wanted to hear, the democratic or economic arguments against membership. As far as they were concerned, the only possible reason for voting Leave was chauvinism.

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“Euro Area Looks to Help on Debt” sounds like the epitomy of cynicism. The Eurogroup withheld €1.7 billion, to Greece’s surprise, because it wanted to assess A) whether a June payment was fully used to pay off third parties, and B) whether the government had squeezed its people enough (reforms). The delay is convenient for Brussels because it also delays debt restructuring talks once again, for the umpteenth time. And without those talks, the IMF won’t commit. Rinse and repeat.

Greece Gets Fresh Loan Payout as Euro Area Looks to Help on Debt (BBG)

The euro area authorized a €1.1 billion payment to Greece and signaled a further €1.7 billion would follow this month, saying the region’s most indebted nation has made progress in overhauling its economy. The green light, given by euro-area finance ministers on Monday in Luxembourg, removes a hurdle on Greece’s path to debt relief on which Prime Minister Alexis Tsipras has staked part of his political future. The country had to fulfill 15 conditions on matters such as selling state assets and improving bank governance to get the first payout.

It “was unanimously decided that Greece had completed the 15 milestones, so we can proceed to the €1.1 billion disbursement,” Greek Finance Minister Euclid Tsakalotos told reporters after the meeting, saying the talks produced a “very good” outcome for his country. The delay in getting an endorsement for the remaining sum, which is tied to the clearing of arrears, is merely “technical,” he said. Greece, in its third bailout since 2010, is struggling to right an economy that is poised to undergo its eighth annual contraction in the past nine years. A second review of the country’s rescue program will pave the way for a possible restructuring of Greece’s debt, which the IMF says is a necessary condition for its future involvement.

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This feels like a military coup, a chapter straight out of the Shock Doctrine. Stocks go up because people’s lives go down.

Glenn Greenwald on Twitter: “Brazil’s lower House- in the face of negative growth- just voted to amend the Constitution to ban spending increases for 20 years..” “This extreme austerity in Brazil – enabled by impeachment- is being imposed in world’s 7th largest economy, 5th most populous country (200m). ”

Nomi Prins on Twitter: “Brazil’s coup was about advancing western speculative market access & squashing domestic population needs – for decades…bastards.”

Brazil Votes To Amend Constitution, Ban Spending Increases For 20 Years (BBG)

The Ibovespa rose to a two-year high and the real gained as commodities advanced and as expectations mounted that lawmakers will approve a bill to cap spending, a key measure in President Michel Temer’s plan to trim a budget deficit and rebuild confidence in Brazil. The benchmark equity index rose 0.9% and the currency climbed 0.5% Monday in Sao Paulo. [..] Brazilian stocks have gained 75% in dollar terms this year and the real has strengthened 24%, the best performances in the world, on bets that a new government would be able to pull the country out of its worst recession in a century.

Temer, who formally replaced impeached former President Dilma Rousseff in August, said the administration should have enough votes to drive through a budget bill Monday that’s seen as a vital first step toward his economic reforms. The proposal to amend the Constitution to set limits on government spending for as long as 20 years must be approved by at least three-fifths of both chambers of Congress. “The market is very optimistic over this legislation,” said Paulo Figueiredo, an economist at FN Capital in Petropolis, Brazil. “New bets on local assets depend a lot on the signals that will come from this vote.”

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Bubble?!

Global Clean Energy Investment Dropped 43% in Worst Quarter Since 2013 (BBG)

Global investment in clean energy fell to the lowest in more than three years as demand for new renewable energy sources slumped in China, Japan and Europe. Third-quarter spending was $42.4 billion, down 43% from the same period last year and the lowest since the $41.8 billion reported in the first quarter of 2013, Bloomberg New Energy Finance said in a report Monday. Financing for large solar and wind energy plants sank as governments cut incentives for clean energy and costs declined, said Michael Liebreich at the London-based research company. Total investment for this year is on track to be “well below” last year’s record of $348.5 billion, according to New Energy Finance.

The third-quarter numbers “are worryingly low even compared to the subdued trend we saw” in the first two quarters, Liebreich said in a statement. “Key markets such as China and Japan are pausing for a deep breath.” Part of the reason for the steep decline in the quarter was a slowdown following strong spending in the first half of the year on offshore wind. Investors poured $20.1 billion into European offshore wind farms in the first and second quarters, “a runaway record,” according to Abraham Louw, an analyst for energy economics with New Energy Finance. That was followed by a “summer lull,” with $2.4 billion in spending in the third quarter.

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So much for that.

Russia’s Rosneft Boss Sechin Says No To OPEC Oil Cut/Freeze (R.)

Igor Sechin, Russia’s most influential oil executive and the head of Kremlin energy champion Rosneft, said his company will not cut or freeze oil production as part of a possible agreement with OPEC. His comments underline how difficult it is for Russia to get its oil companies to freeze or cut output as part of a potential deal with OPEC designed to support oil prices. President Vladimir Putin told an energy congress on Monday that Russia was ready to join the proposed OPEC cap, but did not provide any details. “Why should we do it?” Sechin, known for his anti-OPEC position, told Reuters in Istanbul on Monday evening, when asked if Rosneft, which accounts for 40% of Russia’s total crude oil output, might cap its own output.

Sechin said he doubted that some OPEC countries, such as Iran, Saudi Arabia and Venezuela would cut their output either, saying that an increase in oil prices above $50 per barrel would make shale oil projects in the United States profitable. There have been several attempts in the past for Russia and OPEC to join forces to stabilize oil markets. Those efforts have never come to pass however. Oil prices surged on Monday after Putin’s comments amid hopes that a two-year price slide could be halted.

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Uglee!!!

Britain’s Nuclear Cover-Up (NYT)

Last month, the British government signed off on what might be the most controversial and least promising plan for a nuclear power station in a generation. Why did it do this? Because the project isn’t just about energy: It’s also a stealth initiative to bolster Britain’s nuclear deterrent. For years, the British government has been promoting a plan to build two so-called European Pressurized Reactors (EPR) at Hinkley Point C, in southwest England. It estimates that the facility will produce about 7% of the nation’s total electricity from 2025, the year it is expected to be completed. The EPR’s designer, Areva, claims that the reactor is reliable, efficient and so safe that it could withstand a collision with an airliner.

But the project is staggeringly expensive: It will cost more than $22 billion to build and bring online. And it isn’t clear that the EPR technology is viable. No working version of the reactor exists. The two EPR projects that are furthest along — one in Finland, the other in France — are many years behind schedule, have hemorrhaged billions of dollars and are beset by major safety issues. The first casting of certain components for the Hinkley Point C reactors left serious metallurgical flaws in the pressure vessel that holds the reactor core. In 2014, the Cambridge University nuclear engineer Tony Roulstone declared the EPR design “unconstructable.”

The lead builder of the EPR, the French utility company Electricité de France, faced a mutiny this year: Its unions fought the Hinkley Point project, fearing it might bring down the company. E.D.F.’s chief financial officer has resigned, arguing that it would put too much strain on the company’s balance sheet. But the British government continues to act as though it wants the Hinkley project to proceed at almost any price. In return for covering about one-third of the costs, the Chinese state-run company China General Nuclear Power Corporation will take about one-third ownership in the project. (A subsidiary of E.D.F. owns the rest.) The British government has also provisionally agreed to let China build a yet-untested Chinese-designed reactor in Bradwell-on-Sea, northeast of London, later.

[..] The British government has [..] guaranteed that investors in the Hinkley project will get $115 per megawatt-hour over 35 years. This is approximately twice the price of electricity today [..]. If the market price of electricity falls below that rate, a government company is contractually bound to cover the difference — with the extra cost passed on to consumers. Price forecasts have dropped since the deal was struck: This summer the government, revising estimates, said differential payments owed under the contract could reach nearly $37 billion. If the Hinkley plan seems outrageous, that’s because it only makes sense if one considers its connection to Britain’s military projects — especially Trident, a roving fleet of armed nuclear submarines, which is outdated and needs upgrading.

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Jul 312016
 
 July 31, 2016  Posted by at 10:13 pm Finance Tagged with: , , , , , , , , , , ,  4 Responses »


Vincent van Gogh Branches Of An Almond Tree In Blossom in Red 1890

Think about it for a second: If America -and UK, France- were to announce today that they would immediately cease bombing Syria, Iraq, Libya, Afghanistan, would the US be any less safe? Would Europe?

How about if we’d promise to spend all the billions saved by not throwing bombs on them, to help rebuild these countries? Would that make us less safe, from terrorists, from anyone at all? Do you think ‘they’ would ‘hate’ us for that?

It becomes a pretty stupid non-discussion pretty fast, doesn’t it?

 

 

Oct 242015
 
 October 24, 2015  Posted by at 10:03 am Finance Tagged with: , , , , , , , , , , ,  3 Responses »


William Henry Jackson Hospital Street, St. Augustine, Florida 1897

China Cuts Interest Rates, Reserve Ratios to Counter Slowdown (Bloomberg)
China Interest Rate Cut Fuels Fears Over Ailing Economy (Guardian)
Why The Chinese Rate Cut Will Not Slow China’s Economic Decline (Coward)
Reactions To Rate Cut: “China Is Getting More And More Desperate” (Zero Hedge)
China Takes ‘Riskiest’ Step by Ending Deposit-Rate Controls (Bloomberg)
Draghi’s Signal Adds $190 Billion to Negative-Yield Universe (Bloomberg)
Eurozone Crosses Rubicon As Portugal’s Anti-Euro Left Banned From Power (AEP)
Italy ex-PM Monti: Ignoring Greek Referendum A Violation Of Democracy (EurActiv)
Rare Metals: The War Over the Periodic Table (Bloomberg)
$6.5 Billion in Energy Writedowns and We’re Just Getting Started (Bloomberg)
Greece’s Creditors Demand Further Reform (La Tribune)
Investment Grade Ain’t What It Used to Be in Nervous Bond Market (Bloomberg)
An All Too Visible Hand (WSJ)
EU Negotiators Break Environmental Pledges In Leaked TTIP Draft (Guardian)
Populist, Pernicious and Perilous : Germany’s Growing Hate Problem (Spiegel)
Germany To Push For Compulsory EU Quotas To Tackle Refugee Crisis (Guardian)
Worried Slovenia Might Built Fence To Cope With Migrant Crisis (Reuters)

This cannot end well.

China Cuts Interest Rates, Reserve Ratios to Counter Slowdown (Bloomberg)

China’s central bank cut its benchmark lending rate and reserve requirements for banks, stepping up efforts to cushion a deepening economic slowdown. The one-year lending rate will drop to 4.35% from 4.6% effective Saturday the People’s Bank of China said on its website on Friday. The one-year deposit rate will fall to 1.5% from 1.75%. Reserve requirements for all banks were cut by 50 basis points, with an extra 50 basis point reduction for some institutions. The PBOC also scrapped a deposit-rate ceiling. The expanded monetary easing underscores the government’s determination to meet its 2015 growth target of about 7%. Moderated consumer inflation and a deeper slump in producer prices have given policy makers room for further easing.

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If growth numbers were anywhere near the IMF’s predictions, China wouldn’t be cutting rates.

China Interest Rate Cut Fuels Fears Over Ailing Economy (Guardian)

China fuelled fears that its ailing economy is about to slow further after Beijing cut its main interest rate by 0.25 percentage points. The unexpected rate cut, the sixth since November last year, reduced the main bank base rate to 4.35%. The one-year deposit rate will fall to 1.5% from 1.75%. The move follows official data earlier this week showing that economic growth in the latest quarter fell to a six-year low of 6.9%. A decline in exports was one of the biggest factors, blamed partly by analysts on the high value of China’s currency, the yuan. The rate cut sent European stock markets higher as investors welcomed the boost from cheaper credit in China, together with the hint of further monetary easing by the European Central Bank president, Mario Draghi, on Thursday.

Investors were also buoyed by the likelihood that the US Federal Reserve would be forced to signal another delay to the first US rate rise since the financial crash of 2008-2009 until later next year. The FTSE 100 was up just over 90 points, or 1.4%, at 6466, while the German Dax and French CAC were up almost 3%. The People’s Bank of China’s last rate cut in August triggered turmoil in world markets after Beijing combined the decision with a 2% reduction in the yuan’s value. Shocked at the prospect of a slide in the Chinese currency, investors panicked and sent markets plunging. Some economists have warned that the world economy is about to experience a third leg of post-crash instability after the initial banking collapse and eurozone crisis.

The slowdown in China, as it reduces debts and a dependence for growth on investment in heavy industry and property, will be the third leg. World trade has already contracted this year with analysts forecasting weaker trade next year. The IMF in July trimmed its forecast for global economic growth for this year to 3.1% from 3.3% previously, mainly as a result of China’s slowing growth. The Washington-based fund also warned that the weak recovery in the west risks turning into near stagnation. At its October annual meeting, it said growth in the advanced countries of the west is forecast to pick up slightly, from 1.8% in 2014 to 2% in 2015 while growth in the rest of the world is expected to fall from 4.6% to 4%.

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“The continued and dramatic slowing of the Chinese economy in the years ahead is baked in the cake.”

Why The Chinese Rate Cut Will Not Slow China’s Economic Decline (Coward)

Today the Peoples Bank of China cut the benchmark interest rate by .25% and lowered banks’ reserve requirements by .5%. The measure is supposed to spur growth and make life a little easier on debt-ridden Chinese companies. In the immediate term it may give a slight boost to the economy, but there is no chance this measure, or others like it, will keep the Chinese economy from slowing much further in the years ahead. Let us explain… The continued and dramatic slowing of the Chinese economy in the years ahead is baked in the cake. For the last decade Chinese growth has been fueled by investment in infrastructure (AKA fixed capital formation). In an effort to sustain a high level of growth massive and unprecedented investment in fixed capital was carried out and fixed investment has now become close to 50% of the Chinese economy.

On the flip side, consumption as a% of GDP has shrunk from about 46% of GDP to only 38% of GDP. Most emerging market countries run with fixed investment of around 30-35% of GDP and with consumption accounting for about 40-50% of GDP – exactly the opposite dynamic of the Chinese economy. China has run into a ceiling in terms of the percentage of the economy accounted for by fixed investment and now fixed investment must shrink to levels more appropriate for China’s stage of economic development. This necessarily implies a slowing of the Chinese economy from what the government says is near 7% to something closer to 2-4%, and that is in the optimistic scenario in which consumption growth picks up the pace to mitigate the slowdown in investment.

This is why cuts in rates mean practically nothing for China’s long-term economic prospects. In the short-term rate cuts may postpone corporate bankruptcies by allowing companies to refinance debt at lower rates. Rate cuts may also make housing more affordable, on the margin. But these are cyclical boosts that act as tailwinds to China’s economic train.

No amount of wind, save a hurricane, is going to keep the train from slowing. As a reminder, it has not been working…

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“..easing shows China is “getting more and more desperate” and that “things are really bad there.”

Reactions To Rate Cut: “China Is Getting More And More Desperate” (Zero Hedge)

To say that China, which a few days ago reported GDP of 6.9% which “beat” expectations and which a few hours ago reported Chinese home prices rose in more than half of tracked cities for the first time in 17 months, stunned everyone with its rate cut on Friday night, meant clearly for the benefit of US stocks, as well as the global commodity market, is an understatement: nobody expected this. As a result strategists have been scrambling to put China’s 6th rate cut in the past year (one taking place just ahead of this weekend’s Fifth plenum) in context. Here are the first responses we have seen this morning. First, from Vikas Gupta, executive vice president at Arthveda Fund Management, who told Bloomberg that “China rate cut will spur fund flows to EMs.” He adds that “the move rules out U.S. rate increase this yr; Fed’s “hands are getting tied” concluding that “easing shows China is “getting more and more desperate” and that “things are really bad there.”

While there is no debate on just how bad things in China are, one can disagree that the Fed’s hands are tied – after all the Fed’s biggest “global” concern was China. The PBOC should have just taken that concern off the table. The second reaction comes from Citi’s Richard Cochinos: “Bottom line: Impacts of China rate announcements on the G10 are falling. Investors remain cautious ahead of this weekend’s announcements, and what policy cuts imply for the region. One day after a dovish ECB, China cuts interest rates by 25bp and RRR cut by 50bps. Accommodative policy begets accommodative policy it seems. Our economics team has been expecting further policy accommodation out of China, the issue was just a matter of timing.

Unlike other major central banks, the PBOC doesn’t announce policy on a set schedule – but this doesn’t mean there isn’t a pattern to it. Before today, it had announced cuts to the RRR or interest rate six times in 2015 – the last being on 25 August. So today was a surprise in terms of action, but not completely unexpected. We prefer to see the easing can be seen in the larger picture of China adjusting to weaker growth in a systematic and controlled manner, rather than a reaction to a new economic shock.”

This view helps explain the muted reaction in the G10. So far, AUDUSD (0.27%) and USDJPY (0.18%) have borne the bulk of price action, but we note price action so far is muted relative to April, June or August. Clearly stimulus is beneficial to both Japan and Australia – but we are cautious not to sound too optimistic. Today’s rate cut comes ahead of this weekend’s Fifth plenum, and previous ones haven’t been sufficient to reverse the economic slowdown. Additionally, this weekend it has been expected GDP targets for the next 5-years will be announced (currently at 7%, but broadly expected to fall), along with other fiscal plans and goals. Without knowing the full baseline of what China expects and is working towards, it is difficult to chase price action. The main drivers of EM Asia lower has been poor growth and trade in the region – hence we main cautious. Policy adjustments now could be a way to soften the impact of further weak economic growth.

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Will adding more leverage save Beijing?

China Takes ‘Riskiest’ Step by Ending Deposit-Rate Controls (Bloomberg)

China scrapped a ceiling on deposit rates, tackling what the central bank has called the “riskiest” part of freeing up the nation’s interest rates. The move came as the central bank cut benchmark rates and banks’ reserve requirements to support a faltering economy. The changes take effect on Saturday, the People’s Bank of China said in a statement on Friday. Scrapping interest-rate controls boosts the role of markets in the economy, part of efforts by Premier Li Keqiang to find new engines of growth. While officials must be on guard for any excessive competition for deposits that could increase borrowing costs for companies or lead to lenders going bust, weakness in the economy may be mitigating the risks.

Ending the ceiling is an important milestone but comes in the wake of “a tremendous amount of deposit-rate liberalization over the last several years,” especially in the shape of wealth management products, according to Charlene Chu at Autonomous Research Asia. Wealth products issued by Internet firms are increasingly siphoning away deposits, making rate controls less effective and adding urgency to accelerating reform, the central bank said in a question-and-answer statement after the move. History shows that the best time to deregulate rates is when they’re being cut and inflation is easing, it said. The risks may not be as high as they would’ve been two or three years ago, because competition for deposits has cooled, with weaker demand for funding and a decline in banks’ willingness to lend, Chu, formerly of Fitch Ratings, said ahead of the PBOC announcement. Banks aren’t fully using the deposit-rate flexibility that they already have, she said.

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Remember that Draghi et al have no idea what the effect of negative rates will be. None. All they have is theories.

Draghi’s Signal Adds $190 Billion to Negative-Yield Universe (Bloomberg)

With his confirmation that policy makers had discussed cutting the region’s deposit rate, Mario Draghi extended the euro area’s negative yield universe by $190 billion. Those comments by the ECB chief on Thursday sparked a rally that left yields on German sovereign securities at less than zero for as long as six years. Across the currency bloc, the value of securities issued by governments at negative yields rose to $1.57 trillion, from $1.38 trillion before Draghi’s comments. That’s equivalent to about a quarter of the market. German and French two-year yields set fresh record-lows Friday, while their longer-dated peers pared weekly gains. Draghi also said the ECB will re-examine its quantitative-easing plan in December.

“This is certainly an exceptional environment,” said Christian Lenk at DZ Bank in Frankfurt. “We have to admit that the discussion about the deposit rate being cut further came as a surprise. It takes the curve very much into negative territory. In the time being the short-end looks a bit artificial.” Germany’s two-year yield was little changed at minus 0.32% as of 9:58 a.m. London time, after earlier reaching a record-low minus 0.348%. The price of the 0% security maturing September 2017 was at 100.605% of face value. French two-year yields dropped to a record minus 0.292% on Friday, also below the current level of the deposit rate, which is at minus 0.20%. There are about $752 billion of securities in the euro region with yields below that rate, making them ineligible for the ECB’s €1.1 trillion bond-buying plan

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Next major Brussels headache: “Public debt is 127pc of GDP and total debt is 370pc, worse than in Greece. Net external liabilities are more than 220pc of GDP.”

Eurozone Crosses Rubicon As Portugal’s Anti-Euro Left Banned From Power (AEP)

Portugal has entered dangerous political waters. For the first time since the creation of Europe’s monetary union, a member state has taken the explicit step of forbidding eurosceptic parties from taking office on the grounds of national interest. Anibal Cavaco Silva, Portugal’s constitutional president, has refused to appoint a Left-wing coalition government even though it secured an absolute majority in the Portuguese parliament and won a mandate to smash the austerity regime bequeathed by the EU-IMF Troika. He deemed it too risky to let the Left Bloc or the Communists come close to power, insisting that conservatives should soldier on as a minority in order to satisfy Brussels and appease foreign financial markets. Democracy must take second place to the higher imperative of euro rules and membership.

“In 40 years of democracy, no government in Portugal has ever depended on the support of anti-European forces, that is to say forces that campaigned to abrogate the Lisbon Treaty, the Fiscal Compact, the Growth and Stability Pact, as well as to dismantle monetary union and take Portugal out of the euro, in addition to wanting the dissolution of NATO,” said Mr Cavaco Silva. “This is the worst moment for a radical change to the foundations of our democracy. “After we carried out an onerous programme of financial assistance, entailing heavy sacrifices, it is my duty, within my constitutional powers, to do everything possible to prevent false signals being sent to financial institutions, investors and markets,” he said. Mr Cavaco Silva argued that the great majority of the Portuguese people did not vote for parties that want a return to the escudo or that advocate a traumatic showdown with Brussels.

This is true, but he skipped over the other core message from the elections held three weeks ago: that they also voted for an end to wage cuts and Troika austerity. The combined parties of the Left won 50.7pc of the vote. Led by the Socialists, they control the Assembleia. The conservative premier, Pedro Passos Coelho, came first and therefore gets first shot at forming a government, but his Right-wing coalition as a whole secured just 38.5pc of the vote. It lost 28 seats. The Socialist leader, Antonio Costa, has reacted with fury, damning the president’s action as a “grave mistake” that threatens to engulf the country in a political firestorm. “It is unacceptable to usurp the exclusive powers of parliament. The Socialists will not take lessons from professor Cavaco Silva on the defence of our democracy,” he said.

Mr Costa vowed to press ahead with his plans to form a triple-Left coalition, and warned that the Right-wing rump government will face an immediate vote of no confidence. There can be no fresh elections until the second half of next year under Portugal’s constitution, risking almost a year of paralysis that puts the country on a collision course with Brussels and ultimately threatens to reignite the country’s debt crisis. The bond market has reacted calmly to events in Lisbon but it is no longer a sensitive gauge now that the ECB is mopping up Portuguese debt under quantitative easing. Portugal is no longer under a Troika regime and does not face an immediate funding crunch, holding cash reserves above €8bn. Yet the IMF says the country remains “highly vulnerable” if there is any shock or the country fails to deliver on reforms, currently deemed to have “stalled”. Public debt is 127pc of GDP and total debt is 370pc, worse than in Greece. Net external liabilities are more than 220pc of GDP.

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“Europe has steadily departed from its principal founding goals, democracy, human rights and freedoms and the prosperity of its people and its societies..”

Italy ex-PM Monti: Ignoring Greek Referendum A Violation Of Democracy (EurActiv)

By disregarding the resounding ‘No’ of the recent Greek referendum, Europe clearly violated democracy, said the former Italian premier, Mario Monti. At the “Regaining Public Trust in Europe” event organised this week in Brussels by Friends of Europe, Zoe Konstantopoulou, the former speaker of the Greek Parliament, strongly criticized the EU institutions for the unfolding humanitarian crisis in Greece. “Would you trust the EU if they told you that your vote or the court decisions in your countries do not matter?”, Konstantopoulou wondered. Zoe Konstantopoulou served as a speaker of the Greek parliament under the first term of Syriza coalition government and was a close ally of the Greek premier, Alexis Tsipras.

But shortly after the deal agreed on between Athens and its international creditors this summer, Konstantopoulou resigned from Syriza, and joined the newly established leftist Popular Unity party led by former energy minister Panagiotis Lafazanis. In the recent snap election in Athens, Popular Unity did not manage to enter the Greek parliament, scoring below the required 3% threshold. Konstantopoulou and Monti had a vivid dialogue during the panel discussion. The former Greek lawmaker was quite critical of the EU, and said that at times when the democratic principles of the EU are shaken, “it is our duty to speak clearly and honestly”.

“Europe has steadily departed from its principal founding goals, democracy, human rights and freedoms and the prosperity of its people and its societies,” she stressed. Konstantopoulou noted that “Greeks have been sacrificed and crucified for more than 5 years now, to pay a debt which has been evaluated to be wholly unsustainable ever since 2010 to the knowledge of the IMF and the EU.” “And it was baptised as public, although it was initially private, involving private banks in Germany, France and Greece,” she added.

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Must. Read. Whole. Article.

Rare Metals: The War Over the Periodic Table (Bloomberg)

A little past 9:30 on the morning of Sept. 7, 2010, a Japanese Coast Guard vessel in the East China Sea spots a Chinese fishing trawler off the coast of islands, known as Senkaku in Japanese and Diaoyu in Chinese. The Japanese have little tolerance for such incursions in the Senkakus, which they annexed in 1895 after the Sino-Japanese War. But recently China has asserted claims to these islands extending hundreds of years earlier. The island dispute is wrapped up in a morass of misunderstanding and oneupmanship, with an eye toward the rich seabed resources nearby. When you ask Japanese officials about the territorial dispute, they will look at you as if it is almost insulting to answer the question. “It’s our land,” one government official told me, as if an American diplomat had been asked if Hawaii is part of the US.

On that morning, the Japanese vessel pulls alongside the smaller Chinese trawler and blares messages to the crew in Chinese from loudspeakers: “You are inside Japanese territorial waters. Leave these waters.” Videos from the day show that instead of leaving, the Chinese boat bends toward the stern of the Japanese cutter, hitting it and then sailing on. Forty minutes later, the same captain veers into another Japanese coast guard ship. Tokyo has managed previous incursions with little fanfare. However, the newly elected Democratic Party of Japan detained the trawler’s crew and captain. It planned to put the captain on trial. China retaliated by detaining four Japanese citizens.

Then, on Sept. 21, Japanese trading houses informed its Ministry of Economy, Trade and Industry that China was refusing to fill orders for rare-earth elements – a set of 17 different, obscure rare metals. What seemed like a battle over seabed resources became a new conflict, one that is potentially far larger, a War over the Periodic Table. Japanese officials and manufacturers were frightened. These elements – essential materials in Japan’s high-tech industry, well known for its high quality components – were virtually all produced in China. Beijing never acknowledged an export ban or said it would use the rare-metal trade as a political weapon. But no other country reported such delays. And Beijing never explained why all 32 of the country’s rare-earth exporters halted trade on the same day.

Restricting these exports was an astute move if Beijing’s goal was to escalate the political conflict between the two countries without the use of force. Tokyo worried that rare earths were just the beginning of what China might withhold because China is also the leading global producer of 28 advanced metals also vital to Japanese industry. Bowing to Beijing’s pressure, Tokyo quickly released the Chinese captain. But the damage to Japan and the rare-earth market had only just begun. Prices for rare earths started to climb, some as much as 2,000% over the next year and a half. Prices have since returned to lower levels, and China changed its export regime after being found in violation of global trade rules last year. But the lessons from this episode have not yet been fully realized as a fundamental market instability remains. A little perspective is in order.

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It’s already much much more.

$6.5 Billion in Energy Writedowns and We’re Just Getting Started (Bloomberg)

The oil and gas industry’s earnings season is barely underway, and already there’s been $6.5 billion in writedowns. On Thursday, Freeport-McMoRan reported a $3.7 billion charge for the third quarter, while Southwestern Energy – which has a market value of $4.5 billion – booked $2.8 billion. And that’s just the beginning. Barclays estimated in an Oct. 21 analysis that there could be $20 billion in charges among just six companies. Southwestern’s writedown was double Barclays’ forecast. Oil prices have tumbled 44% in the past year, and natural gas is down 35%, making the write-offs a foregone conclusion from an accounting standpoint. The companies use an accounting method that requires them to recognize a charge when estimates of future cash flow from their properties falls below what the companies spent buying and developing the acreage. The predictions of future cash flow have fallen along with prices.

Since it’s no secret oil and gas prices have plunged, “the majority of write-offs are typically non-events,” said Barclays’ analysts led by Thomas R. Driscoll in the report. Southwestern’s shares have declined 64% in the past year, and Phoenix-based Freeport-McMoRan’s are down 61%. Barclays predicted ceiling-test impairments for Apache, Chesapeake Energy , Devon Energy, Encana and Newfield. All five companies are scheduled to report third-quarter results in November. “Many companies will have writedowns as the price of oil is about half of where it once was and gas is also down,” Timothy Parker at T. Rowe Price said in an e-mail. “However, it won’t generally hurt the companies because very few have debt covenants that are linked to book value, which the writedowns affect.”

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The troika wants to evict Greeks from their homes.

Greece’s Creditors Demand Further Reform (La Tribune)

The European institutions and the IMF are increasing their demands on Greece, despite the recent reforms adopted by the Greek parliament. Athens can hardly afford to resist. Our partner La Tribune reports. Discussions between Greece and its creditors are tense, despite the major reforms accepted by the Greek parliament, the Vouli, on Monday (19 October). The talks between Greece and the new institutional ‘quartet’ began on Wednesday (21 October). The old troika of the Commission, the ECB and the IMF has been joined by the European Stability Mechanism (ESM). On Wednesday afternoon, Olga Gerovasili, a spokesperson for the Greek government, spoke of a “very hard battle” with the institutions.

At the heart of this battle are the Greek banks, which were severely weakened by the massive withdrawal of deposits in the first half of this year. Added to this is the increasing cost of debt. According to the Bank of Greece, in 2014 this represented 34% of the total deposits held by all the Hellenic banks put together. This figure has risen since 2014, and will continue to rise as Greek GDP contracts in 2015 and 2016. Fewer deposits mean more toxic debt: the Greek banking system needs a bailout. The Greek government says it needs a recapitalisation fund of €25 billion. But the creditors clearly hope to provide only the bare minimum. As the supervisor of the process, the ECB plans to carry out an asset quality review (AQR) to determine exactly how much money the banks need before bailing them out.

But the conditions attached to this bailout may create a raft of other problems. Greece’s creditors are now demanding that borrowers who cannot afford to repay their loans be evicted from their homes. The vacated properties would then be sold in order to settle the exact payment due on each loan. Up to now, households with modest incomes have been protected from eviction as long as their main residence was worth less than €250,000; a measure that has helped to keep many families hit by unemployment off the streets. But the creditors want this limit lowered so more bank loans can be recovered in this way. Olga Gerovasili said that the government was “fighting to maintain the protection of main residences”.

A similar issue arose in Cyprus last year. The Cypriot parliament refused to implement the tougher eviction conditions demanded by the troika, and the ECB responded by excluding Cyprus from its quantitative easing programme. The troika then froze all transfers to Nicosia, pushing the island to the verge of bankruptcy. Under pressure from the government, the parliament finally accepted the demand to make evictions easier to carry out.

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Where and why debt deflation starts: “Companies have increased leverage massively, and that is starting to catch up..”

Investment Grade Ain’t What It Used to Be in Nervous Bond Market (Bloomberg)

After six years of a credit boom in which investors distinguished less and less between ratings, rewarding companies across the spectrum with favorable borrowing costs, the market is becoming more discriminating. Fear of low growth, which has largely been focused on the riskiest of energy companies, is spilling over to other industries and into the lower rungs of investment grade as the strength of balance sheets comes back into focus. Just being investment grade, it seems, isn’t good enough anymore. “The chickens are coming home to roost,” said Freddie Offenberg at Andres Capital Management. “Companies have increased leverage massively, and that is starting to catch up, especially given the worries in the economy.” Earnings for Standard & Poor’s 500 companies contracted 1.7% last quarter, the most since 2009.

And more than half of companies in the index that reported earnings this quarter have disappointed analysts’ sales expectations. The credit-ratings companies have noticed: There have been 1.6 investment-grade companies upgraded for every one downgraded so far this year, compared with last year’s 3.5-1 ratio. “It’s not time to panic, but the market is paying closer attention to performance and quality, and rightly so,” said David Leduc at Standish Mellon Asset Management. Companies like Fossil are paying nearly half a percentage point more for their debt since May, based on secondary prices of comparable securities, according to Bank of America Merrill Lynch Indexes. Companies with the best balance sheets, such as Microsoft and Johnson & Johnson, only pay 0.05 percentage point more.

Among companies that have had to pay up in debt markets is Hewlett-Packard. The Baa2 rated computer maker sold $14.6 billion of bonds on Sept. 30 that yielded half apercentage point more than the average for bonds with similar ratings and maturities in the secondary market, according to Bank of America Merrill Lynch index data. That’s not good news for companies that still need to raise debt to finance $356 billion of takeovers that are expected to be completed by the end of the year. This includes Charter Communications, which is attempting to complete its $55.1 billion takeover of Time Warner Cable with the lowest investment-grade rating from S&P and Fitch Ratings, and a junk rating from Moody’s Investors Service.

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“On the basis of its record, the financial system as constituted in the years 1900-1913 must be considered to have been successful to an extent rarely equalled in the United States.”

An All Too Visible Hand (WSJ)

When Woodrow Wilson signed the Federal Reserve Act into law in 1913, the dollar was defined as a weight of gold. You could exchange the paper for the metal, and vice versa, at a fixed and statutory rate. The stockholders of nationally chartered banks were responsible for the solvency of the institutions in which they owned a fractional interest. The average level of prices could fall, as it had done in the final decades of the 19th century, or rise, as it had begun to do in the early 20th, without inciting countermeasures to arrest the change and return the price level to some supposed desirable average. The very idea of a macroeconomy—something to be measured and managed—was uninvented. Who or what was in charge of American finance? Principally, Adam Smith’s invisible hand.

How well could such a primitive system have possibly functioned? In “The New York Money Market and the Finance of Trade, 1900-1913,” a scholarly study published in 1969, the British economist C.A.E. Goodhart concluded thus: “On the basis of its record, the financial system as constituted in the years 1900-1913 must be considered to have been successful to an extent rarely equalled in the United States.” The belle epoque was not to be confused with paradise, of course. The Panic of 1907 was a national embarrassment. There were too many small banks for which no real diversification, of either assets or liabilities, was possible. The Treasury Department was wont to throw its considerable resources into the money market to effect an artificial reduction in interest rates—in this manner substituting a very visible hand for the other kind.

Mr. Lowenstein has written long and well on contemporary financial topics in such books as “When Genius Failed” (2000) and “While America Aged” (2008). Here he seems to forget that the past is a foreign country. “Throughout the latter half of the nineteenth century and into the early twentieth,” he contends, “the United States—alone among the industrial powers—suffered a continual spate of financial panics, bank runs, money shortages and, indeed, full-blown depressions.” If this were even half correct, American history would have taken a hard left turn. For instance, William Jennings Bryan, arch-inflationist of the Populist Era, would not have lost the presidency on three occasions. Had he beaten William McKinley in 1896, he would very likely have signed a silver-standard act into law, sparking inflation by cheapening the currency. As it was, President McKinley signed the Gold Standard Act of 1900, which wrote the gold dollar into the statute books.

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Well, that’s a surprise…

EU Negotiators Break Environmental Pledges In Leaked TTIP Draft (Guardian)

The EU appears to have broken a promise to reinforce environmental protections in a leaked draft negotiating text submitted in the latest round of TTIP talks in Miami.. In January, the bloc promised to safeguard green laws, defend international standards and protect the EU’s right to set high levels of environmental protection, in a haggle with the US over terms for a free trade deal. But a confidential text seen by the Guardian and filed in the sustainable development chapter of negotiations earlier this week contains only vaguely phrased and non-binding commitments to environmental safeguards. No obligations to ratify international environmental conventions are proposed, and ways of enforcing goals on biodiversity, chemicals and the illegal wildlife trade are similarly absent.

The document does recognise a “right of each party to determine its sustainable development policies and priorities”. But lawyers say this will have far weaker standing than provisions allowing investors to sue states that pass laws breaching legitimate expectations of profit. “The safeguards provided to sustainable development are virtually non-existent compared to those provided to investors and the difference is rather stark,” said Tim Grabiel, a Paris-based environmental attorney. “The sustainable development chapter comprises a series of aspirational statements and loosely worded commitments with an unclear dispute settlement mechanism. It has little if any legal force.” The document contains a series of broadly sympathetic statements about the importance of conservation and climate action.

But it offers no definitions of what core terms – such as “high levels of protection” for the environment or “effective domestic policies” for implementing them – actually mean. Last year, more than a million people across Europe signed a petition calling for the Transatlantic Trade and Investment Partnership (TTIP) talks to be scrapped. Their concern was that multinationals could use the treaty’s investor-state dispute settlement (ISDS) provisions to sue authorities in private tribunals, not bound by legal precedent. In one famous case, Lone Pine launched an unresolved $250m suit against the state of Quebec after it introduced a fracking moratorium, using ISDS provisions in the North American Free Trade Agreement (Nafta).

US officials maintain that few such cases are ever likely to be brought under the TTIP, which could wipe away tariffs in the world’s largest ever free trade deal. However, environmental cases accounted for 60% of the 127 ISDS cases already brought against EU countries under bilateral trade agreements in the last two decades, according to Friends of the Earth Europe. Europe’s taxpayers paid out at least $3.5bn to private investors as a result.

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Seen this before: “..a shift in norms that will be difficult to get back under control.”

Populist, Pernicious and Perilous : Germany’s Growing Hate Problem (Spiegel)

Germany these days, it seems, is a place where people feel entirely uninhibited about expressing their hatred and xenophobia. Images from around the country show a level of brutalization that hasn’t been witnessed for some time, and attest to primitive instincts long believed to have been relegated to the past in Germany. The examples are as myriad as they are shocking, and include the bloody attack in Cologne as well as the mock gallows for Angela Merkel and her deputy Sigmar Gabriel carried by a demonstrator at a Pegida rally in Dresden on Oct. 12.

But they also include the abuse shouted at the German chancellor when she visited a refugee hostel in Heidenau near Dresden in August, where she was called a “slut” and other insults, or the placards held aloft by demonstrators on the first anniversary of the Pegida rallies listing the supposed “enemies of the German state” – Merkel, Gabriel and their “accomplices.” The lack of inhibition when it comes to vicious tirades took on a whole new scale on Monday, when Turkish-born German author and Pegida supporter Akif Pirincci, said there are other alternatives in the refugee crisis, but “the concentration camps are unfortunately out of action at the moment.”

There have been more than twice as many attacks on refugee hostels during the first nine months of this year as in the whole of 2014. The rising tide of hatred is now reaching the politicians many hold responsible for the perceived chaos besetting Germany. The national headquarters of Merkel’s conservative Christian Democratic Union (CDU) party in Berlin fields thousands of hate mails every week. As the architect of the “we can do it” policy of allowing masses of refugees into the country, Chancellor Merkel is their primary target. Within the SPD, it is General Secretary Yasmin Fahimi, whose father is Iranian. “Open the doors to the showers, fire up the ovens. They’re going to be needed,” read one recent anonymous mail addressed to her.

The hatred comes in many forms. It’s expressed on the streets and on the Internet. Sometimes it’s loud. Other times it’s unspoken. It eminates from every class and every section of society. According to studies conducted by Andreas Zick, the respected head of the Institute for Interdisciplinary Research on Conflict and Violence at the University of Bielefeld, who has been researching German prejudices against different groups for many years, almost 50% of Germans harbor misanthropic views. Zick warns of a shift in norms that will be difficult to get back under control.

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Rinse and repeat?!

Germany To Push For Compulsory EU Quotas To Tackle Refugee Crisis (Guardian)

Germany is to push for more ambitious and extensive common European policies on the refugee crisis, according to policymakers in Berlin, with compulsory and permanent EU quotas for sharing probably hundreds of thousands of people to be brought to Europe directly from the Middle East. New European powers replacing some national authority over border control, and the possible raising of a special EU-wide levy to fund the new policies are also on Berlin’s agenda. The plans, being prepared in Berlin and Brussels, are certain to trigger bitter resistance and major clashes within the EU. Berlin backs European commission plans to make the proposed scheme “permanent and binding”. But up to 15 of 28 EU countries are opposed.

The plans will not apply to the UK as it is not part of the EU’s passport-free Schengen zone and has opted out of EU asylum policy, saying it will not take part in any proposed European refugee-sharing schemes. Angela Merkel, appears determined to prevail, as she grapples with a crisis that will likely define her political legacy. The German chancellor is said to be angry with the governments of eastern and central Europe who are strongly opposed to being forced to take in refugees. She is said to resent that these EU member states are pleading for “solidarity” against the threats posed by Russia and Vladimir Putin while they resist sharing the burdens posed by the refugee crisis. EU government leaders agreed last month to share 160,000 asylum seekers already inside the EU, redistributing them from Greece and Italy over two years.

But the decision had to be pushed to a majority vote overruling the dissenters, mainly in eastern Europe, with the Hungarian prime minister, Viktor Orban, accusing Merkel of “moral imperialism” by forcing the issue. It is highly unusual in the EU for sensitive issues of such deep national political impact to be settled by majority voting. But Berlin appears prepared to go there if no consensus can be reached. The opponents of quotas insist last month’s decision was a one-off. But according to policymakers in Berlin, Merkel now wants to go much further, shifting the emphasis of burden-sharing from redistribution of refugees inside the EU to those collecting en masse in third countries, notably Turkey where more than two million Syrians are hosted.

Under one proposal being circulated in Berlin, the EU would strike pacts with third countries such as Turkey agreeing to take large but unspecified numbers of refugees from them directly into Europe. In return the third country would need to agree on a ceiling or a cap for the numbers it can send to Europe and commit to keeping all other migrants and refugees, and accommodate them humanely. This effectively means Europe will be financing large refugee camps in those third countries, which will also be obliged to take back any failed asylum seekers returned from Europe.

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Foreign cops on sovereign territory?

Worried Slovenia Might Built Fence To Cope With Migrant Crisis (Reuters)

Slovenia said it will consider all options, including fencing off its border with Croatia, if European leaders fail to agree a common approach to the migrant crisis as thousands stream into the ex-Yugoslav republic. Migrants began crossing into Slovenia last Saturday after Hungary closed its border with Croatia. The Slovenian Interior Ministry said that a total of 47,000 had entered the country since Saturday, including some 10,000 in the past 24 hours. A Reuters cameraman said about 3,000 people broke the fence at the border crossing at Sentilj and walked in to Austria on Friday morning. Slovenian officials said the country is too small and does not have enough resources to handle such large numbers of people. Prime Minister Miro Cerar accused Croatia of transporting too many people too quickly to Slovenia.

When asked if there was the possibility of building a fence on the border, Cerar told Slovenian state TV: “We are considering also those options.” “At first we are seeking a European solution. If we lose hope on the European level, if we do not get enough on Sunday … then all options are possible as that would mean that we are on our own,” Cerar said. Several European leaders are due to meet in Brussels on Sunday under the auspices of the European Commission to discuss the latest developments in the migrant crisis, Europe’s biggest since World War. [..] According to Slovenia’s interior ministry, the cost of fencing off the 670-km long border with Croatia would be about €80 million. Slovenia has asked for the EU for assistance and officials said Austria, Germany, Italy, France, Hungary, the Czech Republic, Slovakia and Poland offered to send police reinforcements.

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