Mar 132019
 


René Magritte Personal values 1952

 

Commenting on my own essays has never been my favorite activity, because before you know it you land into Russian doll territory. But a few recent comments from readers have me rethinking that, for once.

Of course I understand that my expressed views over the past two years and change on the era of Donald Trump and his presidency do not please everyone out there, whether they’re long time Automatic Earth readers or new to the site. It’s just that a surprising -to me- number of people let their thoughts and opinions be shaped by media that primarily follow the color of politics and money, not objective facts.

Or perhaps it shouldn‘t be all that surprising, given the amount of attention the mainstream media still manages to gather. Then again, if the MSM would have been right on more issues, there would never have been a place for the Automatic Earth and many other ‘alternative’ media sources. So yeah, I’m a bit of two minds on that.

What I am sure about is that I don’t think the advent of Donald Trump has been the main event since 2016, I have very few illusions about US politics. For me the big story has been how the media has shifted from reporting the news to manufacturing it. I’m seeing the Russiagate narrative falling apart in real time right now and I think: I saw that coming, because none of all those collusion stories were based on facts to begin with.

And I’ve said exactly that for two years now as well. It started off with supporting their favorite candidate, who was a shoe-in anyway, then it turned into being angry when she lost, and it ended up with figuring out that denouncing Trump ten times a day was a goldmine that could save entire papers and TV channels, because Americans are addicted to scandals, even if they’re invented and/or inconsequential.

 

In my view, media making up stories and narratives from scratch is a much bigger threat to America than Donald Trump. Obviously, people believing the made-up tales is just as bad. You don’t have to be pro-Trump, let alone even like the man, to be very wary of reporters and papers and news channels and everyone and their pet hamster with a social media account, publishing a dozen anti-Trump stories every single day, most of them entirely made up and most of the rest just plain dumping on him.

And you certainly don’t need to be pro-Trump to point out that this is happening, or to agitate against it. But that’s how it’s presented, and that’s how many people, including no doubt many readers of the Automatic Earth, see it. In this day and age, if you wander too far from what the MSM tell you the truth is, you get punished even by somewhat smarter people.

If you don’t support the anti-Trump narrative, and elect to stay out of that echo chamber, you become a Trump supporter. And we all know what happens when you actively resist the narrative.

The reason why one so easily gets labeled a Trump supporter only for pointing out that stories contain no facts, provokes interesting questions, but none of them will have me shy away from saying what I think of it. I mean, just take a look at the Reuters/Ipsos poll that came out last week, which shows that Americans have made up their minds about Trump-Russia way ahead of the Mueller report being published.

Only a small number of Americans have not yet made up their minds about whether Donald Trump’s 2016 election campaign coordinated with Russian officials, according to new Reuters/Ipsos polling, which also showed deep divisions in the United States in the run-up to the 2020 presidential election. Eight out of 10 Americans decided almost immediately about Trump campaign ties to Moscow and only about two in 10 appear to be undecided; about 8 in 10 Democrats said they thought the Trump campaign colluded with Russia, while 7 in 10 Republicans said they did not.

Now how is that possible, the majority ‘knowing’ what to believe without knowing the facts? Easy, the media made up their minds for them, and they did it without knowing the facts either. A much bigger story than Trump. And you would think old-fashioned journalism could have gotten a lot of real dirt on the Donald, but the entire MSM chose to go for unproven smear instead..

The Old Gray Lady and her consorts have made it entirely acceptable to disrespect the Office of the President of the United States. They’ve made doing so an honorable thing to do. All on the basis of rumors about Vladimir Putin pulling Trump’s strings. How this can fail to have terribly dramatic consequences for the US I do not see. Once the respect for the office is gone, how do you get it back? By putting a different questionable person in it?

 

But now I’m doing what I swore not to do: repeat myself. Inevitable when commenting on your own essays perhaps, but still. So let’s move on to the comments. Both came in by private emaiI, and I haven’t asked for permission to use real names, so they’ll be anonymous.

The first one was from a highly respected -and not just by me- retired US professor and writer I’ve had contact with for a decade or so, and came after I published The House Hit A New Low, commenting on Michael Cohen’s testimony before the House on February 27. Which I thought was about nothing at all, “A phishing expedition with a willing whale in the center who sort of volunteered to be harpooned..”, other than Democrat showboating.

But my friend the professor wrote:

Just so you know……… I thought Cohen courageous, believable and completely on target. I think people see what they are predetermined to see…. You and I see different things. As Congressional Republicans and apparently you do not see the problem is Trump, and as he said those who are blinded by him. Not Cohen. We should all speak out. The “conservatism” of your columns sometimes annoys me, but your insights are often good. I try to get different perspectives.

As I said above, and often before, I agree that “people see what they are predetermined to see”. It’s just that I think that originates at the NYT, WaPo, CNN, and my friend does not. But what struck me in his comment is him calling my writing “conservatism”. Nobody ever called me that, I don’t see myself that way, and I doubt that anyone did before I started talking about the way Trump has been treated.

And again, you don’t have to like Trump to dislike the made-up narratives that dictate what ‘news‘ in America has turned into. And that’s not conservative. Not that I think that conservatism is a wrong thing per se, but I don’t see many ‘conservatives’ these days conserving anything at all, other than their privileges.

See, I would think MAGA means protecting bald eagles, mountain lions, humpbacks and even mom-and-pop stores, but what counts as conservative today is the opposite of that. It basically revolves around making a few people rich at the expense of everyone else and the natural world they all depend on for their survival.

Other than that, as I said, I have few illusions about US politics, on either side of the aisle. Which is why I welcomed Trump three years ago, and I welcome Ocasio, Tulsi Gabbard and Ilhan Omar today: something better change, because if things don’t change fast, we’re bound to see the 21st century American version of pitchforks; yes, that would be rifles and handguns.

I hope perhaps that clears things a up, even if just a little, for my friend. But still, I didn’t think Cohen looked “courageous, believable and completely on target”. I thought he looked like a worn out tool of Nadler and Schiff’s committee, telling obvious lies about not having asked Trump for a White House job or a pardon. But let’s agree not to agree.

Then I mentioned the professor’s mail in the Automatic Earth comments section the next day, saying:

Someone mailed me yesterday talking about the conservatism of my columns. Never saw that before. And I don’t agree. Raging against the empty narratives of the anti-Trump machine does not make me a Trump supporter. (People should read more carefully. The world is not divided into two camps.)

… and a second mail came from someone who’s, let’s say, one of my more critical readers (he seems to think I’m full of it, and uses that as a reason to keep reading me):

You’re right: to the extent that you agree with anything Trump says or does to reduce US aggression in different parts of the world, the anti-Trumpers should be shouted down.

You’re wrong: your refusal to even mention racism, sexism, anti-democratic voter suppression, gerrymandering, campaign finance laws, electoral college, gun control, health care, tax cuts and the wholesale attack on the environment by Trump and Republicans (Trump is representative not an outlier among Republicans) is what makes you conservative.

Your silences speak louder than anything you say or print. Your alleged concern for the environment is comical compared to your total silence on American (Trump) policies on the environment. Keep up your selective silences. Its what you do best.

That’s a nice list, but it doesn’t appear to be all around fair. Criticizing Trump over all these things is at best a double-edged sword. But first of all, I don’t refuse to mention them, but I’m not here to provide a fully balanced picture. I’m here to balance out the one-sided positions the Old Gray Lady vents on a daily basis and 27 times on Sunday.

As for racism and sexism, I see those as America-wide issues, not Trump issues. Anti-democratic voter suppression: go ask Bernie Sanders and Debbie Wasserman-Schultz. Gerrymandering ditto. And campaign finance laws. How one can hold such things against Trump and not others in US politics is beyond me. But let’s talk.

The electoral college problem, if it indeed is one, has absolutely nothing to do with Trump. America as a society would need to come together to move to the popular vote. But what are the odds of any such unity happening given the anti-Trump campaigns?

Gun control: I can’t recall Obama doing anything much about that, so how can one hold it against Trump? Guns seem to be too big a problem for the US to deal with, and I see it leading to the American version of France’s pitchforks: the one tool the unwashed masses have left to defend themselves and get their grievances across. A good thing? No. But Trump’s fault? No.

When it comes to health care, things are a bit more confusing and clearer at the same time. The conservatives who conserve dick all, stand quasi-united against universal health care, while the Democrats, who long held a similar position, are starting to shift.

Health care is a much more worthy topic than the ones before mentioned in that comment, but that particular discussion, like so many others, has been stifled by the neverending accusations of Russia collusion that the MSM have placed -the vast majority of- their bets on.

Trump has been president for two years, and not one day has gone by in which he was not accused of sitting on Putin’s lap in some way or another, so how are you going to get him to open up to your different point of view? He’s had to retreat into his trenches just to survive and go about the business of being a president. He was never given a chance to open up and change his mind. Is he to blame for that?

What else was there? Tax cuts. Yeah, well, conservatives and their privileges. And a short-term way to make the economy look better. Long-term economic benefits? Maybe not so much. But don’t let’s go there, because Pandora would open and reveal, again, very little that’s Trump-specific. It’s simply Washington.

Last thing is the environment, and because I post many articles on that topic in my daily news aggregators, it’s obvious that my views are not the Donald’s. But that, again, is conservatives refusing to conserve. It’s not just Trump, and it’s not just Republicans either. From what I see, America has destroyed far too much of its natural world already, and I haven’t seen a single voice in Washington with a convincing story to stop it, not AOC and the Green New Deal either.

 

To summarize: the Automatic Earth has sought, and continues to seek, to provide a balance vs one-sided ‘news’, because it is a much bigger problem than any single presidency. Reporting in the age of Trump has not just been one-sided, most of it has been outright falsehood. Why does it happen? Because it sells. You are prone to believe fictional accounts, you have a tendency to become addicted to scandal, and so you are targeted.

Now, the reason the Automatic Earth exists is that it tells people things they don’t want to hear. That goes for the odd professor, no matter how much we appreciate him or her, for all those who dislike an individual like Donald Trump so much they let others form their opinions for them with trumped-up narratives, it goes for Trump himself, and for everyone else we think fail to think for themselves any longer.

If your opinions are shaped by people who seek to make a profit off of doing that for you, you are merely one among millions who fall into the same trap. It’s ironic and funny too that the Old Gray Lady et al could never have started out on their new business model without the internet and the social media it spawned, while the very same business model makes entities such as the Automatic Earth necessary.

It gets more ironic still: the MSM developed the model because the old one, just plain reporting, wasn’t paying them enough to survive. Orwell was never that easy to understand. After all, he was talking about things that existed only in his mind’s eye when he was alive, and came alive themselves long after he was gone. But look at us today.

One last thing: I can’t perhaps speak for the entire Automatic Earth, because Nicole Foss, though she may have been silent for a while, appears to detest Donald Trump. That gives her and I something to talk about.

 

 

Jan 012018
 


Happy New Year Bill Watterson

 

Happy New Year to you and yours!

 

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US Dollar Refuses to Die as Top Global Reserve Currency (WS)
The Rise And Fall Of The Eurodollar (ZH)
Behind Korea, Iran & Russia Tensions: The Lurking Financial War (Crooke)
Polanyi Best Explains Trump, Brexit And The Failure Of Neoliberalism (Prime)
UK Government Relies On Rising Household Debt To Hit Targets – Labour (G.)
‘Desperate Times’ For Overcrowded British Hospitals (PA)
China’s Growth Engine Stutters As Factories Slow Down (G.)
Greece Dismisses Turkey’s Threats Over Asylum Row (GR)
Greece: Turkish Soldiers Won’t Be Extradited Regardless Of Asylum Process (K.)
UK ‘Faces Build-Up Of Plastic Waste’ (BBC)

 

 

The graphs seem to say it all: the demise of the dollar (and petrodollar, eurodollar -dollars held outside US-) has been greatly exaggerated.

US Dollar Refuses to Die as Top Global Reserve Currency (WS)

Over the decades, there have been a number of efforts to deflate the dollar’s hegemony as a global reserve currency, which it has maintained since World War II. Some of these efforts – such as the creation of the euro – have made a visible dent into the dollar’s status. Other efforts have essentially passed unnoticed. Now there’s a new contender: the Chinese yuan. On December 31, the IMF released its report on the Currency Composition of Official Foreign Exchange Reserves (COFER) for Q3 2017. So how has the US dollar fared as the top world reserve currency, now that the Chinese yuan has also been anointed as one, and that the euro has emerged from its debt crisis? First things, first. The IMF doesn’t really disclose all that much. The COFER data for the individual countries – the level of their reserve currencies and how they allocate them – is “strictly confidential,” it says.

So what we get to look at is the global allocation by currency. Total global foreign exchange reserves rose to $11.3 billion in Q3 2017, within the range of the past three years, between $10.7 trillion (Q4 2016) and $11.8 trillion (Q3, 2014). But something is happening to “allocated reserves.” Not all central banks disclose to the IMF how their foreign exchange reserves are allocated. In Q3 2017, 14.6% of the reserves hadn’t been allocated. But this number is plunging. In Q3 2014, just three years ago, it was still 41.2%. This means that more and more central banks report to the IMF their allocation of foreign exchange reserves, and the COFER is getting broader.

So of the 85.4% of the officially “allocated” reserve currencies in Q3 2017: • US dollar: 63.5% share, down from 64.6% in Q3 2014. • Euro: 20% share, down from 22.6% in Q3 2014. • Yen: 4.5% share, up from 3.6% in Q3 2014. • Pound Sterling: 4.5% share, up from 3.75% in Q3 2014. The Australian and Canadian dollars had a share of 1.8% and 2.0% respectively. • The Chinese yuan – that thin red sliver in the chart below – had a share of 1.1%, up from 1.08% in the prior three quarters, and up from zero before then. • The Swiss franc, the hair-fine black line in the chart below, has a share of 0.2%. • And a number of “other” currencies have a combined share of 2.4%.

The Chinese yuan made its entry after IMF boss Christine Lagarde and the IMF staff declared in mid-November 2015 that they were gung-ho about adding it to the IMF’s currency basket, the Special Drawing Rights (SDR), which is an important step toward becoming a major global reserve currency. At the end of November 2015, it was approved by the board. And it took effect in October 2016. Sure enough, in Q4 2016, the Chinese yuan started showing up in the COFER data as a global reserve currency with a share of 1.08%. But rather than soaring, it didn’t move at all over the first two quarters in 2017. And in Q3, it ticked up to a still minuscule 1.1%. Central banks do not appear to be overeager to hold this currency in large amounts. The chart below shows the changes since Q3 2014. The black line at the top is the US dollar – its hegemony unbroken.

Read more …

Russia experienced dollar shortages with oil prices still at $95 a barrel. It can’t do without dollars. Maybe sometime in the future, but that may well be a long time away.

The Rise And Fall Of The Eurodollar (ZH)

Gromen, who largely sat out this segment, offers a few thoughts toward the end that add to the picture of weakness defining the contemporary eurodollar system. Looking back to the summer of 2014, Gromen posits that the largest oil exporters were able to maintain current account surpluses because they’d already started settling an increasing percentage of their oil sales in dollars.

“It’s interesting, Jeff and Mark (this is Luke of course) when you look back to September – and we put this in our slide deck (which we can touch on later) – but if you look back at the actual timing of events it’s kind of interesting. And it’s, to me it hints to motive. So I’d love to get your thought on it, Jeff or Mark, of – if you go back to August of 2014, actually back even to May of ‘14, you had the Holy Grail gas and energy deal signed between China and Russia. It was rumored that that deal was going to be done in non-dollars, but no proof of that. It was later proven to be the case. In August of 2014, Putin announced that they wanted to start moving away from the dollar in oil trade, because the dollar’s monopoly in the global energy trade was damaging their economy.

And, what’s kind of interesting – and we wrote about this at the time – at this point oil is still $100 a barrel. And then, all of a sudden, by late September, with oil still $96 a barrel, $95 a barrel, Russia’s having dollar shortages. Russia was still – and they weren’t the only ones – Venezuela, Ecuador, a couple of others – you have three major oil exporters that are running still current account surpluses in the low- to mid-single digits at this point, starting to run into dollar shortages. And it was, I think, an underappreciated point at the time that, basically, if you’re an oil exporter you’re only selling in dollars, you’re running a current account surplus.

And so, if you’re only selling in dollars, in theory, there’s only two explanations for that, for those dollar shortages that began to pop up well before the price of oil crashed. Which was (#1) Russia and other places got dramatically more corrupt in the three months versus the three months before. Or they were starting to sell energy at an accelerating rate in non-dollar terms. And, as a result, you were seeing – where you were getting $100 before, now you were getting whatever, $90, $80, whatever the mix was. And at that point, then you started to see some of the devaluations etc. I guess I’d love to hear your thoughts on that.”

Read more …

Alastair Crooke also looks at the dollar demise.

Behind Korea, Iran & Russia Tensions: The Lurking Financial War (Crooke)

What have the tensions between the US and North Korea, Iran and Russia in common? Answer: It is that they are components to a wider financial war. Russia and Iran (together with China) happen to be the three key players shaping a huge (almost half the global population) alternative currency zone. The North Korean issue is important as it potentially may precipitate the US – depending on events – towards a more aggressive policy toward China (whether out of anger at Chinese hesitations over Korea, or as part and parcel of the US Administration’s desire to clip China’s trading wings). The US has embarked on a project to restore America’s economic primacy through suppressing its main trade competitors (through quasi-protectionism), and in the military context to ensure America’s continued political dominance.

The US ‘America First’ National Security Strategy made it plain: China and Russia are America’s ‘revisionist’ adversaries, and the US must and intends to win in this competition. The sub-text is that potential main rivals must be reminded of their ‘place’ in the global order. This part is clear and quite explicit, but what is left unsaid is that America is staking all on the dollar’s global, reserve currency status being maintained, for without it, President Trump’s aims are unlikely to be delivered. The dollar status is crucial – precisely because of what has occurred in the wake of the Great Financial crisis – the explosion of further debt. But here is a paradox: how is it that a Presidential Candidate who promised less military belligerence, less foreign intervention, and no western cultural-identity imposition, has, in the space of one year, become, as President, a hawk in respect to Korea and Iran.

What changed in his thinking? The course being pursued by both states was well-known, and has offered no sudden surprise (though North Korea’s progress may have proved quantitatively more rapid than, perhaps, US Intelligence was expecting: i.e. instead of 2020 – 2021, North Korea may have achieved its weapons objective in 2018 – some two years or so earlier that estimated)? But essentially Korea’s desire to be accepted as a nuclear weapon state is nothing new. It is ‘the Federal debt’, and a pending ‘debt ceiling’ that is crucial. There is little doubt that the US military is not what it used to be, and the Republican Party possesses a wing that is quite fundamentalist about limiting debt (Freedom Caucus). A serious military crisis is possibly the only way Trump is likely to get a huge ramp-up of military expenditure past Congress’ fiscal hawks.

President Trump – the Tax Bill saga tells us — is going to be a big spender as part of MAGA (Make America Great Again). The increase in proposed US defence spending alone, more or less equates to the whole annual Russian defence spending. US Federal debt is already above $20 Trillion, and accelerating fast: the borrowing requirement is ballooning and interest payments to service this additional borrowing, normally would be expected to rise. But Trump is also explicitly a low interest rate, expanding balance-sheet, sort of guy. So, how does one finance a truly ballooning budget deficit, whilst keeping interest rates low, or at zero? Well a fear-driven rush by foreigners into ‘risk free’ US Treasuries (i.e. military crisis again), historically serves to keep rates low – and dollars plentiful — as ‘overseas dollars’ return ‘home’ to Wall Street.

Read more …

No sure why economists et al have such a hard time understanding why limitless liberalization must by definition backfire.

Polanyi Best Explains Trump, Brexit And The Failure Of Neoliberalism (Prime)

It’s good to see the latest (21 December) New York Review of Books give space to a review – by Robert Kuttner of American Prospect– of a biography of “Karl Polanyi: a Life on the Left” by Gareth Dale. For as we have been arguing for a long time, it was Polanyi who better than any other historian/analyst got to the heart of the contradictions of free market globalised liberalism, and saw that it was such economic liberalism, pushed too far, that is likely to lead to authoritarian, or even fascist, outcomes. As Kuttner puts it, “Global capitalism has escaped the bounds of the postwar mixed economy that had reconciled dynamism with security through the regulation of finance, the empowerment of labor, a welfare state, and elements of public ownership”.

The outcome is extreme inequality and instability. However, as Kuttner reminds, “We have been here before. During the period between the two world wars, free-market liberals governing Britain, France, and the US tried to restore the pre–World War I laissez-faire system. They resurrected the gold standard and put war debts and reparations ahead of economic recovery. It was an era of free trade and rampant speculation, with no controls on private capital. The result was a decade of economic insecurity ending in depression, a weakening of parliamentary democracy, and fascist backlash. Right up until the German election of July 1932, when the Nazis became the largest party in the Reichstag, the pre-Hitler governing coalition was practicing the economic austerity commended by Germany’s creditors.”

It was these extremist policies of free market liberalism that Polanyi dissected in his most famous work, “The Great Transformation”, published in 1944. The worst consequences were in Germany and other continental European states, but declining imperial Britain was still the heart of ultra-liberal ideology. I am currently reading David Kynaston’s rambling History of the Bank of England, which sets out the disgraceful pressure that Governor Montagu Norman and the City of London put on elected governments to return to the Gold Standard (at the pre-war rate) and impose harsh austerity, with terrible economic consequences. [..] “[T]he simple proposition that all factors of production must have free markets implies in practice that the whole of society must be subordinated to the needs of the market system.” We see Polanyi’s key insight – in the essays and in the later book – as encapsulated in these passages:

“The real nature of the dangers thus become apparent which are inseparable from the market-utopia. For the sake of society the market mechanism must be restricted. But this cannot be done without grave peril to economic life and therefore to society as a whole. We are caught up on the horns of a dilemma: – either to continue on the paths of a utopia bound for destruction, or to halt on this path and risk the throwing out of gear of this marvellous but extremely artificial system.” “A self-regulating market-system is a utopia. No society could stand its devastating effects once it got really going. Hardly had laissez-faire started when the State and voluntary organizations intervened to protect society through factory laws, Trade Union and Church action from the mechanism of the market.”

Read more …

All western countries do. It’s why interest rates are so low.

UK Government Relies On Rising Household Debt To Hit Targets – Labour (G.)

John McDonnell has accused the government of relying on millions of British families going further into debt in order to meet Treasury targets. The shadow chancellor said families were set to borrow £445bn by the end of the parliament. He also highlighted official figures showing the ratio between household debt and income had reached a five-year high, with forecasts suggesting it will hit 150% by 2022. That means families will have amassed debts worth a year and a half’s income – which Labour warned could result in people falling into financial difficulties. McDonnell is planning for the Labour party to focus heavily on the question of household debt as part of its new year strategy. “The alarming increase in household debt at a time when wages are not keeping up with prices is creating the perfect storm for our economy,” McDonnell told the Guardian.

“There needs to be more done to protect working households from extortionate rates of interest, and also ensure that their earnings are not being squeezed just so Philip Hammond can pretend to meet his own targets, which he has so far failed to meet.” The Labour frontbencher said his party had already promised to cap interest on insecure lending, but would be unveiling a string of further interventions in 2018 about how to protect households from burgeoning debt. He has described the situation as a “personal debt crisis” with levels of unsecured borrowing predicted to hit a record of £19,000 per household by the end of this parliament. Analysis from Labour shows unsecured debt is on course to exceed £15,000 per household next year and could go on to exceed £19,000 per household by 2022 if it follows the current trajectory.

Read more …

They had an excellent health care service. Those days are gone. The poor have become expendable.

‘Desperate Times’ For Overcrowded British Hospitals (PA)

Pressures on the NHS have “escalated rapidly” over the festive period, with hospitals experiencing significant bed shortages, a leading doctor has warned. Dr Nick Scriven, president of the Society for Acute Medicine (SAM), said many hospitals reported more than 99% capacity in the week before Christmas. He said services are being placed under significant strain as they enter the new year and called for non-urgent operations to be postponed until at least the end of January. Doctors have described corridors overflowing with patients and used social media in a bid to find extra staff to cope with demand. Portsmouth hospitals NHS trust, in Hampshire, tweeted on Sunday: “The hospital is extremely busy at the moment and we are asking any medical or nursing staff available for a shift tonight or tomorrow to make contact.”

Epsom and St Helier University hospitals trust, in London, also appealed for staff to work on New Year’s Eve “due to sickness and high volumes of patients”. Dr Richard Fawcett, from the Royal Stoke University hospital, wrote on Saturday that it had run out corridor space in A&E after ambulances were diverted from County hospital, Stafford. NHS England said hospitals were “generally coping”, with overall bed occupancy levels down from 95% in the lead-up to Christmas to about 93%. Scriven said: “Since the bank holiday, things have escalated rapidly and we are on the cusp of a major issue at least as bad as last year when it was described by the Red Cross as a humanitarian crisis. “There is an awful lot of respiratory illness causing a lot of severe symptoms in the old and young and 10- to 12-hour delays in emergency departments are now not uncommon – along with patients being placed on inappropriate wards.”

Read more …

Good story for 2018.

China’s Growth Engine Stutters As Factories Slow Down (G.)

Growth in China’s manufacturing sector slowed in December as a punishing crackdown on air pollution and a cooling property market start to weigh on the world’s second-largest economy. The data supports the view that the Chinese economy is beginning to gradually lose steam after growing by a forecast-beating 6.9% in the first nine months of the year. However, signs of a sharper slowdown – a major fear among global investors – have yet to materialise. The official Purchasing Managers’ Index (PMI) released on Sunday dipped to 51.6 in December, down from 51.8 in November and in line with forecasts from economists in a Reuters poll. The 50-point level divides growth from contraction on a monthly basis. The figures showed that China’s full-year 2017 economic growth would be at about 6.9% and 6.5% for 2018, according to the China Federation of Logistics and Purchasing, which compiles the data.

Boosted by hefty government infrastructure spending, a resilient property market and unexpected strength in exports, China’s manufacturing and industrial firms have driven solid economic growth this year, with their strong appetite for raw materials boosting global commodity prices. However, a slowdown has started to take hold in the last few months due to a wide-ranging combination of government measures, from a crackdown on smog in some heavily industrialised provinces to continued curbs on the housing market, which are weighing on property investment. Chinese steelmakers in 28 cities have been ordered to curb output between mid-November and mid-March, while a campaign to promote cleaner energy by converting coal to natural gas has also hampered manufacturing activity in some cities, leading to shortages and price rises.

Read more …

Any politician seen as giving in to Turkish strong-arming faces a huge problem at home. Long history and all that.

Greece Dismisses Turkey’s Threats Over Asylum Row (GR)

Greece dismissed Turkish angry threats on Sunday over its decision to grant asylum to a soldier who Ankara accuses of involvement in the abortive coup against President Tayyip Erdogan in July 2016. Turkey said on Saturday the decision by a Greek asylum board undermined relations between the two countries. The soldier was one of eight who fled after the July 15 coup attempt. It also accused Athens of harbouring “coup plotters”, a charge Greece denies. Turkey also threatened that the incident would affect bilateral relations over a host of issues from ethnically split Cyprus to sovereignty over airspace. The asylum board rejected the applications by the other seven soldiers, and the Greek government has appealed the decision to grant the soldier asylum and sought its annulment.

The government announcement that it will appeal the decision has caused a minor political storm, with opposition parties accusing the PM of hypocrisy and of bowing to Turkish threats. the row began when the government added to its appeal release that the country’s judiciary is independent. “Our faith in democratic principles and practices is not a weakness, but a source of strength,” the Greek foreign ministry said in a statement on Sunday. “Democracies do not threaten, or can be threatened,” the foreign ministry said. “On the contrary, they work responsibly and methodically to promote understanding and entrench stability and good neighbourly relations. Greece will continue this path and hopes its neighbours will do the same.” The eight soldiers had flown by helicopter to Greece in the early hours of July 16, 2016, as the attempted coup against Erdogan crumbled. They have denied any involvement in the attempt.

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Erdogan is not going to like this one.

Greece: Turkish Soldiers Won’t Be Extradited Regardless Of Asylum Process (K.)

Greek government spokesman Dimitris Tzanakopoulos has said the eight Turkish soldiers wanted by Ankara in connection with a failed coup attempt in 2016 “will not be extradited regardless of the outcome of their asylum applications.” In a message posted on social media late Sunday, Tzanakopoulos said the asylum claims submitted by the soldiers concerns their granting of refugee status. “This is a completely different from their non-extradition,” he said. Turkey said on Saturday the decision by a Greek asylum board to grant asylum to one of the eight soldiers undermined relations between the two countries. It also accused Athens of harboring “coup plotters.”

On Sunday, Tzanakopoulos said it was up to the Greek justice system to decide if the suspect in question is entitled to refugee protection, “in light of the enormous political significance of the issue which directly impacts on relations with the neighboring country.” “The political position of the Greek government is nevertheless clear,” Tzanakopoulos said. “Those suspected of being involved in Turkey’s coup are not welcome.”

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It’s not as if this is a British issue. Just refuse to use all the packaging etc.

UK ‘Faces Build-Up Of Plastic Waste’ (BBC)

The UK’s recycling industry says it doesn’t know how to cope with a Chinese ban on imports of plastic waste. Britain has been shipping up to 500,000 tonnes of plastic for recycling in China every year, but now the trade has been stopped. At the moment the UK cannot deal with much of that waste, says the UK Recycling Association. Its chief executive, Simon Ellin, told the BBC he had no idea how the problem would be solved in the short term. “It’s a huge blow for us… a game-changer for our industry,” he said. “We’ve relied on China so long for our waste… 55% of paper, 25% plus of plastics. “We simply don’t have the markets in the UK. It’s going to mean big changes in our industry.”

China has introduced the ban from this month on “foreign garbage” as part of a move to upgrade its industries. Other Asian nations will take some of the plastic, but there will still be a lot left. Environment Secretary Michael Gove has admitted that he was slow to spot the problem coming. The UK organisation Recoup, which recycles plastics, said the imports ban would lead to stock-piling of plastic waste and a move towards incineration and landfill. Peter Fleming, from the Local Government Association, told the BBC: “Clearly there’s a part to play for incineration but not all parts of the country have incinerators.

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Jul 192017
 
 July 19, 2017  Posted by at 8:47 am Finance Tagged with: , , , , , , , , ,  


US photographer Margaret Bourke-White on top of the Chrysler Building, NYC 1931

 

America Makes China Great Again – People’s Daily (CNBC)
Pentagon Report Declares US Empire ‘Collapsing’ (Nafeez Ahmed)
A Government Can Always Afford High-Quality Health Care Provision (BIlbo)
US Dollar Will Rebound In The Second Half Of 2017 – JPMorgan (CNBC)
Foreigners Snap Up Record Number Of US Homes (CNBC)
Big Australian Banks Told To Hold More Capital, On Notice Over Mortgages (R.)
One Million Homes Left Empty Across Australia (SMH)
In Urban China, Nobody Uses Cash Or Cards Anymore (NYT)
Survivors Of 9/11 Urge May To Release Saudi Arabia Terror Report (Ind.)
West Virginians Are Fighting To Save Their Neighbors From Opioids (NewYorker)
This Isn’t the First US Opiate-Addiction Crisis (BBG)
A Despot In Disguise: One Man’s Mission To Rip Up Democracy (Monbiot)
Italy Mulls Temporary Humanitarian Visas For Migrants, Refugees (G.)

 

 

If I were Beijing, I’d be a tad worried about the implication that Chine needs the US to be great again.

America Makes China Great Again – People’s Daily (CNBC)

A Communist Party mouthpiece is crowing that malfunctioning U.S. leadership is making China “great again” on the eve of highly anticipated bilateral trade talks between the two countries. The op-ed published in the People’s Daily said the U.S. was in political chaos and suffered from a broken system, which was why Washington couldn’t get anything done. It also claimed the U.S. mess was giving China an opportunity to shine. “U.S. foreign policy is in total disarray, and world regard for the U.S. has plummeted. Indeed, America is making China ‘great again,'” the op-ed said. “Once the world’s model, the great American meltdown has turned the U.S. into some bizarre soap opera.” This isn’t the first time China has piggybacked off an American saying — remember President Xi Jinping’s “Chinese Dream” slogan?

This time around, the tone is a bit sharper, with Chinese state media not backing down ahead of annual bilateral talks that have been rebranded this year as the U.S.-China Comprehensive Economic Dialogue. Although both Beijing and Washington have indicated they understand the need to play nice, both sides are pushing their own agenda as expected. The U.S. wants to reduce the more than $300 billion trade deficit with China and make good on a campaign promise from President Donald Trump to pressure China on a number of fronts, such as opening up its markets to more foreign participation and to bring jobs back to America. China, on the other hand, has pushed back, saying Chinese investment has helped the U.S. But it’s clear that as the U.S. continues to face political turmoil, China is enjoying its time in the spotlight. That is, Beijing is explicitly seeking to fill the void the U.S. left as it backed out of various multilateral talks and agreements…

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Got the money? Got the money? Show me the money!

Pentagon Report Declares US Empire ‘Collapsing’ (Nafeez Ahmed)

An extraordinary new Pentagon study has concluded that the US-backed international order established after World War 2 is “fraying” and may even be “collapsing”, leading the United States to lose its position of “primacy” in world affairs. The solution proposed to protect US power in this new “post-primacy” environment is, however, more of the same: more surveillance, more propaganda (“strategic manipulation of perceptions”) and more military expansionism. The document concludes that the world has entered a fundamentally new phase of transformation in which US power is in decline, international order is unravelling, and the authority of governments everywhere is crumbling. Having lost its past status of “pre-eminence”, the US now inhabits a dangerous, unpredictable “post-primacy” world, whose defining feature is “resistance to authority”.

Danger comes not just from great power rivals like Russia and China, both portrayed as rapidly growing threats to American interests, but also from the increasing risk of “Arab Spring”-style events. These will erupt not just in the Middle East, but all over the world, potentially undermining trust in incumbent governments for the foreseeable future. The report, based on a year-long intensive research process involving consultation with key agencies across the Department of Defense and US Army, calls for the US government to invest in more surveillance, better propaganda through “strategic manipulation” of public opinion, and a “wider and more flexible” US military.

[..] Observing that US officials “naturally feel an obligation to preserve the US global position within a favorable international order,” the report concludes that this “rules-based global order that the United States built and sustained for 7 decades is under enormous stress.” The report provides a detailed breakdown of how the DoD perceives this order to be rapidly unravelling, with the Pentagon being increasingly outpaced by world events. Warning that “global events will happen faster than DoD is currently equipped to handle”, the study concludes that the US “can no longer count on the unassailable position of dominance, supremacy, or pre-eminence it enjoyed for the 20-plus years after the fall of the Soviet Union.” So weakened is US power, that it can no longer even “automatically generate consistent and sustained local military superiority at range.”

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I can’t really do Bill Mitchell justice in this format, but the health care debate badly needs views such as his.

A Government Can Always Afford High-Quality Health Care Provision (BIlbo)

The US is the only advanced nation that lacks universal health care. Even though it is the world’s richest nation, millions of US citizens cannot afford to see a doctor much less acquire more complex health care (for example, surgery). It it clear that in seeking private profits, the private health care insurers drive up the cost of health care which means, in nominal terms, the proportion of GDP expenditure devoted to it will rise. It is quite obvious that when private profits are included costs will rise unless efficiency is vastly improved. The ‘free market (not!)’ lobby always appeal to arguments that competitive systems are always more effective. The Commonwealth Report shows emphatically that strong (dare we call them socialist) government-dominated universal care systems like the NHS are vastly more effective than the profit-driven US system.

There also doesn’t seem to be any reason for private insurance in health care at all. And it is here that we enounter the ‘funding’ myths. Too often health care debates get stuck in irrelevant fiscal arguments about whether the government can afford to expand and/or invest in health care. The justification for private insurance is usually predicated on these ‘governments cannot afford’ to pay for the system type arguments. They are fallacious of course. In the pursuit of profits, private health insurance providers have an incentive to move towards the US model where they seek to avoid payment and set up exclusions etc. There is no ‘funding’ reason for the existence of these private insurance providers. The NHS in the UK demonstrates that clearly.

There has clearly been a strong private health industry lobby to privatise as much of the health care system as possible in places like Australia and the UK, where there are good fully-funded public systems of universal health care operating. That lobby has been powerful in the US and continually claims there will be a fiscal blow out and Americans will live in high-taxed penury forever because some latinos or blacks are getting health care for the first time as a result of the Obama changes. From a MMT perspective, the fiscal component of the debate is irrelevant.

The fiscal beat-up is framed in terms of ‘adding heavy costs’ to the ‘budget’ such that their will be soaring deficits, which will penalise future generations etc etc. What is a heavy cost? What is a soaring deficit? These are irrelevant concepts devoid of meaning. Any sophisticated society will deem health care to be a human right. The constitution of the World Health Organisation says: “The enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being without the distinction of race, religion, political belief, economic or social condition.” The hallmark of a sophisticated nation is maximising the potential of its citizens. That must include placing health care under the responsibility of the currency-issuing government.

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Line of the day: “Some market observers have said that a weaker dollar can help to boost earnings of S&P 500 companies and eventually justify their high valuations.”

US Dollar Will Rebound In The Second Half Of 2017 – JPMorgan (CNBC)

The current weakness in the U.S. dollar may be short lived, as a pick-up in inflation and expected rate hikes by the Federal Reserve will support the greenback in the coming months, JPMorgan Asset Management said Wednesday. “We’re thinking that the dollar will actually rebound in the second half, and this is mainly as the markets re-price in interest rates hike. We’re of the view that inflation will actually be picking up in the U.S. and currently, markets have only priced in one rate hike now till end-2018,” Jasslyn Yeo, global market strategist at JPMorgan Asset Management, told CNBC’s “Street Signs.” “So, we think (markets) are going to do a bit of re-pricing and that will support a bit of a rebound in the dollar,” she added.

The U.S. dollar tumbled to a 10-month low on Tuesday after the Republican health-care bill aimed at replacing Obamacare failed to get enough backing to proceed to a debate. Some market observers have said that a weaker dollar can help to boost earnings of S&P 500 companies and eventually justify their high valuations. But Yeo said equity markets outside the U.S., such as Europe and Japan, have more upside potential. Yeo noted that margins in Europe are starting to improve and that could translate into stronger earnings growth, while Japan is likely to benefit from a weaker yen versus the U.S. dollar. “We still like certain spots in the U.S. market. Currently we still favor U.S. banks, which we like in terms of rate hike expectations, bond yields moving higher as well as the promise for financial deregulation in the banking system,” she said.

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Sell it all off, who cares?

Foreigners Snap Up Record Number Of US Homes (CNBC)

Foreign purchases of U.S. residential real estate surged to the highest level ever in terms of number of homes sold and dollar volume. Foreign buyers closed on $153 billion worth of U.S. residential properties between April 2016 and March 2017, a 49% jump from the period a year earlier, according to the National Association of Realtors. That surpasses the previous high, set in 2015. The jump follows a year-earlier retreat and comes as a surprise, given the current strength of the U.S. dollar against most foreign currencies, which makes U.S. housing even more expensive. Apparently, the value of a financial safe-haven is outweighing the rising costs. Foreign sales accounted for 10% of all existing home sales by dollar volume and 5% by number of properties. In total, foreign buyers purchased 284,455 homes, up 32% from the previous year.

Half of all foreign sales were in just three states: Florida, California and Texas. Chinese buyers led the pack for the fourth straight year, followed by buyers from Canada, the United Kingdom, Mexico and India. Russian buyers made up barely 1% of the purchases. But the biggest overall surge in sales in the last year came from Canadian buyers, who scooped up $19 billion worth of properties, mostly in Florida. They are also spending more, with the average price of a Canadian-bought home nearly doubling to $561,000. “There are more [baby] boomers now than ever before. It’s the demographic,” said Elli Davis, a real estate agent in Toronto who said she is seeing more older buyers downsize their primary home and purchase a second or third home in Florida. “The real estate here is worth so much more money. They all have more money. They’re selling the big city houses that are now $2 million-plus, where they went up so much in the last 10 to 15 years, so they’re cashing in.”

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Noooo, that’s not late at all…

Big Australian Banks Told To Hold More Capital, On Notice Over Mortgages (R.)

Australia on Wednesday ordered the country’s biggest banks to raise capital for the second time in two years and signalled further action to shore up their burgeoning mortgage books, potentially squeezing shareholder returns. The banking regulator said it would release a discussion paper later this year to include risk weights on mortgages among other changes, in-line with expected rules due to be finalised by global regulators. The warning on mortgages came as it raised the target for the four major banks’ common equity Tier 1 ratio – a key gauge of a lender’s strength – to at least 10.5%. That translates into an average increase of 100 basis points above the banks’ December 2016 levels. They are expected to meet the new benchmarks by January 2020.

The Australian Prudential Regulation Authority (APRA) has now ordered the big banks to boost capital twice since 2015 as it seeks to make the sector impregnable to global shocks. Australia’s major lenders – Commonwealth Bank of Australia , Westpac Banking Corp, ANZ Banking Group and National Australia Bank – hold combined market share of more than 80%, raising fears their failure could fatally weaken the broader economy. “Capital levels that are unquestionably strong will undoubtedly equip the Australian banking sector to better handle adversity in the future and reduce the need for public sector support,” APRA Chairman Wayne Byres said in a statement.

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Inevitable result of property bubbles.

One Million Homes Left Empty Across Australia (SMH)

Australia has 200,000 more homes sitting empty than it had a decade ago, new figures show, despite the country grappling with a housing supply shortage that is pushing the cost of a first home beyond many of its residents. The figures from the 2016 census have been described as “cruel and immoral” by leading UNSW urban policy expert Hal Pawson, who has warned the government must act to stem the growth in unoccupied housing. “There is gross under-occupation across Australia,” Mr Pawson said, adding that there were up to a million homes with three or more extra bedrooms than the owner required. “There is a growing realisation that our housing market is not working well. It doesn’t just create a problem for people on low incomes, it also hurts spending in the economy when housing is overvalued.”

The figures from the Australian Bureau of Statistics show up to 11.2% of properties are now unoccupied, up from 9.8% in 2006. In the space of two decades Australia has added 2.1 million homes to its property portfolio but an extra 360,000 are being left vacant. Separate analysis by the Grattan Institute, released on Monday, found the number of Australian home owners has been falling for three decades, with the spike in home ownership restricted to baby boomers. “Falling home ownership rates for younger Australians, especially 25 to 34-year-olds where home ownership rates are down 6% in the last decade alone, are just the latest evidence that the traditional Australian dream is slipping out of their reach,” said Grattan Institute fellow Brendan Coates.

[..] “The census showed empty property numbers up by 19% in Melbourne and 15% in Sydney over the past five years alone,” he said. “Considering that thousands of people sleep rough – almost 7000 on census night in 2011, more than 400 per night in Sydney in 2017 and that hundreds of thousands face overcrowded homes or unaffordable rents – these seem like cruel and immoral revelations.”

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Better not lose your phone. Or the government can’t seeyou anymore.

In Urban China, Nobody Uses Cash Or Cards Anymore (NYT)

There is an audacious economic experiment happening in China. It has nothing to do with debt, infrastructure spending or the other major economic topics du jour. It has to do with cash – specifically, how China is systematically and rapidly doing away with paper money and coins. Almost everyone in major Chinese cities is using a smartphone to pay for just about everything. At restaurants, a waiter will ask if you want to use WeChat or Alipay – the two smartphone payment options –before bringing up cash as a third, remote possibility. Just as startling is how quickly the transition has happened. Only three years ago there would be no question at all, because everyone was still using cash. “From a tech standpoint, this is probably one of the single most important innovations that has happened first in China, and at the moment it’s only in China,” says Richard Lim, managing director of the venture capital firm GSR Ventures.

There are certain parts of the Chinese internet that have to be seen to be believed. Coming from outside the country, it’s hard to comprehend that Facebook or Google can be completely blocked until you are forced to do without them. It’s tough to fathom how critical the messenger app WeChat is for everyday life until the sixth person of the day asks to scan your QR (quick response) code – a square-shaped barcode – to connect the two of you. What’s happening with cash in China is similar. For the past three years, I have been outside mainland China covering Asian technology from Hong Kong, which has a very different internet culture from the mainland. I knew that smartphone payments were taking over in China, as the statistics were stark: in 2016, China’s mobile payments hit £42 trillion ($5.5tn), roughly 50 times the size of America’s £860bn market, according to consulting firm iResearch.

[..] Some Scandinavian countries have also weaned themselves from cash but still use cards frequently. In China, the change has been to phones. One friend didn’t realise how reliant she had become on mobile payments until her bank called her. She had left her ATM card in the machine three weeks earlier and had not noticed its absence. In practical terms, this means that two Chinese companies – Tencent, which runs WeChat, and Alibaba, whose financial affiliate, Ant Financial, runs Alipay – are sitting atop a goldmine of staggering proportions. Both companies can make money off the transactions, charge other companies to use their payment platforms and all the while collect the payments data to be used in everything from new credit systems to advertising.

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My wild guess: it’s not going to happen.

Survivors Of 9/11 Urge May To Release Saudi Arabia Terror Report (Ind.)

Survivors of the 9/11 attacks have written to Prime Minister Theresa May – urging her to make public a British government report into the extent of Saudi Arabia’s funding of Islamist extremism in the UK. The report into the significance of the financing of Islamic extremists in Britain by Saudi Arabia and other nations was commissioned by Ms May’s predecessor, David Cameron, as part of a deal to obtain political support for a parliamentary vote on UK airstrikes on Syria. Last week, British Home Secretary Amber Rudd said the report was not being published “because of the volume of personal information it contains and for national security reasons”. Green Party co-leader Caroline Lucas suggested the refusal to make public the report was linked to a reluctance to criticise the kingdom, with which Britain has long had close strategic and economic ties.

Now, a group representing US survivors of the 9/11 attacks and the relatives of some of the almost 3,000 people who died, has urged Ms May to seize the chance to release the report, even if it is not fully complete. “The UK now has the unique historic opportunity to stop the killing spree of Wahhabism-inspired terrorists by releasing the UK government’s report on terrorism financing in the UK which, according to media reports, places Saudi Arabia at its centre of culpability,” says the letter, signed by 15 people. “The longer Saudi Arabia’s complicity is hidden from sunlight, the longer terrorism will continue. They must be stopped; but who will stop them? We submit that you are uniquely situated to shine the cleansing light of public consciousness.” It adds: “We respectfully urge you to release the report now, finished or unfinished. We ask you to consider all the victims of state-sponsored, Saudi-financed terrorism, their families and their survivors in the UK and all over the world.”

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Completely insane. Lawless.

West Virginians Are Fighting To Save Their Neighbors From Opioids (NewYorker)

Michael Barrett and Jenna Mulligan, emergency paramedics in Berkeley County, West Virginia, recently got a call that sent them to the youth softball field in a tiny town called Hedgesville. It was the first practice of the season for the girls’ Little League team, and dusk was descending. Barrett and Mulligan drove past a clubhouse with a blue-and-yellow sign that read “Home of the Lady Eagles,” and stopped near a scrubby set of bleachers, where parents had gathered to watch their daughters bat and field. Two of the parents were lying on the ground, unconscious, several yards apart. As Barrett later recalled, the couple’s thirteen-year-old daughter was sitting behind a chain-link backstop with her teammates, who were hugging her and comforting her.

The couple’s younger children, aged ten and seven, were running back and forth between their parents, screaming, “Wake up! Wake up!” When Barrett and Mulligan knelt down to administer Narcan, a drug that reverses heroin overdoses, some of the other parents got angry. “You know, saying, ‘This is bullcrap,’ ” Barrett told me. “ ‘Why’s my kid gotta see this? Just let ’em lay there.’ After a few minutes, the couple began to groan as they revived. Adults ushered the younger kids away. From the other side of the backstop, the older kids asked Barrett if the parents had overdosed. “I was, like, ‘I’m not gonna say.’ The kids aren’t stupid. They know people don’t just pass out for no reason.” During the chaos, someone made a call to Child Protective Services.

At this stage of the American opioid epidemic, many addicts are collapsing in public—in gas stations, in restaurant bathrooms, in the aisles of big-box stores. Brian Costello, a former Army medic who is the director of the Berkeley County Emergency Medical Services, believes that more overdoses are occurring in this way because users figure that somebody will find them before they die. “To people who don’t have that addiction, that sounds crazy,” he said. “But, from a health-care provider’s standpoint, you say to yourself, ‘No, this is survival to them.’ They’re struggling with using but not wanting to die.”

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So?

This Isn’t the First US Opiate-Addiction Crisis (BBG)

The U.S. is in the throes of an “unprecedented opioid epidemic,” reports the Centers for Disease Control. The crisis has spurred calls for action to halt the rising death toll, which has devastated many rural communities. It’s true that there’s an opioid epidemic, a public health disaster. It’s not true that it’s unprecedented. A remarkably similar epidemic beset the U.S. some 150 years ago. The story of that earlier catastrophe offers some sobering lessons as to how to address the problem. Opioids are a broad class of drugs that relieve pain by acting directly on the central nervous system. They include substances such as morphine and its close cousin, heroin, both derived from the opium poppy. There are also synthetic versions, such as fentanyl, and medications that are derived from a mix of natural and synthetic sources, such as oxycodone.

Opioid addiction can take many forms, but the current crisis began with the use and abuse of legal painkillers in the 1990s, and has since metastasized into a larger epidemic, with heroin playing an especially outsized role. All of this is depressingly familiar. The first great U.S. opiate-addiction epidemic began much the same way, with medications handed out by well-meaning doctors who embraced a wondrous new class of drugs as the answer to a wide range of aches and pains. The pharmacologist Nathaniel Chapman, writing in 1817, held up opium as the most useful drug in the physician’s arsenal, arguing that there was “scarcely one morbid affection or disordered condition” that would fail to respond to its wonder-working powers. That same year, chemists devised a process for isolating a key alkaloid compound from raw opium: morphine.

Though there’s some evidence that opiate dependency had become a problem as early as the 1840s, it wasn’t until the 1860s and 1870s that addiction became a widespread phenomenon. The key, according to historian David Courtwright, was the widespread adoption of the hypodermic needle in the 1870s. Prior to this innovation, physicians administered opiates orally. During the Civil War, for example, doctors on the Union side administered 10 million opium pills and nearly three million ounces of opium powders and tinctures. Though some soldiers undoubtedly became junkies in the process, oral administration had all manner of unpleasant gastric side effects, limiting the appeal to potential addicts.

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The Koch brothers and the Fauxbel for economics.

A Despot In Disguise: One Man’s Mission To Rip Up Democracy (Monbiot)

In 2013 she stumbled across a deserted clapboard house on the campus of George Mason University in Virginia. It was stuffed with the unsorted archives of a man who had died that year whose name is probably unfamiliar to you: James McGill Buchanan. She says the first thing she picked up was a stack of confidential letters concerning millions of dollars transferred to the university by the billionaire Charles Koch. Her discoveries in that house of horrors reveal how Buchanan, in collaboration with business tycoons and the institutes they founded, developed a hidden programme for suppressing democracy on behalf of the very rich. The programme is now reshaping politics, and not just in the US.

Buchanan was strongly influenced by both the neoliberalism of Friedrich Hayek and Ludwig von Mises, and the property supremacism of John C Calhoun, who argued in the first half of the 19th century that freedom consists of the absolute right to use your property (including your slaves) however you may wish; any institution that impinges on this right is an agent of oppression, exploiting men of property on behalf of the undeserving masses. James Buchanan brought these influences together to create what he called public choice theory. He argued that a society could not be considered free unless every citizen has the right to veto its decisions. What he meant by this was that no one should be taxed against their will. But the rich were being exploited by people who use their votes to demand money that others have earned, through involuntary taxes to support public spending and welfare.

Allowing workers to form trade unions and imposing graduated income taxes were forms of “differential or discriminatory legislation” against the owners of capital. Any clash between “freedom” (allowing the rich to do as they wish) and democracy should be resolved in favour of freedom. In his book The Limits of Liberty, he noted that “despotism may be the only organisational alternative to the political structure that we observe.” Despotism in defence of freedom. His prescription was a “constitutional revolution”: creating irrevocable restraints to limit democratic choice. Sponsored throughout his working life by wealthy foundations, billionaires and corporations, he developed a theoretical account of what this constitutional revolution would look like, and a strategy for implementing it. He explained how attempts to desegregate schooling in the American south could be frustrated by setting up a network of state-sponsored private schools. It was he who first proposed privatising universities, and imposing full tuition fees on students: his original purpose was to crush student activism.

He urged privatisation of social security and many other functions of the state. He sought to break the links between people and government, and demolish trust in public institutions. He aimed, in short, to save capitalism from democracy. In 1980, he was able to put the programme into action. He was invited to Chile, where he helped the Pinochet dictatorship write a new constitution, which, partly through the clever devices Buchanan proposed, has proved impossible to reverse entirely. Amid the torture and killings, he advised the government to extend programmes of privatisation, austerity, monetary restraint, deregulation and the destruction of trade unions: a package that helped trigger economic collapse in 1982. None of this troubled the Swedish Academy, which through his devotee at Stockholm University Assar Lindbeck in 1986 awarded James Buchanan the Nobel memorial prize for economics. It is one of several decisions that have turned this prize toxic.

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Well, it would create a ton of chaos…

Italy Mulls Temporary Humanitarian Visas For Migrants, Refugees (G.)

Italy has confirmed it is considering issuing temporary humanitarian visas that would allow tens of thousands of migrants who have arrived in the country from Libya to travel around the European Union. The move would provoke an immediate Austrian response, including the closure of the border with Italy at the Brenner Pass. The chances of Italy being able legally to grant unilateral humanitarian visas in this way is slight, but the threat is intended to concentrate minds in the EU after Italy failed to win clear practical support from Germany and France to take more people that have been arriving in increasing numbers from Libya.

The refugee crisis is putting growing political domestic pressure on the Democratic party (PD)-led government, with PD mayors refusing to take extra migrants and plans for legislation on citizenship being shelved at the weekend by the Italian prime minister, Paulo Gentiloni. In an interview with Il Manifesto, Mario Giro, the deputy foreign minister, said the government was looking at all options including the granting of temporary visas. Previously he had simply described the idea as speculation, and it had been dismissed by the interior minister. Giro said: “We are in a tug of war.” He said Italy wanted to avoid unilateral gestures, but was against the strict application of EU law which required migrants to remain in their first country of arrival.

“We don’t accept being turned into a European hotspot, or feeling guilty because we rescue people, so deciding what to do with the migrants who arrive is everyone’s responsibility,” he said. On Monday, the Italian foreign minister, Angelino Alfano, said the idea of humanitarian visas was not on the agenda. The EU high commissioner for external affairs, Federica Mogherini, insisted the issue was not discussed at the EU foreign affairs council meeting on Monday in Brussels. But the Italians are examining whether they could invoke the application of directive 2001/55, a measure approved following the Balkan wars, that allows the granting of humanitarian visas. It was too early to say when or how many such permits could be issued, Giro said, adding that the Italian authorities who received asylum requests already had the power to grant them.

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Mar 252017
 
 March 25, 2017  Posted by at 9:07 am Finance Tagged with: , , , , , , , , ,  


Dorothea Lange Drought hit OK farm family on way to CA 1936

 

With Health Bill Down, Trump Can Still Unleash HHS To Bedevil Obamacare (MW)
The Heart Of The American Dream Has Stopped Beating (DiMartino Booth)
Pension Crisis Too Big for Markets to Ignore (Danielle DiMartino Booth)
The Swamp Drains Trump (Jim Kunstler)
It Was A Very Bad Earnings Season (Snider)
Flynn and Turkish Officials Discussed Kidnapping Erdogan Foe From US (WSJ)
A ‘Deaths Of Despair’ Crisis Is Gripping America (BI)
New Canadian Budget Drops Obsession With Balanced Budgets (Star)
US Debt of $20 Trillion Visualized in Stacks of Physical Cash (Demonocracy)
The Pound Is Going To Take A Huge Hit, According To Deutsche Bank (Ind.)
Leaving Euro Would Not Help France And Italy – ECB Chief Economist (Ind.)
Greece to Break Off Face-to-Face Talks With Creditors (BBG)
Where Next For Greece? (Makropolis)

 

 

Big defeat. But not a knock-out. Trump needs better advisers.

With Health Bill Down, Trump Can Still Unleash HHS To Bedevil Obamacare (MW)

In a spectacular turn of events, a shortage of support prompted Republican leadership to pull their health-care plan from a House of Representatives vote on Friday. The move means that the Affordable Care Act, also know as Obamacare, will remain in place “for the foreseeable future,” according to House Speaker Paul Ryan. Democrats, ACA supporters and opponents of the Republican American Health Care Act quickly hailed the development as a victory. But what was a legislative battle now is likely to move into the executive realm and the Department of Health and Human Services, led by longtime ACA opponent Dr. Tom Price. Experts say there is plenty that President Donald Trump’s administration can do to undermine the ACA. And any poor deterioration in the performance of the ACA could give Republicans a new opening: Trump indicated Friday that he might re-visit health care after Obamacare “explodes.”

“It’s going to be interesting to see how they balance the responsibility for ensuring the government functions with their hatred for the law,” said Spencer Perlman, director of health-care research at Veda Partners. “If they want to completely sabotage it they probably could, and call it a self-fulfilling prophecy.” The latter is all the more likely because the ACA works best with the help of administrative support and resources. Think of the ACA as a plant, one that requires light and tending-to, that gets inherited by a downright hostile owner. The best example of this occurred during enrollment for 2017 exchange plans. The months-long enrollment period began under former President Barack Obama’s administration, which passed the ACA, and ended under President Trump’s administration.

Enrollment, which had looked like it was on track to surpass previous years, dropped off following the transition, which many attributed to a dearth of marketing and promotional activity under Trump. Plus, the ACA’s problems — which may have helped elect Trump — still exist. Many insurers, including UnitedHealth, Humana and Aetna have exited the exchanges on which many participants purchase health insurance, contributing to a 25% on average increase in premiums. “The biggest thing that needs to be done is figuring out some way to attract young, healthy people” to exchange plans, Perlman said. But HHS, under Price’s leadership, seems unlikely to try to improve the law. And “purposefully sabotaging the exchanges and the ACA probably isn’t difficult,” said Perlman. And for that matter, HHS is “probably the only game in town right now” that can do it.

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“..55% of mortgages in active foreclosure were originated between 2004 and 2008..”

The Heart Of The American Dream Has Stopped Beating (DiMartino Booth)

According to ATTOM Data Solutions, the new parent company of RealtyTrac, default notices, scheduled auctions and bank repossessions slid to 933,045 last year, the lowest tally since the 717,522 reported in 2006. Is the final chapter written? Not if you live in judicial foreclosure states such as New York, New Jersey and Florida where ‘legacy’ foreclosures take years to clear. At the end of last year, 55% of mortgages in active foreclosure were originated between 2004 and 2008. Factor in what’s still in the pipeline and one in ten circa 2006 homeowners will have lost their homes before it is all said and done. That helps explain one part of the chart below which was generously shared with me by one Dr. Gates. Longtime readers of these missives will recognize the nom de plume of my inside-industry economic sleuth. His first take on this sad visual, was that, “The heart of the American Dream has stopped beating.” Did that stop your heart as it did my own?

As you can see, after a steady 40-year build, owner-occupied housing has stagnated and sits at the lowest level since 2004. This has sent the homeownership rate crashing to 63.4%, the lowest since 1967. It would be nice to think that things were looking up for would-be homeowners. But it’s difficult to be overly optimistic when the local newspaper reports that house flipping in the Dallas-Ft. Worth area rose 21% in 2016, seven times the national rate. In all, 193,000 properties nationwide were flipped for a quick inside-12-months profit last year, a 3.1 increase to a nine-year high. Moreover, the median age of a flipped home rose to a two-decade high of 37 years, about double the median age of homes flipped before the crisis hit. That translated into a median gross profit of $69,624 on a median selling price of $189,900 in 2016, a neat 49.2% margin, the highest on record. Awesome!

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Very good -and scary- from Danielle DiMartino Booth. I’ve often asked: what happened to pension funds investing in AAA paper? But there’s more: without accounting tricks dominoes would already be falling. This is not some coincidence, it’s actual policy as conducted by The American Academy of Actuaries.

Pension Crisis Too Big for Markets to Ignore (Danielle DiMartino Booth)

The question is why haven’t the headlines presaged pension implosions? As was the case with the subprime crisis, the writing appears to be on the wall. And yet calamity has yet to strike. How so? Call it the triumvirate of conspirators – the actuaries, accountants and their accomplices in office. Throw in the law of big numbers, very big numbers, and you get to a disaster in a seemingly permanent state of making. Unfunded pension obligations have risen to $1.9 trillion from $292 billion since 2007. Credit rating firms have begun downgrading states and municipalities whose pensions risk overwhelming their budgets. New Jersey and the cities of Chicago, Houston and Dallas are some of the issuers in the crosshairs.

Morgan Stanley says municipal bond issuance is down this year in part because of borrowers are wary of running up new debts to effectively service pensions. Federal Reserve data show that in 1952, the average public pension had 96% of its portfolio invested in bonds and cash equivalents. Assets matched future liabilities. But a loosening of state laws in the 1980s opened the door to riskier investments. In 1992, fixed income and cash had fallen to an average of 47% of holdings. By 2016, these safe investments had declined to 27%. It’s no coincidence that pensions’ flight from safety has coincided with the drop in interest rates. That said, unlike their private peers, public pensions discount their liabilities using the rate of returns they assume their overall portfolio will generate.

In fiscal 2016, which ended June 30th, the average return for public pensions was somewhere in the neighborhood of 1.5%. Corporations’ accounting rules dictate the use of more realistic bond yields to discount their pensions’ future liabilities. Put differently, companies have been forced to set aside something closer to what it will really cost to service their obligations as opposed to the fantasy figures allowed among public pensions. So why not just flip the switch and require truth and honesty in public pension math? Too many cities and potentially states would buckle under the weight of more realistic assumed rates of return. By some estimates, unfunded liabilities would triple to upwards of $6 trillion if the prevailing yields on Treasuries were used.

That would translate into much steeper funding requirements at a time when budgets are already severely constrained. Pockets of the country would face essential public service budgets being slashed to dangerous levels. What’s a pension to do? Increasingly, the answer is swing for the fences. Forget the fact that just under half of pension assets are in the second-most overvalued stock market in history. Even as Fed officials publicly fret about commercial real estate valuations, pensions have socked away 8% of their portfolios into this less than liquid asset class. Even further out on the risk and liquidity spectrum is the 10% that pensions have allocated to private equity and limited partnerships.

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“While the nation remains entertained by all this, the Potemkin financial system will wobble, crash, and burn and the humiliation of Donald Trump will be complete.”

The Swamp Drains Trump (Jim Kunstler)

One can’t help marveling at the way the “Russian interference” motif has shifted the spotlight off the substance of what Wikileaks revealed about Clinton Foundation and DNC misdeeds onto Trump campaign officials “colluding” with Russians, supposedly to support their interference in the election. It’s true that the election is way over and the public is no longer concerned with Hillary or her foundation (which is closing shop anyway). But the switcheroo is impressive, and quite confusing, considering recently retired NSA James Clapper just two weeks ago said on NBC’s Meet the Press that there was “no evidence” of collusion Between Trump and Russia. Okay… uh, say what? On Monday, FBI Director James Comey revealed that his agency had been investigating the Trump Campaign since at least last August. Is that so…? Investigating how? Some sort of electronic surveillance?

Well, what else would they do nowadays? Send a gumshoe to a hotel room where he could press his ear on a drinking glass against the wall to eavesdrop on Paul Manafort? I don’t think so. Of course they were sifting through emails, phone calls, and every other sort of electronic communication. Trump’s big blunder was to tweet that he’d been “wiretapped.” Like the FBI patched into a bunch of cables with alligator clips in the basement of Trump Tower … or planted a “bug” in the earpiece of his bedside phone. How quaint. We also don’t have ice boxes anymore, though plenty of struggling weight-watchers across the land speak guiltily of “raiding the icebox.” But if it’s true, as Mr. Comey said, that the FBI had been investigating Trump’s campaign, the people around him, and Trump himself, since August, how could they not have captured some of Trump’s conversations?

[..] So, the long and the short of it is that the RussiaGate story is spinning out of control, and Trump’s adversaries — who go well beyond Congress into the Deep State — might be getting enough leverage to dump Trump. Either they will maneuver him and his people into some kind of perjury rap, or they will tie up the government in such a web of investigative procedural rigmarole that all the country lawyers who ever snapped their galluses will never be able to unravel it. While the nation remains entertained by all this, the Potemkin financial system will wobble, crash, and burn and the humiliation of Donald Trump will be complete. Abandoned by the Republican Party, isolated and crazed in the White House, tweeting out mad appeals to heaven, he’ll either voluntarily pass the baton to Mike Pence or he will be declared unfit to serve and removed under the 25th amendment.

The after-effects of that will be something to behold: a “lose-lose” for both old-line political parties. The Trumpists will never forgive the Republican Party, and the Democrats will have gained nothing. Don’t let the door bang you on the butt on your way out.

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What a surprise.

It Was A Very Bad Earnings Season (Snider)

With nearly all of the S&P 500 companies having reported their Q4 numbers, we can safely claim that it was a very bad earnings season. It may seem incredulous to categorize the quarter that way given that EPS growth (as reported) was +29%, but even that rate tells us something significant about how there is, actually, a relationship between economy and at least corporate profits. Keynes famously said that we should never worry about the long run for there we will all be dead, but EPS has arrived at the long run and there is still quite a lot of living to do. As late as October, analysts were projecting $29 in earnings for the S&P 500 in Q4 2016. As of the middle of the earnings reports last month, that estimate suddenly dropped to just $26.37. In the month since that time, with the almost all of the rest having now reported, the current figure is just $24.15 – a decline of over $2 in four weeks. Therefore, 29% growth is hugely disappointing because it wasn’t 55% growth as was projected when the quarter began.

It is also the timing of the downgrades that is important as it relates to both “reflation” and the economy meant to support it. All throughout last year, in the aftermath of the near-recession to start 2016, EPS estimates for Q4 (and beyond) were very stable, unusually so given the recent past. That shows us how analysts, at least, were expecting the economy to go once it got past “global turmoil.” It was the “V” shaped rebound typical for past cyclical behavior. But it wasn’t until companies actually started reporting earnings that the belief was tested and then found severely lacking. With just $24.15 for Q4, total EPS was for the calendar year less than $95, the ninth straight quarter below the $100 level. More importantly, on a trailing-twelve month basis, EPS don’t appear to be in any hurry (except in future estimates) to revisit the prior peak of $106 all the way back in Q3 2014.

 

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Like a cheap crime novel: Flynn gets paid $530,000 “on behalf of an Israeli company seeking to export natural gas to Turkey”, and ends up discussing kidnapping Erdogan’s enemy. Oh, and Biden knew about this conversation. So Obama knew too.

Flynn and Turkish Officials Discussed Kidnapping Erdogan Foe From US (WSJ)

Retired Army Lt. Gen. Mike Flynn, while serving as an adviser to the Trump campaign, met with top Turkish government ministers and discussed removing a Muslim cleric from the U.S. and taking him to Turkey, according to former Central Intelligence Agency Director James Woolsey, who attended, and others who were briefed on the meeting. The discussion late last summer involved ideas about how to get Fethullah Gulen, a cleric whom Turkey has accused of orchestrating last summer’s failed military coup, to Turkey without going through the U.S. extradition legal process, according to Mr. Woolsey and those who were briefed. Mr. Woolsey told The Wall Street Journal he arrived at the meeting in New York on Sept. 19 in the middle of the discussion and found the topic startling and the actions being discussed possibly illegal.

The Turkish ministers were interested in open-ended thinking on the subject, and the ideas were raised hypothetically, said the people who were briefed. The ministers in attendance included the son-in-law of Turkish President Recep Tayyip Erdogan and the country’s foreign minister, foreign-lobbying disclosure documents show. Mr. Woolsey said the idea was “a covert step in the dead of night to whisk this guy away.” The discussion, he said, didn’t include actual tactics for removing Mr. Gulen from his U.S. home. If specific plans had been discussed, Mr. Woolsey said, he would have spoken up and questioned their legality. It isn’t known who raised the idea or what Mr. Flynn concluded about it. Price Floyd, a spokesman for Mr. Flynn, who was advising the Trump campaign on national security at the time of the meeting, disputed the account, saying “at no time did Gen. Flynn discuss any illegal actions, nonjudicial physical removal or any other such activities.”

[..] On March 2, weeks after Mr. Flynn’s departure from the Trump administration, the Flynn Intel Group, his consulting firm, filed with the Justice Department as a foreign agent for the government of Turkey. Mr. Trump was unaware Mr. Flynn had been consulting on behalf of the Turkish government when he named him national security adviser, White House press secretary Sean Spicer said this month. In its filing, Mr. Flynn’s firm said its work from August to November “could be construed to have principally benefited the Republic of Turkey.” The filing said his firm’s fee, $530,000, wasn’t paid by the government but by Inovo BV, a Dutch firm owned by a Turkish businessman, Ekim Alptekin.

[..] Mr. Woolsey said he didn’t say anything during the discussion, but later cautioned some attendees that trying to remove Mr. Gulen was a bad idea that might violate U.S. law. Mr. Woolsey said he also informed the U.S. government by notifying Vice President Joe Biden through a mutual friend. [..] Inovo hired Mr. Flynn on behalf of an Israeli company seeking to export natural gas to Turkey, the filing said, and Mr. Alptekin wanted information on the U.S.-Turkey political climate to advise the gas company about its Turkish investments.

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“.. he identified three kinds of suicide: altruistic, anomic, and egoistic. Of the three, the most complicated is anomic suicide. Anomie essentially means the breakdown of social values and norms, and Durkheim closely associated anomic suicide with economic catastrophe.”

A ‘Deaths Of Despair’ Crisis Is Gripping America (BI)

[..] this isn’t the first time that social change has caused self-destructiveness on a mass scale. Indeed, 19th-century French sociologist Emile Durkheim wrote about similar problems in his time, and might refer to the plague of white middle-class mortality we see today as “a state of upheaval.” Of course, the lesson of the 2016 presidential election was that working- and middle-class whites are suffering. What Durkheim offers, though, is the argument for why the newly elected government in Washington — voted in by this very constituency — is getting the solution all wrong. The way to fix this problem is not through less government — but through more. Durkheim’s seminal work, the 1897 book “Suicide,” remains one of the most in-depth examinations of why these situations occur in society, and it is as relevant as ever. Its lessons are an indication that as a country, we are moving swiftly, carelessly in the wrong direction.

The Americans we are talking about are white and middle class. They are aged 45-55. They are losing the battle against heart disease and cancer, and they are succumbing to drugs, alcohol and suicide at rates unseen in modern history or in other developed countries. “The combined effect means that mortality rates of whites with no more than a high school degree, which were around 30% lower than mortality rates of blacks in 1999, grew to be 30% higher than blacks by 2015,” Case and Deaton wrote. The easy thing to say is that these people are suffering from economic and social anxiety and leave it at that. What’s harder to pinpoint is what exactly that means and how to fix it. Economic conditions for minorities in the same social class and in the same communities are as hard, if not harder, than they are for middle class whites. But death rates aren’t increasing for them.

This is where Durkheim comes in. He wrote his work in the midst of another state of upheaval, as industrialization was taking over the world and old economic patterns were falling away. This was the beginning of modern life as we now know it. And it was killing people. Durkheim found that the degree to which a person is integrated in society is inversely correlated to their likelihood to engage in life-threatening behaviors and suicide. In his work, he identified three kinds of suicide: altruistic, anomic, and egoistic. Of the three, the most complicated is anomic suicide. Anomie essentially means the breakdown of social values and norms, and Durkheim closely associated anomic suicide with economic catastrophe. [..] One of the big factors, then, in the increase in substance abuse and suicide among the white middle class could be a decline in the social framework as a result of the rapid economic changes seen over the last few decades.

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We’re getting into Steve Keen territory. At last.

New Canadian Budget Drops Obsession With Balanced Budgets (Star)

I’m intrigued by Modern Monetary Theory, which maintains governments can create (or ‘print’) money to fill public needs and can’t go into debt to themselves, though they should keep an eye on inflation.

Sorry, but I’m afraid I don’t agree that Wednesday’s federal budget was a non-event: “cynical,” a “placeholder,” “bafflegab and buzzwords” — as others wrote. I think this budget rocked, in one sense: it did a 180 on the stifling monomania of the last 30 years. I’m referring to the obsession with deficits. As recently as last election, the Liberals promised a balanced budget by the end of their first term. Now their projected deficits are even higher but that promise is gone and the thought process, transformed. Finance minister Bill Morneau blandly says, they’ll “be responsible every step along the way” and “show a decline in net debt to GDP,” which totally shifts the metric. He might as well have trilled, “Tra-la-la, we really don’t care.” It’s a damn earthquake.

For proof, look not at the opposition – Rona Ambrose predictably called it “spending out of control”- but at the journalists, who were left sputtering. It’s so radical they struggled for words. Peter Mansbridge began interviewing Morneau with: “How does it feel to know you’ll likely never have a balanced budget?” I wish Morneau had said, “I’m fine, but is there anything I can do to help you through this?” Mansbridge couldn’t stop, turning plaintively to his panel: “I tried to get him on the deficit … Is there a right and wrong any more?” Jennifer Ditchburn tried to soothe him with, “Deficit is a word they just don’t use any more.”

If I’m hyperventilating, it’s because I’ve led a cramped existence all these years, bowed under the weight of deficitism since I first heard the phrase, “Yeah, but how ya gonna pay for that?” during the 1988 election. No one knew where it came from or how it usurped all other political concerns, like a missive from heaven, or the Fraser Institute. Paul Martin adopted it, using it to sink the Canada we knew, and his own career. Yet, there’s apparently an ebb and flow to these things: a Nanos poll says Canadians now want Ottawa to run deficits as long as overall debt declines relative to GDP. That’s a pretty sophisticated alteration for ordinary folks to make intuitively; it makes you wonder if someone isn’t pulling strings somewhere and decided to drop a new backdrop (to public discourse) over the previous one.

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Nicely done. Like the music.

US Debt of $20 Trillion Visualized in Stacks of Physical Cash (Demonocracy)

Showing stacks of physical cash in following sequence: $100, $10,000, $1 Million, $2 Billion, $1 Trillion, $20 Trillion The faith and value of the US Dollar rests on the Government’s ability to repay its debt. “The money in the video has already been spent”

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Sounds reasonable.

The Pound Is Going To Take A Huge Hit, According To Deutsche Bank (Ind.)

When it comes to the pound, currency analysts at Deutsche Bank have for months proved to be some of the most bearish across the City, but they’ve just turned even more pessimistic in their outlook for the battered currency. In its latest special report on Brexit released this week, the German lender said the pound could fall as a low as $1.06 against the dollar by the end of 2017, or another 15%. “We do not see sterling (currently) fully pricing a hard Brexit outcome,” the bank wrote. “Combined with limited adjustment in the UK’s current account deficit and slowing growth, we see further downside, and forecast $1.06 in by year-end,” it added.

In an interview with Bloomberg in February, George Saravelos, the German lender’s global co-head of foreign exchange, hinted that the bank could cut its official forecast. He said at the time that sterling could still slip by 16% against the dollar to $1.05 cent as the “incredibly complicated” nature of Brexit becomes ever more clear. Most economists’ forecasts are still more optimistic than Deutsche Bank’s, but few expect the currency to recover from its post-referendum lows any time soon. According to poll of more than 60 banks and research institutions conducted by Reuters that was released earlier this month, forecasters on average expect the currency to trade at $1.23 against the dollar by the end of June, and drop to $1.21 in the subsequent three to six months.

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Praet is a true believer.

Leaving Euro Would Not Help France And Italy – ECB Chief Economist (Ind.)

The chief economist of the ECB has warned Italy and France that their economic problems would not be solved by breaking up the single currency. In an interview with Italy’s Il Sole 24 Ore newspaper, Peter Praet, an executive board member of the ECB, said the idea that the euro was the root cause of high unemployment and low growth in certain European countries was a populist “deception”. “What I do worry about is the populist narrative that things were better before the euro,” he said. “This is a deception. We arrived at monetary union after disastrous experiences with floating exchange rates and some unsuccessful attempts of orderly floating. “The devaluations that populists claim is a free lunch and allows to regain competitiveness by miracle proved extremely expensive.”

With specific reference to Italy, he said: “The nostalgic alternative that everything will be all right just by returning to the lira amounts to fooling the people. The cost of a regime change would be huge and the poor would be the ones that suffer the most.” Mr Praet acknowledged that the euro had lost popularity in many European countries, but said that it had been made a “scapegoat” for other economic policy failures by politicians. However, many credible economists argue that in the absence of fiscal stimulus by core countries in Europe that run current account surpluses, the monetary restrictions of the single currency are indeed driving the economic distress of the likes of France, Italy, Portugal and Greece.

Italy’s Five Star movement, currently leading in national opinion polls, has proposed a referendum on Italy’s membership of the single currency. Marine Le Pen’s Front National in France has previously called for the reinstatement of the franc, although she did not reiterate this in the national debate among presidential candidates earlier this week ahead of April’s national elections. The level of Italy’s GDP is barely higher than when the single currency was formed in 2000 and its working age unemployment rate currently stands at 12 per cent. The French unemployment rate is just below 10% and for young people it is double that.

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An outright lie: “Greece can only do that if Greece has a competitive economy. To that end, it needs to carry out reforms, and we’re giving Greece time to do that.”

Greece to Break Off Face-to-Face Talks With Creditors (BBG)

Greece and the institutions managing its bailout review will break off negotiations in Brussels without having cleared a path to conclude the deliberations that would release needed rescue funds. Finance Minister Euclid Tsakalotos, who was meeting with officials from the euro area and the IMF will return to Athens by Saturday. The two sides still have issues to work out, said the official, who asked not to be named in line with policy. Some progress was made and discussions will continue from their respective headquarters, according to a spokesman from the European Stability Mechanism, the euro-area’s bailout monitor. Greece is edging closer to a repeat of the 2015 drama that pushed Europe’s most indebted state to the edge of economic collapse, as the government in Athens and its creditors disagree over reforms to the pension system and the labor and energy markets.

Greece needs to complete the review in order to get the next portion of its aid payment before it has more than €7 billion of bonds come due in July. German Finance Minister Wolfgang Schaeuble increased the pressure on Prime Minister Alexis Tsipras to accede to creditor demands. “Greece has said it wants to stay in the euro,” Schaeuble said in an interview on Deutschlandfunk radio on Friday. “Greece can only do that if Greece has a competitive economy. To that end, it needs to carry out reforms, and we’re giving Greece time to do that.” [..] European Commission President Jean-Claude Juncker urged Greece and its creditors in an emailed statement to reach a deal that respects commitments made on all sides. In response to Tsipras’s letter, Juncker called on the Greeks not to reverse reforms and creditors “to give Greece the desired and necessary room for maneuver to build its own future.”

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Reasonable overview, but any talk of agreements that could lead Greece back to growth is nonsense. The EU would never sign such an agreement. Theie attitude to date has made that abundantly clear.

Where Next For Greece? (Makropolis)

In September last year, when Alexis Tsipras visited New York to speak at the UN Assembly, he held a meeting with some heavyweights of the international investment community. The Greek prime minister was reportedly advised by the participants that if he wanted to build trust in Greece as an attractive investment destination, he should shift focus from his main objective of debt relief towards ensuring Greece’s participation in the ECB’s QE programme. The investors apparently pointed out to the SYRIZA leader that such a development would have a wide range of benefits for Greece and provide the steadiest path towards regaining market access and the successful completion of the current programme, without the need to follow it up with a fourth memorandum of understanding (MoU).

Tsipras seemingly heeded the advice and, just as the second review was about to start, he charted a path out of the crisis. He set out his intention to close the review by December 2016, secure QE at the start of 2017 and dip his toe back into the markets with a small issue or two early this summer when Greece has to roll over the bond that it issued in 2014, when Antonis Samaras was prime minister. However, the timetable Tsipras identified last autumn has gone up in smoke.

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Jan 022017
 
 January 2, 2017  Posted by at 9:56 am Finance Tagged with: , , , , , , , , ,  


Cary Grant and Constance Bennett, stars of the film ‘Topper’, drive the Topper Buick 1937

‘Patients Who Should Live Are Dying’: Greece’s Public Health Meltdown (G.)
Jean-Claude Juncker Secretly Blocked EU Tax Reforms When Luxembourg PM (G.)
German Ifo Think Tank Chief Says Italy Risks Quitting Euro Zone (R.)
Trump Aide Says US Sanctions On Russia May Be Disproportionate (R.)
Cuomo Vetoes Bill Requiring NY State To Fund Legal Services For Poor (NYDN)
A Giant Wave Of Store Closures Is About To Hit The US (BI)
PBOC’s Ma Says New Cash Transaction Rules Are Not Capital Controls (BBG)
China Central Bank Adviser Calls For Flexible 2017 Growth Target (R.)
Australia House Prices Defy 2016 Predictions, Rise More Than 15% (AFR)
2017: The Wheels Finally Come Off (Jim Kunstler)
The Mosul Dam: A Bigger Problem Than Isis? (New Yorker)
‘Bad Boys of Brexit’ Headed For Screen (R.)

 

 

This is the EU. This is what it stands for. There are no fiancial reasons for this to happen. It’s pure malice. And it’s why it’s way past time to close up shop in Brussels. The EU is the mob. Or as I’ve been saying for a long time: the EU eats people alive.

‘Patients Who Should Live Are Dying’: Greece’s Public Health Meltdown (G.)

Rising mortality rates, an increase in life-threatening infections and a shortage of staff and medical equipment are crippling Greece’s health system as the country’s dogged pursuit of austerity hammers the weakest in society. Data and anecdote, backed up by doctors and trade unions, suggest the EU’s most chaotic state is in the midst of a public health meltdown. “In the name of tough fiscal targets, people who might otherwise survive are dying,” said Michalis Giannakos who heads the Panhellenic Federation of Public Hospital Employees. “Our hospitals have become danger zones.” Figures released by the European Centre for Disease Prevention and Control recently revealed that about 10% of patients in Greece were at risk of developing potentially fatal hospital infections, with an estimated 3,000 deaths attributed to them.

The occurrence rate was dramatically higher in intensive care units and neonatal wards, the body said. Although the data referred to outbreaks between 2011 and 2012 – the last official figures available – Giannakos said the problem had only got worse. Like other medics who have worked in the Greek national health system since its establishment in 1983, the union chief blamed lack of personnel, inadequate sanitation and absence of cleaning products for the problems. Cutbacks had been exacerbated by overuse of antibiotics, he said. “For every 40 patients there is just one nurse,” he said, mentioning the case of an otherwise healthy woman who died last month after a routine leg operation in a public hospital on Zakynthos. “Cuts are such that even in intensive care units we have lost 150 beds.” “Frequently, patients are placed on beds that have not been disinfected.

Staff are so overworked they don’t have time to wash their hands and often there is no antiseptic soap anyway.” No other sector has been affected to the same extent by Greece’s economic crisis. Bloated, profligate and corrupt, for many healthcare was indicative of all that was wrong with the country and, as such, badly in need of reform. Acknowledging the shortfalls, the government announced last month that it planned to appoint more than 8,000 doctors and nurses in 2017. Since 2009, per capita spending on public health has been cut by nearly a third – more than €5bn – according to the OECD. By 2014, public expenditure had fallen to 4.7% of GDP, from a pre-crisis high of 9.9%. More than 25,000 staff have been laid off, with supplies so scarce that hospitals often run out of medicines, gloves, gauze and sheets.

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Symbol of everything that’s wrong with Brussels. He was Luxembourg PM for 18 years.

Jean-Claude Juncker Secretly Blocked EU Tax Reforms When Luxembourg PM (G.)

The president of the European commission, Jean-Claude Juncker, spent years in his previous role as Luxembourg’s prime minister secretly blocking EU efforts to tackle tax avoidance by multinational corporations, leaked documents reveal. Years’ worth of confidential German diplomatic cables provide a candid account of Luxembourg’s obstructive manoeuvres inside one of Brussels’ most secretive committees. The code of conduct group on business taxation was set up almost 19 years ago to prevent member states from being played off against one another by increasingly powerful multinational businesses, eager to shift profits across borders and avoid tax. Little has been known until now about the workings of the committee, which has been meeting since 1998, after member states agreed a code of conduct on tax policies and pledged not to engage in “harmful competition” with one another.

However, the leaked cables reveal how a small handful of countries have used their seats on the committee to frustrate concerted EU action and protect their own tax regimes. Efforts by a majority of member states to curb aggressive tax planning and to rein in predatory tax policies were regularly delayed, diluted or derailed by the actions of a few of the EU’s smallest members, frequently led by Luxembourg. The leaked papers, shared with the Guardian and the International Consortium of Investigative Journalists by the German radio group NDR, are highly embarrassing for Juncker, who served as Luxembourg’s prime minister from 1995 until the end of 2013. During that period he also acted as finance and treasury minister, taking a close interest in tax policy. Despite having a population of just 560,000, Luxembourg was able to resist widely supported EU tax reforms, its dissenting voice often backed only by that of the Netherlands.

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“The standard of living in Italy is at the same level as in 2000..” Wait a minute, why is that such a bad thing? How awful were things in Italy 17 years ago?

German Ifo Think Tank Chief Says Italy Risks Quitting Euro Zone (R.)

The head of Germany’s Ifo economic institute believes Italians will eventually want to quit the euro currency area if their standard of living does not improve, he told German daily Tagesspiegel. “The standard of living in Italy is at the same level as in 2000. If that does not change, the Italians will at some stage say: ‘We don’t want this euro zone any more’,” Ifo chief Clemens Fuest told the newspaper. He also said that if Germany’s parliament were to approve a European rescue program for Italy, it would impose on German taxpayers risks “the size of which it does not know and cannot control.” He said German lawmakers should not agree to do this. Italy is not seeking such a rescue program. The government in Rome is focusing on underwriting the stability of its banking sector, starting with a bailout of Monte dei Paschi di Siena.

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Diplomatic language. Trump was partially briefed a few days ago. Oh, to be a fly on the wall for the full briefing today or tomorrow…

Trump Aide Says US Sanctions On Russia May Be Disproportionate (R.)

A top aide to President-elect Donald Trump said in an interview aired on Sunday that the White House may have disproportionately punished Russia by ordering the expulsion of 35 suspected Russian spies. Incoming White House press secretary Sean Spicer said on ABC’s “This Week” that Trump will be asking questions of U.S. intelligence agencies after President Barack Obama imposed sanctions last week on two Russian intelligence agencies over what he said was their involvement in hacking political groups in the 2016 U.S. presidential election. Obama also ordered Russia to vacate two U.S. facilities as part of the tough sanctions on Russia.

“One of the questions that we have is why the magnitude of this? I mean you look at 35 people being expelled, two sites being closed down, the question is, is that response in proportion to the actions taken? Maybe it was; maybe it wasn’t but you have to think about that,” Spicer said. Trump is to have briefings with intelligence agencies this week after he returns to New York on Sunday. On Saturday, Trump expressed continued skepticism over whether Russia was responsible for computer hacks of Democratic Party officials. “I think it’s unfair if we don’t know. It could be somebody else. I also know things that other people don’t know so we cannot be sure,” Trump said.

He said he would disclose some information on the issue on Tuesday or Wednesday, without elaborating. It is unclear if, upon taking office on Jan. 20, he would seek to roll back Obama’s actions, which mark a post-Cold War low in U.S.-Russian ties. Spicer said that after China in 2015 seized records of U.S. government employees “no action publicly was taken. Nothing, nothing was taken when millions of people had their private information, including information on security clearances that was shared. Not one thing happened.” “So there is a question about whether there’s a political retribution here versus a diplomatic response,” he added.

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By the end of November, Cuomo had already vetoed 70 other bills in 2016. ¿Qué pasa?

Cuomo Vetoes Bill Requiring NY State To Fund Legal Services For Poor (NYDN)

Gov. Cuomo vetoed a bill late Saturday that would have required the state to fund legal services for the poor in each county. Cuomo’s office in a New Year’s Eve statement released just over an hour before the bill was required to be signed or vetoed said last-minute negotiations with the Legislature to address the governor’s concerns failed to yield a deal. “Until the last possible moment, we attempted to reach an agreement with the Legislature that would have achieved the stated goal of this legislation, been fiscally responsible, and had additional safeguards to ensure accountability and transparency,” Cuomo spokesman Richard Azzopardi said. “Unfortunately, an agreement was unable to be reached and the Legislature was committed to a flawed bill that placed an $800 million burden on taxpayers – $600 million of which was unnecessary – with no way to pay for it and no plan to make one.”

He said the issue will be revisited in the upcoming legislative session. The bill, which had support from progressive and conservative groups, would have given the state seven years to take over complete funding of indigent legal services from towns. Dozens of groups representing public defenders, municipalities and others expressed disappointment. Jonathan Gradess, executive director of the New York State Defenders Association, called Cuomo’s decision to veto the bill “stunning.” “We are all shocked that the Governor vetoed a bill that would have reduced racial disparities in the criminal justice system, helped ensure equal access to justice for all New Yorkers, provided improved public defense programs for those who cannot afford an attorney, and much-needed mandate relief for counties, Gradess said. “The governor refused to accept an independent oversight mechanism on state quality standards, and now, sadly tens of thousands of low-income defendants will pay the price.”

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“As shopping patterns have changed..” means: as more credit cards have maxed out.

A Giant Wave Of Store Closures Is About To Hit The US (BI)

Retailers are bracing for a fresh wave of store closures at the start of the new year. The industry is heading into 2017 with a glut of store space as shopping continues to shift online and foot traffic to malls declines, according to analysts. “If you are weaker player, it’s going to be a very tough 2017 for you, ” said RJ Hottovy, a consumer equity strategist for Morningstar. He said he’s expecting a number of retailers to file for bankruptcy next year, in addition to mass store closures. Nearly every major department store, including Macy’s, Kohl’s, Walmart, and Sears, have collectively closed hundreds of stores over the last couple years to try and stem losses from unprofitable stores and the rise of ecommerce. But the closures are far from over.

Macy’s has already said that it’s planning to close 100 stores, or about 15% of its fleet, in 2017. Sears is shuttering at least 30 Sears and Kmart stores by April, and additional closures are expected to be announced soon. CVS also said this month that it’s planning to shut down 70 locations. Mall stores like Aeropostale, which filed for bankruptcy in May, American Eagle, Chicos, Finish Line, Men’s Wearhouse, and The Children’s Place are also in the midst of multi-year plans to close stores. Many more announcements like these are expected in the coming months. The start of the year is a popular time to announce store closures. Nearly half of annual store closings announced since 2010 have occurred in the first quarter, CNBC reports.

In addition to closing stores, retailers are also looking to shrink their existing locations. “As leases come up, you’re going to see a gradual rotation into smaller-footprint stores,” Hottovy said. Despite recent closures, the US is still oversaturated with stores. The US has 23.5 square feet of retail space per person, compared with 16.4 square feet in Canada and 11.1 square feet in Australia — the next two countries with the highest retail space per capita, according to a Morningstar report from October. “Across retail overall the US has too much space and too many shops,” said Neil Saunders, CEO of the retail consulting firm Conlumino. “As shopping patterns have changed, some of those shops are also in the wrong place and are of the wrong size or configuration.”

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1) Think it really matters what you call it? Or is it about how people perceive it?

2) It’s alright Ma, I’m only bleeding.

PBOC’s Ma Says New Cash Transaction Rules Are Not Capital Controls (BBG)

China’s new regulations on cash transactions and overseas transfers are not capital controls, according to a central bank researcher cited by the official Xinhua News Agency. New requirements published by the People’s Bank of China Friday stoked concern that the government is imposing capital controls in a disguised form, Xinhua reported late Sunday. “It is not capital control at all,” Ma Jun, chief economist of the central bank’s research bureau, told the state-run news service. The $50,000 annual foreign exchange purchase quota for individuals is unchanged, and the rules won’t affect normal activities such as business investment and operations abroad or overseas travel and study, Ma said.

Ma’s comments follow the annual Jan. 1 reset of the $50,000 limit for individuals, which may potentially aggravate capital outflow pressures that have been intensifying after the yuan suffered its steepest annual slump in more than two decades. The PBOC said Friday it will tighten rules for banks to report cross-border customer transactions starting July 1 as part of stepped-up efforts to curb money laundering and prevent terrorism financing. Financial institutions will assume responsibility for reporting and there will be neither extra documentation nor official approval procedures for businesses and individuals, Ma said.

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The Chinese come up with one creative way after another to tell us their growth is cratering, without actually saying it. But who’s listening?

China Central Bank Adviser Calls For Flexible 2017 Growth Target (R.)

The Chinese government should set a more flexible target for economic growth this year to give more space for reform efforts, a central bank adviser told the official Xinhua news agency in comments published on Sunday. China’s economy grew 6.7% in the third quarter from a year earlier and looks set to achieve the government’s full-year forecast of 6.5-7%, buoyed by higher government spending, a housing boom and record bank lending. However, growing debt and concerns about property bubbles have touched off an internal debate about whether China should tolerate slower growth in 2017 to allow more room for painful reforms aimed at reducing industrial overcapacity and indebtedness.

Huang Yiping, a monetary policy committee member of the central People’s Bank of China and Peking University professor, told Xinhua that China’s GDP growth target range should be 6-7% for this year, compared with 6.5-7% in 2016. “The 6.5% target is just an average rate,” Huang said. “As long as employment is stable, a slightly wider growth target range in the short term will reduce the need for pro-growth efforts and give policy makers more room to focus on reforms.” This year’s growth target will determine the government’s monetary policy, Huang said. “Large-scale monetary loosening is unlikely, while the possibility of tightening can not be ruled out,” he added, citing inflation concerns, higher U.S. interest rates and a weakening yuan.

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Don’t want to wait to see where it leads? Where would the movie end now?

Australia House Prices Defy 2016 Predictions, Rise More Than 15% (AFR)

Home prices defied forecasts they would stagnate in 2016 to grow more than they did during the “boom” year of 2015, according to year-end figures from property research firm CoreLogic. Dwelling prices rose 15.46% in Sydney while Melbourne had a rise of 13.68%. Even the much-maligned Hobart and Canberra housing markets posted strong gains, rising 11.24% and 9.29% respectively.

The data disappointed economists hoping for a more subdued housing market in 2016. At the end of 2015, Sydney and Melbourne closed with 11.5% and 11.2% growth respectively across houses and units, according to CoreLogic. ANZ had been expecting soft price growth and had forecast a 3% price rise for NSW, a 3.2% increase for Victoria, a 2% gain in Queensland and an overall 2.8% rise the country as a whole.

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Long from Jim. And recommended.

2017: The Wheels Finally Come Off (Jim Kunstler)

Apart from all the ill-feeling about the election, one constant ‘out there’ since November 8 is the Ayn Randian rapture that infects the money scene. Wall Street and big business believe that the country has passed through a magic portal into a new age of heroic businessmen-warriors (Trump, Rex T, Mnuchin, Wilbur Ross, et. al.) who will go forth creating untold wealth from super-savvy deal-making that un-does all the self-defeating malarkey of the detested Deep State technocratic regulation regime of recent years. The main signs in the sky, they say, are the virile near-penetration of the Dow Jones 20,000-point maidenhead and the rocket ride of Ole King Dollar to supremacy of the global currency-space. I hate to pound sleet on this manic parade, but, to put it gently, mob psychology is outrunning both experience and reality. Let’s offer a few hypotheses regarding this supposed coming Trumptopian nirvana.

The current narrative weaves an expectation that manufacturing industry will return to the USA complete with all the 1962-vintage societal benefits of great-paying blue collar jobs, plus an orgy of infrastructure-building. I think both ideas are flawed, even allowing for good intentions. For one thing, most of the factories are either standing in ruin or scraped off the landscape. So, it’s not like we’re going to reactivate some mothballed sleeping giant of productive capacity. New state-of-the-art factories would require an Everest of private capital investment that is simply impossible to manifest in a system that is already leveraged up to its eyeballs. Even if we tried to accomplish it via some kind of main force government central planning and financing — going full-Soviet — there is no conceivable way to raise (borrow) the “money” without altogether destroying the value of our money (inflation), and the banking system with it.

If by some magic any new industrial capacity were built, much of the work in it would be performed by robotics, not brawny men in blue shirts, and certainly not at the equivalent of the old United Auto Workers $35-an-hour assembly line wage. We have not faced the fact that the manufacturing fiesta based on fossil fuels was a one-time thing due to special historical circumstances and will not be repeated. The future of manufacturing in America is frighteningly modest. We’ll actually be lucky if we can make a few vital necessities by means of hydro-electric or direct water power, and that will be about the extent of it. Some of you may recognize this as the World Made By Hand scenario. I’ll stick by that.

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Not a new topic for many, but if it is for the New Yorker, there may be more people not aware of the Mosul Dam’s inherent problems: “a multilayer foundation of anhydrite, marl, and limestone, all interspersed with gypsum—which dissolves in contact with water. Dams built on this kind of rock are subject to a phenomenon called karstification..” Oh well, may be a good read up for all.

The Mosul Dam: A Bigger Problem Than Isis? (New Yorker)

On the morning of August 7, 2014, a team of fighters from the Islamic State, riding in pickup trucks and purloined American Humvees, swept out of the Iraqi village of Wana and headed for the Mosul Dam. Two months earlier, isis had captured Mosul, a city of nearly two million people, as part of a ruthless campaign to build a new caliphate in the Middle East. For an occupying force, the dam, twenty-five miles north of Mosul, was an appealing target: it regulates the flow of water to the city, and to millions of Iraqis who live along the Tigris. As the isis invaders approached, they could make out the dam’s four towers, standing over a wide, squat structure that looks like a brutalist mausoleum. Getting closer, they saw a retaining wall that spans the Tigris, rising three hundred and seventy feet from the riverbed and extending nearly two miles from embankment to embankment. Behind it, a reservoir eight miles long holds eleven billion cubic metres of water.

A group of Kurdish soldiers was stationed at the dam, and the isis fighters bombarded them from a distance and then moved in. When the battle was over, the area was nearly empty; most of the Iraqis who worked at the dam, a crew of nearly fifteen hundred, had fled. The fighters began to loot and destroy equipment. An isis propaganda video posted online shows a fighter carrying a flag across, and a man’s voice says, “The banner of unification flutters above the dam.” The next day, Vice-President Joe Biden telephoned Masoud Barzani, the President of the Kurdish region, and urged him to retake the dam as quickly as possible. American officials feared that isis might try to blow it up, engulfing Mosul and a string of cities all the way to Baghdad in a colossal wave. Ten days later, after an intense struggle, Kurdish forces pushed out the isis fighters and took control of the dam.

But, in the months that followed, American officials inspected the dam and became concerned that it was on the brink of collapse. The problem wasn’t structural: the dam had been built to survive an aerial bombardment. (In fact, during the Gulf War, American jets bombed its generator, but the dam remained intact.) The problem, according to Azzam Alwash, an Iraqi-American civil engineer who has served as an adviser on the dam, is that “it’s just in the wrong place.” Completed in 1984, the dam sits on a foundation of soluble rock. To keep it stable, hundreds of employees have to work around the clock, pumping a cement mixture into the earth below. Without continuous maintenance, the rock beneath would wash away, causing the dam to sink and then break apart. But Iraq’s recent history has not been conducive to that kind of vigilance.

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Don’t want to wait to see where it leads? Where would the movie end now?

‘Bad Boys of Brexit’ Headed For Screen (R.)

Three film production companies including Netflix are interested in making a warts-and-all screen dramatization of Nigel Farage’s insurgent Brexit campaign, according to an associate of Farage. This would be another extraordinary twist for Farage, who from the fringes of British politics achieved his life’s goal when Britons voted to leave the European Union last June, and has since befriended U.S. President-elect Donald Trump. The project would be based on “The Bad Boys of Brexit”, an account of Farage’s campaign by Arron Banks, a multi-millionaire British insurance tycoon who bankrolled the campaign, according to Andy Wigmore, a spokesman for Banks.

“We have three interested parties in the rights to the book and we will be meeting representatives from three studios including a Netflix representative on Jan. 19 in Washington DC,” Wigmore told Reuters in a text message. Farage, Banks, Wigmore and others in their circle will travel to Washington for Trump’s inauguration as president, which will take place on Jan. 20. “We have invited all of them (the studio representatives) to our pre-inaugural drinks party … We have also invited many of Trump’s team to the event,” said Wigmore.

The Sunday Telegraph newspaper earlier reported that Hollywood studio Warner Bros. was also interested, but it was unclear from Wigmore’s texts to Reuters whether those who have approached Banks included representatives of Warner Bros. The subtitle of Banks’ book is “Tales of Mischief, Mayhem and Guerrilla Warfare in the EU Referendum Campaign”. It is described on its publisher’s website as “an honest, uncensored and highly entertaining diary of the campaign that changed the course of history”. Asked whether Farage was likely to appear as himself in any screen adaptation of his campaign, Wigmore said: “Yes we all expect to make a Quentin Tarantino appearance”, a reference to the director’s cameo appearances in his own movies.

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Jun 192015
 
 June 19, 2015  Posted by at 8:07 pm Finance Tagged with: , , , , , , , ,  


Marion Post Wolcott Main Street. Sheridan, Wyoming 1941

Just about exactly three days ago, I wrote an article telling you that I will be going to Athens next week: The Automatic Earth Moves To Athens. I also announced in that article that I was setting up an Automatic Earth fund, the proceeds of which I will donate to needy Greek foodbanks and clinics. The reactions to that fund drive have been amazing in more ways than one. But first, here’s some of what what I wrote June 16:

I don’t think I can go to Athens and not try to see if there’s something I can do to alleviate some of the misery in my own small way. But since that way would be extremely small given where the Automatic Earth’s financial situation and funding stand at the moment, I thought of something.

I’m hereby setting up an “Automatic Earth for Athens” fund (big word), and I’m asking you, our readership, to donate to that fund. I will make sure the revenues will go to clinics and food banks, to the worthiest causes I can find. To not mix up donations for Athens with those for the Automatic Earth, which are also badly needed, I suggest I take any donation that ends with 99 cents, as in $25.99, and single those out for Greece. Does that sound reasonable? Let me know if it doesn’t, please.

I’m not expecting a flood of cash, but I hope that you, like me, think that in a civilized country people shouldn’t have to bring their own bedsheets to a hospital, or that these hospitals should be forced to work their doctors into burnouts, or simply lack basic treatments, medicines, etc.

Or for that matter that children should go hungry.

As I said, the reactions were amazing in more ways than one. Here’s the rundown: within 24 hours of posting the article, the count was already at close to $2000. I kid you not. Thing is, after that not much else has come in. We’re now, some 48 hours later, at $2217.49.

And that just don’t seem right. I think we should be able to do much better than that. If only because when I saw that initial run of donations, I realized we could do some real good. I had expected a few hundred bucks, but nothing like that. So that leads the mind to exploring more options, to thinking bigger.

Two things. Number one is that of those $2000, half came from just 1 individual in Colorado. Who in correspondence after told me how much he was touched by what I said, and how much he felt obliged to do what he could. He blew me away regardless.

Number two is that another sponsor of the “AE for Athens” fund, from California, who donated $200, suggested today that he would try and engage people and groups around him, community groups, to join in and collect donations, which we can then direct towards the people in Athens and the rest of Greece who need it most.

Please, if you at all can, follow that example, make it a group thing. I swear on all my ancestors’ graves that I will do all I can to make sure the money goes where it is most needed. EVen if at times I get the impression that this would mean just about every single street corner in ‘Athina’.

If you think it’s not all that bad, please read the Daily Mail article I will post at the bottom of this mercifully short post, an article, by the way, sent to me by a certain Nicole Foss ;-). That should tell you all you need to, and perhaps didn’t yet, know. It’s bad. Europe has created the third world inside its own borders. Me, personally, I find that inexcusable.

It makes me wonder how would Germany react in such a situation, or Holland, Britain? Where their life expectancy plummets, where babies are held ‘hostage’ in a hospital until the bill is paid up? They can’t even imagine this, while it’s happening right on their very doorstep.

But this post is not about politics, and some Americans may even say it happens stateside too. Which makes it sort of ironic that Americans are the most generous. So far. But maybe I can still turn that around. Maybe I can yet wake up the Europeans.

It’s their governments that made it happen, after all, though Washington is by no means an innocent bystander. The entire thing consists of dirty and ugly power politics executed in YOUR name, and that’s as true for Americans as it is for Europeans. And you have the opportunity to soothe some of the pain, even if it’s just a tiny bit.

So please, join the amazingly generous people who have donated so far, and show them they’re not alone in their generosity.

The amount donated so far is $2217.49. Isn’t that just amazing? We were close to $2000 in 24 hours!

And I have counted only the donations that end in $.99, for reasons I explained earlier. But I will donate as much as TAE can afford anyway, along with whatever comes into the fund.

So please, let your heart speak, and help me help. As I said, if the reason why is still not clear, here’s Ian Birrell for the Daily Mail. That should do it.

Thank you in advance, on behalf of those whose lives we can, together, make a little more bearable. It’s the least we can do. But, again, that’s just me.

You can donate through our Paypal widget at the top of the left sidebar. Make sure if you want to donate to Greece to end the amount with $.99.

You can also donate bitcoin at this address: 1HYLLUR2JFs24X1zTS4XbNJidGo2XNHiTT.

Thank you so much.

Greece Is Literally Dying To Leave The Euro

How does a nation die? This week, in the beleaguered hospitals of Athens, I saw a glimpse of the shocking answer. It is when its own people die in their thousands simply because the state cannot afford to heal them. [..]

There is no greater metaphor for a country’s health than its own healthcare system. And it is only when you see for yourself the horrors convulsing Greece’s NHS that you realise just how insane it is for this once-proud nation to continue as it is. If it was your country, it would make you weep with pain and shame. In its overloaded hospital wards, I either saw or heard first-hand accounts of babies held hostage for payments and dying patients left unattended; of porters sent out as paramedics, patients told to bring their own sheets, brakes failing on ancient ambulances travelling at high speed and hospitals running out of drugs and dressings.

Five years ago, Greece spent £13 billion on the health of its 11 million population – above the European average. It is now spending about half this. Worse still, in the first four months of this year the 140 state hospitals received just £31 million, a 94% fall on the previous year. And to make matters even blacker, any reserves have just been taken back by the government in its desperate scramble for cash to pay public servants and international debts.

There are claims of an astonishing three-year fall in a Greek person’s life expectancy in just five years since the country’s economy crashed. If confirmed, this would be without precedent in modern Europe. And the individual human stories are pitiful, verging on the macabre.

‘The situation is like a war zone without the bullets,’ said one source at the charity. ‘If things keep going the way they are, we could see a totally collapsing health system.’

The tragic consequences could be seen visiting Nikaia hospital in the port of Piraeus, as a handful of night-time staff struggled to cope with patients pouring in for emergency care. One old lady with a deathly countenance lay immobile on a trolley in a corridor, abandoned for the four hours I was there since she appeared to have no family to fight her corner.

Five more elderly people lay on trolleys, two clearly in pain and one in a neck brace, amid a scrum of patients with smashed faces, scraped bodies and fractured limbs being aided by relatives. Police officers escorted a blood-covered prisoner in chains. The daughter of an 84-year-old woman curled up in agony under a coat told me they had been there for four hours, staff shortages forcing her to wheel her mother to the X-ray unit and for blood tests. ‘Greek hospitals are like hell,’ she told me.

‘The decision to stop all hirings of medical staff was a criminal action in my view,’ said [neurosurgeon] Papanikolaou. ‘Intensive care doctors estimate we lose 2,000 people a year that should not be dying.’

Nurses told me there were no sheets so patients had to bring their own; at night, they placed nappies and light mattresses on top if patients bled or wet the bed since there were no replacements. In one ward, they clubbed together to buy a blood pressure monitor and thermometers due to equipment shortages. Since pay has been cut by one third as pressures surge, such actions highlight the heroism of some medical staff struggling to keep the system afloat.

[..] as another nurse put it: ‘If two people are dying, only one can get help – it is that bad.’ Later, I talked to an ambulance driver who told me of a recent incident in which the brakes on his 11-year-old vehicle had failed as he rushed a car crash victim to the hospital.

‘If you have a six-month wait to start radiotherapy there’s no point coming – either you die or the cancer is so advanced it is pointless,’ [..] cardiologist George Vichas set up a free community clinic staffed by volunteers, with 39 similar set-ups across the country.

The consultant said they had even come across five cases at a maternity hospital where new-born babies were held hostage until their parents paid for their treatment. ‘We have seen an absolute collapse of the state health system,’ he said.

How did it ever come to this? And what does it meas for the nation’s future in the eurozone – and the eurozone as a whole? Before the crash, Greece’s health service was inefficient, badly managed and corrupt like the rest of the public sector – yet it provided well-trained staff and one of the world’s most comprehensive healthcare systems. But after the crisis struck and the country was ordered by international lenders to cut costs, new benefit rules and rising unemployment saw the number of Greeks without health cover soar from 500,000 to 2.5 million people.[..]

The EU and the eurozone were projects designed to bring countries closer together. Instead, they have sparked poverty, decay and division. Yet still the euro-zealots demand further austerity, while the latest set of Greek politicians seem as incapable of resolving the crisis as their hapless predecessors. The country and its blighted people are trapped between many more years of this slow stagnation or the sharp pain of euro exit. No wonder the latter increasingly seems a better bet.

[..]it could do the one thing that is the modern definition of a nation: it could begin to cure its own people of their ills. Ultimately, what could be the rebirth of Greece may be the death of the original European dream.

Let’s leave the political ramifications alone for the moment, I deal with that on an almost daily basis here at the Automatic Earth already. Let’s for a moment focus on the more immediate. Let’s see what we can do here and now.

Please support the AE for Athens fund. You can donate through our Paypal widget at the top of the left sidebar, Make sure if you want to donate to Greece to end the amount with $.99.

You can also donate bitcoin at this address: 1HYLLUR2JFs24X1zTS4XbNJidGo2XNHiTT.

Thank you ever so much.