Jun 142019
 


Henri Matisse Woman with a hat 1905

 

US Consults Allies On How To Protect Shipping In Wake Of Tanker Attacks (R.)
Julian Assange Is Not On Trial, British Justice Is (Wight)
The Hitlerization of Jeremy Corbyn – Among Others (Hopkins)
US Retirement Savings Gap Grows By $3 Trillion Each Year (MW)
The Fed Is Pushing On A String
The State of the Canadian Debt Slaves (WS)
Canada Rejects Idea Of Halting Extradition Of Top Huawei Executive To US (R.)
Elizabeth Warren To Propose Cancelling Up To $50,000 In Student Debt (MW)
UK Government Blew Billions on “Help to Buy” Scheme (DQ)
Varoufakis, Kotzias And The Dwindling ‘Progressive Army’ (K.)
School’s Purpose is Indoctrination (Carbone)
Carnival Cruise Ships Pollute 10 Times More Than All Cars in Europe (D.)

 

 

There are Japanese ships in the Persian Gulf literally every moment of every day. But Iran only decides to attack them when the first Japanese PM ever(?!) visits the country. Bolton is dementing.

US Consults Allies On How To Protect Shipping In Wake Of Tanker Attacks (R.)

The United States is discussing with its allies a variety of options on how to protect international shipping in the Gulf of Oman in the wake of tanker attacks that Washington has blamed on Iran, senior Trump administration officials said on Thursday. Two officials, speaking to a small group of reporters on condition of anonymity, said the United States wants to ensure the freedom of navigation in the Strait of Hormuz and make sure international commerce is not disrupted. Two oil tankers were attacked on Thursday and left adrift in the Gulf of Oman. “We don’t think this is over,” one official said of the possibility of more such attacks. The official said options are being reviewed.


“We’re discussing and will be discussing with our partners and allies suggestions on how we collectively can take steps to ensure, one, that we maintain freedom of navigation and international commerce is not disrupted and, second, that we protect our forces’ interests and our commercial assets and those of our partners and allies,” the official said. The official said the attacks appeared “designed to have a political outcome” and suggested it could have been an attempt to disrupt a visit to Tehran by Japanese Prime Minister Shinzo Abe. “We are going to obviously evaluate our presence in the region and the growing threat and make subsequent decisions,” the official said. “We have to look at the threat, as we always do, to our personnel and our forces but the threat to a strategic chokepoint. There’s a significant amount of trade that transits the Strait of Hormuz every day.”

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Another hearing today.

Julian Assange Is Not On Trial, British Justice Is (Wight)

The most honest man in Britain today is Julian Assange, while the most dishonest are those who are engaged in his ongoing persecution. The latest instalment in that persecution is a court hearing in London on June 14, where details of the request for his extradition to the US, it is expected, will be revealed for the first time. The formal request for the extradition of the founder of WikiLeaks was made to the UK by US authorities earlier in the week – and with British Home Secretary Sajid Javid signing the relevant papers sanctioning it, the final decision on whether Julian Assange’s extradition to the US goes ahead now rests with the courts.

[..] In revealing to the world the beast of US hegemony that resides behind the velvet curtains of democracy and human rights, Julian Assange exposed the lie upon which this American Empire (and make no mistake, it is an empire) depends. It depends on it in order to persuade its supposed beneficiaries – i.e. people living in the West – to continue to suspend disbelief as to the reality of a system they’ve been conditioned to believe is rooted in values that emanate from the human heart rather than from the heart of the machine. The end result is that in exposing this lie, Assange and WikiLeaks became a bigger threat to the ability of US hegemony to function normally than a million bayonets. As such, it became imperative that he, as the founder and face of WikiLeaks, be destroyed.

Britain’s role in this process couldn’t be any more sordid or shameful. Its legal system and judiciary has effectively been turned into a subsidiary of its US counterpart; its function not to dispense justice but to deliver a man into the arms of injustice. The fate to befall Assange proves that there’s a world of difference between believing that you live in a free society and behaving as if you do. He is the canary down the coalmine of Western democracy, signalling the warning that its foundations are rotten to the core.

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“..American Hitler (i.e., Donald Trump) will “push back” (i.e., intervene) against British Hitler (i.e., Jeremy Corbyn)..”

The Hitlerization of Jeremy Corbyn – Among Others (Hopkins)

Apparently, American Hitler and his cronies are conspiring with some secret group of “Jewish leaders” to stop British Hitler from becoming prime minister and wiping out all the Jews in Great Britain. Weird, right? But that’s not the weird part, because maybe American Hitler wants to wipe out all the Jews in Great Britain himself, rather than leaving it to British Hitler … Hitlers being notoriously jealous regarding their genocidal accomplishments. No, the weird part is that everyone knows that American Hitler does not make a move without the approval of Russian Hitler, who is also obsessed with wiping out the Jews, and with destroying the fabric of Western democracy. So why would Russian Hitler want to let American Hitler and his goons thwart the ascendancy of British Hitler, who, in addition to wanting to wipe out all the Jews, also wants to destroy democracy by fascistically refunding the NHS, renationalizing the rail system, and so on?

It doesn’t make a whole lot of sense, does it? In any event, here’s the official story. In “a recording leaked to The Washington Post,” and then flogged by the rest of the corporate media, Reichsminister des Auswärtigen, Mike Pompeo, told a group of unnamed “Jewish leaders” that American Hitler (i.e., Donald Trump) will “push back” (i.e., intervene) against British Hitler (i.e., Jeremy Corbyn) to protect the lives of Jews in Great Britain if British Hitler becomes prime minister (and is possibly already doing so now). The identities of these “Jewish leaders” have not been disclosed by the corporate media, presumably in order to protect them from being murdered by Corbyn’s Nazi hit squad.

Whoever they were, they wanted to know whether American Hitler and his fascist cabinet were “willing to work with [them] to take on actions if life becomes very difficult for Jews” after Jeremy Corbyn seizes power, declares himself Führer of Communist Britannia, and orders the immediate invasion of France. To anyone who has been closely following the corporate media’s relentless coverage of Jeremy Corbyn’s Nazi Death Cult (i.e., the UK Labour Party) and the global Anti-Semitism Pandemic, it comes as no real surprise that this group of “Jewish leaders” (whoever they are) would want to stop him from becoming prime minister. I doubt that their motives have much to do with fighting anti-Semitism, or anything else specifically “Jewish,” but … well, I’m kind of old-fashioned that way. I still believe there’s a fundamental difference between “the Jews” and the global capitalist ruling classes.

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Thanks to the Fed.

US Retirement Savings Gap Grows By $3 Trillion Each Year (MW)

Many Americans haven’t saved as much money as they need for retirement — and the gap is expected to widen dramatically in the next 30 years. The retirement savings gap — between what people have and should have — was $28 trillion in the U.S. in 2015, but by 2050, it’s expected to swell to $137 trillion, according to the World Economic Forum, a Cologny-Geneva, Switzerland-based nonprofit that researched international financial affairs. The disparity grows $3 trillion every year in the U.S.

The organization calculated this gap assuming most individuals’ retirement income sources would include a combination of government-provided pensions (such as Social Security), employer pensions in the public or private workforce and individual savings. They also analyzed the level of savings across expectations of income needs and life expectancies, assuming individuals would retire between 60 and 70 years old, for countries including China, Canada, Japan and the United Kingdom. The gap is most pronounced in the U.S., followed by China and Japan tied for $11 trillion in 2015. China is also expected to see a significantly wider discrepancy in 2050, at $119 trillion, followed by India, with an $85 trillion gap. Overall, the eight countries the WEF analyzed will see a $400 trillion disparity.

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Velocity of money and inflation.

The Fed Is Pushing On A String (Roberts)

Historically, the reason the Fed cuts rates, and interest are falling, is because the Fed has acted in response to a crisis, recession, or both. [..] Secondly, after a decade of QE and zero interest rates inflation, outside of asset prices, (as measured by CPI), remains muted at best. The reason that QE does not cause “inflationary” pressures is that it is an “asset swap” and doesn’t affect the money supply or the velocity of money. QE remains confined to the financial markets which lifts asset prices, but it does not impact the broader economy.

Unfortunately, the Fed is still misdiagnosing what ails the economy, and monetary policy is unlikely to change the outcome in the U.S., just as it failed in Japan. The reason is simple. You can’t cure a debt problem with more debt. Therefore, monetary interventions, and government spending, don’t create organic, sustainable, economic growth. Simply pulling forward future consumption through monetary policy continues to leave an ever growing void in the future that must be filled. Eventually, the void will be too great to fill.

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Time to start defaulting?

The State of the Canadian Debt Slaves (WS)

Canadian households are known around the world for their uncanny ability to pile on debt. And American debt slaves, who’d gotten trampled during the Great Recession, turn out to be lackadaisical these days in comparison. The share of disposable income (total incomes from all sources minus taxes) that Canadian households spent on making principal and interest payments on their ballooning mortgage debts and non-mortgage debts reached a new record of 14.9% in the first quarter, despite still ultra-low interest rates and despite the highest disposable income ever, according to data released today by Statistics Canada:

[..] So how do Canadian debt slaves stack up against American debt slaves? Statistics Canada released a report on just this topic at the end of March perhaps because authorities in Canada should get a tad nervous. [..] The annualized data it provided included the household debt-to-disposable income ratios for Canada and for the US through 2018. The ratio shows how large debt is relative to disposable income. For Canada, this ratio was 175% annualized in 2018, one of the highest in the world, and rising. For the US, it was 103%, and declining:

Canada’s household debts have continued to surge since the year 2000 except for a brief dip during the Financial Crisis. But US household debts plunged during years of deleveraging after the Financial Crisis, in part by consumers defaulting on their mortgages and credit cards. Household debts didn’t start growing again until 2013. And it took until 2017 before they surpassed the pre-Financial Crisis peak. But over the decade since the Financial Crisis, the US population has grown, and the number of working people has grown, and the national disposable income has increased, and so the ratio of household debt to disposable income has continued to drop.

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“..could make Canadians around the world less safe..”

Canada Rejects Idea Of Halting Extradition Of Top Huawei Executive To US (R.)

Canadian Foreign Minister Chrystia Freeland on Thursday dismissed a suggestion that Ottawa block the extradition of a top executive from China’s Huawei Technologies Co Ltd to the United States, saying it would set a dangerous precedent. Huawei’s Chief Financial Officer Meng Wanzhou, who was arrested on U.S. fraud charges in Vancouver last December, will challenge Washington’s extradition request at hearings that are set to begin next January. China angrily demanded Canada release Meng and detained two Canadians on spying charges. It has also blocked imports of Canadian canola seed and Prime Minister Justin Trudeau has said he fears further retaliation.


The Globe and Mail newspaper on Thursday said former Canadian Prime Minister Jean Chretien had floated the idea of the government intervening to stop the extradition case and thereby improve ties with Beijing. “When it comes to Ms Meng there has been no political interference … and that is the right way for extradition requests to proceed,” Freeland told a televised news conference in Washington. “It would be a very dangerous precedent indeed for Canada to alter its behavior when it comes to honoring an extradition treaty in response to external pressure,” she added, saying to do so could make Canadians around the world less safe.

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And what about all the others?

Elizabeth Warren To Propose Cancelling Up To $50,000 In Student Debt (MW)

Elizabeth Warren’s proposal to cancel student debt will soon be one step closer to reality — even if she doesn’t become president. The Democratic Senator of Massachusetts plans to introduce legislation in the coming weeks that mirrors her presidential campaign proposal to cancel at least a portion of the student debt held by many of the nation’s 44 million borrowers, her Senate office announced Thursday. Rep. James Clyburn, Democrat of South Carolina and the house majority whip, will introduce companion legislation in the House of Representatives. Warren’s office hasn’t yet released a draft of the legislative text, but the bill is slated to propose cancelling up to $50,000 in student debt for the bulk of student loan borrowers, her office said.


Under the proposal Warren released as part of her presidential campaign in April, borrowers with a household income of less than $100,000 would have $50,000 of their student debt cancelled and borrowers with an income between $100,000 and $250,000 would be eligible for some student debt cancellation — though not the full $50,000. Borrowers earning $250,000 or more would receive no debt cancellation. Her campaign estimated the plan would cost $640 billion, which would be paid through a tax on the ultra-wealthy. The idea of student debt cancellation has been popular in some circles for years, but Warren’s campaign proposal nudged it into the mainstream. Sen. Bernie Sanders, a Vermont independent seeking the Democratic nomination, has vowed to cancel “massive amounts of student debt,” though hasn’t offered specifics.

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All governments blow housing bubbles.

UK Government Blew Billions on “Help to Buy” Scheme (DQ)

Here’s how the scheme works: First-time property buyers get to put down a deposit of as little as 5% on a new-build home worth as much as £600,000 ($761,000) and receive an “equity loan” from the government. The size of the loan varies depending on where borrowers live. In London, where the price of property is an order of magnitude higher than in most other places, buyers can receive as much as 40% of the property price. Across the rest of the country the upper limit is 20%. The rest of the financing is covered by a traditional mortgage. While Help to Buy may have had a limited effect in terms of making housing affordable for first time buyers who are genuinely priced out of the market, it has proven to be effective at sustaining the UK’s all-important housing bubble by jacking up the prices of new-build houses, resulting in even less affordable housing.


Since Help to Buy was first launched in 2013, average UK house prices have increased by 35%, from £167,000 to £226,000, according to the Office for National Statistics. Through the scheme, the government has so far issued around 211,000 loans worth £11.7 billion ($14.8 billion) to home buyers. According to the NAO, this has helped increase sales of new-build properties from 61,357 a year in 2013-14 to 104,245 a year in 2017-18. That, in turn, has helped fuel a spike in profits for the UK’s biggest home builders. The nine largest builders dished out £2.3 billion in dividends in their most recent financial year, 39 times greater than the £53 million they paid out in 2012, a year before the scheme was introduced.

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Greeks have had enough of ‘left’; look what it brought them.

Varoufakis, Kotzias And The Dwindling ‘Progressive Army’ (K.)

Prime Minister Alexis Tsipras has been blindsided and thrown completely off his game plan. His narrative of a “progressive army” and a fresh rally of forces for elections “that will determine the future” is coming under constant attack. The Progressive Alliance was intended to move SYRIZA closer to the center so that it could resonate more strongly with the broader “progressive” section of voters – though what constitutes progressive and conservative in today’s world is a matter of debate – and to more fully acquire the characteristics of one of the two pillars of the two-party system, pushing center-left Movement for Change to the sidelines.

Tsipras’ plan, however, has been scuppered by two developments in the broader area of the Left, which are of significant symbolic importance and may affect the balance of power. What he hopes to achieve in the next few weeks is to convince many of the voters who chose not to vote in the European elections and who are mainly former supporters of SYRIZA to return to the fold and put their weight behind the big battle against the “socially insensitive, neoliberal” Kyriakos Mitsotakis of the opposition New Democracy party. His path in this ambitious plan, however, is littered with obstacles. The first was the surprisingly strong performance of Yanis Varoufakis’ DiEM25 party in the European elections, which shook things up.

There is now a party to the left of SYRIZA that is pro-European and has a leader with what a leftist voter might see as a convincing position. Moreover, he is neither Zoe Constantopoulou nor Panagiotis Lafazanis. He is a TV star who is in a position to boost his popularity thanks to his strong social media presence. It is also quite likely, if not certain, that he will make it into Parliament next month, and not just by scraping by with 3 percent. You can say a lot about Varoufakis, but what is certain is that he represents the thinking of a significant portion of the people who voted for SYRIZA in January 2015. He exercises charm over this portion of voters, and this is something that will be evident at the polls.

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Has been true for a very long time. Still poorly written though.

School’s Purpose is Indoctrination (Carbone)

The near sole purpose of present-day academia is indoctrination. This is a fairly bold thesis, but the evidence is in its favor. The increasingly progressive leftist agenda is sweeping through academia and conservatives are passively watching it happen. The main indoctrination stories you hear are those of radical professors on college campuses, outlandish majors created to forward social justice movements, and, on occasion, a political outburst by a high school teacher. Although these issues need addressing, by far the biggest – and the one that should scare everyone the most – is the silent indoctrination.


Indoctrination is no longer dependent upon the political beliefs of teachers. We are now past that. Course material is blatant political propaganda. Not just the course material for gender studies and similar. The core curricula of grade school through college. Sciences, economics, literature – any core course you can think of is politically influenced. The only course that may still be an exception is mathematics. Unless you account for the left-wing system of common core – which is a complete disaster. If you don’t believe this, sit through a grade school math class or open up your child’s text book. Disaster.

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But who ever measures sulfur oxides?

Carnival Cruise Ships Pollute 10 Times More Than All Cars in Europe (D.)

Commercial cruise lines are some of the world’s worst polluters, and Carnival is near the top of that list according to a study of European cruise line operators. Research found that Carnival alone is responsible for almost 10 times as much sulfur dioxide release as all 260 million of Europe’s cars combined. The study from Transport & Environment says that the 203 cruise ships that operated in European waters in 2017 emitted a combined total of 62 kilotons of sulfur oxides (SOx), which form airborne gases known to cause lung cancer and acid rain. During the same period, Europe’s 260 million known registered vehicles let out just 3.2 kilotons, the study found.

Of these 62 kilotons of SOx, more than half allegedly were the product of the 47 ships operated by Carnival Cruise Lines or its subsidiaries. Of the 20 worst offenders, seven are Carnival properties, which together made up half of the industry’s SOx emissions in Europe. Carnival denied any wrongdoing when asked for comment by Fast Company, pointed the finger at the rest of the maritime transportation industry, and insinuated that the study’s methodology was unscientific. [..] This statement arrived days after Carnival agreed to a $20 million fine and undergo increased scrutiny of its plastic and sewage disposal practices, which included dumping both directly into the ocean in large quantities. Carnival allegedly tried to hide these activities from regulators by falsifying records or pressuring the United States Coast Guard to relax the terms of its environmental compliance agreement.

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Aug 092016
 
 August 9, 2016  Posted by at 8:51 am Finance Tagged with: , , , , , , , ,  1 Response »


Harris&Ewing Woodward & Lothrop dept. store trucks, Washington DC 1912

The Fed Is Losing Control of Global Monetary Conditions (BBG)
Are Negative Rates Backfiring? (WSJ)
Fannie And Freddie Could Need $126 Billion To Get Through A Crisis (R.)
UK Government Has Gambled Hundreds Of Millions On House Price Rises (TiM)
One In Three British Families Are A Month’s Pay From Losing Homes (G.)
Vulnerable UK Banks Still Pay Billions In Dividends To Shareholders (Ind.)
A Crisis Of Intervention (Price)
Spanish 10-Year Bond Yield Falls Below 1% for First Time (BBG)
China Leaders Head to the Beach, With Calmer Seas Ahead (BBG)
Trump Tax Cuts Would Be Costly (CNBC)
Republican Security Experts Rail Against Trump In Open Letter (BBC)
US Taxes Well Spent: Pentagon Can’t Account for $6.5 Trillion (Sputnik)
Facebook Removes Potential Evidence Of Police Brutality Too Readily (I’Cept)
More Than 60% Of Maldives’ Coral Reefs Hit By Bleaching (G.)

 

 

Libor. And by the way: The Fed never had control, just the illusion.

The Fed Is Losing Control of Global Monetary Conditions (BBG)

Libor is coming unhinged from other borrowing costs and that has real implications for the cost of money in the real world. On this basis, the U.S. has already had an interest-rate increase, according to Bloomberg View’s Mark Gilbert. While there are plenty of market participants who favor the Austrian school of economics and would welcome the removal of central banks from the rate-setting mechanism, the change in money-market conditions is something the Fed should take into account as it ponders its next move.

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They do what they’re supposed to prevent: encourage saving. Get the central banks out of the economy!

Are Negative Rates Backfiring? (WSJ)

Recent economic data show consumers are saving more in Germany and Japan, and in Denmark, Switzerland and Sweden, three non-eurozone countries with negative rates, savings are at their highest since 1995, the year the Organization for Economic Cooperation and Development started collecting data on those countries. Companies in Europe, the Middle East, Africa and Japan also are holding on to more cash. Economists point to a variety of other possible factors confounding central-bank policy: Low inflation has left consumers with more money to sock away; aging populations are naturally more inclined to save; central banks themselves may have failed to properly explain their actions.

But there is a growing suspicion that part of problem may be negative rates themselves. Some economists and bankers contend that negative rates communicate fear over the growth outlook and the central bank’s ability to manage it. “People only borrow and spend more when they are confident about the future,” says Andrew Sheets at Morgan Stanley. “But by going negative, into uncharted territory, the policy actually undermines confidence.” Going negative was a big bet by central banks faced with a sluggish recovery from the financial crisis. Whether negative rates succeed or flop has huge implications for the global economy. Japan and Europe are already doing large volumes of bond buying to spur their economies, and their central bankers have little left in their tool kits.

The U.S. Federal Reserve’s next move is likely to raise rates, but Chairwoman Janet Yellen has said negative rates could find a place in the Fed’s armory in any future crisis. The Bank of England, shaken by June’s surprise vote to leave the European Union, cut interest rates to their lowest in its 322-year history last week but said it was reluctant to go negative. BOE Gov. Mark Carney said he is “not a fan” of a policy that has negative consequences for savers and the financial system. European banks say their profitability has been hit hard by low rates. Some central bankers say it is too early to judge negative rates. “The effect won’t be seen all at once, but it will gradually become clear,” said Bank of Japan Gov. Haruhiko Kuroda in a June news conference.

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Governments should stay out of housing markets. Their only interest is make banks make money.

Fannie And Freddie Could Need $126 Billion To Get Through A Crisis (R.)

Fannie Mae and Freddie Mac, two government-controlled housing finance agencies, would need a big cash injection to weather another financial meltdown, a government regulator said on Monday. Fannie and Freddie would need as much as $126 billion in taxpayer funds to come through a serious downturn, according to a ‘stress test’ from the Federal Housing Finance Agency. The companies, which were once owned by shareholders, have drawn $187 billion from the U.S. Treasury since they were seized by the government in September 2008 as the global financial crisis tightened. Since then, as the housing market has strengthened, they have returned roughly $250 billion to the Treasury. Lawmakers have not settled on the future of two companies. The ‘stress test’ required by the Dodd Frank reform legislation of 2010 projected the companies would have to draw at least $49 billion to $126 billion in the case of a serious economic downturn.

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People are forced to use Help to Buy: it acts as an insurance policy in case homes lose value. Then the taxpayer pays.

UK Government Has Gambled Hundreds Of Millions On House Price Rises (TiM)

Taxpayers stand to lose hundreds of millions of pounds if house prices fall, thanks to a gamble the government has been making with our cash for the past three years. Some £3.59billion has been lent to first-time buyers through the Help to Buy loan scheme to help them purchase newly-built properties they may not otherwise have been able to afford, according to the latest government statistics. The scheme was launched by the former Chancellor George Osborne in 2013, in response to a stagnating housing market. It effectively lets borrowers with small deposits top them up with a government loan, worth up to 20% of the value of a new build property.

For the 81,014 buyers who have taken advantage of the scheme so far, it has been an invaluable lifeline, the difference between making that step on to the first hallowed rung of the property ladder and continuing to rent. However, the side effect of the scheme leaves taxpayer funds extremely vulnerable to losses if house prices start to fall. This is because the size of loans is not fixed, but rather is measured as a proportion of the value of the properties bought. Take, for example a first-time buyer who uses the scheme to buy a home costing £300,000. They could borrow up to 20% of the value of the property – £60,000 – using Help to Buy, and put down just a 5% deposit themselves.

However, the size of the loan remains 20% of the value of the property – regardless of how it fluctuates. So if the house increases in value by 10% to £330,000, the value of the loan will increase by 10% as well to £66,000. The taxpayer turns a profit. But if the value of the home declines by 10% to £270,000, the value of the loan will decrease to £54,000. Taxpayers will just have to suck up the £6,000 shortfall. A total of £3.59billion has been lent out so far. If the value of the homes they helped paid for drops by just 10%, the borrowers will be off the hook for as much as £359million – a cost that will be picked up by the taxpayer.

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And this is what you get when a government blows a bubble.

One In Three British Families Are A Month’s Pay From Losing Homes (G.)

More than one in three families in England are a monthly pay packet away from losing their homes, according to research by Shelter highlighting how many households have almost no savings. The housing charity found that 37% of working families would be unable to cover their housing costs for more than a month if one partner lost their job. The findings mirror government figures, which show that there are 16.5 million working age adults in the UK with no savings. Campbell Robb, the chief executive of Shelter, said: “These figures are a stark reminder that sky-high housing costs are leaving millions of working families stretched to breaking point and barely scraping by from one paycheque to the next.

“Any one of us could hit a bump along life’s road, and at Shelter, we speak to parents every day who, after losing their job or seeing their hours cut, are terrified of losing the roof over their children’s heads too.” The charity is calling for an improved welfare safety net to prevent families where someone loses a job from “hurtling towards homelessness”. The phenomenon of the working poor, those earning a regular salary, but living from one paycheque to the next with no savings to speak of, is a widespread feature in English-speaking western economies such as the UK, Canada, the US and Australia. An annual survey by US website Bankrate found that 63% of Americans have no emergency savings for necessities such as a $1,000 (£770) emergency room visit or a $500 car repair. Most turn to credit cards when financial disaster looms.

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If they didn’t, where would their share prices be?

Vulnerable UK Banks Still Pay Billions In Dividends To Shareholders (Ind.)

Three of the UK’s biggest banks have paid out billions of pounds in dividends to investors while turning a blind eye to huge capital holes in their balance sheets, researchers argue. The findings, which come in the wake of estimates the UK banking sector has an aggregate £155bn shortfall of capital, will reinforce calls for the Bank of England to take a tougher stance on the capital adequacy of the lenders it oversees and to restrict the payment of dividends. Between 2010 and 2015 HSBC paid out £37bn in dividends, Barclays paid out £6.3bn and Lloyds paid out £2.3bn according to the calculations of Sascha Steffen of the University of Mannheim, Viral Acharya of New York University and Diane Pierret of the University of Lausanne.

If this cash had been retained by the banks it could have boosted their capital buffers by an equivalent amount. The three researchers last month produced an estimate that suggested UK banks would be massively exposed and at high risk of going bust in another serious financial crisis. They found that the majority state-owned Royal Bank of Scotland, Lloyds, Barclays and HSBC could collectively need to raise another £155bn of capital to maintain a comfortable equity safety buffer in the wake of a fresh crisis based on the market value of their equity.

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Can’t say it enough: ““There is no means of avoiding a final collapse of a boom brought about by credit expansion.”

A Crisis Of Intervention (Price)

For those that already have, Mark Carney is the gift that keeps on giving. Borrowed imprudently and struggling to make those interest payments ? Worry not; the Bank of England has your back. For those that don’t have, the Bank of England is taking away your chance of ever realistically saving anything, now that interest rates have been driven down to new historic lows of 0.25%, and may go lower yet. For the asset-rich, for the 1%, for property speculators, and for zombie companies and banks, Carney is your man. For the asset poor, or for savers, or pensioners, or insurance companies, or pension funds, the Bank of England has morphed from being anti-inflationary fireman to monetary arsonist. The economist Ludwig von Mises foresaw all this, nearly a century ago.

He called it “the crisis of interventionism”. Actions have consequences everywhere (except in Keynesian and Marxist economic theory). Interfere with the free market process and inefficiency and complexity are certain to rise. More actions and interventions are required. Pretty soon the entire system becomes a Heath Robinson contraption requiring constant amendments and ad hoc fixes and bolt-on workarounds. Welcome to the modern monetary system – the last, doomed refuge of the central planner with messianic delusions of adequacy. “The essence of the interventionist policy is to take from one group to give to another. It is confiscation and distribution. Every measure is ultimately justified by declaring that it is fair to curb the rich for the benefit of the poor.”

But so warped has our monetary system become after almost a decade of furious interventionism that Mark Carney’s redistributive efforts don’t even attempt to deliver to that objective. With interest rates fast approaching the theoretical lower bound of zero, Mark Carney is curbing the prospects of the poor for the benefit of the rich. He is redistributing capital from the prudent saver and gifting it to the borrower and the speculator. A crisis of too much debt is being met with ever more urgent attempts to prime the credit pump. Mises had something to say about credit expansion, too. “There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency system involved.”

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Right. Spain. Hasn’t had a real government in a long time now. Unemployment is sky high. So everyone wants their bonds… Not. But Draghi buys all.

Spanish 10-Year Bond Yield Falls Below 1% for First Time (BBG)

Spanish 10-year bond yields fell below 1% for the first time on record Monday, marking another milestone in the four-year rally in the nation’s securities. The drop highlights how local political risk is being offset by monetary easing by central banks across the developed world. The yield fell to as low as 0.99%, down from more than 7.75% during the euro region’s debt crisis in July 2012.

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Strange headline for an article that translates as: BUBBLE!

China Leaders Head to the Beach, With Calmer Seas Ahead (BBG)

China’s top leaders are gathering for their annual conclave at the Beidaihe beach resort having defied the doomsayers once more. Economic data in coming days are projected to confirm the stabilization in growth achieved in the first half of this year continued into July. The backdrop of calm has won China a sustained respite from the financial-market turmoil and capital outflows that accompanied the Communist leadership’s traditional beach-resort meeting last year. But the stability has come at a cost. Instead of delivering on what Premier Li Keqiang called reforms so tough they’d be like cutting “flesh,” authorities have relied on another dose of cheap credit to prop things up.

That’s added more leverage to a nation where debt is already 2.5 times the economy’s size. Behind the reluctance for a bigger economic shakeup is a desire for stability ahead of a potentially wide-ranging reshuffle of the Communist hierarchy next year, according to Credit Suisse. “Candidates will prefer to be playing it safe rather than executing substantial reforms – especially state-owned enterprise reforms,” the bank’s China analysts, led by Vincent Chan, wrote last month. State-owned enterprises offer the major lever for ramping up growth through infrastructure spending, making officials reluctant to implement wide-ranging changes.

Yet their dominance in access to capital has squeezed opportunities for the more efficient private sector, contributing to a build-up in non-performing loans. “The immediate consequences of course are a relatively becalmed economy, which seems to have some staying power,” said George Magnus, senior economic adviser to UBS. “But at what cost in the medium to longer term if there’s no change in the instability-causing policies?”

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He needs to avoid the idea that the elites will profit most. This will be thrown at him no matter if it’s true or not.

Trump Tax Cuts Would Be Costly (CNBC)

Call it a work in progress. GOP presidential candidate Donald Trump unveiled Monday the latest version of his plan to overhaul the American tax code, offering relief for everyone from parents paying for child care to the world’s largest corporations. But it remains to be seen where the money will come from to pay for those cuts. Details of the plan are still fairly sketchy, but in his speech at the Detroit Economic Club, Trump promised they would be forthcoming soon. “In the coming weeks we will be offering more detail on all of these policies,” Trump said Monday. The Trump campaign has promised that the tax plan would “benefit working families while ensuring the wealthy pay their fair share.”

But based on details of Trump’s plan released earlier in the campaign, some analysts think the biggest winners would be those at the top of the income ladder. “The proposal would cut taxes at every income level, but high-income taxpayers would receive the biggest cuts, both in dollar terms and as a percentage of income,” according to an analysis in December by the Tax Policy Center. Trump’s campaign said Monday the tax plan would “dramatically reduce taxes for everyone and streamline deductions, presenting the biggest tax reform since [the] Reagan [administration].” But based on the details released so far, the plan would also explode the federal budget deficit, add trillions of dollars to the national debt and substantially raise the government’s interest payments, according to several independent analysts.

Trump’s tax cuts would amount to some $12 trillion over the next decade, according to the Tax Foundation. Even after accounting for stronger economic growth, the plan would leave the government more than $10 trillion short over the next 10 years. That money would have to be made up for with more borrowing, dramatically expanding the nation’s debt. Trump also promised to ease the burden on American corporations by limiting taxes to 15 percent. The campaign has also promised to “make our corporate tax globally competitive and the United States the most attractive place to invest in the world.” Based on the latest available data, that promise should be fairly easy to keep.

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Security experts? They’re neocons. Brilliant riposte: “We thank them for coming forward so everyone in the country knows who deserves the blame for making the world such a dangerous place..”

Republican Security Experts Rail Against Trump In Open Letter (BBC)

An open letter signed by 50 Republican national security experts has warned that nominee Donald Trump “would be the most reckless president” in US history. The group, which includes the former CIA director Michael Hayden, said Mr Trump “lacks the character, values and experience” to be president. Many of the signatories had declined to sign a similar note in March. In response, Mr Trump said they were part of a “failed Washington elite” looking to hold on to power. The open letter comes after a number of high-profile Republicans stepped forward to disown the property tycoon. Mr Trump has broken with years of Republican foreign policy on a number of occasions.

The Republican candidate has questioned whether the US should honour its commitments to Nato, endorsed the use of torture and suggested that South Korea and Japan should arm themselves with nuclear weapons. “He weakens US moral authority as the leader of the free world,” the letter read. “He appears to lack basic knowledge about and belief in the US Constitution, US laws, and US institutions, including religious tolerance, freedom of the press, and an independent judiciary.” “None of us will vote for Donald Trump,” the letter states. In a statement, Mr Trump said the names on the letter were “the ones the American people should look to for answers on why the world is a mess”.

“We thank them for coming forward so everyone in the country knows who deserves the blame for making the world such a dangerous place,” he continued. “They are nothing more than the failed Washington elite looking to hold on to their power and it’s time they are held accountable for their actions.” Also among those who signed the letter were John Negroponte, the first director of national intelligence and later deputy secretary of state; Robert Zoellick, who was also a former deputy secretary of state and former president of the World Bank; and two former secretaries of homeland security, Tom Ridge and Michael Chertoff.

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Surprised?

US Taxes Well Spent: Pentagon Can’t Account for $6.5 Trillion (Sputnik)

While US lawmakers are applying pressure on the Pentagon to be more transparent about how it spends money, a new report shows that the Defense Department’s substandard bookkeeping practices make that virtually impossible. Despite a 1996 law requiring all federal agencies to conduct regular spending audits, the Pentagon has so far failed to conduct a single one. While US lawmakers have pressed the DoD to comply by September of 2017, a new inspector general’s report indicates that meeting this deadline is highly unlikely.

“Army and Defense Finance and Accounting Service Indianapolis personnel did not adequately support $2.8 trillion in third quarter adjustments and $6.5 trillion in year-end adjustments made to Army General Fund (AGF) data during FY 2015 financial statement compilation,” the report reads. In common language, the Pentagon has no idea how it spent nearly $7 trillion. This is largely due to the fact that the DoD fails to provide the “journal vouchers” for its transactions, intended to provide serial numbers and dates, for bookkeeping purposes. But the report also found that many of the Pentagon’s records were missing without explanation.

“DFAS Indianapolis did not document or support why the Defense Departmental Reporting System-Budgetary, a budgetary reporting system, removed at least 16,513 of 1.3 million records during third quarter FY 2015,” the report reads. While nothing suggests foul play, a lack of proper accounting makes it impossible to determine how much money the Pentagon spends, and on what.

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There is a huge potential for this to backfire. Facebook better watch out.

Facebook Removes Potential Evidence Of Police Brutality Too Readily (I’Cept)

As more details emerge about last week’s killing by Baltimore County police of 23-year-old Korryn Gaines, activists have directed growing anger not only at local law enforcement but also at Facebook, the social media platform where Gaines posted parts of her five-hour standoff with police. At the request of law enforcement, Facebook deleted Gaines’ account, as well her account on Instagram, which it also owns, during her confrontation with authorities. While many of her videos remain inaccessible, in one, which was re-uploaded to YouTube, an officer can be seen pointing a gun as he peers into a living room from behind a door, while a child’s voice is heard in the background. In another video, which remains on Instagram, Gaines can be heard speaking to her five-year-old son, who’s sitting on the floor wearing red pajamas.

“Who’s outside?” she asks him. “The police,” he replies timidly. “What are they trying to do?” “They trying to kill us.” Statements made by officials in the days after the incident revealed little-known details of a “law enforcement portal” through which agencies can ask for Facebook’s collaboration in emergencies, a feature of the site that remains mostly obscure to the general public and which has been criticized following Gaines’ death. It’s not the first time Facebook has become the stage on which violent encounters between law enforcement and residents play out – and it seems likely more and more such incidents will be documented on the social media hub, given that the company’s livestreaming app, Facebook Live, is only nine months old and spreading at a time when recording police has become an instinctive reflex in some communities.

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We can see the earth disappear beneath our feet.

More Than 60% Of Maldives’ Coral Reefs Hit By Bleaching (G.)

More than 60% of coral in reefs in the Maldives has been hit by “bleaching” as the world is gripped by record temperatures in 2016, a scientific survey suggests. Bleaching happens when algae that lives in the coral is expelled due to stress caused by extreme and sustained changes in temperatures, turning the coral white and putting it at risk of dying if conditions do not return to normal. Unusually warm ocean temperatures due to climate change and a strong “El Nino” phenomenon that pushes up temperatures further have led to coral reefs worldwide being affected in a global bleaching event over the past two years. Preliminary results of a survey in May this year found all the reefs looked at in the Maldives, in the Indian Ocean, were affected by high sea surface temperatures.

Around 60% of all assessed coral colonies, and up to 90% in some areas, were bleached. The study was conducted by the Maldives Marine Research Centre and the Environmental Protection Agency, in partnership with the International Union for Conservation of Nature (IUCN). It took place on Alifu Alifu Atholhu – North Ari Atoll – chosen as a representative atoll of the Maldives. Dr Ameer Abdulla, research team leader and senior adviser to the IUCN on marine biodiversity and conservation science, said: “Bleaching events are becoming more frequent and more severe due to global climate change. “Our survey was undertaken at the height of the 2016 event and preliminary findings of the extent of the bleaching are alarming, with initial coral mortality already observed. “We are expecting this mortality to increase if bleached corals are unable to recover.”

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