Jul 232017
 
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Ford Madox Brown King Lear and Cordelia c1851

 

Mea culpa. Yesterday I wrote Scaramouche, Scaramouche, will you do the Fandango?, and not long after publishing it, I figured I missed the target I was going for. Not 100%, and it’s not all bad, as people’s reactions have confirmed, but…

The thing is, Trump’s nomination of Anthony Scaramucci as White House Communications Director was not the main point of my piece. Tempting, because everybody knows the Queen song, but not the main one, and it certainly shouldn’t have been the title of the piece.

So, sorry for that, and let me try to correct. The much stronger point, in my ever so humble view, that I hit on yesterday is the connection between Donald Trump and William Shakespeare. In fact, I think that from now on we should all see Trump in that light. Simply because it fits so … fittingly.

Not because I would call Trump mad, that is far too easy a view. But because his story, both as it unfolds today and in its history, has so many classic Shakespearean elements. And when we look at our world through the glasses of the ‘Old Bard’, we will see it in a different light. As in: Trump could be a man in the process of going mad. Or he could not.

Not that it’s just about Trump. Richard Nixon looks, if anything, way more Shakespeare material than Da Donald. Though, admittedly, we can oversee Nixon’s entire history, while Trump’s is ongoing (he has promise), and Shakespeare is all about development, about what happens to people as they go through what happens to them.

Macbeth and King Lear describe the trappings -and much more- of power. How power corrupts, and not only absolute power. How sociopathic character traits make people seek power, and how it -often- destroys them. But also how outside forces influence them, in -just as often- highly destructive ways.

That’s not to say that Shakespeare, if he were alive today, would have written a play about Trump. I don’t know that, we don’t. I do think he would have found it hard to stay away from Nixon, but that’s just a guess, even if Tricky Dick seems to have all the required boxes ticked off.

The Bard of Avon might have opted for Hillary Clinton’s story instead of Trump’s. Hers has most if not all of his ingredients, power, corruption, murder, treason, trust -and the lack thereof-, madness -inborn, inbred and developing-, gossip, innuendo, conspiracies, scheming, backstabbing, the lot. That’s not trying to single out Hillary, it’s just saying that all these power-seeking tragedies have the same elements.

Shakespeare situated Macbeth in Scotland, Hamlet in Denmark and King Lear in Britain, while the latter play was highly influenced by Sophocles’ Oedipus (Rex), which is set in Greece. Location is for once not essential -sorry, real estate guys-, power corrupts everywhere, and in more or less the same ways and sequences.

Apart from the entire list of people in his camp, some of which get thrown out from time to time, the Trump narrative also relies to a great extent on all the outside people trying to bring him down. It’s hard to see how Shakespeare could not have loved that. Fair is foul and foul is fair, but now with the three witches in Macbeth’s opening part -the media, the commentators?!- having chosen sides from the beginning.

Hillary as Lady Macbeth? Again, tempting, but we’re not Shakespeare -or Sophocles-. Putting too much emphasis on any of the specific traits of characters from 400+ or 2000+ year-old plays doesn’t look like the way to go. For one thing, Shakespeare wouldn’t have wanted to repeat himself. It’s the overarching themes and characteristics that count. What the hunger for power did to people then, and what it does to them now.

If only we had someone to write today’s stories, today. But those writers, the ones that can gaze inside their own narratives, don’t come around very often. And when they do, they write about long-ago narratives and conspiracies. Good thing we can learn from them regardless because many things about our species never change. In a few words: what the ancient Greeks and Shakespeare and many others taught us is that Power equals Tragedy. And that’s eternal.

Moreover, since our media is failing us in unprecedented fashion, Shakespeare looks like our best bet if we want to understand what is happening in Washington. Or Brussels, Berlin, Beijing. Think entertainment value. What else are you going to do? The Bard’s original audiences reportedly threw eggs and tomatoes at the stage.

 

 

May 102017
 
 May 10, 2017  Posted by at 3:32 pm Finance Tagged with: , , , , , , , , ,  8 Responses »
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Ray K. Metzker Philadelphia 1962

 

You might have thought, and hoped, that recent events, such as the election of Trump as president of the US, or Brexit, or the rise of Marine Le Pen and other non-establishment forces in Europe, would, as a matter of -natural- course, have led to increased conversation and discussion between parties, entities, whose divisions were material in sparking these events.

But the opposite has happened, and continues to happen at an ever faster and fiercer pace. Various sides of various divides become ever more deaf to what other sides have to say. What still poses as conversation turns into blame games and shouting matches replete with innuendo, fake news and insinuations.

The mainstream media even find they are to an extent redeemed by this -at least financially-. Formerly last-gasp ‘news sources’, suffering from the advent of the interwebs, like the New York Times, CNN, HuffPo and WaPo, as well as Fox, Breitbart on the other side, and many others, have seen their reader- and viewerships expand over the past year as they turned into increasingly impenetrable echo chambers.

They may be losing a lot of potential attention -and revenues- from one side of the -former- debate, but that is more than made up for by rising attention from their faithful flocks. The public feel they need to have an opinion on political matters, and the media are more than willing to define, construct and phrase that opinion for them, to first confirm what people already think, and then raise it a notch or two, or three, or ten.

It works like a charm, and their finance people are looking at the numbers saying: whatever it is you guys do, keep on doing it and add some more, because we’re selling like hotcakes. Still, at least some of the writers must be wondering what exactly it is they’re doing, wondering how to define ‘journalism’ in this day and age.

All this represents a giant loss, one that not a single democracy can arguably tolerate for long, even if few of us seem to care. In democracies, it’s essential that people who do not agree, talk to each other, and do so all the time. The end of that conversation spells the end of democracy.

 

If anything in the future is revealed about a possible -political- connection between Trump and Russia, it will be gravely tainted by the fact that so much opinion posing as news, and so much news that was not real news, has been published about that possible connection already over the past year and change, without any evidence. The WaPo’s and HuffPo’s of the world will not even be vindicated by such a potential revelation anymore, because they lowered their journalistic levels to match those of the National Enquirer.

But even writing down something as neutral as that last paragraph is prone to lead to demonization from all kinds of ‘sources’. The Russian hack story has embedded itself so profoundly in certain corners of American and European society that it can no longer be denied or even questioned without being interpreted as suspect, if not an outright admission of guilt. All you need to know is there once was PropOrNot and its list of alleged 200 Russian propaganda sites.

It doesn’t matter how often Putin and Foreign Minister Lavrov and spokeswoman Maria Zakharova ask for proof of the accusations, because for a large and influential segment of western mainstream media that is a phase that has long since been passed. There is such an all-encompassing conviction that Russia hacked and otherwise influenced western elections that no proof is deemed necessary.

Or rather, the idea has taken on such a life of its own that things are taken to have been proven that never were. “News’, just like advertizing, has to a large extent become based on the concept of relentless repetition. Say something often enough and people will believe it, certainly when it confirms what they were looking to have confirmed to begin with. If the echo chambers fit enough lost souls, before you know it nobody asks for proof anymore.

 

It’s not about whether Trump is or has ever been guilty of anything he’s accused of, it’s that the insinuating narratives about that have long been written and repeated ad nauseam. It’s about whether the witch hunt exemplified by PropOrNot makes objective news gathering impossible. And the only possible response to that question must be affirmative. If only because you can’t tell one type of ‘news’ from the other anymore.

The MSM have focused on getting Hillary elected, and they failed miserably. So did she, of course, it wasn’t just them. A failure they attempt to hide from view behind a veil of never-ending anti-Russian stories that even now they still can’t prove. Which is where the FBI comes in. Sure, some of it may yet prove to be true, but even if that is so, that’s in the future, not today.

Does Trump deserve being resisted? It certainly looks that way much of the time. But he should be resisted with facts, not innuendo of yellow paper quality. That destroys the media, and the media are needed to maintain a democracy. That is both their task and their responsibility. They exist to inform people, but have instead turned into opinion-fabricating machines. Both because that expresses the opinions of their ownership, and because it’s commercially more attractive.

Take a step back and oversee the picture, and you’ll find that Trump is not the biggest threat to American democracy, the media are. They have a job but they stopped doing it. They have turned to smearing, something neither the NYT nor the WaPo should ever have stooped to, but did.

 

Democracy is not primarily under threat from what one party does, or the other, or a third one, it is under threat because parties have withdrawn themselves into their respective echo chambers from which no dialogue with other parties is possible, or even tolerated.

None of this is to say that there will be no revelations about some ties between some Russian entities or persons and some Trump-related ones. Such ties are entirely possible, and certainly on the business front. Whether that has had any influence on the American presidential election is a whole other story though. And jumping to conclusions because it serves your political purposes is, to put it mildly, not helping.

The problem is that so much has been said and printed on the topic that was unsubstantiated, that if actual ties are proven, that news will be blurred by what was insinuated before. You made your bed, guys.

A lot of sources today talk about how Trump was reportedly frustrated with the constant focus on the alleged Russia ties, but assuming those allegations are not true, and remember nothing has been proven after a year of echo-chambering, isn’t it at least a little understandable that he would be?

Comey was already compromised from 10 different angles, and many wanted him gone, though not necessarily at the same time . The same Democrats, and their media, who now scream murder because he was fired, fell over themselves clamoring for his resignation for months. That does not constitute an opinion, it’s the opposite of one: you can’t change your view of someone as important as the FBI director every day and twice on Sundays without losing credibility.

And yes, many Republicans played similar games. It’s the kind of game that has become acceptable in the Washington swamp and the media that report on it. And many of them also protest yesterday’s decision. Ostensibly, it all has to do not with the fact that Comey was fired, but with the timing. Which in turn would be linked to the fact that the FBI is investigating Trump.

But what’s the logic there? That firing Comey would halt that investigation? Why would that be true? Why would a replacement director do that? Don’t FBI agents count for anything? And isn’t the present investigation itself supposed to be proof that there is proof and/or strong suspicion of that alleged link between Russia and the Trump election victory? Wouldn’t those agents revolt if a new director threw that away with the bathwater?

Since we still run on ‘innocent until proven guilty’, perhaps it’s a thought to hold back a little, but given what we’ve seen since, say, early 2016, that doesn’t look like an option anymore. The trenches have been dug.

These are troubled times, but the trouble is not necessarily where you might think it is. America has an undeniable political crisis, and a severe one, but that’s not the only crisis.

 

 

Mar 182017
 
 March 18, 2017  Posted by at 9:04 am Finance Tagged with: , , , , , , , , ,  11 Responses »
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Andreas Feininger Production B-17 heavy bomber at Boeing plant, Seattle 1942

 

How Bankers Became The Top Exploiters Of The Economy (Michael Hudson)
World Out Of Whack: What’s Next For Global Real Estate? (CE)
Make Big Banks Put 20% Down—Just Like Home Buyers Do (Kashkari)
Deepening EU Banking Crisis Meets Euro-TARP on Angel Dust (DQ)
The Paranoid Attempts To Tie Trump To Russia (Qz)
Clinton Ally Says Smoke, But No Fire: No Russia-Trump Collusion (NBC)
Justice Dept. Delivers Documents On Wiretap Claim To Congress (R.)
Secret Service Says Laptop Stolen From Agent’s Car In New York (R.)
A Bad Week and Getting Badder Bigly Fast (Jim Kunstler)
Athens Sees Turk Effort To Dispute Greek Sovereignty In Aegean (K.)
Turkey Threatens To Send Europe ‘15,000 Refugees A Month’ (AFP)
Over 10,000 Refugees Relocated, IOM Says (K.)

 

 

Absolutely brilliant interview with Michael Hudson. Read the whole thing. It’ll give you so much insight.

How Bankers Became The Top Exploiters Of The Economy (Michael Hudson)

There are two ways of thinking about the economy. The school textbooks only talk about was producing goods and services for wages and profits. They don’t talk about rent or unearned income. That’s what I mean by “unreal” – not grounded in production. And they don’t talk about interest either, or the framework of debt and property rights. There’s a lot of talk about what seems to be the circular flow between producers and consumers. That circular flow is called Say’s law. For example, Henry Ford said he paid his workers $5 a day so that they could afford to buy the cars that they produced. Workers are depicted as paying their wages to buy what they make. All that seemed to make sense, but the economy of production is different from financial and property wealth. Who owns the assets, and who owes debts to whom?

If you look at the economic framework in terms of assets and debt, you find that the 1% makes its money by holding the 99% in debt. Or at least, you could say that the 5% make its money by holding the 95% in debt. The trick is to get other people in debt. How do you do that? You make them think that they can gain. They’re willing to borrow to buy a home, because they think that since 1945, the way that most American families have gotten rich – indeed, the way the middle class was created throughout most western countries – was by the increasing price of real estate they bought on credit. What they didn’t realize was that the price of real estate was being bid up in two ways. Number 1: By more bank lending, on easier terms. Number 2: By public infrastructure spending. Cities, states and federal governments built parks, museums, roads, railroads, water and sewer systems, and electric utilities. But this began to come to an end with Reagan and Thatcher in 1980.

You have had a privatization of public infrastructure – goods that the public sector provided for free, saving people from having to pay monopoly prices. Instead of financing public investment by progressive taxation, it was financed by borrowing. Banks got more and more aggressive and reckless in creating new credit, because they felt they were guaranteed against loss. That was the essence of financialization. Financial engineering replaced industrial engineering. What people thought was wealth turned out to be a rentier overhead. This confusion between real tangible wealth and financial overhead claims on the economy was recognized already over 100 years ago by somebody who won a Nobel Prize: Frederick Soddy. But he won the Nobel Prize in chemistry. He wrote many books saying what people think of wealth— stocks and bonds, bank loans and property rights —are virtual wealth. They are financial claims on real wealth.

A stock or bond is a claim on the income that real wealth can make. So it’s on the opposite side of the balance sheet from assets. It’s on the liabilities side. Economists used to talk about land as a factor of production. But land rights are really a property claim, like a monopoly claim. It’s as if you’d say Walt Disney’s patents on Mickey Mouse or movies that Walt Disney makes are a factor of production. They’re really a property right to charge a monopoly price. The right to charge a monopoly price for a cable service isn’t really a factor of production. It’s extractive. It’s what economists call a zero-sum activity. So classical economics has a different idea of what national income is from today’s idea. A monopoly right is not an addition to national wealth or income just because monopolists make more. It’s a subtraction from the economy’s circular flow.

Read more …

Painful.

World Out Of Whack: What’s Next For Global Real Estate? (CE)

Ever since anyone can remember, global real estate prices have been going up. Pretty much doesn’t matter which country you’re from (unless, of course, it’s Syria, or Iraq… or Fuhggedistan): if you bought something in the last 2 to 3 decades, it’s like the ceilings were insulated with helium. Even when the 2008 crisis hit and we had Captain Clever ensuring the world that things were just peachy: “At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency.” – Ben Bernanke, March 28, 2007 Even with that setback real estate has marched upward. The US, of course, took a decent breather and is only today back to where it was pre the GFC. But the US isn’t the world, so let’s look at what everyone else has been up to. Take a look at this:

In truth, it hasn’t just been Mr. and Mrs. Smith in their tweed coats buying up UK properties, just as it hasn’t been Sheila and Bruce in Sydney, or even Maple and Hudson in Canada. A significant amount of buying power in these markets has come from offshore buyers, largely frightened Chinese money being parked. It’s pretty extraordinary, really.Prices alone don’t provide us with the entire picture or provide us with context. I mean, real estate prices in Harare went through the roof, too, in the 2008-09 period (in ZWD) but the currency went through the floor and real purchasing power collapsed. Context, therefore, is important.Also, clearly a swanky penthouse in Manhattan overlooking the Hudson river shouldn’t be priced the same as a swanky penthouse in Vientiane overlooking the Mekong. The main difference? Incomes. So let’s take a look at prices relative to incomes for a better understanding.

Buying a house in the US actually makes a lot more sense. Certainly relative to its international peers the US is cheap. In fact, if you factor in the ability to fix debt for a ridiculously long time in a currency that’s ultimately going to get hammered, and if you need to find somewhere to live then you’ve found a way to essentially be synthetically short the bond market (provided you fix your rates). I’m not advocating this as a strategy but merely pointing out the mechanics of the trade. As investors we’re interested in viewing real estate as we would any investment or asset, and as such understanding the cashflows is important. Naturally, incomes relative to asset prices tell us what the owner’s cashflows are relative to the asset they’ve buying… and the same analysis can be conducted against student loans, car loans – any credit instrument, really. Here’s rents (cashflows) relative to asset prices:

Read more …

Kashkari makes sense. Lots of it. But will he push it through? Put his career on the line for it?

Make Big Banks Put 20% Down—Just Like Home Buyers Do (Kashkari)

There’s a straightforward way to help prevent the next financial crisis, fix the too-big-to-fail problem, and still relax regulations on community lenders: increase capital requirements for the largest banks. In November, the Federal Reserve Bank of Minneapolis, which I lead, announced a draft proposal to do precisely that. Our plan would increase capital requirements on the biggest banks—those with assets over $250 billion—to at least 23.5%. It would reduce the risk of a taxpayer bailout to less than 10% over the next century. Alarmingly, there has been recent public discussion of moving in the opposite direction. Several large-bank CEOs have suggested that their capital requirements are already too high and are holding back lending.

[..] Bank of America CEO Brian Moynihan recently asked, “Do we have [to hold] an extra $20 billion in capital? Which doesn’t sound like a lot, but that’s $200 billion in loans we could make.” It is true that some regulations implemented after the 2008 financial crisis are imposing undue burdens, especially on small banks, without actually making the financial system safer. But the assertion that capital requirements are holding back lending is demonstrably false. How can I prove it? Simple: Borrowing costs for homeowners and businesses are near record lows. If loans were scarce, borrowers would be competing for them, driving up costs. That isn’t happening. Nor do other indicators suggest a lack of loans. Bank credit has grown 23% over the past three years, about twice as much as nominal GDP.

Only 4% of small businesses surveyed by the National Federation of Independent Business report not having their credit needs met. If capital standards are relaxed, banks will almost certainly use the newly freed money to buy back their stock and increase dividends. The goal for large banks won’t be to increase lending, but to boost their stock prices. Let’s not forget: That’s the job of a bank CEO. It isn’t to protect taxpayers. [..] There is a simple and fair solution to the too-big-to-fail problem. Banks ask us to put 20% down when buying our homes to protect them in case we run into trouble. Similarly, taxpayers should make large banks put 20% down in the form of equity to prevent bailouts in case the financial system runs into trouble. Higher capital for large banks and streamlined regulation for small banks would minimize frustration for borrowers. If 20% down is reasonable to ask of us, it is reasonable to ask of the banks.

Read more …

This is why we get the calls for Eurobonds again, and the world’s biggest bad bank.

Deepening EU Banking Crisis Meets Euro-TARP on Angel Dust (DQ)

The total stock of non-performing loans (NPL) in the EU is estimated at over €1 trillion, or 5.4% of total loans, a ratio three times higher than in other major regions of the world. On a country-by-country basis, things take look even scarier. Currently 10 (out of 28) EU countries have an NPL ratio above 10% (orders of magnitude higher than what is generally considered safe). And among Eurozone countries, where the ECB’s monetary policies have direct impact, there are these NPL stalwarts: Ireland: 15.8%; Italy: 16.6%; Portugal: 19.2%; Slovenia: 19.7%; Greece: 46.6%; Cyprus: 49%. That bears repeating: in Greece and Cyprus, two of the Eurozone’s most bailed out economies, virtually half of all the bank loans are toxic. Then there’s Italy, whose €350 billion of NPLs account for roughly a third of Europe’s entire bad debt stock.

Italy’s government and financial sector have spent the last year and a half failing spectacularly to come up with a solution to the problem. The two “bad bank” funds they created to help clean up the banks’ toxic balance sheets, Atlante I and Atlante II, are the financial equivalent of bringing a butter knife to a machete fight. So underfunded are they, they even strugggled to hold aloft smaller, regional Italian banks like Veneto Banca and Popolare di Vicenza, which are now pleading for a bailout from Rome, which in turn is pleading for clemency from Brussels. What little funds Atlante I and Atlante II have left are hemorrhaging value as the “assets” they’ve been used to buy up, invariably at prices that were way too high (often at over 40 cents on the euro), continue to deteriorate. The recent decision of Italy’s two biggest banks, Unicredit and Intesa Sao Paolo, to significantly write down their investment in Atlante is almost certain to discourage the private sector from pumping fresh funds into bailing out weaker banks.

Which means someone else must step in, and soon. And that someone is almost certain to be the European taxpayer. In February ECB Vice President Vitor Constancio called for the creation of a whole new class of government-backed “bad banks” to help buy some of the €1 trillion of bad loans putrefying on bank balance sheets. Constancio’s idea bore a striking resemblance to a formal proposal put forward by the European Banking Authority (EBA) for the creation of a massive EU-wide bad bank that, in the words of EBA president Andrea Enria, would “make it much easier to achieve critical mass and to create a well functioning market for (impaired) assets.” Here’s how it would work, according to Enria’s words:

“The banks would sell their non-performing loans to the asset management company at a price reflecting the real economic value of the loans, which is likely to be below the book value, but above the market price currently prevailing in illiquid markets. So the banks will likely have to take additional losses. The asset manager would then have three years to sell those assets to private investors. There would be a guarantee from the member state of each bank transferring assets to the asset management company, underpinned by warrants on each bank’s equity. This would protect the asset management company from future losses if the final sale price is below the initial transfer price.”

Read more …

The Democrats are self-imploding over this. They need leadership, fast. And untainted.

The Paranoid Attempts To Tie Trump To Russia (Qz)

In the months following Donald Trump’s surprise victory in the US presidential election, it has become increasingly clear that the Democratic party is unwilling—and perhaps unable—to come to terms with the country’s post-election reality. The party’s inability to accept defeat has since manifested itself through an increasingly hysterical campaign to blame Hillary Clinton’s defeat on alleged Russian interference. The charge that Russia, in the words of respected Russia expert and longtime Clinton associate Strobe Talbott, breached “the firewall of American democracy” has been repeated so often and by so many that it has taken on the patina of fact. It has become an article of faith, among disappointed Clinton partisans, mainstream political commentators, Democrats on Capitol Hill and Republicans like senator Lindsey Graham, that the election was tainted and that Trump’s legitimacy as president is questionable, at best.

The tendency to blame domestic disappointments on foreign bogeymen is not new and is perhaps better understood as a wave that periodically surfaces, then temporarily subsumes American politics. Indeed, this current reliance on conspiracy theories and accusations of unpatriotic disloyalty has been a feature, not a bug, of discourse regarding Russia since the onset of the crisis in Ukraine in early 2014. Yet this paranoia is, so far, little more than a distraction. By blaming Clinton’s loss on Russia, the political establishment is able to largely ignore the way economic, trade, and foreign policies failed large numbers of Americans. And, by elevating Vladimir Putin to supervillain status, this neo-McCarthyism is hindering debate and undermining legitimate attempts to deescalate tensions with our Russian colleagues.

MSNBC’s house intellectual Rachel Maddow has been among the most vociferous and, at times, most incisive critics of president Trump. Yet she also recently questioned whether Trump is actually under the control of the Kremlin. During her broadcast on March 9, Maddow told viewers that what she finds “particularly unsettling” is that “we are also starting to see what may be signs of continuing [Russian] influence in our country. Not just during the campaign but during the administration. Basically, signs of what could be a continuing operation.” That Maddow, a popular and respected liberal voice, would indulge in rhetoric of this sort is a worrying sign given the lack of hard evidence it is based on.

While many have convinced themselves that Russia tipped the scale of the election toward Trump, the more sinister allegations of Putin infiltrating the White House have not been born out. Even the former Director of National Intelligence James Clapper admitted in an interview with NBC’s Chuck Todd in early March that he has “no knowledge” and “no evidence” of “collusion” between Russia and the Trump campaign. Yet Maddow’s charge recalls some of the worst excesses of the early 1950’s, when our political life was marred by the Red Scare and a climate of paranoia prevailed. Unsubstantiated allegations, not dissimilar to the kind Maddow just levied, were characteristic of that era.

Read more …

Steele was paying his ‘sources’ through third parties.

Clinton Ally Says Smoke, But No Fire: No Russia-Trump Collusion (NBC)

Former Acting CIA Director Michael Morell, who endorsed Hillary Clinton and called Donald Trump a dupe of Russia, cast doubt Wednesday night on allegations that members of the Trump campaign colluded with Russia. Morell, who was in line to become CIA director if Clinton won, said he had seen no evidence that Trump associates cooperated with Russians. He also raised questions about the dossier written by a former British intelligence officer, which alleged a conspiracy between the Trump campaign and Russia. His comments were in sharp contrast to those of many Clinton partisans — such as former communications director Jennifer Palmieri — who have stated publicly they believe the Trump campaign cooperated with Russia’s efforts to interfere in the election against Clinton. Morell said he had learned that the former officer, Christopher Steele, paid his key Russian sources, and interviewed them through intermediaries.

“On the question of the Trump campaign conspiring with the Russians here, there is smoke, but there is no fire, at all,” Morell said at an event sponsored by the Cipher Brief, an intelligence web site. “There’s no little campfire, there’s no little candle, there’s no spark. And there’s a lot of people looking for it.” Morell pointed out that former Director of National Intelligence James Clapper said on Meet the Press on March 5 that he had seen no evidence of a conspiracy when he left office January 20. “That’s a pretty strong statement by General Clapper,” Morell said. About the dossier, Morell said, “Unless you know the sources, and unless you know how a particular source acquired a particular piece of information, you can’t judge the information — you just can’t.” The dossier “doesn’t take you anywhere, I don’t think,” he said.

Read more …

No proof on this side of the fence either. Everybody’s just making stuff up.

Justice Dept. Delivers Documents On Wiretap Claim To Congress (R.)

The U.S. Justice Department on Friday said it delivered documents to congressional committees responding to their request for information that could shed light on President Donald Trump’s claims that former President Barack Obama ordered U.S. agencies to spy on him. The information was sent to the House and Senate intelligence and judiciary committees, said Sarah Isgur Flores, a Justice Department spokeswoman. The chairman of the House Intelligence Committee, Republican Devin Nunes, said in a statement late on Friday that the Justice Department had “fully complied” with the panel’s request.

A government source, who requested anonymity when discussing sensitive information, said an initial examination of the material turned over by the Justice Department indicates that it contains no evidence to confirm Trump’s claims that the Obama administration had wiretapped him or the Trump Tower in New York. The House Intelligence Committee will hold a hearing on Monday on allegations of Russian meddling in the U.S. election. Federal Bureau of Investigation Director James Comey and National Security Agency Director Mike Rogers will testify and are expected to field questions on Trump’s wiretap claim. Leaders of both the House and Senate intelligence committees, including from Trump’s Republican Party, have said they have found no evidence to substantiate Trump’s claims that Obama ordered U.S. agencies to spy on Trump or his entourage. The White House has publicly offered no proof of the allegation.

Read more …

What an insane story this is. How did the media get all their info?

Secret Service Says Laptop Stolen From Agent’s Car In New York (R.)

The U.S. Secret Service said on Friday a laptop was stolen from an agent’s car in New York City but that such agency-issued computers contain multiple layers of security and are not permitted to contain classified information. The agency said in a statement that it was withholding additional comment while an investigation continues. ABC News, citing law enforcement sources, said the laptop contained floor plans for Trump Tower, details on the criminal investigation of Hillary Clinton’s use of a private email server and other national security information. The New York Daily News, citing police sources, said authorities had been searching for the laptop since it was stolen on Thursday morning from the agent’s vehicle in the New York City borough of Brooklyn.

Some items stolen with the laptop, including coins and a black bag with the Secret Service insignia on it, were later recovered, the newspaper reported. CBS News, also citing law enforcement sources, said that some of the documents on the computer included important files on Pope Francis. The agent also told investigators that while nothing about the White House or foreign leaders is stored on the laptop, the information there could compromise national security, the Daily News reported. “There’s data on there that’s highly sensitive,” a police source told the newspaper, adding: “They’re scrambling like mad.”

Read more …

Jim was interviewed by Tucker Carlson about this, hope the video shows below (embedding Fox doesn’t always work). Really, Jim, Fox? I know, who else is left?

A Bad Week and Getting Badder Bigly Fast (Jim Kunstler)

[..] it also looks a bit as though the Golden Golem of Re-Greatification has wandered into a political minefield so dense with booby traps that he’s already out of moves. First there’s the debt ceiling problem — which has so far received almost no attention from the Kardashianized collective news media. As David Stockman has pointed out on his blog, the US Treasury amassed a “war chest” of nearly half a trillion dollars last fall (via various book-keeping shenanigans) in expectation that President Hillary would need it to ride out some fiscal bad weather early in her reign. Then, the truly inconceivable happened and Hillary won bigly in the wrong states and not bigly enough in the right ones, and, well….

Immediately, with Trump ascendant, the Treasury and its handmaidens at the Federal Reserve engineered a rapid burn-through of the war chest at a rate of about $90-billion a month since November, so that now there remains only about a month’s worth of walking-around money to run the US Government. With the old debt ceiling truce expired, congress would have to resolve to raise it, to legally enable the Treasury to resume its massive borrowing operations, or else the government won’t be able to pay invoices or issue pension checks or meet any obligations. It could even default on its “no risk” bonds. Those dangers are theoretical for the moment, especially since there is always more accounting fraud to resort to when all else fails. But the longer a debt ceiling stalemate goes on in congress, the more trapped President Trump will be.

The cherry on top is the Federal Reserve’s move to raise interest rates the same day the debt ceiling truce expired. That will thunder through the system, making many loans more expensive to repay, dampening the real estate markets (at a time when commercial real estate is already tanking), and draining all kinds of other mojo (however falsely engineered) from the Potemkin economy. As if being trapped in a political minefield isn’t bad enough, the remaining safe patch Trump is stranded on turns out to be the LaBrea Tar Pit of health care reform. At this point, the crusade is doing worse than going nowhere — it’s getting sucked into the primordial bitumen where the mastodons and camelops sleep.

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Watch out, Merkel, Trump, NATO. You’re playing with fire.

Athens Sees Turk Effort To Dispute Greek Sovereignty In Aegean (K.)

In what is seen in Athens as an effort by Ankara to push through its message that Greece has limited sovereignty in the area of the Eastern Mediterranean surrounding the island of Kastelorizo, Turkish forces have in recent days maintained a steady presence in the region, either through military exercises or with the dispatch of research vessels. According to a navigational telex (navtex) issued by Turkey, the Piri Reis oceanographic vessel will remain in the area south of Kastelorizo until Monday. Furthermore, according to another two navigational telexes, Turkey is planning to conduct exercises with live ammunition in areas west and east of Kastelorizo (within Turkish territorial waters).

Moreover, Ankara has already announced that it will conduct hydrocarbon explorations in the Eastern Mediterranean next month. It remains to be seen exactly what part of the Eastern Mediterranean Turkey plans to explore. In Athens, Turkey’s moves are seen to be clearly linked to the decision by Cyprus to move ahead, in spite of Ankara’s objections, with the extraction of natural gas from drilling block 11 in its exclusive economic zone (EEZ). In an interview with CNN Greece, which will be broadcast Friday, Cyprus President Nicos Anastasiades again expressed his concerns over the tensions that may be further fueled in the period stretching “from now until the Turkish referendum (on April 16),” and by the ongoing effort to create “an atmosphere of fanaticism within Turkish society.”

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The Erdogan referendum is one month from now. Much more important to him till then than international relations.

Turkey Threatens To Send Europe ‘15,000 Refugees A Month’ (AFP)

Turkey’s Interior Minister Suleyman Soylu has threatened to “blow the mind” of Europe by sending 15,000 refugees a month to EU territory, in an intensifying dispute with the bloc. Ankara and Brussels almost a year ago on March 18 signed a landmark deal that has substantially lessened the flow of migrants from Turkey to Europe. But the accord is now hanging in the balance due to the diplomatic crisis over the blocking of Turkish ministers from holding rallies in Europe. “If you want, we could open the way for 15,000 refugees that we don’t send each month and blow the mind” of Europe, Soylu said in a speech late Thursday, quoted by the Anadolu news agency. Foreign Minister Mevlut Cavusoglu has already indicated that Turkey could rip up the deal and said Turkey was no longer readmitting migrants who crossed into Greece.

The crisis was sparked when the Netherlands and Germany refused to allow Turkish ministers to campaign in a April 16 referendum on expanding President Recep Tayyip Erdogan’s powers, prompting the Turkish strongman to compare them with Nazi Germany. Soylu, a hardliner considered close to Erdogan, accused The Hague and Berlin of involvement in June 2013 anti-Erdogan protests, October 2014 pro-Kurdish riots and the July 15, 2016 failed coup attempt. “They are trying to complete the work that they did not finish. Who is doing this work? It’s the Netherlands and Germany,” Soylu said. He accused Europe of failing to help Turkey enter the bloc and of not helping with its fight against terror. “Europe, do you have that kind of courage…? Let us remind you that you cannot play games in this region and ignore Turkey,” he added.

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There were supposed to be 160,000. And this is less than one month of what Turkey threatens to send over.

Over 10,000 Refugees Relocated, IOM Says (K.)

More than 10,000 asylum seekers from Syria, Iraq and Eritrea have been relocated from Greece to other European Union states since the launch of the bloc’s relocation program in 2015, according to the International Organization for Migration, which is implementing the scheme. Since the beginning of March, 367 people have left Greece for Belgium, Estonia, Germany, Malta, Portugal, Slovenia and Spain, bringing the total number of people relocated from Greece to 10,004, IOM said on Friday. Over the same period, another 475 people were relocated from Italy. The total number of people relocated from Greece and Italy since the program was launched in October 2015 now stands at 14,439, the organization said.

“We have seen a steady increase of pledges and acceptance from participating EU countries in the past few months. At this rate, there will be a further 15,000 to 18,000 relocations from Greece by the end of the program,” said Eugenio Ambrosi, director of IOM’s Regional Office for the EU, Norway and Switzerland. The numbers are short of the original target as 66,400 places had been allocated for relocation from Greece and 39,600 from Italy. “We cannot rest at ease because the overall numbers are too low given the needs in Greece and the commitments that were made. We continue to encourage EU member-states to follow through fully on their commitments,” Ambrosi said.

Read more …

Dec 292016
 
 December 29, 2016  Posted by at 10:36 am Finance Tagged with: , , , , , , , , ,  5 Responses »
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Esther Bubley Negro alley dwellings near the Capitol, Washington DC 1943

 

Trump On Russia Sanctions: ‘We Ought To Get On With Our Lives’ (R.)
Moscow Says It’s “Tired Of The Lie About The ‘Russian Hackers'” (Ptv)
Talking about Starwars: What is Henry Kissinger Up To? (PCR)
US Escalates Tensions With Israel (WSJ)
Hillary Clinton Could Face New Email Probe After Explosive Ruling
House Flipping Makes a Comeback as Home Prices Rise (WSJ)
A China-Watcher’s Guide to 2017 (Balding)
China’s ‘Godfather of Real Estate’ Pitches Reverse Mortgages (NYT)
China Slashes First Round Of Oil Products Export Quotas (R.)
China Fault Lines: Where Economic Turbulence Could Erupt in 2017 (BBG)
Trump Tax Reforms Could Depend On Little-Known ‘Scoring’ Panel (R.)
Greek Migration Minister Vows To Improve Conditions At Camps (Kath.)

 

 

It’s very simple: either the White House shows us prrof of hacking today when sanctions are announced, or all credibility is shot, across US intelligence.

Trump On Russia Sanctions: ‘We Ought To Get On With Our Lives’ (R.)

U.S. President-elect Donald Trump on Wednesday suggested that the United States and Russia lay to rest the controversy over Moscow’s computer hacking of Democratic Party computers, saying, “We ought to get on with our lives.” Trump has cast doubt on the findings of U.S. intelligence agencies that Russian hackers took information from Democratic Party computers and individuals and posted it online to help Trump win the election. The Obama administration plans to announce on Thursday a series of retaliatory measures against Russia for hacking into U.S. political institutions and individuals and leaking information, two U.S. officials said on Wednesday.

Asked by reporters if the United States should sanction Russia, Trump replied: “I think we ought to get on with our lives. I think that computers have complicated lives very greatly. The whole age of computer has made it where nobody knows exactly what’s going on.” Trump made his remarks at Mar-a-Lago, his seaside Florida resort where he is spending the Christmas and New Year’s holidays while also interviewing candidates for administration jobs. Trump said he was not familiar with remarks earlier on Wednesday by Republican Senator Lindsey Graham, who said Russia and President Vladimir Putin should expect tough sanctions for the cyber attacks. “We have speed. We have a lot of other things but I’m not sure you have the kind of security that you need. But I have not spoken with the senators and I certainly will be over a period of time,” he said.

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Again: proof or ridicule.

Moscow Says It’s “Tired Of The Lie About The ‘Russian Hackers'” (Ptv)

Moscow has vowed retaliation if Washington issues further economic sanctions over alleged Russian cyber attacks during the US presidential elections. “To be honest, we are tired of the lie about the ‘Russian hackers’, which is being poured down in the United States from the very top,” said Russian Foreign Ministry spokeswoman Maria Zakharova on Wednesday. She warned that her country would respond to any manner of “hostile steps” the US decides to undertake. “It concerns any actions against the Russian diplomatic missions in the US which will immediately ricochet the American diplomats in Russia,” she added.

Zakharova went on to stress that the US was attempting to intimidate Moscow with extending sanctions, taking diplomatic measures and sabotage against Russian computer systems, in retaliation for alleged Russian hacking interference during the US presidential elections in November. Earlier in the day, US Republican Senator Lindsey Graham of South Carolina said that Moscow needed to understand it had gone too far during the election, and that new sanctions would target Russian President Vladimir Putin. “It is now time for Russia to understand – enough is enough,” he said. “You can expect that the Congress will investigate the Russian involvement in our elections and there will be bipartisan sanctions coming that will hit Russia hard, particularly Putin as an individual,” he added.

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Oh, right, Starwars. Paul Craig Roberts contends the neocons are still as strong as ever in the US, even under Trump.

Talking about Starwars: What is Henry Kissinger Up To? (PCR)

The myth is widespread that President Reagan won the cold war by breaking the Soviet Union financially with an arms race. As one who was involved in Reagan’s effort to end the cold war, I find myself yet again correcting the record. Reagan never spoke of winning the cold war. He spoke of ending it. Other officials in his government have said the same thing, and Pat Buchanan can verify it. Reagan wanted to end the Cold War, not win it. He spoke of those “godawful” nuclear weapons. He thought the Soviet economy was in too much difficulty to compete in an arms race. He thought that if he could first cure the stagflation that afflicted the US economy, he could force the Soviets to the negotiating table by going through the motion of launching an arms race. “Star wars” was mainly hype. (Whether or nor the Soviets believed the arms race threat, the American leftwing clearly did and has never got over it.)

Reagan had no intention of dominating the Soviet Union or collapsing it. Unlike Clinton, George W. Bush, and Obama, he was not controlled by neoconservatives. Reagan fired and prosecuted the neoconservatives in his administration when they operated behind his back and broke the law. The Soviet Union did not collapse because of Reagan’s determination to end the Cold War. The Soviet collapse was the work of hardline communists, who believed that Gorbachev was loosening the Communist Party’s hold so quickly that Gorbachev was a threat to the existence of the Soviet Union and placed him under house arrest. It was the hardline communist coup against Gorbachev that led to the rise of Yeltsin. No one expected the collapse of the Soviet Union.

The US military/security complex did not want Reagan to end the Cold War, as the Cold War was the foundation of profit and power for the complex. The CIA told Reagan that if he renewed the arms race, the Soviets would win, because the Soviets controlled investment and could allocate a larger share of the economy to the military than Reagan could. Reagan did not believe the CIA’s claim that the Soviet Union could prevail in an arms race. He formed a secret committee and gave the committee the power to investigate the CIA’s claim that the US would lose an arms race with the Soviet Union. The committee concluded that the CIA was protecting its prerogatives. I know this because I was a member of the committee.

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Place this in the context of what’s being said about Russian hackers at the same time.

US Escalates Tensions With Israel (WSJ)

Secretary of State John Kerry rebuked Israel for its settlement policy and warned in unusually harsh terms that a two-state solution was in serious jeopardy as the Obama administration raced to preserve its approach to the Middle East weeks before President-elect Donald Trump takes power. Mr. Kerry’s speech on Wednesday—in which he defended a U.S. decision to allow a United Nations resolution condemning Israel’s settlements—was seen by Israeli leaders as a parting shot from an unfriendly American administration in its final weeks. But the address appeared equally intended as a message to the incoming Trump team.

Mr. Kerry spelled out principles that have long been largely consistent in American policy—the goal of Israel existing alongside a separate Palestinian state, the notion that the settlements are an impediment to peace, and the idea that Jerusalem should be the capital of both an Israeli and a Palestinian state. Mr. Trump has suggested he would consider breaking with those principles. “President Obama and I know that the incoming administration has signaled that they may take a different path,” Mr. Kerry said at the State Department. “But we cannot in good conscience do nothing, and say nothing, when we see the hope of peace slipping away.”

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“This ruling means that the Trump Justice Department will have to decide if it wants to finally enforce the rule of law..”

Hillary Clinton Could Face New Email Probe After Explosive Ruling

The U.S. Court of Appeals for the District of Columbia has ruled in favor of a conservative group’s lawsuit against the State Department over whether or not enough was done to try to restore Clinton’s missing emails, opening a potential further probe into Clinton’s emails by the Trump administration. Back in January, a District Court judge ruled that the lawsuit brought by the conservative group Judicial Watch, against the State Department, had no validity because it had there had been a “sustained effort” to recover the emails. In the new ruling, however, Judge Stephen Williams wrote that this wasn’t enough.

“The Department has not explained why shaking the tree harder – e.g., by following the statutory mandate to seek action by the Attorney General – might not bear more still,” wrote Williams. He added: “Absent a showing that the requested enforcement action could not shake loose a few more emails, the case is not moot.” Williams also said that it’s “abundantly clear that, in terms of assuring government recovery of emails” the conservative group that brought the lawsuit hasn’t “been given everything [they] asked for.” Additionally, because former State Secretary Clinton used her Blackberry email account during the first few weeks of her term, the judge felt that efforts to restore just the messages from Clinton’s private email server weren’t sufficient either.

“Because the complaints sought recovery of emails from all of the former Secretary’s accounts, the FBI’s recovery of a server that hosted only one account does not moot the suits,” he wrote. Judicial Watch president Tom Fitton issued a statement after the ruling, claiming “The courts seem to be fed up with the Obama administration’s refusal to enforce the rule of law on the Clinton emails.” Fitton added, “This ruling means that the Trump Justice Department will have to decide if it wants to finally enforce the rule of law and try to retrieve all the emails Clinton and her aides unlawfully took with them when they left the State Department,” he added.

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Homes are definitely not places for people to live in. Not in the US.

House Flipping Makes a Comeback as Home Prices Rise (WSJ)

House flipping, a potent symbol of the real-estate market’s excess in the run-up to the financial crisis, is once again becoming hot, fueled by a combination of skyrocketing home prices, venture-backed startups and Wall Street cash. After nearly being felled by real-estate forays almost a decade ago, a number of banks are now arranging financing vehicles for house flippers, who aim to make a profit by buying and selling homes in a matter of months. The sector is small—participants say roughly several hundred million dollars in financing deals have been made in recent months—but is expected to keep growing. In recent months, big banks, including Wells Fargo, Goldman Sachs and JP Morgan have started extending credit lines to companies that specialize in lending to home flippers.

[..] Over the past year, 37-year-old David Franco has collected profits of more than $200,000 on houses that he has quickly refurbished and resold, turning a hobby into an unexpectedly lucrative business. “There’s plenty of money to be made,” says Mr. Franco, who lives just outside of Los Angeles. House-flipping television shows and training “schools” for new investors are proliferating. One “super-intense, hardcore” house-flipping boot camp in Bourne, Mass., promised to teach students about real-estate investing in three days to make “REALLY MASSIVE PROFITS,” according to marketing literature. The increasing amount of speculative housing in recent months is “concerning,” ATTOM noted in a recent report. “We’re starting to see home flipping hit some milestones not seen since prior to the financial crisis.”

ATTOM said profit margins are getting squeezed in some markets. While house flippers typically aim to purchase a house at a 30% discount to the market, in some areas they’re buying homes at a 15% or 10% discount, said Senior Vice President Daren Blomquist. The research firm noted that the number of smaller, inexperienced house flippers entering the market is a sign of rising speculation. George Geronsin, 36, a Southern California real-estate agent and house-flipper who has been in the business since 2008, said he recently sold the majority of the homes he was working on and is sitting on cash “until the next big correction” in the housing market. “Anybody and everybody is getting into the business of house-flipping—that’s when you know it’s the end of the rope,” said Mr. Geronsin.

Read more …

Chris Balding confirms what I wrote yesterday.

A China-Watcher’s Guide to 2017 (Balding)

Last year, China’s leaders were touting plans for deleveraging and supply-side reform. This year, they’re touting yet more plans for deleveraging and supply-side reform. In between, total outstanding credit rose from 246% of gross domestic product to about 265%… Although reining in credit is essential for addressing many of China’s economic problems, the government is still targeting 6.5% growth next year, much of which will be reliant on yet more debt. So pay less attention to the talk and more to the data – specifically, metrics such as credit growth and real-estate prices.

Follow the Fed.China remains tied to the U.S. economy, whether it wants to be or not. Unfortunately, not everything that’s good for the U.S. is good for China. With the U.S. labor market tightening, and President-elect Donald Trump promising a $1 trillion economic stimulus, it is all but certain that the Federal Reserve will continue raising interest rates in 2017. That could have some positive effects for China’s real economy, but it will also put pressure on the People’s Bank of China to raise its own interest rates or risk breaking the soft peg of the yuan to the U.S. dollar. Higher rates, in turn, would raise borrowing costs for heavily indebted Chinese companies, many of which could end up in bankruptcy. How fast the U.S. economy grows, and how many times the Fed raises rates, could have as much impact on China’s economy as anything next year.

The cure can be worse than the disease. Rising asset prices in China have helped prop up everything from coal and steel firms to consumer sentiment. But with potential bubbles popping up everywhere, the government seems to be laying the groundwork for reform. That could mean raising interest rates, applying new restrictions on trading or tightening other regulations. Remember that such measures, however necessary, carry risks of their own. For example, given that China has some of the world’s most expensive housing relative to income, and extremely low turnover, withdrawing credit could result in a real-estate price shock. That might cause indebted developers to fail, or lead to much stronger government action to prevent a hard landing. As regulators try to rein in other asset prices, watch for similar turmoil in bonds and the yuan.

Expect the unexpected. China has long been plagued by poor-quality data, with even senior leadership expressing frustration at getting inaccurate information from the provinces. Unreliable data makes it nearly impossible to properly assess risk, which raises the probability of some type of internal shock. It could come from the nearly $4 trillion market in murky wealth-management products. It could come from social instability tied to hidden unemployment. It could come from something totally unexpected: With the bond market in turmoil, liquidity concerns mounting and defaults rising, there are many ways in which a panic could materialize.

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Prey on the elderly.

China’s ‘Godfather of Real Estate’ Pitches Reverse Mortgages (NYT)

He is known in China as the “godfather of real estate,” helping lay the groundwork for private homeownership in China, a move that enriched millions and laid the foundations for a vibrant and thriving Chinese middle class. Now, Meng Xiaosu wants a lot of Chinese — the older ones, specifically — to cash out. Older people need to mortgage their homes to address China’s looming demographic bust, Mr. Meng argues. Because of China’s now-defunct one-child policy and other social trends, the country has a rapidly graying population that someday soon may become too expensive for the Chinese government to support. Mr. Meng’s proposed solution is to bring reverse mortgages to China. Called a house-for-pension plan in China, a reverse mortgage allows homeowners to tap the equity in their homes by taking out loans against it.

His argument faces deep business and cultural opposition – mortgaging homes is a tough sell in a country where parents traditionally passed them on to their children – and only a few dozen people in all the country have signed up so far. But he argues that China may have little choice. “China’s elderly do not have much money,” said Mr. Meng, who drew much of his inspiration about the Chinese property market from a stint studying in America, “but they have valuable homes.” China is increasingly pondering tough questions as it looks to a graying future. Right now, China’s 215 million elderly people account for 15% of the total population. By 2050, that number is expected to rise to 350 million – nearly one-quarter of the population.

That has China scrambling to find a more sustainable pension system for its people. In the 1990s, the government dismantled the cradle-to-grave welfare system and borrowed money from younger workers to pay older ones. The country’s pension fund will be $116 trillion in the red by 2050, according to the Chinese Academy of Social Sciences, a top government think tank. Enter Mr. Meng.

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What I see between the lines is a huge glut building. They simply can’t sell it anymore. Oh, and what was that question? Market economy?

China Slashes First Round Of Oil Products Export Quotas (R.)

China has cut oil product export quotas to the nation’s four oil majors by 40% in the first round of licences for 2017, according to two sources who have seen the documents, even as traders expect allowances for overseas sales to meet or exceed this year’s record levels. The notice did not include quotas for independent refiners, known as “teapots”, in line with a report by Reuters earlier this month that the government has ditched the small refiners from its export program. In a notice dated Dec. 23, the Ministry of Commerce and the General Administration of Customs said the four state majors will be allowed to sell 12.4 million tonnes of gasoline, gasoil and jet fuel abroad next year.

That’s down from 20.54 million tonnes in the same round this year. Still, the cut is likely to bring little relief to the stubbornly saturated Asian oil market as China’s majors did not use up the huge quotas issued at the start of last year, and have simply applied for more realistic quotas this year, traders said. “The shrinking quota doesn’t reflect shrinking demand from overseas. Instead, it reflects a shift in company exporting strategy,” said a China-based trader who declined to be named, adding that companies were better matching exports to quotas. “We expect the total quota for 2017 to be on par or a bit higher than 2016,” the trader added. China issued allowances for a record 46.08 million tonnes of oil products in 2016, up 80% from 2015. In the first 11 months of the year, it exported 43 million tonnes of oil products – including products other than gasoline, gasoil and jet fuel – up 35% on a year earlier.

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“The real nightmare for Beijing – and for markets – is a vicious cycle of capital outflows triggering bigger devaluations of the yuan that in turn drive bigger and faster outflows..”

China Fault Lines: Where Economic Turbulence Could Erupt in 2017 (BBG)

China’s balancing act isn’t getting any easier. Policy makers are grappling with how to attack excessive borrowing and rein in soaring property prices while maintaining rapid growth. They’re also battling yuan depreciation and capital outflow pressures as U.S. interest rates rise, while on the horizon looms the risk of confrontation with America’s President-elect Donald Trump on trade and Taiwan. It’s a high-wire act with the potential to produce shocks, like the one erupting in the bond market as tighter liquidity threatens financing for small companies. President Xi Jinping told top officials he’s open to growth below the 6.5% target to 2020 if it carries too much risk, a person familiar with the situation said last week. Leaders have pledged to reduce hazards for 2017.

While forecasters have been raising growth estimates for next year and don’t expect major turbulence, the following are among areas they flag as having the potential to trigger a plunge in growth or systemic risk in the financial system: Outflows will exceed $200 billion in the fourth quarter and rise further in the first quarter, said Pauline Loong, managing director at research firm Asia-Analytica in Hong Kong. Capital is leaving for more fundamental reasons than rising U.S. rates and a stronger dollar, she said. Drivers include rising expectations of yuan weakness, fears of an abrupt policy U-turn trapping funds in the country, and a lack of profitable investment opportunities at home amid rising costs and slowing growth.

“The real nightmare for Beijing – and for markets – is a vicious cycle of capital outflows triggering bigger devaluations of the yuan that in turn drive bigger and faster outflows,” Loong said. “We expect capital outflows to increase in the coming months as Chinese money seeks to maximize exit quotas in case of more stringent restrictions later on.”

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Clueless prognosticators.

Trump Tax Reforms Could Depend On Little-Known ‘Scoring’ Panel (R.)

President-elect Donald Trump’s goal of overhauling the U.S. tax code in 2017 will depend partly on the work of an obscure congressional committee tasked with estimating how much future economic growth will result from tax cuts. Known as the Joint Committee on Taxation, or JCT, the nonpartisan panel assigns “dynamic scores” to major tax bills in Congress, based on economic models, to forecast a bill’s ultimate impact on the federal budget. The higher a tax bill’s dynamic score, the more likely it is seen as spurring growth, raising tax revenues and keeping the federal deficit in check. As Trump and Republicans in Congress plan the biggest tax reform package in a generation, the JCT has come under pressure from corporate lobbyists and other tax cut advocates who worry that too low a dynamic score could show the legislation to add billions, if not trillions of dollars to the federal deficit.

“The problem is that the Joint Committee staff has adopted a whole series of assumptions that truly minimize the effects and underestimate the impact that a properly done tax reform could have,” said David Burton at the conservative Heritage Foundation think tank. A low dynamic score could force Republicans to scale back tax cuts or make the reforms temporary, severely limiting the scope of what was one of Trump’s top campaign pledges. Other analysts warn that pressure for a robust dynamic score raises the danger of a politically expedient number that could help reform pass Congress but lead to higher deficits down the road. Until last year, JCT used a variety of economic models in its arcane calculations, reflecting the uncertainties in such work. But House of Representatives Republicans changed the rules in 2015 to require that a bill’s score reflect only a single estimate of the estimated impact on the wider economy and resulting impact on tax revenues.

Next year’s anticipated tax reform package would be the biggest piece of legislation that JCT has scored using this new, narrower approach, presenting the committee with a daunting challenge. JCT Chief of Staff Thomas Barthold acknowledged the challenge of dynamic scoring in an interview with Reuters. “The U.S. economy is so darn complex, you really can’t have one model that picks up all of the complexity and nuance. So the essence of modeling is to try to slim things down, try to emphasize certain points,” he said. Tax reform is still months away. But the initial legislation expected in 2017 is likely to fall somewhere between two similar but separate plans, one backed by Trump and the other by House Republicans including Speaker Paul Ryan.

[..]The Tax Foundation estimates that the House Republican tax plan would lead to a 9.1% higher GDP over the long term, 7.7% higher wages and 1.7 million new full-time-equivalent jobs. It predicts the plan would reduce government revenue by $2.4 trillion over a decade, not counting macroeconomic effects, but by only $191 billion once economic growth is taken into account. By contrast, the centrist Tax Policy Center estimates the House plan would add 1% to GDP over 10 years and erase $2.5 trillion of revenue, even with positive macroeconomic feedback, due to higher federal debt interest.

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Biometric data cards and €400 a month allowances in a country where many pensioners don’t even get that much.

Greek Migration Minister Vows To Improve Conditions At Camps (Kath.)

Migration Policy Minister Yiannis Mouzalas vowed on Wednesday to improve living conditions for migrants stranded on the islands, boost policing and create detention centers. “We are planning to have new, small venues on the islands, either by setting up small, two-story houses, in order to empty the tents, or by finding other places… to improve conditions,” he said, adding that it will take time but “we will do it.” Overcrowded conditions, coupled with the slow processing of asylum requests, have fueled tensions, while outbreaks of violence are not uncommon – especially on the islands, where some 15,000 migrants are crammed into ill-equipped camps. Mouzalas, however, insisted that the situation is better on the mainland and all refugees in the 36 camps there are staying in sheltered, heated areas.

The exception, he said, is the camp at Elliniko, southern Athens, where some migrants are still living outdoors in 70 tents. He also announced that by March, soup kitchens at camps around the country will be abolished. Instead, he said, migrants will be given money – no more than the minimum wage of €400. Mouzalas said Greece will hire more staff to deal with the slow pace of processing asylum requests, which he called an Achilles’ heel. Moreover, he said that migrants living legally in Greece will receive an electronic card that will replace their residence permits. The card, he said, will contain biometric data and other information, and will be given to migrants who want to renew their residence permits or to new arrivals.

The cards will be ready by April, he said, adding that they are part of the effort to modernize the system that processes residence permits, and to help fight forgeries. Roughly 60,000 migrants – mostly Syrians, Iraqis and Afghans fleeing war and poverty – are scattered throughout the country, many living in overcrowded and poor living conditions.

Read more …

Nov 232016
 
 November 23, 2016  Posted by at 4:24 pm Finance Tagged with: , , , , , , ,  11 Responses »
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W. Eugene Smith Orson Welles 1942

 

Ever since the November 8 election, it’s been hard to write anything that makes actual sense, as evidenced by just about everything I’ve read in the past two weeks, little of which was particularly elevating, because just like before the vote, and just like in pre- and post-Brexit Britain, all there is left in the US are deeply dug-in heels.

Everything and everyone is standing still; dug-in heels do that for you. Problem is, of course, that standing still doesn’t get you anywhere. You’re going to have to move or you’ll be left behind. Somehow it’s wonderfully ironic that Donald Trump is the only main character in this play who’s moving, and he does so in more ways than one. It’s like he’s going head first against the latest braindead internet craze, mannequin. If he does it on purpose, I commend him for it.

Sure, one might say Obama has moved a little too, suggesting that a smooth transition of power is paramount, talking a whole different book from what he said about the Donald before November 8. But then Obama doesn’t have many other options. His job requires him to do it, and say it. Over the past few months, the impression has crept upon me that Obama is a mannequin, though not still and silent, but one machine-trained to say the perfect thing at the perfect moment. And then still lost.

 

As predicted pre-election by the precious few willing to ponder a view that’s not entirely partisan or one-sided, Trump now rolls back his most extreme views, and is not afraid to revisit climate change, or a potential Hillary investigation, nor does he shy away from denouncing the most outrageous right wing movements and viewpoints among his voters and supporters.

Not even if every single person he talks to as he builds his administration is automatically labeled a racist, or worse, by US media, politicians and others that have gotten lost in their anti-Trump trenches.

Donald Trump will keep doing what he’s always done: throw ideas out there, see where they land and show that he’s flexible about them. In the process he will make many of his supporters more flexible too. He is the leader, he is their leader. When he reconsiders his views of issues, he ‘invites’ them to do the same. As we move forward, we’ll see this attitude shave off a lot of the sharp edges. It’s all entirely predictable, it’s almost a better story than the Pied Piper.

Of course you san say that some of the views expressed by Trump voters, and the acts committed, don’t belong in America. You would be right. But what you can’t say is that Trump is the source of these acts and views. They were there already. They were ignored and left to fester for years, however, and because of that grew sharper and more pronounced as time went on, until someone finally came along and did not ignore them. Talk about predictable.

 

But without an actual conversation taking place, without people from both sides, gaping as their differences may seem, willing to leave their trenches and talk to Donald Trump, and about him, from something other than the moral heights they have convinced each other and themselves were theirs and theirs alone, without that conversation there’s only so much he can do. They have to move; he already does.

Mind you, he’s got plenty room to maneuver in what he does, because he won the election, and nobody else. He can fill his government with a bunch of weirdos and radicals, he’s got the mandate. But that’s not what he wants. Trump meant it when he said he wants to be a president for all Americans.

The last thing Donald Trump wants is to fail as president. he instead wants to be the best. That requires motion from all sides, though. What Trump wants and needs right now is for people to reach out to him, to tell him they’re willing to talk, that they’re willing to give him the benefit of the doubt, and work with him.

Don’t forget, he has to take on his own right wing camp -which will be a hard enough fight- as much as all those who see themselves as more liberal than he is (liberal is just a word in a country in which there is no left left). While at the same time those ‘liberals’ seem to spend all their waking hours exclusively trying to agree on what to call the people they see as America’s worst: are they neo-nazi’s, racists, white supremacists, bigots?

And as if that is not enough, all this comes with an outspoken implication that Trump is as bad as the worst of his voters. The anti-Trump camp are so busy with this that they fail to see the president-elect has long since moved away from what they thought his position was (was it ever?), and that they are the ones unwilling to talk, not him.

 

Mind you, this is as true for the right wing as for the left. Trump risks facing a lot of backlash from the right for not investigating Hillary, for softening his climate change view, for keeping some aspects of Obamacare, or some parts of the trade deals he has previously dismissed. He knows the risks.

The extreme right has misunderstood him as much as the ‘extreme liberal’ (a.k.a. the Hillary camp including the media). And if Britain is any guide, where 5 months after Brexit the main dish served is still made up of name calling and various other civilized pastimes, Trump has a long, windy and especially bumpy road ahead of him. America should perhaps count itself lucky that he’s a whole lot more flexible than the clowns performing on all sides of the aisles in the UK.

He’s willing to adapt, but that won’t do a lot of good if the other players are not. People may try to mock him for first bashing the New York Times and then, within 24 hours, calling it “a great great American jewel – world jewel”, but that’s only bad or inconsistent if you refuse to try and think like him.

Of course the New York Times, through history, has been a jewel of global media; it just didn’t act like one in the run-up to November 8. Pointing that out is not inconsistent from Trump’s angle: instead, it’s not difficult to make the case that it’s the New York Times that has been inconsistent, by leaving its journalistic standards -i.e. objectivity- behind to go after Trump.

After all, it’s hard to argue that the New York Times was NOT a partisan channel in the election. That so many other news media took the same position may have made it seem normal, but that doesn’t make it so.

Americans from all corners will have to come down from their morally righteous and politically correct mountains. They will then find that Donald Trump was way ahead of them.

 

And no, I am not a Trump supporter. But given the alternatives presented, I do find myself wondering if there was a single one amongst them more fit for the job than the Donald. Not that it matters anymore, the election is over and he won, recounts and discussions about electoral collages or not.

Is that really such a bad thing? Trump won. Which means the Democrats and Republicans did not. The Bush dynasty and Clinton dynasty did not. The incumbent elites did not. That is quite the clean up job. Does anyone want to argue such a clean up was not needed? Donald Trump is shaking up a world in which too many people and institutions across the political scene have been able to gain too much power and influence and wealth for too long, and it’s hard to see that as a big negative.

Besides, whether you like it or not, he’s your president. May I humbly suggest y’all make the best of what you got? Perhaps, and I must say perhaps because I should learn more about this, Trump’s talk Monday with Bernie Sanders-territory left-wing Democrat -and Hindu- Tulsi Gabbard, which may well land her a cabinet post, is indicative of what we may expect. So you got someone who’s left-wing, a woman, and very much not Christian. How many prejudices is that?

Gabbard wants the US to stop killing people in Syria. Is that a bad thing, anyone? She broke with the DNC when she figured out then-Chairwoman Debbie Wasserman Schultz was favoring Hillary and working against Bernie.

If Gabbard’s move is not enough to make you move and un-dig your heels, how about Bernie Sanders himself taking a seat in the Trump government? Would that do the trick? The Donald would love it. Bernie would be told he’s betraying his party, for sure, but we all know the party betrayed him first. He’s either got a few years left to do something real, or he can see himself be betrayed all over again in 2020.

By now, it’s not beyond the realm of possibilities. A National Government is something many nations have tried through history. It might not be a bad idea for the US, because the future sure is not made exclusively of moonshine and roses.

The keyword is flexibility, guys. You have a president-to-be who gets that. How about you?

 

 


JavierJuén 2016

 

 

Nov 212016
 
 November 21, 2016  Posted by at 9:56 am Finance Tagged with: , , , , , , , , , , ,  3 Responses »
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NPC Fordson tractor exposition at Camp Meigs, Washington DC 1922

Japan Exports Drop 13th Month By 10.3%, Imports Down 22nd Month By 16.5% (WSJ)
Negative Rates Are Failing to Halt Savings Obsession in Europe (BBG)
More Than 1 in 3 European Workers Have Difficulty Making Ends Meet (ETUC)
Now it Begins to Unravel (WS)
Former UBS, Credit Suisse CEO: “A Recession Is Sometimes Necessary” (ZH)
Big Shock In France’s Presidential Election As Sarkozy Eliminated (BBG)
The EU’s New Bomb Is Ticking in the Netherlands (WSJ)
APEC Summit Closes With Call for More Globalization, Free Trade (AP)
Obama Says World Leaders Want To Move Forward With TPP (AFP)
The Grey Champion Assumes Command – Part 1 (Quinn)
The Silver Lining In This Disaster: Clinton & Co Are Finally Gone (G.)
Disaffected Rust Belt Voters Embraced Trump. They Had No Other Hope (G.)
Tsipras Ready To Give In On Labor Reform To Ensure Debt Relief (Kath.)

 

 

With trade growth goes globalization.

Japan Exports Drop 13th Month By 10.3%, Imports Down 22nd Month By 16.5% (WSJ)

Japanese exports extended their losses to a 13th straight month in October, indicating that the world’s third-largest economy has yet to regain full fitness despite better-than-expected growth in the third quarter. Exports fell 10.3% from a year earlier in October to 5.870 trillion yen, figures released Monday by the Ministry of Finance showed. The reading came in worse than a 9.4% drop forecast by economists polled by WSJ. Exports decreased 6.9% in September. Despite the grim monthly figures, exports appear to be in better shape than in the spring, when Japan’s manufacturers were being buffeted by worries over a Chinese slowdown and other headwinds from abroad. Government estimates released last week showed that Japan’s economy grew 2.2% from the previous quarter in the July-September period, beating economists’ expectations.

Exports were stronger than in the previous three months. The near-term prospects for exports have also improved after Donald Trump’s victory of U.S. presidential election put the yen’s previous uptrend in reversal. The finance ministry said export volumes for October fell 1.4% from their year-earlier levels. That marked the first fall in three months. But seasonally adjusted month-on-month figures showed exports increased 1.6%. Imports declined 16.5% on year in October to Y5.374 trillion, the 22nd consecutive month of contraction, the ministry said. Japan’s trade balance came to Y496.2 billion in surplus, according to the data. Economists polled by the Nikkei expected a surplus of Y610.0 billion.

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Anything reported as a ‘savings obsession’ can be filed under ‘fake news’. It takes this article a while to get to it, but then it does: “About 44% of all Europeans were unable to pay at least one bill on time during the last 12 months, mainly because of a lack of money..” Combine that with the accounting practice of filing ‘paying off debts’ under ‘saving’, and you know what’s really happening.

Negative Rates Are Failing to Halt Savings Obsession in Europe (BBG)

After years of turbo-driven central bank stimulus, most Europeans still want to leave their spare cash in savings accounts, even if those accounts pay zero interest. That’s the finding of a survey by Europe’s biggest debt collector, Stockholm-based Intrum Justitia AB. “After the financial crisis, people have felt a need – even if they have small means – to create some kind of security,” CEO Mikael Ericson said in an interview in Stockholm on Nov. 16. “It can’t be that people save in a bank account because of the fantastic returns, so it must be about a sense of security, having money in the bank.” Some 69% of Europeans put their savings into bank accounts, according to Intrum Justitia’s European Consumer Payment Report.

The survey is based on feedback gathered in September and covers about 21,000 people in 21 countries. The survey also shows that 26% of Europeans prefer keeping their surplus funds in cash, while 16% hold stocks. Only 14% turn to investment funds, 8% invest in real estate and 8% in bonds. In Denmark and Sweden, where central bank benchmark rates are negative, almost 80% of people put their surplus cash in bank accounts. In France, the U.K. and the Netherlands, the figure is above 80%. [..] The survey also revealed how financially fragile many Europeans continue to be almost half a decade after the region’s debt crisis. About 44% of all Europeans were unable to pay at least one bill on time during the last 12 months, mainly because of a lack of money, the survey found. Greece was worst, with 76% of households failing to pay on time.

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Yeah. Savings Obsession. Sure.

More Than 1 in 3 European Workers Have Difficulty Making Ends Meet (ETUC)

According to the European Working Conditions Survey launched today more than one third of workers report some or great difficulty in making ends meet. This is the reality behind the rosier picture painted by the European Foundation for the Improvement of Living and Working Conditions which highlights an “increasingly skilled workforce, largely satisfied with work”. However, the study also reveals that • A shocking 1 in 5 workers “has a poor quality job with disadvantageous job quality features and job holders …. reporting an unsatisfactory experience of working life.” • Only 1 in 4 workers have “a smooth running job where most dimensions of job quality are satisfactory”.

Luca Visentini, General Secretary of the European Trade Union Confederation said “European workers are struggling to make ends meet. Work no longer assures a decent life. Is it any wonder that more and more voters are losing their faith in “the European Union and mainstream political parties? ”These results only strengthen the ETUC’s determination to fight for more public investment to create quality jobs, and for a pay rise for European workers to tackle poverty and drive economic recovery for all. Economic policies that result in 1 in 3 workers struggling to make ends meet are fundamentally wrong and must be radically changed.” “These are deeply worrying results that cannot be hidden by claiming that the world of work is increasingly complex. The survey actually shows that work is unsatisfactory or unrewarding for far too many workers.”

“The picture painted by the European Working Conditions Survey of widespread poverty in improving working conditions highlights the need for a comprehensive approach to tackle inequality across Europe. Improvements in labour markets and working conditions are modest and uneven at best; what’s more, these are being wiped out by spiralling costs of housing and austerity policies that drive insecurity for workers and their families.”

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“Debt is good” is just another way of saying “Greed is good”.

Now it Begins to Unravel (WS)

Debt is good. More debt is better. Funding consumer spending with debt is even better – that’s what economists have been preaching – because the consumed goods and services are gone after having been added to GDP, while the debt, which GDP ignores, remains until it is paid off with future earnings, or until it blows up. Corporations too have gone on a borrowing binge. Unlike consumers, they have no intention of paying off their debts. They issue new debt and use the proceeds to pay off maturing debts. Funding share-buybacks and dividends with debt is ideal. It’s called “unlocking value.” Debt must always grow. For that purpose, the Fed has manipulated interest rates to rock bottom. Actually paying off and reducing debt has the dreadful moniker, bandied about during the Financial Crisis, “deleveraging.”

It’s synonymous with “The End of the World.” At the institutional level, “debt” is replaced with more politically correct “leverage.” More leverage is better. Particularly if you can borrow short-term at near zero cost and bet the proceeds on risky illiquid long-term assets, such as real estate, or on securities that become illiquid without notice. Derivatives are part of this institutional equation. The notional value of derivatives in the US banking system is $190 trillion, according to the Office of the Comptroller of the Currency. Four banks hold over 90% of them: JP Morgan ($53 trillion), Citibank ($52 trillion), Goldman ($44 trillion), and Bank of America ($26 trillion). Over 75% of those derivative contracts are interest rate products, such as swaps.

With them, heavily leveraged institutional investors that borrow short-term to invest in illiquid long-term assets hedge against interest rate movements. But Treasury yields and mortgage rates have moved violently in recent weeks, and someone is out some big money. These credit bubbles always unravel to the greatest surprise of those institutions and their economists. When they unravel, the above “End-of-the-World” scenario of orderly deleveraging turns into forced deleveraging, which can get messy. Assets that had previously been taken for granted are either repriced or just evaporate. But they’d been pledged as collateral. Suddenly, the collateral no longer exists….

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“..the Swiss National Bank’s balance sheet now accounts for 100% of GDP. Japan is also 100%, but mainly invested in its own state paper. The ECB and the Fed are 30%.”

Former UBS, Credit Suisse CEO: “A Recession Is Sometimes Necessary” (ZH)

Remember when bashing central banks and predicting financial collapse as a result of monetary manipulation and intervention was considered “fake news” within the “serious” financial community, disseminated by fringe blogs? Good times. In an interview with Swiss Sonntags Blick titled appropriately enough “A Recession Is Sometimes Necessary”, the former CEO of UBS and Credit Suisse, Oswald Grübel, lashed out by criticizing the growing strength of central banks and their ‘supremacy over the markets and other banks’. He claimed that the use of negative interest rates and huge positive balance sheets represent ‘weapons of mass destruction’. He calls for an end to the use of negative interest rates. Sounding more like a “tinfoil” blog than the former CEO of the two largest Swiss banks, Grübel warned that central banks have “crossed the point of no return” which will ultimately “end in a crash.”

Joining Deutsche Bank in slamming NIRP, Grubel said that banks are losing hundreds of millions of francs each year to negative interest rates paid to central banks. Worse, he warned that central banks will eventually lose their credibility in the markets but that this could take 10 years or more, at which point it will “all end in a crash.” What happens then? The former CEO believes that the final outcome will be wholesale financial nationalization: “after that all banks could belong to the state” Grubel also the doubted the wisdom of the Swiss National Bank’s balance sheet: “the Swiss National Bank’s balance sheet now accounts for 100% of GDP. Japan is also 100%, but mainly invested in its own state paper. The ECB and the Fed are 30%. Switzerland is far, far, far ahead. Is that wise?”

Grübel also touched on a point we have made ever since 2010 when we said that in a world of unprecedented political polarity, politicians now control the world almost exclusively through monetary policy, to wit: “After the financial crisis, politics has taken power in the banking sector: It has bound the banks into a regulatory corset and now they can no longer move. Politicians have told central banks: now you determine what is going on with the economy.” What are the implications of this power shift? “Previously, the risk was distributed to thousands of banks. They had to pay for their mistakes. The risk lay with the shareholders. Today, more and more the state carries the risk.” Which, of course, is another word for taxpayers. In other words, the next crash will be one where central – not commercial – banks are failing, and the one left with the bill will once again be the ordinary person in the street.

In a tangent, Grübel gave his thoughts on what makes a man rich: “rich is a man when he goes to bed in a carefree manner and wakes up without care.” He is then asked if, by that definition, a billionaire is rich to which he replied: “No. Money has little to do with wealth. The real rich are carefree. Those who are healthy, are not dependent. The greatest wealth is independence.”

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“..the winner will be favorite to become president in May..”. Really? Then why am I thinking Le Pen is the favorite?

Big Shock In France’s Presidential Election As Sarkozy Eliminated (BBG)

Former Prime Minister Francois Fillon, the new front-runner in France’s 2017 presidential election, is offering voters an economic-policy revolution inspired by Margaret Thatcher. Fillon, 62, vaulted from third position in most polls to win the first round of the Republican primary by 16 percentage points from the veteran Alain Juppe on Sunday with the most free-market platform among the seven candidates. They’ll face each other again in next Sunday’s runoff and the winner will be favorite to become president in May 2017. The lifelong politician is pledging to lengthen the work week to 39 hours from 35, to increase the retirement age to 65 and add immigration quotas. He’s vowed to eliminate half a million public-sector jobs and cut spending by €100 billion over his five years in office.

And he proposes a €40 billion tax-cut for companies and a constitutional ban on planned budget deficits. “Who is Fillon? The classic conservative, right-wing candidate,” Bruno Cautres, a political scientist at the Sciences Po Institute in Paris, said in an interview. “He wants a deep reform of the French model: shrinking the role of the state and cutting the welfare system.” Compared with the brash style of former boss, Nicolas Sarkozy, Fillon has a more low-key approach but he makes a virtue of telling it straight. When he took office as premier in 2007, he shocked even Sarkozy by announcing that France was a bankrupt state. Today he’s promising to reverse that, just like his role model when she became U.K. prime minister in 1979.

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Europe and the scourge of direct democracy.

The EU’s New Bomb Is Ticking in the Netherlands (WSJ)

If the European dream is to die, it may be the Netherlands that delivers the fatal blow. The Dutch general election in March is shaping up to be a defining moment for the European project. The risk to the EU doesn’t come from Geert Wilders, the leader of anti-EU, anti-immigration Party for Freedom. He is well ahead in the polls and looks destined to benefit from many of the social and economic factors that paved the way for the Brexit and Trump revolts. But the vagaries of the Dutch political system make it highly unlikely that Mr. Wilders will find his way into government. As things stand, he is predicted to win just 29 out of the 150 seats in the new parliament, and mainstream parties seem certain to shun him as a coalition partner. In an increasingly fragmented Dutch political landscape, most observers agree that the likely outcome of the election is a coalition of four or five center-right and center-left parties.

Instead, the risk to the EU comes instead from a new generation of Dutch euroskeptics who are less divisive and concerned about immigration but more focused on questions of sovereignty—and utterly committed to the destruction of the EU. Its leading figures are Thierry Baudet and Jan Roos, who have close links to British euroskeptics. They have already scored one significant success: In 2015, they persuaded the Dutch parliament to adopt a law that requires the government to hold a referendum on any law if 300,000 citizens request it. They then took advantage of this law at the first opportunity to secure a vote that rejected the EU’s proposed trade and economic pact with Ukraine, which Brussels saw as a vital step in supporting a strategically important neighbor. This referendum law is a potential bomb under the EU, as both Dutch politicians and Brussels officials are well aware.

Mr. Baudet believes he now has the means to block any steps the EU might seek to take to deepen European integration or stabilize the eurozone if they require Dutch legislation. This could potentially include aid to troubled Southern European countries such as Greece and Italy, rendering the eurozone unworkable. Indeed, the Dutch government gave a further boost to Mr. Baudet and his allies when it agreed to accept the outcome of the Ukraine referendum if turnout was above 30%, even though it was under no legal obligation to do so. This was a major concession to the euroskeptics, as became clear when strong turnout among their highly motivated supporters lifted overall turnout to 31%. With Mr. Wilders’s party, currently polling above 25%, and both Mr. Baudet and Mr. Roos having launched their own parties, Dutch euroskeptics are confident they will be able to reach the 30% threshold in future referendums.

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Do they mean things would have been even worse without free trade? (if they do, let them say so): “..the benefits of trade and open markets need to be communicated to the wider public more effectively, emphasizing how trade promotes innovation, employment and higher living standards.”

APEC Summit Closes With Call for More Globalization, Free Trade (AP)

Leaders of 21 Asia-Pacific nations ended their annual summit Sunday with a call to resist protectionism amid signs of increased free-trade skepticism, highlighted by the victory of Donald Trump in the U.S. presidential election. The Asia Pacific Economic Cooperation forum also closed with a joint pledge to work toward a sweeping new free trade agreement that would include all 21 members as a path to “sustainable, balanced and inclusive growth,” despite the political climate. “We reaffirm our commitment to keep our markets open and to fight against all forms of protectionism,” the leaders of the APEC nations said in a joint statement. APEC noted the “rising skepticism over trade” amid an uneven recovery since the financial crisis and said that “the benefits of trade and open markets need to be communicated to the wider public more effectively, emphasizing how trade promotes innovation, employment and higher living standards.”

Speaking to journalists at the conclusion of the summit, Peruvian President Pedro Pablo Kuczynski said the main obstacle to free trade agreements in Asia and around the world is the frustration felt by those left behind by globalization. “Protectionism in reality is a reflection of tough economic conditions,” said Kuczynski, the meeting’s host. Referring to Brexit and Trump’s election win in the U.S., he said those results highlighted the backlash against globalization in former industrial regions in the U.S. and Britain that contrasts with support for trade in more-prosperous urban areas and developing countries. “This is an important point in recent economic history because of the outcome of various elections in very important countries that have reflected an anti-trade, anti-openness feeling,” he said.

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Fuhget about it.

Obama Says World Leaders Want To Move Forward With TPP (AFP)

US President Barack Obama said Sunday that leaders from across the Asia-Pacific have decided to move ahead with a trade deal opposed by his successor Donald Trump. “Our partners made clear they want to move forward with TPP,” Obama said at a press conference after meeting leaders in Peru. “They would like to move forward with the United States.” It is unclear whether there is any future for the TPP, a vast, arduously negotiated agreement between 12 countries that are currently at different stages of ratifying it. It does not include China. Trump campaigned against the proposal as a “terrible deal” that would “rape” the United States by sending American jobs to countries with cheaper labor.

The agreement must by ratified in the US Congress – which will remain in the hands of Trump’s Republican allies when the billionaire mogul takes office on January 20. Without the United States, it cannot be implemented in its current form. However, some have suggested Trump could negotiate a number of changes and then claim credit for turning the deal around. Obama defended the increasing integration of the global economy at the close of his final foreign visit as president – a trade summit held against the backdrop of rising protectionist sentiment in the United States and Europe, seen in both Trump’s win and Britain’s “Brexit” vote. He said that “historic gains in prosperity” thanks to globalization had been muddied by a growing gap “between the rich and everyone else.” “That can reverberate through our politics,” he said.

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Jim Quinn’s longtime series on the Fourth Turning continues. A problem might be that you can’t really know who’s who until afterwards. Maybe Mike Pence will turn out to be the real grey champion, or someone as yet unknown.

The Grey Champion Assumes Command – Part 1 (Quinn)

In September 2015 I wrote a five part article called Fourth Turning: Crisis of Trust. In Part 2 of that article I pondered who might emerge as the Grey Champion, leading the country during the second half of this Fourth Turning Crisis. I had the above pictures of Franklin, Lincoln, and FDR, along with a flaming question mark. The question has been answered. Donald J. Trump is the Grey Champion. When I wrote that article, only one GOP debate had taken place. There were eleven more to go. Trump was viewed by the establishment as a joke, ridiculed by the propaganda media, and disdained by the GOP and Democrats. I was still skeptical of his seriousness and desire to go the distance, but I attempted to view his candidacy through the lens of the Fourth Turning. I was convinced the mood of the country turning against the establishment could lead to his elevation to the presidency. I was definitely in the minority at the time:

“Until three months ago the 2016 presidential election was in control of the establishment. The Party was putting forth their chosen crony capitalist figureheads – Jeb Bush and Hillary Clinton. They are hand-picked known controllable entities who will not upset the existing corrupt system. They are equally acceptable to Goldman Sachs, the Federal Reserve, the military industrial complex, the sickcare industry, mega-corporate America, the moneyed interests, and the never changing government apparatchiks. The one party system is designed to give the appearance of choice, while in reality there is no difference between the policies of the two heads of one party and their candidate products. But now Donald Trump has stormed onto the scene from the reality TV world to tell the establishment – You’re Fired!!!”

Strauss and Howe wrote their prophetic tome two decades ago. [..] They did not know which events or which people would catalyze this Fourth Turning. But they knew the mood change in the country would be driven by the predictable generational alignment which occurs every eighty years. “Soon after the catalyst, a national election will produce a sweeping political realignment, as one faction or coalition capitalizes on a new public demand for decisive action. Republicans, Democrats, or perhaps a new party will decisively win the long partisan tug of war. This new regime will enthrone itself for the duration of the Crisis. Regardless of its ideology, that new leadership will assert public authority and demand private sacrifice. Where leaders had once been inclined to alleviate societal pressures, they will now aggravate them to command the nation’s attention. The regeneracy will be solidly under way.” – Strauss & Howe – The Fourth Turning

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“This is a revolutionary moment. We must not allow them to shift the blame on to voters. This is their failure, decades in the making.”

The Silver Lining In This Disaster: Clinton & Co Are Finally Gone (G.)

Hillary Clinton has given us back our freedom. Only such a crushing defeat could break the chains that bound us to the New Democrat elites. The defeat was the result of decades of moving the Democratic party – the party of FDR – away from what it once was and should have remained: a party that represents workers. All workers. For three decades they have kept us in line with threats of a Republican monster-president should we stay home on election day. Election day has come and passed, and many did stay home. And instead of bowing out gracefully and accepting responsibility for their defeat, they have already started blaming it largely on racist hordes of rural Americans. That explanation conveniently shifts blame away from themselves, and avoids any tough questions about where the party has failed.

In a capitalist democracy, the party of the left has one essential reason for existing: to speak for the working class. Capitalist democracies have tended towards two major parties. One, which acts in the interest of the capitalist class – the business owners, the entrepreneurs, the professionals – ensuring their efforts and the risks they took were fairly rewarded. The other party represented workers, unions and later on other groups that made up the working class, including women and oppressed minorities. This delicate balance ended in the 1990s. Many blame Reagan and Thatcher for destroying unions and unfettering corporations. I don’t. In the 1990s, a New Left arose in the English-speaking world: Bill Clinton’s New Democrats and Tony Blair’s New Labour. Instead of a balancing act, Clinton and Blair presided over an equally aggressive “new centrist” dismantling of the laws that protected workers and the poor.

[..] .. let us be as clear about this electoral defeat as possible, because the New Democratic elite will try to pin their failure, and keep their jobs, by blaming this largely on racism, sexism – and FBI director Comey. This is an extremely dangerous conclusion to draw from this election. So here is our silver lining. This is a revolutionary moment. We must not allow them to shift the blame on to voters. This is their failure, decades in the making. And their failure is our chance to regroup. To clean house in the Democratic party, to retire the old elite and to empower a new generation of FDR Democrats, who look out for the working class – the whole working class.

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What happens when you think the economy means the rich.

Disaffected Rust Belt Voters Embraced Trump. They Had No Other Hope (G.)

The industrial midwest is the vast sweep, from western Pennsylvania through eastern Iowa, that drove the American economy for nearly a century. The great industrial cities, such as Chicago and Detroit, led the way, but it spread into hundreds of small towns and cities – from the steel mills of Ohio to the auto parts factories of Michigan and Wisconsin and the appliance makers of Iowa and Illinois. This was Hillary Clinton’s blue wall, the states she had to win to become president. Of the 11 swing states that decided the election, five – Pennsylvania, Ohio, Michigan, Wisconsin and Iowa – lie in this battered old industrial heartland. If, as expected, Trump’s lead in Michigan holds, she lost them all. How did it happen? There are many reasons. The Clinton team barely campaigned there and in Wisconsin until it was too late.

Misogyny played a role. So did Clinton’s personal unpopularity and the relatively low turnout. But the real reason is that the industrial era created this region and gave a good middle-class way of life to the people who worked there. That economy began to vanish 40 years ago, moving first to the sun belt and then Mexico, before finally China. The good jobs that were left increasingly went to robots. Factories closed. So did the stores and bars and schools around them. The brightest kids fled to universities and then to the cities – to New York or Chicago or the state capital. Those left behind worked two or three non-union jobs just to stay afloat. Families broke up. Drug use increased. Life spans shortened. And nobody seemed to care – until Trump. But does he really? Who knows? He said he did.

His tirades – against trade, against elites, against Obamacare, against immigrants, against the Clintons – sounded like unhinged rants in cities and on campuses, which never took him seriously. In the old industrial zones and withering farm towns, he echoed their own resentments. Mitt Romney couldn’t do this; neither could John McCain. But Trump did, and so they embraced him. Why was this such a surprise? It’s impossible to overstate the alienation between the two Americas, between the global citizens and the global left-behinds, between the great cities that run the nation’s economy and media, and the hinterland that feels not only cheated but, worse, disrespected.

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Tsipras goes from one blunder to the next. Still, as long as he’s there, the streets are quiet, amazingly quiet for a society that’s under such economic fire. But he is soon going to be voted out in favor of someone, anyone, who will then see things get much worse in the streets. A smouldering powder keg.

Tsipras Ready To Give In On Labor Reform To Ensure Debt Relief (Kath.)

Prime Minister Alexis Tsipras is prepared to make further concessions to Greece’s creditors in tough negotiations that are currently under way to ensure that there is no delay in launching crucial talks on relief for the country’s debt burden, Kathimerini understands. According to sources, Tsipras and his key ministers are ready to give in to calls by foreign auditors for more flexibility in the crucial area of labor laws. The government has already agreed to put off its demands for the restoration of collective wage bargaining, a key pledge of leftist SYRIZA before it came to power last year. It is unclear to what degree the Greek side is willing to concede on other issues – such as calls by foreign officials for facilitating mass layoffs for struggling employers and making it harder for unions to call strikes.

A source at the Labor Ministry said over the weekend that the Greek side has submitted its proposals for changes to labor laws and is awaiting the reaction of foreign officials. Tsipras is said to be set on a strategy of withdrawal despite the risks. The key danger is that cohesion in the ranks of leftist SYRIZA, which has already been tested by a series of concessions to foreign creditors, is further compromised, weakening the beleaguered coalition. The other risk is that the further concessions may boost the lead of conservative New Democracy over SYRIZA in opinion polls, which is already significant, thereby enhancing the sense that SYRIZA’s coalition with the right-wing Independent Greeks is on its way out.

Read more …

Nov 132016
 
 November 13, 2016  Posted by at 9:56 am Finance Tagged with: , , , , , , , , , , ,  3 Responses »
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Andy Thomas: Grand Ol’ Gang

Stupid Americans Elect An Absurd and Dangerous President (Spiegel)
Trump Adviser Scaramucci Takes Aim at Conservatives’ Budgetary Restraint (BBG)
Trump’s Truthful Heresy On Globalization And Free Trade (Steve Keen)
Clinton Blames FBI’s Comey For Her Defeat In Call With Donors (R.)
Sidney Blumenthal: Right-Wing FBI Agents Took Down Hillary In Coup D’État (ZH)
NY Times Publisher Vows To ‘Rededicate’ Paper To Reporting Honestly (Fox)
President Trump: How & Why… (Jonathan Pie)
Putin Aide: Trump Could Build Confidence With NATO Pullback (AP)
S&P Predicts Hard Brexit And Fresh Downgrade For UK (G.)
Obama: Greeks ‘Need Hope’ (Kath.)
Erdogan: If 3 Million Refugees March To Europe, EU Won’t Know What To Do (TM)
US To Accept Refugees That Australia Refuses To Resettle (BBC)

 

 

Just trying to make friends.

Stupid Americans Elect An Absurd and Dangerous President (Spiegel)

Although Trump will become the democratically elected 45th president of the United States on January 20, he remains a dangerous man. He is dangerously indifferent, unbalanced and inexperienced — and he is dangerously racist. Trump believes in the superiority of the white race, and if he implements the worst of his campaign promises, he will not be the first elected leader to do so. In other words, 60 million Americans acted stupidly. They cast their votes for xenophobia, racism and nationalism, the end of equal rights and social conscience, for the end of climate treaties and health insurance. Sixty million people followed a demagogue who will do little for them. And yet… this election goes deeper than that.

It says more than that, and all of us, including the media, politicians and civil societies, and unfortunately the entire West, which is now threatened, would be wise to pay far closer attention. Those who have lived in New York or experienced dinner conversations in Georgetown and debates at Harvard University’s Kennedy School of Government, know how brilliantly intelligent and worldly Americans can be. But these are closed circles – ones that are unfortunately nowhere near as open as they like to claim, inaccessible as they are to the vast majority of Americans who could never afford access. Once you get outside such circles, such cosmopolitan thinking isn’t nearly as widespread.

Those who have traveled recently from the East Coast to the West Coast, and witnessed the neglect and deterioration of entire towns and cities in states like Georgia, Alabama and Louisiana, have seen with their own eyes that connections have been severed in American society. Those who have seen what the disappearance of the steel industry has done and what the computer chip has wrought is familiar with the widespread frustration among the white working class, a group that has been left behind. Harvard University and Akron, Ohio, or Wall Street and Birmingham, Alabama, no longer have anything in common when 0.1% of society possesses 90% of the wealth. This is when the American dream is dead and when hate thrives – hate for immigrants, women, the media, and hate for anything that seems elitist or is simply different.

This doesn’t justify the hate – it simply explains it. The tragedy here is that Clinton offered ideas to fight the roots of this hatred, ideas like a higher minimum wage and investments in infrastructure and education. It is tragic because it was too late for credible plans. Trump had no ideas, but he sensed that the left-behinds yearn for strength. After Barack Obama’s victories, the pundits said that demographic change meant that no US election could be won again without the Latino vote. But Trump gave the Latinos a big fuck you, insinuating that the left-behinds are superior. His words were as crude as those spoken in Germany 80 years ago.

Read more …

“Business people like Mr. Trump understand you can grow yourself out of excessive debt.”

Trump Adviser Scaramucci Takes Aim at Conservatives’ Budgetary Restraint (BBG)

Don’t expect President-elect Donald Trump to adhere consistently to traditional Republican economic policy, or even to positions Trump staked out during his election campaign. That’s the message in an opinion piece written in the Financial Times by Trump economic adviser Anthony Scaramucci that took a swipe at the budgetary discipline promoted for years by fiscal conservatives in the U.S. and Europe. It may point to a coming rift between the new executive branch and the Republican-controlled Congress. “Mr. Trump is a different type of leader not burdened by rigid ideology,” Scaramucci said. “He is not dogmatic about policy positions. Rather, he has set bold targets from which to begin negotiations.”

Scaramucci ran though some of Trump’s previously-announced plans, including a proposal for a 10-percent one-off repatriation fee for companies. Trump would “ideally” like to see corporate tax rates cut to 15% from 35%, he said, adding that even a reduction to equal the U.K. rate of 20% would add nearly $600 billion to U.S. GDP. Founder of the investment firm SkyBridge Capital, Scaramucci, 52, was named on Friday to the executive committee of Trump’s transition team. The 16-person list also includes Dune Capital CEO Steve Mnuchin, who was finance chairman of Trump’s campaign; Reince Priebus, chairman of the Republican National Committee; and three of the president-elect’s children.

Scaramucci said global economies are still battling deflation largely because of a movement toward fiscal austerity that followed the 2008-2009 global economic crisis. “While easy-money monetary policies have exacerbated the income divide, central bankers handcuffed by political dysfunction have had little choice but to provide extraordinary accommodation,” he said. “Business people like Mr. Trump understand you can grow yourself out of excessive debt.”

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Steve illustrates his view with an excellent critique of David Ricardo, but I have no space for that here. Read the article.

Trump’s Truthful Heresy On Globalization And Free Trade (Steve Keen)

Dear President Trump, Nothing shuts a loud party down faster than the neighbours bashing the door in. You have just done that to the Washington Party, which—regardless of whether the President has been a Republican or a Democrat—has been the party of Globalisation and Free Trade ever since the 1970s. You declared that this party might have been good for the Washington and Wall Street elites, but it’s been bad for their neighbours, “the forgotten people” of America who once made up its manufacturing workers. So forget it folks, the party’s over. Go home. You’re right. Plenty of people will try to convince you that globalization and free trade could benefit everyone, if only the gains were more fairly shared.

The only problem with the party, they’ll say, is that the neighbours weren’t invited. We’ll share the benefits more equally now, we promise. Let’s keep the party going. Globalization and Free Trade are good. This belief is shared by almost all politicians in both parties, and it’s an article of faith for the economics profession. You are right to reject it. It’s a fallacy based on a fantasy.. [..] the gains from trade for everyone and for every country that could supposedly be shared more fairly simply aren’t there in the first place. Specialization is a con job—but one that the Washington elite fell for (to its benefit, of course). Rather than making a country better off, specialization makes it worse off, with scrapped machinery that’s no longer useful for anything, and with less ways to invent new industries from which growth actually comes.

Excellent real-world research by Harvard University’s “Atlas of Economic Complexity” has found diversity, not specialization, is the “magic ingredient” that actually generates growth. Successful countries have a diversified set of industries, and they grow more rapidly than more specialized economies because they can invent new industries by melding existing ones. My favourite example here is sailboards. To invent them in the first place, it helps to have local industries producing both surfboards and sails. Of course, specialization, and the trade it necessitates, generates plenty of financial services and insurance fees, and plenty of international junkets to negotiate trade deals. The wealthy elite that hangs out in the Washington party benefits, but the country as a whole loses, especially its working class. Forget it folks, the party’s over. Go home.

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It couldn’t have been her own fault, could it?

Clinton Blames FBI’s Comey For Her Defeat In Call With Donors (R.)

Hillary Clinton blamed FBI director James Comey for her stunning defeat in Tuesday’s presidential election in a conference call with her top campaign funders on Saturday, according to two participants who were on the call. Clinton was projected by nearly every national public opinion poll as the heavy favorite going into Tuesday’s race. Instead, Republican Donald Trump won the election, shocking many throughout the nation and prompting widespread protests. Clinton has kept a low profile since her defeat after delivering her concession speech on Wednesday morning. Clinton told her supporters on Saturday that her team had drafted a memo that looked at the changing opinion polls leading up to the election and that the letter from Comey proved to be a turning point.

She said Comey’s decision to go public with the renewed examination of her email server had caused an erosion of support in the upper Midwest, according to three people familiar with the call. Clinton lost in Wisconsin, the first time since 1984 that the state favored the Republican candidate in a presidential election. Although the final result in Michigan has still not been tallied, it is leaning Republican, in a state that last favored the Republican nominee in 1988. Comey sent a letter to Congress only days before the election announcing that he was reinstating an investigation into whether Clinton mishandled classified information when she used a private email server while secretary of state from 2009 to 2012.

Comey announced a week later that he had reviewed emails and continued to believe she should not be prosecuted, but the political damage was already done. Clinton told donors that Trump was able to seize on both of Comey’s announcements and use them to attack her, according to two participants on the call.

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Blumenthal’s the Clinton ally that Obama told her to stop conferring with. He’s rumored to be the main reason she set up her private server, in order to keep talking to me regardless, and keep it all secret.

Sidney Blumenthal: Right-Wing FBI Agents Took Down Hillary In Coup D’État (ZH)

After weeks/months of the Hillary campaign bashing Trump for “irresponsibly” questioning the legitimacy of the election process, Clinton-insider, Sid Blumenthal, is apparently making the media rounds in Europe attributing her loss to a “coup d’etat” organized by “a cabal of right-wing agents of the FBI in the New York office attached to Rudy Giuliani.” “It was the result of a cabal of right-wing agents of the FBI in the New York office attached to Rudy Giuliani, who was a member of Trump’s campaign.”I think it’s not unfair to call it a coup. Yeah, a coup d’etat.” Of course, Blumenthal is well known within Clinton world for his wild conspiracy theories as John Podesta pointed out he is “lost in his own web of conspiracies.” “Sid is lost in his own web of conspiracies. I pay zero attention to what he says.” It would probably be pointless to highlight for Sydney that there would never have been an FBI investigation had Hillary not blatantly violated multiple federal laws for her “convenience”…details.

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If the NYT had actually “reported on both candidates fairly”, the change wouldn’t have been necessary. Then again, the Dems are blaming the press for having been biased AGAINST HER! Anything goes.

NY Times Publisher Vows To ‘Rededicate’ Paper To Reporting Honestly (Fox)

The publisher of The New York Times penned a letter to readers Friday promising that the paper would “reflect” on its coverage of this year’s election while rededicating itself to reporting on “America and the world” honestly. Arthur O. Sulzberger Jr., the paper’s embattled publisher, appealed to Times readers for their continued support. “We cannot deliver the independent, original journalism for which we are known without the loyalty of our subscribers,” the letter states. New York Post columnist and former Times reporter Michael Goodwin wrote, “because it (The Times) demonized Trump from start to finish, it failed to realize he was onto something. And because the paper decided that Trump’s supporters were a rabble of racist rednecks and homophobes, it didn’t have a clue about what was happening in the lives of the Americans who elected the new president.

Sulzbergers letter was released after the paper’s public editor, Liz Spayd, took the paper to task for its election coverage. She pointed out how its polling feature Upshot gave Hillary Clinton an 84% chance as voters went to the polls. She compared stories that the paper ran about President-elect Donald Trump and Clinton, where the paper made Clinton look functional and organized and the Trump discombobulated. Spayd wrote, “Readers are sending letters of complaint at a rapid rate. Here’s one that summed up the feelings succinctly, from Kathleen Casey of Houston: “Now, that the world has been upended and you are all, to a person, in a state of surprise and shock, you may want to consider whether you should change your focus from telling the reader what and how to think, and instead devote yourselves to finding out what the reader (and nonreaders) actually think.”

She wrote about another reader who asked that the paper should focus on the electorate instead of “pushing the limited agenda of your editors.” “Please come down from your New York City skyscraper and join the rest of us.” Sulzberger—who insisted that the paper covered both candidates fairly- also sent a note to staffers on Friday reminding the newsroom to “give the news impartially, without fear or favor.” “But we also approach the incoming Trump administration without bias,” he said.

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Jonathan Pie is a spoof news reporter played by actor Tom Walker. Not a bad rant. h/t Nicole

President Trump: How & Why… (Jonathan Pie)

In case you missed it, I shot my bolt early this week & went viral in the process.

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Stop blaming Russia for NATO making up a reason to continue to exist.

Putin Aide: Trump Could Build Confidence With NATO Pullback (AP)

Vladimir Putin’s spokesman says one way Donald Trump could help build confidence with Russia after he becomes president would be to persuade NATO to slow down its expansion or withdraw its forces from Russia’s borders. Dmitry Peskov said in an interview with AP that this “would lead to a kind of detente in Europe.” But unfortunately, he said, Russia now sees “NATO’s muscles … getting bigger and bigger and closer and closer to Russian borders.” At a NATO summit in July, the Western alliance said it is building up positions in Poland, Estonia, Latvia and Lithuania in response to what it sees as escalating tensions with Russia. The United States is sending 1,000 troops to Poland next year. Trump has praised Putin as a strong leader and suggested that the U.S. could abandon its NATO commitments, which include mutual defense in case of attack.

The president-elect says NATO was created to confront a threat — the Soviet Union — that no longer exists and has called the alliance “obsolete” and a bad deal for America. He argues that the U.S. gets too little out of decades-old security partnerships like NATO, which is anchored in Europe but traditionally led by the United States. Peskov, who is considered one of Putin’s closest aides, called NATO “an instrument of confrontation.” When its forces are being enlarged and deploying closer and closer to Russia’s borders, he said, “we do not feel ourselves safe.” “Of course, we have to take measures to counter,” Peskov said. As “confidence-building measures” to reduce U.S.-Russia tensions in a Trump presidency “let’s say slow down or withdrawal of NATO’s military potential from our borders potentially would ease this situation,” he said.

It’s highly unusual for Peskov to travel abroad separately from Putin, but he is chairman of the board of the Russian Chess Federation and came to New York to attend Friday’s opening of the world championship match between Russia’s Sergei Karyakin and Norway’s Magnus Carlsen. The organizers invited Trump to attend but he did not show up. On other global issues, Peskov said in an interview Thursday at the venue for the championship that there is no possibility of “a breakthrough” to end the more than five-year Syria conflict unless the so-called moderate opposition is separated from “terrorist groups” including the Nusra Front and Islamic State extremists. The U.S. was supposed to do this under a Russia-U.S.-brokered cease-fire, but Peskov said Washington, unfortunately, was unable to do so. The cease-fire collapsed in September as the Syrian army launched an offensive on rebel-held eastern Aleppo under the cover of Russian warplanes.

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Within a year lots of Britons will realize that being out of the EU is a blessing.

S&P Predicts Hard Brexit And Fresh Downgrade For UK (G.)

Britain is in store for a hard Brexit that will hit the UK economy and lay bare the deep divisions in British society, a leading ratings agency has warned. In a bleak assessment of the UK’s prospects following the EU referendum, Standard & Poor’s said Britain was a diminishing global economic power on the verge of losing the ability to freely export goods and services to the EU. S&P said the UK was at risk of a further downgrade, following its unusual decision to slash the rating by two notches from the top AAA rating to AA, following the 23 June referendum. Moritz Kraemer, S&P global ratings chief sovereign credit officer, described that downgrade as “an extraordinary rating action, underlining the unprecedented step that is Brexit”.

He added: “Far from healing festering wounds, as was then PM David Cameron’s intention, the referendum has deepened and laid bare the schisms in British society. “Most of the economic impact will hit Britain itself. The second-round effect on the world economy is likely to be more limited, as the UK economy accounts for a small and shrinking share of global GDP.” The agency cited data from the International Monetary Fund, which suggested the UK’s share of the world economy will shrink from about 5% in 1980 to just over 3% in 2020. Kraemer said: “It is hard to fathom how a rather hard Brexit can be avoided unless both sides become much more flexible than they appear today. Nothing today suggests that a common quest for compromise will overcome the gulf that now looks as wide as the English Channel.”

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He could do much more, or have done at least, and all there is is words.

Obama: Greeks ‘Need Hope’ (Kath.)

You have played an important role in making sure that Greece remains in the eurozone and have repeatedly stated that it should get serious debt relief. Why did you do this and what should the way forward be in terms of promoting reforms, dealing with the debt issue and the strengthening of European institutions? How can the US help Greece in this, in practical terms? Is this going to be a priority during your visit to Berlin? Greece is a democracy, and the future of Greece will be decided by the Greek people. I have strongly supported efforts to keep Greece in the eurozone because I share the view of the vast majority of Greeks that this outcome is in Greece’s best interest. I believe that European integration is one of the greatest political and economic achievements of modern times, with benefits for EU members, the United States and the entire world.

Europe is our largest economic partner and we have a profound economic interest in a Europe that is stable and growing. Without question, Greece had to take steps to reform its economy, and I want to commend the Greek government, including Prime Minister Tsipras, and the Greek people for the very difficult and painful steps they’ve taken to show that Greece is working to help itself. The Greek budget is now in surplus and Parliament has passed tough reforms that will help make the Greek economy more competitive.

But there’s still clearly more to be done. My visit will therefore be an opportunity to reaffirm US support for reforms that improve the business climate, ensure that the imbalances that caused the crisis don’t re-emerge, and lay the foundation for a stronger economic recovery that helps improve the daily lives of the Greek people. I am a strong believer that to make reforms sustainable, people need hope. The IMF has said that debt relief is crucial to put Greece’s economy on a sustainable path and set the stage for a return to prosperity. This is why I will continue to urge Greece’s creditors to take the steps needed to ensure the country is well placed to return to robust economic growth, including by providing meaningful debt relief. Getting that done would not only fuel the Greek economic recovery, it would also show that Europe can make its economy work for everyone.

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How many times have I said the refugee deal would backfire on the EU?

Erdogan: If 3 Million Refugees March To Europe, EU Won’t Know What To Do (TM)

In yet another veiled threat to the European Union, President Recep Tayyip Erdogan said that Turkey currently hosts 3 million refugees and that if they were to march to Europe, the EU would not know what to do with them. In an interview with the Qatar-based Al Jazeera TV, Erdogan said the 3 million refugees in Turkey could march to Europe, without explaining how they might do that. In a progress report released earlier this week, the EU severely criticized Turkey for backsliding in democracy but praised its efforts to contain refugees inside the country. Criticizing Europe for not accepting even 100 or 500 refugees, Erdogan brought to mind the EU’s promise to give Turkey 3 billion euros in June in addition to another 3 billion.

“As far as I can remember, until now the EU has only given Turkey 250-300 million euros”, Erdogan said. The EU has been criticized for not taking any concrete action against Turkey despite growing despotism in the country for the sake of a refugee deal that was agreed earlier this year. Following a further crackdown on media and the opposition last week, several EU politicians called for a suspension of accession talks with Turkey until the rule of law is restored. Erdogan’s veiled threat to Europe came amid increasing criticism from the continent. Meanwhile, Galip Ozturk, the owner of one of the largest passenger bus fleets in Turkey, wrote on Twitter on Friday that he is ready to transport migrants to the EU border upon Erdogan’s orders.

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Aussies are good at cattle trade?!

US To Accept Refugees That Australia Refuses To Resettle (BBC)

Australia and the US have reached a resettlement deal for asylum seekers held in offshore detention centres in Papua New Guinea and Nauru. Under the agreement, the migrants there will be assessed and the most vulnerable will be resettled in the US. About 1,200 people are being held in the asylum centres on Manus Island in Papua New Guinea and on Nauru island. Australia’s policy of sending migrants who arrive by boat to offshore facilities has been criticised. Announcing the deal with the US on Sunday, Prime Minister Malcolm Turnbull said the resettlement process would be gradual. “US authorities will conduct their own assessment of refugees and decide which people are resettled in the US,” he said.

He did not say how many refugees would be relocated, but said that women, children and families would be prioritised. The agreement, to be administered with the United Nations refugee agency UNHCR, is available only to those currently in the processing centres. “It is a one-off agreement. It will not be repeated,” Mr Turnbull said. US Secretary of State John Kerry confirmed the arrangement, adding that his country was “very engaged” with the UNHCR and helping refugees “there and in other parts of the world”. Refugees who are eligible for asylum in the US but reject it would be offered a 20-year Nauru visa instead.

Read more …

Nov 102016
 
 November 10, 2016  Posted by at 10:24 am Finance Tagged with: , , , , , , , , ,  3 Responses »
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Byron In Chinatown, Pell Street, New York 1900

To Make America Great Again, Write Off The Private Debt (Steve Keen)
Asian Markets Soar, Nikkei Rockets Close To 7% (CNBC)
Dow Closes Up 250 Points; Financials Surge After Trump Election Upset (CNBC)
The Jig Is Up: America’s Voters Just Fired Their Ruling Elites (Stockman)
Thousands Protest Trump Win Around US (BBG)
White House Won’t Rule Out Pardon to Protect Clinton From Trump (BBG)
Trump Would Have Lost US Election If Bernie Had Been The Candidate (Ind.)
WikiLeaks Mocks Dems After Election Loss (Hill)
Trump Could Bring Russia In From The Cold (Dejevsky)
Donald Trump’s Financial Advisory Team Stocked With Wall Streeters (WSJ)
Mexico Will Not Pay For Trump Wall, But Seeks Cooperation (R.)
Meanwhile, As The World Watched The Election.. (Black)
Vancouver Wields $10,000-a-Day Fine in Crackdown on Empty Homes (BBG)
India’s Shock Bank Note Ban Sparks Cash Chaos (R.)
Hand Grenade Thrown Outside French Embassy In Athens (AP)

 

 

Too many pieces and opinions on Trump to keep count of. Let’s start with Steve Keen’s, the most practical one. It would be great and highly useful if Trump and/or his people read it.

To Make America Great Again, Write Off The Private Debt (Steve Keen)

Dear President Trump, The key source of America’s economic weakness today is something you have experience with: private debt. All leaders before you have obsessed about government debt while ignoring private debt, which is far higher (150% of GDP versus 100%) and far more dangerous. You can do something about this, and unlike your purely political predecessors, your experience tells you that it can be done—the only question is how to do it. The private debt mound sitting on top of American households and businesses is the reason demand is depressed right now. With that debt mountain weighing them down, firms are reluctant to borrow and invest, while households are reluctant to use credit to consume. Credit demand is now back to the average of the 1950s to 1970s—the “Golden Age” of America, when your supporters today and their parents had well-paying manufacturing jobs.

But it will easily turn negative again like it did during the Great Recession, given how enormous the debt burden still is today, since your immediate predecessor put more effort into rescuing Wall Street than he did into rescuing Main Street. The Washington insider economists who are now going to attempt to get your ear will tell you that this private debt doesn’t matter, and that nothing can be done about it anyway. They’re wrong on both counts. On whether it matters, they’ll say that one person’s debt is another person’s asset, so the total level of debt doesn’t matter. What they ignore is that banks create money and demand when they lend, and both money and demand fall when debt is repaid. They ignore the evidence shown in Figure 2, which I’ve been shoving in front of their faces for over a decade now (from early 2006, well before the Great Recession began).

On whether it can be done, they’ll tell you that this is “helicopter money”, and that it’s a dreadful idea. But the reality is that they’re doing it already. It’s just that the Fed’s helicopter, which they call “Quantitative Easing”, has been dropping that money on Wall Street rather than Main Street. When the Fed buys bonds off a pension fund under QE, it creates the money that it buys that pension’s funds bonds with. The pension fund then does what pension funds do with money: they buy shares and other bonds. This drives up share markets, which benefits Wall Street and the 1% directly. Brokers get paid lots of commission, most of which they stuff in their offshore bank accounts. They spend a fraction of this on Main Street, buying the odd hamburger.

But there would be far more money in Main Street’s hands if you put it there directly. There are many ways to do this, and it’s important to do it in a way that doesn’t favour people who borrowed over people who didn’t. But the easiest way to illustrate it is to imagine that you tell the Federal Reserve to buy mortgages directly from the public. For the Federal Reserve, there’s little practical difference what it’s doing right now, only 100% of the money it creates turns up in Main Street bank accounts rather than those of Pension Funds and Wall Street brokers. With less debt, there’ll be more spending by Main Street, and, as a result, more employment. The only sufferers will be bankers and Wall Street, who will have far less income-earning assets than they have now, and may even have to work for a living.

Read more …

So much for those predictions too.

Asian Markets Soar, Nikkei Rockets Close To 7% (CNBC)

Asia markets soared on Thursday with the Nikkei jumping close to 7%, as traders reassessed the economic impact of Donald Trump’s victory in the U.S. presidential election. The Nikkei 225 ended up 6.72%, or 1,092.88 points, at 17,344.42, as the yen weakened against the dollar, trading at 105.42 as of 2:50 pm HK/SIN. The dollar/yen had plunged to 101 levels on Wednesday. “U.S. yields surged higher on the back of expected increased fiscal spending by Trump. This has helped the dollar rally sharply against other currencies but especially the low yielding yen and the euro,” Anthony Darvall, chief market strategist at easyMarkets, said in a note on Thursday.

“A weaker yen has helped propel Japanese stocks up…completely erasing yesterday’s losses.” The Australian benchmark index closed up 3.34%, or 172.27 points, at 5,328.8. The ASX’s strength was underpinned by its energy subindex, up 3.29%, and the materials subindex, up 5.75%. The gold subindex shed 4.82%. New Zealand’s NZX 50 ended up 1.04%, or 69.51 points, at 6,733.72. Before markets opened, the Reserve Bank of New Zealand cut rates by 25 basis points to a record low of 1.75%. The RBNZ statement warned that “numerous uncertainties remain, particularly in respect of the international outlook, and policy may need to adjust accordingly.”

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The predicted crash took exactly 49 minutes.

Dow Closes Up 250 Points; Financials Surge After Trump Election Upset (CNBC)

U.S. stocks surged more than 1% Wednesday with financials and health care leading after Republican Donald Trump won the presidential election, defying market expectations for a Hillary Clinton win. The day’s rally took the major averages within 2% of their all-time intraday highs, and marked a stunning recovery from a sharp plunge in stock index futures overnight. Trade volume Wednesday was roughly 12 billion shares, the highest since the surprise U.K. vote to leave the European Union in June. “Overnight was all about uncertainty. Today we know” the result,” said JJ Kinahan, chief strategist at TD Ameritrade. He said part of the day’s rally was fueled by short covering, and that volatility will likely continue as traders eye Trump’s potential Cabinet picks.

The Dow Jones industrial average closed up more than 250 points at 18,589, with Goldman Sachs and Caterpillar contributing the most to gains. With about half an hour to the close, the Dow briefly added more than 300 points and was tracking to close at a record high. The index came within about 25 points of its all-time intraday high of 18,668.44 touched in August and closed within half a% of that level. Financials leaped 4% in their best day since 2011 to lead S&P 500 advancers, followed by health care. Banks and diversified financials such as Morgan Stanley led financial sector gains, while biotech stocks led health care gains. “Within financial services, there is a guarded view that there may be less regulation [under Trump] than under a Clinton presidency,” said John Stadtler, head of U.S. financial services at PwC.

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Strong from David. “..the giant stock market bubble will now crash. [..] We will be in an official recession within 6 months.”

The Jig Is Up: America’s Voters Just Fired Their Ruling Elites (Stockman)

America’s voters fired their ruling elites last night. After 30 years of arrogant misrule and wantonly planting the seeds of economic and financial ruin throughout Flyover America, the Wall Street/Washington establishment and its mainstream media tools have been repudiated like never before in modern history. During the course of the past year, upwards of 70 million citizens – 59 million for Trump and 13 million for Bernie Sanders – have voted for dramatic change. That is, for an end to pointless and failed wars and interventions abroad and a bubble-based economic policy at home. The latter showered Wall Street and the bicoastal elites with vast financial windfalls – even as it left 90% of Flyover America behind, where households struggled with stagnant wages, vanishing jobs, soaring health costs, shrinking living standards and diminishing hope for the future.

The voters also said in no uncertain terms that they are fed-up with a “rigged” system that has one set of rules for establishment insiders and another for everyone else. In essence, that’s what servergate, the Clinton Foundation pay-to-play scandals and the trove of Wikileaks DNC/Podesta hacks was all about. Indeed, in his brawling style, the Donald in effect convinced a huge slice of the electorate that the Clintons amounted to America’s leading crime family. And while he may have exaggerated the extent of their personal crimes and misdemeanors, the latter functioned as a proxy for the beltway racketeering that has become the modus operandi of the Imperial City. Stated differently, the people did connect the dots. There is a straight line from repeal of Glass-Steagall by the Rubin-Clinton democrats in the late 1990s through the resounding repudiations of the Clintons last night.

This string includes the M&A roll-up of the giant Wall Street banks after 1998; the subprime mortgage scams, housing booms and subsequent crash during the next decade; the panicked multi-trillion bailouts of the Wall Street gambling houses in the fall of 2008 and the lunatic spree of central bank money pumping that followed; the soaring stock market fueled by the Fed’s free money that arose therefrom; and the egregious global fund-raising and shakedowns of the Clinton Foundation and personal wealth accumulations by the Clinton’s personally, capped by Hillary’s notorious $250,000 off-the-record speeches to Goldman Sachs.

What happened was that during the eight Obama years, Washington essentially borrowed $10 trillion, or nearly as much as the first 43 presidents did over 220 years, while the Fed expanded its balance sheet by 5X more than had happened during its first 94 years of existence. [..] For months and years to come, the Imperial City will be ungovernable and the nation will be racked with fiscal, financial, political and even constitutional crisis. By kicking the can in a ruinous direction for decades, America implicitly opted eventually for the bleeding cure. To wit, the giant stock market bubble will now crash. The stock-price obsessed C-suites of corporate America will now panic and begin pitching inventory and workers overboard. We will be in an official recession within 6 months. The Federal budget will plunge back into trillion dollar annual deficits very soon.

Accordingly, Washington will descend into permanent warfare over the debt ceiling and an exploding $20 trillion+ public debt. Any notion of a Trump economic revival program – even if it could now be confected – will be stillborn in the financial and fiscal chaos ahead. And most important of all, the almighty Fed will be stranded high and dry – out of dry powder and under political attack like never before from angry politicians and citizens alike. The jig is up.

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Earlier today I read what looks to be an apt observation: ‘Every white person in New York who didn’t vote for Trump is now out in the streets protesting against him’. Chaotic scenes in LA and other places too. But the people who protest now are miles off target and months too late: they should have stood up for Bernie when the Hillary camp and the DNC conspired to oust him. Indeed, Bernie himself should have stood up back then, not for himself but for his supporters; they would have stood up with him. Whether they all like it or not, being asleep and/or silent when big things happen that count, does carry a price. If you drop the ball, you can’t just pick it back up again and pretend it didn’t fall. Shouting ‘not my president’ in the wake of an election is a sign of weakness, no matter how well-intentioned. The protests should have taken place before the election, not after.

Thousands Protest Trump Win Around US (BBG)

The raw divisions exposed by the presidential race were on full display across America on Wednesday, as protesters flooded city streets to condemn Donald Trump’s election in demonstrations that police said were mostly peaceful. From New England to heartland cities like Kansas City and along the West Coast, many thousands of demonstrators carried flags and anti-Trump signs, disrupting traffic and declaring that they refused to accept Trump’s triumph. In Chicago, where thousands had recently poured into the streets to celebrate the Chicago Cubs’ first World Series victory in over a century, several thousand people marched through the Loop. They gathered outside Trump Tower, chanting “Not my president!”

Chicago resident Michael Burke said he believes the president-elect will “divide the country and stir up hatred.” He added there was a constitutional duty not to accept that outcome. A similar protest in Manhattan drew about 1,000 people. Outside Trump Tower on Fifth Avenue in midtown, police installed barricades to keep the demonstrators at bay. Hundreds of protesters gathered near Philadelphia’s City Hall despite chilly, wet weather. Participants — who included both supporters of Democratic nominee Hillary Clinton and independent Vermont Sen. Bernie Sanders, who lost to Clinton in the primary — expressed anger at both Republicans and Democrats over the election’s outcome.

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Shouldn’t this be left up to Congress?

White House Won’t Rule Out Pardon to Protect Clinton From Trump (BBG)

The White House on Wednesday wouldn’t rule out issuing a pardon to protect Hillary Clinton from prosecution by the incoming administration over her use of a private e-mail server. President-elect Donald Trump threatened during his campaign to assign a special prosecutor to investigate Clinton. He blamed a “rigged system” for protecting her from prosecution after FBI director James Comey announced in July and again on Nov. 6, two days before the election, that his agency wouldn’t seek charges against the Democrat. “You’d be in jail,” Trump memorably warned Clinton during their final debate. Asked whether President Barack Obama might issue Clinton a pardon before he leaves office in January, White House press secretary Josh Earnest said the administration doesn’t discuss such cases in advance.

Earnest indicated Obama was hopeful a pardon wouldn’t be necessary, noting that Trump was gracious toward Clinton in his victory speech early Wednesday morning. “We’ve got a long tradition in this country of people in power not using the criminal justice system to exact political revenge,” Earnest said. “We go to great lengths to insulate our criminal justice system from partisan politics.” Crowds at Trump’s rallies frequently chanted “lock her up” when the Republican mentioned Clinton’s name. Trump would occasionally join them. On Wednesday, as he claimed victory in the presidential race, Trump complimented Clinton for her campaign and her public service. “Hillary has worked very long and very hard over a long period of time, and we owe her a major debt of gratitude for her service to our country,” he said.

Comey said in July that Clinton and her aides were “extremely careless” in handling classified information, but that criminal prosecution wasn’t warranted. The Justice Department agreed. But proactively offering a pardon isn’t unprecedented. In 1974, Gerald Ford gave former president Richard Nixon a full and unconditional pardon for any crimes he might have committed while in the Oval Office. That move, derided by critics, underscored the political risks of such a move. Ford lost re-election to Democrat Jimmy Carter. Obama and Clinton are in a less perilous situation; Obama cannot run for president again, and Clinton’s political career is also likely over.

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Nothing new. And everyone knew it, too. Including Hillary and the DNC.

Trump Would Have Lost US Election If Bernie Had Been The Candidate (Ind.)

“Right now in every major poll, national poll and statewide poll done in the last month, six weeks, we are defeating Trump often by big numbers, and always at a larger margin than Secretary Clinton is.” So spoke Bernie Sanders, Hillary Clinton’s Democratic rival in the primary, when he appeared on the May 29 2016 edition of NBC’s ‘Meet the Press’. It was not the first time the socialist former Mayor of Burlington had made the claim. And it was something that his supporters believed passionately. Time after time, supporters of the white-haired, frequently cantankerous Democratic socialist, said the media was helping prepare a coronation for Ms Clinton in a way that was neither fair or democratic.

At a rally in the Bronx, New York, in April, Paul Nagel, 58, a gay rights and housing activist, told The Independent that Mr Sanders would go into the Oval Office on the back of a popular movement and that he could continue to listen to the people. “What we’re seeing now feels 1969,” he said. At rallies for the 74-year-old across the country, there was a sense of euphoria and excitement that simply did not exist at those for Ms Clinton. Ms Clinton’s supporters said they had made a calculation to vote for her as they believed she would be the best candidate to lead the country, but there was no sense of the passion witnessed at her rivals’ events, or those of Barack Obama eight years earlier.

But it was not just anecdotal evidence. A series of polls suggested that Mr Sanders – with his calls for free college tuition, the removal of student debt, a national health service and the removal of big money from politics – would stand a better chance against Mr Trump than Ms Clinton. A poll by NBC News-Wall Street Journal on May 15 said Ms Clitnon would beat Mr Trump by three points, but said Mr Sanders would win by 15 points. A CBS News-New York Times on May 3 gave Ms Clinton a six-point advantage over Mr Trump, but said Mr Sanders would win by 13 points. At the same time, Fox News said Ms Clinton would lose to Mr Trump by three points, but said Mr Sanders would win by four.

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‘Mocks’ is a ridiculous term to use here.

WikiLeaks Mocks Dems After Election Loss (Hill)

WikiLeaks capped off Tuesday’s surprising presidential election with a tweet appearing to mock Democrats for picking Hillary Clinton as their nominee. “By biasing its internal electoral market the DNC selected the less competitive candidate defeating the purpose of running a primary,” the official account tweeted near midnight. Throughout the campaign, WikiLeaks published hacked DNC emails that it said showed the party was biased toward Clinton over her primary rival, Bernie Sanders. Some emails showed DNC staffers discussing how to expedite Sanders’s exit from the primary race after it was clear Clinton would win. Others appeared to show then-CNN analyst Donna Brazile leaking questions to the Clinton campaign in advance of town hall debates between the two Democrats.

Donald Trump’s campaign also seized on the hacked emails to argue that Clinton and Democrats had treated Sanders unfairly, as he made a play for the Vermont senator’s supporters. On Tuesday, WikiLeaks head Julian Assange posted a winding statement on his site expressing his dislike of both candidates, saying that the site had an obligation to leak the Clinton-related emails even though it did not have a similar set of Trump documents. “Publishing is what we do. To withhold the publication of such information until after the election would have been to favour one of the candidates above the public’s right to know,” Assange wrote.

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Whaddaya know: A voice of reason in the otherwise full-tard anti-Trump Guardian.

Trump Could Bring Russia In From The Cold (Dejevsky)

As the tally turned towards a victory for Donald Trump in the middle of the European night, comments began to appear on social media to the effect that Russian intelligence had won its biggest victory in the country’s history. More than this, that the Kremlin had actually captured the United States. The prominent, if spectral, role played by Russia was one of the stranger aspects of this already strange US election. And these comments were alarmist, if logical, extensions of the claims made by the Clinton camp during the campaign that Trump was somehow in cahoots with President Vladimir Putin and that the Russian state was interfering in the election on his behalf. There was precious little evidence for such claims, and Putin himself ridiculed them at his annual Valdai meeting with international Russian specialists two weeks ago.

Was the US a banana republic, he asked, that its elections could be so easily manipulated? Of course not. But they were useful to the Democrats’ campaign in showing off Hillary Clinton as a tough foreign policy president-in-waiting and demonising Trump by association. They were not useful enough, though, given the result. Either the voting public dismissed them, or perhaps they agreed with Trump that improved relations with Russia might be a good thing. In any case, they turned out not to be the black mark the Clinton campaign expected. There is no mystery about why the accusations took hold. It was in part because Trump had said early on that he thought he could do business with Putin, earning him the reputation of being soft on big bad Russia. Then the Democrats at their convention chose to divert blame for the hacking of their computer system on to Russian intelligence.

This was never conclusively proved and all the supposedly corroborating statements from US officials contained get-out clauses. People with intelligence connections suggested that everyone tried to hack everyone’s computers, especially at election time, without any intention of actually interfering. The truth of any Russian involvement will probably never be known. But certain myths that gained currency need to be dispelled. One was that Trump was receiving privileged information from Russia. In fact, anything he said was already openly available before he said it. Another was that Trump had complicated and suspect business dealings with Russia. No evidence was ever produced – despite what must have been exhaustive efforts by the Clinton campaign[..]. There also seems to have been some confusion between Russia and other parts of the former Soviet Union, which hardly reflects well on the accusers.

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Let’s see first. But Donald had better be careful with that. All nominations will face heavy scrutiny.

Donald Trump’s Financial Advisory Team Stocked With Wall Streeters (WSJ)

Donald Trump’s successful insurgent bid for the White House promised to upend a global power structure that benefited large corporations. Now, several Wall Street financiers and other successful business leaders could be in line to run top posts in his presidential administration. People close to Mr. Trump have said he is considering Steven Mnuchin, a former Goldman Sachs banker who became his national campaign finance chairman in May, as his pick for Treasury secretary. If tapped for the job, Mr. Mnuchin would become the third Goldman alumnus in the last 20 years to head the Treasury, following Robert Rubin and Hank Paulson, who both served as the bank’s chief executive.

After a 17-year career at Goldman, where Mr. Mnuchin led the mortgage-trading department and was the bank’s chief information officer, he turned to investing. He briefly worked for a hedge fund tied to George Soros, the big Democratic donor. In his closing campaign ad, Mr. Trump featured both Goldman and Mr. Soros as “the establishment…who control the levers of power in Washington.” Advisers to Mr. Trump have said promptly filling senior appointments would help calm jittery markets, which saw volatility soar after it became apparent that Mr. Trump, a political outsider who broke with the political philosophy that has defined both parties, would win the election.

“Just as he comforted a lot of people when he picked Mike Pence as his running mate, they’ll be much more comfortable when they see what the team will be,” predicted Wilbur Ross, the private-equity investor who has advised Mr. Trump on economic policy. Business leaders have been “incorrectly worried about what might happen under Trump,” Mr. Ross said.

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Cooperation it is.

Mexico Will Not Pay For Trump Wall, But Seeks Cooperation (R.)

Mexico said on Wednesday it would work with Donald Trump for the benefit of both nations after his surprise U.S. election win, but reiterated it would not pay for his planned border wall, which stirred up deep resentment during a fraught presidential campaign. As Trump strode toward victory, the peso plunged 13% in its biggest fall since the Tequila Crisis devaluation 22 years ago, before paring losses to trade down 8.7% at 19.91 per dollar. Still, officials held back from taking action to support the peso despite it hitting lifetime lows overnight. Trump’s threats to dump the NAFTA agreement with Mexico and Canada, and to tax money sent home by migrants to pay for the controversial wall on the southern border, have made the peso particularly vulnerable to events in the U.S. presidential race.

“Very hard times are coming to Mexico,” said analyst Gabriela Siller of Mexican bank BASE. Still, President Enrique Pena Nieto said he called to congratulate Trump, and had agreed to meet the New Yorker during the transition phase to discuss joint cooperation, which he hopes would strengthen the competitiveness of North America. Welcoming Trump’s victory speech pledge to seek “common ground” and partnership with other countries, Pena Nieto said in a televised statement that Mexico shared the same vision. [..] Foreign Minister Claudia Ruiz Massieu reiterated that Mexico would not pay for Trump’s proposed wall. The vow to make Mexico pay for the barrier was a key feature of his stump speeches.

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“..the word “never” apparently means 49 minutes to a Nobel laureate, because that’s how long it took for the S&P 500 to turn positive for the day..”

Meanwhile, As The World Watched The Election.. (Black)

[..] when I woke up this morning here in Thailand and flipped on the TV, the first thing I saw was Wolf Blitzer having an orgasm every time Hillary won an electoral vote. It’s almost comical to suggest there was any semblance of objectivity throughout the entire cycle. Hillary Clinton had the full and unabashed backing of the entire media establishment. And the banking establishment. And the political establishment. And countless billionaires, Hollywood celebrities, rock stars, international press, foreign leaders, and even the President of the United States. Yet all of those big guns proved to be ineffective against a citizenry that’s fed up with the status quo.

At least the losing side has accepted its defeat with quiet dignity. University students across the country have come out of their safe spaces to protest by the thousand, chanting “F*ck Donald Trump” and “Not my President”. The students’ sudden fury may be what caused the Canadian government’s immigration website to temporarily go down (though I’m sure this will somehow be blamed on the Russians). Liberal papers like the Huffington Post are running headlines like “An American Tragedy”, while NYT bloggers are calling Trump voters “racist, xenophobic, misogynistic and homophobic.” Celebrities had some real gems like “Well, congratulations America you f–ked this one up,” and “I feel like I’m about to give birth to a baby that’s already dead.”

Comedian Chelsea Handler posted one of the most bizarre Tweets of the night, saying “My condolences to the President and First Lady. We will keep aiming high. We may not have you honored you this time, but we will honor you.” So apparently this exercise of American democracy has dishonored the President. Nobel Prize-winning economist Paul Krugman commented that tumultuous financial markets would “never” recover. Wow. Never. But the word “never” apparently means 49 minutes to a Nobel laureate, because that’s how long it took for the S&P 500 to turn positive for the day once the market opened. Investors ostensibly realized that, despite the Trump victory, Disney will keep making superhero movies, Coke will keep distributing poisonous flavored water, and Mark Zuckerberg will keep selling your personal data to advertisers.

[..] I thought the late-night quickie from Clinton campaign chairman John Podesta summed it up perfectly. While Hillary stayed in her $20,000/night suite at the Peninsula Hotel, Podesta was sent to tell the crowd of Clinton supporters that “She is not done yet!” Nonsense. It was a big fat lie. Minutes later she called Donald Trump to concede the election. Anyone trying to understand why she lost might take note of this deceit– even at the bitter end. She lied to her own supporters.

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All bubble cities should pay attention. Vancouver appears to be making this work.

Vancouver Wields $10,000-a-Day Fine in Crackdown on Empty Homes (BBG)

Want to keep your million-dollar luxury pad in Vancouver empty? Get ready to pay C$10,000 ($7,450) annually in extra taxes. Lie about it? That’ll be C$10,000 a day in fines. Canada’s most-expensive property market, suffering from a near-zero supply of rental homes, announced the details of a new tax aimed at prodding absentee landlords into making their properties available for lease. The empty-home tax will take effect by Jan. 1 and will be calculated at 1% of the property’s assessed value, Vancouver Mayor Gregor Robertson told reporters at City Hall. “Vancouver is in a rental-housing crisis,” Robertson said. “The city won’t sit on the sidelines while over 20,000 empty and under-occupied properties hold back homes from renters.”

The measure is among efforts to make housing more accessible and affordable in Vancouver, ranked the world’s third-most-livable city, and has drawn attention for its sky-high prices fomented by global money flows. Public scrutiny has focused on absentee landlords, particularly from overseas, who are accused of sitting on investment properties where windows remain dark throughout the year. In August, the provincial government imposed a 15% tax on foreign buyers, and last month the federal government tightened mortgage insurance eligibility requirements. The city of Vancouver has focused its efforts on the rental market, where vacancies can get scooped up within hours while bidding wars drive up leasing costs.

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The only possible outcome.

India’s Shock Bank Note Ban Sparks Cash Chaos (R.)

Indians struggled to pay for basic goods like food and fuel on Wednesday and fretted about their savings, after the government withdrew 500 and 1,000 rupee notes from circulation in a bid to flush out money hidden from the tax man. The shock measure also sent shudders through the investment community on a day when the markets were also reeling at the election of Republican candidate Donald Trump as the next U.S. president. India’s National Stock Exchange share index slumped as much as 6.3% in early trade before recovering most losses to close the day off 1.3%.

The currency move, announced late on Tuesday night by Prime Minister Narendra Modi, aims to bring billions of dollars worth of unaccounted wealth into the mainstream economy and curb corruption. The biggest disruption in decades to cash transactions, which power much of the rural economy, comes months before a series of state elections including in India’s most populous Uttar Pradesh state. Critics have warned that ordinary people who do not have access to the banking system will be hardest hit, and that Modi risks upsetting his ruling party’s support base of small traders and businessmen who largely deal in cash.

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Obama visits Athens Nov 15.

Hand Grenade Thrown Outside French Embassy In Athens (AP)

A hand grenade attack outside the French Embassy in central Athens lightly wounded a policeman early Thursday, police said, days before U.S. President Barack Obama is due to visit the Greek capital. Authorities said the policeman, who had been on guard outside the embassy, was wounded when unknown assailants threw a hand grenade outside the embassy building, located opposite Parliament on a major avenue. Police shut down the area to vehicles and pedestrians, while anti-terrorism forensics experts combed the scene for evidence.

Police said the attack was apparently carried out by two people on a motorbike, and a bike matching the description was later found in a central Athens neighborhood popular with anarchists and was being examined to determine whether it was the one that had been used in the attack. Authorities said it appeared the policeman had only been lightly wounded because he had been inside an armored guard post outside the embassy entrance. The attack came days before Obama is to arrive in Athens next week for an expected overnight visit. Left-wing organizations have announced they will hold protests during the visit.

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Nov 092016
 
 November 9, 2016  Posted by at 10:29 am Finance Tagged with: , , , , , , , ,  7 Responses »
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Javier Juén 2016

Donald Trump Wins White House in Astonishing Victory (AP)
Global Markets Roiled as Trump Election Win Upends Forecasts (BBG)
Putin Congratulates Trump, Hopes To Work On International Issues (RT)
World Leaders Brace Themselves For Trump Presidency (G.)
Canada Immigration Website Crashes As Trump’s US Election Lead Grows (G.)
Donald Trump’s Victory Is Nothing Short Of A Revolution (G.)
Toronto Million-Dollar Homes Pushing Demand to Nearby Cities (BBG)
India Abolishes Larger Banknotes In Fight Against Graft, ‘Black Money’ (CNBC)
Spanish Philosopher Marina: ‘We Have Lost The Idea Of Europe’ (EurActiv)
The True Scandal Of 2016 Was The Torture Of Chelsea Manning (Scahill)
Geoffrey Pyatt: Greece An Island Of Stability, Owes Its Success To EU (Kath.)

 

 

 

The media are not yet ready to cover something they opinionated so frantically against.

Donald Trump Wins White House in Astonishing Victory

Donald Trump has been elected the next president of the United States — a remarkable showing by the celebrity businessman and political novice who upended American politics with his bombastic rhetoric. Trump rode an astonishing wave of support from voters seeking sweeping change, capitalizing on voters’ economic anxieties, taking advantage of racial tensions and overcoming a string of sexual assault allegations on his way to the White House. His triumph over Hillary Clinton will end eight years of Democratic dominance of the White House and threatens to undo major achievements of President Barack Obama. He’s pledged to act quickly to repeal Obama’s landmark health-care law, revoke the nuclear agreement with Iran and rewrite important trade deals with other countries, particularly Mexico and Canada.

The Republican blasted through Democrats’ longstanding firewall, carrying Pennsylvania and Wisconsin, states that hadn’t voted for a Republican presidential candidate since the 1980s. He needed to win nearly all of the competitive battleground states, and he did just that, claiming Florida, Ohio, North Carolina and others. Global stock markets and U.S. stock futures plunged deeply, reflecting investor alarm over what a Trump presidency might mean for the economy and trade. Trump will take office with Congress expected to be fully under Republican control. Republican Senate candidates fended off Democratic challengers in key states and appeared poised to maintain the majority. Republicans also maintained their grip on the House. Senate control means Trump will have great leeway in appointing Supreme Court justices, which could mean a major change to the right that could last for decades.

Trump upended years of political convention on his way to the White House, levelling harshly personal insults on his rivals, deeming Mexican immigrants rapists and murderers, and vowing to temporarily suspend Muslim immigration to the U.S. He never released his tax returns, breaking with decades of campaign tradition, and eschewed the kind of robust data and field efforts that helped Obama win two terms in the White House, relying instead on his large, free-wheeling rallies to energize supporters. His campaign was frequently in chaos, and he cycled through three campaign managers this year. His final campaign manager, Kellyanne Conway, touted the team’s accomplishments as the final results rolled in, writing on Twitter that “rally crowds matter” and “we expanded the map.”

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Shocks are wearing off already.

Global Markets Roiled as Trump Election Win Upends Forecasts (BBG)

Global markets were thrown into disarray as Donald Trump won the U.S. presidential election, shocking traders after recent polls indicated that Hillary Clinton would be the victor. Futures on the S&P 500 Index plunged by a 5% limit that triggers trading curbs and European equities sank the most since the aftermath of Britain’s shock vote to leave the European Union. Gold advanced with haven assets including the yen and sovereign bonds. Mexico’s peso tumbled the most since 2008 amid concern U.S. trade policies will become more protectionist under Trump. The dollar pared losses and Treasuries trimmed gains after Trump appeared before supporters.

Trump was projected to be the winner early Wednesday by the AP and television networks after Wisconsin pushed him over the 270 Electoral College vote threshold needed to become president-elect. The Republicans also retained control of Congress. A Trump victory had been portrayed by analysts as having the potential to unhinge markets that were banking on a continuation of policies that coincided with the second-longest bull market in S&P 500 history. Brexit was the last major political shock and led to the U.S. equity gauge sliding 5.3% in two days. “A Trump win is expected to damage trade,” said James Butterfill, head of research and investment strategy at ETF Securities in London. “Traders are already expressing their worries through a depreciating dollar, which is bad news for European companies.”

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I’m sure you’d rather have seen war with Russia.

Putin Congratulates Trump, Hopes To Work On International Issues (RT)

In a message to Donald Trump, Russian President Vladimir Putin has expressed confidence that the dialogue between Moscow and Washington, in keeping with each other’s views, meets the interests of both Russia and the US. Putin also expressed hope over the joint efforts on bringing Russian-American relations out of their current crisis. The Russian leader noted in the message that he hopes to address some “burning issues that are currently on the international agenda, and search for effective responses to the challenges of the global security,” RIA Novosti reported. On top of it, Putin has expressed confidence that “building a constructive dialogue between Moscow and Washington, based on principles of equality, mutual respect and each other’s positions, meets the interests of the peoples of our countries and of the entire international community.”

According to many observers, US-Russia relations are now at their lowest point since the Cold War. Putin has repeatedly noted that the worsening of Russia’s relations with the US “was not our choice,” however. For things to improve between Moscow and Washington, the US should first and foremost start acting like an equal partner and respect Russia’s interests rather than try to dictate terms, Putin said last month. “We are concerned with the deterioration of Russian-American relations, but that was not our choice, we never wanted that. On the contrary, we want to have friendly relations with the US, a great country and a leading economy,” Putin said at an economic forum in Moscow. The US will have to negotiate with Russia on finding solutions to international issues as no state is now able to act alone, Russian Foreign Minister Sergey Lavrov said last week, adding that problems in bilateral relations began to mount long before the Ukrainian crisis broke out in 2014.

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Brussels is full of puppets who won’t feel all that easy today, having ridiculed and vilified Trump for a long time.

World Leaders Brace Themselves For Trump Presidency (G.)

At midnight in Washington, as Donald Trump’s victory became inevitable, the French ambassador to the US sent out a tweet. “It is the end of an era,” he declared, “that of neoliberalism.” “It remains to be seen what will succeed it,” Gérard Araud added. “After Brexit and this election, everything is now possible. A world is collapsing before our eyes.” Those sweeping observations were later deleted, but the underlying sentiment will be widely shared in western capitals. Overnight, the world entered uncharted territory. President-elect Trump spent the campaign threatening to upend what has been called the existing order, the network of treaties and multilateral institutions that govern much of global relations.

He has said he would tear up and renegotiate trade treaties, and he has even called into question America’s commitment to the Nato alliance. With a completely different kind of leader preparing to enter the Oval Office, it is already looking like a world turned upside down. There is a caveat to the direst predictions. Trump will have to work with Congress, including establishment foreign policy Republicans. And he will have to find people to staff the top positions in his administration. It is possible that he will simply enjoy his victory and his new home in the White House and delegate foreign policy to Republican insiders such as Stephen Hadley, George W Bush’s national security adviser who is rumoured to be interested in reprising his role. That Bush administration seemed radical at the time, but no longer in relation to Trump’s stated agenda.

On balance, it seems more likely that he means what he has said all along about US relations with the rest of the world, and intends to turn his ideas into policy under his personal leadership. Long-negotiated multilateral trade deals, the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership (TTIP) with Europe, will be the first to be halted. Opposition to those deals were a cornerstone of the Trump campaign. In their place, Trump has said he will negotiate bilateral deals that would be more favourable for US manufacturing. But he would face hostile trading partners, irritated at the dumping of major agreements. A constant theme of his campaign was to denigrate Chinese trading practices and to promise to claw back American advantage. China will not make concessions easily. Trump’s America could easily face a trade backlash.

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Time for Trump to get deeper into Canadian real estate.

Canada Immigration Website Crashes As Trump’s US Election Lead Grows (G.)

Canada’s main immigration website appeared to suffer repeated outages on Tuesday night as Trump took the lead in several major states and his prospects for winning the US presidency turned markedly higher. Some users in the United States, Canada and Asia saw an internal server error message when trying to access the Citizenship and Immigration Canada website. When the Guardian clicked on the page it would not load and a “this page isn’t working” error message came up. Officials for the ministry could not immediately be reached for comment, but the website’s problems were noted by many on Twitter.

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There’ll be a lot of opinions like this one: “boy, were we wrong, but really, we’re so right we just gotta wear shades.”

Donald Trump’s Victory Is Nothing Short Of A Revolution (G.)

We may as well call this what it is: a revolution. Because nothing else comes close to capturing the political revolt – and the chaos that surely follows – from Donald Trump’s stunning victory in 2016. We were all wrong. So badly wrong. The polls, the pundits, the press. The elites, the allies, the business leaders. Trump’s victory makes the upset of Brexit look like a quaint tiff over a round of golf. America and its relationship to the world has fundamentally changed overnight. An era that stretches back to Franklin D Roosevelt just came to an abrupt and ugly end. Instead of being an expansive, outward-looking, globalist power, the United States has definitively turned inward, shutting its borders to Mexicans, Muslims and any number of other perceived enemies of Trump’s demagogic imagination.

At the same time, America itself has been redefined. The bond between its president and its constitution will be strained, if Trump pursues a fraction of what he so clearly promised through this extraordinary election. His political enemies – notably Hillary Clinton – can expect prosecution led by an FBI that previously found no grounds for legal action over her private email server. The Trump Department of Justice will seek prison time for Clinton, and the only barrier to this punishment is the third and independent branch of government: the judiciary. Trump promised a deportation force to round up hundreds of thousands, if not millions, of undocumented immigrants starting on his inauguration day in January. His transition to government will surely be dominated by plans to rip through the Latino communities of America’s largest cities.

There will be no judicial restraint in these immigration cases. Amid the political upheaval, we can expect massive economic dislocation. The financial markets will now be calculating the price of uncertainty in global trade flows as they contemplate Trump’s promises to impose huge tariffs on China, restrict international investment by US companies, and force an epic diplomatic breach with Mexico over his beloved wall. Taken together, Trump’s victory ushers in the most tumultuous period of American history since the Great Depression and the start of world war two. It will challenge the core concepts of American identity and global security as we have known them for generations.

Overnight, Russia has moved from perennial rival to trusted friend, while Nato’s future is in peril. Allies can now expect to pay for their security umbrella, as the US military effectively turns into a mercenary force. Many countries may find cheaper options and break with the US entirely.

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Vancouver stifled this; TO should too.

Toronto Million-Dollar Homes Pushing Demand to Nearby Cities (BBG)

Toronto’s hot housing market is driving residents to seek more affordable options outside Canada’s largest city, pushing demand for new properties to new highs in these outlying towns. Residential permits in Hamilton, a city of about 500,000 people an hour’s drive from Toronto, more than doubled to a record C$204 million ($153 million) in September, according to Statistics Canada. That’s the largest jump in more than six years for the area reliant on manufacturing and steel production. The value of permits in St. Catharines, in the wine-growing Niagara region, jumped to the second highest on record to C$66 million in the month. The surge in new housing demand in outlying regions of Toronto comes amid escalating prices and all-time-high sales in Canada’s financial capital.

The average price of a detached house in downtown Toronto jumped 22% in October from the prior year to C$1.3 million amid a record number of sales, according to the city’s real estate board. The more affordable condominiums are also facing growing demand and escalating costs, with sales up 20% and the average price up 13%, nearing half-a-million dollars. Hamilton-Burlington is already feeling the effects of the pent-up housing demand. Sales of all housing types rose to a record high for the month of October as listings dropped 3.2% and properties were snapped up within a month of listing. The average price of a freehold home increased 15% to C$540,250, still less than half the cost of a Toronto property.

Read more …

In a society of over a billion people who trade mostly in cash.

India Abolishes Larger Banknotes In Fight Against Graft, ‘Black Money’ (CNBC)

Consumers in the world’s biggest democracy just got a big surprise. Indian Prime Minister Narendra Modi on Tuesday announced that 500 and 1,000 rupee banknotes would be withdrawn from circulation at midnight, saying it was part of a crackdown on rampant corruption and counterfeit currency. India is hampered by so-called black money that is undeclared, untaxed or under the table, said Sasha Riser-Kositsky at research firm Eurasia Group. The unexpected step appears designed to bring billions of dollars worth of cash in unaccounted wealth into the mainstream economy, as well as hit the finances of Islamist militants who target India and are suspected of using fake 500 rupee notes to fund operations. “The move to restrict the circulation of large-denomination currency notes represents a major step in the government’s fight against black money,” Riser-Kositsky said.

Speaking in an address to the nation, Modi said that black money “and corruption are the biggest obstacles in eradicating poverty.” New 500 and 2,000 rupee denomination notes will be issued at a later date, he added. Those notes are worth roughly $7.53 and $30.14, respectively, but they represent very large-denomination bills in the country. The average daily income in India was 272.19 rupees in 2014, or about $4.09 at today’s conversion rate, according to the country’s Labor Bureau. “It shows resolve on the part of the government to do something about black money, which I like a lot,” a hedge fund investor who is active in India but requested anonymity told CNBC. The investor added, however, that “I do think there’s going to be a backlash. A lot of the economy is still cash-driven, and this will inconvenience a lot of people and transactions.”

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Yeah. Many years ago.

Spanish Philosopher Marina: ‘We Have Lost The Idea Of Europe’ (EurA)

Philosopher José Antonio Marina told EurActiv Spain that the idea of Europe has been lost and called on the EU to undertake a period of “quiet” reflection in order to relaunch a project imbued with “intellectual, political and economic vigour”. “The idea that we have about Europe has a direct impact,” which means that the European Union “needs to enter a much more reflective period in order to find solutions to problems that were unimaginable before”, warned philosopher José Antonio Marina. As an example, the Spaniard cited Brexit, and the issue of activating Article 50, which for an exclusive club only accustomed to enlargement has come as a shock. The EU’s doors are still open to new members of course.

Marina added that one of the EU’s major problems is that it has not spent enough time delving into one particular issue: sovereignty. The British, who “are very practical” and “have a clear idea of England, but not of Europe”, preferred to “regain their sovereignty, even if it makes them poorer”, insisted the Toledo-born thinker. “Sovereignty has always been a complicated issue,” he continued. “In Europe, this debate has been diluted, it has become tired and has not been carried out well,” Marina claimed, adding that this whole concept, as well as the concept of the nation, has to be rethought. However, he warned that regulatory system reforms have to be done carefully, because “they are tools that contain a lot of wisdom”.

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I agree with Scahill’s main topic, but cringe at seeing him fall for the “Trump’s bizarre and consistent lauding of Vladimir Putin” narrative.

The True Scandal Of 2016 Was The Torture Of Chelsea Manning (Scahill)

A few days ago, we learned that Private Chelsea Manning attempted to take her own life last month for the second time since being sentenced to 35 years at the U.S. military prison in Leavenworth, Kansas. The whistleblower, who provided the collateral murder video, the Iraq and Afghan war logs, and the hundreds of thousands of classified U.S. State Department cables to Wikileaks, was convicted of espionage. As I waited to vote today, I found myself thinking of her languishing in misery in isolation and incarceration. This election — particularly in its closing stages — has been dominated by controversies over emails, classified documents, and Wikileaks.

We’ve heard endlessly about Hillary Clinton’s private basement server, her 33,000 deleted emails, the phishing and leaking of John Podesta’s emails, including parts of Clinton’s much discussed private speeches to Goldman Sachs. Trump, for his part, suddenly discovered a great love for Julian Assange, though he does have trouble correctly spelling Wikileaks in his tweets of praise. Taken together with Trump’s bizarre and consistent lauding of Vladimir Putin and leaks from the U.S. intelligence community, the country has been treated to an odd flashback of Cold War propaganda, including a fair dose of red-baiting from the Democrats. In the matter of Anthony Weiner’s computer, his wife Huma Abedin’s communications and the potential implications for Clinton, the FBI, whose overreach had not previously been of much concern to Democrats, suddenly became a deviant manipulator of the electoral process, while Trump and his supporters alternately praised the agency’s professionalism and denounced it as part of the rigged system.

The U.S. public is now getting a taste of the way hacking, phishing, and an overwhelming dependence on fallible machines and networks can impact politics. But let’s be clear: None of the disclosures in this campaign — not one thing in any of the hacked emails or those declassified and released from Clinton’s private server — has brought to light anything of greater importance than the documents Chelsea Manning provided to Wikileaks. She revealed war crimes, including murder and torture, dirty and duplicitous dealings of the U.S. and its allies, exposed liars, documented a secret history of America’s longest running war, and forced a much needed debate about the U.S. role in the world. And for that, she is being tortured.

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Talk about a Trojan horse. More like a Trojan assclown. Maybe Trump can get rid of him.

Geoffrey Pyatt: Greece An Island Of Stability, Owes Its Success To EU (Kath.)

A week before a scheduled visit to Athens by US President Barack Obama, American Ambassador Geoffrey Pyatt on Tuesday emphasized that Greece is an island of stability in a volatile region and that the country’s success is linked to the success of the European Union. Pyatt made his comments during a meeting with Parliament Speaker Nikos Voutsis. The two men’s talks focused on the political situation in their respective countries, the state of Greece’s economy and the refugee crisis. Pyatt also met with Deputy Prime Minister Yiannis Dragasakis for talks that focused on the meetings Obama is to have in Athens next week.

Read more …

 

 

Nov 082016
 
 November 8, 2016  Posted by at 4:59 pm Finance Tagged with: , , , , , , , ,  2 Responses »
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Joe Schwartz/Jewish Museum May Day Parade, New York City 1936

Neither candidate in the US presidential election has had many specifics to offer on their economic ideas and projected policies, and that may be a smart move for both. If only because none of the two has indicated any real understanding of what awaits America as per November 9. And I don’t mean where the stock markets will be tomorrow morning, or the price of gold, though short term volatility is obviously certain.

The November 7 rally on Wall Street made plenty clear where everyone’s bets are placed -on Hillary-, so much so that there’s not much of a rally left if she wins. A Trump win could well see some panic, downward pressure for the dollar and stocks, upward pressure for gold, but there’s no telling how long that would last.

It’s the medium to long term future that’s far more interesting. Because who wins makes no difference for the reality of the US economy. It’s been abysmal for years, and there are no plans available for turning that around. Government debt – across the board- and budget deficits don’t help, but they’re not the biggest deal; the US controls its own currency.

It’s private debt, consumer debt, that will offer the winner his or her poisoned chalice. With 94 million Americans not counted as part of the workforce, and untold million others in jobs that pay hardly or no living wage, with so many millions of jobs that no longer pay sufficient or even any benefits, consumer spending has nowhere to go but down.

In an economy where that spending is good for 70% of GDP -perhaps a bit less by now, a bad enough sign-, taking spending power away from people is deadly. The only way people have been able to either keep up appearances or even just make ends meet is going into debt.

 

 

This graph from Wolf Richter shouldn’t really need any explanation, but people have been so numbed by endless repetitions of sunny skewed data that it does. Sure, mortgage debt no longer looks as bad, thanks to foreclosures, jingle mail etc. So Wolf depicts debt without mortgages.

In just 9 years, from let’s say Bear Stearns to roughly this summer, consumer debt in America has gone up more than 50% ex-mortgages. And it’s not as if it was low in 2007, quite the contrary. The graph shows us what the American economy has survived on. It’s as plain vanilla as that. It’s the only graph you need, all the rest is just decoration. And it’s every inch as scary as it looks.

There was a time when America worked for its money, for its homes, for its cars, its healthcare, for the education of its children. There was a time when America produced and sold enough to be able to afford all that. Those days are long gone. Today, the prospect is one of borrowing more money to be able to pay back what you borrowed yesterday.

If and when interest rates start to rise, either in and of themselves or because the Fed has an epiphany, all that debt will get much harder, and much more expensive, to repay. Increasingly, Americans will unceremoniously and rapidly start to fall off the back end of the truck, and one by one lower consumer spending even more.

There’s nothing a new president can do about this. There is a slight difference, granted, in that Hillary largely thinks she can let things continue as they have -but look at that graph, they cannot continue!-, while Donald Trump wants to tear up international trade deals and bring back jobs to America.

Trump’s idea look a tad wiser, but so much manufacturing infrastructure has been obliterated that there’s no telling how fast it can be rebuilt. It’ll take years, for sure. Moreover, America cannot produce most items as cheap as many other countries can, so already squeezed consumers will get squeezed even more.

It’ll have to be back all the way to Henry Ford, paying people more so they can afford what they produce. But, again, look at that graph. If Americans didn’t have that debt burden, and again that’s ex-mortgages, the ‘Ford model’ might have been more feasible. It is not now.

Either of the candidates would have had to base their campaigns on a story of ‘we need to take a few steps back in order to do better later’, and that’s still a politically deadly message in today’s realm of eternal growth, fictional as it may be. People will vote for the better promise, not for the more realistic one. After all, how can they tell? It’s not as if the media will enlighten them.

There’s only one set of possible circumstances under which people will even just accept the ‘few steps back’ idea, and that’s wartime. Which is exactly what Hillary seems to be going for, judging from her neverending anti-Russia, anti-Putin and anti-Assad ‘utterances’ that look very hard to step back from. Maybe she understands America’s economic predicament better than I think?!

I like Wikipedia’s definition of a Pyrrhic victory, couldn’t hardly have put it better myself: “A Pyrrhic victory is a victory that inflicts such a devastating toll on the victor that it is tantamount to defeat. Someone who wins a Pyrrhic victory has been victorious in some way. However, the heavy toll negates any sense of achievement or profit.”

That sounds about right. I just have the idea that Hillary would enjoy it a bit more, and more blindly, than the Donald would. But it wouldn’t make much difference regardless. Obama’s had the luck that he’s been able to hide the economic downfall on his watch behind a $10+ trillion increase in the Fed balance sheet and a multiple trillion, 50% increase in household debt.

The next president won’t have any such gift thrown into their laps. The new president will have to empty the poisoned chalice.

Imagine being -almost- 70 years old, well-off, and still wanting that job. What’s that make a body? In urgent need of a lifetime of therapy? Mariana Trench-deep unhappy?

And on top of that both candidates already know close to half the country hates their guts to begin with.

Remember, not even Socrates could beat the poisoned chalice.