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Although its retail site is the most visible of its business strands, the $740bn company has quietly stretched its tentacles into an astonishing range of unrelated industries. Google and Facebook might have cornered the online advertising market, but Amazon’s business successes now include groceries, TV, robotics, cloud services and consumer electronics. “If you try to measure power by how many executives are up at night because of X company, I think Amazon would win,” said Lina Khan, legal fellow with the Open Markets Program at the thinktank New America. Amazon has a restaurant delivery service, a music streaming service and an Etsy clone called Amazon Homemade. It makes hugely successful hardware and software; it makes movies, television shows and video games.

It runs a labour brokerage for computer-based work and another for manual labour. It publishes books, sells books, and owns the popular social network site for book readers GoodReads.com. It sells diapers, baby food, snacks, clothing, furniture and batteries. It sells ads, processes payments, and makes small loans. It is the unexpected owner of a huge number of websites – everything from the gaming livestream site Twitch to the movie database IMDb. Of the top 10 US industries by GDP (information, manufacturing non-durable goods, retail trade, wholesale trade, manufacturing durable goods, healthcare, finance and insurance, state and local government, professional and business services, and real estate), Amazon has a finger in all but real estate.

And how confident can the real estate industry be right now that Amazon won’t at some point decide to allow people to buy and sell homes on its platform? “I see them as kind of a great white shark,” said Greer. “You don’t really want to mess with them.” “It’s basically become a railroad for the 21st century,” added Khan. “It’s existential for so many businesses but also competing with all those businesses.” What makes Amazon so frightening for rival businesses is that it can use its expertise in data analytics to move into almost any sector. “Amazon has all this data available. They track what people are searching for, what they click, what they don’t,” said Greer. “Every time you’re searching for something and don’t click, you’re telling Amazon that there’s a gap.”

Recovery.

• Richmond Fed Manufacturing Survey Crashes By Most In 25 Years (ZH)

When hope dies… against expectations of a small rise from March to a 16 print, April came in at a disastrous -3 (the worst data since Sept 2016). From record highs just a couple months ago, Richmond Fed manufacturing has crashed by the most in the survey’s 25 year history into contraction…

It was a bloodbath below the surface too. New orders collapsed to -9 from +17, order backlogs plunged to -4 from +10 and while wages and employees rose, workweek dropped notably. Finally, prices paid rose once again even as new orders crashed… Must be the weather, right?

No, inflation is not “heating up by all metrics”. But we get the point.

• Markets Better Prepare for Stagflation (DDMB)

Investors better wake up to the growing risk of stagflation. The coming weeks promise to deliver the verdict on how they should be positioned. By all metrics, inflation is heating up. But it’s not clear the same can said for underlying economic activity. According to producers, input costs have risen for six of the past eight months. And it’s not just big companies that are feeling pressure. One in four small businesses say they plan to raise prices, a 10-year high, according to the National Federation of Independent Business. Inflation’s persistence will finally begin to trickle through to consumers.

David Rosenberg, chief economist at the wealth management company Gluskin Sheff, recently quipped that investors “better say a prayer for Jay Powell,” the Federal Reserve chair. The deniers will dismiss the suggestion. But Rosenberg is serious, citing the core consumer price index’s March leap to 2.1%, a level that breaches the Fed’s 2% inflation target. “There is going to be a price to be paid for last year’s string of wireless-induced 0.1% prints which are falling out of the year-over-year math,” Rosenberg explained, referring to the collapse in wireless services that skewed inflation lower in 2017. “I see 50/50 odds of a 3% core inflation by year end.”

[..] The New York Fed’s regional survey also raised red flags. Delivery Times remained near their highest levels in seven years while New Orders, Backlogs and Employment all declined. The survey showed an even gloomier outlook for the future. The six-month business activity outlook dove to 18.8 from 44.1, the weakest since February 2016. Though one month can never make a trend, the depth of the plunge is bound to have raised eyebrows given that prior moves of its magnitude tend to coincide with recession.

China’s so bloated with debt it is very vulnerable.

• Trade War With US And China’s $14 Trillion Debt-Ridden Economy (CNBC)

While some of the rhetoric around trade tariffs on China has died down over the last couple of weeks, the prospect of a trade war has not. On April 18, China imposed preliminary antidumping tariffs of 178.6% on sorghum, a crop used to make alcohol and biofuels, while President Donald Trump’s threat to impose tariffs on $150 billion worth of goods on everything from solar panels to aircraft to cars remains on the table. If an actual U.S. trade war ensues, then China’s economic growth prospects could be negatively impacted in a significant way. While the country’s economy has shifted inward over the last few years, relying on its own citizens to fuel growth, it still exports billions of dollars in goods and services every year.

Last year it sold $506 billion in exports to the United States — nearly 20% of its exports go to America — while the United States sold just $130 billion to the Chinese. In January the IMF said China’s economic growth would top 6.6% in 2018, but it could now drop by as much as 0.5% if these tariffs are imposed — and it could slow even further if a global trade war truly heats up. China’s economy can likely weather a small decline in growth, in part because of its increased reliance on domestic spending, but this isn’t the only potentially GDP-destroying situation it’s dealing with.

Over the last few years, China’s debt-to-GDP has ballooned to more than 300% from 160% a decade ago, causing many people, including Chinese officials, to warn of a financial-sector debt bubble that’s waiting to burst. [..] How did it get so bad? After the recession, the country spent trillions on infrastructure projects, with many banks, including unregulated or “shadow” banks, loaning money to companies that have been unable to pay back their debts. According to a Chinese news outlet, Lai Xiaoming, chairman of China Huarong Asset Management, one of the country’s biggest asset management firms, said that total volume of nonperforming loans could hit a record $476 billion by 2020.

Why the insects are dying. Europe should cut subsidies for anyone using chemicals.

• Big Farms Set To Pay The Price As EU Eyes Subsidy Cuts (Pol.)

EU Budget Commissioner Günther Oettinger said Monday that Brussels plans to cut its payments to Europe’s biggest farms in the next budget cycle in order to reduce the bloc’s lavish agricultural subsidies by 6%. Brussels is due to make a proposal for the EU’s 2021-2027 budget framework on May 2, and cutbacks are seen as inevitable because Britain will no longer be contributing funds. Agricultural spending is one of the most obvious targets for cost cutting because the Common Agricultural Policy represents almost 40% of the EU budget, or some €59 billion each year.

When asked by POLITICO about CAP cuts on the sidelines of a trade conference in Hannover, Oettinger said: “We cannot fully exempt the existing programs from cutbacks. And in comparison to 2020, as the last year of the existing financial framework, my proposal will focus on approximately 6%, a moderate 6%, reductions.” One of the biggest criticisms of the CAP is that it has prioritized big landowners with direct payments based on acreage. Some 80% of CAP funds go to 20% of farms, owned by the likes of British royalty and major multinational companies. Oettinger said the new budget model would aim to balance that slightly.

“What we have in mind is degressive funding: That means a very big business receives for its hectares a little bit less money than a small enterprise. And that’s exactly what we still have to discuss within the next next days. On Wednesday, we will have a discussion between [Agriculture Commissioner Phil] Hogan and me on this.” Hogan has already told farmers to prepare for belt-tightening. “We need to be realistic: In the absence of more money from member states, there will be a cut to the CAP budget. My job as I see it is to build the strongest possible coalition to resist the worst of these cuts, and achieve the best outcome in a difficult scenario,” he said last week.

Governments are starting to tackle Airbnb.

• In Japan, New Rules May Leave Home-Sharing Industry Out In The Cold (R.)

Japan’s new home-sharing law was meant to ease a shortage of hotel rooms, bring order to an unregulated market and offer more lodging options for foreign visitors ahead of next year’s Rugby World Cup and the 2020 Tokyo Olympics. Instead, the law is likely to stifle Airbnb Inc and other home-sharing businesses when it is enacted in June and force many homeowners to stop offering their services, renters and experts say. The “minpaku,” or private temporary lodging law, the first national legal framework for short-term home rental in Asia, limits home-sharing to 180 days a year, a cap some hosts say makes it difficult to turn a profit.

More important, local governments, which have final authority to regulate services in their areas, are imposing even more severe restrictions, citing security or noise concerns. For example, Tokyo’s Chuo ward, home to the tony Ginza shopping district, has banned weekday rentals on grounds that allowing strangers into apartment buildings during the week could be unsafe. That’s a huge disappointment for Airbnb “superhost” Mika, who asked that her last name not be used because home-renting is now officially allowed only in certain zones. She has enjoyed hosting international visitors in her spare two-bedroom apartment but will stop because her building management has decided to ban the service ahead of the law’s enactment.

“I was able to meet many different people I would have not met otherwise,” said Mika, 53, who started renting out her apartment after she used a home-sharing service overseas. “I may sell my condo.” Mika added that if she were to rent the apartment out on a monthly basis, she would only make one-third of what she does from short-term rentals. The ancient capital of Kyoto, which draws more than 50 million tourists a year, will allow private lodging in residential areas only between Jan. 15 and March 16, avoiding the popular spring and fall tourist seasons.

“..only 645 of 11,000 holiday rentals being offered to tourists on Palma have the licence required to do so.”

• Palma de Mallorca To Ban Holiday Rentals After Residents’ Complaints (BBC)

The Spanish resort city of Palma, on the island of Majorca, is to ban flat owners from renting their apartments to travellers, becoming the first place in Spain to introduce such a measure. The restrictions follow complaints from residents of rising rents due to short holiday lets through websites and apps. Palma’s mayor says the ban, to be introduced in July, will be a model for cities suffering with mass tourism. But business associations say many families will be financially impacted. It was not immediately clear if the ban was restricted only to private flats advertised by their owners on apps or websites.

Houses and chalets will be exempt from the restrictions unless they are located inside protected areas, next to the airport or in industrial zones. Palma, like many other cities around the world, has seen an increase in visitor numbers driven, in part, by private rental accommodation offered through websites and apps. Officials from the local left-wing governing coalition cited a study suggesting that the number of non-licensed apartments on offer to tourists increased by 50% between 2015 and 2017. According to Spanish newspaper El País, only 645 of 11,000 holiday rentals being offered to tourists on Palma have the licence required to do so.

Locally, there is resentment over tourism pushing up prices – rents in Palma have reportedly increased 40% since 2013 – but also about deteriorating conditions in neighbourhoods popular with travellers due to noise and bad behaviour. “Palma is a determined and courageous city,” Mayor Antoni Noguera said. “We agreed on this [ban] based on the general interest [of the city] and we believe it will set the trend for other cities when they see that finding a balance is key.”

They’re all doing it all wrong. Simply force Airbnb to supply numbers on all rentals.

• Greece Uncovers Tax Evading Airbnb Owners By Posing as Customers (KTG)

Tax inspectors uncover tax evading Airbnb owners by pretending to be customers. According to Greece’s Independent Authority for Public Revenue (AADE), the trap has revealed a total of 55 Airbnbn tax evaders, so far. In some cases, the ‘fake customers’ even proceeded to booking an Airbnb flat. The first Airbnb owners who failed to declare their earnings from home-sharing practices were uncovered by Greece’s Independent Authority for Public Revenue (AADE) this week. Under a pilot program aiming to weed out violators, AADE inspectors posed as customers seeking to rent out short-term accommodation via the Airbnb platform. The undercover inspections focused on central points in the Greek capital as well as on luxury options available on popular Greek islands. In some cases, AADE authorities even proceeded to book.

According to AADE, 55 proprietors who had not proceeded with the mandatory declaration of earnings from home-sharing services were notified of the violation. A total of 39 came forward and proceeded with corrections to their income tax declarations indicating additional property income of approximately 921,163 euros resulting in over 200,000 euros going into state coffers. It should be noted that all owners renting out their properties on home-sharing platforms are required by Greek law to declare earned incomes from short-term lease in 2017 on their E2 Forms (column 7).

For income up to 12,000 euros, tax is imposed at a rate of 15%. Takings between 12,001 and 35,000 euros will be taxed at a 35% rate; annual gains over 35,000 euros at a 45% rate. For those offering additional services on the side, the earnings are assessed as income from business activity and taxed at 22% for earnings up to 20,000 euros, 29% for yields between 20,001 and 30,000 euros, 37% for takings between 30,001 and 40,000 euros, and 45% for profits exceeding 40,000 euros.

Looked it up: World population 60 years ago was less than 3 billion (it hit that in 1960). It is now 7.5 billion. Ergo: people used to drink over 2x as much wine back then.

• World Wine Output Falls To 60-Year Low (R.)

Wine production totaled 250 million hectoliters last year, down 8.6% from 2016, data from the Paris-based International Organisation of Vine and Wine (OIV) released on Tuesday showed. It is the lowest level since 1957, when it had fallen to 173.8 million hectoliters, the OIV told Reuters. A hectoliter represents 100 liters, or the equivalent of just over 133 standard 75 cl wine bottles. All top wine producers in the EU have been hit by harsh weather last year, which lead to an overall fall in the bloc of 14.6% to 141 million hectoliters.

The OIV’s projections, which exclude juice and must (new wine), put Italian wine production down 17% at 42.5 million hectoliters, French output down 19% at 36.7 million and Spanish production down 20% at 32.1 million. The French government said last year production had hit a record low due to a series of poor weather conditions including spring frosts, drought and storms that affected most of the main growing regions including Bordeaux and Champagne. In contrast, production remained nearly stable in the United States, the world’s fourth largest producer, and China, which has become the world’s seventh largest wine producer behind Australia and Argentina.

Failed state.

• Homelessness In UK ’10 Times Worse’ Than Official Figures Suggest (Ind.)

The true scale of homelessness in the UK is almost 10 times worse than official figures suggest, according to a new report. Homeless charity Justlife warns thousands of people are being “forgotten in statistics” after it estimated that at least 51,500 people were living in B&Bs in the year to April 2016 – compared with 5,870 official B&B placements recorded by the government. It comes after a separate investigation found that 78 homeless people died last winter – an average of at least two a week. The report by the Bureau of Investigative Journalism revealed the fatalities included rough sleepers, people recognised as “statutory homeless” and people staying in temporary accommodation.

Justlife reached its estimate on the homeless B&B population using data gathered from Freedom of Information requests to local authorities, along with other information from the government’s Rural and Urban Classification for Local Authority Districts data. Christa Maciver, author of the report, said: “We can no longer ignore the tens of thousands of people stuck homeless, hidden and ignored in our cities. This report shows there is so much we don’t know and that we really need to be calculating homelessness more accurately.

And another failed state.

• Over One In Five Greeks Can’t Make Ends Meet (K.)

Last year 21.1% of Greeks – or more than one in five – were unable to cover their basic needs, such as the timely payment of utility bills and regular consumption of meat, according to Eurostat. That 21.1% in 2017 may constitute a minor improvement from the 22.4% rate in 2016, but is still a particularly high level. This rate was also the second highest in the European Union and translates to a large share of the population, or 2.24 million people.

The people or households in that category are by definition those unable to meet the costs of at least four of the following: payment of utility bills in time, sufficient heating at home, tackling extraordinary expenses, consumption of meat (or fish or the equivalent in vegetables) on a regular basis, a one-week vacation away from home, and capacity to purchase a TV set, a washing machine, a car or a telephone. The age group with the highest rate of material deprivation in Greece includes those between 20 and 24 years, amounting to 32.6% – or one in three – though this is according to 2016 data. Notably, the year with the highest material deprivation rate in Greece from 2003 to 2017 (for which Eurostat has data), was 2009.

Arrivals on Lesbos are 4 times what they were last year this time.

• Greek Minister Drafts Action Plans Amid Fears Over Refugee Influx (K.)

Migration Minister Dimitris Vitsas conceded on Tuesday that he is “worried” about the significant increase in the flow of migrants and refugees to Greece observed recently. Vitsas said that arrivals on Lesvos had increased almost fourfold since last year, noting that daily arrivals were 54 on average last year compared to the 206 migrants who arrived on the island on Tuesday. Between January and April, more than 7,000 migrants and refugees arrived on the islands of the eastern Aegean, he said, noting that just 112 people were returned to Turkey during that same period. However, Vitsas appeared far more concerned with the increase in arrivals over the Greek-Turkish land border, noting that 340 people crossed the border on Tuesday.

“I’m not scared about the islands because we know what we have to do. What is really worrisome is the huge increase through Evros,” he said. Under pressure from the opposition over mistakes and omissions in the government’s current migration policy, Vitsas said that his ministry has prepared two plans to deal with the situation and pledged to outline their content to political party leaders in private. According to Bulgarian government statistics, 356 migrants have crossed into that country from Turkey since the beginning of the year. In the same period, more than 2,700 crossed Turkey’s land border with Greece, Vitsas said.

There are fears that the difference in flows is due to deteriorating ties between Greece and Turkey while relations between Sofia and Ankara are good, particularly since Bulgarian authorities returned alleged supporters of the US-exiled Turkish cleric Fethullah Gulen to Turkey in 2016. Security along Turkey’s border with Bulgaria has intensified since then. The opposite has been happening along the Greek border since the detention of two Greek soldiers who strayed across the border in early March. Greek border guards are now more cautious, and less inclined to crack down on migrants.

Curious. Athens should be open about EU pressure on the topic.

• Greek Government Defies Court on Asylum Seekers (HRW)

The Greek government’s move on April 20, 2018, overturning a binding court ruling ordering it to end its abusive policy of trapping asylum seekers on Greece’s islands raises rule of law concerns, 21 human rights and humanitarian organizations said today. Rather than carrying out the April 17 ruling by the Council of State, the country’s highest administrative court, the government issued an administrative decision reinstating the policy, known as the “containment policy.” It also introduced a bill on April 19 to clear the way to restore the policy in Greek law. Parliament members should oppose such changes and press the government to respect the ruling.

Parliament began discussing the draft law on April 24. But the government has preempted the debate on the bill, including the issue of the containment policy by reinstating it. On April 20, the new director of the asylum service reissued an administrative order setting down the reasons for the containment policy. Among grounds given to justify the restrictions imposed by the policy are the need to implement an EU-Turkey deal on migration and a broader public interest claim. But the decision goes against the Council of State ruling and Greece’s responsibilities under international, EU and Greek law, as it offers insufficient justification for the restrictions, the groups said.

The Council of State’s April 17 ruling said that Greece’s containment policy had no legal basis and that there were no imperative reasons under EU and Greek law justifying the restrictions to the freedom of movement of asylum seekers. It ordered the annulment of the administrative decision imposing the restrictions and permitted the free movement of asylum seekers arriving on the islands following the ruling’s publication. The ruling also highlighted that the disproportionate distribution of asylum seekers has overburdened the islands. The ruling is limited, however, applying only to new arrivals.

“Each litre of sea ice contained around 12,000 particles of plastic..”

• Arctic Sea Ice Contains Huge Quantity Of Microplastics (Ind.)

Scientists have found an unprecedented number of microplastics frozen in Arctic sea ice, demonstrating the alarming extent to which they are pervading marine environments. Analysis of ice cores from across the region found levels of the pollution were up to three times higher than previously thought. Each litre of sea ice contained around 12,000 particles of plastic, which scientists are now concerned are being ingested by native animals. Based on their analysis, the researchers were even able to trace the tiny fragments’ paths from their places of origin, from fishing vessels in Siberia to everyday detritus that had accumulated in the infamous Great Pacific Garbage Patch.

“We are seeing a clear human imprint in the Arctic,” the study’s first author, Dr Ilka Peeken, told The Independent. “It suggests that microplastics are now ubiquitous within the surface waters of the world’s ocean,” said Dr Jeremy Wilkinson, a sea ice physicist at the British Antarctic Survey who was not involved with the study. “Nowhere is immune.”

Debt Rattle April 12 2018

Apr 122018

April 12, 2018 Posted by Raúl Ilargi Meijer at 9:09 am Finance Tagged with: behavior modification, Catalonia, Comey, Deep State, Facebook, Gulf stream, homeless, monopoly, train wreck 6 Responses »

The marine and the kitten, Korean War, 1952

• It’s Pure Math – We’re Headed for a Train Wreck (USAW)

• Licence to Kill (Le Monde Diplomatique)

• It’s No Longer Advertising – It’s Behaviour Modification (BBC)

• Zuckerberg’s Answer To Facebook’s Problems: More Facebook (Ind.)

• The Uncomfortable Question: Is Facebook A Monopoly? (MW)

• UK Economic Growth Has Fallen By Half (G.)

• More Than 100,000 British Households Set To Be Homeless By 2020 (Ind.)

• US Interest Payments Will Outpace Military Spending by 2023 (BBG)

• The Deep State Closes In On The Donald, Part 1 (Stockman)

• James Comey Is About To ‘Shock The President And His Team’ (MW)

• Warrant for Catalan Minister Details ‘Violent Revolt’ (BBC)

• New Zealand Bans All New Offshore Oil Exploration (G.)

• Climate Change Could Trigger Volcanic Eruptions Across The World (Ind.)

• Cities Around The World Should Prepare For Running Out Of Water (CNBC)

• Gulf Stream Current At Its Weakest In At Least 1,600 Years (G>)

”What happens when the world figures out that three billion ounces of physical silver cannot and will not be delivered to the buyers? ”

• It’s Pure Math – We’re Headed for a Train Wreck (USAW)

Financial writer and gold expert Bill Holter says China has a lot of weapons to fight a trade war with the U.S. China could stop buying Treasury bonds (as it reportedly already has done). It could sell Treasury bonds. It could slash the value of the Yuan, or something much simpler could happen such as a failed delivery of physical precious metals. Holter says, “If what has happened so far in the first three months of the year were to continue for the full year, you would be over three billion ounces (of silver). That is not deliverable.”What happens when the world figures out that three billion ounces of physical silver cannot and will not be delivered to the buyers?

Holter explains, “That’s called an old fashion run on the banks. “It will be a run on the entire system. You would have a run on every metals exchange, and you would probably have runs on many physical commodities. Confidence throughout the whole system would break. You would basically show the western fractional reserve system is a fraud and has been for many, many years. . . . Can London deliver a billion ounces, or two billion ounces or three billion ounces of silver? The answer to that is no.” So, when does this all blow up? Holter says, “I think this whole thing has a very good chance of blowing this year.”

There are a variety of financial trip wires, according to Bill Holter, such as thousands of sealed criminal indictments that will be unsealed in 2018. Holter also points out the explosion of global debt. Holter charges, “It’s now $237 trillion. The amount of debt grew by $21 trillion globally over the last 12 months. That’s roughly 10 %. How much did global GDP grow? 2% or 3%, I mean that is totally unsustainable.” The biggest worry for Holter right now is escalating military action in Syria. Holter warns, “This is so, so dangerous. Obviously, you worry about a hot war because with the weapons you have today, you could have WWIII start in a heartbeat. But look at the market today. It’s up 400 or 500 points. You have talk of trade wars. You have talk of hot wars. It’s amazing the markets can hold together and ignore potential annihilation.”

These people are all the same.

• Licence to Kill (Le Monde Diplomatique)

British police say their investigation into the poisoning of former Russian army colonel Sergei Skripal in Salisbury may take many months, yet prime minister Theresa May has already identified the guilty party, claiming the order came from the Kremlin. Foreign secretary Boris Johnson, sees the incident as ‘part of a pattern of reckless behaviour by President Vladimir Putin,’ which is the ‘common thread that joins [the poisoning] with [Russia’s] annexation of Crimea, the cyberattacks in Ukraine, the hacking of Germany’s parliament … interference in foreign elections’ and ‘indulgence of Assad’s atrocities in Syria’. The reasoning goes: if Putin is capable of doing it, then he must be guilty.

From Leon Trotsky, killed with an ice pick in Mexico, to Alexander Litvinenko, poisoned with polonium in London, Russia’s security services have undoubtedly liquidated many opponents of the Kremlin living abroad. Other countries have resorted to such measures without triggering the same diplomatic uproar. France, Germany and the US have been involved in the kind of state-sponsored assassination that has so offended Johnson, yet this has not stopped them joining him and May in railing against Russia. Israel has taken great care to avoid commenting, perhaps because it is one of the countries that most frequently ‘carry out this kind of operation, known as an “extraterritorial elimination”’.

The list of Palestinians, including official representatives, killed by Israel’s secret service abroad makes the Russians look like amateurs: at least half a dozen in Paris alone, without serious consequences. Moroccan opposition leader Mehdi Ben Barka also disappeared in Paris; the African National Congress’s chief representative in France, Dulcie September, and more recently three Kurdish activists, were assassinated there. Across the Atlantic, Orlando Letelier, a minister under former Chilean president Salvador Allende, was killed in Washington DC by agents of Augusto Pinochet, which did not stop Ronald Reagan from feting Pinochet; and Margaret Thatcher was happy to drink tea (without polonium) with the dictator and present him with a silver dish.

‘Extraterritorial elimination’ is also a fitting term for the US practice of killing presumed terrorists abroad with drones. Barack Obama officially authorised more than 2,300 such killings during his presidency. For his part, François Hollande has admitted to ordering extrajudicial killings of ‘enemies of the state’ when he was president (an average of one a month during his term), though none of his political allies reproached him for it during the Socialist Party primaries in January 2017. François de Rugy, who has since become president of France’s National Assembly, even said at the time: ‘Yes, it is sometimes necessary.’

Core: “..it can no longer be called advertising any more – it has turned into behaviour modification.”

It’s a moot discussion anyway. People pay for their phone + subscription. Why wouldn’t they pay for social media too? Few bucks a month?!

Point is, Facebook make their money off of ads AND added benefits (sell data). They don’t want to be an ad-less platform. That would take away the benefits.

• It’s No Longer Advertising – It’s Behaviour Modification (BBC)

An influential tech evangelist has called at the TED 2018 conference for an overhaul of Facebook and Google’s business models. Jaron Lanier, who is often referred to as a “father of virtual reality”, told the Vancouver event that the two firms should let users pay for their services as an alternative to relying on ads. “These companies need to change,” he said. But on Tuesday, Facebook’s chief suggested this would not be popular. “A number of people suggest that we should offer a version where people can not have ads if they pay a monthly subscription, and certainly we consider ideas like that,” Mark Zuckerberg told a panel of senators in Washington.

“But overall, I think that the ads experience is going to be the best one. “I think in general, people like not having to pay for a service. A lot of people can’t afford to pay for a service around the world,” Mr Zuckerberg added. Mr Lanier was a frequent TED (Technology, Entertainment and Design) speaker during the 1980s. But, he said, even then he had realised that “the technology we needed and loved could also be our undoing”. “We made a very particular mistake in the 90s when early digital culture had this lefty, socialist mission, which meant that everything on the internet must be available for free,” he added. That decision led directly to the advertising model that allows Google and Facebook to flourish, he explained.

“In the beginning it was cute but as computers became more efficient and algorithms got better, it can no longer be called advertising any more – it has turned into behaviour modification.” It was, he said, a “tragic mistake” rather than a “wave of evil”, pointing out that he knew and loved many people working at the two tech empires. But, he explained, the advertising model had led to addictive social media platforms that rewarded people for sharing their information with “likes”. He also claimed that Google and Facebook had become as “hooked and trapped” on the advertising model as their users. “It is time to turn back the clock and remake that decision. Many people would pay for search and social networks,” Mr Lanier said.

“..using data to target and shape behaviours is an integral part of social media.”

• Zuckerberg’s Answer To Facebook’s Problems: More Facebook (Ind.)

As this hearing made painfully clear, using data to target and shape behaviours is an integral part of social media. It is the potential use of our data that is of real value. Data informed targeting is woven into Facebook’s DNA; the only way to change that is to change its structure and purpose. Under questioning Zuckerberg suggested that Facebook is going through a “broader philosophical shift”, taking them from simply producing tools for “empowering” people to the need now to take a “more proactive role” in “policing the ecosystem”. This implies that they seek an even more powerful position – both as producers and regulators – and a larger roll-out of their particular ideals and philosophies.

The answer to the problems of Facebook, it seemed to be suggested, is more Facebook and more of its current business model. The account was of a purer Facebook that gives you connectivity, voice and control of your information, untainted by any issues, missteps or unwanted players. An enhanced version of what we already have is what was being proposed as the solution. Putting the obvious problems to one side for the moment, the other question is whether we really share the ideals of Facebook.

The tone of this hearing was apologetic, but it leaves us to question if change is actually possible. We might trust Zuckerberg to be responsible, this doesn’t mean that we need to accept the ideals that are wrapped up in these media and the type of world that is being imagined. The problems clearly need attention, but we might also wonder about the ideals that will play such a powerful part in our collective future. The ideals and models of Facebook will continue to expand unless we think a little more about the future that we want to bring into existence.

How is that a question?

• The Uncomfortable Question: Is Facebook A Monopoly? (MW)

Asked by Graham if he felt Facebook had a monopoly, Zuckerberg replied, “It certainly doesn’t feel like that to me.” Senator Kamala Harris, the only Democrat to mention monopoly power during the hearing, noted later that Zuckerberg never really answered Graham’s question. “Every monopolist tries to enlarge the market definition such that his own share of it is insignificant,” said Marshall Steinbaum, the research director at the Roosevelt Institute, the nonprofit partner to the Franklin D. Roosevelt Presidential Library and Museum. “But the fact that he couldn’t name his competitors spoke volumes: Facebook controls the network over which information is proliferated, and it decides who sees what–always to its own benefit. That is a textbook monopolist and it is a company that in its current form cannot be allowed to exist.”

Sen. Ron Johnson, a Republican from Wisconsin, noted that Zuckerberg told Graham that he didn’t think Facebook was a monopoly. “You’re obviously a big player in the space. That might be an area for competition, correct, if somebody else wants to create a social platform that allows a user to monetize their own data?” Johnson asked. Yes, says Zuckerberg. Sen. Dan Sullivan, a Republican from Alaska, asked Zuckerberg if Facebook was too powerful. “All — really all over the world, the Facebook — 2 billion users, over 200 million Americans, 40 billion in revenue. I believe you and Google have almost 75% of the digital advertising in the U.S. Is — one of the key issues here, is Facebook too powerful? Are you too powerful? And do you think you’re too powerful?” asks Sullivan.

Gee, what a surprise.

• UK Economic Growth Has Fallen By Half (G.)

Economic growth in the UK is expected to have fallen by half in the opening months of the year, one of Britain’s leading forecasting bodies has said, amid renewed concerns for the health of the economy. The National Institute for Economic and Social Research (NIESR) said growth was set to fall to 0.2% in the first quarter of 2018 from 0.4% in the final three months of last year, when the economy enjoyed a mini-recovery despite an overall slowdown in 2017 triggered by the Brexit vote. Amit Kara, head of UK macroeconomic forecasting at the thinktank, said the main reason for the weakness was severe weather in March, dubbed the “beast from the east” in the media, which was likely to have disrupted activity in all major sectors of the economy.

The estimate, which comes ahead of official figures from the Office for National Statistics later this month, followed news that Britain’s factories recorded a surprise fall in production in February, in the first drop in activity in the sector for almost a year. Confirming fears of a slowdown in the UK economy so far this year, figures from the ONS showed manufacturing output declined by 0.2% in February, falling well behind economists’ expectations for growth of 0.2%. There was also a sharp drop in construction output, suggesting continued pain for the industry amid the fallout from the collapse of Carillion. Monthly output unexpectedly fell by 1.6% in February, as builders were hit by the snow at the end of the month.

One might think May et al have bigger things on their minds than going to war.

• More Than 100,000 British Households Set To Be Homeless By 2020 (Ind.)

Tens of thousands more families will be trapped in temporary accommodation across England over the next two years if current homelessness trends continue, a report has warned. More than 100,000 households will be living in B&Bs, hostels and other forms of temporary housing by 2020, as rising housing costs and insecure work continue to “lock” people into poverty, according to research commissioned by Crisis and the Joseph Rowntree Foundation (JRF). The annual Homelessness Monitor shows that 70% of local authorities in England are struggling to find any stable housing for homeless people in their area, while a striking 89% reported difficulties in finding private rented accommodation.

As a result, many councils have found themselves forced to place ever more homeless people in emergency housing, including B&Bs and hostels, leading to urgent calls for more permanent and genuinely affordable homes to be built. Government figures published last month revealed almost 79,000 families were staying in temporary housing in the last three months of last year because they didn’t have a permanent home, compared with 48,010 in the same period eight years before. There had been a significant reduction in families living in such conditions before the coalition government came into power, with the number having fallen by 52% between 2004 and 2010 under the Labour government.

But the figure has crept up in each of the past seven years, from 69,140 in the last quarter of 2015, to 75,740 in the same period in 2016 and 78,930 at the end of last year. The new report warns that if current trends continue, with housing supply “dwindling” and rents outstripping wages and benefits, more than 100,000 such households will fall into this trap by 2020.

Unless they go to war.

• US Interest Payments Will Outpace Military Spending by 2023 (BBG)

The head of the Congressional Budget Office warned lawmakers that the U.S. government is on track to pay more to its creditors than on its own military, as interest rates and debt levels continue to climb. CBO chief Keith Hall told the Senate Budget Committee Wednesday that America’s net interest payments will triple over the coming decade, outpacing military expenditures. He called the data point “one of my favorite figures” used to highlight the challenges posed by the country’s ballooning debt. His office’s budget and economic forecasts, published Monday, show net interest payments first outstripping defense outlays in fiscal 2023 and reaching $915 billion five years later.

The increase will come as debt held by the public almost doubles to $28.7 trillion in fiscal 2028 from this year, according to the CBO, a non-partisan arm of Congress. “My point is that the interest cost is just starting to swamp things like defense spending,” Hall said. “Whatever the fix is going to be, it needs to be something that’s pretty big.”

“..when you consider the broader context and what the Russian side is now saying, it is just plain idiotic to own the S&P 500 at 24X.”

• The Deep State Closes In On The Donald, Part 1 (Stockman)

Perhaps we have missed something: Like the possibility that the canyons of Wall Street are actually located on another planet several light years from earth! Otherwise, how can you explain the equipoise of a stock market sitting at the tippy-top of a nine-year bubble expansion and confronted with the potential outbreak of World War Three? Folks, like some alien abductors, the Deep State has taken the Donald hostage, and with ball-and-chain finality. Whatever pre-election predilection he had to challenge the Warfare State has apparently been completely liquidated. Trump’s early AM tweet today, in fact, embodies the words of a man who had more than a few screws loose when he took the oath, but under the relentless pounding of the Imperial City’s investigators, partisans, apparatchiks and lynch-mob media has now gone stark raving mad. To wit:

“….Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and “smart!” You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it! Yes, maybe Wall Street has figured out that the Donald is more bluster than bite. Yet when you consider the broader context and what the Russian side is now saying, it is just plain idiotic to own the S&P 500 at 24X. After all, earnings that have been going nowhere for the past three years (earnings per share have inched-up from $106 in September 2014 to $109 in December 2017), and now could be ambushed by a hot war accident in Syria that would rapidly escalate. Indeed, did the robo-machines and boys and girls down in the casino not ponder the meaning of this message from the Kremlin? It does not leave much to the imagination:

#Russian ambassador in beirut : “If there is a strike by the Americans on #Syria , then… the missiles will be downed and even the sources from which the missiles were fired,” Zasypkin told Hezbollah’s al-Manar TV, speaking in Arabic. Sure, the odds are quite high that the clever folks in the Pentagon will figure out how to keep the pending attack reasonably antiseptic. That is, they will bomb a whole bunch of places in Syria where the Russians and Iranians are not (after being warned); and also deploy stand-off submarine platforms to launch cruise missiles and high-flying stealth aircraft to drop smart bombs, thereby keeping American pilots and ships out of harm’s way. Then, after unleashing the Donald’s version of “shock and awe” they will claim that Assad has just received the spanking of his life and that the Russians and Iranians have been messaged with malice aforethought.

How to sell a book.

• James Comey Is About To ‘Shock The President And His Team’ (MW)

‘How strange is it for you to sit here and compare the president to a mob boss?’ That’s the question ABC’s George Stephanopoulos asked James Comey in a teaser for an interview set to air Sunday night at 10 p.m. as a “20/20” special. A source told Axios that what the former FBI director had to say during that interview is “going to shock the president and his team” and “certainly add more meat to the charges swirling around Trump.” The source added that the interview included information that’s never been divulged before and left people in the room “stunned.” Comey apparently answered every question. The five-hour interview was taped Monday at his Washington-area home ahead of the release of his book, “A Higher Loyalty,” which comes out Tuesday.

Comey is about to go on a promotional media blitz, according to Politico, including a live interview with CNN on April 19, a visit to MSNBC the same day, an interview on Fox News on April 26 and one with PBS NewsHour on April 30. The book, already topping Amazon’s best-seller list, is expected to reveal details about Trump pressuring Comey to shut down at least part of the FBI investigation into Russian interference in the election and other related issues. Separately, Dana Boente, the FBI’s general counsel who had led the Russia investigation in the early days of the Trump administration, has been asked to testify by Mueller, according to a letter obtained by MSNBC.

A sick joke.

• Warrant for Catalan Minister Details ‘Violent Revolt’ (BBC)

A former Catalan minister fighting extradition from Scotland to Spain faces charges of causing widespread violence against police. BBC Scotland has obtained a copy of the European arrest warrant for former education minister Clara Ponsatí. The St Andrews University professor is wanted in Spain on charges of rebellion and misappropriation of public funds. Ms Ponsati’s lawyer Aamer Anwar said: “My client Clara Ponsati utterly refutes the charges.” He added: “Clara is an esteemed University professor who has never committed a criminal act in her life.

As an education minister for just over two months along with her government she promoted a peaceful referendum, yet if extradited and convicted could face a sentence of up to 33 years, thus facing the real prospect of spending the rest of her natural life in prison. “We are instructed to submit that this warrant is a desperate and politically motivated prosecution by the Spanish authorities. Across Europe lawyers have already successfully challenged the credibility of the charges of violent rebellion. “Now in Scotland Clara is accused of orchestrating violence, yet the warrant fails in over 19 pages to ever specify a single act of violence or incitement attributable to her.” The warrant includes lengthy details of violent confrontations at polling stations across the region.

Prof Ponsatí is being pursued by the Spanish government over her involvement in last year’s Catalan independence referendum, which was ruled illegal by Spanish courts. She handed herself in to police in Edinburgh in March, and was subsequently released on bail following a preliminary hearing. The case is due to call in the Scottish courts again on Thursday. The arrest warrant says that the more serious crime of rebellion applies to those “who revolt violently and publicly” for purposes including “declaring the independence of a part of the national territory.”

“Half the world’s whale and dolphin species visit or live in New Zealand waters..”

• New Zealand Bans All New Offshore Oil Exploration (G.)

The New Zealand government will grant no new offshore oil exploration permits in a move that is being hailed by conservation and environmental groups as a historic victory in the battle against climate change. The ban will apply to new permits and won’t affect the existing 22, some of which have decades left on their exploration rights and cover an area of 100,000 sq km. The prime minister, Jacinda Ardern, said her government “has a plan to transition towards a carbon-neutral future, one that looks 30 years in advance”. “Transitions have to start somewhere and unless we make decisions today that will essentially take effect in 30 or more years’ time, we run the risk of acting too late and causing abrupt shocks to communities and our country.”

The Labour coalition government was elected last year and made tackling climate change one of the cornerstones of its policies, committing to transition to 100% of electricity generation from renewable sources by 2035 and making the economy carbon neutral by 2050. Greenpeace New Zealand said the government’s announcement was a “historic moment” for the country and “a huge win for our climate and people power”. Last month Ardern accepted a 50,000-strong Greenpeace petition calling for an end to offshore oil and gas exploration. “The tide has turned irreversibly against big oil in New Zealand,” said the Greenpeace New Zealand executive director, Russel Norman.

[..] the Forest & Bird conservation group said the ban was a “huge step forward” for the country and sent a message to the oil and gas industry that New Zealand waters were no longer “their playground”. “Half the world’s whale and dolphin species visit or live in New Zealand waters, from the critically endangered Maui’s dolphin to giant blue whales,” said the group’s chief executive, Kevin Hague.

Instability.

• Climate Change Could Trigger Volcanic Eruptions Across The World (Ind.)

Besides having a disastrous impact on sea levels and weather, a warming climate could also trigger catastrophic volcanic eruptions across the planet Volcanic eruptions alter the climate by spewing smoke and ash into the atmosphere, but scientists now also think the opposite might be true – changes in climate could actually cause volcanic eruptions. According to Gioachino Roberti, a PhD student at the University of Clermont Auvergne, glaciers can suppress volcanic eruptions by providing mountains with structural stability. As the climate becomes warmer, ice melting from these mountains removes support from their slopes, potentially leading to landslides and collapse.

“Imagine the ice like some sort of protective layer – when the ice melts away, the mountain is free to collapse,” said Mr Roberti. “If your mountain is a volcano you have another problem. “Volcanoes are a pressurised system and if you remove pressure by ice melting and landslide, you have a problem.” Presenting his work at the European Geosciences Union General Assembly, Mr Roberti explained a case study he and his collaborators had investigated in Canada. Though not famous for its volcanic activity, Canada is home to hundreds of potentially active volcanoes. The scientists chose to focus on Mount Meager, a glaciated volcano north of Vancouver.

Mount Meager’s last eruption was over 2000 years ago, but Mr Roberti chose to focus on Mount Meager for a more recent natural disaster that took place there. In summer 2010, the largest landslide in Canadian history occurred on the southern part of the volcano. “The glacier base of the slope retreated and during the hottest part of the summer, the slope catastrophically failed – the whole mountain started to move at a very high velocity,” said Mr Roberti. This was followed in 2016 by the formation of ice caves in the glacier as hot volcanic gases seeped out of the volcano. “This is the first time this has happened there – so the equilibrium of the mountain is changing,” said Mr Roberti.

They won’t until it’s too late.

• Cities Around The World Should Prepare For Running Out Of Water (CNBC)

It’s called “Day Zero”: when Cape Town, South Africa’s bustling port city, sees its water taps run dry, and its population thrust into a perilous situation. Originally projected for this year, the impending crisis has been delayed in part by severe measures — the city instituted restrictions that amount to less than one sixth of an average American’s water consumption. Yet despite that effort, “Day Zero” is still projected to arrive next year. And when it comes, the crisis will see the government switching off all the taps and rationing the resource through collection points. That future isn’t just Cape Town’s. It’s a scenario cities around the globe may face, experts say.

It may be hard to fathom just how cities could be at risk of a water scarcity crisis when approximately 70% of the world is made up of the resource. The stark reality, however, is that the percentage of fresh water probably only amounts to about 2.5 percent, according to often-cited assessments. Even then, a significant supply is locked up in ice and snow, which means just 1 percent of all fresh water is easily accessible to the global population. Inequality in access to water is also quickly becoming a problem. While the affluent can find ways to get access to water— through deliveries or in-built tanks — poorer populations are left to their own devices. That situation oftentimes leads to water theft — for profit, for survival, or for both.

A longtime fear. Slowing of the thermohaline circulation will turn Western Europe into a very cold place.

• Gulf Stream Current At Its Weakest In At Least 1,600 Years (G>)

The warm Atlantic current linked to severe and abrupt changes in the climate in the past is now at its weakest in at least 1,600 years, new research shows. The findings, based on multiple lines of scientific evidence, throw into question previous predictions that a catastrophic collapse of the Gulf Stream would take centuries to occur. Such a collapse would see western Europe suffer far more extreme winters, sea levels rise fast on the eastern seaboard of the US and would disrupt vital tropical rains. The new research shows the current is now 15% weaker than around 400AD, an exceptionally large deviation, and that human-caused global warming is responsible for at least a significant part of the weakening.

The current, known as the Atlantic Meridional Overturning Circulation (Amoc), carries warm water northwards towards the north pole. There it cools, becomes denser and sinks, and then flows back southwards. But global warming hampers the cooling of the water, while melting ice in the Arctic, particularly from Greenland, floods the area with less dense freshwater, weakening the Amoc current. Scientists know that Amoc has slowed since 2004, when instruments were deployed at sea to measure it. But now two new studies have provided comprehensive ocean-based evidence that the weakening is unprecedented in at least 1,600 years, which is as far back as the new research stretches.

The Automatic Earth for Athens Fund – Christmas and 2018

Dec 242017

December 24, 2017 Posted by Raúl Ilargi Meijer at 5:47 pm Finance Tagged with: 2018, Athens, Christmas, churches, Greece, help, homeless, incarceration, Jesus, politics, refugees 5 Responses »

Walter Hege Caryatid overlooking the city of Athens 1930

Christmas is the time when the western world makes a doomed attempt to remember a story whose meaning it has long forgotten, and still claim the story as its own every single time, every single year, claim it as its foundation, the foundation of the principles that guide its societies, its politics and its religion.

Western countries, whether they’re predominantly Catholic or Protestant, label themselves Christian, after Jesus Christ, a man their holy scriptures say is/was the Son of their God, and after his teachings, his sermons and the example his own life is supposed to have been for all his followers. Turn the other cheek, help those in need, don’t judge.

But as we celebrate Jesus’ birth at the time of winter solstice, and we acknowledge that he and his parents, Joseph and Maria, were refugees driven into exile, and the only place the birth could take place was a manger far away from their home, we lose out on the connection to our savior from the very first moment.

Because we sit in our warm and cosy homes, surrounded by meals worthy of kings, and presents worthy of princes and princesses, while frail forms and emaciated children are fainting at our doors. While we are quite aware that whatever Jesus meant to say 2000 years ago, and some of that may have been lost over time, one thing we do know is that he didn’t mean this.

There’s no way he meant for us to, two millennia down the road, to look at present day refugees driven into exile far away from home, just like he and his parents were, and not lift a finger to help them. So when politicians like UK PM Theresa May say in their Christmas messages to their nations that they should “take pride in their Christian heritage”, that’s not just empty rhetoric, it’s hollow.

But as long as religion still sells, and there are many countries where it does, perhaps nowhere more than the US, politicians will quote Jesus and do the opposite of what he actually said according to the bible, and all without blinking once. The thirst for power over others does strange things to people, and our societies are still fully unprepared for that, and we still hear them say one thing and do another, and we still believe what they say. We’re suckers for snake oil.

Actual clergymen and other people of real faith may be somewhat different from politicians and their flocks, but as long as the Vatican remains opulently rich and clad in gold while Catholics and others around the world live in die in misery, perhaps we should question the link between Jesus and the church, the very link the latter base their entire authority on.

Perhaps, as well, we should question any and all claims of being ‘God’s own country’ made by any and all nations who send their best and bravest to go and kill the best and bravest of other nations for the sake of religion, resources or empire. Nothing of that has anything to do with Jesus.

And perhaps we should look for Jesus not in the people who talk about him, but in those who act like him, and like he told his contemporaries to act. And yeah, that takes me to Greece, and the Automatic Earth for Athens fund.

Not in any kind of presumptuous way, mind you, certainly not when it comes to me, but I have met quite a few people who seem to understand Jesus much better than most politicians and church leaders do, they just don’t talk about it, they do it. That much must have become clear through the past 2,5 years and 13-14 articles (for links, see bottom of this article) that I’ve written about them.

The reason I haven’t written much on the topic over the past 9 months or so comes down pretty much to growing pains, for lack of a better term. In my view, my friend Konstantinos and his social kitchen project, O Allos Anthropos (the Other Human), had become too dependent on Automatic Earth readers for donations, which is not a healthy situation for anyone involved.

I didn’t want to continually ask our readers for more money, and O Allos Anthropos needed to find other sources for fund-raising. The problem is that is easier said than done, for multiple reasons. If you have no experience when it comes to fund-raising, it’s hard to know where to start, and it’s hard to organize yourselves to do it. And then you end up broke, as O Allos Anthropos is right now.

Still, I think they could have tried a bit harder, but then, it’s not about me. It’s about the people we help, the refugees and homeless. If you follow my essays at the Automatic Earth a little, you will know that the situation for both groups (and sometimes they’re the same people) is still deteriorating at a rapid pace. And as much as the Greek people are willing to help, most of them are getting poorer fast as well.

Between ever more and higher taxes on the one hand, and ever more cuts to wages and pensions on the other, a recovery of the Greek economy slips further away and out of view by the day, taking people’s ability to take care of the very poorest out with it. And in this case, too, politicians are not going to lend a helping hand unless they see political gain in it.

Greek Minister for Migration Yiannis Mouzalas recently said he could not exclude the possibility that refugees would die on the Greek islands this winter. He’s had two years to do just that, though. That’s enough time to run out of excuses to blame the situation on anyone else. But he’s right: people will probably die there this winter.

There are thousands living in summer tents with no heating, surrounded by wet mud and sheer misery, and with sanitation facilities that provide no privacy and are dirtier than many a manger in a stable could be. If anything, they make one think of Joseph and Mary all over again; just worse, probably. The EU reportedly has spent $1.4 billion on the situation so far, and this is the result.

Mouzalas was nominated for the Council of Europe’s human rights commissioner, and it was no big surprise he didn’t get the job. Though with the example of Saudi Arabia chosen to head a key UN human rights panel, anything is possible.

There is no way that it’s impossible to build adequate facilities for some 20,000 refugees and migrants with $1.4 billion. If that doesn’t work, and it hasn’t, one can only conclude that various parties involved, the EU, the Greek government, and the alphabet soup of NGOs operating in Greece, don’t see these facilities as their no. 1 priority. Thing is, who’s going to call them on it, and what good would that do?

The only priority the EU has when it comes to refugees is to keep them out; the politicians in power in member states read the polls and see their voters don’t want refugees in their countries. So they fund armies and detention camps in Libya etc., where people are sold for $400 or so in open slave markets. And then they talk about Christian values.

Greece has been completely swamped and torn apart by the issue, granted, but that doesn’t mean Mouzalas and Tsipras et al couldn’t have done -and do- a lot more to guarantee at least minimal human dignity to those stuck, if not incarcerated, on the islands. There are hundreds if not thousands of underage children, women, sick people, elderly, stuck in conditions not even the ass and the oxen were in 2,000 years ago.

There’s no way that’s the best we can do. It’s an utter disgrace that shames any and all Christian values, and the man they were named after.

O Allos Anthropos cannot solve these issues, all it can so is help where it can. First, feed the homeless Greeks and refugees in the cities, especially Athens. Then, make life more bearable for those hardest hit by both their circumstances and the way the political classes and the humanitarian-industrial complex deal with them.

And in the end that’s perhaps the only thing we can do: not try and launch huge movements and sweep away a status quo, but work on a small scale, a human scale, human-to-human. Work on a Jesus scale, rather than a Church scale. I know, there are many churches that do help where they can, but that too is most effective where the scale is smallest.

Konstantinos has taken O Allos Anthropos to Bodrum in Turkey this summer, a place where many thousands of Syrians and other refugees are now held up instead of sailing to the Greek islands. These people have nowhere to go, Greece is largely off limits – though the numbers crossing are increasing again- while in the countries they fled, the west is fighting for prominence instead of helping them rebuild.

We will not solve this problem, or at least it will take many years, and the needs of the worst-off, both Greeks and refugees, are immediate. The only way we have to save the world, or make it a better place, is one person at a time. Everyone who tries to do anything on a larger scale fails miserably.

So that’s what we’ll do. Konstantinos and I, and all the other people involved. One person at a time. We can only do that with your help tough. So once again, please be generous this Christmas. Do that spirit honor. Let’s make 2018 a good year for everyone who needs help to make it one.

For donations to Konstantinos and O Allos Anthropos, the Automatic Earth has a Paypal widget on our front page, top left hand corner. On our Sales and Donations page, there is an address to send money orders and checks if you don’t like Paypal. Our Bitcoin address is 1HYLLUR2JFs24X1zTS4XbNJidGo2XNHiTT. For other forms of payment, drop us a line at Contact • at • TheAutomaticEarth • com.

To tell donations for Kostantinos apart from those for the Automatic Earth (which badly needs them too!), any amounts that come in ending in either $0.99 or $0.37, will go to O Allos Anthropos. Every penny goes where it belongs, no overhead. Guaranteed. It’s a matter of honor.

Please give generously.

A list of the articles I wrote so far about Konstantinos and Athens.

June 16 2015

The Automatic Earth Moves To Athens

June 19 2015

Update: Automatic Earth for Athens Fund

June 25 2015

Off to Greece, and an Update on our Athens Fund

July 8 2015

Automatic Earth Fund for Athens Makes First Donation

July 11 2015

AE for Athens Fund 2nd Donation: The Man Who Cooks In The Street

July 22 2015

AE Fund for Athens: Update no. 3: Peristeri

Nov 24 2015

The Automatic Earth -Finally- Returns To Athens

Dec 25 2015

Help the Automatic Earth Help the Poorest Greeks and Refugees

Feb 1 2016

The Automatic Earth is Back in Athens, Again

Mar 2 2016

The Automatic Earth for Athens Fund Feeds Refugees (Too)

Aug 9 2016

Meanwhile in Greece..

Nov 28 2016

The Other Human Needs Your Help This Christmas

Dec 21 2016

The Automatic Earth in Greece: Big Dreams for 2017

Mar 23 2017

The Automatic Earth Still Helps Greeks and Refugees

Konstantinos and a happy refugee

Debt Rattle December 20 2017

Dec 202017

December 20, 2017 Posted by Raúl Ilargi Meijer at 9:38 am Finance Tagged with: bitcoin, Brexit, China, Coinbase, Facebook, Gibraltar, Greece, homeless, Lesbos, overspending, refugees 10 Responses »

Claude Monet Houses of Parliament, Sunset 1904

• Bitcoin Plunges Over $2,500, Bounces Back Somewhat, Bitcoin Cash Surges (MW)

• Coinbase Enables -Then Disables- Bitcoin Cash Trading: Insider Trading? (BI)

• From Bitcoin To Hashgraph: The Crypto Revolution (Mike Maloney)

• Is It 1999? 2007? Or Both? (Roberts)

• China Is Having Second Thoughts About Cracking Down On Ballooning Debt (CNBC)

• EU Commission May Launch Moves To Punish Poland Over Legal Reforms (R.)

• Facebook’s New Nemesis Is a Besuited German Antitrust Watchdog (BBG)

• Un-Merry Christmas: Perverse Incentives to Over-Consume and Over-Spend (CHS)

• Too Late, Theresa – Brexit Offer To EU Citizens Leaves Many Cold (R.)

• Centuries-Old Gibraltar Dispute Threatens Brexit Progress (BBG)

• UK Government Condemned Over ‘Abject Failure’ To Tackle Homelessness (Ind.)

• Salaries Continue To Decline In Greece

• Footage Emerges From Lesbos Refugee Camp Showing Shocking Conditions (K.)

• 10 People Injured In Clashes At Moria Refugee Camp On Lesbos (K.)

• Our Selective Blindness Is Lethal To The Living World (G.)

Pretty wild. You sure you want your savings go through that?

• Bitcoin Plunges Over $2,500, Bounces Back Somewhat, Bitcoin Cash Surges (MW)

The price of bitcoin plunged about 14% — more than $2,500 — Tuesday night after cryptocurrency trading site Coinbase said it would allow its customers to buy and sell its rival offshoot currency, bitcoin cash. In a matter of hours, the price of bitcoin dropped from $18,125 to as low as $15,578. Bitcoin later rallied somewhat and was trading within a $1,000-range; it was last at $16,875 Tuesday night. Bitcoin futures on the CME Group’s Chicago Mercantile Exchange were last trading at $17,425, off more than $700 from the afternoon. Bitcoin cash, meanwhile, rallied more than 50% to all-time highs above $3,300. It was last trading at $3,303, according to CoinMarketCap. “Sends and receives are available immediately,” Coinbase said in a blog post Tuesday announcing bitcoin-cash trading.

“Buys and sells will be available to all customers once there is sufficient liquidity on GDAX. We anticipate that this will take a few hours.” However, Coinbase and its GDAX exchange late Tuesday suspended bitcoin-cash trading after just four minutes until 9 a.m. Pacific time Wednesday, apparently until traffic settles down and liquidity is established. Bitcoin cash was created by a split from bitcoin on Aug. 1 by a faction of disgruntled developers, and allows virtual miners to process transactions in larger units — 8 megabytes rather than the 1-MB bitcoin blocks. The fledgling cryptocurrency has expanded 10-fold since then, and is now the third-largest by market cap, at $55.6 billion, according to CoinMarketCap.com.

Volatility, liquidity, insider trading.

• Coinbase Enables -Then Disables- Bitcoin Cash Trading: Insider Trading? (BI)

Coinbase, one of the largest cryptocurrency trading platforms, shocked the crypto-world with its announcement Tuesday evening that it would allow users to buy and sell bitcoin cash. The news sent bitcoin cash, the spin-off cryptocurrency of bitcoin launched in August, to an all-time high above $3,609 per data from Markets Insider. On Coinbase’s GDAX platform, the price of the cryptocurrency reached well above $8,000 per coin. Bitcoin cash’s appreciation began slightly before the announcement on some exchanges, raising concerns about the possibility of insider trading by employees with advanced knowledge of the news. Coinbase CEO Brian Armstrong said in a post early Wednesday morning that the company was looking into the matter.

“Given the price increase in the hours leading up the announcement, we will be conducting an investigation into this matter”, he said. If we find evidence of any employee or contractor violating our policies- directly or indirectly- I will not hesitate to terminate the employee immediately and take appropriate legal action. The price spike appeared to put pressure on Coinbase. Nearly four hours after the San Francisco-based firm announced it was supporting bitcoin cash trading, it said users wouldn’t be able to buy and sell the cryptocurrency until Wednesday. “An update on Bitcoin Cash for our customers: sends and receives are functional,” the company said in a tweet at 11:15 p.m. ET. “Buys and sells on Coinbase.com and in our mobile apps will be available to all customers once there is sufficient liquidity on GDAX. We anticipate that this will happen tomorrow.”

Ouch. The company said in a blog post it disabled trading because of “significant volatility.” In addition to bitcoin cash spiking by almost $1,000, cryptocurrency trading volumes reached an all-time high above $49 billion, according to data from CoinMarketCap. Coinbase has struggled to fully function under such demand in the past.

Bitcoin this week

Our friend and gold bug Mike has lofty words.

• From Bitcoin To Hashgraph: The Crypto Revolution (Mike Maloney)

Today, mankind stands at a crossroads, and the path that humanity chooses may have a greater impact on our freedom and prosperity than any event in history. In 2008 a new technology was introduced that is so important that its destiny, and the destiny of mankind are inextricably linked. It is so powerful that if captured and controlled, it could enslave all of humanity. But if allowed to remain free and flourish – it could foster unimaginable levels of peace and prosperity. It has the power to replace all financial systems globally, to supplant 90% of Wall St, and to provide some functions of government. It has no agenda. It’s always fair and impartial. It can not be manipulated, subverted, corrupted or cheated.

And – it inverts the power structure and places control of one’s destiny in the hands of the individual. In the future, when we look back at the 2.6 million-year timeline of human development and the major turning points that led to modern civilization – the creation of farming, the domestication of animals, the invention of the wheel, the harnessing of electricity and the splitting of the atom – the sixty year development of computers, the internet and this new technology will be looked upon as a single event…a turning point that will change the course of human history. It’s called Full Consensus Distibuted Ledger Technology, and so far its major use has been for cryptocurrencies such as Bitcoin….but its potential goes far, far beyond that.

Of course, as always, Lance has a lot more to say (click the link). I picked out his graph beacuse it is exceptionally strong.

• Is It 1999? 2007? Or Both? (Roberts)

I have combined the three periods below, scaled to 100, so you can see just how far we have currently gone. Sure. This time could be different. It just probably isn’t.

Beijing has been aware of this for a long time. Don’t watch what they say, watch what they do.

• China Is Having Second Thoughts About Cracking Down On Ballooning Debt (CNBC)

China is planning to relax its goal of cutting debt in its economic outline that’s set for release Wednesday, The Wall Street Journal reported Tuesday. The revised plan will instead clamp down on the rise in borrowing, sources told the WSJ. The move would fly in the face of the Chinese government’s mission to bring down the country’s soaring debt, a goal President Xi Jinping has made a cornerstone to his economic platform. The weakened priority may prove to be a concession by top Communist Party leaders that China’s economy may be more reliant on leveraged growth than the government would like. The Journal added that, by cooling its stance on debt, Beijing is hinting that it would rather fuel growth with higher debt than pursue austerity measures.

Chinese debt levels jumped the most in four years in September, according to Reuters. There’s speculation that the size of China’s debt load may be three times its economy. China may be feeling pressure to keep its economy growing as the U.S. is set to pass its biggest tax overhaul in 30 years this week, which will lower the corporate tax rate to theoretically make more companies competitive with China. To be sure, Xi and the Communist Party have been hard at work to curb borrowing between banks, the Journal noted. But since the crackdown on intrabank lending, smaller banks have scaled risky borrowing.

Don’t think Poland will react very well to being ‘punished’.

• EU Commission May Launch Moves To Punish Poland Over Legal Reforms (R.)

In what would be an unprecedented move, the European Commission could invoke Article 7 of the European Union’s founding Lisbon Treaty to punish Warsaw for breaking its rules on human rights and democratic values. “Unless the Polish government postpones these court reforms, we will have no choice but to trigger Article 7,” said a senior EU official before a Commission meeting on Wednesday, where Poland’s reforms are on the agenda. Poland’s new prime minister Mateusz Morawiecki said in Brussels last week that “the decision has already been made”. The Commission’s deputy head Frans Timmermans warned in July that Poland was “perilously close” to facing sanctions. Such a punishment could still be blocked. Hungary, Poland’s closest ally in the EU, is likely to argue strongly against it.

But the mere threat of it underlines the sharp deterioration in ties between Warsaw and Brussels since the socially conservative Law and Justice (PiS) won power in late 2015. The Commission says Poland’s judicial reforms limit judges’ independence. Polish President Andrzej Duda has until Jan. 5 to sign them into law. If all EU governments agree, Poland could have its voting rights in the EU suspended, and may also see cuts in billions of euros of EU aid. The PiS government rejects accusations of undemocratic behavior and says its reforms are needed because courts are slow, inefficient and steeped in a communist era-mentality.

Cartel Office, no less.

• Facebook’s New Nemesis Is a Besuited German Antitrust Watchdog (BBG)

Andreas Mundt is Facebook’s new nemesis. Mundt, 57, is the president of the Federal Cartel Office, Germany’s competition regulator. For nearly two years, his agency has been probing whether a key part of the Silicon Valley giant’s business model is an abuse of a market dominance. In a case that caused much surprise outside Germany, Mundt unveiled preliminary findings on Tuesday, saying Facebook may take advantage of its popularity to bully users into agreeing to terms and conditions they often don’t understand. The small print allows using the data to generate the targeted ads that make the company so rich. “Competition law would be poorer without somebody like Andreas Mundt,” said Nelson Jung, a lawyer at Clifford Chance in London. “He’s characterized by his willingness to push boundaries and challenge the status quo.”

Facebook took a dim view, saying the report painted an “inaccurate picture” of how it operates, homing in on the criticism that it’s dominant, an important legal term that might curb future behavior. [..] Facebook didn’t hold back in its attempt to rebut Mundt’s report, saying that it’s wrong to label it as “dominant” in Germany. “A dominant company can save the expense of innovating because it doesn’t have to fear someone else developing better features. We must constantly innovate to attract people. If we fail, people will go elsewhere.” According to Mundt, when data is called the new currency of the digital age, then the relationship to competition law is obvious. That’s also why he’s rejecting criticism that the probe blurs the line between privacy and antitrust enforcement.

“It can only be an antitrust issue if a customer can’t avoid the company because it’s dominating the market. Of course that has a privacy angle but it certainly also has an antitrust angle.” Mundt calls the Facebook investigation a “pioneer case” since “for the first time we’re looking into the relation between market power and big data.” For him, it’s as important as the European Union’s clampdown on Alphabet’s Google, which in July was fined 2.4 billion-euros for skewing shopping search results. “I like the Google decision, it set out some markers for the future,” Mundt said. “That’s what we’re trying with the Facebook case as well, regardless of what the result will now be.”

Well, Toys ‘R’ Us is already dying. Our economies run on overspending.

• Un-Merry Christmas: Perverse Incentives to Over-Consume and Over-Spend (CHS)

Few topics are off-limits nowadays: the personal and private are now splashed everywhere for all to see. One topic is still taboo: the holiday’s perverse incentives to over-consume and over-spend,lest our economy implode. This topic is taboo because it strikes at the very heart of our socio-economic system, which is fundamentally based on permanent growth, the faster the better, as if unlimited expansion on a finite planet is not just possible, but desirable. In the current Mode of Production, the solution to every social and economic ill is to “grow our way out of it.” The solution to unemployment: jump-start growth by expanding consumption, spending and borrowing. The solution to stagnant wages: jump-start growth. The solution to declining profits: jump-start growth. The solution to government deficit spending: jump-start growth. And so on.

So what happens when most people have not just the basics of life, but a surplus of stuff? Where is the growth going to come from if people already have everything? The answer is three-fold: 1. Replace a perfectly good product with a new product and dump the old one in the landfill. 2. Buy duplicates and put the surplus products in the closet or storage facility. 3. Buy gimmicks (Pet Rocks, etc.) that are tossed in the dump shortly after the holiday gift-giving season ends. But does this Landfill Economy make sense? The cheap oil is about gone, and so does it make any rational sense to burn the last of the cheap fossil fuels on assembling stuff nobody needs in China, shipping it thousands of miles to retailers or Amazon warehouses, adding it to the immense piles of stuff most households already own, and then shipping the old but still functional products to the landfill, just to keep the economy humming?

This is of course insane. Decisions aren’t being made as if scarcity matters; the goals and incentives are set to encourage perverse and destructive overconsumption and overspending: not only are we squandering resources in the sacrifice to the false gods of “growth,” we’re indebting households to do so, stripping income that could have been saved and invested in productive uses. In the lunatic asylum of the current economic model, media anchors sport grins of delirious joy when reporting increases in holiday spending, as if a bump higher from $680 billion to $700 billion is a gargantuan win for the flailing economy.

There are no Britons ready to fill the roles at either the high end -academics- or the low end -fruit pickers-.

• Too Late, Theresa – Brexit Offer To EU Citizens Leaves Many Cold (R.)

Back from Brussels with a hard-fought Brexit deal, Prime Minister Theresa May wrote an open letter to the three million citizens of other European Union states living in Britain. “I know our country would be poorer if you left and I want you to stay,” she wrote after striking the initial agreement, which promises to secure their British residency rights after Brexit and allows the negotiations to move onto trade relations. But for some EU nationals – who have endured uncertainty over their rights since the Brexit vote in June 2016, not to mention an unpleasant feeling that many Britons do not want them around – May’s Dec. 8 deal is too little, too late. It’s too late to keep German nurse Daniela Jones in the chronically short-staffed National Health Service (NHS), where she worked for 35 years.

It’s too late for French psychotherapist Baya Salmon-Hawk, who after 40 years in Britain has moved to Ireland to remain in the EU. It’s too late for French accountant Nathalie Duran, who is planning early retirement in France because after 31 years as a taxpayer in Britain she objects to being told she has to pay a fee and fill in forms to be granted a new “settled status”. “I will have to regretfully decline your generous offer for settled status and oblige your lovely countrymen’s wishes and go home,” she wrote on Facebook in a response to May laden with irony. Duran told Reuters that the prime minister’s “late outpouring of love” for EU citizens, after years of tough talk on the need to cut immigration, could not mask negative attitudes towards immigrants unleashed by the Brexit vote. “I think it’s turning ugly,” said 56-year-old Duran. “It’s now OK to say ‘go home foreigners’.”

It’s whack-a-mole thing. New issues keep popping up.

• Centuries-Old Gibraltar Dispute Threatens Brexit Progress (BBG)

A 300-year-old argument between Britain and Spain over a small piece of land is threatening to derail Theresa May’s plans to help businesses navigate Brexit. U.K. officials fear Spain will threaten to veto a Brexit transition phase if the British prime minister refuses to negotiate a separate deal with the government in Madrid that covers the disputed territory of Gibraltar. While the peninsula has been in British hands since 1713, Spain maintains a claim over the 2.6 square miles (6.7 square kilometers) of land. Fears are growing among ministers in London that a new framework for the next phase of Brexit talks, due to be outlined by the European Union on Wednesday, might reignite the centuries-old arguments, a U.K. official said.

May faces pressure to quickly strike a deal on transitional terms to assure U.K.-based businesses that trade rules won’t change suddenly on Brexit day in March 2019. May wants an agreement on the transition – or “implementation” – phase by March 2018 in order to shift talks on to the long-term future trade agreement. She hopes the two-year period of stability immediately after Brexit will help encourage businesses to stay based in the U.K. Last week, Spanish Prime Minister Mariano Rajoy suggested his government would need to give its explicit consent to any transitional deal affecting Gibraltar. The measure would require separate negotiations between London and Madrid, he said. [..] One U.K. official who asked not to be identified said British overseas territories must be included within the EU’s guidelines for negotiating an overall transitional period. To do anything else would be a contradiction in the EU’s own position, the official said.

So does Labour stand up for them? really? How do they do that?

• UK Government Condemned Over ‘Abject Failure’ To Tackle Homelessness (Ind.)

The Government has been condemned for taking an “unacceptably complacent” attitude towards tackling homelessness, as soaring numbers of people are forced to live on the streets or in temporary accommodation. A damning report by the cross-party Public Accounts Committee (PAC) said ministerial attempts to solve the “national crisis” had ended in “abject failure”. Figures show more than 9,000 people are sleeping rough on the streets of England at any one time – up 134% since 2011. Over 79,000 households, including 120,000 children, are meanwhile homeless and living in temporary accommodation – a rise of 65% since 2010.

Recent research by charity Shelter revealed that child homelessness has reached a 10-year high, with nearly 130,000 children in Britain set to wake up homeless and in temporary accommodation this Christmas. But the Government’s commitment to eliminate rough sleeping by 2027 will only address the “tip of the iceberg”, according to the PAC report, which found there to be an “unacceptable shortage” of realistic housing options for the homeless or those at risk of homelessness.

Which cuts consumer spending, which cuts jobs, which cuts consumer spending, rinse and repeat.

• Salaries Continue To Decline In Greece

Salaries have declined considerably and the number of workers on low wages has expanded, explaining the increase in jobs recorded by the Labor Ministry’s hirings database Ergani this year. A direct comparison of the first three weeks of October 2017 with the same period last year changes the rosy image of the local labor market that the government is attempting to present. The figures for this year show that more than six in 10 (64.27%) of the total 1,824,437 workers employed at 247,236 enterprises were on salaries of up to 1,000 euros per month gross. Fewer than two-thirds of them, accounting for 759,326 in absolute figures or 41.62% of all workers, were employed full-time, while the rest (22.65%) appeared to have part-time jobs that earned less than 500 euros a month.

Data also show the number of self-employed increased by 121,913 from October 2016, but this was not accompanied by an increase in salaries. The average salary in October 2017 dropped to 1,024.90 euros from 1,060.30 a year earlier. Across the labor market, full-time workers accounted for 68.44% of the total, virtually unchanged from the 68.28% rate in October 2016. However, the number of enterprises rose by 14,085, or 6.04%, from 233,151 in October last year. Over the 12-month period, flexible employment (part-time and shift work) grew by 30,556 jobs or 7.98%.

A growing trend has been recorded toward jobs paying between 500 and 600 euros per month: One in nine workers (11% or 200,759) fall into this revenue category, up by a remarkable 13.9% from October 2016 – a rise that is far greater than the overall increase in jobs. Eurostat data showed on Tuesday that while the hourly cost of labor in Greece rose 0.8% in the third quarter of 2017, salary costs fell 1.8% and non-salary costs (social security contributions etc) increased 8.6%.

It’ll be a bitter winter.

• Footage Emerges From Lesbos Refugee Camp Showing Shocking Conditions (K.)

US-based internet media company BuzzFeed has published a series of photographs and videos shot by residents inside the government-run Moria refugee and migrant processing center on the eastern Aegean island of Lesvos. The scenes of misery and squalor are also evident in a report on Deutsche Welle on Monday, which was International Migrants Day, showing footage taken by hidden camera inside the same facility. BuzzFeed’s Ryan Broderick said in his report that a 25-year-old man from Iraq named Noor and a 27-year-old man from Syria named Ammar agreed to provide the reporter with videos from inside the fenced-in perimeter of the former army camp, which is run by the Greek military.

The footage, which Broderick also posed on his Twitter account, provides a rare glimpse at conditions inside the camp, which was originally built to accommodate some 2,000 migrants and refugees and is now home to around 6,000 people, including unaccompanied minors, children, pregnant women and disabled or elderly individuals. Images of a shower area show a row of filthy stalls with doors hanging off their hinges, allowing little if any privacy. Many residents collect water in plastic bottles to bathe themselves rather than entering the showers, the witnesses inside the facility are quoted as saying after sending photographs of huge piles of plastic water bottled. The toilets are so unsanitary, they add, that many residents prefer to go to the bathroom in the open air, in a part of an olive tree grove set aside for this purpose.

Streets in the camp flood in the rain and are lined with tents that may accommodate more than one family and have been strengthened to withstand winter conditions with plastic sheets. In another video, two police officers are seen forcibly carrying a man by his arms and leg and shouting abuse at him after breaking up a fight between residents. Several international rights groups have decried conditions at Moria for months, calling on the Greek government to ease overcrowding and improve accommodation and sanitation standards. Squalid and cramped conditions have also led to riots and fights breaking out inside the facility.

“300 to 350 unaccompanied minors and hundreds of children, women and elderly and disabled people.”

• 10 People Injured In Clashes At Moria Refugee Camp On Lesbos (K.)

Around 10 people were rushed to hospital on Lesvos on Tuesday night following violent clashes between rival groups in the Moria refugee and migrant camp. Riot police were called in to quell the unrest, which reportedly broke out between rival groups of Iraqi and Afghan nationals and resulted in several small fires being set. Tension is rife at Moria, where scant resources are being stretched at almost three times the camp’s capacity and conditions are squalid.

Among its 6,000-plus residents there are around 300 to 350 unaccompanied minors and hundreds of children, women and elderly and disabled people. Tuesday night’s clashes came a day after American news outlet BuzzFeed and Germany’s Deutsche Welle published videos of the camp’s interior showing the extent of the filth and squalor to which residents are being subjected. Journalists are not allowed into the military-run camp without the prior agreement of authorities, so the exact extent of Tuesday’s and other similar clashes are not known.

Blind to the species that were already gone when you were born.

• Our Selective Blindness Is Lethal To The Living World (G.)

What you see is not what others see. We inhabit parallel worlds of perception, bounded by our interests and experience. What is obvious to some is invisible to others. I might find myself standing, transfixed, by the roadside, watching a sparrowhawk hunting among the bushes, astonished that other people could ignore it. But they might just as well be wondering how I could have failed to notice the new V6 Pentastar Sahara that just drove past. As the psychologist Richard Wiseman points out: “At any one moment, your eyes and brain only have the processing power to look at a very small part of your surroundings … your brain quickly identifies what it considers to be the most significant aspects of your surroundings, and focuses almost all of its attention on these elements.” Everything else remains unseen.

Our selective blindness is lethal to the living world. Joni Mitchell’s claim that “you don’t know what you’ve got till it’s gone” is, sadly, untrue: our collective memory is wiped clean by ecological loss. One of the most important concepts defining our relationship to the natural world is shifting baseline syndrome, coined by the fisheries biologist Daniel Pauly. The people of each generation perceive the state of the ecosystems they encountered in their childhood as normal and natural. When wildlife is depleted, we might notice the loss, but we are unaware that the baseline by which we judge the decline is in fact a state of extreme depletion. So we forget that the default state of almost all ecosystems – on land and at sea – is domination by a megafauna.

We are unaware that there is something deeply weird about British waters; they are not thronged with great whales, vast shoals of bluefin tuna, two-metre cod and halibut the size of doors, as they were until a few centuries ago. We are unaware that the absence of elephants, rhinos, lions, scimitar cats, hyenas and hippos, that lived in this country during the last interglacial period (when the climate was almost identical to today’s), is also an artefact of human activity. And the erosion continues. Few people younger than me know that it was once normal to see fields white with mushrooms, or rivers black with eels at the autumn equinox, or that every patch of nettles was once reamed by caterpillars. I can picture a moment at which the birds stop singing, and people wake up and make breakfast and go to work without noticing that anything has changed.

Debt Rattle December 6 2017

Dec 062017

December 6, 2017 Posted by Raúl Ilargi Meijer at 9:28 am Finance Tagged with: Brexit, Christmas, correction, Flynn, Fraud, Greece, grizzly, homeless, Juncker, pensions, refugees, Toronto 6 Responses »

Balthus Therèse dreaming 1938

• Just How Big Could The Next Correction Be? (Roberts)

• Second Canadian Mortgage Lender Crashes After Admitting Mortgage Fraud (ZH)

• Toronto Housing Prices Fall Amid Growing Pool of Homes for Sale (BBG)

• Plunder Capitalism (Paul Craig Roberts)

• ‘We Can’t Go On Like This’: Resignation In EU As Brexit Talks Stutter (G.)

• Theresa May Faces New Brexit Revolt From Boris Johnson (BBG)

• Most Brits Still Want Brexit But Expect It All to End Badly (BBG)

• Juncker Seeks Greater Commission Control over Eurozone (Spiegel)

• What Now? (Jim Kunstler)

• The Premature Delisting of the Yellowstone Grizzly Bear (CP)

• Greek Pension Cuts To Hit 70% Since The Start Of The Bailouts (K.)

• Aid Groups Warn Of Looming Emergency At Greek Asylum Centres (G.)

• Europe’s Migrant Crisis: Millions Still to Come (Kern)

• US Homeless Population Rises For The First Time Since The Great Recession (G.)

• Nearly 130,000 British Children To Wake Up Homeless This Christmas (Ind.)

From a larger article by Lance, This is Nuts. A 40% crash is starting to sound like a lowball.

• Just How Big Could The Next Correction Be? (Roberts)

Just how big could the next correction be? As stated above, just a correction back to the initial “critical support” set at the 2016 lows would equate to a 29.1% decline. However, the risk, as noted above, is that a correction of that magnitude would begin to trigger margin calls, junk bond defaults, blow up the “VIX” short-carry and trigger a wave of automated selling as the algorithms begin to sell in tandem. Such a combination of events could conceivably push markets to either strong support at the previous two bull market peaks or to support at the 2011 peak which coincides with the topping formations of 2000 and 2007. Such a correction would entail either a 41.1% to 49.2% decline.

I won’t even mention the remote, but real, possibility of a nearly 75% retracement to the previous lows of the last two “bear markets.” That can’t happen you say? It wouldn’t even match the decline following the 1929 crash of 85%. Furthermore, as technical analyst J. Brett Freeze, CFA, recently noted: “The Wave Principle suggests that the S&P 500 Index is completing a 60-year, five-wave motive structure. If this analysis is correct, it also suggests that a multi-year, three-wave corrective structure is immediately ahead. We do not make explicit price forecasts, but the Wave Principle proposes to us that, at a minimum, the lows of 2009 will be surpassed as the corrective structure completes.” Anything is possible.

Behing every bubble there is fraud.

• Second Canadian Mortgage Lender Crashes After Admitting Mortgage Fraud (ZH)

Back in April/May, Canada’s biggest mortgage lender, Home Capital Group, crashed its way into the headlines, coming clean over its balance sheet-full of liar loans, suffered a bank run, and was forced to take emergency liquidty from taxpaying pensioners, and was eventually bailed out by good old Warren Buffett. “Probably nothing…”

Well just when everyone though that crisis was over, a second cockroach in the Canadian mortgage bubble fiasco just emerged… Laurentian Bank of Canada fell the most in almost nine years after reporting it found customer misrepresentations on some mortgage loans it sold to another firm.

Echoing problems that almost sunk Home Capital Group, Bloomberg reports that: An audit “identified documentation issues and client misrepresentations” with some mortgages from its B2B Bank unit that were sold to a third-party firm, the lender said Tuesday in its annual report. Laurentian said it will repurchase about C$89 million ($70 million) of those mortgages in the first quarter, or 4.9% of such loans sold to the firm. It will buy back an additional C$91 million of mortgages “inadvertently” sold to the firm, also in the first quarter. Just as we saw with Home Capital, the CEO initially shrugged it off as immaterial: “This is largely a documentation and securitization-eligibility issue,” Chief Executive Officer Francois Desjardins said in a call with analysts. “It is not material for the bank, its operations, its funding nor its capital. We have worked to change processes to ensure that this issue is resolved.”

Pop.

• Toronto Housing Prices Fall Amid Growing Pool of Homes for Sale (BBG)

Canada’s largest housing market continues to see prices fall amid a widening pool of homes for sale, though there are signs the correction is beginning to lure in some new buyers. The Toronto Real Estate Board’s benchmark home price index fell for the sixth consecutive month, down another 0.4% from October. The index has fallen 8.8% since May – the largest six-month decline in the history of data back to 2000. For the first time since 2009, the average price of a home sold in Toronto – at C$761,757 ($600,991) in November – failed to surpass levels from a year earlier.

Toronto’s housing market, dubbed one of the riskiest housing bubble cities by UBS, has slumped over the past few months amid government rules and harsher mortgage guidelines aimed at curbing demand. That’s coincided with a sharp increase in supply with new listings up 37% from a year earlier. [..] Toronto realtors sold 7,374 units in November. While that’s down 13% from a year earlier, the number is one of the highest readings for the month over the past decade. The correction in Toronto’s housing market has been primarily in Toronto’s detached market, where average prices surpassed C$1.2 million earlier this year. The price index for single family detached homes is down 12% since May. The condominium price index is little changed from record levels earlier this year.

“..the tax cut edges us closer to revolution resulting from complete distrust of government..”

• Plunder Capitalism (Paul Craig Roberts)

I deplore the tax cut that has passed Congress. It is not an economic policy tax cut, and it has nothing whatsoever to do with supply-side economics. The entire purpose is to raise equity prices by providing equity owners with more capital gains and dividends. In other words, it is legislation that makes equity owners richer, thus further polarizing society into a vast arena of poverty and near-poverty and the One%, or more precisely a fraction of the One% wallowing in billions of dollars. Unless our rulers can continue to control the explanations, the tax cut edges us closer to revolution resulting from complete distrust of government. The current tax legislation drops the corporate tax rate to 20%. This means that global corporations registered in the US will be taxed at a lower income tax rate than a licensed practical nurse making $50,000 per year.

The nurse, if single, faces in 2017 a 25% marginal tax rate on all income over $37,950. A single person is taxed at a rate of 33% on all income above $191,651. 33% was the top tax rate extracted from medieval serfs, and approaches the tax rate on US 19th century slaves. Such an upper middle class income as $191,651 sounds extraordinary to most Americans, but it is so far from the multi-million dollar annual incomes of the rich as to be invisible. In America, it is the shrinking middle and upper middle class incomes that bear the burden of income taxation. The rich with their capital gains from their equity holdings are taxed at 15%. Even single individuals who earn between $1 and $9,325 are taxed at 10% on their pittance.

The neoliberal economists who are the shills for the rich, Wall Street, and the Banks-Too-Big-Too-Fail claim, erroneously, that by cutting the corporate income tax rate to 20% all sorts of offshored profits will be brought back to the US and lead to a booming economy and higher wages. This is absolute total nonsense. The money won’t come back, because it is invested abroad where labor costs are lower, if invested at all instead of buying back the corporation’s stock or buying other existing companies. After 20 years of offshoring US manufacturing and professional tradable skills and the incomes associated with the jobs, who is going to invest in America? The American population has no income with which to purchase the goods and services from new investment, and the American population’s credit cards are maxed out.

“We have to treat the UK political system like a rotten egg..”

• ‘We Can’t Go On Like This’: Resignation In EU As Brexit Talks Stutter (G.)

Theresa May has less than a week to salvage a Brexit deal that would open the way to trade talks before the end of the year, amid increasing signs of impatience within the EU over her handling of the process. EU negotiators expect the prime minister to return to Brussels very soon, but have said time is running out to strike a deal at a European summit next week. “The show is now in London,” said the chief spokesman of the European commission president, Jean-Claude Juncker. “We stand ready here in the commission to resume talks with the United Kingdom at any moment in time when we get the sign that London is ready.” While the next “final” deadline for stage one has not been defined publicly, several EU sources said the deal would have to be struck by the end of the week, with either Friday or Sunday as the last resort.

One EU ambassador told the Guardian the failure to reach a deal on Northern Ireland was a microcosm of a wider problem. “At root the problem is that [May] seems incapable of making a decision and is afraid of her own shadow,” the source said. “We cannot go on like this, with no idea what the UK wants. She just has to have the conversation with her own cabinet, and if that upsets someone, or someone resigns, so be it. She has to say what kind of trading relationship she is seeking. We cannot do it for her, and she cannot defer forever.” For weeks, European officials have walked a tightrope between sticking to the EU’s tough negotiating stance and seeking to avoid action or words that could destabilise the fragile May government. “We have to treat the UK political system like a rotten egg,” said one EU source in the run-up to Monday’s talks, suggesting that if “the realities of the world” dawned too soon, the British government could become more fragile.

Cats in a sack.

• Theresa May Faces New Brexit Revolt From Boris Johnson (BBG)

Prime Minister Theresa May is facing a revolt from inside her Cabinet over her plan to keep U.K. regulations aligned with the European Union after Brexit, a split that threatens to undermine her hopes of breaking the deadlock in negotiations. Efforts to rescue Brexit talks from an embarrassing breakdown on Monday prompted fresh divisions in the U.K. Cabinet on Tuesday, as leading Brexit-backers challenged the prime minister just days before a key deadline in talks. Brexit Secretary David Davis told Parliament he wanted the whole country to remain close to EU economic regulations after the split, a move that could have helped unblock talks that broke down over the issue of the Irish border.

Keeping the whole U.K. close to EU regulation would make it easier to avoid a border on the island of Ireland without putting up a new barrier between Northern Ireland and the rest of the U.K. The prospect of a border within the U.K. is a red line for the Northern Irish party that keeps Theresa May in power in London. Foreign Secretary Boris Johnson and Environment Secretary Michael Gove, who together led the Brexit campaign in last year’s referendum, raised concerns about the plan, according to people familiar with the matter. The ministers believe the proposals threaten to dilute Brexit and Johnson raised his fears during a meeting of May’s Cabinet on Tuesday. Part of the Brexit narrative in the last 18 months has been that the split will allow the U.K. to break free from EU rules and chart its own course with free-trade deals around the world.

“What’s clear, is that May will be blamed for any failure.”

• Most Brits Still Want Brexit But Expect It All to End Badly (BBG)

British voters increasingly think Brexit is being mishandled. But that doesn’t mean they’re turning their backs on the idea of abandoning the EU – just on Prime Minister Theresa May’s Conservative government. A report by the National Centre For Social Research published Wednesday found that 52% of people believe the country will get a bad deal, compared to 37% in February, a month before May began divorce proceedings. Even before this week’s embarrassing breakdown, only one in five Brits said the government was handling the talks well. Among those supporting Brexit, 61% thought May was conducting talks badly. The survey of 2,200 people was completed in October, before reports that May was increasing the amount of money she was willing to pay to leave and also before the recent dramatic turn of events that has May at the mercy of a Northern Irish ally.

The findings speak to the sense of disconnect between how the population feels about a process they triggered with the 2016 referendum – and the political realities of a fragile government riven with divisions and bogged down in increasingly technical negotiations. The survey found little change in people’s attitude to Brexit itself. [..] this suggests that rather than regretting their vote, Leave supporters are coming to see it as a good idea badly implemented, something that could help Jeremy Corbyn’s opposition Labour Party. While Britons wonder what is going on – and perhaps even why leaving needs to be so complicated – the EU gave May until the end of the week to deliver a solution to an intractable problem – how to avoid a hard border in Ireland after Northern Ireland leaves the bloc along with the rest of the U.K.

Britain needs to provide an answer that satisfies all sides to move on to trade. What’s clear, is that May will be blamed for any failure. She set the clock for Britain’s exit in March 2019 and was relying on a summit next week to get EU leaders to allow discussions to begin on commerce, as well as a grace period to give businesses time to adapt.

Merkel blinking will have far reaching repercussions. But Europeans don’t want more centralization.

• Juncker Seeks Greater Commission Control over Eurozone (Spiegel)

Jean-Claude Juncker never lets others outshine him if he spots an opportunity to give the European project a boost. And that goes for friends and enemies alike. Indeed, the European Commission president has now come up with a project that not only transgressions the mandate given him by the leaders of the European Union member states, but also pits him against all the Eurozone finance ministers as well. Juncker was supposed to reach an agreement with finance ministers from the common currency area on proposals for deepening European integration he will present at the forthcoming EU summit later this month. Plans for greater EU integration are currently in vogue, a trend started by French President Emmanuel Macron, who presented his ideas for a better Europe two days after the German election in late September.

But instead of getting the finance ministers on board, Juncker has embarked on an ego trip. On Wednesday, the Commission is to present its plan without any input from the finance ministers whatsoever. The Eurogroup of 19 Eurozone finance ministers met in Brussels on Monday and on Tuesday it was the turn of Ecofin, which represents the EU finance ministers, but officially neither group was consulted on the Commission’s plans. “The entire approach is a disaster,” one participant complained. And because the national experts had no input, it’s unlikely that EU heads of state and government will do more than simply take note of Juncker’s proposals. The timing is an expression of rivalry between the Commission and the EU member states when it comes to questions relating to theeconomic and currency union. And the finance ministers aren’t likely to be impressed with the content, either. After all, the Commission’s proposals are designed to increase its own influence at the expense of the member states.

But there is more at stake than just a few bruised Brussels egos. The clash over competencies between European institutions risks torpedoing the French president’s drive for reform. For the first time in years, the French have seized the opportunity to once again set the tone in the EU. Yet, their call to arms is being met with hardly any response. Germany is preoccupied with forming a new government – and nothing much happens in Brussels without Chancellor Angela Merkel. Juncker, though, does not want to stand accused of wasting the chance to implement reforms. His central idea is to turn the EU bailout fund, the European Stability Mechanism, into an EU institution.

How much longer for Mueller now the WSJ has called for his head?

• What Now? (Jim Kunstler)

“Contact with Russians.” Grown men and women, doubling and re-doubling down on a political fantasy, repeat this prayer hour after hour on the cable channels and Web waves as if trying to exorcise a nation possessed by the unholy hosts of Hell. But such vicars of the news as Wolf Blitzer, Rachel Maddow, Chuck Todd, and Dean Baquet (of The New York Times) only shove the country closer to a cliff of constitutional crisis. To a certain class of people — a class that includes a lot of Intellectuals-Yet-Idiots, as Nassim Taleb has dubbed them — President Donald Trump is a figure of supernatural malignity who must be ousted at all costs. I did not vote for Donald Trump and I do not admire him; but I rather resent the dishonesty that is being marshaled against him, especially the mis-use of judicial procedure and the mendacious propagandizing of the nation in service to that end.

This is what it comes down to: General Mike Flynn, designated National Security Advisor, conferred with Russian Ambassador Sergey Kislyak after the 2016 election about two pressing matters: a vote in the UN orchestrated against Israel, and sanctions imposed against Russia by outgoing President Obama on December 28, two weeks before the inauguration. Both these matters could be viewed as bits of mischief designed deliberately to create foreign policy problems for the incoming administration. Flynn’s discussions with Ambassador Kislyak amounted to what are called “back channel talks.” These informal, probing communications occur all the time and everywhere in American foreign policy, especially the transitional months every four or eight years when a new president comes in. They are necessarily secret because they concern issues of high sensitivity.

Every incoming presidential staff in my lifetime (going back to Dwight Eisenhower) has conducted back-channel talks with foreign diplomats in order to directly assess where things stand, minus public posturing and bloviating. And so that is what Mike Flynn did, as incoming National Security Advisor, after an eight-year run of worsening relations with Russia under Obama that Trump publicly pledged to improve. And now he’s been charged with lying to the FBI about it. Which raises some enormous and troubling questions well beyond the simple charge, questions that suggest a US government at war against itself.

What’s America without grizzlies?

• The Premature Delisting of the Yellowstone Grizzly Bear (CP)

The Fish and Wildlife Service (FWS) has decided to delist the Yellowstone grizzly bears, removing them from the protection afforded by the Endangered Species Act (ESA). And state wildlife agencies in Wyoming and Montana are anxious to start sport hunting the bears. If you follow environmental politics, it is very clear why industries like the oil and gas industry, livestock industry and timber industry and the politicians they elect to represent their interests are anxious to see the bear delisted. Without ESA listing, environmentally destructive practices will have fewer restrictions, hence greater profits at the expense of the bear and its habitat. Delisting is opposed by a number of environmental groups [..] Conspicuously absent from the list of organizations opposing delisting is the Greater Yellowstone Coalition.

Proponents of delisting, including the FWS, argue that with as many as 700 grizzlies in the Greater Yellowstone Ecosystem, thus ensuring the bears are now safe from extinction. Seven hundred bears may sound like a big number. But this figure lacks context. Consider that the Greater Yellowstone Ecosystem is nearly 28 million acres in total area. That is nearly the same acreage as the state of New York. Now ask yourself if 700 bears spread over an area the size of New York sounds like a lot of bears? Many population ecologists believe 700 bears is far too small a number of animals to ensure long-term population viability. Rather than hundreds, we need several thousand bears.

But politicians talk of growth.

• Greek Pension Cuts To Hit 70% Since The Start Of The Bailouts (K.)

The next batch of pension cuts, voted through in the last couple of years and set to come into force within the next two years, will take total losses for pensioners since the start of the bailout period in 2010 up to 70%. A recent European Commission report on the course of Greece’s bailout program revealed that the reforms passed since 2015 will slash up to 7% of the country’s GDP up to 2030. The United Pensioners network has made its own calculations and estimates that the impending cuts will exacerbate pensioners’ already difficult position, with 1.5 million of them threatened with poverty. The network argues that when the cuts expected in 2018 and 2019 are added to those implemented since 2010, the reduction in pensions will reach 70%.

Network chief Nikos Hatzopoulos notes that “owing to the additional measures up until 2019, the flexibility in employment and the reduction of state funding from 18 billion to 12 billion euros, by 2021, one in every two pensioners will get a net pension of 550 euros [per month]. If one also takes into account the reduction of the tax-free threshold, the net amount will come to 480 euros.” Pensioners who retired before 2016 stand to lose up to 18% of their main and auxiliary pensions, while the new pensions to be issued based on the law introduced in May 2016 by then minister Giorgos Katrougalos will be up to 30% lower.

More than 140,000 retirees on low pensions will see their EKAS supplement decrease in 2018, as another 238 million euros per year is to be slashed from the budget for benefits for low income pensioners. The number of recipients will drop from 210,000 to 70,000 in just one year. There will also be a reduction in new auxiliary pensions (with applications dating from January 2015), a 6% cut to the retirement lump sum, and a freeze on existing pensions for another four years, as retirees will not get the nominal raise they would normally receive based on the growth rate and inflation.

A few hundred have been moved, but thousands more must be.

• Aid Groups Warn Of Looming Emergency At Greek Asylum Centres (G.)

Humanitarian groups have warned of a looming emergency on Greece’s eastern Aegean islands, the day after residents converged on Athens in protest at policies that have seen thousands of migrants and refugees marooned in reception centres. A surge in arrivals from neighbouring Turkey has seen numbers soar with officials speaking of a four-fold increase in men, women and children seeking asylum on Chios, Kos, Leros, Lesbos and Samos. Conditions are deteriorating in the vastly overcrowded camps in a situation that Médecins Sans Frontières (MSF) on Wednesday warned was “beyond desperate”. “In Lesbos, entire families who recently arrived from countries including Syria, Afghanistan and Iraq are packed into small summer tents, under the rain and in low temperatures struggling to keep dry and warm,” said Aria Danika, MSF’s project coordinator on the island.

“In our mental health clinic we have received an average of 10 patients with acute mental distress every day, including many who tried to kill themselves or self-harm. The situation on the island was already terrible. Now it’s beyond desperate.” Demonstrators – led by delegations of officials from Chios, Lesbos and Samos – gathered in the Athens sunshine on Tuesday to demand that the government move people out of camps. “Action has to be taken now, before it is too late,” said Panos Pitsios, president of the town council of Mytilene, Lesbos’s capital. “We are heading towards an eruption, a situation that is on the verge of getting out of control.”

The strategy of stranding migrants and refugees in remote camps where tensions have also mounted between rival ethnicities has also been condemned by human rights groups. Organisations increasingly fear that unless asylum seekers are transferred to the mainland where facilities are less crowded and better equipped, thousands could be left out in the cold as winter approaches.

Biblical proportions.

• Europe’s Migrant Crisis: Millions Still to Come (Kern)

The African Union-European Union (AU-EU) summit, held in in Abidjan, Côte d’Ivoire, on November 29-30, 2017, has ended in abject failure after the 55 African and 28 European leaders attending the event were unable to agree on even basic measures to prevent potentially tens of millions of African migrants from flooding Europe. Despite high expectations and grand statements, the only concrete decision to come out of Abidjan was the promise to evacuate 3,800 African migrants stranded in Libya. More than six million migrants are waiting in countries around the Mediterranean to cross into Europe, according to a classified German government report leaked to Bild. The report said that one million people are waiting in Libya; another one million are waiting in Egypt, 720,000 in Jordan, 430,000 in Algeria, 160,000 in Tunisia, and 50,000 in Morocco.

More than three million others who are waiting in Turkey are currently prevented from crossing into Europe by the EU’s migrant deal with Turkish President Recep Tayyip Erdogan. The former head of the British embassy in Benghazi, Joe Walker-Cousins, warned that as many as a million migrants from countries across Africa are already on the way to Libya and Europe. The EU’s efforts to train a Libyan coast guard was “too little and too late,” he said. “My informants in the area tell me there are potentially one million migrants, if not more, already coming up through the pipeline from central Africa and the Horn of Africa.” The President of the European Parliament, Antonio Tajani, said that Europe is “underestimating” the scale and severity of the migration crisis and that “millions of Africans” will flood the continent in the next few years unless urgent action is taken.

In an interview with Il Messagero, Tajani said there would be an exodus “of biblical proportions that would be impossible to stop” if Europe failed to confront the problem now: “Population growth, climate change, desertification, wars, famine in Somalia and Sudan. These are the factors that are forcing people to leave. “When people lose hope, they risk crossing the Sahara and the Mediterranean because it is worse to stay at home, where they run enormous risks. If we don’t confront this soon, we will find ourselves with millions of people on our doorstep within five years. “Today we are trying to solve a problem of a few thousand people, but we need to have a strategy for millions of people.”

Recovery.

• US Homeless Population Rises For The First Time Since The Great Recession (G.)

America’s homeless population has risen this year for the first time since the Great Recession, propelled by the housing crisis afflicting the west coast, according to a new federal study. The study has found that 553,742 people were homeless on a single night this year, a 0.7% increase over last year. It suggests that despite a fizzy stock market and a burgeoning gross domestic product, the poorest Americans are still struggling to meet their most basic needs. “The improved economy is a good thing, but it does put pressure on the rental market, which does put pressure on the poorest Angelenos,” said Peter Lynn, head of the Los Angeles homelessness agency. The most dramatic spike in the nation was in his region, where a record 55,000 people were counted. “Clearly we have an outsize effect on the national homelessness picture.”

Ben Carson, secretary of the Department of Housing and Urban Development, which produced the report, said in a statement: “This is not a federal problem – it’s everybody’s problem.” Advocates who have witnessed the homelessness crisis unfold since it emerged in the early 1980s are grimly astonished by its persistence. “I never in a million years thought that it would drag on for three decades with no end in sight,” said Bob Erlenbusch, who began working in Los Angeles in 1984. The government mandates that cities and regions perform a homeless street count every two years, when volunteers fan out everywhere from frozen parks in Anchorage to palm-lined streets in Beverly Hills and enumerate people by hand. Those numbers are combined with the total staying in shelters and temporary housing. The tally is considered a crucial indicator of broad trends, but owing to the difficulties involved it is also widely regarded as an undercount.

There is neither a valid reason nor a justification for this. It’s simply a lack of basic values.

• Nearly 130,000 British Children To Wake Up Homeless This Christmas (Ind.)

Nearly 130,000 children in Britain will wake up homeless and in temporary accommodation this Christmas as child homelessness reaches a 10-year high, new research shows. The number of youngsters who will be spending the festive period in temporary accommodation such as B&Bs and hostels – often with a single room for the whole family and no kitchen – is up 7% on last year, amounting to an additional 8,000 children, according to a report by charity Shelter. Interviews carried out by the charity reveal a quarter of families in temporary accommodation have no access to a kitchen, with many having to eat meals on the bed or floor of their room. The vast majority live in a single room, with more than a third of parents saying they have to share a bed with their children.

An analysis of government figures by Shelter shows that one in every 111 children is currently homeless in the UK, with at least 140 families becoming homeless every day. In England, where the highest number of families are placed into B&Bs, 45% stay beyond the six-week legal limit. The report also lays bare the psychological turmoil experienced by families living in these cramped conditions for often long periods of time, with three-quarters of parents saying their children’s mental health had been badly affected by living in such settings.

Debt Rattle November 25 2017

Nov 252017

November 25, 2017 Posted by Raúl Ilargi Meijer at 9:51 am Finance Tagged with: blockade, Brexit, butterfly, homeless, household debt, Merkel, refugees, shrub, slave trade, starvation, Tesla 4 Responses »

Walter Kelleher 13th Macy’s Thanksgiving Day Parade NYC 1937

• Canada’s Household Debt Levels Higher Than Any Other Country (CNBC)

• As America Gives Thanks, Homelessness Sets New Records (Snyder)

• UK Council Proposes £1,000 Fines For Homeless People Sleeping In Tents (G.)

• UK Faces Longest Fall in Living Standards on Record (BBG)

• Britain Has 10-Day Absolute Deadline On Key Brexit Issues: Tusk (R.)

• Germany’s Voice Suddenly Missing in Brussels (Spiegel)

• Tesla’s Newest Promises Break the Laws of Batteries (BBG)

• The Old Songs (Jim Kunstler)

• Let’s Adopt The U.S. Naval Policy of 1890 (Rossini)

• The US-Saudi Starvation Blockade (Buchanan)

• Horrified By Libya Slave Trade, Rwanda Offers Refuge To Migrants (IBT)

• Mediterranean ‘By Far World’s Deadliest Border’ For Migrants – IOM (R.)

• The Refugee Scandal on the Island of Lesbos (Spiegel)

• Endangered Butterfly, Mexican Shrub May Be Hurdles to Trump Wall (BBG)

Canada, Australia, New Zealand; and Sweden, Denmark and Norway.

• Canada’s Household Debt Levels Higher Than Any Other Country (CNBC)

Household debt levels in Canada are higher than in any other country, according to a report by the Organization for Economic Cooperation and Development (OECD). In a preliminary version of the report, set to be released fully next month, the OECD found Canada’s household debt ranked as the highest among the 35 developed and developing countries the group monitors. The rapid accumulation of household debt for Canadians could also leave its economy particularly vulnerable to shocks, the organization said. “Although in part this reflects strong population growth, these developments may entail significant risk to financial stability given the direct exposure of the financial system to the housing market,” the OECD said. The group found Canada’s household debt-to-GDP ratio had ballooned to 101% — significantly higher than any other nation studied.

In comparison, the ratio for South Korea was the next highest at slightly under 93%, with the U.K. third at over 88%. In the U.S., the household debt-to-GDP ratio was around 80%, while Germany and France had a ratio below 60%. “Research points to a number of links between high indebtedness and the risks of severe recessions,” the group said. While virtually all countries witnessed soaring debt loads ahead of the credit crisis a decade ago, most have seen their indebtedness reduce over time. However, for Canada — and some countries in Scandinavia — this has not been the case, with OECD pinning the blame on inflated house prices. “OECD countries that have experienced the strongest increases in household debt since the crisis have also the steepest rise in house prices,” the group said.

Highest since the Great Depression.

• As America Gives Thanks, Homelessness Sets New Records (Snyder)

If the U.S. economy was actually in good shape, we would expect that the number of people that are homeless would be going down or at least stabilizing. Instead, we have a growing national crisis on our hands. In fact, within the past two years “at least 10 cities or municipal regions in California, Oregon and Washington” have declared a state of emergency because the number of homeless is growing so rapidly. Things are particularly bad in southern California, and this year the Midnight Mission will literally be feeding a small army of people that have nowhere to sleep at night… “Thanksgiving meals will be served to thousands of homeless and near-homeless individuals today on Skid Row and in Pasadena and Canoga Park amid calls for donations and volunteers for the rest of the year. The Midnight Mission will serve Thanksgiving brunch to nearly 2,500 homeless and near-homeless men, women and children, according to Georgia Berkovich, its director of public affairs.”

Overall, the Midnight Mission serves more than a million meals a year, and Berkovich says that homelessness hasn’t been this bad in southern California “since the Great Depression”… “Berkovich said the group has been serving nearly 1 million meals a year each year since 2013. “We haven’t seen numbers like this since the Great Depression,” she said.” And of course the official numbers confirm what Berkovich is claiming. According to an article published earlier this year, the number of homeless people living in Los Angeles County has never been higher…”The number of homeless people in Los Angeles has jumped to a new record, as city officials grapple with a humanitarian crisis of proportions remarkable for a modern American metropolis. Municipal leaders said that a recent count over several nights found 55,188 homeless people living in a survey region comprising most of Los Angeles County, up more than 25% from last year.”

If the California economy is truly doing well, then why is this happening? We see the same thing happening when we look at the east coast. Just check out these numbers from New York City… “In recent years the number of homeless people has grown. Whereas rents increased by 18% between 2005 and 2015, incomes rose by 5%. When Rudy Giuliani entered City Hall in 1994, 24,000 people lived in shelters. About 31,000 lived in them when Mike Bloomberg became mayor in 2002. When Bill de Blasio entered City Hall in 2014, 51,500 did. The number of homeless people now in shelters is around 63,000. For New York, this is the highest that the homeless population has been since the Great Depression, and city leaders are trying to come up with a solution.”

It’s getting to be time for Hoovervilles.

• UK Council Proposes £1,000 Fines For Homeless People Sleeping In Tents (G.)

A council has been called “cruel and callous” for proposing £1,000 fines to homeless people sleeping in tents in the city centre. Stoke-on-Trent council in Staffordshire is consulting on a public space protection order (PSPO) that will make it an offence for a person to “assemble, erect, occupy or use” a tent unless part of a council-sanctioned activity such as a music festival. Under such a scheme anyone who fails to pay their £100 on-the-spot penalty notice can be prosecuted and could be fined up to £1,000 in court. Though only currently at the consultation stage, the PSPO would cover the city centre, Hanley park, Festival park and Octagon retail park.

Ruth Smeeth, the Labour MP for Stoke-on-Trent North and Kidsgrove, said: “This is a cruel and callous policy to inflict on our most vulnerable in the lead-up to Christmas. We do have a growing problem with homelessness here in Stoke-on-Trent, but punishing people for their misfortune is no way to fix it. “It’s right and proper that the police take action to stop antisocial behaviour on our streets, but punishing the homeless simply for being homeless is appalling. “In recent years we’ve seen local funding for drug and alcohol treatment slashed and support to tackle homelessness cut to the bone. Locking these people up or saddling them with debt they can’t pay will only make the problem worse.”

Incompetence.

• UK Faces Longest Fall in Living Standards on Record (BBG)

Britons were warned they are on course for the longest fall in living standards since records began 60 years ago after the U.K.’s fiscal watchdog took the ax to its outlook for economic growth. In an analysis of the government’s latest budget and accompanying report by the Office for Budget Responsibility, the Resolution Foundation said on Thursday that the economy is set to be 42 billion pounds ($56 billion) smaller in 2022 than the OBR predicted in March. It also calculated wages will not return to their pre-financial crisis levels of 2007 until at least 2025 once inflation is taken into account. Average annual pay is now projected to be 1,030 pounds lower in 2022 than the March forecasts and household disposable incomes will fall for an unprecedented 19 straight quarters between 2015 and 2020, according to Resolution.

The analysis was reinforced by the Institute for Fiscal Studies, which said the OBR’s forecasts implied average earnings would be almost 1,400 pounds lower in 2021 than predicted before the 2016 Brexit referendum and still below their 2008 level. “We are in danger of losing not just one but getting on for two decades of earnings growth,” IFS Director Paul Johnson told a briefing in London on Thursday. The warnings underscore the challenge Chancellor of the Exchequer Philip Hammond faced on Wednesday when he released a budget that left him little room for fiscal maneuver as Brexit looms. The OBR slashed its growth forecasts as a result of weak productivity, and Hammond piled further pressure on the budget by pledging extra cash for the health service and abolishing the tax on some housing purchases for first-time buyers.

Tusk pretends to speak with a powerful mandate, but…

• Britain Has 10-Day Absolute Deadline On Key Brexit Issues: Tusk (R.)

Britain has only 10 days left to deliver on all three areas of its divorce terms with the European Union if London wants to start talks on a transition period after Brexit and a future relationship, the chairman of EU leaders Donald Tusk said. “We need to see progress from UK within 10 days on all issues, including on Ireland,” Tusk tweeted on Friday after a meeting with British Prime Minister Theresa May in Brussels. “Sufficient progress in Brexit talks at December council is possible but still a huge challenge,” he said on Twitter. An EU official said that May agreed in the one-hour discussions that Dec. 4 was the “absolute deadline” to allow the EU’s Brexit negotiator Michel Barnier to recommend moving onto the next stage on trade and future ties.

“Tusk presented the timeline ahead of the December European Council, with Dec. 4 as the absolute deadline for the UK to make additional efforts, allowing Barnier to be in a position to recommend sufficient progress,” the official said. “May agreed to this timeframe,” the official said. The official said Tusk had warned that if there was no progress within next 10 days, that would make moving forward impossible. The official said that the way Ireland’s border with Northern Ireland functioned after Britain leaves the EU in March 2019 was still an issue.

… that mandate has severely weakened now Germany’s in trouble…

• Germany’s Voice Suddenly Missing in Brussels (Spiegel)

European Union Budget Commissioner Günther Oettinger wanted to know what is going on in Germany. To find out, he set up a number of meetings in Berlin this week, including one in the Chancellery. He also arranged to chat with Christian Lindner, the head of the Free Democrats (FDP) and the man who unexpectedly turned his back on German coalition talks in Berlin last Sunday night. The reason for Oettinger’s interest in the political developments in Germany is simple. He has been assigned with writing a draft EU budget for the next 10 years and his due date is next May. He is currently traveling from capital to capital on the Continent to determine how member states envision EU spending for the period from 2018 to 2027.

But the German voice, which generally carries significant weight when it comes to budgetary questions,is silent these days. “The long process of assembling a government is weakening Germany’s influence in Brussels,” says Oettinger. “German influence on important issues is currently undiscernible.” The failure of German coalition negotiations in Berlin has caught the European Union completely off guard. Ahead of elections in France and the Netherlands earlier this year, there had been widespread concern about the rise of the right wing and potential difficulties when it came to assembling a governing coalition in those countries. Few such concerns were voiced ahead of Germany’s general election on Sept. 24. Everyone assumed that Germany was solid.

Now, though, French President Emmanuel Macron has taken center stage in the EU with his ambitious reform proposals while European Council President Donald Tusk has already come up with a detailed timeline for transforming Macron’s vision into concrete policy decisions. And suddenly, Germany has vanished. “You’re ruining our entire presidency,” complained Kaja Tael, Estonia’s permanent representative in Brussels. Estonia currently holds the EU’s rotating presidency.

Still surprised by these things?

• Tesla’s Newest Promises Break the Laws of Batteries (BBG)

Elon Musk knows how to make promises. Even by his own standards, the promises made last week while introducing two new Tesla vehicles—the heavy-duty Semi Truck and the speedy Roadster—are monuments of envelope pushing. To deliver, according to close observers of battery technology, Tesla would have to far exceed what is currently thought possible. Take the Tesla Semi: Musk vowed it would haul an unprecedented 80,000 pounds for 500 miles on a single charge, then recharge 400 miles of range in 30 minutes. That would require, based on Bloomberg estimates, a charging system that’s 10 times more powerful than one of the fastest battery-charging networks on the road today—Tesla’s own Superchargers.

The diminutive Tesla Roadster is promised to be the quickest production car ever built. But that achievement would mean squeezing into its tiny frame a battery twice as powerful as the largest battery currently available in an electric car. These claims are so far beyond current industry standards for electric vehicles that they would require either advances in battery technology or a new understanding of how batteries are put to use, said Sam Jaffe, battery analyst for Cairn Energy Research in Boulder, Colorado. In some cases, experts suspect Tesla might be banking on technological improvements between now and the time when new vehicles are actually ready for delivery.

“There is some kind of revolution coming to American life.”

• The Old Songs (Jim Kunstler)

It probably all comes down to money. Money represents the mojo to keep on keeping on, and there is probably nothing more unreal in American life these days than the way we measure our money — literally, what it’s worth, and what everything related to it is worth. So there is nothing more unreal in our national life than the idea that it’s possible to keep on keeping on as we do. The weeks ahead may be most illuminating on this score. The debt ceiling suspension runs out on December 8, around the same time that the tax reform question will resolve one way or another. The debt ceiling means that the treasury can’t issue any more bonds, bills, or notes. That is, it can’t borrow any more money to pretend the government can keep running.

[..] There’s a fair chance that congress may not be able to resolve the debt ceiling deadline. The votes may just not be there. If the deadline comes and goes, the treasury can only use incoming tax revenues to cover its costs, and it won’t be enough. It will have to choose whether it issues paychecks to the roughly 2.7 million US government employees, or pays the vendors that sell things like warplanes to the military, or pay out so-called entitlements like Medicare and SNAP cards, or pay the interest on the previously-issued bonds, debts, and bills that the US has racked up over the years. Believe it or not, making those interest payments is probably the top priority, because failing to do that would shove the nation officially into default for the first time and destroy the country’s credit standing. The full faith and credit in the US dollar would shatter.

And then the fun and games would really cease. The country would discover it doesn’t have its mojo working, as another old song goes. The reality of being truly broke will set in. After all, there are two basic ways of going broke as a nation: you can run out of money; or you can have plenty of money that is worthless. Take your pick. There is some kind of revolution coming to American life. One way or another, it amounts to a much lower standard of living. The journey there may take the public by surprise, a la Ernest Hemingway’s crack about how a character in one of his stories went broke: slowly, and then all at once. The main question about this journey must be whether it is accompanied by political violence. One would have to think the potential for that is pretty high, given levels of animosity and delusional thinking among the two opposing factions — can we even call them Left and Right anymore? — which may even exceed the ill-feeling of 1861.

Amen.

• Let’s Adopt The U.S. Naval Policy of 1890 (Rossini)

Back in 1890, the U.S. Naval Policy Board said in a report: “We fear no encroachments on our territory, nor are we tempted at present to encroach on that of others. We have no colonies, nor any desire to acquire them.” First, let’s discuss the aspect of the statement that has not changed one iota since 1890: “We fear no encroachments on our territory”. In 2017, we can say the exact same statement with total confidence. No state on the planet has any interest in conquering America. No one is interested in ruling over our WalMart/McDonald’s society. No one is interested in taking over Washington D.C. and inheriting 20,000,000,000,000 in debt. No one is interested in ruling a nation of people who are in debt up to their eyeballs with student loans, auto loans, mortgage loans, credit card loans….loans…loans…loans…loans…loans… No one is interested!

Which leads to the part of the statement that has changed since 1890: “..nor are we tempted at present to encroach on that of others.” In 1898, that aspect changed, and the U.S. federal government has never looked back. In 1898, the U.S. got its first taste of the conquering game. It swiftly took control of the Philippines, Guam, Puerto Rico, Cuba, and Hawaii. All of a sudden 11 million people were under a new American Empire. A few decades later, after the first high wore off, one of the worst decisions in the history of the world was made: U.S. President Woodrow Wilson tricked the American public into entering an exhausted and stalemated European war between princes. The “war to end all wars” was the war that would lead to the death of hundreds of millions over the next century.

The rest, of course, is history, and here we are: Broke….A country with middle-class that is disappearing, and 50% of the American public receiving some kind of welfare from a bankrupt government. U.S. Naval Policy in 1890 is where it’s at. The sooner we adopt it, the better.

History repeats AND rhymes.

• The US-Saudi Starvation Blockade (Buchanan)

Our aim is to “starve the whole population – men, women, and children, old and young, wounded and sound – into submission,” said First Lord of the Admiralty Winston Churchill. He was speaking of Germany at the outset of the Great War of 1914-1918. Americans denounced as inhumane this starvation blockade that would eventually take the lives of a million German civilians. Yet when we went to war in 1917, a U.S. admiral told British Prime Minister Lloyd George, “You will find that it will take us only two months to become as great criminals as you are.” After the Armistice of Nov. 11, 1918, however, the starvation blockade was not lifted until Germany capitulated to all Allied demands in the Treaty of Versailles.

As late as March 1919, four months after the Germans laid down their arms, Churchill arose in Parliament to exult, “We are enforcing the blockade with rigor, and Germany is very near starvation.” So grave were conditions in Germany that Gen. Sir Herbert Plumer protested to Lloyd George in Paris that morale among his troops on the Rhine was sinking from seeing “hordes of skinny and bloated children pawing over the offal from British cantonments.” The starvation blockade was a war crime and a crime against humanity. But the horrors of the Second World War made people forget this milestone on the Western road to barbarism. A comparable crime is being committed today against the poorest people in the Arab world – and with the complicity of the United States.

[..] Almost 90% of Yemen’s food, fuel and medicine is imported, and these imports are being cut off. The largest cities under Houthi control, the port of Hodaida and Sanaa, the capital, have lost access to drinking water because the fuel needed to purify the water is not there. Thousands have died of cholera. Hundreds of thousands are at risk. Children are in danger from a diphtheria epidemic. Critical drugs and medicines have stopped coming in, a death sentence for diabetics and cancer patients. If airfields and ports under Houthi control are not allowed to open and the necessities of life and humanitarian aid are not allowed to flow in, the Yemenis face famine and starvation. What did these people do to deserve this? What did they do to us that we would assist the Saudis in doing this to them?

The Houthis are not al-Qaida or ISIS. Those are Sunni terrorist groups, and the Houthis detest them. Is this now the American way of war? Are we Americans, this Thanksgiving and Christmas, prepared to collude in a human rights catastrophe that will engender a hatred of us among generations of Yemeni and stain the name of our country?

We can’t afford Yemen, and we can’t afford Libya. We need to stop these medieval situations.

• Horrified By Libya Slave Trade, Rwanda Offers Refuge To Migrants (IBT)

Rwanda has opened its doors to migrants stuck in Libya and announced plans to take in as many as 30,000 people. The offer of help comes in response to an exposé into Libya’s underbelly where slave trade is flourishing. It involves migrants from other parts of Africa who are stuck in the country as they wait for an opportunity to cross into Europe. The government is still ironing out the details regarding how it plans to move interested parties from the northern part of the continent to the east. “Rwanda is currently under discussions… to see how we can help in welcoming migrants held captive in Libya,” Rwanda’s Foreign Minister Louise Mushikiwabo told AFP. “It has just been decided, so numbers and means are still under discussion, but Rwanda estimates the number to be welcomed around 30,000,” she said.

“For Africans being sold in Libya: Rwanda is small, but we will find some space!” she tweeted. In its investigation into the slave market in Libya, CNN was able to capture footage of auctions held in the capital city of Tripoli, where bids were accepted for men to be used for manual labour. While the videos only featured males, they have raised concerns over a similar fate for women and children who escaped their countries to come to Libya. “Rwanda, like the rest of the world, was horrified by the images of the tragedy currently unfolding in Libya, where African men, women and children who were on the road to exile, have been held and turned into slaves,” Mushikiwabo continued. “Given Rwanda’s political philosophy and our own history, we cannot remain silent when human beings are being mistreated and auctioned off like cattle,” she said. The minister was referring to her nation’s own dark history wherein over 800,000 people (mostly Tutsi) were killed in 1994 in one of the worst genocides in world history.

You see, Angela, the power you crave comes with responsibilities.

• Mediterranean ‘By Far World’s Deadliest Border’ For Migrants – IOM (R.)

More than 33,000 migrants have died at sea trying to reach European shores this century, making the Mediterranean “by far the world’s deadliest border”, the United Nations migration agency said on Friday. After record arrivals from 2014 to 2016, the European Union’s deal with Turkey to stop arrivals from Greece, and robust patrols off Libya’s coast have greatly reduced the flow, the International Organization for Migration (IOM) said. Professor Philippe Fargues of the European University Institute in Florence, author of the report, said the figures probably underestimated the actual scale of the human tragedy. “The report states that at least 33,761 migrants were reported to have died or gone missing in the Mediterranean between the year 2000 to 2017. This number is as of June 30,” IOM’s Jorge Galindo told a Geneva news briefing.

“It concludes that Europe’s Mediterranean border is by far the world’s deadliest,” he said. So far this year some 161,000 migrants and refugees have arrived in Europe by sea, about 75% of them landing in Italy with the rest in Greece, Cyprus and Spain, according to IOM figures. Nearly 3,000 others are dead or missing, it said. “Shutting the shorter and less dangerous routes can open longer and more dangerous routes, thus increasing the likelihood of dying at sea,” Fargues said. The report said: “Cooperation with Turkey to stem irregular flows is now being replicated with Libya, the main country of departure of migrants smuggled along the central route; however, such an approach is not only morally reprehensible but likely to be unsuccessful, given the context of extremely poor governance, instability and political fragmentation in Libya.”

Brussels and Athens have run out of excuses.

• The Refugee Scandal on the Island of Lesbos (Spiegel)

Those wishing to visit ground zero of European ignominy must simply drive up an olive tree-covered hill on the island of Lesbos until the high cement walls of Camp Moria come into view. “Welcome to prison,” someone has spray-painted on the walls. The dreadful stench of urine and garbage greets visitors and the ground is covered with hundreds of plastic bags. It is raining, and filthy water has collected ankle-deep on the road. The migrants who come out of the camp are covered with thin plastic capes and many of them are wearing only flipflops on their feet as they walk through the soup. Children are crying as men jostle their way through the crowd. Welcome to one of the most shameful sites in all of Europe. Camp Moria was originally built to handle 2,330 refugees. But currently it is home to 6,489.

[..] Conditions on the island of Lesbos haverarely been as precarious as they are today. Just as winter is arriving in Greece, some 15,000 refugees find themselves trapped in the five “hotspots” located on Greek islands in the Aegean Sea. Fully 8,357 of them are on Lesbos, living in horrific conditions in overcrowded, completely inadequate shelters. A huge number of refugees are forced to sleep in tents designed for summer conditions and many of them fear for their safety because of the close quarters and the repeated clashes in the main camp. Dozens of refugees have begun a hunger strike on Lesbos. The European Union’s refugee deal with Turkey may have managed to cut the number of people reaching Greece by 97%, but dozens of migrants continue to arrive every day.

Thus far this year, around 11,000 people have crossed over to the island from Turkey – a tiny number compared to the 12,500 who arrived on a single day in August 2015. But back then, newcomers were taken to the mainland and allowed to continue their journeys through the Balkans toward Hungary, Austria and, ultimately, Germany. Now, though, the former registration facilities have essentially been transformed into prisons. [..] he government in Athens has had plenty of time to learn its lesson from last winter, when five refugees died in Camp Moria, some of them because they were trying to heat their tents. Now, the country’s immigration minister is seeking to solve the problem at the last minute ahead of this winter by renting hotels on Lesbos and bringing in two ships from Piraeus that can accommodate a total of 3,000 refugees.

On the island of Lesbos though, where residents have shown remarkable patience thus far, there is widespread opposition to the plan. On Monday, the mayor of Lesbos, known for being a moderate, called for a general strike and declared war on the Greek government. He accuses Athens of seeking to use the need to establish winter facilities as an excuse to transform Lesbos into a prison island.

Let’s finish on a lighter note.

• Endangered Butterfly, Mexican Shrub May Be Hurdles to Trump Wall (BBG)

Environmentalists suing to block President Donald Trump from constructing a wall along the Mexican border say the project would imperil endangered species including the Quino checkerspot butterfly and the Mexican flannel bush. The Homeland Security Department has asserted authority under federal immigration law to waive compliance with environmental protection statutes because 14 miles of existing fencing near San Diego is “no longer optimal for border patrol operations.”

Defenders of Wildlife, the Animal Legal Defense Fund, the Sierra Club and the Center for Biological Diversity argued in court filings this week that the Trump administration’s attempts to sidestep the National Environmental Policy Act and the Endangered Species Act are unconstitutional. A hearing over the dispute is set for February before U.S. District Judge Gonzalo Curiel, whom Trump scorned during the presidential campaign over the San Diego jurist’s handling of the Trump University fraud litigation. Trump attacked Curiel as being biased against him because of his Mexican heritage, saying the Indiana-born judge had issued rulings against him as retribution for his pledge to build a wall between the U.S. and its neighbor to the south.

Debt Rattle November 8 2017

Nov 082017

November 8, 2017 Posted by Raúl Ilargi Meijer at 9:56 am Finance Tagged with: arms sales, Catalonia, corruption, crackdown, homeless, Lebanon, malls, MMT, reversal, Saudi 4 Responses »

Henri Cartier Bresson Nehru Announces Gandhi’s Death, Birla House, Delhi, India Jan 30, 1948

• 700 Years of Data Forewarn of Rapid Reversal From Low Interest Rates (BBG)

• Saudi Banks Freeze More Than 1,200 Bank Accounts in Anti-Corruption Purge (R.)

• Saudi Crackdown to Confiscate Up to $800 Billion in Assets (WSJ)

• Leaked Secret Israeli Cable Confirms Israeli-Saudi Coordination In Lebanon (ZH)

• Lebanon – The Next Front In The Great Gas War (Golem XIV)

• UK Sales Of Bombs And Missiles To Saudi Arabia Increase By Almost 500% (Ind.)

• May to Lose Second Top Minister in One Week Over Secret Israel Meetings (BBG)

• Those Who Broke The Economy Cannot Fix It (Ann Pettifor)

• German ‘Wise Men’ Sound Alarm Over ‘Overheating’ Economy (R.)

• Bean Counters: Lost in Paradise (Ren.)

• British Mainstream Media Spreading Dangerous MMT Ideas (Bilbo)

• Brick-and-Mortar Meltdown Sinks Property Prices (WS)

• Catalan Secessionist Parties Fail To Agree On Unity Ticket For Vote (R.)

• 1 in 200 British, 1 in 60 Londoners Are Homeless (G.)

Long term is always better.

• 700 Years of Data Forewarn of Rapid Reversal From Low Interest Rates (BBG)

Forget secular stagnation. One historian says the world is actually in its ninth “real rate depression” and 700 years of data show that – when it comes – the turnaround could be sudden. In research published on the Bank of England’s staff blog, Harvard University’s Paul Schmelzing says most work pointing to a period of permanently lower equilibrium real interest rates is too short term. Instead, he tracked the risk-free rate since 1311 by identifying the dominant asset of each period – starting with sovereign rates in the Italian city states in the 14th and 15th centuries and moving to long-term rates in Spain, then the Province of Holland, the U.K., Germany, and finally the U.S. Real rates, or the benchmark interest rates minus inflation, have averaged 4.78% while the 200-year real-rate average is 2.6%.

That makes the current market environment “severely depressed,” Schmelzing wrote. However, it’s simply following a five-century downward trend, in which there have been nine periods of secular decline followed by reversals. The current period – since the 1980s – is the second-longest recorded and its closest historical analogy is the global “Long Depression” of the 1880s and 1890s which saw low productivity growth, deflationary price dynamics, and the rise of global populism and protectionism. This spell seems to have ended without a push from policy makers. That could be good news for those struggling to find a fix for the current low-rate environment. “There is strong evidence suggesting that the last ‘secular stagnation cycle’ started fading relatively autonomously after just over two decades following the key financial shock, not requiring the aid of decisive fiscal or monetary stimulus.”

There’ll be more.

• Saudi Banks Freeze More Than 1,200 Bank Accounts in Anti-Corruption Purge (R.)

Saudi Arabian banks have frozen more than 1,200 accounts belonging to individuals and companies in the kingdom as part of the government’s anti-corruption purge, bankers and lawyers said on Tuesday. They added that the number is continuing to rise. Dozens of royal family members, officials and business executives have been detained in the crackdown and are facing allegations of money laundering, bribery, extorting officials and taking advantage of public office for personal gain. Since Sunday, the central bank has been expanding the list of accounts it is requiring lenders to freeze on an almost hourly basis, one regional banker said, declining to be named because he was not authorised to speak to media.

The banker did not name the companies affected but said they included listed and unlisted firms across many sectors. He added that if the freezes stayed in place for long, they could start to hurt day-to-day business activities such as paying staff and creditors or making other transactions. A second banker said, however, that most of the frozen accounts belonged to individuals rather than companies, and that banks were being allowed by the regulator to continue to fund existing commitments. Among top business executives detained in the probe are billionaire Prince Alwaleed bin Talal, chairman of investment firm Kingdom Holding; Nasser bin Aqeel al-Tayyar, founder of Al Tayyar Travel; and Amr al-Dabbagh, chairman of builder Red Sea International.

The stocks of all three companies, which have issued statements saying they continue to operate as normal, plunged between 9 and 10% on Tuesday. One of the bankers speaking to Reuters said the central bank had met with some foreign banks this week to reassure them that the freezing of accounts targeted individuals, and that firms linked to those people would not be damaged.

WSJ has gone full paywall.

• Saudi Crackdown to Confiscate Up to $800 Billion in Assets (WSJ)

The Saudi government is aiming to confiscate cash and other assets worth as much as $800 billion in its broadening crackdown on alleged corruption among the kingdom’s elite, according to people familiar with the matter. Several prominent businessmen are among those who have been arrested in the days since Saudi authorities launched the crackdown on Saturday, by detaining more than 60 princes, officials and other prominent Saudis, according to those people and others. The country’s central bank, the Saudi Arabian Monetary Authority, said late Tuesday that it has frozen the bank accounts of “persons of interest” and said the move is “in response to the Attorney General’s request pending the legal cases against them.”

The purge is the most extensive of the kingdom’s elite in recent history. Crown Prince Mohammed bin Salman, the son of King Salman, was named heir to the throne in June and has moved to consolidate power. He has said that tackling corruption at the highest level is necessary to overhaul what has long been an oil-dependent economy. The crackdown could also help replenish state coffers. The government has said that assets accumulated through corruption will become state property, and people familiar with the matter say the government estimates the value of assets it can reclaim at up to 3 trillion Saudi riyal, or $800 billion.

Strange bedfellows.

• Leaked Secret Israeli Cable Confirms Israeli-Saudi Coordination In Lebanon (ZH)

Early this morning, Israeli Channel 10 news published a leaked diplomatic cable which had been sent to all Israeli ambassadors throughout the world concerning the chaotic events that unfolded over the weekend in Lebanon and Saudi Arabia, which began with Lebanese Prime Minister Saad Hariri’s unexpected resignation after he was summoned to Riyadh by his Saudi-backers, and led to the Saudis announcing that Lebanon had “declared war” against the kingdom. The classified embassy cable, written in Hebrew, constitutes the first formal evidence proving that the Saudis and Israelis are deliberately coordinating to escalate the situation in the Middle East. The explosive classified Israeli cable reveals the following:

• On Sunday, just after Lebanese PM Hariri’s shocking resignation, Israel sent a cable to all of its embassies with the request that its diplomats do everything possible to ramp up diplomatic pressure against Hezbollah and Iran.
• The cable urged support for Saudi Arabia’s war against Iran-backed Houthis in Yemen.
• The cable stressed that Iran was engaged in “regional subversion”.
• Israeli diplomats were urged to appeal to the “highest officials” within their host countries to attempt to expel Hezbollah from Lebanese government and politics.

As is already well-known, the Saudi and Israeli common cause against perceived Iranian influence and expansion in places like Syria, Lebanon and Iraq of late has led the historic bitter enemies down a pragmatic path of unspoken cooperation as both seem to have placed the break up of the so-called “Shia crescent” as their primary policy goal in the region. For Israel, Hezbollah has long been its greatest foe, which Israeli leaders see as an extension of Iran’s territorial presence right up against the Jewish state’s northern border.

“Having failed to liberate the Syrians, Saudi, the West, its Sunni Gulf allies and Israel will now see if they can succeed in blocking any Iranian gas ambitions by liberating the Lebanese from their own government.”

• Lebanon – The Next Front In The Great Gas War (Golem XIV)

The Great Gas War has already two distinct fronts: The now relatively quiet Northern Front in Ukraine and the Southern Front in Syria in which the Western empire has been losing. It looks to me that Lebanon is being targeted as the next front, where the West hopes its loses might be recouped. Yesterday, November 6th, Reuters reported, “Saudi Arabia said on Monday that Lebanon had declared war against it because of attacks against the Kingdom by the Lebanese Shi‘ite group Hezbollah.” This comes after Israel, Saudi’s long time though largely un-offical best friend in the region, has been very publicly preparing to renew its own war with Lebanon – or more accurately with Hezbollah. As the American news journal Newsweek put it recently, “ISRAEL PREPARES FOR ANOTHER WAR WITH HEZBOLLAH AS IDF PRACTICES LEBANON INVASION.”

Why now and why Lebanon? Well the rulers of Saudi, a Sunni dominated country, will tell us that it is because Hezbollah is a Shia terrorist organisation. “Hezbollah” literally means the “Party of Allah” or “Party of God”. Saudi Gulf affairs minister Thamer al-Sabhan yesterday pointedly referred to Hezbollah as, “the Lebanese Party of the Devil”. Saudi is not alone of course, Hezbollah has also been listed as a terrorist organisation by America, Israel, the Arab League, the UK and the EU. It is also, however, part of the popular government of Lebanon having seats in its parliament. I suggest, however, a powerful reason that a new war with Hezbollah may be in the offing is because Lebanon is the next link in any gas pipeline that could potentially bring Iranian Gas to Europe.

That was the reason the West decided to “liberate” the Syrian people and it will be why they decide to enforce the same salvation upon the people of Lebanon. Having failed to liberate the Syrians, Saudi, the West, its Sunni Gulf allies and Israel will now see if they can succeed in blocking any Iranian gas ambitions by liberating the Lebanese from their own government. I would not be surprised to hear quite soon from opposition groups vocally denouncing the government or at least Hezbollah. I expect spokes people from those groups to suddenly get a global platform along-side American and regional supporters such as Saudi.

How to spell insanity.

• UK Sales Of Bombs And Missiles To Saudi Arabia Increase By Almost 500% (Ind.)

The number of British-made bombs and missiles sold to Saudi Arabia since the start of its bloody campaign in Yemen has risen by almost 500%, The Independent can reveal. More than £4.6bn of arms were sold in the first two years of bombings, with the Government grant increasing numbers of export licences despite mounting evidence of war crimes and massacres at hospitals, schools and weddings. The United Nations says air strikes by the Saudi-led coalition are the main cause of almost 5,295 civilian deaths and 8,873 casualties confirmed so far, warning that the real figure is “likely to be far higher”. It has condemned the “entirely man-made catastrophe” leaving millions more on the brink of famine and sparking the world’s worst cholera epidemic, while blacklisting Saudi Arabia for killing and maiming children.

There is also fresh concern over the Kingdom’s attempt to shut all air, land and sea ports into Yemen, which it said was to stop the flow of weapons but will also halt aid imports. British-made bombs have been found at the scene of bombings deemed to violate international law but the UK has continued its political and material support for Riyadh’s campaign. Figures from the Department for International Trade (DIT) show that in the two years leading up to the Yemen war, £33m of ML4 licences covering bombs, missiles and countermeasures were approved. But in the two years since the start of Saudi bombing in March 2015, the figure increased by 457% to £1.9bn, according to calculations by Campaign Against the Arms Trade (CAAT). Licences covering aircraft including Eurofighter jets have also risen by 70% to £2.6bn in the same period.

Secret meetings as the Middle East is imploding. And arms sales are exploding.

• May to Lose Second Top Minister in One Week Over Secret Israel Meetings (BBG)

Prime Minister Theresa May is weighing whether to fire a member of her cabinet only seven days after her defense secretary quit in a sexual harassment scandal, as the U.K. government faces fresh turmoil in the midst of Brexit talks. May is likely to dismiss her International Development Secretary Priti Patel in a row over a succession of unauthorized meetings she held with Israeli officials behind the prime minister’s back, according to reports from the BBC and The Sun Tuesday, which the U.K. government declined to deny. The premier has not yet had the chance to speak to Patel – who is on an official trip to Africa – about the latest revelations. A conversation would be expected before a decision is made about the minister’s future. If she is forced out, Patel will be the second minister to depart May’s cabinet in one week, after Michael Fallon resigned from the defense ministry amid allegations over his past behavior toward women.

For some, May’s latest headache is yet another demonstration of her weakness, which draws repeated questions over how her government can last long enough to see Brexit to the finish line. If more dominoes drop – in the shape of senior ministers – the last one to fall could ultimately be the prime minister herself. “The destabilizing effect on an already weak administration has prompted another burst of speculation that May could soon be forced to resign,” Mujtaba Rahman of Eurasia Group said in a note to clients. He thought one likely scenario is for May to be toppled if she fails to get a grip on the latest crisis and is ousted because her MPs judge that the government cannot go on like this – and is incapable of recovering the authority a prime minister needs.

The British economy is being bled dry….

• Those Who Broke The Economy Cannot Fix It (Ann Pettifor)

Make no mistake, last week’s increase in interest rates was a big deal. Painful as it might be for a good share of the population, the real point is that the Bank is signalling the end of a particular phase of monetary policy. Since 2010 the counterpart to self-defeating austerity policies has been expansionary monetary policies. These have inflated assets – enriching the already-rich, while failing to stimulate wider economic recovery. Yesterday the Bank of England’s Monetary Policy Committee signalled an end of this dangerous game. But this technocratic realignment makes no difference to the fact that ‘the Guardians of the nation’s finances’ – Bank and Treasury economists – have failed absolutely to revive the economy.

You need look no further than the (ongoing) decline in real wages, to continuing low levels of private investment, and to the dangers of rising household debt. A small interest rate rise is hardly likely to improve these conditions. Bank and Treasury economists (aided and abetted by the OBR) are guilty of defeatism. They argue that despite their powers, THERE IS NOTHING TO BE DONE. It is assumed that somehow ‘the invisible hand’ or ‘the markets’ will, without intervention by the authorities, correct the weakness, insecurity and failures of the British economy. The prolonged and painfully weak recovery is regularly blamed on something defined as “productivity”. By shifting responsibility for economic failure on to productivity, the Bank, Treasury and OBR economists are saying that somehow economic failure is inherent to the economy – to businesses and especially to workers.

“Nothing to do with us, guv” they mutter. They add that the situation has been exacerbated by the vote to leave the EU. This is a handy way of denying that the ongoing economic failure of the British economy (and the Brexit vote) can be explained by austerity policies, and the failures of the financial system. By taking this approach, economists at the Bank have – conveniently – set the scene for endorsing further inaction by the Chancellor later this month. Yesterday the Governor of the Bank was flanked by Ben Broadbent and Dave Ramsden. Ben Broadbent, as a Goldman Sachs economist, was among the earliest to call for austerity policies. Dave Ramsden (who did not vote for the rate rise) implemented these policies as top economist at the Treasury.

But both Broadbent and Ramsden were senior figures in economic policy-making throughout the debt inflation that preceded the crisis, and (we presume) supporters of financial globalisation. It is obvious to anyone with an ounce of common sense that austerity policies have hurt the most vulnerable, and damaged Britain’s economic potential, by forcing a brutal adjustment to lower quality and lower paid work. Labour has been forced to bear the brunt of the Global Financial Crisis. The weakness in productivity is just the outcome of these policies, not the cause.

… while Germany’s needs diverge ever more from those of southern Europe.

• German ‘Wise Men’ Sound Alarm Over ‘Overheating’ Economy (R.)

The German economy is at risk of overheating, according to a leaked advisory council report that follows pressure from the Bundesbank for a swifter end to the ECB’s expansive monetary policy. In their annual report, seen by Handelsblatt newspaper, the five “wise men” who advise the German government on economic policy said the economy, which they expected to expand strongly this year and next, was moving gradually into a “boom phase”. “There are clear signs that economic capacity is over-utilised,” read the report, which is due to be published on Wednesday. Germans have been among the foremost critics of the ECB’s bond-buying program, which was introduced three years ago to depress borrowing costs and reignite growth in the euro zone’s heavily indebted southern periphery.

The wise men expected Germany’s economy to expand by 2% this year and by 2.2% in 2018, Handelsblatt said. With unemployment at its lowest level since the early 1990s, Germany’s circumstances are very different from Italy’s or Spain‘s, straining the ECB’s ‘one-size-fits-all’ monetary policy. ECB President Mario Draghi last month announced a halving n the size of its 2 trillion euro bond-buying program, but this is far from the return to conventional monetary policy many Germans, including Bundesbank president Jens Weidmann, demand. Without an intervention to cool the economy, Germany’s hawks fear the buoyant economy could tip over into an inflationary cycle. Last week, a senior official from Chancellor Angela Merkel’s conservatives warned that German savers would not tolerate continued low interest rates for much longer.

Accountants and auditors are not doing their jobs.

• Bean Counters: Lost in Paradise (Ren.)

“The phrase ‘Set a thief to catch a thief’ is common parlance,” says Professor Atul K. Shah. “‘Set a global brand of professional accountants to rob society and pilfer its taxes, bleeding governments’, is not, but it should be.’ Professor Bill Black says internal controls are absolutely critical in reducing fraud by insiders in particular, but not just insiders, as the Paradise Papers have repeatedly demonstrated. Emile Woolf says there is no way to remove control fraud and dodgy accounting practices from the economy without first prosecuting the culprits. “The devils that committed this criminal negligence – with the exception of the Royal Bank of Scotland (RBS) – have never been fined or prosecuted” he said. “What you can then do is create a ring fenced fund inside those institutions, earmarked to save them from going under. But the company has to recognise it has to be paid back.

“RBS is incapable of paying back the billions of fines it still owes for misconduct,” he says. “Where does that money come from and where does it go? Without the fines RBS would have made £100 million profit this year, but because of the reserve for fines in the USA and UK, all those fines are far too great to allow for payment of a dividend.” Of course calculating a true profit figure is difficult when a significant portion of that profit is fraudulent, because it doesn’t take into account the result of the inequities of ten years ago. “The worrying thing for all of us is if it happens again,” he says. “My hope is that three years from now, banks will be forced to recognise their loans that will never be repaid. But my worry is that this is going to be after the next financial crisis, because it’s happening again. There is no redeeming features in the present. The only difference is the next crisis is going to be bigger.”

Joel Benjamin told Renegade Inc that accounting is as much about *what* you count or don’t count as it is *how* you count it. “This is evidenced through the practice of ‘base erosion and profit shifting’ – shifting profits to offshore low or no tax jurisdictions, ” he said. In the space of 50 years, Britain’s economy has transformed from an industrial power house, to that of a finance-led extractive parasite, where the cash starved productive economy receives less than 10% of bank credit. “Until the Big Four accountancy firms are accurately viewed as enablers of corporate offshore dealing, regulatory arbitrage and ardent defenders of the neoliberal order, not the ‘reputable’ objective independent arbiters of the public interest as they claim, society will continue to be taken for a ride, and public services and social cohesion will continue their long decline,” he said.

Bill Mitchell in a long talk with his alter ego.

• British Mainstream Media Spreading Dangerous MMT Ideas (Bilbo)

Mitchell tried to tell me that governments do not spend by ‘printing money’ but rather just adjust bank accounts with numbers. But I know as anyone in the street knows that they just want to print more and more. That is at the core of MMT – they want the government to go on a spending spree and just ignore the inflationary consequences. They hide that by saying that “public spending cannot be unlimited and must be commensurate to the capacity of the economy” which is just a smokescreen that I can see through. And everybody will see through it. It is code for spend like a drunken’ sailor – throw money at lazy people who cannot be bothered finding a job. Throw money at public schools that teach socialist doctrines – you know about inequality and stuff like that.

Throw money at public hospitals so that people can receive unlimited health care without having to pay for it – that is the quickest way to encourage waste and bad behaviour. People know that they can just get sick and no matter what their income is they will get some care. Where is the incentive to stay healthy in that sort of system. The article also shows how stupid Mitchell is when it says he: “… debunks the idea that governments borrow money from international markets and with it the notion that they are hostage to the market.” Well where the hell else do they get the cash from? Does he really think we are that stupid? How come China has all those US government debt bonds or whatever they are called and the US government is spending the Chinese cash? How does he explain that obvious point?

Well he tried to claim the Chinese doesn’t issue US dollars and that only the US government issues US dollars so that it cannot possibly be funded by the Chinese. I don’t buy that, not that I understood anything he said about this – all this talk about trade surpluses accumulating financial claims in the currency that the deficit country issues, and then allowing the surplus nation to use those claims (say, US dollars in the first instance) to purchase US dollar financial assets etc ad nauseum. As if that tells us anything. How come the Chinese can loan the US government money that is what I want to know? Mitchell told the journalist that Jeremy Corbyn should not worry about international capital markets because Britain could impose capital controls if it wanted to. That gets to the nub of my worries – socialist governments stealing hard-earned cash from investors who actually have some get up and go.

Malls don’t look like good investments.

• Brick-and-Mortar Meltdown Sinks Property Prices (WS)

Commercial real estate prices soared relentlessly for years after the Financial Crisis, to such a degree that the Fed has been publicly fretting about them. Why? Because US financial institutions hold nearly $4 trillion of commercial real estate loans. But the boom in most CRE sectors is over. The Green Street Property Price Index – which measures values across five major property sectors – had soared 107% from May 2009 to the plateau that began late last year, and 27% from the peak of the totally crazy prior bubble that ended with such spectacular fireworks. But it has now turned around, dragged down by a plunge in prices for retail space. The CPPI by Green Street Advisors dropped 1.1% in October from September. In terms of points, the 1.4-point decline was the largest monthly decline since March 2009. The index is now below where it had been in June 2016:

This phenomenal bubble, as depicted by the chart above, has even worried the Fed because US financial institutions hold nearly $4 trillion of CRE loans, according to Boston Fed governor Eric Rosengren earlier this year. Of them, $1.2 trillion are held by smaller banks (less than $50 billion in assets). These smaller banks tends to have a loan book that is heavily concentrated on CRE loans, and these banks are less able to withstand shocks to collateral values. Rosengren found that among the root causes of the Financial Crisis “was a significant decline in collateral values of residential and commercial real estate.” But the CRE bubble isn’t unraveling as gently as the chart suggests. Some sectors are still surging, while others are plunging. According to the report, the index, which captures the prices at which CRE transactions are currently being negotiated and contracted, “was pushed down by falling mall valuations.”

Puidgemont predicted to get 14-15 out of 135 seats. He won’t be the leader.

• Catalan Secessionist Parties Fail To Agree On Unity Ticket For Vote (R.)

Catalan secessionist parties on Tuesday failed to agree on a united ticket to contest a December snap regional election, making it more difficult to rule the region after the vote and press ahead with their collective bid to split from Spain. Catalonia’s secessionist push has plunged Spain into its worst political crisis in four decades, triggered a business exodus, forced Madrid to cut its economic forecast and reopened old wounds from Spain’s civil war in the 1930s. Pro-independence groups have called for a general strike in the restive region on Wednesday. Catalan political parties had until midnight on Tuesday to register coalitions ahead of the Dec. 21 vote, but the two main forces which formed an alliance to rule the region for the last two years did not manage to agree on a new pact in time.

While they could still find an agreement after the vote, political analysts say the lack of a deal on a joint campaign may also trigger a leadership fight at the top of the movement. This is because center-right PdeCat (Catalan Democratic Party) of sacked Catalan president Carles Puigdemont is expected to be overtaken by leftist Esquerra Republicana de Catalunya (ERC) of former regional vice president Oriol Junqueras. Puigdemont and Junqueras are the two main leaders behind the current secession bid that last month led to a unilateral declaration of independence which Spain thwarted by imposing direct rule on the region. Junqueras is currently in custody pending a potential trial on charges of sedition, rebellion and misuse of public funds. Puigdemont, who faces the same charges, is currently in self-imposed exile in Belgium and has said he would oppose extradition.

An opinion poll released on Sunday by Barcelona-based newspaper La Vanguardia showed Junqueras’ ERC could garner between 45 and 46 seats in the 135-strong regional assembly while Puigdemont’s PdeCat would win between 14 and 15 seats. In order to reach the 68-seat threshold for a majority, they would then have to form a parliamentary alliance with anti-capitalist CUP, which is expected to get seven or eight seats. Such an alliance previously existed between 2015 and 2017.

Down the drain.

• 1 in 200 British, 1 in 60 Londoners Are Homeless (G.)

More than 300,000 people in Britain – equivalent to one in every 200 – are officially recorded as homeless or living in inadequate homes, according to figures released by the charity Shelter. Using official government data and freedom of information returns from local authorities, it estimates that 307,000 people are sleeping rough, or accommodated in temporary housing, bed and breakfast rooms, or hostels – an increase of 13,000 over the past year. Shelter said the figures were an underestimate as they did not include people trapped in so-called “hidden homelessness”, who have nowhere to live but are not recorded as needing housing assistance, and end up “sofa surfing”. London, where one in every 59 people are homeless, remains Britain’s homelessness centre. Of the top 50 local authority homelessness “hotspots”, 18 were in Greater London, with Newham, where one in 27 residents are homeless, worst hit.

However, while London’s homeless rates have remained largely stable over the past year, the figures show the problem is becoming worse in leafier commuter areas bordering the capital, such as Broxbourne, Luton, and Chelmsford. Big regional cities have also seen substantial year-on-year increases in the rate of homelessness. In Manchester, one in 154 people are homeless (compared with one in 266 in 2016); in Birmingham one in 88 are homeless (119); in Bristol one in 170 are affected (199). Polly Neate, chief executive of Shelter, said: “It’s shocking to think that today, more than 300,000 people in Britain are waking up homeless. Some will have spent the night shivering on a cold pavement, others crammed into a dingy hostel room with their children. And what is worse, many are simply unaccounted for.

Debt Rattle November 7 2017

Nov 072017

November 7, 2017 Posted by Raúl Ilargi Meijer at 10:07 am Finance Tagged with: AI, black swan, forest, Greece, homeless, Lebanon, offshore, oil, oligarchy, Puerto Rico, Saudi 5 Responses »

Edward S. Curtis Zuni Girl with Jar c. 1903

• Saudi Arabia’s Government Purge — And How Washington Corruption Enabled It (IC)

• Saudi Arabia Accuses Lebanon Of ‘Declaring War,’ Egypt Calls For Calm (CNBC)

• Oil Prices Surge On Saudi Purge (CNBC)

• The Black Swan In Plain Sight – Debt Out The Wazoo (Stockman)

• What Could Go Wrong? (Jim Kunstler)

• Growing Homeless Camps Contrast With West Coast Tech Wealth (AP)

• Profiting from Puerto Rico’s Pain (New Yorker)

• Sacked Catalan President Condemns ‘Brutal Judicial Offensive’ (G.)

• Bernie Sanders Warns Of ‘International Oligarchy’ – Paradise Papers (G.)

• End These Offshore Games Or Our Democracy Will Die (G.)

• Four False Viral Claims Spread by Journalists on Twitter in One Week (GG)

• Growing Number of Greeks Unable To Pay Taxes (K.)

• Greek Notaries Refuse To Carry Out Foreclosures (K.)

• Hawking: AI Could Be ‘Worst Event In The History Of Our Civilization’ (CNBC)

• The Charter of the Forest (Standing)

Reading a lot on Saudi. This is good by Ryan Grim. ” And make no mistake, MBS is a project of the UAE — an odd turn of events given the relative sizes of the two countries.”

• Saudi Arabia’s Government Purge — And How Washington Corruption Enabled It (IC)

Whatever the official explanation, it is being read around the world as a power grab by the kingdom’s rising crown prince. “The sweeping campaign of arrests appears to be the latest move to consolidate the power of Crown Prince Mohammed bin Salman, the favorite son and top adviser of King Salman,” as the New York Times put it. “The king had decreed the creation of a powerful new anti-corruption committee, headed by the crown prince, only hours before the committee ordered the arrests. The men are being held in the Ritz-Carlton Riyadh. “There is no jail for royals,” a Saudi source noted. The move marks a moment of reckoning for Washington’s foreign policy establishment, which struck a bargain of sorts with Mohammed bin Salman, known as MBS, and Yousef Al Otaiba, the United Arab Emirates ambassador to the U.S. who has been MBS’s leading advocate in Washington.

The unspoken arrangement was clear: The UAE and Saudi Arabia would pump millions into Washington’s political ecosystem while mouthing a belief in “reform,” and Washington would pretend to believe that they meant it. MBS has won praise for some policies, like an openness to reconsidering Saudi Arabia’s ban on women drivers. Meanwhile, however, the 32-year-old MBS has been pursuing a dangerously impulsive and aggressive regional policy, which has included a heightening of tensions with Iran, a catastrophic war on Yemen, and a blockade of ostensible ally Qatar. Those regional policies have been disasters for the millions who have suffered the consequences, including the starving people of Yemen, as well as for Saudi Arabia, but MBS has dug in harder and harder. And his supporters in Washington have not blinked.

The platitudes about reform were also challenged by recent mass arrests of religious figures and repression of anything that has remotely approached less than full support of MBS. The latest purge comes just days after White House adviser Jared Kushner, a close ally of Otaiba, visited Riyadh, and just hours after a bizarre-even-for-Trump tweet. Whatever legitimate debate there was about MBS ended Saturday — his drive to consolidate power is now too obvious to ignore. And that puts denizens of Washington’s think tank world in a difficult spot, as they have come to rely heavily on the Saudi and UAE end of the bargain. As The Intercept reported earlier, one think tank alone, the Middle East Institute, got a massive $20 million commitment from the UAE. And make no mistake, MBS is a project of the UAE — an odd turn of events given the relative sizes of the two countries.

“Our relationship with them is based on strategic depth, shared interests, and most importantly the hope that we could influence them. Not the other way around,” Otaiba has said privately. For the past two years, Otaiba has introduced MBS around Washington and offered assurances of his commitment to modernizing and reforming Saudi Arabia, according to people who’ve spoken with him, confirmed by emails leaked by the group, Global Leaks. When confronted with damning headlines, Otaiba tends to acknowledge the reform project is a work in progress, but insists that it is progress nonetheless, and in MBS resides the best chance of the region.

“The region cannot support more turmoil..”

• Saudi Arabia Accuses Lebanon Of ‘Declaring War,’ Egypt Calls For Calm (CNBC)

Egyptian President Abdel Fattah al-Sisi called on Middle Eastern nations to maintain stability just as tensions were suddenly spiking between Lebanon and Saudi Arabia. “The stability of the region is very important and we all have to protect it … I am talking to all the parties in the region to preserve it,” Al-Sisi said in an interview with CNBC over the weekend that aired Tuesday morning. On Saturday, Lebanese Prime Minister Saad al-Hariri shocked the political establishment in Beirut by announcing his resignation. The leader said he was stepping down amid concerns of a potential assassination plot against him. Speaking from Riyadh, Hariri criticized Iran, and its Lebanese ally Hezbollah, for igniting conflict in the region.

Following the CNBC interview, Reuters reported that Saudi Arabia sharply escalated rhetoric in the region by declaring that Lebanon had — figuratively at least — declared “war” against it because of aggression from Hezbollah. Saudi Gulf Affairs Minister Thamer al-Sabhan said the government of Lebanon “would be dealt with as a government declaring war on Saudi Arabia,” Reuters reported. When asked whether the time had come for Egypt to consider its own measures against Hezbollah, Al-Sisi replied, “The subject is not about taking on or not taking on, the subject is about the status of the fragile stability in the region in light of the unrest facing the region.” “The region cannot support more turmoil,” he said.

What OPEC couldn’t do.

• Oil Prices Surge On Saudi Purge (CNBC)

Oil prices surged to their highest levels since the summer of 2015 on Monday as a major political shakeup in Saudi Arabia underpinned a rally fueled by geopolitical risk, analysts said. Crude futures hit the new highs overnight after the powerful Saudi Crown Prince Mohammad bin Salman coordinated the arrest of several princes and ministers, ostensibly as part of crackdown on corruption. Prices pulled back in morning trade as the market digested a wealth of analysis on the Saudi purge, but futures suddenly shot higher at midday. International benchmark Brent crude oil topped $64 a barrel for the first time since June 2015. Meanwhile U.S. West Texas Intermediate crude broke above $57, a level the market has not seen since July 2015.

WTI finished Monday’s session $1.71 or 3.1 percent, higher at $57.35. Brent was trading up $2.04, or 3.3 percent, at $64.11 by 2:27 p.m. ET. Analysts cautioned against pinning the surge on any one headline, or even the Saudi arrests alone. Instead, they said a growing cloud of geopolitical uncertainty was unleashing animal spirits in an already bullish market. “You can grab all sorts of different headlines when you have a runaway market, and this is a runaway market right now,” said Tom Kloza, global head of energy analysis at Oil Price Information Service. In this kind of environment, “people throw caution to the wind, and this is like the grand finale of fireworks,” he said.

More debt, fast.

• The Black Swan In Plain Sight – Debt Out The Wazoo (Stockman)

The black swan in plain sight does emit the Donald’s orangish glow, but at the end of the day its true color is actually red. That is, monumental towers of rapidly rising debt loom everywhere on the planet. For the moment, the artificial cash flow from this unsustainable borrowing spree is keeping a simulacrum of growth and prosperity alive. Yet this whole outbreak of debt madness – represented by $225 trillion outstanding on a global basis – is careening toward a financial and economic dead end that will soon crush today’s fiscally profligate politicians and heedless financial punters, alike, in a devastating reset of bond yields. For our first case in point, the always excellent Wolf Richter published a great chart over the weekend on the exploding US public debt.

To say the least, it constitutes a clanging wake-up call amidst the absolute fantasy world that prevails on both ends of the Acela Corridor. That’s because during the mere 8 weeks since the public debt ceiling was suspended by the Donald’s end-run with Nancy and Chuckles in September, the national debt has spiked by $640 billion. That’s about $16 billion per Federal business day, and they are not done yet. The US Treasury will continue to borrow heavily until the current debt ceiling “suspension” expires on December 8 – at which time it will repair to the old game of divesting trusting funds and employing other gimmicks which circumvent the ceiling, while waiting for Congress to blink and raise the ceiling or authorize a new “temporary” suspension.

As Wolf pointed out, this pattern played out during the debt showdowns of 2013 and 2015, as well, when the resulting “temporary” suspension resulted in borrowing spikes of $464 billion and $650 billion, respectively. Accordingly, Washington has suspended it way into a $5.7 trillion increase in the public debt in just six years since October 2011. That is, during a period which supposedly constitutes the third longest business expansion in US history.

“The “narrative” is firmest before its falseness is proved by the turn of events, and there are an awful lot of events out there waiting to present, like debutantes dressing for a winter ball.”

• What Could Go Wrong? (Jim Kunstler)

The economy isn’t growing and can’t grow. The economy is a revenant of something that used to exist, an industrial economy that has rolled over and died and come back as a moldy ghoul feeding on the ghostly memories of itself. Stocks go up because the unprecedented low interest rates established by the Fed allow company CEOs to “lever-up” issuing bonds (i.e. borrow “money” from, cough cough, “investors”) and then use the borrowed “money” to buy back their own stock to raise the share value, so they can justify their companies’ boards-of-directors jacking up their salaries and bonuses — based on the ghost of the idea that higher stock prices represent the creation of more actual things of value (front-end-loaders, pepperoni sticks, oil drilling rigs).

The economy is actually contracting because we can’t afford the energy it takes to run the things we do — mostly just driving around — and unemployment is not historically low, it’s simply mis-represented by not including the tens of millions of people who have dropped out of the work force. And an epic wickedness combined with cowardice drives the old legacy news business to look the other way and concoct its good times “narrative.” If any of the reporters at The New York Times and The Wall Street Journal really understand the legerdemain at work in these “mysteries” of finance, they’re afraid to say. The companies they work for are dying, like so many other enterprises in the non-financial realm of the used-to-be economy, and they don’t want to be out of paycheck until the lights finally go out.

The “narrative” is firmest before its falseness is proved by the turn of events, and there are an awful lot of events out there waiting to present, like debutantes dressing for a winter ball. The debt ceiling… North Korea… Mueller… Hillarygate….the state pension funds….That so many agree the USA has entered a permanent plateau of exquisite prosperity is a sure sign of its imminent implosion. What could go wrong?

All bubbles disrupt.

• Growing Homeless Camps Contrast With West Coast Tech Wealth (AP)

SEATTLE — Housing prices are soaring here thanks to the tech industry, but the boom comes with a consequence: A surge in homelessness marked by 400 unauthorized tent camps in parks, under bridges, on freeway medians and along busy sidewalks. The liberal city is trying to figure out what to do. “I’ve got economically zero unemployment in my city, and I’ve got thousands of homeless people that actually are working and just can’t afford housing,” said Seattle City Councilman Mike O’Brien. “There’s nowhere for these folks to move to.” That struggle is not Seattle’s alone. A homeless crisis is rocking the entire West Coast, pushing abject poverty into the open like never before. Public health is at risk, several cities have declared states of emergency, and cities and counties are spending millions – in some cases billions – in a search for solutions.

San Diego now scrubs its sidewalks with bleach to counter a deadly hepatitis A outbreak. In Anaheim, 400 people sleep along a bike path in the shadow of Angel Stadium. Organizers in Portland lit incense at an outdoor food festival to cover up the stench of urine in a parking lot where vendors set up shop. Homelessness is not new on the West Coast. But interviews with local officials and those who serve the homeless in California, Oregon and Washington — coupled with an Associated Press review of preliminary homeless data — confirm it’s getting worse. People who were once able to get by, even if they suffered a setback, are now pushed to the streets because housing has become so expensive. All it takes is a prolonged illness, a lost job, a broken limb, a family crisis. What was once a blip in fortunes now seems a life sentence.

“There is no European Union standing ready to bail out Puerto Rico.”

• Profiting from Puerto Rico’s Pain (New Yorker)

In 2012, Cate Long was working at the news service Reuters, where she wrote a daily column on the municipal-bond market. Municipal bonds are typically a sleepy corner of investing. They are forms of debt issued by states, counties, or cities, usually to fund infrastructure projects, such as airports and highways, and they are generally considered a safe investment, paying relatively low levels of interest. Finding a compelling story about the municipal-bond market is not an easy task, so when Long came across a document related to an $800 million bond sale that Puerto Rico would be undertaking that spring, she decided to look at the numbers more closely. What she found was startling. “I sat down and read it for a couple of hours, and I said, ‘These people are going to default,’ ” she told me recently. “It was pretty obvious.”

In the column she wrote about her analysis, titled “Puerto Rico Is America’s Greece,” Long expressed concern about the island’s economic health, calling it “America’s own Third World country.” At the time, Puerto Rico’s per-capita income was just $15,203 (less than half that of Mississippi, the poorest of the fifty states), and 45% of its residents were living below the poverty line. Puerto Rico also had a “massive” amount of debt, and was issuing even more bonds, which mutual funds and individuals were eagerly buying up, in spite of the warning signs. In her article, Long seemed to charge almost everyone involved, borrowers and creditors alike, with disingenuousness, incompetence, or both. “As happened with Greece, bond investors continue to buy the debt assuming at some point the government will be bailed out by somebody, somewhere,” she wrote.

“Caution, bond investors: There is no European Union standing ready to bail out Puerto Rico.” The article sent shock waves through the investment community. Moody’s Investors Service, which provides credit ratings, asked Long to come to its offices and defend her findings. (Her defense was, essentially, “I’m looking at the numbers.”) Nevertheless, the island continued its unsustainable borrowing for years—and Wall Street investors kept lending it money. By 2017, five years after Long’s warning, Puerto Rico’s bond debt had soared to $74 billion, almost a third of which was held by hedge funds. Meanwhile, the government was struggling to provide basic services to residents.

Guess: he won’t be back in Catalonia in time for the Dec 21 elections.

• Sacked Catalan President Condemns ‘Brutal Judicial Offensive’ (G.)

The deposed Catalan president, Carles Puigdemont, has accused the Spanish authorities of conducting a “brutal judicial offensive” against members of his ousted government and said he was afraid they would not receive an unbiased hearing in Spanish courts. Writing in the Guardian, Puigdemont said it was a “colossal outrage” that he and 13 colleagues were being investigated over possible charges including sedition and rebellion in relation to their roles in last month’s declaration of independence. “Today, the leaders of this democratic project stand accused of rebellion and face the severest punishment possible under the Spanish penal code; the same as for cases of terrorism and murder: 30 years in prison,” he said.

Puigdemont said he doubted that he and his colleagues would get a “fair and independent hearing” and called for “scrutiny from abroad” to help bring the Catalan crisis to a political, rather than judicial, conclusion. He added: “The Spanish state must honour what was said so many times in the years of terrorism: end violence and we can talk about everything. We, the supporters of Catalan independence, have never opted for violence, on the contrary. But now we find it was all a lie that everything is up for discussion.” The former Catalan leader fled to Brussels with a handful of cabinet colleagues last week, hours before Spain’s attorney general announced he would be seeking to bring charges of rebellion, sedition and misuse of public funds against them.

On Thursday, a national court judge ordered the jailing of the eight Catalan politicians and, a day later, issued a European arrest warrant for Puigdemont and four of his allies. Late on Sunday, a Belgian judge granted the five conditional release. They will make their first appearance in court on 17 November when a judge will decide on whether to execute the arrest warrant. The conditions of release include a ban on them leaving Belgium until their appearance in the court of first instance in Brussels later this month. With the extradition process likely to take months rather than weeks, there is growing scope for Puigdemont’s presence in Belgium to cause the country’s coalition government serious difficulties.

No kidding.

• Bernie Sanders Warns Of ‘International Oligarchy’ – Paradise Papers (G.)

Bernie Sanders has warned that the world is rapidly becoming an “international oligarchy” controlled by a tiny number of billionaires, highlighted by the revelations in the Paradise Papers. In a statement to the Guardian in the wake of the massive leak of documents exposing the secrets of offshore investors, Sanders said that the enrichment of wealthy individuals and companies in tax havens was “the major issue of our time”. He said the Paradise Papers opened the door on a “major problem not just for the US but for governments throughout the world”. “The major issue of our time is the rapid movement toward international oligarchy in which a handful of billionaires own and control a significant part of the global economy. The Paradise Papers shows how these billionaires and multinational corporations get richer by hiding their wealth and profits and avoid paying their fair share of taxes,” the US senator from Vermont said.

Sanders, who came in a close second to Hillary Clinton in the race for the Democratic presidential nomination last year, pointed the finger of blame for the flourishing of offshore holdings on both Congress and the Trump administration. He told the Guardian that Republicans in Congress were responsible for providing “even more tax breaks to profitable corporations like Apple and Nike”. The same tax breaks, he said, were being seized upon by super-wealthy members of Trump’s cabinet “who avoid billions in US taxes by shifting American jobs and profits to offshore tax havens. We need to close these loopholes and demand a fair and progressive tax system.”

“We must accept that Big Finance and runaway inequality are incompatible with either a functioning democracy or a sustainable economy.”

• End These Offshore Games Or Our Democracy Will Die (G.)

Tax avoidance is now so systemic that the Queen’s own wealth managers apparently see nothing wrong with her receiving £82m a year from taxpayers while shunting £10m into the Caymans and elsewhere. Shuttling between tax havens is so commonplace that economist Gabriel Zucman describes it as an “elite sport” – a sport in which the loser each time is the rest of society, which sees its taxbase shrink. These papers are aptly named: they outline a model that is paradise for the super-rich and purgatory for the rest of us. The second myth of British politics is that austerity was the only correct response to the high-living of the New Labour boom. That was always opposed by some of us – now it is exploded with each new tax investigation.

Drawing in part on data from last year’s Panama Papers and the HSBC files leaked in 2015, Zucman recently co-published a study that found wealthy Britons have stashed about £300bn – equivalent to 15% of our GDP – in offshore tax havens. Three hundred billion quid would more than cover our entire education budget for the rest of this decade and into the 2020s. Or, if you prefer, it is the equivalent of £350m being paid into the NHS every week for the next 16 years. Instead, it is funnelled offshore and used to buy yachts and mansions and other baubles – tax efficiently, of course. The economics of David Cameron and George Osborne can be summed up simply: punish the poor, but reward the rich for fear they will flee offshore. To that end, they scrapped the 50p tax rate for millionaires, they drove down corporation tax to a record low, and cut sweetheart deals with companies such as Google who couldn’t be bothered to pay even that much.

The result is that London has more super-rich residents than any other city – yet however soft the kid gloves with which they are treated, our wealthiest 0.01% stick 30-40% of their wealth offshore. In high-tax Sweden, by contrast, the rich do not use havens half as much. The logic that has underpinned our tax system over this entire decade is rubbish. [..] Add the City of London to Britain’s crown dependencies such as Jersey and the Isle of Man, and overseas territories such as the Caymans, and Britain’s tax havens account for nearly a quarter of the entire offshore financial industry. According to Deutsche Bank, London itself receives about £1bn a month in what it calls “hidden capital flows”, much of it Russian. It ends up in Stucco-fronted houses and fine art.

Much of this could be changed, and quickly. Britain has previously ordered the Caymans and other overseas territories to decriminalise homosexuality and abolish the death penalty. It could do the same with tax transparency, in an Order of Council that, a Mayfair tax lawyer recently told me, need be no longer than two sides of A4. We could change the rules on Lords and Commons’ members’ interests so that all offshore holdings would have to be registered. These are the fixes, but a real solution is ultimately political. We must accept that Big Finance and runaway inequality are incompatible with either a functioning democracy or a sustainable economy. Britain either shrinks the City of London, or the City of London will swallow Britain.

Lots of talk about this, with widely differing views.

• Four False Viral Claims Spread by Journalists on Twitter in One Week (GG)

There is ample talk, particularly of late, about the threats posed by social media to democracy and political discourse. Yet one of the primary ways that democracy is degraded by platforms such as Facebook and Twitter is, for obvious reasons, typically ignored in such discussions: the way they are used by American journalists to endorse factually false claims that quickly spread and become viral, entrenched into narratives, and thus can never be adequately corrected. The design of Twitter, where many political journalists spend their time, is in large part responsible for this damage. Its space constraints mean that tweeted headlines or tiny summaries of reporting are often assumed to be true with no critical analysis of their accuracy, and are easily spread.

Claims from journalists that people want to believe are shared like wildfire, while less popular, subsequent corrections or nuanced debunking are easily ignored. Whatever one’s views are on the actual impact of Twitter Russian bots, surely the propensity of journalistic falsehoods to spread far and wide is at least as significant. Just in the last week alone, there have been four major factually false claims that have gone viral because journalists on Twitter endorsed and spread them: three about the controversy involving Donna Brazile and the DNC, and one about documents and emails published by WikiLeaks during the 2016 campaign. It’s well worth examining them, both to document what the actual truth is as well as to understand how often and easily this online journalistic misleading occurs:

Viral Falsehood #1: The Clinton/DNC agreement cited by Brazile only applied to the General Election, not the primary.

Viral Falsehood #2: Sanders signed the same agreement with the DNC that Clinton did.

Viral Falsehood #3: Brazile stupidly thought she could unilaterally remove Clinton as the nominee.

Viral Falsehood #4: Evidence has emerged proving that the content of WikiLeaks documents and emails was doctored.

Deep deep deeper and down.

• Growing Number of Greeks Unable To Pay Taxes (K.)

Almost half a million taxpayers were added to the long list of debtors to the state in the month of September, according to the latest data from the Independent Authority for Public Revenue. The authority’s figures are a reflection of citizens’ increasing inability to pay their taxes, with 410,000 not paying their second income tax installment and the ENFIA property tax in September. More specifically, 4,267,408 taxpayers owed money to the Greek state in September, up from 3,857,086 in August. Moreover, by the end of September, the amount of unpaid taxes since the beginning of the year came to 9.25 billion euros. What concerns the government is whether the 410,000 that couldn’t pay their taxes in September will join the Finance Ministry’s 12-month installment program, as the hole in tax revenues will only grow if they don’t.

What good will kicking people out do?

• Greek Notaries Refuse To Carry Out Foreclosures (K.)

The outlook for property foreclosures in Greece is unclear after notaries announced a boycott on auctions until the end of the year, citing abuse by protesters, though foreign creditors expect the first online auctions to take place this month. According to sources, Greece’s lenders have suggested that the responsibility for foreclosures be shifted from notaries to Greek courts or possibly to Justice Ministry officials. The latter model, which has been tried and tested in Germany and Spain, was first mooted last month during a visit to Athens by bailout monitors. The auditors made it clear that the resumption of foreclosures on the homes of overindebted Greeks, which have dragged during the crisis years due to strikes by lawyers and notaries and more recently due to anti-austerity protesters, is a prerequisite for the successful conclusion of Greece’s current bailout review.

In comments at Monday’s summit of eurozone finance ministers in Brussels, ECB President Mario Draghi indicated that the resumption of property auctions would help banks by reducing the large proportion of bad loans that they hold. Commenting, Greek Finance Ministry sources said Athens was committed to “not taking our foot off the gas in the implementation of reforms for the review.” One of the many conditions of the latest review is that Greece launch electronic foreclosures. The first is supposed to take place on November 29. However, it is unclear how that procedure will be carried out in view of the protracted walkout by Greek notaries.

In a joint statement on Monday, the associations representing notaries in Athens, Piraeus and the islands of the Aegean and the Dodecanese said they will not be conducting any property auctions through December 31. The decision was reached during a meeting on Saturday with a vote of 134 in favor and 132 against. The associations said the decision was aimed at initiating talks with the Justice Ministry in order to provide protection to notaries who have come under attack – often violent – by anti-establishment groups and protesters opposed to foreclosures. Notaries also want the Justice Ministry to be made responsible for electronic auctions, as well as to address any disputes that may arise from them.

I don’t share his optimism.

• Hawking: AI Could Be ‘Worst Event In The History Of Our Civilization’ (CNBC)

The emergence of artificial intelligence (AI) could be the “worst event in the history of our civilization” unless society finds a way to control its development, high-profile physicist Stephen Hawking said Monday. He made the comments during a talk at the Web Summit technology conference in Lisbon, Portugal, in which he said, “computers can, in theory, emulate human intelligence, and exceed it.” Hawking talked up the potential of AI to help undo damage done to the natural world, or eradicate poverty and disease, with every aspect of society being “transformed.” But he admitted the future was uncertain. “Success in creating effective AI, could be the biggest event in the history of our civilization. Or the worst. We just don’t know. So we cannot know if we will be infinitely helped by AI, or ignored by it and side-lined, or conceivably destroyed by it,” Hawking said during the speech.

“Unless we learn how to prepare for, and avoid, the potential risks, AI could be the worst event in the history of our civilization. It brings dangers, like powerful autonomous weapons, or new ways for the few to oppress the many. It could bring great disruption to our economy.” Hawking explained that to avoid this potential reality, creators of AI need to “employ best practice and effective management.” The scientist highlighted some of the legislative work being carried out in Europe, particularly proposals put forward by lawmakers earlier this year to establish new rules around AI and robotics. Members of the European Parliament said European Union-wide rules were needed on the matter. Such developments are giving Hawking hope.

“I am an optimist and I believe that we can create AI for the good of the world. That it can work in harmony with us. We simply need to be aware of the dangers, identify them, employ the best possible practice and management, and prepare for its consequences well in advance,” Hawking said.

We want one!

• The Charter of the Forest (Standing)

Eight hundred years ago this month, after the death of a detested king and the defeat of a French invasion in the Battle of Lincoln, one of the foundation stones of the British constitution was laid down. It was the Charter of the Forest, sealed in St Paul’s on November 6, 1217, alongside a shortened Charter of Liberties from 2 years earlier (which became the Magna Carta). The Charter of the Forest was the first environmental charter forced on any government. It was the first to assert the rights of the property-less, of the commoners, and of the commons. It also made a modest advance for feminism, as it coincided with recognition of the rights of widows to have access to means of subsistence and to refuse to be remarried. The Charter has the distinction of having been on the statute books for longer than any other piece of legislation.

It was repealed 754 years later, in 1971, by a Tory government. In 2015, while spending lavishly on celebrating the Magna Carta anniversary, the government was asked in a written question in the House of Lords whether it would be celebrating the Charter this year. A Minister of Justice, Lord Faulks, airily dismissed the idea, stating that it was unimportant, without international significance. Yet earlier this year the American Bar Association suggested the Charter of the Forest had been a foundation of the American Constitution and that it was more important now than ever before. They were right. It is scarcely surprising that the political Right want to ignore the Charter. It is about the economic rights of the property-less, limiting private property rights and rolling back the enclosure of land, returning vast expanses to the commons.

It was remarkably subversive Sadly, whereas every school child is taught about the Magna Carta, few hear of the Charter. Yet for hundreds of years the Charter led the Magna Carta. It had to be read out in every church in England four times a year. It inspired struggles against enclosure and the plunder of the commons by the monarchy, aristocracy and emerging capitalist class, famously influencing the Diggers and Levellers in the 17th century, and protests against enclosure in the 18th and 19th. At the heart of the Charter, which is hard to understand unless words that have faded from use are interpreted, is the concept of the commons and the need to protect them and to compensate commoners for their loss. It is scarcely surprising that a government that is privatising and commercialising the remaining commons should wish to ignore it.

In 1066, William the Conqueror not only distributed parts of the commons to his bandits but also turned large tracts of them into ‘royal forests’ – ie, his own hunting grounds. By the time of the Domesday Book in 1086, there were 25 such forests. William’s successors expanded and turned them into revenue-raising zones to help pay for their wars. By 1217, there were 143 royal forests. The Charter achieved a reversal, and forced the monarchy to recognise the right of free men and women to pursue their livelihoods in forests. The notion of forest was much broader than it is today, and included villages and areas with few trees, such as Dartmoor and Exmoor. The forest was where commoners lived and worked collaboratively.

Debt Rattle October 11 2017

Oct 112017

October 11, 2017 Posted by Raúl Ilargi Meijer at 9:05 am Finance Tagged with: Catalonia, debt, epic, EU, Fukushima, Gavras, homeless, Kobe, self harm, Thaler 10 Responses »

Georgia O’Keeffe New York night 1929

• Stock Record Ride ‘Has Reached Epic Proportions’ – Morgan Stanley (MW)

• Janet Yellen Has Finally Come To Her Senses – Somewhat (Crudele)

• Nobel Economist Thaler Says He’s Nervous About Stock Market (BBG)

• Catalans Call Time Out on Independence Bid, Seek Spain Talks (BBG)

• China Debt-for-Equity Swaps Turn Out More Like Debt-for-Debt (BBG)

• Chinese Investors Keep Pouring Money Into Australian Housing (BBG)

• Kobe Steel Shares Plunge As Data Fabrication Concerns Deepen (R.)

• 51 Eurozone Banks Vulnerable To Rate Shocks – ECB (R.)

• Russian Central Bank To Ban Websites Offering Crypto-Currencies (R.)

• Fukushima Court Rules Tepco, Government Liable Over 2011 Disaster (R.)

• 10% of New York City Public School Students Were Homeless Last Year (NYT)

• The European Union Is Doomed to Fail (FEE)

• How Labour Could Lead The Global Economy Out Of The 20th Century (G.)

• I Will Make A Film Based On Adults in the Room (Costa Gavras)

• Self-Harm, Suicide Attempts Rise In Greek Refugee Camps (Reuters)

You don’t say.

• Stock Record Ride ‘Has Reached Epic Proportions’ – Morgan Stanley (MW)

Wall Street isn’t just in a bull market, it’s in an “epic” one. That is according to Morgan Stanley, which on Tuesday wrote that the equity market rally “has reached epic proportions.” “We say this not as hyperbole, but based on a quantitative perspective,” the investment bank explained. “Dispersions in valuations and growth rates are among the lowest in the last 40 years; stocks are at their most idiosyncratic since 2001; and equity hedge fund beta is at its highest since March 2008.” Simply from the perspective of price moves, the “epicness” of recent trading activity should come as no surprise to investors. The Dow DJIA, S&P 500 SPX, Nasdaq COMP, and Russell 2000 RUT have all hit repeated records this year alone, notching dozens of all-time highs. Those gains have been widespread and “perpetual,” to use Morgan Stanley’s description.

Only two of the 11 primary S&P 500 sectors are in negative territory for the year, and for broader indexes, even mild pullbacks of 3% have basically been nonexistent for months. Volatility is near record lows. Beta refers to a measure of an assets tendency to fluctuate compared against a benchmark like the S&P 500. [..] “While investors have at times appeared reluctant to embrace the recent rally, there is evidence from last month that risk appetites are increasing,” Morgan Stanley wrote. The investment bank noted that cyclical sectors, which are more closely correlated to the pace of economic growth, have been outperforming defensive ones, just as small-capitalization stocks have outperforming larger companies. “Momentum is now strongly correlated with high beta globally, and the presence of this cohort of investors could produce continued risk-seeking behavior,” wrote the team of analysts, led by Brian Hayes, an equity strategist.

“The big question is whether Yellen was just misreading the data or whether the data she was reading were wrong.”

• Janet Yellen Has Finally Come To Her Senses – Somewhat (Crudele)

I’ve been telling you for years that the employment data produced by the US government were misleading people into thinking the economy was performing better than it really was. Now Federal Reserve Chair Janet Yellen — finally! — agrees. Yellen, speaking before the National Association of Business Economics on Sept. 26, said, “My colleagues and I may have misjudged the strength of the labor market, the degree to which longer-run inflation expectations are consistent with our inflation objective or even the fundamental forces driving inflation.” That’s what she said. Internet news sites picked up that statement, but none of the major newspapers did. And the story behind Yellen’s admission and its importance would be way over the heads of TV news anchors — so they ignored it as well.

Yet Yellen’s statement is important as heck. It means that the Fed has been screwing up in thinking that the US economy was, as Yellen has often said, near full employment. But here’s the kicker — Yellen has been overestimating the strength of the job market and underestimating the amount of inflation in the economy. The big question is whether Yellen was just misreading the data or whether the data she was reading were wrong. There will need to be years of investigation to determine that, but I’ll give you a clue now. Anyone who lives in the real world knows that the unemployment rate is far higher than the 4.2% that the Labor Department reports. And that the job growth each year — as I’ve been harping on — is mostly driven by guesstimates and adjustments made by government statisticians who apparently don’t live in the real world.

And, of course, the economy has been creating crappy-paying, benefit-lacking jobs that don’t come close to replacing the higher-quality employment that went bye-bye after the last recession. Last Friday, Labor said the jobless rate dipped in September to 4.2% from 4.4% in August — and its number crunchers also reported that 33,000 jobs were lost last month. It blamed the hurricanes. The experts were expecting the US economy to have added 100,000 new jobs despite the storms. Labor also announced that it revised August’s figures lower — from growth of 189,000 jobs to just 138,000. So instead of being reasonably good, August was blah, with nary a hurricane to blame.

An award for not understanding?! If you ask me, the very fact that someone gets an award for ‘finding out’ that human behavior affects economies, says all you need to know about economics.

• Nobel Economist Thaler Says He’s Nervous About Stock Market (BBG)

A buoyant and complacent stock market is worrying Richard H. Thaler, the University of Chicago professor who this week won the Nobel Prize in economics. “We seem to be living in the riskiest moment of our lives, and yet the stock market seems to be napping,” Thaler said, speaking by phone on Bloomberg TV. “I admit to not understanding it.” The S&P 500 index has been reaching repeated records since President Donald Trump’s election last November amid steady growth in the U.S. economy and labor market, as well as expectations for lower taxes, though policy action in Washington has been limited. Thaler, who has made a career of studying irrational and temptation-driven actions among economic actors and won the Nobel for such contributions to behavioral economics, expressed misgivings about the low volatility and continued optimism among investors.

“I don’t know about you, but I’m nervous, and it seems like when investors are nervous, they’re prone to being spooked,” Thaler said, “Nothing seems to spook the market” and if the gains are based on tax-reform expectations, “surely investors should have lost confidence that that was going to happen.” The economist said that he didn’t know “where anyone would get confidence” that tax reform is going to happen. “The Republican leadership does not seem to be interested in anything remotely bipartisan, and they need unanimity within their caucus, which they don’t have,” Thaler said. “And the president’s strategy of systematically insulting the votes he needs doesn’t seem to be optimizing anything I can think of, but maybe he’s a deeper thinker than me.”

Schrödinger’s State. On Wikipedia, someone last night put Catalonia at no. 1 on the List of Shortest-Lived States. At 8 seconds, which is how long the applause lasted when Puigdemont said he had the mandate, only to say right after that he would hold off on executing the mandate. Wikipedia took it down.

• Catalans Call Time Out on Independence Bid, Seek Spain Talks (BBG)

Catalan President Carles Puigdemont said that he’ll seek talks with the government in Madrid over the future of his region in Spain, rowing back from an immediate declaration of independence that threatened to turn a constitutional crisis into an economic one. Addressing the regional parliament in Barcelona on Tuesday evening after days of tension in Catalonia, Puigdemont said the result of an Oct. 1 referendum had given him the mandate to pursue independence, but he would hold off for “weeks” for dialogue on the way forward with Prime Minister Mariano Rajoy’s administration. Rajoy convened an extraordinary meeting of his cabinet in Madrid on Wednesday at 9 a.m. to discuss his next move, and is due to address the Spanish Parliament on the crisis in Catalonia later in the day.

“Today Mr. Puigdemont has plunged Catalonia into the highest level of uncertainty,” Spain’s Deputy Prime Minister Soraya Saenz de Santamaria told reporters in Madrid late on Tuesday. “Neither Mr. Puigdemont nor anyone else can draw conclusions from a law that doesn’t exist, from a referendum that hasn’t taken place and from the wishes of the Catalan people which it’s trying to take over.” Pressure has piled on Puigdemont as the Spanish government and Catalan business leaders demand that he desist from pitching the region further down a path to independence that they warn would wreck the economy and tear apart Spain’s social fabric. Rajoy has consistently ruled out talks until the Catalans drop the threat of a declaration of independence that is illegal under Spanish law.

“Today I assume the mandate for Catalonia to become an independent state in the form of a republic,” Puigdemont said to cheers from the packed assembly, with Catalan police deployed around the parliament perimeter. “We propose the suspension of the effects of the declaration of independence for a few weeks, to open a period of dialogue.”

When equity is debt.

• China Debt-for-Equity Swaps Turn Out More Like Debt-for-Debt (BBG)

A key Chinese initiative to rein in the world’s largest corporate-debt load has been a program swapping some loans into equity stakes. As the initiative gets going, however, it’s becoming clear the debt isn’t really going away. In a late-summer notice, central government officials said that new bonds should be used to finance the swaps, effectively moving the debt off the balance sheets of the original lenders onto those buying the new debt. The first such deal came last month, according to China Lianhe Credit Rating Co., a domestic rating firm. Shaanxi Coal and Chemical Industry Group Co., a troubled old-line industrial company, was targeted for a debt-for-equity swap. Then the Shaanxi provincial government in northwest China set up an asset-management company to raise new debt to pay off the existing lending that was designated to be swapped for an equity stake.

One criticism of the debt-for-equity initiative, which was launched a year ago, is that it keeps afloat struggling enterprises, leaving excess capacity intact and pulling down productivity. The Shaanxi example shows a further weakness: while the company won’t need to service debt any more, the new asset-management unit will – without any new source of revenue having been generated. “If the funding comes from debt, it’s really not solving the issue here because the capital is not permanent capital,” Christopher Lee, managing director of corporate ratings at S&P Global Ratings in Hong Kong. “In fact, you are adding more debt just to refinance the debt that was going to be swapped.”

Australia lives off its bubble. It’s all that’s left.

• Chinese Investors Keep Pouring Money Into Australian Housing (BBG)

Property-hungry Chinese investors have shrugged off the impact of tighter capital controls and continue to pour money into Australian housing. Foreign buyers are acquiring about a quarter of new housing supply in New South Wales, and China accounts for about 90% of that demand, according to Credit Suisse analysis of tax office data. Foreigners are buying 17% of new housing in Victoria, and 8% in Queensland, Credit Suisse said. While local property agents say higher state taxes on foreigners are deterring buyers, Credit Suisse isn’t so sure they will have a big impact on prices.

They point to even-higher taxes in other global cities, the relative cheapness of Australian property compared to Chinese cities, and the growing stock of wealth in China. “Local incomes are becoming less relevant in determining the outlook for house prices and regional wealth is becoming more relevant,’’ Credit Suisse analysts Hasan Tevfik and Peter Liu said in the report. “We see no evidence of a slowdown in foreign demand because of the stronger capital controls introduced by Chinese authorities.” That’s not good news for locals already struggling to break into the booming housing market.

WHy would anyone still want to buy a car or plane made with Kobe metals? Imagine the lawsuits if accidents happen.

• Kobe Steel Shares Plunge As Data Fabrication Concerns Deepen (R.)

Kobe Steel shares tumbled a further 16% on Wednesday after it admitted it may have fabricated data on iron powder products and media reported the possible sale of its real estate business. The latest disclosure comes after Japan’s No.3 steelmaker said on the weekend it had falsified data to show that its aluminum and copper products had met customer specifications, and suggests the problems could be widespread. Japanese manufacturers were thrown into turmoil by the revelation, with implications for materials used in cars, aircraft and possibly a space rocket and defense equipment.

Shares in Kobe Steel were down 15.73% at 900 yen as of 0114 GMT on Wednesday, underperforming the broader market which was steady. They fell 22% the previous day. A Kobe Steel spokesman confirmed a report on Wednesday in the Yomiuri newspaper saying the firm may have fabricated data on iron powder products used in components such as automotive gears. He said the company was investigating the issue. The Nikkei business daily meanwhile reported that Kobe Steel intended to put its real estate business on the block in an effort to shore up already shaky finances now threatened by the data falsification scandal.

And that’s after all those trillions in support.

• 51 Eurozone Banks Vulnerable To Rate Shocks – ECB (R.)

Fifty-one large euro zone banks are leaving themselves exposed to a sudden change in interest rates and may need to aside more capital against that risk, the European Central Bank said on Monday. The ECB is preparing to start dialing back its monetary stimulus after years of ultra-low interest rates and massive bond purchases, paving the ground for rate hikes further down the line. After simulating scenarios ranging from a sudden monetary tightening to the kind of lending freeze that followed Lehman Brothers’ collapse, the ECB found that most of the 111 euro zone banks it tested are well prepared for interest rates shocks. But it cautioned it needed “intense discussions” with 51 of them after finding they may be making themselves vulnerable via large bets on derivative instruments and overly aggressive models for calculating risk.

A hike in interest rates could mean the banks suddenly need more capital. “What we need to do is have intense discussions and check with the banks if they’re aware of the… risk and if they have enough capital if things go wrong,” Korbinian Ibel, a senior supervisor at the ECB, said. Results of the test, which started in February, are incorporated into the ECB’s guidance on how much capital each lender on its watch should hold. Ibel said the 51 banks may, in principle, see their capital demands rise by up to 25 basis points, although any decision would depend on the individual circumstances of each firm. Similarly, the remaining 60 banks could see their guidance reduced by the same amount.

Crypto makes it too easy for money to leave a country.

• Russian Central Bank To Ban Websites Offering Crypto-Currencies (R.)

Russia will block access to websites of exchanges that offer crypto-currencies such as Bitcoin, Russian Central Bank First Deputy Governor Sergei Shvetsov said on Tuesday. He called them “dubious”. Russian financial authorities initially treated any sort of money issued by non-state approved institutions as illegal, saying they could be used to launder money. Later the authorities accepted the globally booming market of crypto-currencies but want to either control the turnover or to limit access to the market “We cannot stand apart. We cannot give direct and easy access to such dubious instruments for retail (investors),” Shvetsov said, referring to households.

Speaking at a conference on financial market derivatives, Shvetsov said the central bank sees rising interest in crypto-currencies because of high returns from buying into such instruments. He warned, however, that crypto-currencies gradually transform into high-yielding assets from being a mean of payment. “We think that for our citizens, for businesses the usage of such crypto-currencies as an investment object carries unreasonably high risks,” he said. Russian authorities said earlier this year they would like to regulate the use of crypto-currencies by Russian citizens and companies.

$4 million? That’s the damage?

• Fukushima Court Rules Tepco, Government Liable Over 2011 Disaster (R.)

A district court in Fukushima prefecture on Tuesday ruled that Tokyo Electric Power and the Japanese government were liable for damages totaling about 500 million yen ($4.44 million) in the largest class action lawsuit brought over the 2011 nuclear disaster, Kyodo news agency said. A group of about 3,800 people, mostly in Fukushima prefecture, filed the class action suit, marking the biggest number of plaintiffs out of about 30 similar class action lawsuits filed across the nation. This is the second court ruling that fixed the government’s responsibility after a Maebashi district court decision in March.

All the three district court decisions so far have ordered Tepco to pay damages. Only the Chiba court decision last month did not find the government liable for compensation. The plaintiffs in Fukushima case have called on defendants for reinstating the levels of radioactivity at their homes before the disaster, but the court rejected the request, Kyodo said. Tepco has long been criticized for ignoring the threat posed by natural disasters to the Fukushima plant and the company and the government were lambasted for their handling of the crisis.

Incredible. You’d expect to see this in Bombay perhaps, or Lagos.

• 10% of New York City Public School Students Were Homeless Last Year (NYT)

The number of homeless students in the New York City public school system rose again last year, according to state data released on Tuesday. The increase pushed the city over a sober milestone: One in every 10 public school students was homeless at some point during the 2016-17 school year. More than 111,500 students in New York City schools were homeless during the last academic year, a 6% increase over the year before and enough people to populate a small city. Of the overall figure, 104,000 students attended regular district public schools, while the rest were in charter schools. Statewide, 148,000 students were homeless, or about 5% of the state’s public school population.

The data was released by the New York State Technical and Education Assistance Center for Homeless Students, a project of Advocates for Children of New York funded by the state Education Department. The plight of homeless students is part of the entrenched and growing problem of homelessness confronting New York City and Mayor Bill de Blasio, who is pushing a controversial plan to expand the city’s shelter system. After rising steadily for about five years, the number of homeless students reported to the state shot up in the 2015-16 school year, reaching nearly 100,000 children, and in the last school year the numbers crossed that threshold. The count this year is the highest since the state began keeping records.

Not great title for interesting article.

• The European Union Is Doomed to Fail (FEE)

Have you ever heard of Deutsch Jahrndorf? No? I don’t blame you. The tiny Austrian village, which is situated four miles from the Danube, is utterly unremarkable, except for the fact that it sits on the border of three countries. To the east is Slovakia. To the south lies Hungary. As such, within shouting distance of one another, live three peoples speaking completely unintelligible languages. Austria belongs to the West Germanic language group, Hungary to Finno-Ugric and Slovakia to West Slavic. I thought about the exquisitely rich tapestry of European languages, cultures, customs, and nationalities as I watched the sad spectacle of Spanish riot police and Catalan separatists confronting one another on the streets of Barcelona. How on earth can the European Union unite that which history forced asunder?

The European Union, French President Emmanuel Macron has recently declared to almost universal acclaim, needs more unity, including the creation of “a eurozone budget managed by a eurozone parliament and a eurozone finance minister”. The need for the centralization of power in Brussels is, apparently, the lesson that the EU establishment has learned from the outcome of the British referendum on EU membership. Meanwhile, in Catalonia, millions of people have set their sights on independence from Spain. Foremost among their complaints is that the Catalan budget is influenced by Madrid. Independence, the Catalans feel, will rectify a grave injustice occasioned by the French capture of Barcelona in 1714. The conqueror, Duke of Anjou, became the first Bourbon king of Spain under the name of Philip V. His descendant, Philip VI, is on the throne today. In Europe, ancient lineages last as long as ancient resentments.

Therein lies the conundrum of European unification. On the one hand, people throughout much of Europe desire greater autonomy. Madrid has the vexing problem of the Basque Country to worry about as well as Catalonia. In Italy, Padania and South Tyrol in the North don’t feel like they have very much in common with the Mezzogiorno in the South. Corsica does not want to be French and Britain has only recently revisited a territorial arrangement that dates back to 1707. On the other hand, every separatist movement in Europe declares its support for the project of European unification. But, how likely is it that people annoyed by Madrid, Rome, Paris, and London will be happy to have their affairs decided upon in Brussels? Will the Catalans, resentful of subsidizing farmers in Andalusia, quietly have no problem with subsidizing Polish peasants in Lower Silesia?

Monbiot has some nice ideas, but underestimates the degree to which our societies profit from carbon. And why bring in Labour?

• How Labour Could Lead The Global Economy Out Of The 20th Century (G.)

We are still living in the long 20th century. We are stuck with its redundant technologies: the internal combustion engine, thermal power plants, factory farms. We are stuck with its redundant politics: unfair electoral systems, their capture by funders and lobbyists, the failure to temper representation with real participation. And we are stuck with its redundant economics: neoliberalism, and the Keynesianism still proposed by its opponents. While the latter system worked very well for 30 years or more, it is hard to see how it can take us through this century, not least because the growth it seeks to sustain smacks headlong into the environmental crisis. Sustained economic growth on a planet that is not growing means crashing through environmental limits: this is what we are witnessing, worldwide, today.

A recent paper in Nature puts our current chances of keeping global heating to less than 1.5C at just 1%, and less than 2C at only 5%. Why? Because while the carbon intensity of economic activity is expected to decline by 1.9% a year, global per capita GDP is expected to grow by 1.8%. Almost all investment in renewables and efficiency is cancelled out. The index that was supposed to measure our prosperity, instead measures our progress towards ruin. But the great rupture that began in 2008 offers a chance to change all this. The challenge now is to ensure that the new political movements threatening established power in Britain and elsewhere create the space not for old ideas (such as 20th-century Keynesianism) but for a new politics, built on new economic and social foundations.

There may be a case for one last hurrah for the old model: a technological shift that resembles the second world war’s military Keynesianism. In 1941 the US turned the entire civilian economy around on a dime: within months, car manufacturers were producing planes, tanks and ammunition. A determined government could do something similar in response to climate breakdown: a sudden transformation, replacing our fossil economy. But having effected such a conversion, it should, I believe, then begin the switch to a different economic model.

Featuring Dwayne Johnson? All we need then is a ferret to play Dijsselbloem.

• I Will Make A Film Based On Adults in the Room (Costa Gavras)

When the crisis began, the tragedy that the Greek people are still living through, I began to gather material and information in an attempt to make sense of the reasons and the people – published, filmic and oral. However, what I was missing were the goings on behind the closed doors, where the representatives of the European Union and the Greek people met. On 16th July 2015, just after his resignation, I sent a text message to Yanis Varoufakis, whom I did not know personally. In that message I wrote: “Reading your interview in the New Statesman, I believe I found what I have been looking for a long time: the subject for a film, a piece of fiction, about a Europe governed by a group of cynical people disconnected from human, political and cultural concerns – obsessed with numbers and them alone.”

Soon, the arrangements were made and Michele, my wife, and I visited Yanis and Danae in Greece a few weeks later. Meanwhile I read two of his books, The Global Minotaur (London: Zed Books, 2011,2015) and the manuscript of a book he was completing at that time entitled And The Weak Suffer What They Must? (London: The Bodley Head, 2016). I was impressed by the quality and originality of their content, as well as the prose. When we met we had long conversations, in the context of which he let me know that he was about to begin writing his own account of his tenure as Greece’s finance minister, a tale of being an outsider in politics, of the negotiations in the Eurogroup – that illegitimate but ultra powerful EU body. I asked to read the manuscript. He agreed and began sending it to me chapter by chapter, as the book was being written.

Immediately I was convinced by the text’s seriousness and the accuracy of the description of the behaviour of each of the tragedy’s protagonists. Reading it saddened me, and I found myself often angered, indeed enraged, by the violence and the indifference of Eurogroup members, especially the German side, to the drama and unsustainable situation in which the people of Greece lived, and live. I decided to make a film out of this tragedy. Yanis Varoufakis gave me the rights to his book and absolute freedom to adapt it.

Words fail.

• Self-Harm, Suicide Attempts Rise In Greek Refugee Camps (Reuters)

A mental health emergency is unfolding in migrant camps on Greece’s islands, fueled by poor living conditions, neglect and violence, Doctors Without Borders (MSF) said Tuesday. Medical staff have seen a sharp increase in people trying to get help after attempting suicide, harming themselves or suffering psychotic episodes, the humanitarian organization said in a report. More than 13,000 migrants and refugees, mostly Syrians and Iraqis fleeing years of war, are living in five camps on Greek islands close to Turkey, government figures show. Four of those camps are holding two to three times as many people as they were designed for. “Every day our teams treat patients who tell us that they would prefer to have died in their country than be trapped here,” said Jayne Grimes, manager of MSF’s mental health activities on Samos.

The organization said six or seven new patients had visited its clinic on the nearby island of Lesvos each week over the summer following suicide attempts, self-harm or psychotic episodes, 50% more than the previous three months. Violence which many experienced on the journey or in Greece was one factor aggravating mental distress, MSF said. “I know I need to find hope, but when the night falls and I see where I am, I feel like I’m going crazy,” it quoted a Syrian man as saying. The 25-year-old said he was haunted by the images of people dying of hunger in front of him in the long-besieged town of Madaya. “I still remember the taste of the leaves and the smell of death,” he said. On Samos, more than 3,000 people are crammed into facilities designed to hold 700, and about 400 live in the woods. In one Lesvos camp, about 1,500 people are in makeshift shelters or tents without flooring or heating, the UN refugee agency says.

Debt Rattle July 22 2017

Jul 222017

July 22, 2017 Posted by Raúl Ilargi Meijer at 8:34 am Finance Tagged with: Brexit, collusion, EPA, Goldman, greed, homeless, IMF, media, refugees, shorts, Trump, tundra Comments Off

Jackson Pollock Pasiphae 1943

• House of Cards (Paul Craig Roberts)

• Deeply Flawed Western Economic Models Undermine Worst Recovery In History (CNBC)

• Short Sellers Give Up as Stocks Run to New Records (WSJ)

• Greed Is No Longer Good – Bond Boom Comes To An End (G.)

• The Media’s War On Trump Is Destined To Fail. Why Can’t It See That? (Frank)

• Goldman Sachs Boss Urges Long Brexit Transition. Is Anyone Listening? (Ind.)

• US To Drop Criminal Charges In ‘London Whale’ Case (R.)

• A Third Of Greeks At Risk Of Poverty As Athens Wants Return To Bond Market

• No Surprises From IMF Report On Greek Debt (K.)

• The Kingdom Whose Name We Dare Not Speak At All (Robert Fisk)

• EPA Will Allow Fracking Waste Dumping in the Gulf of Mexico (TO)

• German Carmakers Colluded On Diesel Emissions For Decades (Qz)

• Number Of Homeless Children In Temporary Accommodation in UK Rises 37% (G.)

• Sicilian Mayor Moves To Block Far-Right Plan To Disrupt Migrant Rescues (G.)

• All Hell Breaks Loose As The Tundra Thaws (G.)

PCR short and to the point. And don’t you ever forget it.

• House of Cards (Paul Craig Roberts)

Despite unrealistic plots and weak characterization (except for Francis Urquhart), Michael Dobbs’ books, House of Cards, Play the King, and The Final Cut were best sellers that provided the basis for a long-running TV series. I haven’t seen the films, but I have read the books. I conclude that plot and characters are mere props for the didactic lesson of the novels: Democratic politics is concerned only with power and sex. Nothing else is in the picture. There is no such thing as a politician concerned with the people’s well being or capable of marital fidelity.

The media are as bad as the politicians. Female journalists use their bodies for access to power and become accomplices in political intrigues. Idealism is merely another vehicle used in the competition for power. I suspect the novels and TV series were popular because they expose politics for what it is. Politics serves only personal ambition. This is a lesson that liberals and progressives, who present government as a public-spirited alternative to private greed, need to learn. In showing politics in service to personal ambition, Dobbs is a master of truth despite his shortcoming as a novelist.

Yeah, the future of the world depends on the definition of “tight”. Do you buy it?

• Deeply Flawed Western Economic Models Undermine Worst Recovery In History (CNBC)

The Western economic system is deeply flawed with countries such as the U.S. and Britain contributing to the lowest quality economic recovery the world has ever seen, Chris Watling, chief executive of Longview Economics, told CNBC on Friday. “The economic model is deeply flawed and the system in the west is deeply flawed, particularly in the English speaking part of the world and it needs to change,” Watling said. “I think this is undoubtedly the lowest quality economic recovery we have seen globally… full stop,” he added. The Longview Economics CEO explained that a debt-laden global economy could be vulnerable to looming interest rate hikes. The Federal Reserve is on a course to gradually increase interest rates, with financial markets expecting it to approve one more rate hike this year.

In addition, other central banks are pulling the reins on bond-buying and other liquidity programs aimed at injecting cash into their respective economies. “This is a world that is more indebted than it was before the global financial crisis in 2007, there’s no productivity growth, asset prices are very elevated, a lot of debt that corporates have built up has gone to share buy backs (and) the number of ‘zombie companies’ has doubled since 2007,” Longview Economics’ CEO explained. In the U.S. alone, households have $14.9 trillion in debt while businesses owe $13.7 trillion, according to the Federal Reserve.

Bond guru Bill Gross also warned that the course of global central banks toward tightening policy could be detrimental for the economic recovery. He argued that raising interest rates would increase the cost of short-term debt that corporations and individuals currently hold. When asked whether an imperfect system constituted a clear and present danger for the financial markets, Watling replied, “Whatever you want to call it doesn’t really matter but these sorts of things always unwind when you tighten money. The problem is judging what is tight? And that is sort of the million dollar question.”

What are shorts worth in a world without price discovery? Shorts are there to chase off zombies. But central banks keep them alive.

• Short Sellers Give Up as Stocks Run to New Records (WSJ)

Times are tough for skeptics of the bull market. Flummoxed by the endurance of a 2017 rally that produced its 27th S&P 500 record this week, investors are backing off bets that major indexes are headed downward. Bets against the SPDR S&P 500 exchange-traded fund, the largest ETF tracking the broad index, fell to $38.9 billion last week, the lowest level of short interest since May 2013, and remained near those levels this week, according to financial-analytics firm S3 Partners. Short sellers borrow shares and sell them, expecting to repurchase them at lower prices and collect the difference as profit. Bearish investors say they are scaling back on these bets not because their view of the market has fundamentally changed, but because it is difficult to stick to a money-losing strategy when it seems stocks can only go up.

They believe the market moves are at odds with an economy that remains lukewarm as it enters its ninth year of growth, stock valuations that are historically high and a delay of business-friendly policies in Washington like tax cuts and infrastructure spending. “There seems to be an overall view that people are invincible, that things will always go up, that there are no risks and no matter what goes on, no matter what foolishness is in play, people don’t care,” said Marc Cohodes, whose hedge fund focused on shorting stocks closed in 2008. Mr. Cohodes is now a chicken farmer based in California who is looking to get into goat herding in Canada. He shorts a handful of individual stocks personally, but isn’t focused on the broader market.

[..] The practice of shorting companies is also going by the wayside as stocks continue to notch records. Short-biased hedge funds had $4.3 billion in assets at the end of March, down from $7.1 billion at the end of 2013, according to HFR Inc. The difficulty for stock-market bears stems from a Goldilocks-like market environment, in which the economy is expanding fast enough to support corporate earnings, but slow enough for the Federal Reserve to keep rates relatively low. Years of low rates and easy-money policies have boosted stocks, defying forecasts for a steep, prolonged downturn. “The shorts have been frustrated now for quite a while,” said Scott Minerd, global chief investment officer at Guggenheim Partners, which has $260 billion in assets under management. The scenarios that might lead to a payout for market bears—an economic recession or a sharp rise in interest rates—don’t seem imminent, either, Mr. Minerd added.

Sure, I believe you.

• Greed Is No Longer Good – Bond Boom Comes To An End (G.)

City bond traders have put the champagne on ice. They had a good run. For some it lasted almost a year. But it’s over now and the “new normal” of low trading volumes and weak profits is reasserting itself. On Wall Street, Goldman Sachs took the biggest hit. This week the firm reported profits had plunged 40% in the second quarter on its bond, currency and commodities trading desks. All the other big names in the US investment banking world saw bond trading profits dive in the three months to the end of June, save for age-old Goldman rival Morgan Stanley, which restricted the loss to 4%. Lloyd Blankfein, the Goldman boss who rose through the ranks of bond traders to the top job, was unlikely to be sanguine about the turn of events amid concerns that his bank suffered more than most for relying on out-of-favour hedge funds as clients.

Back in October 2016 the story was very different. Barclays was on a high after what it said was a summer bonanza for its bond traders, pushing quarterly profits to a two-year high. Likewise Goldman, Deutsche Bank, Bank of America and JPMorgan were raking in the trades. Much of the reason for their optimism was a change of stance at the Federal Reserve. The US central bank signalled in late 2015 that the post-crash era of low inflation and low interest rates was coming to an end. To combat the threat of inflation, it would start to raise rates consistently through 2016 and 2017. This move put two trends in motion that spelled a big payday for the banks. First, the price of bonds started to fall, making them more attractive to buy. Second, not long afterwards, it became clear the other central banks were not going to follow suit in raising rates.

That broke seven years of agreement among the major central banks to hold interest rates at near zero as a way to boost economic activity. The Bank of England, the European Central Bank and the Bank of Japan were still on board, but Janet Yellen at the Fed had broken away. Without a consistent story, investors in fixed-income securities, the jargon name for bonds, found themselves needing to back several horses. And investors demanded the banks buy and sell their securities more frequently as uncertainty translated into an ever-changing mood in the market. The main measure of volatility – the Vix index – was still well below the 2009 peak, but it was elevated in 2016. And traders make money in periods when uncertainty and confusion raise levels of volatility.

Thomas Frank (re-)writes my article from a few weeks ago, Feeding Frenzy in the Echo Chamber.

• The Media’s War On Trump Is Destined To Fail. Why Can’t It See That? (Frank)

These are the worst of times for the American news media, but they are also the best. The newspaper industry as a whole has been dying slowly for years, as the pathetic tale of the once-mighty Chicago Tribune reminds us. But for the handful of well funded journalistic enterprises that survive, the Trump era is turning out to be a “golden age” – a time of high purpose and moral vindication. The people of the respectable east coast press loathe the president with an amazing unanimity. They are obsessed with documenting his bad taste, with finding faults in his stupid tweets, with nailing him and his associates for this Russian scandal and that one. They outwit the simple-minded billionaire. They find the devastating scoops. The op-ed pages come to resemble Democratic fundraising pitches. The news sections are all Trump all the time. They have gone ballistic so many times the public now yawns when it sees their rockets lifting off.

A recent Alternet article I read was composed of nothing but mean quotes about Trump, some of them literary and high-flown, some of them low-down and cruel, most of them drawn from the mainstream media and all of them hilarious. As I write this, four of the five most-read stories on the Washington Post website are about Trump; indeed (if memory serves), he has dominated this particular metric for at least a year. And why not? Trump certainly has it coming. He is obviously incompetent, innocent of the most basic knowledge about how government functions. His views are repugnant. His advisers are fools. He appears to be dallying with obviously dangerous forces. And thanks to the wipeout of the Democratic party, there is no really powerful institutional check on the president’s power, which means that the press must step up.

But there’s something wrong with it all. The news media’s alarms about Trump have been shrieking at high C for more than a year. It was in January of 2016 that the Huffington Post began appending a denunciation of Trump as a “serial liar, rampant xenophobe, racist, birther and bully” to every single story about the man. It was last August that the New York Times published an essay approving of the profession’s collective understanding of Trump as a political mutation – an unacceptable deviation from the two-party norm – that journalists must cleanse from the political mainstream. It hasn’t worked. They correct and denounce; they cluck and deride and Trump seems to bask in it. He reflects this incredible outpouring of disapprobation right back at the press itself.

Contemplating the horrors of bankers leaving your society.

• Goldman Sachs Boss Urges Long Brexit Transition. Is Anyone Listening? (Ind.)

I’ve no fondness for wealthy bankers, but that doesn’t mean to say they aren’t sometimes right. An example of that is Goldman Sachs International chief executive Richard Gnodde, who has just entered the Brexit debate to urge a “significant” transition period. Mr Gnodde is currently pouring money down a bottomless pit labelled “Brexit Contingency Plans”. There aren’t many Britons who will feel all that much sympathy for him over that. That money pit will mean less is available for the bonuses he and his colleagues are so fond of. So tough luck. Trouble is, his masters in New York won’t see it that way. They will eventually say that’s enough of that, start moving your people over to Frankfurt. Actually, the process has already begun. Some jobs are moving over to Germany.

Still more are simply staying in New York, which, for all the scrambling being done by Frankfurt, and Paris, and Dublin, has quietly become the biggest winner from this whole sorry affair. There are many who would shrug some more. What do we lose by inconveniencing a few thousand wealthy bankers anyway. They don’t exactly contribute much to society. Well, they pay a lot of tax for starters. It’s also true that they should pay more. But that’s just another debate. Despite that, I have for years argued that London’s financial centre has played too central a role in the nation’s economy, and that it would be a good idea for the Government to pursue a more balanced economic approach rather than coddling it (as it did until recently).

The trouble is it is now happening at a dangerously fast pace and it is impossible to see, as things stand, quite what is going to replace those tax revenues, which contribute to things like the NHS, schools, roads without potholes, and any number of other things. There are also a lot of support staff who work for banks like Goldman in the City. They’re not rich, by any means, and they’re unlikely to be able to move like the bankers so they’ll just lose their jobs. If it’s unpalatable hearing about this from Mr Gnodde – as it will be to an awful lot of people – consider also that the CBI has said much the same thing as have most sensible, and even semi-sensible, businesses both in the square mile of the City of London and beyond.

Everyone walks. Yawn.

• US To Drop Criminal Charges In ‘London Whale’ Case (R.)

U.S. prosecutors have decided to drop criminal charges against two former JPMorgan Chase derivatives traders implicated in the “London Whale” trading scandal that caused $6.2 billion of losses in 2012. In seeking the dismissal of charges against Javier Martin-Artajo and Julien Grout, the Department of Justice said it “no longer believes that it can rely on the testimony” of Bruno Iksil, a cooperating witness who had been dubbed the London Whale, based on recent statements he made that hurt the case. Prosecutors also said efforts to extradite Martin-Artajo and Grout, respectively citizens of Spain and France, to face the charges have been “unsuccessful or deemed futile.” Acting U.S. Attorney Joon Kim in Manhattan asked a federal judge for permission to drop charges that included securities fraud, wire fraud and falsifying records. Martin-Artajo and Grout were indicted in September 2013.

“After four long years of protracted litigation, we are very pleased that the government has decided to do the right thing, and dismiss the criminal case,” Grout’s lawyer, Edward Little, said. The dismissal request marks a fresh setback in U.S. efforts to prosecute individuals for financial crimes. This has included the undoing of several insider trading convictions and pleas that had been won by Kim’s predecessor Preet Bharara. It has also included this week’s overturning of the convictions of two former Rabobank NA traders for rigging the Libor interest rate benchmark. Martin-Artajo and Grout were accused of hiding hundreds of millions of dollars of losses within JPMorgan’s chief investment office (CIO) in London by marking positions in a credit derivatives portfolio at inflated prices.

At risk of, you said? Weird that if you let investors and analysts discuss this, turns out they have no idea what’s really going on. But doesn’t that cluelessness hurt their investments. their clients?

• A Third Of Greeks At Risk Of Poverty As Athens Wants Return To Bond Market

The Greek government might be preparing to return to the bond market but there are many structural problems that have yet to be resolved to make the economy more sustainable, an analyst told CNBC on Friday. Greece is currently on a third financial program since 2010, due to expire next year. According to James Athey, fixed income investment manager at Aberdeen Asset Management, despite the reforms implemented until now, “it still doesn’t seem we are particularly far down the road in solving the structural issues of Greece.” “Until the Greek economy has got a business model which works and it’s productive and it’s creating stable, secure growth that it’s not reliant on debt relief, external support and constantly bailouts from the Europeans, then it’s difficult to believe that the path is towards something more healthy rather than something less healthy,” Athey told CNBC on Friday.

The IMF agreed Thursday to make a loan of $1.8 billion to Greece as part of its current bailout program, but warned that the country will have to continue reforming in order to receive that money. Greece has to continue focusing on reducing the level of bad loans in its financial sector and extend labour market reform to liberalize Sunday trade and allow for collective dismissals, the fund said. However, with the bailout program due to end in 2018, Greece wants to come back to bond markets to show the rescue has been successful and the economy is able to fund itself. The government is studying when and how such a comeback will be more appropriate. Though Athens refuses to comment on this issue, it is widely expected that Greece will issue bonds next week.

The move is somewhat confusing given that Greek government bonds do not qualify for the ECB’s asset purchase program. They are considered junk by credit rating agencies, and thus cannot feature on the central bank’s balance sheet. When asked how Greece would convince investors to buy bonds if the ECB isn’t buying these assets, Athey said: “I don’t know.” “I guess from a Greek perspective it seems to be a window of opportunity, we’ve seen Greek yields have fallen fairly consistently throughout the year…the fact that Greece might come to market at what optically looks like an attractive yield for a Greek issuer must be tempting to them, especially considering that we are expecting the QE program to ultimately come to a conclusion over the next 6 to 12 months, they certainly would not want to wait until then,” he suggested.

Absolute fantasy predictions. That’s the only way left to sell their stories. They all want Greece back in ‘markets’ before the next bailout expires next year.

• No Surprises From IMF Report On Greek Debt (K.)

Bond markets responded calmly on Friday to the debt sustainability analysis (DSA) of the IMF, which found Greece’s debt exceptionally unsustainable, while deciding to participate in the Greek bailout program with 1.6 billion euros. The markets’ reaction allows for the government to issue the five-year bond as early as on Monday. The DSA reiterates that the eurozone’s commitments to secure the sustainability of the Greek debt are not sufficient. The IMF estimates the debt will slide to 160% of GDP in 2020 and to 150% in 230, before soaring to 190% in 2060. Servicing the debt will exceed 15% of GDP in 2028, reaching as high as 45% in 2060.

The Fund argues that the estimates of Athens and the eurozone on growth rates, primary surpluses and other parameters affecting the debt are optimistic and insists its own views are realistic, saying that Greece has historically been weak in implementing reforms and cannot support high primary surpluses for many years. It goes on to say that revenues from privatizations will not exceed €2 billion by 2030 and believes that the state will not collect any substantial funds from the sale of the bank shares it acquired in the last few share capital increases. It therefore calls on the eurozone to reach an agreement on a realistic strategy for easing Greece’s debt.

The IMF’s proposal for a new stress test on Greek banks and a fresh asset quality review were met with a clear dismissal on Friday by a ECB spokesman, who pointed to Frankfurt being the sole monitoring authority that decides on such issues. The strong ECB response was also addressed at the IMF’s estimate that Greek lenders will require fresh recapitalization to the tune of €10 billion. On Friday Standard & Poor’s stopped short of raising the country’s credit rating, affirming it at ‘B-,’ but pointed to an upcoming upgrade switching Greece’s outlook from stable into positive.

How much longer? We know there are reports.

• The Kingdom Whose Name We Dare Not Speak At All (Robert Fisk)

Theresa May has oddly declined to comment on the reported arrest of the mini-skirted lass who was videotaped cavorting through an ancient Najd village this week, provoking unexpected roars of animalistic male fury in a kingdom known for its judicial leniency, political moderation, gender equality and fraternal love for its Muslim neighbours. May should, surely, have drawn the attention of the rulers of this normally magnanimous state to the extraordinarily uncharacteristic behaviour of the so-called religious police – hitherto regarded as extras in the very same kingdom’s growing tourism industry which is supported by its newly appointed peace-loving and forward-thinking young Crown Prince.

But of course, since May cannot possibly believe that a single person in this particular national entity would give even a riyal or a halfpenny to “terrorists” – of the kind who have been tearing young British lives apart in Manchester and London – she’s hardly likely to endanger the “national security” of said state by condemning the arrest of the aforementioned young lady. In any event, a woman so proper that she would not risk soiling her hands by greeting the distraught survivors of the Grenfell Tower fire has no business shedding even a “little tear” for middle class girls who upset what we must now call The Kingdom Whose Name We Dare Not Speak At All. Or at least, we do not dare to speak its name.

It’s now a week since this extraordinary woman – our beloved May, not the cutie of Najd – declined to publish perhaps the most important, revelatory document in the history of modern “terrorism” on the grounds that to identify the men who are funding the killers running Isis, al-Qaeda, al-Nusrah and sundry other chaps, would endanger “national security”. Note that Amber Rudd, May’s amanuensis, intriguingly declined to specify whose “national security” was at risk. Ours? Or that of The Kingdom Whose Name We Dare Not Speak At All – henceforth, for brevity’s sake, the KSA – which must surely be well aware which of its illustrious citizens (peace-loving, moderate, gender-equalised, etc) have been sending their lolly to the Isis lads.

If you read carefully, you see that it’s all been a mess for many years. The only difference is Trump doesn’t try to hide that.

• EPA Will Allow Fracking Waste Dumping in the Gulf of Mexico (TO)

As the Trump administration moves to gut Obama-era clean water protections nationwide, an environmental group is warning the Environmental Protection Agency (EPA) that its draft pollution discharge permit for offshore drilling platforms in the Gulf of Mexico violates clean water laws because it allows operators to dump fracking chemicals and large volumes of drilling wastewater directly into the Gulf. In a recent letter to the agency, the Center for Biological Diversity told the EPA that the dumping of drilling wastewater – which can contain fracking chemicals, drilling fluids and pollutants, such as heavy metals – directly into Gulf waters is unacceptable and prohibited under the Clean Water Act.

Under current rules established by the Obama administration, offshore oil and gas platforms can discharge well-treatment chemicals and unlimited amounts of “produced waters” from undersea wells directly into the Gulf as long as operators perform toxicity tests a few times a year and monitor for “sheens” on the water’s surface. About 75 billion gallons of produced water were dumped in the Gulf in 2014 alone, according to EPA records. Offshore fracking, which typically involves injecting water and chemicals at high pressure into undersea wells to improve the flow of oil and gas, has rapidly expanded in the Gulf of Mexico over the past decade.

The latest draft of the pollution discharge permit, which was largely prepared under the Obama administration, would require drillers to collect information on the fracking chemicals they dump overboard. Regulators want to know what these chemicals are; their catalogue of offshore fracking chemicals has not been updated since 2001, despite advancements in technology.

Here’s real collusion for you: “special committees of up to 200 employees”. It wasn’t just software, they also agreed to use too small versions of the ‘tanks’ that clean emissions. Now VW is talking, trying to get its own fines diminished.

Oh, and you think nobody in government ever knew about this? Prediction: Merkel will push EU into lower fines. Prediction 2: they will comply.

• German Carmakers Colluded On Diesel Emissions For Decades (Qz)

German magazine Der Spiegel reports that the country’s powerful automakers have been meeting in secret since the 1990s—and their joint decisions on dealing with diesel emissions may have laid the groundwork for Volkswagen’s massive emissions-cheating scandal. According to Der Spiegel, VW admitted to German authorities that it may have engaged in “anti-competitive behavior” with rivals BMW and Daimler via special committees of up to 200 employees that set prices, agreed on suppliers, and engaged in other forms of coordination. One major topic of the meetings was how to manage emissions from diesel engines. The result, as we now know in Volkswagen’s case, was the installation of emissions-cheating software, which was uncovered by American regulators in 2015 and has cost the automaker dearly since.

Daimler tried to get ahead of things this week by recalling 3 million diesel vehicles in Europe for a free emissions-system alteration. Audi followed suit today, with a similar offer to “improve emissions behavior” for 850,000 cars. Spiegel says that German regulators discovered signs of an illegal agreement between the automakers this summer, when they were investigating Volkswagen on suspicion that carmakers were fixing the price of steel. Volkswagen, Daimler, and BMW declined to comment on the Spiegel report, with the latter two calling it “speculation.” Germany’s automakers are anxious as a backlash against diesel motors gathers pace. Several European cities—including Stuttgart, the home of Porsche—have called for a ban on diesel cars, which accounted for around 47% of cars sold in Europe’s five biggest markets in the second quarter of this year.

Nice society you got there. Britain’s way overdue for a complete make-over.

• Number Of Homeless Children In Temporary Accommodation in UK Rises 37% (G.)

Councils across England are housing the equivalent of an extra secondary school of pupils per month as the number of homeless children in temporary accommodation soars, according to local government leaders. The Local Government Association (LGA) said councils are providing temporary housing for around 120,540 children with their families – a net increase of 32,650 or 37% since the second quarter of 2014. It said the increase equates to an average of 906 extra children every month. The LGA said placements in temporary accommodation can present serious challenges for families, from parents’ employment and health to children’s ability to focus on school studies and form friendships. The LGA, which represents 350 councils across England, said the extra demand is increasing the pressure on local government.

It said councils need to be able to build more “genuinely affordable” homes and provide the support that reduces the risk of homelessness. This means councils being able to borrow to build and to keep 100% of the receipts of any home they sell to reinvest in new and existing housing, the LGA said. Council leaders are also calling for access to funding to provide settled accommodation for families that become homeless. Martin Tett, the LGA’s housing spokesman, said: “When councils are having to house the equivalent of an extra secondary school’s worth of pupils every month, and the net cost for councils of funding for temporary accommodation has tripled in the last three years, it’s clear the current situation is unsustainable for councils, and disruptive for families.

“Councils are working hard to tackle homelessness, with some truly innovative work around the country – and we now need the Government to support this local effort by allowing councils to invest in building genuinely affordable homes, and taking steps to adapt welfare reforms to ensure housing remains affordable for low-income families.”

EU policies bring the vermin our of the woodwork.

• Sicilian Mayor Moves To Block Far-Right Plan To Disrupt Migrant Rescues (G.)

A Sicilian mayor is seeking to block a ship chartered by a group of far-right activists attempting to disrupt migrant rescues in the Mediterranean. Enzo Bianco, the mayor of Catania, has urged authorities in the port city on the island’s east coast to deny docking rights to C-Star, a 40-metre vessel hired by Generation Identity, a movement made up of young, anti-Islam and anti-immigration activists from across Europe, for its sea mission to stop migrants entering Europe from Libya. The ship is expected to arrive on Saturday, and the group intends to launch its mission next week. “I’ve told [the relevant] authorities that allowing the ship to dock in our port would be very dangerous for public order,” Bianco said in a statement to the Guardian.

“I also consider it to be a provocation by those involved, with their sole purpose being to fuel conflict by pouring fuel on the fire.” Under a vigilante scheme called “Defend Europe”, the activists crowdfunded more than €75,000 (£67,000) to hire the boat. In a “trial run” two months ago, the ship successfully intercepted a charity rescue ship off Sicily. The activists’ aim is to expose what they claim to be wrongdoing by “criminal” NGO search and rescue vessels, which they accuse of working with people smugglers to transport illegal immigrants to Europe. They also plan to disrupt the work of the crews by calling the Libyan coastguard and asking them to take migrants and refugees attempting to cross the Mediterranean back to war-torn Libya.

Anti-racism groups across Sicily have also urged authorities to take action against the group, to prevent them interfering in the life-saving missions. “Sicily is a place where every family has an emigration story,” Bianco said. “In recent years we have welcomed thousands of people fleeing from war and hunger, people who were saved from dying in the Mediterranean by European vessels, and those who have lost one or more family members crossing the sea. Talking about ‘defending Europe’ is not just demagogic, it’s unworthy.”

“Long dormant spores of the highly infectious anthrax bacteria frozen in the carcass of an infected reindeer rejuvenated themselves and infected herds of reindeer and eventually local people.”

• All Hell Breaks Loose As The Tundra Thaws (G.)

Strange things have been happening in the frozen tundra of northern Siberia. Last August a boy died of anthrax in the remote Yamal Peninsula, and 20 other infected people were treated and survived. Anthrax hadn’t been seen in the region for 75 years, and it’s thought the recent outbreak followed an intense heatwave in Siberia, temperatures reaching over 30C that melted the frozen permafrost. Long dormant spores of the highly infectious anthrax bacteria frozen in the carcass of an infected reindeer rejuvenated themselves and infected herds of reindeer and eventually local people. More recently, a huge explosion was heard in June in the Yamal Peninsula. Reindeer herders camped nearby saw flames shooting up with pillars of smoke and found a large crater left in the ground.

Melting permafrost was again suspected, thawing out dead vegetation and erupting in a blowout of highly flammable methane gas. Over the past three years, 14 other giant craters have been found in the region, some of them truly massive – the first one discovered was around 50m (160ft) wide and about 70m (230ft) deep, with steep sides and debris spread all around. There have also been cases of the ground trembling in Siberia as bubbles of methane trapped below the surface set the ground wobbling like an airbed. Even more dramatic, setting fire to methane released from frozen lakes in both Siberia and Alaska causes some impressive flames to erupt. Methane is of huge concern. It is more than 20 times more potent a greenhouse gas than carbon dioxide, and a massive release of methane in the Arctic could pose a significant threat to the global climate, driving worldwide temperatures even higher.

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