Mar 132023
 
 March 13, 2023  Posted by at 9:56 am Finance Tagged with: , , , , , , , , , , ,  73 Responses »


Rembrandt van Rijn Student at a table by candlelight c.1642

 

Fed, TSY, FDIC Announce New Banking System Bailout, Signature Bank Closed (ZH)
Bill Ackman To US Gov’t: Fix Mistake In ‘48 Hours’ Or Face ‘Destruction’ (CT)
Yellen Says Government Will Help SVB Depositors But “No Bailout” (ZH)
HSBC To Buy Silicon Valley Bank’s UK Operations (G.)
Hatred of Putin Makes Washington ‘Do Dumb Things’ – Seymour Hersh (RT)
Liu Xin’s Interview With Seymour Hersh (CGTN)
Zakharova: Ukraine Allegations Russia’s Reluctant To Talk A Colossal Lie (TASS)
Ukraine Won’t Get Western Jets ‘Anytime Soon’ – FM (RT)
Growing Backlash Against Methods To Conscript Ukrainian Men For War (Lavrenin)
Prigozhin Describes Situation In Bakhmut As Very Difficult (TASS)
US ‘Sitting Still’ Amid Growing China-Russia Influence – Bolton (RT)
‘Rigorous’ Maidan Massacre Exposé Suppressed By Top Academic Journal (GZ)
Comer: We Have Documents That Show Biden Family Was Getting Money from CCP (GP)
The Democrats Have Lost the Plot (Taibbi)
Georgian Protesters Unwittingly Imperil Their Nation’s Survival (Scott Ritter)
Could Vitamin D Help Save Our Veterans? (ET)
The Doctor Indicted For Not Killing His Patients (Horowitz)

 

 

 

 

 

 

Chansley
https://twitter.com/FreeStateWill/status/1635011407434641408

 

 

 

 

O’Keefe

 

 

Iran Saudi

 

 

 

 

Stone Putin
https://twitter.com/i/status/1634557724619943939

 

 

 

 

 

 

Zakharova: “Every child can explain how the US authorities will ‘support the stability of the banking system’ – with paper and paint. They will print even more unsecured dollars then they will cause even more problems in the world.”

“..pledge collateral at par, not at market value, thus giving banks credit for all those hundreds of billions in unrealized net losses, and allowing banks to “unlock liquidity” based on losses which the Fed and TSY now backstop!”

Fed, TSY, FDIC Announce New Banking System Bailout, Signature Bank Closed (ZH)

On Friday, we said that the Fed will have to make an announcement before the Monday open, and we didn’t have to wait that long: in fact, the Fed waited just 15 minutes after futures opened for trading to announce the new bailout, alongside even more shocking news: the Treasury announced that New York State regulators are shuttering Signature Bank – a major New York bank – adding that all depositors both at Signature Bank, and also the now insolvent Silicon Valley Bank, will have access to their money on Monday. And as we process the shock of yet another small bank failure (which makes JPMorgan even bigger), the Fed just issued a statement saying that “to support American businesses and households, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors.

This action will bolster the capacity of the banking system to safeguard deposits and ensure the ongoing provision of money and credit to the economy.” The Fed also said that it is prepared to address any liquidity pressures that may arise, which in turn has just unveiled the first bailout acronym of the new crisis: the Bank Term Funding Program, or BTFP. Some more details: The financing will be made available through the creation of a new Bank Term Funding Program (BTFP), offering loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral. These assets will be valued at par. The BTFP will be an additional source of liquidity against high-quality securities, eliminating an institution’s need to quickly sell those securities in times of stress.

The Fed explains that the Department of the Treasury will make available “up to $25 billion from the Exchange Stabilization Fund as a backstop for the BTFP.” And while the Federal Reserve – which was completely clueless about this banking crisis until Thursday – does not anticipate that it will be necessary to draw on these backstop funds, we anticipate that the final number of needed backstop liquidity be somewhere north of $2 trillion. What is more notable is that the BTFP – or Buy The Fucking Pivot – facility, will pledge collateral at par, not at market value, thus giving banks credit for all those hundreds of billions in unrealized net losses, and allowing banks to “unlock liquidity” based on losses which the Fed and TSY now backstop!

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And they did…

Bill Ackman To US Gov’t: Fix Mistake In ‘48 Hours’ Or Face ‘Destruction’ (CT)

Billionaire Bill Ackman has urged the United States government to “guarantee” all deposits held by Silicon Valley Bank (SVB) within the next “48 hours,” or it risks the “destruction” of many financial institutions. In a March 11 tweet, Bill Ackman, CEO of hedge fund management firm Pershing Square Capital Management, said a “giant sucking sound” will be heard from the ”withdrawal of substantially all uninsured deposits” from all banks, not just the “systemically important banks (SIBs),” should the government fail to “guarantee all” of SVB’s deposits before the “open on Monday.”Ackman suggested that this would be the result of “the world” realizing what an uninsured deposit is — “an unsecured illiquid claim on a failed bank.”

https://twitter.com/CaitlinLong_/status/1635047789376974848

He warned that these withdrawals would “drain liquidity” from the community, regional and other banks and “begin the destruction” of these crucial institutions if the United States government fails to protect “all depositors.” Ackman said the only other way to prevent this was in the “unlikely” event that major financial institutions, such as JPMorgan Chase, Citibank or Bank of America, acquire SVB before Monday. He argued that this could have been “avoided” if the U.S. government had “stepped in on Friday” to guarantee SVB’s deposits, adding that the long-standing bank’s “franchise value” could have been safeguarded and “transferred” to a new owner in return for an “equity injection.”


Ackman suggested that SVB’s senior management “made a basic mistake” and should be fired. He noted: “They invested short-term deposits in longer-term, fixed-rate assets. Thereafter short-term rates went up and a bank run ensued. Senior management screwed up and they should lose their jobs. After conducting a “back-of-the-envelope review” of SVB’s balance sheet, Ackman believes that even “in a liquidation,” depositors “should eventually” get back approximately “98% of their deposits”. However, he argued that “eventually” is “too long” when you have “payroll to meet next week.”

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A new meaning for “bailout”.

“No bailout for shareholders and bondholders of SVB. Depositors will be protected.”

“the Fed itself is insolvent. It has exactly the same problem as SVB — it paid top dollar for bonds whose prices have fallen, driving the Fed deep into neg equity (along with BoJ, ECB…)”

Yellen Says Government Will Help SVB Depositors But “No Bailout” (ZH)

With just hours left until futures open for trading late on Sunday afternoon, the situation remains extremely fluid and for now it appears that regulators, central bankers and treasury officials (we won’t mention the White House where the most competent financial advisor is Hunter Biden) still don’t have a clear idea of how they will coordinate or respond. Take Janet Yellen, who said on Sunday morning that the US government was working closely with banking regulators to help depositors at Silicon Valley Bank but dismissed the idea of a bailout. Speaking with CBS on Sunday, the treasury secretary sought to assure US customers of the failed tech lender that policies were being discussed to stem the fallout from the sudden collapse this week. The Federal Deposit Insurance Corporate (FDIC) took control of the bank on Friday morning.

“Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out . . . and the reforms that have been put in place means we are not going to do that again,” Yellen said (oh but you will, you just don’t know it yet). “But we are concerned about depositors, and we’re focused on trying to meet their needs.” It wasn’t clear which depositors she meant: as we first pointed out on Friday, out of SIVB’s $173 billion of customer deposits at the end of 2022, $152 billion were uninsured (i.e., over the $250,000 FDIC insurance threshold) and only $4.8 billion were fully insured. As we also noted last week, a further look at SIVB funding (pie charts) shows unusually high reliance on corporate/VC funding; only the small red private bank slice looks like traditional retail deposits to us.

As a result, as JPM’s Michael Cembalest says “It’s fair to ask about the underwriting discipline of VC firms that put most of their liquidity in a single bank with this kind of risk profile. At the end of 2022, SIVB only offered 0.60% more on deposits than its peers as compensation for the risks illustrated below; in 2021 this premium was 0.04%”.

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Tech start-ups are sexy.

HSBC To Buy Silicon Valley Bank’s UK Operations (G.)

The government has struck a last-minute deal for HSBC to buy Silicon Valley Bank’s UK operations, saving thousands of British tech startups and investors from big losses after the biggest bank failure since 2008. The takeover will override the Bank of England’s initial decision to place SVB UK into insolvency, after a run on the lender that was originally sparked by fears over the a multibillion-pound shortfall on the US parent company’s balance sheet. The US bank was closed and its assets seized by authorities on Friday. “This morning, the government and the Bank of England facilitated a private sale of Silicon Valley Bank UK to HSBC. Deposits will be protected, with no taxpayer support. I said yesterday that we would look after our tech sector, and we have worked urgently to deliver that promise,” the chancellor, Jeremy Hunt, said on Twitter.

HSBC’s takeover is expected to protect the finances of SVB UK’s 3,500 customers, including hundreds of tech startups that feared they would go bust if their deposits were wiped out. Authorities had been considering a range of options to help SVB UK customers pay wages and suppliers, including an emergency fund that could provide a cash lifeline to support startups, as well as government-guaranteed loans for the sector, similar to those offered to businesses during the Covid crisis. It follows a tense 72 hours, with Rishi Sunak having been locked in weekend talks with the Bank of England governor, Andrew Bailey, and Hunt, who warned that tech and life sciences sector were at “serious risk” as a result of the bank’s collapse.

While analysts said there was little chance of contagion across the banking sector – given that the biggest banks serve a wider range of customers and have plenty of capital – tech startups and investors were worried about the ripple effects for the sector. A group of more than 200 tech executives warned in an open letter to Hunt over the weekend that the loss of deposits had the potential to cripple the industry, with many businesses at risk of falling into insolvency overnight.

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“They make it personal. They don’t make it professional.”

Hatred of Putin Makes Washington ‘Do Dumb Things’ – Seymour Hersh (RT)

Legendary investigative journalist Seymour Hersh on Sunday offered a theory for what he sees as the foreign policy “complete idiocy” displayed by US officials, saying they’re so consumed by hatred of Russian President Vladimir Putin that they stumble into bad decisions. Hersh, the Pulitzer Prize-winning journalist who reported last month that US President Joe Biden ordered last fall’s sabotage of the Nord Stream natural gas pipelines, has called the alleged plot one of Washington’s “dumbest” decisions in years. However, the blunder didn’t reflect a lack of intelligence among top officials in Biden’s administration, including Secretary of State Antony Blinken and National Security Adviser Jake Sullivan, Hersh said in an interview with China’s CGTN.

Top administration officials “all have high degrees of, plenty of, intelligence,” Hersh said. “It’s just what they’re so driven by, I think, hatred of all things particularly Putin, and also communism per se. They’re so cold warriors, they’re really out of sorts. It makes them do dumb things.” The White House dismissed Hersh’s bombshell report on the Nord Stream blast as “complete fiction.” The New York Times, where Hersh did award-winning work on the Watergate scandal and other stories as a star reporter in the 1970s, claimed earlier this month that a “pro-Ukraine group” was behind the Nord Stream attack. The story cited unidentified US officials. Hersh told CGTN that neither the Ukrainian navy nor a non-state actor had the resources to carry out the sabotage, which involved planting C4 explosives on four concrete-encased steel pipelines at the bottom of the Baltic Sea. He said the false claim was made to distract from the fact that US Navy divers planted the remotely detonated explosives under cover of a NATO exercise in the Baltic.

“They’re trying to divert attention from the story that I wrote, which included enormous specifics,” Hersh said. “I was describing a process that began before Christmas of 2021. . . . They had a series of meetings at a secret room in the White House, that I gave clues I know the title of the room.” The veteran journalist argued that being “antagonistic” with China and Russia is counterproductive for Washington. “They make it personal. They don’t make it professional.” He added that Biden’s foreign policy has alienated governments around the world since Russia’s military operation in Ukraine began last year. “Russia has made more friends in the Third World since this began than anybody in this administration seems to appreciate,” Hersh said. “This notion of American hegemony, if you will, just doesn’t work anymore.”

Nordstream attack vessel

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The interview.

Liu Xin’s Interview With Seymour Hersh (CGTN)

As the NYT reports new allegations on the Nord Stream sabotage, Seymour Hersh takes the “pro-Ukrainian group” intel with a pinch of salt. Here’s the reason. Liu Xin: But you think it’s not possible for a “pro Ukrainian group” to carry out this explosion? Seymour Hersh: I know that the few things I know about the Ukrainian navy is they are capable of dropping mines. I’m not an expert on it. I just happen to ask questions after that story came out. They don’t have a working decompression chamber. We’re talking about four pipelines, Nord Stream 1 and 2, each has two. They’re steel tubes covered by a concrete cover to protect themselves from the salinity, the salt in the water. So, you have to have people that know, that are the experts in underwater diving and experts in using the most, the plastic C4, the most volatile stuff there is.And also, they have to be able to go quick. They have to be sure they get the bomb, their weapon and the bomb in the right place that triggers, destroys everything. They have to practice like, they practice for weeks and months on this, I would say, in the waters of the Baltic Sea. “The U.S. is trying to divert attention away from my story,” says Seymour Hersh, after the NTY reported intel pointed at a “pro-Ukrainian group” on the Nord Stream sabotage.

Liu Xin: The fact that the U.S. government officials leaked this intelligence to the New York Times at this particular moment. What do you think they are trying to send as a message? Seymour Hersh: They are trying to divert attention from the story that I wrote, which included enormous specifics. I was describing a process that began before Christmas of 2021. It involved the National Security Advisor Jake Sullivan of the White House for the President. They had a series of meetings at a secret room in the White House. They gave clues, I know the title of the room. They were asked to come up with both reversible and irreversible concepts, ideas. A reversible concept would have been more sanctions. Something irreversible would have been kinetic, a bomb. And then eventually it turned out what they really wanted was a hit on the pipelines. And in this government, the concern has always been that Germany has been getting so much gas at such a cheap price from Russia that it would be very hard to wean them away from Russia. Slamming U.S. foreign policy as “complete idiocy,” Seymour Hersh told Liu Xin he believes American hegemony and the hatred of “all things Putin & communism” are driving the Biden Administration to do dumb things.

Liu Xin: You have also called a part of the called this planning “stupidity.” And you on several occasions you laughed at the intelligence level of the Biden. Seymour Hersh: I was not questioning their intelligence. These are all people, Tony Blinken, the Secretary of State, the one who didn’t go to China to meet his counterpart because of a balloon and Jake Sullivan, who’s the National Security Advisor, and the Undersecretary of State, all have high degrees of, plenty of intelligence. It’s just what they’re so driven by, I think, hatred of all things particularly Putin, and also communism per se. They’re so cold warriors. They’re really out of sorts. It makes them do dumb things. I just think his foreign policy is too complete idiocy, alienating a lot of people around the world. This notion of American hegemony, if you will, it just doesn’t work anymore. That’s what I object to.

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“..this point of view is nothing but a wish of defeat to his country and its non-existence..”

Zakharova: Ukraine Allegations Russia’s Reluctant To Talk A Colossal Lie (TASS)

Russian Foreign Ministry Spokeswoman Maria Zakharova has slammed her Ukrainian counterpart Dmitry Kuleba’s statement that Moscow is reluctant to negotiate the crisis settlement with Kiev as a “colossal lie”. “These days, Kuleba was once again ranting and raving in interview with the Italian newspapers Repubblica and Stampa. He called those Italians who are standing for settling the conflict with Russia through talks rather than in the battlefield hypocrites. In his interpretation, this point of view is nothing but a wish of defeat to his country and its non-existence – “Not peace but ‘rest in peace’ on Ukraine’s grave,” she wrote on her Telegram channel.


“However, he seems to share the opinion that ‘there is always room’ for talks but says he sees no willingness for them in Russia. A colossal lie, bearing in mind the fact that it is the regime he represents that has banned such talks with Russia in its laws”. Moreover, in he words, Kuleba forecasted “the end of Europe if Ukraine is defeated”. “An optimist. In its current shape, Europe ended right when the European Union let Washington govern its political institutions and ultimately surrendered to NATO,” she added.

Ukraine Inc.
https://twitter.com/i/status/1634810341682036738

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“We sat down with Ukrainian representatives and the German armaments industry … and German industry, in my presence, asked the German government for one thing: signed contracts..”

Ukraine Won’t Get Western Jets ‘Anytime Soon’ – FM (RT)

Kiev will not get Western-made fighter jets “anytime soon,” Ukrainian Foreign Minister Dmitry Kuleba admitted during an interview with the German newspaper Bild am Sonntag published late on Saturday. The potential delivery of fighter jets to Kiev to prop it up in its ongoing conflict with Moscow is hindered by assorted technical and logistical issues, Kuleba said. However, he urged that Ukrainian pilots, who are only familiar with Soviet-made aircraft, begin training on the Western planes as soon as possible. “I don’t expect the delivery of fighter jets to happen anytime soon because it’s a very difficult task logistically and technically. Therefore, we advise that the training of Ukrainian pilots on Western jets should start now, so that when the decision to provide aircraft is made, we do not waste time or many months on training,” he said.

The diplomat also urged Berlin to ramp up deliveries of ammunition to Ukraine, namely artillery shells, claiming that while German industry had already expressed a readiness to provide them, the issue lies with the country’s government. “We sat down with Ukrainian representatives and the German armaments industry … and German industry, in my presence, asked the German government for one thing: signed contracts,” he stated. Over the course of the conflict, Ukraine has increasingly demanded more and more sophisticated weapon systems from its Western backers. Kiev has intensified calls for NATO to supply it with fighter jets – namely the US-made F-16 – in recent months after securing a pledge for dozens of Leopard 2 and Leopard 1, M1 Abrams, and Challenger 2 main battle tanks from multiple EU countries, the US, and UK, respectively.

So far, however, the West has been reluctant to provide Ukraine with modern aircraft. Late in February, US President Joe Biden said he was “ruling it out for now.” His Ukrainian counterpart Vladimir Zelensky “doesn’t need F-16s now. There is no basis upon which there is a rationale, according to our military, now, to provide F-16s,” Biden told ABC at the time. Still, American media reported that the Pentagon has already invited Ukrainian pilots to a military base in Arizona to determine how long it would take to train them to fly the F-16. Last week, unnamed officials told NBC that two Ukrainian airmen had already arrived on American soil and more were likely to follow. Russia has repeatedly warned the West against “pumping” Ukraine with assorted weaponry, maintaining it would only prolong the hostilities rather than change the ultimate outcome.

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By Petr Lavrenin, Odessa-born political journalist and expert on Ukraine and the former Soviet Union

Growing Backlash Against Methods To Conscript Ukrainian Men For War (Lavrenin)

Last year, military conscription became an issue in both Russia and Ukraine. However, the extent has been completely different in the two countries. While in Russia the mobilization was partial, lasting barely more than a month and affecting around 300,000 people, according to official figures – a significant part of whom already had military experience – a completely different picture has developed in Ukraine. Kiev instituted a general conscription drive which has been in force for more than a year. The exact number of those taken to the armed forces during this time is not known for certain and the process has been accompanied by numerous scandals. Cases where law enforcement officers have applied force when handing out conscription notices and illegally delivered men to enlistment offices have given rise to public discontent.

However, the Ukrainian authorities clearly have no intention of pausing enlistment because the situation remains critical at some sections of the front. The Armed Forces of Ukraine (AFU) are losing their grip on fortified areas around Artyomovsk (Bakhmut), and taking huge numbers of casualties, according to the Guardian and other media outlets. Meanwhile, Kiev continues to issue mobilization summonses and is sending people without proper training. According to the country’s legislation, a summons for military duty can only be issued on the street if it specifies the personal data of the person to whom it is given. It is also illegal for military commissars to detain citizens, as they are not the police, and conscripts are not criminals. Yet, that’s exactly how conscription is currently being conducted in Ukraine. Men of military age are being hunted down, and videos showing military commissars going to extreme lengths to hand out summonses, including by force, constantly circulate on social media.

Odessa, in particular, stands out in this respect. For example, military commissars were caught driving around the city in ambulances. When they came across men of the appropriate age, they stopped, handed over summonses and drove on. After videos emerged on social networks, local military commissars had to explain themselves and claimed that they were given the ambulance to use for their work. There were also cases when men in Odessa were detained on the street and forcibly taken to military enlistment offices, even without being handed a mobilization summons. For quite a long time, the AFU’s Operational Command South tried to ignore the illegal, forceful methods used by its military commissars. However, on February 14, a video was released showing military enlistment office staff detaining a man by force. In order to avoid a scandal, the military quickly assured the public that the staff responsible would be disciplined for “incorrect” behavior and the incident investigated.

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Too many tunnels?!

Prigozhin Describes Situation In Bakhmut As Very Difficult (TASS)

The situation is Artyomovsk (known as Bakhmut in Ukraine) is very difficult, with the Ukrainian army receiving “endless reserves,” Wagner PMC founder Yevgeny Prigozhin said on Sunday. “The situation in Bakhmut is difficult, very difficult, with the enemy fighting for each meter. And the closer we are approaching the city center the fiercer fighting is growing, the more artillery and tank being used against us. Ukrainians keep on supplying endless reserves. But we are moving forward and will continue to move forward and we will not cover the glory of Russian arms with shame,” his press service quoted him as saying on its Telegram channel.


Artyomovsk is located in the Kiev-controlled part of the Donetsk People’s Republic (DPR). Fierce fighting for control of the city is underway. According to the latest data, Russian forces have blocked or taken control of all paved roads to the city while the nascent spring mud season is complicating the logistics of supplying the Ukrainian army with fresh ammunition and personnel. Prigozhin said on Saturday that Russia forces were some 1.2 kilometers from the city’s administrative center.

Prigozhin
https://twitter.com/i/status/1634598452666544128


“Wagner” began storming the underground part of the “Bakhmut Azovstal”. Right now,”Wagner” are making their way into the mine. The battles take place at a depth of up to 320 meters.

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You lost. You were staring blind.

US ‘Sitting Still’ Amid Growing China-Russia Influence – Bolton (RT)

President Joe Biden’s administration is doing nothing to counteract steps by China, Russia, and their allies to work more closely together, jeopardizing US interests and undermining its global influence, former White House National Security Adviser John Bolton has claimed. “We’re sitting still, and the Chinese, the Russians, Iran, North Korea and several others are moving to shore up their relations and threaten us in a lot of different places,” Bolton said on Sunday in a WABC 770 radio interview. He added that while Beijing follows a clear strategy, “we kind of wander around from day to day.”

Bolton, a longtime war hawk who has called for regime changes in Moscow and Tehran, made his comments in the wake of Friday’s announcement that Saudi Arabia and Iran had agreed to re-establish diplomatic ties under a deal brokered by China. He lamented that the agreement reflected diminishing US influence around the world. “It’s an indication that the Saudis and others are trying to hedge their bets with China and Russia, because they don’t think the United States has the resolve and the fortitude necessary to do what they need to do to protect the world against Iran and its intentions,” Bolton said.

The 74-year-old Bolton has worked in the administrations of former Presidents Donald Trump, George W. Bush, George H.W. Bush and Ronald Reagan. Chinese officials have bristled at Washington’s threat claims, arguing that the US and its NATO allies behave as if they’re still fighting the Cold War. Beijing has maintained neutrality on the Ukraine crisis, resisting US pressure to condemn Russia over the conflict, and proposed a 12-point blueprint to end the fighting late last month. Biden dismissed the peace plan, saying it would benefit only Russia.

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Maybe he should name the journal…

‘Rigorous’ Maidan Massacre Exposé Suppressed By Top Academic Journal (GZ)

A peer-reviewed paper initially approved and praised by a prestigious academic journal was suddenly rescinded without explanation. Its author, one of the world’s top scholars on Ukraine-related issues, had marshaled overwhelming evidence to conclude Maidan protesters were killed by pro-coup snipers. The massacre by snipers of anti-government activists and police officers in Kiev’s Maidan Square in late February 2014 was a defining moment in the US-orchestrated overthrow of Ukraine’s elected government. The death of 70 protesters triggered an avalanche of international outrage that made President Viktor Yanukovych’s downfall a fait accompli. Yet today these killings remain unsolved.

Enter Ivan Katchanovski, a Ukrainian-Canadian political scientist at the University of Ottawa. For years, he marshaled overwhelming evidence demonstrating that the snipers were not affiliated with Yanukovych’s government, but pro-Maidan operatives firing from protester-occupied buildings. Though Katchanovski’s groundbreaking has been studiously ignored by the mainstream media, a scrupulous study he presented on the slaughter in September 2015 and August 2021 and published in 2016 and in 2020 has been cited on over 100 occasions by scholars and experts. As a result of this paper and other pieces of research, he has among the world’s most-referenced political scientists specializing in Ukrainian matters.

In the final months of 2022, Katchanovski submitted a new investigation on the Maidan massacre to a prominent social sciences journal. Initially accepted with minor revisions after extensive peer review, the publication’s editor effusively praised the work in a lengthy private note. They said the paper was “exceptional in many ways,” and offered “solid” evidence in support of its conclusions. The reviewers concurred with this judgment. However, the paper was not published, a decision Katchanovski firmly believes to have been “political.” He filed an appeal, but to no avail. Among those fervently supporting Katchanovski’s appeal was renowned US academic Jeffrey Sachs. “You have written a very important, rigorous, and substantial article. It is thoroughly documented. It is on a topic of great significance,” Sachs wrote to the scholar.

“Your paper should be published for reasons of its excellence…The journal will only benefit from publishing such a work of importance and excellence, which will further the scholarly understanding and debate regarding a very important moment of modern history.” Katchanovski declined to name the journal in question, but described it as “top-tier” in the field of social sciences. He believes its refusal to publish his study is “extraordinary,” but nonetheless emblematic of a “far bigger problem in academic publishing and academia.” “The editor who accepted my article only learned it would not be published from my tweets on the subject. This reversal was highly irregular and political. There is growing political censorship concerning Ukraine in academia, and also self-censorship..”

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Let’s see them.

Comer: We Have Documents That Show Biden Family Was Getting Money from CCP (GP)

House Oversight Chairman James Comer (R-KY) joined Maria Bartiromo on Sunday Morning Futures this morning. This was an explosive interview. Comer dropped several bombs on the Biden Crime Family. According to Comer the House Oversight Committee is working with four individuals with close ties to the Bidens. Comer says the committee now has documents that tie the Bidens to the Chinese Communist Party. Biden is finished. James Comer: “It’s as bad as we thought… Since we’ve last spoken we have bank records in hand. We have individuals who are working with our committee. In the last two weeks we’ve met with either these individuals personally or with their attorneys. And that would be four individuals who had ties in with the Biden family in their various schemes around the world. So now we have in hand documents We have in hand documents in hand that show just how the Biden family was getting money from the Chinese Communist Party.”

Comer’s got the goods! This is a pivotal moment in American history. They finally have the goods on the Biden Crime Family.How will Democrats deal with this? With more phony charges against President Trump? Or maybe Old Joe will suffer a slip and fall?

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“They did not want to have a discussion about anything. It was completely opposite to what the party was even ten years ago..”

The Democrats Have Lost the Plot (Taibbi)

One of the crazier parts came at the end of the examination by Garcia, when I ended up becoming just a bystander to a heated and apparently sincerely unfriendly blowup between chairman Jim Jordan and Plaskett: GARCIA: So you’re not gonna tell us when Musk first approached you. TAIBBI: Again, Congresswoman, you’re asking me to, you’re asking your journalist to reveal a source. GARCIA: So then you consider Mr. Musk to be the direct source of all this? TAIBBI: Now you’re, you’re trying to get me to say that he is the source. GARCIA: Well, he isn’t, if you’re telling me you can’t answer because it’s your source, the only logical conclusion is that he is in fact your source. TAIBBI: Well, you’re free to conclude that. GARCIA: Well, sir, I just don’t understand. You can’t have it both ways, but let’s move on, because — JORDAN: Well, no, he can. He’s a journalist. PLASKETT: He can, because either Musk is the source and he can’t talk about it, or Musk is not the source. And if Musk is not the source, then he can discuss.

Did these people really not understand that identifying who is not a source crosses the same line as identifying who is one? You just can’t go into these questions. I started to interject to point this out, then realized that Garcia and Plaskett legitimately didn’t even know the basics of the civil liberties landscape. This was much the same as when Vijaya Gadde acted completely at a loss when Ro Khanna wrote to her in the middle of the Hunter Biden laptop affair, to express concerns about speech rights. Khanna mentioned the New York Times v. Sullivan case and other principles to Gadde, and she seemed to have no idea what he was talking about. This was like that. Garcia also made it clear she didn’t know what Twitter was. At one point she said, regarding yesterday’s Twitter Files thread, that I had said “I had to attribute all the sources to Twitter first.”

I was so confused by this that I paused, worried that I was misunderstanding (my hearing is not so great). She then asked if I “sent it to Twitter first.” As I was replying no, that I’d posted the thread on Twitter, I heard an aide whispering something about “putting it on Twitter.” Garcia seemed to think that Twitter was an editorial body to which I was sending text, maybe for review. It’s understandable, not knowing that the platform doesn’t work that way — not everyone has to be on Twitter obviously — but then why the hostility? Instead of simply asking me in a friendly way about this process, which I would have been glad to explain, she kept blasting away. “First, sir. Yes or no?” The Democrats were angry that Michael and I were there at all. They did not want to have a discussion about anything. It was completely opposite to what the party was even ten years ago, when expression rights were an issue they wanted to own.

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Scott Ritter’s wife is Georgian. He knows the country. This is a harrowing story.

Georgian Protesters Unwittingly Imperil Their Nation’s Survival (Scott Ritter)

In many ways, the critics were correct—the practical outcome of the foreign agents bill would have been to expose the extent to which Georgian politics and governance had become overrun with foreign money and influence. The threat, however, didn’t come from Russia, but rather the United States, which uses the $40 million in aid funneled through the United States Agency for International Development (USAID) every year to conduct what amounts to a “soft coup” in Georgia designed to displace the current government with one that will be compliant to American—not Georgian—goals and objectives—including the establishment of a “second front” against Russia. All of this is done, according to Samantha Power, the Director of USID, to build “a country with free expression, a free press, & a path to Euro-Atlantic integration.”

But what she really means is a country that suppresses any dissent as “disinformation,” uses the media as state-sponsored propaganda, and removes from power any politician or political party that dares impede Georgia’s absorption into the US-led NATO sphere of influence. Georgia’s Prime Minister, Irakli Garibashvili, does not want an expanded war with Russia—especially one that drags Georgia into the conflict. As such, Samantha Power and her minions at USAID believe the prime minister of Georgia must now be removed and replaced with an anti-Russian (i.e., pro-war) leader cut from the same pro-American cloth as Georgia’s US-backed President, Salome Zurabishvili.

To accomplish this, USAID funds programs designed to foment a “bottom-up” transformation of Georgian society and politics by empowering “diversity” at the grass-roots level, suppressing opposing points of view in the name of building “societal resilience to disinformation,” and seizing control of the electoral process so that the US-controlled “diversity” movements can prevail in local elections and, by extension, national elections. The Georgian foreign agents bill would have exposed the level to which these USAID-funded programs, and other related US and EU-funded activities, had infiltrated Georgian society. For that reason, the US mobilized its paid activists to take to the streets, forcing the Georgian Prime Minster to pull the plug on the legislation in the interests of public safety.

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This is about suicides, not covid. Why only suicides among veterans? Isn’t it time to widen and broaden this discussion?

Could Vitamin D Help Save Our Veterans? (ET)

Findings from a new study have shown that vitamin D may lower the risk of suicide and suicide attempts in U.S. veterans with low vitamin D levels. The study found that veterans who received vitamin D had a 64 percent lower risk of suicide than those who did not receive supplementation. The study was published in February 2023 in the journal Plos One. Suicide is a serious public health issue and the 12th leading cause of death in the United States. In 2020, 45,979 Americans died by suicide and there were an estimated 1.2 million suicide attempts. According to the CDC, suicide rates increased 36 percent between 2000-2018, and Suicide Awareness Voices of Education states that from 2020 to 2021 there was a 3.6 percent increase in suicides, bumping it up to the 11th leading cause of death in the United States. This is one death every eleven minutes.

When it comes to veterans, however, the statistics change. Veterans are at a 57 percent higher risk of suicide than those who haven’t served, which is more than 1.5 times the national average. Suicide is the second leading cause of death of veterans under the age of 45. Some other notable statistics: • 125,000 veterans have died by suicide since 2001. • There were 6,146 veteran suicides in 2020. • There have been 20 consecutive years with 6,000-plus veteran suicides. The study aimed to determine the association between vitamin D supplementation, vitamin D blood serum levels, suicide attempts, and intentional self-harm in a group of veterans in the Department of Veterans Affairs.

The retrospective cohort study looked at veterans who had filled either a vitamin D3 or vitamin D2 prescription between 2010 and 2018. A cohort of 169,241 vitamin D2-treated veterans and 490,885 vitamin D3-treated veterans were each matched to an equal number of controls that had similar demographics and medical histories. The results of the study showed that vitamin D3 and D2 supplementation was associated with a 45 percent and 48 percent reduced risk of suicide attempt and self-harm. This was an almost 44 percent difference between the groups receiving supplementation and the control group. Additionally, the study found that vitamin D supplementation among black veterans was associated with a 60 percent decline in suicide attempts, and in veterans with vitamin D deficiency, which the study defined as being below 20 nanograms per milliliter (ng/mL), there was a more than 64 percent reduction in potential suicide attempts.

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“..in exceptional circumstances of unjust laws, ethical responsibilities should supersede legal duties.”

The Doctor Indicted For Not Killing His Patients (Horowitz)

All the government officials, pharmaceutical executives, and doctors involved in defrauding the public with taxpayer funding and violating the consent of humanity to mandate dangerous shots are absolved of liability. Meanwhile, a doctor who took his Hippocratic Oath seriously and allegedly saved nearly 2,000 patients (with FULL CONSENT) from the shots, is facing serious federal charges for conspiracy to defraud the government defrauders. We’re all big talkers. We’d like to believe that if we were there in Germany during the late 1930s, we would have protested the budding genocide, which was first rooted in medical experimentation and coerced sterilization. But just like most doctors and scientists went along with the Third Reich, nearly every doctor went along with the Fourth Reich in coercing patients into taking a known dangerous shot because they were “just following orders” and “following the science.”

Dr. Kirk Moore, an experienced plastic surgeon from Utah, on the other hand, has risked his life and career to actually follow the dictates of the Nuremberg Code. Yet despite everything we now know about the shots, which should win him the Presidential Medal of Freedom for his alleged actions, he is the one facing prosecution for a disposing of a shot that is only on the market because of government fraud. In January, Dr. Moore, along with two members of his clinic’s staff and a neighbor, were indicted on conspiracy to defraud the federal government by allegedly offering nearly 2,000 patients saline injections along with vaccine documentation while disposing of the real shots into the sink. To be clear, he is not being accused of tricking patients. He never offered unsuspecting patients fake shots. These were all people (or parents of minors) who desperately sought him out to bypass the genocidal, unconstitutional, inhumane, and immoral jab mandates, so they could go on with their lives unharmed by this terrible technology.

Prosecutors accuse Dr. Moore and staff at the Plastic Surgery Institute of Utah of pretending to administer 391 children shots, 524 adult Pfizer shots, 64 Moderna shots, and 958 J&J shots between October 2021 and Sept. 2022 just based on the inventory of shots that went to that office. That was long after it was known these shots were dangerous, yet Moore, not the Pfizer executives, faces up to five years in federal prison. According to the AMA Medical Code, “When physicians believe a law violates ethical values or is unjust, they should work to change in law.” However, it adds that “in exceptional circumstances of unjust laws, ethical responsibilities should supersede legal duties.”That is clearly going to be part of Moore’s defense if he is indeed shown to have given people saline at their request. Ironically, Moore is being accused of grifting and running a fake vaccine card ring and earning $98,000 off it. Dr. Moore, though, rigorously disputed this fact in an interview on my podcast and notes that when people asked him for his fee for COVID treatment, he told them to donate it to a 501(c)(3) medical freedom group.

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Earth music
https://twitter.com/i/status/1634947463487574018

 

 

 

 

Owl
https://twitter.com/i/status/1634644161239437318

 

 

God made a farmer
https://twitter.com/i/status/1634879637527445504

 

 

 

 

Support the Automatic Earth in virustime with Paypal, Bitcoin and Patreon.

 

 

 

 

 

Jul 052021
 


Paul Gauguin We hail thee Mary 1891

 

“Asymptomatic Covid Spread” Used To Shut Down The Economy Was A Lie (TSN)
New Research Suggests Ivermectin Works (HART)
Indonesia to Produce Ivermectin Starting in July (Tempo)
‘Perverse Incentives’ in the Vaccine Rollout and the Censorship of Science (ET)
Lancet Accused Of Doing China’s Dirty Work Denouncing Lab Leak Theory (DM)
Daszak Refuses House Request For Wuhan Docs, Democrats Fail To Subpoena (JTN) /span>
Fauci Doubles Back To Masks – For the Vaccinated (JTN)
Retraction Of Paper On Vaccine Deaths Spurs Call For More Scrutiny (JTN)
OPEC On Verge Of Collapse After Saudis, UAE Refuse To Budge (ZH)
No, We Weren’t All Born Yesterday (David Stockman)
HSBC in Big Trouble in its Biggest Market, China (WS)

 

 

 

 

FLCCC’s Dr. Marik is asked how he would end the pandemic in a month. “I would do a mass distribution program of ivermectin together with melatonin and aspirin. We should’ve done this months ago.” Simple. Safe.

 

 

Mike Yeadon
https://twitter.com/i/status/1411596825103155201

Mike Yeadon variants

 

 

Paul Elias Alexander, PhD, Former COVID Pandemic consultant/advisor to WHO-PAHO and former COVID pandemic advisor to Health and Human Services (HHS), United States; Parvez Dara, MD, MBA; Howard Tenenbaum, DDS, PhD

“Asymptomatic Covid Spread” Used To Shut Down The Economy Was A Lie (TSN)

There was no credibility to ‘asymptomatic spread’ or transmission in COVID-19 as a key driver of the pandemic nor even as a driver of minimal infection. This is not only our hypothesis, we feel strongly that asymptomatic spread was bogus from the start and was used to underpin the lockdowns and had and has still today, no basis. This was part of pandemic corruption. We have looked at the evidence gathered across the last 16 months and can safely say this was a false narrative along with masking, lockdowns, social distancing, and school closure polices that visited crushing harms on the society and hurt the US and the world immensely. That the US Pandemic Task Force and these illogical, irrational, unscientific medical experts could use this falsehood and shutter the society and cost so much destruction of life, wealth and property is a scandal, shameful, and unforgiveable.

This was all about corruption, this pandemic response, and there certainly were ingredients other than science at play throughout. There are members of the US Task Force that some of us here got the pleasure of working with and some of them are incredibly smart, good people. Decent god-fearing people. But they were and are flat wrong! Have been on everything COVID. Every policy was based on their input and guidance and they created disaster. Many thousands of people died due to them! Their policies! Never has a President been as ill-served as by these Task Force members. They misled and undercut President Trump at each turn and one continues to mislead the current administration.

Who knows, maybe the combination caused a chaotic frenetic collaboration, so maybe the combination doomed them from the start. But on a day-to-day basis, we were watching a clown car in the daily briefings! Their hypothesis cannot be borne out on asymptomatic spread, and we have decided once and for all, to lay out the evidence on asymptomatic spread and give our view. This should have never been about supposition, speculation, assumptions or even whimsy by them. This is not evidence-based research, that is not science. Speculation and assumption is not science. They failed catastrophically and must not be allowed to re-write their history.

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All serious research says the same thing.

New Research Suggests Ivermectin Works (HART)

Another conundrum is whether many more lives could have been saved by the early adoption of ivermectin, a repurposed drug, with a long track record of safety for use in parasitic diseases but also shown to have antiviral properties. In the specific case of COVID-19, the mode of action appears to be two-fold: it acts by docking to the SARS-CoV-2 spike receptor-binding domain bound with ACE2 (thus blocking the virus from entering cells), and also acts as an anticoagulant, which protects against the clotting associated with the viral spike protein. Numerous articles summarised by the Front Line COVID-19 Critical Care Alliance have reported successful use both in treatment and prevention of COVID-19 but have been criticised for lack of peer reviewed RCT data.


Last week Dr Tess Lawrie from the Evidence-Based Medicine Consultancy and colleagues published a peer reviewed systematic review and meta-analysis in the American Journal of Therapeutics that showed moderate-certainty evidence of large reductions in COVID-19 deaths. ‘Moderate-certainty’ may sound like an ‘average’ result, but it in fact represents one of the highest certainties possible and the stringent data filters used in this kind of meta-analysis mean that only the most robust RCT data are included. With mild to moderate disease, ivermectin reaches the threshold for ‘high certainty’ of efficacy meaning it appears to be of immense benefit in both the treatment and prevention of COVID-19. Being out of patent, it is incredibly cheap (cost of production is around 3 cents a tablet) and very safe, particularly in comparison to COVID-19 vaccines:

In relation to the above table, it should be noted that around 4 billion doses of ivermectin have been given to humans since reporting started. Real world experience has been enormous and largely censored — something Dr Lawrie has also been subject to, having been removed from Twitter and had articles deleted from LinkedIn. HART has previously highlighted YouTube’s ‘COVID-19 medical misinformation policy’ which outlaws any claims that ivermectin is an effective treatment for the disease. Unfortunately, the influence of pharmaceutical lobbying in preventing the early adoption of ivermectin is evident and it is the sick and dying who inevitably suffer in a system where profit is a huge driver in dictating what does and does not reach the market. There is a point at which enough evidence of efficacy of a medicine has been provided and anything beyond that is deemed ‘unnecessary’.

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13 million per month. Good start, but 260 million people.

Indonesia to Produce Ivermectin Starting in July (Tempo)

State-owned pharmaceutical firm PT Indofarma on Friday spoke about Ivermectin that has recently claimed popularity after a number of public figures claimed the drug’s effectiveness against COVID-19. Asked by Tempo about the price for one pack, Indofarma management stated in a written release on Friday, July 2, that they “established the price for [Ivermectin] at Rp123 thousand.” The product they sell includes 20 tablets of 12 mg per botol. The highest retail price that includes the added-value tax (PPN) is set at Rp157,700 (US$10 in current exchange). Based on Tempo’s observation across online and physical stores the drug is sold at an average price of Rp200,000 (US$13.7) with the highest retail price at Rp256,000 (US$ 17). Ivermectin, as of June 20, has obtained marketing authorization from the Food and Drugs Monitoring Agency (BPOM). Indofarma stated the production of the drug would kickstart in early July, and that it aimed at producing 13.8 million tablets until August 2021.

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Interview with Bret Weinstein.

‘Perverse Incentives’ in the Vaccine Rollout and the Censorship of Science (ET)

You mentioned two areas. One is repurposed drugs therapeutics for COVID, another one is of course, vaccine safety. So what are you seeing? Well, let’s pick one. Let’s go into the vaccine safety first. Dr. Weinstein: Well, I’m not sure that there is even a way to do one without the other. The two appear to be the same story viewed from two different sides. And I think what people need to track is the fact that in order for the vaccines to be administered, they had to get an Emergency Use Authorization. And one of the requirements for the Emergency Use Authorization is that there’d be no safe and effective treatments available. So if the repurposed drugs are as good as some people believe they are, then the vaccines would not be available at all. They would still be in testing.

Add to that the fact that the pharmaceutical companies that manufacture these vaccines have been granted immunity from liability. And these two things in combination, I believe, have created a headlong rush to administering the vaccines to everyone irrespective of medical or epidemiological need. [..] I’ve seen a piece of the censorship on YouTube. YouTube has in their community guidelines, a provision that actually forbids the discussion of ivermectin if the discussion involves the claim that it works. And the problem is that there is substantial evidence that it works. And works doesn’t mean one thing, it actually means two distinct things.

There is strong evidence that ivermectin works for the treatment of COVID, especially if it is given early in the course of disease. It is also apparently highly effective as a prophylactic. And these things are clearly visible in the recent meta-analysis that have been released that show a clear pattern. So somehow on YouTube, the discussion of evidence that has been peer-reviewed and delivered within the scientific literature is forbidden because it contradicts the CDC’s view, which is that ivermectin does not work or that there is no evidence that it works. [..] I learned this from Robert Malone, who is the inventor of mRNA vaccine technology, and he is also somebody who has been involved in a professional capacity inside the regulatory apparatus.

And what he said is that at the point that the Emergency Use Authorizations for the vaccines were granted, there was the opportunity to require extra data to be collected to find out what the impact of these vaccines was on the people who received them. And a choice was made not to collect the data, which I find quite alarming in light of the fact that the process of establishing the safety of these vaccines was necessarily truncated in order to bring them to the public so quickly. [..] the ramifications of it are that we are exposing a huge fraction of the population to what is in effect, a scientific experiment, except that it isn’t a scientific experiment because we are deliberately avoiding collecting data that would allow us to evaluate the impact.

And I find that shocking. It is one thing to argue that we have no choice that COVID-19 is an emergency and we have to make shortcuts that we would not ordinarily consider. I accept that argument. I also accept that these vaccines appear to work at least in the short term. But the right thing to do in order to make proper medically justified decisions and epidemiologically justified decisions is to collect the data on what happens after administration. These are brand new technologies. They have many different ways in which they could fail, and it is our obligation, especially to the people who receive these vaccines, that we collect the data on what happened. And to not do so means that we are very likely to put people in danger in the future with no justification for it.

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Yup, it’s Daszak.

Lancet Accused Of Doing China’s Dirty Work Denouncing Lab Leak Theory (DM)

The Lancet letter, signed by 27 experts, played a key part in silencing scientific, political and media discussion of any idea that this pandemic might have begun with a lab incident rather than spilling over naturally from animals. It was even reportedly used by Facebook to flag articles exploring the lab leak hypothesis as ‘false information’ before the social media giant dramatically changed tack last month. Yet it emerged later that The Lancet statement was covertly drafted by British scientist Peter Daszak – a long-term collaborator with the Wuhan Institute of Virology, which was carrying out high-risk research on bat coronaviruses and had known safety issues.

Daszak is the £300,000-a-year president of EcoHealth Alliance, a New York-based charity that funnelled funds to his friend Shi Zhengli, the Wuhan virologist known as ‘Batwoman’ for her work in collecting samples from bats. Four months later, The Lancet set up a ‘Covid-19 Commission’ to assist governments and scrutinise the origins. It was led by Jeffrey Sachs, the celebrity economist and author who campaigns on aid with rock star Bono. Sachs recently dismissed claims that China is committing genocide on the Uighurs, adopting Beijing’s line that it is confronting Islamic militancy. Incredibly, he backed Daszak to lead his commission’s 12-person taskforce investigating Covid’s origins – joined by five fellow signatories to The Lancet statement.

Daszak’s conflicts of interest were exposed by this newspaper six months ago. Last week The Lancet finally ‘recused’ him from its commission and published an ‘addendum’ to its statement detailing some of his Chinese links. Yet critics say the journal has still failed to admit that six more signatories to that February statement have ties to Daszak’s EcoHealth Alliance as directors or partners. ‘It would have been better for The Lancet to have stated that Daszak’s and other signers’ previous declarations were untruthful and to have attached an editorial expression of concern,’ said Richard Ebright, a bio-security expert and professor of chemical biology at Rutgers University in New Jersey.

Now The Mail on Sunday has learned that The Lancet is set to publish a second statement by these signatories that presses the case that Covid probably emerged through natural ‘zoonotic’ transmission from animals to humans. ‘We consider that it seems more likely a transmission through an intermediate mammalian host, although other possibilities can’t be fully excluded,’ said one, adding that they were still ‘missing some signatures’. Four of The Lancet’s original experts seem to have since shifted their position, including Charles Calisher, a Colorado virologist. He admits ‘there is too much coincidence’ to ignore the lab leak hypothesis and that ‘it is more likely that it came out of that lab’.

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And Daszak again.

Daszak Refuses House Request For Wuhan Docs, Democrats Fail To Subpoena (JTN)

Amajor conduit of federal research funding to the Chinese coronavirus lab at the center of ongoing speculation over the origins of the SARS-Cov-2 virus is not complying with a months-old request from House Republicans for documentation related to his work with that lab, while Democrats in the House have failed to issue a subpoena to compel that evidence. Peter Daszak, the president of the U.S. nonprofit EcoHealth Alliance, has been the subject of growing scrutiny over the last several months regarding his role in the funding of the Wuhan Institute of Virology. For several years leading up to the pandemic, EcoHealth Alliance funneled hundreds of thousands of dollars in federal research grants to the WIV for the study of potential pandemic coronaviruses at the Wuhan lab.

As government investigators and journalists dig to uncover the full scope of Daszak’s links to the WIV, Daszak is continuing to spurn a congressional request for that information. In April, Republicans on the House Committee on Energy and Commerce sent Daszak a letter directing him to submit, among many other documents, “all letters, emails, and other communications between [EcoHealth] and [the WIV] related to terms of agreements, bat coronaviruses, genome or genetic sequencing, SARS-CoV-2, and/or laboratory safety practices” pursuant to key NIH research funding through EcoHealth to the Wuhan lab as a grant sub-recipient.

Yet Daszak himself has not cooperated with the request. An aide with the Energy and Commerce Committee confirmed to Just the News this week that the committee has “received no response still from EcoHealth Alliance and Peter Daszak to the April 16th letter from Leaders Rodgers, Guthrie, and Griffith.” Washington GOP Rep. Cathy McMorris Rodgers has also publicly noted Daszak’s refusal to cooperate with the request made roughly two and a half months ago. “We have asked Daszak to provide information we know he has that sheds light on the origins of this pandemic,” Rodgers said during a House subcommittee hearing this week. “But he refuses to cooperate.” “Dr. Daszak, you received American funds you used to conduct research on bat coronaviruses at the Wuhan Institute of Virology,” Rodgers continued. “You owe it to the American people to be transparent.”

[..] The committee itself could subpoena Daszak for the materials; both House and Senate committees enjoy subpoena powers pursuant to investigations within their congressional purviews, something that has been upheld by the Supreme Court several times. Yet subpoena power in both chambers is controlled by whichever party is in the majority. Democrats still hold a slim majority in the House, meaning the ultimate authority to compel Daszak to produce the documentation rests with that party, specifically in this case with Energy and Commerce Committee Chairman Frank Pallone.

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“DOES ANY SANE PERSON CARE WHAT LITTLE NAPOLEON SAYS?”

Fauci Doubles Back To Masks – For the Vaccinated (JTN)

Less than two months after the government eased its COVID-19 mask requirements, the nation’s chief infectious disease specialist suggested Sunday that vaccinated Americans “go the extra mile” and begin wearing them again in low vaccinated areas. Dr. Anthony Fauci’s recommendation led to howls by many on Twitter, who noted recently released emails from the NIH doctor suggested masks provided little protection. “DOES ANY SANE PERSON CARE WHAT LITTLE NAPOLEON SAYS?,” a woman with the Twitter handle Conservative Gal tweeted Sunday afternoon. The Centers for Disease Control and Prevention on May 13 eased mask restrictions as vaccinations grew quickly.


Fauci made the rounds on the Sunday shows to address the new, contagious COVID-19 delta variant and slowing vaccination rates, offering his changed advice on masks. “If you put yourself in an environment in which you have a high level of viral dynamics and a very low level of vaccine, you might want to go the extra step and say ‘When I’m in that area where there’s a considerable degree of viral circulation, I might want to go the extra mile to be cautious enough to make sure that I get the extra added level of protection, even though the vaccines themselves are highly effective,’” Fauci told NBC’s “Meet The Press.” Some blue cities like Los Angeles and St. Louis have already reinstated a mask advisory for vaccinated and unvaccinated citizens as the delta variant has spread.

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The things that nobody wants to know.

Retraction Of Paper On Vaccine Deaths Spurs Call For More Scrutiny (JTN)

Should public health authorities scrutinize deaths attributed to COVID-19 as closely as they scrutinize deaths attributed to COVID-19 vaccines? Defenders of a controversial study on the risk-benefit ratio of COVID-19 vaccines are calling hypocrisy on a medical journal for retracting the paper a week after publishing it, following the resignations of several journal editors in protest. In a Friday retraction notice in the journal Vaccines, the editor in chief and “several” editorial board members said the paper’s authors were not able to “satisfactorily” answer claims that they conflated correlation with causation. Analyzing data from the Netherlands Pharmacovigilance Centre, known as LAREB, the paper’s authors estimated COVID-19 vaccines take two lives for every three they save. The country leads Europe in vaccine adverse-reaction reporting.

Authors Harald Walach, Rainer Klement and Wouter Aukema challenged criticism from Eugene van Puijenbroek, who leads LAREB’s scientific department, that they had misused its data. “This starts a long-overdue debate on how to gauge the safety of COVID-19 vaccines,” they wrote in a statement provided to Retraction Watch Thursday. “Currently we only have association, we agree, and we never said anything else. But the same is true with fatalities as consequences of SARS-CoV2-infections [sic],” which are “rarely vetted by autopsy or second opinion” to confirm they were caused by the novel coronavirus, rather than incidental to infection. Brown University epidemiologist Andrew Bostom wasn’t impressed by the journal’s “baloney” explanation for the retraction, either.

“The [vaccine] deaths are as causally related as C19 deaths which allow for any positive test within 30-60 days of a death from any cause to be tallied as a C19 death,” he wrote in a Twitter message to Just the News. Bostom pointed to a June study, not yet peer-reviewed, of a sample of deaths in the U.S. Vaccine Adverse Events Reporting System reported through April. The sample was limited to people who got early vaccinations, primarily elderly or those with “significant health conditions.” Researchers at the University of London and New Zealand’s Massey University found that they could rule out “vaccine reaction” as a contributing factor in just 14% of deaths. “Contrary to claims that most of these reports are made by lay-people and are hence clinically unreliable, we identified health service employees as the reporter in at least 67%,” they wrote.

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They’re always on the verge of collapse?!

OPEC On Verge Of Collapse After Saudis, UAE Refuse To Budge (ZH)

Is the world about to go through another 2014 Thanksgiving massacre when OPEC collapsed sending the price of oil crashing and unleashing a brief if catastrophic wave of destruction across the US shale sector? That’s what commodity traders are wondering this long weekend when just two days after the UAE refused to fall inline with the rest of OPEC+, late on Sunday, in a Bloomberg TV interview, Saudi Prince Abdulaziz said that “we have to extend,” referring to the deal agreed upon by all but the UAE on Friday, according to which oil production would be increased by 400kbd over the next few months, while also extending the broader production quota agreement until the end of 2022 for the sake of stability: “the extension puts lots people in their comfort zone” said the Saudi, adding that Abu Dhabi was isolated within the OPEC+ alliance.

“It’s the whole group versus one country, which is sad to me but this is the reality”, the Saudi summarized the potentially explosive situation, which has seen Saudi Arabia and the United Arab Emirates crank up the tension in their OPEC standoff which as Bloomberg summarizes, has left the global economy guessing how much oil it will get next month. The bitter clash between the Saudis and UAE has forced OPEC+ to halt talks twice already, with the next meeting scheduled for Monday, putting markets in limbo as oil continues its inflationary surge above $75 a barrel. With the cartel discussing its production policy not only for the rest of the year, but also into 2022, the solution to the standoff will shape the market and industry into next year.

While traditionally the oil cartel has been shy of publicity, keeping its spats behind close doors, on Sunday the fight between the two key producers broke into public view with both countries, which typically keep their grievances within the walls of the royal palaces, airing their differences on television, with Riyadh insisting on its plan, backed by other OPEC+ members including Russia, that the group should both increase production over the next few months, while also extending the broader agreement reached in the aftermath of the oil price collapse of 2020 until the end of 2022 to avoid a production glut. Just hours earlier, the Emirati energy minister, Suhail al-Mazrouei, again rejected the Saudi-proposed deal extension, supporting only a short-term increase and demanding better terms for itself for 2022. “The UAE is for an unconditional increase of production, which the market requires,” Al-Mazrouei told Bloomberg Television earlier on Sunday. Yet the decision to extend the deal until the end of 2022 is “unnecessary to take now.”

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“..only 73% of the state-imposed shrinkage of hours worked has been recovered as of June 2021.”

No, We Weren’t All Born Yesterday (David Stockman)

According to the mainstream narrative, we were all born yesterday. There is no such thing as context, history or critical analysis – just cherry-picked short-term data-deltas, which are held to be either awesome or at least much improved from last time. That’s why we predictably got this headline from the Wall Street Journal with reference to today’s June employment release, which allegedly showed “employers added 850,000 jobs last month”: Stocks Tick Higher With Strong Jobs Report Well, no, it wasn’t and they (employers) didn’t. In fact, total hours worked in June actually declined from the May level, and, far more importantly, were still down 4.4% from the pre-Covid peak in February 2020.

When expressed in total hours, there is absolutely nothing “strong” at all about the numbers. To wit, at the end of Q2 2021 total hours employed in the nonfarm economy were still down 8 billion hours from the Q4 2019 level. That’s right. Eight billion worker hours are MIA, yet the lazy shills at the WSJ, Bloomberg, Reuters et. al. keep pumping out bilge about an awesome economic rebound! Actually, what has never been noted notwithstanding the fact that it sits there in plain sight on the BLS website is that Dr. Fauci and his economy wreckers dug a far deeper hole in the main street labor market last spring than the narrative led you to believe. At the pre-Covid peak in Q4 2019, the nonfarm economy utilized 257.2 billion labor hours at an annualized rate, but that plunged by nearly -12% to just 227.6 billion hours in Q2 2020.

So doing, Fauci & Co wiped out all of the aggregate nonfarm labor hours gain since Q4 2011. That is to say, it obliterated the awesome gains that had been contained in 102 monthly Jobs Friday reports in the interim. And now, after $4 trillion of freshly printed fiat cash and $6 trillion of stimmies and other bailouts and free stuff only 73% of the state-imposed shrinkage of hours worked has been recovered as of June 2021.

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By some measures, still the world’s biggest bank.

HSBC in Big Trouble in its Biggest Market, China (WS)

HSBC, headquartered in the UK, is first and foremost an Asian bank. The Hongkong and Shanghai Banking Corporation Limited cut its teeth in the 19th century in Greater China. In 2020, its Mainland and Hong Kong operations accounted for 39% of its annual $50 billion in revenue, while the United Kingdom, its second largest market, brought in 28%. The bank is now selling off its retail banking units in France and the United States and scaling back its presence in some emerging markets in order to accelerate its eastward pivot. But there’s a problem with this plan: Its success rests largely on the bank’s ability to maintain good relations with the Chinese government. And that is proving to be a tough proposition.

Relations have soured significantly over the past two years after it was revealed in 2019 that HSBC had ratted out Chinese telecom giant Huawei to the U.S. Department of Justice for breaching U.S. sanctions on Iran. The information provided by HSBC led to the arrest of Meng Wanzhou, Huawei’s chief financial officer and daughter of the company’s founder, in Vancouver in 2018. As geopolitical tensions have escalated between the US and China, HSBC has had to walk a tightrope in its relations with China on the one hand and Washington and London on the other. The lenders’ travails reveal a core challenge for multinational firms operating in China: the market is vital to their growth prospects, but Western firms doing business there increasingly risk being mired in the ratcheting tensions between Beijing and the West.

But given the size and growth of the market, many big global banks have decided to continue expanding in China, whether organically or through acquisitions. HSBC Holdings PLC, Standard Chartered PLC and Citigroup Inc. have all unveiled plans to beef up their wealth management operations in China, targeting the growing middle class. But with net profits for foreign lenders falling precipitously and Beijing demanding that foreign companies toe the line as the US ramps up sanctions on China, it’s getting more and more complicated.

Read more …

 

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Jun 042020
 


G. G. Bain On beach near Casino, Asbury Park 1911

 

Malaria Drug Touted By Trump Fails To Prevent COVID19 In High Profile Study (R.)
Big HCQ Study the Media Went Nuts Over Turned Out to Be a Scam (RS)
Concerns Mount Over Study Attacking Hydroxychloroquine (JTN)
WHO Set To Resume Hydroxychloroquine Trial In Battle Against COVID19 (R.)
Brazil Sets Record For Daily Coronavirus Deaths, Beating Tuesday (R.)
US Airlines Gain Final Approval To Drop Services To 75 Domestic Airports (R.)
Qantas To Boost Domestic Capacity To 15% Of Normal By End Of June (R.)
What Will it Take to Save the Airlines? (Horan)
Protest Disrupts Hong Kong Legislative Debate Over China Anthem Bill (R.)
HSBC Breaks Silence And Backs National Security Law For Hong Kong (SCMP)
Rosenstein Points Clear Finger At FBI (JTN)
Rosenstein: Trump Did Not Commit ‘A Crime That Warrants Prosecution’ (JTN)
With US In Crisis, Germany Reluctant To Be ‘Leader Of The Free World’ (SCMP)
Nation Feigns Surprise At Government Handout To Rich Homeowners (Chaser)

 

 

Worldometer puts global new cases in past 24 hrs at + 121,413. I counted under 80K yesterday, using their numbers.

New cases past 24 hours in:

• US + 20,578
• Brazil + 28,663
• Russia + 8,536
• India + 9,572
• Chile + 4,942
• Pakistan + 4,801

 

 

The UK had more COVID19 deaths yesterday than the 27 EU countries combined.

 

 

 

Cases 6,596,501 (+ 122,212 from Saturday’s 6,474,289)

Deaths 388,421 (+ 5,507 from Saturday’s 382,914)

 

 

 

From Worldometer yesterday evening -before their day’s close-:

 

 

From Worldometer:

 

 

From COVID19Info.live:

 

 

 

 

 

 

This just goes on. WIth one study fully discredited, they seamlessly switch to the next. This time HCQ doesn’t kill, but it’s “ineffective”. Ineffective in what? In preventing infection. Only, no-one ever said it would do that. HCQ and zinc combine to prevent the virus, once you are infected, from doing further and grave damage to your body.

That’s all. When used for malaria, the idea never was that HCQ could prevent infection either. Instead, it helps the body fight the pathogen.

Oh, and if you’re Reuters and you think that after all the articles about HCQ, you still must put “Malaria Drug Touted By Trump” in your headline, I’d say you have a very big bias issue.

Malaria Drug Touted By Trump Fails To Prevent COVID19 In High Profile Study (R.)

The malaria drug promoted by U.S. President Donald Trump as a treatment for COVID-19 was ineffective in preventing infection in people exposed to the coronavirus, according to a widely anticipated clinical trial released on Wednesday. The new trial found no serious side effects or heart problems from use of hydroxychloroquine. Vocal support from Trump kicked off a heated debate and raised expectations for the decades-old drug that could be a cheap and widely available tool in fighting the pandemic that has infected more than 6.4 million people and killed over 382,000 worldwide. In the first major study comparing hydroxychloroquine to a placebo to gauge its effect against the new coronavirus, University of Minnesota researchers tested 821 people who had recently been exposed to the virus or lived in a high-risk household.


It found 11.8% of subjects given hydroxychloroquine developed symptoms compatible with COVID-19, compared with 14.3% who got a placebo. That difference was not statistically significant, meaning the drug was no better than placebo. “Our data is pretty clear that for post exposure, this does not really work,” said Dr. David Boulware, the trial’s lead researcher and an infectious disease physician at the University of Minnesota. Several trials of the drug have been stopped over concerns about its safety for treating COVID-19 that were raised by health regulators and previous less rigorous studies. “I think both sides – one side who is saying ‘this is a dangerous drug’ and the other side that says ‘this works’ – neither is correct,” said Boulware.

Read more …

“How many people who might have been helped by the drug, if used properly early in the process, might be alive had countries and doctors not been so discouraged from using it?”

Big HCQ Study the Media Went Nuts Over Turned Out to Be a Scam (RS)

Hydroxychloroquine is back in the news today after a major study, which was widely touted by the media a few weeks ago, has turned out to be a scam. The study was also used to change coronavirus treatment policies by the World Health Organization. Now, we are learning that that the company that supposedly did the study, and has helped push others, is a front company of some kind. Further, the person who put the data together is not a scientist, but a science fiction author. The studies produced by this company were published by Lancet, a renowned medical journal, and used as evidence to attack Donald Trump with.

Lancet has now issued an “expression of concern,” demanding that the company provide details on their data and methodology. Given what’s already been revealed, you’d think they’d just disown the studies altogether, but I suspect they want to save face. While these studies being frauds is bad, what’s worse is that the media took their message far and wide, literally painting hydroxychloroquine as some kind of death sentence. How many people who might have been helped by the drug, if used properly early in the process, might be alive had countries and doctors not been so discouraged from using it? We may never know the answer to that, though the usual suspects continue to dig in behind their narrative.


This does provide some notion to how flawed the medical journal system is. Why would something like this be published and used to make life and death decisions when Lancet wasn’t even aware of their methodology? It seems rather insane on it’s face.

Read more …

Time to seriously investigate Surgisphere, who funds it?, and while you’re at it, look at how the Lancet dumped its own standards when it published this. The suggestion that a scifi writer and an adult content provider are behind Surgisphere are a bonus.

Concerns Mount Over Study Attacking Hydroxychloroquine (JTN)

Two major medical journals have issued alerts that recent scientific data regarding the drug hydroxychloroquine may have significant flaws, with the two journals claiming “substantive concerns” and “significant scientific questions” have been raised regarding the validity of the cited information. A study published on May 22 in the journal The Lancet by medical data analytics company Surgisphere determined that hydroxychloroquine — a drug repeatedly touted by President Trump as a possible viable treatment for the coronavirus — was “associated with an increased risk of in-hospital mortality” when given to COVID-19 patients. A total of 9,273 patients in the study received some form of hydroxychloroquine treatment. Patients given that drug, the study concluded, are also more likely to experience “de-novo ventricular arrhythmia,” a condition in which the heart beats irregularly.

Those conclusions so alarmed the World Health Organization that it announced at the end of last month that it would be pausing its own hydroxychloroquine trials “while the data is reviewed by the Data Safety Monitoring Board.” Barely a week after that announcement, serious questions are beginning to arise surrounding the study by Surgisphere. The World Health Organization has since resumed its hydroxychloroquine trials. The Lancet and the New England Journal of Medicine, meanwhile, have both signaled concerns over Surgisphere’s data and analytical methods. A breakdown of the alleged problems surrounding the Surgisphere study — as well as questions regarding the company itself — was published late last month by medical student James Todaro at his website “Medicine (Un)Censored,” an aggregator of COVID-19 news that heavily touts the purported benefits of hydroxychloroquine in treating the disease.


Todaro wrote on the website that the Surgisphere study had numerous data issues, including overcounting COVID-19 deaths on the Australian continent as well as the study’s claim that it included in its dataset nearly every single hospitalized COVID-19 patient in North America. The study also “reports patient data from Africa that requires sophisticated patient monitoring technology and electronic medical record systems,” factors Todaro clams are unlikely to be present in sufficiently high numbers in many African hospitals.

Read more …

The WHO is an empty facade.

WHO Set To Resume Hydroxychloroquine Trial In Battle Against COVID19 (R.)

The World Health Organization will resume its trial of hydroxychloroquine for potential use against the coronavirus, its chief said on Wednesday, after those running the study briefly stopped giving it to new patients over health concerns. The U.N. agency last month paused the part of its large study of treatments against COVID-19 in which newly enrolled patients were getting the anti-malarial drug to treat COVID-19 due to fears it increased death rates and irregular heartbeats. The study continued with other medicines. But the WHO’s director-general, Tedros Adhanom Ghebreyesus, said its experts had advised the continuation of all trials including hydroxychloroquine, whose highest-profile backer for use against the coronavirus is U.S. President Donald Trump.


“The executive group will communicate with the principal investigators in the trial about resuming the hydroxychloroquine arm of the trial,” Tedros told an online media briefing, referring to WHO’s initiative to hold clinical tests of potential COVID-19 treatments on some 3,500 patients in 35 countries. The WHO’s decision to suspend its trial prompted others to follow suit, including Sanofi, which said on May 29 it was suspending recruitment for its trials. A Sanofi spokesman said the company would review available information and run consultations in the coming days to reassess its position following the WHO’s latest decision on Wednesday. The WHO’s chief scientist, Soumya Swaminathan, called for other trials of the drug to proceed. “We owe it to patients to have a definitive answer on whether or not a drug works,” she said, adding that safety monitoring should also continue.

Read more …

Hoe much longer for Bolsonaro?

Brazil Sets Record For Daily Coronavirus Deaths, Beating Tuesday (R.)

Brazil registered a record number of daily deaths from the coronavirus for the second consecutive day, according to Health Ministry data released on Wednesday. The nation recorded 1,349 new coronavirus deaths on Wednesday, and 28,633 additional confirmed cases, the data showed. Brazil has now registered 32,548 deaths and 584,016 total confirmed cases.

Read more …

As the country opens up, airlines cut flights. But of course.

US Airlines Gain Final Approval To Drop Services To 75 Domestic Airports (R.)

Fifteen U.S. airlines were granted final government approval on Wednesday to temporarily halt service to 75 domestic airports as travel demand has been crushed due to the coronavirus pandemic. The U.S. Transportation Department said all airports would continue to be served by at least one air carrier. Despite some objections to a tentative list made public on May 22, the government did not make any changes.The U.S. airline industry has been awarded $25 billion in government payroll assistance grants to help weather the pandemic. While carriers must maintain minimum service levels to receive the assistance, many petitioned to stop service to airports with low passenger demand. The department has previously allowed some airlines to halt service to some airports and rejected other requests.


Both United Airlines and Delta Air Lines won approval to halt flights to 11 airports. Allegiant Air was allowed to halt service to six airports, while JetBlue, Alaska Airlines, Spirit Airlines and Frontier Airlines gained approval to stop flights to five airports each. U.S. air carriers have said they are collectively burning through more than $10 billion in cash a month as travel demand remains a fraction of prior levels. They have parked more than half of their planes and cut thousands of flights. Cities that Delta can halt service to include Aspen, Colorado; Bangor, Maine; Santa Barbara, California and Flint, Michigan. United can halt service to airports including Chattanooga, Tennessee; Hilton Head and Myrtle Beach, South Carolina as well as Key West, Florida.

Read more …

The 15% is a good indication of how long of a battle this will be.

Qantas To Boost Domestic Capacity To 15% Of Normal By End Of June (R.)

Australia’s Qantas Airways and Air New Zealand on Thursday outlined plans for significant boosts to domestic capacity as pandemic-related travel restrictions ease, sending their shares higher. Qantas said it would lift domestic capacity to 15% of pre-pandemic levels by the end of June, up from 5% now. The airline said more flights are likely in July depending on travel demand and further opening of state borders, with the ability to increase to up to 40% of pre-crisis capacity by the end of July. Air New Zealand said it would raise domestic capacity to 55% of normal levels during July and August, up from 20% after a strict nationwide lockdown was lifted in May.


Qantas shares were trading 5% higher at 0240 GMT, while Air New Zealand shares were up 4.8%. Australia and New Zealand have both reported few new COVID-19 cases in recent weeks. Qantas Chief Executive Alan Joyce said there was pent-up demand for domestic air travel. “We are already seeing a big increase in customers booking and planning flights in the weeks and months ahead,” he said in a statement.

Read more …

Hubert Horan has 40 years of experience in the management and regulation of transportation companies (primarily airlines). Horan currently has no financial links with any airlines or other industry participants

What Will it Take to Save the Airlines? (Horan)

Coronavirus has created the greatest challenge the airline industry has ever faced. For the large legacy carriers serving intercontinental markets, the threat is comparable to the meteor that caused massive climate change and drove dinosaurs into extinction. While the industry was clearly viable prior to coronavirus, it faced a number of serious competitive and financial issues that will impede efforts to deal with the impact of the coronavirus meteor. The industry requires major, painful restructuring. Baring staggering increases in taxpayer subsidies (beyond the $60 billion already pledged in the US), it is unclear how most (perhaps any) of these carriers survive under current ownership in anything like their current form. None of the needed changes are even being discussed within the industry at this point, and the processes needed to manage the needed restructuring do not currently exist.

Airline economics depend critically on extremely high capacity utilization. Small changes have huge profit leverage. US airlines filled 85% of their seats in 2019 (up from 58% when the industry was deregulated and 70% 20 years ago). Once an airline has committed to the costs of operating a given schedule, almost all of the lost revenue from a shortfall of passengers directly reduces the bottom line. Coronavirus-driven traffic losses have been vastly larger than anyone could have ever imagined. Traffic through TSA checkpoints in US airports was down 96% versus the year before in mid April and 88% in mid-May. While the industry had faced demand shocks in the past (9/11 in the US, various wars, the original SARS outbreak in Asia), none were global in scope, and none were seen as driving permanent declines in demand. Never before has flying on an airplane required accepting serious medical risk.


In a recent poll only 23% of US travelers thought flying on an airplane was safe. While no one knows what will happen, this analysis assumes that there is no widely available vaccine and no reliable way to prove individual immunity during 2020. Perhaps infection rates decline gradually and economic activity gradually increases. Perhaps there are new outbreaks and efforts to reopen the economy are put on hold. Perhaps economic activity declines seriously as companies realize that recent losses are unsustainable, and major new waves of layoffs and bankruptcies occur. But the idea of a rapid, “V-shaped” recovery to the January status quo seems wildly improbable.

Read more …

No Tiananmen square commemoration, but a vote over a bill that would criminalise disrespect of China’s national anthem. Happy days. [UPDATE: the law passed].

Protest Disrupts Hong Kong Legislative Debate Over China Anthem Bill (R.)

Police and firefighters entered Hong Kong’s legislature on Thursday after two pro-democracy lawmakers threw foul-smelling liquid to protest against China’s “murderous” crackdown by Chinese troops in and around Tiananmen Square 31 years ago. Lawmakers Eddie Chu and Ray Chan rushed to the front of the chamber during a debate over a controversial bill that would criminalise disrespect of China’s national anthem, splashing the reeking fluid as guards grappled with them. Police and firefighters later arrived on the scene. “A murderous state stinks forever. What we did today is to remind the world that we should never forgive the Chinese Communist Party for killing its own people 31 years ago,” Chu said later, before he and Chan were removed from the chamber.


A final vote on the bill is expected later on Thursday with people in Hong Kong set to commemorate the bloody 1989 crackdown by lighting candles across the city. For the first time, police have banned an annual vigil to mark the event that is usually held in downtown Victoria Park, citing the coronavirus outbreak. The disruption in the legislature came after pro-establishment lawmakers vetoed most amendments to the anthem bill proposed by democrats. If passed, the bill could punish those who insult the anthem with up to three years jail and/or fines of up to HK$50,000 ($6,450). It states that “all individuals and organisations” should respect and dignify the national anthem and play it and sing it on “appropriate occasions”.

Read more …

You know the oddest thing about this? HSBC backs a law without knowing what’s in it. Not only hasn’t it been released yet, it’s still being drafted.

This is the biggest bank in Europe. Maybe it should no longer be.

HSBC Breaks Silence And Backs National Security Law For Hong Kong (SCMP)

HSBC has broken its silence and offered its support for the national security law that Beijing is drafting for Hong Kong, days after a former city chief who is now a state leader criticised the banking giant for not making its stance on the legislation clear. It posted an article on HSBC China’s WeChat account on Wednesday, with the headline saying the group’s Asia-Pacific CEO had signed a petition supporting the new law. The article noted that the Hong Kong Association of Banks had already issued a statement saying the law would contribute to a stable business environment and raise investor confidence in the city.


“As a key member of the association, HSBC reiterates that under the ‘one country, two systems’ principle, it respects and supports all laws that stabilise Hong Kong’s social order and boost the economy to develop prosperously,” it said, referring to the framework under which Beijing governs the city. The HSBC group is headquartered in London. It is the biggest bank in Hong Kong and Europe and is dual-listed in the city and London. China’s top legislature, the National People’s Congress, announced on May 21 that its standing committee would draft a tailor-made national security law for Hong Kong. The law is likely to be passed by August, with Beijing identifying it as a necessity amid anti-government protest violence and perceived external interference. It aims to prevent, stop and punish secession, subversion of state power, terrorism and foreign interference in Hong Kong, but opposition politicians and critics warn it could be used to suppress dissent and erode long-standing freedoms.

Read more …

The Senate questioning is not the main dish. But it’s an okay starter. Let’s see them squirm and turn on each other.

Rosenstein Points Clear Finger At FBI (JTN)

Former Deputy Attorney General Rod Rosenstein made clear in his Senate testimony he is no Harry Truman or Janet Reno, two larger-than-life Washington figures from yesteryear who embraced the idea that no matter what went wrong on their watch the bucks stops at the top. During three-plus hours of uncomfortable interrogation by Republicans and Democrats alike, Rosenstein repeatedly tried to blame others – the FBI and its former deputy director Andrew McCabe often – for failures in a Russia probe he personally supervised. Rosenstein testified he would not have signed the Foreign Intelligence Surveillance Act warrant targeting Trump adviser Carter Page for a fourth time in summer 2017 if the FBI had just told him about exculpatory evidence.

He acknowledged the Robert Mueller special counsel probe went on for 18 more months after the FBI knew, by August 2017, that there was no evidence of collusion between the Trump campaign and Russia during the 2016 election. And he claimed the FBI kept him in the dark about the fact that its field agents had recommended closing down an investigation of Trump national security adviser Michael Flynn all the way back in January 2017. McCabe, the former deputy director and acting director of the FBI, “was not fully candid with me,” Rosenstein said in explaining how he could be so in the dark on so many critical Russia probe issues. Rosenstein’s performance before the Senate Judiciary Committee on Wednesday frustrated many of the committee’s members.


“He acted like he wasn’t responsible and, you know, that it was somebody else’s responsibility to verify these facts,” Sen. Josh Hawley, R-Mo., said on Fox News after the testimony. Texas Sen. Ted Cruz, R-Texas, took Rosenstein to task during the middle of the hearing. “You came into a profoundly politicized world and yet, all of this was allowed to go forward under your leadership,” Cruz said. “That, unfortunately, leads to only two possible conclusions—either you were complicit in the wrongdoing, which I don’t believe was the case, or that your performance of your duties was grossly negligent.” Rosenstein could only muster this in response: “You always wish you could have done more.”

https://twitter.com/i/status/1268238790184894466

Read more …

Question is: did Rosenstein?

Rosenstein: Trump Did Not Commit ‘A Crime That Warrants Prosecution’ (JTN)

Former Deputy Attorney General Rod Rosenstein on Wednesday appeared before the Senate Judiciary Committee at an oversight hearing about the Crossfire Hurricane investigation and denied that he has ever suggested removing President Trump from office using the 25th Amendment to the U.S. Constitution. “I did not suggest or hint at secretly recording President Trump,” Rosenstein also said during questioning from Democratic Sen. Mazie Hirono. The Hawaiian senator blasted the hearing as a ploy to bolster President Trump’s “conspiracy theories and to help the president’s reelection” and said that it “wastes this committee’s time.”

Hirono asked Rosenstein if he concurred with Attorney General Barr’s statement in a letter to Congress, in which Barr wrote that, “Deputy Attorney General Rod Rosenstein and I have concluded that the evidence developed during the Special Counsel’s investigation is not sufficient to establish that the President committed an obstruction-of-justice offense.” “Did Attorney General Barr accurately present your view regarding the obstruction of justice?” Hirono asked.


“Senator I do not believe that the evidence collected by the special counsel warrants prosecution of the president, that is correct,” Rosenstein replied. The senator pressed the issue of the letter again and asked Rosenstein if he concurred “that there was no obstruction of justice involved?” Rosenstein responded to the senator, reiterating his previous response: “Yes, I do not believe that the president committed a crime that warrants prosecution. And that’s the issue that we review as prosecutors.”

Read more …

People read this as if it’s something serious. But the US hasn’t led the world in many decades. The leader of the free world doesn’t bomb Syria, Libya, Iraq.

With US In Crisis, Germany Reluctant To Be ‘Leader Of The Free World’ (SCMP)

Germans have long viewed the United States as a protector of human rights and democracy around the globe, the undisputed leader of the free world. But many have recoiled in horror at America’s chaos in the last week since the killing of black man George Floyd by police in Minneapolis, which US president Donald Trump threatened to end with military force. The demonstrations have resonated in Germany, a deeply pacifist nation for which military force is anathema. Thousands have protested in front of the US embassy in Berlin and elsewhere, as demonstrations against racism and US police brutality spread in other countries including Britain, France and Australia.

The eruption of violence across the United States, coupled with the disorder in dealing with the Covid-19 pandemic there, has fed into angst in Berlin and other capitals that the United States has lost its way and could be inexorably abdicating its status as leader of the free world. That could create an ominous vacuum that neither Germany nor the European Union is equipped to handle or eager to fill. “Germany is not the leader of the free world,” Juergen Hardt, the head of foreign policy affairs in parliament for Chancellor Angela Merkel’s conservatives, told South China Morning Post, flatly making clear that Europe’s leading nation has no such aspirations.


“There are certainly signs that America is losing the unity and virtues that long made it so strong,” the close Merkel ally and unabashed supporter of tight and trusted transatlantic relations added with a heavy heart. “The whole world always had the faith that America could resolve its issues in the end. You always had a sense that they’d figure it out at some point. That’s why there’s always been such enormous confidence in the United States. There are doubts growing about that now.”

Read more …

“The news has come as a great surprise to Liberal Minister Peter Dutton, who had completely forgotten he owned nine houses when he helped make the decision. ”

Nation Feigns Surprise At Government Handout To Rich Homeowners (Chaser)

The nation has put on its best surprised face today, upon learning that the Liberal government has chosen to give the next round of stimulus money to rich homeowners, in order to help them increase the values on their properties. “Wow never saw that coming,” sighed one Australian today. “I’ve always said the one industry that really needs propping up in this country is the housing market. Absolutely nobody there is getting rich off that already. Glad we could give those battlers a hand up.” The news has come as a great surprise to Liberal Minister Peter Dutton, who had completely forgotten he owned nine houses when he helped make the decision.


“Gosh, the government wants to give thousands of dollars to me, a struggling home owner?” blushed Dutton. “Why this is even better than that handout to child care owners a few months back, which coincidentally also benefited me. Good golly, what are the odds.” Asked what they had planned for the thousands of entertainment industry and tourism industry workers who were currently now entering their third month of unemployment, the government said they already had plans underway to retrain them as real estate agents, to help boost the country’s much more needy housing industry.

Read more …

 

 

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Oct 072019
 
 October 7, 2019  Posted by at 9:30 am Finance Tagged with: , , , , , , , , , , , , ,  23 Responses »


Print your own Assange mask

 

The ‘Whistleblower’ Probably Isn’t (Taibbi)
DNC Colluded With Ukraine To Boost Hillary By Harming Trump – Report (DWire)
Bob Woodward: GOP Senators ‘Choking’ On Trump-Ukraine Scandal (WE)
In Last Minute Call, Erdogan Agrees To Meet Trump Over Syria ‘Safe Zone’ (ZH)
Arise, Commissioner Farage! (Pol.eu)
Brexit Border Talk Stirs Up Bad Memories In Northern Ireland (G.)
An Actual Conspiracy Kept Jeffrey Epstein’s Accomplices out of Prison
Chinese Farmers Raise Mutant Pigs The Size Of Polar Bears (ZH)
Lula’s Prosecutors Request His Release From Prison. He Refuses. (Greenwald)

 

 

Not even close.

The ‘Whistleblower’ Probably Isn’t (Taibbi)

Start with the initial headline, in the story the Washington Post “broke” on September 18th: “TRUMP’S COMMUNICATIONS WITH FOREIGN LEADER ARE PART OF WHISTLEBLOWER COMPLAINT THAT SPURRED STANDOFF BETWEEN SPY CHIEF AND CONGRESS, FORMER OFFICIALS SAY”. The unnamed person at the center of this story sure didn’t sound like a whistleblower. Our intelligence community wouldn’t wipe its ass with a real whistleblower. Americans who’ve blown the whistle over serious offenses by the federal government either spend the rest of their lives overseas, like Edward Snowden, end up in jail, like Chelsea Manning, get arrested and ruined financially, like former NSA official Thomas Drake, have their homes raided by FBI like disabled NSA vet William Binney, or get charged with espionage like ex-CIA exposer-of-torture John Kiriakou.


It’s an insult to all of these people, and the suffering they’ve weathered, to frame the ballcarrier in the Beltway’s latest partisan power contest as a whistleblower. I’ve met a lot of whistleblowers, in both the public and private sector. Many end up broke, living in hotels, defamed, (often) divorced, and lucky if they have any kind of job. One I knew got turned down for a waitressing job because her previous employer wouldn’t vouch for her. She had little kids. The common thread in whistleblower stories is loneliness. Typically the employer has direct control over their ability to pursue another job in their profession. Many end up reviled as traitors, thieves, and liars. They often discover after going public that their loved ones have a limited appetite for sharing the ignominy. In virtually all cases, they end up having to start over, both personally and professionally.

Read more …

When will the MSM start publishing about the “DNC-UKRAINE SCANDAL”? The Director of the National Anti-Corruption Bureau of Ukraine was convicted in Ukraine for interfering in the U.S. presidential election in 2016…

DNC Colluded With Ukraine To Boost Hillary By Harming Trump – Report (DWire)

The Blaze has released an audio recording that they recently obtained that appears to show Artem Sytnyk, Director of the National Anti-Corruption Bureau of Ukraine, admitting that he tried to boost the presidential campaign of Hillary Clinton by sabotaging then-candidate Donald Trump’s campaign. The connection between the Democratic National Committee (DNC) and the Ukrainian government was veteran Democratic operative Alexandra Chalupa, “who had worked in the White House Office of Public Liaison during the Clinton administration” and then “went on to work as a staffer, then as a consultant, for Democratic National Committee,” Politico reported.

Chalupa was working directly with the Ukrainian embassy in the United States to raise concerns about Trump campaign chairman Paul Manafort and, according to Politico, she indicated that the Embassy was working “directly with reporters researching Trump, Manafort and Russia to point them in the right directions.” The Ukrainian embassy political officer who worked at the embassy at the time, Andrii Telizhenko, stated that the Ukrainians “were coordinating an investigation with the Hillary team on Paul Manafort with Alexandra Chalupa” and that “the embassy worked very closely with” Chalupa. The Blaze highlighted an email from WikiLeaks from Chalupa to Louise Miranda at the DNC:


“Hey, a lot coming down the pipe. I spoke to a delegation of 68 investigative journalists from Ukraine last night at the Library of Congress, the Open World Society forum. They put me on the program to speak specifically about Paul Manafort. I invited Michael Isikoff, who I’ve been working with for the past few weeks, and connected him to the Ukrainians. More offline tomorrow, since there was a big Trump component you and Lauren need to be aware of that will hit in the next few weeks. Something I’m working on that you should be aware of.” The Blaze then reported that Sytnyk, who eventually “was tried and convicted in Ukraine for interfering in the U.S. presidential election in 2016,” released a “black ledger” on Manafort during the 2016 presidential election that eventually led to Manafort’s downfall.

Read more …

Republicans drowning in donations.

Bob Woodward: GOP Senators ‘Choking’ On Trump-Ukraine Scandal (WE)

Veteran journalist Bob Woodward said Republican senators are “choking” on President Trump’s Ukraine scandal. At his second appearance in Spokane, Washington, in as many days, the famed Watergate sleuth discussed the precarious situation GOP lawmakers find themselves in as Trump faces controversy for encouraging foreign countries to investigate Joe Biden, a political rival, and his son Hunter. “I know Republican senators, and they are choking on this,” Woodward said on Friday, according to the Spokesman-Review. “Whether they say that’s too much, I don’t know.” Some Republicans in the upper chamber have begun to break ranks after Trump openly encouraged Ukraine and China to investigate the Bidens on Thursday.

Among those who have vented publicly are Maine Sen. Susan Collins, Nebraska Sen. Ben Sasse, and Utah Sen. Mitt Romney, as well as Texas Rep. Will Hurd in the House. Trump, who claims his overtures were about corruption and not crippling a political opponent in the 2020 election, repeatedly castigated Romney on Saturday, even calling for his impeachment. In a discussion with college students on Thursday, Woodward said the situation for Trump is getting “more serious each day” and predicted that impeachment in the House “is almost certainly going to happen to Trump.” He added, “But then there’s a trial in the Senate.”


On Friday, Woodward acknowledged that Trump encouraging foreign countries to investigate the Biden family is “probably not criminal,” but he nonetheless referred to the controversy as being wide in scope. Speaking of the House impeachment inquiry, Woodward said, “They’re looking through a keyhole, and it’s a panorama.” Woodward also noted how some Republicans in the Senate are seeing an advantage from the Democrats’ impeachment venture. He mentioned that Sen. Lindsey Graham, a former Trump critic who has become one of his most vociferous defenders, is seeing an influx of donations. Woodward said the South Carolina Republican told him he “couldn’t count the money fast enough.”

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Erdogan blames the US for not establishing the safe zone.

In Last Minute Call, Erdogan Agrees To Meet Trump Over Syria ‘Safe Zone’ (ZH)

Turkish President Tayyip Erdogan again threatened this weekend to initiate a military incursion into northeast Syria, where US-backed Syrian Democratic Forces (SDF) are based (and bolstered locally by small American bases), saying an offensive “both on land and air” would come “as soon as today or tomorrow.” Like many threats of an “imminent” invasion, it appears this proverbial can will be kicked further down the road, as presidents Trump and Erdogan held a “last minute” phone call on Sunday, where it appears the two leaders came to some level of an understanding. They discussed Turkey’s proposed “safe zone” east of the Euphrates in Syria — which Erdogan has long urged a resistant Washington to cooperate militarily on — and though exact details of the exchange weren’t published, they agreed to meet in Washington next month upon Trump’s invitation.

“Erdogan expressed Turkey’s unease with U.S. military and security bureaucracies not doing what is required by the agreement between the two countries, the presidency said, adding that the two men agreed to meet,” Reuters reported of the call. As we reported previously, Turkey’s military is reportedly on high alert, ready to carry out the Turkish president’s orders on short notice, after a longtime military build-up along the border. “We will carry out this operation both on land and air as soon as today or tomorrow,” Erdogan said on Saturday. “We gave all warnings to our interlocutors regarding the east of Euphrates and we have acted with sufficient patience,” the Turkish president added.


He further slammed the prospect of cooperating with the US on a US-Turkey administered safe zone “a fairytale” given Washington’s recalcitrance regarding Syria’s Kurds, the ethnic group’s militias of which Turkey considers “terrorists”. The Kurdish dominated and US-backed Syrian Democratic Forces (SDF) has vowed it will treat any invading Turkish soldiers as an act of war. In a statement the SDF said it would “not hesitate to turn any unprovoked (Turkish) attack into an all-out war” to defend its region in northeast Syria, according to Reuters.

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Given what Dominic Cummings thinks of Farage, hard to see him taking up a job with much publicity.

Arise, Commissioner Farage! (Pol.eu)

London may not be planning to nominate a commissioner to Brussels but if it does, some say there’s only one option: Nigel Farage. Conservative MP Steve Baker told the Telegraph’s Chopper Brexit Podcast that the Brexit Party member of the European Parliament would be the obvious choice to be the U.K.’s European commissioner, if Brexit is delayed and the country is able to nominate one. “I think we should appoint somebody with about twenty years experience … we should appoint somebody who’s incredibly well-known throughout the institutions, somebody who can be absolutely relied upon at all times to support our exit from the European Union,” he said.


“And therefore I unashamedly back Nigel Farage to be our next European commissioner in the event, in the unfortunate event, should it transpire, though I think it unlikely, that we have to remain in.” Baker, who leads the pro-Brexit European Research Group of MPs in the U.K. parliament, said the idea would be “inspired by the film Armageddon,” referring to a 1998 science fiction movie. There is a scene where “they’re trying to save the world, and so what they do is they land on the asteroid, and they put a nuclear weapon in the heart of the asteroid, and Nigel Farage is that nuclear weapon,” Baker said. “I’ve reason to think he might say that he would accept such an offer,” Baker added, while noting that “my sympathy for Nigel Farage, which has not always been at very high levels, has dramatically increased the more that I am demonized.”

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A traumatized people. Too easily forgotten.

Brexit Border Talk Stirs Up Bad Memories In Northern Ireland (G.)

Remnants of Hurricane Lorenzo unleashed wind and rain from the Atlantic across the area, a rural pocket of County Fermanagh that marks Northern Ireland’s border with the Republic. “Stay back, stay high, stay dry,” advised the authorities, and residents duly hunkered down. Lorenzo passed without major damage. [..] Around Gortmullan, businesses and ordinary people were left wondering if – and where – to seek cover, a dilemma dating from the 2016 referendum result that now thrummed with urgency. “We’re setting up new companies on both sides of the border,” said Liam McCaffrey, CEO of Quinn Industrial Holdings, which supplies building materials.

Customs checks would be bad enough, but Johnson’s apparent plan to give the Stormont assembly a veto over trading arrangements verged on surreal, said McCaffrey. Power sharing in Northern Ireland collapsed in January 2017 and shows little sign of reviving. “The future of how we trade is to be decided every four years by an assembly that hasn’t sat in three years? Bizarre.” Such was the challenge of Storm Boris. Perhaps it was hot air, a plan destined for oblivion to be superseded by who knows what. Or perhaps it was a blast of what is to come in a no-deal crash-out, or a deal negotiated in the next few weeks or after a general election. The uncertainty was head spinning.


[..] The 310-mile border, drawn in 1922 during the partition of Ireland, bristled with military patrols and fortifications during the Troubles. The 1998 Good Friday agreement and the EU’s single market rendered it invisible, helping to seal the peace. [..] A complex web connects the economies on both sides of the border. Trade in goods is worth about £5.2bn. About a third of Northern Ireland’s goods and services exports are sold to the Republic, while about a quarter of its imports come from the south. Downing Street says electronic paperwork and a “very small number” of physical inspections at traders’ premises would limit disruption. Farmers and business leaders dispute that. Some warn of disaster. Diageo, which makes Guinness and Baileys, estimates a hard border could cost it £1.3m, based on an estimate of an hour’s delay for each of the 18,000 beer trucks that traverse the border each year. Smaller businesses with tight margins could face ruin.

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How could this ever happen? “The parties anticipate that this agreement will not be made part of any public record. If the United States receives a Freedom of Information Act request or any compulsory process commanding the disclosure of the agreement, it will provide notice to Epstein before making that disclosure.”

An Actual Conspiracy Kept Jeffrey Epstein’s Accomplices out of Prison (MJ)

But not limited to: It was just a four-word phrase, a bit of plain contractual verbiage, but even now, more than a decade later, Spencer Kuvin has a hard time expressing just how bizarre it was. “It’s incredibly odd language,” said Kuvin, an attorney in Florida. “I’ve never seen it before in a non-prosecution agreement.” Kuvin and I were talking about the infamous and inexplicable 2007 plea deal offered by then–US Attorney Alexander Acosta, last seen slinking out of the Labor Department’s back door. Kuvin had represented three of Epstein’s victims at the time of the agreement, and Kuvin is still exercised about the deal, in particular its brief immunity clause that continues to protect Epstein’s co-conspirators.

According to a ruling by US District Judge Kenneth Marra in February 2019, “from between about 1999 and 2007, Jeffrey Epstein sexually abused more than 30 minor girls…at his mansion in Palm Beach, Florida, and elsewhere in the United States and overseas.” The ruling goes on to describe a child sex ring: “In addition to his own sexual abuse of the victims, Epstein directed other persons to abuse the girls sexually. Epstein used paid employees to find and bring minor girls to him. Epstein worked in concert with others to obtain minors not only for his own sexual gratification, but also for the sexual gratification of others.”

But back in 2007, Epstein was charged only with procuring an underage girl for prostitution, having struck an unbelievable sweetheart deal with Acosta. Epstein served 13 months in a Palm Beach County jail, of which six days a week were spent on work release in his high-rise office, a limo chauffeuring him to and from jail. He was also required to register as a sex offender. The deal on its face is incredibly favorable to Epstein. If you look closer, things get even better for him:


“The United States also agrees that it will not institute any criminal charges against any potential co-conspirators of Epstein, including but not limited to Sarah Kellen, Adriana Ross, Lesley Groff, or Nadia Marcinkova.” The four women named had allegedly helped recruit underage girls for Epstein at his direction. But that four-word phrase “but not limited to” gave a free pass to anybody who would have helped Epstein acquire or traffic underage girls for sex. How could the government agree to immunize “any potential co-conspirators” of an alleged serial child rapist? The question is at the center of so many conspiracy theories surrounding Epstein’s life and death.

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Me when I see this, I’m thinking Dante’s Ninth Circle of Hell.

Chinese Farmers Raise Mutant Pigs The Size Of Polar Bears (ZH)

Amid one of the worst food crises in recent memory, Chinese farmers are reportedly trying to breed larger pigs as the African swine fever – less affectionately known as ‘pig ebola’ – has destroyed over 100 million pigs, between one-third and a half of China’s supply of pigs by various estimates, causing pork prices to explode to levels never seen before. As Beijing scrambles to make up for the lost domestic supply with imports, even desperately waiving tariffs on American pork products in what China’s politicians tried to sell to their population (and Washington) as a “gesture of goodwill”, farmers in southern China have raised a pig that’s as heavy as a polar bear.

Once slaughtered, these giant mutant pigs can fetch a, well, giant price on the market. Here’s more from Bloomberg: “The 500 kilogram, or 1,102 pound, animal is part of a herd that’s being bred to become giant swine. At slaughter, some of the pigs can sell for more than 10,000 yuan ($1,399), over three times higher than the average monthly disposable income in Nanning, the capital of Guangxi province where Pang Cong, the farm’s owner, lives.” Soaring pork prices have encouraged small and large farms to experiment with DIY genetic experimentation, in the name of raising pigs that are about 40% heavier than the ‘normal’ weight of 125 kilos.

“High pork prices in the northeastern province of Jilin is prompting farmers to raise pigs to reach an average weight of 175 kilograms to 200 kilograms, higher than the normal weight of 125 kilograms. They want to raise them “as big as possible,” said Zhao Hailin, a hog farmer in the region.”

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The entire case is falling to bits.

Lula’s Prosecutors Request His Release From Prison. He Refuses. (Greenwald)

The same Brazilian prosecutors who for years exhibited a single-minded fixation on jailing former President Luiz Inácio Lula da Silva are now seeking his release from prison, requesting that a court allow him to serve the remainder of his 11-year sentence for corruption at home. But Lula — who believes the request is motivated by fear that prosecutorial and judicial improprieties in his case, which were revealed by The Intercept, will lead to the nullification of his conviction — is opposing these efforts, insisting that he will not leave prison until he receives full exoneration. In seeking his release, Lula’s prosecutors are almost certainly not motivated by humanitarian concerns. Quite the contrary: Those prosecutors have often displayed a near-pathological hatred for the two-term former president.

Last month, The Intercept, jointly with its reporting partner UOL, published previously secret Telegram messages in which the Operation Car Wash prosecutors responsible for prosecuting Lula cruelly mocked the tragic death of his 7-year-old grandson from meningitis earlier this year, as well as the 2017 death of his wife of 43 years from a stroke at the age of 66. One of the prosecutors who participated publicly apologized, but none of the others have. Far more likely is that the prosecutors are motivated by desperation to salvage their legacy after a series of defeats suffered by their once-untouchable, widely revered Car Wash investigation, ever since The Intercept, on June 9, began publishing reports based on a massive archive of secret chats between the prosecutors and Sergio Moro, the judge who oversaw most of the convictions, including Lula’s, and who now serves as President Jair Bolsonaro’s Minister of Justice and Public Security.


The prosecutors’ cynical gambit, it appears, is that the country’s Supreme Court — which two weeks ago nullified one of Moro’s anti-corruption convictions for the first time on the ground that he violated core rights of defendants — will feel less pressure to nullify Moro’s guilty verdict in Lula’s case if the ex-president is comfortably at home in São Paulo (albeit under house arrest) rather than lingering in a Curitiba prison. But this strategy ran into a massive roadblock when Lula demanded that he not be released from prison unless and until he is fully exonerated.

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Oct 242017
 
 October 24, 2017  Posted by at 9:10 am Finance Tagged with: , , , , , , , ,  4 Responses »


Bill Brandt After the celebration 1934

 

Everything We Think We Know About Chinese Finances is Wrong (Balding)
China’s Greatest Vulnerabilities (ZH)
Ray Dalio Explains Why 3 in 5 Americans Are Struggling (Fortune)
To Understand the Next 10 Years, Study Spain (Krieger)
HSBC Trader’s Conviction Will Rattle $5 Trillion FX Market (BBG)
The Family That Built an Empire of Pain (New Yorker)
America’s Forever Wars (NYT)
China Speeds Ahead Of US As Quantum Race Escalates (McC.)
EU On Brink Of Historic Decision On Pervasive Glyphosate Weedkiller (G.)
Hidden Danger of Ecological Collapse (CP)

 

 

As Xi Jinping is being written into the Chinese constitution(!), Christopher Balding comes with a long and excellent expose of China’s real debt situation. Makes one wonder what Xi will actually be remembered for.

Everything We Think We Know About Chinese Finances is Wrong (Balding)

China has long faced doubts about the veracity of its economic data and concerns about its rapidly rising level of indebtedness. While defaults and individual incidents raised questions about debt discrepancies, there was no systematic evidence that the financial system faced systemic misstatement. The People’s Bank of China changed that with a few sentences. By some estimate, the widely watched debt to GDP metric in China has already surpassed 300%. While this is level is worrying given financial stress associated with countries that reached similar levels, this is only half the story. There have long been suspicions that Chinese debt numbers are not entirely accurate but data that would demonstrate a systemic difference from data has never emerged.

However, every time a company collapsed, there would inevitably come out a mountain of undeclared debt. While this raised suspicions, there was never systematic evidence. The Financial Stability Board (FSB), formed after the 2008 Global Financial Crisis, aggregates data for major countries that includes a broader measure of assets by banks, insurance companies, and other major asset holders. According to their data, at the end of 2015, China financial system assets had already reached 401% of GDP.

[..] China itself, gave us evidence that its financial data is wildly off. The annual PBOC Financial Stability Report with little fanfare more than doubled its estimates of financial system assets. In a little noticed paragraph the PBOC noted that “the outstanding balance of the off-balance sheet of banking institutions….registered 253.52 trillion yuan.” [..] Nor does the PBOC provide many clues as to what these off balance assets are holding. They do note that roughly two-thirds of the 253 trillion is held as “financial asset services” which may mean everything from structured products sold to clients who believe the bank will stand behind the product, special purpose vehicles holding non-traditional assets, or certain types of financial flows. If we revise our earlier estimate of financial system assets to GDP based upon the new PBOC numbers, China’s position changes dramatically.

[..] If we take the FSB data, add in the new PBOC data, and estimate forward to 2016 Chinese financial system assets are equal to 833% of nominal GDP ahead of Japan at 657% and behind only international banking center United Kingdom at 1008%. This level of asset accumulation imposes real costs. Where as Japan and Europe have close to zero or negative interest rates, China has significantly higher. If we make the simple cheap assumption that these assets earn the short term interbank deposit rate of return of 3.5%, this would imply a financial servicing cost to the economy of 29% of nominal GDP. Conversely, Japan with financial assets of 657% of GDP but using the higher long term loan rates of 1% instead, would need only 6.6% of GDP to service its asset costs.

What makes this disclosure concerning is how extreme the numbers are. Even the FSB placed China among developed country financialization and well outside the range of other emerging markets. The new numbers place China on the extremity of all major economies behind only a major international banking center even in front of Japan who has run strongly expansionary monetary policy for years to try and push inflation. Many analysts have raised concerns about asset bubbles and debt growth in China but even the most bearish would have had trouble believing this level of financialization.

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Victor Shih from the Mercator Institute for China Studies has a few subtle points on China as well.

China’s Greatest Vulnerabilities (ZH)

[..] while some categories of shadow finance, including bill finance and non-loan trust credit, have actually declined in recent months (duly noted here), most other categories rose by double digits in percentage terms in the year and half between the end of 2015 and May 2017. Of note, credit held by funds, rose by 116%. So with credit soaring, Shih – like Goldman clients – asks “how much longer can this go on?” and answers that “the amount of interest that debtors in China must pay creditors provides clues on the costs of such a high debt level. If interest servicing exceeds incremental increase in nominal GDP, the debtor would need to pursue one of two courses of action to avoid a crisis. This ultimately goes to the question whether China has hit its “Minsky Moment” or is still in the Ponzi Finance stage, a discussion popularized by Morgan Stanley first in 2014.

Here are Shih’s observations: First, creditors can extend even more credit to the debtors so that interest payments are serviced with new credit. This mechanism renders China more of a Ponzi unit, which requires new credit to service interest payments. Alternatively, a rising share of income for households, firms, or government will go toward servicing interest. While the first dynamic would cause the acceleration of debt accumulation, the second dynamic is tantamount to a massive tax which will slow growth for an extended period. The problem with both approaches is that China as a whole is a Ponzi unit. And, as Shih calculates and as shown in the chart below, total interest payments from June of 2016 to June of 2017 exceeded incremental increase in nominal GDP by roughly 8 trillion RMB.

And since we have not see large-scale defaults in China, the new additional interest burden must have been financed in some way. Most likely, the Merics analysis notes, roughly this amount or more was capitalized as new loans, contributing to the rapid rise in total debt. As the chart above shows, this was not always the case. Prior to 2011, incremental nominal GDP roughly matched or even exceeded interest payments. The advent of high-yielding shadow banking led to the explosive growth in interest payments, and thus the need to capitalize interest payments, starting in 2012. This is a dynamic which will drive debt growth in China for years to come, or until the debt bubble ends.

So what ends the bubble? According to the Merics analysis, there are 4 possible channels for a financial crisis in China. First, it should be noted that despite the enormous debt load, a domestically triggered crisis is not likely in the next five years. Trouble is more likely to come from some combination of capital flight and sudden withdrawal of external credit.

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Are people finally waking up to what makes societies viable, and what destroys them?

Ray Dalio Explains Why 3 in 5 Americans Are Struggling (Fortune)

The founder of the world’s largest hedge fund has serious concerns about the U.S. economy. In a LinkedIn note published Monday, Ray Dalio, who founded Bridgewater Associates, said that average statistics about what’s going on in the economy mask deep divisions that could lead to “dangerous miscalculations.” To explain this divide, Dalio splits up the economy into two separate sections: the top 40% and the bottom 60%. He then runs through a number of different statistics showing that the economy for the bottom 60% of the population – or three in five Americans – is much less stable than that for those in the top bracket. For example, Dalio notes that, since 1980, real incomes have been flat or down for the average household in the bottom 60%.

Those in the top 40% also now have an average of 10 times as much wealth as households in the bottom 60% — an increase from six times as much in 1980. Other points include that only about one-third of people in the bottom 60% save any of their income and a similar number have retirement savings accounts. These three in five Americans have also seen an increasing rate of premature death and spend an average of four times less on education than those in the top 40%, Dalio wrote. Those without a college education see lower income rates and higher divorce rates. Dalio wrote that all of these concerns will likely intensify in the next five to 10 years, and that he believes policy makers need to take them into consideration. Dalio added that if he were running the Federal Reserve, he would “keep an eye on the economy of the bottom 60%.”

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Can’t stop decentralization.

To Understand the Next 10 Years, Study Spain (Krieger)

Some of you may be confused as to why a U.S. citizen living in Colorado has become so completely obsessed with what’s going on in Spain. Bear with me, there’s a method to my madness. I believe what’s currently happening in Spain represents a crucial microcosm for what we’ll see sweep across the entire planet over the next ten years. Some of you will want to have a discussion about who’s right and who’s wrong in this particular affair, but that’s besides the point. It doesn’t matter which side you favor, what matters is that Madrid/Catalonia is an example of the forces of centralization duking it out with forces of decentralization. Madrid represents the nation-state as we know it, with its leaders claiming Spain is forever indivisible according to the constitution.

Madrid has essentially proclaimed there’s no possible avenue to independence from a centralized Spain even if various regions decide in large number they wish to be independent. This sort of attitude will be seen as unacceptable and primitive by increasingly large numbers of humans in the years ahead. Catalonia should be seen as a canary in the coal mine. The forces of decentralization are rising, but entrenched centralized institutions and the bureaucrats running them will become increasingly terrified, panicked and oppressive. As I’ve discussed, this isn’t coming out of nowhere. Humanity’s current established centralized institutions and nation-states have become clownishly corrupt, merely existing to protect and enrich the powerful/connected as opposed to benefiting the population at large.

As such, legitimacy has been shattered and people have begun to demand a new way. Whether we see this with the rising popularity of Bitcoin, or the UK decision to leave the EU, evidence is everywhere and we’ve already passed the point of no return. This is precisely why EU leaders are rallying around Madrid. They’re scared to death and fear they might be next. They’re probably right.

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Maybe this is good, though one must wonder why the case wasn’t brought before a UK court.

HSBC Trader’s Conviction Will Rattle $5 Trillion FX Market (BBG)

Global currency traders and compliance officers who monitor them were put on high alert after a New York jury convicted a former HSBC executive of fraud for front-running a large client order. The verdict is a victory for U.S. prosecutors in their first attempt to hold individuals accountable since a global currency-rigging probe that led to banks paying more than $10 billion in penalties. Mark Johnson faces a maximum sentence of 20 years in prison, although he’s likely to get much less. Traders will almost certainly come under pressure to avoid conduct that could be seen as harming their clients and profiting unfairly at their expense, said Mayra Rodriguez Valladares, a former foreign-exchange analyst for the Federal Reserve Bank of New York.

“Front-running is a crime,” she said. “This should be a lesson to senior executives that they should invest in more training of ethics for traders and more in systems to detect irregularities.” The verdict is likely to echo worldwide. Although Johnson, HSBC’s global head of foreign exchange in 2011, was in New York at the time of the transaction, the trade was executed primarily in London, where Johnson’s co-defendant, Stuart Scott, was overseeing it. Scott, the bank’s former head of currency trading in Europe, remains in the U.K. as he fights extradition to the U.S. “This conviction will embolden the U.S. in other cases,” said Peter Henning, a law professor at Wayne State University in Detroit. “The U.S. authorities have shown they’re able to police global markets.”

“At its very essence,” he added, “this was a theft case.” Johnson, the first banker to go on trial following the investigation over foreign-exchange trading, was convicted of defrauding Cairn Energy Plc in what prosecutors said was a clear case of front-running the company’s $3.5 billion order. London-based HSBC wasn’t accused of wrongdoing, but the bank has been under investigation over currency trading and is in talks with the Justice Department and U.S. regulators to resolve the matters, according to a July 31 regulatory filing.

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An absolutely crazy story. 145 Americans die every day from opioid overdoses.

The Family That Built an Empire of Pain (New Yorker)

According to Forbes, the Sacklers are now one of America’s richest families, with a collective net worth of thirteen billion dollars—more than the Rockefellers or the Mellons. The bulk of the Sacklers’ fortune has been accumulated only in recent decades, yet the source of their wealth is to most people as obscure as that of the robber barons. While the Sacklers are interviewed regularly on the subject of their generosity, they almost never speak publicly about the family business, Purdue Pharma—a privately held company, based in Stamford, Connecticut, that developed the prescription painkiller OxyContin. Upon its release, in 1995, OxyContin was hailed as a medical breakthrough, a long-lasting narcotic that could help patients suffering from moderate to severe pain. The drug became a blockbuster, and has reportedly generated some thirty-five billion dollars in revenue for Purdue.

But OxyContin is a controversial drug. Its sole active ingredient is oxycodone, a chemical cousin of heroin which is up to twice as powerful as morphine. In the past, doctors had been reluctant to prescribe strong opioids—as synthetic drugs derived from opium are known—except for acute cancer pain and end-of-life palliative care, because of a long-standing, and well-founded, fear about the addictive properties of these drugs. “Few drugs are as dangerous as the opioids,” David Kessler, the former commissioner of the Food and Drug Administration, told me. Purdue launched OxyContin with a marketing campaign that attempted to counter this attitude and change the prescribing habits of doctors. The company funded research and paid doctors to make the case that concerns about opioid addiction were overblown, and that OxyContin could safely treat an ever-wider range of maladies.

Sales representatives marketed OxyContin as a product “to start with and to stay with.” Millions of patients found the drug to be a vital salve for excruciating pain. But many others grew so hooked on it that, between doses, they experienced debilitating withdrawal. Since 1999, two hundred thousand Americans have died from overdoses related to OxyContin and other prescription opioids. Many addicts, finding prescription painkillers too expensive or too difficult to obtain, have turned to heroin. According to the American Society of Addiction Medicine, four out of five people who try heroin today started with prescription painkillers. The most recent figures from the Centers for Disease Control and Prevention suggest that a hundred and forty-five Americans now die every day from opioid overdoses.

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They’re everywhere.

America’s Forever Wars (NYT)

The United States has been at war continuously since the attacks of 9/11 and now has just over 240,000 active-duty and reserve troops in at least 172 countries and territories. While the number of men and women deployed overseas has shrunk considerably over the past 60 years, the military’s reach has not. American forces are actively engaged not only in the conflicts in Afghanistan, Iraq, Syria and Yemen that have dominated the news, but also in Niger and Somalia, both recently the scene of deadly attacks, as well as Jordan, Thailand and elsewhere.

An additional 37,813 troops serve on presumably secret assignment in places listed simply as “unknown.” The Pentagon provided no further explanation. There are traditional deployments in Japan (39,980 troops) and South Korea (23,591) to defend against North Korea and China, if needed, along with 36,034 troops in Germany, 8,286 in Britain and 1,364 in Turkey — all NATO allies. There are 6,524 troops in Bahrain and 3,055 in Qatar, where the United States has naval bases.

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A quantum computer would turn the world upside down.

China Speeds Ahead Of US As Quantum Race Escalates (McC.)

U.S. and other Western scientists voice awe, and even alarm, at China’s quickening advances and spending on quantum communications and computing, revolutionary technologies that could give a huge military and commercial advantage to the nation that conquers them. The concerns echo – although to a lesser degree – the shock in the West six decades ago when the Soviets launched the Sputnik satellite, sparking a space race. In quick succession, China in recent months has utilized a quantum satellite to transmit ultra-secure data, inaugurated a 1,243-mile quantum link between Shanghai and Beijing, and announced a $10 billion quantum computing center. “To me, what is alarming is the level of coordination of what they’ve done,” said Christopher Monroe, a physicist and pioneer in quantum communication at the University of Maryland.

Perhaps more than the accomplishments of the Chinese scientists, it is the resources that China is pouring into the research into how atoms, photons and other basic molecular matter can harness, process and transmit information. “It doesn’t necessarily mean that their scientists are better,” said Martin Laforest, a physicist and senior manager at the Institute for Quantum Computing at the University of Waterloo in Ontario, Canada. “It’s just that when they say, ‘We need a billion dollars to do this,’ bam, the money comes.” The engineering hurdles that China has cleared for quantum communication means that the United States will lag in that area for years.

But building a functioning quantum computer sets forth different kinds of challenges than mastering quantum communication, and may involve creating materials and processes that do not yet exist. Once thought to be decades off, scientists now presume a quantum computer may be built in a decade or less. The stakes are so high that advances by the U.S. government remain secret. “We don’t know exactly where the United States is. I fervently hope that a lot of this work is taking place in a classified setting,” said R. Paul Stimers, a lawyer at K&L Gates, a Washington law firm, who specializes in emerging technologies. “It is a race.”

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“..its residues were recently found in 45% of Europe’s topsoil – and in the urine of three quarters of Germans tested, at five times the legal limit for drinking water.”

Seems a simple case. But it is not.

EU On Brink Of Historic Decision On Pervasive Glyphosate Weedkiller (G.)

A pivotal EU vote this week could revoke the licence for the most widely used herbicide in human history, with fateful consequences for global agriculture and its regulation. Glyphosate is a weedkiller so pervasive that its residues were recently found in 45% of Europe’s topsoil – and in the urine of three quarters of Germans tested, at five times the legal limit for drinking water. Since 1974, almost enough of the enzyme-blocking herbicide has been sprayed to cover every cultivable acre of the planet. Its residues have been found in biscuits, crackers, crisps, breakfast cereals and in 60% of breads sold in the UK. But environmentalists claim that glyphosate is so non-selective that it can even kill large trees and is destructive to wild and semi-natural habitats, and to biodiversity.

The CEO of the Sustainable Food Trust, Patrick Holden, has said that a ban “could be the beginning of the end of herbicide use in agriculture as we know it, leading to a new chapter of innovation and diversity”. But industry officials warn of farmers in open revolt, environmental degradation and crops rotting in the fields if glyphosate is banned. Alarm at glyphosate’s ubiquity has grown since a 2015 study by the World Health Organisation’s IARC cancer agency found that it was “probably carcinogenic to humans”. More than a million people have petitioned Brussels for a moratorium. On Tuesday, MEPs will vote on a ban of the chemical by 2020 in a signal to the EU’s deadlocked expert committee, which is due to vote on a new lease the next day.

Anca Paduraru, an EC spokeswoman, said that a decision was needed before 15 December or “for sure the European commission will be taken to court by Monsanto and other industry and agricultural trade representatives for failing to act. We have received letters from Monsanto and others saying this.” France is resisting a new 10-year licence. Spain is in favour. Germany is in coalition talks and likely to abstain. The UK would normally push for a new lease of the licence but is less engaged due to Brexit. There may not be a qualified majority for any outcome.

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And the EU dithers on glyphosate. Tragic species.

Hidden Danger of Ecological Collapse (CP)

Is human society, en mass, committing suicide? The answer could be yes, humankind is committing harakari in the wide-open spaces for all to see, but nobody has noticed. Until now, as insect losses forewarn of impending ecosystem collapse. Loss of insects is certain to have deleterious effects on ecosystem functionality, as insects play a central role in a variety of processes, including pollination, herbivory and detrivory, nutrient cycling, and providing a food source for higher trophic levels such as birds, amphibians, and mammals. Harkening back to the Sixties, a strikingly similar issue was identified in Rachel Carson’s famous book Silent Spring (1962), the most important environmental book of the 20th century that exposed human poisoning of the biosphere through wholesale deployment of myriad chemicals aimed at pest control.

Carson’s fictional idyllic American town enriched with beautiful plant and animal life suddenly experienced a “strange blight,” leaving a swathe of inexplicable illnesses, birds found dead, farm animals unable to reproduce, and fruitless apple trees, a strange lifelessness. She wrote: “A grim specter has crept upon us to silence the voices of spring.” Today, scientists do not know the specific causes but speculate it could be simply that there is no food for insects; alternatively, the issue could be, specifically as well as more likely, exposure to chemical pesticides or maybe a combination, meaning too little food/too much pesticide. Not only that, flower-rich grasslands, the natural habitat for insects, have declined by 97% since early-mid 20th century whilst industrial pesticides literally cover the world.

Rachel Carson would be floored. That’s a sure-fire guaranteed formula for a tragic ending. Nature doesn’t have a snowball’s chance in hell.

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Apr 302017
 
 April 30, 2017  Posted by at 9:35 am Finance Tagged with: , , , , , , , , , ,  3 Responses »


Pablo Picasso Self portrait 1965

 

Are Canada’s Homes and Mortgages Worth Just 50 Cents on the Dollar? (WS)
US Congress Does Bare Minimum to Keep Government Open Next Week (BBG)
All the Plenary’s Men (BestEvidence)
The National Blues (Jim Kunstler)
‘Taxation Is Theft’ Meme Goes Mainstream (TAM)
Erdogan: Turkey and US Can Wipe Out ISIL in Raqqa (AlJ)
ISIS Suffers Heavy Casualties In Kurdish Fighters’ Advances In Raqqa (FNA)
Russia Backs China Call To Stop N. Korea Nuke Tests, US-S. Korea Drills (RT)
Brazil Paralyzed by Nationwide Strike, Driven by Corruption and Impunity (GG)
Mélenchon: France To Choose Between Extreme Right And Extreme Finance (IC)
Matteo Renzi Tries The Macron Approach (Pol.)
EU Throws Down Brexit Gauntlet to Britain as Talks Edge Closer (BBG)
Merkel Talks Tough on Migrants in Election Campaign Warm-Up (BBG)
PwC: Greece Must Reform Or Forget Recovery (K.)

 

 

“On April 28, HOOPP CEO Jim Keohane told BNN in an interview that “for every $1 we lend Home Capital, they’re going to provide us with $2 of mortgages as collateral. That’s where we get our protection from.” So the C$2 billion loan would be backed by C$4 billion in mortgages. In other words, in the eyes of Keohane, these mortgages might be actually worth, when push comes to shove, 50 cents on the dollar.”

Are Canada’s Homes and Mortgages Worth Just 50 Cents on the Dollar? (WS)

Home Capital is Canada’s biggest “alternative” mortgage lender. It’s not a bank – which today is part of its problem because it cannot create money to lend out; it has to obtain it first by attracting deposits and borrowing money through other channels. Through its subsidiary, Home Trust, it specializes in high-profit mortgages to risky borrowers, with dented credit or unreliable incomes who don’t qualify for mortgage insurance and were turned down by the banks. This includes subprime borrowers. Since revelations of liar loans surfaced in 2015, things have gone to heck. Now it’s experiencing a run on its deposits. Teetering at the abyss, it obtained a $2 billion bailout loan on Thursday. The terms are onerous. And on Friday, the crux of the deal emerged – the amount of mortgages it has to post as collateral. It’s a doozie.

It sheds some light on what insiders think mortgages and the homes that back them are worth when push comes to shove. A bone-chilling wake-up call for the Canadian housing and mortgage market. This is when the whole construct started falling apart: On July 15, 2015, Home Capital announced that originations of high-margin uninsured mortgages had plunged 16% and originations of lower-margin insured mortgages had plummeted 55%, and that it had axed an unspecified number of brokers. Shares plunged 25% in two days. On July 30, 2015, it disclosed, upon the urging of the Ontario Securities Commission, the results of an investigation that had been going on secretly since September 2014 into “falsification of income information.” Liar loans. It suspended 45 mortgage brokers who’d together originated in 2014 nearly C$1 billion in residential mortgages, or 12.5% of its total.

The scandal festered. Short sellers circled in formation. On April 26, 2017, Home Capital announced that it’s experiencing a run on its deposits. As of the end of March, its subsidiary Home Trust sat on about C$2 billion in high-interest savings accounts (HISA) it is offering to regular savers. But these folks were pulling their money out, it said, and the pace of the run was accelerating. It also disclosed that it was finalizing a $2 billion bailout loan from the Healthcare of Ontario Pension Plan (HOOPP) which has about $70 billion in assets. The loan would “have a material impact on earnings….” So an expensive loan.

Home Trust would pay a non-refundable commitment fee of $100 million; would be required to make an initial draw of $1 billion at an interest rate of 10%; and would pay a 2.5% standby fee on undrawn funds. So the initial $1 billion for the first 12 months would cost it $225 million in fees and interest, a juicy 22.5%! Once the credit line is fully utilized, the cost of the loan would drop to 15%. Its shares collapsed by 65%. On Friday, April 28, it announced that another C$290 million in deposits were yanked out on Thursday, after C$472 had been yanked out on Wednesday. Its HISA deposits were down to C$521 million, having plunged 75% since late March.y

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Kept the lights on for 100 days.

US Congress Does Bare Minimum to Keep Government Open Next Week (BBG)

Congress gave itself one more week to agree on a spending bill to fund the U.S. government through September, leading into President Donald Trump’s 100th day in office Saturday by keeping the lights on. The 382-30 House vote Friday was followed quickly by unanimous Senate passage of the stopgap spending bill hours before the shutdown deadline. Trump signed the bill Friday evening, according to a White House official. “We feel very good” that lawmakers will be able to pass a full spending bill next week, White House press secretary Sean Spicer told reporters earlier in the day. Leaders of both parties say they’re close to agreement on a broader spending plan after Republicans signaled they would accept Democratic demands that the Trump administration promise to continue paying Obamacare subsidies and to drop its bid for immediate funds for a wall on the Mexican border.

“You shouldn’t create artificial deadlines,” Alabama Republican Representative Gary Palmer said in support of the short-term measure. “If there are things we need to work through, we need to take the time to work through them.” Vermont Senator Patrick Leahy, the top Democrat on the Appropriations Committee, said both sides have made progress on issues including more funds for the National Institutes of Health, opioid funding for states, Pell college grants and money for transit. But he said the talks remain snagged over Republican demands for policy “riders.” “Let’s not govern by partisan manufactured crisis,” he said on the Senate floor. “Stop posturing,” he added as he called for a speedy resolution on the bill sometime next week. “This is no way to govern,” Leahy said before the Senate vote.

Sixteen House Republicans voted against Friday’s stopgap measure. The short-term fix to ward off a government shutdown – on a deadline set months ago – shows the stubborn dysfunction of Congress even with a unified Republican government. House GOP leaders on Thursday abandoned efforts to vote this week on their plan to repeal and replace Obamacare for lack of support in their party. A vote is still possible next week.

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Eye-opening to say the least. Make the coffee extra strong before viewing. Lots of ground gets covered, quickly. And don’t mothball those pitchforks and torches just yet.

All the Plenary’s Men (BestEvidence)

“The King can do no wrong.”
—William Blackstone, Commentaries on the Laws of England

“When the president does it, that means that it is not illegal.”
—Ex-President Richard Nixon, interview with David Frost

The question at bar is why the U.S. Department of Justice has failed to prosecute any too-big-to-fail banks or—more importantly—their bankers, even for admitted crimes. It’s a crucial question, because after eight straight years of unremitting prosecutorial failure, it looks very much as if a select group of top banks can, in fact, do no wrong. If that’s the case, then our constitutional republic isn’t merely in trouble. It’s dead. A person or group of people who satisfy Blackstone’s criterion for ultimate sovereign power—the power to commit crimes with impunity—can’t exist in a nation where the law reigns supreme. And yet here we are a decade after the financial crisis began in earnest, and not one TBTF bank executive has gone to jail.

Legally, the TBTF banks are indistinguishable from the King, since the power to commit crimes with impunity swallows all other sovereign powers; such a power isn’t even supposed to exist in the U.S., and yet it does. Moreover, since there can’t be two kings in a kingdom, the entire U.S. government, from the president on down, is just one of the King’s men under this formulation of power. The real job of the U.S. government, then, isn’t to represent the will of the people at all, it’s to do the King’s bidding. A nation that isn’t governed by law is governed by instead by a king—it’s one or the other—and the president’s inferiority to such an above-the-law sovereign was confirmed over 40 years ago with Nixon’s ouster. The president, unlike the King, answers to the law (despite Nixon’s opinion).

Now, you may say that while the TBTF banks might arguably have the de facto power of the King, that’s a far cry from wielding such power formally (i.e., having de jure criminal immunity). The reply to that objection is set forth in this film, “All the Plenary’s Men,” which is a sequel to “The Veneer of Justice in a Kingdom of Crime.” Another objection, raised by the DOJ itself, is that it HAS prosecuted TBTF bankers, citing cases like that of Raj Rajaratnam. These cases, however, in fact reveal the DOJ acting on behalf of the criminal global banking cartel. On that score, the DOJ’s abysmal track record is by now so extensive and so thorough that it’s possible to spot legal patterns in the DOJ’s protracted miscarriage of justice, and, as you’re about to see, those patterns are very deeply disturbing indeed.

What’s been going on cuts right past a garden variety constitutional crisis like Watergate straight to a crisis of sovereignty. The backdrop for all of this is HSBC’s exoneration in December of 2012 for laundering money for drug dealers and terrorists, about which the House Financial Services Committee issued a report in July of 2016. Whether it was due to the political circus in town at the time, or to the Republican authorship of that report (albeit without dissent), it didn’t get nearly the scrutiny it deserved. You see, prosecutors working on the HSBC case were actually going to indict the bank, but they got overruled, and HSBC and its team of criminals skated. The story of how exactly that reversal came about reveals, if not the King himself, then certainly many of the King’s top men.

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“It concentrates the mind, as Samuel Johnson once remarked, like waiting to be hanged.”

The National Blues (Jim Kunstler)

You can read it in the bodies of the people in the new town square, i.e. the supermarket: people prematurely old, fattened and sickened by bad food made to look and taste irresistible to con those sunk in despair, a deadly consolation for lives otherwise filled by empty hours, trash television, addictive computer games, and their own family melodramas concocted to give some narrative meaning to lives otherwise bereft of event or effort. These are people who have suffered their economic and social roles in life to be stolen from them. They do not work at things that matter. They have no prospects for a better life — and, anyway, the sheer notion of that has been reduced to absurd fantasies of Kardashian luxury, i.e. maximum comfort with no purpose other than to enable self-dramatization. And nothing dramatizes a desperate life like a drug habit. It concentrates the mind, as Samuel Johnson once remarked, like waiting to be hanged.

[..] The eerie thing about reading the landscape of despair is that you can see the ghosts of purpose and meaning in it. Before 1970, there were at least five factories in my little town, all designed originally to run on the water power (or hydro-electric) of the Battenkill River, a tributary of the nearby Hudson. The ruins of these enterprises are still there, the red brick walls with the roofs caved in, the twisted chain-link fence that no longer has anything to protect, the broken masonry mill-races. The ghosts of commerce are also plainly visible in the bones of Main Street. These were businesses owned by people who lived in town, who employed other people who lived in town, who often bought and sold things grown or made in and around town.

Every level of this activity occupied people and gave purpose and meaning to their lives, even if the work associated with it was sometimes hard. Altogether, it formed a rich network of interdependence, of networked human lives and family histories. What galls me is how casually the country accepts the forces that it has enabled to wreck these relationships. None of the news reports or “studies” done about opioid addiction will challenge or even mention the deadly logic of Wal Mart and operations like it that systematically destroyed local retail economies (and the lives entailed in them.) The news media would have you believe that we still value “bargain shopping” above all other social dynamics. In the end, we don’t know what we’re talking about.

I’ve maintained for many years that it will probably require the collapse of the current arrangements for the nation to reacquire a reality-based sense of purpose and meaning. I’m kind of glad to see national chain retail failing, one less major bad thing in American life. Trump was just a crude symptom of the sore-beset public’s longing for a new disposition of things. He’ll be swept away in the collapse of the rackets, including the real estate racket that he built his career on. Once the collapse gets underway in earnest, starting with the most toxic racket of all, contemporary finance, there will be a lot to do. The day may dawn in America when people are too busy to resort to opioids, and actually derive some satisfaction from the busy-ness that occupies them.

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Funny but true.

‘Taxation Is Theft’ Meme Goes Mainstream (TAM)

The month of April is a nightmare for anyone with a conscience, as we only have until “tax day” — which usually falls on April 15 — to give the taxman what he says he deserves. So if you pay taxes to Uncle Sam and you’re also aware you’re paying for mass murder in the Middle East and in U.S. streets due to the drug war, you should also feel sick to your stomach as you write that check. To a restaurant customer, this may have served as enough incentive to remind his server that taxation is always immoral — but he didn’t stop there. Last week, a customer at a Missouri restaurant gave the waitress a “personal gift” instead of a tip, writing the now popular line “Taxation is theft” in the tip section of the receipt. In a second note, the fiscally conscious customer added: “This is not a tip. This is a personal gift and not subject to federal or state income taxes.”

With major progressive news outlets like ATTN: reporting on this story, left-leaning reporters started to debate wages in the food and service industries, discussing the fact that tips end up being factored as wages, meaning they are always taxable. But as that discussion developed, reporters were quick to realize that when personal gifts are in the mix, the taxman can’t take part of those earnings away. After all, a gift would have to exceed $13,000 to be subject to taxation, meaning that even if the customer had spent hundreds, the “personal gift” would not amount to anything close to the requirements stipulated by the IRS.

With that, ladies and gentlemen, it becomes easier to not only tip with class, but also with substance, giving your waiter a lesson on what’s moral and how to legally go around the rules to make sure they enjoy their full tip — not just the percentage deemed to be fit by the federal government. As this story becomes part of the popular movement ignited by libertarians, expect to see more progressive news outlets becoming familiarized with the actual concept of taxation. What’s left for us to find out is if they are going to change their tune and start attacking people like this customer when the two-party pendulum swings once again and a fully Democratic slate takes over Washington. Are they going to remain consistent in discussing taxation from the point of view of the worker, or are they going to side with the leech? Only time will tell.

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From separate map picked up on Twitter: “When ISIS was winning Turkey was just watching. Now when ISIS is getting defeated by Kurds, Turkey starts attacking Kurds. Turkey = ISIS.”

Erdogan: Turkey and US Can Wipe Out ISIL in Raqqa (AlJ)

Turkish President Recep Tayyip Erdogan said on Saturday if Ankara and Washington were to join forces they could turn the Syrian city of Raqqa into a “graveyard” for Islamic State of Iraq and the Levant (ISIL). Erdogan also suggested he could launch cross-border operations against Kurdish rebels at any time, just days after the military carried out air strikes in Syria and Iraq, drawing concern from the United States. “America, the coalition, and Turkey can join hands and turn Raqqa into a graveyard for [ISIL],” Erdogan told a business summit in Istanbul. “They [ISIL] will look for a place to hide.” Erdogan’s comments come ahead of a meeting with US President Donald Trump on May 16 – their first face-to-face summit since the real estate mogul and reality TV star took office in January.

Ankara is hopeful about a relationship with Washington under Trump after ties frayed in the final years of Barack Obama’s administration, which limited cooperation between the NATO allies. The two countries have bitterly disagreed over the role of the Kurdish People’s Protection Units (YPG) in Syria. Turkey views the YPG as the Syrian extension of the Kurdish PKK group, which has waged a deadly insurgency against the Turkish state since 1984. But the US is concerned that Turkey’s military operations in Syria are more focused on preventing Syrian Kurds from forming an autonomous region in northern Syria, along Turkey’s border, that could embolden Turkey’s own Kurdish minority.


@Furiouskurd: When ISIS was winning Turkey was just watching. Now when ISIS is getting defeated by Kurds, Turkey starts attacking Kurds. Turkey = ISIS.

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As the only party involved, the Kurds fight for their own land. And they have liberated lots of prisoners, women, children.

ISIS Suffers Heavy Casualties In Kurdish Fighters’ Advances In Raqqa (FNA)

The Kurdish-led Syrian Democratic Forces (SDF) continued the anti-ISIL Euphrates Rage Operation in Western Raqqa and managed to drive the terrorists out of more neighborhoods in al-Tabaqa city, killing over 40 of them. The SDF engaged in heavy fighting with ISIL in al-Tabaqa city and managed to take control of the neighborhoods of al-Nababeleh, al-Zahra and al-Wahab, killing 23 militants. In the meantime, the Kurdish fighters managed to push ISIL back from al-Wahabah and Radio Station in al-Tabaqa, killing 20 militants and capturing 10 others. In relevant developments in the province on Tuesday, the SDF stormed ISIL’s defense lines and took full control over the villages and settlements of Kabash al-Sharqi, Um al-Tonok, Rayan, Tishrin farm, Mosheirehe al-Shamaliyeh, Mosheirefeh al-Janoubiyeh, al-Rahiyat, Beir Jarbou, Jarwa, al-Hattash, Hazimeh, Khalwa Abideh, Holo Abd, Abareh, al-Kaleteh, Sukriyeh and Zohra, inflicting major losses on ISIL.

The Kurdish forces also won back a key neighborhood in the Southern sector of Tabaqa city following a large advance on its Western urban. In the meantime, the SDF managed to seize control over the Alexandria suburb, and now the Kurds have swept through the adjacent Wahab neighborhood. Kurdish forces also secured the island of Jazirat al-Ayd, a few kilometers North of Lake Assad. According to latest reports, around 40% of Tabaqa city has been brought under Kurdish control with just a few hundred ISIL militants left in its Northern sector and around the city center.

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‘..double suspension..’

Russia Backs China Call To Stop N. Korea Nuke Tests, US-S. Korea Drills (RT)

Russia has supported a Chinese initiative in the UNSC intended to stabilize the situation on the Korean peninsula. It calls on the North to refrain from missile and nuclear testing, while the US and South Korea should halt military drills in the area.
“Members of the [UN] Security Council have unanimously called upon DPRK [Democratic People’s Republic of Korea] to stop missile and nuclear tests and to fulfil UNSC resolutions,” the Russian Foreign Ministry said in a statement on Saturday following a United Nations Security Council (UNSC) session held in New York earlier on Friday. The UNSC called for a political and diplomatic solution to the nuclear crisis on the Korean Peninsula, the ministry added.

“In this context, the Russian Federation supported a Chinese proposal for a ‘double suspension’ (Pyongyang is to stop missile and nuclear tests and the US and South Korean militaries are to halt drills near North Korea) as a starting point for political negotiations.” However, the council was not able to agree on a common solution, the ministry added. The UNSC session was joined by Russian Deputy Foreign Minister Gennady Gatilov, who urged Washington and Seoul to reconsider their decision to station a THAAD anti-missile system on the Korean Peninsula, warning that it will serve as a “destabilizing factor” in the region.

Gatilov said the Terminal High Altitude Area Defense (THAAD) had been deployed “in line with the vicious logic of creating a global missile shield,” while warning that it is also undermining the security and deterrent capacities of adjacent states, such as China, thus threatening “the existing military balance in the region.” “It is not only we who perceived this step very negatively. We are once again urging both the United States and the Republic of Korea to reconsider its expediency, and other regional states not to yield to the temptation of joining such destabilizing efforts,” the deputy foreign minister said. Ahead of the UNSC session, Chinese Foreign Minister Wang Yi told reporters that a peaceful solution to the Korean crisis is the “only right choice.” “Peaceful settlement of the nuclear issue on the Korean Peninsula through dialogue and negotiations represents the only right choice that is practical and viable,” Wang said.

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Very few Brazil politicians are not involved in one scam or another.

Brazil Paralyzed by Nationwide Strike, Driven by Corruption and Impunity (GG)

Just over one year ago, Brazil’s elected President, Dilma Rousseff, was impeached – ostensibly due to budgetary lawbreaking – and replaced with her centrist Vice President, Michel Temer. Since then, virtually every aspect of the nation’s political and economic crisis – especially corruption – has worsened. Temer’s approval ratings have collapsed to single digits. His closest political allies – the same officials who engineered Dilma’s impeachment and installed him in the presidency – recently became the official targets of a sprawling criminal investigation. The President himself has been implicated by new revelations, saved only by the legal immunity he enjoys. It’s almost impossible to imagine a presidency imploding more completely and rapidly than the unelected one imposed by elites on the Brazilian population in the wake of Dilma’s impeachment.

The disgust validly generated by all of these failures finally exploded this week. A nationwide strike, and tumultuous protests in numerous cities, today has paralyzed much of the country, shutting roads, airports and schools. It is the largest strike to hit Brazil in at least two decades. The protests were largely peaceful, but some random violence emerged. The proximate cause of the anger is a set of “reforms” that the Temer government is ushering in that will limit the rights of workers, raise their retirement age by several years, and cut various pension and social security benefits. These austerity measures are being imposed at a time of great suffering, with the unemployment rate rising dramatically and social improvements of the last decade, which raised millions of people out of poverty, unravelling.

[..] During the past three years, Brazilians have been subjected to one revelation after the next of extreme corruption pervading the country’s political and economic class. Scores of corporate executives and long-time party leaders are imprisoned. They include the head of the Brazilian construction giant Odebrecht, the House Speaker who presided over Dilma’s impeachment, and the former governor of the state of Rio de Janeiro. The current House Speaker, and Senate President, and nine of Temer’s ministers are now targets of criminal investigations for bribery and money laundering, as are numerous governors.

In sum, the vast bulk of the top-shelf political and economic elite have proven to be radically corrupt. Billions upon billions of dollars have been stolen from the Brazilian public. Recently released recordings from the judicial confessions of Marcelo Odebrecht, scion of one of Brazil’s richest families, depict a country ruled almost entirely through bribes and criminality, regardless of the ideology or party of political leaders. And yet, even in the wake of this oozing and incomparable elite corruption, the price that is being paid falls overwhelmingly on the victims – ordinary Brazilians – while the culprits prosper.

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Melenchon seeks to hold on to his voters for the June parliamentary elections.

Mélenchon: France To Choose Between Extreme Right And Extreme Finance (IC)

The leader of a far-left movement who won nearly 20% of the vote in the first round of France’s presidential election, Jean-Luc Mélenchon, told his seven million voters in a YouTube address on Friday that he would not tell them how to vote in the final-round run-off next weekend. As for himself, Mélenchon said that he would cast a ballot, and that it would not be for Marine Le Pen, the candidate of the far-right National Front, who courted his voters in a video of her own on Friday. But Mélenchon also refused to say, like the leaders of other parties across the political spectrum – and celebrities including the French soccer legend Zinedine Zidane – that he would vote for Le Pen’s centrist rival, the former banker Emmanuel Macron, to stop the far-right from gaining power.

Instead, Mélenchon predicted that forcing France to choose between a candidate of “the extreme right” and one of “extreme finance” would led to a political crisis, and left open the possibility that he would submit a blank ballot, a form of protest vote permitted under French electoral law. (Mélenchon’s platform included provisions for voting to be made mandatory, and for blank ballots to be recognized under law.) The appeal for unity, to construct a barrage, or dam, against the rising tide of the far-right, Mélenchon said, was, in fact, a disguised attempt to force voters like him, who profoundly disagree with Macron’s economic policies, to endorse his project. Amid fears that widespread abstention and protest votes for neither candidate could lower the threshold for Le Pen to win with 50% of the valid votes cast, Mélenchon’s refusal to join the sort of united front against Le Pen that led to her father’s defeat in 2002 caused anxiety to spike.

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Chameleons and parrots are us.

Matteo Renzi Tries The Macron Approach (Pol.)

Matteo Renzi toned down the EU-critical rhetoric of his final months as Italian prime minister during his visit to Brussels on Friday to drum up support for his bid to be restored as head of the Democratic Party (PD) in its primaries this weekend. With aides suggesting on social media that French presidential hopeful Emmanuel Macron’s pro-EU stance, which helped him beat Euroskeptic Marine Le Pen in the election’s first round, could be a boost for Renzi, he talked about “Angela, François and I” when referring to German Chancellor Angela Merkel and French President François Hollande. Renzi even stood in front of a display showing the EU flag, and felt the need to explain why, in the run-up to his failed constitutional referendum that cost him the prime ministership last December, he had removed the EU flag from behind his desk.

“It wasn’t anger, it was calculated gesture,” Renzi told PD followers at a hotel near the European Parliament, adding that it was in response to the European Commission demanding Italian action on its budget deficit when it had been hit by an earthquake. The Italian and international media have speculated about the similarities between Renzi and Macron, with Renzi’s slogan for the PD primary this Sunday — In Cammino (“on the way”) — almost a direct translation of the name of Macron’s centrist political movement, En Marche. One close Renzi aide, Giuliano Da Empoli, wrote on Facebook the day after Macron’s first-round victory on April 23 that the French result “shows that one can be at the same time a convinced pro-European and a harsh critic of the status quo.”

That was the tone Renzi tried to strike in Brussels on Friday, repeating his line that the EU “needs radical change” and taking a dig at Germany for its trade surplus, while warning about the dangers of populism. “With the radicals you win the primary elections but then you lose the elections,” he told the audience. In the French campaign, which comes to a head with the second-round vote on May 7, the candidate closest to Renzi’s Democratic Party was Benoît Hamon, who won the ruling Socialist Party’s primaries but took only 6% of the vote on election night. That must resonate for Renzi, who wants to regain control of the PD to prepare a bid for a new term as prime minister in elections due early next year.

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“Nobody has united here against the U.K.,” German Chancellor Angela Merkel told reporters..” She’s right, all everyone’s done is side WITH Germany. Without a word.

EU Throws Down Brexit Gauntlet to Britain as Talks Edge Closer (BBG)

European Union governments threw down the gauntlet to the U.K. ahead of Brexit talks, listing demands Prime Minister Theresa May must satisfy before they will discuss the trade deal she wants and urging her to be more realistic in her expectations. Any doubts about the scale of the task facing Britain in withdrawing from the EU after four decades were laid to rest at a Brussels summit of the region’s leaders on Saturday. A tough negotiating stance was endorsed unanimously, within minutes and to applause. The U.K. responded by saying it’s bracing for a confrontation. The complexity comes down to the fact that a departure from the world’s biggest trading bloc has never been done and was never supposed to happen. The EU is striving to ensure the U.K. is worse off outside it than inside, not least to avoid setting a precedent.

After agreeing to the terms of separation, then it’s a matter of getting down to the business of what a future relationship might look like. “Nobody has united here against the U.K.,” German Chancellor Angela Merkel told reporters as she left the meeting. “The British people have made a decision, which we will have to respect. But we remaining 27 now get together in order to speak with one voice.” The Brexit discussions will begin soon after the U.K.’s June election, which May called in part to strengthen her mandate going into talks. The first orders of business will be guaranteeing the rights of 3 million EU citizens living in the Britain and calculating a financial settlement one leader said would be at least €40 billion euros ($44 billion). Only once “sufficient progress’’ is made on those thorny topics and reinforcing the border between the two Irelands will the EU’s attention turn to trade. That looks unlikely to happen before December.

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Merkel tries to deflect the blame for what’s gone wrong, blames local officials for sweeping things under the carpet. Yeah, she would never have had any reason to do just that herself. Plus, she blames ‘Europe’s haphazard policing of its outer borders’, something for which no-one carries more responsibility than … Merkel, the de facto boss of the EU. Mutti Merkel’s just another politician going wherever the wind blows.

Merkel Talks Tough on Migrants in Election Campaign Warm-Up (BBG)

German Chancellor Angela Merkel is talking tough on migrants and crime as she hits the campaign trail for two state elections next month, giving a foretaste of her bid for a fourth term in September. Merkel’s hardened rhetoric was on display in North Rhine-Westphalia, Germany’s most populous state, where her Christian Democratic Union is seeking to end seven years of Social Democratic rule on May 14. On Friday, she’s campaigning east of Hamburg in Schleswig-Holstein, where two polls this week suggest her party has a slim lead over the SPD ahead of a regional vote on May 7. At a CDU rally in the rural Westphalian town of Beverungen, Merkel reaffirmed her push to return migrants who don’t qualify for asylum and attacked the state’s Social Democrat-led government as soft on crime.

She said local officials “tried to sweep under the carpet” lapses in policing around mass sexual assaults on women in Cologne on New Year’s Eve in 2015, an incident that stoked an anti-immigration backlash. “The opportunity for improvement was there,” Merkel told the crowd on Thursday. “Things didn’t get better, so it’s time for a change.” As polls suggest that both Germany’s anti-immigration AfD party and her Social Democratic challenger Martin Schulz are in retreat for now, Merkel is using the opening to rally her CDU behind traditional themes of public safety. At a security conference this week, she said Europe’s haphazard policing of its outer borders compares unfavorably to U.S. immigration checks and must be strengthened.

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PricewaterhouseCoopers gets the first half right: as I’ve said numerous times, Greece cannot recover under present conditions imposed by the Troika. But then PwC loses the thread. Pity but predictable.

PwC: Greece Must Reform Or Forget Recovery (K.)

The extent of the destruction the Greek economy has suffered in the last few years, also undermining the effort to restructure it, becomes clear when comparing specific data, not on a quarterly or annual basis, but over the longer term. The country remains in a vicious cycle of recession, the economy will not grow by more than 1% this year, and any positive signs have proved temporary or insufficient to alter the overall picture. According to “Economic Outlook for Greece 2017-2018,” a study by PricewaterhouseCoopers (PwC), investment in the country’s economy dropped from €60 billion in 2010 to €20 billion last year. Investments are showing no signs of sustainable recovery as savings remain in the red and banks continue to deleverage their financial reports.

Consumption has been in constant decline, with a small recovery last year followed by a fresh drop in recent months. The average disposable income has gone down primarily due to the increased taxation and hikes in social security contributions, while the capital controls remain and banks are dependent on emergency liquidity assistance (ELA) for their financing. PwC notes that disposable incomes are unlikely to grow significantly anytime soon. There are just a few domestic investments that could fuel a recovery and no significant funding for investments is expected from abroad. At the same time it will be hard for fiscal performance to post a significant improvement without any deep structural reforms, including in the social security system.

The banks’ lack of liquidity, the delayed repayment of the state’s dues to its suppliers and the capital controls are likely to persist. PwC further argues that despite the delays in the second bailout review, Greece could avoid any unforeseeable tension and political events and achieve some growth, but not any greater than 1%, and the same challenges will remain next year too. An exit from the vicious cycle, says PwC, will require not only a change in the Greek debt’s sustainability terms, but also a drastic acceleration of structural reforms and the boosting of competitiveness and growth.

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Jul 222016
 
 July 22, 2016  Posted by at 8:26 am Finance Tagged with: , , , , , , , , ,  1 Response »


Lewis Wickes Hine Night scene in Cumberland Glass Works, Bridgeton, NJ 1909

(There’s No) Money In The Mattress (Roberts)
Sub-Zero Government Bonds Turn the Hunt For Yield Upside Down (BBG)
US Sides With HSBC To Block Release Of Money Laundering Report (R.)
Are Wall Street Banks in Trouble? You’d Never Know from the Headlines (WSoP)
Denmark Faces ‘Out of Control’ Housing Market in Negative Spiral (BBG)
Fracklog in Biggest US Oil Field May All But Disappear (BBG)
China Continues To Produce More Steel Than The Rest Of The World Combined (BI)
China’s Vice FinMin: We’ve Got No Reason To Devalue The Yuan (CNBC)
Apple’s Q2 China Revenues Could Fall 20%: Baidu (CNBC)
Pension Funds Are Underwater – And Taking Us With Them (VW)
Once-Expanding EU Prepares To Contract For The First Time In Its History (G.)
Earth On Track For Hottest Year Ever As Warming Speeds Up (R.)
Fighting the Most Dangerous Animal in the World (Spiegel)

 

 

“Every time someone says, ‘There is a lot of cash on the sidelines,’ a tiny part of my soul dies.”

Scary graph.

(There’s No) Money In The Mattress (Roberts)

Here is a myth that just won’t seem to die: “Cash On The Sidelines.” This is the age old excuse why the current “bull market” rally is set to continue into the indefinite future. The ongoing belief is that at any moment investors are suddenly going to empty bank accounts and pour it into the markets. However, the reality is if they haven’t done it by now after 3-consecutive rounds of Q.E. in the U.S., a 200% advance in the markets, and now global Q.E., exactly what will that catalyst be? However, Clifford Asness summed up the problem with this myth the best and is worth repeating:

“Every time someone says, ‘There is a lot of cash on the sidelines,’ a tiny part of my soul dies. There are no sidelines. Those saying this seem to envision a seller of stocks moving her money to cash and awaiting a chance to return. But they always ignore that this seller sold to somebody, who presumably moved a precisely equal amount of cash off the sidelines. If you want to save those who say this, I can think of two ways. First, they really just mean that sentiment is negative but people are waiting to buy. If sentiment turns, it won’t move any cash off the sidelines because, again, that just can’t happen, but it can mean prices will rise because more people will be trying to get off the nonexistent sidelines than on.

Second, over the long term, there really are sidelines in the sense that new shares can be created or destroyed (net issuance), and that may well be a function of investor sentiment. But even though I’ve thrown people who use this phrase a lifeline, I believe that they really do think there are sidelines. There aren’t. Like any equilibrium concept (a powerful way of thinking that is amazingly underused), there can be a sideline for any subset of investors, but someone else has to be doing the opposite. Add us all up and there are no sidelines.”

Margin debt levels, negative cash balances, also suggest the same. Cash on the sidelines? Not really.

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And there are plenty plans to ‘do more’.

Sub-Zero Government Bonds Turn the Hunt For Yield Upside Down (BBG)

The erosion of yields on government debt is generally thought to push investors into riskier assets as they seek out higher returns. That’s true, argue Credit Suisse analysts in a new note, but only in the ‘first phase’ of a negative yield world. That is, when yields on government bonds with shorter-durations dip below zero, total returns on riskier assets such as junk-rated corporate debt do trump returns on German bunds. That tendency disappeared, however, as yields on longer-dated government debt also fell into negative territory — at least in Europe.

“The defining characteristic of Phase One is a strong outperformance of high-yielding credit assets versus low-yielding credit assets and government bonds, i.e. a strong hunt for yield trend. Nothing unusual so far,” write Credit Suisse’s William Porter and Chiraag Somaia. “However, more interestingly, Phase Two, still characterized by negative yields, actually sees an outperformance of government bonds versus both low- and high-yielding credit assets, i.e. any hunt for yield over the past 2.5 years as a whole has been an unsuccessful strategy.” The trend is shown in the below chart, where total returns on German government bonds have bested high-yield and investment-grade corporate debt.

“For now, we think ever-falling yields represent an overall risk aversion and/or verdict on economic policies that is not overly friendly to yieldier assets despite the obvious incentives they carry in this environment,” conclude the analysts. “So yield-hunting behavior is not always and everywhere wrong – this summer may treat it favorably – but any outperformance has subsequently been counter-trend in the past 2.5 years.”

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Quick! Find me a carpet to sweep this under!

US Sides With HSBC To Block Release Of Money Laundering Report (R.)

The U.S. government asked a federal appeals court on Thursday to block the release of a report detailing how HSBC is working to improve its money laundering controls after the British bank was fined $1.92 billion. In a brief filed with the 2nd U.S. Circuit Court of Appeals, the U.S. Department of Justice sought to overturn an order issued earlier this year by U.S. District Judge John Gleeson to make public a report by the bank’s outside monitor. “Public disclosure of the monitor’s report, even in redacted form, would hinder the monitor’s ability to supervise HSBC,” the government’s court filing said, adding that bank employees would be less likely to cooperate with the monitor if they knew their interactions could be released.

HSBC concurred with the court’s finding. “HSBC also argues that the Monitor’s report should remain confidential, as have the Monitor, the UK Financial Conduct Authority, the US Federal Reserve and other HSBC regulators,” HSBC said in a statement. “The effectiveness of the monitorship is dependent on confidentiality.” The filing comes a week after U.S. congressional investigators criticized senior officials at the Department of Justice for overruling internal recommendations to criminally prosecute HSBC for money-laundering violations. Instead, the government in 2012 fined HSBC and entered into a five-year deferred prosecution agreement that stipulated all charges would be dropped if the bank agreed to install an independent monitor to help improve compliance. In the 2012 settlement, HSBC admitted to violating U.S. sanctions laws and failing to stop Mexican and Colombian cartels from laundering hundreds of millions of dollars in drug proceeds through the bank.

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Martens & Martens. Strong.

Are Wall Street Banks in Trouble? You’d Never Know from the Headlines (WSoP)

On July 14, when America’s biggest bank by assets reported its second quarter earnings, this headline ran at the New York Times: “JPMorgan Chase Has Strong Quarter as Earnings Top Estimates.” CNBC, a unit of NBCUniversal, used the same criteria in its headlines to report the earnings of Citigroup, Bank of America and Morgan Stanley — putting a positive spin in the headline because the earnings had topped what analysts were expecting – rather than the far more meaningful, and traditional, measure of whether earnings had beaten the same quarter a year earlier. CNBC’s headlines read: Citigroup earnings handily top Wall Street expectations: CNBC-July 15, 2016 Bank of America earnings top expectations: CNBC-July 18, 2016 Morgan Stanley solidly beats earnings expectations: CNBC-July 20, 2016.

This is hubris of the highest order. Publicly traded companies simply guide research analysts toward lowered expectations on their upcoming quarterly earnings so that the companies can surprise on the upside and get these kinds of misleading headlines in the all-to-willing New York media – which has a vested interest in making everything appear rosy in the Big Apple. (New York media is dependent on fat Wall Street profits to boost the price of their own publicly traded shares since ad revenue in New York is linked to the health of Wall Street.) One would never know by these headlines that big bank earnings were actually down year over year – and in some cases, down dramatically. JPMorgan Chase earned $6.2 billion in the second quarter of 2016 versus $6.29 billion in the second quarter of 2015.

The news was far worse at Citigroup, despite the rosy headline at CNBC. Citigroup’s second quarter profit fell 17.5% year over year, to $4 billion from $4.85 billion in the second quarter of 2015. Its revenues were the lowest in 14 years according to S&P Capital IQ. At Bank of America, profit fell to $4.23 billion from $5.3 billion in the second quarter of 2015, a sharp decline of 20%. Morgan Stanley reported a year over year decline of 8%, with profits in the second quarter of 2016 falling to $1.67 billion from $1.82 billion in the second quarter of 2015. Now news of jobs cuts is spilling out with the Wall Street Journal reporting that Bank of America will make “$5 billion in annual cost cuts by 2018 as part of its strategy to deal with persistently low interest rates that are eating away at lenders’ profitability.”

The New York Post is calling job cuts at Goldman Sachs the worst since the financial crisis in 2008. Fortune’s Stephen Gandel reported two days ago that Goldman had slashed a whopping “1,700 positions in the past three months.” Something else one won’t find in those smiley-face headlines is the fact that Wall Street is not only bleeding profits and jobs but it’s also bleeding equity capital – the only thing that separates the word “bank” from the word “bankruptcy.” While the Dow Jones Industrial Average and Standard and Poor’s 500 Indices may be setting new highs, the big Wall Street banks are decidedly not.

Over the past 52 weeks, Goldman is down from a share price of $214.61 to an open this morning of $162.55 – a decline of 24%. Bank of America is off 22% from its 52-week high, based on today’s open. Morgan Stanley and Citigroup are in decidedly worse shape with declines of 28% and 27%, respectively, from their 52 week highs versus their share price at the open of the New York Stock Exchange this morning. Add this all up and you’re talking about tens of billions of dollars in equity capital vaporizing.

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Denmark is in the same position as dozens of other countries: “..there’s a real risk that housing prices can see a dramatic fall, even though we’re not seeing a bubble in the classical definition of the term..”

Denmark Faces ‘Out of Control’ Housing Market in Negative Spiral (BBG)

Denmark’s biggest mortgage bank is warning there’s a risk the housing market may get “out of control,” especially around cities, as long-term negative interest rates make borrowers complacent. “To be concrete, there is a danger that Danes go blind to the risk of rates ever rising again,” Tore Stramer, chief analyst at Nykredit in Copenhagen, said in an e-mail. “That raises the risk of a major housing price decline, when rates at some point or other start to rise again.” Denmark’s central bank has had negative interest rates for the better part of four years. Thomas F. Borgen, CEO of Danske Bank, says his managers are operating under the assumption that rates won’t go positive until “at least” 2018, with Britain’s departure from the EU adding to the risk of an even longer period below zero.

With no other country on the planet having experienced negative rates longer than Denmark, the distortions the policy is wreaking may provide a preview of what other economies face should they go down a similar path. Danes can get short-term mortgages at negative interest rates, and pay less to borrow for 30 years than the U.S. government. Apartment prices in Denmark are now about 5% above their 2006 peak. Back then, the country’s bubble burst and apartment prices slumped about 30% through 2009. “It’s worth remembering that there’s a real risk that housing prices can see a dramatic fall, even though we’re not seeing a bubble in the classical definition of the term,” Stramer said. Denmark’s negative rates are a product of the central bank’s policy of defending the krone’s peg to the euro. Its main rate was minus 0.75% for most of last year, though the bank raised it by 10 basis points in January in an effort to normalize policy.

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Reality kicks in. What’s going to happen to the lenders who made it all possible?

Fracklog in Biggest US Oil Field May All But Disappear (BBG)

The number of dormant crude and natural gas wells in the U.S. stopped growing in the first quarter – and may all but disappear in the nation’s biggest oil field should prices hold steady. As of April 1, there were 4,230 wells left idle after being drilled, a figure little changed from January, according to an analysis by Bloomberg Intelligence. While some explorers have continued to grow their fracklog of drilled but not yet hydraulically fractured wells, others began tapping them in February as oil prices rose, the report showed.

Crude in the $40- to $50-a-barrel range may wipe out most of the fracklog in Texas’s Permian Basin and as much as 70% of the inventory in its Eagle Ford play by the end of 2017, according to Bloomberg Intelligence analyst Andrew Cosgrove. While bringing them online is the cheapest way of taking advantage of higher prices, the wave of new supply also threatens to kill the fragile recovery that oil and gas markets have seen so far this year. “We think that by the end of the third quarter, beginning of the fourth quarter, the bullish catalyst of falling U.S. production will be all but gone,” Cosgrove said in an interview Thursday. “You’ll start to see U.S. production flat lining.”

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It’s the same as oil producers. In China’s steel industry, a return to reality would mean too many jobs lost to bear.

China Continues To Produce More Steel Than The Rest Of The World Combined (BI)

For the fourth month in a row, China produced more steel than all other nations combined in June. According to data released by the WorldSteel Association on Wednesday, a group that accounts for approximately 85% of the world’s steel production, China produced 69.5 million of crude steel in June, dwarfing production in all other nations which came in at 66.5 million tonnes. At 136 million tonnes, total global output in June was unchanged from the levels of a year earlier.

While down 1.4% on the 70.5 million tonnes produced in May, Chinese crude steel production is now 1.7% higher than the levels of June 2015, fitting with the splurge in state-backed infrastructure investment seen in recent months. Despite the recent uplift in steel production, shown in the chart below supplied by WorldSteel, global steel production came in at 794.8 million tonnes in the first half of the year, down 1.9% on the same corresponding period in 2015.

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They fix it daily, but that’s not manipulation nor devaluation…. That’s just fixing.

China’s Vice FinMin: We’ve Got No Reason To Devalue The Yuan (CNBC)

China has no reason to devalue the yuan, as economic fundamentals remained strong, with growth at 6.7% in the first half, the country’s Vice Finance Minister Zhu Guangyao told CNBC. Zhu’s comments came shortly before Republican presidential candidate Donald Trump lambasted China again, this time for what he said was “devastating currency manipulation. [..] “The yuan has been trading around five-year lows recently, as concerns over the state of the economy fueled capital outflows. Investors have also expressed concerns over the level of debt built up in the economy. China suffered almost $700 billion worth of capital flight in 2015. The surge in outflows late in 2015 sparked market concerns that China’s foreign reserves weren’t sufficient to stabilize the currency by buying yuan over the long term.

Meanwhile, the greenback has strengthened against most major currencies as investors reacted to negative interest rates in Japan and Europe, as well as the possibility the Federal Reserve would continue on its rate-hiking path. On Friday the dollar/yuan traded at 6.6683 on-shore and 6.6754 off-shore. China fixes its currency against the dollar every day. In August, China shifted the market mechanism for setting the daily fix, saying it would set the spot rate based on the previous day’s close, theoretically allowing market forces to play a greater role in its direction. That resulted in an effective 2% devaluation in the currency, a move that sparked fears of a “currency war” to make Chinese exports more competitive.

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What’s that going to do to the share price?

Apple’s Q2 China Revenues Could Fall 20%: Baidu (CNBC)

Apple’s revenues in China could be down 20% in China in its quarterly earnings report, according to research by Baidu, the so-called “Chinese Google.” As part of its online suite of products Baidu offers mapping software and a search platform. It has about a 70 to 80% market share in search in China and logs billions of location requests on Baidu Maps. Using this so called “big data” from the use of its map and search products, which is all anonymized, Baidu said it could predict employment and consumer trends and their impact on a company’s revenues. It used these tools on Apple’s retail sales in China, selecting a list of flagship Apple stores in mainland China and the counting the volume of map queries of all the stores.

Baidu found that in the last quarter of 2015, map query volumes were up 15.4% year-on-year, which corresponded with a 14% rise in Apple’s China revenue in that same period. But in the first quarter of 2016, map queries declined 24.5% year-on-year, which was parallel with a 26% decline in Apple’s China revenue. “The impressively strong correlation indicates that map query data provides possibilities for us to ‘nowcast’ the company’s revenues and reveal the future trends. Based on our analysis of latest data, we project that the Apple’s revenue in China of second quarter of 2016 may be down around 20% on a year-over-year basis,” Baidu concluded. The “second-quarter” that Baidu references is Apple’s fiscal third-quarter and will be announced on July 26.

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Pensions. A word your children will know only from history books.

Pension Funds Are Underwater – And Taking Us With Them (VW)

The California Public Employees’ Retirement System (CalPERS) has announced its worst performance in seven years. Its meager rate of return for the fiscal year ending June 30 just managed to squeak by .6%, not even beating our current meager rate of inflation. After two successive years of tepid returns, long-term fund averages have sunk far below the critical 7.5% benchmark. It’s bad news for California taxpayers, because if returns don’t soon show a long-term average of 7.5%, they’ll be the ones who will have to make up the difference. Ted Eliopoulos, the fund’s chief investment officer, admits the massive pension fund’s long-term returns are well below anticipated levels, telling the Los Angeles Times, “We’re moving into a much more challenging, low-return environment.”

Yeah. Average returns are now barely over seven% for a twenty-year period, and returns over ten and fifteen years now average less than 6%. These changes are not just a blip on the investment horizon, as we assume bond yields and stock dividends will improve. According to the Milliman pension consulting firm, many public pension funds have had to adjust their expectations to accommodate lower returns overall. CalPERS needs to adjust its own expectations accordingly, even though doing so would drive up costs for state and local government agencies covered by the big pension firm. “We quite clearly have a lower return expectation than we had just two years ago,” Eliopoulos said. “That will be reflected in our next cycle. We are cognizant that this is a challenging environment for institutional investors.”

Thus, while the Times reports this dismal turn of events as a new development, it’s apparent Eliopoulos and CalPERS have been struggling for a while. What’s more, financial observers have been voicing concerns about pension fund depletion for at least as long as bond yields and stock dividends have been anemic. [..] The bad news is: If you’re a California public employee, you’re going to take a hit. But even if you’re not a public employee, but merely a California taxpayer, you’ll also take a hit. In addition, while private employee pension funds don’t pose the same financial risk to non-participants, their members run a similar risk; after all, they’re toiling in the same universe of stocks and bonds.

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The Guardian gets the headline right, but shows no understanding of what it means.

Once-Expanding EU Prepares To Contract For The First Time In Its History (G.)

Johannes Hahn’s job title sounds a little incongruous these days: he’s the EU commissioner for European neighbourhood policy and enlargement negotiations. The job title was created in the late 1990s during a period of optimism and expansion. But now, thanks to the will of 52% of British voters, the EU looks set to contract rather than enlarge for the first time in its history. There are still six candidate countries for EU membership, in the process of making formal applications to join the bloc, as well as a number of other countries with various levels of association. But with many in the EU wary and sceptical of further expansion, the only enlargement negotiations going on at the moment are about managing the expectations of countries that want to join.

Hahn was in Kiev last week, meeting Ukrainian government officials and chairing ministerial meetings of the EU’s Eastern Partnership, a programme linking the EU with six former Soviet countries, which was launched as a response to the Russian war with Georgia in 2008 and was implicitly meant as the first step towards EU membership for the nations. “Don’t believe that the unfortunate decision of Brexit will have any influence on our relationship – quite the opposite,” he told a meeting of the group’s foreign ministers.

But in reality, the initial Eastern Partnership plans are in tatters, as both enlargement fatigue inside the EU and a stick-carrot combination from Russia has pushed a number of the countries away from wanting further integration with the EU. Two of them, Belarus and Armenia, have joined Russia’s Eurasian Economic Union, an explicit challenge to the EU, while nobody seriously speaks about Ukraine or Georgia as members any more.

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Surprise? What surprise?

Earth On Track For Hottest Year Ever As Warming Speeds Up (R.)

The earth is on track for its hottest year on record and warming at a faster rate than expected, the World Meteorological Organization (WMO) said on Thursday. Temperatures recorded mainly in the northern hemisphere in the first six months of the year, coupled with an early and fast Arctic sea ice melt and “new highs” in heat-trapping carbon dioxide levels, point to quickening climate change, it said. June marked the 14th straight month of record heat, the United Nations agency said. It called for speedy implementation of a global pact reached in Paris last December to limit climate change by shifting from fossil fuels to green energy by 2100.

“What we’ve seen so far for the first six months of 2016 is really quite alarming,” David Carlson, director of the WMO’s Climate Research Program, told a news briefing. “This year suggests that the planet can warm up faster than we expected in a much shorter time… We don’t have as much time as we thought.” The average temperature in the first six months of 2016 was 1.3° Celsius (2.4° Fahrenheit) warmer than the pre-industrial era of the late 19th Century, according to space agency NASA. [..] “There’s almost no plausible scenario at this point that is going to get us anything other than an extraordinary year in terms of ice (melt), CO2, temperature – all the things that we track,” Carlson said. “If we got this much surprise this year, how many more surprises are ahead of us?”

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Hard to gauge what’s going to happen with this.

Fighting the Most Dangerous Animal in the World (Spiegel)

[..] Aedes aegypti presents a threat to some 4 billion people across the globe. The world long approached the Aedes agypti plague as though it were a storm that would soon blow over, but it has now become a fixture in large cities in the tropics. If nothing is done, experts say, more and more people will die as a result. And it has also become clear that some of the tropical diseases carried by this insect are coming to Europe. Partly, that is the result of rising temperatures on the European continent. In the southwestern German city of Freiburg, for example, scientists have determined that a population of Aedes mosquitoes survived the German winter for the first time. It used to be that only those who traveled to the tropics were at risk of becoming infected with tropical illnesses.

But now, many in Europe must face the prospect of the tropics coming to them. It was images from Brazil that sent a jolt of fear around the world at the beginning of this year. Across the country, babies were suddenly being born with heads that were misshapen and too small. When indications mounted that this curious increase in cases of so-called microcephaly was connected to the Zika epidemic that had stormed across Brazil in the previous months, the WHO declared an international emergency. Brazil mobilized 220,000 soldiers for the battle, sending them through bathrooms, yards and garages to eliminate standing water where female Aedes mosquitoes lay their eggs. But the campaign did little to reduce the threat. In the first four months of this year, officials registered 100,000 additional cases thought to be Zika.

In addition, almost a million people were infected with dengue fever, more than ever before in such a short span of time. There is no vaccine against the Zika virus and there is no medicine that can prevent people from becoming infected. In March, medical researchers said that Zika can also be transmitted via sexual intercourse and, as if that weren’t enough, 151 health experts wrote an open letter in May demanding that the Olympic Games – set to kick off in Rio in two weeks – be postponed or moved. Taking the risk of holding the games as planned, they said, would be irresponsible. The city is expecting a half-million visitors. If only a tiny fraction of them become infected by the virus, these games – intended to crown Brazil’s climb to economic power status – could mark the beginnings of a catastrophe.

Read more …

Feb 092015
 
 February 9, 2015  Posted by at 11:25 am Finance Tagged with: , , , , , , , ,  3 Responses »


NPC Ezra Meeker’s Wild West show rolls into town, Washington DC May 11 1925

The Swiss Leaks (60 Minutes)
HSBC Files: Swiss Bank Helped Clients Dodge Taxes And Hide Millions (Guardian)
US Government Faces Pressure After Biggest Leak In Banking History (Guardian)
Greek Leader Tsipras Pledges to Press Ahead on Undoing Austerity Measures (WSJ)
Greenspan Predicts Greece Exit From Euro Inevitable (BBC)
Greek Finance Minister Says Euro Will Collapse If Greece Exits (Reuters)
If Greece Exits, Here Is What Happens – Redux (Zero Hedge)
UK Is Readying Contingency Plans for Possible Greek Eurozone Exit (WSJ)
Historically Speaking Germany A Bigger Deadbeat Than Greece (Joe Schlesinger)
A Greece Debt Deal Is By All Means Not Impossible (Guardian)
War and Default in Europe Pose Merkel’s Biggest Challenge (Bloomberg)
Obama Joins the Greek Chorus (Ashoka Mody)
Bernie Sanders Asks Janet Yellen to Explain Her Apparent Inaction on Greece (NC)
In The Eternal City, The Euro Remains The Eternal Problem (Guardian)
Italy Lenders Seen Cleansing Books Amid Bad-Bank Plans (Bloomberg)
US Banks Say Soaring Dollar Puts Them at Disadvantage (WSJ)
Global Economy Will Shrink By $2.3 Trillion In 2015 (Zero Hedge)
Trouble For China As Money Flows Out (MarketWatch)
Citi Fears 23% Downside Correction in Chinese Stocks (Zero Hedge)
Will US Consumers Ever Go On Spending Spree? (MarketWatch)
Albert Edwards: Core Inflation In The US And Europe Are The Same (Zero Hedge)
OECD: Changes Must Cut Inequality, Not Just Boost Economic Growth (Guardian)
US Locks In Cheap Financing (Bloomberg)

“For these big banks, the fines that have been imposed amount to a parking ticket..”

The Swiss Leaks (60 Minutes)

The largest and most damaging Swiss bank heist in history doesn’t involve stolen money but stolen computer files with more than 100,000 names tied to Swiss bank accounts at HSBC, the second largest commercial bank in the world. A 37-year-old computer security specialist named Hervé Falciani stole the huge cache of data in 2007 and gave it to the French government. It’s now being used to go after tax cheats all over the world. 60 Minutes, working with a group called the International Consortium of Investigative Journalists, obtained the leaked files.

They show the bank did business with a collection of international outlaws: tax dodgers, arms dealers and drug smugglers – offering a rare glimpse into the highly secretive world of Swiss banking. This is the stolen data that is shaking the Swiss banking world to its core. It contains names, nationalities, account information, deposit amounts – but most remarkable are these detailed notes revealing the private dealings between HSBC and its clients. Few people know more about money laundering and tax evasion by banks than Jack Blum. He’s a former U.S. Senate staff investigator. We asked him to analyze the files for us.

Jack Blum: Well, the amount of information here that has come public is extraordinary. Absolutely extraordinary. [..] If you read these notes, what you understand is the bank is trying to accommodate the secrecy needs of the client. And that’s the first concern.

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Jailtime!

HSBC Files: Swiss Bank Helped Clients Dodge Taxes And Hide Millions (Guardian)

HSBC’s Swiss banking arm helped wealthy customers dodge taxes and conceal millions of dollars of assets, doling out bundles of untraceable cash and advising clients on how to circumvent domestic tax authorities, according to a huge cache of leaked secret bank account files. The files – obtained through an international collaboration of news outlets, including the Guardian, the French daily Le Monde, BBC Panorama and the Washington-based International Consortium of Investigative Journalists – reveal that HSBC’s Swiss private bank:
• Routinely allowed clients to withdraw bricks of cash, often in foreign currencies of little use in Switzerland.
• Aggressively marketed schemes likely to enable wealthy clients to avoid European taxes.
• Colluded with some clients to conceal undeclared “black” accounts from their domestic tax authorities.
• Provided accounts to international criminals, corrupt businessmen and other high-risk individuals.

The HSBC files, which cover the period 2005-2007, amount to the biggest banking leak in history, shedding light on some 30,000 accounts holding almost $120bn of assets. The revelations will amplify calls for crackdowns on offshore tax havens and stoke political arguments in the US, Britain and elsewhere in Europe where exchequers are seen to be fighting a losing battle against fleet-footed and wealthy individuals in the globalised world. Approached by the Guardian, HSBC, the world’s second largest bank, has now admitted wrongdoing by its Swiss subsidiary. “We acknowledge and are accountable for past compliance and control failures,” the bank said in a statement. The Swiss arm, the statement said, had not been fully integrated into HSBC after its purchase in 1999, allowing “significantly lower” standards of compliance and due diligence to persist.

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The chance of Washington coming clean is zero.

US Government Faces Pressure After Biggest Leak In Banking History (Guardian)

The US government will come under intense pressure this week to explain what action it took after receiving a massive cache of leaked data that revealed how the Swiss banking arm of HSBC, the world’s second-largest bank, helped wealthy customers conceal billions of dollars of assets. [..] .. the Swiss files, made public for the first time by the Guardian and other media, are likely to raise questions in Washington over whether there is evidence to prosecute HSBC or its executives in the US. Lawmakers are also expected to question the rigour of IRS investigations into undeclared assets hidden by US taxpayers in Geneva.

The IRS said it “remains committed to our priority efforts to stop offshore tax evasion wherever it occurs”, and pointed out it has collected more than $7bn from a program, introduced in 2009, that allows US taxpayers to voluntarily disclose previously undeclared offshore accounts. However the IRS declined to say how much it has retrieved in back taxes, interest and penalties as a result of investigations stemming from the leaked HSBC Swiss data. The IRS also declined to say how many US taxpayers have been investigated as a result of the leak, citing taxpayer privacy and the Tax Information Exchange Agreement (TIEA), a treaty that renders secret information shared between the US and France.

The DoJ said it “does not confirm or deny the existence of an investigation”. Senior Senate sources said government officials are likely to be questioned on Capitol Hill over what action was taken after the US received the leaked HSBC data almost five years ago. On Tuesday, Maryann Hunter, who is on the board of governors of the Federal Reserve, and has some responsibility for regulation of foreign banking organisations operating in the US, will give evidence to the Senate banking committee. Two days later, Geoffrey Graber, a deputy associate attorney general at the DoJ who oversees settlements with Wall Street banks, will appear before a House judiciary subcommittee. Both are expected to be questioned about the leak.

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“The more our partners want austerity, the more the problem with the debt will get worse..“

Greek Leader Tsipras Pledges to Press Ahead on Undoing Austerity Measures (WSJ)

Greece unveiled plans Sunday to undo several austerity measures that were a condition of its international bailout, ranging from tax cuts to increasing the minimum wage, putting the country firmly on a collision course with its European partners. In a speech to lawmakers, Prime Minister Alexis Tsipras reiterated that Greece would seek a bridge loan from its international creditors until June, refusing to accept an extension of its current bailout, as demanded by European partners. “We know very well that talks won’t be easy and that we are facing an uphill path but we believe in our abilities,” he said, presenting his newly-elected government’s policy statement to lawmakers. “The more our partners want austerity, the more the problem with the debt will get worse,“ he said.

Among the changes announced by Mr. Tsipras are raising the taxable income threshold; gradually increasing the minimum wage, starting next year; and dropping a recently introduced property tax. He also promised the retirement age wouldn’t be changed. These changes are aimed at providing the country with a growth push, he added, after the economy contracted by about a quarter in the last five years and unemployment shot up to more than 25%. It is not clear, however, where the savings will come from in order to pay for these changes, given that Mr. Tsipras promises that the country will avoid creating fresh budget deficits. Greece’s current €240 billion rescue runs out at the end of the month, and the government has warned it could run out of money in weeks unless it can gain access to additional funds.

The Greek government also has said that it wants to change the terms of its funding agreement, which require the new leftist government to adhere to austerity measures agreed to by its predecessors. But Greece’s partners in the European Union—led by Germany—have insisted that promises made by the previous Greek government have to be kept if Athens wants to receive further assistance. Eurozone officials have asked Greece to come up with a specific funding plan by Wednesday, when finance ministers, meeting in Brussels, will try to move closer to a deal on the paralyzed bailout program. A day later, Mr. Tsipras will sit down for his first talks with German Chancellor Angela Merkel at a European summit in Brussels.

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The oracle comes clean with his last breath.

Greenspan Predicts Greece Exit From Euro Inevitable (BBC)

The former head of the US central bank, Alan Greenspan, has predicted that Greece will have to leave the eurozone. He told the BBC he could not see who would be willing to put up more loans to bolster Greece’s struggling economy. Greece wants to re-negotiate its bailout, but Mr Greenspan said “I don’t think it will be resolved without Greece leaving the eurozone”. Earlier, UK Chancellor George Osborne said a Greek exit would cause “deep ructions” for Britain. Mr Greenspan, chairman of the Federal Reserve from 1987 to 2006, said: “I believe [Greece] will eventually leave. I don’t think it helps them or the rest of the eurozone – it is just a matter of time before everyone recognises that parting is the best strategy.

“The problem is that there there is no way that I can conceive of the euro of continuing, unless and until all of the members of eurozone become politically integrated – actually even just fiscally integrated won’t do it.” Following the election in Greece of the anti-austerity Syriza party, Greek ministers have been touring European capitals trying to drum up support for a re-negotiation of its bailout terms. However, there appears little willingness in Berlin, or at the European Central Bank, to alter the terms of its €240bn rescue by the EU, ECB and IMF. “The [bailout] conditions with Greece were generous, beyond all measure,” German Finance Minister Wolfgang Schaeuble said last week. He saw no justification for relaxing them further. Mr Greenspan said: “All the cards are being held by members of the eurozone.”

He also warned that trying to hold the 19-nation euro bloc together “is putting strain on everybody”. He said as well as Greece leaving the eurozone, there was a real risk of a “much bigger break-up” with other southern European countries forced out. Alan Greenspan has long been a critic of the European single currency. Now, the 88-year-old former chairman of the US Federal Reserve has repeated a claim that nothing short of full political union – a United States of Europe – can save the euro from extinction. Given that few (if any) of the current 19 sovereign governments which make up the eurozone would choose to create such an entity at this time, that means – for Greenspan at least – the euro is doomed. Before all that, though, he foresees Greece quitting the single currency, but the euro surviving intact. Grexit, he says, is more manageable now than it would have been when Greece got its first EU bailout in 2010.

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“The euro is fragile, it’s like building a castle of cards, if you take out the Greek card the others will collapse.”

Greek Finance Minister Says Euro Will Collapse If Greece Exits (Reuters)

– If Greece is forced out of the euro zone, other countries will inevitably follow and the currency bloc will collapse, Greek Finance Minister Yanis Varoufakis said on Sunday, in comments which drew a rebuke from Italy. Greece’s new leftist government is trying to re-negotiate its debt repayments and has begun to roll back austerity policies agreed with its international creditors. In an interview with Italian state television network RAI, Varoufakis said Greece’s debt problems must be solved as part of a rejection of austerity policies for the euro zone as a whole. He called for a massive “new deal” investment program funded by the European Investment Bank.

“The euro is fragile, it’s like building a castle of cards, if you take out the Greek card the others will collapse.” Varoufakis said according to an Italian transcript of the interview released by RAI ahead of broadcast. The euro zone faces a risk of fragmentation and “de-construction” unless it faces up to the fact that Greece, and not only Greece, is unable to pay back its debt under the current terms, Varoufakis said. “I would warn anyone who is considering strategically amputating Greece from Europe because this is very dangerous,” he said. “Who will be next after us? Portugal? What will happen when Italy discovers it is impossible to remain inside the straitjacket of austerity?”

Varoufakis and his Prime Minister Alexis Tsipras received friendly words but no support for debt re-negotiation from their Italian counterparts when they visited Rome last week. But Varoufakis said things were different behind the scenes. “Italian officials, I can’t tell you from which big institution, approached me to tell me they backed us but they can’t tell the truth because Italy also risks bankruptcy and they are afraid of the reaction from Germany,” he said. “Let’s face it, Italy’s debt situation is unsustainable,” he added, a comment that drew a sharp response from Italian Economy Minister Pier Carlo Padoan, who said in a tweet that Italy’s debt was “solid and sustainable.”

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Pretty ugly.

If Greece Exits, Here Is What Happens – Redux (Zero Hedge)

Now that the possibility of a Greek exit from the euro is back to being topic #1 of discussion, just as it was back in the summer of 2012 and the fall of 2011, and investors are propagandized by groundless speculation posited by journalists who have never used excel in their lives and are merely paid mouthpieces of bigger bank interests, it is time to rewind to a step by step analysis of precisely what will happen in the moments before Greece announces the EMU exit, how the transition from pre- to post- occurs, and the aftermath of what said transition would entail, courtesy of one of the smarter minds out there at the time (before his transition to a more status quo supportive tone), Citi’s Willem Buiter, who pontificated precisely on this topic previously. Three words: “not unequivocally good.” From Willem Buiter (2012): What happens when Greece exits from the euro area?

Were Greece to be forced out of the euro area (say by the ECB refusing to continue lending to Greek banks through the regular channels at the Eurosystem and stopping Greece’s access to enhanced credit support (ELA) at the Greek central bank), there would be no reason for Greece not to repudiate completely all sovereign debt held by the private sector and by the ECB. Domestic political pressures might even drive the government of the day to repudiate the loans it had received from the Greek Loan Facility and from the EFSF, despite it having been issued under English law.

Only the IMF would be likely to continue to be exempt from a default on its exposure, because a newly ex-euro area Greece would need all the friends it could get – outside the EU. In the case of a confrontation-driven Greek exit from the euro area, we would therefore expect to see around a 90% NPV cut in its sovereign debt, with 100% NPV losses on all debt issued under Greek law, including the debt held, directly or directly, by the ECB/Eurosystem. We would also expect 100% NPV losses on the loans by the Greek Loan Facility and the EFSF to the Greek sovereign.

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Everyone is, of course.

UK Is Readying Contingency Plans for Possible Greek Eurozone Exit (WSJ)

The U.K. government is stepping up contingency planning to prepare for a possible Greek exit from the eurozone and the market instability such a move would create, U.K. Treasury chief George Osborne said on Sunday. The U.K. government has said the standoff between Greece’s new antiausterity government and the eurozone is increasing the risks to the global and U.K. economy. “That’s why I’m going tomorrow to the G-20 [Group of 20] to encourage our partners to resolve this crisis. It’s why we’re stepping up the contingency planning here at home,” Mr. Osborne told the BBC in an interview. “We have got to make sure we don’t, at this critical time when Britain is also facing a critical choice, add to the instability abroad with instability at home.”

Mr. Osborne is on Monday heading to Istanbul for talks with other finance officials from the G-20. Alan Greenspan , former chairman of the U.S. Federal Reserve, said in a separate interview that he believed Greece would eventually leave the eurozone. He told the BBC he couldn’t see who would be willing to put up more loans to bolster the country’s struggling economy. “I believe [Greece] will eventually leave. I don’t think it helps them or the rest of the eurozone—it is just a matter of time before everyone recognizes that parting is the best strategy,” he was quoted as saying by the BBC.

Ahead of the U.K. general election in May, Prime Minister David Cameron and Mr. Osborne have used the Greek situation to argue their case for a continuation of the government’s austerity plans. Mr. Osborne noted that Greece had chosen to stay in the eurozone and had worked hard to do so. “If Greece left the euro that would create real instability in financials markets in Europe,” he said. “That’s why we have got to avoid this crisis getting out of control, which is why we have got to make sure we have an international effort to resolve the standoff and here in Britain we step up our contingency planning to prepare for whatever is thrown at us.”

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“In the 1920s, according to a prominent German economic historian, Germany was “like Greece on steroids.”

Historically Speaking Germany A Bigger Deadbeat Than Greece (Joe Schlesinger)

In its attempt to bust the austerity shackles that lenders have imposed, Greece’s new leftist government is finding a particularly unsympathetic ear in Germany, the EU’s paymaster, which says it is done writing off Greek debt. That warning from German Chancellor Angela Merkel and others is overwhelmingly backed by a German public outraged by the contrast between Greece’s spendthrift ways, with its penchant for treating tax bills as junk mail, and their own obsession with a tight hold on the purse strings, both personal and as a country. What the Germans are conveniently ignoring is their own record as one of history’s biggest deadbeats. In the 1920s, according to a prominent German economic historian, Germany was “like Greece on steroids.”

Albrecht Ritschl, a professor at the London School of economics and adviser to Germany, says that Germany’s current prosperity was built on borrowed — mostly American — money, much of it written off. It all started in 1918 when Germany lost the First World War. In the peace settlement that followed, the victors exacted payment of 269 billion marks or 96,000 tonnes of gold. Mirroring the Greeks’ current sentiments regarding debt repayment and forced austerity, Germans after WWI saw the reparations as a national humiliation and rejected the validity of that Versailles Treaty. They did pay, though. But they made their payment by printing ever more money, which led to the kind of hyperinflation where money was carried around in suitcases. By 1923, one U.S. dollar was worth billions of marks. In Berlin, a streetcar ticket cost 15 billion marks.

The collapse of the German economy led to the demise of the country’s Weimar Republic democracy and the rise of Adolf Hitler, who promptly stopped the payments once he came to power. It is often said that the debacle of the Versailles settlement thus led directly to Second World War. But once that war was over, with Germany having lost again, the lesson of Versailles was finally heeded. Instead of punishing the Germans, the victorious Western allies decided to help them get back on their feet again. Not all Germans, of course, because by that time the country was divided between the Soviet satrapy of Communist East Germany and the budding democracy of West Germany. The Cold War was on, and the allies wanted to make sure that Western Europe didn’t succumb to Joseph Stalin, as it had a decade earlier to Hitler and his collaborators. The problem, though, was that Western Europe lay in ruins and its people were starving. There was only one possible rescuer — the U.S.[..]

In 1947, the U.S. Congress voted $13 billion in aid to the Europeans, a massive sum at the time. The Germans got $1.45 billion of that money. They were also allowed to put off paying, and indeed never did fully repay the money they already owed to other Europeans as well as the Americans. [..] As for the money they owed, in 2010 the Germans made a last payment of €69.9 million to settle all their debts from both wars. That settlement, though, was more symbolic than real as the original debt was repeatedly reduced over the decades.

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“..nor does she want to be the politician responsible for rolling back more than half a century of closer European integration.”

A Greece Debt Deal Is By All Means Not Impossible (Guardian)

Tsipras is not going to get everything he wants. He might only get a fraction of what he wants. But he will get something. Why? Because this is Europe, where horse-trading and deal-making is the natural order of things. Because the Greek people have spoken by voting for Syriza. Because there is an acceptance that the country has suffered grievously in the past five years. But, above all, because sending Tsipras off with a flea in his ear would mean risking Greece leaving the eurozone. And nobody wants that: not Juncker, not Mario Draghi, not Angela Merkel. The German chancellor may not be prepared to offer Tsipras much, but nor does she want to be the politician responsible for rolling back more than half a century of closer European integration.

A deal will be done despite what appeared to be a hardening of positions in the second half of last week. The mood darkened after the European Central Bank said it would no longer accept Greek bonds as collateral for lending to Greek banks. That was seen as an aggressive act, since it means the Greek central bank will have to provide its own emergency assistance at a higher interest rate. And even that source of funding could be ended by the ECB if it thought there was no prospect of a deal between Athens and its eurozone partners. Were this to happen, it would precipitate a financial crisis. Greece’s banks would become insolvent very quickly, leaving Tsipras with the choice of either abject surrender or exit from the euro, followed by debt default and devaluation.

It is, though, unlikely to get to this point. Indeed, there are some commentators – such as the US prizewinning economist Paul Krugman – who believe that far from being a crude act of belligerence this was actually another one of Draghi’s subtle ploys, designed to make it clear to Merkel just how close the eurozone was to losing one of its 19 members. By refusing to be provoked by the ECB move, Tsipras and his finance minister, Yanis Varoufakis, pitched their response just about right. That said, any concessions to Greece will be limited. That was clear in the two days I spent in Brussels last week talking to officials and politicians. Valdis Dombrovskis, commissioner for the euro and social dialogue, said: “We are respecting the democratic choice of the Greek people. The European commission is willing to engage with Greece. The basis of the negotiations is that all sides stick with their own commitments.”

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Merkel has largely morphed into a tool.

War and Default in Europe Pose Merkel’s Biggest Challenge (Bloomberg)

After almost a decade as German chancellor, Angela Merkel faces a moment of truth as a resurgent Russia and fed-up Greeks challenge her blueprint for Europe’s future. As bloodshed in eastern Ukraine escalates and the new Greek government rejects austerity championed by Merkel, her deliberate leadership style may be reaching the limit of its effectiveness. With Europe’s post-Cold War order and its unifying currency at stake, the weight of global and domestic expectations is pushing Merkel out of her comfort zone and into two direct confrontations. Both adversaries and allies have repeatedly underestimated Merkel’s determination as she rose from obscurity in an East German lab to become the world’s most powerful woman.

“It underscores how much Germany is really the pivotal power in Europe and Angela Merkel is the pivotal leader,” Daniel Hamilton, head of the Center for Transatlantic Relations at the Paul H. Nitze School of Advanced International Studies in Washington, said in an interview. “Much of it has to do with Germany’s success, but much of it also has to do with default by other powers. It’s not like she or Germany aspires to this role.” Merkel’s status as Europe’s go-to leader will be on display when President Barack Obama hosts her at the White House on Monday. In the run-up, she’s resisting pressure by U.S. politicians to send arms to Ukraine’s government. The biggest risk for Merkel is if either crisis spiraled out of control. At that point, she would have failed to address “German concern about stability,” Hamilton said.

While Merkel, 60, doesn’t deliver grand visions of European unity and reconciliation like her mentor Helmut Kohl, she has a practical set of values that are now under threat. For the 19-nation currency bloc, her goal is to make economies from Greece to Ireland more like her export-driven powerhouse. She says changes are vital to adapt to globalization and Europe’s aging populations. Even so, bailouts she backed have spawned a challenge by the anti-euro Alternative for Germany party that limits her leeway for cutting another deal with Greece.

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They all start to admit their failures, but still insist Greece pay for them.

Obama Joins the Greek Chorus (Ashoka Mody)

US President Barack Obama’s recent call to ease the austerity imposed on Greece is remarkable – and not only for his endorsement of the newly elected Greek government’s negotiating position in the face of its official creditors. Obama’s comments represent a break with the long-standing tradition of official American silence on European monetary affairs. While scholars in the United States have frequently denounced the policies of Europe’s monetary union, their government has looked the other way. Those who criticize the euro or how it is managed have long run the risk of being dismissed as Anglo-Saxons or, worse, anti-Europeans. British Prime Minister Margaret Thatcher accurately foresaw the folly of a European monetary union. Gordon Brown, as British Chancellor of the Exchequer, followed in Thatcher’s footsteps.

When his staff presented carefully researched reasons for not joining the euro, many Europeans sneered. And that is why Obama’s statement was such a breath of fresh air. It came a day after German Chancellor Angela Merkel said that Greece should not expect more debt relief and must maintain austerity. Meanwhile, after days of not-so-veiled threats, the European Central Bank is on the verge of cutting funding to Greek banks. The guardians of financial stability are amplifying a destabilizing bank run. Obama’s breach of Europe’s intellectual insularity is all the more remarkable because even the IMF has acquiesced in German-imposed orthodoxy. As IMF Managing Director Christine Lagarde told the Irish Times: “A debt is a debt, and it is a contract. Defaulting, restructuring, changing the terms has consequences.”

The Fund stood by in the 1990s, when the eurozone misadventure was concocted. In 2002, the director of the IMF’s European Department described the fiscal rules that institutionalized the culture of persistent austerity as a “sound framework.” And, in May 2010, the IMF endorsed the European authorities’ decision not to impose losses on Greece’s private creditors – a move that was reversed only after unprecedented fiscal belt-tightening sent the Greek economy into a tailspin. The delays and errors in managing the Greek crisis started early. In July 2010, Lagarde, who was France’s finance minister at the time, recognized the damage incurred by those initial delays, “If we had been able to address [Greece’s debt] right from the start, say in February, I think we would have been able to prevent it from snowballing the way that it did.”

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The US, too, is at risk.

Bernie Sanders Asks Janet Yellen to Explain Her Apparent Inaction on Greece (NC)

Senator Bernie Sanders issued a letter over the weekend asking Janet Yellen to “make it clear to the leadership of the European Central Bank that the United States and the Federal Reserve object to actions that affect our national interest and risk U.S. and global financial stability through the unnecessary and counterproductive implementation of deflationary policies.” The full letter is embedded below. Also note that Senator Sanders wrote Christine Lagarde at the IMF on January 28, two days after Syriza’s victory, expressing his concern about the humanitarian costs and political risks of continuing to pursue failed austerity policies. If you are a Vermont voter, please e-mail him and thank him for taking this stand. And the rest of you who are moved to help, please write Hillary Clinton’s office and ask why, as the Democratic party Presidential nominee-in-waiting, why she is silent on this important topic.

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Greece 2.

In The Eternal City, The Euro Remains The Eternal Problem (Guardian)

You see, for decades, the Italian economy trundled along quite nicely, with a strong industrial sector, a great name for design, and the ability to devalue the lira from time to time, when wages got out of control and international competitiveness suffered. That is to say, for all its “structural rigidities” and “Italian practices”, the economy performed reasonably well. In recent decades, it has been hit by a succession of blows, not least the financial crisis – which struck after great strides had been made in reducing the budget deficit – and the economic straitjacket of the eurozone. Membership of the single currency not only removes the freedom to devalue against, for example, Germany: it also subjects Italy to the kind of fiscal sadism against which the Greeks have just revolted.

The many “rigidities” of Italy’s economy are highlighted in the film Girlfriend in a Coma, made by Annalisa Piras and former Economist editor Bill Emmott, described by Le Monde as “a desperate love letter to Italy”. Well, the Italians are having another go. One reform which might not be too popular with Pessina is yet another attempt to crack down on tax avoidance – generally considered something of a national sport. They are trying to speed up the justice system as part of an effort to stimulate more inward investment, and – especially important for so many of the young, who are effectively excluded from the labour market – the Renzi administration aims to reduce the imbalance in labour contracts between those with a “job for life” and those desperate to get a job.

Meanwhile, rays of hope as the sun was setting in Venice last Saturday were: first, although Italy cannot devalue against Germany, the entire eurozone may gain some relief from both the ECB QE programme – boosting money and credit – and the devaluation of the euro. Then there is the potential boost to spending from the lower oil price.Nevertheless, macroeconomic policy in the eurozone remains far too restrictive. I think we are talking of alleviation of the Italian economy’s problems, rather than a cure.

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In your dreams: “Appropriate tax relief or state guarantees on assets backed by bad debts would smooth the way for the creation of a private market in non-performing loans..”

Italy Lenders Seen Cleansing Books Amid Bad-Bank Plans (Bloomberg)

Italian banks, under pressure to bring their balance sheets in line with the ECB’s health check, will probably set aside billions more for loan losses in the fourth quarter as the government considers a national plan for offloading their troubled assets. Banca Monte dei Paschi the weakest performer in the 130-bank review, is likely to almost triple its loan-loss provisions to €3.2 billion, according to the average of six analyst estimates compiled by Bloomberg for Italy’s third-biggest bank. In total, the top five banks may set aside about €8 billion, estimates show.

The nation’s lenders are saddled with a record €181 billion of nonperforming loans that are hindering their ability to expand lending and holding back the country’s recovery from its third recession in six years. More than two years after the balance-sheet clean-up started, the government is considering creating a bad bank to accelerate disposals of problematic assets. Government support would help generate economic growth, Bank of Italy Governor Ignazio Visco said Saturday. “Appropriate tax relief or state guarantees on assets backed by bad debts would smooth the way for the creation of a private market in non-performing loans,” he said in a speech in Milan.

“A bad bank vehicle combined with structural reforms would be a key tool to improve Italian bank profitability,” analysts at Morgan Stanley including Francesca Tondi wrote in a report Friday. Fabrizio Bernardi, an analyst at Fidentiis Equities, said banks with a lower-than-average asset quality profile would benefit the most from a bad bank. All five banks are scheduled to publish fourth-quarter earnings this week. Leading the pack, UniCredit and Intesa Sanpaolo will probably set aside about €3 billion between them. Both banks posted full-year losses in 2013 after writing down billions of non-performing loans. Banco Popolare, the country’s fifth-biggest lender, may post €1.27 billion in provisions, according to the surveys.

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Boo hoo hoo.

US Banks Say Soaring Dollar Puts Them at Disadvantage (WSJ)

The strengthening U.S. dollar is rippling through the financial system in unexpected ways, revealing what bankers say is a hidden flaw in a Federal Reserve proposal to increase capital cushions at the nation’s largest banks. Big U.S. banks say that, under the rule proposed in December, the recent steep rise in the dollar’s value would force some U.S. firms to hold billions of dollars more in capital than foreign competitors, including weaker European banks, because of how the Fed plans to calculate a so-called surcharge levied on the eight most systemically important U.S. banks. The Fed rule is aimed at forcing big banks to add extra layers of financing to protect against losses.

The banks believe it would wind up penalizing U.S. banks if the dollar remains strong against the euro, as many economists expect, because the high exchange rate makes their dollar-denominated assets and operations look larger relative to their European peers. Officials from banks including Citigroup, Goldman Sachs, Bank of America and Morgan Stanley met privately with Fed officials in January to discuss the threat and other concerns about the rule, according to people who attended. The banks plan to file an official comment letter later this month detailing those concerns and seeking changes to how the proposal calculates the extra capital required. The currency’s potential impact on big U.S. banks is the latest example of how a strengthening dollar is affecting the U.S. economy.

The strong dollar is hitting the profits and sales of a wide swath of corporate America, including firms that expanded overseas aggressively, like consumer-products giant Procter & Gamble and pharmaceuticals company Pfizer, but are now finding that sales abroad are suffering or not keeping up with dollar-based costs. The impact has weighed on U.S. stocks and raised worries about the health of the U.S. economy. U.S. banks say the currency volatility exposes underlying problems with the Fed’s proposal, which is aimed at forcing banks to shrink by putting a price on bigness but ties their capital requirements in part to forces beyond their control. Banks have already expressed concern that the Fed’s surcharge proposal is tougher than what European regulators are expected to require.

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In dollar terms.

Global Economy Will Shrink By $2.3 Trillion In 2015 (Zero Hedge)

Via BofAML: The $2.3 Trillion Global GDP Write-Off

Global nominal GDP is likely to contract by about $2.3tn in 2015, a consequence of the USD strengthening. It will be the sixth time since 1980 that global nominal GDP contracts in dollar terms and the second biggest contraction since 2009. This change will have far reaching implications across markets, principally for commodity prices. The world is going to be about $2.37tn smaller in 2015 than what we thought when we prepared our Year Ahead forecasts. This is not insignificant, as it represents 3.2% of last year’s estimated global GDP. For perspective, that would be as if an economy of the size between Brazil’s and the UK’s would have just disappeared.

In our calculation, we include the US, the Euro area, Japan, the UK, Australia, Canada and all the emerging markets we cover. Together they totaled $70.9tn last year, or 91% of the world output as measured by the IMF. The change is mostly attributed to the stronger USD. We barely changed our real growth forecasts from the time of the Year Ahead publication. In fact, we expect global real growth to accelerate to 3.5% in 2015 from 3.3% in 2014. The number of goods and services produced will increase at a faster rate; it is just that most of them are going to be produced in countries where the currency has weakened against the USD, and will continue to weaken, according to our forecast.

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“The dilemma for the People’s Bank of China is how to keep liquidity flowing without prompting more outflows.”

Trouble For China As Money Flows Out (MarketWatch)

China’s reserve requirement cut last week failed to provide much of a lift as it was more about replacing hot money outflows than adding new money. It also helped to bring into focus the central bank’s tricky position: In an environment of capital outflows how do you fine-tune policy so that both a credit crunch and currency crunch are avoided? Without signs the economy is regaining momentum, investors should watch out for unexpected policy moves — such as meaningful currency depreciation or new measures to trap capital inside its borders. Concerns will be compounded by terrible trade figures released at the weekend, with exports unexpectedly down 3.3% in January from a year earlier and imports falling almost 20%.

After running the reserve-reduction numbers, analysts poured cold water on last week’s half-percentage-point cut, as it merely tops up liquidity after recent outflows. Fitch Ratings calculates the 570 billion yuan ($91.4 billion) freed up almost equals exactly the 575 billion yuan in net capital outflows in 2014. The dilemma for the People’s Bank of China (PBOC) is how to keep liquidity flowing without prompting more outflows. If it loosens aggressively during a period of capital outflows and dollar strength, this could just help facilitate capital flight. Expectations of a weakening yuan would also have the same effect.

Here, the consensus remains that authorities will be resolute in defending the loosely pegged exchange rate, with Bank of America saying it expects the PBOC will stabilize the rate in order to stem capital flight. Keeping the currency stable is widely viewed as a key policy objective of Beijing as it seeks to elevate the yuan to a means of settlement for international trade and even as a reserve currency. What’s more, Chinese corporations hold a sizeable amount of foreign-currency debt. However, analysts warn that pressure is building on the exchange rate. TD Securities estimates monetary conditions in China are the tightest in a decade, with a real effective exchange rate at 15-year highs and growth in credit at decade lows. January’s decline in exports will put the yuan’s level under renewed scrutiny.

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“We suggest you take a look at a chart of Chinese retail margin debt, but not just right before bedtime. It looks something like the U.S. figures heading for 1929.”

Citi Fears 23% Downside Correction in Chinese Stocks (Zero Hedge)

The Chinese stock market is “looking prercarious” according to Citi FX Technicals’ team. A bearish outside day on the Shanghai Composite could represent just the first of a series of technical patterns that suggest a potential 23% correction… as 100s of thousands of newly minted margin’d retail equity ‘investors’ find out the hard what a tap on the shoulder feels like. As Paul Singer warned, “take a look at a chart of Chinese retail margin debt, but not just right before bedtime. It looks something like the U.S. figures heading for 1929.” Via Citi FX,
• The Shanghai Composite Index posted a bearish outside day in today’s trading
• This suggests a return to the recent low from January 14th at 3,095. A breach of that level would confirm a double top that would target a decline to 2,785
• Such a move would break through the 55dMA for the first time since July 2014 (on a closing basis).
• Given the stretched moving average dynamic a breach of the 55dMA would leave the way open for a move to the 2,415 – 2,445 range, where the 200dMA converges with support from the February 2013 high
Everything’s fine…

Perhaps – more fundamentally speaking – Elliott’s Paul Singer sums it up best… “A universal belief underlying global financial markets is that the Chinese government has complete control over its economy and financial system. We cannot know whether the corruption, bad loans, see-through projects, and internal dynamics of the Chinese system are bad, very bad, or headed for a crack-up, but any set of developments that challenge the widespread assumption of complete Chinese control over its destiny would be a very large shock to global markets.

We suggest you take a look at a chart of Chinese retail margin debt, but not just right before bedtime. It looks something like the U.S. figures heading for 1929. But there is no way for outsiders to know the net of the balance of forces, and whether the negatives are overwhelmed by the Chinese economic growth juggernaut. To paraphrase Senator Everett Dirksen: A trillion dollars of margin debt, a couple of trillion dollars of sour loans, a trillion dollars of wasted capital projects, and pretty soon you are talking about real money.”

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“Although consumers are better off than they’ve been in years, they sure haven’t acted like it.” That’s because they’re only better off in accounting models.

Will US Consumers Ever Go On Spending Spree? (MarketWatch)

There are more jobs now, for more money, than any time since the recession ended in mid-2009. Gas prices are at a six-year low, while the stock market is near near an all-time high. The question is whether Americans will spend that newfound wealth. So far, the answer has been no. The pace of consumer spending continues to disappoint even though unemployment has tumbled below 6% and U.S. added 3.1 million jobs in 2014 — the biggest gain since 1999. Although consumers are better off than they’ve been in years, they sure haven’t acted like it. Americans are still saving more and shopping frugally. Just look at what’s happened in the past few months. The savings rate rose in December to 4.9% to mark the highest level since midsummer, government data showed.

At the same time, both retail sales and consumer spending fell sharply. There’s a big asterisk to that last factoid: in both cases the negative readings reflected lower prices, namely at the gas pump. Even so, inflation-adjusted consumer spending fell slightly in December. Which again raises the question heading into Thursday’s report on retail sales. When will consumers start to spend that extra cash — and pump up the U.S. economy? Retailers seem to expect it will happen soon, as they’ve added 113,000 new positions over the last three months. Traders are expecting the headline figure again to decline in January, reflecting the lower revenue coming in for gas stations. Auto sales also will be lower, according to what the auto companies themselves have reported.

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“..the US deflation threat is every bit as immediate as that in the eurozone.”

Albert Edwards: Core Inflation In The US And Europe Are The Same (Zero Hedge)

.. one thing the SocGen strategist revealed which most certainly was not widespread public knowledge is that if one uses the inflation-measurement methodology of Europe, then not only is core CPI in the US below that of “deflationary” Europe, but is in fact negative! The US deflationary predicament, which is hiding between the lines, is why Edwards maintains his “view that the market is far too convinced that the US is in the spring of its economic recovery, whereas I believe we could well be in the autumn. What matters though is not my view, but the overconfidence of investors together with the very rich equity valuations.” The catalyst would be investor realization “that, despite the US having recently been the single engine of global growth, the US deflation threat is every bit as immediate as that in the eurozone.” Edwards explains:

The US CPI shelter component is made up of rent (7% of total CPI) and owner-occupier equivalent rent (OER, a massive 24% of the CPI). Now, when we exclude food and energy from the CPI we often hear people complain that we shouldn’t as food and energy are real expenditures that cannot be avoided. In contrast, the OER is a totally made-up number which no homeowner actually pays! OER is meant to measure the implied rent they incur by living in their home rather than renting it out – economists debate its inclusion in the CPI.

Typically OER mirrors actual rents which tend to lag house price inflation, which rose strongly in 2013 but is now slowing sharply. Hence OER inflation will probably slow too this year, revealing the underlying deflation threat. But whatever the whys and wherefores, the bottom line is simple – OER is not part of the eurozone CPI and to compare like-with-like we should exclude it. If we do, the yoy rate of core US CPI inflation is the same as in the eurozone.

But, perhaps more significantly, the 6m change in core US CPI inflation (using the eurozone definition) is actually already negative, unlike the eurozone series. Who then do you think has the bigger deflation problem ? the US or the eurozone? Which sadly means that not only all those “whopping” job gains of the past 3 months will be promptly “seasonally-adjusted” away during the next major revision opportunity, but that all the talk of a rate hike at a time when the US has a worse deflation problem than the Eurozone, will quickly and quietly disappear.

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“..the thinktank’s annual “Going for Growth” report..” Oh boy..

OECD: Changes Must Cut Inequality, Not Just Boost Economic Growth (Guardian)

Politicians must focus on policies that ensure stronger economic growth goes hand in hand with fairer distribution of the gains if they are to stem rising inequality, a leading economic thinktank has said. Analysing the effects of pro-growth policies on inequality, the Paris-based Organisation for Economic Co-operation and Development (OECD) has identified widening gaps in wealth distribution in many rich nations, with the the poorest hardest hit. The OECD urges governments to prioritise policies that help reduce inequality while also boosting growth, such as more education for low-skilled workers and measures to get more women into work.

The recommendations, part of the thinktank’s annual “Going for Growth” report, are being unveiled in Istanbul on the first day of the G20 finance ministers’ meeting. The OECD suggestion that some pro-growth policies have widened inequality will further fuel the heated debate over how countries can best restore sustainable economic growth six years after the global financial crisis. “The financial crisis and continued subdued recovery have resulted in lower growth potential for most advanced countries, while many emerging-market economies are facing a slowdown,” says the report. “In the near term, policy challenges include persistently high unemployment, slowing productivity, high public-sector budget deficit and debt, as well as remaining fragilities in the financial sector.

The crisis has also increased social distress, as lower-income households were hit hard, with young people suffering the most severe income losses and facing increasing poverty risk.” The report comes as Greece’s new leftwing government faces off with its international creditors and argues that relentless cuts under the terms of its bailout package have stifled the economy and caused widespread hardship. The OECD report highlights large increases in income inequality and poverty in Greece, alongside other countries hit hardest by the crisis: Iceland, Ireland and Spain.

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Understatement of the year; “Treasuries are “becoming detached from U.S. economic fundamentals..”

US Locks In Cheap Financing (Bloomberg)

Uncle Sam is going long. As the insatiable demand for Treasuries pushes down yields, the U.S. has locked in low-cost financing for years to come by issuing more long-term debt. The average maturity of Treasuries is now poised to reach an all-time high this year. The shift is saving money for American taxpayers – but it’s also made Treasuries more perilous for bond investors as the strength of the U.S. economy bolsters the Federal Reserve’s case for raising interest rates. Holders stand to lose about $570 billion if yields rise by a%age point, data compiled by Bloomberg show. In 2009, it was $170 billion. Treasuries are “becoming detached from U.S. economic fundamentals,” said William Irving at Fidelity Investments, which oversees about $2 trillion. “I don’t think it’s a great time to buy.”\

Long-term Treasuries have been some of the best investments around in the past year as oil tumbled, deflation emerged in Europe and a global slowdown threatened to drag on the U.S. recovery. The 30-year bond, the longest maturity security issued by the Treasury, returned 29%, double that for U.S. equities. The rally accelerated in 2015, pushing down yields to a record-low 2.22% on Jan. 30. A year ago, yields were closer to 4%. The demand for long bonds helped the Obama administration trim the nation’s short-term borrowing, which ballooned as U.S. ran trillion-dollar deficits to restore demand after the credit crisis. Treasuries due three years or less make up 48% of the market for U.S. debt, versus 58% six years ago.

The share of bills, due in one year or less, is approaching the least since the 1950s. That’s given the U.S. more time to repay its obligations. The average maturity has reached 68.7 months, or two months short of its high in 2001. With the U.S. budget deficit falling to a six-year low, the government is in better shape to finance its record debt burden when interest rates do rise.

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