Oct 192019
 


Paul Gauguin Schooner and three masters 1886

 

Twitter War Breaks Out Between Tulsi Gabbard And Hillary Clinton (ZH)
Green Party Torches Hillary Clinton For Claiming Jill Stein Is ‘Totally’ a Russian Asset
Quid Pro Nothing: Trump Accusers Don’t Care About The Facts (NYPost Ed.)
The Fatal Loop of Recursivity (Kunstler)
US Energy Secretary Will Not Comply With Democrats’ Impeachment Probe (R.)
Brexit Vote Could Be Delayed After Move By MPs To Prevent No-Deal (Ind.)
Mnuchin Backs Proposal To Double IMF’s Crisis Fund (R.)
Spain Calls In Civil Guard To Outskirts Of Barcelona (R.)
Syria Tells Russia It Will Force Both Turkey And US Out ‘By All Means’ (NW)
Boeing Employees Misled FAA About Key 737 MAX Safety System – Report (CNBC)
Boeing Pilots Detected 737 MAX Glitch 2 Years Before 1st Crash (NPR)
‘Just Don’t Waste’: David Attenborough’s Message To Next Generation (G.)

 

 

Zero Hedge on Twitter: Putin’s diabolical plan to run the same democrat who lost against trump in 2016 is nearly complete.

Tulsi is brilliant here. Her tweets garnered 30k retweets and 100k likes in under two hours and she gained, more than 40,000 Twitter followers more than she gains in an average month.

Still, during and after every single debate, Tulsi was the most searched candidate on Google (even the debate she was banned from). Now with Hillary gifting her this much attention, will she still poll 2% or less? Then you would know what rigging means.

Tulsi is the first female combat veteran in history to run for President, and is still a Major in the Hawaii National Guard. And Hillary accuses her of being a Russian asset, i.e. treason. Real treason.

Michael Tracey: “If Tulsi is being controlled by Russia that’s a National Security Threat because she’s active military. Let’s have Hillary follow through on her batshit rhetoric. Is she alleging that a Major in the National Guard is secretly doing the bidding of Russia?”

Will Tulsi sue Hillary for defamation?

 

Twitter War Breaks Out Between Tulsi Gabbard And Hillary Clinton (ZH)

Democratic presidential candidate and Hawaii Congresswoman Tulsi Gabbard – who like Trump was quickly put in the crosshairs of the military industrial complex, the deep state and the pro-war Atlantic Council for her de-interventionist foreign policy – fired back at Hillary Clinton, accusing her of being behind a “concerted campaign” to destroy her reputation and challenged her to stop hiding and enter the 2020 presidential race. Earlier in the day, Hillary Clinton floated a conspiracy theory that the Russians are “grooming” the Hawaii congresswoman to be a third-party candidate in 2020, while claiming 2016 Green Party nominee Jill Stein is “also” a Russian asset.

“Great! Thank you Hillary Clinton,” Gabbard tweeted late on Friday afternoon. “You, the queen of warmongers, embodiment of corruption, and personification of the rot that has sickened the Democratic Party for so long, have finally come out from behind the curtain.” “From the day I announced my candidacy, there has been a concerted campaign to destroy my reputation. We wondered who was behind it and why. Now we know — it was always you, through your proxies and powerful allies in the corporate media and war machine, afraid of the threat I pose.” Gabbard added. “Don’t cowardly hide behind your proxies. Join the race directly,” Gabbard called out Clinton, who has dropped hints that she might run again in 2020 as a rematch for her 2016 humiliation.

During this week’s Democratic debate, Gabbard blasted debate co-sponsors CNN and the New York Times for “smearing” her along similar lines. CNN commentator Bakari Sellers called her a “puppet” for the Russian government and the Times reported on her “frequent” mentions in Russian state news media. “Just two days ago, The New York Times put out an article saying that I’m a Russian asset and an Assad apologist and all these different smears,” Gabbard said. “This morning, a CNN commentator said on national television that I’m an asset of Russia — completely despicable.”

Read more …

Green Party isn’t nearly as efficient as Tulsi is.

Green Party Torches Hillary Clinton For Claiming Jill Stein Is ‘Totally’ a Russian Asset

“Brazen Orwellian doublespeak” — that’s what the Green Party is saying in response to Hillary Clinton’s accusation that their 2016 candidate, Dr. Jill Stein, is “totally” a “Russian asset.” “Clinton has spent her entire career as an asset of Wall Street, the police state and war — the real dangers to everyday people in the United States and around the world,” Green Party communications manager Michael O’Neil said in a statement to Rolling Stone on Friday. Clinton, the erstwhile Democratic nominee in 2016, sat down for an interview with former Obama campaign manager David Plouffe earlier this week. Over the course of an hour-long discussion, the former Secretary of State speculated that American antagonists would attempt to influence the 2020 election, as they did in 2016.


She suggested the Democratic Rep. Tulsi Gabbard might be the recipient — witting or not — of help from the Kremlin this time around. (At the Democratic debate on Tuesday, Gabbard called allegations that her candidacy is being boosted by the Russian government “completely despicable.”) Clinton said she wouldn’t be surprised if Gabbard, failing to secure the Democratic nomination, mounted a third party challenge in 2020. [..] “While Clinton would love to intimidate Green Party candidates and voters with baseless smears, her salty neo-McCarthyism will prove to be rocket fuel for the motivation of Greens everywhere in 2020 and beyond,” O’Neil said. Clinton’s spokesman, meanwhile, doubled down on the characterization to CNN on Friday. “If the nesting doll fits, ” Nick Merrill said. “This is not some outlandish claim. This is reality.”

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New York Post editorial. A counterweight to the 1001 pieces that all interpret Mulvaney the same way.

Quid Pro Nothing: Trump Accusers Don’t Care About The Facts (NYPost Ed.)

Everyone who already thought the case for President Trump’s impeachment was a slam-dunk went berserk Thursday, claiming that acting White House Chief of Staff Mick Mulvaney had just admitted to a quid pro quo with Ukraine. Except that what Mulvaney “admitted” is that the administration was doing what it should — pushing a foreign government to cooperate in getting to the bottom of foreign interference in the 2016 campaign. Virtually every media outlet in America — certainly all those that jumped on Mulvaney’s remarks — has spent most of the last three years painting such foreign interference as the blackest possible crime.


In fact, all Mulvaney did was repeat yet again that Trump “was worried about corruption with that nation” — and specifically say those worries extended to cooperation in “the look-back to what happened in 2016.” Asked if Ukraine’s uncertainty about probing those matters was linked to the US holdup of military aid, he said “yes” — clarifying hours later that it wasn’t a quid pro quo. Which it couldn’t be: Ukraine didn’t know about the holdup until weeks after President Volodymyr Zelensky’s call with Trump. Critics complain that one specific issue Trump pushed is a “debunked conspiracy theory.” So what? The Obama administration and several Democratic senators at various times pushed Ukraine to cooperate in probes of possible Trump 2016 wrongdoing that eventually turned out not to exist.

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“..the final act in the collapse of the USA will be the government choking itself to death on replayed narratives from its own server farms.”

The Fatal Loop of Recursivity (Kunstler)

The stupendous failure of the Mueller Investigation only revealed what can happen when extraordinary bad faith, dishonesty, and incompetence are brought to this project of reinventing “truth” — of who did what and why — while it provoked a counter-industry of detecting its gross falsifications. This dynamic has long been systematically studied and applied by institutions like the so-called “intelligence community,” and has gotten so out-of-hand that its main mission these days appears to be the maximum gaslighting of the nation — for the purpose of its own desperate self-defense.

The “Whistleblower” episode is the latest turn in dishonestly manipulated records, but the most interesting feature of it is that the release of the actual transcript of the Trump-Zelensky phone call did not affect the “narrative” precooked between the CIA and Adam Schiff’s House Intel Committee. They just blundered on with the story and when major parts of the replay didn’t add up, they retreated to secret sessions in the basement of the US capitol. Perhaps you can see why unleashing the CIA, NSA, and the FBI on political enemies by Mr. Obama and his cohorts has become such a disaster. When that scheme blew up, the intel community went to the mattresses, as the saying goes in Mafia legend and lore.

The “company” found itself at existential risk. Of course, the CIA has long been accused of following an agenda of its own simply because it had the means to do it. It had the manpower, the money, and the equipment to run whatever operations it felt like running, and a history of going its own way out of sheer institutional arrogance, of knowing better than the crackers and clowns elected by the hoi-polloi. The secrecy inherent in its charter was a green light for limitless mischief and some of the agency’s directors showed open contempt for the occupants of the White House. Think: Allen Dulles and William Casey. And lately, Mr. Brennan.

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Pelosi needs to hold that vote. But she won’t. She’d rather go to the Senate based on secret info.

US Energy Secretary Will Not Comply With Democrats’ Impeachment Probe (R.)

U.S. Energy Secretary Rick Perry will not turn over documents to congressional Democrats who had subpoenaed them over his role in Ukraine as part of their impeachment probe into President Donald Trump, a department official said in a letter on Friday. Three U.S. House of Representatives committees subpoenaed Perry on Oct. 10 for any role he played in Trump’s push to pressure Ukraine President Volodymyr Zelenskiy to investigate his political rival, former Democratic Vice President Joe Biden and his son. In a letter to the three committees, Melissa Burnison, an assistant energy secretary, wrote that the impeachment inquiry had not been properly authorized.


“Even if the inquiry was validly authorized, much of the information sought in the subpoena appears to consist of confidential Executive Branch communications that are potentially protected by executive privilege,” said the letter, a copy of which was obtained by Reuters. “However, the Department remains committed to working with Congress on matters of mutual importance conducted in accordance with proper authorizations and procedures,” it said. The energy department’s response follows the lead of the White House, which has said it would refuse to cooperate with an “illegitimate, unconstitutional” congressional impeachment inquiry.

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Big day, but very unclear what the result will be.

Brexit Vote Could Be Delayed After Move By MPs To Prevent No-Deal (Ind.)

Boris Johnson’s hopes of finally obtaining parliament’s consent on Saturday for a historic deal to take the UK out of the European Union look set to be thwarted by an extraordinary bid by MPs to delay the crucial “meaningful vote”. Ahead of the highly unusual weekend sitting of the Commons, the prime minister was pulling out all the stops to secure the 320 votes he needs to claim victory in what was expected to be a razor-edge ballot, with the balance held by wavering Labour MPs, hardline ERG “Spartans” and expelled Tory rebels. But an amendment to his motion tabled by exiled Conservative Oliver Letwin threatens to withhold MPs’ approval until the full legislation to implement the deal is put into law.

With Labour expected to back the amendment, it seems almost certain to pass if selected for debate by Commons speaker John Bercow. The move – designed to avoid no-deal Brexit if the legislation is amended by Brexiteers or fails to complete its passage through parliament by Halloween – would force Mr Johnson to request an extension from Brussels beyond 31 October and could delay the meaningful vote for weeks. Although Downing Street indicated it would still push Mr Johnson’s motion to a vote in the hope of a symbolic win, success for the Letwin amendment would deny him the chance to claim he has parliament’s support for the last-minute deal struck with EU leaders on Thursday.

And if the motion fails, he could then face a non-binding vote on a second referendum put forward by Labour backbenchers Peter Kyle and Phil Wilson with the aim of demonstrating that a majority in the Commons back a public ballot on any future change to the relationship between the UK and EU.

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The IMF is running out of money.

Mnuchin Backs Proposal To Double IMF’s Crisis Fund (R.)

U.S. Treasury Secretary Steven Mnuchin on Friday said he welcomes a proposal to double the size of the International Monetary Fund’s $250 billion crisis lending fund as part of a deal to maintain overall IMF resources. Mnuchin, in a statement to the IMF’s steering committee, said he backed the funding increase to ensure the global lender remained adequately resourced to respond to potential crises over the medium term. He also called for various reforms to streamline the fund’s costs, modernize salaries and benefits, and adopt a more independent, centralized risk management system.

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Large scale often violent demos taking place today that I’ve indentified, not including the climate ones because they’re not big enough except incidentally (I did include London because they banned protests):

Chili, Ecuador, Lebanon, Barcelona, France, London, Puerto Rico, Hong Kong.

I must have missed some. Do add. There appears to be a trend here.

Spain Calls In Civil Guard To Outskirts Of Barcelona (R.)

The Spanish Interior Ministry said on Friday it had given the go ahead for civil guard police reinforcements to be sent to the outskirts of Barcelona following five days of sometimes violent protests over the jailing of pro-separatist leaders. No further details were immediately available. Interior Minister Fernando Grande-Marlaska told reporters on Thursday he planned to send security reinforcements to Barcelona to help maintain order in the city and also to let police already there get some rest.

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How far ahead has Putin planned?

Syria Tells Russia It Will Force Both Turkey And US Out ‘By All Means’ (NW)

Syrian President Bashar al-Assad has informed a visiting Russian delegation that his country was prepared to force out any uninvited guests, especially the armed forces of Turkey and the United States, which themselves recently fell on opposing ends of an eight-year civil war. Assad met Friday with Russian President Vladimir Putin’s special envoy for Syria Alexander Lavrentiev, Deputy Foreign Minister Sergei Vershinin and other visiting officials from Moscow to discuss “the situation in Syria, especially the Jazeera region”—referring to the country’s northeast, across the Euphrates river—”and the Turkish aggression against it,” according to the Syrian leader’s office.


Last week, Turkey mobilized Syrian rebels to storm the region and defeat Kurdish forces that participated in the U.S.-led fight against the Islamic State militant group (ISIS) but were viewed as terrorists by Ankara. “The current and future stage must be focused on stopping the aggression, and the withdrawal of all Turkish, American and other illegal forces from all Syrian territories, considering them occupation forces according to international law and conventions,” Assad said. “The Syrian people have the right to resist them by all means available.”

Read more …

Two Boeing reports that appear to lay the blame with employees and pilots.

Boeing Employees Misled FAA About Key 737 MAX Safety System – Report (CNBC)

Boeing shares slipped Friday after a Reuters report said instant messages from 2016 suggest that employees misled the Federal Aviation Administration about a key safety system on the 737 Max, the plane that has been grounded since mid-March after two fatal crashes. The FAA turned over the instant messages to U.S. lawmakers and the Department of Transportation Inspector General, the FAA said in a statement. The FAA says Boeing discovered the messages “some months ago” and the flight regulatory agency finds the document “concerning.” “The FAA is also disappointed that Boeing did not bring this document to our attention immediately upon its discovery,” the agency said. “The FAA is reviewing this information to determine what action is appropriate.”


The document was shared with lawmakers investigating the plane’s certification, the FAA added. Boeing shares were down more than 4% in midday trading, shaving 107 points off the Dow Jones Industrial Average. FAA’s statement that Boeing knew about the document earlier, comes amid mounting pressure on Boeing’s CEO Dennis Muilenburg. The company’s board removed Muilenburg as chairman last week, saying the division of the two roles will help him focus on bringing the plane back to service.

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But in the end it’s all about huge cost-saving operations in the face of Airbus competition. Not employees and pilots, but upper echelons.

Boeing Pilots Detected 737 MAX Glitch 2 Years Before 1st Crash (NPR)

New evidence indicates that Boeing pilots knew about “egregious” problems with the 737 Max airplane three years ago, but federal regulators were not told about them. Investigators say the plane’s new flight control system, called MCAS, is at least partially to blame for 737 Max crashes in Indonesia in 2018 and Ethiopia this year that killed 346 people. Acting on data from a single, faulty angle-of-attack sensor, MCAS repeatedly forced both planes into nosedives as the pilots struggled, but failed to regain control. The pilots in the Lion Air plane that crashed in Indonesia last October did not know MCAS existed, as Boeing did not disclose any information about it in pilot manuals or in training material.

Newly revealed instant messages sent between Boeing’s then-chief technical pilot for the 737, Mark Forkner, and another technical pilot, Patrik Gustavsson, in November 2016 indicate that Forkner experienced similar problems with MCAS during a test session in a flight simulator. In a transcript obtained by NPR, Forkner writes that “there are still some real fundamental issues” with the system that he says Boeing engineers and test pilots “claim that they are aware of.” As the two pilots banter back and forth in the messages, Forkner says the system is “running rampant in the sim on me,” then adding, “I’m leveling off at like 4000 ft, 230 knots and the plane is trimming itself like crazy.”

Forkner calls the problem “egregious” and writes that he had “basically lied to the regulators (unknowingly)” before experiencing the glitch, when he had told the FAA that MCAS was safe and did not need to be included in pilot manuals. Later emails, also newly disclosed, show Forkner still telling the FAA that MCAS didn’t need to be covered in the manuals. “If you read the whole chat, it is obvious that there was no ‘lie,’ ” Forkner’s lawyer, David Gerger, told news services by email on Friday. “The simulator was not reading right and had to be fixed to fly like the real plane. Mark’s career — at Air Force, at FAA, and at Boeing — was about safety. And based on everything he knew, he absolutely thought this plane was safe.”

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How are the kids going to ‘not waste’? The societies they grow up in are geared towards maximizing waste. They have to be completely retrofitted. But I don’t see you mentioning that. What I see is “don’t waste paper”.

‘Just Don’t Waste’: David Attenborough’s Message To Next Generation (G.)

David Attenborough has delivered a heartfelt message to children around the world on how they can help save the planet: “Live the way you want to live but just don’t waste.” At the first screening of the BBC’s forthcoming blockbuster nature series, Seven Worlds, One Planet, the 93-year-old offered his advice to a five-year-old in the London audience. The boy was overwhelmed by nerves when handed the microphone, so his father asked his question on his behalf: “What can he do to save the planet?” “You can do more and more and more the longer you live, but the best motto to think about is not waste things,” Attenborough replied. “Don’t waste electricity, don’t waste paper, don’t waste food. Live the way you want to live but just don’t waste. Look after the natural world, and the animals in it, and the plants in it too. This is their planet as well as ours. Don’t waste them.”


A rapt audience of children in India and South Africa joined the event by videolink and lined up to ask Attenborough questions and wave posters. At Mumbai’s packed Royal Opera House, placards read “Sir David please come to India please” and “Sir David can I please come on a shoot with you?” One asked Attenborough which animal he had found most difficult to document during his 70-year career. “I nominate going to look for mountain gorillas for the first time,” he said. “That was an unforgettable time and more successful than we could possibly have hoped … but it was a long time ago.”

Read more …

 

 

 

 

 

Aug 022019
 


Pablo Picasso Bathers with a toy boat 1937

 

The Giant Sucking Sound of Financial Repression (WS)
Dutch Bank ING Warns Against Further ECB Money Printing (R.)
Trump’s $300 Billion China Tariff Threat Sends Markets Into Tailspin (G.)
Rate Cut Odds Surge After Tariff Announcement (ZH)
US Tariffs Risk Reviving Chinese Zombies (R.)
The EU Has New People In Charge. It’s Not Good News For US Tech Firms (CNBC)
EU Governments Seek Name For IMF Head (R.)
Boris Johnson’s Commons Working Majority Cut To One (BBC)
Expecting Ireland To Be Servile Is Part Of A Long British Tradition (G.)
Irish Peace Is Too Precious To Be Squandered By The Brexit Ultras (G.)
Boeing To Change 737 MAX Flight-Control Software To Address Flaw (R.)
Rachel Maddow Ratings Tank After Collusion Narrative Implodes (Ryan)

 

 

The war on savings and pensions continues unabated. Central banks are in so deep there’s no way out anymore. But what happens when you want to, or have to, retire?

The Giant Sucking Sound of Financial Repression (WS)

It’s called interest-rate repression. Or more poetically, financial repression. It’s where central banks manipulate interest rates down to where investments with little credit risk, such as Treasury securities, FDIC-insured savings accounts and CDs, pay little or no interest, or pay less interest than the rate of inflation. People such as savers and retirees, and institutions such as pension funds, that depend on this cash flow have lost their income stream. In addition, the purchasing power of their principal is getting gradually wiped out by inflation. How much money are we talking about? In the US alone, this interest rate repression impacts nearly $40 trillion. This includes savings products, Treasury securities, municipal bonds, and high-grade corporate debt.

$40 Trillion with a T. A 2% reduction across the board cuts this income by $800 billion a year. And this has had an impact. Central banks have accomplished this interest-rate repression by pushing short-term rates to zero or below zero, and by buying bonds and other assets to push long-term rates down too. These were emergency measures during the Financial Crisis that have become the “new normal,” as it has been called. This new normal has been going on for over a decade now. Other central banks, including the ECB and the Bank of Japan, pushed their policy rates below zero. This, in addition to vast asset buying binges by those central banks, produced $13 trillion in negative yielding bonds. But that’s a different universe of idiocy that we’re not going to get into today. We’re going to stick to US conditions.

To the Fed’s credit, it is the only major central bank that has raised its policy-rate target a bit, from near-zero to a range between 2.25% and 2.5%, which are still historically low rates. But it is under immense pressure by Wall Street and by the White House to cut rates again. So now we have this situation where short-term Treasury yields are low, and long-dated Treasury yields are even lower. How much money are we talking about here? Let’s see. There are $22 trillion in Treasury securities. They’re held by individuals and institutions, including insurance companies, pension funds, and the Social Security Trust Fund. Then there is high-grade corporate debt. The category of triple-A to single-A-rated debt is about $3.3 trillion. These yields have been pushed down too.

Then there are $3.8 trillion in municipal bonds outstanding. Many of them trade below US Treasury yields. For example, the GO bonds of California, which is not exactly a paragon of fiscal rectitude. During trading last Thursday, the California 10-year yield was 1.76%. This was about one-third of a percentage point below the US Treasury 10-year yield of 2.08% on the same day. Then there are $9.4 trillion in savings products, mostly savings accounts and CDs at banks. There are also about $3 trillion in checking accounts, payroll accounts, etc., but they’re not included here. These are just savings products. So let’s add these categories up: They amount to $39 trillion.

Read more …

“There is no shortage of money in the market.”

Dutch Bank ING Warns Against Further ECB Money Printing (R.)

Ralph Hamers made his plea as central banks redouble efforts to keep the cost of borrowing at historic lows to buoy the economy, a policy that weighs on bank profits and makes it costly to hold deposits. “I don’t think QE is a recipe to support an uncertain environment,” Hamers told journalists, referring to so-called quantitative easing to print fresh money. “There is no shortage of money in the market.” Although bankers have previously made similar complaints, Hamers’ blunt comments carry weight because his bank is one of Europe’s largest, with 38 million customers. ING, the largest Dutch bank, cautioned on Thursday that rock-bottom interest rates would pressure future earnings, as it announced a 1.4 billion euro net profit in the second quarter of the year.


“Looking ahead, we expect that persistently low interest rates will put pressure on net interest income,” Hamers said, referring to the bank’s chief earnings pillar from activities such as lending. European Central Bank President Mario Draghi has all but pledged to loosen monetary policy further amid a continued economic deterioration of Europe’s euro currency bloc, still grappling with the aftermath of a debt crisis. Officials recently told Reuters that an interest rate cut in September appeared certain, while government bond buys were also likely. Draghi recently said the outlook looked bleak as a global trade war hit Europe’s manufacturers.

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Did he do it to push Powell?

Trump’s $300 Billion China Tariff Threat Sends Markets Into Tailspin (G.)

Donald Trump’s surprise decision to escalate the trade war with tariffs on another $300bn of Chinese goods has sent global financial markets into a tailspin. After sharp falls on Wall Street in the wake of the US president’s announcement on Twitter on Thursday, Asian share prices plummeted on Friday morning as growing hopes that the world’s two economic superpowers would be able to reach a deal were dashed. In Tokyo the Nikkei was down 2.3%, with a similar fall in Hong Kong and Shanghai. The Kospi was down 0.8% in Seoul while in Sydney the benchmark ASX200, which passed its pre-global financial crisis all-time high on Tuesday, fell 0.3%. On the commodities markets the price of Brent crude oil plunged 7%, its biggest fall for four years, although it recovered 2.5% on Friday to $62.01.


Trump’s decision was also likely to increase the chances of another cut in US interest rates with the prospect of worsening trade with China forcing the Federal Reserve to loosen monetary policy again in September. It follows Wednesday’s 0.25% reduction, which was widely seen as not being enough to please the president who has been very vocal in calling for lower rates to boost the economy. As a signal of lower rates to come, the 10-year US bond yield fell almost 12 basis points on Thursday to 1.902%, hitting the lowest level since Trump won the presidential election in November 2016. The US dollar also fell and stockmarkets in Europe and the US were braced for a turbulent last day’s trading of the week. The FTSE100 is set to drop 1% at the opening and the Dow 0.3%.

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“It’s very logical to conclude that if trade tensions increase, given what Powell said, that would be something he would look at to evaluate a further cut.”

Rate Cut Odds Surge After Tariff Announcement (ZH)

Earlier today, we wrote a post titled “What Would It Take For The Fed To Not Cut Again?”, with Goldman providing a stylized answer, although in retrospect, the post should have been titled “What Would It Take For The Fed To Cut Again”, as that is what the market was far more concerned about after yesterday’s hawkish Powell press conference. In any case, Goldman hinted at the one specific catalyst that could force the Fed to cut more: “We also see risks in the other direction, especially on a significant escalation of tariffs against China.” To this, we said that “if an acceleration in the trade war with China is what the Fed will need to cut more, it’s pretty clear what that means for the chances of any trade deal between Washington and Beijing, since even Trump now understands that if he keeps escalating trade war with China, Powell will have no choice but to eventually cut to 0% (and lower).”

Just a few hours later, we were proven right in suggesting that an escalation in the trade war is inevitable and imminent when Trump tweeted that he would hike tariffs on $300BN in Chinese imports to 10% starting September 1, ending the tentative ceasefire with Beijing with a bang, and sending risk prices sharply lower. And yes, while Trump did suffer a modest drop in his favorite polling indicator – i.e., the stock market – which “cratered” as much as 1.5% below its all time high – far more importantly Trump also called Powell’s bluff, and effectively forced the Fed to prepare for more rate cuts as the trade war with China – which Powell explicitly highlighted as a condition that would result in more easing – is set to escalate further.

Late today, Bloomberg confirmed as much noting that traders “fixated on a timeline in which Powell seems to suggest cooling trade tensions reduced the need for future rate reductions — and a day later Trump revs the tensions back up”, just as we said he would. “It fits the pattern of a president bent on getting the central bank to submit, many thought”, the Bloomberg authors concluded. “Powell was very careful to say that he was looking at three things, one of which was global growth and the extent to which that is risked by trade tensions,” said Ellen Hazen, senior vice president and portfolio manager for F.L. Putnam, which has $2.2 billion under management. “It’s very logical to conclude that if trade tensions increase, given what Powell said, that would be something he would look at to evaluate a further cut.” Precisely, hence our prediction first thing this morning.

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Really? Xi is going to build more bridges to nowhere?

US Tariffs Risk Reviving Chinese Zombies (R.)

President Donald Trump is threatening new levies on $300 billion of Chinese goods entering the United States, after Shanghai talks proved inconclusive this week. That might not prod Chinese officials into striking a deal, but it is likely to raise some unwelcome zombies. Trump is among those who claim the Chinese economy is on the brink of the abyss. And it’s true that as a truce in trade negotiations gets more elusive the country’s business community is being forced to price in a new status quo. Their country has stumbled into a cold war with the world’s largest economy, a nuclear-armed military colossus that controls the world’s foremost trading currency. But a $13 trillion economy growing at 6.2% is hardly imploding, and a country where private consumption makes up roughly two-fifths of nominal GDP has padding against a downturn in trade.


Tensions exacerbate economic problems of China’s own making, though. There is a massive stack of non-performing debt incurred by government banks that mis-allocated capital after the global financial crisis. And there are still plenty of inefficient state-backed companies that compete with China’s private sector, driving down profitability across the board. If the new 10% tariffs kick in on Sept. 1 as Trump threatened on Thursday, President Xi Jinping may re-open a playbook that reformist officials have been trying to close. The central government has already pushed localities to ramp up infrastructure spending, and there may be more to come. Construction investment creates jobs immediately, and the government can order banks to lend, and order state firms to build.

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Trump won’t like this.

The EU Has New People In Charge. It’s Not Good News For US Tech Firms (CNBC)

New officials at the heart of the EU will likely keep America’s big tech firms under close scrutiny, experts have told CNBC. The European Commission — the EU’s executive arm — has fined companies such as Google for disrespecting its competition rules, it’s asked Ireland to collect unpaid taxes from Apple and is currently investigating Amazon. It has also proposed different laws that seek to limit online content and there’s little evidence that anything will change under the EU’s new leadership. Dexter Thillien, a senior industry analyst at Fitch Solutions, told CNBC via telephone Wednesday that Europe is keen to continue to be seen as the global leading force in tech regulation. Thillien explained that Europe saw a loophole in global tech regulation and felt the need to act.


“Europeans have all the negatives but none of the positives,” he said, referring to the fact that Europe has not created any large tech firms but has had to deal with the presence of Silicon Valley behemoths. “The European Commission has become more assertive making big tech companies pay their fair share of taxes. If anything, the incoming Commission looks even more determined to do so,” Florian Hense, an economist at Berenberg, told CNBC via email. Ursula von der Leyen, the president-elect of the Commission, said during a speech earlier this month that “if (tech companies) are making these profits by benefiting from our education system, our skilled workers, our infrastructure and our social security, if this is so, it is not acceptable that they make profits, but they are barely paying any taxes because they play our tax system.”

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A European under Washington’s thumb.

EU Governments Seek Name For IMF Head (R.)

European Union finance ministers are set on Friday to choose the bloc’s candidate to lead the International Monetary Fund from a list of four names, a spokeswoman for the French government said. The list includes Jeroen Dijsselbloem, the Dutch former head of euro zone finance ministers; Nadia Calvino, the Spanish economy minister; Olli Rehn, the Finnish central bank governor; and Bulgaria’s World Bank chief executive Kristalina Georgieva. Mario Centeno, the Portuguese chairman of euro zone finance ministers, said on Thursday he was pulling out of the race “in this stage of the process”, adding that he would be available if needed for a compromise solution.


Britain did not field a candidate because it could not come up with a name on time, a European official said. It had been expected to name a candidate and the deadline was extended by a few hours on Thursday to allow it to do so. France is leading the process to select a European candidate. The top job at the Washington-based global lender has historically been filled by a European. Outgoing IMF head Christine Lagarde is taking over from Mario Draghi as European Central Bank president.

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is that enough to push through a no-deal Brexit?

Boris Johnson’s Commons Working Majority Cut To One (BBC)

The Liberal Democrats have won the Brecon and Radnorshire by-election, leaving new PM Boris Johnson with a Commons working majority of just one. Jane Dodds overturned an 8,038 majority to beat incumbent Conservative Chris Davies by 1,425 votes. Mr Davies stood again after being unseated by a petition following his conviction for a false expenses claim. It was the first electoral test for Mr Johnson just eight days after becoming prime minister. It is the quickest by-election defeat for any new prime minister since World War Two.


Now, with the thinnest possible working majority, he will have to rely heavily on the support of his own MPs and his confidence-and-supply partners the DUP to get any legislation passed in key votes. It was also a bad night for Labour, whose vote share dropped by 12.4% as it was beaten into fourth place by the Brexit Party. The result means the Lib Dems now have 13 MPs. Ms Dodds, who is the Welsh Liberal Democrat leader, said: “My very first act as your new MP when I get to Westminster will be to find Mr Boris Johnson, wherever he’s hiding, and tell him to stop playing with the future of our community and rule out a no-deal Brexit.”

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“Paddy should know his place..”

Expecting Ireland To Be Servile Is Part Of A Long British Tradition (G.)

Boris Johnson’s approach to Ireland is part of an ignoble tradition in British politics. At its heart is the false assumption that superiority in resources and military prowess equates to a superiority in intellectual power and moral rectitude. In short, the idea that might is right and that, ultimately, Paddy should know his place. This assumption shaped and even, at times, dominated, policy on Ireland for centuries before independence. It runs through 19th-century British depictions of the Irish as incapable of self-government, unreliable, lazy and inferior. For Benjamin Disraeli, a British prime minister who shares some personal characteristics with the current incumbent, the Irish were “wild, reckless, indolent, uncertain and superstitious”.

Most obviously, this sense of superiority and a refined “moral” stance was clearly manifest in government policy during the Great Famine of 1845-49, which caused the deaths of more than one million people on the island of Ireland. This consistently damaging strain of thought continued into the 20th century, with British military and economic power often used crudely to address deep-rooted political conflicts in Ireland, which refused, and continue to refuse, to allow for simple solutions. Ireland, the thinking went, should be the handmaiden for glorious Britannia – and this servile position is for Ireland’s own benefit and ultimately serves Irish interests.

Of course, within this particular strain of British political thought, the history of violence and tragedy in Ireland is sometimes portrayed as a product of Irish recalcitrance – a tendency towards disorder and conflict that fails to recognise the beneficence of British policy on the island. Britain, it is often suggested, is a guarantor of Irish stability, addressing and suppressing the inherent conflicts in Irish society, rather than a highly disruptive force that has often recklessly pursued its own interests at a serious cost to its nearest neighbour.

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“Tories of influence” told him privately that Leo Varadkar, Ireland’s taoiseach “isn’t bright” and “the Irish will blink”.

Irish Peace Is Too Precious To Be Squandered By The Brexit Ultras (G.)

In The Ultras, the brutal, brilliant novel by Eoin McNamee set during the Troubles, the protagonist (based on the real-life undercover British intelligence officer Robert Nairac) finds himself in the company of dangerous men like himself. The Ultras plot terrible events and create dark polities while forcing everyone else to live with their consequences. “Ultra meaning beyond,” wrote McNamee. “Ultra meaning extreme.” The so-called war cabinet formed by the new British prime minister, Boris Johnson, and whose course the maverick arch-Brexiteer Dominic Cummings now charts, of course bears no resemblance to the characters in the war of the Ultras imagined by McNamee.

But the sheer velocity and ferocity of their opening salvoes about crashing out of the EU with no deal on October 31 unless the backstop – the insurance policy to avoid a hard border in Ireland – is abolished, raise the kind of alarm that we in Ireland have not felt since the dark years of the Troubles. The political fear is that this new breed of “Brexit Ultras” (Johnson’s cabinet with Nigel Farage’s Brexit party snapping at its heels) could deliberately pursue a no-deal EU exit at the expense of a volatile Irish peace. The sabre-rattling and pre-emptive blame-shifting of course is intended to shore up political support in the UK ahead of a possible general election, but also to intimidate Ireland into abandoning the backstop while shaking the unity of the EU27.

Europe, with its own demons to face, has its red lines too and will not sacrifice the single market or its external borders, or jeopardise the wider integrity of the European project. Ireland, and the fragile peace process that has been built over the past 20 years, falls between these two positions. And while it is still early days for the Johnson premiership, we have a deteriorated state of Anglo-Irish relations following his ascent to power. How real is the damaging rhetoric emanating from London and the anti-Irish tropes spewing from much of the British media? David Yelland, the former editor of the Sun, revealed that he had been shocked when “Tories of influence” told him privately that Leo Varadkar, Ireland’s taoiseach “isn’t bright” and “the Irish will blink”. “It seems, amazingly, that this is the actual policy of HMG under Johnson,” tweeted Yelland. “They are anti-Irish, arrogant, dangerous and wrong.”

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Well, actually, they’re going to change hardware: a second flight control computer and a second angle-of-attack sensor. Both of which are altready on board, but not used.

Boeing To Change 737 MAX Flight-Control Software To Address Flaw (R.)

Boeing Co plans further changes to the software architecture of the 737 MAX flight-control system to address a flaw discovered after a test in June, two people briefed on the matter said late on Thursday. The redesign, first reported by the Seattle Times, involves using and receiving input from both flight control computers rather than one. The move comes in response to an effort to address a problem discovered in June during a Federal Aviation Administration(FAA) simulator test. This is on top of earlier announced changes to take input from both angle-of-attack sensors in the MCAS anti-stall system linked to two deadly crashes that led to a global grounding of the plane.


Boeing still hopes to complete the software redesign by the end of September to submit to the FAA for approval, the sources said. For decades, 737 models have used only one of the flight control computers for each flight, with the system switching to the other computer on the following flight, according to people familiar with the plane’s design. The FAA said in June that it had identified a new risk that would need to be addressed before the plane could be ungrounded. Under a scenario where a specific fault in a microprocessor caused an uncommanded movement of the plane’s horizontal tail, it took pilots too long to recognize a loss of control known as runaway stabilizer, a Boeing official said at the time.

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Crazy bag lady.

Rachel Maddow Ratings Tank After Collusion Narrative Implodes (Ryan)

Once a shining beacon of hope for Russiagate true believers, it looks like Rachel Maddow has left her best days behind her; MSNBC’s conspiracy queen has seen her show plummet to fifth place in cable news ratings. What happened? You rise fast and fall hard in the fickle world of television. Just last April, Maddow overtook Fox News’ Sean Hannity to claim the title of most-watched host across cable news. She had become a reliable source for Russigate aficionados to get their daily dose of crazy. Sadly for Maddow, the latest data released by Nielsen shows her show in fifth place with a total audience of 2.4877 million viewers for July – behind Hannity, Tucker Carlson, Laura Ingraham and The Five (all Fox News shows).


For context, in January this year, Maddow still boasted an audience of nearly 3.3 million, which means she shed around 800,000 viewers in just six months. Maddow was also in fifth place among viewers in the 25-54 age range – the group most-favored by advertisers. Ouch. Once dubbed “the smartest person on TV” by Forbes (really), this is certainly not the big payoff Maddow was expecting, having dedicated three years of her career to breathlessly covering every twist and turn in the anticlimactic Trump-Russia “collusion” drama.

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Ship with dolphins.Wall painting from Akrotiri, Thera island (Santorini), Greece.17th century BC.

 

 

 

 

 

Jul 042019
 


Pablo Picasso Still life 1936

 

Trump Says US Should Start Manipulating The Dollar (AP)
China Says Existing US Tariffs Must Be Removed For A Trade Deal (R.)
China and Britain Wage War Of Words Over Hong Kong (AFP)
Moody’s: UK Faces Economic Meltdown After No Deal Brexit (Ind.)
UK Swaps May for Johnson, But No Change in Brexit Stalemate – Steve Keen (Sp.)
Brainwashing Under Freedom (Cook)
George Osborne ‘Aiming For New Role As Head Of IMF (G.)
US New-Vehicle Sales Fall to 1999 Levels (WS)
Boeing Offers $100 Million To Help 737 MAX Crash Families (BBC)
US Refusal To Give F-35s To Turkey Would Be ‘Robbery’ – Erdogan (R.)
The EU Has A New Batch Of Unelected Leaders (Ryan)
As Families Flee Paris, Fingers Point At Airbnb (AFP)

 

 

Reserve curreny status is not a free for all. But if you insist on learning that the hard way…

Trump Says US Should Start Manipulating The Dollar (AP)

President Donald Trump on Wednesday accused China and Europe of playing a “big currency manipulation game.” He said the United States should match that effort, a move that directly contradicts official U.S. policy not to manipulate the dollar’s value to gain trade advantages. In a tweet, the president said if America doesn’t act, the country will continue “being the dummies who sit back and politely watch as other countries continue to play their games — as they have for so many years.” Trump’s own Treasury Department in May found that no country meets the criteria of being labeled a currency manipulator, although the report did put China and eight other countries on a watch list.


A country manipulates its currency when it drives down the value to make its exports cheaper and foreign imports more expensive. As a candidate in 2016, Trump repeatedly charged that China was manipulating its currency and as president he would immediately label China as a currency manipulator. However, after taking office, Trump’s Treasury Department has issued five reports on the subject, required by law every six months. In each report it said no country met the criteria to be labeled a currency manipulator. Trump’s tweet seemed to have no impact in currency markets, a situation that would likely change if Treasury Secretary Steven Mnuchin began threatening to use currency manipulation to drive down the dollar’s value.

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Feels like they’re far away from a deal.

China Says Existing US Tariffs Must Be Removed For A Trade Deal (R.)

Existing U.S. tariffs will have to be removed if there is to be a trade deal between Beijing and Washington, China’s commerce ministry said on Thursday. The leaders of the two countries agreed last weekend to relaunch trade talks that had stalled in May after U.S. officials accused China of pulling back from commitments made in the text of a pact negotiators had said was nearly finished. Trade teams from both countries are in contact, commerce ministry spokesman Gao Feng told a regular media briefing.


To get talks restarted, U.S. President Donald Trump had agreed not to put tariffs on about $300 billion in additional Chinese imports and ease curbs on Chinese tech giant Huawei. The United States now has tariffs of 25% on $250 billion of Chinese goods, ranging from furniture to semiconductors. China welcomes the U.S. decision not to slap new tariffs on its goods, Gao said, when asked how long the trade truce can last.

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Britain has only a small shrill voice left.

China and Britain Wage War Of Words Over Hong Kong (AFP)

London summoned Beijing’s ambassador for a dressing down Wednesday in a rapidly escalating diplomatic feud over protests in Hong Kong as China told Britain to keep its “hands off” the city and “show respect”. The demonstrations sweeping the former British colony have also revived tensions inherent in the two sides’ historic agreement on the global financial hub’s handover to Chinese rule 22 years ago. Hong Kong enjoys broad freedoms and rights not seen in mainland China under a doctrine known as “one country, two systems”. But fears and frustrations over Beijing’s gradual tightening of those liberties has spilled over into mass demonstrations against a now-stalled draft law on extradition from Hong Kong to China.

On Monday, groups of mostly young, hardline protesters stormed and ransacked Hong Kong’s legislature, daubing it with graffiti such as “HK is not China”. British Foreign Secretary Jeremy Hunt — one of two candidates to become Britain’s next prime minister — on Wednesday took the global lead in condemning China’s handling of its “special administrative region”. Hunt called on Beijing not to use the protests as a “pretext for repressions” and warned of “serious consequences” if China breaches the commitments it made to London decades ago under the terms of the handover. His comments provoked a cascade of condemnations from China that began with its foreign ministry in Beijing and continued with its embassy in London.

“He seems to be fantasising in the faded glory of British colonialism and in the bad habit of gesticulating while looking down on other countries’ affairs,” Chinese foreign ministry spokesman Geng Shuang told a regular briefing in Beijing. “I need to re-emphasise that Hong Kong has now returned to its motherland.”

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Boris will simply deny it.

Moody’s: UK Faces Economic Meltdown After No Deal Brexit (Ind.)

Crashing out of the EU would propel Britain into a recession, a top global credit rating agency has predicted, adding its voice to similarly stark warnings from economists. Even Jeremy Hunt – who says that as prime minister he would take the UK out of the EU without a deal if necessary – has admitted that doing so could cause almost as much economic damage as the 2008 financial crisis, which led to a severe recession and put 2.7 million people out of work. “We believe that, without an agreement, the UK economy would likely enter a recession,” says the latest yearly analysis of Britain’s creditworthiness by Moody’s, one of the world’s three biggest providers of government and company credit scores to investors.

“The British pound, which has already weakened since the Brexit vote, would come under renewed pressure. Inflation would rise temporarily … squeezing real wages over the first two to three years following Brexit. This in turn would weigh on consumer spending and depress growth.” The UK government itself, Moody’s noted, estimated in November that leaving the EU without an agreement would reduce GDP by between 6.3 and 10.7 per cent over the course of 15 years. The risks of such an abrupt departure have risen in recent months, not least because both men in the running to replace Theresa May insist they are ready to go through with it on 31 October.

At the same time, the global economy is sputtering, sapped by tensions stemming from Donald Trump’s trade war, mainly with China but also threatening Europe and Mexico. In a sign of things to come, weaker demand from abroad was a key driver behind an unexpectedly sharp contraction in UK manufacturing in June.

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“..what he is saying is going to be saving of money of something like $5 billion will actually reduce the UK’s GDP by $5 billion. So to begin with, it is a stupid idea.”

UK Swaps May for Johnson, But No Change in Brexit Stalemate – Steve Keen (Sp.)

Boris Johnson has said that the existing system has led to “inevitable waste” as funds were simply “shoved out of the door”, calling to abolish or merge several government departments such as Justice, Business, Transport, International Trade, Work and Pensions, and Brexit in order to save 8 billion pounds if he is elected prime minister. In your view, what does Mr Johnson mean by these two terms “inevitable waste” and “shoved out of the door”?

Steve Keen: What he means is that he doesn’t understand bureaucracy nor does he doesn’t understand macroeconomics. Because the first thing he is saying is we have to save money. This is the attitude that individuals have that if they spend less than they earn then they can save money and that gives them a buffer for the future. But at the national level what you spend becomes somebody else’s income. And if the government tries to save money, what it does is spend less money, and by spending less money, GDP falls by initially precisely as much as the government stops spending. So what he is saying is going to be saving of money of something like $5 billion will actually reduce the UK’s GDP by $5 billion. So to begin with, it is a stupid idea.

Secondly, when these ideas about rearranging bureaucracies are imposed from the top, the political top – I have had personal experience of watching this happen – it doesn’t save money, it causes utter confusion inside the bureaucracy. Normally what happens is that any fall in saving, it’s courtesy of things being done less well in the future. And I think that’s certainly going to be the case where he was talking about handing across some elements of foreign affairs to the Home Office or things like that when the Home Office is notorious because its basic role is to be rude to foreigners, which is hardly the sort of thing one wants in foreign affairs. But of course, that is what Boris himself was accused of when he was Foreign Affairs Minister.

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“The plot to keep Corbyn out of power.”

Brainwashing Under Freedom (Cook)

Even the best designed systems have flaws, especially when the maintenance of the system’s image as benevolent is considered vitally important. It wasn’t that Corbyn’s election had shown Britain’s political system was representative and accountable. It was simply evidence that corporate power had made itself vulnerable to a potential accident by preferring to work out of sight, in the shadows, to maintain the illusion of democracy. Corbyn was that accident. Corbyn’s success also wasn’t evidence that the power structure he challenged had weakened. The system was still in place and it still had a chokehold on the political and media establishments that exist to uphold its interests.

Which is why it has been mobilising these forces endlessly to damage Corbyn and avert the risk of a further, even more disastrous “accident”, such as his becoming prime minister. Listing the ways the state-corporate media have sought to undermine Corbyn would sound preposterous to anyone not deeply immersed in these media-constructed narratives. But almost all of us have been exposed to this kind of “brainwashing under freedom” since birth. The initial attacks on Corbyn were for being poorly dressed, sexist, unstatesmanlike, a national security threat, a Communist spy – relentless, unsubstantiated smears the like of which no other party leader had ever faced.

But over time the allegations became even more outrageously propagandistic as the campaign to undermine him not only failed but backfired – not least, because Labour membership rocketed under Corbyn to make the party the largest in Europe. As the establishment’s need to keep him away from power has grown more urgent and desperate so has the nature of the attacks.

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Unfortunately, he would fit right in.

George Osborne ‘Aiming For New Role As Head Of IMF (G.)

George Osborne is considering putting his name forward to replace Christine Lagarde as the head of the International Monetary Fund, according to reports, a move that would see him become the first Briton to lead the Washington-based body. The former chancellor – and current Evening Standard editor – has told allies he would be well suited to succeed Lagarde, the Financial Times reported, after she was picked to lead the European Central Bank this week. Such a development would mark a dramatic return to a major public role for Osborne three years after he was unceremoniously sacked as chancellor in the aftermath of the Brexit vote, facing a barrage of criticism over a botched campaign to have the UK remain in the EU.

It would also mark the first time in the 75-year history of the IMF that a Briton has led the global body, which acts as the lender of last resort to nations in financial distress. In the unwritten rules surrounding the formation of the Bretton Woods institution, a European has always held the top job, while an American has led the World Bank – its twin institution, which aims to encourage financial stability, international trade and sustainable economic growth. Osborne could face stiff competition from other highly qualified candidates at a time when Britain’s place in the world has been coloured by internal disputes over leaving the EU, clouding the UK’s international reputation.

Other contenders may include Mark Carney, the Bank of England governor, who was installed by Osborne. Although Canadian by birth, he holds Irish and UK citizenship. Carney is due to leave Threadneedle Street early next year.

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Wolf Richter thinks this is bad. I do not.

US New-Vehicle Sales Fall to 1999 Levels (WS)

Ford waited until today to report its second-quarter new-vehicle deliveries in the US. So now we know what happened to total US auto sales in the second quarter and in the first half this year, and it wasn’t pretty. New-vehicle deliveries, fleet and retail combined, fell 1.5% in Q2 compared to Q2 last year, to 4.5 million vehicles; and in the first half fell by 2.4% to 8.4 million vehicles. This puts new vehicle sales on track to fall below 17 million units for the year. This would be the worst level since 2014. According to my own estimates, new vehicle sales in 2019 will decline to 16.95 million units, roughly on par with 1999, in a horribly mature market, whose two-decade stagnation was interrupted by the excitement of a collapse and recovery back to stagnation levels:

Ford, like GM, stopped reporting monthly vehicle sales, and now only reports on a quarterly basis. In the second quarter, reported this morning, sales fell 4.1% to 650,336 units. This put Ford into third place, behind GM and Toyota. Carmageddon: This is the big shift where Americans refuse to buy new “cars” and instead are buying new pickups, SUVs, compact SUVs, and vans. And they have far higher price tags and profit margins than cars. Ford’s car sales plunged another 21.4% to just 110,195 units in Q2, continuing their multi-year collapse.

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As they refuse to talk to the families. The height of cynicism. Note: just one 737MAX costs more than $100 million.

Boeing Offers $100 Million To Help 737 MAX Crash Families (BBC)

Boeing is giving $100m to help families affected by the two crashes of the company’s 737 Max planes in Indonesia and Ethiopia. The payment, stretching over several years, is independent of lawsuits filed in the wake of the disasters, which together killed 346 people. The money will support education and living expenses for families and community programmes, Boeing said. Lawyers for victims’ families dismissed the move. [..] Boeing said in a statement on Wednesday that the “funds will support education, hardship and living expenses for impacted families, community programs, and economic development in impacted communities. Boeing will partner with local governments and non-profit organizations to address these needs. This initial investment will be made over multiple years.”

Dennis Muilenburg, the chairman and chief executive, added: “We at Boeing are sorry for the tragic loss of lives in both of these accidents and these lives lost will continue to weigh heavily on our hearts and on our minds for years to come. “The families and loved ones of those on board have our deepest sympathies, and we hope this initial outreach can help bring them comfort,” he said. Nomi Husain, a Texas-based lawyer representing some of the families of victims of ET 302, said Boeing’s payment “doesn’t come anywhere close to compensating the families for what has been taken from them”.

He told the BBC’s transport correspondent Tom Burridge that “some of our clients are not interested in financial compensation at this point” and that Boeing “put profit over safety to get their number-one selling plane to market” – a claim the planemaker strongly denies. Mr Husain has so far filed seven cases on behalf of families, with some of those lawsuits seeking damages of $276m. He estimated that about 50 lawsuits had so far been filed by victims’ families.

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Beware of Erdogan.

US Refusal To Give F-35s To Turkey Would Be ‘Robbery’ – Erdogan (R.)

A refusal by the United States to hand over to Turkey the F-35 fighters jets which it has bought would be “robbery”, media reports on Thursday cited President Tayyip Erdogan as saying in a dispute over Ankara’s purchase of Russian air defences. US officials have told Reuters the Trump administration still plans to impose sanctions on Turkey and remove it from the F-35 programme if its NATO ally acquires the Russian S-400 missile defence system. “If you have a customer and that customer is making payments like clockwork, how can you not give that customer their goods? The name of that would be robbery,” Hurriyet newspaper quoted Erdogan as telling reporters during a visit to China.


He said that Turkey had so far paid 1.4 billion dollars for the F-35s and that four jets had been handed over, with Turkish pilots going to the United States for training. “We have made an agreement to buy 116 F-35s. We are not just a market, we are also joint producers. We produce some of the parts in Turkey,” he added. After meeting US President Donald Trump last weekend in Japan on the sidelines of a G20 summit, Erdogan said Ankara would be spared damaging US sanctions once Russia’s S-400 air defence system started arriving in Turkey in the coming days. If the United States removes Turkey from the F-35 program, and imposes sanctions on the NATO ally, it would be one of the most significant ruptures in recent history in the relationship between the two nations.

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“How many Europeans, if you told them something happened at the European Commission Security Council, would actually be able to tell you right off the bat, that this council does not exist? Not many.”

The EU Has A New Batch Of Unelected Leaders (Ryan)

For a brief period on Tuesday evening, there was speculation online of impending doom as US VP Mike Pence canceled plans for an “urgent meeting.” When Twitter reports said the “European Commission Security Council” was also called for an “emergency meeting,” it started to sound serious. Maybe the world really was ending. However, the European Commission Security Council does not actually exist – and people were getting worked up over nothing. For a solid five minutes, I too was convinced that it must be a real body I had never heard of. This is the EU we’re talking about – one could be forgiven for confusion. EU leaders, much like their American counterparts, spend quite a lot of their time pontificating to the rest of the world about democracy – but where is the democracy in the process by which these new faces of the EU were selected?

There is none, of course. No votes were cast, no debates were held, no elections took place. It would be no exaggeration to suggest that the vast majority of Europeans hadn’t even the foggiest notion that these switches were going to happen. When you have no say in something, it’s impossible to feel connected to it. So, who are the anointed ones? German Defense Minister Ursula von der Leyen will head the European Commission. An ally of Angela Merkel, she is a major proponent of an EU super-army. Spanish Foreign Minister Josep Borrell Fontelles will run the EU’s foreign policy. Christine Lagarde will move from the IMF to head the European Central Bank. Belgian Prime Minister Charles Michel will replace Tusk as European Council president – and no one elected any of them.

In March, French President Emmanuel Macron proposed the creation of a “European Agency for the Protection of Democracies,” a “common border force,” a “European asylum office,” and a “European Council for Internal Security.” If all you have is a hammer, everything looks like a nail – and if all you have is unelected neoliberal bureaucrats, the solution to every problem looks like a new mega-agency or supranational body answerable to no one. The brief furore over the fake ‘European Commission Security Council’ was the perfect demonstration of how bloated and disconnected the EU really is from the citizens it is supposed to serve. How many Europeans, if you told them something happened at the European Commission Security Council, would actually be able to tell you right off the bat, that this council does not exist? Not many.

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Schools close, stores disappear, etc etc. Welcome to Disneyland.

As Families Flee Paris, Fingers Point At Airbnb (AFP)

The bells will ring for the last time this week at Vaugirard elementary school in central Paris, the latest school in the city to close as spiralling property prices drive families out of the capital. Just 51 students were enrolled this year at Vaugirard, a stark illustration of the steady decline in numbers at many schools in central Paris which some parents and teachers blame on the surge of home-renting giant Airbnb. “The centre of Paris is basically becoming a vast Airbnb hotel, and there are fewer and fewer residents,” Jean-Jacques Renard, vice president of the FCPE parents’ association, told AFP.

Real estate prices in Paris and most Western capitals have soared in recent years, making it harder for middle-class couples to find family-sized apartments in a city already known for its cramped living conditions. While record low interest rates and a shortage of housing have fuelled the boom, fingers are increasingly being pointed at Airbnb. Its popularity has encouraged thousands of property owners to turn Paris flats or commercial spaces into short-term rentals that are far more profitable than traditional leases. The number of Paris lodgings that are not permanently occupied jumped by nearly 30,000 in the five years to 2017, “likely due to the development of short-term rentals,” according to a report by the Paris Urbanism Institute last year.

[..] With 65,000 listings for a population of 2.2 million in the 20 districts that fall within the city’s limits, compared with 50,000 for the 8.5 million people spread across New York’s five boroughs, Paris is Airbnb’s single biggest market. By contrast with Berlin, where many Airbnb offerings are for a room in an apartment, nearly 90 percent of the Paris listings are for an entire home, according to the Paris Urbanism Institute. City officials accuse Airbnb of effectively siphoning thousands of apartments off the market. “We don’t have a problem with vacation rentals, but we do when we lose an apartment that’s turned into an Airbnb rental,” said Maxime Cochard, an advisor to Ian Brossat, the deputy mayor in charge of housing.

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Jun 232019
 


Rembrandt van Rijn Saskia en profil in expensive attire 1640-45

 

Mapping the World’s Financial Weak Spots (IMF)
US Launched Cyber Attack On Iranian Rockets And Missiles (AP)
US To Hit Iran With ‘Major’ New Sanctions Monday: Trump (AFP)
Kushner’s Economic Plan For Mideast Peace Faces Broad Arab Rejection (R.)
Three Year Prison Sentence For Damaging EU Flag, German State Proposes (Exp.)
Johnson & Johnson Faces Multibillion Opioids Lawsuit (G.)
Istanbul Votes In Mayoral Re-Run, In Test For Turkish Democracy, Erdogan (R.)
EU Warns Turkey Of Sanctions For Cyprus Drilling (BBC)
Why Is UK Life Expectancy Faltering? (O.)
Great Pacific Garbage Patch: Giant Plastic Trap Put To Sea Again (AP)

 

 

But what does it tell us really?

Mapping the World’s Financial Weak Spots (IMF)

Where will the next financial crisis come from? The short answer is: We don’t know. We can, however, look for vulnerabilities in the system that, if left untreated, can develop into problems. What do we mean by a vulnerability? It is an area of weakness that can amplify and spread an unexpected economic shock, increasing the level of risk to the financial system. Imagine the impact of an earthquake on a house built on sand, as opposed to bedrock. In the financial world, cracks in the bedrock can arise from high levels of debt and mismatches of institutions’ risk factors such as currencies or the maturities of their exposures.


One such weak spot is the debt level in US corporations and the risks investors in their securities take. Lending to heavily indebted companies with weak credit ratings is on the rise and may be a widening crack in the system. This and other vulnerabilities are reflected in the Chart of the Week on a five-point scale ranging from lowest (dark green) to highest (red) for six sectors and five country groups. The chart shows the distribution of vulnerabilities across six sectors in five regions. It was constructed using dozens of indicators going back up to two decades.

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When I see “CrowdStrike” I stop believing anything.

US Launched Cyber Attack On Iranian Rockets And Missiles (AP)

The US military launched a cyber-attack on Iranian weapons systems on Thursday, according to sources, as President Donald Trump backed away from plans for a more conventional strike in response to Iran’s downing of a US surveillance drone. The hack disabled Iranian computer systems that controlled its rocket and missile launchers, two officials told the Associated Press, and were conducted with approval from Trump. A third official confirmed the broad outlines of the strike. All spoke on condition of anonymity because they were not authorised to speak publicly about the operation.

Two of the officials said the attacks, which specifically targeted computer systems of Iran’s Islamic Revolutionary Guard Corps (IRGC), had been provided as options after two oil tankers were bombed. The IRGC has been designated a foreign terrorist group by the Trump administration. Over the past year US officials have focused on persistently engaging with adversaries in cyberspace and undertaking more offensive operations. Tensions with Iran have escalated since the US withdrew last year from the 2015 nuclear deal with Iran and began a policy of “maximum pressure”. Iran has since been hit by multiple rounds of sanctions.[..]

The cyberattacks are the latest chapter in the US and Iran’s ongoing hacking of each other. In recent weeks hackers believed to be working for the Iranian government have targeted US government agencies, as well as sectors of the economy including finance, oil and gas, sending waves of spear-phishing emails, according to representatives of cybersecurity companies CrowdStrike and FireEye, which track such activity. This new campaign appears to have started shortly after the Trump administration imposed sanctions on the Iranian petrochemical sector this month.

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Inevitably hastening the demise of the reserve currency.

US To Hit Iran With ‘Major’ New Sanctions Monday: Trump (AFP)

President Donald Trump said Saturday that the United States would impose “major” new sanctions on Iran in two days — a move sure to exacerbate tensions with the Islamic republic inflamed by the downing of a US spy plane. Trump tamped down the threat of military action on Friday, when he called off retaliatory strikes at the last minute because the response was not “proportionate” to the drone’s destruction over the Strait of Hormuz. But he had said military action is still an option and brandished the threat of sanctions ever since. Now, he has set a timetable for fresh punitive economic measures to heap more pressure on an Iranian economy already reeling from the sanctions in place since Trump withdrew from an international nuclear deal with Tehran.


“We are putting major additional Sanctions on Iran on Monday,” Trump tweeted. “I look forward to the day that Sanctions come off Iran, and they become a productive and prosperous nation again – The sooner the better!” Earlier, before heading to Camp David for meetings with his advisors on the situation, Trump said he would be Iran’s “best friend” and that the Islamic republic could be a “wealthy” country if it renounced nuclear weapons. “We’re not going to have Iran have a nuclear weapon,” Trump told reporters outside the White House. “When they agree to that, they’re going to have a wealthy country. They’re going to be so happy, and I’m going to be their best friend. I hope that happens.”

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In complete denial of what is at stake: “Homelands cannot be sold”.

Kushner’s Economic Plan For Mideast Peace Faces Broad Arab Rejection (R.)

U.S. President Donald Trump’s economic vision as part of the wider plan to resolve the Israeli-Palestinian conflict was met with contempt, repudiation and exasperation in the Arab world, even as some in the Gulf called for it to be given a chance. The $50 billion “peace to prosperity” plan, set to be presented by Trump’s son-in-law Jared Kushner at a conference in Bahrain next week, envisions a global investment fund to lift the Palestinian and neighboring Arab state economies. But the lack of a political solution, which Washington has said would be unveiled later, prompted rejection not only from Palestinians but also in Arab countries that Israel would seek normal relations with.

From Sudan to Kuwait, prominent commentators and ordinary citizens denounced Kushner’s proposals in strikingly similar terms: “colossal waste of time,” “non-starter,” “dead on arrival.” “Homelands cannot be sold, even for all the money in the world,” Egyptian analyst Gamal Fahmy said. “This plan is the brainchild of real estate brokers, not politicians. Even Arab states that are described as moderate are not able to openly express support for it.” Commentator Sarkis Naoum at Lebanon’s An-Nahar newspaper said, “This economic plan, like others, won’t succeed because it has no political foundation.”

While the precise outline of the political plan has been shrouded with secrecy, officials briefed on it say Kushner has jettisoned the two-state solution – the long-standing worldwide formula that envisages an independent Palestinian state alongside Israel in the West Bank, East Jerusalem and Gaza. The PLO has dismissed Kushner’s plans as “all abstract promises,” insisting that only a political solution will solve the problem. It said they were an attempt to bribe the Palestinians into accepting Israeli occupation.

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Huh?

Three Year Prison Sentence For Damaging EU Flag, German State Proposes (Exp.)

Anyone who attacks the blue and gold starred cloth displayed in public, rendering it “removed, destroyed, damaged, unusable or unrecognisable” could be slapped with a lengthy jail term or hefty fine. The proposed law will also protect the European anthem, Beethoven’s Ode to Joy, according to a report in Saarbrucken Zeitung, a daily newspaper in West Germany. The Saxon bill seeks to bring the status of the union’s flag into line with that of other foreign flags and national symbols. The new bill says attacks “on the reputation of the symbols of the European Union” are unacceptable, according to Saarbrucken Zeitung.


It states that it is “a commandment of self-respect and self-assertion” that the state protects the EU “against malicious contempt”. Paragraph 104 of Germany’s criminal code states that anyone who damages the flag or symbol of a foreign nation will be imprisoned or fined. A precondition is that Germany maintains diplomatic relations with the state. Saxony, home to four million people, sits in eastern Germany, where far-right party Alternative for Germany (AfD) emerged as the strongest group in last month’s European elections.

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Will we see as many jail terms as for the financial crisis?

Johnson & Johnson Faces Multibillion Opioids Lawsuit (G.)

Day after day, the memos flashing across screens in an Oklahoma courtroom have jarred with the family-friendly public image of Johnson & Johnson, the pharmaceutical giant best known for baby powder and Band-Aid. In one missive, a sales representative dismissed a doctor’s fears that patients might become addicted to the company’s opioid painkillers by telling him those who didn’t die probably wouldn’t get hooked. Another proposes targeting sales of the powerfully addictive drugs at those most at risk: men under 40.

As the state of Oklahoma’s multibillion-dollar lawsuit against Johnson & Johnson has unfolded over the past month, the company has struggled to explain marketing strategies its accusers say dangerously misrepresented the risk of opioid addiction to doctors, manipulated medical research, and helped drive an epidemic that has claimed 400,000 lives over the past two decades. Johnson & Johnson profited further as demand for opioids surged by buying poppy growing companies in Australia to supply the raw narcotic for its own medicines and other American drug makers. One expert witness at the forefront of combatting the epidemic, Dr Andrew Kolodny, told the court he had little idea about Johnson & Johnson’s role until he saw the evidence in the case. “I think it’s fair to characterize Johnson & Johnson as a kingpin in our opioid crisis,” he said.

Oklahoma’s attorney general, Mike Hunter, is suing Johnson & Johnson for billions of dollars for its alleged part in driving addiction and overdoses in his state in the first full trial of a drug maker over the opioid epidemic. But Hunter’s lawsuit has put the wider industry in the dock, too, by laying out how opioid manufacturers worked together to drive up sales by using their huge resources to influence medical policy and doctor prescribing. Hunter said the strategy was motivated by the industry’s “greed” as profits surged. [..] Purdue Pharma kickstarted the epidemic with its high-strength, long-lasting opioid, OxyContin, in the mid-1990s. The court heard how Johnson & Johnson quickly realized the potential and set about competing.

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Erdogan wobbles.

Istanbul Votes In Mayoral Re-Run, In Test For Turkish Democracy, Erdogan (R.)

Millions of Istanbul residents voted on Sunday in a re-run of a mayoral election that has become a referendum on President Tayyip Erdogan’s policies and a test of Turkey’s ailing democracy. In the initial March 31 vote, the opposition Republican People’s Party (CHP) candidate secured a narrow victory over Erdogan’s AK Party (AKP) in Turkey’s largest city, a rare electoral defeat for the president. But after weeks of AKP appeals, Turkey’s High Election Board in May annulled the vote citing irregularities. The opposition called the decision a “coup” against democracy, which has raised the stakes for round two.

“It is really ridiculous that the election is being re-run. It was an election won fair and square,” said Asim Solak, 50, who said he was voting for the opposition candidate in the CHP stronghold of Tesvikiye. “It is clear who canceled the election. We hope this election re-run will be a big lesson for them,” he said. Erdogan has repeated his line that “whoever wins Istanbul wins Turkey.” A second loss in the city, where in the 1990s he served as mayor, would be embarrassing for Erdogan and could weaken what until recently seemed to be his iron grip on power.

Turkey’s economy is in recession and the United States, its NATO ally, has threatened sanctions if Erdogan goes ahead with plans to install Russian missile defenses. A second AKP loss could also shed further light into what CHP mayoral candidate Ekrem Imamoglu said was the misspending of billions of lira at the Istanbul municipality, which has a budget of around $4 billion. “If Imamoglu wins again, there’s going to be a chain of serious changes in Turkish politics,” journalist and writer Murat Yetkin said. “It will be interpreted as the beginning of a decline for AKP and for Erdogan as well,” he said, noting that the president himself had called the local elections “a matter of survival”.

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NATO and US need Turkey. It’s as central as Iran.

EU Warns Turkey Of Sanctions For Cyprus Drilling (BBC)

The EU has threatened to impose sanctions on Turkey if it continues “illegal drilling” in waters near Cyprus in the eastern Mediterranean. The warning came at an EU summit in Brussels. EU Commission President Jean-Claude Juncker called Turkey’s actions “totally unacceptable”. Turkey launched a second drilling ship – the Yavuz – on Thursday for natural gas and oil prospecting off Cyprus. The Republic of Cyprus is in the EU, but the breakaway north is pro-Turkey. The European Council – the EU government leaders – called on Turkey to “show restraint, respect the sovereign rights of Cyprus and refrain from any such actions”.


“The European Council endorses the invitation to the [EU] Commission and the EEAS [EU foreign affairs service] to submit options for appropriate measures without delay, including targeted measures,” the statement said. The self-declared Turkish Republic of Northern Cyprus is recognised only by Turkey, and is internationally isolated. Turkey said it was drilling inside its continental shelf, complying with international law. Reuters news agency reported that a Turkish drilling ship, the Fatih, had been anchored west of Cyprus since early May and had begun drilling. [..] Turkey – a key Nato partner for the West – has extensive trade ties with the EU and has not yet been hit with EU sanctions, unlike Russia. The US has threatened Turkey with sanctions if Mr Erdogan goes ahead with a deal to buy S-400 air defence missiles from Russia.

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Given the attacks on the NHS, this should not be surprising. Same as in US.

Why Is UK Life Expectancy Faltering? (O.)

In a few days, a team of researchers, statisticians and geographers will gather at University College London to tackle an issue of increasing concern for doctors and health experts. They will investigate why many UK citizens are now living shorter, less healthy lives compared with the recent past. The emergence of faltering life expectancy in Britain has caused particular alarm because it reverses a trend that has continued, almost unbroken, for close to 100 years. Over this period, lives have lengthened continuously, blessing more and more British people with the gift of old age. But now that increase has come to a halt, statisticians have discovered. Indeed, among many sections of the UK population, declines have set in.

Hence the meeting, organised by the British Society for Population Studies, which has been organised so delegates can use data – to be released this week by the Office for National Statistics – to update their life expectancy projections. “It is a perfect storm,” says Danny Dorling, professor of social geography at Oxford University, who has organised the London meeting. “Our faltering life expectancy rates show we have now got the worst trend in health anywhere in western Europe since the second world war. To achieve that, we must have made a lot of bad decisions,” he said. Statisticians first noticed in 2013 that rises in life expectancy in the UK had begun to slow down. Gradually, the graph – which been rising for decades – flattened out until, a few years ago, it started to decline for increasing numbers of people.

The elderly, the poor and the newborn were worst affected. For example, life expectancies for those over 65 have dropped by more than six months. The trend now causes considerable concern among doctors who view life expectancy figures as barometers of the health of Britain. From this perspective, the nation is sickening – and a host of different factors have been put forward as explanations. One frequently made claim is that humans have simply reached the peak of longevity. “Life expectancy cannot be expected to increase forever,” Robert Courts, a Tory MP, told the Commons recently. Many statisticians point out, however, that life expectancy has continued to rise – well above UK levels – in many other places, including Hong Kong, mainland China, Japan and Scandinavia. Other factors must be involved, they state.

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If breaks again will it ever sail again?

Great Pacific Garbage Patch: Giant Plastic Trap Put To Sea Again (AP)

A floating device designed to catch plastic waste has been redeployed in a second attempt to clean up a huge island of garbage swirling in the Pacific Ocean between California and Hawaii. Boyan Slat, creator of the Ocean Cleanup project, announced on Twitter that a 600-metre (2,000-foot) long floating boom that broke apart late last year was sent back to the Great Pacific garbage patch this week after four months of repair. A ship towed the U-shaped barrier from San Francisco to the patch in September to trap the plastic. But during the four months at sea, the boom broke apart under constant waves and wind and the boom wasn’t retaining the plastic it caught.

“Hopefully nature doesn’t have too many surprises in store for us this time,” Slat tweeted. “Either way, we’re set to learn a lot from this campaign.” Fitted with solar-powered lights, cameras, sensors and satellite antennas, the device intends to communicate its position at all times, allowing a support vessel to fish out the collected plastic every few months and transport it to dry land. The plastic barrier with a tapered 3-metre deep (10-foot deep) screen is intended to act like a coastline, trapping some of the 1.8tn pieces of plastic that scientists estimate are swirling in the patch while allowing marine life to safely swim beneath it.

During its first run, the organisation said marine biologists on board the support vessel did not observe any environmental impact. Slat has said he hopes one day to deploy 60 of the devices to skim plastic debris off the surface of the ocean.

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Jun 092019
 
 June 9, 2019  Posted by at 9:52 am Finance Tagged with: , , , , , , , , , , , ,  2 Responses »


Georges Seurat A Sunday Afternoon on the Island of La Grande Jatte 1884

 

Angst and Madness at the End of Empire (Orphan)
Theresa May: The Total Decay Of Political Integrity And Vision (Ind.)
Boris Johnson Threatens To Withhold $50 Billion Brexit Payment (R.)
US Auto Loans Hit Record (CNBC)
Used-Car Wholesale Prices Surge (WS)
ECB Policymakers Open To Cut Rates If Growth Weakens (R.)
China Banking Regulator Says Small Bank Risks Manageable (R.)
IMF Warns Of Giant Tech Firms’ Dominance (BBC)
Amazon Gets Booted by FedEx (WS)
The End Of The Arctic As We Know It (G.)

 

 

“..those expensive bases of aggression around the world will begin to cost more than they bring in profit.”

Angst and Madness at the End of Empire (Orphan)

[..] the angst of the American bourgeoisie is demonstrated more by what it doesn’t speak about than what it does. It is a disquiet which is at once terrified of the collapse that looms ahead and horrified at the idea of losing the status quo arrangement, even though that status quo is benefiting fewer and fewer people. It stands simultaneously aghast and paralyzed before the obvious madness of its rulers, and yet continually grasps at failed “lesser evilism” as a solution. And it largely still buys into the noxious mythology of it being the “greatest country on earth.” The corporate elite, having stripped down civic education over decades, robbed them of their political agency and resistance and replaced it with a sanitized history and demoralizing optimism, or “positive thinking,” which places all blame for their collective state and its inadequacies on the individual.

That it has been so lauded by Wall Street should cause anyone to wonder why it has been so internalized by the disenfranchised masses. To be sure, this arrangement is rapidly meeting its end. Banking and corporate corruption, never really having been dealt with in the last “Great Recession” or its notorious state funded “bailout,” has only become more blind and reckless. The membrane of the bubble created after that fiasco, born in avarice, is thinning in plain sight. It is about to burst again, and this time it will be far more catastrophic. The endless imperialistic wars that the US has engaged in for the last decades are also creating a financial strain.

Coupled with climate breakdown those expensive bases of aggression around the world will begin to cost more than they bring in profit. In the US itself biblical floods are wiping clean the soil graded for agriculture throughout the Midwest and causing tremendous economic hardship for scores of rural and commercial farmers. Droughts offer a grim alternative to this increasingly chaotic climate pattern. Food prices will undoubtedly rise in the future thanks to a capitalist system which creates artificial shortages and surpluses.

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“..our so called leaders are devoid of principle, immune to responsibility and seem only to prioritise their own interests, power and most importantly private profit above all. Theresa May is exhibit one. ”

Theresa May: The Total Decay Of Political Integrity And Vision (Ind.)

As an NHS doctor, making a diagnosis is quite an important part of my job. Central to it in fact. One has to process and put together information while providing care to your patients. Attention to detail is critical. For many of us working within the NHS therefore, it has been abundantly clear that the diagnosis for Theresa May has been terminal for some time. But where did it all go wrong? Was it always destined to end like this? What could have been done? Watching her face crumple and tears fall as she defended her claim to have “tackled Britain’s burning injustices”, as well as saying she had proudly served the country she loved, surely only the coldest of hearts could not have pity for a woman who had done her very best at the worst of times?

Well let me answer in the only way I know how: honestly, Theresa May is a mere symptom of the problem. The diagnosis is much greater and much more devastating than this one tragic figure. What we appear to be all bearing witness to is the total decay of political integrity and vision. We now live in a world where our so called leaders are devoid of principle, immune to responsibility and seem only to prioritise their own interests, power and most importantly private profit above all. Theresa May is exhibit one.

The woman who has supposedly tackled “burning injustices” has consciously implemented measures to ensure inequality has soared, overseen childhood and old-age poverty skyrocket, had life expectancy fall under her watch, ordered the Home Office to send out racist, xenophobic anti-immigration “Go Home” vans, and who oversaw a “hostile environment” policy that led to the deportation of many of the Windrush generation.

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Hollowness echoes with the people.

Boris Johnson Threatens To Withhold $50 Billion Brexit Payment (R.)

Boris Johnson, the leading candidate to succeed Theresa May as Britain’s next prime minister, said he would withhold a previously agreed 39 billion pound ($50 billion) Brexit payment until the European Union gives Britain better exit terms. The EU has repeatedly said it will not reopen discussion of the Brexit transition deal it reached with May last year, which British lawmakers have rejected three times, prompting May to announce her resignation earlier this month. May stepped down as leader of the governing Conservatives on Friday. Johnson, a former foreign secretary in May’s cabinet, is popular with ordinary Conservative Party members, who will decide between the two candidates who come top in a series of votes by Conservative lawmakers over the coming weeks.


“I always thought it was extraordinary that we should agree to write that entire cheque before having a final deal. In getting a good deal, money is a great solvent and a great lubricant,” Johnson told the Sunday Times. Britain is due to leave the EU on Oct. 31. If Parliament does not approve a deal – and the government does not ask the EU for another delay – there risks being major economic disruption from a disorderly departure. The 39 billion pounds represents outstanding British liabilities to the EU, which would be paid over a number of years according to the withdrawal agreement negotiated by May. Johnson also said border arrangements with Ireland should be settled only as part of a long-term agreement, rejecting a “backstop” which would avoid checks on Northern Ireland’s border but which Conservative lawmakers fear is a backdoor way of requiring Britain to continue to follow EU rules after Brexit.

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Record loans for clunkers.

US Auto Loans Hit Record (CNBC)

People buying a new vehicle are borrowing more and paying more each month for their auto loan. Experian, which tracks millions of auto loans each month, said the average amount borrowed to buy a new vehicle hit a record $32,187 in the first quarter. The average used-vehicle loan also hit a record, $20,137. “We have not seen a slowdown in loan demand. In fact, volume for new and used loans is up from previous years,” said Melinda Zabritski, senior director of automotive financial solutions for Experian. With sales of new vehicles moderating slightly after the four best years the industry has ever seen in the U.S., dealers and auto executives are watching whether consumers will be more resistant to the steady increase in new car prices.


That is not happening. In fact, the average amount borrowed topped $32,000 for the first time ever. As a result, the average monthly payment for a new vehicle continued to climb to a new high of $554 and to a record $391 for used vehicles, according to Experian. While new car sales and loans are still strong, people with the best credit scores are increasingly buying a used model instead of new. Experian says 61.8% of those with a prime credit rating and 44.7% of those with a super prime credit rating took out loans to buy a used vehicle in the first quarter. Those are the highest percentages Experian has ever recorded for prime and super prime used vehicle borrowing.

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There’s something very ironic hidden in here.

Used-Car Wholesale Prices Surge (WS)

Prices of used vehicle that were sold in May at wholesale auctions rose 4.0% compared to May last year, according to Manheim, the largest auto-auction house in the US, running about 8 million vehicles through its venues a year. The chart of the Manheim Used Vehicle Value Index, which is adjusted for mix, mileage, and seasonality, shows the two price surges from end of March 2017 and March 2018 that were subsequently only partially unwound. And the 2019 selling season is beginning likewise. The last time there was such an extended period of year-over-year price gains was from the trough of the Financial Crisis. After prices had collapsed in 2008, they started bouncing off sharply in January 2009.

By the time the “Cash for Clunkers” program started officially on July 1, 2009, used vehicle prices had already recovered to their prior pre-crisis levels (see chart below). But “cash for clunkers” boosted prices further. Congress had appropriated $1 billion that was supposed to last through November. But by July 30, it was gone. Congress appropriated another $2 billion, which was soon gone too. Car buyers were handed this $3 billion to trade in their “clunkers” and buy a new vehicle. Cash for clunkers was designed to boost new-vehicle sales. The engines of these trade-ins under the program were destroyed and the vehicle was then towed to the salvage yard for parts.


As a side effect, the program destroyed a portion of the most affordable vehicles – another devastating blow to lower-income car buyers in subsequent years. Not only were the most affordable vehicles gone; but by removing this supply from the market, Cash for Clunkers caused the prices up the entire scale of used cars to surge. This included my three-year-old car. Its book value rose month after month, even as the car got older and accumulated miles, something I’d never seen before, and I’d spent many years in the car business.

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So Europeans can buy clunkers too?!

ECB Policymakers Open To Cut Rates If Growth Weakens (R.)

European Central Bank policymakers are open to cutting the ECB’s policy rate again if economic growth weakens in the remainder of the year and a strong euro hurts a bloc already bearing the brunt of a global trade war, two sources said. The ECB said on Thursday that its interest rates would stay “at their present levels” until mid-2020 but President Mario Draghi added rate setters had started a discussion about a possible cut or fresh bond purchases to stimulate inflation. The apparently mixed message failed to convince some investors, who saw it as too tenuous a commitment to more stimulus. This sent the euro rallying to a 2-1/2 month high of $1.1347 against the U.S. dollar.


But two sources familiar to the ECB’s policy discussions said a rate cut was firmly in play if the bloc’s economy was to stagnate again after expanding by 0.4% in the first quarter of the year. “If inflation and growth slow, then a rate cut is warranted,” said one of the sources, who requested anonymity because the ECB’s deliberations are confidential. The ECB’s deposit rate is already 40 basis points below zero and the bloc’s top-rated governments, such as Germany’s, can borrow at negative rates for up to a decade. In this context, countering the euro’s strength, rather than lowering already rock-bottom borrowing costs, would be the main reason for a further cut to that deposit rate, one of the sources said.

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What else are they going to say?

China Banking Regulator Says Small Bank Risks Manageable (R.)

China’s banking regulator says risks at small and mid-sized banks are manageable, a central bank publication reported on Sunday, in the latest move to soothe investors’ concerns after the government took over a troubled regional lender last month. The China Banking and Insurance Regulatory Commission (CBIRC) took control of Inner Mongolia’s Baoshang Bank due to “serious” credit risks on May 24, rattling Chinese markets and prompting the People’s Bank of China (PBOC) to inject cash into the banking system. While authorities said it was a standalone case, the seizure comes as Beijing is urging banks to boost lending to help cushion an economic slowdown, fuelling concerns about rising debt and more bad loans.


“At present, small and mid-sized banks are operating smoothly, liquidity is relatively ample, and overall risks are fully manageable,” the CBIRC said in a Q&A interview with the Financial News. The regulator also said big banks are willing to continue interbank business with small banks to safeguard the stability of financial markets. Some small banks rely heavily on short-term borrowing from the interbank market, leaving other banks at risk if they run into trouble. A Reuters analysis showed at least 18 smaller institutions have not published up-to-date financial reports, and in some of those cases senior regulatory officials have been appointed for bank management oversight.

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Can I add a warning about IMF dominance?

IMF Warns Of Giant Tech Firms’ Dominance (BBC)

Giant technology companies might cause significant disruption to the world’s financial system, the head of the International Monetary Fund has warned. Christine Lagarde said just a few firms with big data access and artificial intelligence could run the global payment and settlement arrangements. Her warning came as the G20 finance ministers met in Japan. The summit is also discussing the need to close tax loopholes for internet giants like Facebook and Google. One of the options being considered is to tax such companies where they make their profits – rather than where they base their headquarters.


“A significant disruption to the financial landscape is likely to come from the big tech firms,” Ms Lagarde said in Japan’s south-western city of Fukuoka. She said such firms “will use their enormous customer bases and deep pockets to offer financial products based on big data and artificial intelligence”.”This presents a unique systemic challenge to financial stability and efficiency,” she added. She cited China as a most recent example. “Over the last five years, technology growth in China has been extremely successful and allowed millions of new entrants to benefit from access to financial products and the creation of high-quality jobs,” Ms Lagarde said. “But it has also led to two firms controlling more than 90% of the mobile payments market.”

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Can Bezos buy FedEx?

Amazon Gets Booted by FedEx (WS)

Amazon is aggressively butting in on freight carriers with its own planes, trucks, and delivery infrastructure, and is at the same time aggressively pushing for faster and cheaper service from freight carriers such as FedEx, UPS, and the US Postal Service. And FedEx has had it with Amazon, announcing today that it was dumping Amazon as customer of its FedEx Express division. “FedEx has made the strategic decision to not renew the FedEx Express U.S. domestic contract with Amazon.com, Inc. as we focus on serving the broader e-commerce market,” it said in a surprise statement. The current contract ends June 30.


Its other units that do business with Amazon and its international services with Amazon are not impacted by this decision, FedEx said. FedEx is not overly dependent on Amazon – unlike some other freight companies that now have come to grief under Amazon’s boots, including New England Motor Freight, a less-than-truckload carrier that “stunned” the transportation world when it filed for bankruptcy in February. Interestingly, FedEx chose to address this point explicitly in the statement: “Amazon.com is not FedEx’s largest customer. The percentage of total FedEx revenue attributable to Amazon.com represented less than 1.3 percent of total FedEx revenue for the 12-month period ended December 31, 2018.”

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“It will go when stratification breaks down completely and the Atlantic takes over the whole region.”

The End Of The Arctic As We Know It (G.)

If the Arctic were a patient, doctors would be alarmed by its vital signs. As well as hot flushes, asthma and contamination (the researchers are following up on studies that suggest the Fram strait has one of the highest levels of microplastics in the world), the ocean has also been diagnosed with a weakening of its immune system. For centuries, the Arctic’s distinctive character has been shaped by a layer of cold, relatively fresh water just below the surface, produced by melting ice and glaciers. This has insulated the sea ice from the warmer, denser, saltier waters of the Atlantic currents that flow in the depth. But this stratification is collapsing as temperatures rise.

The oceanic shift was outlined in a landmark study published last year in Science, which found that the water density and temperature of the Fram strait and Barents Sea were increasingly like those of the Atlantic, while further east, Russia’s Laptev sea was starting to resemble what the Barents used to be. “The polar front is shifting,” the lead author, Dr Sigrid Lind, of the Institute of Marine Science and the University of Bergen, told the Guardian this year. “The Arctic as we know it is about to become history. It will go when stratification breaks down completely and the Atlantic takes over the whole region.”


This has not happened for more than 12,000 years, but the shift is well under way. First to succumb, according to Lind, will be the Barents Sea, which will have no fresh water by 2040, then the Kara sea. The consequences will be far-reaching. The food chain is already affected. Atlantic species of cod, herring and mackerel are moving northwards. For the next 20 to 30 years this could boost fishing catches, but forecasts by Norway suggest boom will turn to bust later as the waters grow too warm for fish larvae.


Photograph: Denis Sinyakov/Greenpeace

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May 222019
 


James Ensor The oyster eater 1882

 

Mueller Refuses To Testify Publicly Before Congress (ZH)
Democrats’ Impeachment Divide Tests Pelosi (NPR)
We’ve Hit a New Low in Campaign Hit Pieces (Matt Taibbi)
US ‘Sees Signs’ Damascus ‘May’ Have Used Chlorine In Idlib (RT)
EU Despairs At Emptiness Of May’s Latest Brexit Offer (G.)
UN Report Compares Tory Welfare Policies To Creation Of Workhouses (G.)
The Assange/Manning Cases Discredit Humanity (PCR)
Will FAA’s Plan For 737 MAX Fly Outside US? (AFP)
Chinese Airlines Seek Boeing Compensation Over 737 MAX Grounding (R.)
Tesla Stock ‘Bear Case’ Is $10 – Morgan Stanley (MW)
IMF Admits ‘Notable Failures’ In Bailout Deepened Greek Recession (KTG)
Netherlands Becomes First AAA Rated Sovereign To Launch Green Bond (R.)

 

 

Nobody wants to talk to these people anymore. Because it’s become a circus act.

Mueller Refuses To Testify Publicly Before Congress (ZH)

With most Congressional Democrats still stunned from the anticlimatic publication of Mueller’s “Russiagate” report, which found that Trump did not collude with Russia, many have been desperate to hear Mueller’s side of the story perhaps in hopes that he will unveil some smoking gun in public (something he failed to do in his report) while the others have quietly turned on Mueller, asking why after a two year probe, he failed to put Trump behind bars. And now, after the latest development in the never-ending Russia “witch hunt” to paraphrase the president, it won’t be long before virtually all Democrats are convinced that Mueller himself must also a Putin plant.

According to Bloomberg, which cites three people familiar with the special counsel’s position, Robert Mueller has balked at testifying publicly before Congress, pushing instead for a closed-door appearance in negotiations with House Democrats. Why? Because Mueller, who was the center of a media and political circus for no less than two years has told the Democratic-controlled House Judiciary Committee that – get this – he doesn’t want to be dragged into a political fight and that he’s hesitant to publicly discuss his final report. Among the options Mueller has raised is making a public statement before the committee questions him in private, the people said. But why if he has nothing to hide, and if all the results of his multi-million probe were disclosed in his report?

As a reminder, the NYT and WaPo recently sparked more Russiagate drama, when they reported that Mueller had written AG William Barr to complain that he’s given summaries of the report’s findings that “did not fully capture the context, nature and substance” of his team’s work. A more detailed read of the report also revealed that Mueller did not actually have complaints about Barr’s representation of his lengthy report but was instead bashing the media – such as the NYT and WaPo. As the WaPo reported earlier, Mueller III and House Democrats “have been unable to reach an agreement on how much of the special counsel’s expected congressional testimony would be public, and how much would take place in private, according to people familiar with the matter.”

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Impeachment as a simple political tool: not so much because they want to impeach the president, but because it would give them added powers. Shaky.

Democrats’ Impeachment Divide Tests Pelosi (NPR)

House Speaker Nancy Pelosi will convene a meeting Wednesday morning to hear from Democrats on whether to move forward with impeachment proceedings against President Trump. Pelosi, a public skeptic of impeachment, is confronting a rising tide of support for it among rank-and-file House Democrats and members of her own leadership team. Democrats are outraged by the Trump administration’s ongoing effort to stymie congressional oversight into the president, his administration, and the findings in special counsel Robert Mueller’s report. “She’s hearing the views of the caucus, and listening to different perspectives and we’re having that debate,” said Rep. Seth Moulton, D-Mass., who is running for president.

Moulton supports opening an impeachment inquiry based on the argument being made by a number of Democrats that it gives the House a stronger legal hand in securing documents, testimony and cooperation from the Trump administration. “I don’t think there’s any question but there’s a growing realization in the caucus that impeachment is inevitable. It’s not a question of if but when,” said Rep. John Yarmuth, D-Ky., a member of the leadership’s whip team. Yarmuth said the administration’s “blanket resistance” to their oversight efforts is changing the calculation. “I think the speaker is right that these investigations need to go on. I don’t think they should go on interminably,” he said, adding that he expected a decision on impeachment to be made by the end of the summer.

Yarmuth and other top leaders have characterized those pushing for impeachment as a small but growing minority dissatisfied with Pelosi’s focus on traditional committee investigations. The group largely confined their frustrations to closed-door sessions until recently. “I think what is happening is that the initial aim was to investigate and then see what we had. The problem is we can’t get any information. The president is blocking us,” House Oversight and Reform Committee Chairman Elijah Cummings, D-Md., said. “I think we’re in a position where we’re moving more and more towards [impeachment] because he’s not leaving us with any choices. You don’t have any choices.” Cummings maintained that moving ahead with impeachment could assist their efforts. “Once you file for impeachment you’re under a whole new different set of rules. And you have a much broader opportunity to get things.”

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This should test Pelosi a lot more than the impeachment stuff.

We’ve Hit a New Low in Campaign Hit Pieces (Matt Taibbi)

Last week, the Daily Beast ran this headline: “Tulsi Gabbard’s Campaign Is Being Boosted by Putin Apologists” That was followed by the sub headline: “The Hawaii congresswoman is quickly becoming the top candidate for Democrats who think the Russian leader is misunderstood.” The Gabbard campaign has received 75,000 individual donations. This crazy Beast article is based on (maybe) three of them. The three names are professor Stephen Cohen, activist Sharon Tennison and someone using the name “Goofy Grapes,” who may or may not have once worked for comedian Lee Camp, currently employed by Russia Today. This vicious little article might have died a quiet death, except ABC’s George Stephanopoulos regurgitated it in an interview with Gabbard days later.

The This Week host put up the Beast headline in a question about whether or not Gabbard was “softer” on Putin than other candidates. Gabbard responded: “It’s unfortunate that you’re citing that article, George, because it’s a whole lot of fake news.” This in turn spurred another round of denunciations, this time in the form of articles finding fault not with the McCarthyite questioning, but with Gabbard’s answer. As Politico wrote: “’Fake news’ is a favorite phrase of President Donald Trump…” Soon CNN was writing a similar piece, saying Gabbard was using a term Trump used to “attack the credibility of negative coverage.” CNN even said Gabbard “did not specify what in the article was ‘fake,’” as if the deceptive and insidious nature of this kind of guilt-by-association report needs explaining.

“Stephanopoulos shamelessly implied that because I oppose going to war with Russia, I’m not a loyal American, but a Putin puppet,” Gabbard told Rolling Stone. “It just shows what absurd lengths warmongers in the media will go, to try to destroy the reputation of anyone who dares oppose their warmongering.”

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With the leaked file from an OPCW expert discrediting the Douma report, it’s time to double down: a new false flag casts doubt on last year’s file as well. 2 for the price of 1.

Or you could say: it’s another Syria chemical attack accusation! It must be spring then!

US ‘Sees Signs’ Damascus ‘May’ Have Used Chlorine In Idlib (RT)

The US State Department has accused the Syrian government of a recent chemical attack and threatened it with a ‘quick and appropriate’ response – while admitting it has little information to substantiate the allegations.
In a statement on Tuesday, Washington alleged that the government of Syrian President Bashar Assad is likely to be found responsible for allegedly using chlorine to attack civilians in militant-controlled areas of Idlib province. “We continue to see signs that the Assad regime may be renewing its use of chemical weapons, including an alleged chlorine attack in northwest Syria on the morning of May 19, 2019,” the statement says. Despite the evident uncertainty, the State Department adopted the habitually threatening stance against Damascus.

“We are still gathering information on this incident, but we repeat our warning that if the Assad regime uses chemical weapons, the United States and our allies will respond quickly and appropriately.” The State Department also lashed out at Moscow for its efforts to expose the White Helmets, the self-proclaimed civil defense group that operates exclusively in militant-controlled areas and has been accused of associating with extremists and staging chemical attacks. Having invested heavily in the White Helmets along with other Western nations, Washington accused Moscow and Damascus of trying to “create the false narrative that others are to blame for chemical weapons attacks that the Assad regime itself is conducting.”

Meanwhile, according to the State Department, “the Assad regime’s culpability in horrific chemical weapons attacks is undeniable.” It just so happens that these latest claims come after a newly-surfaced report by an engineer from the Organisation for the Prohibition of Chemical Weapons (OPCW) that calls into question the March OPCW report accusing Damascus of being behind the Douma chemical incident last April. The new report, which suggested that gas canisters were placed at the scene of the attack by hand, potentially by ‘rebel’ militants active in the area, went virtually unnoticed in the West. Several celebrity activists have called out the mainstream media over their lack of coverage.

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Delivering the country to Farage. May will be gone by June.

EU Despairs At Emptiness Of May’s Latest Brexit Offer (G.)

Theresa May’s “bold offer” to MPs ahead of a final vote on the Brexit deal consisted of a series of platitudes and the restatement of negotiating objectives that have already been rejected, EU officials said in response to the prime minister’s appeal to the Commons. As Conservative MPs who have previously voted in favour of the withdrawal agreement turned on May over the speech, the response in Brussels was one of despair at what was viewed as the emptiness of the prime minister’s proposals. Most significantly, the suggestion that the political declaration could be rewritten to emphasise the ability of the government to achieve something amounting to “frictionless trade” caused concern.


May appeared to suggest that the government’s policy was to seek a customs arrangement that delivers the same benefits as today along with the renewed ability to make independent trade deals. The alternative, May said, was a compromise position with Labour in which the government negotiated a temporary customs union on goods only which would include a UK say in relevant EU trade policy and an ability to change the arrangement following a general election.

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‘The UK’s social safety net has been “deliberately removed and replaced with a harsh and uncaring ethos..”

UN Report Compares Tory Welfare Policies To Creation Of Workhouses (G.)

A leading United Nations poverty expert has compared Conservative welfare policies to the creation of 19th-century workhouses and warned that unless austerity is ended, the UK’s poorest people face lives that are “solitary, poor, nasty, brutish, and short”. In his final report on the impact of austerity on human rights in the UK, Philip Alston, the UN rapporteur on extreme poverty, accused ministers of being in a state of denial about the impact of policies, including the rollout of universal credit, since 2010. He accused them of the “systematic immiseration of a significant part of the British population” and warned that worse could be yet to come for the most vulnerable, who face “a major adverse impact” if Brexit proceeds.


He said leaving the EU was “a tragic distraction from the social and economic policies shaping a Britain that it’s hard to believe any political parties really want”. The New York-based lawyer’s findings, published on Wednesday, follows a two-week fact-finding mission in November after which he angered ministers by calling child poverty in Britain “not just a disgrace but a social calamity and an economic disaster”. Now he has accused them of refusing to debate the issues he raised and instead deploying “window dressing to minimise political fallout” by insisting the country is enjoying record lows in absolute poverty, children in workless households and low unemployment.

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Not PCR’s finest.

The Assange/Manning Cases Discredit Humanity (PCR)

No one has protested the open and highly visible effort to force Manning to commit perjury that can be used to build a case against Assange or otherwise be imprisoned for “contempt” and fined into penury. The despicable liberal-progressive-left whores that comprise the US print and TV media and NPR will not protest the injustice. They hate Manning and Assange for having more integrity than all of them together. The conservative talk radio hosts won’t protest the attempt to coerce Manning, because they love Trump, Washington’s wars, and hate “anti-Americans,” which is everyone who dares tell the truth about the US. On conservative talk radio on May 17, I heard one popular host say “I am happy Manning is in prison.”


No US senators or representatives and neither the Senate or House judiciary committee sees anything untoward in forcing an American citizen to produce the needed lies for framing up the world’s best journalist. Law schools and bar associations are not demanding the corrupt US attorney to be disbarred for violating every precept laid down by US Attorney General, Supreme Court Justice, and Nuremberg prosecutor Robert Jackson. Nor are they demanding the impeachment of the corrupt federal district judge, who perhaps has his eye on appointment to the appeals court for his cooperation in finishing off the First Amendment.

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It’s still only that software fix. For a hardware problem. Everybody better have some tough talks with their lawyers. One more fail and you’re going to prison.

They add an alert light for when the two sensors conflict. But that requires a third sensor.

Will FAA’s Plan For 737 MAX Fly Outside US? (AFP)

Getting Boeing’s top-selling 737 MAX back in the skies faces a critical test this week as the company and US regulators each seek to restore their reputations after two deadly crashes. The US Federal Aviation Administration convened a summit of global aviation regulators on Thursday to walk through the steps taken to address concerns with the MAX following criticism the agency dragged its feet on the decision to ground the jets. Most agencies around the world have said little or nothing about the situation since the 737 MAX was grounded .. So the gathering in Fort Worth, Texas is expected to provide clues as to whether the aviation safety authorities will be willing to set aside any skepticism about the FAA, which has not yet given the green light for the 737 MAX to fly again.


Regulators “are going to want a lot of explanation,” said Richard Aboulafia of the Teal Group. “We’re going to learn a lot.” The FAA would prefer to have other agencies quickly follow its lead — which previously would have been likely — but several aviation experts think that is improbable. Europe and Canada could follow the US by weeks in allowing the MAX jets to return to the skies. China is a wildcard. It was the first country to order the planes grounded in March, and has been sparring with the US for months over trade policy. The FAA said 57 agencies from 33 countries will attend the summit, including China, France, Germany, Britain, India, Indonesia and Ethiopia, as well as the European Union Aviation Safety Agency (EASA) and the United Nation’s International Civil Aviation Organization.

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Nice one for the trade war.

Chinese Airlines Seek Boeing Compensation Over 737 MAX Grounding (R.)

China’s three biggest airlines have requested compensation from U.S. planemaker Boeing Co for losses incurred by the grounding and delayed deliveries of 737 MAX jets, as regulators gather to discuss design changes for the troubled aircraft. Chinese state television on Wednesday reported that Air China and China Southern Airlines have added their voices to a request from China Eastern Airlines Corp Ltd a day earlier. China was the first country to ground the 737 MAX globally after a crash in Ethiopia killed 157 people in March, in the second such incident for Boeing’s newest aircraft.


The compensation requests come as the U.S. Federal Aviation Administration hosts global regulators in Dallas on Thursday to review 737 MAX software and training proposals from Boeing before deciding whether and when to end the two-month grounding. The International Air Transport Association has convened a meeting of airlines with grounded 737 MAX jets for the same day in Montreal. Other carriers including Turkish Airlines, United Airlines, Ryanair and Flydubai have also asked Boeing for compensation.

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From $205 now.

Tesla Stock ‘Bear Case’ Is $10 – Morgan Stanley (MW)

Tesla Inc. shares slid further on Tuesday after analysts at Morgan Stanley said their worst-case scenario for the stock is $10, mostly on concerns about faltering demand and worries that the Silicon Valley car maker might have grown “too big.” Analysts led by Adam Jonas kept their rating on Tesla stock their equivalent of neutral. The $10 “bear case” was revised from $97, and the analysts’ “bull case” is $391. Tesla shares ended 0.1% lower at $205.08 on Tuesday after trading as low as $196.04 during the session. The stock has been caught in a technical downdraft and a fresh volley of Wall Street criticism amid the company’s attempts to curb expenses and keep growing.


Tesla bonds went the way of the shares, and the 2025 bonds recently traded at 82.919 cents on the dollar to yield 8.932%, according to trading platform MarketAxess. On a spread basis, the notes were 676 basis points over Treasurys, 35 basis points wider on the day.

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But nobody’s to blame except the Greeks.

IMF Admits ‘Notable Failures’ In Bailout Deepened Greek Recession (KTG)

The International Monetary Fund (IMF) has admitted “notable failures” in the first Greek bailout including a deeper-than-expected recession, a run on the country’s banking system and exceptionally high unemployment. The IMF’s Review of Program Design and Conditionality provides a deep look into the design of 133 IMF-supported lending programs in operation between September 2011 and December 2017. The IMF research paper said the multi-billion rescue package for Greece failed to restore market confidence, that the fiscal adjustment proramme had notable failures, wrong projections and overlook. It also admitted that delays in debt restructuring saved the foreign banks but it was of little help for Greece. The PSI of March 2012 did not help either.

The review also identified several factors that potentially inhibited programs from fully reaching their objectives. Overoptimistic economic forecasts reduced a program’s chances of success; accordingly, the review recommends using a more conservative approach to economic forecasts and providing deeper analyses of the impact that policies under the program could have on economic growth. More extensive contingency planning should also be included when designing programs. Public debt is a case in point. Debt sustainability improved in most cases where debt vulnerabilities started out high. In some programs, however, debt exceeded the Fund’s initial projection by considerable margins. Fund policies are already in place to deal with unsustainable debt in Fund-supported programs.

While any debt restructuring needs to be considered on a case-by-case basis, more careful diagnosis is essential—this means sharper tools for the IMF’s debt sustainability analysis are needed to reduce any bias in judgement when assessing debt. The review finds many programs applied fiscal adjustments that were less growth-friendly than initially envisaged. Fiscal adjustment tended to be achieved by cutting public investment, possibly curtailing future growth, rather than by lowering current spending or raising revenue. To be a more useful guide for the government’s fiscal policy, an IMF program could set more granular targets, like a floor for critical public investments.

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This is “get rich while you save the planet” idiocy. Don’t fall for it.

Netherlands Becomes First AAA Rated Sovereign To Launch Green Bond (R.)

The Netherlands became on Tuesday the first AAA-rated sovereign to offer investors a green bond, saying it would give preference to funds that prove their own environmentally friendly credentials. The government said it aimed to raise up to 6 billion euros ($6.7 billion) from the issue, although bankers said order books on the 20-year euro-denominated bond had climbed past 20 billion euros. The Netherlands follows euro zone peers Poland, France, Belgium and Ireland which have all sold green bonds. The initial price guidance was put in a range of 18 to 21 basis points (bps) over a benchmark German bond. The spread was finally set at 18 bps over, banking sources told Reuters.


The bond was offered at an auction in which there was no underwriting role for primary dealers and client bids were placed directly with the Dutch debt agency. Other euro zone sovereigns have issued green bonds via syndication. Investors and bankers said it was the first time they had seen the issuer, in this case the Dutch debt agency DTSA, explicitly prioritizing investors with green credentials and offering them a more favorable allocation. “That’s an interesting step,” said Ross Hutchison, a bond fund manager, at Aberdeen Standard Investments in Edinburgh. Investors who proved their green credentials will be given an additional allocation of up to 10%, which a banker said meant that a green investor placing an order for 50 million euros could expect to be allocated up to 55 million euros.

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Apr 042019
 
 April 4, 2019  Posted by at 9:01 am Finance Tagged with: , , , , , , , , , ,  5 Responses »


Pablo Picasso Nude on a beach 1929

 

Lack Of Redundancies On Boeing 737 MAX Baffles Its Developers (ST)
Trolling the Mueller Report (WSJ Op-ed)
Mueller Investigators Say Findings More Damaging To Trump Than Barr Has Let On
Comey Says He Fears Possible Counterinvestigation After Mueller Report (Pol.)
US Senators Want Stiff Sanctions To Deter Russia Election Meddling (R.)
Maybe Politics Matters After All (John Rubino)
Economist: Brexit Will Happen And Trump Fans Are ‘Economically Illiterate’ (FN)
UK MPs Back Brexit Delay Bill By One Vote (BBC)
No Deal Brexit Measures Needed To Keep Planes In Air And Troops On Ground (G.)
Top Labour Figures Demand Corbyn Secure Referendum (Ind.)
IMF Warns That Tech Giants Stifle Innovation And Threaten Stability (G.)
Next Phase in Trucking Boom-Bust Cycle Has Started (WS)
‘Excluding Everything That Makes China What It Is’ (Crooke)

 

 

Let’s start with the Seattle Times, because this article strongly hints that Boeing’s problems cannot possibly be solved with a software tweak. It’s a hardware issue as much as anything else. Cutting corners until there’s no corner left. And well over 300 people lost their lives due to this.

“Normal” planes have 3×3 sensors. The 737MAX effectively has one. And it was known to fail.

Lack Of Redundancies On Boeing 737 MAX Baffles Its Developers (ST)

Boeing has long embraced the power of redundancy to protect its jets and their passengers from a range of potential disruptions, from electrical faults to lightning strikes. The company typically uses two or even three separate components as fail-safes for crucial tasks to reduce the possibility of a disastrous failure. Its most advanced planes, for instance, have three flight computers that function independently, with each computer containing three different processors manufactured by different companies. So even some of the people who have worked on Boeing’s new 737 MAX airplane were baffled to learn that the company had designed an automated safety system that abandoned the principles of component redundancy, ultimately entrusting the automated decision-making to just one sensor — a type of sensor that was known to fail.

Boeing’s rival, Airbus, has typically depended on three such sensors. “A single point of failure is an absolute no-no,” said one former Boeing engineer who worked on the MAX, who requested anonymity to speak frankly about the program in an interview with The Seattle Times. “That is just a huge system engineering oversight. To just have missed it, I can’t imagine how.” Boeing’s design made the flight crew the fail-safe backup to the safety system known as the Maneuvering Characteristics Augmentation System, or MCAS.

A faulty reading from an angle-of-attack sensor (AOA) — used to assess whether the plane is angled up so much that it is at risk of stalling — is now suspected in the October crash of a 737 MAX in Indonesia, with data suggesting that MCAS pushed the aircraft’s nose toward Earth to avoid a stall that wasn’t happening. Investigators have said another crash in Ethiopia this month has parallels to the first. [..] one problem with two-point redundancies is that if one sensor goes haywire, the plane may not be able to automatically determine which of the two readings is correct, so Boeing has indicated that the MCAS safety system will not function when the sensors record substantial disagreement.

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The Wall Street Journal counterbalances the NYT and WaPo.

Trolling the Mueller Report (WSJ Op-ed)

Democrats are still reeling from Special Counsel Robert Mueller’s conclusion that the Trump campaign did not collude with Russians in 2016. But they’ve now hit upon a political comeback strategy: Accuse Attorney General William Barr of a coverup. That’s the context for Wednesday’s decision by House Democrats to authorize subpoenas, on a partisan vote, demanding that Mr. Barr immediately hand over the entire Mueller report and its supporting evidence. This is intended to give the impression, abetted by a press corps that was fully invested in the collusion story, that Mr. Barr is somehow lying about Mr. Mueller’s real conclusions. That’s preposterous, since Mr. Barr’s four-page letter quotes directly from Mr. Mueller’s report.

The AG surely understood on releasing the summary of conclusions last week that he would be open to contradiction by Mr. Mueller if he took such liberties. Mr. Barr also knew he’d be called to testify before Congress once the rest of the report is released. Mr. Barr has committed to releasing as much of the report as possible subject to Justice Department rules. He’s working with the special counsel’s office to make redactions required by grand-jury rules of secrecy, intelligence sources and methods, ongoing investigations, and “the personal privacy and reputational interests of peripheral third parties.” Under Justice rules relating to special counsels, Mr. Barr has no obligation to provide anything beyond notifying Congress when an investigation has started or concluded, and whether the AG overruled a special counsel’s decisions.

Mr. Barr’s notice to Congress that Mr. Mueller had completed his investigation said Mr. Mueller was not overruled. Congress has no automatic right to more. The final subparagraph of DOJ’s rule governing special counsels reads: “The regulations in this part are not intended to, do not, and may not be relied upon to create any rights, substantive or procedural, enforceable at law or equity, by any person or entity, in any matter, civil, criminal or administrative.” Mr. Barr has made clear that he appreciates the public interest in seeing as much of Mr. Mueller’s report as possible. Yet his categories of information for review aren’t frivolous or political inventions. The law protecting grand-jury secrecy is especially strict, as even Democrats admit.

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Glenn Greenwald tweets about this:

Trump/Russia conspiracists are like zombies: the dream can’t die. Their new hope is a) anonymously sourced, b) bereft of even one specific, c) irrelevant to *conspiracy* as opposed to obstruction & d) unrelated to the fact that Mueller indicted *zero* Americans for conspiracy

[..] Mueller could have concluded he thinks Trump was guilty of obstruction, but chose not to. He could have alleged a Trump/Russia conspiracy, or could have charged Trump officials & family members with conspiring with Russia, but didn’t. These last-gasp efforts don’t change that.

[..] Anyway, we’ve had 3 years of anonymously-sourced “bombshells” journalists spend 16-24 hours tiring themselves out celebrating on Twitter, only for it to fizzle into nothing (ie: no indictments from Mueller for conspiring with Russia). Why not have one more? An addict’s last fix.:

Mueller Investigators Say Findings More Damaging To Trump Than Barr Has Let On

The conclusions of special counsel Robert Mueller’s investigation are more damaging to President Donald Trump than Attorney General William Barr has revealed, the New York Times reported late Wednesday. The Times said some investigators who were part of the probe are frustrated that Barr has undersold the findings, which may be creating a misleading narrative that could be hard to overcome if and when the full report is released. The sources did not specify how they believe the report is more damaging to Trump. The investigators told the Times that they had written numerous summaries of their main conclusions, which were not included in Barr’s summary of the report. Barr said the report found no collusion between Trump and Russia, but did not exonerate Trump on the issue of obstruction of justice. House Democrats have pressed Barr to release the full report, but Barr claims parts of it needs to be redacted first for security reasons.

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It would be crazy if there isn’t one.

Comey Says He Fears Possible Counterinvestigation After Mueller Report (Pol.)

Former FBI Director James Comey on Tuesday condemned President Donald Trump’s calls for a possible investigation into how special counsel Robert Mueller’s Russia inquiry started, adding that it creates a troubling precedent. During an interview with CNN’s Christiane Amanpour, Comey was asked about whether he feared possible counterinvestigations. “I don’t fear it personally. I fear it as a citizen,” he said. “Right? Investigate what? Investigate that investigations were conducted? What would be the crime you’d be investigating? So it’s a terrible cycle to start.” Several days after Attorney General William Barr released his summary of Mueller’s report, Trump and his team have called for investigations into how the probe began.


“Hopefully, somebody is going to look at the other side,” Trump told reporters late last month. The president’s personal lawyer, Rudy Giuliani, has also made similar statements. On Tuesday, Trump continued to advocate for an examination of how the FBI and Mueller investigations began. “I hope they now go and take a look at the origins of the investigation, the beginnings of the investigation,” the president told reporters at the White House on Tuesday. “You look at the origin of the investigation, where it started, how it started, who started it.” “Whether it‘s [former FBI Deputy Director Andrew] McCabe or Comey or a lot of them, where does it go? How high up in the White House did it go?“ Trump continued, calling on reporters to investigate the origins of Mueller‘s probe, even dangling the prospect of a Pulitzer Prize to journalists in the room.

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Whatever powers these people have should be taken away from them. Both sides of the aisle want war with Russia.

US Senators Want Stiff Sanctions To Deter Russia Election Meddling (R.)

U.S. Republican and Democratic senators introduced legislation on Wednesday seeking to deter Russia from meddling in U.S. elections by threatening stiff sanctions on its banking, energy and defense industries and sovereign debt. The “Deter Act” is the latest effort by U.S. lawmakers to increase pressure on Moscow over what they see as a range of bad behavior, from its aggression in Ukraine and involvement in Syria’s civil war to attempts to influence U.S. elections. The measure was introduced by Senators Chris Van Hollen, a Democrat, and Marco Rubio, a Republican. They offered a similar measure last year, when it also had bipartisan support but was never brought up for a vote by the Senate’s Republican leaders, who have close ties to President Donald Trump.

Trump has gone along with some previous congressional efforts to increase sanctions on Russia, although sometimes reluctantly. Backers of stronger action against Russia believe such measures will have better prospects in 2019, given control of the House of Representatives by Democrats, who are less reluctant than Trump’s fellow Republicans to push back against the White House. According to details of the legislation, first reported by Reuters, it would require the U.S. Director of National Intelligence (DNI) to determine, within 30 days of any federal election, whether Russia or other foreign government or anyone acting as an agent of that government, had engaged in election interference.

If the DNI found such interference occurred, the act would require, among other things, that mandatory sanctions be imposed within 10 days on, among others, Russian banks and energy companies. The act would mandate that sanctions be imposed on two or more of the following Russian banks: Sberbank, VTB Bank, Gazprombank, Vnesheconombank and Rosselkhozbank. It also would order the prohibition of all transactions subject to U.S. jurisdiction in Russian sovereign debt, Russian government bonds and the debt of any entity owned or controlled by Russia’s government.

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Very-long-time Automatic Earth friend John Rubino has a series of reasons why politics matter.

Maybe Politics Matters After All (John Rubino)

Looking strictly at the numbers it’s hard to work up much interest in whether Republicans or Democrats are in charge after 2020. Either way, trillion-dollar deficits and extremely easy money are guaranteed, which means the US – along with most of the rest of the world – will fall off a financial cliff shortly. After that, the only non-financial issue that will matter is war – and both parties seem about equally bloodthirsty these days. However, after the November congressional elections — in which Democrats with, ahem, assertive ideas and attitudes did extremely well — proposing big, potentially transformative change now looks like the best way to cut through the media clutter and gain a following.

So the Democrat base has lost its fear of the “S” word and is now embracing a list of policies that are designed to lock in their dominance for a generation, but which carry myriad unintended consequences. If the Dems were in charge today, there’s a good chance that they would: Make Washington D.C. a state This is a no-brainer for Democrats. Since DC voters skew liberal (no surprise for people who by and large work for the government), making it a state adds two guaranteed votes in the Senate and several solid votes in the House. That alone might be enough to tip the balance on many votes.

[..] The math of elector apportionment gives more per-capita clout to small states as a way of protecting them from the whims of the large. Without this advantage, according to fans of the Electoral College, candidates would ignore Wyoming and Rhode Island and spend all their time in population centers like Los Angeles and Dallas. Subsequent governments would favor big states over small; good luck to Nevada if it has a water dispute with California. In short, without the Electoral College, flyover country is toast. But with the Electoral College it’s possible to win the most votes and still lose the election, as has happened a couple of times recently to the Dems. As the following chart shows, a majority of Democrats would abolish the College while Republicans would keep it.

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The City sees itself as immune.

Economist: Brexit Will Happen And Trump Fans Are ‘Economically Illiterate’ (FN)

The received wisdom within the City is that Brexit will cause widespread disruption to the Square Mile. But according to Dr Savvas Savouri, chief economist at Toscafund Asset Management, the $4bn London-based investment firm, so great is the extent of foreign investment in UK companies that leaving the EU carries no risk for the City at all. In an interview with Financial News at Toscafund’s Covent Garden office, when asked what is the biggest risk posed by Brexit to London’s finance industry, the abrasive and outspoken economist replied: “Nothing. The whole point about Brexit is there’s too much insurable interest in the UK across Europe for it to fail [for the UK and the EU not to form an agreement]. Ireland would go into immediate deep recession, so would Spain, Malta, Greece and Cyprus.”


An IMF study in August estimated that a scenario where the UK leaves the customs union and single market, and trades with the EU on WTO terms — an orderly version of a no-deal Brexit — would impose long-term costs on Ireland of 4% of output, and between 0.2% and 0.5% on countries such as Spain and Greece. Economists have warned that a disorderly Brexit would likely hit such countries even harder. “They know a bad Brexit would undermine the pound, a currency in which they have large holdings,” Savouri said. Warming to his theme, he added that the lack of short interest in European stocks exposed to the UK suggests investors are not particularly worried about a crash-out Brexit. “The people in finance who tell you they’re worrying about Brexit are not putting their money where their mouth is.”

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The most dangerous majority on earth.

UK MPs Back Brexit Delay Bill By One Vote (BBC)

MPs have voted by a majority of one to force the prime minister to ask for an extension to the Brexit process, in a bid to avoid any no-deal scenario. Labour’s Yvette Cooper led the move, which the Commons passed in one day. The bill will need Lords approval to become law, while it is the EU who decides whether to grant an extension. It comes as talks between Prime Minister Theresa May and Labour leader Jeremy Corbyn to end the Brexit deadlock are set to continue. Discussions between the two leaders on Wednesday were described as “constructive”, but were criticised by MPs in both parties.


Meanwhile, Chancellor Philip Hammond has suggested that he expects Brussels to insist on a lengthy delay to Brexit and described a public vote to approve any final deal as “a perfectly credible proposition”. Ms Cooper’s attempts to prevent a no-deal departure from the EU passed by 313 votes to 312. The draft legislation by the former Labour minister would force the prime minister to ask the EU for an extension to the Article 50 process beyond 12 April and would give Parliament the power to decide the length of this delay.

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Yup. They voted down No Deal again, and the press keeps talking about what happens under a No Deal.

No Deal Brexit Measures Needed To Keep Planes In Air And Troops On Ground (G.)

Cabinet ministers were told they must agree emergency contingency plans to keep planes flying to North America and Australia, as well as keeping British troops legally in Bosnia, in case the EU forces a no-deal exit. Before their marathon cabinet meeting on Tuesday, the cabinet secretary, Sir Mark Sedwill, briefed ministers that major security and commercial decisions would need to be completed if Brussels rejected Theresa May’s plan to ask for a short extension to article 50. A cabinet source said the decisions were likely to result in large costs to the taxpayer and that decisions would also need to be taken on direct rule in Northern Ireland and payment of the UK’s £39bn divorce bill to the EU.

Among the decisions outlined in a 14-page document handed to ministers in Downing Street were: • New agreements would be required for air services with Canada, the US and Australia. • British troops in Bosnia currently serving as part of an EU force would need to be placed under Nato command. • Negotiations would need to be urgently completed on a future fisheries agreement so that EU fishing boats could be expelled from British waters. Sedwill, the UK’s highest-ranking civil servant, is said to have warned cabinet ministers that some of the biggest decisions were likely to be very difficult to reverse, because they involved international agreements.

The warnings from Sedwill, who is also May’s national security adviser, follow an earlier letter he wrote to ministers warning that no deal would lead to food price rises and a reduction in security capacity. The 14-page leaked letter, obtained on Monday by the Daily Mail, said no deal would result in the reintroduction of direct rule in Northern Ireland. Sedwill also warned that the UK would face a recession “more harmful” than the 2008 financial crisis and that food prices could increase by up to 10%. He wrote that it was possible that the government would come under pressure to bail out companies facing collapse due to the barriers to trade with the EU and that security services and police would face a reduction in their capabilities.

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May would be done if she’d give in.

Top Labour Figures Demand Corbyn Secure Referendum (Ind.)

Labour is on the brink of a major bust-up if Jeremy Corbyn fails to demand a second referendum as the price for any Brexit deal struck with Theresa May. A string of senior figures – including shadow foreign secretary Emily Thornberry – believe securing a public vote is an absolute must, while 11 MPs, including four frontbenchers, have written an open letter to Mr Corbyn in The Independent saying “it would be untenable for Labour not to insist” on one. As Mr Corbyn was in the prime minister’s office holding the talks, one of his party’s biggest trade union backers also endorsed a motion calling for a confirmatory referendum on any deal.


But key individuals on the Labour side of the talks indicated a new vote may not be one of his asks, with one shadow cabinet member attending having stated hours earlier that a deal endorsed by the party would not need a referendum. It comes despite Labour, and indeed Mr Corbyn himself, backing a motion in the House of Commons days ago which called for a referendum on any Brexit plan passed by parliament.

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Yeah, we really trust the IMF in everything they say.

IMF Warns That Tech Giants Stifle Innovation And Threaten Stability (G.)

The International Monetary Fund has warned that the market power exercised by a small number of global companies threatens to stifle innovation and make it harder for central banks to deal with recessions. Adding its contribution to the growing public debate about the corporate power exercised by the US tech giants such as Google, Amazon, Apple and Facebook, the IMF said it would be concerned if there was any further increase in the clout of already dominant firms. The IMF said there was a need for stronger competition policy to ensure that established firms did not block the entry of potential rivals and called for excess profits to be targeted by a tougher international tax regime.

Although the study contained in the IMF’s forthcoming World Economic Outlook (WEO) did not mention any company by name, it said the past two decades had seen the concentration of market power among a small number of productive and innovative firms. Market concentrations tended to be higher in the US than in Europe, the IMF said, and in part reflected the growth of firms that exploited intangible assets. “Over the past two decades, a generally moderate but broad-based rise in corporate market power has been observed across advanced economies, driven primarily by a small fraction of firms.”

The chapter from the WEO noted that the big-picture economic implications of the trend had so far been “rather modest” and that the impact of rising market power on innovation had so far been positive. But the IMF said impact would become “increasingly negative if the market power of high mark-up firms, in particular, were to continue to rise in the future.”

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Just a cycle?!

Next Phase in Trucking Boom-Bust Cycle Has Started (WS)

This is one of the most cyclical industries, with legendary boom-and-bust cycles: Orders for Class-8 trucks plunged 67% in March compared to March last year, to 15,200 orders, the lowest March for orders since 2010, according to FTR Transportation Intelligence. These are the heavy trucks that haul consumer goods, equipment, commodities, and supplies across the US. This plunge comes after orders had already plunged 58% year-over-year in February and January and 43% in December. The chart shows the percent change of Class-8 truck orders for each month compared to the same month a year earlier. The year-over-year collapse in orders over the past four months are of the same or greater magnitude as those during the last transportation recession in 2015 and 2016:

The recipients of these orders are the truck manufacturers Peterbuilt and Kenworth (divisions of Paccar); Navistar International; Freightliner and Western Star (divisions of Daimler); and Mack Trucks and Volvo Trucks (divisions of Volvo Group). The industry is notorious for over-ordering, which then, once these trucks are built, leads to overcapacity, at which point freight rates take a hit. Trucking companies see this coming and slash their orders in advance. Hence the bust that inevitably follows the boom. The last transportation recession in 2015 and 2016 led to waves of layoffs at truck and engine manufacturers. But at the moment, truck manufacturers are sitting on what was a historic backlog of orders dating from the phenomenal boom that peaked last August at 52,400 orders, as this chart of total monthly class-8 truck orders shows (data via FTR):

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Alastair’s starting to feel goal-seeked. Like many Belt&Road views.

‘Excluding Everything That Makes China What It Is’ (Crooke)

In the past few weeks, we have witnessed a mini ‘Belt & Road’ unfolding across the northern Middle East – linking Iran to Iraq, to Syria, and to Lebanon – a ‘Belt and Road’ that, it is envisaged, ultimately will be assimilated into China’s greater BRI project. And – as telling – Lebanon, the eternal weathervane for the Middle East wind direction, seems to be cutting a 500-year-old umbilical linking it to Rome and Europe, to look rather to Moscow (to protect the regions’ Christians, to get its Syrian refugees home to Syria, and to move under President Putin’s protective ‘wing’ in preventing Bolton and Netanyahu from detonating chaos on their patch) – and to China.

More recently, the New Silk Road infrastructure initiative landed squarely in Italy, potentially giving some real substance (i.e. infrastructure) – especially in the case of Sicily – to the notion of a Mediterranean commonality. Both these events are linked by a single motive: How to return autonomy to these states; how to recover at least a modicum of decision-making – and to break free from the strait-jacket of economic stagnation, and the deadweight of stale political shackles. As Christina Lin has noted: “China for one takes the view that security follows economic development, and has made it clear that reconstruction comes before political settlement. It is adopting a regional approach to the Levant and now views Lebanon as a platform for reconstruction in Syria and Iraq”.

[..] Both Italy and the Levant are ‘civilisation-states’ in their own right. They do not need the EU ‘brand’ to reassure them of their status as ‘civilisation-states’. As Lebanon’s former Minister of Economy noted last year, China doesn’t “look at Lebanon as a small country of 4 million citizens, but as a country with huge potential given its geographical location”. The point here is precisely that ‘the West’ is no longer the West. There is the belligerent ‘West’ of Trump, Pence, Bolton and Pompeo – and this is the ‘West’ that is incrementally losing traction across the Middle East, and beyond.

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Feb 102019
 
 February 10, 2019  Posted by at 11:32 am Finance Tagged with: , , , , , , , , , ,  6 Responses »


Vincent van Gogh On the outskirts of Paris near Montmartre 1887

 

More Violence In Paris As Gilet Jaunes Protests Enter 13th Weekend (R.)
‘Macron Unleashed Violence Against Yellow Vests, Each Casualty Is On Him’ (RT)
Italy Saves Europe’s Dignity Over US Bullying Of Venezuela (ZH)
Plan To End Brexit Deadlock: Back May’s Deal, Then Hold People’s Vote (G.)
UK Cancels Brexit Ferry Contract Awarded To Firm With No Ferries (PA)
250 UK Firms Discuss Moving To Netherlands (G.)
Why The Sickly Ugly Sisters Of UK Politics Deserve To Suffer The Splits (G.)
MSM Fall in Lockstep for Cheap Trump/Rubio Venezuela Aid PR Stunt (Fair)
IMF Chief Lagarde Warns Of High Arab Public Debt (AFP)
Trump’s World Bank Pick, An Ally For The Lender’s Critics? (AFP)
Catalan Separatists Trial To Start: Not Just Legal Battle, Media One Too (AFP)
Carmageddon for Tesla Model 3: US Deliveries Plunge 55% to 60% (WS)

 

 

Another Sunday of looking in vain for Yellow Vests articles in the western media.

Best detail: the house of Macron’s leader of the National Assembly was attacked. Nobody knows who, nobody knows why. Yellow Vests? Who knows.

Well, Little Napoleon knows, apparently: “Nothing justifies intimidations and violence towards an elected official of the Republic..”

On the other hand, intimidations and violence towards his own people is fine. Gory photos galore of another guy who lost most of one of his hands to a police grenade.

More Violence In Paris As Gilet Jaunes Protests Enter 13th Weekend (R.)

Thousands of French gilets jaunes (yellow vests) demonstrators marched on Saturdayin what was their 13th weekend of action. There were scuffles in Paris and a demonstrator’s hand was mangled by a small explosive. There was also an overnight arson attack on the Brittany residence of the National Assembly head, Richard Ferrand, though no immediate link was made to the actions against President Emmanuel Macron. The demonstrations, named for high-visibility jackets worn by the protesters, began in mid-November over fuel taxes. They have since broadened into a more general revolt against a political class they view as out of touch with common people. In Paris, several thousand people marched on Saturday beside symbols of power such as the National Assembly and Senate.

The demonstrations were mainly peaceful, but some protesters threw objects at security forces, a scooter and a police van were set on fire and some shop windows were smashed. One participant’s hand was severely injured when he tried to pick up a so-called “sting-ball grenade” used by police to disperse crowds with teargas, a police source told Reuters. [..] Politicians from across the spectrum condemned the arson attack on the home of Ferrand, a close ally of Macron and president of parliament’s lower house. He published pictures on Twitter of a scorched living room, saying police found materials soaked in fuel. Ferrand said criminal intent was the likely cause, although the perpetrators’ identity was unclear. “Nothing justifies intimidations and violence towards an elected official of the Republic,” Macron tweeted in relation to the incident.

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Strong against the weak, and weak against the strong. Does Macron want to fight Onfray?

“Macron is trying to explain that there is not enough liberalist Europe in our lives, while the Gilets Jaunes are saying back to him that there is too much – not too much Europe, but too much liberalism.”

‘Macron Unleashed Violence Against Yellow Vests, Each Casualty Is On Him’ (RT)

One of France’s foremost public intellectuals has posted a 4,000-word screed exposing collusion between “the brute” Emmanuel Macron and the mainstream media to put down the Gilets Jaunes, all while blaming them for the violence. “Emmanuel Macron has chosen not to maintain order, but to suppress public protest,” writes Michel Onfray in his blog, in an attempt at a definitive account of the protests that have gripped France since November. “Intentionally, the president did not restrain the violence of protesters, and unleashed it on the part of the authorities. As the head of state, he carries responsibility for choosing repressive measures, so every single injury sustained is on him.” A household name in France, Onfray is the author of over 100 books on subjects ranging from philosophy to religion to politics, many of them non-fiction bestsellers.

He is also the founder of a tuition-free private university in Caen, which is part-funded by his publications. He is one of the most respected figures to try to give an overview of the crisis that goes beyond headlines and political allegiances. Onfray writes that the protest did not begin as a “peasants’ revolt of disgruntled right-wingers” refusing to pay an environmental fuel tax – as it is being portrayed by newspapers – but was simply a result of ordinary Frenchmen saying, “We cannot pay!” Instead of listening, however, Macron decided to escalate the conflict “using it for his own benefits, and the interests of the Maastricht camp [the pro-EU establishment].” The philosopher, who has previously aligned with leftist movements, details six “symbolic slaps” the president dealt out to the protesters, in addition to the physical violence they suffered in their weekly clashes during the demonstrations.

Onfray sees the roots of the problem in the “liberal Maastricht state” created in 1992 with the establishment of the European Union, “to promoting which Macron has dedicated his entire short adult life.” “This is an order that is strong against the week, as we can see on the streets, and weak against the strong, as is evident from the abolition of the wealth tax and the failure to root out tax havens,” writes the 60-year-old Onfray. “Macron is trying to explain that there is not enough liberalist Europe in our lives, while the Gilets Jaunes are saying back to him that there is too much – not too much Europe, but too much liberalism.” The Maastricht state is “cruel to those who carry the burdens of globalization” and “simply by declaring their poverty, these people have been ideologically criminalized.”


©Reuters/Gonzalo Fuentes

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The EU cares a whole lot more about Macron than about its dignity. Perhaps it should rethink that before it’s too late.

Italy Saves Europe’s Dignity Over US Bullying Of Venezuela (ZH)

The row between France and Italy is but the latest in a long-running spat between French President Emmanuel Macron and the newly elected coalition government in Rome. The Italian government is an unlikely coalition between the left-leaning Five Star Movement (5SM) and a rightwing party, La Lega (The League). Both parties are highly critical of the EU establishment and neoliberal capitalist polices which France’s former Rothschild banker-turned-president Macron embodies. Rome has also slammed France for its responsibility in fomenting massive immigration problems for Europe and Italy in particular through Paris’ criminal military interventions, along with the US and other NATO powers, in the Middle East and North Africa.

Things came to a head this week when it emerged that Italian deputy Prime Minister Luigi Di Maio (and 5SM leader) had met with members of the Yellow Vest protest movement in France. The Yellow Vest movement has been holding nationwide demonstrations for the past 12 weeks protesting against Macron’s economic policies and what they call his elitist style of government. Di Maio and the other Italian deputy premier Matteo Salvini (leader of The League) have been openly supporting the French protesters, whom they identify with as part of a popular revolt across Europe against neoliberal austerity.

Reacting to reports of Italian government contact with the French protesters, France’s Foreign Minister Jean-Yves Le Drian said it was “outrageous interference” in his country’s internal affairs. The row has further escalated after France recalled its ambassador from Rome. The last time that happened was in 1940 during the Second World War. This is a major breakdown in relations between two of the EU’s founding members. Here is where the irony descends into farce. France is blustering with rage at Italy’s alleged meddling in its sovereign affairs while at the very same time the French government is party to an international effort led by the US to bring about regime change in Venezuela. The hypocritical arrogance is priceless.

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The revolutionary new plan among MPs from both sides: Vote for May’s deal, and then let the people vote it down. That way, whatever happens is not your fault.

Plan To End Brexit Deadlock: Back May’s Deal, Then Hold People’s Vote (G.)

Theresa May could win parliament’s approval for her controversial Brexit deal in return for guaranteeing another referendum, under a new plan being drawn up by a cross-party group of MPs. The new vote would give the British people a simple choice: to confirm the decision or stay in the EU. The initiative, aimed at breaking the political impasse, is being advanced by Labour MPs Peter Kyle and Phil Wilson and has won the support of prominent Remainers in the Tory party including Sarah Wollaston, Dominic Grieve and Anna Soubry. Kyle says the idea, which is likely to be put forward as an amendment to the EU withdrawal bill, is also being taken seriously by “people at a high level in government” as a potential way to resolve the Brexit crisis.

The amendment would offer all MPs the chance to support, or abstain on, the withdrawal bill and would specify that, if passed, the decision would be implemented on the condition it was put to the public for approval in a second referendum. If the amendment passed through parliament but the deal was rejected in the subsequent referendum, the UK would stay in the EU under current arrangements. If, however, the British people confirmed the decision of MPs to leave the EU under the terms of May’s deal, Brexit on these terms would immediately come into effect without any need for it to return to parliament.

“The beauty of this plan is that it holds attractions for both Leavers and Remainers. For Leavers, if the deal is confirmed by the British people, it offers a definitive end to the withdrawal process with Brexit sealed once and for all. For Remainers, on the other hand, it offers the chance to make the case to stay in the EU to the public, based on facts not promises as before,” said Kyle.“Remainers could vote for May’s deal, or abstain, even though they might not like it, in the knowledge that they could campaign against it later in the referendum. “The key is that Labour and Tory MPs could choose their own way of allowing the bill to pass, yet both will still be able to campaign in the referendum for their real objectives and their principles will remain intact,” he added.

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These clowns are paid generous salaries to make these decisions. May that’s a good place to start.

UK Cancels Brexit Ferry Contract Awarded To Firm With No Ferries (PA)

A controversial no-deal Brexit ferry contract awarded to a firm with no ships has been cancelled by the UK’s department for transport. Transport secretary Chris Grayling’s decision to award Seaborne Freight a contract worth £13.8 million (€15.7 million) had attracted widespread criticism. The department said it had decided to terminate the contract after Irish company Arklow Shipping, which had backed Seaborne Freight, stepped away from the deal. A department of transport spokeswoman said: “Following the decision of Seaborne Freight’s backer, Arklow Shipping, to step back from the deal, it became clear Seaborne would not reach its contractual requirements with the government. We have therefore decided to terminate our agreement.

“The government is already in advanced talks with a number of companies to secure additional freight capacity — including through the port of Ramsgate — in the event of a no-deal Brexit.” Mr Grayling last month defended the Seaborne Freight contract, insisting it was “not a risk”. It was one of three firms awarded contracts totalling £108 million (€123 million) in late December to lay on additional crossings to ease the pressure on Dover when Britain leaves the EU, despite having never run a Channel service. The department said it had been Arklow Shipping’s backing that gave it confidence in the viability of the deal, and that it stands by the robust due diligence carried out on Seaborne Freight.

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How close Brexit is getting. 47 days. A Bloomberg headline this morning says it all:

“Cargo ships are about to set sail from Britain for Asia, the Middle East and Africa, but their goods will arrive in an uncertain post-Brexit world.”

250 UK Firms Discuss Moving To Netherlands (G.)

The Dutch government has said it is in talks with more than 250 companies about moving their operations from the UK to the Netherlands before Brexit. The economic affairs ministry said it had lured 42 companies or branch offices and 1,923 jobs from the UK last year, as it increases its efforts to gain Brexit business. Among those who have chosen to invest in the Netherlands are the Discovery Channel, Sony and Bloomberg. Sony announced last month it was moving its European headquarters to Amsterdam, as companies in the UK continue to progress with contingency plans. Its rival Panasonic has already moved to the Dutch capital.

The government report said another Japanese company, the investment bank Norinchukin, was also moving to Amsterdam, along with the global content company TVT Media, the financial services providers MarketAxess and Azimo, and the maritime insurer UK P&I Club. While Mark Rutte, the Dutch prime minister, recently said he did not see Brexit as a business opportunity, countries including Ireland, France, Germany, Belgium and Luxembourg have been actively looking for opportunities to capitalise on Brexit ever since the EU referendum. Banks and other financial services are obliged to have operations in a member state if they want to serve a pan-EU market, while broadcasters who transmit across the EU need to have a licence in one member state to meet regulations.

The BBC is considering setting up an international base in Belgium. The Dutch economic affairs ministry said: “In 2019, several companies including Discovery and Bloomberg have already announced their intention to invest in the Netherlands because of Brexit. “Additionally, the Netherlands foreign investment agency is talking with more than 250 foreign companies considering setting up operations in the Netherlands following Brexit.” Most of the 250 companies were British, but some were American or Asian firms reconsidering their European branch structures, the report said.

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Oh Christ, Britons who think this is a British issue. Lord have patience.

Why The Sickly Ugly Sisters Of UK Politics Deserve To Suffer The Splits (G.)

If they did not exist, would we invent them? Given the chance to start from scratch, would Britain regard the Conservative and Labour parties, the two old and ugly sisters of our politics, as the best we can do? Are they fit for the purpose of representing and reconciling the diversity of opinions in a modern and complex country? And for offering it a choice of decent governments? A growing number of us have been saying not and for a long time. Even before Brexit split both parties and scrambled voter allegiances, much of the electorate was expressing its dissatisfaction with the big two. The Tories have not won a solid parliamentary majority since 1987.

The last Labour leader who was not called Tony Blair to secure a healthy Commons majority was Harold Wilson in 1966. The number of voters who enthusiastically identify as red or blue has been in long-term decline. Party membership has also been shrivelling. The Tories, who once boasted that they were a million strong, bump along at around 100,000. Labour enjoyed a trend-defying surge in its membership during the Ohhh Jeremy Corbyn phase of his leadership, but that is going downhill as the magical uncle turns out not to be so wondrous after all. It is true that the big two can still gather up a lot of votes. After decades of decline in their combined vote share, it blipped up at the last election.

But I don’t think that truly indicated renewed enthusiasm for either of them. It was a false positive induced by an electoral system that compels many voters to make a forced choice between the unappetising and the inedible. It doesn’t mean that these nose-holding voters like what’s put before them. The current choice on offer is so disdained that, when pollsters ask who would make best prime minister, Theresa May and Jeremy Corbyn are regularly beaten into second and third place by Neither. More than half of the electorate say their views are not properly represented by the existing political parties.

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No, you got that really really wrong, they didn’t fall for anything, they are an integral part of the process.

MSM Fall in Lockstep for Cheap Trump/Rubio Venezuela Aid PR Stunt (Fair)

The Trump administration’s now completely overt effort to overthrow Venezuelan President Nicolás Maduro had a very successful public relations effort this week, as major Western media outlets uniformly echoed its simplistic, pre-packaged claim that the Venezuelan government was heartlessly withholding foreign aid. All of the articles—and scores more like it—repeated the same script: Maduro was blocking aid from the US “out of refusal to relinquish power,” preferring to starve “his own people” rather than feed them. It’s a simple case of good and evil—of a tyrannical, paranoid dictator not letting in aid to feed a starving population.

Except three pieces of key context are missing. Context that, when presented to a neutral observer, would severely undermine the cartoonish narrative being advanced by US media. 1) Both the Red Cross and UN warned the US not to engage in this aid PR stunt. 2) The bridge in question is a visual metaphor contrived by the Trump administration of little practical relevance. 3) The person in charge of US operations in Venezuela has a history of using aid as a cover to deliver weapons to right-wing mercenaries. (1) Not only has the international aid community not asked for the “aid,” earlier this week, both the International Red Cross and United Nations warned the US to explicitly not engage in these types of PR stunts. As Washington Post contributor Vincent Bevins pointed out, the transparent cynicism of these efforts was preemptively warned about by the groups actually charged with keeping starving people fed.

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“..oil producing countries should look to renewable energy in the coming decades..”

IMF Chief Lagarde Warns Of High Arab Public Debt (AFP)

Public debt has rapidly increased in many Arab countries since the 2008 global financial crisis, due to persistently high budget deficits, the International Monetary Fund warned Saturday. “Unfortunately, the region has yet to fully recover from the global financial crisis and other big economic dislocations over the past decade,” IMF Managing Director Christine Lagarde said. “Among oil importers, (economic) growth has picked up, but it is still below pre-crisis levels,” she told the Arab Fiscal Forum in Dubai. Lagarde said public debt among Arab oil importing nations had increased from 64 percent to 85 percent of GDP in the decade since 2008.

Nearly half of these countries now have public debt of over 90 percent of GDP, she said. Public debt among oil exporters — including the six-nation Gulf Cooperation Council – rose from 13 percent of GDP to 33 percent of GDP, accelerated by the crash in oil prices around five years ago, Lagarde said. “The oil exporters have not fully recovered from the dramatic oil price shock of 2014,” she said. “Modest growth continues, but the outlook is highly uncertain.” Lagarde said oil producing countries should look to renewable energy in the coming decades, in line with the Paris Agreement on climate change, which stipulates a reduction in greenhouse emissions.

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Ironically, the World Bank is a facade for US rule.

Pelosi manages to utter that “Trump’s choice threatens to “undermine the institution’s mission.” An institution whose funds “internal audits and outside reports have tied to forced labor in Uzbekistan, death squads in Honduras and a Chadian oil pipeline that enriched the undemocratic local government all while child mortality rose..” Thanks, Nancy.

Trump’s World Bank Pick, An Ally For The Lender’s Critics? (AFP)

President Donald Trump’s choice to lead the World Bank is a firebrand critic of the world’s largest anti-poverty lender – an institution he has called wasteful, corrupt and overly generous to China. Those complaints are similar to those voiced by others in the development community. But that does not mean they have found a new ally in David Malpass, the senior US Treasury official who has pledged to reform the bank. Nancy Pelosi, the newly reinstalled Democratic speaker of the US House of Representatives, says Trump’s choice threatens to “undermine the institution’s mission.” And Liberia’s former minister of public works W. Gyude Moore tweeted that “an incorrigible arsonist will now be our fire chief.”

Malpass’ many criticisms of the Washington-based lender certainly echo familiar refrains. Many activists have long called for reforms at the World Bank, citing a litany of alleged human rights failures and scandals, and saying projects all too often left the world’s poorest even worse off, harmed the environment or entrenched the power of oligarchies and despots. Those critics might well have nodded their heads in accord in 2017 when Malpass said international financial institutions such as the World Bank “spend a lot of money” but are “not very efficient.” “They are often corrupt in their lending practices and they don’t get the benefit to the actual people in the countries,” he said in congressional testimony.

Internal audits and outside reports have tied World Bank funds to forced labor in Uzbekistan, death squads in Honduras and a Chadian oil pipeline that enriched the undemocratic local government all while child mortality rose, to name just a few examples.

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Spain went from right-wing to socialist government, and nothing changed. A familiar global pattern.

Catalan Separatists Trial To Start: Not Just Legal Battle, Media One Too (AFP)

The trial on Tuesday of 12 Catalan leaders over their role in Catalonia’s failed independence bid will be fought between Madrid and the separatists in the international media as much as in the courtroom. “We have to use this trial as a tool of denunciation, use it in our goal to make Catalonia independent,” the head of influential grassroots separatist group ANC, Elisenda Paluzie, said before the start of the trial at Spain’s Supreme Court on February 12. The separatists who govern the wealthy northeastern region have for years tried to convince the world of the legitimacy of their cause and make the case that Spain lacks political freedoms. But with over 600 journalists from 150 media outlets from around the world accredited to cover the trial, Spain’s central government does not want to remain on the sidelines.

The arrival in power in June of Socialist Prime Minister Pedro Sanchez marked a change in Madrid’s strategy. The previous conservative government of Mariano Rajoy was largely passive in the face of the separatists’ international campaign. But Sanchez’s Foreign Minister Josep Borrell – a Catalan who fiercely opposes independence – and his team spare no efforts to refute their arguments. “We are starting a completely different chapter,” the Global Spain spokesman said, adding the posture of the Rajoy government had “a very high cost in terms of misinformation”.

Officials from Spain’s justice ministry and the Supreme Court also met with foreign correspondents based in Madrid before the trial. And on Thursday Sanchez defended Spain’s judiciary during a visit to the Council of Europe and the European Court of Human Rights in Strasbourg in France. Many separatists are convinced that their leaders were jailed for political reasons and will not have a fair trial. And they see the central government’s public relations push as proof of this. “If the Spanish government is forced to carry out a campaign of marketing and misinformation, that means they feel insecure,” Alfred Bosch, in charge of foreign affairs in Catalonia’s regional government, said during a recent visit to London.

The Catalan government will respond to Madrid’s campaign by explaining “the truth….about a trial which is a political trial” and ease the work for foreign journalists and observers so they “reach their own conclusions”, he added. Catalonia’s public television will offer coverage of the trial in English to give it an “international dimension”. Grassroots separatist organisations ANC and Omnium Cultural are preparing their own information campaigns targeting an international audience which include videos made in several languages and meetings in cities across Europe. The lawyers of several of the defendants, who face long prison sentences if convicted, have demanded the presence of international observers at the trial. But the request was turned down by the Supreme Court..

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What did Elon say, there’s lots of interest but people can’t afford Tesla’s?!

Carmageddon for Tesla Model 3: US Deliveries Plunge 55% to 60% (WS)

Details trickling out over the 3,200-plus layoffs Tesla announced on January 18 are starting to paint a picture of what is happening on the demand side for the Model 3 in the US. According to two laid-off employees cited by Reuters, the company has gutted its delivery team of 230 people at its Las Vegas facility that delivered tens of thousands of Model 3s to buyers mostly in the US but also in Canada. About 150 of the 230 employees on the team have been let go, the two sources said who were among those let go, as the company struggles with deliveries that have plunged from the pace in the fourth quarter last year.

The federal tax credit of $7,500 was cut in half to $3,750 at the beginning of the year after Tesla’s EV sales rose past the 200,000-threshold in 2018. Yet the $35,000 Model 3 that CEO Elon Musk promised in 2016 remains a distant promise. The company already slashed its Model 3 price twice this year to stimulate demand, yet the least expensive Model 3 still has a price tag of $42,900. “There are not enough deliveries,” one of the laid-off employees told Reuters. “You don’t need a team because there are not that many cars coming through.”

The two laid-off employees said that in the first quarter, delivery targets for North America – mostly buyers in the US but also in Canada – are down 55% to 60% from what they were in Q4 2018. After a herculean effort late last year, Tesla delivered 145,610 Model 3s in 2018, all of them high-priced luxury versions. During this effort to deliver as many Model 3s as possible while the full federal tax credit of $7,500 was still in effect, the reservation list was “plucked clean” of American buyers “willing to pay current prices,” as Reuters put it, citing those two laid-off employees on the delivery team.

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Feb 092019
 
 February 9, 2019  Posted by at 11:03 am Finance Tagged with: , , , , , , , , , , , , , ,  5 Responses »


Pablo Picasso Le pigeon aux petits pois (Pigeon with Peas) – stolen May 20 2010 1911

 

German Industrial Production Falls Most Since 2009. New Orders Plummet (WS)
Fed’s QE Unwind Reaches $434 Billion, Remains on “Autopilot” (WS)
UK Forcing Poor Nations Into Risky Post-Brexit Trade Deals (Ind.)
Acting AG Whitaker Says He Has Not Meddled In Russia Inquiry (AP)
US Faces A Catastrophic Food Supply Crisis, As Farmers Struggle (SHTF)
The State of the American Debt Slaves, Q4 2018 (WS)
Bezos, Amazon And Privacy (Greenwald)
Leaked Wikileaks Doc Reveals US Military Use of IMF, World Bank (MPN)
Venezuela: The US’s 68th Regime Change Disaster (AntiWar)
US In Direct Contact With Venezuelan Military, Urging Defections (R.)
Venezuela’s Maduro Spurns US Aid, Rival Warns Military Not To Block It (R.)
Dreams Die Hard (Kunstler)
Wiped Out Before Our Eyes’ Hawaii Proposes Ban On Shark Killings (G.)

 

 

Almost off the news radar, Germany’s problems get serious, and drag Europe down with it.

German Industrial Production Falls Most Since 2009. New Orders Plummet (WS)

“Unexpectedly,” German industrial production fell 3.9% in December 2018 compared to December 2017, after having fallen by a revised 4.0% in November, according to German statistics agency Destatis Thursday morning. These two drops were steepest year-over-year drops since 2009. Even during the European Debt Crisis in 2011 and 2012 – it hit Germany’s industry hard as many European countries weaved in and out of a recession, with some countries sinking into a depression — German industrial production never fell as fast on a year-over-year basis as in November and December:

The declines on a year-over-year basis were broad: Without construction, industrial production fell 3.9% year-over-year in December, after having fallen 4.5% in November. And just manufacturing production, which includes mining and quarrying, fell 4.0% year-over-year in December, after having fallen 4.6% in November. On a longer-term scale, the industrial production index peaked in May 2018 and has since fallen 4.6%. It is now back where it had first been in February 2017:

And industrial production is not getting a whole lot better any time soon as new orders for the manufacturing sector have plunged – according to data released by Destatis on Wednesday. New orders dropped 7.0% year-over-year in December (adjusted for calendar differences), after having fallen 3.4% in November and 3.0% in October. In fact, orders have fallen seven months in a row on a year-over year basis in ever larger drops. The chart below shows the decline in each month compared to the same month a year earlier — with a sharp deterioration at the end of the year:

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As I’ve said before, tweaking rates is sort of an instant measure, but re-purchasing $434 billion in assets takes much longer. If only because the Fed will cause a panic if they try.

Fed’s QE Unwind Reaches $434 Billion, Remains on “Autopilot” (WS)

The Fed shed $32 billion in assets in January, according to the Fed’s balance sheet for the week ended February 6, released this afternoon. This reduced the assets on its balance sheet to $4,026 billion, the lowest since January 2014. Since the beginning of this “balance sheet normalization,” the Fed has now shed $434 billion.

[..] the questions going forward are these: One, will the Fed continue to trim its balance sheet on “autopilot,” or will it deviate from plan and slow or stop the balance sheet reductions; Or two, will the Fed reverse course and restart QE all over again at any moment now, as the biggest Wall Street hype-mongers have prophesied; Or three, will the Fed tweak the roll-off – as a slew of Fed governors have suggested – to where it would get rid of its MBS more quickly by outright selling them; and by replacing some of them with short-term Treasury bills to lower the balance sheet’s average maturity, which currently is over eight years.

Over the next few months, the Fed will likely announce some tantalizing tidbits about how it might tweak the balance-sheet reduction. One of those tidbits will likely relate to how it will shed MBS faster and replace those additional reductions of MBS with short-term Treasury bills. The effects of this may not be what the markets had hoped for in their wildest dreams. And the Fed will likely dole out more clues about how much further it wants to cut its balance sheet. But all this will take months, and until those tweaks are nailed down and announced, the balance sheet normalization will proceed on autopilot at its by now customary glacial pace.

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Dreams of empire. France does the exact same thing.

UK Forcing Poor Nations Into Risky Post-Brexit Trade Deals (Ind.)

Some of the world’s poorest countries are being forced to agree potentially damaging trade deals with the UK by government “threats” in the rush to Brexit, campaigners say. Liam Fox, the international trade secretary, is accused of piling pressure on developing nations to “sign up blind” – without knowing the value of the deals – with a warning they will otherwise be lost. Just three of the 40 agreements the UK enjoys through EU membership, covering 71 countries, have been successfully “rolled over” – as the government promised – with Brexit day just seven weeks away. Now the Department for International Trade is under fire for telling the countries concerned they risk punishing tariffs on crucial exports to the UK, unless they re-sign the deals in time.

Among them are Ghana, which relies on banana sales, Mauritius (tuna), Kenya (flowers), Cote d’Ivoire (cocoa), Namibia (grapes and beef), Swaziland (sugar), and scores of other developing countries in Africa, the Caribbean and Central America. And, says the fair trade charity Traidcraft Exchange, they risk a legal challenge at the World Trade Organisation (WTO) under an extraordinary plan to treat EU parts as originating from the UK. “The continuity agreements are being rushed because of the threat of no deal. Countries are being asked to sign up blind,” said Liz May, the charity’s head of policy.

“Without the full picture of how the EU and UK will trade in the future, it is impossible for countries to judge what these deals are really worth, how they will work in practice or even how some elements will be enforced. “Instead of acknowledging this difficulty, the government is relying on developing countries being compelled to sign up at the last minute, rather than risk high tariffs being slapped on their key exports. “This type of bad-faith negotiating – using implicit threats to get countries ‘over the line’ – is not a great way to start the UK’s independent trade policy.”

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“I’m thinking about maybe we just set up a popcorn machine in the back because that’s what this is becoming. It’s becoming a show..”

The Senate will vote on Barr next week anyway, so why the showboating carnival?

Acting AG Whitaker Says He Has Not Meddled In Russia Inquiry (AP)

The acting attorney general, Matthew Whitaker, said on Friday that he has “not interfered in any way” in the special counsel’s Russia investigation as he faced a contentious congressional hearing in his waning days on the job. The hearing before the House Judiciary Committee was the first, and likely only, chance for newly empowered Democrats in the majority to grill an attorney general they perceive as a Donald Trump loyalist, and whose appointment they suspect was aimed at suppressing investigations of the Republican president. Democrats confronted Whitaker on his past criticism of the special counsel Robert Mueller’s work and his refusal to recuse himself from overseeing it, attacked him over his prior business dealings, and sneeringly challenged his credentials as the country’s chief law enforcement officer.

“We’re all trying to figure out: who are you, where did you come from and how the heck did you become the head of the Department of Justice,” said congressman Hakeem Jeffries. When Whitaker tried to respond, the New York Democrat interrupted: “Mr Whitaker, that was a statement, not a question. I assume you know the difference.” Yet Democrats yielded no new information about the status of the Mueller invesetigation as Whitaker repeatedly refused to discuss conversations with the president or answer questions that he thought might reveal details. Though clearly exasperated – he drew gasps and chuckles when he told the committee chairman that his five-minute time limit for questions was up – Whitaker nonetheless sought to assuage Democratic concerns by insisting he had never discussed the Mueller probe with Trump or other White House officials, and that there’d been no change in its “overall management”.

“We have followed the special counsel’s regulations to a T,” Whitaker said. “There has been no event, no decision, that has required me to take any action, and I have not interfered in any way with the special counsel’s investigation.” Republicans made clear they viewed the hearing as pointless political grandstanding, especially since Whitaker may have less than a week left in the job, and some respected his wishes by asking questions about topics other than Mueller’s inquiry into potential coordination between Russia and the Trump campaign. The Senate is expected to vote as soon as next week on confirming William Barr, Trump’s pick for attorney general. “I’m thinking about maybe we just set up a popcorn machine in the back because that’s what this is becoming. It’s becoming a show,” said the Republican congressman Doug Collins ,of Georgia, who accused his Democratic colleagues of “character assassination”.

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The US food crisis is exclusively caused by Big Ag and Monsanto. Farmers depending on China is not in their interest.

US Faces A Catastrophic Food Supply Crisis, As Farmers Struggle (SHTF)

American farmers are battling several issues when it comes to producing our food. Regulated low prices, tariffs, and the inability to export have all cut into the salaries of farmers. They are officially in crisis mode, just like the United States’ food supply. “The farm economy’s in pretty tough shape,” said John Newton, chief economist at the American Farm Bureau Federation. “When you look out on the horizon of things to come, you start to see some cracks.” Average farm income has fallen to near 15-year lows under president Donald Trump’s policies, and in some areas of the country, farm bankruptcies are soaring. And with slightly higher interest rates, many don’t see borrowing more money as an option.

“A lot of farmers are going to give the president the benefit of the doubt, and have to date. But the longer the trade war goes on, the more that dynamic changes,” said Brian Kuehl, executive director of Farmers for Free Trade, according to Politico. With no end to the disastrous trade war in sight, many farmers have traveled to Washington to share their plights with the president himself hoping that he’ll end the trade war that’s exacerbating an already precarious food crisis. Farmers make up a fairly large chunk of president Trump’s base, and an unwillingness to put food production in the United States first could be detrimental for Trump reelection chances in 2020. It could also be the beginning of a catastrophic food shortage.

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“It’s a tough job, but someone’s got to do it: Propping up the massive US economy.”

The State of the American Debt Slaves, Q4 2018 (WS)

It’s a tough job, but someone’s got to do it: Propping up the massive US economy. And consumers are doing it, but in a somewhat lackadaisical manner when it comes to spending money they don’t have. Consumer debt – more enticingly, “consumer credit” similar to “extra credit” – rose 4.7% in the fourth quarter 2018 compared to the fourth quarter last year. In the year 2018, Americans added $179 billion to their balances on their credit cards, auto loans, and student loans. Every dime was spent and added to GDP. It amounted to nearly 1% of GDP. If GDP grew 3.1% in 2018, just under one third of the growth was generated by that additional consumer debt.

Without this additional consumer borrowing, if consumers had just maintained their debt levels, GDP growth might only have been 2.2% in 2018, instead of 3.1%. So, a huge round of applause is due our debt slaves that now owe over $4 trillion for the first time ever, according to the Federal Reserve Thursday afternoon. Consumer debt includes auto loans, student loans, credit-card debt, and personal loans, but it excludes housing related debt, such as mortgages and HELOCs. The $4.01 trillion in consumer debt is up 52% from the peak early in the Financial Crisis in Q3 2008. This is not adjusted for inflation. Over the same period, the Consumer Price Index rose 16% and nominal GDP rose 39%. Thus, Americans are sticking to their time-honored plan of out-borrowing both inflation (by a big margin) and economic growth.

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Summary: Trump accused of using the same FBI that spies on him, to spy on Bezos, who’s in bed with the FBI.

I may have temporarily lost the thread, and the logic.

Bezos, Amazon And Privacy (Greenwald)

On Thursday, Bezos published emails in which the Enquirer’s parent company explicitly threatened to publish intimate photographs of Bezos and his mistress, which were apparently exchanged between the two through their iPhones, unless Bezos agreed to a series of demands involving silence about the company’s conduct. [..] Despite a lack of evidence, MSNBC is already doing what it exists to do – implying with no evidence that Trump is to blame (in this case, by abusing the powers of the NSA or FBI to spy on Bezos). But, under the circumstances, those are legitimate questions to be probing (though responsible news agencies would wait for evidence before airing innuendo of that sort).

If Bezos were the political victim of surveillance state abuses, it would be scandalous and dangerous. It would also be deeply ironic. That’s because Amazon, the company that has made Bezos the planet’s richest human being, is a critical partner for the U.S. Government in building an ever-more invasive, militarized and sprawling surveillance state. Indeed, one of the largest components of Amazon’s business, and thus one of the most important sources of Bezos’ vast wealth and power, is working with the Pentagon and the NSA to empower the U.S. Government with more potent and more sophisticated weapons, including surveillance weapons.

In December, 2017, Amazon boasted that it had perfected new face-recognition software for crowds, which it called Rekognition. It explained that the product is intended, in large part, for use by governments and police forces around the world. The ACLU quickly warned that the product is “dangerous” and that Amazon “is actively helping governments deploy it.” “Powered by artificial intelligence,” wrote the ACLU, “Rekognition can identify, track, and analyze people in real time and recognize up to 100 people in a single image. It can quickly scan information it collects against databases featuring tens of millions of faces.” “Amazon’s Rekognition raises profound civil liberties and civil rights concerns.”

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The core of the Venezuela crisis: “Hugo Chávez, broke ties with the IMF and World Bank, which he noted were “dominated by US imperialism.” Instead Venezuela and other left-wing governments in Latin America worked together to co-found the Bank of the South..”

Leaked Wikileaks Doc Reveals US Military Use of IMF, World Bank (MPN)

In a leaked military manual on “unconventional warfare” recently highlighted by WikiLeaks, the U.S. Army states that major global financial institutions — such as the World Bank, IMF, and the OECD — are used as unconventional, financial “weapons in times of conflict up to and including large-scale general war,” as well as in leveraging “the policies and cooperation of state governments.” The document, officially titled “Field Manual (FM) 3-05.130, Army Special Operations Forces Unconventional Warfare” and originally written in September 2008, was recently highlighted by WikiLeaks on Twitter in light of recent events in Venezuela as well as the years-long, U.S.-led economic siege of that country through sanctions and other means of economic warfare. Though the document has generated new interest in recent days, it had originally been released by WikiLeaks in December 2008 and has been described as the military’s “regime change handbook.”

WikiLeaks’ recent tweets on the subject drew attention to a single section of the 248-page-long document, titled “Financial Instrument of U.S. National Power and Unconventional Warfare.” This section in particular notes that the U.S. government applies “unilateral and indirect financial power through persuasive influence to international and domestic financial institutions regarding availability and terms of loans, grants, or other financial assistance to foreign state and nonstate actors,” and specifically names the World Bank, IMF and the OECD, as well as the Bank for International Settlements (BIS), as “U.S. diplomatic-financial venues to accomplish” such goals.

[..] Given the close relationship between the U.S. government and these international financial institutions, it should come as little surprise that – in Venezuela – the U.S.-backed “interim president” Juan Guaidó – has already requested IMF funds, and thus IMF-controlled debt, to fund his parallel government. This is highly significant because it shows that top among Guaidó’s objectives, in addition to privatizing Venezuela’s massive oil reserves, is to again shackle the country to the U.S.-controlled debt machine. As the Grayzone Project recently noted: Venezuela’s previous elected socialist president, Hugo Chávez, broke ties with the IMF and World Bank, which he noted were “dominated by US imperialism.” Instead Venezuela and other left-wing governments in Latin America worked together to co-found the Bank of the South, as a counterbalance to the IMF and World Bank.”

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So many millions of victims nobody tries to count anymore.

Venezuela: The US’s 68th Regime Change Disaster (AntiWar)

In his masterpiece, Killing Hope: U.S. Military and C.I.A. Interventions Since World War II, William Blum, who died in December 2018, wrote chapter-length accounts of 55 US regime change operations against countries around the world, from China (1945-1960s) to Haiti (1986-1994). Noam Chomsky’s blurb on the back of the latest edition says simply, “Far and away the best book on the topic.” We agree. If you have not read it, please do. It will give you a clearer context for what is happening in Venezuela today, and a better understanding of the world you are living in. Since Killing Hope was published in 1995, the US has conducted at least 13 more regime change operations, several of which are still active: Yugoslavia; Afghanistan; Iraq; the 3rd US invasion of Haiti since WWII; Somalia; Honduras; Libya; Syria; Ukraine; Yemen; Iran; Nicaragua; and now Venezuela.

William Blum noted that the US generally prefers what its planners call “low intensity conflict” over full-scale wars. Only in periods of supreme overconfidence has it launched its most devastating and disastrous wars, from Korea and Vietnam to Afghanistan and Iraq. After its war of mass destruction in Iraq, the US reverted to “low intensity conflict” under Obama’s doctrine of covert and proxy war. Obama conducted even heavier bombing than Bush II, and deployed US special operations forces to 150 countries all over the world, but he made sure that nearly all the bleeding and dying was done by Afghans, Syrians, Iraqis, Somalis, Libyans, Ukrainians, Yemenis and others, not by Americans. What US planners mean by “low intensity conflict” is that it is less intense for Americans.

[..] While Venezuelans face poverty, preventable diseases, malnutrition and open threats of war by US officials, those same US officials and their corporate sponsors are looking at an almost irresistible gold mine if they can bring Venezuela to its knees: a fire sale of its oil industry to foreign oil companies and the privatization of many other sectors of its economy, from hydroelectric power plants to iron, aluminum and, yes, actual gold mines. This is not speculation. It is what the US’s new puppet, Juan Guaido, has reportedly promised his American backers if they can overthrow Venezuela’s elected government and install him in the presidential palace.

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“..a source in Washington close to the opposition expressed doubts whether the Trump administration has laid enough groundwork to spur a wider mutiny in the ranks..”

US In Direct Contact With Venezuelan Military, Urging Defections (R.)

The US is holding direct communications with members of Venezuela’s military urging them to abandon President Nicolas Maduro and is also preparing new sanctions aimed at increasing pressure on him, a senior White House official said. The Trump administration expects further military defections from Maduro’s side, the official told Reuters, despite only a few senior officers having done so since opposition leader Juan Guaido declared himself interim president last month, earning the recognition of the United States and dozens of other countries. “We believe these to be those first couple pebbles before we start really seeing bigger rocks rolling down the hill,” the official said this week, speaking on condition of anonymity. “We’re still having conversations with members of the former Maduro regime, with military members, although those conversations are very, very limited.”

With the Venezuelan military still apparently loyal to Maduro, a source in Washington close to the opposition expressed doubts whether the Trump administration has laid enough groundwork to spur a wider mutiny in the ranks where many officers are suspected of benefiting from corruption and drug trafficking. Members of the South American country’s security forces fear they or their families could be targeted by Maduro if they defect, so the U.S. would need to offer them something that could outweigh those concerns, said Eric Farnsworth, vice president of the Council of the Americas think tank in Washington. “It depends on what they’re offering,” Farnsworth said. “Are there incentives built into these contacts that will at least cause people to question their loyalty to the regime?”

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A horse felled Troy.

Venezuela’s Maduro Spurns US Aid, Rival Warns Military Not To Block It (R.)

Venezuela’s government on Friday said the United States should distribute humanitarian aid in Colombia where it is being stockpiled, while the opposition warned that blocking much-needed food and medicine could constitute crimes against humanity. A day after the aid convoy arrived in the border city of Cucuta, President Nicolas Maduro ridiculed the United States for offering small amounts of assistance while maintaining sanctions that block some $10 billion of offshore assets and revenue. Rival Juan Guaido, who is recognized by dozens of countries as Venezuela’s legitimate leader, warned military officers against blocking the arrival of aid amid spiraling disease and malnutrition brought on by a hyperinflationary collapse.

“Take all that humanitarian aid and give it to the people of Cucuta, where there is a lot of need,” Maduro said in a news conference. “This is a macabre game, you see? They squeeze us by the neck and then make us beg for crumbs.” “They offer us toilet paper, like (U.S. President) Donald Trump threw at the people of Puerto Rico,” he said at the conference, which experienced technical difficulties including a blackout and a microphone failure. He was referring to Trump’s improvised 2018 aid distribution in the U.S. territory following a hurricane, during which he threw rolls of paper towels.

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“Societies and economies are fundamentally emergent, non-linear, and self-organizing as they respond to the mandates of reality — which are not necessarily consistent with human wishes.”

Dreams Die Hard (Kunstler)

America has been blowing green smoke up its own ass for years, promoting oxymorons such as “green skyscrapers” and “clean energy,” but the truth is we’re not going to run WalMart, Suburbia, DisneyWorld, and the interstate highway system on any combination of wind, solar, geothermal, recycled Fry-Max, and dark matter. We’re just running too much stuff at too great a scale for too many people. We’ve blown through the capital already and replaced it with IOUs that will never be honored, and we’re caught in an entropy trap of diminishing returns from all the work-arounds we’re desperately trying. For all that, there are actually some sound proposals in the mostly delusional matrix of the Green New Deal promoted by foxy front-person AOC.

• Revoke corporate personhood by amending our Constitution to make clear that corporations are not persons and money is not speech. Right on, I say, though they have not quite articulated the argument which is that corporations, unlike persons, have no vested allegiance to the public interest, but rather a legal obligation solely to shareholders and their boards-of-directors.
• Replace partisan oversight of elections with non-partisan election commissions. A no-brainer.
• Replace big money control of election campaigns with full public financing and free and equal access to the airwaves. Quite cheap and worth every penny.
• Break up the oversized banks that are “too big to fail.” And while you’re at it, resume enforcement of the anti-trust laws.
• Restore the Glass-Steagall separation of depository commercial banks from speculative investment banks. Duh….

There are two kinds of deadly narcissism at work in American culture these days: techno-narcissism — the belief that magical rescue remedies can save the status quo of comforts and conveniences — and organizational narcissism — the belief that any number of committees can lead a march of humanity into a future of rainbows and unicorns. Both of these ideas are artifacts of a fossil fuel turbo-charged economy that is coming to an end. Societies and economies are fundamentally emergent, non-linear, and self-organizing as they respond to the mandates of reality — which are not necessarily consistent with human wishes. Circumstances in the world change and sometimes, when the changes are profound enough, they provoke episodes of flux and disorder. A better index for our journey into the unknown frontier beyond modernity will not be what is “green” and “smart” but perhaps what is “sane” and “insane.”

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100 million sharks are killed globally each year.

We need to protect, and love, life in all its glory and beauty, because we are life. But we don’t see what connects us to all that we kill, we think we’re some separate entity.

There is no more flagrant failure in our education systems than this: they don’t teach us who we are.

Wiped Out Before Our Eyes’ Hawaii Proposes Ban On Shark Killings (G.)

Sharks could soon become more numerous in Hawaii waters – and advocates say that’s a good thing. Lawmakers in Honolulu advanced a proposed ban on killing sharks in state waters on Wednesday, after receiving hundreds of calls and letters of support from around the country. The law, which would provide sweeping protection for any shark, rather than select species, could be the first of its kind in the United States. “These amazing animals are getting wiped out before our eyes, and people don’t even realize what they’re missing out on,” said Ocean Ramsey, a Hawaii-based shark conservationist, researcher and tour operator who has been instrumental in lobbying for the bill. Last month, a photo of Ramsey swimming with a 6-metre (20ft) great white shark off the coast of Oahu went viral.


Photograph: OneOceanDiving

Along with killing the animals, capturing or harming them would also incur fines and count as a misdemeanor offense. Sharks, Ramsey said, are deeply misunderstood. Their presence in the ocean is unlike any other animal’s, she noted. “Everything else in the ocean swims away from you, but you can have these incredible interactions with sharks because they’re apex predators and they’re not afraid of you.” The threats to Hawaii’s sharks are numerous, proponents of the bill argue. [..] shark fins can sometimes sell for as much as $500 a pound. Shark fin soup, a delicacy once favored by Chinese emperors, has become widely popular as a status symbol in modern China. As a result, nearly 100 million sharks are killed globally each year, and species are disappearing.

[..] Sharks are crucial to Hawaii’s marine ecosystem, and oceans worldwide. “They’re the ocean’s immune system,” Ramsey said. Multiple studies have linked shark populations to overall ocean health. They serve a critical purpose by picking off sick and injured marine animals and keeping smaller fish populations under control. When the shark population declines, large predatory fish can overproduce and decimate the populations of small plant-eating fish, which are crucial to keeping algae down and supporting reef systems.


Photograph: OneOceanDiving

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Feb 012019
 


Vincent van Gogh Outskirts of Paris: Road with Peasant Shouldering a Spade 1887

 

Death Of 95% Of Indigenous People In Colonization Of America Cooled Earth (RT)
Who Bought the Gigantic $1.5 Trillion of New 2018 US Government Debt? (WS)
Central Bank Gold Buying Hits Highest Level In Half A Century (CNBC)
Refusal To Return Venezuelan Gold Means End Of Britain As Financial Center (RT)
Brexit Could Be Delayed Because Government Is Not Ready (Ind.)
What Corbyn Must Do To Rescue Britain From Its Brexit Torture (Varoufakis)
UK Homeless Crisis Is Worse Than Ever (Ind.)
US Home Sales to Get Even Uglier in Near Future (WS)
US New Home Prices Drop 12% as Supply Surges (WS)
Trump Says Border-Wall Talks ‘A Waste Of Money And Time’ (MW)
With World Bank and IMF In Crisis, Time To Push Radical New Vision (DiEM25)
Apple Punishes Facebook, Google Over App Rules (BBC)
Greece Raises Minimum Wage By 11% (K.)
25% of Greeks Cannot Afford To Heat Their Homes (K.)

 

 

The Great Dying of the Indigenous Peoples of the Americas. 95% of them, 56 million, had died by 1600. But who knows this? The history we’ve been told about is white man’s history, almost exclusively. In his lovely books 1491 and 1493, Charles Mann describes this from a different view. First, he says as many people lived in North America as in Europe when Columbus came 500 years ago. Second, the image of roaming herds of buffalo was not accurate then: there was no place for them, the land was farmed. Only after the people had died did the buffalo take over and multiply.

Death Of 95% Of Indigenous People In Colonization Of America Cooled Earth (RT)

European colonization of the Americas contributed to the advent of the 17th century ‘Little Ice Age,’ a new study says. As some 55 million indigenous people were wiped out, their farmland turned into forest and sucked out CO2. Much of the continental US may feel like it is living through a ‘mini ice age’ due to the polar vortex weather pattern. But while this will come and go, there was a proper global drop in temperatures about four centuries ago, which is commonly called the ‘Little Ice Age.’ A team of scientists from University College London says that humans were partially to blame for it – particularly Europeans traveling to the New World for treasure and new life. While there were some natural reasons behind the oddball phenomenon, much of it remains veiled in mystery.

The British researchers argue that they have found a missing link – the “Great Dying” of indigenous people as result of the European conquest. The scientists found that some 56 million hectares of land were abandoned by the native population of the Americas as they fled or died due to epidemics, war, slavery and subsequent famine. Those lands were reclaimed by forests that, in turn, absorbed so much carbon dioxide that the process cooled Earth. “The resulting terrestrial carbon uptake had a detectable impact on both atmospheric CO2 and global surface air temperatures in the two centuries prior to the Industrial Revolution,” according to the study, published in the Quaternary Science Reviews.

Using a combination of counting methods, the researchers found that prior to the arrival of Europeans in 1492, the Americans were inhabited by some 60.5 million people. About 95 percent of them, or 56 million, had died by 1600. Some 55.8 million hectares (138.3 million acres) of what was previously farmland was reclaimed by the forests and led to a 7.4 pentagram carbon uptake, according to the paper. One pentagram (Pg) of carbon is equivalent to a billion metric tons. “These changes show that the Great Dying of the Indigenous Peoples of the Americas is necessary for a parsimonious explanation of the anomalous decrease in atmospheric CO2,” the paper notes.

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Treasuries stay at home. Foreigners no longer want them. Japan, China, Russia are all selling.

Who Bought the Gigantic $1.5 Trillion of New 2018 US Government Debt? (WS)

Under the impact of a stupendous spending binge peppered with juicy tax cuts, the Treasury Department has had to issue a flood of Treasury securities to fund the cash outflow. So, over the past 12 months, the US gross national debt has ballooned by $1.5 trillion to $22 trillion as of January 30, according to Treasury Department data. And these are the good times when the economy is hopping. At the next recession, this is going to get cute. But who the heck is buying all this debt? That question will grow increasingly important and worrisome as we move forward with this gigantic ballooning debt, fueled by deficits that Fed chairman Jerome Powell calls “unsustainable” at every chance he gets:

So, who bought all this debt? US government debt, as expensive as it is in terms of interest payments for US taxpayers, is a mildly income-producing asset for the creditors of the US. Somebody has to buy it, every last dollar of it. The US relies on it. So, who bought this pile of debt that got issued in 12 months? China, Japan, other foreign investors? Nope. They’re gradually unloading this debt. All foreign investors combined slashed their holdings of marketable Treasury securities in November by $105 billion from November a year earlier, to $6.2 trillion, according to the Treasury Department’s TIC data released today.

The Treasury Department divides these foreign investors into two categories: “Foreign official” holders (foreign central banks and government entities) cut their holdings by $144 billion over the 12 months, to $3.9 trillion at the end of November. But private-sector investors (foreign hedge funds, banks, individuals, etc.) increased their holdings by $52 billion, to $2.3 trillion. The two largest foreign creditors of the US — China and Japan — have both been unloading their Treasury securities: • China’s holdings fell by $55 billion from a year earlier to $1.12 trillion. • Japan’s holdings fell by $47 billion from a year earlier to $1.04 trillion, having now reduced its stash by 16% since the peak at the end of 2014 ($1.24 trillion).

[..] American banks (very large holders), hedge funds, pension funds, mutual funds, and other institutions along with individual investors in their brokerage accounts or at their accounts with the US Treasury were huge net buyers, while nearly everyone else was selling, increasing their holdings by $1.36 trillion over the 12-month period. These American entities combined owned the remainder of the US gross national debt, $7.5 trillion, or 34.4% of the total!

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It’s mostly Russia really: The Russian central bank sold almost all of its U.S. Treasury stock to buy 274.3 tons of gold in 2018.

Central Bank Gold Buying Hits Highest Level In Half A Century (CNBC)

The amount of gold bought by central banks in 2018 reached the second highest annual total on record, according to the World Gold Council (WGC). Central banks bought the most gold by volume since 1967, according to the industry research firm, which also highlighted it was the largest amount since former U.S. President Nixon Richard’s decision to end the dollar’s peg to bullion in 1971. Central bank net purchases reached 651.5 metric tons in 2018, 74 percent higher than in the previous year when 375 tons were bought. The WGC has estimated that central banks now hold nearly 34,000 tons of gold. The Federal Reserve is reported to hold the most, amounting for almost three quarters of the nation’s foreign-exchange reserve pot.

Taking the current spot price of $1,321.15 per troy ounce, gold purchases by central banks in 2018 amounted to a $27.7 billion spending splurge on the precious metal. “Heightened geopolitical and economic uncertainty throughout the year increasingly drove central banks to diversify their reserves and re-focus their attention on the principal objective of investing in safe and liquid assets,” said the report released on Thursday. The WGC said the bulk of the buying was carried out by a handful of central banks with Russia leading the way as it looks to swap out dollars from its portfolio. The Russian central bank sold almost all of its U.S. Treasury stock to buy 274.3 tons of gold in 2018.

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Every country should hold its own gold. What’s the problem with that?

Refusal To Return Venezuelan Gold Means End Of Britain As Financial Center (RT)

The freezing of Venezuelan gold by the Bank of England is a signal to all countries out of step with US interests to withdraw their money, according to economist and co-founder of Democracy at Work, Professor Richard Wolff.
He told RT America that Britain and its central bank have shown themselves to be “under the thumb of the United States.” “That is a signal to every country that has or may have difficulties with the US, [that they had] better get their money out of England and out of London because it’s not the safe place as it once was,” he said. The Bank of England is currently withholding $1.2 billion in gold from Venezuelan President Nicolas Maduro’s government, but is being urged by Washington to release it to the chairman of the National Assembly, Juan Guaido.

Last week, the US backed Guaido as the legitimate president of Venezuela, after he declared himself interim president. According to Professor Wolff, control of Venezuela’s oil has always been an urgent issue for Washington. He also said that the collapse of Britain as a global power, which was accelerated by Brexit, is now about to take another step. “One of the few things left for Britain is to be the financial center that London has been for so long. And one of the ways you stay a financial center is if you don’t play games with other people’s money,” he said.

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Pretty much a given now.

Brexit Could Be Delayed Because Government Is Not Ready (Ind.)

Jeremy Hunt has said Brexit could be delayed as the government may need “extra time” to pass key legislation if Theresa May can agree a deal at the eleventh hour. The foreign secretary admitted that a technical delay to the Article 50 process could be necessary to prepare for Britain’s exit from the EU, which is legally due to take place on 29 March. MPs ordered the prime minister to go back to Brussels to renegotiate a key part of her Brexit deal after her plan was resoundingly defeated in the Commons earlier this month. But despite the Tory truce, Ms May faces an uphill battle to convince the EU to reopen talks on the withdrawal agreement, with European leaders lining up to rebuff her efforts.

Asked about Britain’s exit date, Mr Hunt told the Today programme: “I think that depends on how long this process takes. “I think it is true that if we ended up approving a deal in the days before 29 March then we might need some extra time to pass critical legislation. But if we are able to make progress sooner, then that might not be necessary. “We can’t know at this stage exactly which of those scenarios would happen.” There is growing concern among ministers that there is not enough time to pass the necessary legislation before exit day, amid reports that the February recess could be cancelled to give Ms May more time to win over the EU.

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Ironically, Varoufakis points out exactly why Corbyn is too late (all he’s done is wait):

“Irresolute princes, to avoid present dangers, generally follow the neutral path, and are generally ruined” – Niccolò Machiavelli, The Prince

What Corbyn Must Do To Rescue Britain From Its Brexit Torture (Varoufakis)

Britain’s prime minister has been remarkable in resolutely following a ruinous path that she keeps insisting remains the least perilous road to Brexit. Theresa May’s first crime against logic was to trigger Article 50 without a plan of what to do on 29 March 2019 if no deal had been struck with Brussels. Her second was to forfeit any bargaining power she had by accepting Michel Barnier’s two-phase negotiation (first London delivers all that Brussels demands, then Brussels considers what London wants). May’s two colossal errors combined to allow a gloating European Commission to dictate to her a withdrawal agreement that, independently of whether one is pro-Leave or pro-Remain, resembles the kind of treaty imposed upon a nation defeated at war.

Unsurprisingly, Brexit has turned into a process tearing Britain apart while revealing its constitutional inadequacies. The next few weeks are depressingly predictable. The prime minister will continue to run down the clock putting all the pressure on Remainers, both Tory and Labour, to avert a no-deal Brexit by accepting hers. That was the point of backing the Brady amendment on Tuesday: to take Brexit revocation off the table, gain two weeks during which to pretend to negotiate with a European Commission that does not have the mandate to negotiate and then take a version of the same withdrawal agreement, possibly with some pointless addenda, to parliament. If her blackmail fails again, she will apply for an extension of Article 50 until 1 July to start the same war of attrition anew.

It is imperative that May is prevented from following this path. Those who can stop her and fail to do so will not be forgiven by at least one generation of Britons. Which brings me to my friend and comrade Jeremy Corbyn and his team. Labour’s leadership understands that, with weeks to go before the cliff’s edge, Niccolò Machiavelli’s counsel applies just as much to them too. “Irresolute princes, to avoid present dangers, generally follow the neutral path, and are generally ruined” – Niccolò Machiavelli, The Prince

Until now it was right and proper for Labour to avoid distracting a Tory government while it was making a mess of things. Jeremy Corbyn’s critics were wrong to chastise him for delaying to call a vote of no confidence or for not backing a second referendum. Labour just did not have the numbers to win such votes. However, the time has come for Jeremy Corbyn to give a speech of hope for Britain, one that contains a clear vision of a country that heals itself after two years of wanton destruction by a short-sighted, clueless prime minister thinking solely of the unity of her divided government and party.

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Why Brexit?!

UK Homeless Crisis Is Worse Than Ever (Ind.)

Housing charities have criticised government claims of falling numbers of rough sleepers as homeless shelters across Britain report unprecedented demand. Communities secretary James Brokenshire said his department’s strategy was “starting to have an effect” as official figures showed that, on a “snapshot night in autumn”, the number of people sleeping on the street had dropped to 4,677 from 4,751 the year before. But Jon Sparkes, the chief executive of charity Crisis, said the count was widely believed to be an “unreliable” source which “significantly underestimated” the number of people experiencing the devastation of sleeping rough.

Shelters in England, Wales and Scotland contacted by The Independent all reported record levels of demand as temperatures in parts of the country dropped as low as -14C. On the snapshot count, Mr Sparkes said: “The problem is, these counts and estimates inevitably miss a significant number of people, including those not rough sleeping on that particular night, those hidden from view and who aren’t bedded down for the night.” Figures published by his organisation in December revealed levels of rough sleeping in the UK – including sleeping on public transport and in tents – had doubled in five years, rising by 20 per cent to 24,000 in just 12 months.

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Lawrence Yun still has a job. Amazing.

US Home Sales to Get Even Uglier in Near Future (WS)

What will home sales look like in January and February? Very, very lousy, according to pending home sales, a measure that counts how many contracts were signed. Contract signings run roughly one or two months ahead of when the sales close and are reported as sales. The measure of pending home sales for December projects actual home sales in January and February. To that tune, the National Association of Realtors (NAR) said that its Pending Home Sales Index for December fell to the lowest level since April 2014. “It’s been dripping down, down, down,” NAR chief economist Lawrence Yun said in the interview.

“Frustrating that the housing market is not recovering.” Compared to December a year earlier, contract signings dropped 9.8%, the 12th month in a row of year-over-year declines, and the worst year-over-year decline since the days of housing and mortgage crisis. To show the acceleration of the declines of contract signings toward the end of the year, I marked October, November, and December in red. The NAR’s report blamed the stock market swoon that had sapped consumer confidence, unaffordable home prices – that, after years of price gains had far outgrown wage gains – and mortgage rates. The latter is an interesting theory because mortgage rates, after a peak in early November, were falling starting in mid-November and fell throughout December.

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Let’s see the Fed tackle this one.

US New Home Prices Drop 12% as Supply Surges (WS)

The Commerce Department has reopened for business, and the good folks there are now in hyperdrive to put together and release the data that was blocked during the partial government shutdown that had also shut down the Commerce Department. This morning, it released the sales data for new homes whose sales closed in November. This report had originally been scheduled for the end of December. In the near future, the Commerce Department will further catch up and release the new-home sales data for December, which had been scheduled for last week. So, time to catch up, and here we go. The median prices of new single-family houses that sold across the US in November 2018 fell 11.9% from November 2017 to $302,400, the lowest median price since October 2016, and in the same range as the median price in November and December 2014:

This new-home sales data – produced jointly by the Census Bureau and the Department of Housing and Urban Development – is very volatile, and subject to revisions in the following months. But after a while, and despite the jumpiness of the data, as the above chart shows, the trend becomes clear. The year-over-year decline of 11.9% was the third months in a row of year-over-year declines, and the largest year-over-year decline since Housing Bust 1. Note the many double-digit year-over-year price increases in prior years, which attest to the boom in prices that has now outrun what the market can bear:

Just how far prices have ballooned before they began to deflate becomes apparent in this long-term chart of the median price of new houses. At the price peak in December 2017 ($343,300), the median price was 31% above the crazy bubble peak in March 2007, before it all blew apart:

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Pelosi will have to come with something. Does she understand this?

Trump Says Border-Wall Talks ‘A Waste Of Money And Time’ (MW)

Negotiations with Congress are a waste of time if Democrats won’t discuss border-wall funding, President Donald Trump said Thursday, vowing to build a wall with or without congressional approval. In a wide-ranging Oval Office interview published Thursday night by the New York Times, Trump also said he’s done playing nice with House Speaker Nancy Pelosi, expressed optimism over reaching a trade deal with China and issued numerous denials related to special counsel Robert Mueller’s investigation. Pelosi has adamantly opposed any funding to build a wall along America’s southern border, and the specter of another government shutdown looms in two weeks, when a temporary funding deal expires.

“If she doesn’t approve the wall, the rest of it’s just a waste of money and time and energy.” A 17-member panel of lawmakers has been tasked with reaching a border-funding compromise. Trump suggested in the interview that an emergency order could be issued if Congress won’t allocate the $5.7 billion that he’s demanded for the wall. “I’ll continue to build the wall, and we’ll get the wall finished,” he told the Times. “Now whether or not I declare a national emergency — that you’ll see.” About Pelosi, Trump said: “I’ve actually always gotten along with her, but now I don’t think I will any more. . . . I think she’s doing a tremendous disservice to the country.”

When asked about a number of other subjects, Trump said he ”never did” speak to Roger Stone about WikiLeaks during his campaign; denied he was tampering with witnesses through his tweets; and said testimony by his intelligence chiefs earlier this week was mischaracterized by the media, despite the fact that video of the hearing was shown, along with a 42-page written transcript. He also called being president a “loser” job, financially. “I lost massive amounts of money doing this job,” he said. “This is not the money. This is one of the great losers of all time. You know, fortunately, I don’t need money.”

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Varoufakis and David Adler. Personally, when someone says we need $8 trillion a year for a Green New Deal, I think: forget it. People think in terms of keeping present energy use levels alive, just switching to different sources. But the No. 1 issue should be to use less energy.

With World Bank and IMF In Crisis, Time To Push Radical New Vision (DiEM25)

“Prosperity, like peace, is indivisible,” said the US treasury secretary, Henry Morgenthau, in his inaugural speech to the Bretton Woods conference, which gave birth to the World Bank (then the International Bank for Reconstruction and Development) and to the IMF. “We cannot afford to have it scattered here or there among the fortunate or enjoy it at the expense of others.” The original Bretton Woods plan was for exchange rates to be fixed, with the IMF helping heavily indebted countries restructure their debt and a stabilization fund curbing capital flight. Meanwhile, the World Bank would offer development finance and an international commodity stabilization corporation would “bring about the orderly marketing of staple commodities at prices fair to the producer and consumer alike”.

Finally, the whole system would be dollar-denominated, with the greenback being the only currency exchangeable for gold at a fixed rate. John Maynard Keynes, the chief British negotiator at Bretton Woods, was worried that the new system could only rely on the dollar as long as America had a trade surplus. The moment the United States became a deficit country, the system would collapse. So, Keynes suggested that instead of building the new world order on the dollar, all major economies would subscribe to a multilateral International Clearing Union (ICU). While keeping their own currencies, and central banks, countries would agree to denominate all international payments in a common accounting unit, which Keynes named the bancor, and to clear all international payments through the ICU.

Once set up, the ICU would tax persistent surpluses and deficits symmetrically so as to balance out capital flows, volatility, global aggregate demand and productivity. Had it been instituted, the ICU would have worked alongside the World Bank to keep the global economy in balance and build shared prosperity worldwide. But Keynes’s ICU was rejected. The United States was unwilling to replace the dollar as the anchor of the new monetary system. And so the IMF was downgraded to a bailout fund, the World Bank was limited to lending from its own reserves (contributed by stressed member states) and, crucially, any possibility of the IMF leveraging the World Bank’s investments (like a central bank might have done) was jettisoned.

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They got young people ‘volunteering’ to be spied upon to an even higher degree than they already were.

Apple Punishes Facebook, Google Over App Rules (BBC)

Apple revoked Google’s ability to offer its employees internal-only iPhone apps, likely causing significant disruption to the search giant. Apple was punishing its rival for breaking its developers’ policy, a day after it took the same action against Facebook. The move came after both firms used special access for market research. Apple restored Google’s access to the software by the end of the working day on Thursday. After more than 24 hours of disruption, Facebook had its access restored earlier on Thursday. “We are in the process of getting our internal apps up and running” a spokeswoman told the BBC. “To be clear, this didn’t have an impact on our consumer-facing services.”

Apple allows companies the ability to exert special control over employee devices in order to add additional security and control. Many firms use this to distribute apps that might contain private information to employees but not the wider public. Some firms also distribute test or beta versions of apps the firm is working on such as, in Google’s case, Maps, Hangouts and Gmail. Both firms use internal iOS apps to help employees access services such as travel. However, Apple explicitly prohibits firms from using this access on regular consumers. On Monday it was revealed that Facebook had used its enterprise access to distribute a market research app to the public, including teenagers. On Tuesday it became known that Google was doing something similar with its own app, Screenwise.

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The Troika is not happy.

Greece Raises Minimum Wage By 11% (K.)

An 11 percent increase in Greece’s minimum wage and the abolition of the so-called subminimum wage paid to young employees which were announced by Prime Minister Alexis Tsipras during a cabinet meeting early this week came into effect on Friday. “Today, a new era begins for the country’s young employees. An era with more rights, more dignity,” Labor Minister Effie Achtsioglou told state-run news agency ANA-MPA. “With the increase in the minimum wage and the abolition of the sub-minimum wage, we restore part of what austerity policies deprived employees of. And this is an act of justice.” The hike, the first such wage change in the country in almost a decade, raises the minimum wage from €586 to €650. The measure, however, has generated concern on the part of Greece’s creditors during their recent visit to the country to assess its post-bailout compliance.

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Why those minimum wage were raised. Imagine if Greece were further north.

25% of Greeks Cannot Afford To Heat Their Homes (K.)

Almost one in four Greeks cannot afford to heat their home sufficiently, according to Eurostat data collected as part of the annual EU survey on income and living conditions in the bloc. Based on the report, 25.7 percent of Greeks said they were not able to keep their home adequately warm due to their economic condition. Greeks buy heating oil at an average price of 1,025 euros per liter when the average price for the whole of the European Union is 0.794 euros per litre and 0.781 euros in the eurozone. The largest share of people who shared the same view was recorded in Bulgaria (37 pct), followed by Lithuania (29 pct), Greece, Cyprus (23 pct) and Portugal (20 pct).

In contrast, the lowest shares – close to 2 percent – were recorded in Luxembourg, Finland, Sweden, the Netherlands and Austria. In 2017, eight percent of the EU population said in an EU-wide survey that they could not afford to heat their home sufficiently. This share peaked in 2012 with 11 percent, and has fallen continuously in subsequent years.

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