Sep 292019
 
 September 29, 2019  Posted by at 9:56 am Finance Tagged with: , , , , , , , , ,  23 Responses »


Paul Gauguin Portrait of Ingeborg Thaulow 1877

 

Pelosi Says Public Opinion Shifting In Support Of Impeachment Inquiry (R.)
Pelosi’s House Rule Changes are Key Part of “Articles of Impeachment” (CTH)
Scott Adams Makes the Case for ‘President for Life’ Trump (Ricochet)
The Problem With Impeachment (Chris Hedges)
On The Motives Behind Whistleblower-gate (MoA)
The Latest Plot To Topple Trump: Politics According To -Groucho- Marx (SCF)
State Dept. Ramps Up Probe Into Clinton Email Server (Hill)
Has Australia Really Had a 28-Year Expansion? (St.Louis Fed)
U.S. Income Inequality Worsens, Widening To A New Gap (NPR)
Edward Snowden’s Julian Assange is an Unfamiliar Julian Assange (MPN)

 

 

She made that up.

Pelosi Says Public Opinion Shifting In Support Of Impeachment Inquiry (R.)

U.S. House Speaker Nancy Pelosi said on Saturday that public opinion is now on the side of an impeachment inquiry against President Donald Trump following the release of new information about his conversations with Ukrainian President Volodymyr Zelenskiy. Pelosi this week announced her support for an investigation after the surfacing of a whistleblower complaint that said Trump appeared to solicit a political favor from Ukraine’s president aimed at helping him be re-elected next year. Pelosi for months took a cautious approach in weighing the calls of other Democratic House members to launch impeachment proceedings against Trump, which grew louder after former Special Counsel Robert Mueller testified on July 24 about his probe of Trump and Russian interference in the 2016 election.

“In the public, the tide has completely changed; it could change now – who knows – but right now after seeing the complaint and the IG (Inspector General) report and the cavalier attitude the administration had towards it, the American people are coming to a different decision,” Pelosi said at a journalism event hosted by the Texas Tribune news website. She added that her resistance to holding an impeachment inquiry quickly evolved from urging that fellow Democrats remain cautious of the political fallout ahead of next year’s elections to full steam ahead as details emerged of Trump’s dealings with Ukraine’s leader. “A president of the United States would withhold military assistance paid for by taxpayers to shake down the leader of another country unless he did him a political favor – that is so, so clear,” Pelosi said.

[..] Several Democratic presidential candidates attended the three-day event in Austin, including Mayor Pete Buttigieg, former Representative Beto O’Rourke, Senator Amy Klobuchar and former Housing Secretary Julian Castro, all of whom agreed with Pelosi that the campaign to push Trump from office must focus on policies and not impeachment. While some polls have shown Americans are split on supporting impeachment, Castro, who served under former President Barack Obama, said he thinks the public will increasingly back the inquiry. “Like in Watergate, after more evidence gets out there … you’ll see more people of different political stripes start to support it,” Castro said at the event, referring to moves in 1974 to impeach former President Richard Nixon.

Read more …

Pelosi called for impeachment without having seen the transcript or the complaint. That will forever be weird.

Pelosi’s House Rule Changes are Key Part of “Articles of Impeachment” (CTH)

Back in December 2018 CTH noted the significant House rule changes constructed by Nancy Pelosi for the 116th congress seemed specifically geared toward impeachment. {Go Deep} With the House going into a scheduled calendar recess, those rules are now being used to subvert historic processes and construct the articles of impeachment. A formal vote to initiate an “impeachment inquiry” is not technically required; however, there has always been a full house vote until now. The reason not to have a House vote is simple: if the formal process was followed the minority (republicans) would have enforceable rights within it. Without a vote to initiate, the articles of impeachment can be drawn up without any participation by the minority; and without any input from the executive. This was always the plan that was visible in Pelosi’s changed House rules.

Keep in mind Speaker Pelosi selected former insider DOJ official Douglas Letter to be the Chief Legal Counsel for the House. That becomes important when we get to the part about the official full house impeachment vote. The Lawfare group and DNC far-left activists were ecstatic at the selection. Doug Letter was a deep political operative within the institution of the DOJ who worked diligently to promote the weaponized political values of former democrat administrations. Speaker Pelosi has authorized the House committees to work together under the umbrella of an “official impeachment inquiry.” The House Intelligence (Schiff) and Judiciary Committees (Nadler) are currently working together leading this process.

From recent events we can see the framework of Schiff compiling Trump-Ukraine articles and Nadler compiling Trump-Russia articles. Trump-Ukraine via Schiff will likely focus on a corruption angle; Trump-Russia via Nadler will likely focus on an obstruction angle. How many articles of impeachment are finally assembled is unknown, but it is possible to see the background construct as described above. Unlike historic examples of committee impeachment assembly, and in combination with the lack of an initiation vote, Pelosi’s earlier House Rule changes now appear intentionally designed to block republicans during the article assembly process. The minority will have no voice. This is quite a design.

Read more …

Not really, but his arguments are interesting, and shared by many: how to put the CIA offside.

Scott Adams Makes the Case for ‘President for Life’ Trump (Ricochet)

No, Scott Adams is not suggesting that Trump be president for life. But Scott is making the case for Trump being the last legitimate president. Hence (my conclusion), if we want our president to be legitimate then we should want Trump to be president for life. And given his age that would not be an oppressively long time. So what is Scott talking about?! He referenced the other day a tweet from the person Scott thinks is the “smartest man he has ever met” — Naval Ravikant: Does it bother anyone else that our elected officials live in a panopticon run by our intelligence agencies? A panopticon is like a one-way mirror where a person can see everything without being seen.

In other words, if you assume that our intelligence service has technological access to conversations, emails, texts by accessing both public networks and “things” owned by elected officials that are connected to the internet, then our intelligence apparatus is in an enormously powerful position vis a vis elected officials. That is, bureaucrats have something on officials that can be used as leverage to override the desires and preferences of constituencies. This delegitimizes the elected politician as acting in the constituents’ interest rather than that of the intelligence community. Earlier Senator Schumer said much the same thing: “Let me tell you: You take on the intelligence community — they have six ways from Sunday at getting back at you.”

Now, according to Scott, Trump is the only elected politician who can resist the threats of the intelligence agencies because his flaws are well-known and flagrant, thus he has the least risk of losing political power from anything the intelligence officials could leak and would be believed. (At this point most voters don’t think or will ever be made to think that Trump is a traitor, intentionally working against the interests of the United States. Nor do they think that he is engaged in any “abuse of power” that is over the line for a president.) This makes him more legitimate as a political leader — from a constituency standpoint — than anyone who could be elected. So why wouldn’t you want Trump to be president for life?

Read more …

Chris Hedges has the same reasoning as Scott Adams.

The Problem With Impeachment (Chris Hedges)

Impeaching Donald Trump would do nothing to halt the deep decay that has beset the American republic. It would not magically restore democratic institutions. It would not return us to the rule of law. It would not curb the predatory appetites of the big banks, the war industry and corporations. It would not get corporate money out of politics or end our system of legalized bribery. It would not halt the wholesale surveillance and monitoring of the public by the security services. It would not end the reigns of terror practiced by paramilitary police in impoverished neighborhoods or the mass incarceration of 2.3 million citizens. It would not impede ICE from hunting down the undocumented and ripping children from their arms to pen them in cages. It would not halt the extraction of fossil fuels and the looming ecocide. It would not give us a press freed from the corporate mandate to turn news into burlesque for profit. It would not end our endless and futile wars. It would not ameliorate the hatred between the nation’s warring tribes—indeed would only exacerbate these hatreds.


Impeachment is about cosmetics. It is about replacing the public face of empire with a political mandarin such as Joe Biden, himself steeped in corruption and obsequious service to the rich and corporate power, who will carry out the same suicidal policies with appropriate regal decorum. The ruling elites have had enough of Trump’s vulgarity, stupidity and staggering ineptitude. They turned on him not over an egregious impeachable offense—there have been numerous impeachable offenses including the use of the presidency for personal enrichment, inciting violence and racism, passing on classified intelligence to foreign officials, obstruction of justice and a pathological inability to tell the truth—but because he made the fatal mistake of trying to take down a fellow member of the ruling elite.

Read more …

Decent overview of what’s going on.

On The Motives Behind Whistleblower-gate (MoA)

The whistleblower statute says that the matter in question must be an “urgent concern” that is defined as: “… a serious or flagrant problem, abuse, violation of law or Executive order, or deficiency relating to the funding, administration, or operations of an intelligence activity involving classified information, but does not include differences of opinions concerning public policy matters”. At the core of the complaint in question is a claim that Trump used a phone call with President Volodymyr Zelensky of the Ukraine to press Zelensky to investigate two issues. The call memorandum was declassified and published. During the phone call Zelensky had two requests. He wanted U.S. anti-tank weapons and he wanted an invitation to the White House. (He got both.)

Trump also had a request. He asked that Ukrainian authorities investigate two issues of U.S. public interest. The first is the reported interferences by Ukrainian government officials in favor of Hillary Clinton during the 2016 election campaign. This also involved the notorious security company CrowdStrike which made some false claims about Russian hacking in the Ukraine. The second one is the also well-know intervention by then Vice-President Joe Biden against a Ukrainian Attorney General who had an open investigation against a company that was sponsoring his son Hunter Biden. The U.S. and the Ukraine have a treaty that requires them to cooperate on law enforcement matters. That Trump wanted the Ukrainian authorities to investigated these issues was well known.

His personal lawyer Rudi Giuliani had said for several months that he was looking into these questions. The issues pointed out in the complaint are clearly beyond the scope of the whistleblower statute. Trump’s actions with regard to the Ukraine, especially the phone call, were neither outside of any law nor do they involve any intelligence activity. What Trump did during the call was not nefarious. The issue is clearly a question of “differences in opinion concerning public policy matters”. A whistleblower complaint must be send to the relevant agency’s inspector general. If he finds it credible it goes to the head of the agency who decides if it is within the statute and, if it is, sends the complaint to Congress.

The agency’s inspector general Michael Atkinson found the complaint ‘credible’ but, after seeking legal advice, the acting director of national intelligence Joseph Maguire did not forward it to Congress. It was the right thing to do as the content of the complaint is neither ‘whistleblowing’ nor within the relevant statute. What happened next is curious: “The agency’s inspector general, Michael Atkinson, notified Congress that the complaint existed but says he and Maguire have reached an “impasse” over whether to turn it over.” I have found no legal analysis if this was a required move or outside of the usual process. After that step was taken details of the complaint leaked to the press as they were supposed to do.

Read more …

I increasingly suspect Hillary will emerge.

The Latest Plot To Topple Trump: Politics According To -Groucho- Marx (SCF)

Right after being falsely accused of conspiring with Russia for the past two and a half years, Trump is suddenly accused of the opposite – of conspiring with Ukraine instead! This Reversal of Fortune – and of accusations – demands that the American public be as stupid and brainwashed as the oppressed population of Oceania in George Orwell’s dark and prophetic classic dystopia “1984.” “We are at War with Eurasia! We have always been at War with Eurasia!” “No! We LOVE Eurasia! We are at War with EASTAsia! We have always been at war with Eastasia!” Clearly, the readers and viewers of the New York Times, the Washington Post, MSNBC, CNN and all the rest of America’s media “Powers That Be” have already been well trained in Orwellian Doublethink and witless stupidity.

Suddenly, President Vladimir Putin of Russia is no longer the Evil Bad Guy plotting with Trump. Now it is new President of Ukraine Volodymyr Zelenskyy, himself a former professional comic actor on television. The Marx Brothers would have loved to co-star with him. Perhaps after being forced out of the presidency Trump, himself a former hit TV star across America, could hire Zelenskyy as his sidekick in a revival of his famous reality television show “The Apprentice.” As the late great British satirist Michael Wharton, who wrote under the nom de plume Peter Simple liked to say – the wilder the fantasy, the more rapidly it was bound to ‘collapse” into the realm which we naively and inaccurately describe as “reality.”

And what is the latest terrible crime that the President of the United States is now –suddenly and without warning – accused of? He dared to investigate whether Hunter Biden, the son of another eminent politician, former vice president Joe Biden was guilty of corruption. Just think of the consequences if Trump and his officials were allowed to continue their investigation unhindered: They might – shockingly! – put some other corrupt former US politicians out of business. Obviously, that would be the most terrible threat imaginable to the Home of the Brave and the Land of the Free.

No wonder the US Deep State hates Donald Trump! But there is another goal for this concocted scandal. It’s a twofer – a two for one scandal – intended to topple Trump and remove Biden from serious consideration at the same time, clearing the way for the Deep State’s True Candidate – Senator Elizabeth Warren. The shamelessness of this latest concocted scandal would leave Josef Goebbels green with envy and laughing uncontrollably. Unfortunately, it isn’t a joke.

Read more …

Hilarious: “It is such an obscene abuse of power and time involving so many people for so many years,” they said. “This has just sucked up people’s lives for years and years.”

I could have sworn they were talking about the Mueller investigation.

State Dept. Ramps Up Probe Into Clinton Email Server (Hill)

The State Department reportedly intensified a probe into former Secretary of State Hillary Clinton’s private email server, contacting dozens of former aides involved in email exchanges that passed through Clinton’s server. The Washington Post reported Saturday that as many as 130 former Clinton aides have been contacted by State Department investigators in recent weeks, with many being informed that they have been found “culpable” for transmitting information that should have been classified at a higher level than it was originally sent. Former Obama administration officials describe the probe to the Post as an extraordinary investigation fueled by political animosity.

But current officials speaking on the condition of anonymity told the newspaper that the probe was structured to avoid the appearance of political bias. The probe, which reportedly reached the stage where former officials began being contacted shortly after Trump’s inauguration, was described by one senior agency official to the Post as having nothing to do with President Trump’s vows to investigate Clinton if elected during the 2016 election. “This has nothing to do with who is in the White House,” the official said. “This is about the time it took to go through millions of emails, which is about three and a half years.” “The process is set up in a manner to completely avoid any appearance of political bias,” another official told the Post.

Former officials involved in the probe described it as a political vendetta, with one telling the Post it was an “abuse of power” by the Trump administration. “It is such an obscene abuse of power and time involving so many people for so many years,” they said. “This has just sucked up people’s lives for years and years.”

Read more …

No.

Has Australia Really Had a 28-Year Expansion? (St.Louis Fed)

In July, the U.S. officially entered its longest expansion on record. Naturally, many are wondering if the expansion is sustainable. When asking this question, many turn to the Australian case, as it has been argued that Australia hasn’t had a recession in 28 years. But is this really the case? The figure below shows the growth rate of Australia’s GDP, with recessions shaded gray. (Recessions are defined here as two or more consecutive quarters of negative GDP growth.)

According to this, Australia has not had a recession since 1991 and has been growing since. However, when we look at real per capita GDP growth, the story changes. The figure below shows Australia’s per capita GDP growth rate. Again, recessions are shaded gray and defined as two or more consecutive quarters of negative growth.

As shown in the figure, Australia has had three recessions since 1991 when looking at GDP per capita, the most recent one being from the second quarter of 2018 to the first quarter of 2019. This discrepancy between the growth rate of per capita GDP and the growth rate of GDP implies that population growth has been a key factor for Australia’s economic expansion. A rising population increases the size of the economy, and therefore total output increases, which is reflected in the level of GDP. However, the fact that we do see economic downturns in per capita terms means that population is growing faster than GDP. For nearly 40 years, Australia has had a higher population growth rate than other industrialized economies, as seen in the figure below.

In particular, it had a surge in population around 2008—during the height of the global financial crisis—due to migration. This population growth translated to overall positive GDP growth, but its effect on GDP growth hasn’t been enough to prevent recessions in per capita terms. Per capita recessions are not unique to Australia. In the table below, we compare the number of observed recessions when using GDP growth versus per capita GDP growth for several OECD countries. Again, a recession is defined as two or more consecutive quarters of negative growth.

Read more …

On a societal level (in)equality is strongly linked to prosperity.

U.S. Income Inequality Worsens, Widening To A New Gap (NPR)

The gap between the richest and the poorest U.S. households is now the largest it’s been in the past 50 years — despite the median U.S. income hitting a new record in 2018, according to new data from the U.S. Census Bureau. U.S. income inequality was “significantly higher” in 2018 than in 2017, the federal agency says in its latest American Community Survey report. The last time a change in the metric was deemed statistically significant was when it grew from 2012-2013. While many states didn’t see a change in income inequality last year, the income gap grew wider in nine states: Alabama, Arkansas, California, Kansas, Nebraska, New Hampshire, New Mexico, Texas and Virginia.

The disparity grew despite a surging national economy that has seen low unemployment and more than 10 years of consecutive GDP growth. The most troubling thing about the new report, says William M. Rodgers III, a professor of public policy and chief economist at the Heldrich Center at Rutgers University, is that it “clearly illustrates the inability of the current economic expansion, the longest on record, to lessen inequality.” When asked why the rising economic tide has raised some boats more than others, Rodgers lists several factors, including the decline of organized labor and competition for jobs from abroad. He also cites tax policies that favor businesses and higher-income families.

Income inequality is measured through the Gini index, which measures how far apart incomes are from each other. To do that, the index assigns a hypothetical score of 0.0 to a population in which incomes are distributed perfectly evenly and a score of 1.0 to a population where only one household gets all of the income. In the U.S., the Gini index figure had been holding steady for the past several years. But it moved from 0.482 in 2017 to 0.485 in 2018. While that change may seem small, it’s statistically significant, the Census Bureau says. The agency notes that back in 2006, the figure stood at 0.464.

Read more …

I haven’t read the book, but this is a little alarming.

Edward Snowden’s Julian Assange is an Unfamiliar Julian Assange (MPN)

NSA whistleblower Edward Snowden and WikiLeaks’ former editor Julian Assange have a complicated relationship. On the one hand, they share important similarities: both are perceived as dangerous enemies by the United States government, and both have been documentary subjects of filmmaker Laura Poitras. On the other hand, they clearly disagree when it comes to the means of achieving government transparency and accountability. After all, if Snowden had agreed with Assange about publishing practices, it is likely that he would have followed Chelsea Manning’s example and sent the NSA documents he collected and disclosed in 2013 to WikiLeaks.

The recent publication of Permanent Record, Snowden’s 336-page memoir, takes the Snowden-Assange dynamic to new—and problematic—heights. When Assange was forcibly dragged out of the Ecuadorian embassy in early 2019, Snowden was among the leading voices condemning the arrest of the WikiLeaks founder, calling it a dangerous assault on journalism. But in his memoir, Snowden uses rhetorical tricks to present Assange and WikiLeaks as his deceitful and irresponsible foils in a blatant and seemingly self-serving effort to highlight his own trustworthiness and accountability. Indeed, reviewers at the Washington Post and New Yorker have already seized upon Snowden’s anti-Assange rhetoric to serve their own anti-Assange agendas.

Proponents of press freedom have become accustomed to Pentagon and national security state attacks on Assange, but Snowden’s puzzling claims about the white-haired Australian and his transparency organization are exceptionally dangerous because they come from an otherwise highly respectable and trustworthy source, and at a time when there is otherwise a virtual media blackout on WikiLeaks. To be sure, Snowden deserves recognition as a courageous whistleblower and as a global champion of privacy rights, but in Permanent Record, Snowden appears willing to use a political prisoner for personal gain, deliberately distorting the truth and perpetuating the imperialistic propaganda that threatens not only Assange’s health but also his very life—just like the corporate media and national security state he exposed in 2013.

Read more …

 

Trans I Re by Fredrik Raddum

 

 

 

 

 

Sep 022019
 


Strongest storm ever to threaten Florida east coast

 

 

‘Get Ready for Brexit’: Government Launches Information Blitz (G.)
Johnson’s Brexit Gambit Puts Queen in a Tight Spot (Spiegel)
Leaked No-Deal Report Says Lorries Could Face 48-Hour Delays At Dover (PA)
Irish Border After Brexit – All Ideas Beset By Issues Says Secret Paper (G.)
Many US Firms Already Have Ditched China, More On The Way (CNBC)
Hong Kong Students Boycott Classes As Chinese Media Warns ‘End Is Coming’ (G.)
Why Has The U.S. CEO-To-Worker Pay Ratio Increased So Much? (Colombo)
In The Era Of Neurocapitalism, Your Brain Needs New Rights (Vox)
Hollywood Reboots Russophobia For The New Cold War (Parry)
A Black Hole So Big It Shouldn’t Even Exist Is Baffling Scientists (RT)

 

 

After carefully making sure there were no needy people left in the country, and no children were going hungry, the new UK gov decided to spend £100+ million on an advertising campaign. They’re going to absolutely bombard, if not strangle, you with this stuff. You won’t be able to escape it.

‘Get Ready for Brexit’: Government Launches Information Blitz (G.)

The billboards have been unveiled, the branded mugs have been ordered and the adverts will soon start following you around the internet after the government launched what it claimed to be the largest ever public information campaign in an effort to prepare the British public for leaving the EU. The Get Ready for Brexit campaign went live on Sunday, stating that the UK would be leaving the EU on 31 October and urging the public to visit a new website to check what they needed to do to prepare for a no-deal exit. The slogan appeared for the first time on a giant advertising screen next to a John Lewis store at the Westfield shopping centre in Stratford, east London, looming over visitors.

Downing Street has previously briefed that the taxpayer-funded advertising campaign will cost up to £100m, although doubts have been raised over whether the government will realistically be able to spend that much on a campaign lasting just two months. One leading advertising industry source pointed out that this figure was substantially higher than the amount spent on traditional advertising in the UK by major consumer brands such as Amazon, Tesco and Asda in the whole of 2018. This suggests that either the government is overstating the amount it intends to spend in an attempt to draw extra attention or that Downing Street really is launching an advertising campaign that will be unequalled in its ubiquity.


Michael Gove, the cabinet minister in charge of no-deal planning, said: “Ensuring an orderly Brexit is not only a matter of national importance, but a shared responsibility” as he launched the adverts by referring to government polling that showed only 50% of the population thought it was likely the UK would leave the EU on 31 October. The same research found that 42% of small- to medium-sized businesses were still unsure of how they could prepare for Brexit and just a third of the British public have looked for information on what they will need to do, suggesting large-scale ignorance of what Brexit will involve with less than two months to go until the expected departure date.=

Read more …

View from Germany: “..the last intact pillar of the United Kingdom: its queen…”

Johnson’s Brexit Gambit Puts Queen in a Tight Spot (Spiegel)

[..] the anger of the masses isn’t being directed solely at the man in Downing Street. One of the last taboos for many Brits has also been broken: blatant criticism of the queen. “The. Queen. Did. Not. Save. Us,” tweeted Labour Party politician Kate Osamor, and hinted at the abolition of the monarchy. Her party leader Jeremy Corbyn asked the queen in writing for a personal meeting to protest against Johnson’s coup. Jo Swinson, the head of the EU-friendly Liberal Democrats, also wrote to the queen asking for an “urgent meeting.” After three years of the country beating itself up in the Brexit debate, Johnson is now leading Britain into the last round of the ordeal – an unprecedented showdown between the executive, the legislative and the judiciary, which, incidentally, threatens to damage the last intact pillar of the United Kingdom: its queen.


It’s impossible to predict what will ensue in the coming weeks – aside from chaos. But there is much to suggest Johnson wants precisely that, and at any cost, in order to deliver the main promise he made to become British prime minister – to lead his country out of the EU on Oct. 31, with or without an agreement. After the G-7 summit in Biarritz, Johnson may have praised the EU’s willingness to compromise, he may have put the chances of no deal at “one in a million,” and the majority of Brits and their elected representatives may be against leaving the EU without a deal, but no one in the betting crazy UK is now likely to bet on there being any agreement between London and Brussels in the end.

Read more …

Blame France.

Leaked No-Deal Report Says Lorries Could Face 48-Hour Delays At Dover (PA)

Leaked government documents which reportedly say there could be 48-hour delays at Dover in the event of a no-deal Brexit have moved hauliers to warn of the “clear and present danger” to the UK supply chain. Sky News said it had seen documents which suggest vehicles could face a two-day delay at the Kent port in a no-deal scenario, and the revelation has led to industry insiders saying the government has “failed to deliver”. Rod McKenzie, the managing director of policy at the Road Haulage Association (RHA), said it came as absolutely no surprise to him that such a document existed, adding that there was still no sign of a new customs process with just weeks left before the UK is expected to leave the EU.

He had not seen the Department for Transport documents (DfT), but said he understood they were more recent than the leaked Operation Yellowhammer files which contained predictions of a three-month “meltdown” at ports in the event of no deal. “The Road Haulage Association has been saying this for quite literally years now that if there is a no-deal Brexit, there will be very substantial queues at the border,” McKenzie said. “We have got a very, very serious problem with the UK supply chain if there is a no-deal Brexit on 31 October from where we are now. “This is a clear and present danger to the supply chain on which we all depend, and we are calling on the government in the clearest terms to make it clear what traders have to do to trade with the continent. This they have failed to do so far.”


Sky News said on Sunday night that analysis commissioned by the DfT suggested that on the first day of a no-deal Brexit, the worst-case scenario would be a two-day maximum delay for freight and vehicles at Dover, and an average wait of a day-and-a-half. McKenzie said any delay at the ports would cause a “very, very substantial traffic jam”, adding: “What we are saying is that we urgently need clarity from this government, having not had it from the previous government, we urgently need clarity from this government of what traders have to do to get ready for a no-deal Brexit.”

Read more …

Troubles.

Irish Border After Brexit – All Ideas Beset By Issues Says Secret Paper (G.)

All potential solutions to the post-Brexit Irish border are fraught with difficulty and would leave smaller businesses struggling to cope, experts have said, as leaked government papers outline major concerns just two months before Britain is due to leave the EU. A report summarising the findings of the government’s official “alternative arrangements” working groups concluded that there are issues with all the scenarios put forward to try to replace the backstop arrangement. There are also specific concerns over whether any technological solution could be delivered to monitor cross-border trade. Critics said the paper, seen by the Guardian, should “ring alarm bells” across government over how likely it is that alternative arrangements to the backstop will be found.

The dossier marked “official-sensitive” prepared for the EU Exit Negotiations Board is dated 28 August. It details how the findings of all advisory groups informing the government on the Northern Irish border are being kept deliberately under wraps to try to avoid hampering Britain’s intended renegotiation of the backstop agreed to by Theresa May. Alternative systems to avoid a hard Northern Irish border after Brexit have become the central tenet of Boris Johnson’s Brexit strategy. He sees this as a way of unlocking a new deal with Europe and has claimed that there are “abundant solutions”.


However, the damning report shows there is no single deliverable solution at present, despite the fact Johnson is almost a third of the way through the “30 days” target that the German chancellor, Angela Merkel, gave him to come up with a fresh border proposal. The report said: “It is evident that every facilitation has concerns and issues related to them. The complexity of combining them into something more systemic and as part of one package is a key missing factor at present.”

Read more …

This will take a long time.

Many US Firms Already Have Ditched China, More On The Way (CNBC)

President Trump rattled Wall Street when he demanded U.S. firms move production out of China. But many have already taken steps to do so, and, in earnings calls just over the past month, dozens of chief executives have signaled plans to further diversify their supply chains amid the intensifying trade war. On Aug. 23, Trump took to Twitter, ordering American companies to “immediately start looking for an alternative to China” and urging them instead to start making their products in the U.S. In doing so, he cited the International Emergency Economic Powers Act (IEEPA) — passed in 1977 to deal with an “unusual and extraordinary threat to the national security, foreign policy, or economy of the United States.” [..]

Trump doubled down on Friday, attacking General Motors for its significant presence in China and questioning whether the automaker should move the operations to the U.S. “Sometimes you’ve got to take stern measures,” White House economic advisor Larry Kudlow said alongside Treasury Secretary Steven Mnuchin on the sidelines of the G-7 meeting in France. Kudlow added that American companies should heed the president’s call to leave China. No U.S. president has invoked the law as leverage in a commercial dispute, let alone to sever commercial ties with one of its largest trading partners. Indeed, over the past century, U.S. administrations have mainly deployed the IEEPA to prosecute drug trafficking or financial terrorism through sanctions or other economic penalties.


[..] in an annual survey conducted in June by the U.S.-China Business Council, nearly 30% of the 220 respondents said they have already delayed or cancelled investments in China or the U.S. due to mounting trade uncertainty. Though just 13% said they had plans to specifically move operations out of China, that’s steadily increased from 10% in 2018 and 8% in 2017.

Read more …

Peace please.

Hong Kong Students Boycott Classes As Chinese Media Warns ‘End Is Coming’ (G.)

For the last 13 weeks, protesters have come to the streets to demand the formal withdrawal of a bill that would allow extradition to mainland China, which critics fear will be used by Beijing to target those who criticise the ruling Chinese communist party. As the protests have dragged on, they have taken on new forms and other demands including instituting democratic reforms and conducting an independent investigation into police behaviour. On Sunday, demonstrators attempted to lay siege to the airport, prompting a swift response from riot police. On Saturday, riot police stormed a metro station, attacking trapped protesters with batons. Monday’s class boycott was accompanied by a call for a general strike. It followed two days of mass protests where demonstrators paralysed links to airport, and clashed with police outside government buildings and in MTR stations.


Several editorials in Chinese state media on Monday condemned the protesters as “crazy and vicious” for bringing “catastrophe” upon the Hong Kong economy. An editorial on the website of the state-run news agency Xinhua warned “the end is coming for those attempting to disrupt Hong Kong”. The shift of the protests to school campuses is comes after Chinese officials have blamed the protests on the city’s liberal education curriculum. In recent weeks, Beijing has criticised teachers and parents for not instilling patriotic values in students and called for an overhaul of Hong Kong’s education system, which includes topics like the Chinese military’s violent crack down on democracy demonstrators on 4 June, 1989.

Read more …

Is capitalism itself at fault or just the excesses it allows for?

Why Has The U.S. CEO-To-Worker Pay Ratio Increased So Much? (Colombo)

MarketWatch recently published a piece about the soaring U.S. CEO-to-worker pay ratio, which hit 278-to-1 in 2018 (up from just 58-to-1 in 1989 and 20-to-1 in 1965) –

“CEO pay has increased 1,008% between 1978 and 2018, while typical worker pay has edged up 12%. [..] In 2018, CEOs in the country’s top 350 businesses were paid $17.2 million on average. Employees working in those industries — ranging from retail to technology and manufacturing — typically earned $64,500, researchers said. Overall, there’s a 278-to-1 pay ratio between workers and CEOs. In 1989, the compensation ratio was 58-to-1 and in 1965, it was 20-to-1. Stock awards and cashed-in stock options averaged $7.5 million of CEO pay in 2017 and 2018, the study added. Incorporating stock in pay arrangements is one way to incentivize CEO, and rising salaries illustrate the market for talent in the C-suite, some observers say.”


Left-leaning economists, politicians, and other commentators frequently use the soaring CEO-to-worker pay ratio as an example of why capitalism is inherently flawed and always leads to the rich getting richer, but my research has found that it is a byproduct of central banking and fiat (i.e., “paper”) currency rather than capitalism. To make a long story short, the Federal Reserve has excessively inflated the financial markets in its attempt to create an economic recovery from the Great Recession. This excessive asset price inflation has pushed U.S. household wealth far out of line with its historic relationship to the GDP, as the chart below shows. The wealthy have been the greatest beneficiaries of this asset price inflation because they own a disproportionate share of the assets that have been inflated by the Fed, which are stocks, bonds, and high-end real estate.

The Fed’s inflation of the U.S. stock market is the primary reason why the CEO-to-worker pay ratio has increased so much. The CEOs of public corporations usually receive stock options as part of their compensation packages, which means that they can benefit greatly when their stock prices rise. As the chart below shows, the CEO-to-worker pay ratio surges during asset bubbles, but falls back down when the bubbles burst (it correlates with the chart above). The current asset bubble is no different and the excesses will be corrected in the form of a strong bear market, just like they always are.

Read more …

Elon Muck can’t even produce a decent electric car. How big a threat is he?

In The Era Of Neurocapitalism, Your Brain Needs New Rights (Vox)

“Nothing was your own except the few cubic centimeters inside your skull.” That’s from George Orwell’s dystopian novel 1984, published in 1949. The comment is meant to highlight what a repressive surveillance state the characters live in, but looked at another way, it shows how lucky they are: At least their brains are still private. Over the past few weeks, Facebook and Elon Musk’s Neuralink have announced that they’re building tech to read your mind — literally. Mark Zuckerberg’s company is funding research on brain-computer interfaces (BCIs) that can pick up thoughts directly from your neurons and translate them into words. The researchers say they’ve already built an algorithm that can decode words from brain activity in real time.

And Musk’s company has created flexible “threads” that can be implanted into a brain and could one day allow you to control your smartphone or computer with just your thoughts. Musk wants to start testing in humans by the end of next year. Other companies such as Kernel, Emotiv, and Neurosky are also working on brain tech. They say they’re building it for ethical purposes, like helping people with paralysis control their devices. This might sound like science fiction, but it’s already begun to change people’s lives. Over the past dozen years, a number of paralyzed patients have received brain implants that allow them to move a computer cursor or control robotic arms. Implants that can read thoughts are still years away from commercial availability, but research in the field is moving faster than most people realize.


Your brain, the final privacy frontier, may not be private much longer. Some neuroethicists argue that the potential for misuse of these technologies is so great that we need revamped human rights laws — a new “jurisprudence of the mind” — to protect us. The technologies have the potential to interfere with rights that are so basic that we may not even think of them as rights, like our ability to determine where our selves end and machines begin. Our current laws are not equipped to address this.

Read more …

Russiagate, the sequel.

Hollywood Reboots Russophobia For The New Cold War (Parry)

In the Cold War, Tinseltown played an important role in the cultural battlefield against the USSR and anti-Soviet paranoia was an ever-present theme in American cinema for decades, from the McCarthy era until the Berlin Wall fell. Contemporaneously, a revival of geopolitical tensions between the United States and the Russian Federation — which many have dubbed a second Cold War — has seen the return of such tropes on the silver screen. Most recently, it has resurfaced in popular web television shows such as the third season of Netflix’s retro science fiction/horror series Stranger Things, as well as HBO’s miniseries Chernobyl, which dramatizes the 1986 nuclear accident in Soviet Ukraine.

It was a famous cinematic work that many believe ominously foreshadowed Chernobyl in Andrei Tarkovsky’s 1979 science fiction film, Stalker, less than a decade prior to the calamity. It is unlikely that HBO would have been as interested in green-lighting a five-part program on the disaster without the current hysteria surrounding the unproven allegations of Russian interference in the 2016 U.S. presidential election and ‘collusion’ between Moscow and the Trump campaign. ‘Russiagate’ has become a national obsession and suddenly the very idea of corruption and intrigue has been made synonymous with the Kremlin. Hollywood liberal figures have been some of the hoax’s biggest proponents, including the show’s writer, Craig Mazin.


It is equally as hard to imagine Americans themselves being as captivated by a re-enactment of the nuclear accident without the current political climate of fear-mongering bombarding them every day in corporate media. From the perspective of the U.S. political establishment, what better way to deflect attention away from its own sins than onto a manufactured adversary?

Read more …

The black hole’s mass is 100 times greater than that of the sun.

M87* is an example of a black hole that is 6.5 billion times as massive as the Sun.

A Black Hole So Big It Shouldn’t Even Exist Is Baffling Scientists (RT)

Scientists may have spotted a black hole that is so enormous, it shouldn’t even exist, although they aren’t quite sure if it even does. The black hole’s mass is 100 times greater than that of the sun. The potential black hole, which is twice as large as what physicists had believed was possible, was detected by the LIGO and Virgo gravitational-wave detectors at the European Gravitational Observatory. A black hole is usually formed when a star collapses after it runs out of fuel, but this only happens when the star’s core is less than 50 times the mass of the Sun, Quanta Magazine explains. Stars with larger masses, between 50-130 times the mass of the Sun, either shed matter until they are small enough, or destroy themselves in a powerful explosion, meaning this new potential black hole defies what scientists understand to be possible.


Black holes that are larger than 130 solar masses can also form when their core’s collapse is too strong to stop. M87* is an example of a black hole that is 6.5 billion times as massive as the Sun. Scientists are scratching their heads trying to figure out how this newly spotted potential large black hole came into being. According to Qanta, they suspect that the black hole could be the result of smaller black holes colliding and merging into one gigantic one. They think it is possible that somewhere in a dense area of the universe, a 30 and 50 solar mass black hole could have merged and that the new black hole then combined with another one, which could explain the signals they detected.

Read more …

 

 

 

 

 

Jul 232019
 


Odilon Redon Sunset n.d.

 

US Justice Department Tells Mueller To Limit Congressional Testimony (R.)
What Goes Around (Kunstler)
A Non-Hack That Raised Hillary’s Hackles (Ray McGovern)/span>
Inequality is Destroying Democratic Capitalism (Deaton)
Who Was Jeffrey Epstein Calling? (NYMag)
Chelsea Clinton Denies Ties To Jeffrey Epstein’s Alleged ‘Madam’ (MN)
UK’s May Takes Parting Shot at Putin in Desperate Diversion From Failure (SCF)
Iran Warns West Against Starting Conflict (R.)
France To Shut Down Nuclear Plants Due To Heatwave (Montel)
Huge Swathes Of The Arctic On Fire, Satellite Images Show (Ind.)

 

 

He might as well stay home. Can’t talk about Concord, can’t talk about anything not in the report.

US Justice Department Tells Mueller To Limit Congressional Testimony (R.)

The U.S. Justice Department told former Special Counsel Robert Mueller on Monday he should limit his testimony before Congress this week to discussing his public report on the Russia probe. In a letter to Mueller, Associate Deputy Attorney General Bradley Weinsheimer said his testimony set for Wednesday “must remain within the boundaries of your public report because matters within the scope of your investigation were covered by executive privilege.” The letter said “these privileges would include discussion about investigative steps or decisions made during your investigation not otherwise described in the public version of your report.”

Mueller completed in March his nearly two-year-long probe into Russian meddling in the 2016 election and possible obstruction of justice by President Donald Trump. The Justice Department released a redacted copy of his 448-page report in April. A spokesman for Mueller, Jim Popkin, said no one at the Justice Department, Congress or the White House would review Mueller’s statement before he delivers it on Wednesday. In back-to-back hearings before the House of Representatives Judiciary and Intelligence committees, Democrats are expected to try to get Mueller to focus his testimony on specific examples of Trump’s misconduct.

[..] Mueller has been using offices at his former law firm WilmerHale and working with a small team from the special counsel’s office to prepare for Wednesday’s hearings, Popkin said. “He will come well prepared,” Popkin said. “His team has been working on this for a while and they will be ready for whatever comes their way.”

Read more …

“is it possible that he’s just not very bright?”

What Goes Around (Kunstler)

The entrapment operation that was the Special Counsel’s covert mission has turned out to be Mr. Mueller own personal booby-trap, prompting the question: is it possible that he’s just not very bright? Though Mr. Mueller’s final report asserted that the Russian government interfered in “a sweeping and systemic fashion” to influence the 2016 election, the 450-page great tome contains zero evidence to support that claim, and the discrepancy was actually noticed by federal judge Dabney Friedrich who is presiding over the case against the alleged Russian Facebook trolls that was one of the two tent-poles in the RussiaGate fantasy. The case is now blowing up in Robert Mueller’s face.

In early 2018, Mr. Mueller sold a DC grand jury on producing indictments against a Russian outfit called the Internet Research Agency and its parent company Concord Management, owned by Russian oligarch Yevgeny Prigozhin for the so-called election meddling. The indictment was celebrated as a huge coup at the time by the likes of CNN and The New York Times, styled as a silver bullet in the heart of the Trump presidency. But the indicted parties were all in Russia, and could not be extradited, and there was zero expectation that any actual trial would ever take place — leaving Mueller & Co. off-the-hook for proving their allegations.

To the great surprise of Mr. Mueller and his “team,” Mr. Prigozhin hired some American lawyers to defend his company in court. Smooth move. It automatically triggered the discovery process, by which the accused is entitled to see the evidence that prosecutors hold. It turned out that Mr. Mueller’s team had no evidence that the Russian government was involved with the Facebook pranks. This annoyed Judge Friedrich, who ordered Mr. Mueller and his lawyers to desist making public statements about Concord and IRA’s alleged “sweeping and systemic” collusion with Russia, and threatened legal sanctions if they did.

Read more …

Three years ago. That went by fast.

A Non-Hack That Raised Hillary’s Hackles (Ray McGovern)/span>

Three years ago Monday WikiLeaks published a trove of highly embarrassing emails that had been leaked from inside the Democratic National Committee. As has been the case with every leak revealed by WikiLeaks, the emails were authentic. These particular ones, however, could not have come at a worse time for top Democratic Party officials. The emails made it unmistakably clear that the DNC had tipped the scales sharply against Democratic insurgent Bernie Sanders, giving him a snowball’s chance in hell for the nomination. [..] A mere four days after the WikiLeaks release, a well orchestrated Democratic Convention nominated Clinton, while many Sanders supporters loudly objected.

Thus, she began her campaign under a cloud, and as more and more Americans learned of the fraud that oozed through the DNC email correspondence — including the rigging of the Democratic primaries — the cloud grew larger and darker. On June 12, 2016, six weeks before the convention, WikiLeaks publisher Julian Assange had announced in an interview on British TV, “We have upcoming leaks in relation to Hillary Clinton … We have emails pending publication.” Independent forensic investigations demonstrated two years ago that the DNC emails were not hacked over the Internet, but had been copied onto an external storage device — probably a thumb drive. Additional work over recent months has yielded more evidence that the intrusion into the DNC computers was a copy, not a hack, and that it took place on May 23 and 25, 2016.

No one knew how soon WikiLeaks would publish the emails, but the DNC offense/defense would surely have to be put in place before the convention scheduled to begin on July 25. That meant there were, at most, six weeks to react. But it only took two days. As early as July 24, about 48 hours after the leaks were published, and a day before the convention, the DNC first blamed Russia for hacking their emails and giving them to WikiLeaks to sabotage Clinton. Granted, it was a stretch — and the DNC would have to hire a pliable cybersecurity firm to back up their claim. But they had good reason to believe that CrowdStrike would perform that service. It was the best Clinton campaign manager Robbie Mook and associates could apparently come up with.

If they hurried, there would be just enough time to prepare a PR campaign before the convention and, best of all, there was little doubt that the media could be counted on to support the effort full bore. [..] It pretty much worked like a charm. The late Senator John McCain and others were quick to call the Russian “hack” an “an act of war.” Evidence? None. For icing on the cake, then-FBI Director James Comey decided not to seize and inspect the DNC computers. Nor, as we now know, did Comey even require a final report from CrowdStrike.

Read more …

Not sure having it discussed by well-paid economists is all that useful.

Inequality is Destroying Democratic Capitalism (Deaton)

At the risk of grandiosity, I think that today’s inequalities are signs that democratic capitalism is under threat, not only in the US, where the storm clouds are darkest, but in much of the rich world, where one or more of politics, economics, and health are changing in worrisome ways. I do not believe that democratic capitalism is beyond repair nor that it should be replaced; I am a great believer in what capitalism has done, not only to the oft-cited billions who have been pulled out of poverty in the last half-century, but to all the rest of us who have also escaped poverty and deprivation over the last two and a half centuries. It also provides our jobs and the cornucopia of goods and services that we take for granted.

And Milton Friedman, whose starry-eyed view of capitalism has much to answer for, was not entirely wrong when he extolled the freedom that free markets can bring. Though history has not been kind to his view that equality would be guaranteed by using markets to pursue freedom. But we need to think about repairs for democratic capitalism, either by fixing what is broken, or by making changes to head off the threats; indeed, I believe that those of us who believe in social democratic capitalism should be leading the charge to make repairs.

As it is, capitalism is not delivering to large fractions of the population; in the US, where the inequalities are clearest, real wages for men without a four-year college degree have fallen for half a century, even at a time when per capita GDP has robustly risen. Mortality rates are rising for the less-educated group at ages 25 through 64, and by enough that life expectancy for the entire population has fallen for three years in a row, the first time such a reversal has happened since the end of the first world war and the great influenza epidemic. Less educated Americans are dying by their own hands, from suicide, from alcoholic liver disease, and from overdoses of drugs. Morbidity is rising too, and they are also suffering from an epidemic of chronic pain that, for many, makes a misery of daily life.

Read more …

“If you watch Fox News, you will believe Bill Clinton was Epstein’s No. 1 pal and enabler. If you watch MSNBC, this scandal is usually all about Donald Trump. ”

Who Was Jeffrey Epstein Calling? (NYMag)

Perhaps, at long last, a serial rapist and pedophile may be brought to justice, more than a dozen years after he was first charged with crimes that have brutalized countless girls and women. But what won’t change is this: the cesspool of elites, many of them in New York, who allowed Jeffrey Epstein to flourish with impunity. For decades, important, influential, “serious” people attended Epstein’s dinner parties, rode his private jet, and furthered the fiction that he was some kind of genius hedge-fund billionaire. How do we explain why they looked the other way, or flattered Epstein, even as they must have noticed he was often in the company of a young harem?

Easy: They got something in exchange from him, whether it was a free ride on that airborne “Lolita Express,” some other form of monetary largesse, entrée into the extravagant celebrity soirées he hosted at his townhouse, or, possibly and harrowingly, a pound or two of female flesh. If you watch Fox News, you will believe Bill Clinton was Epstein’s No. 1 pal and enabler. If you watch MSNBC, this scandal is usually all about Donald Trump. In fact, both presidents are guilty (at the very least) of giving Epstein cover and credibility.

There are so many unanswered questions about Epstein, but one that looms over all of them is whether the bipartisan crowd who cleared a path for him will cover its tracks before we can get answers — not just Clinton and Trump and all those who drank at Epstein’s trough but also (among others) institutions like Harvard, Dalton, and the Council on Foreign Relations, or lawyers like the New York prosecutor Cy Vance Jr., whose office tried to downgrade Epstein’s sex-offender status; Kenneth Starr, who tried to pressure Republican Justice Department officials to keep the Epstein case from ever being prosecuted; and Alan Dershowitz, who tried to pressure the Pulitzer Prizes to shut out the Miami Herald for its epic investigative reporting that cracked open the case anew.

Read more …

People are going to start talking soon, if only to protect themselves. But why hasn’t Maxwell been arrested yet?

Chelsea Clinton Denies Ties To Jeffrey Epstein’s Alleged ‘Madam’ (MN)

Since Jeffrey Epstein’s latest arrest on sex trafficking charges, a who’s who of the rich and powerful — notably Donald Trump, Prince Andrew and Bill Clinton — have rushed to downplay their associations with the financier who is accused of abusing underaged girls. Now Chelsea Clinton has joined her ex-president father on this who’s who list. Her representative issued a statement to Politico over the weekend denying reports that the former First Daughter was close friends with Ghislaine Maxwell, Epstein’s ex-girlfriend and the alleged “madam” who has been accused of helping him procure underaged girls for sex.

Politico’s report on Maxwell, 57, focuses on how the daughter of the late British publishing mogul Robert Maxwell helped Epstein, the Brooklyn-born son of a New York City parks groundskeeper, gain access to social circles that allowed him to become friendly with two U.S. presidents, billionaire business moguls, America’s media elite and at least one member of the British royal family. Maxwell has not been criminally charged, but has settled two lawsuits filed by women who say she participated in Epstein’s alleged sex trafficking, the New York Times reported last week. She has denied any wrongdoing. Politico said Maxwell first grew close to the Clinton family after former president Bill Clinton left office, and eventually became friends with Chelsea Clinton, vice chair of the Clinton Foundation.

According to the news outlet, the two women vacationed together on a yacht in 2009, and Maxwell attended Chelsea’s wedding to Marc Mezvinsky in 2010, Politico reported. A photo of Maxwell at the wedding has circulated online. Maxwell also participated in the Clinton Foundation’s Clinton Global Initiative as recently as 2013, through The TerraMar Project, an oceanic non-profit she founded, according to the Initiative’s website. The contacts between Chelsea Clinton and Maxwell appear to have occurred after Maxwell’s name first emerged in accounts of Epstein’s alleged sexual abuse. “Ghislaine was the contact between Epstein and Clinton,” a person familiar with the relationship told Politico. “She ended up being close to the family because she and Chelsea ended up becoming close.”

Read more …

May goes away in July. Bye.

UK’s May Takes Parting Shot at Putin in Desperate Diversion From Failure (SCF)

In what was billed as her last major speech before quitting Downing Street, Britain’s outgoing Prime Minister Theresa May focused her concerns on Russian President Vladimir Putin, lashing out at his “cynical falsehoods” and admonishing her successor “to stand up to” the Russian leader. Given her ignominious failure as premier over the Brexit fiasco, it seemed a strange choice of topic as she addressed the Chatham House think tank in London this past week. Her speech dealt with the wider theme of rising “populist politics” in the US and Europe. And she sought to portray Putin as an archetypal sinister figure fomenting populist threat to the “liberal” democratic order.

At one point, May claimed: “No one comparing the quality of life or economic success of liberal democracies like the UK, France and Germany to the Russian Federation would conclude that our system is obsolete.” This was supposed to be a riposte to an interview given by Putin to the Financial Times last month ahead of the G20 summit in Japan. During a lengthy interview on a wide range of issues, the Russian president was quoted as saying: “The liberal idea has become obsolete. It has come into conflict with the interests of the overwhelming majority of the population.”

Putin was apparently explaining a fairly straightforward and, to many observers, valid assessment of international politics. Namely, that Western establishments and institutions, including the mainstream media, are experiencing a crisis in authority. That crisis has arisen over several years due to popular perception that the governance of the political class is not delivering on democratic demands of accountability and economic progress. That in turn has led people to seek alternatives from the established parties, a movement in the US and Europe which is denigrated by the establishment as “populist” or rabble rousing.

Read more …

Boris is capable of doing very stupid things.

Iran Warns West Against Starting Conflict (R.)

Iran’s foreign minister warned the West on Monday against “starting a conflict,” saying it was not seeking confrontation after its military seized the British-flagged tanker Stena Impero in the Strait of Hormuz last week. London described the seizure of the Stena Impero as “state piracy” and on Monday called for a European-led naval mission to ensure safe shipping through the Strait of Hormuz. Speaking in Nicaragua, Foreign Minister Mohammad Zarif said Iran had taken measures against the ship to implement international law, not in retaliation for the British capture of an Iranian tanker two weeks earlier in Gibraltar.


“Starting a conflict is easy, ending it would be impossible,” Zarif told reporters after meeting his Nicaraguan counterpart. “It’s important for everybody to realize, it’s important for Boris Johnson to understand, that Iran does not seek confrontation,” he said, referring to the front-runner to become Britain’s new prime minister. “Iran wants to have normal relations based on mutual respect,” he added. Zarif said Iran acted when it observed that the UK ship did not follow regulations. “The UK ship had turned down its signal for more time than it was allowed to (and) was passing through the wrong channel, endangering the safety and security of shipping and navigation in the Strait of Hormuz, for which we are responsible,” Zarif said.

Read more …

France imports UK wind energy.

France To Shut Down Nuclear Plants Due To Heatwave (Montel)

French weather service Meteo France issued a 40C heatwave warning on Monday for 21 regions across France, while utility EDF will shut down nearly 3 GW of nuclear capacity this week amid cooling water issues. Golfech 2 (1.3 GW) on the Garonne river would be stopped from Tuesday at 23:00 until 29 July at 23:59, while Golfech 1 (1.3 GW) would be halted from Wednesday at 02:00 until 29 July at 23:59. Low river flows and high water temperatures can force operators to cut output if it breaches environmental limits. Flows on key French rivers had “significantly” weakened over the last two weeks amid persistent hot and dry weather, the ministry of energy told Montel recently.


The St Alban 1 and 2 (2.6 GW) reactors, meanwhile, saw their output cut over the weekend, and though both reactors are now back online, EDF warned last week it could curb output at its nuclear plants located along the river Rhone – which also included Bugey (3.7 GW) – due to declining flows amid the hot weather. The temperature of the Rhone around St Alban and Tricast in was currently 26C, while it was 23.4C at Bugey, estimates from Montel’s Energy Quantified showed, with 28C deemed unsafe. French TSO RTE expected power demand to peak at 59.4 GW on Thursday and 58.6 GW on Friday, with a surge expected due to an increase in need for cooling.

Read more …

Ugly. Peat fires are impossible to control.

Huge Swathes Of The Arctic On Fire, Satellite Images Show (Ind.)

Vast swathes of the Arctic are suffering from “unprecedented” wildfires, new satellite images have revealed. North of the Arctic circle, the high temperatures are facilitating enormous wildfires which are wreaking ecological destruction on a colossal scale. It comes after the world’s hottest June on record which has been followed by a devastating heatwave in the US, with Europe forecast for the same treatment later this week. Satellite images reveal fires across Greenland, Siberia and Alaska, with warm dry conditions following ice melt on the enormous Greenland icesheet commencing a month earlier than average.

Pierre Markuse, a satellite photography expert, posted images showing smoke billowing across massive areas of uninhabited and wild land. The pictures show forest fires and burning peat. They also reveal the extent of the damage the fires leave behind. In Alaska wildfires have already burned more than 1.6 million acres of land. Mark Parrington, a senior scientist at the European Centre for Medium-Range Weather Forecast, said the amount of CO2 emitted by Arctic wildfires between 1 June and 21 July 2019 is around 100 megatonnes and is approaching the entire 2017 fossil fuel CO2 emissions of Belgium.


Satellite image processed by Pierre Markuse showing numerous wildfires burning in Russia just south of the Arctic Circle (Pierre Markuse/Creative Commons)

Read more …

 

 

 

 

 

Feb 132019
 


Edouard Manet Osny, The road-menders, Rue de Berne 1878

 

America’s 1% Hasn’t Had This Much Wealth In 100 Years (MW)
Senate Has Found No Direct Evidence of Trump-Russia Conspiracy (NBC)
NBC Has A Hard Time Accepting There’s No Collusion (ZH)
Mitch McConnell To Force Senate Vote On Ocasio-Cortez’s Green New Deal (CNBC)
For The Stock Market, A Trade-War Win May Be A Hollow Victory (MW)
Labour To Set Out Plans To Decarbonise UK, Fulfil Green Jobs Pledge (G.)
Mark Carney: Brexit Is The First Test Of A New Global Order (G.)
EU’s Verhofstadt Suggests Brexiteers Could ‘End Up On The Guillotine’ (Ind.)
Theresa May’s Brexit Tactic: My Way Or A Long Delay (G.)
Dark Money Is Pushing For A No-Deal Brexit. Who Is Behind It? (Monbiot)
Spanish PM May Call Snap Election If Budget Rejected (G.)
Australia Rate Cut Calls As Home Loans Fall At Fastest Rate Since GFC (SMH)
Chinese Banks Resist Maxing Out Credit Cards (R.)
China’s Private Firms Hit By Default Contagion (R.)
Russia Takes Steps To Survive Global Internet Shutdown With Its Own Web (RT)

 

 

My friend Jesse Colombo is right to point out the impact of imploding asset bubbles is the main takeaway. But I think even more than that, it’s who will be the main victims of that: those who have no assets. The losses will land on their shoulders.

America’s 1% Hasn’t Had This Much Wealth In 100 Years (MW)

It’s not fashionable to wear flapper dresses and do the Charleston, but 1920s-style wealth inequality is definitely back in style. New research says America’s ultra-rich haven’t held as much of the country’s wealth since the Jazz Age, those freewheeling times before the country’s finances shattered. “U.S. wealth concentration seems to have returned to levels last seen during the Roaring Twenties,” wrote Gabriel Zucman, an economics professor at the University of California, Berkeley. Zucman said all the research on the issue also points to large wealth concentrations in China and Russia in recent decades. The same thing is happening in France and the U.K., but at a “more moderate rise,” the paper said.

In 1929 — before Wall Street’s crash unleashed the Great Depression — the top 0.1% richest adults’ share of total household wealth was close to 25%, according to Zucman’s paper, which was distributed by the National Bureau of Economic Research. Those rates plunged in the early 1930s and continued dropping to below 10% in the late 1970s, findings show. Rates have been on the rebound since the early 1980s, and are currently close to 20%. It’s become especially hard to measure the full extent of riches these days. “Since the 1980s, a large offshore wealth management industry has developed which makes some forms wealth (namely, financial portfolios) harder to capture,” the paper added.


MarketWatch photo illustration/iStockphoto, Everett Collection

[..] Millions of Americans live paycheck to paycheck; the recent federal government’s partial government shutdown forced some federal workers to food pantries, and cast a harsh light on Americans’ lack of savings. Jesse Colombo says people should be more worried about issues other than the current gap between the rich and poor. “America’s wealth inequality is not a permanent situation, but a temporary one because the asset bubbles behind the wealth bubble are going to burst and cause a severe economic crisis,” he added. “My argument is that our society should be worrying more about these asset bubbles than the temporary inequality.” “What is the common denominator between U.S. wealth inequality during the Roaring Twenties and now?” he said. “A massive stock market bubble.”

Read more …

The inevitable fall-out of a press that no longer reports the news, but manufactures it.

Senate Has Found No Direct Evidence of Trump-Russia Conspiracy (NBC)

The Senate Intelligence Committee’s investigation into the 2016 election has uncovered no direct evidence of the Trump campaign conspiring with Russia, Democrats and Republicans on the committee told NBC News. But different parties’ investigators in the probe, which is winding down, disagree over the implications of a pattern of contacts between Trump associates and Russians. Last week, Sen. Richard Burr, the panel’s Republican chairman, told CBS News that, while more facts may be uncovered, “If we write a report based upon the facts that we have, then we don’t have anything that would suggest there was collusion by the Trump campaign and Russia.” Democratic Senate investigators told NBC News on condition of anonymity that Burr’s characterizations, while accurate, lacked context. One aide said, “We were never going find a contract signed in blood saying, ‘Hey Vlad, we’re going to collude.'”

Read more …

For MS(NBC), Russigate has been a major investment. And they’re still trying to squeak past it by saying an official report will take many more months etc., but it’s done as far as the Senate is concerned. And Mueller has given zero indication of having anything collusion-related.

NBC Has A Hard Time Accepting There’s No Collusion (ZH)

We knew this day was coming, but watching an MSNBC anchor and guest pundits squirm during a live Tuesday morning update in which NBC News intelligence and national security correspondent, Ken Dilanian, read aloud that the Senate Intelligence Committee admits it has found “no direct evidence” of collusion between President Trump and Russia, is a segment that itself perhaps belongs to the history books. Mediaite described of the “stunned” MSNBC host’s demeanor: “The report met surprise first, then skepticism, with Jackson and her guests.” They awkwardly and visibly try to make sense of hard and unambiguous reporting that runs contrary to everything being parroted in the MSNBC echo chamber over the past 2 years.

To drive home the explosive significance of the findings, Dilanian noted just how long the ‘collusion’ incessant drumbeat has lasted: “After two years and interviewing more than 200 witnesses, the Senate intelligence Committee has not uncovered any direct evidence of a conspiracy between the Trump campaign and Russia,” said Dilanian. “That’s according to sources on both the Republican and the Democratic side of the aisle.” And in a prior NBC News article Tuesday morning, Dilanian spelled out: “After two years and 200 interviews, the Senate Intelligence Committee is approaching the end of its investigation into the 2016 election, having uncovered no direct evidence of a conspiracy between the Trump campaign and Russia, according to both Democrats and Republicans on the committee.”

MSNBC anchor Hallie Jackson and her guest panelists’ faces looked visibly confused and uncomfortable as they learned the Senate report is going in the opposite direction of everything MSNBC and other mainstream outlets have been breathlessly reporting on a near 24/7 basis. More importantly, if this is a precursor of what the Mueller report concludes in a few weeks/months, the TV station that built its current reputation on the premise of Russian collusion, may have no option but to go on indefinite hiatus. Watch the segment above, with host Hallie Jackson appearing to grow exasperated by the 2:20 mark:“If and when the president, as he may inevitably do, points to these conclusions and says look, the Senate intelligence committee found I am not guilty of conspiracy… he would be correct in saying that?”

Dilanian noted that while the Republican chair of the committee made what he characterized as “partisan” comments the week prior, it turned out be unanimous fact. “What I found,” he said, “is that Democrats don’t dispute that characterization.” [..] Dilanian also noted the Senate intel committee has access to classified material, which means “if there was an intercept between officers suggesting they were conspiring with the Trump campaign, [the committee] would see that. And that has not emerged.” “So that evidence does not exist, and Trump will claim vindication,” he repeated.

Read more …

McConnell thinks it’s best to be fast in voting it down, before there’s more detailed discussion, for instance about which parts could work and which don’t. He’s probably right.

Mitch McConnell To Force Senate Vote On Ocasio-Cortez’s Green New Deal (CNBC)

Senate Majority Leader Mitch McConnell said Tuesday that the Senate would vote on the Green New Deal introduced last week by Sen. Edward Markey, D-Mass., and Rep. Alexandria Ocasio-Cortez, D-N.Y. “I’ve noted with great interest the Green New Deal, and we’re going to be voting on that in the Senate to give everybody an opportunity to go on record,” McConnell told reporters. The bill, which is not expected to pass the Republican-dominated upper chamber, could force some Democrats to make a politically awkward calculation. Democratic liberals, including all of the senators currently running for president, have come out in support of the legislation, which calls for generating 100% of the nation’s power from renewable sources within 10 years. Scientists have said that dramatic, immediate action is necessary to stem the catastrophic effects of climate change.

Democratic moderates have been less than enthusiastic about the proposal. House Speaker Nancy Pelosi derisively referred to the House version of the bill as a “green dream,” while only 11 of the 47 senators who caucus with the Democrats have signed on to sponsor the bill. Sen. Sherrod Brown, D-Ohio, who is widely expected to enter into the 2020 race, has declined to say whether he supports the proposal. “I’m not going to take position on every bill that’s coming out,” he said Tuesday, according to Politico. “I support a Green New Deal. I think we need to aggressively support climate change [legislation]. That’s my answer.” Republicans control the Senate, with 53 members of the 100-seat chamber. Democrats control the House of Representatives, but it is not clear if the House will vote on the measure under Pelosi’s leadership.

Read more …

Stocks are up when the deficit is up.

For The Stock Market, A Trade-War Win May Be A Hollow Victory (MW)

Sometimes losing can pay dividends in unexpected ways, and that seems particularly true in the case of stocks and trade. For the past five decades, the U.S. stock market has comparatively outperformed when the trade deficit widened and vice versa, suggesting that even if the U.S. emerges victorious from its trade war with China, investors may have few reasons to rejoice. At face value, it may seem counterintuitive, but for the U.S., which relies on trade to fuel its economic juggernaut, a deficit can actually be a sign that all is well. “Since at least 1970, U.S. stocks have done best when its trade deficit worsens,” said Jim Paulsen, chief investment strategist at Leuthold Group, who explained that if imports rise, it indicates that domestic consumption is healthy.

“And if exports go up, it means foreign demand is strong. So when we have a trade deficit, it means the U.S. is doing better,” he said. A trade balance is the difference between how much a country sells and buys from abroad, and a deficit is often viewed as a negative, chiefly as it means a country is spending more than it is making. But as the chart below demonstrates, U.S. stocks vis-a-vis foreign equities have done quite well notwithstanding all the depressing headlines over the years about how the rest of the world is taking advantage of the U.S.

Read more …

And Labour wants part of the Green New Deal fame too. But what do any of these people really know about physics, about energy? It all still looks like a typical dumb politics approach: we’ll get rich while going green, promise!

Labour To Set Out Plans To Decarbonise UK, Fulfil Green Jobs Pledge (G.)

Labour is to set out how the UK can move swiftly to a decarbonised future to tackle the unfolding climate crisis and put “meat on the bones” of its promise to create hundreds of thousands of high-skilled, unionised green jobs. Trade unionists and industry leaders will come together with academics, engineers and public institutions to build detailed regional plans setting out the challenges and opportunities ahead. The proposal, due to be outlined on Wednesday by Rebecca Long-Bailey, the shadow business secretary, will involve a national call for evidence and a series of regional events to build “a detailed action plan” to maximise the benefits of moving to a zero-carbon future.

“A decade of austerity and decades of neoliberalism have left many in our country asking: what is Britain for?” Long-Bailey told the Guardian. “This has been brought into focus by the government’s handling of Brexit, which is at its core deeply pessimistic, with nothing to say about the future.” She said a future Labour government would oversee an economic revolution to tackle the climate crisis, using the full power of the state to decarbonise the economy and create hundreds of thousands of green jobs in struggling towns and cities across the UK. “We believe that together, we can transform the UK through a green jobs revolution, tackling the environmental crisis in a way that brings hope and prosperity back to parts of the UK that have been held back for too long.”

[..] Long-Bailey said Labour was determined to move beyond rhetoric about a green revolution and work out exactly how that could be achieved, and how it could translate to new well-paid, unionised jobs across the UK. “We’re launching an unprecedented call for evidence about what this means for your town, your city, your region,” she said. “We want to bring unions, industry, universities, the public sector and others together to build this vision out into a practical reality.” Labour says a key plank of its plan will be to ensure a “just transition” to high quality green jobs for those currently working in carbon-emitting industries. To do that it will have to persuade its trade union backers, who represent people in high-carbon industries, that there is a viable economic alternative.

Read more …

More liberalism! No matter that it played a big role in Britons voting for Brexit. These people are one-dimensional.

Mark Carney: Brexit Is The First Test Of A New Global Order (G.)

Brexit is an acid test of whether it is possible to reshape globalisation in a way that offers the benefits of trade while allaying public fears about the erosion of democracy, the governor of the Bank of England, Mark Carney, has said. Speaking in London, Carney said the ramifications of the UK’s departure from the EU would be felt around the world and would determine whether it was possible to shrug off rising protectionism in favour of a new era of international cooperation. The governor cited trade tensions and the result of the 2016 referendum as examples of fundamental pressures to reorder globalisation. “It is possible that new rules of the road will be developed for a more inclusive and resilient global economy. At the same time, there is a risk that countries turn inwards, undercutting growth and prosperity for all.”

Carney’s recent comments about Brexit have highlighted the short-term risks to the economy of leaving the EU next month without an agreement in place, but he used his speech on the state of the global economy to provide a more upbeat assessment. “In many respects, Brexit is the first test of a new global order and could prove the acid test of whether a way can be found to broaden the benefits of openness while enhancing democratic accountability,” he said, speaking at a Financial Times event in London. “Brexit can lead to a new form of international cooperation and cross-border commerce built on a better balance of local and supranational authorities. In these respects, Brexit could affect both the short and long-term global outlooks.”

Read more …

Just trying to make friends, I guess. Best of all, he has no idea it could just as well be him on that guillotine.

EU’s Verhofstadt Suggests Brexiteers Could ‘End Up On The Guillotine’ (Ind.)

The politicians pushing Brexit should be careful not follow in the footsteps of revolutionary leaders who “ended up on the guillotine”, the European Parliament’s Brexit chief has said. At a press conference in Strasbourg Guy Verhofstadt compared Boris Johnson and Jacob Rees-Mogg to Georges Danton and Maximilien Robespierre – leading figures in the French revolution who were ultimately executed by their former comrades. He said it was “important to remind” the senior Conservatives that their historical counterparts had ended up losing their heads.

“I know that within the Tory party the hard Brexiteers are compared to the leaders of the French revolution. I think Gove is Brissot, and Boris Johnson is Danton, and Rees-Mogg is compared to Robespierre,” Mr Verhofstadt said. “We should not forget that the efforts of these men were not appreciated by the common man they claimed to represent – because they all ended up on the guillotine. So that’s important to remind [them].” His comments come a week after European Council president Donald Tusk caused a story in the UK by saying there was a “special place in hell” for Brexiteers who had advocated leaving the EU without a serious plan of how to do it.

Read more …

44 days.

Theresa May’s Brexit Tactic: My Way Or A Long Delay (G.)

Theresa May’s high-stakes Brexit strategy may have been accidentally revealed after her chief negotiator Olly Robbins was overheard in a Brussels bar saying MPs will be given a last-minute choice between her deal and a lengthy delay. The prime minister has repeatedly insisted that the government intends to leave the EU as planned on 29 March, and urged MPs to “hold our nerve”, while she tries to renegotiate changes to the Irish backstop. “So our work continues,” she told MPs on Tuesday. “Having secured an agreement with the European Union for further talks, we now need some time to complete that process. The talks are at a crucial stage. We now all need to hold our nerve to get the changes this house requires and deliver Brexit on time.”

But Robbins, the most senior civil servant involved in the Brexit process, was overheard by a reporter from ITV, holding a late-night conversation in which he appeared to suggest she would wait until March – and then give MPs the choice between backing her, or accepting a long extension to article 50. According to the broadcaster, Robbins said the government had “got to make them believe that the week beginning end of March … extension is possible, but if they don’t vote for the deal then the extension is a long one.” The tactic appears to be aimed squarely at members of the backbench Tory European Research Group (ERG), who may fear Brexit could ultimately be cancelled altogether, if MPs accept a delay.

“The issue is whether Brussels is clear on the terms of extension,” Robbins was overheard saying. “In the end they will probably just give us an extension.” On the backstop, Robbins appeared to confirm that the government’s initial plan was for the backstop, which effectively keeps the UK in a customs union, to form a temporary “bridge” to the long-term trading relationship. “The big clash all along is the ‘safety net’,” Robbins said. “We agreed a bridge but it came out as a ‘safety net’.”

Read more …

I don’t think Monbiot should be writing about this, not his field. But nobody else does, either, and the issue will re-appear very very bigly if Brexit becomes reality.

Dark Money Is Pushing For A No-Deal Brexit. Who Is Behind It? (Monbiot)

In Britain, for example, we now know that the EU referendum was won with the help of widespread cheating. We still don’t know the origins of much of the money spent by the leave campaigns. For example, we have no idea who provided the £435,000 channelled through Scotland, into Northern Ireland, through the coffers of the Democratic Unionist party and back into Scotland and England, to pay for pro-Brexit ads. Nor do we know the original source of the £8m that Arron Banks delivered to the Leave.EU campaign. We do know that both of the main leave campaigns have been fined for illegal activities, and that the conduct of the referendum has damaged many people’s faith in the political system.

But, astonishingly, the government has so far failed to introduce a single new law in response to these events. And now it’s happening again. Since mid-January an organisation called Britain’s Future has spent £125,000 on Facebook ads demanding a hard or no-deal Brexit. Most of them target particular constituencies. Where an MP is deemed sympathetic to the organisation’s aims, the voters who receive these ads are urged to tell him or her to “remove the backstop, rule out a customs union, deliver Brexit without delay”. Where the MP is deemed unsympathetic, the message is: “Don’t let them steal Brexit; Don’t let them ignore your vote.”

So who or what is Britain’s Future? Sorry, I have no idea. As openDemocracy points out, it has no published address and releases no information about who founded it, who controls it and who has been paying for these advertisements. The only person publicly associated with it is a journalist called Tim Dawson, who edits its website. Dawson has not yet replied to the questions I have sent him. It is, in other words, highly opaque. The anti-Brexit campaigns are not much better. People’s Vote and Best for Britain have also been spending heavily on Facebook ads, though not as much in recent weeks as Britain’s Future.

Read more …

He has 84 of the 350 seats in congress… And is propped up by the Catalans.

Spanish PM May Call Snap Election If Budget Rejected (G.)

Spain’s socialist government could be forced to call a snap general election if rightwing parties and Catalan secessionists make good on their threats to reject the national budget in a key vote on Wednesday. The prime minister, Pedro Sánchez, faces an uphill battle to secure approval for the budget in the face of opposition from critics of his minority government. Sánchez’s PSOE, which holds 84 of the 350 seats in congress, relied on the support of Basque and Catalan nationalist parties to seize power from the conservative People’s party in a confidence vote last year. If, as seems likely, the budget is rejected by rightwing parties as well as the Catalan Republican Left and the Catalan European Democratic party, Sánchez is expected to call a snap general election in April or May.

The next general election is due to be held next year. The prime minister had been banking on the fact that the prospect of an early election – and a possible win for rightwing parties that fiercely oppose Catalan secession – would make the two big Catalan pro-independence parties swing behind the budget. But, speaking to the Guardian and other European media, the Catalan leader, Quim Torra, said the secessionist groupings would not be forced into supporting Sánchez’s budget plans. “Are we meant to approve the budget because we’re afraid of the Spanish right?” said Torra. “Mr Sánchez can obviously decide to call elections whenever he wants – he’s the prime minister. But why would he make dialogue conditional on approving the budget?

Read more …

I wouldn’t be surprised if Australia were the first to fall into crisis. It hasn’t had a recession in I think 27 years, and that is like saying a homeowner hasn’t done a proper spring cleaning in decades.

Australia Rate Cut Calls As Home Loans Fall At Fastest Rate Since GFC (SMH)

The sharpest fall in home loans since the depths of the global financial crisis has prompted calls for the Reserve Bank to slice interest rates and cast doubt over the state of the budget leading into the federal election. As the NAB said the Reserve may have to cut rates within months, figures from the Australian Bureau of Statistics revealed first time buyers and investors deserting the property market in a sign house prices may fall even further. Home loans in December fell by 5.9%. It was the second largest monthly fall since 2008-09 while the annual fall of 19.8% was the worst since the global financial crisis.

Investor loans have tumbled 28% over the past year while those for owner-occupiers have slumped by 16%. Since their peak in mid-2015, investor lending has dropped by almost 48%. First home buyers have been a key part of the market over the past year as they have taken advantage of falling prices but even they are now resisting the chance to enter the market. The number of loans to first time buyers fell 8% in the month to be 12% lower over the past year. NSW and Victoria are leading down the national market with sharp falls in total loan numbers through 2018. It’s not just housing. Business loans dropped by 9.7% in December to be 6.2% lower over the year.

Read more …

China and borrowing, not a happy marriage: “recovery rates, sometimes estimated at below 16% ..”

Chinese Banks Resist Maxing Out Credit Cards (R.)

Chinese banks are wise to resist maxing out their credit cards. Lenders have issued hundreds of millions of them to local consumers, facilitating debt-fuelled shopping sprees. It’s a lucrative but risky supplement to other types of loans, and some now appear to be pulling back. Banks in the People’s Republic issued more than 650 million credit cards as of the third quarter of 2018, up from less than 450 million three years earlier, official data show. Balances payable on cards reached 6.6 trillion yuan ($980 billion), an increase of more than 120% over the same period. Lenders are keen on the business. There’s a big opportunity for growth given relatively low penetration: the average Chinese individual has only half of a credit card, whereas the average American has three.

Plastic can be profitable, too, yielding higher interest rates and fees than typical corporate loans. That boosts net interest margins. Yet a reassessment may be underway, according to analysts at Citi Research. At Shanghai Pudong Development Bank, for instance, credit card lending made up 35% of total new loans in 2017. In the first half of 2018, that figure collapsed to negative 5%. It’s a similar story at China Merchants Bank and other lenders covered by the analysts – although some are still aiming at rapid growth, including Ping An Bank and Postal Savings Bank of China. Household credit stood at around half of GDP by the middle of last year, up from 18% a decade earlier, according to the Bank for International Settlements. Fitch Ratings projects household debt might reach 100% of disposable income by 2020, just below the 105% ratio in the US.

The current economic slowdown could make bankers’ affection for plastic look rash. Individuals tend to default on card debt first, and chasing after them in court is time-consuming, while recovery rates, sometimes estimated at below 16%, compare poorly with between 50% to 60% for corporate borrowers.

Read more …

Firms guaranteeing each other’s debt. Never seen a bigger Ponzi. Click the pic for a much larger version. It’s brilliant insanity very strongly bordering on fraud.

China’s Private Firms Hit By Default Contagion (R.)

The collapse in China of a complex web of debt guarantees involving several private firms highlights risks in its financial system and opens up a potentially hazardous front for an economy in the grip of its slowest growth in nearly three decades. It is the last thing Beijing needs as it tries to fight off intensifying pressure on growth from a months-long trade dispute with the United States. Yet, as the government steps up economic support measures and moves to loosen gummed-up funding, it might be inadvertently inflaming financial risks with its call on state banks to sharply boost lending to the private sector.

The warning bells are already sounding in the once-prosperous eastern city of Dongying, a hub for oil refining and heavy industry in Shandong province. Here, at least 28 private companies are seeking to restructure their debts and avoid bankruptcy, mainly due to souring loans that they guaranteed for other firms, court rulings seen by Reuters show. Among the 28 firms are Shandong Dahai Group and Shandong Jinmao Textile Chemical Group, which were on the 2018 top 500 best-run private enterprises in China. For a private firm to get bank loans in China, especially those in traditional, capital-intensive industries, it often needs substantial collateral or the guarantee of another company. The guarantor itself is very likely to have taken on loans guaranteed by other firms.

Read more …

Wonder how many other countries are protecting themselves this way.

Russia Takes Steps To Survive Global Internet Shutdown With Its Own Web (RT)

Russia is preparing itself to be disconnected from the World Wide Web. The Lower House of Parliament passed in the first reading a law ensuring the security of the Russian part of the internet. The bill envisions the ‘Runet’ – the Russian segment of the internet – being able to operate independently from the rest of the world in case of global malfunctions or deliberate internet disconnection. The measures to ensure internet stability include the creation of a national DNS system that stores all of the domain names and corresponding IP numbers. The new legislation was drafted in response to the new US cyber strategy that accuses Russia, along with China, Iran, and North Korea, of using cyber tools to “undermine” its economy and democracy.

It also threatens dire consequences for anyone conducting cyber activity against the US. The autonomous system would ensure that Russia doesn’t face a total internet shutdown if relations with the West completely collapse and the US goes as far as cutting off Russian IP addresses from the World Wide Web. Back in 2012, then-US President Barack Obama signed an executive order allowing him to take control of all communications on American soil, including those crucial for the normal operation of the internet. The US National Security Agency actually caused a three-day internet blackout in Syria in November 2012, whistleblower Edward Snowden told Wired magazine. NSA hackers accidently ‘bricked’ one of the core routers while trying to install spyware on it.

Read more …

Jan 212019
 


Martin Luther King, Jr. following his 1963 arrest in Birmingham

 

 

Rebranding MLK (Fikre)
A Call to Reinvestigate American Assassinations of the 1960s (CN)
The Number Of Births In China Hit Its Lowest Level Since 1961 (CNBC)
China Economic Growth Lowest In 28 Years (MW)
China Real Estate Sales Growth Slows Down (R.)
Theresa May ‘Considers Amending Good Friday Agreement’ To Break Deadlock (Ind.)
May Tries To Break Brexit Deadlock By Winning More EU Concessions (R.)
No Solutions To Irish Backstop In May’s Brexit Call With Cabinet (G.)
Bizarre Turn Of Events Could Push May’s Brexit Deal Through After All (Ind.)
Clashes in Athens Over Neighbour’s Name Change (BBC)
World’s 26 Richest People Own As Much As Poorest 3.8 Billion (G.)

 

 

Martin Luther King Jr. Day. He’s been dead long enough that everyone feels safe, if not entitled to, appropriating his name and celebration. But who in America today truly lives up to his legacy and message? Not many. The screwed up scenes at a high school, and the way media and individuals react to it, make that abundantly clear. There are many voices calling for serious harm to, if not murder of, a group of schoolchildren, voices who will in their very next breath seek to take possession of Dr. King’s name.

It’s time for all Americans, and not just Americans either, to find a nice bright mirror and face the beams in their own eyes. All sides focus on promoting hate of the others, and really, that is the opposite of what Dr. King said. How could you forget? You don’t solve anything be demanding other people change, you solve things only by changing yourself. You have no more right to hate Trump and his supporters than they have of hating you, or anyone else.

MLK: “a slogan ‘Power for Poor People’ would be much more appropriate than the slogan ‘Black Power.’”

Rebranding MLK (Fikre)

Lost in the chorus of politicians, pundits and media personalities who are praising MLK is the core message that he was pushing before he was felled on the balcony of the Lorraine Motel. King evolved in his thinking; instead of seeking Civil Rights for “African-Americans”, he made the fatal decision to fight for economic justice for all. King realized that the infringements against “black” folks in America were interconnected to the injustices felt by marginalized people throughout the world. That awakening is the reason he traveled to Memphis, by standing up for striking sanitation workers, he was hoping to form a bridge between poor folks irrespective of their skin color.

The establishment love people who lead sectional movements—those who seek exclusive justice are doing the work of the status quo—what they will not abide are those who try to unify the oppressed and inspire collective actions. King paid with his life for having the courage to pursue inclusive justice. After he was murdered, institutions of power—from government, academia to mainstream media and beyond—kicked in, stealthy erased King’s legacy and replaced it with disinformation. What has taken place over the past fifty years is a systematic and coordinated effort to blacken his narrative and dilute the power of his message. What MLK fought for, and ultimately died on behalf of, was for equality and fairness for all. By narrowing the scope of his cause and containing his sacrifice to only as a struggle for “black” people, opinion leaders successfully ghettoized him in an effort to lessen his appeal to a broader constituency.

[..] “One unfortunate thing about [the slogan] Black Power is that it gives priority to race precisely at a time when the impact of automation and other forces have made the economic question fundamental for blacks and whites alike. In this context a slogan ‘Power for Poor People’ would be much more appropriate than the slogan ‘Black Power.’” This was a quote from King in August of 1967, eight months before he was executed.

Read more …

All for it. But who’s impartial and strong enough to do it?

A Call to Reinvestigate American Assassinations of the 1960s (CN)

To mark Martin Luther King Jr. Day a group of academics, journalists, lawyers, Hollywood artists, activists, researchers and intellectuals, including two of Robert F. Kennedy’s children, are calling for new investigations into four assassinations of the 1960s. On the occasion of Martin Luther King Jr. Day, a group of over 60 prominent American citizens is calling upon Congress to reopen the investigations into the assassinations of President John F. Kennedy, Malcolm X, Martin Luther King Jr., and Senator Robert F. Kennedy.

* We call upon Congress to establish continuing oversight on the release of government documents related to the presidency and assassination of President John F. Kennedy, to ensure public transparency as mandated by the JFK Records Collection Act of 1992. The House Committee on Oversight and Government Reform should hold hearings on the Trump administration’s failure to enforce the JFK Records Act.

* We call for a major public inquest on the four major assassinations of the 1960s that together had a disastrous impact on the course of American history: the murders of John F. Kennedy, Malcolm X, Martin Luther King Jr. and Robert F. Kennedy. This public tribunal, shining a light on this dark chapter of our history, will be modeled on the Truth and Reconciliation process in post-apartheid South Africa. The inquest — which will hear testimony from living witnesses, legal experts, investigative journalists, historians and family members of the victims — is intended to show the need for Congress or the Justice Department to reopen investigations into all four assassinations.

* On Martin Luther King Jr. Day, we call for a full investigation of Reverend King’s assassination. The conviction of James Earl Ray for the crime has steadily lost credibility over the years, with a 1999 civil trial brought by Reverend King’s family placing blame on government agencies and organized crime elements. Following the verdict, Coretta Scott King, the slain leader’s widow, stated: “There is abundant evidence of a major, high-level conspiracy in the assassination of my husband.” The jury in the Memphis trial determined that various federal, state and local agencies “were deeply involved in the assassination … Mr. Ray was set up to take the blame.” Reverend King’s assassination was the culmination of years of mounting surveillance and harassment directed at the human rights leader by J. Edgar Hoover’s FBI and other agencies.

* We call for a full investigation of the Robert F. Kennedy assassination case, the prosecution of which was a mockery of a trial that has been demolished by numerous eyewitnesses, investigators and experts — including former Los Angeles County Coroner Dr. Thomas Noguchi, who performed the official autopsy on Senator Kennedy. The forensic evidence alone establishes that the shots fired by Sirhan Sirhan from in front of Senator Kennedy did not kill him; the fatal shot that struck RFK in the head was fired at point–blank range from the rear. Consequently, the case should be reopened for a new comprehensive investigation while there are still living witnesses — as there are in all four assassination cases.

Read more …

I looked this one up: Chinese population in 1961 was about 670 million. Today it’s more than twice that. That would seem to say birth rates have halved.

The Number Of Births In China Hit Its Lowest Level Since 1961 (CNBC)

The number of babies born in China in 2018 was the lowest the country has seen in nearly 60 years, according to Chinese financial services firm Wind Information. China on Monday reported that there were 15.23 million births last year — the lowest since 1961 when 11.87 million births were reported, data on Wind showed. Last year’s birth figure was 11.6 percent lower than 17.23 million in 2017, according to Wind. The release of China’s latest birth data puts the country’s population at 1.395 billion in 2018, the Associated Press reported, citing data by the National Bureau of Statistics. That means the population grew 3.81 percent compared to a year earlier, according to the news wire. AP also reported that the Chinese government estimated that its population will peak in 2029 at 1.442 billion, and then start to decline in the year after that.

Read more …

And that’s just official numbers. Economics professor Xiang Songzuo put it as low as 1.67% in December.

China Economic Growth Lowest In 28 Years (MW)

China’s economic expansion languished to its slowest pace in nearly three decades last year, as a bruising trade fight with the U.S. exacerbated weakness in the world’s second-largest economy. The 6.6% growth rate for 2018 reported Monday is the slowest annual pace that China has recorded since 1990. The economic downturn, which has been sharper than Beijing expected, deepened in the final months of 2018, with fourth quarter growth rising 6.4% from a year earlier. Adding to the gloom was the trade conflict with Washington. The uncertain outlook for Chinese exporters caused companies to delay investing and hiring and in some cases even to resort to layoffs–a practice that is often discouraged by China’s stability-obsessed Communist Party rulers. The official jobless rate ticked up to 4.9% last month from 4.8% in November.

In the southern technology and export-manufacturing center of Shenzhen, for instance, many private makers of electronics, textiles and auto parts furloughed workers more than two months before the Lunar New Year holiday, which begins in February, according to business owners and local officials. The neighboring city of Guangzhou saw growth slump to 6.5% last year–well short of the 7.5% annual target set by the city government–as trade tensions hit the city’s manufacturing sector hard. Some economists and investors have said China’s economy is far more anemic than the government’s 6.6% rate of expansion for 2018. They note the government’s move on Friday, just ahead of Monday’s data release, to cut the 2017 growth rate to 6.8% from 6.9%, which they said provides a slightly lower base, giving a slight boost to the fresh 2018 data.

Read more …

Consumer spending in general is slowing in China. That’s the biggest danger for its economy.

China Real Estate Sales Growth Slows Down (R.)

Growth in property investment in China cooled to the second slowest pace in 2018 in December, adding to signs of a further slackening in the real estate market in a blow to a key driver economic growth. Real estate investment, which mainly focuses on the residential sector but includes commercial and office space, rose 8.2 percent in December from a year earlier, down from 9.3 percent in November, according to Reuters calculations based on data released by National Bureau of Statistics (NBS) on Monday. That was just ahead of the slowest pace of growth last year at 7.7 percent recorded for October. For the full year, property investment increased 9.5 percent from the year-earlier period, down from 9.7 percent in January-November.

In December, property sales by floor area, a major indicator of demand, rose a touch by 0.9 percent from a year earlier, the first gain in four months and compared with November’s 5.1 percent drop. For 2018, property sales by area rose a modest 1.3 percent from a year earlier, official data showed. Analysts say a continued downturn in sales on the back of tight government controls to curb speculation could add to the growing pressure on the world’s second-largest economy. The real estate sector is a key pillar of the economy, so any further weakness in sales could influence the pace and scope of fresh stimulus measures expected from Beijing this year.

Read more …

It took decades to negotiate the Good Friday Agreement, after 1000s of lives were lost. May should not be allowed to touch it.

Theresa May ‘Considers Amending Good Friday Agreement’ To Break Deadlock (Ind.)

Theresa May is considering an attempt to amend the Good Friday Agreement in a bid to break the Brexit deadlock and win support for a negotiated exit deal, it has been reported. Ministers believe the move could avoid the UK having to commit to a backstop as part of the prime minister’s “plan B”, The Daily Telegraph reported on Sunday. The EU has insisted on a backstop measure to ensure an open border remains between Northern Ireland and the Republic after the UK leaves the bloc. Ms May has been forced to find alternatives to her original Brexit deal after it was crushed in the Commons on Tuesday.

Under the PM’s plan, it is reported, London and Dublin would either agree a new set of principles or add words to the Good Friday Agreement in order to guarantee an open border. The 1998 peace deal effectively brought an end to the Troubles after years of failed talks, and established a power-sharing structure to accommodate unionist and nationalist politicians. It follows separate reports that Ms May planned to pitch to the Irish government a bilateral treaty that would remove the need for the backstop so hated by many Conservative MPs; the arrangement would see the UK enter into a temporary customs union with the EU, and Northern Ireland agree to abide by European rules on goods until a subsequent deal was reached.

Read more …

Parliament demanded a Plan B today. May has none. She speaks 1530 GMT.

May Tries To Break Brexit Deadlock By Winning More EU Concessions (R.)

British Prime Minister Theresa May on Monday will try to crack the deadlock over Brexit by setting out proposals in parliament that are expected to focus on winning more concessions from the European Union. With just over two months left until the United Kingdom is due to leave the European Union on March 29 there is no agreement in London on how and even whether it should leave the world’s biggest trading bloc. After her Brexit divorce deal was rejected by 402 lawmakers in the 650-seat parliament last week, May has been searching for a way to get a deal through parliament.

Attempts to forge a consensus with the opposition Labour Party failed so May is expected to focus on winning over 118 rebels in her own party and the small Northern Irish party which props up her government with concessions from the EU. In a sign of just how grave the political crisis in London has become, the Daily Telegraph reported that May was even considering amending the 1998 Good Friday Agreement which ended 30 years of violence in Northern Ireland. The Daily Telegraph said EU sources cast May’s plan a non-starter as a renegotiation of such a significant international treaty would require the consent of all the parties involved in Northern Ireland. May told British ministers she would focus on securing changes from Brussels designed to win over rebel Conservatives and the Northern Irish DUP, The Times said.

May will make a statement in parliament at about 1530 GMT and put forward a motion in parliament on her proposed next steps on Brexit, though some lawmakers are planning to wrest control of Britain’s exit from the government. After May’s motion is published, lawmakers will be able to propose amendments to it, setting out alternatives to the prime minister’s deal.

Read more …

Time to send her away. She’s a dead end.

No Solutions To Irish Backstop In May’s Brexit Call With Cabinet (G.)

Theresa May is expected to reject calls to forge a cross-party consensus on Brexit when she lays out her plan B to parliament on Monday, choosing instead to back new diplomatic efforts in Brussels to renegotiate the Irish backstop. The prime minister held a conference call with her bitterly divided cabinet from the country retreat of Chequers on Sunday evening. Cabinet sources said the consensus on the 90-minute call was to renew efforts to find acceptable changes to the backstop arrangement but that the conversation was light on specifics. One said there were “no actual solutions” proposed during the call. “It is difficult to know – as ever – what she will do,” another said. “But the broad agreement is on the need to bring DUP and Tory rebels on board.”

Despite her claim in the wake of last week’s significant defeat in parliament that she would speak to “senior parliamentarians” from all parties to seek a compromise, government sources insisted her overriding priority was to prevent a historic split in the Tory party. Several senior Conservative MPs have suggested they could form a breakaway party if May opted to support a customs union – one of Labour’s central demands, which is also backed by Tory supporters of a Norway-style soft Brexit. Whitehall sources said the prime minister’s chief of staff, Gavin Barwell, had counselled her to consider a customs union after last week’s catastrophic defeat, when her deal was rejected by an overwhelming majority of 230 votes. But when the government tables a formal statement on Monday, setting out its next steps, it is instead expected to focus on seeking changes to the Irish backstop in order to win over Jacob Rees-Mogg’s European Research Group and the DUP.

Read more …

Party before country.

Bizarre Turn Of Events Could Push May’s Brexit Deal Through After All (Ind.)

Yvette Cooper is in many ways the alternative leader of the opposition. The Labour MP who chairs the home affairs select committee will table a bill in the House of Commons on Monday, under the catchy title of the European Union (Withdrawal) (No 3) Bill, which could be decisive in breaking the Brexit deadlock. It could lead to parliament being forced to make a straight choice between Theresa May’s deal and postponing Brexit in order to hold a new referendum. If that is what happens, I think there would be a small majority for the prime minister’s deal. The importance of Cooper’s bill is that it changes the default setting in law. At the moment, if parliament fails to act, the UK will leave the EU on 29 March.

Cooper’s bill says that, if a deal has not been approved by 7 March, the government would be required to seek an extension of the Article 50 deadline. That would mean asking the EU to postpone the UK’s departure until the end of this year – and EU leaders have said they would agree to an extension if it were to hold another referendum. This would transform the situation in the House of Commons. Jacob Rees-Mogg and the rest of the cohort of Conservative MPs who want to leave without a deal would have to think again. At the moment they are happy to vote everything down, knowing that this gets them what they want. But Cooper’s bill would take what they want off the table. They would then have to choose between the prime minister’s deal and putting off Brexit for at least nine months.

Read more …

They would still get to call themselves Macedonians. Insult and injury. Tsipras should be very careful.

Clashes in Athens Over Neighbour’s Name Change (BBC)

Protesters have clashed with police in the Greek capital Athens at a big rally to oppose the government’s deal with Macedonia on changing its name. Police fired tear gas at some of those attending a protest which attracted tens of thousands to the city. The deal, which is yet to be approved, designates Greece’s northern neighbour as Republic of North Macedonia. The name Macedonia is sensitive for many Greeks who say it implies a claim on the Greek province of the same name. Years of wrangling finally brought an agreement last June between Greece’s left-wing Prime Minister Alexis Tsipras and his Macedonian counterpart. A vote on the deal, which aims to end a 28-year row between the nations, is set to take place in the Greek parliament this week.

The dispute dates back to 1991 and the break-up of Yugoslavia. Macedonia was a Yugoslav republic and adopted the name Macedonia when it became an independent nation. Greece has long argued the use of the name implied a territorial claim and cultural appropriation. At the UN the country was formally known as the Former Yugoslav Republic of Macedonia (Fyrom). [..] Greek nationalists argue that the name Macedonia can only refer to the Greek province of the same name. The dispute has led to Greece to blocking Macedonia’s hopes of joining Nato and the EU. Under the deal, the country’s language would be Macedonian and its people known as Macedonians (citizens of the Republic of North Macedonia). The move has met with sharp resistance in both countries because nationalists believe it erodes their identity.


EPA

Read more …

They’re not going to solve the issue by themselves, they can’t help it.

World’s 26 Richest People Own As Much As Poorest 3.8 Billion (G.)

The growing concentration of the world’s wealth has been highlighted by a report showing that the 26 richest billionaires own as many assets as the 3.8 billion people who make up the poorest half of the planet’s population. In an annual wealth check released to mark the start of the World Economic Forum in Davos, the development charity Oxfam said 2018 had been a year in which the rich had grown richer and the poor poorer. It said the widening gap was hindering the fight against poverty, adding that a 1% wealth tax would raise an estimated $418bn (£325bn) a year – enough to educate every child not in school and provide healthcare that would prevent 3 million deaths. Oxfam said the wealth of more than 2,200 billionaires across the globe had increased by $900bn in 2018 – or $2.5bn a day.

The 12% increase in the wealth of the very richest contrasted with a fall of 11% in the wealth of the poorest half of the world’s population. As a result, the report concluded, the number of billionaires owning as much wealth as half the world’s population fell from 43 in 2017 to 26 last year. In 2016 the number was 61. Among the findings of the report were: • In the 10 years since the financial crisis, the number of billionaires has nearly doubled. • Between 2017 and 2018 a new billionaire was created every two days. • The world’s richest man, Jeff Bezos, the owner of Amazon, saw his fortune increase to $112bn. Just 1% of his fortune is equivalent to the whole health budget for Ethiopia, a country of 105 million people. • The poorest 10% of Britons are paying a higher effective tax rate than the richest 10% (49% compared with 34%) once taxes on consumption such as VAT are taken into account.

Read more …

Oct 112018
 
 October 11, 2018  Posted by at 1:22 pm Finance Tagged with: , , , , , , , , , , , ,  6 Responses »


Pieter Bruegel the Elder The Triumph of Death 1562

 

Finally financial ‘markets’ go through a substantial dip, which Steve Mnuchin claims is just temporary and Donald Trump says is caused by the fact that the Fed is ‘loco’. Mnuchin may well be right, but it won’t be because he knows something you don’t.

And Trump is certainly right, but in reality the Fed has been loco for many years, so why be surprised if it acts crazy now? The reason Mnuchin and a million other ‘experts’ may be right without realizing it is that the Fed has been crazy enough to kill the financial markets.

Or at least killed what made the markets functional, and beneficial to society. And that may well be exactly what Jay Powell is trying to repair, but he may well not be aware of that either. Looked at from a ‘benign’ angle, Powell is perhaps raising rates so people can regain insight into what they’re buying.

The pre-Powell Fed pushed up asset prices (don’t let’s say ‘values’) to such heights nobody has any insight anymore into what anything is truly worth. And in what was formerly known as the financial markets that was not important, because what were formerly known as investors were making heaps of money regardless.

Surely they must all have known that this wouldn’t continue?! That it’s just a matter of timing, of knowing when it would end? Oh, but that’s not really possible, is it, without the very price discovery process the Fed successfully strangulated?

Still, there must also be tons of people left thinking the Fed can kick that can six times to the moon and back, or sixty. If only because they’ve never bothered to think about price discovery, and what role it plays in the very ‘markets’ they volunteer to spend their money in.

And along those same lines, many acknowledge housing bubbles in Sydney and Vancouver but think the US has learned its lesson a decade ago. And the loco Fed plays its role there too: mortgage rates have been ultra-low, enticing the last left batch of greater fools not mortally wounded by the last fire to jump in this time. Wolf Richter’s Case-Shiller graph says plenty in that regard:

 

 

But of course things tend back to normalcy, and it doesn’t take all the overleveraged stock- and home buyers longing for price discovery; it takes just a few to get the engine started. And then everyone will be along for the ride. So from that angle Jay Powell looks anything but crazy raising rates, we just can’t be sure if he knows what the consequences will be.

Not that it matters all that much what he does or does not know. What was formerly the market is like a pendulum swung so far out of balance that it costs ever more effort and money to keep it from moving towards equilibrium, and that process has only one possible outcome.

For mortgage rates, it looks something like this, and to make anyone able to buy any home at all higher rates will of necessity mean lower prices. You can’t, nobody can, not the Fed or the government can, keep that pendulum away from its tendency towards equilibrium forever.

 

 

For stocks it looks much the same. So why try, you’d think?! To prevent incumbents and ruling classes from being exposed as swimming naked, that’s why. They invented a way to make the entire nation swim naked, thinking they’d never be found out because the water levels were so high.

Whether yesterday’s 831-point Dow dip is temporary or not is of little interest. Much more important is that the entire asset prices situation is temporary. It doesn’t matter if the Fed pumps $1, $10, or $100 trillion into what once were markets, in the end it all comes down to how many people can pay how much money for the assets.

And since there is never an unending supply of greater fools, we know where this is going. The easy money and low rates and asset purchases at central banks and stock buybacks by companies can and will result only in more profits and more wealth for a few, and sheer endlessly less for the many.

Inequality in the US has now reached such extremities that the country’s AAA rating threatens to be taken away –as Moody’s indicated-; the government has so many people it must support financially (or let perish) that its financial position comes under pressure. Which is, again, negative for the many, for the few; they don’t care about that rating.

Yes, too many people are on some form of welfare in America. And Washington would love to throw many of them off of it. The many have no representation on Capitol Hill anymore. Just about any senator and congress(wo)man is a millionaire or certainly well-off.

 

How can the country get its rating back, or at least not lose it due to its increasing inequality? There seem to be two ways: let the 80 million now on welfare die by the side of the road, or provide them with jobs that allow them a fruitful life. That may sound like socialism or something, but it’s really the exact opposite.

It’s not the government’s role to give people jobs, but it is its role to make sure conditions are in place for the private sector to provide them. Trump’s ‘trade wars’ look crazy to many, but the intent is to get jobs back to the US. But there is much more.

America was once prosperous. What changed?

Here’s one thing: In what was -arguably?- America’s wealthiest time as a nation, the post-World War II period, income taxes for the richest were as high as 90% (1952: 92%); they were slowly brought down towards 70%. Only when Ronald Reagan took over in 1980 did they really fall (1982: 50%). This was ‘justified’ by lowering the highest income bracket (1982: $85,600, it had been between $200,000 and $400,000 for years).

In 1988, the top rate plunged to 28%, and the highest bracket to $29,750. Today, the top rate is 39.6% and the high bracket $400,000. In a graph, the consequences look like this:

 

 

The corporate tax rate, meanwhile, pulled this one, and don’t get started on tax havens etc.:

 

 

And that situation has led to a huge financial crisis, to the Fed going crazy and handing out trillions to the exact wrong part of society, those who already have a lot of money, and the result has been an absolute disaster, at least for the country; not so much for its elites.

But as even Moody’s now recognizes, you can’t run an AAA-rated country on elites alone. Despite the crazy Fed trillions, the US has achieved negative growth (imagine where it would be without):

 

 

Something must be done. Problem is, with only those millionaires in charge in the House and Senate, the likelihood of boosting income tax levels up to where they were when America was most prosperous is extremely low. And Trump’s tariffs are not on their own going to bring back the jobs; they can’t rebuild the lost infrastructure, for one thing.

Something must be done, and it’s entirely unclear what, or rather, who’s going to do it. The Democrats have nothing, or nothing but frustrated millionaires and Bernie Sanders. The GOP has only Trump. None of these people are going to vote to double their income taxes.

Much of what needs to be done will be classified as socialism, ridiculed and thrown out the window, even if the country was anything but socialist under Eisenhower and Kennedy, during its -at least economic- Golden Age.

It’s a nice puzzle, isn’t it? Well, maybe not so nice after all.

 

 

Oct 112018
 


Pablo Picasso Bather 1908

 

Dow Tumbles 830 Points In One Day, Trump Says The Fed Has ‘Gone Crazy’ (MW)
World Stock Markets Dive As Trump Attacks ‘Crazy’ US Rate Hikes (G.)
Tech Stocks Have Their Worst Day Since August 2011 (CNBC)
“Rising Inequality” Could Impact America’s AAA Credit Rating (SH)
How Will 6% Mortgage Rates Deal with Housing Bubble 2? (WS)
Brexit Deal Within Reach If May Agrees On Customs Union, Says Barnier (G.)
Hysteria Over the Italian Budget Is Wrong-Headed (Costantini)
Trump Campaign Claims Wikileaks Not Liable For Releasing Hacked Emails (G.)
Acropolis To Close In One-Day Strike Over Privatisation Fears (G.)
Trump Will Be The Last ‘Pure Human’ Leader – Scott Adams (Y!)
Judge Moves To Allow Monsanto New Trial After $289m Cancer Verdict (G.)
HSBC Issues Dire Warning On Antibiotics Resistance (BI)
Historic Climate Litigation Result Stands After Dutch Court Victory (CE)

 

 

Low volatility anyone?

Dow Tumbles 830 Points In One Day, Trump Says The Fed Has ‘Gone Crazy’ (MW)

‘I think the Fed is making a mistake. It’s so tight, I think the Fed has gone crazy’. That is the view that President Donald Trump shared of the Federal Reserve on Wednesday in the wake of a virtual bloodbath on Wall Street that resulted in the worst daily decline for the Dow Jones Industrial Average and the S&P 500 since both U.S. equity benchmarks tumbled into correction territory back in early February. The Nasdaq, meanwhile, suffered its ugliest day since U.K. voters coalesced around a market-disrupting plan to exit from the European Union’s trade bloc back in June 2016.

In all, it was a withering session for an administration that has closely watched stock-market performance and views it, at least partly, as a gauge of the success of its economic policies, including corporate tax cuts and deregulation. However, those efforts, Trump says, are imperiled by the policies of the Fed, which has raised interest rates three times this year and has signaled its intention to do so a fourth time before year-end. IMF managing director Christine Lagarde dismissed Trump’s comments Thursday. “I would not associate Jay Powell with craziness,” she told CNBC at the IMF and World Bank annual meetings in Bali, Indonesia.

Read more …

Everything’s going down. ‘Investors’ are jittery.

World Stock Markets Dive As Trump Attacks ‘Crazy’ US Rate Hikes (G.)

A jittery, volatile week on global financial markets has burst into a frenzy of selling, triggered by heavy losses on Wall Street and comments by Donald Trump describing US interest rate hikes as “crazy”. The Nikkei index in Tokyo was down by 4.25% on Thursday afternoon, while in Hong Kong the index was down 3.9% and Shanghai was at its lowest mark for four years after a plunge of 4.15%. In Sydney the benchmark S&P/ASX200 index closed down 2.74%, slipping below the 6,000-point mark for the first time since early June. European markets were braced for more losses with the FTSE100 in London poised to fall almost 2% and close to dropping down below 7,000 points for the first time since March.

The rout was triggered by a fall of more than 800 points in the Dow Jones industrial average on Wall Street on Wednesday. It was the worst drop in eight months and was led by sharp declines in technology stocks. Despite a booming US economy, low inflation and low unemployment, investors are concerned about rising bond yields that have been drawing money out of the stock market, and rising US interest rates. “It’s a bit of a bloodbath,” said Ed Campbell, senior portfolio manager at QMA, the asset management branch of Prudential Financial in New York. “It’s primarily the cumulative effect of interest rate moves over the past five days and news reports about trade impacting companies.”

[..] The Chinese yuan slipped against the dollar again on Thursday as Beijing tries to mitigate the impact of US tariffs. But it was the only currency across the region that was feeling the pressure from higher bond yields as the Australian dollar slipped under US71c. “The yuan has already weakened significantly, to offset the tariffs announced so far,” said Alan Ruskin, Deutsche’s global head of G10 FX strategy in Sydney. “Further weakness could exacerbate concerns of a self-fulfilling flight of capital, and a loss of control.”

Read more …

Most overvalued sinks fastest.

Tech Stocks Have Their Worst Day Since August 2011 (CNBC)

Technology stocks got clobbered on Wednesday, suffering their worst day in more than seven years, as concerns over rising interest rates punished the overall market, particularly shares of companies that have been the best performers. The S&P 500 Information Technology Index closed at $1,220.62, down 4.8 percent, marking the biggest decline since August 18, 2011, when the index dropped 5.3 percent. All 65 members of the index fell. The broader S&P 500 dropped by 3.3 percent and the Dow Jones Industrial Average tumbled 3.2 percent. The tech sector includes the largest companies by market cap in the U.S. and those that have been the biggest contributors to the extended rally. Shares of Apple, Microsoft and Amazon are up sharply for the year as investors bet they will continue to deliver strong earnings growth and take market share.

Read more …

“The wider the income gap becomes, the more the government will have to spend in order to support lower-income households.”

“Rising Inequality” Could Impact America’s AAA Credit Rating (SH)

“Since 1995, the top 10% of US income earners have experienced an overall median net worth increase of close to 200%, while the bottom 40% of income earners have seen a decline. There has been a particularly sharp increase in wealth and income inequality ratios since the global financial crisis,” Moody’s noted in a report released on Monday. “The global financial crisis exacerbated the effects of these trends by disproportionately affecting poorer overleveraged households and by reducing the mobility of households with negative home equity and, oftentimes, negative net wealth as a result,” says Moody’s Vice President William Foster. “Wealthier households with a higher concentration of equity market holdings in retirement savings plans and personal portfolio investments have disproportionately benefited from the significant gains in the US and global stock markets since the global financial crisis.”

In turn, that rising inequality “will exacerbate already material fiscal challenges on the horizon,” Moody’s continued. “Should inequality go unaddressed, social tensions will continue to rise, leading to a more fractious political landscape that increases political risk, and with it a less predictable policy environment.” But it’s not just about taxes, either. Everything from globalization, automation, technological advancements requiring advanced job skills, elevated premium on education and the increasing costs associated with education have played a role in widening inequality. So what does it mean for the U.S.’ AAA rating? According to Moody’s Vice President William Foster, the widening gap between rich and poor is a threat, but the U.S. government, of course, has other aspects supporting the rating—at least in the medium term (2-5 years). Chief among them is the debt denominated in dollars.

Still, Moody’s cites rising inequality as the U.S.’ weakest rating factor. Why? It’s simple math: The wider the income gap becomes, the more the government will have to spend in order to support lower-income households. These costs, Moody’s notes, “are unlikely to be offset by revenue raising measures following recent tax cuts”. At the end of the day, even though the economy is chugging along nicely—nicely enough, in fact, for everyone to ignore rising inequality that will contribute to widening fiscal deficits and a growing debt burden.

Read more …

Timebomb.

How Will 6% Mortgage Rates Deal with Housing Bubble 2? (WS)

What many in 2016 thought would never happen again is now reality. It finally happened – a line in the sand has been breached. The average interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) and a 20% down-payment did what people had thought in 2016 we’d never see again: It breached 5%. It hit 5.05%, to be precise, for the week ending October 5, according to the Mortgage Bankers Association (MBA) this morning. This is the highest average rate since January 5, 2010 (chart via Investing.com):

This is likely not the pain-threshold for the housing market, though it is already putting pressure on it at the margin, with some potential buyers being scared off and other potential buyers finding the inflated home prices of today with the current mortgage rates outside their range of affordability. As interest rates have risen, some potential buyers have fallen by the wayside – though not a huge number just yet. But 6% will likely be the pain threshold, in my estimates. It will block a considerable number of potential buyers from buying at current prices. Home prices would have to fall first.

If the maximum a household can afford is a mortgage payment of $1,720 a month, they can finance $320,000 over 30 years with a 5% fixed rate mortgage. But if the mortgage rate rises to 6%, they’re maxed out at $287,000. In other words, the price they can afford would drop by about 10% if the rate rises by 1 percentage point. This principle goes for all budget-constrained buyers. And 6% has moved into view. This is still historically low. It would take rates back to December 2008, when the Fed was kicking off its first round of QE to repress long-term rates and inflate asset prices. Beyond that are the now unimaginably high rates of 7% and 8%:

Mortgage rates move more or less in tandem with the 10-year Treasury yield, but are higher. The spread between the MBA’s average 30-year fixed mortgage rate and the 10-year yield runs around 1.5 to 2.0 percentage points over time. With today’s 10-year yield at 3.22%, the spread is 1.83 percentage points.

[..] This new mortgage rate environment is meeting home prices across the US that have surged over the past years. Affordability issues, already tough to deal with at 4% and 4.5% and even tougher to deal with at 5%, are going to be much tougher at 6%.

Read more …

Barnier knows that the DUP and hardliners won’t accept.

Brexit Deal Within Reach If May Agrees On Customs Union, Says Barnier (G.)

Michel Barnier has claimed a Brexit deal could be within reach by next Wednesday but warned the prime minister that only by abandoning a key red line and agreeing to a customs union can impediments on trade between Northern Ireland and the rest of the UK be avoided. The British government would have to give up on its plans for free-trade deals with China and the US under such an agreement, the EU’s chief negotiator insisted, but otherwise a customs and regulatory border within the territory of the UK will have to be erected.

The EU’s contentious proposal for avoiding a hard border on the island of Ireland after Brexit is for Northern Ireland to, in effect, stay in the customs union and remain under single market regulations, while the rest of the UK withdraws. In a speech in Brussels, Barnier reiterated his rejection of the counter-proposals hammered out by the cabinet at Chequers, which Theresa May insists is the only deal that respects both the referendum result and the constitutional integrity of the UK by ensuring “frictionless” trade and no hard border.

The prime minister’s plan for a common rulebook on goods and a customs arrangement that meant the UK could avoid border checks, while allowing the country to sign its own bespoke trade deals, would give British companies “a huge competitive edge” and be “counter to our very foundations”, Barnier said. He instead encouraged Britain to make a final push in the talks, offering to launch “around 10 negotiations running in parallel” from April 2019 on an EU-UK trade deal, if agreement can be found now on the Irish border issue and the principles of a Canada-style free trade deal.

Read more …

Why the EU-Italy feud will be fierce.

Hysteria Over the Italian Budget Is Wrong-Headed (Costantini)

Even the moderate face of the coalition, the Italian Premier Giuseppe Conte, stepped up to question the priorities of the European Commission, the Bank of Italy, and the IMF: He assured that his government remains committed to containing the public debt and maintaining fiscal stability, but claimed that goal is impossible to achieve without economic development. The minister for European affairs, economist Paolo Savona, said that, in fact, a higher deficit-to-GDP ratio than 2.4% would be helpful. The heated reactions to the new fiscal plan are unjustified. In fact, the estimated targets that the new fiscal plan would (minimally) breach are unreliable and based on wrong macroeconomic principles.

Moreover, despite accusations of profligacy, Italy has in fact been running large primary surpluses (the budget balance minus interest payments), and will keep doing so even if the government confirms its plans. If anything should be of “serious concern,” it is the fact that the country continues down the road of austerity, which has proven to be contractionary; it has locked the country into stagnation and exposed its banking system to still more stress. With public investments at historically low levels, unemployment still above the 2008 rate in all regions, and a youth unemployment rate above 30%, it is hard not to see a strong case for fiscal stimulus.

Read more …

It’s all about Russiagate and Mueller’s indictment of ‘Russian hackers’. All nonsense. Free Assange and let him provide the evidence.

Trump Campaign Claims Wikileaks Not Liable For Releasing Hacked Emails (G.)

The Trump campaign argued in a legal filing that Wikileaks could not be held liable for publishing emails that were stolen by Russian hackers ahead of the 2016 US election because the website was simply serving as a passive publishing platform on behalf of a third party, in the same way as Google or Facebook. Questions about Wikileaks’ publication of thousands of hacked emails, which it allegedly obtained following a plot by Russian military intelligence to steal the emails from Hillary Clinton’s presidential campaign and the Democratic party, are at the heart of Robert Mueller’s criminal investigation into possible collusion between the Trump campaign and the Kremlin.

The campaign also said in a legal filing that any alleged agreement between the Trump campaign and Wikileaks to publish the emails could not have been a “conspiracy” because Wikileaks’ decision to release the stolen emails was not an illegal act. The court filing was written in response to a civil lawsuit brought against the Trump campaign by two of Hillary Clinton’s donors and a former employee of the Democratic party. The Trump campaign’s surprising defence of Wikileaks marks a stark departure from official US policy, which has condemned the website for frequently targeting the US government and for publishing thousands of classified documents about covert policies.

[..] Analysts say the legal filing is also significant because it hints at how officials in the Trump White House or individuals who served on the campaign may eventually seek to defend themselves against any criminal charges alleging that they conspired with Wikileaks to release the emails. The legal arguments suggest the Trump White House would argue Wikileaks was not criminally liable for the release of the emails and that it therefore would not be a criminal conspiracy to work with the website on their release. The filing also makes the case that, under the campaign’s first amendment right to free speech, it had the right to publish information – even if it was stolen – as long as it did not participate in the theft of the emails. The hacked materials were a matter of “significant public concern”, the filing said.

Read more …

They need to move well beyond one day to get attention. And whoever signed those secret deals (Tsipras, Troika!) needs their day in court.

Acropolis To Close In One-Day Strike Over Privatisation Fears (G.)

Striking trade unionists in Greece are forcing the shutdown of the country’s prime ancient sites, including the Acropolis, in a one-day protest over privatisation fears. The 24-hour walkout on Thursday is expected to close the majority of Greece’s 275 archaeological sites, monuments and museums, which generate about €100m in revenue, mostly from ticket sales, every year. “We are doing this to protest the prospect of any of these sites being exploited by foreign funds,” said Grigoris Vafiadis, the head of the association of culture ministry employees. “Every day we are discovering that monuments have been transferred to the privatisation fund set up at the request of [bailout] lenders. No country in the world, for whatever reason, has mortgaged its cultural heritage.”

The sites, which protestors say include Knossos on Crete, are believed to have been placed on a list of properties overseen by a superfund established in 2016 with the express purpose of managing state assets for the next 99 years. The body, which also handles state asset sales, was part of the price the debt-burdened country had to pay to keep default at bay and remain in the eurozone. Vafiadis, whose union represents more than 3,000 cultural ministry officials, mostly in the Greater Attica region surrounding Athens and central Greece, said sites were listed in the superfund by code. “It’s a long process to work out what the codes refer to on the land registry. For all we know, they might even include the Acropolis which is not just Greek but a world heritage site and should never be put in the hands of any foreign fund,” he said.

Read more …

Interesting assessment.

Trump Will Be The Last ‘Pure Human’ Leader – Scott Adams (Y!)

Scott Adams, the creator of the office-themed comic strip “Dilbert,” isn’t laughing about the future of American democracy. Having expressed his admiration for Donald Trump over the past few years, Adams believes the tech industry poses a threat to the president as well as to the country as a whole. “I think President Trump will be the last pure human leader,” Adams told Grant Burningham, host of the Yahoo News podcast “Bots & Ballots.” “Everything after this will be a human and he will be elected, he or she, but the decisions will really come from the algorithm after that.”

The algorithm, Adams said, was the one unleashed on the world by Silicon Valley tech companies that has the power to shape popular opinion that, in turn, will determine how politicians express themselves. “There are people making decisions at the tech companies — the Googles and Twitters and Facebooks. Those decisions get turned into algorithms, and once they’re turned into algorithms, the humans no longer really understand them,” Adams said. Adams has likened Trump’s off-the-cuff communications approach in the 2016 presidential election to a form of hypnosis that helped insulate him from the powers of the algorithm.

“President Trump is unique in that his persuasion skills are greater than the tech companies’. It’s probably the only reason he got elected,” Adams said. “I can imagine no one else who would have beat Hillary Clinton. So, after him, I think if you get in an ordinary politician, and it doesn’t matter which party they’re in, the algorithm will push the voters and the voters will push the politicians and everybody will think they have free will, they will think they made up their own minds. They will think they did their own research, they came up with independent decisions, but we’re no longer in that world.”

Read more …

Monsanto will appeal until the next century.

Judge Moves To Allow Monsanto New Trial After $289m Cancer Verdict (G.)

A California judge has moved to grant the agrochemical company Monsanto a new trial after a landmark jury verdict found its herbicide had caused a man’s terminal cancer. Dewayne “Lee” Johnson, a 46-year-old former groundskeeper, won a $289m award in August in a trial alleging that the popular Roundup weedkiller had made him sick and that Monsanto had failed to warn him of the risks. Monsanto, now owned by Bayer, the German pharmaceutical company, immediately appealed the verdict, which included punitive damages and economic losses and also found that Monsanto had “acted with malice or oppression”.

The San Francisco superior court judge Suzanne Bolanos cited the “insufficiency of the evidence to justify the award for punitive damages” in a tentative written ruling issued before a hearing on Wednesday. She is expected to make a final decision after attorneys submit additional arguments. Monsanto sought to overturn the verdict and has continued to argue that it is safe to use glyphosate, the world’s most widely used herbicide. Glyphosate-based products, including the Roundup and Ranger Pro brands, are now worth billions of dollars in revenues, approved for use on more than 100 crops, and registered in 130 countries. Timothy Litzenburg, one of the attorneys who represented Johnson in the trial, told the Guardian that regardless of the outcome, the original ruling would still have a long-term impact: “There’s been a loud and clear message.”

Read more …

Precautionary principle? Not for Monsanto, not for Big Pharma.

HSBC Issues Dire Warning On Antibiotics Resistance (BI)

According to the global research team at HSBC, the use of antibiotics in meat production could have “devastating” consequences for humanity. When farmers feed antibiotics to their animals, they create antibiotic-resistant bacteria, which can lead to antibiotic-resistant “superbugs” in humans. Over time, this could make it difficult to treat even common infections like strep throat. The report’s authors liken the impact of antibiotic resistance to climate change: The causation may not be immediately clear, but the evidence suggests a catastrophic future. Scientific experts now predict that antibiotic resistance could lead to 10 million deaths annually by 2050, exceeding cancer as one of the most common forms of death worldwide.

While some of this is related to the overprescribing of antibiotics by doctors, it also has to do with the antibiotics that are fed to key sources of produce, such as chickens, cows, and pigs. According to the report, more than half of global antibiotics are used in agriculture rather than medicine. Although China accounts for 60% of the world’s agricultural antibiotics, the US also uses antibiotics in around 70% of its agricultural products. Most of these antibiotics are used in meat production, which has risen by 90% per capita globally since the 1960s. In June, an analysis of more than 47,000 US government lab tests found an increase in the number of pork chops and ground beef that were contaminated with antibiotic-resistant bacteria.

Read more …

Court decides because of “a violation of the European Convention on Human Rights”. If that is true in Holland, it will also be in 26 other countries. Moreover, as Elliot Sherber said in his article in yesterday’s Debt Rattle:

“According to the legal maxim that “the health of the people should be the supreme law” (another type of emergency brake – one cited by jurists, and those contesting coercive power, since antiquity), there is a legal duty to pursue this as well (for, among other things, human health is contingent on the health of its general environment – and freedom from oppression). Indeed, if we are to take this maxim seriously, we must recognize that it implies that conditions that are inimical to health (harmful to the health of the people) must be corrected in order to comply with the “supreme law.”

Historic Climate Litigation Result Stands After Dutch Court Victory (CE)

Climate litigators are celebrating after a second landmark court victory that will hold the Netherlands government to account for greater action on climate change. The Hague Court of Appeal has upheld a historic win for the Urgenda Foundation on behalf of 886 Dutch citizens in their climate case, rejecting the Dutch government’s arguments. A day after the UN IPCC report outlined the urgent climate action needed to restrict global warming to 1.5 degrees, the Dutch court today affirmed that any less than a 25% reduction in carbon emissions by the Netherlands government before 2020 would be a violation of the European Convention on Human Rights. Dutch emissions are currently only 13% lower compared to 1990 levels and have stagnated during the last six years.

The original legal victory by Urgenda inspired a wave of climate lawsuits worldwide, brought by people determined to hold their governments accountable for a lack of climate action. ClientEarth CEO James Thornton said: “Today’s news shows just what a powerful tool climate litigation has become in holding decision-makers to account for their climate inaction. “For a second time now, a Dutch court has ruled that the country’s government has a constitutional duty to protect its citizens from the impacts of climate change and that anything less is a violation of their human rights. “This second victory shows that Dutch judges have been clear about what the government must do now: accept both decisions and refocus its efforts on reducing its carbon emissions by 25% by 2020.

“This is the climate case that started it all, inspiring similar lawsuits worldwide. It has completely changed the debate on climate policy and will inspire people everywhere to use the power of the courts to hold their leaders to account for greater action on climate change.”

Read more …

Sep 092018
 


Vincent van Gogh A Restaurant at Asnieres 1887

 

The ‘Most Striking Development’ In 40 Years Of The US Economy (BI)
This Insider Betrayal Is A Sorry Precedent (Observer ed.)
Argentina, Turkey, Mexico … Fear Of Contagion Haunts Emerging Markets (G.)
No-Deal Brexit Could Lead To “Military On The Streets” (Ind.)
Brexit Talks At Risk Of Collapse (Ind.)
Bombshell Poll Reveals Heavy Union Backing For Second Brexit Vote (G.)
YouGov Poll Shows Support For A People’s Brexit Vote Is Solid (G.)
Fresh From End Of Bailout, Greek PM Announces Tax Breaks (R.)
Protect Assange From US Extradition, Amnesty International Tells UK (RT)
The Latest Incarnation of Capitalism (Jacobin)
What’s The Biggest Influence On The Way We Think? (G.)

 

 

This is going spectacularly wrong. Somone better stop it.

The ‘Most Striking Development’ In 40 Years Of The US Economy (BI)

French economist Thomas Piketty is one of the world’s leading researchers of global income and wealth inequality, and became well-known in the United States when the English translation of his book “Capital in the 21st Century” became a surprise bestseller. For the past year, Piketty has been speaking about the 2018 World Inequality Report, published by the Paris School of Economics’ World Inequality Lab last December. Piketty coauthored the report alongside Facundo Alvaredo, Lucas Chancel, Emmanuel Saez, and Gabriel Zucman. In his talks in the US, Piketty has paid special attention to the following chart, which shows what he and his coauthors called “perhaps the most striking development in the United States economy over the last four decades.”

The authors write that “the incomes of the top 1% collectively made up 11% of national income in 1980, but now constitute above 20% of national income, while the 20% of US national income that was attributable to the bottom 50% in 1980 has fallen to just 12% today.” Further, “while average pre-tax income for the bottom 50% has stagnated at around $16,000 since 1980, the top 1% has experienced 300% growth in their incomes to approximately $1,340,000 in 2014. This has increased the average earnings differential between the top 1% and the bottom 50% from 27 times in 1980 to 81 times today.”

Read more …

The Guardian/Observer, leading anti-Trump voice, has a piece ‘Unfit for President, but…” Look, just like the NYT, you no longer are a voice, because you’ve spent two years 24/7 denouncing the man with rumors and half-truths -like you did with Corbyn being anti-semite. You can’t now turn around and be a voice for democracy. You’re done.

This Insider Betrayal Is A Sorry Precedent (Observer ed.)

[..] the president’s discomfort, and his detractors’ glee, should not obscure more serious issues raised by this affair and by similarly critical revelations contained in a new exposé by the celebrated Watergate reporter Bob Woodward. Whatever one’s opinion of Trump, it is a matter of concern that unelected, unnamed officials are apparently willing and able to act in ways contrary to an elected president’s stated wishes and calculated to thwart his policies. Trump’s worst instincts must undoubtedly be resisted, as Barack Obama, rejoining the fight last week, has declared. The best way to achieve that, as ever in a democracy, is through public scrutiny and open debate. Every leader needs candid advisers.

But who are these self-described “adults in the room” to clandestinely decide what is in the best interests of the country? Their motives may be sound, but their illicit actions, boasted of publicly, set a worrisome precedent. They have also gifted Trump a golden opportunity to peddle his favourite narrative of an establishment conspiring against him, aided and abetted by media organisations – which he terms “enemies of the people”. Speaking in Montana on Thursday, he seized his chance. “Unelected, deep state operatives who defy the voters to push their own secret agendas are truly a threat to democracy itself,” he declared.

The anonymous writer tried to provide reassurance that things in the White House are not as bad as they seem. Woodward’s new book, Fear, suggests the exact opposite: they are worse. It describes a “Crazytown” of tantrums, endless crises, serial lying, unhinged behaviour, and an administration in a recurring state of nervous breakdown.

Read more …

It’s not so much dominoes falling one by one, it’s the USD that crashes down everything.

Argentina, Turkey, Mexico … Fear Of Contagion Haunts Emerging Markets (G.)

In the past six months, some of the world’s fastest-growing economies have found themselves flat on the floor, gasping for breath and, in one case, seeking help from the global financial rescue centre otherwise known as the IMF. Argentina’s $50bn bailout by the Washington-based lender of last resort is the most extreme event so far, but it sits alongside the dramatic collapse of the Turkish lira, a recession in South Africa and dire economic predictions for the Philippines, Indonesia and Mexico. Making matters worse, the US is poised to slap tariffs as high as 25% on as much as $200bn worth of Chinese goods. If the US goes ahead, Beijing has already threatened to retaliate, which would only incense President Donald Trump further.

This tit-for-tat might only end when tariffs are applied to the entire $500bn of Chinese goods imported by America each year. In response, the stock markets of many developing nations have slumped in value, leaving investors to ask themselves whether they are witnessing an emerging-markets meltdown akin to the Asian crisis of 1997: a panic that wrecked the finances of several hedge funds and proved to be an hors d’oeuvre before the dotcom crash of 1999 and the global financial crisis of 2008. Investors have run for safety to such an extent that the MSCI Emerging Markets index, which measures the value of shares in emerging economies, has tumbled by more than 20% since the beginning of the year.

That slump appeared to be over in July, when Turkey and Argentina were seen as being isolated, and more importantly ringfenced, economic trouble spots. But figures last week showing that the US economy is steaming along like a runaway train – underlining the likelihood of more US interest rate rises – have sent the currencies and stock markets of most emerging-market economies tumbling again. Lukman Otunuga, research analyst at currency dealer FXTM, says that a sense of doom is lingering in the financial markets as fears of contagion from the “brutal emerging-market sell-off” rattle investor confidence. “More pain seems to be ahead for emerging markets as the combination of global trade tensions, prospects of higher US interest rates and overall market uncertainty haunt investor attraction,” he says.

Read more …

Now we’re talking.

No-Deal Brexit Could Lead To “Military On The Streets” (Ind.)

A no-deal Brexit could lead to the “real possibility” of police calling upon the military to help with civil disorder, a leaked document claims. Contingency plans are being drawn up by police chiefs if there is chaos on the streets due to shortages of goods, food and medicine, The document prepared by the National Police Co-ordination Centre (NPoCC) warns of traffic queues at ports with “unprecedented and overwhelming” disruption to the road network. Concerns around medical supplies could “feed civil disorder”, while a rise in the price of goods could also lead to “widespread protest”, the document obtained by the Sunday Times said.

The potential for a restricted supply of goods raised concerns of “widespread protest which could then escalate into disorder”. It could also trigger a rise in non-Brexit-related acquisitive crime such as theft. The document, set to be considered by the National Police Chiefs’ Council (NPCC) later this month, also sets out concerns of increased data costs, loss of warrant cards and queues at ports and docks around the country. Shadow police minister Louise Haigh lashed out at the Government’s handling of the situation. “This is the nightmare scenario long feared; according to the UK’s most senior police officers a no-deal Brexit could leave Britain on the brink,” she said.

Read more …

May keeps pushing the same button after it’s failed 1000 times. The EU won’t give.

Brexit Talks At Risk Of Collapse (Ind.)

Brexit talks are at risk of collapse as a planned EU compromise on the critical question of the Irish border has been branded “unacceptable” by British cabinet ministers. The Independent has learnt that EU officials believe they have struck upon “the only way” to bring the two sides together on the Irish border in a bid to secure a withdrawal agreement later this year. But their proposal has already been outright rejected by at least two cabinet ministers, with one going further and branding the EU’s suggestion “bollocks”. The impasse over the Irish border threatens to bring the talks crashing down with Theresa May’s beleaguered Chequers proposal already lacking support both in Europe and among her own MPs in Westminster.

The Independent now understands that the EU will try to break the deadlock in negotiations by offering the UK a vague political declaration on the future UK-EU relationship in return for a deal on the Irish border. A well-placed Brussels source said: “This may well prove the only way to respect the EU’s red lines and allow Theresa May to win approval for a deal in the UK parliament. “The political declaration holds the key to reaching a deal.” Since the start of Brexit talks Brussels has insisted the UK sign up to a legally binding “backstop”, which would come into play if no arrangement to avoid a hard border in Northern Ireland is found before Brexit day. It would see Northern Ireland effectively remain in the EU’s customs union and single market, creating a customs border down the Irish sea – something both Ms May and her DUP partners say is unacceptable.

[..] The strength of opposition indicates Ms May could face a further round of cabinet resignations if she were to consider agreeing to such a proposal, with Boris Johnson and David Davis having already quit earlier this year. A government spokesman said: “We don’t comment on speculation. The proposals we have put forward for our future relationship would allow both sides to meet our commitments to the people of Northern Ireland in full and we are working hard to get a deal on that basis. “But we are clear the EU backstop proposals are unacceptable.”

Read more …

The Tories are thinking: we got rid of unions, didn’t we?

Bombshell Poll Reveals Heavy Union Backing For Second Brexit Vote (G.)

Members of Britain’s three biggest trade unions now support a new referendum on Brexit by a margin of more than two to one, according to a bombshell poll that will cause political shockwaves on the eve of the party conference season. The survey of more than 2,700 members of Unite, Unison and the GMB by YouGov, for the People’s Vote campaign, also finds that a clear majority of members of the three unions now back staying in the EU, believing Brexit will be bad for jobs and living standards. The poll comes as union delegates gather in Manchester for the annual TUC conference, where Brexit will be debated on Monday, and two weeks before the Labour party conference in Liverpool, where delegates are expected to debate and vote on Brexit policy. They will also consider calls to keep open the option of a fresh referendum on any deal Theresa May may strike on the UK’s exit from the EU.

In an interview with the Observer before the poll findings were released, shadow chancellor John McDonnell said his preferred option was still for voters to be offered a say on the government’s handling of Brexit – and any deal brought back from Brussels by May – in a general election. But he said that if Labour was unable to force one in the coming months, he wanted to “keep all options open”, including supporting a new referendum. McDonnell said he was sure there would be a full debate, and votes, on Brexit at the Labour conference. And he went out of his way to praise the People’s Vote campaign, which he said had been very “constructive” and had made clear that its attempts to influence Labour policy should not be seen “as an attack on Jeremy Corbyn or positioning around the leadership. It should be a constructive debate and that is right.”

The poll found that members of Unite, the country’s biggest union, and Labour’s largest financial backer, now support a referendum on the final Brexit deal by 59% to 33% and support staying in the EU by 61% to 35%. GMB’s members support putting the issue back to the people by 56% to 33% and its members want the UK to stay in the EU by 55% to 37%. Unison members back another referendum by 66% to 22% and would opt to stay in the EU by 61% to 35%.

Read more …

That second vote will come, or else…

YouGov Poll Shows Support For A People’s Brexit Vote Is Solid (G.)

Thirty years ago this week, Jacques Delors came to Bournemouth to urge Britain’s trade unions to change their stance on Europe. The president of the European commission told TUC delegates that the EU was good for workers’ jobs, workers’ rights and workers’ living standards. It was a decisive moment in the union movement’s relationship with Brussels. This week could be equally decisive for the TUC – perhaps even more so – given the precarious balance of forces at Westminster. And the clear message from YouGov’s poll of more than 2,700 members of the TUC’s three biggest unions is that most trade union members think Brexit is bad for jobs; they want a fresh public vote and the chance to keep the UK in the EU.

Can we be sure that YouGov’s figures are right? Do the people it polled accurately reflect the views of all the members of the three big unions? I recall the same questions being asked when YouGov first showed Jeremy Corbyn well ahead in the race for the Labour leadership three years ago. Nonsense, said the critics. YouGov’s respondents, they claimed, were hopelessly biased towards leftwing activists. When it came to it, Corbyn won by almost precisely the majority reported in the final poll. And the methods YouGov used in the latest union survey are essentially the same as it used in Labour’s leadership election three years ago.

It’s not that trade union members are indulging in gesture politics or ideological breast-beating. They are worried about the impact of Brexit on jobs, taxes, living standards and the NHS. They fear a Brexit Britain would find it harder to sell products and services abroad. Their attitudes to immigration are especially significant. In the 2016 referendum, one of the arguments for Brexit was that immigrant workers were undercutting the pay of low-paid British workers. Brexit, so the argument ran, would allow Britain to stop this. As a result, there would be more, and better-paid, jobs for British workers.

Many Unite, Unison and GMB members earn below-average wages. They might be expected to support that part of the Brexit agenda. They don’t. Overwhelming majorities, ranging from 74% to 85%, want EU citizens either to have complete freedom of movement to come to the UK, or the freedom to settle here if they have a job or university place lined up.

Read more …

Tsipras is trying to create the impression that he decides and is bold. He has no say at all.

Fresh From End Of Bailout, Greek PM Announces Tax Breaks (R.)

Greek Prime Minister Alexis Tsipras on Saturday unveiled plans for tax cuts and pledged spending to heal years of painful austerity, less than a month after Greece emerged from a bailout program financed by its EU partners and the IMF. Tsipras, who faces elections in about a year’s time, used a keynote policy speech in the northern city of Thessaloniki to announce a spending spree that he said would help fix the ills of years of belt-tightening, and help boost growth. But he said Athens was also committed to sticking to the fiscal targets and reforms promised to its lenders. Greece has agreed to maintain an annual primary budget surplus – which excludes debt servicing costs – of 3.5 percent of GDP up to 2022.

So far, it has outperformed on fiscal goals and the economy has returned to growth. “We will not allow Greece to revert to the era of deficits and fiscal derailment,” he told an audience of officials, diplomats and businessmen. He said would beat its primary surplus target again this year and, following a debt relief deal in June, he could “safely plan its post-bailout future”. Government officials have put this year’s fiscal room at 800 million euros. Tsipras promised a phased reduction of corporate tax to 25 percent from 29 percent from next year, as well as an average 30 percent reduction in a deeply unpopular annual property tax on homeowners, rising to 50 percent for low earners.

Read more …

Amnesty’s Aussie branch. Timing?!

Protect Assange From US Extradition, Amnesty International Tells UK (RT)

Amnesty International has backed calls to not extradite WikiLeaks founder Julian Assange to the United States, arguing that this would put his human rights at serious risk of abuse. The statement, issued Friday by the group’s Australian branch, backed Assange’s lawyers and supporters’ claim that if he is sent to the US, “he would face a real risk of serious human rights violations due to his work with WikiLeaks.” Amnesty said that Assange could face several human rights violations in the event that he is extradited to the US, including: violation of his right to freedom of expression; right to liberty; right to life if the death penalty were sought; and being held in conditions that would violate his right to humane treatment.

While Amnesty said it took “no position” on Ecuador’s decision to grant, and then withdraw, Assange’s diplomatic asylum, it did call on the UK government to recognize the “need for international protection vis-a-vis the USA” in relation to the whistleblower’s case. Amnesty has joined several other humanitarian organizations by backing Assange and denouncing any extradition attempt. These include the UN Human Rights office, Human Rights Watch, and the Inter-American Court of Human Rights.

Read more …

How cheap money saved and doomed the world at the same time.

The Latest Incarnation of Capitalism (Jacobin)

Financialization — “the increasing importance of financial markets, financial motives, financial institutions, and financial elites in the operation of the economy” — is a process that began in the 1980s with the removal of barriers to capital mobility. Global capital flows rose from about 5 percent of world GDP in the mid-1990s to about 20 percent in 2007. This is about three times faster than world trade flows. Increases in capital mobility helped facilitate the emergence of large imbalances between creditor countries with large current account surpluses and debtors with large current account deficits. According to textbook economic theory, these imbalances should be self-correcting.

When a country runs a deficit, currency is flowing out of the country. If this currency does not return in the form of capital inflows, the resulting increase in supply will exert downward pressure on the currency. A less valuable currency makes your exports cheaper to international consumers and should therefore increase demand for those exports. Played out over the scale of the global economy, this should lead to equilibrium. In the lead-up to the crisis, the fact that this equilibrium was not forthcoming puzzled some economists. Deficit countries should have been experiencing large currency depreciations, given the size of their current account deficits. These depreciations should, in turn, then have increased the competitiveness of their goods.

Ben Bernanke, then chairman of the Fed, accused a number of emerging economies of “hoarding” savings to protect themselves from future crises, preventing the global economy from reaching equilibrium. In fact, deficit countries were able to maintain strong currencies because, even though there was relatively little demand for their goods, there was strong demand for their assets — particularly financial assets. The main reason for the high demand for UK and US assets was the financial deregulation undertaken by neoliberal governments in these states in the 1980s, which facilitated a dramatic expansion in the provision of private credit to individuals, businesses, and financial institutions.

In the UK, consumer debt — primarily composed of mortgage lending — reached 148 percent of household disposable incomes in 2008, the highest it has ever been. While UK banks’ lending to the non-financial economy rose 50 percent between 2005-8, their lending to other financial institutions rose by 260 percent. Capital from the rest of the world flowed into banks in the UK and the US, which were generating significant returns from this lending.

Read more …

Google shapes are thought and we have no idea.

What’s The Biggest Influence On The Way We Think? (G.)

Google search is in a different league from earlier tools, and so the consequences of being dependent on it are more serious and far-reaching – for two inter-related reasons. The first is that it can influence what you think you know and shape the way you think because it knows more about you than you realise. And secondly, it’s not a passive tool that you own and control, but the property of a huge corporation that has acquired strange – and in some ways unprecedented – powers. Ten years ago, Nicholas Carr published a striking article – “Is Google Making Us Stupid?” – in the Atlantic. The title was misleading because the thrust of the piece was actually about how the internet might be messing with our brains, and in that sense Carr was using Google as a proxy for the technology in general.

Which is a pity because there are plenty of important questions to be asked about Google’s impact on the way we think. Its search results, for example, are heavily influenced by how many websites it finds that are supposedly relevant to a query. Sometimes, that’s fine. But sometimes it’s toxic – yet many people think it provides the “truth”. And because people’s search queries can sometimes be very revealing, the company knows more about people’s innermost secrets, fears and fantasies than even their friends or partners. We ask Google questions that we would not breathe to any living soul.

So Google, as philosopher Benjamin Curtis points out, is anything but a passive cognitive tool. Its current offerings, boosted by machine learning algorithms, are increasingly suggestive. Its Maps not only provide navigational help but give us “personalised location suggestions that it thinks will interest us”. Gmail makes helpful suggestions about what to type in a reply and Google News highlights stories that it believes we will find interesting. “All of this,” says Curtis, “removes the very need to think and make decisions for ourselves.” It “fills gaps in our cognitive processes, and so fills gaps in our minds”.

In two short decades, therefore, Google has gone from being a geeky delight to something that influences the way we think. All of which brings to mind something that John Culkin, a buddy of Marshall McLuhan, said many years ago: “We shape our tools and then our tools shape us.” Amen to that. And you can Google him to check the quote.

Read more …

May 042018
 


Herri met de Bles c1510-after 1555 Saint Jerome medidating

 

Fed’s QE Unwind Accelerates Sharply (WS)
The Root of It All (Batnick)
Tesla Is A Zombie Company (F.)
With No Letup In Home Prices, The California Exodus Surges (MW)
Demand For US Soybeans Remains Strong Despite China (CNBC)
US Charges VW Ex-CEO With Conspiracy And Fraud (G.)
Mueller’s Questions for Trump Show Folly of Special-Counsel Appointments (NR)
Why We Need To Be Propagandized For Our Own Good (CJ)
Neocons Form Brand New Russia-Bashing ‘Think’ Tank (RI)
UK Pushes To Strengthen Anti-Russia Alliance (G.)
Nobel Prize For Literature Postponed Amid Swedish Academy Turmoil (BBC)
Jacinda Ardern Pledges Shelter For All Homeless People Within Four Weeks (G.)

 

 

As most voices seem convinced QT would be madness.

Fed’s QE Unwind Accelerates Sharply (WS)

The QE Unwind is ramping up toward cruising speed. The Fed’s balance sheet for the week ending May 2, released this afternoon, shows a total drop of $104 billion since the beginning of the QE Unwind in October – to the lowest level since June 11, 2014. During the years and iterations of QE, the Fed acquired $3.4 trillion in Treasury securities and mortgage-backed securities. The mortgages underlying those MBS are guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. The “balance sheet normalization,” as the Fed calls it, was nudged into motion last October. But the pace accelerates every quarter until it reaches up to $50 billion a month in Q4 this year.

This would trim the balance sheet by up to $420 billion this year, and by up to $600 billion in 2019 and every year going forward, until the Fed considers the balance sheet to be adequately “normalized” — or until something big breaks, whichever comes first. [..] The balance of Treasury securities fell by $17.6 billion in April. This is up 60% from March, when $11 billion “rolled off.” Since the beginning of the QE-Unwind, $70 billion in Treasuries “rolled off.” Now at $2,395 billion, the balance of Treasuries has hit the lowest level since June 18, 2014.

[..] Residential MBS are different from regular bonds. Holders receive principal payments on a regular basis as the underlying mortgages are paid down or are paid off. At maturity, the remaining principal is paid off. Over the years, to keep the MBS balance from declining, the New York Fed’s Open Market Operations (OMO) has been continually buying MBS. But settlement of those trades occurs two to three months later. The Fed books the trades on an as-settled basis. The time lag between the trade and settlement causes the large weekly fluctuations on the Fed’s balance sheet. And it also delays when MBS that “rolled off” actually disappear from the balance sheet.

[..] Total assets on the Fed’s balance sheet dropped by $30 billion in April, and by $104 billion since the beginning of the QE-Unwind, to $4,356 billion. This is the lowest since June 11, 2014. Note that total assets are now down by $160 billion from the peak in January 2015:

Read more …

“The poor stay poor, the rich get rich. That’s how it goes. Everybody knows.”

The Root of It All (Batnick)

Steven Pinker wrote, “In almost every year from 1992 through 2015, an era in which the rate of violent crime plummeted, a majority of Americans told pollsters that crime was rising. In late 2015, large majorities in eleven developed countries said that “the world is getting worse.” But crime isn’t rising, and the world is objectively getting better. And while life is improving at the macro level, at the micro level, people aren’t feeling so great. So what gives? We tend to expect the worst as a way to insulate ourselves from disappointment. Life is not about good or bad, it’s about better or worse, so if things don’t turn out as bad as we imagine, we’re pleasantly surprised. If you were asked to think about how your life could improve, a few things might come to mind.

But imagine how your life could get worse, and a barrage of negative possibilities fills your brain. The risk and reward of every day life is asymmetrical. This is why being a pessimist feels safe and being an optimist feels reckless. [..] While the news certainly isn’t doing anyone any favors, there are legitimate reasons why people don’t feel like things are getting better. For too many, they aren’t. The chart below shows the change in real income since 1980. This chart is the root of all the negative things facing our society. People in the top 20% saw their income increase by 60%. People in the bottom 20% saw their income rise by just 5% over the same time. As Leonard Cohen said, “The poor stay poor, the rich get rich. That’s how it goes. Everybody knows.”

Real income increased 38% from 1980-2016, or just 0.87% per year, and 70% of that increase went to people in the top 20%. Things are better, especially around the world, but in our country, way too many people are getting left behind. Extreme poverty is collapsing, but relative poverty is exploding, and everything in life is relative. If things don’t feel better than they were two hundred years ago, it’s because people compare themselves to their neighbors, not to their ancestors.

Read more …

As simple as that.

Tesla Is A Zombie Company (F.)

Tesla’s quarter was terrible from a financial perspective, as I had expected. The controlling figure I use, operating cash flow (operating loss plus depreciation minus capital expenditures,) was reported as -$836 million in the quarter, which very nearly approximates one quarter of 2017’s full year cash outflow of $3.4 billion. Things are not improving at Tesla from a financial perspective, and the second quarter is likely to be just as bad as the first. For the third consecutive quarter, Tesla posted negative EBITDA (-$180 million) and if this were any other company, there would be an active death watch on the Street. Tesla’s bonds have dropped sharply in today’s trading, now quoted at 87 cents on the dollar.

This is not surprising given that Tesla is not even remotely close to earning enough profit to cover its interest expense, which management estimated would be $160 million in the second quarter. Tesla added $346 million to its now $10 billion debt pile in the quarter, and the management’s weasel-worded projection of “positive net income excluding non-cash stock based compensation in Q3 and Q4” would still leave Tesla short of covering its debt service costs, by my calculations. So, from a financial perspective, Tesla is a zombie company. There is simply no justification for Tesla’s current market capitalization of $47.2 billion, and the market eventually figures these things out. It’s actually been a slow burn for Tesla shares, not a plummet, but that can be just as painful.

On September 12, 2014, Teslashares closed at $279.20 and the Nasdaq Composite closed at 4567.60. As of this writing, Tesla is trading at $279.04 and the Nasdaq is trading at 7011.00. So that’s where the value destruction Musk has wrought is evident. His shares are down slightly in a period in which his peer companies have collectively risen 53.5%.

Read more …

Housing bubbles break communities.

With No Letup In Home Prices, The California Exodus Surges (MW)

Over a million more people moved out of California from 2006 to 2016 than moved in, according to a new report, due mainly to the high cost of housing that hits lower-income people the hardest. “A strong economy can also be dysfunctional,” noted the report, a project of Next 10 and Beacon Economics. Housing costs are much higher in California than in other states, yet wages for workers in the lower income brackets aren’t. And the state attracts more highly-educated high-earners who can afford pricey homes. There are many reasons for the housing crunch, but the lack of new construction may be the most significant.

According to the report, from 2008 to 2017, an average of 24.7 new housing permits were filed for every 100 new residents in California. That’s well below the national average of 43.1 permits per 100 people. If this trend persists, the researchers argued, analysts forecast the state will be about 3 million homes short by 2025. California homeowners spend an average of 21.9% of their income on housing costs, the 49th worst in the nation, while renters spend 32.8%, the 48th worst. The median rent statewide in 2016 was $1,375, which is 40.2% higher than the national average. And the median home price was — wait for it — more than double that of the national average.

Read more …

Globally, supple has a hard time keeping up with demand. Everybody involved knows this.

Demand For US Soybeans Remains Strong Despite China (CNBC)

Demand for U.S. soybeans remains strong, regardless of worries China could target the crop in retaliation over Trump administration tariffs. China has canceled several shipments of U.S. soybeans in the last month, raising questions over whether the country is taking preemptive action against the U.S. by reducing purchases. But analysts say the reduction is a minor amount and is not that surprising from a seasonal perspective. The “U.S. accounts for 37 percent of total soybean exports throughout the world. Beyond Brazil, there’s really nobody else,” said Rich Nelson, director of research at Allendale, an agricultural market research and trading firm. “Despite the trade concerns, there’s really nobody else. You’re just simply not going to have a massive decline in U.S. soybean exports,” he said.

Chinese cancellations of U.S. soybean orders for the week ended April 26 resulted in a decline of 133,700 metric tons in net sales to China, USDA Foreign Agricultural Service data showed Thursday. But 66,000 metric tons of those soybeans were sent to Vietnam instead, the data showed. Meanwhile, the U.S. sold 82,700 metric tons of soybeans in new sales to Mexico, 68,800 to Taiwan, 60,000 to Argentina and 52,600 to the Netherlands. Although Argentina is the third-largest exporter of soybeans, a severe drought has reduced production by 7 million tons to 40 million, according to USDA estimates. “That just goes to show we’re not dependent on China for soybean exports,” said Michael Stumo, head of Coalition for a Prosperous America, a nonprofit representing the interests of those in manufacturing, agriculture and labor unions.

Read more …

Germany doesn’t extradite its citizens.

US Charges VW Ex-CEO With Conspiracy And Fraud (G.)

US authorities have charged Volkswagen’s former chief executive officer Martin Winterkorn with conspiracy and wire fraud in relation to the car company’s efforts to cheat on US diesel emissions tests. Winterkorn, who resigned in 2015 as the scandal was revealed, conspired to defraud the US and violate the Clean Air Act, federal laws designed to control air pollution, according to an indictment unsealed on Thursday in a Michigan federal court. Five other VW executives were also charged in the indictment. He becomes the highest-ranking executive to be charged over “dieselgate” – a scheme where VW used software to trick government emissions testers.

“The indictment unsealed today alleges that Volkswagen’s scheme to cheat its legal requirements went all the way to the top of the company,” said US attorney general Jeff Sessions. “These are serious allegations and we’ll prosecute this case to the full extent of the law.” When news of the scheme broke Winterkorn said he was “stunned that misconduct on such a scale was possible in the Volkswagen Group”. He denied any knowledge of the scandal – which was used to evade pollution limits on nearly 600,000 diesel vehicles. Last December, Oliver Schmidt, a senior Volkswagen executive, was jailed for seven years and fined $400,000 for his part in the scheme. Schmidt, who had returned to Germany, was arrested while on holiday in Florida. VW pleaded guilty as a corporation in March, agreeing to pay a record $4.3bn in fines.

Read more …

“If Bob Mueller wants that kind of control over the executive branch, he should run for president. Otherwise, he is an inferior executive official who has been given a limited license — ultimately, by the chief executive — to investigate crime. If he doesn’t have an obvious crime, he has no business inventing one, much less probing his superior’s judgment. He should stand down.”

Mueller’s Questions for Trump Show Folly of Special-Counsel Appointments (NR)

I am assuming the authenticity of the questions that Special Counsel Robert Mueller reportedly wants to ask President Trump. The questions indicate that, after a year of his own investigation and two years of FBI investigation, the prosecutor lacks evidence of a crime. Yet he seeks to probe the chief executive’s motives and thought processes regarding exercises of presidential power that were lawful, regardless of one’s view of their wisdom. If Bob Mueller wants that kind of control over the executive branch, he should run for president. Otherwise, he is an inferior executive official who has been given a limited license — ultimately, by the chief executive — to investigate crime. If he doesn’t have an obvious crime, he has no business inventing one, much less probing his superior’s judgment. He should stand down.

The questions, reported by the New York Times, underscore that the special counsel is a pernicious institution. Trump should decline the interview. More to the point, the Justice Department should not permit Mueller to seek to interrogate the president on so paltry and presumptuous a showing.

When should a president be subject to criminal investigation? It is a bedrock principle that no one is above the law. The Framers made clear that this includes the president. But, like everything else, bedrock principles do not exist in a vacuum. They vie with other principles. Two competing considerations are especially significant here. First, our law-enforcement system is based on prosecutorial discretion. Under this principle, the desirability of prosecuting even a palpable violation of law must be balanced against other societal needs and desires. We trust prosecutors to perform this cost-benefit analysis with modesty about their mission and sensitivity to the disruption their investigations cause.

Second, the president is the most essential official in the world’s most consequential government. That government’s effectiveness is necessarily compromised if the president is under the cloud of an investigation. Not only are the president’s personal credibility and capability diminished; such an investigation discourages talented people from serving in an administration, further undermining good governance. The country is inexorably harmed because a suspect administration’s capacity to execute the laws and pursue the interests of the United States is undermined.

Read more …

Caitlin Johnstone on the Atlantic Council.

Why We Need To Be Propagandized For Our Own Good (CJ)

I sometimes try to get establishment loyalists to explain to me exactly why we’re all meant to be terrified of this “Russian propaganda” thing they keep carrying on about. What is the threat, specifically? That it makes the public less willing to go to war with Russia and its allies? That it makes us less trusting of lying, torturing, coup-staging intelligence agencies? Does accidentally catching a glimpse of that green RT logo turn you to stone like Medusa, or melt your face like in Raiders of the Lost Ark? “Well, it makes us lose trust in our institutions,” is the most common reply. Okay. So? Where’s the threat there? We know for a fact that we’ve been lied to by those institutions. Iraq isn’t just something we imagined. We should be skeptical of claims made by western governments, intelligence agencies and mass media. How specifically is that skepticism dangerous?

Trying to get answers to such questions from rank-and-file empire loyalists is like pulling teeth, and they are equally lacking in the mass media who are constantly sounding the alarm about Russian propaganda. All I see are stories about Russia funding environmentalists (the horror!), giving a voice to civil rights activists (oh noes!), and retweeting articles supportive of Jeremy Corbyn (think of the children!). At its very most dramatic, this horrifying, dangerous epidemic of Russian propaganda is telling westerners to be skeptical of what they’re being told about the Skripal poisoning and the alleged Douma gas attack, both of which do happen to have some very significant causes for skepticism.

When you try to get down to the brass tacks of the actual argument being made and demand specific details about the specific threats we’re meant to be worried about, there aren’t any to be found. Nobody’s been able to tell me what specifically is so dangerous about westerners being exposed to the Russian side of international debates, or of Russians giving a platform to one or both sides of an American domestic debate. Even if every single one of the allegations about Russian bots and disinformation are true (and they aren’t), where is the actual clear and present danger? No one can say. No one, that is, except the Atlantic Council.

Read more …

The entire MSM can’t get the job done?!

Neocons Form Brand New Russia-Bashing ‘Think’ Tank (RI)

A group of neocon heartthrobs have banded together with an eclectic array of Russiagaters to form a visionary organization committed to protecting Western democracy. You can also pre-order their book, according to their website. Chaired by pompous chess wizard turned Kremlinologist Garry Kasparov, the brand-new Renew Democracy Initiative (RDI) is the latest three-letter-initialism non-profit devoted to “the defense of democratic freedom and prosperity.” The trailblazing think tank has already sent shockwaves through Washington, DC and every European capital. Celebrated war cheerleader Max Boot, who serves on RDI’s board of directors, announced the creation of this highly original organization in a Washington Post op-ed.

Interestingly, the unveiling started with a laundry list of 10 other groups that are already “protesting Trump and championing democracy.” So why does the world need RDI, then? Because RDI is different – some might even say “special.” Unlike the dozens of other well-financed bastions of status-quo thinking, RDI aims to “unite both the center-left and center-right” by promoting “liberty, democracy and sanity in an age of discord.” And where will this much-needed sanity come from? From RDI’s all-star team of important intellectuals and free thinkers, of course – some of whom just happen to be really tight with the other 10 groups mentioned in Boot’s WaPo piece. Dear Mr. Boot: does fighting Putin with the Committee to Investigate Russia allow enough spare time to fight Putin with the Renew Democracy Initiative? Curious minds want to know.

Read more …

It’s contagious.

UK Pushes To Strengthen Anti-Russia Alliance (G.)

The UK will use a series of international summits this year to call for a comprehensive strategy to combat Russian disinformation and urge a rethink over traditional diplomatic dialogue with Moscow, following the Kremlin’s aggressive campaign of denials over the use of chemical weapons in the UK and Syria. British diplomats plan to use four major summits this year – the G7, the G20, Nato and the European Union – to try to deepen the alliance against Russia hastily built by the Foreign Office after the poisoning of the former Russian double agent Sergei Skripal in Salisbury in March. “The foreign secretary regards Russia’s response to Douma and Salisbury as a turning point and thinks there is international support to do more,” a Whitehall official said.

“The areas the UK are most likely to pursue are countering Russian disinformation and finding a mechanism to enforce accountability for the use of chemical weapons.” Former Foreign Office officials admit that an institutional reluctance to call out Russia once permeated British diplomatic thinking, but say that after the poisoning of Skripal and his daughter, Yulia, that attitude is evaporating. A cross-party alliance in parliament has developed which sees the question of Russian corruption no longer through the prism of finance, but instead as a security and foreign policy threat, requiring fresh sanctions even if this causes short-term economic damage to the UK.

[..] For some old hands in the Foreign Office with deep experience of Russia, however, demonising Russia is a disastrous strategy. Sir Anthony Brenton, the British ambassador to Russia between 2004 and 2008, insists a fruitful common agenda with Moscow on issues such as nuclear disarmament, Islamist terrorism and cyberwarfare is still possible. “What on earth was her majesty’s foreign secretary doing comparing the Russian World Cup with Hitler’s 1936 Olympics?” he asked. “If you are looking for a single statement really calculated to infuriate the Russians there it is, or indeed the defence secretary telling Russia to shut up. Elementary diplomacy goes a long way with the Russians and we need to get back to that.

Read more …

Still feels like a weird story.

Nobel Prize For Literature Postponed Amid Swedish Academy Turmoil (BBC)

The organisation that decides the Nobel Prize for Literature has said it will not announce an award this year, after it was engulfed in a scandal over sexual assault allegations. The Swedish Academy has been in crisis over its handling of allegations against the husband of a member. She has since quit, as have the academy’s head and four other members. The academy says it will now announce the 2018 winner along with the 2019 winner next year.

The scandal is the biggest to hit the prize since it was first awarded in 1901. The academy said the decision had been made due to a lack of public confidence. Some academy members had argued that the prize should proceed to protect the tradition, but others said the institution was in no state to present the award. Apart from six years during the world wars, there has been only one year when the prize was not awarded. No worthy winner was found in 1935.

Read more …

You go girl. The only right thing to do.

Jacinda Ardern Pledges Shelter For All Homeless People Within Four Weeks (G.)

The New Zealand government has promised to get the country’s homeless population off the streets and into shelter in time for winter. In a joint announcement on Friday, housing minister Phil Twyford and prime minister Jacinda Ardern announced a NZ$100m emergency housing package to tackle the ballooning problem. An estimated 40,000 people live in cars, tents and garages amid a chronic housing shortage in the nation of 4.7 million people. “We’re pulling out all the stops to support people in need and urgently increase housing supply this winter,” said housing minister Phil Twyford. “Our government will make sure everyone is helped to find warm, dry housing this winter.”

With winter starting on 1 June in the southern hemisphere, less than four weeks away, the government has put out an urgent call for anyone with additional accommodation that may be suitable to house homeless people. Seasonal worker accommodation such as shearers quarters, private rental properties, motor camps and maraes (Maori meeting houses) would all be considered. New Zealand has the highest rates of homelessness in the OECD, with more than 40,000 people living on the streets, in emergency housing or in substandard conditions. Per capita New Zealand’s homeless population is almost twice as bad as Australia, which is placed third on the list. More than half of New Zealand’s homeless population live in Auckland but it is also growing in smaller cities such as Rotorua, Tauranga, Queenstown and Wellington.

Read more …

Dec 172017
 
 December 17, 2017  Posted by at 10:31 am Finance Tagged with: , , , , , , , ,  7 Responses »


Russell Lee Shasta Dam under construction. Shasta County, California 1942

 

Zombie Corporations: 10% Of Global Companies Depend On Cheap Money (Mish)
America’s Inequality Machine Is Sending the Dow Soaring (BBG)
“Dark Money” Runs the World (Nomi Prins)
‘There’s No Life Here’: A Journey Into Britain’s Precarious Future (O.)
Brexit: Britons Now Back Remain Over Leave By 10 Points (Ind.)
Call Off Brexit Bullies Or Face Defeat, Conservative Peers Tell May (G.)
Metlife Says It Failed To Pay Some Pensions, Flags Hit To Reserves (R.)
EU Banks Told to Get Crisis-Ready by Removing Wind-Down Hurdles (BBG)
Humans At Maximum Limits For Height, Lifespan And Physical Performance (SD)

 

 

Only 10? You sure?

Zombie Corporations: 10% Of Global Companies Depend On Cheap Money (Mish)

10% of corporations survive only because central banks have kept real interest rates negative. The BIS defines Zombie firms as those with a ratio of earnings before interest and taxes to interest expenses below one, with the firm aged 10 years or more. In simple terms, Zombies are those firms that could not survive without a flow of cheap financing. The chart shows the median share of zombie firms across AU, BE, CA, CH, DE, DK, ES, FR, GB, IT, JP, NL, SE and US. According to the BIS Quarterly Report one out of ten corporations in emerging and advanced countries is a “Zombie”. Let’s dive into the report for more details.

The inability to come to grips with the financial cycle has been a key reason for the unsatisfactory performance of the global economy and limited room for policy manoeuvre. Since 2007, productivity growth has slowed in both advanced economies and EMEs. One potential factor behind this decline is a persistent misallocation of capital and labour, as reflected by the growing share of unprofitable firms. Indeed, the share of zombie firms – whose interest expenses exceed earnings before interest and taxes – has increased significantly despite unusually low levels of interest rates. Over the past 10 years, there has been a close positive correlation between the growth of corporate credit and investment.

A build-up of corporate debt has financed investment in many economies, particularly in EMEs, including high investment rates in China. Turning financial cycles in these economies could therefore weigh on investment. As with consumption, the level of debt can affect investment. Rising interest rates would push up debt service burdens in countries with high corporate debt. Moreover, in EMEs with large shares of such debt in foreign currency, domestic currency depreciation could hurt investment. As mentioned before, an appreciation of funding currencies, mainly the US dollar, increases debt burdens where currency mismatches are present and tightens financial conditions (the exchange rate risktaking channel).

Empirical evidence suggests that a depreciation of EME currencies against the US dollar dampens investment significantly, offsetting to a large extent the positive impact of higher net exports. For the above reasons, I believe the end of the global recovery is at hand. And when the next bust happens, the last thing central banks will be doing is raising interest rates.

Read more …

How to define the Fed.

America’s Inequality Machine Is Sending the Dow Soaring (BBG)

The Great Recession is a speck in the rear-view mirror for America’s financial markets. They’ve advanced far beyond pre-crisis levels. In fact, Goldman Sachs says you can go back a century before 2008, and still not find a “bull market in everything” like today’s. If the real economy had roared back the same way, Donald Trump might not be president. Instead, it’s been a grind. While unemployment is near a two-decade low, wages have grown slowly by past standards. They’re nowhere near keeping pace with the asset-price surge. Elected on a promise of better jobs and pay, Trump is about to pull the most powerful lever any government has for firing up the economy: fiscal policy. By slashing taxes on corporate profits, its authors say, the Republican plan will unleash the animal spirits of American business – and everyone will benefit.

A rising tide does lift all boats – but nowadays, in the U.S., not equally. Under both parties, recoveries have become increasingly lopsided. The current one has helped millions of people find work; it’s also benefited asset-owners far more than people who trade their labor for a paycheck. Income distribution, already the most unequal in the developed world, is getting worse. And that’s starting to influence everything from America’s spending habits to its elections. “The story of our time is polarization – by party, by class and by income,” said Mark Spindel, founder and chief investment officer at Potomac River Capital in Washington, and co-author of a 2017 book about the Federal Reserve. “I don’t see anything in the tax bill to make that any better.’’

The Fed’s post-2008 toolkit included massive purchases of financial assets, which supported a liftoff on the markets but took time to trickle through to the real economy. Trump’s tax critics say his plan will have a similar effect, because companies will spend the windfall on share buybacks or dividends, instead of job-creating investments. Plenty of executives say that’s exactly what they’ll do. Bank of America’s most recent buyback program totals $18 billion. Chairman Brian Moynihan championed the tax proposal this month. “It’s good for corporate America, and it’s good for us,” he said.

Read more …

Same thing: inequality machine.

“Dark Money” Runs the World (Nomi Prins)

Dark money is the #1 secret life force of today’s rigged financial markets. It drives whole markets up and down. It’s the reason for today’s financial bubbles. On Wall Street, knowledge of and access to dark money means trillions of dollars per year flowing in and around global stock, bond and derivatives markets. I learned this firsthand from my career on Wall Street. My first full year working on Wall Street was in 1987. I wasn’t talking about “dark money” or central bank collusion back then. I was just starting out. Eventually, I would uncover how the dark money system works… how it has corrupted our financial system… and encouraged greed to the point of crisis like in 2008. When I moved abroad to create and run the analytics department at Bear Stearns London as senior managing director, I got my first look at how dark money flows and its effects cross borders.

The “dark money” comes from central banks. In essence, central banks “print” money or electronically fabricate money by buying bonds or stocks. They use other tools like adjusting interest rate policy and currency agreements with other central banks to pump liquidity into the financial system. That dark money goes to the biggest private banks and financial institutions first. From there, it spreads out in seemingly infinite directions affecting different financial assets in different ways. Yet these dark money flows stretch around the world according to a pattern of power, influence and, of course, wealth for select groups. To be a part of the dark money elite means to have control over many. How elite is a matter of degree. These is not built upon conspiracy theories. To the contrary, alliances make perfect sense and operate publicly.

Even better, their exclusive dealings and the consequences that follow are foreseeable — but only if you understand how the system works and follow the dark money flows. It’s easy to see how this dark money affects the stock market at a high level, because we can monitor its constant movement. Here’s the smoking gun:

The red line shows you how much “dark money” the Federal Reserve has printed since 2008. The gray line shows you the S&P 500. They move together — more dark money drives the market higher. Much higher. There are dark money charts from around the world, just like the one I showed you for the Federal Reserve and U.S. stock market. Look at this “dark money” chart from Japan, for example:

Read more …

Time for a change.

‘There’s No Life Here’: A Journey Into Britain’s Precarious Future (O.)

Ebbw Vale is the largest town in the county of Blaenau Gwent. This autumn the county was found to be the cheapest place to buy a home in England and Wales (averaging £777 per sq m in 2016, compared with £19,439 for the most expensive, London’s Kensington and Chelsea). It offers the second-lowest mean salary in Britain, and its GCSE results are the worst in Wales. Five food banks operate within an area of about 42 square miles. People here are struggling economically and physically. It’s a grim irony that an area encompassing the former constituency of Aneurin Bevan, architect of the National Health Service, should today be facing a quietly unfolding health crisis. Some 12% of working-age residents receive government support for disability or incapacity – twice the national average.

Life expectancy for both men and women is among the lowest in England and Wales. Out of a population of 60,000, one in every six adults is being prescribed an antidepressant, according to NHS data from 2013. “GPs haven’t got time to listen, to talk to people, to find out what’s going on. They’ve got that five- or 10-minute slot, somebody’s in tears, they’re saying they’re depressed,” Tara Johnstone tells me at the Phoenix Project, the publicly funded drop-in centre where she works in nearby Brynmawr. It’s run by a local charity, Torfaen and Blaenau Gwent Mind, and people come to chat about their problems: anxiety, depression, illness, bereavement. Most stories revolve around the same theme. “It’s lack of work,” explains Trish Richards, another Phoenix staff member. “I’ve had people come to me on zero-hours contracts. They don’t know where they are from one week to the next. Can’t plan. Can’t even plan to go to the dentist in case they get called in to work.”

Read more …

The shift is only just starting. Incompetence will rule 2018 in Britain.

Brexit: Britons Now Back Remain Over Leave By 10 Points (Ind.)

The British public has swung behind staying in the EU by its largest margin since the referendum, with those backing Remain outstripping Leavers by ten points, a new poll has revealed. The exclusive survey for The Independent by BMG Research showed 51% now back remaining in the union, while 41% want Brexit. Once “don’t knows” were encouraged to choose one way or the other, or excluded, the Remain lead rises to 11 points. Either way, it is the biggest gap since the June 2016 vote. It comes as leading political figures write in The Independent tomorrow about whether the country needs a further referendum to decide on Brexit, once terms of departure are known.

Michael Heseltine, Peter Mandelson, Gina Miller and Vince Cable call for a rethink, while Leave campaign mastermind Matthew Elliott and Conservatives James Cleverly and Suella Fernandes demand Brexit is seen through. Last week again underlined the difficulties of withdrawal, after the EU set out terms for a Brexit transition period that will likely be unacceptable to leading Conservative Eurosceptics. Theresa May also suffered a damaging defeat in the Commons while trying to pass her key piece of Brexit legislation, before being forced to make a major concession to avoid further embarrassment next week. Amid the furore, the latest poll indicates British voters have slowly but steadily been turning their backs on Brexit.

When a weighted sample of some 1,400 people were asked: “Should the United Kingdom remain a member of the European Union, or leave the European Union?” – 51% backed Remain, and 41% backed Leave. 7% said “don’t know” and 1% refused to answer. After “don’t knows” were either pushed for an answer or otherwise excluded, 55.5% backed Remain and 44.5 backed Leave. Polling since this time last year appears to demonstrate a clear trend; Leave enjoyed a lead last December which gradually shrank, before turning into a lead for Remain in the month of the general election, that has since grown.

Read more …

Pretty soon the only thing left will be dividing lines.

Call Off Brexit Bullies Or Face Defeat, Conservative Peers Tell May (G.)

Theresa May was warned on Sunday by Tory peers that she will face a string of parliamentary defeats over Europe in the House of Lords if she tries to “bully” members of the second chamber into backing an extreme form of Brexit. After 11 Conservative MPs joined opposition parties to inflict a humiliating loss on the government last week, Tory grandees are warning that the spirit of rebellion will spread to the Lords unless May shows she respects parliament and decisively rejects those with “extreme views” in her own party. Writing in the Observer, two Tory peers, the former pensions minister Ros Altmann and Patience Wheatcroft, a former editor of the Sunday Telegraph, say they are appalled at the insults heaped by hardline Brexiters on MPs who voted with their consciences, and at the “strong-arm” tactics of the Tory whips.

They say it is vital to democracy that parliamentarians be given the right to assess the Brexit deal on behalf of the British people without being threatened or bullied, and suggest that the aggression of Tory party managers has helped create a “toxic atmosphere”, not only in parliament but across the UK. Altmann and Wheatcroft write: “The resulting appalling insults from Brexiters, calls for expulsion from the party, and even death threats, are worrying symptoms of the toxic atmosphere which has been created in our country.” They add: “There are many moderate Conservatives in both Houses of Parliament who are deeply concerned that some in our party are so desperate to leave the EU, with or without a deal, that they believe any cost is justified to bring Brexit. They maintain ‘freedom is priceless’ but this extreme view does not reflect public opinion.”

The two peers say Conservative members of the House of Lords, in which there was a large pro-Remain majority, will not take kindly to being told by the Tory whips and the executive what to think about Brexit and how to vote. “Mindful of the monumental importance for future generations of getting Brexit right, the Lords is unlikely to be receptive to bullying over a restricted timetable or vigorous whipping to toe the party line,” they say. “The people voted to ‘take back control’ but that has to mean control by parliament, not a small group with extreme views or an executive that will brook no challenge. It is parliament that must have the final say on whether the deal that is negotiated for breaking away from the EU … is in the UK’s best interests.”

Read more …

The shape of things to come.

Metlife Says It Failed To Pay Some Pensions, Flags Hit To Reserves (R.)

Metlife failed to pay pensions to potentially tens of thousands of people and will have to strengthen its reserves because of the costs of finding and repaying them, the New York insurer said. Metlife said in a filing on Friday that it believed the group missing out on the payments represented less than 5 percent of about 600,000 people who receive benefits from the company via its retirement business. Those affected generally have average benefits of less than $150 a month, it said. When taken, however, the increase to reserves could be material to Metlife’s financial results. The insurer said it would provide further disclosure on its fourth-quarter earnings call and in its annual report for 2017. MetLife did not say how many years of missing income was owed. The people who missed out on the payments have changed jobs, relocated or are otherwise unreachable based on currently available information, the company said, adding that it was widening its search efforts and making better use of technology.

Read more …

Are we really to believe Europe will stand up against its most powerful banks?

EU Banks Told to Get Crisis-Ready by Removing Wind-Down Hurdles (BBG)

Big euro-area lenders face a choice; clean up the complicated corporate structures that make them difficult to wind down in a crisis, or watch Elke Koenig do it for them. Koenig, head of the Brussels-based Single Resolution Board, said in an interview that streamlining banks’ architecture and ensuring they can fund their own demise without taxpayers’ help will be priorities in the year ahead. “You have banks where you end with something that looks more like a spider web than a clean structure,” Koenig said. The message that those banks will receive is: “Please tidy up,” she said. The SRB is part of the EU’s efforts to end the problem of too-big-to-fail banks. In 2018, it will adopt resolution plans for nearly all of the 140-odd lenders within its remit, then start to identify “substantive impediments” to orderly wind-down.

Under EU law, when the SRB finds such obstacles, it sends a report to the bank, which must respond within four months on how it plans to fix the problem. If the SRB isn’t satisfied, it can instruct the supervisor to impose a range of measures on the bank, including issuing loss-absorbing liabilities, altering its legal or operational structures and selling assets. This task assumed greater importance earlier this year when the the European Commission withdrew a bill that could have forced major banks such as Deutsche Bank and BNP Paribas to split their trading and retail operations. Finance Watch, a public-interest watchdog, has said that without that bill, it’s “squarely” on authorities like the SRB to make sure systemically important banks can be wound down in an orderly manner.

Koenig accepts that the SRB is responsible for making sure banks have resolvable structures. “That’s clearly on us,” she said. “And it’s something that needs to be addressed swiftly.” “The ideal structure for me is one where you can with confidence isolate certain functions to keep them up and running in case something unforeseen happens,” Koenig said. “I would not try to differentiate between investment banking functions and retail banking functions, but think about it this way: If you need to separate businesses, are you producing a viable set of companies? Can you really separate them in a timely manner?”

Read more …

But we were going to implant robots into ourselves… When will we learn that it’s the limits that set us free?

Humans At Maximum Limits For Height, Lifespan And Physical Performance (SD)

Humans may have reached their maximum limits for height, lifespan and physical performance. A recent review suggests humans have biological limitations, and that anthropogenic impacts on the environment – including climate change – could have a deleterious effect on these limits. Published in Frontiers in Physiology, this review is the first of its kind spanning 120 years worth of historical information, while considering the effects of both genetic and environmental parameters. Despite stories that with each generation we will live longer and longer, this review suggests there may be a maximum threshold to our biological limits that we cannot exceed. A transdisciplinary research team from across France studied trends emerging from historical records, concluding that there appears to be a plateau in the maximum biological limits for humans’ height, age and physical abilities.

“These traits no longer increase, despite further continuous nutritional, medical, and scientific progress. This suggests that modern societies have allowed our species to reach its limits. We are the first generation to become aware of this” explains Professor Jean-François Toussaint from Paris Descartes University, France. Rather than continually improving, we will see a shift in the proportion of the population reaching the previously recorded maximum limits. Examples of the effects of these plateaus will be evidenced with increasingly less sport records being broken and more people reaching but not exceeding the present highest life expectancy. However, when researchers considered how environmental and genetic limitations combined may affect the ability for us to reach these upper limits, our effect on the environment was found to play a key role.

“This will be one of the biggest challenges of this century as the added pressure from anthropogenic activities will be responsible for damaging effects on human health and the environment.” Prof. Toussaint predicts. “The current declines in human capacities we can see today are a sign that environmental changes, including climate, are already contributing to the increasing constraints we now have to consider.” “Observing decreasing tendencies may provide an early signal that something has changed but not for the better. Human height has decreased in the last decade in some African countries; this suggests some societies are no longer able to provide sufficient nutrition for each of their children and maintain the health of their younger inhabitants,” Prof. Toussaint explains.

To avoid us being the cause of our own decline, the researchers hope their findings will encourage policymakers to focus on strategies for increasing quality of life and maximize the proportion of the population that can reach these maximum biological limits. “Now that we know the limits of the human species, this can act as a clear goal for nations to ensure that human capacities reach their highest possible values for most of the population. With escalating environmental constraints, this may cost increasingly more energy and investment in order to balance the rising ecosystem pressures. However, if successful, we then should observe an incremental rise in mean values of height, lifespan and most human biomarkers.” Prof. Toussaint warns however, “The utmost challenge is now to maintain these indices at high levels.”

Read more …