Oct 192022
 


Salvador Dali Self-portrait in the studio 1919

 

People Who Resisted Covid Jabs Are ‘Superheroes’ (Blanchon)
Russian General In Charge Of Ukraine Operation Speaks Out
US Should Not Listen To Kiev, Former Ambassador To Moscow Says (RT)
Erdogan Still Wants To Bring Putin And Zelenskyy Together (RT)
The End Game (Batiushka)
Russia Destroys Power And Water Infrastructure Across Ukraine (RT)
Cui Bono? The Big Picture (Blair)
EU Won’t Introduce Gas Price Cap For Now As Countries Disagree (Az.)
US Warned Of Winter Blackouts – WSJ (RT)
Lawmakers Seek Emergency Powers For Pentagon’s Ukraine War Contracting (DN)
Pentagon Considering Paying For Musk’s Starlink Network In Ukraine (G.)
Details Of Nord Stream Probe Shared By Media (RT)
Nord Stream 1: First Underwater Images Reveal Devastating Damage (G.)
Germany Facing Retail Collapse – Der Spiegel (RT)
CDC To Vote On Permanently Shielding Pfizer, Moderna From Vaccine Liability (JS)
Joe Biden KNEW of Hunter’s Shady Business Dealings: Whistleblowers (PM)

 

 

 

 

Trump Larry King 1987

 

 

 

 

Malhotra

 

 

 

 

Maher

 

 

 

 

“The text of the tribute letter may have originated with Spanish biologist and film-maker Fernando López-Mirones, or France’s General Christian Blanchon.”

People Who Resisted Covid Jabs Are ‘Superheroes’ (Blanchon)

Even if I were fully vaccinated, I would admire the unvaccinated for standing up to the greatest pressure I have ever seen, including from spouses, parents, children, friends, colleagues, and doctors. People who have been capable of such personality, courage, and such critical ability undoubtedly embody the best of humanity. They are found everywhere, in all ages, levels of education, countries, and opinions. They are of a particular kind; these are the soldiers that any army of light wishes to have in its ranks. They are the parents that every child wishes to have and the children that every parent dreams of having. They are beings above the average of their societies; they are the essence of the peoples who have built all cultures and conquered horizons.

They are there, by your side, they seem normal, but they are superheroes. They did what others could not do; they were the tree that withstood the hurricane of insults, discrimination, and social exclusion. And they did it because they thought they were alone and believed they were alone. Excluded from their families’ Christmas tables, they have never seen anything so cruel. They lost their jobs, let their careers sink, and had no more money… but they didn’t care. They suffered immeasurable discrimination, denunciations, betrayals, and humiliation… but they continued. Never before in humanity has there been such a casting; we now know who the resisters are on planet Earth.

Women, men, old, young, rich, poor, of all races and all religions, the unvaccinated, the chosen ones of the invisible ark, the only ones who managed to resist when everything fell apart. Collapsed. You’ve passed an unimaginable test that many of the toughest marines, commandos, green berets, astronauts, and geniuses couldn’t pass. You are made of the stuff of the greatest that ever lived, those heroes born among ordinary men who shine in the dark.

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“..Ukraine is preparing a massive strike on the Kakhovka hydroelectric plant, located on the Dnieper River.”

Russian General In Charge Of Ukraine Operation Speaks Out

Army General Sergey Surovikin on Tuesday spoke to the media for the first time since assuming overall command of the ongoing Russian military operation in Ukraine. Describing the situation as particularly “tense” around the city of Kherson in his statement to the broadcaster Rossiya-24, he added that the military may be forced to make “difficult decisions.” “The NATO command of the armed forces of Ukraine has long been demanding offensive operations in the Kherson direction from the Kiev regime, regardless of any casualties – both in the Armed Forces of Ukraine and among the civilian population,” Surovikin stated. The Russian military is aware of Kiev’s plans to use “prohibited” means of waging war in the Kherson area, Surovikin added.

Namely, Ukraine is preparing a massive strike on the Kakhovka hydroelectric plant, located on the Dnieper River, as well as launching massive rocket and artillery attacks on Kherson itself. “These actions can lead to the destruction of the infrastructure of this large industrial center and massive casualties among the civilian population,” Surovikin said. In the ongoing effort to dislodge the Russian military from its positions, Kiev is pouring its reserves en masse into the frontline, the general said. The vast majority of those reserves are “territorial defense units, who have not been properly trained,” Surovikin added. Such troops have low morale, thus they are propped up by “barrier squads”composed of hardline nationalists “who shoot anyone trying to leave the battlefield,” he claimed.

“The enemy’s daily losses amount to hundreds of casualties. We have a different strategy. <…> We are not aiming at fast-paced offensives, we spare every soldier and methodically grind the enemy’s attacking forces. This not only minimizes our own losses, but also significantly reduces the amount of victims among the civilian population.” “The enemy is the criminal regime that pushes Ukrainian citizens towards death. We are one people with Ukrainians and only wish for Ukraine to be a state independent from the West and NATO and friendly towards Russia,” Surovikin said. Surovikin assumed overall command of Russian troops participating in the military operation earlier in October. The general has significant combat experience, ranging from hostilities in Chechnya to the operation in Syria, for which he was awarded the title of Hero of Russia back in 2017.

According to media reports, Surovikin was given the nickname ‘General Armageddon’ by his colleagues over his hardline and unorthodox approach to warfare. His elevation into the new role has coincided with Russia ramping-up aerial bombings across Ukraine, with cruise missiles and suicide drones attacking crucial infrastructure sites in the country.

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“..Washington is in a position to “encourage the Ukrainians to agree to a ceasefire..”

US Should Not Listen To Kiev, Former Ambassador To Moscow Says (RT)

The Ukraine crisis was preventable but now seems doomed to further escalation, the last US ambassador to the Soviet Union has warned. Washington is making the mistake of delegating to Kiev many of the decisions about American involvement, he added. Kiev does “not know best what is in the security interests of the American people, and that should be the primary concern of any American government,”Jack Matlock wrote in an article published on Monday by the website Responsible Statecraft. The Ukrainians, “under the stress of war, may not be the best judges of their own ultimate security interests,” he argued. Matlock cited a situation from his own time as the top US diplomat in Moscow. He recalled a moment in 1990 when the leadership of Soviet Lithuania declared independence from the USSR right before the Soviet Union itself ceased to exist, and requested “immediate recognition” from the US.

Washington had never formally recognized the three Baltic states, which were captured during World War II, as parts of the Soviet Union. Nevertheless, Matlock advised against acting on the Lithuanian request. “I had total sympathy with the Lithuanian aspirations but had to explain that it would be a mistake to do so until Lithuania was in fact free. Why? Because, in 1990, US recognition would almost certainly have precipitated a Soviet crack-down which the US could not counter without risking nuclear war,”he explained. Matlock said it is natural for Americans to admire “the valiant resistance” that the Ukrainians have demonstrated against Russia, but that “does not mean that Ukraine has to recover all the territory it inherited in 1991.” He explained that people in some regions claimed by Kiev may resist a return to its control, given that they consider the 2014 overthrow of the Ukrainian government to be a US-organized coup.

The former ambassador noted that Kiev had multiple opportunities to avert war. He believes that Russia would not have sent troops into Ukraine in February if Kiev “had been willing to abide by the Minsk agreement, recognize the Donbas as an autonomous entity within Ukraine, avoid NATO military advisors, and pledge not to enter NATO.” Now, however, neither side seems willing to take a pause in hostilities and let diplomacy take hold, he said, adding that the longer the conflict continues, the harder it will be to avoid the “utter destruction” of Ukraine.“The reality is that if the war continues Russia is capable of damaging Ukraine more than Ukraine can damage Russia without risking a wider war,” Matlock said. He concluded that Washington is in a position to “encourage the Ukrainians to agree to a ceasefire” and urged it to do so.

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“..Kalin said that Vladimir Putin wants negotiations now.”

Erdogan Still Wants To Bring Putin And Zelenskyy Together (RT)

Turkish President Recep Tayyip Erdogan still wants to meet Ukrainian leader Volodymyr Zelenskyy and Russian President Vladimir Putin, the Spokesperson of the President of Turkiye, Ibrahim Kalin said, Report informs. Kalin said that Vladimir Putin wants negotiations now – after Russia annexed four regions of Ukraine: “Despite all the difficulties, the door of diplomacy should be kept open. The President of Turkiye can do it.”

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“..we need a consolidated society, and this consolidation can only be based on sovereignty, freedom, creation, and justice. Our values are humanity, mercy and compassion.”

The End Game (Batiushka)

The partial mobilisation of 300,000 Russian reservists is nearly complete. Their presence in Donbass will free up the regulars to advance further, although some of the land taken by Kiev forces in September has already been taken back and more is liberated every day. After seven days of aerial attacks (only two days of them reported in the Western media) on Ukrainian infrastructure, especially on power supplies, even Zelensky has today admitted that 30% of the Kiev regime power stations have been destroyed throughout the Ukraine. This is all in response to his terrorism in Zaporozhye, Donetsk, Belgorod, Moscow (Daria Dugina), and on Nordstream and the Crimean Bridge. What else did he expect? France is on strike. Italy is fed up and wants arms deliveries to the Kiev Neo-Nazis to stop.

In the bankrupt UK, to the amazement of all, Truss is still ‘present’, but the Daily Mail website reports that many pubs will have to close for the winter. The landlords cannot afford to pay for heating bills. In Germany, the Health Minister, Karl Lauterbach, has warned of the risk of even hospitals having to close because of the energy crisis. Some ask: But why did the Russian Federation not start the liberation campaign last February by turning up the pain dial there and then? The answer is simple. It is not just that the Federation underestimated the utter stupidity of NATO and the Kiev junta. It is much more than that, it is quite simply that Russia never did wanted to inflict pain on ordinary Ukrainians and on its own Union soldiers. Ordinary Ukrainians have NEVER been the enemy. Russian targeting has always been of the NATO-supplied and NATO-trained Kiev military.

Russians are not Americans who spray the bushes with machine gun bullets and the trees with Agent Orange, or who blast Hamburg and Dresden off the map like the British. They target. They are not terrorists. Have you not read President Putin’s 30 September speech? Please listen again: ‘I want the Kiev authorities and their true handlers in the West to hear me now, and I want everyone to remember this: the people living in Lugansk and Donetsk, in Kherson and Zaporozhye have become our citizens, forever.…We call on the Kiev regime to cease fire and all hostilities immediately; to end the war it unleashed back in 2014 and to return to the negotiating table. We are ready for this, as we have said more than once. But the choice of people in Donetsk, Lugansk, Zaporozhye and Kherson will not be discussed.

The decision has been made, and Russia will not betray it. …We will defend our land with all the forces and resources we have, and we will do everything we can to ensure the safety of our people. This is the great liberating mission of our nation.’ Today, we are fighting so that it would never occur to anyone that Russia, our people, our language, or our culture can be erased from history. Today, we need a consolidated society, and this consolidation can only be based on sovereignty, freedom, creation, and justice. Our values are humanity, mercy and compassion.

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Targeted. But the story is they hit apartment buildings at random.

Russia Destroys Power And Water Infrastructure Across Ukraine (RT)

Ukraine said Russia had destroyed almost a third of its power stations over the past week as Moscow stepped up a pre-winter campaign to strike infrastructure, a move the West says is a calculated attempt to disrupt and demoralize. Missiles struck power-generating facilities in a clutch of Ukrainian cities home to millions of people and several people were killed. Moscow acknowledged targeting energy plants, while Ukraine said water infrastructure had also been hit. “The situation is critical now across the country … the whole country needs to prepare for electricity, water and heating outages,” Kyrylo Tymoshenko, deputy head of the Ukrainian president’s office, told Ukrainian television.


At least one man died when a Russian missile reduced his apartment in the southern river port of Mykolaiv to rubble. “They (Russians) probably get pleasure from this,” said Oleksandr, the owner of a local flower shop damaged in the attack. “They get pleasure from us feeling bad. I think they want us to bomb and shell (their) city buildings. But we won’t do that to be different from them.”

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“..eventually the destabilization of the USA: perhaps with civil war and revolution in the USA, resulting from its own inevitable economic collapse..”

“note: the author is not Russian, knows no Russians and has never been to Russia”

Cui Bono? The Big Picture (Blair)

First of all, we need to be absolutely clear that this insane FUBAR Ukraine situation was 100% concocted, fabricated and engineered by the USA, certainly since the droolin’ Nuland / lamebrained McCain / CIA Maidan coup of 2014, but even dating back before that. There are few situations in life where one party can be found to be 100% guilty and evil and morally bankrupt, and where the other party is 100% acting in self defence and self preservation. However history will show that with respect to this Ukraine situation, the USA was 100% the evil aggressor and Russia was 100% acting in self preservation and in defense of civilian Russian speakers in Ukraine. This is truly a war of good against evil and in case you still haven’t got the message yet, let me repeat: the USA Deep State is EVIL.

This reality is indisputably obvious to any semi-comatose person remotely interested in historical, documented FACTS. For those with any remaining doubts, they need to listen to this comprehensively researched three part podcast summary by a journalist and a military historian (both Anglophones). They actually obtained their information from Western mainstream media sources before those reports and articles mysteriously vanished from the Google search algorithms (or were relegated to 500th priority on the search list) after 24 Feb 2022. It is unfortunate that the stupid sheeple of the West, probably 99% of the “golden billion”, believe the exact opposite of the Truth, which is testimony to the incredible effectiveness of the relentless lying propaganda pooped out from the AngloEuroZionist mainstream media sewer outlets ever since 24 Feb 2022.

Until the two recent terrorist bombings (Nordstream pipelines and Kerch bridge), Russia had been reacting in a highly restrained manner to the US and US proxy aggravations. The US started provocations many years ago and contemptuously rebuffed multiple opportunities for peaceful settlements. Russia will soon end it. How? With the humiliating defeat of Ukraine for sure, but more widely we will see the economic devastation of Europe (apart from those who buy energy in Rubles – eg Hungary and Turkey) and eventually the destabilization of the USA: perhaps with civil war and revolution in the USA, resulting from its own inevitable economic collapse. The latter two eventualities were never Russia’s intended goal, but will be unintended consequences of the malicious actions of the US and EU themselves, blowback or karma if you like.

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Another big plan down the drain.

EU Won’t Introduce Gas Price Cap For Now As Countries Disagree (Az.)

The European Union is unveiling a new emergency package to tackle the energy crunch, betting on steps to bolster solidarity among member states. But the bloc will refrain from immediate gas-price caps amid political divisions and concerns over security of supply, Report informs referring to Bloomberg. The European Commission plans to propose measures to avoid extreme price spikes in energy derivatives and to use the EU’s joint purchasing power as a leverage in negotiations with global gas suppliers, according to a draft document seen by Bloomberg News. The bloc’s executive arm, also wants to launch a new liquefied natural gas index to better reflect the region’s energy reality after a cut in supplies of pipeline gas from Russia. At stake is the future of the bloc’s $17 trillion economy, which the energy crisis threatens to push into recession as companies and consumers reel from high power and gas bills.


The EU is trying to balance demands by more than a half of the EU’s 27 member states to limit gas prices with the need to avoid undermining its single market or deepening economic splits among member states. “This is the moment to act, for this winter and beyond,” according to the draft document. “The current situation causes economic and social hardship, placing a heavy burden on citizens and on the economy. Rising energy costs are leading to reduced purchasing power for citizens and loss of competitiveness for companies.” The EU’s executive arm is also seeking authority from national governments to propose – only as a last resort – price limits on transactions on the Dutch Title Transfer Facility, whose main index is the benchmark for all gas traded on the continent.

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“They also cannot buy US-produced LNG due to the Jones Act, which bans the movement of ships between US ports..”

US Warned Of Winter Blackouts – WSJ (RT)

New England could face blackouts in the coming months as more global shipments of liquefied natural gas (LNG) are being directed to Europe, the Wall Street Journal reported on Monday, citing power producers. According to the report, the surging LNG demand across the ocean amid dwindling gas flow from Russia puts the supplies needed to provide electricity to the US’ northeastern region – including Maine, Vermont, New Hampshire, Massachusetts, Connecticut, and Rhode Island – in jeopardy. These states have limited pipeline capacity and rely on LNG imports from abroad for more than a third of their gas supply during periods of peak demand, according to the Energy Information Administration.

They also cannot buy US-produced LNG due to the Jones Act, which bans the movement of ships between US ports.Europe is also a much more attractive buyer for LNG suppliers than New England. According to the news outlet, while the European benchmark price for natural gas was over $100 per one million British thermal units, gas prices in New England rarely climb above $30. Earlier this year, the governors of some New England states sent a letter to US Energy Secretary Jennifer Graholm asking her to dispel the Jones Act and allow for domestic LNG imports to the region. However, there are no reports so far regarding a change in legislation.

The situation in the region is expected to be especially dire if there are prolonged cold spells, as gas volumes would be redirected from power generation to heating homes. According to ISO New England, the region’s power-grid operator, an extremely cold winter could result in the need for rolling blackouts to balance the supply and demand for electricity. Analysts warn that supply shortages may also drive power producers to purchase gas on the spot-market, which would result in larger bills.

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What you’re paying for. Limitless.

Lawmakers Seek Emergency Powers For Pentagon’s Ukraine War Contracting (DN)

Bipartisan legislation introduced in the Senate would grant the Pentagon wartime procurement powers, allowing it to buy massive amounts high-priority munitions using multi-year contracts to help Ukraine fight Russia and to refill U.S. stockpiles. The Senate Armed Services Committee’s chairman, Sen. Jack Reed, D-R.I., and ranking member, Sen. Jim Inhofe, R-Okla., proposed the legislation as an amendment to the annual defense authorization bill, which the Senate is expected to vote on in November. It was offered instead of the critical munitions acquisition fund that the Pentagon and some lawmakers sought for the same purposes, before Senate appropriators rejected it. The amendment, the text of which was released last week, offers multi-year contracting authorities typically reserved for Navy vessels and major aircraft.

As drafted, it would let the Pentagon lock in purchases of certain munitions made by Lockheed Martin, Raytheon Technologies, BAE Systems and Kongsberg over fiscal 2023 and 2024, a step aimed at encouraging manufacturers to expand production lines for sought-after munitions. The Pentagon would also be permitted to team with NATO to buy weapons for its members in mass quantities, and for Ukraine-related contracts, the legislation would ease several key legal restrictions on Pentagon procurement through fiscal 2024 – a sign lawmakers see the war dragging on. The intent of the legislation is to spur the Pentagon and industry to move more aggressively by removing bureaucratic barriers, with an eye not only on Russia but the potential for a confrontation with China over Taiwan, according to a senior congressional aide [..]

“Whether you want to call it wartime contracting or emergency contracting, we can’t play around anymore,” the aide said. “We can’t pussyfoot around with minimum-sustaining-rate buys of these munitions. It’s hard to think of something as high on everybody’s list as buying a ton of munitions for the next few years, for our operational plans against China and continuing to supply Ukraine.” If the language becomes law, the Department of Defense would be allowed to make non-competitive awards to arms manufacturers for Ukraine-related contracts, an idea spearheaded in legislation from Sen. Jeanne Shaheen, D-N.H., and 13 other senators.

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“..25,300 terminals were sent to Ukraine, but, at present, only 10,630 are paying for service..”

Pentagon Considering Paying For Musk’s Starlink Network In Ukraine (G.)

The Pentagon is considering paying for Elon Musk’s Starlink satellite network in war-torn Ukraine, Politico reported on Monday, citing two US officials involved in the discussions. The most likely source of funding would be the US Department of Defense’s Ukraine security assistance initiative, designed to support the country as it fights Russia, the report added. Musk had said on Friday that SpaceX could not indefinitely fund Starlink in Ukraine, but backtracked over the weekend to assert the rocket company would continue to fund the service in the country. He said in a tweet on Monday that SpaceX had already withdrawn its request for funding, an acknowledgement that such a request was made.A Pentagon spokesman said the defense department would not speculate on future security assistance announcements before they occur.


A separate report in the Financial Times said the European Union was also weighing funding Starlink in Ukraine, citing three officials with knowledge of the decision. Musk, the world’s richest person and chief executive of Tesla Inc, recently said SpaceX spends nearly $20m a month maintaining satellite services in Ukraine and that the company has spent about $80m to enable and support Starlink there. “To be precise, 25,300 terminals were sent to Ukraine, but, at present, only 10,630 are paying for service,” Musk tweeted on Monday. Starlink has helped Ukraine’s civilians and military stay online during the war, with Ukraine’s vice prime minister, Mykhailo Fedorov, last week saying Starlink’s services helped restore energy and communications infrastructure in critical areas.

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“Russian Foreign Ministry spokeswoman Maria Zakharova noted that this summer, NATO conducted military drills not far from Bornholm.”

Details Of Nord Stream Probe Shared By Media (RT)

The blasts that ripped through the Nord Stream 1 and 2 gas pipelines last month were likely caused by sabotage, the Wall Street Journal reported on Monday, citing German officials familiar with the investigation. Earlier, the Russian Foreign Ministry said that NATO had conducted a military exercise this summer close to the location where the leaks were found. According to the outlet, while German investigators have so far failed to definitively identify the culprits, they are “working under the assumption that Russia was behind the blasts.” Moscow has repeatedly denied that it had anything to do with the incident.

German officials reportedly believe that the alleged attack was not likely to have been conducted by a military submarine, given that the Baltic Sea around Denmark’s Bornholm Island, where the explosions occurred, is relatively shallow. This would make it difficult for underwater vessels to operate without being detected. According to one theory, an explosive device may have been dropped from a ship and detonated remotely, sources told the WSJ. [..] Moscow has denounced the incident as a terrorist attack and called for an investigation into the matter. Russian Foreign Ministry spokeswoman Maria Zakharova noted that this summer, NATO conducted military drills not far from Bornholm.

She was apparently speaking about the BALTOPS 2022 exercises held in June, in which ‘’deep-sea equipment’’ was used intensively. According to Germany’s Interior Ministry, Sweden rejected a plan to set up a joint investigation team with Berlin and Denmark. Stockholm argued that its own findings are too sensitive to share even with other EU member states, Reuters reported. All three nations have said they will not grant access to the investigation to Russia. This prompted Moscow to summon the German, Danish, and Swedish envoys, while declaring that it would not recognize the results of the probe unless Russian experts are invited to take part.

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“At least 50 metres of the gas pipeline appeared to be missing..”

Well, it’s there somewhere. More interesting: is Sweden, after refusing a joint probe with Germany and Denmark, let alone Russia, now also going to refuse a Gazprom repair of the pipeline?

Nord Stream 1: First Underwater Images Reveal Devastating Damage (G.)

The first underwater images taken of the ruptured Nord Stream 1 pipeline reveal the devastating damage caused by what Danish police have described as “powerful explosions” under the Baltic Sea. Swedish newspaper Expressen on Tuesday published photographs and film footage taken by an underwater drone at the site near the island of Bornholm where the gas pipeline between Russia and Germany ruptured on 26 September. They appear to show long tears in the seabed near the concrete-reinforced steel pipe that was not merely cracked but torn apart in an act of suspected sabotage. At least 50 metres of the gas pipeline appeared to be missing, Expressen said. Three separate investigations are currently trying to assess the full extent of the damage to the two twin pipelines, Nord Stream 1 and 2, and collect evidence as to who was behind the sabotage.


A German government official on Monday confirmed there would be no joint investigations team working on clearing up the pipeline blast as initially envisioned, but three separate investigations carried out by Danish, Swedish and German authorities would coordinate closely. According to German news magazine Der Spiegel, the offer of a joint investigation was rejected by the Swedish side, with a state prosecutor from the country telling Reuters that “there is some information in our investigation that is confidential because it is directly linked to national security”. A preliminary investigation by Danish authorities established the leak had been caused by “powerful explosions”, Copenhagen police said in a statement on Tuesday.

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Getting serious.

Germany Facing Retail Collapse – Der Spiegel (RT)

Germany’s retail industry is in jeopardy amid rising energy costs and a sharp decline in consumption, Der Spiegel reported on Monday, citing the German Retail Federation (HDE). According to the organization’s forecasts, the first to face the risk of bankruptcy are smaller stores in city centers. Retail turnover in Germany started to decrease in August. According to the Federal Statistical Office, sales in real terms fell by 1.3% compared to July, and by 4.3% versus August 2021. Food sales were down 1.7% from July and 3.1% year-on-year, reaching their lowest level since 2017. Textiles and shoes, household appliances, and construction supplies were other segments seeing a decline in sales.


An HDE spokesman said that the financial assistance promised by the German government to ease energy price spikes should be used to support retail stores. “If this does not happen, we will face a disaster in many urban centers,” he said, as cited by the news outlet. However, he thinks the crisis can be avoided through investments and new creative ideas, although this would require cooperation between retailers and the authorities. “In the current acute crisis, everything is becoming a little more difficult. The money pots will certainly not get fuller for the time being… If the concepts are to work, all stakeholders in the municipalities would have to work together – from the top of the town hall to city marketing, retail and gastronomy to cultural providers and citizens,” he stated.

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“By adding the shots to the childhood schedule, the CDC [..] will transfer liability for vaccine injuries to the federal government..”

CDC To Vote On Permanently Shielding Pfizer, Moderna From Vaccine Liability (JS)

A CDC committee will convene this week and likely vote Thursday to deliver permanent legal indemnity to Pfizer and Moderna, through the process of adding the drug companies’ mRNA injections to the child and adolescent immunization schedules. By adding the shots to the childhood schedule, the CDC’s Advisory Committee on Immunization Practices (ACIP) will transfer liability for vaccine injuries to the federal government’s National Vaccine Injury Compensation Program (VICP), allowing for Pfizer and Moderna to finally bring an FDA approved shot to the market without opening itself up to lawsuits. Moreover, it will act as another windfall for companies that have already brought in hundreds of billions of dollars in revenues, by requiring these vaccinations for children who attend public schools.

In March 2020, the federal government invoked the PREP Act, which gave Pfizer and Moderna a tort liability shield due to the declared “public health emergency,” which the government is reportedly going to revoke in early 2023. The companies’ emergency use authorization shots have since been protected by the federal government through this 2005 congressional action. [..]The Health Resources & Services Administration has clarified what needs to happen for a vaccine to become liability free. “For a vaccine to be covered, the Centers for Disease Control and Prevention (CDC) must recommend the category of vaccine for routine administration to children or pregnant women, and it must be subject to an excise tax by federal law.”

The Dossier has reported extensively on the coordinated effort by Big Pharma and the Biden Administration to delay the rollout of an FDA approved COVID vaccine, with legal experts suspecting the process is in place to protect Pfizer and Moderna from legal liability from vaccine injuries. Once described as the cure to the coronavirus, the novel mRNA shots have resulted in catastrophic failure, with a side effect profile exponentially higher than advertised. Thanks to a fraudulent, deceptive marketing campaign, assisted by top federal officials and high-profile pharmaceutical executives, the drugmakers and the federal government convinced millions of Americans to take shots that were much more dangerous (especially for young men), and much less effective than advertised.

RFK

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“.. the interview summary states that work “remained intentionally uncompensated while Joe Biden was vice president.”

Joe Biden KNEW of Hunter’s Shady Business Dealings: Whistleblowers (PM)

New whistleblower documents obtained by Senator Chuck Grassley have revealed that President Biden “was aware of Hunter Biden’s business arrangements and may have been involved in some of them.” On Monday morning, Grassley sent a letter to Attorney General Merrick Garland, FBI Director Christopher Wray, and US Attorney for Delaware David Weiss outlining new whistleblower allegations that claim the FBI has “significant, impactful and voluminous evidence with respect to potential criminal conduct by Hunter Biden and James Biden,” according to Fox News. The whistleblowers allege that the FBI has documents relating to information on Mykola Zlochevsky, who is the owner of Burisma Holdings, where Hunter Biden sat on the board.

“The documents in the FBI’s possession include specific details with respect to conversations by non-government individuals relevant to potential criminal conduct by Hunter Biden,” Grassley wrote. “These documents also indicate that Joe Biden was aware of Hunter Biden’s business arrangements and may have been involved in some of them,” Grassley said. The Senator added that it is “unclear whether the FBI followed normal investigative procedure to determine the truth and accuracy of the information or shut down investigative activity based on improper disinformation claims in advance of the 2020 election.” “It is also unclear whether US Attorney Weiss has performed his own due diligence on these and related allegations,” Grassley continued.

Grassley, alongside Senator Ron Johnson, led an investigation into Hunter Biden starting in 2019, which discovered that officials within the Obama administration “knew” of Hunter Biden’s “problematic” position on the board, saying that it interfered “in the efficient execution of policy with respect to Ukraine.” Hunter Biden joined the board in April of 2014, while his father was serving as vice president and running US-Ukraine relations and policy for the administration. Additionally, Grassley noted an FBI interview with Tony Bobulinski, Hunter Biden’s ex-business partner, from October 2020, where he stated that Hunter Biden and his uncle, James Biden, had created a business agreement with foreign nationals connected to the Chinese government during Biden’s vice presidency.

Grassley said that the interview summary states that work “remained intentionally uncompensated while Joe Biden was vice president.” “After Joe Biden left the vice presidency, the summary makes clear that Hunter Biden and James Biden worked with CEFC and affiliated individuals to compensate them for that past work and benefits they procured for CEFC,” Grassley said. Hunter Biden, James Biden, and their business partners created a joint venture, known as SinoHawk Holdings, that would be a “vehicle to accomplish that financial compensation.” The venture was a partnership between the two Bidens, and CEFC Chairman Ye Jianming. 50 percent of SinoHawk was owned by Oneida Holdings, which according to the summary, was made up of five evenly divided LLCs, two of which went to Hunter and James Biden, and 10 percent, Bobulinski revealed, was “to be held for Joe Biden.”

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Aluminum

 

 

 

 

 

 

Cockatoo

 

 

 

 

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Jun 052021
 


Brassaï Cat 1945

 

Vaccine Spike Protein Travels From Injection Site, Can Cause Organ Damage (CHD)
Patent Filed For Covid Vaccine Just After Contagion Emerged (NYP)
Ok, Now We’re Done (Denninger)
State Department Officials Told Probing Wuhan Lab Opens Pandora’s Box (DM)
The Pentagon Gave $39 Million To Dr. Peter Daszak’s EcoHealth Alliance (DM)
Daszak In Charge Of The Lancet’s Task Force To Investigate COVID Origin (SN)
Biden Says He’s ‘Very Confident’ In Fauci After 1000s Of Emails Revealed (Fox)
The Rise and Fall of Dr. Fauci (Howie Carr)
What If the “Big Lie” Is the Big Lie? (Kunstler)
Biden Rejects New Republican Infrastructure Offer (R.)
US Judge Overturns California’s Ban On Assault Weapons (AP)
Facebook Faces Antitrust Investigation in EU, UK (HE)
‘Over Confident’ US Risks Going Down Same Path As Soviet Union – Putin (EN)

 

 

A rare photo of Schrödingers cat.

 

 

“Research obtained by a group of scientists shows the COVID vaccine spike protein can travel from the injection site and accumulate in organs and tissues including the spleen, bone marrow, the liver, adrenal glands and in “quite high concentrations” in the ovaries.”

Vaccine Spike Protein Travels From Injection Site, Can Cause Organ Damage (CHD)

COVID vaccine researchers had previously assumed mRNA COVID vaccines would behave like traditional vaccines. The vaccine’s spike protein — responsible for infection and its most severe symptoms — would remain mostly in the injection site at the shoulder muscle or local lymph nodes. But new research obtained by a group of scientists contradicts that theory, a Canadian cancer vaccine researcher said last week. “We made a big mistake. We didn’t realize it until now,” said Byram Bridle, a viral immunologist and associate professor at University of Guelph, Ontario. “We thought the spike protein was a great target antigen, we never knew the spike protein itself was a toxin and was a pathogenic protein. So by vaccinating people we are inadvertently inoculating them with a toxin.”

Bridle, who was awarded a $230,000 grant by the Canadian government last year for research on COVID vaccine development, said he and a group of international scientists filed a request for information from the Japanese regulatory agency to get access to Pfizer’s “biodistribution study.” Biodistribution studies are used to determine where an injected compound travels in the body, and which tissues or organs it accumulates in. “It’s the first time ever scientists have been privy to seeing where these messenger RNA [mRNA] vaccines go after vaccination,” Bridle said in an interview with Alex Pierson where he first disclosed the data. “Is it a safe assumption that it stays in the shoulder muscle? The short answer is: absolutely not. It’s very disconcerting.”

The Sars-CoV-2 has a spike protein on its surface. That spike protein is what allows it to infect our bodies, Bridle explained. “That is why we have been using the spike protein in our vaccines,” Bridle said. “The vaccines we’re using get the cells in our bodies to manufacture that protein. If we can mount an immune response against that protein, in theory we could prevent this virus from infecting the body. That is the theory behind the vaccine.” “However, when studying the severe COVID-19, […] heart problems, lots of problems with the cardiovascular system, bleeding and clotting, are all associated with COVID-19,” he added. “In doing that research, what has been discovered by the scientific community, the spike protein on its own is almost entirely responsible for the damage to the cardiovascular system, if it gets into circulation.” When the purified spike protein is injected into the blood of research animals, they experience damage to the cardiovascular system and the protein can cross the blood-brain barrier and cause damage to the brain, Bridle explained.

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Everything about this stinks.

Patent Filed For Covid Vaccine Just After Contagion Emerged (NYP)

A Chinese Communist Party military scientist who got funding from the National Institutes of Health filed a patent for a COVID-19 vaccine in February last year — raising fears the shot was being studied even before the pandemic became public, according to a new report. Zhou Yusen, a decorated military scientist for the People’s Liberation Army (PLA) who worked alongside the Wuhan Institute of Virology as well as US scientists, filed a patent on Feb. 24 2020, according to documents obtained by The Australian.

The patent -lodged by the “Institute of Military Medicine, Academy of Military Sciences of the PLA”- was filed just five weeks after China admitted there was human-to-human transmission of the virus, and months before Zhou died under mysterious circumstances, the report noted. “This is something we have never seen achieved before, raising the question of whether this work may have started much earlier”, Prof. Nikolai Petrovsky from Flinders University told the paper. Adding to the intrigue, Zhou later died under mysterious circumstances in May last year – something being looked into as part of the international investigation ordered by President Biden, the paper insisted. Despite being an award-winning military scientist, there were no reports or tributes, with him just listed as “deceased” in a Chinese media report in July and a December scientific paper.

Before working for the PLA, Zhou had strong ties to the US, doing postdoctoral research at the University of Pittsburgh School of Medicine and collaborating with the New York Blood Center, the report said. Zhou worked closely with the Wuhan lab at the heart of increasing international focus over its possible links to the pandemic, as well as its now-notorious “bat woman” lead scientist, Shi Zhengli, the report said. The close working relationship between the pair supports declassified US intelligence released in January that said the Wuhan lab was conducting “secret military activity,” The Australian said.

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Karl’s take on the article above.

Ok, Now We’re Done (Denninger)

“A Chinese Communist Party military scientist who got funding from the National Institutes of Health filed a patent for a COVID-19 vaccine in February last year — raising fears the shot was being studied even before the pandemic became public, according to a new report. Zhou Yusen, a decorated military scientist for the People’s Liberation Army (PLA) who worked alongside the Wuhan Institute of Virology as well as US scientists, filed a patent on Feb. 24 2020, according to documents obtained by The Australian.” So what do we now know? • China’s military was in fact involved at the Wuhan lab. It was not just a civilian operation. • The lab’s scientists knew not only the sequencing of the virus but in addition had a patentable way to create an alleged vaccine before the pandemic was public.

• It takes time to draft patents and figure them out. Quite a lot of time, in fact — not a couple weeks or months. • The PLA, China’s military, did file said patent with Zhou’s name on it. • It takes time to prove up patent material, including in the case of a vaccine. To patent something you must be able to demonstrate it; you cannot patent ideas, only embodiments of ideas. In that case you would have to prove immunogenicity which isn’t instantaneous; it takes weeks or even months to get through original science on this with animals and then humans, which means the date of knowledge was not February 24th it was months or even further before that.

• That means they were working on this even before that time because to work on a vaccine you have to know you must or would want to work on it in the first place. This in turn means they knew damn well there was a virulent virus in the wild prior to that date, or they released it or intended to release it into the wild on purpose. Nobody comes up with a vaccine for a virus you intend to and have confined entirely within a laboratory in animal or cell culture testing; that’s worthless. Without an isolate to create a vaccine for and a virus outside of a lab environment where vaccination becomes a “thing” that might be required and thus have value why would you do the work to create one?

What’s the timeline on all this? Many, many months or even a couple of years. That means either the virus was “out” for many months to a couple of years before February of 2020 (not a month or two) or the Chinese intended to release it in the fall of 2019. In either case the evidence is now overwhelming that this was not a virus that “magically appeared” one fine day in late December. That is not just improbable anymore — it is now, on the manifest weight of the evidence, impossible. Further, the person who filed the patent died under “mysterious circumstances.” Gee, I wonder why? Let me guess — did he shoot himself in the back of the head twice?

Next up is exactly what sort of vaccine patent we’re talking about here? Specifically how is it that the “stiffened” areas in the viral vector and mRNA shots we’re using in the US came to be known and proved up? How did Moderna and Pfizer know they needed to do that? That sort of study takes months if not years too, not days or weeks, to both come up with it and then prove it actually works as expected.

[..] Oh wait — the manufacturers didn’t bother with all of making sure it worked as expected, did they? Nope! It sort of works as expected. Yes, the shots produce antibodies – lots of them. But they also cluster in multiple organs where we were told it would not; we were told it would remain in the deltoid muscle where the injection was delivered. That it remained in the muscle was false; the science was not done and it appears we were just told it would do so without evidence. Now, due to a leaked document out of Japan we know the shots do not stay where intended and they bioaccumulate in other places, including the ovaries and spleen and yet this, which was a direct contravention of the predicate upon which the EUAs issued did not lead to immediate revocation. Oh no, the FDA doesn’t care when claims about where it is contained to in the body turn out to be false!

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Fauci, Daszak, PLA, CCP, Pentagon, we could go on.

State Department Officials Told Probing Wuhan Lab Opens Pandora’s Box (DM)

At least four State Department employees said in separate interviews that they repeatedly were ‘warned’ that an investigation into a possible COVID-19 leak from the Wuhan lab would ‘open Pandora’s Box;’ and reveal that the U.S. funded gain-of-function research there. It ‘smelled like a cover-up,’ Thomas DiNanno told Vanity Fair. DiNanno, the former acting assistant secretary of the State Department’s Bureau of Arms Control, Verification and Compliance, was one of four State Department officials who told Vanity Fair they wanted to investigate the possibility that COVID-19 spread after it escaped from the Wuhan lab. The others were David Asher, David Feith and Miles Yu. But they were muzzled by other State Department officials as well as the Bureau of International Security and Nonproliferation and even ‘ostracized,’ Yu told Vanity Fair.


The lab leak was touted by then-President Donald Trump and other right-wing leaders, but was deemed impossible by a ‘scientific consensus’ in a letter signed by 27 scientists, published on February 19, 2020 in the medical journal The Lancet. After that, the Wuhan lab theory was considered to be at best a conspiracy – some even considered it racist – so it wasn’t discussed as a realistic origin of COVID-19 until recently. Yu, the State Department’s principal China strategist, found the government’s and scientists’ silence ‘maddening,’ Vanity Fair reported. He said, ‘Anyone who dares speak out would be ostracized.’ Asher, now a senior fellow at the Hudson Institute who ran the State Department’s day-to-day COVID-19 origins inquiry, told Vanity Fair it became clear that ‘there is a huge gain-of-function bureaucracy’ inside the federal government.

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Plus $64.7 million from the US Agency for International Development (USAID), $13 million from Health and Human Services, $2.3 million from the Department of Homeland Security, and $2.6 million from the National Science Foundation.

The Pentagon Gave $39 Million To Dr. Peter Daszak’s EcoHealth Alliance (DM)

The Pentagon gave $39 million to a charity that funded controversial coronavirus research at a Chinese lab accused of being the source for Covid-19, federal data reveals. The news comes as the charity’s chief, British-born scientist Dr. Peter Daszak, was exposed in an alleged conflict of interest and back-room campaign to discredit lab leak theories. The charity, EcoHealth Alliance (EHA), has come under intense scrutiny after it emerged that it had been using federal grants to fund research into coronaviruses at the Wuhan Institute of Virology in China. The U.S. nonprofit, set up to research new diseases, has also partly funded deeply controversial ‘gain of function’ experiments, where dangerous viruses are made more infectious to study their effect on human cells.

A political storm broke when former president Donald Trump canceled a $3.7 million grant to the charity last year amid claims that Covid-19 was created in, or leaked from, the Wuhan lab funded by EHA. But federal grant data assembled by independent researchers shows that the charity has received more than $123 million from the government – from 2017 to 2020 – and that one of its biggest funders is the Department of Defense, funneling almost $39 million to the organization since 2013. Exactly how much of that money went toward research at the Wuhan Institute of Virology is unknown.

Grants from the Pentagon included $6,491,025 from the Defense Threat Reduction Agency (DTRA) from 2017 to 2020 with the description: ‘Understanding the risk of bat-borne zoonotic disease emergence in Western Asia.’ The grant was categorized as ‘scientific research – combating weapons of mass destruction.’ The news comes as the charity’s chief, British-born scientist Dr. Peter Daszak, was exposed in an alleged conflict of interest and back-room campaign to discredit lab leak theories The majority of the DoD funding came from the DTRA, a military branch with a mission to ‘counter and deter weapons of mass destruction and improvised threat networks.’ EHA also received $64.7 million from the US Agency for International Development (USAID), $13 million from Health and Human Services, which includes the National Institutes of Health and Centers for Disease Control, $2.3 million from the Department of Homeland Security, and $2.6 million from the National Science Foundation.

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He gets to lead everything, including the ivestigation into himself.

Daszak In Charge Of The Lancet’s Task Force To Investigate COVID Origin (SN)

Revered scientific journal The Lancet has created a ‘task force’ to investigate the origins of the coronavirus that caused a global pandemic, yet it has decided to employ as it’s leader the very guy who funded the dangerous gain of function research at the Wuhan lab and subsequently allegedly ‘bullied’ other scientists into avoiding looking into the lab as a potential source of the outbreak. In the wake of renewed scrutiny of the lab leak hypothesis, the Lancet’s task force will reportedly “focus on analyzing data on all of the theories put forward on the origins of COVID, on the reasons why SARS-CoV-2 was able to break out of Wuhan and spread globally, and on the most plausible strategies to prevent future pandemics.”

It also states that “The Task Force will review thoroughly and objectively all publicly available evidence, particularly the peer-reviewed literature, and conduct interviews with key leaders in science, medicine, policy and civil society.” ‘Objectively’. Right. Dr Peter Daszak, who is heading up this task force, is perhaps the least suitable scientist on the planet to objectively analyse the data, given his track record. Daszak, as President of the EcoHealth Alliance, shovelled at least $600,000 to the Wuhan Institute of Virology in the past few years to play around with coronaviruses inside the lab through the now infamous ‘gain of function’ research. Daszak, who also works for the World Health Organisation, is on record admitting that he was involved with manipulating coronaviruses.

Daszak notes that “coronaviruses are pretty good… you can manipulate them in the lab pretty easily… the spiked proteins drive a lot about what happens. You can get the sequence you can build the protein, we work with Ralph Baric at UNC to do this, insert into the backbone of another virus and do some work in a lab.” No wonder then that Daszak as lead investigator for the WHO investigation determined within 3 hours of visiting the Wuhan lab in February 2021 that there was ‘nothing to see here’?

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They’re stuck with each other, and with Daszak, PLA, CCP, Pentagon.

Biden Says He’s ‘Very Confident’ In Fauci After 1000s Of Emails Revealed (Fox)

President Biden said he is “very confident” in Dr. Anthony Fauci amid Republican attacks on his chief medical adviser after the revelation of thousands of his emails from the early days of the coronavirus pandemic. The president was updating reporters as he departed Rehoboth Beach, Del., and when he walked out of the room, one shouted to ask if he is “still” confident in Fauci, director of the U.S. National Institute of Allergy and Infectious Diseases (NIAID). Moments later, Biden popped his head back in the room and said, “Yes, I am very confident in Dr. Fauci.” Fauci’s emails, which are heavily redacted, have prompted Republicans to demand answers from the NIAID director about why he did not more aggressively pursue the theory that coronavirus could have leaked from the Wuhan Institute of Virology (WIV) in China.


In one February 2020 email, he also said wearing a mask was “not really effective in keeping out the virus,” though the disease expert has already admitted he downplayed the effectiveness of masks in part so that supply would not run low for medical professionals. At the same time, Fox News has confirmed that State Department officials seeking to demand transparency from the Chinese government say they were explicitly told by colleagues not to explore the WIV’s gain-of-function research because it would bring unwelcomed attention to U.S. government funding of it. “We’ll let him speak for himself,” press secretary Jen Psaki said Thursday when asked about Fauci’s emails. “He’s been an undeniable asset in our country’s pandemic response,” Psaki said. “It’s obviously not that advantageous for me to relitigate the substance of emails from 17 months ago.”

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“These Fauci emails are certainly revealing, so revealing, in fact, that the Washington Post isn’t posting them.”

The Rise and Fall of Dr. Fauci (Howie Carr)

“Fauci Lied, People Died.” If you still occasionally run into some unrepentant Karen glaring at your unmasked following-the-science face, just scrawl the above words on your raggedy mask and wear it one final time. Karen won’t bother you anymore, because what can Karen say after the release of all the Fauci emails from last year? Dr. Anthony Fauci, a hack’s hack since 1968, is many things, but on the level is not one of them. Consider his response to a February 2020 email from a Cornell University professor of medicine who wrote him: “We think there is a possibility that the virus was released from a lab in Wuhan.” Fauci responded by forwarding the prescient warning to one of his minions: “Please handle.” A month later, a government-funded physicist sent Fauci a warning that China was sending out false data, among other things.

Once again, Fauci dismissively fobbed off this 911 call to an underling: “Too long for me to read.” Of course it was. You know how hard it is to concentrate on scientific data when you’re in the green room having the makeup applied for your third or fourth TV live shot of the day. Especially when you’re 80 years old. These Fauci emails are certainly revealing, so revealing, in fact, that the Washington Post isn’t posting them. Almost as revealing are the endless redactions, as if there’s some national security issue here when he’s been pitched by Mark Zuckerberg of Facebook. Fauci is still being defended by the Democrat operatives with press passes — the “serious people,” as ABC hack Jonathan Karl described his fellow cheerleaders last week. But the reality is, his upcoming so-called book, which at 80 pages is almost as short as he is (67 inches high), was pulled this week from the two biggest online booksellers, five months ahead of its publication date.

The publisher claimed that “Expect the Unexpected” had been “prematurely posted.” Yeah, right. At least Gov. Andrew Cuomo had his abysmal $5.1-million COVID tome published before he was busted as a total fraud. Fauci’s book got torched before it even reached the public. The publisher’s sell sheet described him as “one of the world’s greatest medical minds,” but now he ends up the same authorial class as O.J. Simpson and Clifford Irving — their faux books didn’t make it out of the gate either. Fauci joins the long list of great anti-Trump saviors who have been, you’ll pardon the expression, debunked. Like, say, Michael Avenatti, Michael Cohen, Omarosa, Mary Trump, Robert Mueller, Christine Blasey Ford, Julie Swetnick, Lt. Col. Vindman, etc.

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“All Joe Biden’s handlers can do now is fade Dr. Fauci out, keep him off the cable channels, and hope the public can be distracted with some new nonsense.”

What If the “Big Lie” Is the Big Lie? (Kunstler)

Maybe now that Dr. Tony Fauci has begun to spill the beans on his doings in service to the Wuhan virology lab, the phrase “conspiracy theory,” flogged by the media as jauntily and incessantly as by the soviet kommissars of yore, will have worn out its welcome. In a sane polity, Dr. Fauci would be cooked. He looks circumstantially like an epic villain of history, who promoted and funded dangerous research activities knowingly, which led to an international disaster that killed millions of people and destroyed countless livelihoods and households, perhaps even the whole global economy, when all is said and done — and he appears to have lied at every step along the way. As a practical matter, what is the “Joe Biden” admin going to do about him? Throw him under the bus? I don’t think they can at this point.

Dr. Fauci has come to represent not just the falsehoods employed around the Covid-19 fiasco but more generally the long campaign against truth itself by a grossly illiberal Jacobin Democratic Party seemingly out to punish and destroy Western Civ. Whether the Covid-19 pandemic was an overt tactic in that campaign, or just the result of Dr. Fauci’s catastrophic bad judgment, remains to be revealed. But at least half the country will conclude that there’s some connection between the terrible losses suffered in the pandemic year and the political bullshit they were force-fed in the four-year effort to defenestrate Donald Trump. All Joe Biden’s handlers can do now is fade Dr. Fauci out, keep him off the cable channels, and hope the public can be distracted with some new nonsense. You also have good reason to doubt that Merrick Garland will do anything but look the other way and whistle.

The downfall of Dr. Fauci is a watershed moment. There were so many more authorities caught lying over the past five years, but who got off scot-free — Hillary Clinton, Barack Obama, James Comey (actually, the whole FBI and DOJ E-suites), John Brennan, James Clapper, Robert Mueller, Andrew Weissman, Adam Schiff, and the editors and producers of the news media, plus the execs of social media — who not only disabled the truth at every opportunity, but just about destroyed the public’s grip on reality.

The result has been an utter collapse of authority in this land, so that now nobody who runs anything is credible, from the current pitiful president of the USA, to most elected and appointed officials, judges, corporate CEOs, college deans and presidents, and now “The Science” itself. Just remember: there is still a sizable faction in America of people who are deeply interested in ascertaining the truth about a lot of things. They are aiming to get at it, too, for example, the truth about the 2020 election. Maybe now you can begin to see why this is important.

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Boondoggle.

Biden Rejects New Republican Infrastructure Offer (R.)

President Joe Biden and Republicans entered the weekend sharply at odds over how to craft an infrastructure deal that could satisfy their camps, imperiling the odds of a bipartisan deal. Democrat Biden shot down a new proposal from the main Republican negotiator on infrastructure, Senator Shelley Moore Capito, that increased spending by about $50 billion over their last offer, the White House said. Biden rejected the offer, saying it “did not meet his objectives to grow the economy, tackle the climate crisis, and create new jobs.” Republicans had previously offered roughly $257 billion in new spending, short of the $2.25 trillion Biden initially offered and suggested he might bring down to as low as $1 trillion.


And while the two sides agreed to speak again on Monday, the White House also strongly signaled that they may seek a path forward with other Republican lawmakers or even with only Democrats. “He indicated to Senator Capito that he would continue to engage a number of Senators in both parties in the hopes of achieving a more substantial package,” White House spokeswoman Jen Psaki said in a statement. Up until now, Capito has been Biden’s primary negotiating partner. Monday’s conversation will be their third in a week. Biden is eager to show that he made a good-faith effort at a bipartisan deal, sources said, but he risks creating division among Democrats, some who believe he is giving up too much to Republicans. Democrats hold narrow majorities in both the House of Representatives and Senate.

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This guy likes the arms a bit too much.

US Judge Overturns California’s Ban On Assault Weapons (AP)

A federal judge Friday overturned California’s three-decade-old ban on assault weapons, ruling that it violates the constitutional right to bear arms. U.S. District Judge Roger Benitez of San Diego ruled that the state’s definition of illegal military-style rifles unlawfully deprives law-abiding Californians of weapons commonly allowed in most other states and by the U.S. Supreme Court. “Under no level of heightened scrutiny can the law survive,” Benitez said. He issued a permanent injunction against enforcement of the law but stayed it for 30 days to give state Attorney General Rob Bonta time to appeal. Gov. Gavin Newsom condemned the decision, calling it “a direct threat to public safety and the lives of innocent Californians, period.”


In his 94-page ruling, the judge spoke favorably of modern weapons, said they were overwhelmingly used for legal reasons. “Like the Swiss Army knife, the popular AR-15 rifle is a perfect combination of home defense weapon and homeland defense equipment. Good for both home and battle,” the judge said in his ruling’s introduction. That comparison “completely undermines the credibility of this decision and is a slap in the face to the families who’ve lost loved ones to this weapon,” Newsom said in a statement. “We’re not backing down from this fight, and we’ll continue pushing for common sense gun laws that will save lives.”

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“Are you watching, America?”

Facebook Faces Antitrust Investigation in EU, UK (HE)

The United Kingdom and European Union opened formal antitrust investigations into Facebook’s classified-ads service, Marketplace. Both the European Commission and the U.K.’s Competition and Markets Authority said Friday they are investigating whether Facebook revamps data gathered from advertisers who buy ads in order to give illegal advantages to its own services, the Wall Street Journal reports. The cases look specifically at how Facebook uses the data it collects, and whether that would put the company at an advantage in the promotion of its own services in neighboring markets. The U.K. is also investigating whether Facebook uses advertiser data to give similar advantages to its online-dating service. “In today’s digital economy, data should not be used in ways that distort competition,” said Margrethe Vestager, the EU’s antitrust chief.


A Facebook spokesman said its services will “continue to cooperate fully with the investigations to demonstrate that they are without merit.” Though the EU has been informally investigating the Big Tech giant for some time, if the Commission or the U.K.’s CMA finds evidence of any wrongdoing, they can then file formal charges. The new cases are part of a new series of antitrust enforcements throughout Europe. The European Commission filed formal charges against Apple last month for abusing its control over the distribution of music-streaming apps, including Spotify. In November, the EU also filed formal charges against Amazon for using nonpublic data gathered from third-party sellers to unfairly compete against them. Are you watching, America?

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“We don’t have any issues with the U.S. But it has an issue with us..”

‘Over Confident’ US Risks Going Down Same Path As Soviet Union – Putin (EN)

Russian President Vladimir Putin on Friday accused Europe and the U.S. of hypocrisy over criticism of the response to anti-government protests in Russia and Belarus and warned that America was at risk of following the path of the Soviet Union. In a speech at an economic forum in St. Petersburg, Putin discussed Russia’s relations with the U.S. ahead of a meeting with President Joe Biden, describing them as “at an extremely low level now.” He criticised sanctions against Russia as well as allegations that Moscow interfered in the U.S. election and said that Washington and Europe had double standards in criticising the police crackdown against protesters in Moscow and Belarus in recent months. “We don’t have any issues with the U.S. But it has an issue with us,” he said.

“It wants to contain our development and publicly talks about it. Economic restrictions and attempts to influence our country’s domestic politics, relying on forces they consider their allies inside Russia, stem from that.” Ties between Russia and the U.S. have sunk to post-Cold War lows over Moscow’s 2014 annexation of Crimea, accusations of Russian interference in elections, and cyberattacks that U.S. officials allege had Russian origins. Putin reiterated that Russia rejects accusations of interfering in U.S. presidential elections, and he spoke critically of the U.S. response to the Capitol attack, which took place as Congress prepared to certify that Biden had defeated then-President Donald Trump in November.

“They weren’t just a crowd of robbers and rioters. Those people had come with political demands,” he said. Putin pointed out that the heavy charges against hundreds of participants in the attack were filed even as the U.S. and its allies strongly criticized Belarus’ crackdown on anti-government protests. He charged that even as the West has criticized Russian authorities for a harsh response to anti-Kremlin demonstrations, protesters in Europe have faced an even tougher police response, with some shot in the eye by what he mockingly called “democratic rubber bullets.” Later, during a call with journalists, Putin criticised the United States as being overconfident and drew a parallel with the Soviet Union.

“You know what the problem is? I will tell you as a former citizen of the former Soviet Union. What is the problem of empires — they think that they are so powerful that they can afford small errors and mistakes,” he said. “But the number of problems is growing. There comes a time when they can no longer be dealt with. And the United States, with a confident gait, a firm step, is going straight along the path of the Soviet Union.”

Read more …

 

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Apr 012021
 


Pablo Picasso Jacqueline in Turkish costume 1955

 

Biden Unveils $2T Infrastructure Plan, Tax Increases (OAN)
Emergence Of Dominant Selective Immune Escape Variants (Vanden Bossche)
Therapeutics and COVID-19: Living Guideline (WHO)
Judge Demands That Belgium Scraps All Corona Measures Within Thirty Days (AD)
France Headed For New National Lockdown As COVID Cases Surge (ZH)
Outdoor Mask Decree Met With Dismay By Spain’s Tourism Industry (G.)
Washington State ‘Vaccine Breakthrough’: 100s Get Covid Weeks After Jab (JTN)
15 Million Doses Of J&J Vaccine Ruined By Ingredient Mix-up (DM)
Bipolar Corona-Politics Positive? (OffG)
Russiagate Prober Couldn’t Verify Anything in the Steele Dossier (RCI)
US Dollar’s Status as “Global Reserve Currency” Drops to 25-Year Low (WS)
Ron Paul: Gold and Bitcoin Are At Risk Of Government Crackdown (Kitco)
Journalists Are “Centering” Their “Trauma” To Acquire Power (Tracey)

 

 

We must always take sides. Neutrality helps the oppressor, never the victim. Silence encourages the tormentor, never the tormented. The opposite of love is not hate, it’s indifference.
— Elie Wiesel

 

 

Tucker Greenwald Vaccine passports
https://twitter.com/i/status/1377095450440785924

 

 

The problem with such schemes in the US can be summarized in one word: pork.

Biden Unveils $2T Infrastructure Plan, Tax Increases (OAN)

Joe Biden has unveiled his massive infrastructure plan, projected to cost roughly $2 trillion in taxpayer money. Dubbed the American Jobs Plan, the details of it were made public during an event in Pittsburgh, Pennsylvania on Wednesday. “So today, I’m proposing a plan for the nation that rewards work, not just rewards wealth,” Biden said. “That builds a fair economy and gives everybody a chance to succeed, and it’s going to create the strongest, most resilient, innovative economy in the world.” The plan’s largest proposed investment is $621 billion devoted to transportation, with a heavy focus on transitioning to so-called “green energy,” followed by $400 billion to home care services, $300 billion to manufacturing and $213 billion to housing. It would also allocate funds to digital infrastructure, schools and workforce development.

Biden claimed the package would modernize the American economy and boost job creation. “It will create millions of jobs, good paying jobs, it will grow the economy, make us more competitive around the world, promote our national security interests, and put us in position to win the global competition with China in the upcoming years,” Biden stated. Yet despite Biden’s grandiose claims of an American revival brought about by government spending, conservatives have balked at the huge price tag attached to his plan, and how he intends to pay for it. The package proposed a reversal of the Trump administration’s 2017 cut to the corporate tax rate, raising it from 21 to 28 percent. It would introduce a minimum tax of 15 percent on book income, the income reported by companies to their investors rather than the IRS.

Additionally, it would increase the global minimum tax on international subsidiaries of U.S. corporations from 13 to 21 percent, regardless of where their profits were made. This last point is notable, as it creates a strong incentive for U.S. companies to reincorporate abroad and ultimately bypass the higher tax rates the Democrat administration wishes to levy from them. This has prompted leading Republicans to heavily criticize Biden’s plan for using infrastructure as a smokescreen to sneak in tax hikes favored by Democrat politicians. “I think the Trojan horse will be called infrastructure, but inside the Trojan horse will be all the tax increases that Senator Scott and others have talked about,” Senate Minority Leader Mitch McConnell (R-Ky.) said. “They want to raise taxes across the board and the only way I think they could pull that off would be through a reconciliation process. They have one more of those available to them.”

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Vanden Bossche is not giving up.

Emergence Of Dominant Selective Immune Escape Variants (Vanden Bossche)

Mass vaccinaton of vulnerable groups does not abrupt viral transmission chains but increasingly redirects transmission events to asymptomatic carriers (i.e., vaccinated subjects as well as not yet vaccinated young and healthy people, several of whom experienced asymptomatc infecton without mounting long-lived Ab titers2 ). As ongoing mass vaccinaton campaigns are shifing the ‘reservoir’ of viral transmission to asymptomatcally infected subjects (whether vaccinated or not), the likelihood for unvaccinated, previously asymptomatcally infected subjects to experience re-infecton with Sars-CoV-2 while being endowed with suboptmal and short-lived ant-S Abs substantally increases.


This is to say that within the populaton that is now most actvely involved in viral transmission, new, spontaneously emerging S variants have plenty of opportunity to train under suboptmal immune pressure such as to ultmately adapt to the human host and become part of the dominant circulatng Sars-Cov-2 populaton. This is how – afer inital breeding of viral variants as a direct result of infecton preventon measures – subsequent mass vaccinaton campaigns will drive enhanced circulaton of additonal, more infectous viral S variants. ‘Training’ of such more infectous immune escape variants is thought to be refected by the plateau that follows the vaccine-mediated decline in cases and the height of which exceeds the one following the previous wave of cases.

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They test for those things that are most likely to fail.

Therapeutics and COVID-19: Living Guideline (WHO)

This fourth version of the WHO living guideline addresses the use of ivermectin in patients with COVID-19. It follows the increased international attention on ivermectin as a potential therapeutic option. While ivermectin is also being investigated for prophylaxis, this guideline only addresses its role in the treatment of COVID-19. Ivermectin is relatively inexpensive and accessible, and some countries have already witnessed its widespread use in the treatment of COVID-19; in other countries, there is increasing pressure to do so (14).

In response to this international attention, the WHO GDG now provides recommendations on ivermectin for treatment of COVID-19. Ivermectin is an antiparasitic agent that interferes with nerve and muscle function of helminths through binding glutamate-gated chloride channels (15). We currently lack persuasive evidence of a mechanism of action for ivermectin in COVID-19, and any observed clinical benefit would be unexplained (see Section 5).

[..] Benefits and harms: The effects of ivermectin on mortality, mechanical ventilation, hospital admission, duration of hospitalization and viral clearance remain uncertain because of very low certainty of evidence addressing each of these outcomes. Ivermectin may have little or no effect on time to clinical improvement (low certainty evidence). Ivermectin may increase the risk of SAEs leading to drug dicontinuation (low certainty evidence). Subgroup analyses indicated no effect modification based on dose. We were unable to examine subgroups based on patient age or severity of illness due to insufficent trial data (see Section 5). Therefore, we assumed similar effects in all subgroups. This recommendation applies to patients with any disease severity and any duration of symptoms.

Certainty of the evidence: For most key outcomes, including mortality, mechanical ventilation, hospital admission, duration of hospitalization and viral clearance, the panel considered the evidence of very low certainty. Evidence was rated as very low certainty primarily because of very serious imprecision for most outcomes: the aggregate data had wide confidence intervals and/or very few events. There were also serious concerns related to risk of bias for some outcomes, specifically lack of blinding, lack of trial pre-registration, and lack of outcome reporting for one trial that did not report mechanical ventilation despite pre-specifying it in their protocol (publication bias).

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Google translate

Judge Demands That Belgium Scraps All Corona Measures Within Thirty Days (AD)

The Brussels court of first instance orders the Belgian government to end the corona measures within thirty days, on pain of a penalty of 5000 euros per day. According to the judge, the current measures are based on laws that cannot serve as the basis for the ministerial decisions by which the corona measures are issued. The ruling follows a lawsuit brought by the League for Human Rights and has been confirmed to the Belgian media by the lawyers involved. The League is an independent Belgian foundation that fights “injustices and arbitrary attacks on the rights of the individual or the community”. The court finds that the measures taken by the governments to prevent the further spread of the corona virus are illegal. According to Lackner, the court actually says that the legal basis on which the ministerial decisions are based is not valid.

According to the court, the measures in Belgium to prevent the further spread of the corona virus are illegal. The measures are based on the 2007 Civil Security Act and two other laws, De Standaard writes about the case. That law came after a major train disaster in Ghislenglien to be able to act quickly and with urgency after such disasters. The court finds that this basis is not sufficient for the imposed corona measures. The judge gives the Belgian state thirty days to provide a solid legal basis on pain of a penalty of 5000 euros per day that that term is exceeded, up to a maximum of 200,000 euros. The Belgian Ministry of the Interior is said to be studying the verdict. An appeal is possible against the decision.

Belgium announced last week that it will continue to be locked, because the number of hospital admissions and infections with the corona virus continue to rise. The non-essential stores may only open by appointment and the very large stores for a maximum of fifty people at a time. The non-medical contact professions such as hairdressers also have to close again for the time being for four weeks. The number of people with whom Belgians are allowed to meet outside their families in the open air will be reduced from ten to four people. A number of corona measures remain, such as the curfew. Non-essential journeys from Belgium will also remain prohibited until April 19. According to Prime Minister Alexander De Croo, a “short period of pain, an Easter break” has been chosen in the hope of reducing the virus.

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It’s just sad.

France Headed For New National Lockdown As COVID Cases Surge (ZH)

Despite expanding lockdown measures to cover more than one-third of the country (including Paris and other major cities) earlier this month, and other areas French President Emmanuel Macron is expected to follow German Chancellor Angela Merkel by imposing strict new nation lockdown measures as Europe’s “third wave” of COVID cases intensifies. France has seen COVID cases (adjusted for population) surge to the highest level in Western Europe, while only hard-hit ex-eastern bloc countries like Poland, Hungary and the Czech Republic have it worse than France, as the chart below shows. This has inspired Germany and Spain to restrict travel from the country.

Bloomberg reports that President Macron is planning to announce during a national address on Wednesday evening that he will impose new nationwide measures to contain the spike, and that these measures could include school closures and a ban on inter-city travel. The new national edict would mark the end of the “regional” approach that France has relied on all year. Although he declined to elaborate, government spokesman Gabriel Attal said Wednesday after a defense council meeting that “decisions have been made” regarding new lockdown measures, but he declined to elabroate. Macron will address the nation at 2000 local time (1400ET). If Macron follows through with the school closures, that would also mark a major reversal for France, which had insisted on keeping schools open over the past year, unlike many of its European neighbors.

Macron has so far been “unapologetic” about his resistance to more restrictive measures, according to Bloomberg. As the EU vaccination push lags for a number of reasons (primarily a shortage of supplies, and widespread skepticism) more than 8MM people have received at least one jab of the vaccine, which represents more than 10% of the population. The target to vaccinate all French adults willing to get the jab by the end of the summer remains in place. Notably, Macron ignored the advice of his health minister who began advocating for more restrictive measures earlier this year. Instead, the government imposed a nationwide curfew, closed malls and expanded travel curbs – but didn’t go all in on a national lockdown. The hope was that the most pessimistic forecasts wouldn’t become a reality – but they have.

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On the beach.

Outdoor Mask Decree Met With Dismay By Spain’s Tourism Industry (G.)

The Spanish tourist industry has reacted with dismay to the government’s decree that face masks must be worn in all outdoor spaces, including beaches and swimming pools, even when it is possible to maintain social distancing. “We’re going through hell with thousands of jobs and businesses threatened and now they want to turn the beaches into open-air field hospitals,” José Luis Zoreda, vice-president of Exceltur, the umbrella organisation that represents Spain’s tourism industry, told El País newspaper. Industry representatives complain that they were not consulted over the decision, which was announced in an official state bulletin on Tuesday. “We’ve already given up on Easter as a lost cause,” said Zoreda. “Now we have to put our hopes on summer.”


He said the “improvised measures” did not inspire confidence on the part of the foreign visitors whom the struggling industry is desperate to bring back. Tourism accounts for about 12% of Spain’s GDP. Masks have been obligatory indoors and out in Catalonia since last July and in Valencia since early this year, despite claims by scientists that there is a very low risk of contagion in the open air. Earlier this month Fernando Simón, head of Spain’s coordination centre for health emergencies and alerts, said: “I don’t believe that masks are the key to reducing transmission. It’s not necessary for everyone to wear one. What’s important is that people who are infected wear one, although we don’t know who is infected and who isn’t.” Simón added that they should be obligatory in enclosed spaces.

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Building trust.

Washington State ‘Vaccine Breakthrough:’ 100s Get Covid Weeks After Jab (JTN)

The state of Washington is investigating what officials are calling a “vaccine breakthrough,” after roughly 100 cases of people testing positive for the virus about two weeks after being vaccinated. Epidemiologists report evidence of 102 breakthrough cases in 18 Washington counties, among millions of vaccinated residents. Two patients who received the vaccination died after becoming infected with the virus. “DOH is investigating two potential vaccine breakthrough cases where the patients died. Both patients were more than 80 years old and suffered underlying health issues,” officials said in a news release.


The health department also said the majority of those vaccinated who tested positive experienced mild symptoms, but at least eight have been hospitalized. “It is important to remember that every vaccine on the market right now prevents severe disease and death in most cases,” said Dr. Umair A. Shah, the states’s health secretary. “Finding evidence of vaccine breakthrough cases reminds us that, even if you have been vaccinated, you still need to wear a mask, practice socially distancing, and wash your hands to prevent spreading COVID-19 to others who have not been vaccinated.”

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“..poorly trained employees, cracked vials and mold around one of its facilities..”

15 Million Doses Of J&J Vaccine Ruined By Ingredient Mix-up (DM)

The Biden administration knew more than a week ago that 15million doses of Johnson & Johnson had been ruined by its contractor – potentially causing significant delays in the vaccine rollout, senior administration officials said. Two senior officials on the government’s Covid-19 response team told Politico that it was clear there were serious problems at the West Baltimore plant of Emergent BioSolutons, a little-known company at the center of the vaccine supply chain. A third official said the Department of Health then found out last week that Emergent had ruined 15 million doses of vaccine by adding the wrong ingredient. ‘It was no secret that Emergent did not have a deep bench of pharmaceutical manufacturing experts,’ that official told Politico.

The news finally became public on Wednesday when Johnson & Johnson said that a batch of vaccine made by Emergent at its Baltimore factory, known as Bayview, can’t be used because employees accidentally swapped in an ingredient meant for a different vaccine into the J&J shot, the New York Times reported Wednesday. The Emergent BioSolutions plant is also manufacturing doses for AstraZeneca, and apparently used an ingredient for the UK firm’s vaccine in a batch of J&J’s. The gaff occurred two weeks ago and will delay tens of millions doses of J&J’s shot slated to ship next month while the FDA investigates.

The company at the center of quality problems that led Johnson & Johnson to discard 15 million doses has a had string of citations from U.S. health officials for quality control problems. Emergent, which was key to Johnson & Johnson’s plan to deliver 100 million doses of its vaccine to the U.S. by the end of May, has been cited repeatedly by the Food and Drug Administration for problems such as poorly trained employees, cracked vials and mold around one of its facilities, according to The Associated Press.

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“He trusts the government would only deliver a safe, effective vaccine.”

Bipolar Corona-Politics Positive? (OffG)

I had a patient this morning. More precisely, I telephoned him. He suffered a myocardial infarction last year and is on anti-hypertensives. His last few BP measurements showed very good, stable control. He barricades himself in his home against the rogue cold virus each time the government locks-down. He expressed terror about the link between hypertension and an enhanced Covid-19 risk. I would say he is, like the government, somewhat delusional about it or at the very least harbours some fixed false beliefs towards it. Hence, he measures his blood pressure many times a day. It fibrillates up and down with the propaganda. Masks are not enough for him. He refuses to leave his home until Johnson and Hancock lift lockdown. He asks me to increase his medications without seeing him.

The easy cure might be to turn off his TV and smartphone. But, there is more bipolarity, more paradox, more human folly. He refuses to come out for a hypertension review until he receives his Covid-19 vaccinations. I ask him how he suggests doing that? Perhaps he could find it reasonable to specifically come for his vaccine and have an opportunistic BP? He pauses, and then refuses. Classic Joseph Heller, Catch-22. Nothing surprises me these days in medical practice, so without a pause I remind him that we are not currently offering a bespoke domiciliary vaccination service. He remains insistent. As his doctor, I try to reassure him he is not at any great risk. I remind him we pay great lip service to all the viral psychological interventions such as porous ill-fitting mask, alcohol gel and … polythene apron.

Rather selectively, he dismisses these sacred verses of the government propaganda. As if to out-fox me, he replies in denouement, ‘Okay, I won’t come in, then.’ I leave it open for him to come back to us. It is not only the rule of law, but also the practice of medicine which has succumbed to hysteria. He is the ideal citizen of the corporate pharmaceutical Gods. Open to suggestion, vulnerable to propaganda, crouched with bayoneted rifle in trench against an unavoidable, invisible particle. Always willing to go above and beyond the unreasonable demands of tyrants. He trusts the government would only deliver a safe, effective vaccine.

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“..without the dossier, the warrants could not have been obtained.”

Russiagate Prober Couldn’t Verify Anything in the Steele Dossier (RCI)

For the past four years, Democrats and the Washington media have suspended disbelief about the Steele dossier’s credibility by arguing that some Russia allegations against Donald Trump and his advisers have been corroborated and therefore the most explosive charges may also be true. But recently declassified secret testimony by the FBI official in charge of corroborating the dossier blows up that narrative. The top analyst assigned to the FBI’s Russia “collusion” case, codenamed Crossfire Hurricane, admitted under oath that neither he nor his team of half a dozen intelligence analysts could confirm any of the allegations in the dossier — including ones the FBI nonetheless included in several warrant applications as evidence to establish legal grounds to electronically monitor a former Trump adviser for almost a year.

FBI Supervisory Intelligence Analyst Brian Auten made the admission under questioning by staff investigators for the Senate Judiciary Committee during closed-door testimony in October. The committee only this year declassified the transcript, albeit with a number of redactions including the name of Auten, who was identified by congressional sources who spoke on condition of anonymity. “So with respect to the Steele reporting,” Auten told the committee, “the actual allegations and the actions described in those reports could not be corroborated.” After years of digging, Auten conceded that the only material in the dossier that he could verify was information that was already publicly available, such as names, entities, and positions held by persons mentioned in the document.

His testimony, kept secret for several months, is eye-opening because it’s the first time anybody from the FBI has acknowledged headquarters failed to verify any of the dossier evidence supporting the wiretaps as true and correct. As one of the FBI’s leading experts on Russia, Auten was highly familiar with the subject matter of the dossier and the Russian players it cited. He also had a team of intelligence analysts at his disposal to pore over the material and chase down leads. They even traveled overseas to interview the dossier’s author, former British intelligence officer Christopher Steele, and other sources. Still, they could not corroborate any of the allegations of Trump-Russia “collusion” in the dossier, and actually debunked many of them — including the rumor, oft-repeated by the media, that Trump attorney Michael Cohen flew to Prague in the summer of 2016 to secretly huddle with Kremlin agents over an alleged Trump-Russia plot to hack the election.

They determined that Cohen had never even been to the Czech Republic. Yet Auten and his Crossfire teammates — who referred to the dossier as “Crown material,” as if it were valuable intelligence from America’s closest ally, Britain — never informed a secret surveillance court that the dossier was a bust. Instead, they used it as the basis for all four warrant applications to spy on Carter Page, a tangential 2016 Trump campaign adviser. Former acting FBI Director Andrew McCabe, who personally signed and approved the final application, has testified that without the dossier, the warrants could not have been obtained.

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But I see the remarkable strength of the USD. Yes, the euro has taken a few percent, and so has the yen. So what?

US Dollar’s Status as “Global Reserve Currency” Drops to 25-Year Low (WS)

Two decades ago, when the dollar had a share of about 70% of reserve currencies, a presumed competitor became day-to-day reality: The euro, which combined the currencies of the member states into one currency, thereby combining their weight as reserve currency. Since then, the dollar’s share has dropped by 11 percentage points. By contrast, between 1977 and 1991, the dollars share had dropped by 46 percentage points – with huge plunges in 1979 and 1980 possibly linked to US inflation which was threatening to spiral out of control, peaking at nearly 15% in 1980. The plunge bottomed out in 1991, with inflation more or less under control. And the dollar’s share then surged by 25 percentage points until 2000:


The euro’s share had since been in the range between 19.5% and 20.6%, but it Q4 it broke out of the range and rose to 21.4%, the highest in the data. The ECB’s holdings of euro-denominated assets that it acquired as part of its QE are not included in the euro-denominated foreign exchange reserves. The rest of the reserve currencies are also-rans – the spaghetti at the bottom in the chart below. This includes the Chinese renminbi, the bold red line at the bottom:

The renminbi’s share is still only 2.25%, despite the magnitude and global influence of China’s economy, and despite the hype when the IMF elevated the renminbi to an official global reserve currency in October 2016 by including it in the basket of currencies that back the Special Drawing Rights (SDRs). But the renminbi’s share has been creeping up ever so slowly. At the rate it has been gaining momentum over the past two years (+0.36 percentage points in two years), it would take the renminbi another 50 years or so to reach a share of 25%. Clearly, other central banks are still leery of the renminbi and its implications, and are not eager to dump their dollars all at once in exchange for renminbi; easy does it.


To see what’s going on with the spaghetti at the bottom of the above chart, I magnified the scale and limited it to the range of 0% to 6%. This takes the dollar and the euro out of the picture, and allows for a detailed look of the other reserve currencies. What sticks out is the surge of the yen, the third largest reserve currency. This includes a 2.0-percentage point gain since Q4 2016, which blew away the 1.15-percentage point gain over the same period by the renminbi. With regards to the yen, the renminbi is losing ground.Despite Brexit and all the scary hoopla around it, the pound sterling (GBP), the fourth largest reserve currency, has not given up any share.

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“I was banking committee for all those years, I couldn’t even go to the Open Market Committee meeting. There was no way that would be permissible..”

Ron Paul: Gold and Bitcoin Are At Risk Of Government Crackdown (Kitco)

The best way to protect against economic turbulence is with hard assets like precious metals and real estate, but even these are under threat from the government, said former Congressman and host of The Liberty Report, Ron Paul. “The government is a threat,” Paul said. “They will crackdown because they have the ability to do it. We had a taste of [a free society]. If you don’t know where to start, just start with the Constitution, that might give you an idea of what a free society is all about.” Paul noted that this “crackdown” could take the form of taxes. On President Biden’s proposed infrastructure bill, Paul said that its outcome would be “worse than average.”

“Most likely it will do what those kinds of programs always do, they spend a lot of money, they’re inefficient, they always cost more than they thought they should. Besides, it’s built on some mystical belief that you shouldn’t have any concern about the deficit…everybody’s just in a dream,” he said. During Fed Chair Jerome Powell’s and Treasury Secretary Janet Yellen’s testimony to Congress last week, Republican Senator John Neely Kennedy from Louisiana questioned whether or not the central banks around the world are still “independent” entities, or if they’ve already become intertwined with politics. Paul commented that “independence” was never the objective of central banks to begin with.

“This whole idea of independence…I just don’t believe they’re interested in secrecy because I don’t think of the Treasury or the Federal Reserve and the fiscal people in Congress as really representing a whole lot. I think about the people in the shadow government, in the Deep State, because there’s people pulling strings that have a lot of power and clout. I was banking committee for all those years, I couldn’t even go to the Open Market Committee meeting. There was no way that would be permissible,” he said.

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Virtue signalling in overdrive.

Journalists Are “Centering” Their “Trauma” To Acquire Power (Tracey)

On March 28, Washington Post journalist Felicia Somnez posted a Twitter thread describing the intense trauma she said she’d endured over the past year. An editorial policy imposed by the paper’s management had greatly exacerbated this trauma, she alleged, causing her to burst into tears during a recent therapy session and frequently lapse into spells of “vacant staring.” Somnez, a Harvard graduate in her 30s who holds one of the most prestigious journalism jobs in the country, spoke of being “silenced” by her editors, which in turn kicked her “trauma response” into overdrive and worsened her condition further. She declared that the new crop of young journalists now beginning at the Post “deserve better” than how she’d been treated, particularly on account of their being so “diverse, talented and relentless in their fight for equity.”

If any of these buzzwords and/or phrases sound familiar, it’s because their usage now dependably instigates a swift capitulatory reaction from the people who run legacy media institutions. The editorial policy adjustment that Somnez had demanded be effectuated did in fact get effectuated, within a matter of hours. Her elaborately confessional Twitter thread — a well-worn tactic by this point — worked fantastically. Whatever the merits of the proposed policy adjustment at issue (and she may well have been on sound footing in demanding it), no one can dispute that her chosen self-advocacy approach achieved what she set out to achieve. Because increasingly, as this episode once again demonstrated, the key to coaxing stodgy old editors into acquiescence is to publicly “call them out” using a now-familiar punchy, emotionally inflammatory rhetorical style.

We can just take Somnez at her word and grant that this professional adult journalist genuinely did undergo the debilitating trauma she described, vacant staring spells and all. It’s impossible to judge the precise veracity of these trauma-related claims anyway, given how inextricable they are with the interior mental state of the individual in question. So we’ll have to just accept that Somnez being “attacked online,” as she put it, really did result in the kind of extraordinary psychological turmoil she says she experienced. What can be judged, however — and what has to be judged given its rapidly increasing prominence in public life — is the wider impact of the rhetorical style used so adroitly by Somnez. Because it very clearly gets results. Call it therapeutic trauma jargon.

Read more …

 

 

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Mar 192021
 
 March 19, 2021  Posted by at 8:38 am Finance Tagged with: , , , , , , , ,  35 Responses »


Camille Corot Study for “The Destruction of Sodom” 1843

 

Biden’s Tough-Guy Flexing At ‘Soulless Killer’ Putin Would Be Funny If.. (RT)
Putin Challenges Biden To A Live Public ‘Discussion’ (JTN)
Biden ‘Clearly Doesn’t Want Good Relations’ With Russia – Kremlin (RT)
A Brief List Of Official Russia Claims That Proved To Be Bogus (Taibbi)
Journalists Yesterday Spread a Significant Lie All Over Twitter (Greenwald)
US and China Publicly Rebuke Each Other In First Major Talks Of Biden Era (G.)
Covid Spiking In Over A Dozen States—Most With High Vaccination Rates (F.)
Norwegian Scientists Say AstraZeneca DID Cause Blood Clots (RT)
Your Unvaccinated Kid Is Like a Vaccinated Grandma (Oster)
How The US Military Subverted The Afghan Peace Agreement (GZ)
FBI Now Probing Cuomo’s Corporate Immunity Law (DO)
Without Trump, Is A “Depression In Television” Coming? (Taibbi)
Building or Unbuilding America? (Nomi Prins)
Growth Of US Homelessness During 2020 Was Devastating – HUD (NPR)

 

 

 

 

My thought exactly. He made the whole thing up. Or rather, someone did it for him.

Biden’s Tough-Guy Flexing At ‘Soulless Killer’ Putin Would Be Funny If.. (RT)

[..] the likelihood of the Biden-Putin meeting occurring as described by Joe Biden is slim to none. When Biden made his trip to the Kremlin in 2011, he was fronting for the Obama administration’s “reset” with Russia. There was no opportunity, or need, for Biden’s faux machismo. The two men did meet, but as part of delegations discussing the possibility for improving relations. Not only would Biden’s insulting verbal flexing have been wildly inappropriate and inconsistent with the larger policy objectives of his visit, but it ran counter to his own feelings, expressed at the time, about Russia. “Russia has the best engineers in the world,” Biden said in a press conference after his meeting with Putin (who was serving as Russia’s prime minister, not president, at the time.) “Russia has intellectual capital. Russia is a great nation.”

These are not words one utters after telling a Russian leader in private that he has “no soul.” Biden’s struggle with the truth is well known, so it should come as no surprise to anyone that he possibly made up a meeting with Putin. Biden has been caught plagiarizing a speech delivered by former British Labour Party leader Neil Kinnock, lied about his academic record and accomplishments, and manufactured from whole cloth a narrative that has him participating in the civil rights movement of the 1960s. Biden’s lies all have one goal in common: to make him out to be that which he is not. So, too, his apparent lie about calling Putin soulless. Biden is desperate to be a ‘tough guy’. But for that reputation to stick vis-à-vis Putin, there had to be a ‘showdown’ moment, where the good guy faced off against the bad guy and called him out.

Since no such event exists, Biden had to make one up. And, like most of his lies, Biden repeats them long enough and often enough that they take on a life of their own, embraced as fact by unquestioning journalists. In his interview with Stephanopoulos, Biden raised the findings of the DNI report, and his conversation with Putin. “He will pay a price. We had a long talk, he and I. I know him relatively well and the conversation started off [like this]: I said, ‘I know you and you know me. If I establish this occurred, then be prepared.’”

Biden does not know Putin well at all. If he did, he would know that the last thing that would give the Russian leader pause were the fanciful tough-guy posturing of a geriatric president. There is little doubt that the Biden administration will impose additional sanctions against Russia in the days and weeks to come, citing the report as justification. There is also little doubt that these sanctions will have no impact whatsoever on the policies and practices of the Russian government. But that is not the point. Biden is not flexing for the benefit of Putin. His audience is the American people, and part and parcel of a coordinated campaign designed to drive home his mantra that “America is back.”

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Biden’s too busy.

Putin Challenges Biden To A Live Public ‘Discussion’ (JTN)

Russian President Vladimir Putin has suggested that he and American President Joe Biden engage in a live public “discussion.” The Russian leader’s proposal comes after Biden, when asked earlier this week during an ABC News interview whether he believes Putin is a killer, responded that he does believe that. A U.S. intelligence report indicates that Putin authorized influence operations related to the 2020 U.S. election, and during the interview Biden said that Putin “will pay a price.” Biden said that he told Putin: “If I establish this occurred, then be prepared.”

The intelligence report states in part: “We assess that Russian President Putin authorized, and a range of Russian government organizations conducted, influence operations aimed at denigrating President Biden’s candidacy and the Democratic Party, supporting former President Trump, undermining public confidence in the electoral process, and exacerbating sociopolitical divisions in the US.” “I’ve just thought of this now,” the Russian president told a Russian state television reporter, according to ABC News. “I want to propose to President Biden to continue our discussion, but on the condition that we do it basically live, as it’s called. Without any delays and directly in an open, direct discussion. It seems to me that would be interesting for the people of Russia and for the people of the United States.”

Putin suggested that the “discussion” with Biden could be held on Friday or Monday: “I don’t want to put this off for long. I want to go the taiga this weekend to relax a little,” Putin said. “So we could do it tomorrow or Monday. We are ready at any time convenient for the American side.” When asked during Thursday’s press briefing if the idea is one that the administration would consider, White House Press Secretary Jen Psaki told the reporter she would need to “get back to you if that is something we are entertaining,” and noted that Biden will be busy in Georgia on Friday.

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Recalling your ambassador is a serious step.

Biden ‘Clearly Doesn’t Want Good Relations’ With Russia – Kremlin (RT)

The Kremlin has claimed that comments from American President Joe Biden, in which he said he believes his Russian counterpart, Vladimir Putin, to be a “killer,” is proof Washington isn’t serious about relations with the country. Speaking to journalists on Thursday, Kremlin spokesman Dmitry Peskov said there was no precedent for the remarks in the history of the two nations. “These are very bad statements by the US president,” he added. “He clearly doesn’t want to establish a relationship with our country, and we will proceed on that basis.” In the TV interview with ABC, which aired on Wednesday, Biden was asked by chief anchor George Stephanopoulos whether he thought Putin was “a killer.” “Mmm hmm, I do,” he replied.

He added that he had warned the Russian leader that the US would take action if it found evidence of Moscow meddling in the country’s 2020 presidential election. “He will pay a price,” Biden said. “We had a long talk, he and I… I know him relatively well. And the conversation started off, I said, ‘I know you and you know me. If I establish this occurred, then be prepared.’” A joint report by Washington’s spy agencies, published the day before, alleged that Russia was behind a campaign to “denigrate” Biden’s reputation during the campaign. The Kremlin has blasted the allegations, insisting it had not engaged in political smears against any candidates.

On Wednesday evening, Russia’s ambassador to the US, Anatoly Antonov, was recalled to Moscow for talks on the future of ties with Washington. Foreign Ministry spokeswoman Maria Zakharova said that consultations were needed “to analyze what to do and where to head in the context of relations with the US.” The remarks have sparked a wave of criticism from Russian officials. The speaker of the country’s parliament, Vyacheslav Volodin, added his voice to those claiming the remarks were indicative of a diplomatic rift. The top politician argued that “this is a tantrum that comes from powerlessness. Putin is our president, attacking him is an attack on our country.”

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“We’ve spent the last five years watching as anonymous officials make major Russia-related claims, only to have those evidence-free claims fizzle.”

A Brief List Of Official Russia Claims That Proved To Be Bogus (Taibbi)

The Office of the Director of National Intelligence (ODNI) has released a much-hyped, much-cited new report on “Foreign Threats to the 2020 Elections.” The key conclusion: “We assess that Russian President Putin authorized, and a range of Russian government organizations conducted, influence operations aimed at denigrating President Biden’s candidacy and the Democratic Party, supporting former President Trump, [and] undermining public confidence in the electoral process…” The report added Ukrainian legislator Andrey Derkach, described as having “ties” to “Russia’s intelligence services,” and Konstantin Kilimnik, a “Russian influence agent” (whatever that means), used “prominent U.S. persons” and “media conduits” to “launder their narratives” to American audiences.

The “narratives” included “misleading or unsubstantiated allegations against President Biden” (note they didn’t use the word “false”). They added a small caveat at the end: “Judgments are not intended to imply that we have proof that shows something to be a fact.” As Glenn Greenwald already pointed out, the “launder their narratives” passage was wolfed down by our intelligence services’ own “media conduits” here at home, and regurgitated as proof that the “Hunter Biden laptop story came from the Kremlin,” even though the report didn’t mention the laptop story at all. Exactly one prominent reporter, Chris Hayes, had the decency to admit this after advancing the claim initially. With regard to the broader assessment: how many times are we going to do this? We’ve spent the last five years watching as anonymous officials make major Russia-related claims, only to have those evidence-free claims fizzle.

From the much-ballyhooed “changed RNC platform” story (Robert Mueller found no evidence the changed Republican platform was “undertaken at the behest of candidate Trump or Russia”), to the notion that Julian Assange was engaged in a conspiracy with the Russians (Mueller found no evidence for this either), to Michael Cohen’s alleged secret meetings in Prague with Russian conspirators (“not true,” the FBI flatly concluded) to the story that Trump directed Cohen to lie to Congress (“not accurate,” said Mueller), to wild stories about Paul Manafort meeting Assange in the Ecuadorian embassy, to a “bombshell” tale about Trump foreknowledge of Wikileaks releases that blew up in CNN’s face in spectacular fashion, reporters for years chased unsubstantiated claims instead of waiting to see what they were based upon.

The latest report’s chief conclusions are assessments about Derkach and Kilimnik, information that the whole world knew before this report was released. Hell, even Rudy Giuliani, whose meeting with Derkach is supposedly the big scandal here, admitted there was a “50/50 chance” the guy was a Russian spy. Kilimnik meanwhile has now been characterized as having “ties” to Russian intelligence (Mueller), and as a “Russian intelligence officer” (Senate Intelligence Committee), and is now back to being a mere “influence agent.” If he is Russian intelligence, then John McCain’s International Republican Institute (where Kilimnik worked), as well as embassies in Kiev and Moscow (where Kilimnik regularly gave information, according to the New York Times), have a lot of explaining to do.

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“..these career spies and propagandists, led by Obama CIA Director and serial liar John Brennan..”

Journalists Yesterday Spread a Significant Lie All Over Twitter (Greenwald)

Journalists with the largest and most influential media outlets disseminated an outright and quite significant lie on Tuesday to hundreds of thousands of people, if not millions, on Twitter. While some of them were shamed into acknowledging the falsity of their claim, many refused to, causing it to continue to spread up until this very moment. It is well worth examining how they function because this is how they deceive the public again and again, and it is why public trust in their pronouncements has justifiably plummeted. The lie they told involved claims of Russian involvement in the procurement of Hunter Biden’s laptop. In the weeks leading up to the 2020 election, The New York Post obtained that laptop and published a series of articles about the Biden family’s business dealings in Ukraine, China and elsewhere.

In response, Twitter banned the posting of any links to that reporting and locked The Post out of its Twitter account for close to two weeks, while Facebook, through a long-time Democratic operative, announced that it would algorithmically suppress the reporting. The excuse used by those social media companies for censoring this reporting was the same invoked by media outlets to justify their refusal to report the contents of these documents: namely, that the materials were “Russian disinformation.” That claim of “Russian disinformation” was concocted by a group of several dozen former CIA officials and other operatives of the intelligence community devoted to defeating Trump.

Immediately after The Post published its first story about Hunter Biden’s business dealings in Ukraine that traded on his influence with his father, these career spies and propagandists, led by Obama CIA Director and serial liar John Brennan, published a letter asserting that the appearance of these Biden documents “has all the classic earmarks of a Russian information operation.” News outlets uncritically hyped this claim as fact even though these security state operatives themselves admitted: “We want to emphasize that we do not know if the emails…are genuine or not and that we do not have evidence of Russian involvement — just that our experience makes us deeply suspicious that the Russian government played a significant role in this case.” Even though this claim came from trained liars who, with uncharacteristic candor, acknowledged that they did not “have evidence” for their claim, media outlets uncritically ratified this assertion.

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Blinken got his ass handed to him.

US and China Publicly Rebuke Each Other In First Major Talks Of Biden Era (G.)

The United States and China have clashed over human rights during their first face-to-face high-level talks since Joe Biden took office, with one senior Chinese official urging the US to address “deep-seated” issues such as racism, and accusing his American counterparts of “condescension”.Any hopes that the meeting, in Anchorage, would reset bilateral ties after years of tensions over trade and cyber security during Donald Trump’s presidency evaporated when US secretary of state Antony Blinken and national security adviser Jake Sullivan opened their meeting with China’s top diplomat Yang Jiechi and state councillor Wang Yi.

After Blinken referred to rising global concern over Beijing’s human rights record, Yang said: “We hope that United States will do better on human rights. The fact is that there are many problems within the United States regarding human rights, which is admitted by the US itself,” he said in a 15-minute speech that appeared to irritate Blinken. He added that US human rights issues were “deep-seated … they did not just emerge over the past four years, such as Black Lives Matter”. In his opening remarks Blinken had said world leaders had voiced “deep satisfaction” that the US was re-engaging with the international community after four years of Trump’s “America First” doctrine. “I’m also hearing deep concern about some of the actions your government is taking.”

Blinken, who added he had heard similar sentiments during his visits this week to Japan and South Korea, said the Biden administration and its allies were united in pushing back against China’s increasing authoritarianism and assertiveness at home and abroad. In response, Yang angrily demanded that the US stop pushing its own version of democracy at a time when it was dealing with discontent among its own population. “We believe that it is important for the United States to change its own image and to stop advancing its own democracy in the rest of the world,” he said. “Many people within the United States actually have little confidence in the democracy of the United States.” “China will not accept unwarranted accusations from the US side,” Yang said, adding that recent developments had plunged relations “into a period of unprecedented difficulty” that “has damaged the interests of our two peoples.”

Read more …

Get healthy.

Covid Spiking In Over A Dozen States—Most With High Vaccination Rates (F.)

Coronavirus cases are again spiking in 13 U.S. states, according to an analysis of trends over the past week, including some states among the highest in vaccination rates as health experts warn more contagious variants of Covid-19 will soon dominate the United States. An Axios analysis found Michigan by far leading the way in new cases, with the 7-day rolling average spiking by more than 53%. Michigan is above the U.S. average in terms of vaccination rate, according to Johns Hopkins University, but cases, positivity rate and hospitalizations are all on the rise. State health officials have placed the blame on highly contagious new variants now spreading in the state, as health experts caution national vaccination efforts are a race against the contagious strains.

Other states among the highest in vaccination rates, including West Virginia, Maine and Montana are also dealing with case spikes. Only two of the states with rising cases—Mississippi and New Hampshire—are below the U.S. average in terms of vaccination rate, according to Johns Hopkins. Top health officials, including Dr. Anthony Fauci and CDC Director Dr. Rochelle Walensky, have said a variant that originated in the U.K. could become the dominant strain in the U.S. by the end of the month. That strain is believed to be some 56% more contagious and perhaps twice as deadly than the existing dominant strain in the United States. Health experts say the country is continuing to move in the right direction as a whole, with the vaccine effort hopefully ending the pandemic this year.

But what had been a rapid national case decline starting in January has slowed significantly over the past few weeks, with the U.S. continuing to average over 50,000 new cases a day, a plateau level Fauci said “concerns me.” Top health officials and President Joe Biden are also advising against expansive reopening measures that states are putting into effect, including some that have decided to lift mask mandates.

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“The clotting in those patients was triggered by a very specific “strong immune response” likely caused as a result of the AstraZeneca jab..”

Norwegian Scientists Say AstraZeneca DID Cause Blood Clots (RT)

Norwegian scientists have linked the AstraZeneca vaccine and blood clots – a condition seen in some people that led countries around the world to halt its use. But British and Dutch medics say there’s no evidence for such a link. “The cause of our patients’ condition has now been found,” Pal Andre Holme, the head of a research group at the Oslo University Hospital, told Norway’s VG media outlet. He was referring to the cases of three health workers under the age of 50 who suffered from severe blood clotting after receiving the AstraZeneca jab. One of the medics then died on Monday. The clotting in those patients was triggered by a very specific “strong immune response” likely caused as a result of the AstraZeneca jab, Holme explained.

In collaboration with the University Hospital of North Norway, Holme’s team detected specific antibodies that “activate” platelets and in some cases can lead to blood clots. Asked by VG if the vaccine was the “most likely” cause of this specific immune response, Holme said he believes “there is no other thing” in the history of the three individual patients which would generate such a response. None of the three patients had a history of similar health issues before, he said. I am pretty sure it is these antibodies that are the cause and I see no other reason than that it is the vaccine that triggers them.

The professor still admitted that such side effects are likely to be very rare since “we are talking about very specific antibodies.” Norway halted the use of the AstraZeneca jab in its vaccination campaign alongside many other European nations. Some 120,000 Norwegians already received the jabs produced by the British-Swedish company. According to Norwegian media, “very few” serious side effects were reported by those vaccinated to date. [..] Norwegian scientists revealed the results of their analysis just as the British medical regulator, MHRA, said that it found no evidence that could prove the link between the Oxford-AstraZeneca vaccine and blood clotting.

“This type of blood clot can occur naturally in people who have not been vaccinated, as well as in those suffering from COVID-19,” the MHRA CEO, Dr. June Raine, said in a statement, adding that her agency’s “thorough and careful review” showed that blood clots in veins of affected persons are occurring just as often as they would “in the absence of vaccination.”

Read more …

But you still want to vaccinate all kids?

Your Unvaccinated Kid Is Like a Vaccinated Grandma (Oster)

Different vaccines yield different results, but all of the vaccines approved by the FDA (Pfizer-BioNTech’s, Moderna’s, and Johnson & Johnson’s) are very effective, which is why the CDC has indicated that vaccinated individuals can interact unmasked with other vaccinated individuals. It hasn’t yet commented on flying, but I’m guessing the CDC will relax its flying advisories for vaccinated individuals in the next few weeks. It will continue to recommend masks, for the sake of protecting the unvaccinated population, because the science on transmission by the vaccinated is still hazy. Now think about your child. The CDC has published some risk assessments by age. For comparison’s sake, I’ll phrase the findings the way I would the results of a vaccine trial:

Being a child aged 5 to 17 is 99.9 percent protective against the risk of death and 98 percent protective against hospitalization. For children 0 to 4, these numbers are 99.9 percent (death) and 96 percent (hospitalization). The central goal of vaccination is preventing serious illness and death. From this standpoint, being a child is a really great vaccine. Your unvaccinated first grader appears to have about as much protection from serious illness as a vaccinated grandmother. Comparisons are more difficult when it comes to the risk of any infection at all. An Israeli study undergoing peer review found that the Pfizer vaccine reduces infection in asymptomatic cases by about 90 percent, and in symptomatic cases by almost 94 percent.

Child case counts haven’t been well documented, in part because asymptomatic infection appears to be so common among kids. However, the available data suggest that children are less likely than adults to contract the coronavirus, but more likely to contract it than a vaccinated grandmother. (Below, I’ll address the latest thinking on variants, and research on the possible long-term effects of less-than-serious infections, which remains murky, and controversial.) This news may feel a little mixed: Yes, kids are protected from serious illness, just like their vaccinated grandparents, but they are not as protected from contracting the virus at all. Here is where the concept of herd immunity comes in to save the summer. If the Israeli Pfizer study is anywhere near right, then case rates will fall once a large share of adults are vaccinated. They are likely to fall a lot as the virus finds fewer and fewer receptive hosts.

Read more …

Must have war.

How The US Military Subverted The Afghan Peace Agreement (GZ)

In an exclusive interview with The Grayzone Col. Douglas Macgregor, a former senior advisor to the Acting Secretary of Defense, revealed that President Donald Trump shocked the US military only days after the election last November by signing a presidential order calling for the withdrawal of all remaining US troops from Afghanistan by the end of the year. As Macgregor explained to The Grayzone, the order to withdraw was met with intense pressure from the Chairman of the Joint Chiefs of Staff, Gen. Mark M. Milley, which caused the president to capitulate. Trump agreed to withdraw only half of the 5,000 remaining troops in the country. Neither Trump’s order nor the pressure from the JCS Chairman was reported by the national media at the time.


The president’s surrender represented the Pentagon’s latest victory in a year-long campaign to sabotage the US-Taliban peace agreement signed in February 2020. Military and DOD leaders thus extended the disastrous and unpopular 20-year US war in Afghanistan into the administration of President Joseph Biden. The subversion of the peace agreement with the Taliban initiated by the US military leadership in Washington and Afghanistan began almost as soon as Trump’s personal envoy Zalmay Khalilzad negotiated a tentative deal in November 2019. The campaign to undermine presidential authority was actively supported by then-Secretary of Defense Mark Esper.

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“Critics say that the immunity law removed a key deterrent to corporate malfeasance, and victims and their families were subsequently stripped of their legal rights.”

FBI Now Probing Cuomo’s Corporate Immunity Law (DO)

Federal law enforcement officials are scrutinizing New York Gov. Andrew Cuomo’s controversial move to help his donor shield nursing home executives from legal consequences during the COVID-19 pandemic, according to a new report. The probe follows a Daily Poster investigative series detailing how one of Cuomo’s biggest donors, the Greater New York Hospital Association (GNYHA) — a lobby group that represents hospital systems and nursing home operators — said it “drafted and aggressively advocated for” the corporate immunity provision. Cuomo’s administration quietly inserted the measure into his state’s budget as thousands lay dying from COVID-19 in New York nursing homes.

Critics say that the immunity law removed a key deterrent to corporate malfeasance, and victims and their families were subsequently stripped of their legal rights. Cuomo’s original executive order shielding front line health care workers from lawsuits was widely reported, but not the governor’s separate budget language extending immunity to hospital and nursing home corporations’ executives and board members. On Thursday, THE CITY disclosed that federal investigators looking into Cuomo’s handling of nursing home policy are now specifically asking questions about the immunity provision. The New York news outlet reports:

“FBI investigators probing the Cuomo administration’s handling of nursing homes during the pandemic last spring are seeking information about a state budget provision that gave operators legal immunity, THE CITY has learned. In recent weeks, FBI officials have been looking to interview members of Gov. Andrew Cuomo’s staff and other state officials about the eleventh-hour addition to the state budget last March, according to three people familiar with the matter. The measure granted nursing homes and hospitals broad legal protections against lawsuits and criminal liability for care provided to residents and patients during the pandemic. FBI officials started to make house calls this month, showing up at people’s residences and leaving business cards, according to the three sources. Investigators’ questions have focused primarily on the nursing home immunity provision and how it “got in the state budget,” said one legislative source, who did not want to be named because of the ongoing probe.”

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Not coming, but already here.

Without Trump, Is A “Depression In Television” Coming? (Taibbi)

[..] the Democratic Party’s response to Trump — which involved multiple efforts to remove him, premised on the idea that every day he spent in the Oval Office was an existential threat to humanity — allowed stations to turn every day of the Trump years into a baby-down-a-well story (the baby was democracy). Between the Mueller investigation, two impeachments, the Kavanaugh confirmation, multiple border crises, the “Treason in Helsinki” fiasco, and a hundred other tales, every day could be pitched as a drop-everything emergency. Add the partisan rooting angle, and you had ratings gold. Imagine three or four dozen Super Bowls a year, each one played in the middle of a category 5 hurricane, and you come close to grasping the magnitude of the gift that Donald Trump was to MSNBC, Fox, and CNN.

Six or seven years ago, it was common to see CNN or MSNBC fall outside the top 20 rated cable networks, below titans like Disney, USA, TBS, and the History Channel. By 2020, the three top networks on cable — not just news networks, but overall — were Fox News, MSNBC, and CNN. The fact that news ate away so much of the market share of the entertainment business in the Trump years raises questions about what exactly we were watching. Jump in your Dr. Who police box and go back to 2014, the last year Trump was not a major political figure. The cable news genre had what Variety described as an “overall down year.” It was a particularly grim time for CNN and MSNBC:

Total Primetime Viewers, 2014 Change
Fox News 1.779 million (even)
MSNBC 600,000 (down 8%)
CNN 528,000 (down 8%)
HLN 337,000 (down 16%)

CNN exemplified the pre-Trump dilemma. In 2011, the network’s average primetime viewership was 689,000. That dropped to 670,000 in 2012, and the year after that, in 2013, it fell all the way to 568,000, a 20-year low. Imagine the pucker factor at Time Warner the next year, when CNN’s entire 8-11 p.m. programming slate dropped 8% off that 20-year dip. 2013 was CNN’s first year under the management of Jeff Zucker, whose career arc leading into the Trump years was a dazzling study in failing upward. He was named head of NBC Entertainment in 2000, and rode the successes of a handful of shows — including, notably, The Apprentice — into a job as CEO of NBC Universal, where he presided over one of the most disastrous tenures of any TV executive in history. Under his leadership, NBC dropped to fourth behind ABC, CBS, and Fox, amid catastrophic decisions like trying to move Jay Leno into primetime.

When Zucker moved to CNN, he trumpeted a new plan to save the news. This is from Politico in 2013: “Zucker has told staff he wants to “broaden the definition of what news is,” meaning more sports, more entertainment, more human interest stories — and, at times, less politics.” That didn’t work out so well in 2014, though to be fair to Zucker, the ratings narrative started reversing at least somewhat before Trump jumped on the scene. But the first giant leap forward for the business as a whole came in 2015, when CNN’s average primetime audience soared to 730,000, a 30% increase, in significant part because it hosted two Republican debates starring Trump.

The news business had never seen anything like the Trump effect. The first Republican debate on Fox drew 25 million viewers and was the most-watched non-sports event in the history of cable, while the second debate drew 23 million and was merely the top show in the history of CNN. Taking note of all this was Trump himself, whose poll numbers were dipping a bit at the end of 2015. Some were predicting his demise. To this, Trump snapped, “I’m not a masochist,” and promised he’d pull out if his numbers worsened. However, he said, if he did, “There’d be a major collapse of television ratings,” adding a poisonous prediction: “It would become a depression in television.”

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“The cost of what we need but haven’t done to modernize our infrastructure has expanded to $5.6 trillion over the last 20 years ($3 trillion in the last decade alone)”

Building or Unbuilding America? (Nomi Prins)

During the Trump years, the phrase “Infrastructure Week” rang out as a sort of Groundhog Day-style punchline. What began in June 2017 as a failed effort by The Donald’s White House and a Republican Senate to focus on the desperately needed rebuilding of American infrastructure morphed into a meme and a running joke in Washington. Despite the focus in recent years on President Trump’s failure to do anything for the country’s crumbling infrastructure, here’s a sad reality: considered over a longer period of time, Washington’s political failure to fund the repairing, modernizing, or in some cases simply the building of that national infrastructure has proven a remarkably bipartisan “effort.”

After all, the same grand unfulfilled ambitions for infrastructure were part and parcel of the Obama White House from 2009 on and could well typify the Biden years, if Congress doesn’t get its act together (or the filibuster doesn’t go down in flames). The disastrous electric grid power outages that occurred during the recent deep freeze in Texas are but the latest example of the pressing need for infrastructure upgrades and investments of every sort. If nothing is done, more people will suffer, more jobs will be lost, and the economy will face drastic consequences. Since the mid-twentieth century, when most of this country’s modern infrastructure systems were first established, the population has doubled. Not only are American roads, airports, electric grids, waterways, railways and more distinctly outdated, but today’s crucial telecommunications sector hasn’t ever been subjected to a comprehensive broadband strategy.

Worse yet, what’s known as America’s “infrastructure gap” only continues to widen. The cost of what we need but haven’t done to modernize our infrastructure has expanded to $5.6 trillion over the last 20 years ($3 trillion in the last decade alone), according to a report by the American Society of Civil Engineers (ASCE). Some estimates now even run as high as $7 trillion. In other words, as old infrastructure deteriorates and new infrastructure and technology are needed, the cost of addressing this ongoing problem only escalates. Currently, there is a $1-trillion backlog of (yet unapproved) deferred-maintenance funding floating around Capitol Hill. Without action in the reasonable future, certain kinds of American infrastructure could, like that Texas energy grid, soon be deemed unsafe.

Read more …

Make the right to housing a law.

Growth Of US Homelessness During 2020 Was Devastating – HUD (NPR)

The nation’s homeless population grew last year for the fourth year in a row. On a single night in January 2020, there were more than 580,000 individuals who were homeless in the United States, a 2% increase from the year before. The numbers, released by the Department of Housing and Urban Development Thursday, do not reflect the impact of the pandemic. “And we know the pandemic has only made the homelessness crisis worse,” HUD Secretary Marcia Fudge said in a video message accompanying the report. She called the numbers “devastating” and said the nation has a “moral responsibility to end homelessness.” Among the report’s more sobering findings: homelessness among veterans and families did not improve for the first time in many years.


Also, more than 106,000 children were homeless during the once-a-year count, conducted in most communities across the nation. While the majority of homeless children were in shelters or transitional housing, almost 11,000 were living outside. As has been the case for years, a disproportionate share of those experiencing homelessness were Black — about 39% of the total, though African Americans make up about 13% of the nation’s overall population. Twenty-three percent of those who were homeless last year identified as Hispanic or Latino. California was home to the largest number of people experiencing homelessness — 161,548 — according to the 2020 count. A quarter of all homeless individuals in the United States were living in either New York City or Los Angeles. For the first time since the government began doing the annual count, the number of single adults living outside — 209,413 — exceeded the number of individuals living in shelters — 199,478.

Read more …

 

 

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Jan 312018
 


Paul Gauguin Farm in Brittany 1894

 

Market Euphoria May Turn to Despair If 10-Year Yield Jumps to 3% (BBG)
Forget Stocks, Look At EU Bonds – They Are The Real Problem (Luongo)
The Ticking Time Bomb in the Municipal-Bond Market (Barron’s)
UK Interest-Only Mortgagees Are at Risk of Losing Their Homes
US National Debt Will Jump by $617 Billion in 5 Months (WS)
Trump Urges Congress To Pass $1.5 Trillion In Infrastructure Spending (R.)
Trump Joins Bezos, Dimon, Buffett In Pledge To Stop Soaring Drug Prices (MW)
Trump Says ‘100%’ After He’s Asked to Release GOP Memo (BBG)
Saving Rate Drops to 12-Year Low As 50% of Americans Don’t Have Savings (WS)
U.S. Regulators Subpoena Crypto Exchange Bitfinex, Tether (BBG)
Customer Lawsuits Pummel Spanish Banks (DQ)
Britons Ever More Deeply Divided Over Brexit (R.)
The GDP of Bridges to Nowhere (Michael Pettis)

 

 

If central banks and governments have really lost control over bonds, find shelter.

Market Euphoria May Turn to Despair If 10-Year Yield Jumps to 3% (BBG)

It’s getting harder and harder to quarantine the selloff in Treasuries from equities and corporate bonds. The benchmark 10-year U.S. yield cracked 2.7% on Monday, rising to a point many forecasters weren’t expecting until the final months of 2018. For over a year, range-bound Treasuries helped keep financial markets in a Goldilocks state, with interest rates slowly rising due to favorable forces like stronger global growth and the Federal Reserve spearheading a gradual move away from crisis-era monetary policy. Yet the start of 2018 caught many investors off guard, with the 10-year yield on pace for its steepest monthly increase since November 2016. It’s risen 30 basis points this year and reached as high as 2.73% in Asian trading Tuesday.

Suddenly, they’re confronted with thinking about what yield level could end the good times seen since the presidential election. For many, 3% is the breaking point at which corporate financing costs would get too expensive, the equity market would lose its luster and growth momentum would fade. “We are at a turning point in the psyche of markets,” said Marty Mitchell, a former head government bond trader at Stifel Nicolaus & Co. and now an independent strategist. “A lot of people point to 3% on the 10-year as the critical level for stocks,” he said, noting that higher rates signal traders are realizing that quantitative easing policies really are on the way out.

U.S. stocks have set record after record, buoyed by strong corporate earnings, President Donald Trump’s tax cuts and easy U.S. financial conditions. The S&P 500 Index has returned around 6.8% this year, once reinvested dividends are taken into account, and the U.S. equity benchmark is already higher than the level at which a Wall Street strategists’ survey last month predicted it would end 2018. What often goes unsaid in explaining the equity-market exuberance is that Treasury yields refused to break higher last year. Instead, they remained in the tightest range in a half-century, allowing companies to borrow cheaply and forcing investors to seek out riskier assets to meet return objectives.

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It’s all bonds, not even just sovereign bonds. Investors will move from equities into bonds all over the place.

Forget Stocks, Look At EU Bonds – They Are The Real Problem (Luongo)

While all the headlines are agog with stories about the Dow Jones dropping a couple hundreds points off an all-time high, German bunds are getting killed right before our eyes. The Dow is simply a market overdue for a meaningful correction in a primary bull market. And it’s a primary bull market brought on by a slow-moving sovereign debt crisis that will engulf Europe. It’s not the end of the story. Hell, the Dow isn’t even a major character in the story. In fact, similar stories are being written in French 10 year debt, Dutch 10 year debt, and Swiss 10 year debt. These are the safe-havens in the European sovereign debt markets. Meanwhile, Italian 10 year debt? Still range-bound. Portuguese 10 year debt? Near all-time high prices. The same this is there with Spain’s debt. All volatility stamped out. Why? Simple. The ECB.

The ECB’s quantitative easing program and negative interest rate policy (NIRP) drove bond yields across the board profoundly negative for more than a year. [..] the ECB is trapped and cannot allow rates to rise in the vulnerable sovereign debt markets — Italy, Portugal, Spain — lest they face bank failures and a real crisis. The problem with that is, the market is scared and so they are selling the stuff the ECB isn’t buying – German, French, Dutch, Swiss debt. In simple terms, we are seeing the flight into the euro intensify here as investors are raising cash. The euro and gold are up. The USDX continues to be weak even though capital is pouring into the U.S. thanks to fundamental changes to tax and regulatory policy under President Trump. In the short term Dow Jones and S&P500 prices are overbought. Fine. Whatever. But, the real problem is not that. The real problem is the growing realization in the market that governments and central banks do not have an answer to the debt problem.

[..] The U.S. economy is about to be unleashed by Trump’s tax cut law. It will be able to absorb higher interest rates for a while. Yield-starved pension funds, as Armstrong rightly points out, will be bailed out slightly forestalling their day of reckoning. And in doing so, higher rates in the U.S. are driving core-rates higher in Europe. An overly-strong euro is crushing any hope of further economic recovery in the periphery, like Italy. The debt load on Italy et.al. has increased relative to their national output by around 20% since the end of 2016. This will put the ECB at risk of a massive loss of confidence when Italian banks start failing, Italy’s budget deficit starts expanding again and hard-line euroskeptics win the election in March. As capital is drained out of Europe into U.S. equities, the dollar, gold and cryptocurrencies, things should begin to spiral upwards rapidly.

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See? More bonds. Meredith Whitney was 10 years early.

The Ticking Time Bomb in the Municipal-Bond Market (Barron’s)

There’s a looming disaster in the market for municipal debt. Every market participant knows about it, and there isn’t much any of them can do about it. Many state and local governments, even more than corporations, have promised generous pensions they can’t afford. The promises may have looked plausible in the past, especially during the dot-com boom, when money that pension funds put in the markets was doubling. When the market crashed, so did their returns—and, a few years later, the global financial crisis took out another substantial chunk. And with interest rates at historic lows, bonds have failed to deliver the income the funds relied on. While governments delay dealing with the problem as long as they can, analysts and researchers are wondering if we have reached the point of no return. For investors in municipal bonds, it could mean future defaults and losses.

“We are increasingly wary of high pension exposure, especially among state and local credits,” the Barclays muni-research team wrote this month, citing “inflated return targets, low funded ratios, growing obligations, perhaps heavy allocations to equities and compressed tax revenues make for especially adverse conditions.” What’s more, “short-term investment gains won’t be sufficient to plug liability gaps.” Yet many pensions still assume they will be able to generate the returns they saw in the past. New Jersey’s pension and the California Public Employees’ Retirement System have lowered their assumed rate of return to 7%. But with the 30-year Treasury yielding less than 3% and stocks already at record highs, it’s unclear how public markets can generate 7%—which is why many pensions have turned to higher-risk, lower-liquidity strategies, such as private equity.

Muni investors, for their part, are increasingly sensitive to pensions’ widening gap. After the financial crisis and the ensuing recession, they suddenly became interested in pension finances. A report late last year by the Center for Retirement Research at Boston College found that, as pension liabilities grew, spreads between state and local municipal bonds and Treasuries also increased. When such issuers came to issue new debt, they discovered the market was charging them more to borrow. “Pensions have become increasingly relevant to the municipal bond markets and can have a meaningful impact on the borrowing costs of a municipality,” the report says.

Read more …

Rising bond yields mean higher mortgage rates. Australia is overflowing with interest only loans. Plenty other countries have loads of it too.

UK Interest-Only Mortgagees Are at Risk of Losing Their Homes

Some borrowers with interest-only mortgages may lose their homes as a result of shortfalls in repayment plans, the U.K.’s Financial Conduct Authority warned. The FCA has identified three peaks in interest-only mortgage repayments, the first of which is currently underway. Defaults are less likely in the present wave of maturities because the homeowners are approaching retirement and have higher incomes. The next two peaks, from 2027 through 2028 and in 2032, are more at risk of shortfalls, the regulator said. Customers are reluctant to discuss with their lenders how they’ll pay off the loans, limiting their options, the FCA found. Almost 18% of outstanding mortgages in the U.K. are interest-only or involve only partial payment of the capital, according to the statement.

“Since 2013, good progress has been made in reducing the number of people with interest-only mortgages,” Jonathan Davidson, executive director of supervision retail and authorization at the regulator, said in a statement. “However, we are very concerned that a significant number of interest-only customers may not be able to repay the capital at the end of the mortgage and be at risk of losing their homes.” The FCA reviewed 10 lenders representing about 60% of the interest-only mortgage market for the study. The supervisor also urged lenders to review and improve their own strategies regarding repayment of the loans.

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Now add some infrastructure.

US National Debt Will Jump by $617 Billion in 5 Months (WS)

While everyone is trying to figure out how to twist the new tax cut to their advantage and save some money, the US Treasury Department just announced how much net new debt it will have to sell to the public through the second quarter to keep the government afloat: $617 billion. That’s what the Treasury Department estimates will be the total amount added to publicly traded Treasury securities — or “net privately-held marketable borrowing” — through the end of the second quarter. This will be the net increase in the US debt through the end of Q2. By quarter: During Q1, the Treasury expects to increase US public debt by $441 billion. It includes estimates for “lower net cash flows.” During Q2 – peak tax seasons when revenues pour into the Treasury – it expects to increase US public debt by $176 billion.

It also “assumes” that with these increases in the debt, it will have a cash balance at the end of June of $360 billion. So over the next five months, if all goes according to plan, the US gross national debt of $24.5 trillion currently – which includes $14.8 trillion in publicly traded Treasury securities and $5.7 trillion in internally held debt – will surge to about $25.1 trillion. That’s a 4% jump in just five months. Note the technical jargon-laced description for this (marked in green on the chart). The flat lines in 2013, 2015, and 2017 are a result of the prior three debt-ceiling fights. Each was followed by an enormous spike when the debt ceiling was lifted or suspended, and when the “extraordinary measures” with which the Treasury keeps the government afloat were reversed. And note the current debt ceiling, the flat line that started in mid-December.

In November, Fitch Ratings said optimistically that, “under a realistic scenario of tax cuts and macro conditions,” the US gross national debt would balloon to 120% of GDP by 2027. The way things are going right now, we won’t have to wait that long. Back in 2012, gross national debt amounted to 95% of GDP. Before the Financial Crisis, it was at 63% of GDP. At the end of 2017, gross national debt was 106% of GDP! Over the next six month, the debt will grow by about 4%. Unless a miracle happens very quickly, the debt will likely grow faster over the next five years due to the tax cuts than over the past five years. But over the past five years, the gross national debt already surged nearly 25%, or by $4.1 trillion. So that’s a lot of borrowing, for an economy that is growing at a decent clip.

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Coverage of SOTU proves my point: Moses split the nation.

As for infrastructure, they will go for what provides most short term gain. That is, make people pay. For roads, not public transport, for instance.

Trump Urges Congress To Pass $1.5 Trillion In Infrastructure Spending (R.)

President Donald Trump called on the U.S. Congress on Tuesday to pass legislation to stimulate at least $1.5 trillion in new infrastructure spending. In his State of the Union speech to Congress, Trump offered no other details of the spending plan, such as how much federal money would go into it, but said it was time to address America’s “crumbling infrastructure.” Rather than increase federal spending massively, Trump said: “Every federal dollar should be leveraged by partnering with state and local governments and, where appropriate, tapping into private-sector investment.” The administration has already released an outline of a plan that would make it easier for states to build tollways and to privatize rest stops along interstate highways.

McKinsey & Company researchers say that $150 billion a year will be required between now and 2030, or about $1.8 trillion in total, to fix all the country’s infrastructure needs. The American Society of Civil Engineers, a lobbying group with an interest in infrastructure spending, puts it at $2 trillion over 10 years. Trump said any infrastructure bill needed to cut the regulation and approval process that he said delayed the building of bridges, highways and other infrastructure. He wants the approval process reduced to two years, “and perhaps even one.” Cutting regulation is a top priority of business lobbying groups with a stake in building projects and the U.S. Chamber of Commerce.

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Just the kind of folk you want in charge of your health. With your medical needs standing in the way of their profits.

Trump Joins Bezos, Dimon, Buffett In Pledge To Stop Soaring Drug Prices (MW)

President Trump pledged to bring down drug prices. “One of my greatest priorities is to reduce the price of prescription drugs,” Trump said during his State of the Union address on Tuesday evening. “In many other countries, these drugs cost far less than what we pay in the United States and it’s over, very unfair. That is why I have directed my administration to make fixing the injustice of high drug prices one of our top priorities for the year.” Mark Hamrick, Washington, D.C. bureau chief at Bankrate.com, said the president has made that promise before. “Will his choice of a former drug industry executive, Alex Azar, now the head of Health and Human Services, deliver results on that front?” he said. “I’d prefer to place my bet on the partnership just announced by Berkshire Hathaway, J.P. Morgan Chase and Amazon.”

Earlier Tuesday, Amazon, Berkshire Hathaway and JP Morgan Chase, three of the biggest companies in the U.S., surprised the health-care industry on Tuesday with a plan to form a company to address rising health costs for their U.S. employees. They said it will be “free from profit-making incentives and constraints.” Health-care costs have skyrocketed over the last 60 years, according to the Kaiser Family Foundation, a nonprofit, private foundation based in Washington, D.C. In 1960, hospital costs cost $9 billion. In 2016, they cost $1.1 trillion. In 1960, physicians and clinics costs were $2.7 billion, but ballooned to $665 billion. Prescription drug prices soared from $2.7 billion in 1960 to $329 billion. U.S. health-care spending reached $3.3 trillion, or $10,348 per person in 2016.

The Trump administration has pledged to roll back the 2010 Affordable Care Act, perhaps Barack Obama’s signature achievement as U.S. president. Roughly 1 million people will lose their insurance under Trump’s plans, according to the Congressional Budget Office. Berkshire Hathaway chairman and CEO Warren Buffett didn’t hold back in excoriating the health-care industry. “The ballooning costs of health care act as a hungry tapeworm on the American economy,” Buffett said. Amazon founder CEO Jeff Bezos and J.P. Morgan Chase chairman and CEO Jamie Dimon were more measured in their remarks. “Amazon, Chase and Berkshire Hathaway think they can do it better than the insurance companies,” said Jamie Court, president of Consumer Watchdog. “There’s a lot of frustration with the high cost of health insurance, yet government’s offering almost no systemic solutions. It’s as big a change as I have seen in the market in years.”

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Just do it?! Perhaps it makes sense not to release it before SOTU, it would have been the only talking point.

Trump Says ‘100%’ After He’s Asked to Release GOP Memo (BBG)

President Donald Trump was overheard Tuesday night telling a Republican lawmaker that he was “100%” planning to release a controversial, classified GOP memo alleging bias at the FBI and Justice Department. As he departed the House floor after delivering his State of the Union address, C-SPAN cameras captured Representative Jeff Duncan, a South Carolina Republican, asking Trump to “release the memo.” Republican lawmakers say the four-page document raises questions about the validity of the investigation into possible collusion between Trump’s campaign and Russia, now led by Special Counsel Robert Mueller. “Oh yeah, don’t worry, 100%,” Trump replied, waving dismissively. “Can you imagine that? You’d be too angry.”

Republicans in the House moved to release the memo, authored by House Intelligence Chairman Devin Nunes, in a party-line vote on Monday. The move has been opposed by Democrats, who argue the memo gives an inaccurate portrayal of appropriate actions undertaken by law enforcement, and by the Justice Department, which has said it should remain classified. Releasing the memo has become a cause for conservative congressional Republicans, who say the FBI and the Justice Department pursued the investigation of possible Russian ties to the Trump presidential campaign under false pretenses. Trump has as many as five days to review the document for national security concerns, and White House officials insisted earlier Tuesday he hadn’t yet seen the document.

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Talk about your American Dream: “..households are living paycheck-to-paycheck even if those paychecks are reasonably large and even if life is comfortable at the moment.”

Saving Rate Drops to 12-Year Low As 50% of Americans Don’t Have Savings (WS)

In terms of dollars, personal saving dropped to a Seasonally Adjusted Annual Rate of $351.6 billion, meaning that at this rate in December, personal savings for the whole year would amount to $351.6 billion. This is down from the range between $600 billion and $860 billion since the end of the Financial Crisis. But who is – or was – piling up these savings? Numerous surveys provide an answer, with variations only around the margins. For example, the Federal Reserve found in its study of US households: Only 48% of adults have enough savings to cover three months of expenses if they lost their income. An additional 22% could get through the three-month period by using a broader set of resources, including borrowing from friends and selling assets. But 30% would not be able to manage a three-month financial disruption. 44% of adults don’t have enough savings to cover a $400 emergency and would have to borrow or sell something to make ends meet.

Folks who had experienced hardship were more likely to resort to “an alternative financial service” such as a tax refund anticipation loan, pawn shop loan, payday loan, auto title loan, or paycheck advance, which are all very expensive. Similarly, Bankrate found that only 39% of Americans said they’d have enough savings to be able to cover a $1,000 emergency expense. They rest would have to borrow, sell, cut back on spending, or not deal with the emergency expense. All these surveys say the same thing: about half of Americans have little or no savings though many have access to some form of credit, including credit cards, pawn shops, payday lenders, or relatives. So what does it mean when the “saving rate” declines?

Many households spend more than they make. For them, the personal saving rate is a negative number. This negative personal saving rate translates into borrowing, which explains the 5.7% year-over-year surge in credit card debt, and the 5.5% surge in overall consumer credit. It boils down to this: most of the positive saving rate, with savings actually increasing, takes place at the top echelon of the economy – at the top 40%, if you will – where households are flush with cash and assets and where the saving rate is very large. But the growth in borrowing for consumption items (the negative saving rate) takes place mostly at the bottom 60%, where households are living paycheck-to-paycheck even if those paychecks are reasonably large and even if life is comfortable at the moment.

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Peculiar: $2.3 billion ‘worth’ of a dollar-pegged ‘currency’, backed by nothing much in proof.

U.S. Regulators Subpoena Crypto Exchange Bitfinex, Tether (BBG)

U.S. regulators are scrutinizing one of the world’s largest cryptocurrency exchanges as questions mount over a digital token linked to its backers. The U.S. Commodity Futures Trading Commission sent subpoenas on Dec. 6 to virtual-currency venue Bitfinex and Tether, a company that issues a widely traded coin and claims it’s pegged to the dollar, according to a person familiar with the matter, who asked not to be identified discussing private information. The firms share the same chief executive officer. Tether’s coins have become a popular substitute for dollars on cryptocurrency exchanges worldwide, with about $2.3 billion of the tokens outstanding as of Tuesday.

While Tether has said all of its coins are backed by U.S. dollars held in reserve, the company has yet to provide conclusive evidence of its holdings to the public or have its accounts audited. Skeptics have questioned whether the money is really there. “We routinely receive legal process from law enforcement agents and regulators conducting investigations,” Bitfinex and Tether said Tuesday in an emailed statement. “It is our policy not to comment on any such requests.” Bitcoin, the biggest cryptocurrency by market value, tumbled 10% on Tuesday. It fell another 3.2% to $9,766.41 as of 9:19 a.m. in Hong Kong, according to composite pricing on Bloomberg. The virtual currency hasn’t closed below $10,000 since November.

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Who’s aiding Spain in keeping its problems hidden? 30,000 complaints in 9 months, and the ECB is silent?!

Customer Lawsuits Pummel Spanish Banks (DQ)

Following a succession of consumer-friendly rulings, bank customers in Spain are increasingly taking their banks to court. And many of them are winning. Last year an unprecedented wave of litigation against banks forced the Ministry of Justice to set up dozens of courts specialized in mortgage matters to prevent the collapse of the rest of the national judicial system. The Bank of Spain, according to its own figures, received 29,957 complaints from financial consumers between January and September 2017 — already double that of the previous year and by far the highest number of complaints registered since 2013, a record year when investors and customers were desperately trying to claw back the money they’d lost in the preferred shares that issuing banks had pushed on their own customers as savings products.

In 2017, eight out of 10 complaints related to one key product: mortgages, and in particular the so-called “floor clauses” contained within them. These floor clauses set a minimum interest rate — typically of between 3% and 4.5% — for variable-rate mortgages, even if the Euribor dropped far below that figure. This, in and of itself, was not illegal. The problem is that most banks failed to properly inform their customers that the mortgage contract included such a clause. Those that did, often told their customers that the clause was an extreme precautionary measure and would almost certainly never be activated. After all, they argued, what are the chances of the Euribor ever dropping below 3.5% for any length of time? At the time (early 2009), Europe’s benchmark rate was hovering around the 5% mark.

Within a year it had crashed below 1% and has been languishing at or below zero ever since. As a result, most Spanish banks were able to enjoy all the benefits of virtually free money while avoiding one of the biggest drawbacks: having to offer customers dirt-cheap interest rates on their variable-rate mortgages. But all that came to a crashing halt in May 2013 when Spain’s Supreme Court ruled that the floor clauses were abusive and that the banks must reimburse all the funds they’d overcharged their mortgage customers — but only from the date of the ruling! Then, on December 21, 2016, the European Court of Justice (ECJ) delivered a further hammer blow when it acknowledged the right of homeowners affected by “floor clauses” to be reimbursed money dating back to when the mortgage contract was first signed. Since the ECJ ruling, law firms are now so confident of winning floor-clause cases that they’re even offering no win, no-fee deals.

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US and UK suffer from the exact same problem.

Britons Ever More Deeply Divided Over Brexit (R.)

The social divide revealed by Britain’s 2016 vote to leave the European Union is not only here to stay but deepening, according to academic research published on Wednesday. Think tank The UK in a Changing Europe said Britons were unlikely to change their minds about leaving the EU, despite the political and economic uncertainty it has brought, because attitudes are becoming more entrenched. “The (Brexit) referendum highlighted fundamental divisions in British society and superimposed a leave-remain distinction over them. This has the potential to profoundly disrupt our politics in the years to come,” said Anand Menon, the think tank’s director.

Britain is negotiating a deal with the EU which will shape future trade relations, breaking with the bloc after four decades, but the process is complicated by the divisions within parties, society and the government itself. Menon said the research, based on a series of polls over the 18-month period since Britain voted to leave the European Union, showed 35% of people self-identify as “Leavers” and 40% as “Remainers”. Research also found that both sides had a tendency to interpret and recall information in a way that confirmed their pre-existing beliefs which also added to the deepening of the impact of the vote. The differences showed fragmentation was more determined by age groups and location than by economic class.

Polls have shown increasing support for a second vote on whether or not to leave the European Union once the terms of departure are known, but such a vote would not necessarily provide a different result, a poll by ICM for the Guardian newspaper indicated last week. The report also showed that age was a better pointer to how Britons voted than employment. Around 73% of 18 to 24-year-olds voted to stay in the EU, but turnout among that group was lower than among older voters. “British Election Study surveys have suggested that, in order to have overturned the result, a startling 97% of under-45s would have had to make it to the ballot box, as opposed to the 65% who actually voted,” the report said.

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How China hides debt through swaps. As US and EU have done for ages now.

The GDP of Bridges to Nowhere (Michael Pettis)

In most economies, GDP growth is a measure of economic output generated by the performance of the underlying economy. In China, however, Beijing sets annual GDP growth targets it expects to meet. Turning GDP growth into an economic input, rather than an output, radically changes its meaning and interpretation. On January 18, 2018, China’s National Bureau of Statistics announced that the country’s GDP grew by 6.9% in 2017. A day earlier, the People’s Bank of China (PBoC) announced that total social financing (TSF) in 2017 had increased to 19.44 trillion renminbi.

[..] I was recently part of a discussion on a listserv that brings together Chinese and foreign experts to exchange views on China-related topics. What set off this discussion was a claim that the Chinese economy began to take deleveraging seriously in 2017. Everyone agreed that debt in China is still growing far too quickly relative to the country’s debt-servicing capacity, but the pace of credit growth seems to have declined in 2017, even as real GDP growth held steady and, more importantly, nominal GDP growth increased. I was far more skeptical than some others about how to interpret this data. It is not just the quality of data collection that worries me, but, more importantly, the prevalence in China of systemic biases in the way the data is collected. Not all debt is included in TSF figures. The table above, for example, indicates a fall in TSF in 2015, but this did not occur because China’s outstanding credit declined.

[..] in 2015 there was a series of debt transactions (mainly provincial bond swaps aimed at reducing debt-servicing costs and extending maturities) that extinguished debt that had been included in the TSF category and replaced it with debt not included in TSF. The numbers are large. According to the China Daily, there were 3.2 trillion renminbi worth of bond swaps in 2015, plus an additional 600 billion renminbi of new bonds issued. If we adjust TSF by adding these back, rather than indicate a decline of 6.4%, we would have recorded an increase of 15.7%. [..] The point is that the deceleration in credit growth implied by TSF data might indeed reflect the beginning of Chinese deleveraging, but it could also reflect the surge in regulatory concern. In the latter case, this would mean that China has experienced not the beginnings of deleveraging, but rather a continuation of the trans-leveraging observers have seen before.

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Jan 282018
 


Paul Cezanne Sugar Bowl, Pears and Blue Cup c.1866

 

Trump Moving On to Infrastructure Push (BBG)
Stock Market Setting Records In Levitation (Lyons)
Happy Landings (Jim Kunstler)
The Founding Fathers Worst Nightmare Come True (CH)
Illinois Ponders Pension-Fund Moonshot: a $107 Billion Bond Sale
The Dark Side of America’s Rise to Oil Superpower (BV)
Saudi Frees Billionaires Including Alwaleed as Ritz Jail Empties (BBG)
German Minister Urges Fast Passage Of EU Law On Chinese Takeovers (R.)
Spanish Court Suspends Puigdemont’s Return To Power In Catalonia (AFP)
British Lords Get Ready to Disrupt Brexit (BBG)
Corbyn Under Pressure To Change Direction On Brexit (G.)
Facebook Doesn’t Care (Atlantic)
In 2017, The Oceans Were By Far The Hottest Ever Recorded (G.)

 

 

State of the Union on Tuesday. Look for grand plans. $1.5 trillion?!

Trump Moving On to Infrastructure Push (BBG)

President Donald Trump plans to use Tuesday’s State of the Union address to build momentum for sweeping legislation on infrastructure and immigration that could buoy the White House and fellow Republicans ahead of crucial midterm elections. Emboldened by a booming economy and victory in his stare-down with Senate Democrats over government funding, Trump will make the case that the Republican tax cuts passed in December and his administration’s efforts to curb regulations are drawing investment to the U.S. and creating jobs, said a White House official who discussed the speech on condition of anonymity. There are few obvious areas for compromise, and little incentive to do so among increasingly polarized lawmakers whose chief concern remains an upcoming election season primed for a wave of votes protesting Trump.

Yet the president also aims to strike a bipartisan tone, the official said – a stark departure from his address to Congress a year ago. That speech delighted supporters, who saw his on-script performance as evidence that Trump, a mercurial political novice, could seize the power of the bully pulpit. This year, aides say, he’ll offer a future-focused vision. His agenda, the official said, includes a long-anticipated plan to rebuild and improve the nation’s infrastructure, continuing efforts to cut regulations, and an overhaul of the immigration system – campaign promises that got set aside last year as the administration focused on efforts to repeal Obamacare and pass the tax overhaul.

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Hell no, no bubble.

Stock Market Setting Records In Levitation (Lyons)

In our habitation within the investment-based social media realm, we have noticed a ongoing discussion between market observers related to the present stock rally. On the one hand, there is a loud chorus from folks (likely many of whom are frustrated non-participants in the rally) pointing out the unusual, and perhaps inorganic, nature of the incessant rally. On the other hand, you have the assured (condescending?) reminders from the other side (i.e., folks “killing it” at the moment) that an upward trajectory is the “normal” course of action for stocks, historically speaking. So which contingent is correct? They both are, to an extent. Yes, it has been far more typical for stocks to rise than fall over the past 100-plus years.

Thus, we should not be surprised by a rally, even in the face of elevated valuations, sentiment, etc. However, an unwillingness to acknowledge the noteworthy, even historic, nature of the current rally, would be an indication of either willful denial or potentially harmful ignorance. This week, we take a look at some of the ways in which our current rally is truly unique from a broad historical basis. Today, we note the torrid pace at which the stock market is racking up new 52-week highs. Specifically, the Dow Jones Industrial Average (DJIA) is in the midst of a historic run of new highs. Over the past 100 days, the index has scored no fewer than 46 new 52-week highs. That is the most new highs the DJIA has ever accumulated over a 100-day stretch.

This new record surpasses the former mark of 45 set in 1954. And looking back over the last 100-plus years, there have now been just 14 unique occasions with even 35 new highs over a 100-year span. So will the new highs continue from here – or is there nowhere to go but down at this point? Well, we’re not going to pretend that a new high is a bad thing. In fact, it’s about the most bullish thing a security or index can do – no resistance at all-time highs, you know. Furthermore, the momentum often generated by moves to new highs can be a powerful and (at least, temporarily) persisting phenomenon. That is, until the final high of the run. Obviously one high will eventually mark the top and the upward momentum will cease. Are we at that point now? Are stocks going to come crashing back to earth – or can the market continue its levitation act a little longer?

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“How long do you think the equity indexes will levitate once the bond market implodes?”

Happy Landings (Jim Kunstler)

A financial smash-up is really the only thing that will break the awful spell this country is in: the belief that everyday life can go on when nothing really adds up. It seems to me that the moment is close at hand. Treasury Secretary Mnuchin told the Davos crowd that the US has “a weak dollar” policy. Is that so? Just as his department is getting ready to borrow another $1.2 trillion to cover government operations in the year to come. I’m sure the world wants nothing more than to buy bucket-loads of sovereign bonds backed by a falling currency — at the same time that the Treasury’s partner-in-crime, the Federal Reserve, is getting ready to dump an additional $600 billion bonds on the market out of its over-stuffed balance sheet. I’d sooner try to sell snow-cones in a polar bomb-cyclone.

When folks don’t want to buy bonds, the interest rates naturally have to go higher. The problem with that is your country’s treasury has to pay the bond-holders more money, but the only thing that has allowed the Treasury to keep borrowing lo these recent decades is the long-term drop of interest rates to the near-zero range. And the Fed’s timid 25-basis-point hikes in the overnight Fed Fund rate have not moved the needle quite far enough so far. But with benchmark ten-year bond rate nosing upward like a mole under the garden toward the 3.00% mark, something is going to give.

How long do you think the equity indexes will levitate once the bond market implodes? What vaporizes with it is a lot of the collateral backing up the unprecedented margin (extra borrowed money) that this rickety tower of financial Babel is tottering on. A black hole is opening up in some sub-basement of a tower on Wall Street, and it will suck the remaining value from this asset-stripped nation into the vacuum of history like so much silage. Thus will begin the harsh era of America screwing its head back on and commencing the salvage operation. We’ll stop ricocheting from hashtag to hashtag and entertain a few coherent thoughts, such as, “…Gee, it turns out you really can’t get something for nothing….” That’s an important thought to have when you turn around and suddenly discover you’ve got nothing left.

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Founding fathers and inequality.

The Founding Fathers Worst Nightmare Come True (CH)

As the total debt grows (total debt now essentially equals GDP), the denominator is larger and the resultant debt spending must be that much larger to have the same impact. For example, to have the same impact as the ’09 debt binge, a $4+ trillion increase (annually) would be necessary to have the same impact as the $0.2 trillion spent in ’83 or the $2.1 trillion spent in ’09. However, in the next “crisis”, we should expect a $4 trillion jolt (annual) and perhaps as much as $20 trillion in the next episode of this ongoing “crisis” to achieve an ’83 or ’09 like stimuli. But this may not have nearly the impact as previous.

Typically, deficit spending and interest rate cuts have gone hand in hand but with rates having been at zero for nearly a decade before the recent, minor rise…a move to cut rates from anywhere near current levels back to zero will likely have little impact and not be capable of amplifying the deficit spending. Perhaps significantly greater debt creation will be necessary to have a like impact as that of ’83 or ’09. But, of course, the impact on the debt to GDP ratio will be an irrevocable moon shot into Japan style debt to GDP levels. Perhaps the sanity of an economy built on building new homes for a core population that is now shrinking is highly questionable (chart below)?

And to round it out, the annual growth of the 15-64yr/old US core population versus the Wilshire 5000 (representing the value of all publicly traded US stocks).

What should already be clear will be obvious for everyone…the federal “debt” being created isn’t actually “debt” at all. It is being created and spent with no intention of ever repaying it and the move back to zero % interest rates (or more likely NIRP) on that “debt” will make clear that it is simply centrally created and centrally directed monetization. And the resultant wealth is being centrally directed to a shrinking minority of asset holders at the expense of the vast majority. The founding fathers worst nightmare come true.

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Where greed meets despair.

Illinois Ponders Pension-Fund Moonshot: a $107 Billion Bond Sale

Lawmakers in Illinois are so desperate to shore up the state’s massively underfunded retirement system that they’re willing to entertain an eye-popping wager: Borrowing $107 billion and letting it ride in the financial markets. The legislature’s personnel and pensions committee plans to meet on Jan. 30 to hear more about a proposal advanced by the State Universities Annuitants Association, according to Representative Robert Martwick. The group wants Illinois to issue the bonds this year to get its retirement system nearly fully funded, assuming that the state can make more on its investments than it will pay in interest. It would be by far the biggest debt sale in the history of the municipal market, and in one fell swoop would be more than Puerto Rico amassed in the run up to its record-setting bankruptcy.

“We’re in a situation in Illinois where our pension debt is just crushing,” Martwick, a Democrat who chairs the committee, said in a telephone interview. “When you have the largest pension debt in the world, you probably ought to be thinking big.” Illinois owes $129 billion to its five retirement systems after years of failing to make adequate annual contributions. Because the state’s constitution bans any reduction in worker retirement benefits, the government’s pension costs will continue to rise as it faces pressure to pay down that debt, a squeeze that has pushed Illinois’s bond rating to the precipice of junk. Many American governments have sold bonds for their pensions, albeit on a much smaller scale. Illinois did so in 2003, when it issued a record $10 billion of them.

New Jersey also tried it, only to see its pension shortfall soar again after the state failed to make adequate payments into the system for years. Detroit’s pension-fund borrowing in 2005 and 2006 helped push it into bankruptcy. On the whole, the track record has been mixed, according to a study by the Center for Retirement Research at Boston College. Much hinges on timing the stock market: While most pension bonds have been profitable because of equity gains since the recession, those sold after the late 1990s rally or before the 2008 crash lost money, the study found. The S&P 500 Index climbed 19 percent last year and has continued to hit new highs.

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Oil is power.

The Dark Side of America’s Rise to Oil Superpower (BV)

The last time U.S. drillers pumped 10 million barrels of crude a day, Richard Nixon was in the White House. The first oil crisis hadn’t yet scared Americans into buying Toyotas, and fracking was an experimental technique a handful of engineers were trying, with meager success, to popularize. It was 1970, and oil sold for $1.80 a barrel. Almost five decades later, with oil hovering near $65 a barrel, daily U.S. crude output is about to hit the eight-digit mark again. It’s a significant milestone on the way to fulfilling a dream that a generation ago seemed far-fetched: By the end of the year, the U.S. may well be the world’s biggest oil producer. With that, America takes a big step toward energy independence. The U.S. crowing from the top of a hill long occupied by Saudi Arabia or Russia would scramble geopolitics. A new world energy order could emerge.

That shuffling will be good for America but not so much for the planet. For one, the influence of one of the most powerful forces of the past half-century, the modern petrostate, would be diminished. No longer would “America First” diplomats need to tiptoe around oil-supplying nations such as Saudi Arabia. OPEC would find it tougher to agree on production guidelines, and lower prices could result, reopening old wounds in the cartel. That would take some muscle out of Vladimir Putin’s foreign policy, while Russia’s oligarchs would find it more difficult to maintain the lifestyles to which they’ve become accustomed. President Donald Trump, sensing an opportunity, is looking past independence to what he calls energy dominance. His administration plans to open vast ocean acreage to offshore exploration and for the first time in 40 years allow drilling in the Arctic National Wildlife Refuge.

It may take years to tap, but the Alaska payoff alone is eye-popping—an estimated 11.8 billion barrels of technically recoverable crude. It sounds good, but be careful what you wish for. The last three years have been the hottest since recordkeeping began in the 19th century, and there’s little room in Trump’s plan for energy sources that treat the planet kindly. Governors of coastal states have already pointed out that an offshore spill could devastate tourism—another trillion-dollar industry—not to mention wreck fragile littoral environments. Florida has already applied for a waiver from such drilling. More supply could lower prices, in turn discouraging investments in renewables such as solar and wind. Those tend to spike when oil prices rise, so enthusiasm for nonpolluting, nonwarming energies of the future could wane. For now, though, the petroleum train is chugging. And you can thank the resilience of the U.S. shale industry for it.

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Oil is power. Twitter shares are not. They’re just money.

Saudi Frees Billionaires Including Alwaleed as Ritz Jail Empties (BBG)

Saudi Arabia freed Prince Alwaleed bin Talal and several of the kingdom’s most prominent businessmen from detention, clearing out the Ritz-Carlton hotel that served as a jail for the country’s elite during a controversial crackdown on corruption. Prince Alwaleed, the billionaire chairman of Riyadh’s Kingdom Holding Co. who owns stakes in Citigroup and Twitter, returned home on Saturday after reaching a settlement with authorities, a senior government official said on condition of anonymity. He will remain at the helm of his company, the official said, declining to provide the other terms of the deal. Waleed al-Ibrahim, head of a major media firm, and retail billionaire Fawaz Al Hokair were also freed after agreeing to deals, another government official said.

The prince’s release came just hours after Alwaleed told Reuters in an interview that he expected to go home soon and retain control of his company, calling his detention a “misunderstanding” and expressing support for the kingdom’s rulers. With the suspects’ names and evidence against them never officially announced, the detentions had raised concerns about transparency among foreign investors – vital to Crown Prince Mohammed bin Salman’s plan to diversify the economy away from oil. The departures from the hotel mark the end of the first phase of Prince Mohammed’s anti-corruption campaign, which shook the kingdom when it was launched in November. Hundreds of suspects were arrested, including some of the country’s richest men and its top economic policymaker.

Officials say the government expects to reap more than $100 billion from settlements with detainees in exchange for their freedom. Others have been transferred to prison to face trial, the Wall Street Journal reported. Also released after agreeing to settlements were Khalid al-Tuwaijri, head of the royal court under the late King Abdullah, and Prince Turki bin Nasser, who was involved in a massive arms sale that led to corruption probes in the U.K. and the U.S., one of the government officials said. Several of those released from detention earlier appear to be returning to their lives as usual. Among them is former finance minister and minister of state, Ibrahim al-Assaf, who recently led Saudi Arabia’s delegation to the World Economic Forum in Davos, Switzerland.

Read more …

While taking over and buying up southern Europe, Germans protect their own economy from the very same.

German Minister Urges Fast Passage Of EU Law On Chinese Takeovers (R.)

Germany wants to acquire the legal means to take a closer look at bids from Chinese companies to acquire German and European companies in order better to protect technologies, a German minister told newspaper Welt am Sonntag. Matthias Machnig, state secretary in Germany’s economics ministry, said it was urgent that proposed Europe-wide measures to police surging Chinese investment be adopted by the end of this year. “It is essential that we get a tougher law in the European Union this year to resist takeover fantasies or outflows of technology or know-how,” he said in an interview, excerpts of which were made available on Saturday.

The paper cited a study by the Cologne Institute for Economic Research that showed the volume of known Chinese investments in Germany had risen to €12.1 billion ($15.03 billion) in 2017 from around €11 billion the year before and just €100 million seven years ago. Concern has been growing across Europe at China’s buying spree on the continent, with investors snapping up often iconic businesses in a way many fear could threaten Europe’s position as a high-value economy. “With its innovative companies, the EU is attractive for many around the world,” Machnig said. “Takeovers are becoming more frequent, often under market-distorting conditions.”

Read more …

Rajoy lost two elections, one of which he himself called. This is very much how democracy is viewed in Europe.

Spanish Court Suspends Puigdemont’s Return To Power In Catalonia (AFP)

Spain’s constitutional court on Saturday announced it was blocking Catalonia’s ousted separatist leader Carles Puigdemont from returning to power in the region while he remains the subject of legal action. The court said in a statement that its 12 magistrates had decided unanimously “to preventively suspend the investiture of Puigdemont unless he appears in the (regional) parliament in person with prior judicial authorisation”. Puigdemont, who fled to Belgium after the Catalan parliament declared independence in October, was earlier this week chosen as candidate to lead Catalonia again, with the regional parliament set to vote on the issue in Barcelona on Tuesday . This despite the fact that he faces arrest for rebellion, sedition and misuse of public funds over his attempt to break Catalonia from Spain as soon as he returns to the country.

He has said he could be sworn in to office remotely, via videoconference from Brussels, a plan Spain’s central government opposes. The constitutional court warned all members of the Catalan parliament of “their responsibilities” and warned against disobeying the order to suspend any investiture. The magistrates said they needed six more days to consider a government bid to annul the nomination of Puigdemont as a candidate for the regional presidency. Puigdemont has said he would rather return to Spain, but without any risk of arrest. “The government must use every tool made available by the laws and the constitution to make sure that a fugitive, someone who is on the run from the law and the courts, cannot be illegitimately be sworn in,” Spain’s Deputy Prime Minister Soraya Saenz de Santamaria said Friday after the government lodged the legal bid to keep Puigdemont from returning to power.

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It’s getting hard to predict where Brexit will be by the end of 2018. Not where it is now, that’s for sure.

British Lords Get Ready to Disrupt Brexit (BBG)

The bumpy journey toward Brexit reaches another fork in the road this week as the upper chamber of the British parliament plans to rewrite a key piece of Prime Minister Theresa May’s legislation. What happens to the European Union Withdrawal Bill in the predominantly pro-EU House of Lords could lead to a smoother divorce, a showdown with the government or even a constitutional crisis. It makes planned changes by the peers more than just a perfunctory stage in the sometimes complex democratic machinery of Westminster. The law aims to replicate thousands of existing EU regulations so there’s no legal black hole on the day Britain’s membership ceases, currently set for March 29 next year. That process could go awry if the lords halt or, more likely, demand changes that might include delaying the exit date or increasing the chance of second public vote on the issue.

“Drama is not a word usually associated with the House of Lords,” said Tom Strathclyde, a Conservative peer who used to guide legislation through the upper house. “On this occasion, there really could be high drama.” Already the passage of the law has been far from smooth as opponents of May’s vision for Brexit – taking Britain out of the EU single market and customs union – try to tear it up. She suffered a serious defeat in the House of Commons last month at the hands of mutineers from her own Conservative party who are opposed to Brexit in its current form. She slapped down Chancellor of the Exchequer Philip Hammond last week after he said Brexit would only herald modest changes to Britain’s relationship with the EU. Now more rebels are set to vent their frustration in the Lords.

The role of the unelected lords is supposed to be to revise rather than block legislation that the elected members of parliament have passed. In the case of Brexit, a majority of lawmakers in the House of Commons also opposed it, although most cite the need to uphold the result of the referendum in 2016 that kicked off the whole Brexit process dominating U.K. politics. The key Commons amendment last month was that parliament will now get a final vote on the Brexit deal after an agreement with the EU on the cost of the divorce and future trading relationship. The lords can start proposing more changes on Jan. 31. A list of them will be published two days later and the government will decide how to proceed. “There is a large majority of people in the Lords who feel that Brexit is a national disaster, and we will be trying to mobilize that majority as we go through,” said Dick Newby, who leads the Liberal Democrat peers.

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But Corbyn was never a fan of the EU.

Corbyn Under Pressure To Change Direction On Brexit (G.)

Jeremy Corbyn has called key members of his shadow cabinet to an “away day” to re-examine the party’s policy and strategy on Brexit amid growing frustration in Labour ranks that it is failing to exploit mounting Tory turmoil over Europe. Party sources confirmed to the Observer that the meeting, scheduled for early February, would look at adapting and developing Labour’s approach during “phase two” of the Brexit process. The gathering – which will be seen as a response to unrest and the threat of rebellions by dozens of Labour MPs – will be held at a location “away from Westminster”, and will involve senior shadow cabinet members in policy areas most affected by the UK’s departure from the EU.

The news suggests Labour may soon announce a major shift in policy that would see it back permanent membership of some form of customs union with the EU after Brexit – opening a potentially decisive dividing line with Theresa’s May’s increasingly fractured government. A senior figure aware of the meeting said: “There are several among those who will attend who want the party to move on the single market and customs union. But Jeremy is a lifelong eurosceptic and there is still opposition to doing so. “The greatest pressure for change is from those who insist we must back permanent membership of a customs union with the EU after Brexit, not just a fudge position of backing it during a transition and leaving open what happens after, which we have at present.”

Those who have been asked to attend are understood to include members of the shadow cabinet Brexit subcommittee. They include the shadow chancellor John McDonnell, shadow Brexit secretary Keir Starmer, the shadow home secretary Emily Thornberry, and shadow home secretary Diane Abbott. Shadow ministers responsible for Northern Ireland, Scotland and Wales will also attend. With Theresa May’s government increasingly split over Brexit, and the EU withdrawal bill heading into the House of Lords on Tuesday, where it is expected to be savaged by pro-Remain peers of all parties as well as crossbenchers, a growing number of Labour MPs and peers are pressing the leadership to open up clearer dividing lines with the Tories.

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“People say they’re interested in a broad range of news from different political preferences, but Facebook knows they really want angry, outraged articles that confirm political prejudices.”

Facebook Doesn’t Care (Atlantic)

Facebook’s crushing blow to independent media arrived last fall in Slovakia, Cambodia, Guatemala, and three other nations. The social giant removed stories by these publishers from users’ news feeds, hiding them in a new, hard-to-find stream. These independent publishers reported that they lost as much as 80% of their audience during this experiment. Facebook doesn’t care. At least, it usually seems that way. Despite angry pushback in the six countries affected by Facebook’s algorithmic tinkering, the company is now going ahead with similar changes to its news feed globally. These changes will likely de-prioritize stories from professional publishers, and instead favor dispatches published by a user’s friends and family. Many American news organizations will see the sharp traffic declines their brethren in other nations experienced last year—unless they pay Facebook to include their stories in readers’ feeds.

At the heart of this change is Facebook’s attempt to be seen not as a news publisher, but as a neutral platform for interactions between friends. Facing sharp criticism for its role in spreading misinformation, and possibly in tipping elections in the United States and in the United Kingdom, Facebook is anxious to limit its exposure by limiting its role. It has long been this way. This rebalancing means different things for the company’s many stakeholders—for publishers, it means they’re almost certainly going to be punished for their reliance on a platform that’s never been a wholly reliable partner. Facebook didn’t talk to publishers in Slovakia because publishers are less important than other stakeholders in this next incarnation of Facebook. But more broadly, Facebook doesn’t talk to you because Facebook already knows what you want.

Facebook collects information on a person’s every interaction with the site—and many other actions online—so Facebook knows a great deal about what we pay attention to. People say they’re interested in a broad range of news from different political preferences, but Facebook knows they really want angry, outraged articles that confirm political prejudices. Publishers in Slovakia and in the United States may warn of damage to democracy if Facebook readers receive less news, but Facebook knows people will be perfectly happy—perfectly engaged—with more posts from friends and families instead. For Facebook, our revealed preferences—discovered by analyzing our behavior—speak volumes. The words we say, on the other hand, are often best ignored.

Read more …

Lots of Joules.

In 2017, The Oceans Were By Far The Hottest Ever Recorded (G.)

Among scientists who work on climate change, perhaps the most anticipated information each year is how much the Earth has warmed. That information can only come from the oceans, because almost all heat is stored there. If you want to understand global warming, you need to first understand ocean warming. This isn’t to say other measurements are not also important. For instance, measurements of the air temperature just above the Earth are really important. We live in this air; it affects us directly. A great commentary on 2017 air temperatures is provided by my colleague Dana Nuccitelli. Another measurement that is important is sea level rise; so too is ocean acidification. We could go on and on identifying the markers of climate change.

But in terms of understanding how fast the Earth is warming, the key is the oceans. This important ocean information was just released today by a world-class team of researchers from China. The researchers (Lijing Cheng and Jiang Zhu) found that the upper 2000 meters (more than 6000 feet) of ocean waters were far warmer in 2017 than the previous hottest year. We measure heat energy in Joules. It turns out that 2017 was a record-breaking year, 151×1022 Joules hotter than any other year. For comparison, the annual electrical generation in China is 600 times smaller than the heat increase in the ocean. The authors provide a long history of ocean heat, going back to the late 1950s.

By then there were enough ocean temperature sensors to get an accurate assessment of the oceans’ warmth. Their results are shown in the figure below. This graph shows ocean heat as an “anomaly,” which means a change from their baseline of 1981–2010. Columns in blue are cooler than the 1981-2010 period, while columns in red are warmer than that period. The best way to interpret this graph is to notice the steady rise in ocean heat over this long time period.

Read more …

Sep 092017
 
 September 9, 2017  Posted by at 1:21 pm Finance Tagged with: , , , , , , , , , ,  8 Responses »


Adolphe Yvon Genius of America c1870

 

A number of people have argued over the past few days that Hurricane Harvey will NOT boost the US housing market. As if any such argument would or should be required. Hurricane Irma will not provide any such boost either. News about the ‘resurrection’ of New Orleans post-Katrina has pretty much dried up, but we know scores of people there never returned, in most cases because they couldn’t afford to.

And Katrina took place 12 years ago, well before the financial crisis. How do you think this will play out today? Houston is a rich city, but that doesn’t mean it’s full of rich people only. Most homeowners in the city and its surroundings have no flood insurance; they can’t afford it. But they still lost everything. So how will they rebuild?

Sure, the US has a National Flood Insurance Program, but who’s covered by it? Besides, the Program was already $24 billion in debt by 2014 largely due to hurricanes Katrina and Sandy. With total costs of Harvey estimated at $200 billion or more, and Irma threating to cause far more damage than that, where’s the money going to come from?

It took an actual fight just to push the first few billion dollars in emergency aid for Houston through Congress, with four Texan representatives voting against of all people. Who then will vote for half a trillion or so in aid? And even if they do, where would it come from?

 

 

Trump’s plans for an infrastructure fund were never going to be an easy sell in Washington, and every single penny he might have gotten for it would now have to go towards repairing existing roads and bridges, not updating them -necessary as that may be-, let alone new construction.

Towns, cities, states, they’re all maxed out as things are, with hugely underfunded pension obligations and crumbling infrastructure of their own. They’re going to come calling on the feds, but Washington is hitting its debt ceiling. All the numbers are stacked against any serious efforts at rebuilding whatever Harvey and Irma have blown to pieces or drowned.

As for individual Americans, two-thirds of them don’t have enough money to pay for a $500 emergency, let alone to rebuild a home. Most will have a very hard time lending from banks as well, because A) they’re already neck-deep in debt, and B) because the banks will get whacked too by Harvey and Irma. For one thing, people won’t pay the mortgage on a home they can’t afford to repair. Companies will go under. You get the picture.

There are thousands of graphs that tell the story of how American debt, government, financial and non-financial, household, has gutted the country. Let’s stick with some recent ones provided by Lance Roberts. Here’s how Americans have maintained the illusion of their standard of living. Lance’s comment:

This is why during the 80’s and 90’s, as the ease of credit permeated its way through the system, the standard of living seemingly rose in America even while economic growth rate slowed along with incomes. Therefore, as the gap between the “desired” living standard and disposable income expanded it led to a decrease in the personal savings rates and increase in leverage. It is a simple function of math. But the following chart shows why this has likely come to the inevitable conclusion, and why tax cuts and reforms are unlikely to spur higher rates of economic growth.

 

 

There’s no meat left on that bone. There isn’t even a bone left. There’s only a debt-ridden mirage of a bone. If you’re looking to define the country in bumper-sticker terms, that’s it. A debt-ridden mirage. Which can only wait until it’s relieved of its suffering. Irma may well do that. A second graph shows the relentless and pitiless consequences of building your society, your lives, your nation, on debt.

 

 

It may not look all that dramatic, but look again. Those are long-term trendlines, and they can’t just simply be reversed. And as debt grows, the economy deteriorates. It’s a double trendline, it’s as self-reinforcing as the way a hurricane forms.

 

Back to Harvey and Irma. Even with so many people uninsured, the insurance industry will still take a major hit on what actually is insured. The re-insurance field, Munich RE, Swiss RE et al, is also in deep trouble. Expect premiums to go through the ceiling. As your roof blows off.

We can go on listing all the reasons why, but fact is America is in no position to rebuild. Which is a direct consequence of the fact that the entire nation has been built on credit for decades now. Which in turn makes it extremely vulnerable and fragile. Please do understand that mechanism. Every single inch of the country is in debt. America has been able to build on debt, but it can’t rebuild on it too, precisely because of that.

There is no resilience and no redundancy left, there is no way to shift sufficient funds from one place to the other (the funds don’t exist). And the grand credit experiment is on its last legs, even with ultra low rates. Washington either can’t or won’t -depending on what affiliation representatives have- add another trillion+ dollars to its tally, state capitals are already reeling from their debt levels, and individuals, since they have much less access to creative accounting than politicians, can just forget about it all.

Not that all of this is necessarily bad: why would people be encouraged to build or buy homes in flood- and hurricane prone areas in the first place? Why is that government policy? Why is it accepted? Yes, developers and banks love it, because it makes them a quick buck, and then some, and the Fed loves it because it keeps adding to the money supply, but it has turned America into a de facto debt colony.

If you want to know what will happen to Houston and whatever part of Florida gets hit worst, think New Orleans/Katrina, but squared or cubed -thanks to the 2007/8 crisis.

 

 

Nov 212016
 
 November 21, 2016  Posted by at 4:45 pm Finance Tagged with: , , , , , , , , , ,  7 Responses »


Theodor Horydczak “Dome of US Capitol through trees at night” 1943

 

For the second time in a few weeks (see ‘End of Growth’ Sparks Wide Discontent), former British diplomat Alastair Crooke quotes me extensively, and I gladly return the favor. Crooke here attempts to list -some of- the difficulties Donald Trump will face in executing the -economic- measures he promised to take in his campaign. Crooke argues that, as I’ve indicated repeatedly, for instance in America is The Poisoned Chalice, the financial crisis that never ended may be one of his biggest problems.

Here, again, is Alastair Crooke:

 

 

We are plainly at a pivotal moment. President-Elect Trump wants to make dramatic changes in his nation’s course. His battle cry of wanting to make “America Great Again” evokes – and almost certainly is intended to evoke – the epic American economic expansions of the Nineteenth and Twentieth centuries.

Trump wants to reverse the off-shoring of American jobs; he wants to revive America’s manufacturing base; he wants to recast the terms of international trade; he wants growth; and he wants jobs in the U.S. – and he wants to turn America’s foreign policy around 180 degrees.

The run-down PIX Theatre sign reads "Vote Trump" on Main Street in Sleepy Eye, Minnesota. July 15, 2016. (Photo by Tony Webster Flickr)

The run-down PIX Theatre sign reads “Vote Trump” on Main Street in Sleepy Eye, Minnesota. July 15, 2016. (Photo by Tony Webster Flickr)

It is an agenda that is, as it were, quite laudable. Many Americans want just this, and the transition in which we are presently in – dictated by the global elusiveness and search for growth (whatever is meant now by this term “growth”), clearly requires a different economic approach from that followed in recent decades.

As Raúl Ilargi Meijer has perceptively posited, greater self-reliance “is the future of the world, ‘post-growth’, and post-globalization. Every country, and every society, needs to focus on self-reliance, not as some idealistic luxury choice, but as a necessity. And that is not as bad or terrible as people would have you believe, and it’s not the end of the world … It is not an idealistic transition towards self-sufficiency, it’s simply and inevitably what’s left, once unfettered growth hits the skids. …

“Our entire world views and ‘philosophies’ are based on ever more and ever bigger and then some, and our entire economies are built upon it. That has already made us ignore the decline of our real markets for many years now. We focus on data about stock markets and the like, and ignore the demise of our respective heartlands, and flyover countries …

“Donald Trump looks very much like the ideal fit for this transition … What matters [here] is that he promises to bring back jobs to America, and that’s what the country needs … Not so they can then export their products, but to consume them at home, and sell them in the domestic market …There’s nothing wrong or negative with an American buying products made in America instead of in China.

“There’s nothing economically – let alone morally – wrong with people producing what they and their families and close neighbours themselves want, and need, without hauling it halfway around the world for a meagre profit. At least not for the man in the street. It’s not a threat to our ‘open societies’, as many claim. That openness does not depend on having things shipped to your stores over 1000s of miles, that you could have made yourselves, at a potentially huge benefit to your local economy. An ‘open society’ is a state of mind, be it collective or personal. It’s not something that’s for sale.”

A Great Wish

That’s Trump’s ostensible great wish, (it seems). It is not an unworthy one, but things have changed: America is no longer what it was in the Nineteenth or Twentieth centuries, neither in terms of untapped natural resources, nor societally. And nor is the rest of the world the same either.

Mr. Trump rather unfortunately may find that his chief task will not be the management of this Great Re-orientation, but more prosaically, fending off the headwinds which he will face as he hauls on the tiller of the economy.

In short, there is a real prospect that his ambitious economic “remake” may well be prematurely punctured by financial crisis.

These headwinds will not be of his making, and for the main part, they lie beyond human agency per se. They are structural, and they are multiple. They represent the accumulation of an earlier monetary doctrine which will fetter the President-elect into a small corner from which any chosen exit will carry adverse implications.

Ditto for anyone else trying to steer any ship of state in this contemporary global economy. Paradoxically – in an era moving toward greater self-sufficiency – what success Trump may have, however, will likely depend not on self-reliance so much as he would like.

For his foreign policy about turn, he will depend on finding common interest with Russian President Vladimir Putin (that should not be too hard) – and for the economic “about turn” – on Trump’s ability not to confront China, but to come to some modus vivendi with President Xi (less easy).

“Things are not what they were.” Complexity “theory” tells us that trying to repeat what worked earlier – in very different conditions – will likely not work if repeated later. In the Clinton era, for example, 85 percent of the U.S. population growth derived from the working-age population. The headwind that Trump will face is that, over the next eight years, 80 percent of the population growth will comprise 65+ year olds. And 65+ year olds are not a good engine of economic growth. This is not an uniquely American problem; it is a global trend too.

“The peak growth” (according to Econimica blog), “in the annual combined working age population (15-64 year/olds) among all the 35 wealthy OECD nations, China, Brazil, and Russia has collapsed since its 1981 peak. The annual growth in the working age population among these nations has fallen from +29 million a year to just +1 million in 2016 … but from here on, the working age population will be declining every year … These nations make up almost three quarters of all global demand for oil and exports in general. But their combined working age populations will shrink every year, from here on (surely for decades and perhaps far longer). Global demand for nearly everything is set to suffer.

(FFR stands for Federal Funds Rate: i.e. the US key interest rate) Source: https://econimica.blogspot.it/2016/11/trump-lies-no-different-than-obama-or.html

(FFR stands for Federal Funds Rate: i.e. the US key interest rate) Source: https://econimica.blogspot.it/2016/11/trump-lies-no-different-than-obama-or.html

And then there is China: It too is passing through a difficult “transition” from the old economy to an “innovative” one. It too, has an aging population and a debt problem (with a debt-to-gross domestic ratio reaching 247 percent). Trump argues that China deliberately holds down the value of its currency to gain unfair trade advantage, and he further suggests that he intends to confront the Chinese government on this key issue.

Again, Trump does have a point (many nations are managing their exchange rates precisely in order to try to “steal” a little bit extra growth from the diminished global pot). But as noted at Zerohedge, citing the analysis of One River Asset Management executive Eric Peters:

“What’s good for the US in this case [the rising dollar and interest rates in anticipation of ‘Trumponomics’], is not good for emerging markets (EMs). Emerging markets benefit from a weaker dollar, and you’re not going to get that. Emerging markets benefit from global capital flows moving in their direction and that’s not happening either. Back in February, emerging markets were in sharp decline, driven by (1) a strong dollar, (2) rising US interest rates, and (3) slowing Chinese growth. Then China spurred a massive credit stimulus, the Fed became wildly dovish, and the dollar declined sharply.

“Interest rates collapsed throughout the year. As the growing pool of dollar, euro and yen liquidity searched for a decent return, it headed to emerging markets. Trump has reignited the dollar rally, and his fiscal stimulus will force interest rates higher. This reversed everything. [the dollars are heading home]

“And to be sure, the Beijing boys don’t want to see material weakness ahead of next autumn’s Party Congress. But we’re currently near peak impulse from China’s Q1 stimulus.”

In short, Peters is saying that, with the appreciating dollar and rising interest rate environment, growth from emerging markets as a whole will falter, since emerging markets have effectively leveraged their economies to Chinese growth. It used to be the case that they were closely tied to U.S. growth, but it is now China which dominates the EMs’ trade flows [i.e. without China growth, the EMs languish]. The question is, can America reboot its growth whilst China and the EMs languish? It is another structural shift, whereas heretofore, it was vice versa: without U.S. growth, the EMs and China languished. Now it is the converse.

Hollowed-Out Economies

There are other structural changes of course which will make it harder for the industrially hollowed-out economies of the West to recuperate jobs off-shored earlier. Firstly, there has been a systemic shift of innovation and technology eastwards (often to a more skilled and better-educated workforce). This represents not only an economic event, but a redistribution of power too. In any case, technology in this new era is being more job destructive than creative.

In one sense, Trump’s economic plan to “get America working again” through massive debt-financed, infrastructure projects, harks back to the Reagan era, which was also a period in which the dollar was strong. But yet again, “things today are not what they were then.” Inflation then was at 13 percent, Interest rates were around 20 percent, and crucially, the U.S. debt to GDP ratio was a mere 35 percent (compared to today’s estimate of 71.8 percent or 104.5 percent with external debt included).

Then, as Jim Rickards has suggested, the strong dollar was deflationary (deliberately so), and interest rates had nowhere to go, but down. It was the beginning of the three decades’ bond boom, which finally seems to have come to an end, coincident with Trump’s election. Today, inflation has nowhere to go but up – as have interest rates – and the bond market, nowhere to go, but (perilously) down.

Growth and Jobs?

Can Trump then achieve growth and jobs through infrastructure expenditure? Well, “growth” is an ambiguous, shape-shifting term. The first chart shows both sides of the equation … the annual GDP growth and the annual federal debt incurred, spent, and (thus counted as part of the growth) to achieve the purported growth.

Source: https://econimica.blogspot.it/2016/11/trump-lies-no-different-than-obama-or.html

Source: https://econimica.blogspot.it/2016/11/trump-lies-no-different-than-obama-or.html

The second chart shows the annual GDP minus the annual growth in federal debt to achieve that “GDP growth.” In other words, unlike in the earlier Reagan times, more recently, the debt is producing no growth – but … well … just more debt, mostly.

In fact, what the second chart is reflecting is the dilution – through money “printing” – of purchasing power: away from one entity (the American consumer), through the intermediation of the financial sector, to other entities (mostly financial entities, and to corporations buying back their own shares). This is debt deflation: the American consumer ends having less and less purchasing power (in the sense of residual discretionary income).

The point here is that “growth” is becoming rarer everywhere. Russia and China, like everyone else, are in search for new sources for growth.

As Rickards has said, debt is the “devil” that can undo Trump’s whole schema: a “$1 trillion infrastructure refurbishment plan, along with his proposal to rebuild the military, will — at least in the short-term — significantly increase annual deficits. In fact, deficits are already soaring; the fiscal 2016 budget hole jumped to $587 billion, up from $438 in the prior year, for a huge 34% increase…in addition to this, Trump’s protectionist trade policies would implement either a 35% tariff on certain imports or would require these goods to be produced inside the United States, at much higher prices. For example, the increase in labor costs from goods made in China would be 190% when compared to the federally mandated minimum wage earner in the United States. Hence, inflation is on the way.”

In sum, self-sufficiency implies higher domestic costs and price rises for consumers.

Debt will rise. And there is seemingly already a buyers’ strike against U.S. government debt underway: well over a third of a $1 trillion worth of Treasuries were disposed of, and sold in the year to Aug. 31 by foreign Central Banks. And who is buying it? (Below, the chart shows what this purchasing looks like, as a percentage of total debt issued by the Treasury). Well, foreign central banks have disappeared. (The Chinese have not bought a U.S. Treasury bond since 2011.)

(Above: who purchased the marketable debt as a percentage, by period) Source: https://econimica.blogspot.it/2016/11/trump-lies-no-different-than-obama-or.html

(Above: who purchased the marketable debt as a percentage, by period)
Source.

 

It is the American public who are buying. Will they be willing to take on Trump’s $1 trillion infrastructure spree? Or, will it be “printed” in yet another dilution of the American consumer’s purchasing power? The question of whether the infrastructure splurge does give growth hangs very much in the balance to such answers. (Equity shares in construction firms will do okay, of course).

The bottom line: (Michael Pento, Pento Report): “If interest rates continue to rise it won’t just be bond prices that will collapse. It will be every asset that has been priced off that so called ‘risk free rate of return’ offered by sovereign debt. The painful lesson will then be learned that having a virtual zero interest rate policy for the past 90 months wasn’t at all risk free. All of the asset prices negative interest rates have so massively distorted including; corporate debt, municipal bonds, REITs, CLOs, equities, commodities, luxury cars, art, all fixed income assets and their proxies, and everything in between, will fall concurrently along with the global economy.

“For the record, a normalization of bond yields would be very healthy for the economy in the long-run, as it is necessary to reconcile the massive economic imbalances now in existence. However, President Trump will want no part of the depression that would run concurrently with collapsing real estate, equity and bond prices.”

A Pending Financial Crisis

Trump, to be fair, has said consistently throughout the election campaign that whoever won the Presidential campaign to take office in January would face a financial crisis. Perhaps he will not face the “violent unwind” of the QE and bond bubble as some experts have predicted, but many more – according to Bank of America’s survey of 177 fund managers over the last six days, and controlling just under half a trillion of assets – expect a “stagflationary bond crash.”

This has major political implications. Trump is setting out to do no less than transform the economy and foreign policy of the U.S. He is doing this against a backdrop of many of the followers of the liberal élite, so angered at the election outcome, that they reject completely his electoral legitimacy (and, with the élites themselves staying mum at this rejection of the U.S. democratic process). Movements are being organized to wreck his Presidency (see here for example). If Trump does indeed experience a severe financial “unwind” at a time of such domestic anger and agitation, matters could turn quite ugly.

 

 

Alastair Crooke is a former British diplomat who was a senior figure in British intelligence and in European Union diplomacy. He is the founder and director of the Conflicts Forum, which advocates for engagement between political Islam and the West.

May 122016
 


DPC Betsy Ross house, Philadelphia. Birthplace of Old Glory 1900

The Next US President Will Face A Recession (BBG)
America’s Middle Class Meltdown (FT)
‘Fed Doesn’t Get It About Global Excess Supply’ (MW)
The New Kings Of Wall Street (Forbes)
Italy Must Choose Between The Euro And Its Own Economic Survival (AEP)
Hong Kong Property Market in Free Fall: Kyle Bass (BBG)
China Eyes $724 Billion Of Transport Investment Over Next Three Years (R.)
Defying Debt Fears, China Bets On Infrastructure, Property (R.)
Budweiser’s ‘America’ No Longer Exists (MW)
US Anti-Poverty Campaigner Is Worried About Australia (DL)
Berlin Should Be Careful What It Wishes For (FT)
EU Parliament Raises the Rhetoric Over Turkey’s Visa-Waiver Bid (BBG)
European Rights Watchdog Complains About Greek Refugee Camps Conditions (R.)

Look what the Fed bought you! “The 83-month-old expansion is already the fourth-longest in more than 150 years..”

The Next US President Will Face A Recession (BBG)

Talk about a poisoned chalice. No matter who is elected to the White House in November, the next president will probably face a recession. The 83-month-old expansion is already the fourth-longest in more than 150 years and starting to show some signs of aging as corporate profits peak and wage pressures build. It also remains vulnerable to a shock because growth has been so feeble, averaging just about 2% since the last downturn ended in June 2009. “If the next president is not going to have a recession, it will be a U.S. record,” said Gad Levanon, chief economist for North America at the Conference Board in New York. “The longest expansion we ever had was 10 years,” beginning in 1991.

The history of cyclical fluctuations suggests that the “odds are significantly better than 50-50 that we will have a recession within the next three years,” according to former Treasury Secretary Lawrence Summers. Michael Feroli, chief U.S. economist for JPMorgan Chase & Co. in New York, puts the probability of a downturn during that time frame at about two in three. The U.S. doesn’t look all that well-equipped to handle a contraction should one occur during the next president’s term, former Federal Reserve Vice Chairman Alan Blinder said. Monetary policy is stretched near its limit while fiscal policy is hamstrung by ideological battles.

This wouldn’t be the first time that a new president was forced to tackle a contraction in GDP. The nation was in the midst of its deepest slump since the Great Depression when Barack Obama took office on January 20, 2009. His predecessor, George W. Bush, started his tenure as president in 2001 with the economy about to be mired in a downturn as well, albeit a much milder one than greeted Obama. The biggest near-term threat comes from abroad. Former IMF official Desmond Lachman said a June 23 vote by the U.K. to leave the European Union, a steeper-than-anticipated Chinese slowdown and a renewed recession in Japan are among potential developments that could upend financial markets and the global economy in the coming months. “There’s a non-negligible risk that by the time the next president takes office in January you would have the world in a pretty bad place,” said Lachman, who put the odds of that happening at 30% to 40%.

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A strange combo of how great Raleigh is and how decrepit at the same time. ‘Remarkable success story’ blah blah. The FT blows up America’s economic myths, but it does so reluctantly.

America’s Middle Class Meltdown (FT)

The erosion of America’s middle class and the resulting voter frustration that has helped fuel the presidential campaigns of Republican Donald Trump and Bernie Sanders, the populist Democratic senator from Vermont, is often portrayed as a phenomenon brought about by the collapse of well-paying manufacturing jobs over the past three decades thanks to increased automation and competition from China. But a new study by the non-partisan Pew Research Center, shared with the Financial Times, points to just how widespread the damage to America’s middle has been and how divided the country’s class structures are becoming. Median incomes fell in four-fifths of the 229 metropolitan areas studied by Pew, with the share of middle-income adults decreasing in 203 areas.

At the same time the portion of lower-income adults rose in 160 metropolitan areas between 1999 and 2014 while the share of upper-income households rose in 172. Of the metropolitan areas analysed by Pew, none saw faster population growth this century than Raleigh. Together with neighbouring Durham and the Research Triangle Park, it is celebrated as an example of how cities can transform themselves into sparky science and technology-driven hubs of innovation, or key outposts for America’s new “knowledge economy”. “It is one of the most remarkable success stories of the last 20 years, or even 30 years,” says Enrico Moretti, a University of California, Berkeley, economist and author of The New Geography of Jobs.

[..] But while Raleigh’s population continues to grow, the new data from Pew shows that the robust population growth has not necessarily translated into higher incomes for its new residents. The benefits of the boom have been shared unequally. The inflation-adjusted annual median income for a household of three in Raleigh fell by more than $10,000 to $74,283 in 2014 from $85,784 in 1999, even as its population grew by two-thirds to more than 1.3m people from just under 800,000. More surprisingly, the only income group to grow as a share of the population was its poorest. In 1999 one in five residents of the metropolitan area lived in households making two-thirds or less of the median income. By 2014 that figure had grown to one in four.

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“..the Forecaster of the Month contest for April..”? Geez, that’s for real? But the point made is relevant, even if I’m not convinced the Fed ‘doesn’t get it’.

‘Fed Doesn’t Get It About Global Excess Supply’ (MW)

The Federal Reserve is blowing it because it thinks the economy could be overheating, but the real problem is excess supply and deflationary pressure, says Steven Ricchiuto, chief economist for Mizuho Securities USA and the winner of the Forecaster of the Month contest for April. “The dynamics of supply and demand have shifted,” Ricchiuto said in an interview. “I don’t think they get it yet,” he said of the Fed. The central bank is trying to manage the economy as if excess demand were still the major problem it was in the 1970s and 1980s. But today’s global economy suffers from a different imbalance, Ricchiuto says: Excess supply. When excess demand is the normal state of the economy, then inflation is the perennial problem.

But if the economy is stuck in a rut of excess supply, then slow growth and deflation will persist. “We should be immunizing the nation against deflation,” Ricchiuto said. But, instead, the Fed still seems to be living in the 1970s, worried that the unemployment rate will go too low and that the economy will overheat. That’s why the Fed “blew it in December” when it raised interest rates. The myopic focus on unemployment is misguided, in Ricchiuto’s view. Almost all of the economic data on the production side of the economy (such as industrial output, business sales and gross domestic product) show a tepid economy. But the labor market is doing great, comparatively. The Fed reacts to the strong job news, but ignores the rest of the story. If the Fed cared about the supply side of the economy, it would see that idle resources are pulling the economy toward stagnation and deflation.

Of course, excess supply is a global problem, not just in the U.S. Other economies are trying to reduce their excess supply the quickest way they can: Devaluing their currency in hopes that they can push the problem of excess capacity onto the country with the strongest currency. These beggar-thy-neighbor policies don’t really solve the problem, at least not quickly. Everybody around the world needs to figure out how to increase domestic demand to bring supply and demand back into balance, he said. Although the Fed doesn’t get it, many voters do, and so do candidates like Bernie Sanders, Ricchiuto said. “People are recognizing deep, fundamental flaws” in the economy. They are clamoring for policies such as more spending on infrastructure, measures to reduce the concentration of wealth, and tax reform.

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In a nutshell: Banks are regulated. Blackstone is not.

The New Kings Of Wall Street (Forbes)

In March 2015 Stephen Schwarzman got a telephone call from JPMorgan vice chairman Jimmy Lee, one of Wall Street’s legendary power brokers. Lee, who died three months later, was helping General Electric unload $30 billion in commercial real estate assets lingering on its books. GE boss Jeffrey Immelt was uncomfortable with the massive financial services business his predecessor, Jack Welch, had slowly built up. During the 2008 meltdown, frozen credit markets put GE Capital’s $101 billion in commercial paper funding in peril, bringing the mighty industrial conglomerate to its knees. Lee told Schwarzman that the real estate sale was the keystone to Immelt’s reinvention plan for the 123-year-old company.

The hang-up: finding a single buyer for a portfolio that included financing for everything from Mexican warehouses to Parisian office buildings to commercial mortgages in Australia. The billions in real estate and commercial mortgages were scattered across six countries, comprising all sorts of risks. Lee, Immelt and GE Capital boss Keith Sherin knew that Blackstone Group was the only firm with three key traits: the global reach to understand all the different assets, the resources to close a deal quickly and the financial firepower to swallow the entire package. The first call went to Blackstone’s global real estate chief, Jonathan Gray, who quickly darted over to GE’s 30 Rockefeller Center offices in Manhattan.

There Sherin offered Blackstone an exclusive look for three weeks–a minuscule period of time given the scope of the assets, but also a huge opportunity. Gray agreed, and before even getting off the elevator, he was marshaling an army of 100 Blackstone real estate professionals to tear through GE Capital’s portfolio. Four weeks later, on Apr. 10, Immelt announced that Blackstone would purchase $14 billion of GE’s assets, with Wells Fargo WFC -0.65% taking $9 billion of GE’s commercial real estate mortgages. For Immelt, Blackstone was a savior. GE’s languishing stock jumped 11% on the news. It was an even better transaction for Blackstone. The private equity firm had the inside track and thus more control over the deal terms and price, which was ultimately discounted.

“It was a perfect deal for us,” Schwarzman says. “No one else in the world is set up to buy both equity assets and real estate debt on a global basis.” Indeed, Blackstone’s massive 2015 purchase, executed flawlessly, announced to the world that the bankers at JPMorgan and Goldman Sachs–who had been the premier financiers for many decades–were no longer the kings of Wall Street. There was a new pecking order that put private equity firms on top–with Blackstone at the apex and its chairman and chief executive, Schwarzman, as the most powerful banker on the planet.

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All that’s missing is a spark to start the fire.

Italy Must Choose Between The Euro And Its Own Economic Survival (AEP)

Italy is running out of economic time. Seven years into an ageing global expansion, the country is still stuck in debt-deflation and still grappling with a banking crisis that it cannot combat within the paralyzing constraints of monetary union. “We have lost nine %age points of GDP since the peak of the crisis, and a quarter of our industrial production,” says Ignazio Visco, the rueful governor of the Banca d’Italia. Each year Rome hopefully pencils in a fall in the ratio of public debt to GDP, and each year the ratio rises. The reason is always the same. Deflationary conditions prevent nominal GDP rising fast enough to outgrow the debt. The putative savings from drastic fiscal austerity – cuts in public investment – were overwhelmed by the crushing arithmetic of the ‘denominator effect’. Debt was 121pc in 2011, 123pc in 2012, 129pc in 2013.

It came close to levelling out last year at 132.7pc, helped by the tailwinds of a cheap euro, cheap oil, and Mario Draghi’s fairy dust of quantitative easing. This triple stimulus is already fading before the country escapes the stagnation trap. The IMF expects growth of just 1pc this year. The global window is closing in any case. US wage growth will probably force the Federal Reserve to raise interest rates and wild speculation will certainly force China to rein in its latest credit boom. Italy will enter the next downturn – perhaps early next year – with every macro-economic indicator in worse shape than in 2008, and half the country already near political revolt. “Italy is enormously vulnerable. It has gone through a whole global recovery with no growth,” said Simon Tilford from the Centre for European Reform.

“Core inflation is at dangerously low levels. The government has almost no policy ammunition to fight recession.” Italy needs root-and-branch reform but that is by nature contractionary in the short-run. It is viable only with a blast of investment to cushion the shock, says Mr Tilford, but no such New Deal is on the horizon. Legally, the EU Fiscal Compact obliges Italy to do the exact opposite: to run budget surpluses large enough to cut its debt ratio by 3.6pc of GDP every year for twenty years. Do you laugh or cry? “There is a very real risk that Matteo Renzi will come to the conclusion that his only way to hold on to power is to go into the next election on an openly anti-euro platform. People are being very complacent about the political risks,” said Mr Tilford. Indeed. The latest Ipsos MORI survey shows that 48pc of Italians would vote to leave the EU as well as the euro if given a chance.

The rebel Five Star movement of comedian Beppe Grillo has not faded away, and Mr Grillo is still calling for debt default and a restoration of the Italian lira to break out of the German mercantilist grip (as he sees it). His party leads the national polls at 28pc, and looks poised to take Rome in municipal elections next month. The rising star on the Italian Right, the Northern League’s Matteo Salvini, told me at a forum in Pescara that the euro was “a crime against humanity” – no less – which gives you some idea of where this political debate is going. The official unemployment rate is 11.4pc. That is deceptively low. The European Commission says a further 12pc have dropped out of the data, three times the average EU for discouraged workers.


Italy’s industrial output has fallen back to the levels of the 1980s. It has been catastrophic Credit: St Louis Fed

The youth jobless rate is 65pc in Calabria, 56pc in Sicily, and 53pc in Campania, despite an exodus of 100,000 a year from the Mezzogiorno – often in the direction of London. The research institute SVIMEZ says the birth rate in these former Bourbon territories is the lowest since 1862, when the Kingdom of the Two Sicilies in Naples began collecting data. Pauperisation is roughly comparable to that in Greece. Industrial output has dropped by 35pc since 2008, and investment by 59pc. SVIMEZ warns that the downward spiral is turning a cyclical crisis into a “permanent state of underdevelopment”. In short, southern Italy is close to social collapse, and there is precious little that premier Renzi can do about it without reclaiming Italian economic sovereignty.

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“The Chinese credit system, according to Bass, is “one of the biggest macro imbalances the world has ever seen”..”

Hong Kong Property Market in Free Fall: Kyle Bass (BBG)

Kyle Bass, the hedge-fund manager who’s wagering on a slowdown in China’s economy, said Hong Kong’s property market is in “free fall” and the credit expansion in Southeast Asian emerging markets will unravel. “Hong Kong’s in a worse position than it was in prior to the ’97 crisis today,” Bass said at the SkyBridge Alternatives Conference in Las Vegas on Wednesday. He said credit in Asian emerging markets has grown “recklessly,” citing Malaysia and Thailand. Hong Kong property prices have declined and sales are hovering near a 25-year low as the city grapples with the repercussions of a slowing Chinese economy. Home prices have dropped about 13% from a peak in September, according to data compiled by Centaline Property Agency.

The last major housing crash in the former British colony saw prices tumble almost 50% in the 12 months from October 1997. They eventually bottomed in mid-2003 when the city was swept up by the severe acute respiratory syndrome epidemic and have almost quadrupled since then. Bass, famed for betting against U.S. subprime mortgages prior to the housing crash, is predicting losses for China’s banks and raising money to start a dedicated fund for bets in the nation. He said last week at a conference that investors putting money in Asia should ask themselves if they can handle 30% to 40% writedowns in Chinese investments.

“China may be able to not tell the truth about specific output levels, or GDP figures – they might be able to fudge those numbers for a while,” Bass said at a panel discussion, moderated by Bloomberg TV’s Erik Schatzker. “But their trading partners kind of tell the truth, and you’re already seeing what’s happening in their primary trading partners.” The Chinese credit system, according to Bass, is “one of the biggest macro imbalances the world has ever seen.” The fund manager said China is already experiencing a “hard landing as we speak.” He said he isn’t a “permanent bear” on China, instead describing himself as a pragmatist.

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In lieu of welfare?! BTW, where will they borrow the money?

China Eyes $724 Billion Of Transport Investment Over Next Three Years (R.)

China will invest around 4.7 trillion yuan ($724 billion) in transport infrastructure projects over the next three years, the country’s transport ministry said in an article posted on its website late on Wednesday. The 2016-2018 plan from China’s Ministry of Transport and National Development and Reform Commission (NDRC) will see the country push forward 303 key transportation projects including railways, highways, waterways, airports and urban rail, it said. The investment splurge underlines China’s reliance on high-levels of public sector spending, credited by economists as being behind recent signs of improvement in the country’s economy, but also as creating a risk as debt levels rise.

The article, posted on the Ministry of Transport’s website, said the investment plan would improve the country’s high-speed transport networks and inter-city links to meet the demands of China’s wider economic and social development. China’s first quarter investment in infrastructure surged almost 20%, as the government looks to transport-related sectors to help support wider economic growth. The official Xinhua news agency reported earlier this month that China will invest around $12 billion this year in building aviation infrastructure.

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And yes, this is where they’ll borrow, and that means shadow banks: “..Beijing has given local governments its blessings to raise funds in the bond market, much of it through local government financing vehicles (LGFVs) that skirt official spending limits..”

Defying Debt Fears, China Bets On Infrastructure, Property (R.)

Local governments across China are binging on debt again to pump-prime their slack economies. But this time round, they are not wasting money propping up zombie factories or loss-making steel plants. Investment in industries hit by chronic overcapacity is drying up quickly. Investment in mining tumbled 18% in the first quarter from a year earlier, the most since at least the second quarter of 2004, while investment in manufacturing grew just 6%, the slowest in the same period, according to the latest data from the National Bureau of Statistics. In recent years, miners and manufacturers had tapped easy-to-access bank credit and government subsidies to fire up production even as demand began to wilt.

In a landmark move, Beijing has ordered the closure of debt-ridden zombie firms as its policy priority for 2016. In contrast, first-quarter investment in infrastructure and real estate surged 19.6% and 6.2%, respectively. The numbers reflect the government’s strategy of re-allocating capital to other engines of the economy, and in turn, providing a little respite to the steel, cement, energy and related services sectors. China will invest $11.9 billion in aviation infrastructure this year alone. It has also approved a 27.4 billion yuan high-speed rail project linking Beijing’s new airport with neighboring Hebei province. In real estate, China’s March home prices rose at the fastest clip in almost two years on the back of a boom in top-tier cities amid easy bank credit.

To boost infrastructure investment, Beijing has given local governments its blessings to raise funds in the bond market, much of it through local government financing vehicles (LGFVs) that skirt official spending limits. LGFVs have raised tens of billions of dollars through bonds in the first quarter, according to brokerage estimates, even as China skeptics warn of another debt bust. The AA-rated LGFV issuances have appealed to investors increasingly unsure of the quality of corporate paper. Overall local government bond issuances in the quarter totaled 955.4 billion yuan, according to investment firm China International Capital. Investment in infrastructure and real estate is more organized and demand-based this time, and will have a better chance of success than more speculative developments in the past, some economists say. But that’s a subject for debate.

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Fun with beer. The kind of stuff to bore your guests with while serving them ‘America’.

Budweiser’s ‘America’ No Longer Exists (MW)

Oh, Budweiser is American all right — just not in the way its cans want you to think it is. Earlier this week, the folks behind Anheuser-Busch InBev’s Budweiser brand announced their intention to relabel Budweiser as “America” from late May through the November presidential election. They’re going to sub in “US” for “AB” in the logo, switch out “King of Beers” for “E Pluribus Unum” and include the entire first stanza of “The Star-Spangled Banner” on the head of the label. Now, you could write this off by saying that A-B takes some sort of patriotic measure with Budweiser cans every year, and you’d be right, but this particular rebrand says more about Budweiser’s American tale than it likely wants to admit. For starters, “Budweiser” traces its origins back to the South Bohemia region of what is now the Czech Republic.

The city of Ceske Budejovice has been brewing beer since the 1400s, and its German-speaking residents — who called it “Budweis” — began brewing Budweiser Bürgerbräu in 1795. They began shipping that beer to the U.S. in 1875, or about a year before a German immigrant named Adolphus Busch made a trip to Bohemia and decided to name his own U.S. beer Budweiser in tribute to the Bohemian brand. Though Anheuser-Busch InBev now owns that brand, another Czech brewery — state-owned Budejovicky Budvar , founded in 1895 — has laid claim to the Budweiser name, saying it is indicative of the city where it was first made. While A-B InBev can call its beer Budweiser in North America, the United Kingdom and much of the rest of the world, Budvar has the rights to the Budweiser name in much of Europe and forces Anheuser-Busch InBev to name its version “Bud.”

When challenged in court, Budvar simply reminds folks of what Adolphus Busch himself testified in a New York courthouse in 1896: “The Budweiser beer is brewed according to the Budweiser Bohemian process. The idea was simply to brew a beer similar in quality, color, flavor and taste to the beer then made at Budweis, or in Bohemia.” If the loss of its identity in Europe didn’t sever Budweiser’s ties to the Old World, the sale of Anheuser-Busch to InBev for $52 billion back in 2008 certainly did. Not only had A-B been taken over by a company with headquarters in Belgium and Brazil — enabling it to engage in the grand American tradition of tax inversion — but cost-cutting measures reduced U.S. jobs, removed German Hallertauer Mittelfrüh hops from the equation and put pressure on suppliers of everything from rice grains to the beechwood used in “beechwood-aged” Budweiser’s touted brewing process.

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“You’re gonna lift the tax-free threshold for rich people. If you lift my tax-free threshold, that changes my life. That means that I get to say to my little girls, ‘Daddy’s not broke this weekend, we can go to the pictures.’ Rich people don’t even notice their tax-free threshold lift.”

US Anti-Poverty Campaigner Is Worried About Australia (DL)

Linda Tirado is in the green room of the ABC on Monday night during the broadcast of Q&A and she is getting madder and madder; and it’s not just from hearing #IStandWithDuncan Duncan Storrar be real in the audience that evening. Tirado, a US anti-poverty campaigner (a job we should all do), is overwhelmed by what Storrar, the 45 year-old Geelong father of two and part-time truck driver had to say about the federal government’s planned tax cuts. “You’re gonna lift the tax-free threshold for rich people. Why don’t I get it? Why do they get it?” he asked assistant treasurer Kelly O’Dwyer.

“I’ve got a disability and a low education – that means I’ve spent my whole life working off a minimum wage. You’re gonna lift the tax-free threshold for rich people. If you lift my tax-free threshold, that changes my life. That means that I get to say to my little girls, ‘Daddy’s not broke this weekend, we can go to the pictures.’ Rich people don’t even notice their tax-free threshold lift.” So, Duncan Storrar is talking, Kelly O’Dwyer is responding and Tirado is sitting in the green room, furious. She’s wondering exactly what’s been happening to Australia over the last 12 months. “Obviously I cannot tell you what a hero he is and what a sacrifice he made. To say something like that in public, to say you don’t make enough to make ends meet, that is incredibly brave.”

But she fears the change she has seen in the Australian political landscape since she was last here. She’s here as part of the Anti-Poverty Network’s conference but is keen to stay a little longer and cover the Australian election from the eyes of a survivor of the US class war. [..] “In America, we have this idea of meritocracy. If you deserve it, you will have it. If you don’t have it, it is because you don’t deserve it and the fact remains 45 million Americans are living in poverty, most of those people are in work. They’re holding down multiple jobs and we call them lazy. By definition anybody who works three jobs is not lazy and if you think so I dare you to get out of your air conditioned office and try it for yourself.”

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“..a disease whose main cause is now Germany’s own current account surplus.”

Berlin Should Be Careful What It Wishes For (FT)

Greece’s parliament this week approved reforms to the country’s creaking pensions and tax system by a larger margin than had been anticipated. But significant differences remain, notably on how large a primary budget surplus should be targeted over the next few years, and above all on the question of debt relief. The disagreement between the IMF and European governments on the latter point has come into the open. On this, the IMF is right and those Europeans who oppose relief are wrong: there can be no solution to the Greek crisis without it. Germany, driven by Wolfgang Schäuble, its finance minister, remains doggedly opposed, but even within the German government, open opposition to Mr Schäuble’s hard line has come recently from Sigmar Gabriel, economics minister.

Chancellor Angela Merkel may be tempted to ignore Mr Gabriel, whose Social Democratic party is polling poorly and whose own future as its leader is in question. German public opinion sees relief as a favour the Greeks have done little or nothing to deserve, and asks whether it will stop with Greece. The issue is not a winning one for a chancellor already under siege. Nevertheless, she would be wise to recognise the stakes for Europe as a whole. Berlin’s tenacious enforcement of austerity across the eurozone mistakes a symptom — the continued difficulties of countries like Greece — for a disease whose main cause is now Germany’s own current account surplus. The Germans have been able to persist in this illusion because without the low interest rates that Germany’s affluent voters now complain about it is doubtful whether the eurozone would have weathered the last six years at all.

Mr Schäuble might believe that the eurozone is safe come what may, even if his hard line leads to Grexit, but saving the euro will count for little if the cost is massive damage to the EU itself. Is this putting it too strongly? Perhaps it was two or three years ago but things have moved on since then. The refugee crisis has mushroomed and openly authoritarian Eurosceptic parties have profited and threaten some of the EU’s core values and principles. Euclid Tsakalotos, the Greek finance minister, warned his European counterparts recently of turning the country into a “failed state”. Even though some of his frustrated partners might think it already is, he is right: things could get much worse. It is not just about the refugee crisis although that is one factor.

There is a good deal of wishful thinking right now on this in much of central and eastern Europe. The Greeks, who despite their own deep difficulties are actually doing a great deal to help the refugees, know better: the neo-Habsburg military frontier going up across south-eastern Europe to keep out refugees will not work. There is no good alternative to helping the Greeks in the massive task that confronts them. Then there is the question of the Balkans as a whole. In Bosnia the Dayton peace settlement did one thing: it stopped the fighting. But two decades on, Bosnia remains a genuinely failed state, and Kosovo and Macedonia, too, are deeply fragile polities. The EU needs Greece to serve as a force for growth right across the Balkans and not as some kind of confirmation that the EU has decided to abandon the entire region.

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Does the parliament have the guts to say no? It’s starting to look that way. EP president Schulz has refused to send the necessary documents to be appraised.

EU Parliament Raises the Rhetoric Over Turkey’s Visa-Waiver Bid (BBG)

The European Parliament added to the war of words with Turkey over its bid for visa-free travel to Europe, highlighting the risk that a hard-fought agreement with Ankara to curb the influx of Mideast refugees will collapse. Members of the European Union assembly said Turkey must narrow the scope of its terrorism legislation to qualify for EU visa-free status. That is a prize the Turkish government sought in return for signing up to the mid-March migrant accord, which has stemmed Europe’s biggest refugee wave since World War II and eased domestic political pressure on leaders including Angela Merkel. Turkish President Recep Tayyip Erdogan has signaled he won’t bow to the European demand over terrorism legislation, citing terror threats in Turkey that his critics say are being used as cover to jail political opponents.

Adding Turkey to a list of around 60 countries whose citizens benefit from hassle-free travel to Europe requires approval by EU governments and the 28-nation Parliament. “The liberalization can only be granted if all of the criteria are fulfilled,” Mariya Gabriel, a Bulgarian member of the Christian Democrats, the EU Parliament’s biggest faction, said during a debate on Wednesday in Strasbourg, France. Tanja Fajon, a Slovenian member of the No. 2 Socialists, said: “Turkey is very important to the solution to the migration crisis, but this does not mean that we should be making promises to Turkey without ensuring that all the conditions are fulfilled.” The EU-Turkey sparring is a test of geopolitical power that combines high politics, principles and pride.

The migrant flows into Europe via Turkey over the past year have handed Erdogan leverage over the EU, which has lambasted him for cracking down on domestic dissenters and kept Turkey’s longstanding bid for membership of the bloc largely on hold. Last Friday, when commenting on the EU call for Turkish terrorism-rule changes, Erdogan said “we are going our way and you go yours.” He also dared the bloc to “go make a deal with whoever you can.” In a further sign of Ankara’s renewed confidence in dealing with the EU, Burhan Kuzu, a former adviser to Erdogan, said earlier on Wednesday that Turkey would send refugees to Europe should the EU Parliament make a “wrong decision” in the deliberations over visa-free status for Turkey. “That is blackmail,” said Sophie in ’t Veld, a Dutch member of the EU Parliament’s Liberal group. She called Erdogan a “dictator.” Cecilia Wikstroem, a Swedish Liberal, said “something is rotten in this.”

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This is Europe’s epic failure. And that is what the UK Brexit vote next month is really about: do you want to be part of this?

European Rights Watchdog Complains About Greek Refugee Camps Conditions (R.)

Urgent measures are need to address overcrowding and poor living conditions in refugee and migrant camps in Greece, Europe’s top rights watchdog warned on Wednesday. The Council of Europe, which brings together 47 countries, said some facilities were “sub-standard” and able to provide no more than the most basic needs such as food, hygiene products and blankets. The report echoes warnings by other rights groups and aid agencies who say Greece has been unable to care properly for the more than 800,000 people reaching its shores in the last year, fleeing wars or poverty in the Middle East and Africa. The Council described dire living conditions in several sites visited on a March 7-11 trip, just before the EU and Turkey reached a deal that reduced arrivals but increased the number of people held in detention awaiting asylum decisions or deportation.

It said in its report that people who reached Greece were locked away in violation of international human rights standards and lacked legal access. At Greece’s Nea Kavala temporary transit camp, people were left burning trash to keep warm and sleeping in mud-soaked tents, according to the report. The Council called for the closure of a makeshift camp in Idomeni, where some 10,000 people have been stranded en route to northern Europe due to the closure of Macedonia’s border. Germany has taken in most of the 1.3 million refugees and migrants who reached Europe across the Mediterranean in the past year, triggering bitter disputes among the 28 EU member states on how to handle the influx. Europe’s deal with Turkey last month gave its leaders some breathing space but has come under pressure since Prime Minister Ahmet Davutoglu, one of the sponsors of the accord, stepped down.

The morality and legality of the deal has been challenged by human rights groups, however, and a provision to grant Turkish citizens visa-free travel to Europe in exchange for Ankara’s help remains politically contentious. In a separate report, a trio of European Parliamentarians on Tuesday described the poor conditions faced by people who have been returned to Turkey under the deal. “We have seen how the migration policies imposed by the European Union have terrible consequences on the lives of thousands of people,” said Cornelia Ernst, a German member of the European Parliament and a co-author of that report. “Turkey has been hired as a deportation agency, putting into practice the migration policies designed in Brussels.”

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May 112016
 
 May 11, 2016  Posted by at 7:47 am Finance Tagged with: , , , , , , , ,  5 Responses »


Jack Delano Engineer at AT&SF railroad yard, Clovis, NM 1943

‘Miracle’ Needed To Save The World, Because Central Banks Can’t (SMH)
“Anonymous Voice” Signals Big Policy Change In China (ZH)
The Triggers For A New Financial Crisis (Das)
US: Neglected Nation (FT)
Big Oil Abandons $2.5 Billion in US Arctic Drilling Rights (BBG)
Germany Posts Record Current-Account Surplus (BBG)
Germany is the Eurozone’s Biggest Problem (Wolf)
London Is Building More Offices Than Ever (BBG)
NATO Is Much Worse Than A Cold War Relic (FFF.Org)
Greece Faces Its Toughest Austerity Measures Yet (G.)

Make it easier to pay off debt and we’ll all go deeper into debt.

‘Miracle’ Needed To Save The World, Because Central Banks Can’t (SMH)

The Bank of Japan and the ECB are printing billions in a “useless” attempt at stimulating demand as a “crisis of confidence” erupts over central banks and their diminishing influence. And for the same reason, the Reserve Bank of Australia may find itself powerless in trying to defeat low inflation by cutting interest rates to fresh record lows. That is the view of Vimal Gor, who is head of income and fixed interest at BT Investment Management. Mr Gor is the latest expert to question the wisdom of RBA rate cuts. “The theory says yes, but in practice it’s unclear as RBA monetary policy has no influence over commodity prices or overcapacity in Chinese and Japanese markets. This takes us back to the question of central bank credibility in being able to deliver on their objectives,” he said.

“Take negative rates any further and central banks risk putting the financial system at risk.” Inflation expectations implied by long-dated inflation swaps suggest markets are not convinced that central banks can lift prices through easy policy settings. “It is clear markets are giving up on central banks to fulfil their mandate in the inflation fighting arena.” Helicopter money, which Mr Gor agrees is a “ridiculous” idea, might be tested, but there is another idea worth exploring. “The other option is to abandon the inflation targeting mantra which has been pervasive over the last 25 years,” he says. Instead, central banks could come up with “a per capita measure of economic activity”. This would limit the pressure to keep lowering interest rates.

“The reality remains that the world is overwhelmed with debt, so that would suggest that we would need to have low rates to make repayment easier, and to discourage saving. “Ironically low rates spur further adoption of debt because of asset prices that are shooting skywards, and actually encourage more saving because income levels from the existing savings pile are too small to live on.”

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Xi doesn’t have the guts to come out and say it.

“Anonymous Voice” Signals Big Policy Change In China (ZH)

Overnight the People’s Daily published an interview with “anonymous authorities” on the topic of China’s economy. It’s a very important article as the “anonymous authorities” is considered to be Mr. Liu He, who is the economy brain of President Xi Jinping. The interview sends strong signals that China policy will shift from its aggressive easing in Q1 to a conservative position which focus on structural reforms. People’s Daily also published the “anonymous authorities” interviews in May 2015 and Jan 2016, which led to the subsequent collapse in the China A share market, because Mr. Liu (and President Xi’s camp) has been promoting structure reforms and risk controls.

For a credit driven China economy and the associated highly leveraged equities/commodities/properties markets, these’re the bad news. The A share market and China domestic commodities market had a big fall last night. Many overseas investors may think last night’s chaos is driven by the weak April import/export data announced during the weekend. I can tell you that it’s not. The local Chinese take the “anonymous authorities” article seriously and his opinion will have much deeper impact for China in the coming quarters. In general, the interview denied the “demand driven” stimulus policy adopted by China in Q1. Like other governments in the world, the CCP party and Chinese government have different sub-parties internally holding different views of the economy.

They believe their own claims are the best for China and advocate their ideas when the reality cling to them. For example, when the economy is really bad, the pro-growth camp will have upper hands and is able to push for their demand driven policies. That’s why we see China swings between structural reform and demand stimulus in the last two years. China pumped $1tn credit in Q1 to stop the falling knife, and this really cross the line of structural reform camp, so that’s why we see the article comes out right now. As the Politburo economy meeting just finished in the end of April, I believe the article delivers the consensus message agreed in the meeting.

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One overriding trigger: debt.

The Triggers For A New Financial Crisis (Das)

There are a number of potential triggers to a new crisis. The first potential trigger may be equity prices. The US stock market runs into trouble. A stronger dollar affects US exports and foreign earnings. Emerging market weakness affects businesses in the technology, aerospace, automobile, consumer products and luxury product industries. Currency devaluations combined with excess capacity, driven by debt fuelled over-investment in China, maintain deflationary pressures reducing pricing power. Lower oil prices reduce earnings, cash flow and asset values of energy producers. Overinflated technology and bio-tech stocks disappoint. Earnings and liquidity pressures reduce merger activity and stock buybacks which have supported equity values. US equity weakness flows into global equity markets.

The second potential trigger may be debt markets. Heavily indebted energy companies and emerging market borrowers face increased risk of financial distress. According to the Bank of International Settlements, total borrowing by the global oil and gas industry reached US$2.5 trillion in 2014, up 250% from US$1 trillion in 2008. The initial stress will be focused in the US shale oil and gas industry which is highly levered with borrowings that are over three times gross operating profits. Many firms were cash flow negative even when prices were high, needing to constantly raise capital to sink new wells to maintain production. If the firms have difficulty meeting existing commitments, then decreased available funding and higher costs will create a toxic negative spiral.

A number of large emerging market borrowers, such as Brazil’s Petrobras, Mexico’s Pemex and Russia’s Gazprom and Rosneft, are also vulnerable. These companies increased leverage in recent years, in part due to low interest rates to finance significant operational expansion on the assumption of high oil prices. These borrowers have, in recent years, used capital markets rather than bank loans to raise funds, cashing in on demand from yield hungry investors. Since 2009, Petrobras, Pemex and Gazprom (along with its eponymous bank) have issued US$140 billion in debt. Petrobras alone has US$170 billion in outstanding debt. Russian companies such as Gazprom, Rosneft and major banks have sold US$244 billion of bonds. The risk of contagion is high as institutional and retail bond investors worldwide are exposed.

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A nation on its way to becoming a sinkhole.

US: Neglected Nation (FT)

The American Society of Civil Engineers yesterday projected a $1.44tn investment funding gap between 2016 and 2025, warning of a mounting drag on business activity, exports and incomes. Politicians are demanding action. Hillary Clinton, the Democratic frontrunner, has called for a $275bn spending blitz, including the creation of an infrastructure bank, recalling past glories such as the interstate highway system and Hoover Dam. Donald Trump, the presumptive Republican presidential nominee, is bucking anti-spending dogma within the party by promising major programmes to renew infrastructure and create jobs — albeit without putting forward any detail on how to pay for them.

Without radical surgery, the decay in tunnels, railways and waterways will cost the US economy nearly $4tn in lost GDP by 2025 as costs rise and productivity is impeded, according to estimates from the ASCE, dragging on a recovery in output that is the shallowest since the end of the second world war. Faced with crimped public resources, President Barack Obama’s administration and some states have tried to fill infrastructure gaps by luring in private investment, including from public-private partnerships or P3s. A number of states and municipalities have lifted petrol taxes to pay for roads and bridges, even as the federal petrol tax that serves as the backbone of transport spending nationwide has remained frozen since 1993. Many argue that the recent fall in oil prices presented the perfect moment to raise petrol taxes.

Even in the heart of Washington, Memorial Bridge, a symbolic link between the north and the south of the US, might have to be closed to traffic early in the next decade if major repairs are not carried out. Around the country more than 61,000 bridges were deemed structurally deficient in 2014. Last year US public capital investment, which includes infrastructure, was just 3.4% of GDP, or $611bn, according to the president’s Council of Economic Advisers — the lowest in more than 60 years. In the White House, the inability to do more to improve roads, bridges and other infrastructure is seen as one of the major policy failures since the crisis. Mr Obama last month bemoaned the absence of a major infrastructure programme from 2012 to 2014, when borrowing costs were low and the construction industry was short of jobs.

The administration included so-called shovel-ready infrastructure projects in its $800bn stimulus bill after Mr Obama took office, but the spending fell short of what was needed for repairs and to galvanise the economy. Critics see it as a squandered opportunity. However, Jason Furman, chairman of the council, says Mr Obama made repeated attempts to get more money into infrastructure and was rebuffed. “Congress has been unwilling to substantially expand infrastructure investment — it is as simple as that,” he says.

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Price discovery.

Big Oil Abandons $2.5 Billion in US Arctic Drilling Rights (BBG)

After plunking down more than $2.5 billion for drilling rights in U.S. Arctic waters, Royal Dutch Shell, ConocoPhillips and other companies have quietly relinquished claims they once hoped would net the next big oil discovery. The pullout comes as crude oil prices have plummeted to less than half their June 2014 levels, forcing oil companies to cut spending. For Shell and ConocoPhillips, the decision to abandon Arctic acreage was formalized just before a May 1 due date to pay the U.S. government millions of dollars in rent to keep holdings in the Chukchi Sea north of Alaska. The U.S. Arctic is estimated to hold 27 billion barrels of oil and 132 trillion cubic feet of natural gas, but energy companies have struggled to tap resources buried below icy waters at the top of the globe.

Shell last year ended a nearly $8 billion, mishap-marred quest for Arctic crude after disappointing results from a test well in the Chukchi Sea. Shell decided the risk is not worth it for now, and other companies have likely come to the same conclusion, said Peter Kiernan, the lead energy analyst at The Economist Intelligence Unit. “Arctic exploration has been put back several years, given the low oil price environment, the significant cost involved in exploration and the environmental risks that it entails,” he said. All told, companies have relinquished 2.2 million acres of drilling rights in the Chukchi Sea – nearly 80% of the leases they bought from the U.S. government in a 2008 auction. Oil companies spent more than $2.6 billion snapping up 2.8 million acres in the Chukchi Sea during that sale, on top of previous purchases in the Beaufort Sea.

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Bloomberg relates this to the US, but that’s not the point. It’s what the surplus does to the rest of the EU that counts.

Germany Posts Record Current-Account Surplus (BBG)

Germany posted a record current-account surplus just days after being placed on a U.S. watchlist for countries that may have an unfair foreign-exchange advantage. The current-account gap climbed to €30.4 billion in March, up from €21.1 billion the previous month, data from the Federal Statistics Office showed on Tuesday. The nation’s trade surplus, a narrower measure that only counts imports and exports of goods and services, widened to €26 billion, also a record. The U.S. put Germany, China, Japan, South Korea and Taiwan on a new currency watchlist on April 29, saying their foreign-exchange practices bear close monitoring to gauge whether they provide an unfair trade advantage over America. The economies met two of the three criteria used to judge unfair practices under a February law that seeks to enforce U.S. trade interests.

Meeting all three would trigger action by the president to enter discussions and seek potential penalties, including being cut off from some U.S. development financing and exclusion from U.S. government contracts. While Germany has no direct influence over the value of its currency, being just one member of the 19-nation euro area, it was cited because of its current-account and trade surpluses. Taiwan made the list because of its current-account surplus and persistent intervention to weaken the currency, according to the Treasury. Germany’s excess savings could be used to boost growth in the euro area, the Treasury said at the time. A report by the IMF on Monday said the current-account surplus will probably stay near record levels this year.

The euro weakened by more than 10% against the dollar in each of 2014 and 2015, though it has strengthened this year. The single currency traded at $1.1383 at 9:04 a.m. Frankfurt time. It was at almost $1.40 in mid-2014, before the European Central Bank started an unprecedented monetary-stimulus drive that includes negative interest rates and bond purchases.

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Germany and Holland prey on Europe’s poor.

Germany is the Eurozone’s Biggest Problem (Wolf)

Why is conventional German thinking on macroeconomics so peculiar? And does it matter? The answer to the second question is that it matters a great deal. A part of the answer to the first is that Germany is a creditor. The financial crisis has given it a dominant voice in eurozone affairs. This is a matter of might, not right. Creditors’ interests are important. But they are partial, not general, interests. Recent complaints have focused on the European Central Bank’s monetary policies, especially negative interest rates and quantitative easing. Wolfgang Schauble, Germany’s finance minister, even claimed that the ECB bore half of the responsibility for the rise of the Alternative for Germany, an anti-euro party. This is an extraordinary attack.

Criticism of ECB policies is wide-ranging: they make it unnecessary for recalcitrant members to reform; they have failed to reduce indebtedness; they undermine the solvency of insurance companies, pension funds and savings banks; they have barely kept inflation above zero; and they foment anger with the European project. In brief, ECB policy has become a big threat to stability. All this accords with a conventional German view. As Peter Bofinger, an heretical member of Germany’s council of economic experts argues, the tradition goes back to Walter Eucken, the influential father of postwar ordoliberalism. In this approach, ideal macroeconomics has three elements: a balanced budget at (almost) all times; price stability (with an asymmetric preference for deflation); and price flexibility.

This is a reasonable approach for a small, open economy. It is workable for a larger country, such as Germany, with highly competitive tradeable industries. But it cannot be generalised to a continental economy, such as the eurozone. What works for Germany cannot work for an economy three times as large and far more closed to external trade. Note that in the last quarter of 2015, real demand in the eurozone was 2% lower than in the first quarter of 2008, while US demand was 10% higher. This severe weakness in demand is missing from most of the German complaints. The ECB is rightly trying to prevent a spiral into deflation in an economy suffering from chronically weak demand. As Mario Draghi, ECB president, insists, the low interest rates set by the bank are not the problem. They are instead “the symptom” of insufficient investment demand.

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Following the MO of China’s ghost cities.

London Is Building More Offices Than Ever (BBG)

Developers started a record number of central-London office projects in the six months through March as they tried to capitalize on rising rents. Construction work began on 51 office buildings during the period, Deloitte LLP said in a report on Tuesday. About 14 million square feet (1.3 million square meters) of space is now under construction, 28% more than the previous six months and the highest since March 2008, according to the report. “In just 18 months, we have seen activity nearly double,” Deloitte said in the report, which it started publishing in 1996. “This is perhaps the first survey in a long time where we are able to point to the pendulum swinging away from landlords and back toward tenants.”

About 42% of the space under construction has already been leased and vacancy rates remain at a record low of less than 4%, Deloitte said. The “tight market conditions” are likely to continue for a few more years, according to Tim Leckie at JP Morgan. “There is a risk of the cycle turning first in the City from 2018 as new supply comes online,” he said in an e-mail.

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It’s war machine.

NATO Is Much Worse Than A Cold War Relic (FFF.Org)

Whatever else might be said about Donald Trump, the fact is that he has provided a valuable service in producing a national and international discussion of NATO, the old Cold War organization whose mission was to protect Western Europe from an attack from the Soviet Union, which had been America’s partner and ally during World War II. The obvious question arises: Given that NATO was a Cold War institution, why didn’t it go out of existence when the Cold War ended, as its counterpart, the Warsaw Pact, did? Indeed, let’s not forget that that’s precisely what U.S. officials assured Soviet officials would happen as the Cold War was ending. Shut down the Warsaw Pact and we’ll shut down NATO. But U.S. officials double-crossed the Russians. Even though the Warsaw Pact, which consisted of the Soviet Union and Eastern European countries, dismantled, NATO didn’t.

[Recently], the New York Times said reminded readers that former Defense Secretary Robert Gates had expressed a concern back in 2011 that young Americans would have no memory of the Cold War and would consider NATO to be just an artifact. If only NATO was only an artifact, one in which people just sat around collecting tax-funded paychecks. Instead, after double-crossing the Russians, it continued operating as if the Cold War had never ended, moving ever close to Russia’s border by absorbing former members of the Warsaw Pact. When NATO forces ultimately reached Ukraine, which is on Russia’s border, how could anyone be surprised over Russia’s reaction? The U.S. would have reacted the same way. In fact, it did in 1961, when the Soviets installed defensive missiles in Cuba.

There is no way U.S. national-security state officials could have been shocked over Russia’s reaction to NATO’s plan to absorb Ukraine. U.S. officials had to know from the get-go that Russia would never permit NATO to take control over its longtime military base in Crimea, which is precisely what would have happened if NATO had absorbed Ukraine. The same New York Times article quotes Gen. Philip M. Breedlove, former supreme allied commander for Europe: “The United States absolutely needs NATO — a NATO that is strong, resilient and united.” According to the article, “Five members of the Joint Chiefs of Staff made a similar set of arguments at the Council on Foreign Relations on Tuesday, also avoiding any mention of Mr. Trump’s name.”

Well, duh! Of course, they favor NATO! What better way to ignite more crises and more Cold War than with NATO? After all, what if Americans demand that U.S. troops come home from the Middle East, thereby eliminating any more threat of anti-American terrorism? What better new official enemy than the old Cold War official enemy, Russia? What better way to keep the entire national-security establishment in high cotton with ever-increasing budgets? The Times article also expressed the concern among many that Trump intends to establish good relations with Russian President Vladimir Putin. Heaven forbid! Why, that’s heresy to any advocate of the national-security state! Everyone knows that Putin is a former KGB official. Everyone knows that the KGB was composed of communists. Everyone knows that a communist can never be trusted. The war on communism is on, once again.

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Allegedly to make sure the country can rebuild its economy. But there’s nothing left to rebuild with.

Greece Faces Its Toughest Austerity Measures Yet (G.)

In his tiny shop in downtown Athens, Kostis Nakos sits behind a wooden counter hunched over his German calculator. The 71-year-old might have retired had he been able to make ends meets but that is now simply impossible. “All day I’ve been sitting here doing the maths,” he sighs, surrounded by the undergarments and socks he has sold for the past four decades. “My income tax has just gone up to 29%, my social security payments have gone up 20%, my pension has been cut by 50 euros; they are taxing coffee, fuel, the internet, tavernas, ferries, everything they can, and then there’s Enfia [the country’s much-loathed property levy]. Now that makes me mad. They said they would take that away!” A mild man in milder times, Nakos finds himself becoming increasingly angry.

So, too, do the vast majority of Greeks who walked through his door on Monday. “Everyone’s outraged, they’ve been swearing, insulting the government, calling [prime minister] Alexis Tsipras a liar,” he exclaims after parliament’s decision on Sunday night to pass yet more austerity measures. “And they’re right. Everything he said, everything he promised, was a fairy tale.” Until the debt-stricken country’s financial collapse, shops like this were the lifeblood of Greece. For small-time merchants, the pain has been especially vivid because, like everyone Nakos knows, he voted for Tsipras and his leftist Syriza party. Now the man who was swept to power on a platform to eradicate austerity has passed the toughest reforms to date – overhauling the pension system, raising taxes and increasing social security fund contributions as the price of emergency bailout aid.

As MPs voted inside the red-carpeted 300-seat chamber on Sunday, police who had blocked off a large part of the city centre deployed teargas and water cannon against the thousands of anti-austerity demonstrators amassed outside. It was a world away from the day the tieless, anti-austerity leftists first assumed office, tearing down the barricades outside the sandstone parliament building. The latest measures – worth €5.4bn (£4.3m) in budget savings – mark a new era. After nine months of wrangling with the international creditors keeping the country afloat, Athens must apply policies that until now had been abstract concepts for a populace who have suffered as unemployment and poverty rates have soared.

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