Mar 192019
 
 March 19, 2019  Posted by at 10:54 am Finance Tagged with: , , , , , , , , , , ,  


René Magritte The conquerer 1926

 

Boeing, FAA Under Intense Scrutiny Over 737 MAX Certification (AFP)
7 In 10 Americans Say Economy In Good Shape (CNN)
UK In Constitutional Chaos After Speaker Blocks Third Vote On Brexit Deal (G.)
Are The English Ready For Self-Government? (Fintan O’Toole)
Hardline Tory Brexiteers Threaten Strike If Brexit Delayed By A Year (Sun)
UK Students Studying Abroad Left In Limbo (G.)
Deadly Serious (Jim Kunstler)
Paris Police Chief Sacked After Riots (G.)
Merging Deutsche Bank And Commerzbank Won’t Solve Their Problems (Coppola)
China’s Banks Have a Hidden Wave of Bad Debt (Balding)
Chelsea Manning and the New Inquisition (Chris Hedges)
Bumblebee Added To The Ever-Growing List Of Endangered Species (SNR)

 

 

 

 

“Unlike France, where criminal investigations into aviation accidents seems common, it is very, very rare in the US..”

Boeing, FAA Under Intense Scrutiny Over 737 MAX Certification (AFP)

Boeing and US aviation regulators are coming under intense scrutiny over the certification of the 737 MAX aircraft after news that two recent crashes share similarities. On March 11, just a day after the Ethiopia crash left 157 dead, a grand jury in Washington issued a subpoena to at least one person involved in the plane’s certification, according to a Wall Street Journal article citing people close to the matter. The subpoena, which came from a prosecutor in the Justice Department’s criminal division, seeks documents and correspondence related to the plane, according to the report. A criminal inquiry is “an entirely new twist,” said Scott Hamilton, managing director of the Leeham Company, who recalled a probe of a 1996 ValuJet crash as the only other aviation probe that was not a civil investigation.

“Unlike France, where criminal investigations into aviation accidents seems common, it is very, very rare in the US,” Hamilton added. The Transportation Department’s inspector general also is probing the approval of the 737 MAX by the Federal Aviation Administration (FAA), The Wall Street Journal also reported. The probe is focusing on the Maneuvering Characteristics Augmentation System, or MCAS, implicated in the Lion Air crash, which authorities have said shared similarities with the latest accident. The Ethiopian Airlines crash on March 10 came less than five months after a 737 MAX 8 operated by Lion Air crashed in Indonesia, killing 189. While it may take months for definitive conclusions, Ethiopian officials said Sunday there were “clear similarities” between the two catastrophes based on information from the flight data recorder.

Read more …

Still only 19% of Democrats report an improved financial situation?!

7 In 10 Americans Say Economy In Good Shape (CNN)

Americans give the nation’s economy glowing reviews in a new CNN Poll conducted by SSRS, and Donald Trump’s approval rating may be reaping the benefits. Overall, 71% say the nation’s economy is in good shape, the highest share to say so since February 2001, and the best rating during Trump’s presidency by two points. A majority give the President positive reviews for his handling of the nation’s economy (51% approve), and his overall approval rating has ticked up to 42% in the new poll. The 51% who say they disapprove of the President’s job performance overall represent the lowest share to do so in CNN polling since the start of his presidency.

Trump’s 42% approval rating at this point in his presidency puts him near the bottom of the list of modern elected presidents, between President Bill Clinton in 1995 (44%) and President Ronald Reagan in 1983 (41%). Both were re-elected to second terms. The President’s approval ratings for other major issues have largely held steady or turned downward. On handling foreign affairs, 40% approve – the same share who said so in early February before the President’s abruptly-ended summit with North Korean leader Kim Jong Un. About 4 in 10 approve of Trump’s handling of taxes (42%), roughly the same as just before the midterm elections last year.

[..] The President’s strong reviews on the economy come as a plurality say their personal financial situation is better off today than it was three years ago — before Trump took office. About 4 in 10 (42%) say they are better off now, a similar share (41%) say they’re about the same, and 15% say they’re worse off than they were three years ago. Those results are closely tied to partisanship, with Republicans most apt to report an improved financial situation (65%), and Democrats far less so (19%).

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Because 1604.

UK In Constitutional Chaos After Speaker Blocks Third Vote On Brexit Deal (G.)

Theresa May’s government has been plunged into constitutional chaos after the Speaker blocked the prime minister from asking MPs to vote on her Brexit deal for a third time unless it had fundamentally changed.
With 11 days to go until Britain is due to leave the EU, May was forced to pull her plans for another meaningful vote because John Bercow said she could not ask MPs to pass the same deal, after they rejected it twice by huge margins. EU officials, meanwhile, were considering offering her a new date for a delayed Brexit to resolve the crisis. Quoting from the guide to parliamentary procedure, Erskine May, Bercow said the question “may not be brought forward again during the same session” and that it was a “strong and longstanding convention” dating back to 1604.

It must be “not different in terms of wording, but different in terms of substance”, he said, suggesting there must be a change in what the EU is offering. Bercow’s surprise intervention means May is likely to have to go to Thursday’s Brussels summit with a request for a long extension to article 50, which could mean the UK has to spend more than £100m on participating in European parliament elections. During the delay, parliament would have to make a decision on how to break the deadlock, potentially with a second referendum, an election or a cross-party proposal for a softer Brexit. Alternatively, government sources suggested May could negotiate a lengthy extension with the EU, with a “get-out clause” enabling it to be cut short if her Brexit deal is passed by parliament before the European parliamentary elections.

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“..the House of Commons was a Benny Hill chase on acid, running through a Salvador Dali painting in a spaceship on its way to infinity”

Are The English Ready For Self-Government? (Fintan O’Toole)

“The alleged aptitude of the English for self-government,” wrote Bernard Shaw in his preface to Androcles and the Lion, “is contradicted by every chapter of their history.” Shaw was, of course, parodying British imperialist rhetoric and its insistence that lesser peoples – including his own nation, the Irish – were not ready to govern themselves. He was being naughtily provocative, which only the most irresponsible of commentators would dare to be in these grave times. But there is nonetheless some tinge of truth in his words. Aptitude for self-government is not what comes to mind when one looks in from the outside at the goings-on in Westminster last week, when, as Tom Peck so brilliantly put it in the London Independent, “the House of Commons was a Benny Hill chase on acid, running through a Salvador Dali painting in a spaceship on its way to infinity”.

Let’s just say that if Theresa May were the head of a newly liberated African colony in the 1950s, British conservatives would have been pointing, half-ruefully, half-gleefully, in her direction and saying “See? Told you so – they just weren’t ready to rule themselves. Needed at least another generation of tutelage by the Mother Country.” There is a surreal kind of logic to this. If, as the Brexiteers do, you imagine yourself to be an oppressed colony breaking away from the German Reich aka the European Union, perhaps you do end up with a pantomime version of the travails of newly independent colonies, including the civil wars that often follow national liberation.

And without wishing to rub it in, Shaw’s quip does point up two of the deep problems that underlie, and undermine, the whole Brexit project. First, the problem of this imagined effort at self-government is the “self” bit. What is the self of the British polity? As in all nationalist revolts, the easy bit of “Them against Us” is Them: in this case the EU. The hard bit is Us. Brexit appeals to a collective British self but it is itself the most dramatic symptom of the unravelling of that very thing. The anarchy at Westminster is the political expression of anarchy in the UK, the sundering of a common sense of belonging. Brexit is a fabulous form of displacement – it acknowledges a profound and genuine unhappiness about how the British are governed but deflects it on to Europe.

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Get in line.

Hardline Tory Brexiteers Threaten Strike If Brexit Delayed By A Year (Sun)

Hardline Tory Brexiteers have threatened Theresa May they will go on strike if she carries out her vow to delay Brexit by a year. No10 on Monday set a deadline of late on Tuesday for MPs to agree the PM’s exit deal before Thursday’s European summit. But instead of buckling to the pressure, diehard Tory MP Leavers raised the stakes back on the PM with a pledge to withdraw their cooperation. As many as 20 members of the hardline European Research Group have told whips they will carry out “vote strikes” – a move that would push Mrs May’s minority government to the verge of collapse. On another dramatic day in Westminster:

Fears among Tory Brexiteers began to rise that the PM is preparing to put her Brexit deal to a second In/Out referendum rather than go ahead with a long delay, Mrs May was given a boost when ERG chairman Jacob Rees-Mogg signalled he was ready to switch his vote to support her deal, Boris Johnson was accused by his own allies of torpedoing his fading hopes of taking the Tory leadership after he vowed to block Theresa May’s Brexit deal. As Conservative tensions over Brexit reached boiling point around the PM’s ultimatum strategy, one senior Tory backbencher told The Sun: “If she tried to go ahead with a long extension, there will be vote strikes on all Government legislation.

“She will lose us, and lose us permanently if she goes ahead with this, and that has been made crystal clear to her.” Staring down Mrs May in the ultra-high stakes game of bluff, ERG member Lee Rowley added: “The Prime Minister is going to have to reflect very carefully over the next few days. “I don’t think she wants to be a PM who has failed to get a deal through, and then has to enforce a two-year extension. “That won’t look very good.”

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One of countless issues they had over 2 years to prepare for.

UK Students Studying Abroad Left In Limbo (G.)

For Alice Watkins, a Manchester University student, a year in Paris, then Madrid, as part of her degree was a dream. Now, with the turmoil of Brexit, she is preparing to arrive in France this summer with nowhere to live and no idea whether the money will still be there to support her. “It’s horrible not knowing,” Watkins says. “We’ve been told to take at least £1,200 of our own cash to cover us for the first six weeks, and that we can’t realistically sort any accommodation before we arrive. Turning up abroad with nowhere to live is a big stress.” Last Wednesday the European parliament voted to guarantee funding for UK students already studying abroad on the Erasmus+ student exchange programme, in the event of a no-deal Brexit on 29 March.

It also promised to continue supporting European students already in the UK on the scheme. But uncertainty hangs over the 17,000 British students who had planned to study in Europe under Erasmus+ from this September. A technical note, published by the government at the end of January, failed to guarantee any funding for the scheme if Britain leaves the EU with no deal. In recent weeks both Spain and Norway have advised their students planning to study in the UK to go elsewhere. [..] Vivienne Stern, director of the international arm of Universities UK, the vice-chancellors’ body, says the organisation had been under the impression that the government would create a national alternative to the Erasmus+ scheme to protect students in the event of no deal. She says, however, there is no evidence of this happening. “As we understand it, there is no money on the table for an alternative scheme, and no work is under way in the DfE to prepare one.”

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American pitchforks.

Deadly Serious (Jim Kunstler)

Last week, coincidental with the New Zealand mosque massacre, Mr. Trump said the following: “You know, the left plays a tougher game. It’s very funny. I actually think that the people on the right are tougher, but they don’t play it tougher. O.K.? I can tell you I have the support of the police, the support of the military, the support of the Bikers for Trump. I have the tough people, but they don’t play it tough — until they go to a certain point, and then it would be very bad, very bad.”

As usual, his syntax is disastrous as well as his habit of placing himself at the center of every issue. But, also as usual with Mr. Trump, and because of his filter-less tongue, he lays out matters that should be extremely troubling to all Americans: that the land is full of men with tremendous potential for violence — and most particularly men with military and paramilitary training in killing and warfare, who have, so far, barely expressed in action their discontent with the tactics of their adversaries on the Left. This Pandora’s box of calamity includes the Left’s recent campaign to denigrate men as toxic and without value, especially white men wearing their scarlet letter “P” for privilege.

The Left had better sober up and join an intelligible good faith debate about US immigration policy and the enforcement of existing laws or this will lead to exactly what Brent Tarrant laid out and what Mr. Trump maladroitly hinted at. Instead, of course, we will more likely commence another bootless campaign over guns. Here are some plain facts about that. There are already enough firearms of every sort loose in this land to commence hot civil warfare and they will not be surrendered by their owners. The horses are out of the barn on that one, even if sales of military-style weapons are outlawed. Any effort to confiscate them from people already possessing them will only provoke more overt antagonism between the two poles of American politics — and would probably lead to exactly the sort of violence that sober observers discern on the horizon.

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Basically, for not using enough violence.

Paris Police Chief Sacked After Riots (G.)

The French government has removed the Paris police chief and announced it will shut down all anti-government street protests by the gilets jaunes (yellow vests) in central parts of Paris, Bordeaux and Toulouse if violent groups are spotted in the crowds. The prime minister, Édouard Philippe, announced the hardline measures on Monday after the government admitted failures in dealing with rioting and arson in Paris this weekend. “From next Saturday, we will ban ‘yellow vest’ protests in neighbourhoods that have been the worst hit as soon as we see sign of the presence of radical groups and their intent to cause damage,” Philippe said in a televised statement. He replaced the Paris police chief, Michel Delpuech, with Didier Lallement, a colleague serving in western France.

The government was on the defensive after security forces were again unable to prevent violence, arson and looting on the Champs Élysées at the weekend. Several hundred black-clad rioters caused havoc for more than seven hours as 10,000 gilets jaunes protesters marched in the capital. More than 90 shops and businesses, including luxury stores such as Longchamp and Bulgari, were damaged and looted, and a bank and a restaurant were burnt. Since the end of December the number of protesters has fallen, but each Saturday thousands of people still take to the streets in the movement, which began as a fuel tax revolt and morphed into a protest against the government. The interior ministry has said violence at the demonstrations is carried out by rioters from far-right and far-left groups as well as anarchists.

The police have been criticised for alleged excessive use of force and weapons against protesters, and the United Nations recently called for a full investigation. Rights groups have tried to force a ban on the handheld rubber bullet launchers used by police, noting that France is one of only a handful of western countries to use them. Lawyers have said a number of people have lost eyes or hands as a result of the use of rubber-bullet launchers and explosive sting grenades. However, the French government argued that not enough force was used by police at the weekend, and urged a greater use of weapons by police.

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A $2 trillion zombie in the heart of Europe. This can blow up the ECB.

Merging Deutsche Bank And Commerzbank Won’t Solve Their Problems (Coppola)

Rumors of a potential merger between Germany’s two biggest banks have now crystallized. Deutsche Bank and Commerzbank are officially engaged in talks. Not that either bank seems enthusiastic about being dragged to the altar. The broker of this marriage appears to be the German government, which has ideas about creating a national bank large enough to compete with American investment banks. But it is not at all clear that a merger would solve the banks’ problems, let alone create a “national champion.” Both banks are zombies. Commerzbank, the smaller of the two, was bailed out after swallowing up Germany’s third largest bank, Dresdner Bank, in the 2007-8 financial crisis: the German government still holds 15% of its shares.

Despite years of “restructuring” (aka cost-cutting), Commerzbank is still struggling to deliver much in the way of returns to shareholders: return on equity for the third quarter of 2018 was a pathetic 4% and earnings per share only 60 euro cents (which is less than 1 dollar). Unsurprisingly, investors are encouraged by the merger talks: the share price rose by 6.81% today. Investors are less impressed with the merger prospects for Deutsche Bank: the share price was only up 4.15%. This might be because Deutsche Bank is in very deep trouble. Although it has now put behind it most of its litigation and conduct issues, the business has enormous structural problems. It has a very high cost/income ratio, large debts and no profitable business lines.

Since 2010 its share price has collapsed from over 76.00 to 8.00, and its market cap is now a paltry $18.35bn, the lowest it has been since the 2008 financial crisis. And after years of losses, it is still barely making a profit, though it has now restored a small dividend. Earnings per share and return on equity are both negative. Quite why the German government thinks that merging two zombie banks would create a national flag-carrier capable of competing successfully with the giant American banks is a mystery. It is surely much more likely that this merger would just create a much larger zombie.

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“..newly soured debt was coming through the front door as fast as banks could shovel it out the back.”

China’s Banks Have a Hidden Wave of Bad Debt (Balding)

China’s banks may have a flood of bad loans waiting in the wings. Not that you’d know it from looking at official levels for 2018, which suggest the problem was broadly contained. The reality is that newly soured debt was coming through the front door as fast as banks could shovel it out the back. Authorities worked hard to restrain financial-system leverage in 2018. Outstanding credit increased a relatively modest 10 percent, with growth in new loans falling 14 percent. The government accomplished this primarily by tightening restrictions on shadow banking and moving that lending into the formal banking system, which recorded a 13 percent jump in new loans last year.

To make way for that increase, and with new deposits falling 1 percent last year, banks sold a lot of nonperforming debt to asset management companies. Sales to AMCs and other disposals totaled almost 1.8 trillion yuan ($268 billion), according to a report by Jason Bedford, executive director of Asian financials research at UBS Group AG in Hong Kong. To put that in perspective, China began the year with 1.7 trillion yuan in bad loans and ended it with 2 trillion yuan. In other words, after selling roughly their entire declared stock of soured advances, lenders still closed the year with more than they started with.

This has a couple of implications. First, banks are having to dedicate more earnings to loan loss-provisions. In the first half of 2018, Industrial & Commercial Bank of China Ltd. allocated 43 percent of pre-provision profit to boosting capital reserves. At Agricultural Bank of China Ltd., impairment losses were equal to 56 percent of first-half profit, up from 41 percent a year earlier.

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Who among the two dozen Democrat candidates will stand up for her?

Chelsea Manning and the New Inquisition (Chris Hedges)

Manning has always insisted her leak of the classified documents and videos was prompted solely by her own conscience. She has refused to implicate Assange and WikiLeaks. Earlier this month, although President Barack Obama in 2010 commuted her 35-year sentence after she served seven years, she was jailed again for refusing to answer questions before a secret grand jury investigating Assange and WikiLeaks. While incarcerated previously, Manning endured long periods in solitary confinement and torture. She twice attempted to commit suicide in prison. She knows from painful experience the myriad ways the system can break you psychologically and physically. And yet she has steadfastly refused to give false testimony in court on behalf of the government.

Her moral probity and courage are perhaps the last thin line of defense for WikiLeaks and its publisher, whose health is deteriorating in the Ecuadorian Embassy in London, where he has been holed up since 2012. Manning—who was known as Bradley Manning in the Army—has undergone gender reassignment surgery and needs frequent medical monitoring. Judge Claude M. Hilton, however, dismissed a request by her lawyers for house arrest. Manning was granted immunity by prosecutors of the Eastern District of Virginia, and because she had immunity she was unable to invoke the Fifth Amendment protection against self-incrimination or to have her attorney present. The judge found her in contempt of court and sent her to a federal facility in Alexandria, Va.

Hilton, who has long been a handmaiden of the military and intelligence organs, has vowed to hold her there until she agrees to testify or until the grand jury is disbanded, which could mean 18 months or longer behind bars. Manning said any questioning of her by the grand jury is a violation of First, Fourth and Sixth Amendment rights. She said she will not cooperate with the grand jury. “All of the substantive questions pertained to my disclosures of information to the public in 2010—answers I provided in extensive testimony, during my court-martial in 2013,” she said on March 7, the day before she was jailed. “I will not comply with this, or any other grand jury,” she said later in a statement issued from jail. “Imprisoning me for my refusal to answer questions only subjects me to additional punishment for my repeatedly-stated ethical objections to the grand jury system.”

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Maybe the saddest thing is the lack of alarm.

Bumblebee Added To The Ever-Growing List Of Endangered Species (SNR)

The bumblebee has been officially added to the list of endangered species along with the gray wolf, grizzly bear, the northern spotted owl, and about 700 other extinct animal species. According to National Geographic: “The rusty-patched bumblebee (Bombus affinis), once a common sight, is “now balancing precariously on the brink of extinction,” according to the U.S. Fish and Wildlife Service. Once thriving in 28 states and the District of Columbia, but over the past two decades, the bee’s population has plummeted nearly 90 percent. There are more than 3,000 bee species in the United States, and about 40 belong to the genus Bombus—the bumblebees.” ”Advocates for the rusty-patched bumblebee’s listing are abuzz with relief, but it may be the first skirmish in a grueling conflict over the fate of the Endangered Species Act under the Trump administration.”

According to James Stranger, a research entomologist, and Bumblebee ecologist: “There are a few little spots where we know they are. But only a really few spots.” The scientific name of the bee, Bombus affinis, was given due to the red patch in its abdomen. Even though the original listing date as an endangered species was set for April 2018, it was not until now that it was listed. According to Xerces Society director of endangered species Sarah Jepsen: “We are thrilled to see one of North America’s most endangered species receive the protection it needs. Now that the Fish and Wildlife Service has listed the rusty-patched bumble bee as endangered, it stands a chance of surviving the many threats it faces — from the use of neonicotinoid pesticides to diseases.”

According to the U.S. Fish and Wildlife Service: “Bumblebees are among the most important pollinators of crops such as blueberries, cranberries, and clover, and almost the only insect pollinators of tomatoes. The economic value of pollination services provided by native insects (mostly bees) is estimated at $3 billion per year in the United States.” One of the main factors in the declining trend of its population was the human encroachment which led to the subsequent loss of their natural habitat. Therefore, this classification will protect the grasslands needed by these bees and other pollinators.

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Sep 292018
 
 September 29, 2018  Posted by at 9:20 am Finance Tagged with: , , , , , , , , , ,  


M. C. Escher Corte, Corsica 1928

 

Trump Orders New FBI Probe Into Kavanaugh Following Senate Request (Ind.)
The Return Of The Inquisition (Simon Black)
Fiscal Irresponsibility (Roberts)
Junk Bonds Set For Record Winning Streak, High Grade Worst Since 2008 (ZH)
Elon Musk Believed He Had Verbal Deal With Saudis To Take Tesla Private (WSJ)
Labour Claims Theresa May’s Government ‘The Most Divided Ever’ (Ind.)
Boris Johnson’s ‘Super Canada’ Alternative Brexit Plan Rubbished (G.)
Democratizing Brexit (Varoufakis)
Facebook Says Nearly 50m Users Compromised In Huge Security Breach (G.)
Melting Arctic Ice Opens New Route From Europe To East Asia (AP)

 

 

“This country is being ripped apart here,” Mr Flake told the committee…

Trump Orders New FBI Probe Into Kavanaugh Following Senate Request (Ind.)

Donald Trump has ordered the FBI to carry out a fresh investigation into his nominee for the Supreme Court, after Republicans were obliged to delay a full confirmation vote after being blind-sided by one of their own senators. During a day of blurred and frequently confusing drama on Capitol Hill, the Senate Judiciary Committee on Friday voted 11-10 to approve Brett Kavanaugh for a confirmation vote in the full senate. But it did so, only after an 11th hour intervention from Jeff Flake, a senator from Arizona, who said his support in the later confirmation vote was dependent on the FBI being given a week to carry out an investigation into Mr Kavanaugh, the subject of sexual assault allegations from several women, all of which he denies.

“This country is being ripped apart here,” Mr Flake told the committee, after a vote scheduled for 1.30pm was delayed. “We ought to do what we can to make sure that we do all due diligence with a nomination this important.” Mr Flake’s deeds sent senior Republicans scrambling to decide how best to proceed. The senate’s Republican chairman, Chuck Grassley, who has long said he did not see the need for an additional investigation into Mr Kavanaugh, said it was the decision of Senate majority leader Mitch McConnell on when to hold the confirmation vote.

Within a matter of hours, Mr Grassley issued a statement saying he would ask the White House to request the FBI carry out an additional background check. Shortly afterwards, White House press secretary Sarah Huckabee Sanders released a statement from the president, which read: “I’ve ordered the FBI to conduct a supplemental investigation to update Judge Kavanaugh’s file. As the senate has requested, this update must be limited in scope and completed in less than one week.”

[..] Mr Flake may have been motivated to act by the words of two protesters who confronted him in a senate elevator after it was initially announced he would back Mr Kavanaugh. “What you are doing is allowing someone who actually violated a woman to sit on the Supreme Court. This is not tolerable. You have children in your family. Think about them. I have two children,” shouted one of the women, Ana Maria Archila. “I cannot imagine that for the next 50 years they will have to have someone in the Supreme Court who has been accused of violating a young girl. What are you doing, sir?”

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Plenty angles: … trial by social media…

The Return Of The Inquisition (Simon Black)

Senator Maize Hirono of Hawaii recently stated, “Not only do women like [Kavanaugh’s accuser], who bravely come forward, need to be heard, but they need to be believed.” By definition this is neither fair nor impartial, and turns the entire process into a Kangaroo Court… which is what the Senate has become. At a certain point yesterday, one Senator introduced multiple pieces of evidence on behalf of the accuser, including ‘expert reports’ that justify her inability to remember details from the assault. This is truly bizarre. These Senators are playing the role of judge in this matter. It seems impossible to do this while simultaneously acting as advocate for the accuser.

Another Senator sat smugly and sanctimoniously, leering down at Brett Kavanaugh and demanding explanations about code words for beer and flatulence that date back to Kavanaugh’s high school days. The fact that a United States Senator would actually consider this important evidence is an utter embarrassment. Another disgusting perversion of justice is that the United States Senate actually felt compelled to negotiate with the accuser about when/how she would testify. For example, the accuser wanted to prohibit certain questions, control who could/could not ask questions, determine the order of witness testimony, etc. This is simply NOT how the justice system is supposed to work.

[..] the saddest part – this manner of Inquisition… trial by social media… has now been condoned and advanced by the United States Senate, an institution whose members have ALL taken a solemn oath to support and defend the Constitution which they are now violating in the worst way. Clearly the Senate is no longer an assembly of kings… but a brood of bickering, immature weaklings. (The only resilience displayed has been from the accused and accuser, both of whom have had to endure insane public scrutiny.) There’s obviously an agenda here.

Perhaps some Senators are trying to win points with the #metoo movement for the upcoming elections. Or they’re intentionally blocking Kavanaugh simply because he is a Trump nominee. Whatever their reasons, they may be victorious in achieving their desired outcome. But it will be a Pyrrhic victory… for it will come at the expense of establishing a dangerous new standard that destroys the most important principles of Justice.

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As deficits grow, liquidity is shrinking.

Fiscal Irresponsibility (Roberts)

Without much fanfare or public discussion, Congress has decided to push the U.S. into deeper fiscal responsibility. Earlier this week, the House passed another Continuing Resolution (CR) to keep the government from “shutting down” prior to the mid-term elections. “The House on Wednesday passed an $854 billion spending bill to avert an October shutdown, funding large swaths of the government while pushing the funding deadline for others until Dec. 7. The bill passed by 361-61, a week after the Senate passed an identical measure by a vote of 93-7.” For almost a decade, Congress has failed to pass, and operate, underneath a budget.

Of course, without any repercussions from voters in demanding that Congress “does their job,” the path to fiscal insolvency continues to grow. The Committee For A Responsible Federal Budget made the following statement: “We’re pleased policymakers have likely avoided a shutdown and actually appropriated most of this year’s discretionary budget on time. But let’s not forgot that Congress did so without a budget and had to grease the wheels with $153 billion to pass these bills. That isn’t function; it’s a fiscal free-for-all.” Of course, with trillion-dollar deficits just around the corner, the negative impact from unbridled spending and debt increases will begin to reverse the positive effects from deregulation and tax reform.

The bigger problem with the $854 billion CR just passed by the House, and awaiting the President’s signature, is that it only covers spending from now until December. Such means that by the time we get the full 2019 budget funded, with the annual automatic increases still in place, we will be looking at more than $2 Trillion in annual spending. Such will require further increases in debt issuance at a time when there are potentially fewer buys of Treasuries readily available. As shown in the chart below, with the major Central Banks reducing their balance sheets simultaneously, some of the more major buyers are being removed from the market. “Central bank balance sheets have shrunk by over half-a-trillion dollars since March. This decrease in global liquidity – in the face of a global slowdown – raises the risk of policy mistakes much higher than is commonly assumed.” – ECRI

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Courtesy of your friendly neighborhood central bank.

Junk Bonds Set For Record Winning Streak, High Grade Worst Since 2008 (ZH)

For the latest confirmation of the upside down market, look no further than corporate bonds where the riskiest, CCC-rated junk bonds are set to make a positive return for the 3rd consecutive year, the longest winning streak since records began in 1997. Not only have the lowest quality junk bonds, those rated CCC or lower, generating respectable absolute returns of 5.8% YTD, they have also outperformed higher quality debt with a 1% total return so far this month, according to Bloomberg and ICE data. Additionally, the lowest rated junk bonds have also outperformed the broader junk bond index, which has returned 1.9% YTD.

And while the key contributor to the outperformance of lowest-rated bonds is demand for, well, higher yielding paper as investors continue to chase returns, a key structural issue has been the lack of HY supply, which at $150 billion YTD is the lowest since 2009. Meanwhile, as investors scramble for any paper that promises a material yield, regardless of underlying fundamentals, investment grade corporate bond returns have, in the worlds of Bloomberg’s James Crombie “fallen from darling to deadbeat.”

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Perhaps the biggest risk is that Tesla shares fall and loans have to be rolled over.

Elon Musk Believed He Had Verbal Deal With Saudis To Take Tesla Private (WSJ)

Tesla Inc. CEO Elon Musk believes he had a verbal agreement in place with Saudi Arabia’s sovereign-wealth fund to help finance a plan to take the auto maker private, according to a person familiar with the matter, a contention that could preview how he will fight regulators’ accusation that he misled shareholders. Musk was sued Thursday by the Securities and Exchange Commission, which alleged that he misled investors when he tweeted last month that he had funding secured to lead a Tesla buyout. The agency, which is seeking to oust Musk from Tesla, said in its complaint that he “knew that he had never discussed a going-private transaction at $420 per share with any potential funding source.”

Musk believes the SEC’s effort is flawed in assuming that a written agreement and fixed price were necessary for a deal, the person said. Musk also thinks regulators aren’t taking into account that Middle Eastern businesses routinely operate using verbal agreements in principle, the person said. In addition, Musk has told people that he could have led a go-private transaction using his own stake in SpaceX, if major Tesla investors were on board. SpaceX is the privately held aerospace firm that Mr. Musk controls and is valued at tens of billions of dollars.

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Tory conference soon. Spectacle.

Labour Claims Theresa May’s Government ‘The Most Divided Ever’ (Ind.)

Labour has accused Theresa May of leading “the most divided government ever” as it released a dossier claiming a third of Conservative MPs have publicly criticised either the government or a Tory colleague within the last year. On the eve of the Conservatives’ annual conference, Labour said more than 100 Tory MPs have recently turned their fire on a colleague or on government policy. The report said 80 per cent of the attacks were directed at Ms May or her government, with 83 MPs having criticised one of the two. The dossier was released as a number of senior Conservatives spoke out against Ms May’s leadership and voiced fears about the prospects of the party.

Much of the criticism outlined in the Labour document relates to Ms May’s Chequers plan for Brexit, which has been widely condemned by both Eurosceptics and Remain supporters on the Tory benches. It has been called “unworkable” by Justine Greening, the pro-European former education secretary, while former Brexit minister Steve Baker said it could lead to a “catastrophic split” in the Conservative Party. Mike Penning, previously seen as an ally of Ms May, described the plan as “dead as a dodo”, and former cabinet minister Priti Patel said it would be “a disaster for our country”. Ms May is facing mounting pressure to ditch the proposals, which are also highly unpopular with Tory members and have been rejected by EU leaders.

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EU has already thrown out Chequers.

Boris Johnson’s ‘Super Canada’ Alternative Brexit Plan Rubbished (G.)

Furious ministers rounded on Boris Johnson for suggesting the UK could renege on its Brexit agreements over the Irish border, calling it unworkable and criticising the former foreign secretary for denouncing agreements made while he was a cabinet minister. The Department for Exiting the European Union issued a defiant statement rejecting Johnson’s alternative, laid out in a 4,000-word Telegraph article, saying it was “not a workable or negotiable plan,” less that two days before the start of the Conservative party conference in Birmingham. Government sources mocked Johnson’s disavowal of the December withdrawal agreement, when he had been part of the cabinet that approved it, dismissing his intervention as “another very lengthy article which doesn’t offer any answers”.

Speaking ahead of the conference, May said the government was on the verge of a Brexit deal, despite admitting after the EU summit in Salzburg that the two sides remained some distance apart on customs and the Northern Irish border. “The right deal is close – and with it the opportunity to make life better for ordinary working people,” she said. But Johnson continued his public intervention with a series of television interviews – his first since quitting over Chequers – criticising the prime minister, warning May that she risked betraying the wishes of leave voters if she persisted with the Chequers deal but stopping short of calling her to go. Johnson told the BBC: “If you stick with Chequers, the electorate of this country will look at what we have produced and think how on Earth was that the outcome of voting leave.”

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If people want a second vote, isn’t that democratic?

Democratizing Brexit (Varoufakis)

As deadlines approach and red lines are redrawn in the United Kingdom’s impending withdrawal from the European Union, it is imperative for the people of Britain to regain democratic control over a process that is opaque and ludicrously irrational. The question is: How? Democracy can never aspire to being more than a work in progress. Decisions made collectively must constantly be reappraised collectively in the light of new evidence. Yet, in the UK’s current circumstances, nothing would be more poisonous to democracy than revisiting Brexit by means of a second referendum.

Both sides, Leavers and Remainers, feel betrayed. Even though Brexit was meant to restore its sovereignty, Parliament has no real say in a process that will mark Britain for decades to come. The Scots and the people of Northern Ireland are hostages to a distinctly English feud that could do them serious damage. The young feel the old have hijacked their future, while the old feel that their accumulated wisdom and legitimate concerns are being ignored by insiders striking bad deals behind closed doors on behalf of vested interests. In short, British democracy is failing its latest and most stringent test.

But a fresh referendum cannot be the answer to the unfolding disaster triggered by the original referendum. In June 2016, a stark choice was available to the people of Britain: leave the EU or stay in. While one can question the wisdom of making such a collective choice via a referendum, the logical coherence of the enterprise was beyond dispute. Once the verdict came in, and the process stipulated by the Treaty of Lisbon’s Article 50 was triggered, no binary yes-or-no choice to steer Britain out of its mess became available. In fact, there are now at least five options that must be collectively appraised.

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Oh, yeah, that has them worried. They want their friends spying on you, and nobody else.

Facebook Says Nearly 50m Users Compromised In Huge Security Breach (G.)

Nearly 50m Facebook accounts were compromised by an attack that gave hackers the ability to take over users’ accounts, Facebook revealed on Friday. The breach was discovered by Facebook engineers on Tuesday 25 September, the company said, and patched on Thursday. Users whose accounts were affected will be notified by Facebook. Those users will be logged out of their accounts and required to log back in. “I’m glad we found this and fixed the vulnerability,” Mark Zuckerberg said on a conference call with reporters on Friday morning. “But it definitely is an issue that this happened in the first place. I think this underscores the attacks that our community and our services face.”

The security breach is believed to be the largest in Facebook’s history and is particularly severe because the attackers stole “access tokens”, a kind of security key that allows users to stay logged into Facebook over multiple browsing sessions without entering their password every time. Possessing a token allows an attacker to take full control of the victim’s account, including logging into third-party applications that use Facebook Login. The security breach comes at a time of significant strife for the social media company, which has faced mounting criticism over issues including foreign election interference, the flow of misinformation, hate speech, and data privacy.

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I kid you not: there will be many voices labeling this as ‘opportunity’.

Melting Arctic Ice Opens New Route From Europe To East Asia (AP)

A Danish-flagged cargo ship has successfully passed through the Russian Arctic, in a trial voyage showing that melting sea ice could potentially open a new trade route from Europe to east Asia. The Venta Maersk made the journey as a one-off trial, said Palle Laursen, the chief technical officer of A.P. Moller-Maersk, the world’s biggest shipping group. The ship, carrying a cargo of frozen fish, arrived in St Petersburg on Friday, after leaving Russia’s Pacific port city of Vladivostok on 22 August. “The trial allowed us to gain exceptional operational experience,” said Laursen, adding the ship had performed well in the unfamiliar environment.

The Northern Sea route could be a shorter journey for ships travelling from east Asia to Europe than the Northwest Passage over Canada because it will likely be free of ice sooner due to climate change. Experts say it could reduce the travel distance from east Asia to Europe from the 21,000 kilometres (13,000 miles) it takes to go via the Suez Canal, to 12,800 kilometres (8,000 miles). This would cut transit time by 10 to 15 days. It’s not the first time a cargo vessel has completed the Russian Arctic route, and Maersk underlined that the journey was “to gain operational experience in a new area and to test vessel systems”. “Currently, we do not see the Northern Sea route as a viable commercial alternative to existing east-west routes,” Laursen said.

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