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Debt Rattle March 20 2024

Mar 202024
 
 March 20, 2024  Posted by at 9:30 am Finance Tagged with: , , , , , , ,  51 Responses »


Edgar Degas Leaving the paddock1866
Stolen from Gardner Museum March 18 1990, the single largest art theft in the world. Never recovered

 

• ‘Losing a War is No Fun’ (Manley)
• French Army ‘Ready For War’ – Top General (RT)
• France Preparing to Deploy Military Contingent in Ukraine: Russian Intel (Sp.)
• Ukraine’s Losses ‘In The Millions’ – Polish General (RT)
• Lindsey Graham Tells Ukraine To Draft Younger Soldiers (RT)
• US Military-Industrial Complex Jacks Up Prices Amid Ukraine Proxy War (Sp.)
• iPhones Won’t Work In Case Of World War III – Russian MP (RT)
• German Living Standards In ‘Unprecedented post-WW2 Slump’ (RT)
• Medvedev Reacts To Germany’s Putin Snub (RT)
• ‘Catastrophic’ Hunger Has Gripped Gaza (RT)
• Supreme Court Allows Texas To Start Arresting And Deporting Illegal Aliens (ZH)
• Guilty!—But Not Really Guilty? (Victor Davis Hanson)
• It’s Time for GOP To Unite Behind Trump (Marcus)
• How the Democrats Plan To Steal the Election (Lew Rockwell)
• Viagra May Prevent Alzheimer’s (RT)

 

 

B.S.

 

 

Lensman

 

 

O’Leary

 

 

Sachs

 

 

Navarro

 

 

AIPAC


https://twitter.com/i/status/1770019795762659476

 

 

Greenwald SCOTUS

 

 

 

 

“..the US will not suffer the consequences anywhere near to the degree the Europeans will.”

• ‘Losing a War is No Fun’ (Manley)

Russia’s economy has survived Western sanctions “far better” than predicted, recent reports show. Meanwhile, the European Union’s (EU) economy has been suffering drastically, causing working class voters to turn against aid for Ukraine. The Greanville Post published an article on Tuesday which claims the European Union has become the site of the 21st century’s “biggest political disaster”. The article writes that Paris, France—which once saw leftist planning agendas filled with “protests, gatherings and strikes”—now seems to be a city where there is little talk of the “economic, political and confidence collapse” of the biggest economic bloc in the world. Daniel Lazare, an independent investigative journalist and author, sat down with Sputnik’s The Critical Hour on Tuesday and discussed the recent piece. “Well, I think Europe is losing the war,” said Lazare. “And losing a war is no fun. The situation in Ukraine is going very poorly. Russia clearly is winning, its economy is doing very well. The European economy, by contrast, is stalling.

And if Russia does make progress in the war, if the Ukraine government breaks in some way, then the results for Europe will be devastating.” “I mean, this is not a faraway war for [the EU]. It’s a faraway war for America. But it’s a war on the doorstep of the EU. And the prospect of a Ukrainian collapse would cause panic in Poland, but also in Berlin and Paris, and Macron has been making crazy noises about sending troops to Ukraine, which is completely nuts. But then again, the guy is desperate and doesn’t know quite how to respond. And, the same kind of desperation is evident in other capitals as well,” he added. Sputnik’s Garland Nixon noted that European governments have not done a “good job” of trying to convince their public that they have to suffer and sacrifice for the “democracy of the neo-Nazis”.

“The US is also quite confident that, as you said, the ruble will be turned to rubble, the Russian economy would be smashed, that they’d be, you know, they’d be closed out of the energy market and would be crying for mercy very soon,” said Lazare of the West’s attacks on Russia’s economy. “But that didn’t happen. Quite the reverse. Russia was able to find outlets for its oil and gas. It developed markets with China and other nations. The US has wound up shooting itself in the foot. And the amazing thing is that this keeps happening again and again.” Sputnik’s Wilmer Leon added that the reason French President Emmanuel Macron and German Chancellor Olaf Scholz don’t want to address the collapse of their biggest economic bloc in the world is because it was done at the “behest of the United States”. “The US really engineered this war,” said Lazare. “I don’t want to let France and Britain off the hook because they were solidly behind US efforts, but this is an American-led effort which really installed a nationalist government in Kiev, which was itching for a fight with Russia, which got one and then, followed by a full scale military invasion in February 2022.”

“The US thought it would win that war easily,” he continued. “But now the war is going very poorly. And it turns out that the US really had a very poor idea of what it was getting into. Now, the problem is that the US will not suffer the consequences anywhere near to the degree the Europeans will.” “So, it’s a case that they followed the US, they tag along happily behind it, and now they’ve got to pay the price for their own behavior. It’s crazy, and I do agree that there’s going to be a reckoning.” The EU’s working class is growing increasingly opposed to conflict with Russia as their economy suffers from Western imposed sanctions which saw them lose access to cheap and reliable Russian energy. The economic growth forecast for Germany, for instance, was cut down to 0.2% in 2024 from a previous projection of 1.3%, according to a recent report. Robert Habeck, Germany’s Vice-Chancellor, has said the country is performing “dramatically bad.”

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Far toos much war talk coming out of France.

• French Army ‘Ready For War’ – Top General (RT)

France is ready to face whatever developments unfold internationally and is prepared for the “toughest engagements” to protect itself, the chief of staff of the French Army, Gen. Pierre Schill, said in an interview published on Tuesday. In recent weeks, French President Emmanuel Macron has repeatedly refused to rule out Western troops being sent to Ukraine at some point to help Kiev in its fight against Moscow, which he described as an “adversary” of Paris. France’s forces are “ready,” Schill told Le Monde, stressing that “whatever the developments in the international situation, the French can be convinced: their soldiers will respond.” Schill said France has “international responsibilities” and is linked by defense agreements to “states exposed to major threats,” and must therefore have its forces trained and interoperable with allied armies.

He added that nuclear deterrence “is not a universal guarantee” because it does not guard against conflicts that would remain “below the threshold of vital interests.” Schill said that the Army must show itself a credible force through responsiveness in terms of force projection and the ability to carry out operations of increased scope. The general said that France currently has the capacity to commit a division of around 20,000 men within 30 days and has the means to command an army corps of up to 60,000 which includes allied divisions. In an interview with the TF1 and France 2 channels last week, President Macron said that France is “not waging war on Russia” by supporting Kiev, but labeled Russia an “adversary” and has stood by his remarks that a potential deployment of NATO troops to the country could not be “excluded.”

His statements drew a wave of denials from most of France’s fellow NATO members and officials – including Secretary General Jens Stoltenberg – about having any intention to deploy their forces to Ukraine. At the same time, Spain’s El Pais reported on Monday that the US-led bloc has already been involved “in virtually every possible aspect” of the conflict and that active and former military personnel from NATO states have been operating in the country overseeing Kiev’s use of Western-supplied weapons. Moscow has repeatedly described the conflict as a US-led proxy war against Russia, while Russian President Vladimir Putin has warned against escalation and said that a direct clash between NATO and Russia would be “one step shy of a full-scale World War III.”

French troops
https://twitter.com/i/status/1770143287040459213

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Macron’s bet: war with France means war with NATO.

• France Preparing to Deploy Military Contingent in Ukraine: Russian Intel (Sp.)

France is preparing to deploy a contingent of troops in Ukraine, with the first echelon to include about 2,000 soldiers, Russian Foreign Intelligence Service (SVR) chief Sergei Naryshkin has announced. “The country’s current leadership does not care about the death of ordinary Frenchmen and the concerns of the country’s generals. According to information received by the Russian Foreign Intelligence Service, a contingent of troops is already being prepared to be sent to Ukraine. At the initial stage, it will number about 2,000 people,” Naryshkin said in a statement Tuesday. According to the SVR head’s information, France’s generals are concerned about the difficulty of transferring such a large force to Ukraine and stationing it there unnoticed. Naryshkin warned that any French forces arriving in Ukraine “will become a legitimate priority target” for Russia’s military, with the same fate to await them as has already befallen those who fell during previous instances of French aggression against Moscow.

The SVR head also confirmed that those French nationals already in Ukraine (presumably fighting as mercenaries), have suffered losses not experienced by Paris since Algeria’s war of liberation against French control in the 1960s, hence concerns among the military leadership about the threat of discontent among mid-level officers in the French Army about the prospects of being deployed in Ukraine. President Macron has been the loudest voice among any NATO leaders in warning that he wouldn’t rule out sending troops to Ukraine “at some point.” “Maybe at some point – I don’t want it, I won’t take the initiative – we will have to have operations on the ground, whatever they may be, to counter the Russian forces,” Macron told Le Parisien last Friday. “France’s strength is that we can do it,” he added.

Macron riled up his NATO allies, particularly Germany, in early March by urging Europe not to be “cowards” in supporting the Kiev regime using all available means.If late February, he warned that he wouldn’t “rule out” sending French forces east. The president was roundly condemned by French opposition leaders for his remarks, with politicians both on the left and the right accusing him of playing with the lives of the French people and risking a new world war for the sake of his personal geopolitical ambitions. Russian Foreign Ministry spokeswoman Maria Zakharova went further, accusing Macron of trying to recreate “French SS Division Charlemagne II to defend President Volodymyr Zelensky’s bunker.” The extent of the French mercenary presence in Ukraine was revealed in January, when a Russian missile strike killed and injured dozens of fighters in Kharkov.

NATO will not gain control over the Black Sea

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“..There are no resources in this country, there is no one to fight.”

• Ukraine’s Losses ‘In The Millions’ – Polish General (RT)

Ukraine’s losses in the conflict with Russia should be counted “in the millions,” the former chief of the Polish General Staff, Rajmund Andrzejczak, has claimed. Kiev “is losing the war” and does not have the resources to sustain the fight against Moscow, he added. In an interview with the Polsat broadcaster on Monday, the retired general described Ukraine’s battlefield situation as “very dramatic” and insisted that “there are no miracles in war.”
Ukrainian President Vladimir Zelensky’s decision to replace his top general, Valery Zaluzhny, with Aleksandr Syrsky has failed to make a significant difference as the same issues remain for Kiev’s new commander-in-chief, Andrzejczak added. According to the retired general, Ukraine is suffering deficits in equipment and manpower, with losses taking their toll on its capabilities. “They are missing over 10 million people. I estimate that the losses should be counted in the millions, not hundreds of thousands. There are no resources in this country, there is no one to fight.”

“The Ukrainians are losing this war,” Andrzejczak stated, pointing to media reports suggesting that Kiev is running out of anti-aircraft missiles to protect itself from Russian strikes. Echoing warnings from several Western leaders in recent weeks, Andrzejczak called for arms production to be boosted and argued that the West should prepare for a full-scale conflict with Russia within two or three years. Russian President Vladimir Putin has insisted that Moscow has no plans or interest in attacking NATO. Russian Defense Minister Sergey Shoigu stated last month that Ukraine had lost more than 444,000 troops since the start of the conflict in February 2022. The hostilities have also triggered an exodus of Ukrainian refugees, with almost 6.5 million recorded worldwide, according to UN data.

Officials in Kiev have repeatedly complained that Western arms shipments have been inadequate. Those calls have grown louder as US President Joe Biden’s request to provide an additional $60 billion in aid remains stalled in Congress, due to Republican demands to strengthen American border security. Kiev is also mulling a new mobilization bill that would lower the minimum draft age for men from 27 to 25, with reported plans to send 500,000 new troops to the frontline. Against this backdrop, the Russian military last month pushed Kiev out of the strategic Donbass city of Avdeevka, also liberating several nearby settlements. The former stronghold has been on the front line since 2014 and was frequently used by Kiev to shell residential blocks in the nearby city of Donetsk.

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“You’re in a fight for your life, so you should be serving — not at 25 or 27.” “We need more people in the line..”

• Lindsey Graham Tells Ukraine To Draft Younger Soldiers (RT)

US Senator Lindsey Graham (R-South Carolina) has urged the Ukrainian parliament to pass a highly controversial mobilization bill that would lower the minimum conscription age from 27 to 25 to compensate for battlefield losses. At the same time, he advocated a scheme in which the US would provide Ukraine with loans instead of non-repayable aid. Kiev announced general mobilization in February 2022 shortly after the start of the conflict, with men between 27 and 60 eligible to be called up, although those over the age of 18 could also volunteer. In December, Ukrainian officials proposed a bill expanding the draft bracket, with reported plans to send as many as 500,000 fresh soldiers to the front line. On Monday, Graham traveled to Kiev to discuss continued US support for Ukraine with President Vladimir Zelensky. Speaking to reporters, he said that he hoped that those eligible to serve in the Ukrainian military would join the fight.

“I can’t believe [the conscription threshold] is at 27,” he added, as quoted by the Washington Post. “You’re in a fight for your life, so you should be serving — not at 25 or 27.” “We need more people in the line,” he said. Graham also stressed that Ukrainians need to serve regardless of whether the US sends arms to Kiev or not. “No matter what we do, you’re fighting for you.” The US has struggled to approve President Joe Biden’s aid request earmarking $60 billion for Ukraine due to Republican opposition demanding that the White House do more to enhance security on the southern border. Moreover, Graham appeared to endorse the approach of GOP presidential frontrunner Donald Trump who has advocated providing aid to Kiev in form of loans on “extraordinarily good terms.”

“I was very direct with President Zelensky. You can expect me to always be in your corner, but it’s not unfair for me to ask you and other allies: Pay us back down the road, if you can,” the senator said. Graham’s call for Kiev to extend the draft bracket comes as Russian Defense Minister Sergey Shoigu last month estimated Ukrainian losses since the start of the conflict at more than 444,000 troops. Meanwhile, Zelensky has claimed that Kiev has suffered only 31,000 dead. Last year, President Vladimir Putin said that Western countries seemed determined “to fight Russia to the last Ukrainian.” He also noted at the time that while the West could provide Kiev with new arms, Ukraine’s manpower is not limitless.

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“..who the main beneficiaries of the spending bonanza really are (hint: it’s not the Ukrainians)..”

• US Military-Industrial Complex Jacks Up Prices Amid Ukraine Proxy War (Sp.)

Dedicated Ukraine proxy war supporter and Vermont Senator Bernie Sanders has laced into America’s biggest defense contractors, accusing them of price gouging. “Like a majority of Americans, I believe it is in the vital interest of the United States and the international community to fight off Russian President Vladimir Putin’s illegal invasion of Ukraine. But many defense contractors see the war primarily as a way to line their own pockets. The RTX Corporation, formally Raytheon, has increased prices for its Stinger missiles sevenfold since 1991. Today, it costs the United States $400,000 to replace each Stinger sent to Ukraine – an outrageous price increase that cannot even remotely be explained by inflation, increased costs, or advances in quality,” Sanders complained in an essay published in Foreign Affairs magazine on Monday.

“When contractors pad their profits, fewer weapons reach Ukrainians on the frontlines. Congress must rein in this kind of war profiteering by more closely examining contracts, taking back payments that turn out to be excessive, and creating a tax on windfall profits,” Sanders urged. The senator’s shock and outrage over the US military-industrial complex’s war profiteering is in itself a surprise. Serving as a congressman between 1991 and 2007 and as a senator from 2007 onward, Sanders has been part of Washington political establishment for over 30 years now. One might think that to be more than enough time to realize that obscene profitmaking is the name of the arms industry’s game.

The senator’s farfetched epiphany aside, his point stands. Since the 1990s, US weapons giants from Raytheon and Lockheed to BAE Systems to General Dynamics have jacked prices on everything from man-portable anti-tank and air defense missiles to artillery, tanks, drones and more. In other words, the Stinger certainly isn’t the only example of out of control costs at the Pentagon. The Kiel Institute for the World Economy estimates total Western military assistance to Ukraine to have hit $113+ billion in 2024. On first glance, that figure sounds impressive, representing nearly double Russia’s entire pre-conflict defense budget of $66 billion in 2021. Taking account of the seemingly out-of-control price increases of US weapons, however, a different picture emerges on the capabilities given to Kiev, and about who the main beneficiaries of the spending bonanza really are (hint: it’s not the Ukrainians).

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“..Apple will disable all iPhones in the Russian Federation, and Google will disable non-jailbroken Android phones..”

• iPhones Won’t Work In Case Of World War III – Russian MP (RT)

Western smartphones could stop working in Russia if the Ukraine conflict turns into a global war, Anton Gorelkin, deputy head of the Russian State Duma’s Information Policy Committee, warned in an interview posted to the YouTube channel Telega Reality. According to the MP, if the conflict “moves to another stage,” everyone will “up the stakes,” including the tech companies. “I’m talking about something that some experts call World War III. In this scenario, I fully expect that Apple will disable all iPhones in the Russian Federation, and Google will disable non-jailbroken Android phones,” he stated. He warned that in such a case the Russian authorities and tech experts could retaliate with similar actions regarding Western tech companies, although he did not specify what these actions could be. Gorelkin also admitted that Russia currently has no alternatives to replace Western smartphones or the software they use. He predicted, however, that things may change in 5-10 years, as Russia’s IT sphere is rapidly developing, especially since the exit of a number of foreign companies from the country’s market.

Gorelkin is not the first person to suggest the possibility that Western gadgets will stop working in Russia. Various experts warned that such a scenario was technically possible for all devices that require software updates from companies abroad, or have options that allow owners to remotely find and block a phone that has gone missing. However, so far Western tech companies have stopped short at removing undesirable applications from their app stores and disabling the use of the payment services Apple Pay and Google Pay on phones belonging to Russian users. Russian President Vladimir Putin recently weighed in on the possibility of the Ukraine conflict turning into a global war. During a question-and-answer session at his campaign headquarters in Moscow on Sunday night, he commented on recent statements from members of the US-led military bloc on the possibility of NATO troops being deployed in Ukraine. Putin said that such a move would be seen as a direct confrontation between NATO and Russia, which “would be one step shy of a full-scale World War III.”

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“.. real wages measured against pre-crisis forecasts dropped by 4% from April 2022 to March 2023, while output declined by 4.1%..”

• German Living Standards In ‘Unprecedented post-WW2 Slump’ (RT)

Germany’s 2022 living standards took the biggest downturn since World War II, a report released by the Forum for a New Economy on Monday has suggested. The decline is attributed to the energy shocks that sent prices for consumers soaring. Economists from the Berlin-based think-tank highlighted that the decline in Germany’s economic output recorded in 2022 is comparable to the financial crisis of 2008 and the short-lived decline during the Covid-19 pandemic in 2020. The failure to protect the country’s industrial sector from energy price spikes is expected to turn the 2020s into “a lost decade for Germany,” the analysts have warned, calling the crisis “the worst economic downturn in the country since World War II.” For years, Germany’s prized industrial sector had been fueled by relatively inexpensive Russian gas. However, since the Ukraine conflict erupted in 2022, Berlin has opted to forgo energy from Russia in favor of costlier alternatives, including American liquefied natural gas.

According to the report, real wages measured against pre-crisis forecasts dropped by 4% from April 2022 to March 2023, while output declined by 4.1%. Germany’s economy shrank by 0.3% in 2023, according to the federal statistics agency Destatis. However, the country managed to avoid a technical recession after the second-quarter figures were revised to 0.1% growth. Two consecutive quarters of negative growth are widely considered to mark a technical recession. The Bundesbank, Germany’s central bank, recently forecast growth of 0.4% in 2024. However, some financial institutions, such as the country’s two largest lenders, Deutsche Bank and Commerzbank, expect German GDP to decline again this year. Meanwhile, EU Commission’s most recent forecast for the Eurozone shows an expected increase in GDP of only 0.8% in 2024, down from the previous forecast of 1.2% growth made last November.

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“We cannot affect the outcome of the election… but just to spite them we need to make some stupid statement.”

• Medvedev Reacts To Germany’s Putin Snub (RT)

Berlin’s decision not to refer to Russian President Vladimir Putin by his proper title in government documents is ridiculous and possibly a sign of a mental disorder, officials in Moscow have said. The diplomatic snub was announced on Monday in an effort to discredit last week’s presidential election in Russia. Germany and other Western nations claim the electoral process was neither free nor fair. A government spokesperson said the move was symbolic, noting that communications between Berlin and Russia were severely limited anyway. Reacting to the news, former Russian president Dmitry Medvedev said the stunt “comes from shameful weakness.”

He claimed that Germany was essentially saying “We cannot affect the outcome of the election… but just to spite them we need to make some stupid statement.”If Germany does not recognize Putin as the legitimate head of Russia, how does it intend to negotiate with Moscow and what value would any outcome of such talks have, asked Medvedev, who is the deputy head of Russia’s Security Council. Meanwhile, Russian Foreign Ministry spokeswoman Maria Zakharova said the decision not to use Putin’s official title looked like the result of a self-induced “wild phobia,” an inability to name the source of one’s fear. ”This is something that differentiates a healthy person from someone who is not. They appear to be in a state of paranoia,” she remarked during an interview.

Western rhetoric following Putin’s re-election had contrasted with the reaction of most nations of the world, which had congratulated the president, Zakharova noted. The US and its allies should “take care of themselves and their problems” instead of picking on other sovereign states, she suggested. The Russian president has dismissed Western criticism of his election win, claiming that it was made in bad faith by governments seeking to contain Russia. ”What did you expect? For them to stand up in applause or something? They are fighting against us, including with arms,” Putin said following his victory.

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“In Gaza we are no longer on the brink of famine. We are in a state of famine..”

• ‘Catastrophic’ Hunger Has Gripped Gaza (RT)

Famine conditions now exist in the northern part of Gaza, a UN monitor group warned on Monday. Around 300,000 people remain trapped in the area, following months of Israeli bombardment that has left over 31,000 people dead. The UN-backed report also warns that more than 70% of Gaza’s population of 2.3 million faces “catastrophic hunger.” The Integrated Food-Security Phase Classification (IPC) said that mass death is now imminent without an immediate ceasefire and deliveries of food aid to the areas affected by the fighting. More than a dozen children in Gaza, including newborn babies, have starved to death and many more are at risk from soaring malnutrition. UN aid agencies warned earlier in March that urgently-needed humanitarian aid is being blocked from entering the Palestinian enclave.

The IPC estimated that two out of every 10,000 people will die daily from starvation, malnutrition, and disease if not helped immediately. “The actions needed to prevent famine require an immediate political decision for a ceasefire together with a significant and immediate increase in humanitarian and commercial access to the entire population of Gaza,” the report said. Israel has been criticized by its Western partners since it began launching retaliatory strikes against Hamas militants following their attack on Israel on October 7. “In Gaza we are no longer on the brink of famine. We are in a state of famine,” EU foreign policy chief Josep Borrell said at the opening of a conference on humanitarian aid for Gaza in Brussels on Monday.

He also accused Israel of “using starvation as a weapon of war.” Foreign Minister Israel Katz responded by saying, “Israel allows extensive humanitarian aid into Gaza,” and told Borrell “to stop attacking Israel and recognize our right to self-defense against Hamas’ crimes.” Efforts to reach a truce between Hamas and Israel are ongoing, with no breakthrough so far as the hostilities continue. Heavy fighting erupted on Monday in and around Gaza’s Al-Shifa hospital complex. The Israeli Army said it was combatting Hamas militants there and advised civilians to evacuate.

Sachs Israel

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“..the federal government’s inability or unwillingness to protect the border..”

• Supreme Court Allows Texas To Start Arresting And Deporting Illegal Aliens (ZH)

The Supreme Court on Tuesday dealt a blow to the Biden administration’s attempts to keep the US border open – allowing Texas to enforce a new law giving local police the power to arrest migrants. With three liberal justices dissenting, the conservative-majority court rejected an emergency request by the Biden administration which claimed that states have no authority to legislate on immigration. The ruling means that Texas’ law can go into effect while litigation continues in lower courts. The law, SB4, allows police to arrest migrants who illegally cross into the United States from Mexico, and imposes criminal penalties. It also empowers judges to deport people to Mexico. “Texas is the nation’s first-line defense against transnational violence and has been forced to deal with the deadly consequences of the federal government’s inability or unwillingness to protect the border,” Texas argued in court papers.

The dispute is the latest clash between the Biden administration and Texas over immigration enforcement on the U.S.-Mexico border. A federal judge blocked the law after the Biden administration sued, but the New Orleans-based 5th U.S. Circuit Court of Appeals said in a brief order that it could go into effect March 10 if the Supreme Court declined to intervene. On March 4, Justice Samuel Alito issued a temporary freeze on the law to give the Supreme Court time to consider the federal government’s request. -NBC News. Solicitor General Elizabeth Prelogar said in court filings that Texas’ law is “flatly inconsistent” with Supreme Court precedent dating back 100 years. “Those decisions recognize that the authority to admit and remove noncitizens is a core responsibility of the national government, and that where Congress has enacted a law addressing those issues, state law is preempted,” she said, adding that the appeals court did not explain its reasoning for allowing the law to go into effect.

And what about the GDP? The new ruling may put a crimp in the Biden administration’s seeming plan to flood the country with low-wage labor in an effort to boost GDP, which Democrats now insist would benefit to the tune of $7 trillion thanks to illegal immigrants – who are allowed to work indefinitely whilst waiting for the US immigration system to process their asylum claims. Recall that 10 million illegals have entered the US under Biden, while virtually all of the job gains under Biden have gone to foreign-born workers, looks like their ‘great replacement’ theory scheme has just suffered a swift kick to the huevos. “This unprecedented surge in illegal immigration isn’t an accident. It is the result of deliberate policy choices by the Biden administration,” said Eric Ruark, Director of Research for Numbers USA, a nonprofit that advocates for immigration restrictions.

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“..Is there a pattern here of likely guilt that is contextualized into a not guilty assessment?..”

• Guilty!—But Not Really Guilty? (Victor Davis Hanson)

In 2011, then Homeland Security Advisor to President Obama, John Brennan, swore before Congress that drone-targeted assassination missions near the Pakistani border had not led to “a single collateral death.” That was an obvious lie with grave consequences, given that Brennan was sworn under oath and was one of the top officials in the US national security community. Yet there were no subsequent repercussions. In fact, the opposite occurred. Brennan was subsequently rewarded with a 2013 appointment as CIA. But the next year, once again, Brennan lied to Congress, assuring the Senate Intelligence Committee that his CIA had not secretly accessed senate staffers’ computers. Again, there were no consequences for his repeated lies. Instead, Brennan, upon retirement, went on to be an MSNBC/NBC analyst who helped to promulgate the Russian collusion/laptop disinformation hoaxes.

In 2013, Director of National Intelligence James Clapper also lied under oath to Congress when he laughably stated that the National Security Agency did not spy on American citizens. Later, when called out by senators, Clapper fudged in a televised interview. “I responded in what I thought was the most truthful, or least untruthful, manner by saying no.” Try that contortion with the IRS. Some members of Congress referred a criminal complaint of perjury against Brennan to then Attorney General Eric Holder. Nothing happened. Again, one of the chiefs of the American national security community was exempted after lying to members of Congress. Clapper went on to a lucrative position as a CNN national security analyst, and at one point he claimed that Trump was a Putin “asset.”

As far as Eric Holder, he had earlier defied a congressional subpoena and was held in contempt by the House. The Department of Justice, however, chose not to pursue the complaint. Later in the Trump administration, Trump adviser Peter Navarro would be sentenced to four months in jail for similarly resisting a congressional subpoena. Was it a crime or not to resist a congressional subpoena? The Justice Department’s Inspector General concluded that Andrew McCabe, the former FBI deputy director and interim director, had lied repeatedly to a variety of officials, including FBI Director James Comey, various FBI agents, and officials of the Office of the Inspector General. On some of these occasions, McCabe was sworn under oath. Yet in 2020, the Department of Justice chose not to pursue the IG’s criminal referrals. McCabe went on to become an outspoken CNN News contributor. Note that Gen. Michael Flynn, Trump’s National Security Advisor, was indicted—and convicted—for similarly lying to the FBI in 2017.

In 2016, an FBI investigation found that Hillary Clinton, as Secretary of State, had violated the law by transmitting and receiving classified information over an unsecured private server. Subsequently, she destroyed thousands of emails and some devices, some of which were under subpoena. FBI Director James Comey found that “any reasonable person” should have known it was illegal to transmit classified information in such a sloppy fashion. Comey, however, found that “Although there is evidence of potential violations of the statutes regarding the handling of classified information, our judgment is that no reasonable prosecutor would bring such a case.” Translated, that meant Hillary Clinton had likely broken the law, but it was unlikely that any prosecutor like Comey would indict the then-current Democratic nominee for president and former Secretary of State—at least in the fashion that state and federal prosecutors would later file over 90 indictments against Donald Trump.

In 2018, the now-former FBI Director James Comey on some 245 occasions claimed under oath to Congress that he did not know or could not remember essential facts in the FBI Crossfire Hurricane investigation of Donald Trump, which he had authorized. In addition, the Office of the Inspector General of the Justice Department found that Comey had broken the law by violating both DOJ and FBI policies, as well as the FBI’s employment agreement—especially by retaining in his personal safe copies of four bureau memos concerning a confidential conversation with President Trump. Elements in the memos from that meeting likely contained classified information. Yet Comey leaked it to a friend without a security clearance in order to make it public. Despite the damning IG report, the Department of Justice chose not to prosecute Comey. Is there a pattern here of likely guilt that is contextualized into a not guilty assessment—and not guilty due to the prosecutorial psychoanalysis of the jury—that a guilty verdict would be difficult to obtain?

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“For the first time in my 94 years on earth, I fear for the future of our democracy..”

“Joe Biden has fulfilled Barack Obama’s promise to “transform” America..”

• It’s Time for GOP To Unite Behind Trump (Marcus)

For the first time in my 94 years on earth, I fear for the future of our democracy. I see the federal government using its enormous powers with contempt for the governed instead of with the consent of the governed as our founders envisioned. Fundamental change in America is occurring by executive order or the force of the government’s police powers instead of through the legislative process required by the Constitution. From this, I fear that free market capitalism may be replaced by big government socialism. I also fear the erosion of our rights and freedoms, including parental rights, freedom of speech and religion, and due process. In the past, I always had the confidence that a president who was a threat to democracy could be voted out of office in the next election. I am no longer that confident today. My lack of confidence is because the media today is not the watchdog over government that our Founders intended it to be. It is instead the lapdog of government, shielding the public from the entire truth about the policies and actions of the current administration.

One vivid example of this became a meme: the television reporters declaring while doing their standups that the riots in 2020 were “mainly peaceful” as fires raged in the background. I was not surprised earlier this month by the reprise of “Russia collusion.” Nor will I be surprised if the media soon characterizes a Trump rally as an “insurrection.” The media may be the biggest threat to our democracy since only well-informed voters guarantee the future of it. There is more on the line in this year’s presidential election than ever before. It is a mistake to assume that this election will be a rerun of 2020. The presumptive nominees and the world have changed since then. President Biden can no longer portray himself as “kindly Uncle Joe” or a moderate Democrat. His recent State of the Union Address, which was the most divisive of any I recall, reveals he is a very angry man and not someone Americans would want as their uncle. His policies and the undemocratic means by which he implemented them confirm he has been pulled to the far left by far-left extremists in the Democrat Party.

The Biden administration’s policies invited an invasion along our southern border by millions of unvetted people, compromised national security, allowed crime to spin out of control in our streets, forced middle-class Americans to raid their retirement funds to put food on their tables, and divided America more than at any time in our history since the Civil War. Joe Biden has fulfilled Barack Obama’s promise to “transform” America. This is not a welcome transformation, as confirmed by Biden’s dismal job approval ratings. When Donald Trump was in office, his Democrats and their media allies portrayed him as a pugnacious New Yorker who “did not act presidential” and somehow craved dictatorial powers. They’re still doing this, although they’ve upped the rhetoric. Over the weekend, Nancy Pelosi invoked Adolf Hitler while attacking the former president. His detractors are unwilling to look past Trump’s rough edges and see the results he achieved during his first of what I hope will be two terms.

His policies achieved the highest wage rate in 50 years while keeping inflation in check, the lowest unemployment rate for minorities, and energy independence for America, among other stunning results. Moreover, his policies and the projection of his and America’s strength kept the country out of any new foreign conflicts. It is essential to our national security that America’s enemies fear our president. This does not mean that President Trump did not have to do better. He did, and he has done so since leaving office. Having become close to him in the last seven years, I have seen a side of him that is not seen by the public. He is truly one of the most misunderstood men in America, and I and other friends of his have urged him to let the public see the real Donald Trump. His recent praise of Nikki Haley was unifying and shows the magnanimous side of him that his friends often see. Expect more of the real Donald Trump to emerge.

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“..You live in a country where the Attorney General is abetting, in fact calling for voter fraud, and that’s the only chance they have to get their guy re-elected.”

• How the Democrats Plan To Steal the Election (Lew Rockwell)

This isn’t the first time the Left has stolen an election. It happened in the 2020 presidential election too. Ron Unz offers his usual cogent analysis: “There does seem to be considerable circumstantial evidence of widespread ballot fraud by Democratic Party forces, hardly surprising given the apocalyptic manner in which so many of their leaders had characterized the threat of a Trump reelection. After all, if they sincerely believed that a Trump victory would be catastrophic for America why would they not use every possible means, fair and foul alike, to save our country from that dire fate? In particular, several of the major swing-states contain large cities—Detroit, Milwaukee, Philadelphia, and Atlanta—that are both totally controlled by the Democratic Party and also notoriously corrupt, and various eye-witnesses have suggested that the huge anti-Trump margins they provided may have been heavily ‘padded’ to ensure the candidate’s defeat.”

In a program aired right after Biden’s pitiful State of the Union speech, the great Tucker Carlson pointed out that Biden’s “Justice” Department has already confessed that it plans to rig the election. It will do this by banning voter ID laws as “racist.” This permits an unlimited number of fake votes: “If Joe Biden is so good at politics, why is he losing to Donald Trump, who the rest of us were assured was a retarded racist who no normal person would vote for? But now Joe Biden is getting stomped by Donald Trump, but he’s also at the same time good at politics? Right. Again, they can’t win, but they’re not giving up. So what does that tell you? Well, they’re going to steal the election. We know they’re going to steal the election because they’re now saying so out loud. Here is the Attorney General of the United States, the chief law enforcement officer of this country in Selma, Alabama, just the other day. [Now Carlson quotes the Attorney General, Merrick Garland:] “The right to vote is still under attack, and that is why the Justice Department is fighting back. That is why one of the first things I did when I came into office was to double the size of the voting section of the Civil Rights Division.

That is why we are challenging efforts by states and jurisdictions to implement discriminatory, burdensome, and unnecessary restrictions on access to the ballot, including those related to mail-in voting, the use of drop boxes and voter ID requirements. That is why we are working to block the adoption of discriminatory redistricting plans that dilute the vote of Black voters and other voters of color. [Carlson then comments on Garland:] “Did you catch that? Of course, you’re a racist. That’s always the takeaway. But consider the details of what the Attorney General of the United States just said. Mail-in balloting, drop boxes, voter ID requirements. The chief law enforcement officer of the United States Government is telling you that it’s immoral, in fact racist, in fact illegal to ask people for their IDs when they vote to verify they are who they say they are. What is that? Well, no one ever talks about this, but the justification for it is that somehow people of color, Black people, don’t have state-issued IDs.

Somehow they’re living in a country where you can do virtually nothing without proving your identity with a government-issued ID without government-issued IDs. They can’t fly on planes, they can’t have checking accounts, they can’t have any interaction with the government, state, local, or federal. They can’t stay in hotels. They can’t have credit cards. Because someone without a state-issued ID can’t do any of those things. But what’s so interesting is these same people, very much including the Attorney General and the administration he serves, is working to eliminate cash, to make this a cashless society. Have you been to a stadium event recently? No cash accepted. You have to have a credit card. In order to get a credit card you need a state-issued ID, and somehow that’s not racist. But it is racist to ask people to prove their identity when they choose the next President of the United States. That doesn’t make any sense at all. That’s a lie. It’s an easily provable lie, and anyone telling that lie is advocating for mass voter fraud, which the Attorney General is. There’s no other way to read it. So you should know that. You live in a country where the Attorney General is abetting, in fact calling for voter fraud, and that’s the only chance they have to get their guy re-elected.”

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“..the drug activates genes in neurons that affect cell growth, improves brain function and reduces the risks of inflammation..”

• Viagra May Prevent Alzheimer’s (RT)

Sildenafil, the generic name for Viagra, may not only treat erectile dysfunction and pulmonary arterial hypertension, but also ward off cognitive decline, according to research published by the Cleveland Clinic Genome Center earlier this month. The authors of the study, published in the Journal of Alzheimer’s Disease on March 1, found that those who took sildenafil were 30% to 54% less likely to be diagnosed with Alzheimer’s disease. The researchers used real-world patient data from the MarketScan Medicare Supplemental database (2012-2017) and the Clinformatics database (2007-2020) to arrive at the conclusion.

The research was focused on those taking sildenafil or four comparator drugs, including bumetanide, furosemide, spironolactone, and nifedipine. Comparators are existing marketed drug products, or new drugs in development, including placebo versions. Gender, age, race, and concurrent diseases of the patients were factored in. The study concluded that the use of sildenafil was associated with reduced likelihood of Alzheimer’s relative to the control drugs. The results also showed that the drug activates genes in neurons that affect cell growth, improves brain function and reduces the risks of inflammation.

“We used artificial intelligence to integrate data across multiple domains which all indicated sildenafil’s potential against this devastating neurological disease,” said Feixiong Cheng, director of the Cleveland Clinic Genome Center, who led the study. Similar conclusions about sildenafil were made by researchers from University College London earlier this year. The study, published in the journal Neurology last month, included nearly 270,000 men who were diagnosed with erectile dysfunction and had no cognitive problems at the beginning of the research work. Those taking the drugs were 18% less likely to develop the dementia-causing condition.

Read more …

 

 

 

 

CO2

 

 

Rik Mayall
https://twitter.com/i/status/1770026300385743303

 

 

 

 

Dogshower

 

 

Frens

 

 

Owl
https://twitter.com/i/status/1769916272089952458

 

 

Luna

 

 

SF 1950s

 

 

 

 

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Debt Rattle February 10 2020

Feb 102020
 
 February 10, 2020  Posted by at 10:37 am Finance Tagged with: , , , , , , , , , , , , ,  28 Responses »


Arnold Genthe 17th century Iglesia el Carmen, Antigua, Guatemala 1915

 

• Japan: 60 More Coronavirus Infections On Diamond Princess Cruise Ship (SCMP)
• iPhones Will Display China’s Back-to-Work Power (R.)
• Beijing Officially Declares Lockdown (GNews)
• Taiwan’s Foxconn Gets OK To Restart Plant In Zhengzhou, China (R.)
• Nikkei Denies Reuters Story That Foxconn Will Restart Production (ZH)
• Shenzhen Denies Blocking Apple Supplier Foxconn From Resuming Production (R.)
• Amazon Latest To Pull Out Of Major Barcelona Tech Show (BBC)
• Millions Left Wuhan Before Quarantine. Where Did They Go? (AP)
• The Mysterious Origin of the Wuhan Coronavirus (ET)
• Rick Gates Told Mueller The Black Ledger Was Fabricated (Solomon)

 

 

Lots of ‘China back to work’ articles today, because I was curious how that would go. Well, it’s not clear -what a surprise. Beijing put itself on lockdown today, maybe that’s a clear sign. They, too, must have seen that the cruise ship floating off Yokohama found an additional 60 infections. And factories, like trains etc., can be almost as bad as cruise ships in spreading viruses.

The best line on the topic is perhaps that Citi estimates that by Tuesday, only 30% of China’s total workforce will be able to return to work. Much less today. Reuters claims that Foxconn can open its Zhengzhou factories, only to have Nikkei deny it. Nikkei in turn says Shenzhen ordered Foxconn’s plants there shut, but Shenzhen denies that.

That Amazon, LG, Ericsson and NVIDIA have all withdrawn from a conference as far away as Barcelona should also tell you something about the overall mood. People say: how iPhones fare will tell you a lot. I say: look at the less iconic stuff.

 

• Deaths 910, up 97 from yesterday’s 813 – people say: Daily Record! I say: every day has been a record so far, or the same as the day before.

• New cases 2,973 from 2,652 yesterday – no more levelling off

• Global confirmed cases 40,614

Hubei

• 29,631 confirmed cases
• 871 deaths
• 1,795 discharged from hospitals
• 73,127 under medical observation

 

Note: the SCMP app where the numbers below come from appears to have some troubles. The detailed numbers are not there. At first, no numbers at all. Then they re-appeared, and then started counting backward. But they’re about right as official numbers go.

 

 

 

 

Petri dish. Newer studies suggest the virus can survive 9 days on surfaces. Good luck.

• Japan: 60 More Coronavirus Infections On Diamond Princess Cruise Ship (SCMP)

Testing aboard the Diamond Princess cruise ship in Japan has found 60 more confirmed cases of the novel coronavirus, national broadcaster NHK said on Monday. That brings total cases on the ship docked in Yokohama, south of Tokyo, to 130. Japanese authorities have so far tested about 280 people on board the Diamond Princess, which was placed on a two-week quarantine after a former passenger, who disembarked in Hong Kong last month, was diagnosed with the coronavirus. About 3,700 people are on board the vessel, which usually has a crew of 1,100 and a passenger capacity of 2,670.


The Princess Cruise website describes the ship as “your home away from home” and it will remain so for most passengers at least until February 19. The quarantine period could be extended if necessary, a Japanese government official said. One of those found infected is in serious condition. Many on board are elderly and at greater risk of developing complications from the virus. Mike Ryan, the World Health Organisation’s top emergency expert, said new cases would push back the quarantine. “We need to find a way to break that vicious cycle and find a way of organising the patients on board in a way that we can get people off the ship in due course, Ryan said.

Read more …

Sure sounds strict.

• Beijing Officially Declares Lockdown (GNews)

As the novel coronavirus spreads from Wuhan, China has been implementing “closed management” by putting 80 cities under lockdown. Today, Beijing authorities also issued a “Strict Closed Management of Residential Communities” in an epidemic prevention and control announcement. It is an official declaration that Beijing, the country’s capital city of China, is now under lockdown. According to the notice, Beijing will further enforce “community closed management” in a strict manner. Outside vehicles and personnel are not allowed to enter the city. People arriving in Beijing must also report their health status and complete the registration of personal information. Those who have left the epidemic area or have physical contact with persons in the epidemic area within 14 days of their arrival at Beijing, shall be inspected or quarantined at home in accordance with the regulations.


They should take the initiative to report their health conditions, and cooperate with relevant management services. They shall not go out. Anyone who refuses to accept epidemic prevention measures such as medical observation and home quarantine constitutes a violation of public security management and shall be severely punished by the public security bureau according to the law. In addition, all public places in the Beijing community that are not essential for people’s living are closed. All agencies and enterprises must strictly strengthen body temperature monitoring. Housing agencies and landlords in Beijing must provide local government with information on rental houses and tenants. This is a measure for epidemic prevention.

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I’m still not convinced. But I realize that Xi really really wants it.

• China Slowly Gets Back To Work (R.)

Authorities told businesses to add up to 10 extra days onto Lunar New Year holidays that had been due to finish at the end of January. Even on Monday, a large number of workplaces remained closed and many people worked from home. Few commuters seen during the morning rush-hour on one of Beijing’s busiest subway lines. All were wearing masks. Jin Yang, who works in a department of China’s State Administration of Foreign Exchange, rode a bicycle to work instead of public transport. Staff were told to wear masks, avoid face-to-face meetings and the canteen was closed. Another employee surnamed Chen said the insurance company he worked for had barred people from taking public transport. “I usually take subways but this morning it cost me 200 yuan one way by cab,” he said.

Hubei, the province of 60 million people that is the hardest hit by the outbreak, remains in virtual lockdown, with its train stations and airports shut and its roads sealed off. The extended closure of factories in the world’s second-largest economy has raised concerns about disruptions cascading through global supply chains. China’s central bank has taken a raft of steps to support the economy, including reducing interest rates and flushing the market with liquidity. From Monday, it will provide special funds for banks to re-lend to businesses combating the virus. Taiwan’s Foxconn has received Chinese government approval to resume production at a key plant in the north China city of Zhengzhou, a source with direct knowledge of the situation told Reuters on Monday.

But the southern city of Shenzhen rejected a company request to resume work at a plant there. Tesla, Daimler and Ford Motor are among carmakers that have said that they will restart production at their factories on Monday. Gaming giant Tencent Holdings said it had asked staff to continue working from home until Feb. 21. Samsung Electronics resumed production at its home appliance factory in China on Monday, while it continues to run its chip factory there, a spokeswoman said. It extended the suspension of work at a television factory to Feb. 17. Hyundai said its suppliers in China resumed production but volume was negligible. Kia Motors is suspending production at all three Korean plants due to a shortage of parts, although one of them will resume production on Tuesday.

Read more …

Beijinng can make iPhones a priority, knowing the west will watch them more than other products. So, bad barometer.

• iPhones Will Display China’s Back-to-Work Power (R.)

The next iPhones will test China’s ability to restart its economy. Apple supplier Foxconn, formally known as Hon Hai Precision Industry, is re-opening a key Chinese plant as authorities ease curbs. But the handset-maker and other companies face labour shortages as workers struggle to travel with ongoing contagion fears around a coronavirus outbreak. It’s a reminder of the complexity of restarting supply chains. Foxconn has won permission to resume operations at its mega Zhengzhou facility in northern China. Production at the plant, which some analysts reckon account for the bulk of the iPhone’s assemblies, has been halted for over two weeks.

The company is still in talks with officials to restart two other major plants, according to Reuters. One, in the southern city of Shenzhen, is focused on new iPhone models slated for this year, local media reports. There are practical limitations, though. Barely 16,000 workers, less than 10% of the workforce, returned to the Zhengzhou factory, Reuters reported on Monday [..] Many employees of Chinese companies crisscrossed the country to go back to their hometowns for the Lunar New Year holiday, that was then extended. Citywide lockdowns make it hard for people to move around. Analysts at Citi estimate that by Tuesday, only 30% of China’s total workforce will be able to return to work.

And that doesn’t factor in the immense challenge of preventing fresh cases of infection on factory floors. Most companies may have to enforce additional quarantines for people returning from virus-hit areas, as well as implement daily temperature checks. Foxconn has even resorted to manufacturing its own surgical face masks – up to two million a day – for its hundreds of thousands of employees. Following China-U.S. trade tension, the current disruption will fuel debate about the merits of companies allowing supply chains to consolidate too much in a single country. China’s looming labour shortage, though, is even more pronounced because the virus outbreak coincided with the holidays.

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Or do they?

• Taiwan’s Foxconn Gets OK To Restart Plant In Zhengzhou, China (R.)

Taiwan’s Foxconn has received approval to resume production at a plant in the northern Chinese city of Zhengzhou that had been shuttered due to a coronavirus outbreak, a person with direct knowledge of the matter told Reuters on Monday. About 16,000 people, or under 10% of Foxconn’s workforce in Zhengzhou, have returned to the plant, the person said, adding that company executives were “trying very hard” to negotiate with authorities to resume production in other parts of China. The development comes as the coronavirus outbreak – declared a global health emergency by the WHO – threatens to disrupt Chinese manufacturing and force policymakers to ready measures to stabilize the economy.


At Foxconn, the delayed resumption of operations could impact the global technology supply chain and shipments to customers including Apple Inc, a source with direct knowledge of the matter previously told Reuters. The contract manufacturer is in talks to resume production at key plants including in Shenzhen and Kunshan, said the person on Monday [..] Tens of thousands of Foxconn employees have returned to work following an extended Lunar New Year holiday. They have been told to wear masks, undergo temperature checks and adhere to a specified dining system, showed internal memos reviewed by Reuters. Most senior Taiwanese officials have been told to refrain from returning to China and those who needed to do so required approval from Chairman Liu Young-Way, the person said.

Read more …

Are these contradictory stories spread on purpose?

• Nikkei Denies Reuters Story That Foxconn Will Restart Production (ZH)

[..] after futures sprinted into the green following a Reuters report that Foxconn had received Chinese government approval to resume production at a key plant in the northern China city of Zhengzhou, Nikkei now denies this, reporting that “Foxconn’s plan to resume production on Monday has been called off by the Chinese authorities due to worries surrounding the coronavirus outbreak” The Japanese publication adds that “the action further worsens the supply chain disruption for global electronics companies, including Apple, Amazon, Google and Huawei. Foxconn is the world’s biggest iPhone assembler, and it makes Huawei smartphones and Amazon Kindle tablets as well as echo speakers, while it also supplies HP, Dell and most the major electronics brands.”


Public health experts in Shenzhen informed Foxconn, which trades as Hon Hai Precision Industry, that its factories there face “high risks of coronavirus infection” after conducting on-site inspections and therefore are not suitable to restart work, four people familiar with the matter told Nikkei. “Violation of epidemic prevention and control could potentially face the death penalty,” the internal meeting memo seen by the Nikkei Asian Review said. More importantly, Foxconn’s Zhengzhou complex, which according to Reuters would reopen on Monday, also canceled plans to resume work on Monday, they said.

Read more …

Where politics meets business. Local officials feel the heat from all sides.

• Shenzhen Denies Blocking Apple Supplier Foxconn From Resuming Production (R.)

Local Chinese authorities have not blocked Apple supplier Foxconn from resuming production amid a coronavirus outbreak, they said in a statement on Sunday, denying an earlier report in the Nikkei Business Daily. The Nikkei, citing four people familiar with the matter, said on Saturday that public health experts had carried out inspections at Foxconn’s factories and told the company that there was a “high risk of coronavirus infection” at the facilities, making them unsuitable for a production restart. Shenzhen’s Longhua district, where Foxconn’s largest factory is located, said in a statement on its official WeChat account on Sunday that those reports were untrue and that it was still conducting checks, adding that the company would restart production once inspections were completed.


It said it had received proposals from three Foxconn subsidiaries on Feb. 6 detailing how the Taipei-headquartered firm, which makes smartphones for Apple and other brands, planned to put in place epidemic prevention and control measures. The thousands of workers that work in Foxconn’s factories will need to wear masks, undergo temperature checks, and adhere to a dining system considered safe, it said in the statement.

Read more …

How far is that from Wuhan?

• Amazon Latest To Pull Out Of Major Barcelona Tech Show (BBC)

Amazon is the latest major company to pull out of one of the world’s largest tech shows because of risks posed by coronavirus. Amazon said “due to the outbreak and continued concerns about novel coronavirus” it would no longer take part in Mobile World Congress in Barcelona. The organiser said the event, which attracts 100,000 people, will go ahead. But it admitted other companies are considering whether to attend. South Korea’s LG Electronics, Ericsson, the Swedish telecoms equipment-maker, and US chip company NVIDIA have already withdrawn from the conference which runs between 24-27 February.


The GSMA, which organises the show in the Spanish city, said that while it could “confirm some large exhibitors have decided not to come to the show this year with others still contemplating next steps, we remain more than 2,800 exhibitors strong”. However, it revealed that it had put in place additional measures to “reassure attendees and exhibitors that their health and safety are our paramount concern”. These include a ban on all travellers from China’s Hubei province, the epicentre of the outbreak, while people who have been in China must provide proof they have been outside the country for 14 days.

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Most stayed in China. That’s at least something.

• Millions Left Wuhan Before Quarantine. Where Did They Go? (AP)

For weeks after the first reports of a mysterious new virus in Wuhan, millions of people poured out of the central Chinese city, cramming onto buses, trains and planes as the first wave of China’s great Lunar New Year migration broke across the nation. Some carried with them the new virus that has since claimed over 8 00 lives and sickened more than 37,000 people. Officials finally began to seal the borders on Jan. 23. But it was too late. Speaking to reporters a few days after the the city was put under quarantine, the mayor estimated that 5 million people had already left. Where did they go?

An Associated Press analysis of domestic travel patterns using map location data from Chinese tech giant Baidu shows that in the two weeks before Wuhan’s lockdown, nearly 70% of trips out of the central Chinese city were within Hubei province. Baidu has a map app that is similar to Google Maps, which is blocked in China. Another 14% of the trips went to the neighboring provinces of Henan, Hunan, Anhui and Jiangxi. Nearly 2% slipped down to Guangdong province, the coastal manufacturing powerhouse across from Hong Kong, and the rest fanned out across China. The cities outside Hubei province that were top destinations for trips from Wuhan between Jan. 10 and Jan. 24 were Chongqing, a municipality next to Hubei province, Beijing and Shanghai.

The travel patterns broadly track with the early spread of the virus. The majority of confirmed cases and deaths have occurred in China, within Hubei province, followed by high numbers of cases in central China, with pockets of infections in Chongqing, Shanghai and Beijing as well. “It’s definitely too late,” said Jin Dong-Yan, a molecular virologist at Hong Kong University’s School of Biomedical Sciences. “Five million out. That’s a big challenge. Many of them may not come back to Wuhan but hang around somewhere else. To control this outbreak, we have to deal with this. On one hand, we need to identify them. On the other hand, we need to address the issue of stigma and discrimination.”

Read more …

Too many theories to keep up.

• The Mysterious Origin of the Wuhan Coronavirus (ET)

Scientific studies based on phylogenetic analysis have researched the sequence of the novel coronavirus, compared it to other coronavirus sequences, and found it likely originated in bats. Researchers from the Wuhan Institute of Virology found the genome in the virus found in patients was 96 percent identical to that of an existing bat coronavirus, according to a study published in the journal Nature. But there have been other theories as well. One Chinese study suggested, for example, that snakes were the source of transmission to humans. However, many scientists believe that reptiles are a less likely source and that mammals like rats and pigs, and some birds, have been the primary reservoir for coronaviruses.

With this in mind, phylogenetic studies of viral genome sequences need to be supported by animal studies to confirm the origin of the infection, as well as to determine whether there is an intermediate host. It is not an easy task for a virus to establish zoonotic transmission, and coronaviruses rarely leap from animal to human infection with high transmissibility. There is even less chance to see a coronavirus leap directly from bats to humans. To infect new hosts, mutations need to occur with the viral surface proteins and/or envelope and structural genes, so that the mutated viruses can bind and enter the cells of new species, and efficiently complete the replication cycles in the new hosts. Some scientists have argued that coronaviruses can jump directly to humans, without mutating or passing through an intermediate species.

However, an intermediate host was clearly needed to establish zoonotic transmission to humans in the previous outbreaks of coronaviruses. Many studies suggested that the bat coronavirus jumped from its natural host bats to civets and then to humans during the 2003 SARS outbreak, and it jumped from bats to camels and then to humans for the MERS outbreak. So, civets and camels would serve as intermediate hosts for zoonotic transmission. Because bats were not sold at the Huanan market in Wuhan—the epicenter of the infection—at the time of the outbreak, this suggests the existence of another intermediate animal host that may have transferred the virus to humans. What is the most puzzling is that there have been no reports on the testing of animal samples collected in any epicenters in Wuhan, especially at the Huanan seafood market, to identify what animals might be the host or intermediate hosts of this novel Wuhan coronavirus.

Read more …

Both the Steele dossier and the black ledger are fabricated files.

• Rick Gates Told Mueller The Black Ledger Was Fabricated (Solomon)

One of Robert Mueller’s pivotal trial witnesses told the special prosecutor’s team in spring 2018 that a key piece of Russia collusion evidence found in Ukraine known as the “black ledger” was fabricated, according to interviews and testimony. The ledger document, which suddenly appeared in Kiev during the 2016 U.S. election, showed alleged cash payments from Russian-backed politicians in Ukraine to ex-Trump campaign chairman Paul Manafort. “The ledger was completely made up,” cooperating witness and Manafort business partner Rick Gates told prosecutors and FBI agents, according to a written summary of an April 2018 special counsel’s interview. In a brief interview with Just the News, Gates confirmed the information in the summary. “The black ledger was a fabrication,” Gates said.

“It was never real, and this fact has since been proven true.” Gates’ account is backed by several Ukrainian officials who stated in interviews dating to 2018 that the ledger was of suspicious origins and could not be corroborated. If true, Gates’ account means the two key pieces of documentary evidence used by the media and FBI to drive the now-debunked Russia collusion narrative — the Steele dossier and the black ledger — were at best uncorroborated and at worst disinformation. His account also raises the possibility that someone fabricated the document in Ukraine in an effort to restart investigative efforts on Manafort’s consulting work or to meddle in the U.S. presidential election.

Much mystery has surrounded the black ledger, which was publicized by the New York Times and other U.S. news outlets in the summer of 2016 and forced Manafort out as one of Trump’s top campaign officials. After gaining wide attention as purported evidence of Russian ties to the Trump campaign, the ledger was never introduced as evidence at Manafort’s 2018 trial or significantly analyzed in Mueller’s final 2019 report, which concluded that Trump did not collude with Russia to influence the 2016 election. No FBI 302 interview reports have been released either showing what the FBI concluded about the ledger. Gates’ interview with the Mueller team now provides a potential clue as to why.

Read more …

 

 

 

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The Price We Pay For Progress

Jul 062019
 
 July 6, 2019  Posted by at 6:58 pm Finance, Primers Tagged with: , , , , , , , , , ,  6 Responses »


Jack Delano A welder in the roundhouse of the Chicago and North Western Railroad’s Proviso yard 1942

 

It’s rare that I reach back into the past of the Automatic Earth, but it’s not entirely unique either. The reason I do it today is not only the relevance of the article -in my view-, or the fact it was published so long ago, but it’s that the ‘world’ has changed so much since January 1 2014, the date I wrote the piece below, as Everything Better Is Purchased At The Price Of Something Worse. It’s gained much new relevance since.

This essay, way back when, dealt with Carl -Gustav- Jung, probably the most influential psycho-analist we’ve ever known (he’s having a heated discussion with Freud about this as we speak, over a glass of brandy), and his take in the 1950s on our ability to incorporate new technologies into our lives, our minds and brains.

Jung couldn’t have dreamt how much of that was yet to come, but he already put some very dire warnings out there. His main point appears to be that our capacity to ’embrace’ anything new is per definition -very- limited because we ARE our ancestors, and whatever they never knew, we will have a hard if not impossible time making part of our lives.

It’s just that, as he warns, we are completely blind to this. Once you lose the link to your ancestors, you will move away from them ever faster. Because there’s nothing left to anchor you. But at the same time, you ARE your ancestors.

I am thinking about this on a near constant basis as I see people sit or move around with their iPhones et al, and their Facebook and Instagram et al, and I wonder what they did with their lives before they could walk the streets bumping into each other -or the odd car- before a constant link to faraway places seemed appropriate and/or needed.

Jung already thought about this, before it existed, 60-odd years ago. He framed it as: what are you giving up for what you gain? But of course the whole younger part of the poulation, who’ve never known anything else, have no notion of having given up anything. They never did anything else with their lives.

Well, Jung had a completely different idea. He said our brains haven’t even processed the times we never knew, ‘primitivity’, ‘antiquity’, or the Middle Ages yet, let alone radio, TV, or the internet. “We are very far from having finished completely with the Middle Ages, classical antiquity, and primitivity, as our modern psyches pretend.”

Carl Jung claimed that our only true frame of reference is our ancestors, and since they never knew radio, TV, internet, we cannot incorporate such things into our lives without losing our connection to them. But we ARE them, and if we would ever lose that connection, we would be beyond lost. We’d be gone. First mentally, then -inevitably- physically.

And what we label ‘progress’ is then merely a way to move ever faster awasy from what we really are, which is the ancestors that gave birth to us. Gone, lost, into some empty space, with no grounding and no purpose.

Perhaps that goes a ways towards explaining why we are destroying the planet we live on. We lost the connection to who we are. We are focused today only on progress, on the future, and not on the present, because the present requires a link to the past.

Here’s my take on this 5.5 years ago. Before all these millions of zombies were stalking the streets looking only at their phones, eagerly – nay, desperately- awaiting messages from people thousands of miles away. Mostly about what food they eat, no less, or what dress they wear.

The concept of what constitutes our lives has changed profoundly. It is no longer the people around us, or even the landscape, our lives now are made up of people who are not here (and landscapes in travel brochures and nature documentaries). That is quite something.

Carl Jung said quite a while ago that our minds and brains cannot handle that. But there you are and here we go.

 

 

Ilargi, Jan 1 2014: I thought I’d start off 2014 on a philosophical note, with something that I hope perhaps people will remember as the year progresses, or even through the rest of their lives, and share with those around them. In my humble view, that would do the planet a world of good. But it’s not easy; we have wandered far.

There are many things we have neglected and forgotten, if not never understood or even thought about, that are nevertheless essential to our personal well-being and that of our surroundings. If anyone in the western world has considered and analyzed these forgotten ‘things’, it’s Carl Gustav Jung, the psycho-therapist who died in 1961. Jung defined the collective unconscious, archetypes and synchronicity, among many other things. It was his active interest in Eastern civilization and philosophies that led him to ponder how the collective unconsciousness influences our notion of progress.

In general, Jung suggested that our minds are woefully ill-equipped to incorporate progress into our lives when it takes the shape of new methodology, and new machinery, gadgets, because we don’t have a suitable frame of reference for them. We interpret the world through the frame of reference embedded in our minds that was built through countless generations of our ancestors. That is not to say we can never comprehend or incorporate new things, but that it must always be a gradual process, and if we are not at all times sufficiently aware of how this process takes place, as it takes place, we will lose ourselves, because we risk losing our connection to our ancestors, and we ARE, in essence, our ancestors.

In particular, we need to be aware of the fact that there is no such thing as absolute progress, that every time we add something to our world, we take something away as well. It’s the Eastern notion of balance, of yin and yang, at play: Everything Better Is Purchased At The Price Of Something Worse. Life does not by definition only get better when someone invents a new phone or car or facial cream, even if that phone makes it easier to talk to someone thousands of miles away, or the car makes it easier to go see people, or get away from them, or the cream dissolves wrinkles like magic. It doesn’t work like that. We pay a price: for everything we add, we lose something. The question then becomes: what do we value most. But that’s a question we never ask: we see everything new as an addition to our lives, and ignore what gets taken away from us.

As Jung wrote about these issues, probably in the late 1950s, the world was very different from what it is today. If he were alive now, he would undoubtedly have found that difference very painfully unsettling, and declared it dangerous for all of mankind. When we lose our connection to the collective references passed on by those whose DNA we carry, references that we are born with, we lose our connection with ourselves, and we become disoriented, dissatisfied.

There is no happy ending to this process. It needs to be shut down at some point, and therefore it will, in order for us to reconnect with our own minds and brains, which owe their composition and very existence to our forefathers. But for the process to be shut down, we must be deprived of both our ability and our drive to generate progress, since we will never volunteer to stop. We must go on, because we lost our connection to ourselves. There is no way back, not if we insist on keeping on going “forward”. That suggests a return to a sort of stone age world is the only possible outcome.

 

It is precisely Jung and Freud’s insights into the human mind that have made it possible for politicians and advertisers and other tricksters to fool us into thinking we want or need the things that make our world poorer, not richer. There is a huge amount of irony in this: that we use our increased ability to understand our minds in order to fool ourselves. If that doesn’t prove that Everything Better Is Purchased At The Price Of Something Worse, what does?

Although it would be best to incorporate the principle into our lives as just that, a general principle, it is of course possible to name specific examples. The automobile, the car, has brought us a lot of pleasure and comfort. It has also polluted our world like maybe no other single invention has ever done. And that’s not even the worst part: the car has cut through our communities like a gutting knife (to the point where we have no recollection of what these communities used to look like), separating us from each other, turned public space into no-go zones, and arguably been made more important than the people whose comfort they were was supposed to serve. For many people who have no car, for one reason or another, their own communities have become de facto inaccessible and unnavigable.

And the car is an easy example. What about medicine? We have, through progress in medicine, been able to save so many people from dying, and/or enabled them to die later, that our population has exploded, a huge problem in more ways than I could even attempt to discuss here. And that’s a hard one: nobody, including me, will suggest we stop saving lives, or start killing people, but there is a problem all the same. Everything Better Is Purchased At The Price Of Something Worse.

We can all come up with many examples, fridges, supermarkets, nuclear plants, photographs, indoor plumbing, and think about how they have changed our lives for the better or the worse. But I don’t think it’s a good idea to risk losing ourselves in examples. We should keep sight of the overriding principle: that we risk destroying our world as we seek to improve it. And that the lessons from a behemoth mind like Jung’s should be used to make us wiser, not to fool us into buying things that harm our lives.

You could be forgiven for thinking that Jung’s prolific writing should be obligatory course material in every single educational institution on the planet, but then you wouldn’t understand your world’s priorities, now, would you? We go with what we find convenient, not with what can make us wiser people. We pick material wealth over mental wealth any day and every day, or mental wealth only if there’s money in it. And perhaps that points to the reason why we find people like Carl Gustav Jung so easy to ignore.

I’ll leave you with Jung’s own words, after saying this: Our rush to obtain new things, a rush we call progress, and to make money from these new things – after all, what money is there in old things? – has disconnected us from our ancestors. Unfortunately, we ARE our ancestors. There is a price we pay for everything that is different today from what is was when our parents were our age, and our grandparents, and their parents before them, and so on. We ignore that price, and pretend we don’t need to pay it, encouraged by the fact that it doesn’t always have to be paid immediately, and we can leave it to our kids to settle the bill. Something we do all too willingly, which somehow puts our connections to our ancestors in a cynical, bleak light even more.

 

Here’s Jung from his book ‘Memories, Dreams, Reflections’, published in 1963, 2 years after his death, in the paragraphs with which he closes the chapter “The Tower”:

 

Our souls as well as our bodies are composed of individual elements which were all already present in the ranks of our ancestors. The “newness” in the individual psyche is an endlessly varied recombination of age-old components. Body and soul therefore have an intensely historical character and find no proper place in what is new , in things that have just come into being. That is to say, our ancestral components are only partly at home in such things. We are very far from having finished completely with the Middle Ages, classical antiquity, and primitivity, as our modern psyches pretend.

Nevertheless, we have plunged down a cataract of progress, which sweeps us on into the future with ever wilder violence the farther it takes us from our roots. Once the past has been breached, it is usually annihilated, and there is no stopping the forward motion. But it is precisely the loss of connection with the past, our uprootedness, which has given rise to the “discontents” of civilisation and to such a flurry and haste that we live more in the future and its chimerical promises of a golden age than in the present, with which our whole evolutionary background has not yet caught up.

We rush impetuously into novelty, driven by a mounting sense of insufficiency, dissatisfaction, and restlessness. We no longer live on what we have, but on promises, no longer in the light of the present day, but in the darkness of the future, which, we expect, will at last bring the proper sunrise. We refuse to recognise that everything better is purchased at the price of something worse; that, for example, the hope of greater freedom is cancelled out by increased enslavement to the state, not to speak of the terrible perils to which the most brilliant discoveries of science expose us.

The less we understand of what our fathers and forefathers sought, the less we understand ourselves, and thus we help with all our might to rob the individual of his roots and his guiding instincts, so that he becomes a particle in the mass, ruled only by what Nietzsche called the spirit of gravity.

Reforms by advances, that is, by new methods or gadgets, are of course impressive at first, but in the long run they are dubious and in any case dearly paid for. They by no means increase the contentment or happiness of people on the whole. Mostly, they are deceptive sweetenings of existence, like speedier communications, which unpleasantly accelerate the tempo of life and leave us with less time than ever before. Omnis festinatio ex parte diaboli est – all haste is of the devil, as the old masters used to say.

Reforms by retrogressions, on the other hand, are as a rule less expensive and in addition more lasting, for they return to the simpler, tried and tested ways of the past and make the sparsest use of newspapers, radio, television, and all supposedly timesaving innovations.

In this book I have devoted considerable space to my subjective view of the world, which, however, is not a product of rational thinking. It is rather a vision such as will come to one who undertakes, deliberately, with half-closed eyes and somewhat closed ears, to see and hear the form and voice of being. If our impressions are too distinct, we are held to the hour and minute of the present and have no way of knowing how our ancestral psyches listen to and understand the present – in other words, how our unconscious is responding to it. Thus we remain ignorant of whether our ancestral components find elementary gratification in our lives, or whether they are repelled. Inner peace and contentment depend in large measure upon whether or not the historical family, which is inherent in the individual, can be harmonised with the ephemeral conditions of the present.

In the Tower at Bollingen it is as if one lived in many centuries simultaneously. The place will outlive me, and in its location and style it points backwards to things of long ago. There is very little about it to suggest the present. If a man of the sixteenth century were to move into the house, only the kerosene lamp and the matches would be new to him; otherwise, he would know his way about without difficulty.

There is nothing to disturb the dead, neither electric light nor telephone. Moreover, my ancestors’ souls are sustained by the atmosphere of the house, since I answer for them the questions that their lives once left behind. I carve out rough answers as best I can. I have even drawn them on the walls. It is as if a silent, greater family, stretching down the centuries, were peopling the house. There I live in my second personality and see life in the round, as something forever coming into being and passing on.

 

 

 

 

Debt Rattle March 8 2018

Mar 082018
 
 March 8, 2018  Posted by at 11:01 am Finance Tagged with: , , , , , , , , , , , , ,  14 Responses »


Paul Gauguin Tahitian village 1892

 

• We May Have Hit ‘Peak Trade’ Even Without Trump’s Tariffs – UBS (CNBC)
• China’s Exports Surge At The Fastest Pace In 3 Years (R.)
• 42% of Americans Are Set To Retire Broke (CNBC)
• Trump’s Volley (Lebowitz)
• Divorced From Reality (RIA)
• A Currency War Is Coming – With Japan (BBG)
• Hallelujah! The Squid Regency At The White House Is Finally Over (Stockman)
• Canada, Mexico to Get Initial Exemption From Trump Tariffs (BBG)
• New iPhones Aren’t Selling In Asia (CNBC)
• Vancouver Declares 5% Of Homes Empty And Liable For New Tax (G.)
• More People Called David And Steve Lead FTSE 100 Companies Than Women (Ind.)
• ‘Why Would We Want A World Without Russia?’ – Putin (RT)
• Sergei Skripal Is Not Litvinenko (Ind.)
• Turkey Renews Threat Against Cyprus Offshore Gas Exploration (AP)
• US State Department Stresses Cyprus’s Right To Develop Resources In EEZ (K.)
• Tepco’s ‘Ice Wall’ Fails To Freeze Fukushima’s Toxic Water Buildup (R.)
• Over 500 Quebec Doctors Protest Their Own Pay Raises (CNBC)

 

 

And not a day too soon. There’s nothing more destructive than schlepping 10 million things 10,000 miles across the planet that don’t neeed to be.

• We May Have Hit ‘Peak Trade’ Even Without Trump’s Tariffs – UBS (CNBC)

The world may have hit ‘peak trade,’ according to an expert who pointed to robotics, digitization and localization as major game-changers for the sprawling supply chains that have defined globalization. Paul Donovan, global chief economist at UBS Wealth Management, said Wednesday that President Donald Trump’s recently announced trade tariffs are not to blame. “I don’t think that the modest taxes imposed by Trump are a driver of peak trade, at this stage. Trade protectionism — mainly non-tariff barriers to trade — have been rising for some years,” he told CNBC. Rather, Donovan said, the peak trade argument is based on “a reversal of the structural way in which globalization took place in recent years.” Globalization as we know it has meant long cross-border supply chains, where many different countries and entities would take part in the production or processing of goods.

The resulting value of trade rose for each country as a proportion of GDP. Trade to GDP, therefore, rose as supply chains lengthened. “What is now happening is that robotics and digitization mean we can produce efficiently, locally,” Donovan said. As an example, he compared the purchase of a compact disc — whose components, intellectual property and packaging would come from different places — a decade ago to downloading music now, which requires only one transaction of intellectual property. This reduces the ratio of trade to GDP. [..] “Robotics, digitization and localization mean that trade wars today are fighting battles from the past,” Donovan said. “I think global trade in goods (not services) revert to something like the old ‘imperial model’ of importing raw materials and then processing close to the consumer.”

Read more …

Cancer growth.

• China’s Exports Surge At The Fastest Pace In 3 Years (R.)

China’s exports unexpectedly surged at the fastest pace in 3 years in February, suggesting its economic growth remains resilient even as trade relations with the United States rapidly deteriorate. Trade tensions have jumped to the top of the list of risks facing China this year, with proposed U.S. tariffs on steel and aluminium imports suggesting more measures may be on the way, Zhou Hao, senior emerging markets economist at Commerzbank, [said]. China’s February exports rose 44.5% from a year earlier, compared with analysts’ median forecast for a 13.6% increase, and an 11.1% gain in January, official data showed on Thursday. Imports grew 6.3%, the General Administration of Customs said, missing analysts’ forecast for 9.7% growth, and down from a sharper-than-expected 36.9% jump in January.

Analysts caution Chinese data early in the year can be heavily distorted by the timing of the Lunar New Year holiday, which fell in February this year but in January in 2017. But combined January-February trade data also showed a dramatic acceleration in export growth. Exports rose 24.4% on-year in Jan-Feb, much better than 10.8% in December and 4% growth in Jan-Feb last year. The government also releases combined data for the first two months in an attempt to smooth out seasonal distortions. The deceleration in import growth for February may be payback for the previous month’s unusual strength, rather than a sign there has been an abrupt weakening in demand. Robust import growth in January was mostly led by commodities as factories scrambled to restock inventories ahead of the long holiday. Imports in the first two months of the year rose 21.7%, compared with 4.5% in December.

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Jesse Colombo’s comment: “And what’s amazing is that these retirement stats are during a massive, Fed-driven asset bubble that has inflated the value of retirement accounts – and people STILL can’t retire! Stick a fork in it…we’re done.”

• 42% of Americans Are Set To Retire Broke (CNBC)

At this rate, retirement is more of a fantasy than a reality for many people in this country. About 42% of Americans have less than $10,000 saved for when they retire, according to a study by GoBankingRates released Tuesday. The No. 1 reason most people cited for not stashing more away was because they didn’t earn enough to save, followed by the fact that they were already struggling to pay bills, GoBankingRates said. The personal finance site polled more than 1,000 adults online in February.

For those with little or no savings, a serious lack of proper investment income and planning, coupled with a longer life expectancy, has destroyed any retirement expectations. Although millennials are most likely to have less than $10,000 saved, older Americans are also becoming steadily more pessimistic about their future economic prospects, according to a separate study by United Income, a start-up that aims to apply big-data analysis to financial planning.

Read more …

The role of teh reserve currency warrants way more attention.

• Trump’s Volley (Lebowitz)

America relinquished its role as the world’s leading manufacturer in exchange for cheaper imported goods and services from other countries. The profits of U.S.-based manufacturing companies were enhanced with cheaper foreign labor, but the wages of U.S. employees were impaired, and jobs in the manufacturing sector were exported to foreign lands. This had the effect of hollowing out America’s industrial base while at the same time stoking foreign appetite for U.S. debt as they received U.S. dollars and sought to invest them. In return, debt-driven consumption soared in the U.S. The trade deficit, also known as the current account balance, measures the net flow of goods and services in and out of a country. The graph shows the correlation between the cumulative deterioration of the U.S. current account balance and manufacturing jobs.

Since 1983, there have only been two quarters in which the current account balance was positive. During the most recent economic expansion, the current account balance has averaged -$443 billion per year. To further appreciate the ramifications of the reigning economic regime, consider that China gained full acceptance into the World Trade Organization (WTO) in 2001. The trade agreements that accompanied WTO status and allowed China easier access to U.S. markets have resulted in an approximate quintupling of the amount of exports from China to the U.S. Similarly, there has been a concurrent increase in the amount of credit that China has extended the U.S. government through their purchase of U.S. Treasury securities as shown below.

To further understand why the current economic regime is tricky to change, one must consider that the debts of years past have not been paid off. As such the U.S. Treasury regularly issues new debt that is used to pay for older debt that is maturing while at the same time issuing even more debt to fund current period deficits. Therefore, the important topic not being discussed is the United States’ (in)ability to reduce reliance on foreign funding that has proven essential in supporting the accumulated debt of consumption from years past. Trump’s ideas are far more complicated than simply leveling the trade playing field and reviving our industrial base. If the United States decides to equalize terms of trade, then we are redefining long-held agreements introduced and reinforced by previous administrations.

In breaking with that tradition of “we give you dollars, you give us cheap goods (cars, toys, lawnmowers, steel, etc.), we will most certainly also need to source alternative demand for our debt. In reality, new buyers will emerge but that likely implies an unfavorable adjustment to interest rates. The graph below compares the amount of U.S. Treasury debt that is funded abroad and the total amount of publicly traded U.S. debt. Consider further, foreigners have large holdings of U.S. corporate and securitized individual debt as well. (Importantly, also note that in recent years the Fed has bought over $2 trillion of Treasury securities through QE, more than making up for the recent slowdown in foreign buying.)

Read more …

“Investors still believe in stocks as an asset class.”

• Divorced From Reality (RIA)

There are many ways of assessing the value of the stock market. The Shiller PE (price relative to the past decade’s worth of real, average earnings) and Tobin’s Q (the value of companies’ outstanding stock and debt relative to their replacement cost) are likely the two best. That doesn’t mean those metrics are accurate crash indicators, or that one can use them profitably as trading signals. Expensive stocks can stay expensive or get more expensive, and cheap stocks can stay cheap or get cheaper for inconveniently long periods of time.

But those metrics do have a good record of forecasting future long-term (one decade or more) returns. And that’s important for financial planning and wealth management. Difficult though it is sometimes, everyone must plug in an estimated return into a formula for retirement savings. And if an advisor is plugging in a 7% or so return for a balanced portfolio currently, he or she is likely not doing their job well. Stocks will almost certainly return less than their long-term 10% annualized average for the next decade or two given a starting Shiller PE over 30. The long-term average of the metric, after all, is under 17.

[..] Companies are always manipulating items on income statements to arrive at a particular earnings number. Recently, record numbers of companies have supported net income numbers with non-GAAP metrics. That can be legitimate sometimes. For example, depreciation on real estate is rarely commensurate with reality. But it can also be nefarious[..] So I created a chart showing sales per share growth and price per share growth of the S&P 500 dating back to the end of 2008. From the beginning of 2009 through the end of 2016, companies in the index grew profits per share by nearly 4% annualized, a perfectly respectable number for a mature economy. But price per share grew by a whopping 14.5% over that time. Over that 8 year period, sales grew less than 50% cumulatively, while share prices tripled.

Anyone invested in stocks should worry about this chart. How do share prices get so divorced from underlying corporate sales? One likely answer is low interest rates. But there must be other reasons because we’ve had low interest rates and low stock prices before – namely in the 1940s. That was after the Great Depression, and stocks were still likely viewed as suspect investments. Today, by contrast, stocks are not viewed with much suspicion, despite the technology bubble peaking in 2000 and the housing bubble in 2008. Investors still believe in stocks as an asset class.

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Japan cannot do a strong yen for too long.

• A Currency War Is Coming – With Japan (BBG)

As if a brewing trade war wasn’t enough to worry about, investors also need to be alert to the threat of a major currency conflict. Norihiro Takahashi, president of Japan’s Government Pension Investment Fund, dismissed Donald Trump’s tariffs plan as a “performance” for his supporters, and said U.S. assets are no longer expensive, in an interview with The Wall Street Journal this week. That marks a change in stance since the December quarter, when the world’s largest pension fund scaled back its exposure to foreign assets. Takahashi’s comments could well be a veiled expression of Japan’s displeasure at a stronger yen. The Japanese currency has soared 6.6% against the greenback this year — and we’re only three months into 2018. For a yen-based investor, Treasuries, in particular, do indeed look more reasonably priced than in December.

In theory, currency policy falls under the jurisdiction of Japan’s finance ministry. In practice, government agencies from the Bank of Japan to the GPIF co-ordinate their actions. Don’t forget that on Oct. 31, 2014, the central bank expanded its monetary policy on the same day the GPIF adopted a “new policy asset mix” that increased the fund’s exposure to foreign bonds. BOJ Governor Haruhiko Kuroda can deny it, but the central bank has every interest in seeking a weak yen. Japanese corporate earnings are highly cyclical: On a market-weighted basis, companies on the Topix index derive more than 37% of their revenue from abroad, data compiled by Gadfly show. A strengthening yen can cause stocks to plunge, depressing consumption and tipping the economy back into deflation.

With the Topix down more than 10% from its January high, that’s no idle threat. CPI ex-food, the BOJ’s inflation metric, was 0.9% in January, still nowhere near the 2% target that was last breached in 2015. Kuroda’s domestic toolbox, meanwhile, is starting to look empty. With a record 40% of government bonds already in its hands, the central bank is running out of assets to buy.

Read more …

I was wondering yesterday why not more people were happy about this. Question is: how far do the Squid’s tentacles still reach?

• Hallelujah! The Squid Regency At The White House Is Finally Over (Stockman)

The financial commentariat and the robo-machines are all in a tizzy this morning because Gary Cohn up and quit. But we say good riddance: The man gave Trump bad advice on nearly every single issue – trade, taxes, fiscal policy and the Fed. We didn’t make any bones about that viewpoint during our appearance on Fox Business this AM. When Maria Bartiromo asked us about Cohn’s departure, our reply was: Hallelujah, the Goldman Sachs Regency in the White House is finally over! The fact is, we do have a trade crisis, but Gary Cohn and the Wall Street pseudo-free traders don’t care and never have. That’s because they fiercely support a perverted, self-serving monetary regime that systematically and massively inflates financial assets, even as it strip mines and deflates the main street economy.

As we have been pointing out in this series, there is a perverse symbiosis between the Fed and the Dirty Float central banks of the 10 major countries (China, Vietnam, Mexico, Japan, etc), which account for 90% of the nation’s $810 billion trade deficit (2017). Together they have ripped the guts out of the US industrial economy – effectively sending jobs and production abroad and cash flow and liquidated capital to Wall Street. For its part, the Fed has monkey-hammered US competitiveness. That’s the result of its insensible 2.00% inflation policy, which has fatally inflated nominal dollar wages in a world market drowning in cheap labor priced in artificially under-valued currencies. At the same time, its massive interest rate repression and price-keeping operations in the stock market have turned the C-suites of corporate America into financial engineering joints.

So doing, they have slashed real net business investment by nearly 3o% since the turn of the century, by 20% from the 2007 pre-crisis peak and, actually, to a level in 2016 that barely exceeded real net investment two decades earlier in 1997. Meanwhile, the C-suites shuttled upwards of $15 trillion of cash flow and debt capacity during the last decade alone into stock buybacks, vanity M&A deals and excess dividends and recaps.

Read more …

Re-negotiate.

• Canada, Mexico to Get Initial Exemption From Trump Tariffs (BBG)

The Trump administration will initially exclude Canada and Mexico from stiff tariffs on steel and aluminum imports, an exemption they would lose if they fail to reach an updated Nafta agreement with the U.S., White House trade adviser Peter Navarro said on Wednesday. The two nations won’t be subject to tariffs on their steel and aluminum if they sign a new NAFTA that meets the satisfaction of the U.S., Navarro said, adding that other American allies could use a similar system to ask for an exemption. If Nafta talks fall through, Canada and Mexico would face the same tariff as other nations, expected to be 25% on steel and 10% on aluminum. “Here’s the situation, and the president has made this public,” Navarro said. “There’s going to be a provision which will exclude Canada and Mexico until the Nafta thing is concluded one way or another.”

The decision-making process regarding the tariffs has evolved and more changes could be made before President Donald Trump formally approves them. China on Thursday vowed to retaliate, its most forceful comments yet on the threatened tariffs. “A trade war is never the right solution,” China’s Foreign Minister Wang Yi told reporters in Beijing. “In a globalized world, it is particularly unhelpful, as it will harm both the initiator and the target countries. In the event of a trade war, China will make a justified and necessary response.” Earlier Wednesday, White House Press Secretary Sarah Huckabee Sanders said the tariff plan would feature “potential carve outs for Canada and Mexico based on national security” considerations and also possible exclusions for specific countries. Australia is among those making the case for exemption, with Foreign Minister Julie Bishop citing her nation’s status as a “close ally and partner” in a Sky News interview on Thursday.

Read more …

Good headline, followed by shameless promo.

• New iPhones Aren’t Selling In Asia (CNBC)

Apple’s iPhone X may not have wooed Asian consumers during the Lunar New Year holiday — but the company has some new products in the pipeline, according to Rosenblatt Securities’ Jun Zhang. Zhang chopped 5.5 million units off expectations for iPhone X sales for the first half of this year in a Wednesday research note. But with sales of high-end smartphones shrinking, Apple could offset lower iPhone sales with new products. “We are not surprised with the quick cooldown of iPhone X sales following Chinese New Year,” Zhang wrote. “Further iPhone X cuts, in our view, suggest the high-end smartphone market upgrade cycle continues to extend. We are seeing similar issues for Samsung’s S9 model since our research suggests that preorders are weak.”

Apple and Samsung, like many tech companies, and rarely release data on new products or unit sales outside of quarterly reports or launch events. But, Zhang wrote, Apple could sell 6 million to 8 million iPad Pro units with more advanced 3-D sensing, as well as new phones in the fall. A new red iPhone model, lower-end iPhones and a lower-priced HomePod might also be in the works, Zhang said. (Apple has had a partnership with HIV/AIDS organization (RED) for over a decade, and often sells red-colored products to support AIDS research and prevention.) “Since we expect the overall smartphone market to be flat this year, particularly in the mid-to-high end markets, Apple’s upcoming lower priced iPhone model could drive Apple’s unit growth,” Zhang wrote.

Read more …

Why do I get the idea there’s not an actual plan behind any of this, or a philosophy?

• Vancouver Declares 5% Of Homes Empty And Liable For New Tax (G.)

Thousands of homes in Vancouver have been declared unused and liable for a new empty homes tax as part of a government attempt to tackle skyrocketing home prices and soaring rents. About 4.6% or 8,481 homes in the western Canadian city stood empty or underutilised for more than 180 days in 2017, according to declarations submitted to the municipality by 98.85% of homeowners. Properties deemed empty will be subjected to a tax of 1% of their assessed value. Vancouver has rolled out a raft of measures to cool prices and improve housing affordability in the country’s most expensive real estate market. Empty houses, also a big issue in the UK, are only one aspect of the problem. In 2017 the provincial government of British Columbia raised its foreign buyer tax from 15% to 20% to target offshore investors blamed for pushing up prices.

Toronto, Canada’s biggest city, followed suit with a 15% tax in April. Before the foreign buyer tax, sales agents said investors in Hong Kong, China and other parts of Asia were acquiring up to 40% of Vancouver condominium projects marketed abroad, absorbing the more expensive units that domestic buyers could not afford. Nearly 61% of the homes declared empty in Vancouver were condos, and other multi-family properties made up almost 6%, according to the city government. More than a quarter of the empty properties were in downtown Vancouver. Property owners who did not submit a declaration and those who claimed exemptions, such as for renovations or if the owner was in hospital or long-term care, were included in the empty homes number.

Read more …

I’m a sucker for headlines. The original says “..women and ethnic minorities..”, but that had me wondering how many immigrants are named David or Steve. More than women, I’d bet.

• More People Called David And Steve Lead FTSE 100 Companies Than Women (Ind.)

There are more people called David or Steve who head up FTSE 100 companies than there are women or ethnic minorities, underscoring the extent to which corporate Britain is still dominated by men. According to research conducted by INvolve, a group that champions diversity and inclusion in business, there are currently five ethnic minority and seven female chief executives of FTSE 100 companies. Nine are named David and four are called Steve. Later this month Royal Mail, which is headed up by Moya Greene, is set to join the index of the UK’s biggest publicly listed companies, taking the total number of female-led firms to eight.

The number highlights how women and ethnic minorities are still dramatically underrepresented on corporate boards across the UK. According to the Government’s Hampton-Alexander Review into female leaders across FTSE companies published last November, only five FTSE 250 companies had at the time achieved a gender-balanced board. Speaking at an event in London to mark International Women’s Day this week, Carolyn Fairbairn, director general of the Confederation of British Industry, said that women are now joining boards in greater numbers than ever, but often as non-executive directors.

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He doesn’t give an inch. Why would he?

• ‘Why Would We Want A World Without Russia?’ – Putin (RT)

President Vladimir Putin, who recently startled the world by unveiling Russia’s advanced nuclear arsenal, has again spoken of nuclear arms, clarifying the circumstances in which Moscow is prepared to enter a nuclear war. “Certainly, it would be a global disaster for humanity; a disaster for the entire world,” Putin said, in an interview for a Russian documentary “The World Order 2018,” adding that “as a citizen of Russia and the head of the Russian state I must ask myself: Why would we want a world without Russia?” Even though Putin admitted that any conflict involving the use of nuclear weapons would have dire consequences for humanity, he maintained that Russia would be forced to defend itself using all available means if its very existence is put at stake.

“A decision on the use of nuclear weapons may only be taken if our ballistic missile attack warning system not only detects a launch, but also predicts that the warheads would hit Russian territory. This is called a retaliation strike,” he said in the interview. Russia’s latest edition of its nuclear doctrine allows the use of nuclear weapons in response to a nuclear attack against Russia or its allies, or to a conventional attack that threatens the existence of Russia. Putin also denied Russia was interested in pursuing a nuclear arms race, saying that “to begin with, we did not start this… nuclear bomb was first developed not by us but by the US,” he said in the interview, pointing out that “we have never used nuclear weapons [although] the US used them against Japan.”

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A rare dose of reality in a British press -and politics- engaged in full-steam Russia bashing.

• Sergei Skripal Is Not Litvinenko (Ind.)

Boris Johnson just about observed diplomatic protocol when he addressed MPs about the apparent poisoning of Sergei Skripal. He stopped short of accusing the Russian state directly. But his inference – a malevolent and unjustified inference for the Foreign Secretary of a country that harps on about the rule of law – was indeed of Russian guilt. And it was clearest in the parallel he invited MPs to draw with the death of Alexander Litvinenko. Now it may indeed be that Russia – or Russians (something rather different) – are responsible for whatever happened in Salisbury. And it is true that Russians in the UK seem disproportionately accident-prone. But it is premature in the extreme to blame the Russian state, and just as misleading to draw this particular parallel with the Litvinenko case.

Both men may have been Russians branded traitors by their homeland, and both may have been victims of poisoning, but there are important differences. In Russia, Litvinenko worked against organised crime; he was less a spy in the conventional sense than a criminal intelligence officer. He fled the country after blowing the whistle on his corrupt bosses, and applied for asylum in the UK. His first choice, the US, had turned him down on the apparent grounds that the information he had to offer was not valuable enough. Unlike Skripal, he started working for MI5/6 only after arriving in the UK, and even then seems to have had difficulty getting on the payroll. His widow, Marina, is still battling to get the intelligence agencies to pay a pension or recognise a duty of care. It is cruel to say so, but Litvinenko seems almost to have been more use to the UK in death – as a totem of Russia’s general badness – than he was in life.

[..] For the moment, though, I will resist the temptation to delve into my inner Le Carre and return to Litvinenko. As I said, there are crucial differences between the two – differences that should militate against state-sponsored assassination being the favoured explanation for Skripal’s plight. But there should be doubts, too, about this judgment in the case of Litvinenko. The conclusions of the Litvinenko inquiry, now treated as unimpeachable proof of Russian state culpability, are nowhere near as definitive – or credible – as they have since been presented. The much-trumpeted (and over-interpreted) conclusion of the judge, Sir Robert Owen, was that “the FSB operation to kill Litvinenko was probably approved by Mr Patrushev [then head of the FSB] and also by President Putin”. He said there was “a strong probability” that Andrei Lugovoy poisoned Litvinenko “under the direction of the FSB” and the use of polonium-210 was “at very least a strong indicator of state involvement”. What sort of proof is that?

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They better be careful….

• Turkey Renews Threat Against Cyprus Offshore Gas Exploration (AP)

Turkey’s prime minister has renewed a threat against efforts to search for offshore gas around Cyprus. Turkey opposes what it says are “unilateral” efforts to search for gas, saying they infringe the rights of Turkish Cypriots to the ethnically split island’s resources. Binali Yildirim said Wednesday during a joint news conference with Tufan Erhurman, the so-called “prime minister” of the breakaway north of Cyprus, that “provocative activities will be met with the appropriate response.” Yildirim’s comments were in response to reports that an ExxonMobil vessel was heading toward the Mediterranean, coinciding with exercises in the area involving the US Navy. Last month, Turkish warships prevented a rig from reaching an area southeast of Cyprus where Italian company Eni was scheduled to drill for gas.

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….because the US must defend Exxon.

• US State Department Stresses Cyprus’s Right To Develop Resources In EEZ (K.)

The United States recognizes the right of Cyprus to develop the resources in its Exclusive Economic Zone, and discourages any actions or statements that provoke a rise in tensions in the region, a State Department official has said. In a statement late on Wednesday, the official said that Washington’s policy on Cyprus’ EEZ was longstanding and has not changed, noting that the US “recognizes the right of the Republic of Cyprus to develop its resources in its Exclusive Economic Zone.” “We continue to believe the island’s oil and gas resources, like all of its resources, should be equitably shared between both communities in the context of an overall settlement,” the official said. “We discourage any actions or rhetoric that increase tensions in the region.” The official did not comment directly on threats from Ankara regarding the arrival in the region of a research vessel belonging to US company ExxonMobil.

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How is it possible that TEPCO is allowed to just keep on lying?

• Tepco’s ‘Ice Wall’ Fails To Freeze Fukushima’s Toxic Water Buildup (R.)

A costly “ice wall” is failing to keep groundwater from seeping into the stricken Fukushima Dai-ichi nuclear plant, data from operator Tokyo Electric Power Co shows, preventing it from removing radioactive melted fuel at the site seven years after the disaster. When the ice wall was announced in 2013, Tepco assured skeptics that it would limit the flow of groundwater into the plant’s basements, where it mixes with highly radioactive debris from the site’s reactors, to “nearly nothing.” However, since the ice wall became fully operational at the end of August, an average of 141 metric tonnes a day of water has seeped into the reactor and turbine areas, more than the average of 132 metric tonnes a day during the prior nine months, a Reuters analysis of the Tepco data showed.

The groundwater seepage has delayed Tepco’s clean-up at the site and may undermine the entire decommissioning process for the plant, which was battered by a tsunami seven years ago this Sunday. Waves knocked out power and triggered meltdowns at three of the site’s six reactors that spewed radiation, forcing 160,000 residents to flee, many of whom have not returned to this once-fertile coast. Though called an ice wall, Tepco has attempted to create something more like a frozen soil barrier. Using 34.5 billion yen ($324 million) in public funds, Tepco sunk about 1,500 tubes filled with brine to a depth of 30 meters (100 feet) in a 1.5-kilometre (1-mile) perimeter around four of the plant’s reactors. It then cools the brine to minus 30 degrees Celsius (minus 22 Fahrenheit).

The aim is to freeze the soil into a solid mass that blocks groundwater flowing from the hills west of the plant to the coast. However, the continuing seepage has created vast amounts of toxic water that Tepco must pump out, decontaminate and store in tanks at Fukushima that now number 1,000, holding 1 million tonnes. It says it will run out of space by early 2021. “I believe the ice wall was ‘oversold’ in that it would solve all the release and storage concerns,” said Dale Klein, the former chairman of the U.S. Nuclear Regulatory Commission and the head of an external committee advising Tepco on safety issues.

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The people that see the threats to the entire system are not politicians.

• Over 500 Quebec Doctors Protest Their Own Pay Raises (CNBC)

In Canada, more than 500 doctors and residents, as well as over 150 medical students, have signed a public letter protesting their own pay raises. “We, Quebec doctors who believe in a strong public system, oppose the recent salary increases negotiated by our medical federations,” the letter says. The group say they are offended that they would receive raises when nurses and patients are struggling. “These increases are all the more shocking because our nurses, clerks and other professionals face very difficult working conditions, while our patients live with the lack of access to required services because of the drastic cuts in recent years and the centralization of power in the Ministry of Health,” reads the letter, which was published February 25.

“The only thing that seems to be immune to the cuts is our remuneration,” the letter says. Canada has a public health system which provides “universal coverage for medically necessary health care services provided on the basis of need, rather than the ability to pay,” the government’s website says. The 213 general practitioners, 184 specialists, 149 resident medical doctors and 162 medical students want the money used for their raises to be returned to the system instead. “We believe that there is a way to redistribute the resources of the Quebec health system to promote the health of the population and meet the needs of patients without pushing workers to the end,” the letter says.

“We, Quebec doctors, are asking that the salary increases granted to physicians be canceled and that the resources of the system be better distributed for the good of the health care workers and to provide health services worthy to the people of Quebec.” A physician in Canada is paid $260,924 ($339,000 Canadian) for clinical services by the government’s Ministry of Health per year on average, according to a report from the Canadian Institute for Health Information published in September 2017. On average, a family physician is paid $211,717 ($275,000 Canadian) for clinical services and a surgical specialist is paid $354,915 ($461,000 Canadian), according to the same report.

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Debt Rattle January 9 2018

Jan 092018
 
 January 9, 2018  Posted by at 10:26 am Finance Tagged with: , , , , , , , , , , , ,  11 Responses »


Thomas Abercrombie Beirut 1957

 

• Americans Wait For Tax Refunds Before Seeing A Doctor (BBG)
• US Has The Worst Rate of Child Mortality Among 20 Rich Nations (CNBC)
• Chapter 11 Bankruptcies Spike 107% from a Year Ago (WS)
• The New Gilded Age: First Time Arrogance, the Second Time Vengeance (Rosen)
• Retail Investors Are Finally True Believers with Record Exposure (WS)
• iPhone Addiction May Be A Virtue, Not A Vice For Investors (R.)
• ‘It Can’t Be True.’ Inside the Semiconductor Industry’s Meltdown (BBG)
• The Decline of Anti-Trumpism (David Brooks)
• Cryptocurrencies Are Selling Off (BBG)
• Fund Managers Say US Regulator Told Them To Suspend Bitcoin ETF Bids (R.)
• US Energy Watchdog Terminates Plan To Subsidize Coal, Nuclear Sectors (AFP)
• Fairy Tale (Jim Kunstler)
• Theresa May’s Cabinet Reboot Descends Into Chaos (BBG)
• Merkel, Coalition Negotiators Agree To Scrap 2020 Climate Target (R.)

 

 

A nation of expendables. To think how hard earlier generations fought for health care.

• Americans Wait For Tax Refunds Before Seeing A Doctor (BBG)

As tax season approaches, some consumers are waiting for their refund checks to spend on a long-delayed purchase – a visit to the doctor or dentist. U.S. consumers boosted their out-of-pocket health spending by 60% in the week after they got a tax refund, according to new research from JPMorgan Chase, based on data from Chase customer accounts. Spending stayed high for about 2 1/2 months, with about two-thirds of the extra spending money going to in-person payments to doctors and dentists. Much of the rest was used to pay down past bills. Health insurers and employers have raised copays and deductibles for consumers, making them bear a larger portion of the cost of care when they go see a health-care provider.

As a result, patients sometimes lack the cash to get the care they may need, according to the report. “Cash-flow dynamics are a significant driver of out-of-pocket spending for health care,” the study found. “Even when consumers knew with near-certainty the size and source of a major cash infusion, they still waited until the infusion arrived before spending.” The researchers found that availability of cash had far less of an impact on health-spending decisions among those with credit cards, or who had higher bank-account balances.

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Until about 1970, the US had the lowest child mortality rates. Then something happened.

• US Has The Worst Rate of Child Mortality Among 20 Rich Nations (CNBC)

The United States has the worst child mortality rate among a group of 20 wealthy democracies, an analysis released Monday found. And despite overall improvement in the child mortality rate in the U.S. and those 19 other countries, the U.S. has persistently outpaced those nations in that grim metric for decades, the Health Affairs report said. “From 2001 to 2010, the risk of death in the US was 76% greater for infants and 57% greater for children age 1-19,” the report said. And during the same decade, children between the ages of 15 and 19 were 82 times more likely to die from gun-related homicide in the U.S. than in the comparison countries.

The authors of the Health Affairs report said that in the full 50-year period their study looked at, the U.S. had more than “600,000 excess deaths” among kids because of the country’s lagging performance in curbing child mortality. Those excess deaths have occurred even as the U.S. spends more money on health care for kids than the other countries. Among the countries looked at, “there has never been a better time to be born in any of these 20 countries,” the Health Affairs report said. “Despite this generalized trend, children are less likely to survive and transition into adulthood in the US than in other [countries examined],” the report said. “Persistently high poverty rates, poor educational outcomes, and a relatively weak social safety net have made the US the most dangerous of wealthy nations for a child to be born into.”

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Due to the tax law.

• Chapter 11 Bankruptcies Spike 107% from a Year Ago (WS)

New Chapter 11 bankruptcies in the US more than doubled in December 2017 from a year ago to 699 filings. That jump of 362 filings from December 2016 was the largest year-over-year jump since the Financial Crisis. This chart shows Chapter 11 filings back to 2011, based on data from the American Bankruptcy Institute. I marked the prior five Decembers with red dots. Note how they’re near the low point of the seasonal swings. That makes the spike in December 2017 even more spectacular. A spike like this in Chapter 11 filings in a month of December is unheard of in normal times. Normally, bankruptcies jump during tax season, the first four or five months of the year, but not at the end of the year. But these are not normal times.

In December, Chapter 11 filings soared 61% from November. This is also highly unusual, as over the prior five years, presumably the “normal times,” the number of filings from November to December has fallen by an average 8.7%. The chart below shows the year-over-year change in Chapter 11 filings. I marked the prior Decembers in yellow. I circled the oil bust and the brick-and-mortar meltdown. But December 2017 was special.

I think companies and their owners and creditors know one thing: They can write off losses in 2017 under the old corporate tax rates, at 35%, thus getting the government to pick up 35% of the tab of their losses via lower taxes. In 2018, the new tax law applies and all kinds of uncertainties have yet to be ironed out, and these companies – the owners and creditors – are thinking (I assume) that it’s better to try to recognize the loss in 2017, support it with a Chapter 11 filing, and pull the write-off into 2017 against a tax rate of 35%, rather than 21% in 2018. A tax-law change of this drastic nature motivates people jump through all kinds of hoops to save some money – including waiting in line for hours to pay property taxes early, a hitherto unthinkable strategy. And I think this is the likely suspect for the spike.

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Wonderful history lesson about the robber barons. Go read.

• The New Gilded Age: First Time Arrogance, the Second Time Vengeance (Rosen)

The U.S. is now living through a second Gilded Age. Where once the robber barons were millionaires, today they’ve added a few zeros to their wealth and became billionaires. However, they act with no-less impunity, but a greater sense of entitlement. The Trump administration, together with the Republican-controlled Congress, are functional shills for the current generation of robber barons. As evident from the recently-passed tax bill, legislators jump when their big-money donors order them to deliver the goods — and they did. The U.S. economy has rebounded from the 2007-2009 “great recession,” with the stock market hitting new highs, unemployment the lowest in a generation and home prices recovering. But Americans still haven’t regained the wealth they lost, with incomes remaining stagnant and, on the whole, working Americans worse off than since the late-1990s.

The Federal Reserve’s most recent Survey of Consumer Finances finds that median net worth for all families (measured in 2016 dollars) dropped 8% since 1998. Most sobering, the poorer you are, the worst your fate – and this is compounded by race, education level, gender and age factors. America’s poorest, the bottom fifth, saw their net worth fall 22%; the broad working class, the second-lowest income tier, were the hardest hit with their net worth shrinking by more than a third (34%); and those dubbed “middle class,” with incomes from $43,501 to $69,500, were barely treading water, with their worth gaining a whopping 3.5%. Since 1998, the top 10% saw their worth rise 146%. The share of the nation’s wealth held by the top 1% rose to 38.6% while that portion controlled by the bottom 90% fell 22.8% (from 33.2% in ’89).

Looking at the nation’s income for the period of 2013 to 2016, the same phenomenon is evident: income going to the top 1% climbed to 23.8% (from 20.3%) while the share going to the bottom 90% slipped to about 50% (from 54%). And then there is debt, the lubricant of the U.S. post-WW-II “consumer revolution.” During the 2013 to 2016 period, those with the lowest income (below $25,300), saw their debt rise by 57%; for the lower-middle class (incomes between $25,301 and $43,500), debt increased 58%; and for the middle class (incomes from $43,501 to $69,500), debt rose by a modest 12.5%.

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What beaking points are made of.

• Retail Investors Are Finally True Believers with Record Exposure (WS)

As far as the stock market is concerned, it took a while – in fact, it took eight years, but retail investors are finally all in, bristling with enthusiasm. TD Ameritrade’s Investor Movement Index rose to 8.59 in December, a new record. TDA’s clients were net buyers for the 11th month in a row, one of the longest buying streaks and ended up with more exposure to the stock market than ever before in the history of the index. This came after a blistering November, when the index had jumped 15%, “its largest single-month increase ever,” as TDA reported at the time, to 8.53, also a record:

Note how retail investors had been to varying degrees among the naysayers from the end of the Financial Crisis till the end of 2016, before they suddenly became true believers in February 2017. “I don’t think the investors who are engaging regularly are doing so in a dangerous fashion,” said TDA Chief Market Strategist JJ Kinahan in an interview. But he added, clients at the beginning of 2017 were “up to their knees in it and then up to their thighs, and now up to their chests.” The implication is that they could get in a little deeper before they’d drown. “As the year went on, people got more confident,” he said. And despite major geopolitical issues, “the market was never tested at all” last year. There was this “buy-the-dip mentality” every time the market dipped 1% or 2%.

But one of his “bigger fears” this year is this very buy-the-dip mentality, he said. People buy when the market goes down 1% or 2%, and “it goes down 5%, then it goes down 8% — and they turn into sellers, and then they get an exponential move to the downside.” In addition to some of the big names in the US – Amazon, Microsoft, Bank of America, etc. – TDA’s clients were “believers” in Chinese online retail and were big buyers of Alibaba and Tencent. But they were sellers of dividend stocks AT&T and Verizon as the yield of two-year Treasuries rose to nearly 2%, and offered a risk-free alternative at comparable yields. And he added, with an eye out for this year: “It’s hard to believe that the market can go up unchallenged.” This enthusiasm by retail investors confirms the surge in margin debt – a measure of stock market leverage and risk – which has been jumping from record to record, and hit a new high of $581 billion, up 16% from a year earlier.

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Duh!

• iPhone Addiction May Be A Virtue, Not A Vice For Investors (R.)

Apple investors are shrugging off concerns raised by two shareholders about kids getting hooked on iPhones, saying that for now a little addiction might not be a bad thing for profits. Hedge fund JANA Partners and the California State Teachers’ Retirement System (CalSTRS) pension fund said on Saturday that iPhone overuse could be hurting children’s developing brains, an issue that may harm the company’s long-term market value. But some investors said the habit-forming nature of gadgets and social media are one reason why companies like Apple, Google parent Alphabet Inc and Facebook Inc added $630 billion to their market value in 2017. “We invest in things that are addictive,” said Apple shareholder Ross Gerber, chief executive of Gerber Kawasaki Wealth and Investment Management.

He also owns stock in coffee retailer Starbucks Corp, casino operator MGM Resorts International and alcohol maker Constellation Brands Inc. “Addictive things are very profitable,” Gerber said. Still, the investment community is increasingly holding companies to higher social standards, and there is some concern that market-leading tech companies could draw attention from regulators much like alcohol, tobacco and gambling companies have in the past. Alphabet and Facebook could not immediately be reached for comment on Monday. Facebook has said social media can be beneficial if used appropriately. In a statement to Reuters, Apple said it has offered a range of controls on iPhones since 2008 that allow parents to restrict content, including apps, movies, websites, songs and books, as well as cellular data, password settings and other features.

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This leaves many questions about what the industry knew and what they did not. Hard to believe they were all entirely ignorant for 20 years.

• ‘It Can’t Be True.’ Inside the Semiconductor Industry’s Meltdown (BBG)

It was late November and former Intel Corp. engineer Thomas Prescher was enjoying beers and burgers with friends in Dresden, Germany, when the conversation turned, ominously, to semiconductors. Months earlier, cybersecurity researcher Anders Fogh had posted a blog suggesting a possible way to hack into chips powering most of the world’s computers, and the friends spent part of the evening trying to make sense of it. The idea nagged at Prescher, so when he got home he fired up his desktop computer and set about putting the theory into practice. At 2 a.m., a breakthrough: he’d strung together code that reinforced Fogh’s idea and suggested there was something seriously wrong. “My immediate reaction was, ‘It can’t be true, it can’t be true,’” Prescher said.

Last week, his worst fears were proved right when Intel, one of the world’s largest chipmakers, said all modern processors can be attacked by techniques dubbed Meltdown and Spectre, exposing crucial data, such as passwords and encryption keys. The biggest technology companies, including Microsoft, Apple, Google and Amazon.com are rushing out fixes for PCs, smartphones and the servers that power the internet, and some have warned that their solutions may dent performance in some cases. Prescher was one of at least 10 researchers and engineers working around the globe – sometimes independently, sometimes together – who uncovered Meltdown and Spectre. Interviews with several of these experts reveal a chip industry that, while talking up efforts to secure computers, failed to spot that a common feature of their products had made machines so vulnerable.

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David Brooks exposes everything his paper -NYT- has done for well over a year: make it all up. A mea culpa between the lines.

• The Decline of Anti-Trumpism (David Brooks)

Let me start with three inconvenient observations, based on dozens of conversations around Washington over the past year: First, people who go into the White House to have a meeting with President Trump usually leave pleasantly surprised. They find that Trump is not the raving madman they expected from his tweetstorms or the media coverage. They generally say that he is affable, if repetitive. He runs a normal, good meeting and seems well-informed enough to get by. Second, people who work in the Trump administration have wildly divergent views about their boss. Some think he is a deranged child, as Michael Wolff reported. But some think he is merely a distraction they can work around. Some think he is strange, but not impossible. Some genuinely admire Trump. Many filter out his crazy stuff and pretend it doesn’t exist.

My impression is that the Trump administration is an unhappy place to work, because there is a lot of infighting and often no direction from the top. But this is not an administration full of people itching to invoke the 25th Amendment. Third, the White House is getting more professional. Imagine if Trump didn’t tweet. The craziness of the past weeks would be out of the way, and we’d see a White House that is briskly pursuing its goals: the shift in our Pakistan policy, the shift in our offshore drilling policy, the fruition of our ISIS policy, the nomination for judgeships and the formation of policies on infrastructure, DACA, North Korea and trade. It’s almost as if there are two White Houses. There’s the Potemkin White House, which we tend to focus on: Trump berserk in front of the TV, the lawyers working the Russian investigation and the press operation.

Then there is the Invisible White House that you never hear about, which is getting more effective at managing around the distracted boss. I sometimes wonder if the Invisible White House has learned to use the Potemkin White House to deke us while it changes the country. I mention these inconvenient observations because the anti-Trump movement, of which I’m a proud member, seems to be getting dumber. It seems to be settling into a smug, fairy tale version of reality that filters out discordant information. More anti-Trumpers seem to be telling themselves a “Madness of King George” narrative: Trump is a semiliterate madman surrounded by sycophants who are morally, intellectually and psychologically inferior to people like us. I’d like to think it’s possible to be fervently anti-Trump while also not reducing everything to a fairy tale.

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Still up and down, but that will be a big problem at some point, not some quaint feature..

• Cryptocurrencies Are Selling Off (BBG)

Bitcoin slumped, dragging down smaller rivals such as ether and litecoin, as concerns that regulators will tighten their grip on the market weigh on the the world’s largest cryptocurrency. Regulators in China and South Korea are increasing oversight on cryptocurrency trading and mining, while the U.S. Securities and Exchange Commission late last year started cracking down on some digital token sales, known as ICOs. Coinmarketcap.com’s decision to exclude Korean pricing data for coins helped create the appearance of a large drop in prices, which some traders attributed as playing a part in the selloff. “News on the regulatory front is dragging down cryptos,” said Gabor Gurbacs at VanEck Associates.

“South Korea and China tightening is weighing on bitcoin and in the ICO market, things started slowing down, with the SEC cracking down on illegal offerings.” Bitcoin slumped as much as 17% to $14,820, the most in more than two weeks. The rout in bitcoin is part of a broader selloff in the cryptocurrency realm, with all of the top 10 by market cap falling, and most tumbling by at least 10%, according to Coinmarketcap.com. Cardano fell 16%, while litecoin slumped as much as 16% to as low as $230. Bitcoin is little changed this year after surging about 1,400% in 2017.

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Liquidity concerns.

• Fund Managers Say US Regulator Told Them To Suspend Bitcoin ETF Bids (R.)

Two U.S. companies shelved proposals to launch bitcoin exchange-traded funds, citing ongoing concerns by the Securities and Exchange Commission (SEC), filings showed on Monday. Staff at the regulatory agency “expressed concerns regarding the liquidity and valuation” of futures contracts based on the digital asset, according to one of the filings. The move adds a new hurdle to the bid by Wall Street firms to capitalize on investor interest in cryptocurrencies, and it opens a rare public divergence between two financial regulatory agencies over how to regulate them. Trusts controlled by Rafferty Asset Management and Exchange Traded Concepts each canceled plans to launch three bitcoin funds that could be traded by retail investors as easily as stocks. Neither firm could be reached for comment.

Fund managers thought the proposals had a chance at winning approval given the launch last month of futures contracts based on bitcoin on both the CME and the CBOE exchanges. Regulators have been scrambling to figure out how to deal with this relatively new asset, and no single one has control. The SEC has dominion over funds, while the Commodity Futures Trading Commission (CFTC) governs futures contracts. The CFTC has been under pressure to address concerns it did not fully assess the potential risks that bitcoin poses to the financial system. [..] The SEC’s decisions also face close scrutiny given its power to clear the way for products that could be among the more volatile traded in U.S. equity markets.

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It was always nonsense, and they know it.

• US Energy Watchdog Terminates Plan To Subsidize Coal, Nuclear Sectors (AFP)

The US energy watchdog terminated Monday a key proposal by President Donald Trump’s administration to subsidize coal and nuclear plants, finding it neither justified nor reasonable. The decision by the Federal Energy Regulatory Commission (FERC) was handed down in a unanimous verdict by its five members, a majority of whom belong to the president’s Republican Party. Energy Secretary Rick Perry had in September proposed providing federal aid to nuclear and coal power plants with at least 90 days’ worth of production capacity, arguing the move was necessary to make the national grid more resilient in case of extreme events.

Both sectors have seen their share of the energy market diminish in recent years, losing out to oil, natural gas and renewables – which had all opposed Perry’s plan. There are currently only two nuclear reactors under construction in the US, in addition to the 99 in service. Coal is also facing a crisis, and Trump made reversing its decline a major campaign pledge. In announcing its decision, FERC cited an existing department study’s findings that “changes in the generation mix, including the retirement of coal and nuclear generators, have not diminished the grid’s reliability or otherwise posed a significant and immediate threat to the resilience of the electric grid.”

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Of the Oprah kind.

• Fairy Tale (Jim Kunstler)

Oprah might be the Democratic Party’s last best hope before it collapses into the mausoleum of US political history, where the Whigs, Free Soilers, and Anti-Federalists lie a’moldering. Politics in this land has failed in its effort to become show business, while show business is succeeding wildly in its attempt to replace politics. All Washington can produce these days is a succession of tedious irresolvable soap operas. Hollywood is enacting a grand moral drama of clear-cut heroines and villains, victims and oppressors, sticking to archetypal story-line of our lifetime: the campaign for freedom, equality, and decency. Show business loves the desert sunshine; politics is mired in the Potomac swamp. Oprah even has better hair than the current occupant of 1600 Pennsylvania Avenue.

Oprah herself is an object lesson in the social and political themes that America dares not talk about: a person of humble origins who succeeded wildly in American life by signing onto a once-sturdy and now-fading common culture. In fact, Oprah probably embodies all that remains of American common culture, and the multitudes adore her for it. They are reassured to know that the binding verities still exist. She moves in a realm where blackness and whiteness are emphatically irrelevant — which is surely a relief to people of good will who are sick of race-hustling from all quarters. Though she has credibly acted plenty of sharecropper roles in the movies, Oprah speaks English beautifully and doesn’t apologize for moving up from the ghetto patois of her rough childhood. She may not write all her own material — such as Sunday’s Golden Globes speech that may live on like MLK’s I Have a Dream oration — but she delivers her message with conviction.

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Stumbling from failure to failure.

• Theresa May’s Cabinet Reboot Descends Into Chaos (BBG)

U.K. Prime Minister Theresa May’s attempt to give her government a 2018 reboot was marred by a chaotic cabinet reshuffle as senior ministers refused to follow her orders. It’s a development that bodes ill for her ability to successfully navigate the next, even trickier stage of Brexit talks. May’s office flagged Monday’s events as “a refresh” of her top team. But instead of the usual parade of lawmakers arriving at her office in quick succession to accept their new roles, things went off script. First Health Secretary Jeremy Hunt, then Education Secretary Justine Greening were locked in discussions with her after rejecting proposed moves. Hunt eventually won his argument to stay on, but Greening, who spent more than two hours in 10 Downing Street, quit rather than accept another job.

May was said to be “disappointed” at losing Greening, who opposed Brexit, and could now vote with pro-European Union rebels in the House of Commons. It was not the restart she wanted. There were echoes of her botched decision to call an election in her announcement of a reshuffle she didn’t have to carry out. In both instances May seemed to dissipate any political goodwill she recouped. She had begun the new year in a position of relative strength, having concluded a problematic first phase of talks over Brexit – still the issue that will define her political legacy and will only get more complicated this year. “She can’t have the government she would choose and has to select from a small group of people,” said Matt Beech, director of the Centre for British Politics at the University of Hull. “Even with a majority she’d be facing tough decisions because her party’s completely divided on Brexit.”

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Want to know when you’re being had? Look no further. The reasoning here is that the German economy is doing so well that climate targets can’t be met. But that’s an impossible contradiction. Because it tries to make you believe that the investments needed to meet the targets will be made when the economy is not doing so well. But they won’t, because by then the story will be that the money is needed to support the economy.

• Merkel, Coalition Negotiators Agree To Scrap 2020 Climate Target (R.)

Germany’s would-be coalition partners have agreed to drop plans to lower carbon dioxide emissions by 40% from 1990 levels by 2020, sources familiar with negotiations said on Monday – a potential embarrassment for Chancellor Angela Merkel. Due to strong economic growth and higher-than-expected immigration, Germany is likely to miss its national emissions target for 2020 without any additional measures. Negotiators for Merkel’s conservative bloc and the centre-left Social Democrats (SPD) told Reuters the parties had agreed in exploratory talks on forming a government that the targeted cut in emissions could no longer be achieved by 2020. Instead, they would aim to hit the 40% target in the early 2020s, the sources said, adding that both parties are still sticking to their goal of achieving a 55% cut in emissions by 2030.

The deal would represent something of a U-turn for Merkel, who has long presented herself as an advocate of climate protection policies on the international stage. Sources said both parties had also agreed that the share of renewable energy in Germany’s electricity consumption should rise to 65% by 2030 from roughly a third last year. Currently, the government plans to raise the renewable energy quota to between 45 and 55% by 2025. Negotiators also agreed to cut the tax on electricity in order to reduce energy costs, according to a document seen by Reuters. They also plan to tender an extra 4 gigawatts of solar energy as well as onshore and offshore wind-generating capacity.

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Debt Rattle January 8 2018

Jan 082018
 
 January 8, 2018  Posted by at 10:41 am Finance Tagged with: , , , , , , , , , , , ,  6 Responses »


James Karales Selma to Montgomery March Alabama 1965

 

• Beijing’s Yuan Ambitions Look Dashed (BBG)
• Two Major Apple Shareholders Push for Study of iPhone Addiction in Children (BBG)
• New Jersey Poised To Bar Drunken Droning (R.)
• South Korea Inspects Six Banks Over Crypto Currency Services To Clients (R.)
• Bitcoin Futures Traders Are Quietly Building A Big Short Position (ZH)
• Australia Forecasts 20% Iron Ore Price Drop In 2018 (R.)
• Australia Government Can’t Supply Its Way To Housing Affordability (SMH)
• Rising Volatility Begets Rising Volatility (Peters)
• The Artificial Liquidity Bubble (Henrich)
• Wikileaks Publishes Michael Wolff’s Entire Sold Out Trump Book As A PDF (ZH)
• US Freezes While Sydney Sizzles: World’s Temperature Extremes Span 85ºC (BBG)

 

 

It’s not as if a strong yuan is all that good for China. A stable one might be. But the bottom line remains: nobody wants it.

• Beijing’s Yuan Ambitions Look Dashed (BBG)

As 2018 gets underway, China seems to be on top again. The yuan has strengthened 6.8% against the dollar over the past 12 months and foreign-exchange reserves are growing. Not so fast.Remember November 2015, when the IMF- with some fanfare – agreed to add the yuan to its prestigious special drawing rights currency basket. Talk then was of the yuan one day becoming one of the world’s reserve currencies, perhaps even rivaling the dollar.Two years on and central banks aren’t buying the notion. Although China’s currency has a weight of more than 10% in the SDR basket, which gives equal importance to a country’s trade status and balance-sheet metrics, just 1.1% of the world’s forex reserves were held in yuan versus 63% in dollars as of the third quarter.

It’s understandable that central banks have been shying away from the euro. German two-year bunds have been offering a negative yield since mid-2014. But why the yuan? China’s short-dated government notes offer among the best interest rates: Part of the explanation is liquidity. According to the Bank of International Settlements, in 2016, the yuan constituted only 4% of the world’s currency trades. The dollar, through pairs with the euro and the yen, accounted for 88% of transactions.

Then there’s the question of time. It could be decades before any currency, yuan or bitcoin, replaces the greenback.But China itself is also to blame. It seems to have abandoned its great yuan ambitions.What happened to the dim sum bond market? The Chinese government, along with policy banks, sold fewer than $3 billion of offshore yuan notes last year, a sharp pullback from 2016 and 2015. And oddly, last October, China sold its first sovereign dollar debenture since 2004 – a move that was widely interpreted as Beijing wishing to develop a vibrant international bond market for its state-owned enterprises. The panda bond market, where foreign companies raise yuan onshore, is also going nowhere. Hungary had a small, 1 billion yuan ($154 million) issue in July, while the Philippines keeps delaying its plans. China has also hit the pause button on the idea of trading oil in yuan.

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Curious new problems.

• Two Major Apple Shareholders Push for Study of iPhone Addiction in Children (BBG)

Two big shareholders of Apple are concerned that the entrancing qualities of the iPhone have fostered a public health crisis that could hurt children – and the company as well. In a letter to the smartphone maker dated Jan. 6, activist investor Jana Partners and the California State Teachers’ Retirement System urged Apple to create ways for parents to restrict children’s access to their mobile phones. They also want the company to study the effects of heavy usage on mental health. “There is a growing body of evidence that, for at least some of the most frequent young users, this may be having unintentional negative consequences,” according to the letter from the investors, who combined own about $2 billion in Apple shares. The “growing societal unease” is “at some point is likely to impact even Apple.”

“Addressing this issue now will enhance long-term value for all shareholders,” the letter said. It’s a problem most companies would kill to have: Young people liking a product too much. But as smartphones become ubiquitous, government leaders and Silicon Valley alike have wrestled for ways to limit their inherent intrusiveness. France, for instance, has moved to ban the use of smartphones in its primary and middle schools. Meanwhile, Android co-founder Andy Rubin is seeking to apply artificial intelligence to phones so that they perform relatively routine tasks without needing to be physically handled. Apple already offers some parental controls, such as the Ask to Buy feature, which requires parental approval to buy goods and services. Restrictions can also be placed on access to some apps, content and data usage.

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I must admit, another new problem, and one that hadn’t occurred to me yet.

• New Jersey Poised To Bar Drunken Droning (R.)

U.S. drone sales in 2017 topped $1 billion for the first time ever, but don’t raise a glass too quickly if you are in New Jersey, where lawmakers are poised to outlaw drunken droning next week. It is one of a wave of U.S. states moving to bring the unmanned aircrafts’ high-flying fun back to earth. New Jersey’s Assembly is slated to vote on a bill approved by the state Senate to ban inebriated or drugged droning, as well as to outlaw flying unmanned aircraft systems over prisons and in pursuit of wildlife. The vote was set for Thursday but postponed until Monday because of a severe snowstorm that triggered a state of emergency in New Jersey. “It’s basically like flying a blender,” said John Sullivan, 41, of New York, a drone buff and aerial cinematographer.

He said he opposed drunk droning but also fretted about regulatory overreach. “If I had like one drink, I’d be hesitant to even fly it.” A 2015 drone crash on the White House lawn fueled debate in the U.S. Congress over the need for drone regulations. It was a drunken, off-duty employee of the National Geospatial-Intelligence Agency who flew the 2-foot-by-2-foot (60 cm by 60 cm) “quadcopter” from a friend’s apartment balcony and lost control of it over the grounds surrounding the White House, the New York Times reported. [..] “Like any technology, drones have the ability to be used for good, but they also provide new opportunities for bad actors,” said Assemblywoman Annette Quijano of Elizabeth, New Jersey. She backed the bill, which would impose a punishment of up to six months prison and a $1,000 fine for drunk droning.

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A big gap: “..bitcoin’s global price average was trading at $16,294 while in South Korean markets, it stood at 25 million won, or $23,467.35..?

• South Korea Inspects Six Banks Over Crypto Currency Services To Clients (R.)

South Korean financial authorities on Monday said they are inspecting six local banks that offer virtual currency accounts to institutions, amid concerns the increasing use of such assets could lead to a surge in crime. The joint inspection by the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) will check if banks are adhering to anti-money laundering rules and using real names for accounts, FSC Chairman Choi Jong-ku told a press conference. [..] Choi said the inspections are intended to provide guidance to banks and are not the result of any suspected wrongdoing. “Virtual currency is currently unable to function as a means of payment and it is being used for illegal purposes like money laundering, scams and fraudulent investor operations,” said Choi. “The side effects have been severe, leading to hacking problems at the institutions that handle cryptocurrency and an unreasonable spike in speculation.”

A Woori Bank spokesperson told Reuters the bank was filling out a checklist for the inspection. The spokesperson said Woori had stopped providing virtual account services last month as the costs of using a real-name transaction system were too prohibitive. [..] Choi said authorities are also looking at ways to reduce risks associated with cryptocurrency trading in the country, which could include shutting down institutions that use such currencies. Last month, the government said it would impose additional measures to regulate speculation in cryptocurrency trading within the country, including a ban on anonymous cryptocurrency accounts and new legislation to allows regulators to close virtual coin exchanges if needed.

Bitcoin and other virtual coins have been extremely popular in South Korea, drawing wide investments from housewives and students. Government officials have expressed concern over frenzied speculation, with South Korea’s central bank chief warning of “irrational exuberance” in trading of virtual currency last month. A South Korean cryptocurrency exchange, Youbit, shut down and filed for bankruptcy in December after it was hacked twice last year, highlighting security and regulatory concerns. South Korea’s virtual currency exchanges have been more vulnerable to hackers as bitcoin trades at higher rates on local exchanges than they do elsewhere. As of 0710 GMT, bitcoin’s global price average was trading at $16,294 while in South Korean markets, it stood at 25 million won, or $23,467.35, according to Coinhills.com.

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Bitcoin and Ripple are falling, ether rises.

• Bitcoin Futures Traders Are Quietly Building A Big Short Position (ZH)

In retrospect, the launch of bitcoin futures one month ago has proven to be a modestly disappointing event: while it helped send the price of bitcoin soaring as traders braced for the institutionalization of bitcoin, the world’s most popular cryptocurrency has stagnated since the beginning of December when first the Cboe then CME started trading bitcoin futures, trading in a range between $12,000 and $17,000. And while bitcoin futures markets volumes have been lower than most had expected, the past 4 weeks have provided enough data to observe how volumes and open interest have evolved.

We discussed previously that Bitcoin futures were off to a slow start in the first week of trading, with volumes of CBOE Bitcoin futures averaging just around $40MM per day, despite intense media hype helping fuel heavy trading when both contracts launched, at least in the first hours of trading. Since then, volumes spike briefly in the following week coinciding with the launch of the CME futures, with volumes of on both exchanges at relatively similar levels. Then, as JPM’s Nikolaos Panagirtzoglou shows, after a spike in volumes to around $200mn on 22 December, which saw sharp swings in underlying Bitcoin prices, volumes have averaged around $50mn and $60mn per day on the CBOE and CME futures, respectively.

One month after their launch, futures trading volumes remain very modest compared to average Bitcoin trading volumes of around $15bn per day since futures contracts were launched according to coinmarketcap.com data. While open interest in both the CBOE and CME contracts has risen steadily, it too remains rather modest at around $60mn and $70mn, respectively. Putting futures volumes in context, on Friday, the combined size of the bitcoin-futures markets at the two exchanges was roughly $150 million, measured in terms of the value of outstanding contracts, while the total value of all bitcoins in existence was around $290 billion.

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That’s a big drop.

• Australia Forecasts 20% Iron Ore Price Drop In 2018 (R.)

Australia on Monday said it expects iron ore prices to average $51.50 a tonne this year, down 20% from 2017, because of rising global supply and moderating demand from top importer China as its steel sector shrinks. The world’s top three mining companies, BHP and Vale rely heavily on iron ore sales for the bulk of their revenue despite efforts to diversify more into other industrial raw materials, such as copper, aluminium and coal. Brazil-based Vale is planning to lift iron ore exports 7% in 2018 to 390 million tonnes. In Australia, Rio Tinto and BHP, along with Fortescue Metals Group aim to add about 170 million tonnes of new capacity over the next several years.

The forecast price decline — from an average of $64.30 a tonne in 2017 — continues into 2019, when the steelmaking raw material will average only $49 a tonne, according to the Department of Industry, Innovation and Science. “The iron ore price is expected to experience some ongoing volatility in early 2018, as the market responds to uncertainty regarding the impact of winter production restrictions on iron ore demand,” the department warned in its latest commodities outlook paper. Iron ore currently sells for about $75 a tonne.

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All it needs to do is let prices crash. Does wonders for affordability.

• Australia Government Can’t Supply Its Way To Housing Affordability (SMH)

Sydney and Melbourne are entering a housing downturn. While the government has hoped record high levels of property development would have an impact, research shows supply is not behind the price falls. Housing economists say the market slowdown is not due to additional home building but a drop in demand, in part thanks to the banking regulator making it more difficult for some to get a loan. In fact, the effect of new supply on property prices has been very limited despite state governments largely pinning hopes on a surging home building industry to rein in affordability. In a recent Australian National University paper Regional housing supply and demand in Australia academics Ben Phillips and Cukkoo Joseph found supply levels from 2001 to 2017 were larger than necessary to cover demand requirements, with thousands of excess homes in Sydney, but prices boomed over the time period.

This flies in the face of conventional economic wisdom, with the law of supply and demand dictating that the more of something you make, the cheaper it should be. There are many reasons why housing doesn’t respond to increases in supply in the way the market for coal, apples or t-shirts might be expected to react. When economists are making models they usually assume they are calculating the impacts on a “normal” good. One of the assumptions often made when modelling supply and demand for these goods is that what is produced is all homogenous, that is they are more or less the same. Typically, someone will pay the same amount for one item as they will for another that is identical.

Housing is not in this category. Even in the most sterile of apartment blocks, there will be many different design features, flaws, views and aspects that differ in each unit. The impact of new supply on the property market is limited by whether the type of property being built caters to existing demand. For instance, new apartments on the outskirts of greater Sydney or Melbourne may not appeal to the same market bidding up the price of mansions with water views.

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It’s just like Minsky: stability begets instability.

• Rising Volatility Begets Rising Volatility (Peters)

To sell implied volatility at current 50yr lows, investors must imagine tomorrow will be virtually identical to today. They must imagine that bond yields won’t rise despite every major central bank eager to hike interest rates and exit QE. They must imagine that economies at or near full employment will not create inflation; that GDP will neither accelerate nor decelerate; that governments will tolerate historic levels of income inequality despite citizens voting for the opposite; that strongly rising global debts will be supported by structurally decelerating global growth. And volatility sellers must imagine that nine years into a bull market, amplified by a proliferation of complex volatility-selling strategies and passive ETFs with liquidity mismatches, that we will dodge a destabilizing shock to market infrastructure.

I can imagine a few of those things happening, but neither sustainably nor simultaneously. It is much easier to imagine a tomorrow that looks different from today. Also consider that investment banks and asset managers have always devised creative strategies to make money once asset valuations exceed reasonable levels. These perpetual prosperity machines typically combine leverage and alchemy, transforming real risk into perceived safety. Examples abound. But in this cycle, a proliferation of cleverly disguised volatility-selling strategies has dominated. Zero interest rates and quantitative easing left yield-starved investors with few ways to achieve their target returns. Wall Street’s engineers developed many wonderful solutions to this problem. Their magnificence is matched only by the amount of negative convexity now lurking in investment portfolios.

As volatility has declined, investors have had to sell even more of it to sustain sufficient profits. This selling reinforces the trend lower, which produces an illusion that legacy volatility shorts are less risky today than yesterday. Lower volatility thus begets lower volatility. And this also ensures that quantitative models reduce overall portfolio risk estimates, which allows (and in many cases forces) investors to buy more assets at prevailing prices. This in turn reduces volatility, reflexively. Naturally, the reverse is also true. Rising volatility begets rising volatility. And given the unprecedented volatility-selling in this cycle, this market is exposed to a historic reversal somewhere along the path to policy normalization. Which has now begun.

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aka the everything bubble.

• The Artificial Liquidity Bubble (Henrich)

8 years after the financial crisis we remain in an environment that is entirely dependent on artificial liquidity, be it via central bank liquidity driven low rates and/or QE or now US fiscal stimulus in the form of tax cuts. And while a reduction in central bank stimulus is anticipated for 2018 the $1.5 trillion US tax cut is the next active artificial boost to hit markets. You can view it perhaps this way: When the US ended QE3 Europe and Japan took over the stimulus baton, and now that Europe is reducing stimulus the US again is taking the lead, this time with fiscal stimulus. It is a bizarre dance that excels in one aspect in particular: It never ends. Consider: German unemployment is at all time lows, and European PMIs are at their highest in over 7 years.

Is the ECB raising rates from record lows? Nope. Has QE ended? Nope. QE continues to run at $30B Euro a month and rates remain in full panic mode. Not what one would’ve expected 8 years ago following a return to full employment. Stimulus programs & interventions used to be methods of crisis management now they have become permanent fixtures in global economies. Why? Because this is what it takes. And they will continue. Japanese Prime Minister Shinzo Abe has just instructed central bank chief Kuroda to keep printing as he decides whether to keep him in his job. Wink wink. Normalizing rates? Reducing balance sheets back to pre-crisis levels? Letting markets run on their own without intervention? Call it the big central banking lie. It will never happen. It can’t. Global debt is now exceeding $233 Trillion.

[..] the math of higher rates doesn’t work and will eventual break the camel’s back. Low rates are an absolute must requirement to keep the construct afloat. It is no accident that Morgan Stanley wealth management has decided to pull out of junk bonds. They are warning of US tax cuts accelerating market excesses bringing about a coming recession. And make no mistake, a recession will come as we are very late in the cycle.

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Count me out.

• Wikileaks Publishes Michael Wolff’s Entire Sold Out Trump Book As A PDF (ZH)

Considering that Wikileaks made its name by leaking confidential and/or hard to find documents and information, and also considering the reversal in the Trump administration vis-a-vis Julian Assange, whom it first lauded only to threaten with incarceration in recent months, it is perhaps not surprising that moments ago the official Wikileaks twitter account published Michael Wolff’s controversial – and largely sold out – book, “Fire and Fury” in pdf format.

New Trump book “Fire and Fury” by Michael Wolff. Full PDF: https://t.co/sf7vj4IYAx

— WikiLeaks (@wikileaks) January 7, 2018

Since, somewhat ironically, WikiLeaks picked a google drive to host the leaked pdf, it will unlikely remain available for an extended period, as it would mean substantial lost revenue for book published Henry Holt and Company. So for those who wish to read what all the hoople is about – for free – they are advised to do so sooner rather than later.

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View from the west only. How do you dress for a flight like that?

• US Freezes While Sydney Sizzles: World’s Temperature Extremes Span 85ºC (BBG)

Temperature extremes across the globe spanned more than 85 degrees Celsius at the weekend as Sydney melted and parts of the U.S. froze. Western Sydney touched 47.3 degrees Celsius (117 degrees Fahrenheit) on Sunday afternoon local time, the city’s hottest day since 1939. Weekend temperatures at Mount Washington Observatory in New Hampshire plummeted to minus 36 degrees Fahrenheit (minus 38 degrees Celsius). Roads melted, firefighters battled wildfires across New South Wales state and Sydney residents retreated to air-conditioned shopping malls as temperatures surged. English cricket captain Joe Root was hospitalized with severe dehydration after battling Australia in the cauldron of the Sydney Cricket Ground. At the same time, freezing fog and snow buffeted Mount Washington, tying the observatory for the second-coldest place on Earth.

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Debt Rattle August 6 2017

Aug 062017
 
 August 6, 2017  Posted by at 8:26 am Finance Tagged with: , , , , , , , , ,  7 Responses »


Giorgio de Chirico Piazza d’Italia 1913

 

• The Bursting of the China Credit Bubble (Crescat)
• The Swamp Is So Undrainable It Will End Up Making Mincemeat Of Trump (Stockman)
• How The Trump Administration Broke The State Department (FP)
• Have Smartphones Destroyed a Generation? (Atl.)
• Amazon Isn’t The No. 1 Villain In Retail Sector’s Demise (Katsenelson)
• On The Beach (John Pilger)
• Merkel Is Kowtowing To The German Car Industry (Spiegel)
• North Korea Sanctions Bring Nuclear Issue To ‘Critical Phase’, Says China (G.)
• What If Every Government Paid Off Its National Debt? (Connelly)
• Are Greek Capital Controls Easing? (K.)
• More People Live Inside This Circle Than Outside It (WEF)
• Is Global Ocean Circulation Collapsing? (Forbes)

 

 

A tour de force PDF by private firm Crescat on China and its potential influence on the world of finance. It echoes a longtime theme of mine: China’s shadow banking sector could bring it all down.

• The Bursting of the China Credit Bubble (Crescat)

History has proven that credit bubbles always burst. China by far is the biggest credit bubble in the world today. We layout the proof herein. There are many indicators signaling that the bursting of the China credit bubble is imminent, which we also enumerate. The bursting of the China credit bubble poses tremendous risk of global contagion because it coincides with record valuations for equities, real estate, and risky credit around the world. The Bank for International Settlements (BIS) has identified an important warning signal to identify credit bubbles that are poised to trigger a banking crisis across different countries: Unsustainable credit growth relative to GDP in the household and (non-financial) corporate sector. Three large (G-20) countries are flashing warning signals today for impending banking crises based on such imbalances: China, Canada, and Australia.

The three credit bubbles shown in the chart above are connected. Canada and Australia export raw materials to China and have been part of China’s excessive housing and infrastructure expansion over the last two decades. In turn, these countries have been significant recipients of capital inflows from Chinese real estate speculators that have contributed to Canadian and Australian housing bubbles. In all three countries, domestic credit-to-GDP expansion financed by banks has created asset bubbles in self-reinforcing but unsustainable fashion. Post the 2008 global financial crisis, the world’s central bankers have kept interest rates low and delivered just the right amount of quantitative easing in aggregate to levitate global debt, equity, and real estate valuations to the highest they have ever been relative to income.

Across all sectors of the world economy: household, corporate, government, and financial, the world’s aggregate debt relative to its collective GDP (gross world product) is the highest it has ever been. Central banks have pumped up the valuation of equities too. The S&P 500 has a cyclically adjusted P/E of almost 30 versus a median of 16, exceeded only in 1929 and the 2000 tech bubble. The US markets are also in a valuation bubble because US-owned financial assets have never been more richly valued relative to income as we show below. The picture is equally frothy if we include real estate, also at record valuations to income. China’s capital outflow spillover from its credit bubble has driven up real estate valuations around the world.

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“And then the Donald will be gone, and well before August 2018, too…”

• The Swamp Is So Undrainable It Will End Up Making Mincemeat Of Trump (Stockman)

What will be the trigger that finally sends the establishment after Trump? Ultimately, the hammer of fiscal crisis and a crashing stock market will break any remaining loyalty of the GOP elders as they smell the 2018 elections turning into a replay of the rout of 1974. And then the Donald will be gone, and well before August 2018, too. I told an audience in Vancouver last Friday that it could happen by February. The bottom line is that the Swamp is so undrainable that it will end up making mincemeat of Donald Trump. Needless to say, the ultimate causes of his demise are anchored deep in the failing status quo. America is so addicted to war, debt and central bank driven false prosperity that even the most resourceful and focused challenger would be taken down by its sheer inertia.

But the Donald is so undisciplined, naïve, out-of-touch, thin-skinned, unfocused and megalomaniacal that he is making it far easier for the Swamp critters than they deserve. To a very considerable extent, in fact, he is filling out his own bill of indictment. Moreover, he is totally clueless about how to manage his presidency or cope with the circling long knives of the Deep State which are hell bent on removing him from office. Accordingly, the single most important thing to know about the present risk environment is that it is extreme and unprecedented. In essence, the Donald is the ultimate bull in an exceedingly fragile China shop — and an already badly wounded one at that. So it is no understatement to suggest that the S&P 500 at 2470 and the Dow at 22,000 is about as fragile as the “market” has ever been.

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Is Trump trying the drain the swamp anyway? Or Tillerson? Foreign Policy can’t quite decide on the latter. But these lines, intended as positives, sort of say it all:

“..the legacy of decades of American diplomacy is at risk..”, or this one: “I used to wake up every morning with a vision about how to do the work to make the world a better place..”

• How The Trump Administration Broke The State Department (FP)

Employees at the State Department couldn’t help but notice the stacks of cubicles lined up in the corridor of the seventh floor. For diplomats at the department, it was the latest sign of the “empire” being built by Secretary of State Rex Tillerson’s top aides. The cubicles are needed to accommodate dozens of outsiders being hired to work in a dramatically expanded front office that is supposed to advise Tillerson on policy. Foreign service officers see this expansion as a “parallel department” that could effectively shut off the secretary and his advisors from the career employees in the rest of the building. The new hires, several State officials told Foreign Policy, will be working for the policy planning staff, a small office set up in 1947 to provide strategic advice to the secretary that typically has about 20-25 people on its payroll.

One senior State Department official and one recently retired diplomat told FP that Tillerson has plans to double or perhaps triple its size, even as he proposes a sweeping reorganization and drastic cuts to the State Department workforce. Veterans of the U.S. diplomatic corps say the expanding front office is part of an unprecedented assault on the State Department: A hostile White House is slashing its budget, the rank and file are cut off from a detached leader, and morale has plunged to historic lows. They say President Donald Trump and his administration dismiss, undermine, or don’t bother to understand the work they perform and that the legacy of decades of American diplomacy is at risk.

By failing to fill numerous senior positions across the State Department, promulgating often incoherent policies, and systematically shutting out career foreign service officers from decision-making, the Trump administration is undercutting U.S. diplomacy and jeopardizing America’s leadership role in the world, according to more than three dozen current and former diplomats interviewed by FP. “I used to wake up every morning with a vision about how to do the work to make the world a better place,” said one State Department official, who spoke on condition of anonymity for fear of retaliation. “It’s pretty demoralizing if you are committed to making progress. I now spend most of my days thinking about the morass. There is no vision.”

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Interesting, but it can’t be just one generation.

• Have Smartphones Destroyed a Generation? (Atl.)

The more I pored over yearly surveys of teen attitudes and behaviors, and the more I talked with young people like Athena, the clearer it became that theirs is a generation shaped by the smartphone and by the concomitant rise of social media. I call them iGen. Born between 1995 and 2012, members of this generation are growing up with smartphones, have an Instagram account before they start high school, and do not remember a time before the internet. The Millennials grew up with the web as well, but it wasn’t ever-present in their lives, at hand at all times, day and night. iGen’s oldest members were early adolescents when the iPhone was introduced, in 2007, and high-school students when the iPad entered the scene, in 2010. A 2017 survey of more than 5,000 American teens found that three out of four owned an iPhone.

The advent of the smartphone and its cousin the tablet was followed quickly by hand-wringing about the deleterious effects of “screen time.” But the impact of these devices has not been fully appreciated, and goes far beyond the usual concerns about curtailed attention spans. The arrival of the smartphone has radically changed every aspect of teenagers’ lives, from the nature of their social interactions to their mental health. These changes have affected young people in every corner of the nation and in every type of household. The trends appear among teens poor and rich; of every ethnic background; in cities, suburbs, and small towns. Where there are cell towers, there are teens living their lives on their smartphone. To those of us who fondly recall a more analog adolescence, this may seem foreign and troubling.

The aim of generational study, however, is not to succumb to nostalgia for the way things used to be; it’s to understand how they are now. Some generational changes are positive, some are negative, and many are both. More comfortable in their bedrooms than in a car or at a party, today’s teens are physically safer than teens have ever been. They’re markedly less likely to get into a car accident and, having less of a taste for alcohol than their predecessors, are less susceptible to drinking’s attendant ills. Psychologically, however, they are more vulnerable than Millennials were: Rates of teen depression and suicide have skyrocketed since 2011. It’s not an exaggeration to describe iGen as being on the brink of the worst mental-health crisis in decades. Much of this deterioration can be traced to their phones.

Even when a seismic event—a war, a technological leap, a free concert in the mud—plays an outsize role in shaping a group of young people, no single factor ever defines a generation. Parenting styles continue to change, as do school curricula and culture, and these things matter. But the twin rise of the smartphone and social media has caused an earthquake of a magnitude we’ve not seen in a very long time, if ever. There is compelling evidence that the devices we’ve placed in young people’s hands are having profound effects on their lives—and making them seriously unhappy.

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More on the iPhone.

• Amazon Isn’t The No. 1 Villain In Retail Sector’s Demise (Katsenelson)

Retail stocks have been annihilated recently, despite the economy eking out growth. The fundamentals of the retail business look horrible: Sales are stagnating and profitability is getting worse with every passing quarter. Jeff Bezos and Amazon get most of the credit, but this credit is misplaced. Today, online sales represent only 8.5% of total retail sales. Amazon, at $80 billion in sales, accounts only for 1.5% of total U.S. retail sales, which at the end of 2016 were around $5.5 trillion. Though it is human nature to look for the simplest explanation, in truth, the confluence of a half-dozen unrelated developments is responsible for weak retail sales. Our consumption needs and preferences have changed significantly. Ten years ago we spent a pittance on cellphones.

Today Apple sells roughly $100 billion worth of i-goods in the U.S., and about two-thirds of those sales are iPhones. Apple’s U.S. market share is about 44%, thus the total smart mobile phone market in the U.S. is $150 billion a year. Add spending on smartphone accessories (cases, cables, glass protectors, etc.) and we are probably looking at $200 billion total spending a year on smartphones and accessories. Ten years ago (before the introduction of the iPhone) smartphone sales were close to zero. Nokia was the king of dumb phones, with sales in the U.S. in 2006 of $4 billion. The total dumb cellphone handset market in the U.S. in 2006 was probably closer to $10 billion. Consumer income has not changed much since 2006, thus over the last 10 years $190 billion in consumer spending was diverted toward mobile phones.

It gets more interesting. In 2006 a cellphone was a luxury only affordable by adults, but today 7-year-olds have iPhones. Our phone bill per household more than doubled over the last decade. Not to bore you with too many data points, but Verizon’s wireless’s revenue in 2006 was $38 billion. Fast-forward 10 years and it is $89 billion – a $51 billion increase. Verizon’s market share is about 30%, thus the total spending increase on wireless services is close to $150 billion. Between phones and their services, this is $340 billion that will not be spent on T-shirts and shoes. But we are not done. The combination of mid-single-digit health-care inflation and the proliferation of high-deductible plans has increased consumer direct health-care costs and further chipped away at our discretionary dollars. Health-care spending in the U.S. is $3.3 trillion, and just 3% of that figure is almost $100 billion.

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“A lobotomy is performed on each generation. Facts are removed. History is excised and replaced by what Time magazine calls “an eternal present”.”

• On The Beach (John Pilger)

“This is the way the world ends; Not with a bang but a whimper”. These lines from T.S. Eliot’s poem The Hollow Men appear at the beginning of Nevil Shute’s novel On the Beach, which left me close to tears. The endorsements on the cover said the same. Published in 1957 at the height of the Cold War when too many writers were silent or cowed, it is a masterpiece. At first the language suggests a genteel relic; yet nothing I have read on nuclear war is as unyielding in its warning. No book is more urgent. Some readers will remember the black and white Hollywood film starring Gregory Peck as the US Navy commander who takes his submarine to Australia to await the silent, formless spectre descending on the last of the living world.

I read On the Beach for the first time the other day, finishing it as the US Congress passed a law to wage economic war on Russia, the world’s second most lethal nuclear power. There was no justification for this insane vote, except the promise of plunder. The “sanctions” are aimed at Europe, too, mainly Germany, which depends on Russian natural gas and on European companies that do legitimate business with Russia. In what passed for debate on Capitol Hill, the more garrulous senators left no doubt that the embargo was designed to force Europe to import expensive American gas. Their main aim seems to be war – real war. No provocation as extreme can suggest anything else. They seem to crave it, even though Americans have little idea what war is. The Civil War of 1861-5 was the last on their mainland. War is what the United States does to others.

The only nation to have used nuclear weapons against human beings, they have since destroyed scores of governments, many of them democracies, and laid to waste whole societies – the million deaths in Iraq were a fraction of the carnage in Indo-China, which President Reagan called “a noble cause” and President Obama revised as the tragedy of an “exceptional people”. He was not referring to the Vietnamese. Filming last year at the Lincoln Memorial in Washington, I overheard a National Parks Service guide lecturing a school party of young teenagers. “Listen up,” he said. “We lost 58,000 young soldiers in Vietnam, and they died defending your freedom.” At a stroke, the truth was inverted. No freedom was defended. Freedom was destroyed. A peasant country was invaded and millions of its people were killed, maimed, dispossessed, poisoned; 60,000 of the invaders took their own lives. Listen up, indeed.

A lobotomy is performed on each generation. Facts are removed. History is excised and replaced by what Time magazine calls “an eternal present”. Harold Pinter described this as “manipulation of power worldwide, while masquerading as a force for universal good, a brilliant, even witty, highly successful act of hypnosis [which meant] that it never happened. Nothing ever happened. Even while it was happening it wasn’t happening. It didn’t matter. It was of no interest.”

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Original tile: “‘Made in Germany’ Label Badly Damaged By Car Scandal”. But the power politics behind it are far more revealing.

• Merkel Is Kowtowing To The German Car Industry (Spiegel)

Since the days of former Chancellor Gerhard Schröder, who served from 1998 to 2005, Germany’s leaders have been nicknamed the “Auto Chancellor” for their close ties to the industry. Schröder felt he was a patron of the industry. And Merkel, his successor, was quick to see the connection between maintaining close ties to the key industry and staying in power. On Sept. 23, 2008, she spoke to workers at a Volkswagen factory. “The German government stands behind VW. VW is a great piece of Germany.” The sheer mass of 18,000 workers seemed to awe her. She had likely never spoken in front of that many people at one time. She said she would travel home with the feeling that many workers at Volkswagen wanted “Germany to be doing well.” Observers of the chancellor say that visit to Wolfsburg had a deep impact on Merkel.

A short time later, as the world faced a major economic crisis, she gave employees and executives at Germany’s car companies a gift worth billions of euros in the form of government subsidies that saved jobs and kept the floor from falling out on the industry. The unsavory symbiosis between the government, the industry and the lobbying groups – and the revolving door of personnel moving between them – seems to be the root of the evil. This ensures that the industry has influence and access, and assures employees money and access to the career ladder. It can also cause a bit of head-scratching. A public servant who is supposed to one day passionately fight for the good of the people, is suddenly ready to contribute to their systematic poisoning only a moment later.

Former German Transportation Minister Matthias Wissmann, who served as a member of Merkel’s cabinet and is also a friend, sticks out. Today he’s the president of the German Association of the Automotive Industry (VDA). All he has to do to get the chancellor’s attention is send her a text message on his mobile phone. Merkel’s former chief of staff at the national headquarters of her conservative Christian Democratic Union (CDU) party, Michael Jansen, now works at Volkswagen as the head of the VW’s Berlin office, which conducts the company’s lobbying. A few months ago, carmaker Opel’s chief lobbyist, Joachim Koschnicke, left his job to join the CDU’s election campaign team. All have showered the federal government with emails and letters in recent years to ensure that their companies’ interests are fulfilled.

In May 2013, VDA head Wissmann wrote to “Dear Angela” that she should try to hinder the European Commission’s “excessive” proposals on CO2 targets. VW lobbyist Jansen also wrote to the Chancellery in July 2015 that, on the issue of “air quality/diesel,” the industry’s proposals should be given the “greatest possible consideration.” When he was still an Opel lobbyist, Joachim Koschnicke warned the head of the KBA when approval was delayed for a new Opel model that without it, there would be “potential effects on our business operations.” He said it jeopardized production at five plants and that the “negative effects would be dramatic in every aspect.” And then there’s Eckart von Klaeden, who served as minister of state in the Chancellery from 2009 to 2013 and has since served as head of global external affairs at Daimler.

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How far will China go?

• North Korea Sanctions Bring Nuclear Issue To ‘Critical Phase’, Says China (G.)

The situation on the Korean peninsula is entering “a very critical phase”, China has warned after new United Nations sanctions targeting Pyongyang were announced following its recent intercontinental ballistic missile test. Speaking in Manila before a regional security summit, China’s foreign minister, Wang Yi, said the sanctions had been designed “to efficiently, or more efficiently, block North Korea’s nuclear missile development”. “Sanctions are needed but not the ultimate goal,” Wang added. “The purpose is to pull the peninsula nuclear issue back to the negotiating table, and to seek a final solution to realise the peninsula denuclearisation and long-term stability through negotiations.” “After the resolution is passed, the situation on the peninsula will enter a very critical phase,” Wang warned, according to China’s state broadcaster CGTN.

“We urge all parties to judge and act with responsibility in order to prevent tensions from escalating.” Wang met his North Korean counterpart, Ri Yong Ho, on Sunday who reportedly smiled continuously as he shook the Chinese official’s hand. According to Reuters, journalists were not given access to a meeting between the two men. On Saturday Nikki Haley, the US ambassador to the United Nations, said “further action is required” against North Korea. Earlier, National Security Adviser HR McMaster said Donald Trump had been “deeply briefed” on recent missile tests carried out by Pyongyang, and said the US would do “everything we can to to pressure this regime” while seeking to avoid “a very costly war”. Haley spoke to the UN security council after the 15-member body imposed the new sanctions against North Korea, in response to its two long-range missiles tests in July.

“We should not fool ourselves into thinking we have solved the problem,” Haley said. “Not even close. The North Korean threat has not left us, it is rapidly growing more dangerous. Further action is required. The United States is taking and will continue to take prudent defensive measures to protect ourselves and our allies.” Washington would continue annual military exercises with South Korea, Haley said. The UN-approved sanctions include a ban on exports worth more than $1bn, a huge bite out of North Korea’s total exports, valued at $3bn last year. Countries are also banned from giving any additional permits to North Korean laborers – another source of money for the regime of Kim Jong-un – and all new joint ventures with North Korean companies and foreign investment in existing ones are banned.

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“The national debt is actually the government’s savings account..”

• What If Every Government Paid Off Its National Debt? (Connelly)

There were six times in US history in which budget surpluses were achieved for long enough to retire a significant amount of debt. Five of those were followed by depressions, the last of which culminated in the Great Depression of the 1930s. The last time America ran a significant budget surplus (about 2.5 years) was under President Clinton. The 2002 recession is a direct result of Clinton’s 1999 surplus which forced the domestic private sector into deficit. Consumer spending fell, unemployment rose and a recession occurred. The economy crashed first in 2000 and then onwards into the Great Recession that began in 2007. “But reducing or retiring the debt isn’t what caused the economic downturns,” says economist, Ellis Winningham. “It was the surpluses that caused it. Simply put, you cannot operate an economy with no money in it.”

So why have we convinced ourselves that government debt is the mother of all evil? That somehow, if the government is in surplus, our bank accounts will automatically improve? In fact, as we shall see, the precise opposite is what would probably happen. Anyone who has ever been chased by a debt collector has come to associate the word ‘debt’ as necessarily scary, bad and to be avoided. If you are a household, this is likely to be true. But debt has an entirely different meaning for governments. To whom is the national debt owed? That would be us: the people. But this truth has been avoided in favour of eliciting a pavlovian response based entirely on the principle that a government budget is the same as that of a household.

“People think that public debt is like a household debt, hence, they buy into the neoliberal nonsense about the government going ‘bankrupt’ and then it’s financial armageddon and we will all die,” says Winningham. “It’s total nonsense. The public debt is just a bunch of savings accounts that pay interest. “People think it will improve their lives because they believe that the government’s debt is their debt. In reality, the government’s debt is the private sector’s asset.” In truth, there is no such thing as the national debt beyond a rhetorical device used to scare the public into submission. In the US, the National Debt is the sum-total of all US dollars ever issued by the Federal Government, from the nation’s founding up until this very moment, that have never been taxed away by the Federal Government.

“From around the 1790’s until today, 2017, the US government has issued, after taxes, $18 trillion dollars for everyone in the non-government sector to use,” says Winningham. “In fact, the national debt has been around for over 170 years now, so at some point, you’re going to have to start understanding that it is not an actual problem. “Further, you need to start understanding that when you accuse Obama, or Bush, or Trump of adding to the national debt, you’re actually accusing them of adding US dollars to the US economy. Or, more precisely, you’re accusing them of adding US dollars to our national savings.” Put simply, The National Debt is the country’s total exports minus the country’s total imports, and isn’t an actual debt at all, but a “balance of trade”.

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A giant sleight of hand: ..new measures that are billed as easing the capital controls but which will in fact reduce the annual amount of cash bank clients can withdraw

• Are Greek Capital Controls Easing? (K.)

The government is gearing up to launch new measures that are billed as easing the capital controls but which will in fact reduce the annual amount of cash bank clients can withdraw. As of September 1, when the new measures come into force, citizens will be able to withdraw a total of 1,800 euros per month. When the controls were first introduced in July 2015, Greeks could only withdraw €60 a day, 365 days a year, but since then they have been allowed to carry that amount forward up to a period of two weeks, giving them a €840 limit every 14 days (fixed, from midnight Friday to midnight two weeks later). That will remain the case until the end of August.

The extension of the cumulative withdrawal period may facilitate transactions, but on an annual basis the total amount a bank customer can withdraw will fall from €21,840 (€840 x 26 two-week periods) to €21,600 (€1,800 x 12 months). Greeks could in fact withdraw more money per year on the original limit of €60 per day, totaling €21,900 a year, as that avoided the fixed-two-week-period problem. In other words the “easing” of restrictions has resulted in curtailing people’s withdrawal limit by €300 per annum, for the right to transfer a withdrawal to another day or week. Bank sources tell Kathimerini it is a positive move that will strengthen confidence, make transactions easier and boost the economy.

The new measures will also affect withdrawals in foreign currency in Greece and the use of Greek debit cards for withdrawals abroad. As of September 1 any recipients of money forwarded from abroad will be able to withdraw 50% of the amount without any restrictions. Companies will also be able to open an account at a credit institution by creating a new customer ID regardless of whether they already have another account there. Farmers, who have not been allowed to open bank accounts since the controls started, will finally be allowed to (provided they do not have one already). Employees will be further able to open a new salary account at a different bank to the one at which they are already a client or if their new employer pays their salary at another lender.

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Perspective.

• More People Live Inside This Circle Than Outside It (WEF)


Circle centred on 106.6° East, 26.6° North, projected using GMT, created by BCMM – Brilliant Maps

While the map looks surprising at first glance, it shouldn’t really once you consider it contains all or most of the world’s most populous countries: China, India, Indonesia (fourth), Pakistan (sixth), Bangladesh (seventh) and Japan (tenth). And according to the World Population Prospects 2017, a recently updated UN report, the world population will hit a staggering 9.8 billion by 2050. China (with currently 1.4 billion inhabitants) and India (with currently 1.3 billion inhabitants) will remain the two most populous countries, and Nigeria will overtake the United States to become the third-most populous country in the world.

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Not a new theme at all, the Gulfstream, so why present it as somehow new without any new evidence? Nice map though.

• Is Global Ocean Circulation Collapsing? (Forbes)

Scientists have long known about the anomalous “warming hole” in the North Atlantic Ocean, an area immune to warming of Earth’s oceans. This cool zone in the North Atlantic Ocean appears to be associated with a slowdown in the Atlantic Meridional Overturning Circulation (AMOC), one of the key drivers in global ocean circulation. A recent study published in Nature outlines research by a team of Yale University and University of Southhampton scientists. The team found evidence that Arctic ice loss is potentially negatively impacting the planet’s largest ocean circulation system. While scientists do have some analogs as to how this may impact the world, we will be largely in uncharted territory. AMOC is one of the largest current systems in the Atlantic Ocean and the world. Generally speaking, it transports warm and salty water northward from the tropics to South and East of Greenland.

This warm water cools to ambient water temperature then sinks as it is saltier and thus denser than the relatively more fresh surrounding water. The dense mass of water sinks to the base of the North Atlantic Ocean and is pushed south along the abyss of the Atlantic Ocean. This process whereby water is transported into the Northern Atlantic Ocean acts to distribute ocean water globally. What’s more important, and the basis for concern of many scientists is this mechanism is one of the most efficient ways Earth transports heat from the tropics to the northern latitudes. The warm water transported from the tropics to the North Atlantic releases heat to the atmosphere, playing a key role in warming of western Europe. You likely have heard of one of the more popular components of the AMOC, the Gulf Stream which brings warm tropical water to the western coasts of Europe.

Evidence is growing that the comparatively cold zone within the Northern Atlantic could be due to a slowdown of this global ocean water circulation. Hence, a slowdown in the planet’s ability to transfer heat from the tropics to the northern latitudes. The cold zone could be due to melting of ice in the Arctic and Greenland. This would cause a cold fresh water cap over the North Atlantic, inhibiting sinking of salty tropical waters. This would in effect slow down the global circulation and hinder the transport of warm tropical waters north. Melting of the Arctic sea ice has rapidly increased in the recent decades. Satellite image records indicate that September Arctic sea ice is 30% less today than it was in 1979. This trend of increased sea ice melting during summer months does not appear to be slowing. Hence, indications are that we will see a continued weakening of the global ocean circulation system.

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