Jun 242019
 
 June 24, 2019  Posted by at 9:22 am Finance Tagged with: , , , , , , , , , , , ,  


Pablo Picasso Sleeping girl 1935

 

Free Money Socialism (Henrich)
Iran Goes For “Maximum Counter-Pressure” (Escobar)
Facebook’s Libra Cryptocurrency ‘Poses Risks To Global Banking’ -BIS (G.)
Google’s Chrome Web Browser “Has Become Spy Software” (ZH)
Austerity, Inequality Fuelling Mental Illness – Top UN Envoy (G.)
Republicans Don’t Understand Democrats – and Vice Versa (Atl.)
400 Pilots Sue Boeing In Class Action Over 737 MAX Cover-Up (ABC.au)
How Wall Street Colonized the Caribbean (BR)
Blow To Turkey’s Erdogan As Opposition Wins Big In Istanbul (R.)
Turkey Warns EU Not To Interfere On Cyprus EEZ Issue (K.)
Greek Armed Forces On Standby For Turkish Moves In East Med, Aegean (K.)

 

 

Very close to what I’ve been saying.

Free Money Socialism (Henrich)

According to Jay Powell the Fed’s primary mission is now to “sustain the economic expansion.” I’ve never used the term “manipulation” before, but let’s just be clear what “sustain the economic expansion” really means: To prevent natural market forces from taking hold. That’s manipulation. Business cycles are natural. They serve a purpose, they lay the foundation for new growth, they weed out the excess, they permit for a reset of an aging expansion, for a renewed flourishing of innovation, new solutions, creativity, and yes growth. Of course because of all this recessions bring about temporary pain, but nobody wants pain anymore, and hence central bankers with hero magazine covers have now taken on a new role, that of preventing a recession altogether.

No more cleansing, no more resets, but only ever more excess and propagating the notion that they alone can prevent the cleansing process from taking place with their favorite and only method: Free Money. Oh yes, the free money whores are here again. Hurry back into stocks: “Now, interest rates are coming down en masse. Investors who adjusted their portfolios for a high-rate environment must readjust. That means leaning into growth stocks again, scouring Asia for opportunities, and earning income from investments that won’t succumb to the low-rate trend and will also hold up in a shaky economy”. Barron’s calls the Fed flip flop “graceful”. I call it disgraceful.

Just stop. It’s 2019, wealth inequality is higher than ever, corporate debt is higher than ever, and growth is slowing. Innovation is hampered by a system that has benefitted the few which have grown into bloated monopolies, and the entire system itself remains held afloat by massive and ever more expending debt. After all there is zero intellectual integrity to anything that is being propagated. In recent times Fed chairs have bemoaned rising wealth inequality, oh how un-American it all is, and rising corporate debt being a threat to the economy, but then they proceed to again exacerbate both by promising more easy money, their default solution in the misguided attempt to bail investors out from all pain and any bad decisions.

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“The key in the analysis is what is called notional. They are so far out of the money that they are said to mean nothing. But in a crisis the notional can become real.”

Iran Goes For “Maximum Counter-Pressure” (Escobar)

The facts are stark. Tehran simply won’t accept all-out economic war lying down – prevented to export the oil that protects its economic survival. The Strait of Hormuz question has been officially addressed. Now it’s time for the derivatives. Presenting detailed derivatives analysis plus military analysis to global media would force the media pack, mostly Western, to go to Warren Buffett to see if it is true. And it is true. Soleimani, according to this scenario, should say as much and recommend that the media go talk to Warren Buffett. The extent of a possible derivatives crisis is an uber-taboo theme for the Washington consensus institutions. According to one of my American banking sources, the most accurate figure – $1.2 quadrillion – comes from a Swiss banker, off the record.

He should know; the Bank of International Settlements (BIS) – the central bank of central banks – is in Basle. The key point is it doesn’t matter how the Strait of Hormuz is blocked. It could be a false flag. Or it could be because the Iranian government feels it’s going to be attacked and then sinks a cargo ship or two. What matters is the final result; any blocking of the energy flow will lead the price of oil to reach $200 a barrel, $500 or even, according to some Goldman Sachs projections, $1,000. Another US banking source explains; “The key in the analysis is what is called notional. They are so far out of the money that they are said to mean nothing.

But in a crisis the notional can become real. For example, if I buy a call for a million barrels of oil at $300 a barrel, my cost will not be very great as it is thought to be inconceivable that the price will go that high. That is notional. But if the Strait is closed, that can become a stupendous figure.” BIS will only commit, officially, to indicate the total notional amount outstanding for contracts in derivatives markers is an estimated $542.4 trillion. But this is just an estimate. The banking source adds, “Even here it is the notional that has meaning. Huge amounts are interest rate derivatives. Most are notional but if oil goes to a thousand dollars a barrel, then this will affect interest rates if 45% of the world’s GDP is oil. This is what is called in business a contingent liability.”

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“If even modestly successful, Libra would hand over much of the control of monetary policy from central banks to these private companies.”

Facebook’s Libra Cryptocurrency ‘Poses Risks To Global Banking’ -BIS (G.)

Facebook’s plan to operate its own digital currency poses risks to the international banking system that should trigger a speedy response from global policymakers, according to the organisation that represents the world’s central banks. Although the move of big tech firms such as Facebook, Amazon and Alibaba into financial services could speed up transactions and cut costs, especially in developing world countries, it could also undermine the stability of a banking system that has only just recovered from the crash of 2008. Echoing warnings from many tech experts, the Bank for International Settlements (BIS) said that while there were potential benefits to be made, the adoption of digital currencies outside the current financial system could reduce competition and create data privacy issues.

“The aim should be to respond to big techs’ entry into financial services so as to benefit from the gains while limiting the risks,” said Hyun Song Shin, economic adviser and head of research at BIS. “Public policy needs to build on a more comprehensive approach that draws on financial regulation, competition policy and data privacy regulation.” The warning from the BIS on Sunday comes only days after Facebook announced it would launch its own digital currency, Libra, in 2020. It will allow its billions of users to make financial transactions across the globe in a move that could potentially shake up the world’s banking system.

Chris Hughes, a co-founder of Facebook, last week added his voice to concerns being expressed over big tech’s move into finance, warning that Libra could shift power into the wrong hands. Hughes, who is co-chair of the Economic Security Project, an anti-poverty campaign group, said: “If even modestly successful, Libra would hand over much of the control of monetary policy from central banks to these private companies. If global regulators don’t act now, it could very soon be too late.”

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Very easy for a government to counter. Should make one suspicious as to why they don’t.

Google’s Chrome Web Browser “Has Become Spy Software” (ZH)

Google’s Chrome is essentially spy software according to Washington Post tech columnist Geoffrey Fowler, who spent a week analyzing the popular browser and concluded that it “looks a lot like surveillance software.” Fowler has since switched to Mozilla’s Firefox because of its default privacy settings, and says that it was easier than one might imagine.

“My tests of Chrome vs. Firefox unearthed a personal data caper of absurd proportions. In a week of Web surfing on my desktop, I discovered 11,189 requests for tracker “cookies” that Chrome would have ushered right onto my computer but were automatically blocked by Firefox. These little files are the hooks that data firms, including Google itself, use to follow what websites you visit so they can build profiles of your interests, income and personality. Chrome welcomed trackers even at websites you would think would be private. I watched Aetna and the Federal Student Aid website set cookies for Facebook and Google. They surreptitiously told the data giants every time I pulled up the insurance and loan service’s log-in pages.

And that’s not the half of it.= Look in the upper right corner of your Chrome browser. See a picture or a name in the circle? If so, you’re logged in to the browser, and Google might be tapping into your Web activity to target ads. Don’t recall signing in? I didn’t, either. Chrome recently started doing that automatically when you use Gmail. -Washington Post”

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Iceland?!

Austerity, Inequality Fuelling Mental Illness – Top UN Envoy (G.)

Austerity, inequality and job insecurity are bad for mental health and governments should counteract them if they want to face up to the rising prevalence of mental illness, the UN’s top health envoy has said. In an exclusive interview with the Guardian to coincide with a hard-hitting report to be delivered to the UN in Geneva on Monday, Dr Dainius Puras said measures to address inequality and discrimination would be far more effective in combatting mental illness than the emphasis over the past 30 years on medication and therapy. “This would be the best ‘vaccine’ against mental illness and would be much better than the excessive use of psychotropic medication which is happening,” said Puras, who as the UN’s special rapporteur on health reports back to the UN human rights council in Geneva.

He said that since the 2008 financial crisis, policies that accentuated division, inequality and social isolation have been bad for mental equilibrium. “Austerity measures did not contribute positively to good mental health,” he said. “People feel insecure, they feel anxious, they do not enjoy good emotional wellbeing because of this insecurity situation.” “The best way to invest in the mental health of individuals is to create a supportive environment in all settings, family, the workplace. Then of course [therapeutic] services are needed, but they should not be based on an excessive biomedical model.”

Puras said there had been an overemphasis on trying to cure mental illness like physical illness, through “good medicine”, without thinking about the social factors that cause or contribute to some mental disorders. The prescription of psychotropic drugs to deal with mental illness, particularly antidepressants, has soared across the developed world in the past 20 years.

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What do Americans understand these days?

Republicans Don’t Understand Democrats – and Vice Versa (Atl.)

Unfortunately, the “Perception Gap” study suggests that neither the media nor the universities are likely to remedy Americans’ inability to hear one another: It found that the best educated and most politically interested Americans are more likely to vilify their political adversaries than their less educated, less tuned-in peers. Americans who rarely or never follow the news are surprisingly good at estimating the views of people with whom they disagree. On average, they misjudge the preferences of political adversaries by less than 10 percent. Those who follow the news most of the time, by contrast, are terrible at understanding their adversaries. On average, they believe that the share of their political adversaries who endorse extreme views is about 30 percent higher than it is in reality.


Perhaps because institutions of higher learning tend to be dominated by liberals, Republicans who have gone to college are not more likely to caricature their ideological adversaries than those who dropped out of high school. But among Democrats, education seems to make the problem much worse. Democrats who have a high-school degree suffer from a greater perception gap than those who don’t. Democrats who went to college harbor greater misunderstandings than those who didn’t. And those with a postgrad degree have a way more skewed view of Republicans than anybody else. It is deeply worrying that Americans now have so little understanding of their political adversaries. It is downright disturbing that the very institutions that ought to help us become better informed may actually be deepening our mutual incomprehension.

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And that’s just in one airline.

400 Pilots Sue Boeing In Class Action Over 737 MAX Cover-Up (ABC.au)

More than 400 pilots have joined a class action against American plane manufacturer Boeing, seeking damages in the millions over what they allege was the company’s “unprecedented cover-up” of the “known design flaws” of the latest edition of its top-selling jet, the 737 MAX. Boeing’s 737 MAX series— first announced in 2011 and put to service in 2017 — is the fourth generation of its 737 aircraft, a widely popular narrow-body aircraft model that has been a mainstay of short-haul aircraft routes across the globe. By March 2019, the entire global fleet was suspended by a US presidential decree, following the second fatal crash involving a 737 MAX that killed 157 people in Ethiopia.

The first crash involving the 737 MAX jet happened off the coast of Indonesia in October 2018, killing 189 people. In the time since the two fatal crashes, some of the families of the 346 people killed have sought compensation, while aircraft carriers — such as Norwegian Air — have sought compensation from the American manufacturer for lost revenue as a result of the plane’s global ban. This latest lawsuit filed against Boeing marks the first class action lodged by pilots qualified to fly the 737 MAX series, who have alleged that Boeing’s decisions have caused them to suffer from monetary loss and mental distress since the jet’s suspension.

The originating plaintiff, known as Pilot X —who has chosen to remain anonymous for “fear of reprisal from Boeing and discrimination from Boeing customers” — lodged the statement of claim on Friday, which seeks damages for them and more than 400 colleagues who work for the same airline. In court documents seen by the ABC, the claim alleges that Boeing “engaged in an unprecedented cover-up of the known design flaws of the MAX, which predictably resulted in the crashes of two MAX aircraft and subsequent grounding of all MAX aircraft worldwide.” They argue that they “suffer and continue to suffer significant lost wages, among other economic and non-economic damages” since the fleet’s global grounding. The class action will be heard in a Chicago court, with a hearing date set for October 21, 2019.

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History lesson” “The Caribbean archipelago was ground zero for U.S. imperial banking.”

How Wall Street Colonized the Caribbean (BR)

Scrubbed from the pages of glossy coffeetable books, the history of U.S. imperialism can be found in the archives of Wall Street’s oldest, largest, and most powerful institutions. A deep dive into the vaults and ledgers of banking houses such as Citigroup, Inc., and J. P. Morgan Chase and Co. reveals a story of capitalism and empire whose narrative is not of morally pure and inspiring economic growth, technological innovation, market expansion, and shareholder accumulation, but rather of blood and labor, stolen sovereignty and pilfered resources, military occupation and monetary control. Sugar comingles with blood, chain gangs cross spur lines, and the magical abstractions of finance are found vulgarized in the base manifestations of racial capitalism.

This history of bankers and empire is also a Caribbean history. The Caribbean archipelago was ground zero for U.S. imperial banking. Wall Street’s first experiments in internationalism occurred in Cuba, Haiti, Panama, Puerto Rico, the Dominican Republic, and Nicaragua, often with disastrous results—for those countries and colonies, and often for the imperial banks themselves. Yet where there was expansion, there was also pushback. The internationalization of Wall Street was met with local resistance, refusal and revolt. And just as the history of imperialism has been excised from popular narratives, so too has this history of Caribbean anti-imperialism and autonomy. The history of imperial banking and racial capitalism begins at the end of the nineteenth century, at the historical horizon where the project of U.S. settler colonialism that spurred the financing of the West became the enterprise of U.S. territorial colonialism in the Caribbean and Asia.

Buoyed by unprecedented wealth and boosted by the expansionist jingoism following the victory over Spain in the Caribbean and the Pacific, New York City’s bankers and merchants believed that the organization of an imperial banking system—one that could compete with Europe’s long-established institutions—was critical to the global rise of the city and to the consolidation of Wall Street’s position in international finance, trade, and commerce. With these ambitions, bankers and business-people set their sights on asserting control over the trade and finance of the Americas. They sought to control local central banks, establish U.S. branch banks, take over commodity financing, reorganize monetary systems on a dollar basis, and refinance European-funded sovereign debt.

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He’s losing it. Beware. Next move will be to suggest Turkey’s under threat, call for patriotism.

Blow To Turkey’s Erdogan As Opposition Wins Big In Istanbul (R.)

Turkey’s opposition has dealt President Tayyip Erdogan a stinging blow by winning control of Istanbul in a re-run mayoral election, breaking his aura of invincibility and delivering a message from voters unhappy over his policies. Ekrem Imamoglu of the Republican People’s Party (CHP) secured 54.21% of votes, according to state-owned Anadolu news agency – a far wider victory margin than his narrow win three months ago. The previous result was annulled after protests from Erdogan’s Islamist-rooted AK Party, which said there had been widespread voting irregularities. The decision to re-run the vote was criticized by Western allies and caused uproar among domestic opponents who said Turkey’s democracy was under threat.


On Sunday, tens of thousands of Imamoglu supporters celebrated in the streets of Istanbul after the former businessman triumphed over Erdogan’s handpicked candidate by almost 800,000 votes. “In this city today, you have fixed democracy. Thank you Istanbul,” Imamoglu told supporters who made heart signs with their hands, in an expression of the inclusive election rhetoric that has been the hallmark of his campaigning. “We came to embrace everyone,” Imamoglu said. “We will build democracy in this city, we will build justice. In this beautiful city, I promise, we will build the future.”

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The EU has no choice anymore.

Turkey Warns EU Not To Interfere On Cyprus EEZ Issue (K.)

Turkey has warned the European Union that any intervention on their part on the issue of Cyprus’ Exclusive Economic Zone (EEZ) would negatively affect relations between Greece and Turkey, as well as any prospects for an end to the occupation of the northern part of Cyprus. The warning was made through a non-paper sent to 27 of the EU’s 28 member-states on June 16, Cyprus’ “Fileleftheros” newspaper reports. Turkey didn’t send the note to Cyprus, whose government it does not recognize. The non-paper says the EU would be wise not to act as a judge in the dispute on sea borders and that a similar stance would further discourage efforts to solve the “Cyprus problem” and would cause Greek-Turkish relations to deteriorate.


Turkey claims that the area where one of its drillships has begun exploring for oil and natural gas, soon to be joined by a second, is within Turkey’s continental shelf and that no islands, Cyprus included, can constitute a “full” EEZ. Turkey repeats its views on “equal rights” between Greek- and Turkish-Cypriots, that-is, between the internationally-recognized Republic of Cyprus and the Turkish-occupied north of the island, which Turkey alone has recognized as the “Turkish Republic of Northern Cyprus” and says the best solution is the appointment of a mixed commission with representatives of both sides. Failing that, Turkey says, it is determined to protect the rights of the Turkish-Cypriot resources in the area. The non-paper ends with the hope that, in the decisions to be taken by the EU, “common sense” will prevail.

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Greece will not give in.

Greek Armed Forces On Standby For Turkish Moves In East Med, Aegean (K.)

As Turkey continues with its provocative behavior in the Eastern Mediterranean, despite European Union calls for it to desist from drilling for oil in Cyprus’ exclusive economic zone (EEZ), Greece’s armed forces are on standby to deal with a possible escalation of tensions in the East Med or the Aegean, Kathimerini understands. According to sources, the key question being pondered in Athens is how to react in the event that Turkey decides to conduct seismic research or drilling within Greece’s continental shelf or its EEZ. The biggest concern is about a potential Turkish intervention east of Rhodes and south of Kastellorizo.

On the political level, Athens has done what it can, underlining the potential repercussions of Turkey’s provocative behavior on stability in the broader region. The statement by the EU last week, though vague, was welcomed by Prime Minister Alexis Tsipras as “the first clear and decisive” condemnation of Turkey by the bloc “after decades of violations of international law.” On the operational level, however, it is less clear what Greece’s response should be. The country’s armed forces will be on high alert over the summer as defense officials prepare a series of plans to deal with a possible Turkish intervention. The plans are primarily based on Hellenic Navy maneuvers, as Turkey is currently using research ships and drilling vessels to entrench its presence in the region.

However, the Hellenic Air Force would likely play a supportive role in any response. Asked last week whether Greece can count on military support from the EU or the United States in the event of an incident, Defense Minister Evangelos Apostolakis told reporters that Greece will have to plan to deal with such a scenario independently. “There is no such promise, nor any such issue at the moment, but as I’ve said before, when we need to do something we expect that we will basically be alone.” Athens also holds little faith in promises by French President Emmanuel Macron to send French Navy ships to the Aegean if necessary, as such pledges have been made in the past.

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Jun 232019
 
 June 23, 2019  Posted by at 9:41 am Finance Tagged with: , , , , , , , , , ,  


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

 

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

 

 

But what does it tell us really?

Mapping the World’s Financial Weak Spots (IMF)

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


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

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When I see “CrowdStrike” I stop believing anything.

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

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

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

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

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Inevitably hastening the demise of the reserve currency.

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

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


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

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

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

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

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

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

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Huh?

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

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


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

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

Johnson & Johnson Faces Multibillion Opioids Lawsuit (G.)

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

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

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

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Erdogan wobbles.

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

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

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

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

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

EU Warns Turkey Of Sanctions For Cyprus Drilling (BBC)

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


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

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

Why Is UK Life Expectancy Faltering? (O.)

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

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

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

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If breaks again will it ever sail again?

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

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

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

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

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Jun 212019
 
 June 21, 2019  Posted by at 8:24 pm Primers Tagged with: , , , , , , , , , , ,  


Pablo Picasso Femme aux bras leves- Tête de Dora Maar- 1936

 

As a nation, you’re certifiedly (is that a word?!) in deep trouble if and when Donald Trump is your most peaceloving man. But nevertheless, that is America today. It all harks back to the days when Trump was first -grudgingly and painstakingly- recognized as an actual presidential candidate.

He campaigned as a man who would end the costly and neverending decades-old and counting US wars far away from American shores and territory. He hasn’t lived up to those campaign goals at all, far from it, and he hired doofuses like John Bolton and Mike Pompeo to show everyone that he didn’t, but in the early hours of June 21 2019 he apparently decided at the last minute that it just didn’t add up.

You don’t kill 150 people because someone destroyed a piece of machinery, he got that right. I vividly remember writing a hundred times that a country of 320 million people that can’t come up with a better president than Trump has a behemoth problem. I also remember saying that Trump himself is not that problem, it’s the system that gave rise to him and his popularity. A war-hungry-system, that is, which has pervaded Washington DC.

And there is absolutely nothing that tells me anything has changed in that system. There are hearings and investigations all over the place, right now from Hope Hicks to Jerry Nadler, but none of them are geared towards trying to make peace with Iran or Russia or China, or anyone else. None.

 

Trump’s domestic opponents don’t appear to want peace, not those in the Democratic party, and not those in the MSM, or at least not anyone I’ve seen, other than Tulsi Gabbard. I haven’t seen a word from Nadler or Pelosi trying to coax Trump away from bomb bombing Iran, and diddly squat from the NYT or WashPo either. But sure, tell me what you’ve seen that contradicts that.

Which means he’s on his own, fighting off not only Bolton and Pompeo, but the entire opposition as well. So far he’s done just that. But how much longer can he, when both sides of the aisle continue to call for blood? I find that a hard call to make. I don’t think Trump wants his presidency to be about starting WWIII, but there are so many others calling on him to make it just that.

I said a while ago to a friend that the US invading Iran would be the end of the US, not in 2 days or week, or even 2 years, but in 20 years surely. Because doing so would change the entire power structure in the Middle East so much it would become unrecognizable.

The terribly odd couple of Benjamin Netanyahu and MBS may think they can conquer the region if only Trump sends Americans kids to die there, but they’re as wrong as they are about anything else. Iran is where it is, and it won’t move or budge. It’s just 40 years ago the country rid itself from the US-installed Shah and his SS-like Savak secret services.

Iranians, Persians, have a very deep-seated aversion and -to put it exceedingly mildly- hatred of the US, and they have good reason to. The Shah unleashed pure terror upon “his” entire people, at the benefit of US Big Oil.

 

The only constructive thing the US can do at this point in time is to go talk to Iran, in open and honest discussions. The US will want to do that because Iran is the heart of the Middle East. Just ask Russia and China, they understand that point. Very well even.

Bombing Iran won’t lead to anything at all, other than the demise of the US, down the road. These people will not succumb, and Russia and China will make sure they won’t have to. And Trump’s declaration of US military capabilities being “superior” is just words (or as they say stateside “hogwash”).

The US military ceased being “superior” a long time ago, simply because Raytheon and Boeing et al develop weapons for profit, whereas Russia and China develop them for defense purposes, and at 10% of the price. That single “little” difference will do the US in. Promise.

America needs to start talking. About trade, about weapons, about everything. Maybe Trump can do that. Maybe not. But he won’t be able to do anything by threatening countries like iran who already have nothing left but their backs to a wall.

Trump appears to have some good points vis-a-vis China and trade talks. He has some very bad points vs Russia and the sanctions. He MUST retreat when it comes to Iran, because it would become a much deeper swamp than Washington could ever be.

And it would end any idea of a positive legacy of his presidency. And his grand kids would be far worse off. And and and. But if he would do it regardless, it would only be an extension of US presidential politics as it has has been going on for many decades. So what’s to win, and what’s to lose? You trust a 73-year old burger flipper with that assessment?

 

 

 

 

Jun 212019
 
 June 21, 2019  Posted by at 8:44 am Finance Tagged with: , , , , , , , , , , , ,  


Pablo Picasso La guerre 1951

 

Trump Approved Strikes On Iran But Cancelled Them: Reports (AlJ)
The Drone Iran Shot Down Was a $220 Million Surveillance Monster (W.)
The Real Meaning Of Trump’s Deplorable Aggression Against Iran (Stockman)
Senate Blocks Arms Sales To Saudi Arabia In Bipartisan Trump Rebuke (ZH)
More Spent On S&P 500 Buybacks Than All 2018 R&D (Axios)
China Concerned Over Possible US Dollar Shortage Risk (SCMP)
US Spend Ten Times More On Fossil Fuel Subsidies Than Education (F.)
Bring on Higher Oil Prices: They’ll Boost the US Economy (WS)
Defiant Italy Urges Changes To EU Rules (R.)
UK Will Be ‘Diminished’ After Brexit – Dutch PM Rutte (Pol.eu)
Ecuador Judge Frees Ola Bini, Swedish Programer Close To Assange (R.)
Ten Cities Ask EU For Help To Fight Airbnb Expansion (G.)
The Dangerous Methane Mystery (CP)

 

 

When something like this is leaked to multiple news outlets at the same time, isn’t it likely the White House itself does the leaking?

Kim Dotcom’s take:

Trump: Attack Iran now!
General: Iran can sink our Carrier strike group in the region.
Trump: What?
General: If we strike Iran now they can retaliate against thousands of US sailors.
Trump: WTF!
General: This isn’t Syria Sir.
Trump: Call it off.
THE END

Trump Approved Strikes On Iran But Cancelled Them: Reports (AlJ)

US President Donald Trump approved military strikes on Friday against Iran in retaliation for the downing of an unmanned surveillance drone, but pulled back from launching the attacks, the New York Times reported. A US official told Associated Press that the military made preparations on Thursday night for limited strikes on Iran in retaliation for drone shootdown, but approval was abruptly withdrawn. The official, who was not authorised to discuss the operation publicly and spoke on condition of anonymity, said the targets would have included radars and missile batteries.


Planes were in the air and ships were in position, but no missiles fired, when the order to stand down came, the Times cited one senior administration official as saying. The abrupt reversal put a halt to what would have been Trump’s third military action against targets in the Middle East, the paper added, saying Trump had struck twice at targets in Syria, in 2017 and 2018. However, it is not clear whether attacks on Iran might still go forward, the paper said, adding that it was not known if the cancellation of strikes had resulted from Trump changing his mind or administration concerns regarding logistics or strategy.

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This thing is huge: “..a wingspan of more than 130 feet and a maximum takeoff weight of more than 16 tons..”

Why would Iran want that in its airspace?

The Drone Iran Shot Down Was a $220 Million Surveillance Monster (W.)

Early Thursday morning, Iran shot down a United States unmanned aerial vehicle over the Strait of Hormuz, which runs between the Persian Gulf and the Gulf of Oman. Iran identified the drone as an RQ-4A Global Hawk, a $220 million UAV that acts as a massive surveillance platform in the sky. The attack marks an escalation with tensions already running high between the US and Iran—particularly because of the value and technical sensitivity of the downed drone. Iran’s Islamic Revolutionary Guard Corps said on Thursday that the Northrup Grumman-made Global Hawk—part of a multibillion-dollar program that dates back to 2001—had entered Iranian airspace and crashed in Iranian waters; US Central Command confirmed the time and general location of the attack, but insists that the drone was flying in international airspace.


Alamy

The incident comes on the heels of another situation last week in which the US accused Iran of attacking two fuel tankers in the Gulf of Oman. The US also said that Iran had attempted to shoot down a different UAV—an MQ-9 Reaper drone—but failed. The Pentagon also linked Iran to an attack on a Reaper drone in Yemen two weeks ago that caused the vehicle to crash. Thursday’s attack, though, targeted a massive and much more expensive surveillance drone, and likely represents a more definite escalation. “There’s a lot going on here, and we’re probably only seeing some of it,” says Thomas Karako, director of the Missile Defense Project at the Center for Strategic and International Studies.


“This is a more expensive, higher-altitude, more capable, long-range intelligence surveillance reconnaissance craft. If they’re shooting down aircraft in international airspace over international waters, that’s likely to elicit some kind of measured reprisal.” Global Hawks are massive surveillance platforms, in operation since 2001, with a wingspan of more than 130 feet and a maximum takeoff weight of more than 16 tons, equivalent to roughly seven shipping containers of cocaine. They have a range of more than 12,000 nautical miles, can fly at strikingly high altitudes of 60,000 feet, and can stay aloft for 34 hours straight.


U.S. military drone RQ-4A Global Hawk – Eric Harris/U.S. Air Force/Handout via REUTERS

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Iran has no army to speak of, and hardly an economy. But it does have friends.

The Real Meaning Of Trump’s Deplorable Aggression Against Iran (Stockman)

Iran has no blue water Navy that could even get to the Atlantic and only 18,000 sailors including everyone from admirals to medics; an aging, decrepit fleet of war planes with no long range flight or refueling capabilities; ballistic missiles that mainly have a range of under 800 miles; a very limited air defense based on a Russian supplied S-300 system (not the far more capable S-400); and a land Army of less than 350,000 or approximately the size of that of Myanmar. Indeed, Iran’s defense budget of less than $15 billion amounts to just 7 days of spending compared to the Pentagon’s $750 billion; and it is actually far less even in nominal terms than Iran’s military budget under the Shah way back in the late 1970’s. In inflation-adjusted dollars, Iran’s military expenditure today is less than 25% of the level prior to the Revolution.

Whatever the foibles of today’s Iranian theocratic state, a thriving military power it is not. In fact, that’s the real irony. Mostly what comprises the core of Iran air force is left over 40-50 year-old planes that had been purchased from the US under the Shah, and which have been Jerry-rigged with bailing wire and bubble gum to stay aloft and to accommodate some modest avionics and armaments modernizations. As one analyst further noted, some of its planes were actually gifts from Saddam Hussein! Much of the IRIAF’s equipment dates back to the Shah era, or is left over from Saddam Hussein’s Iraqi air force, which flew many of its planes to Iran during the 1991 Persian Gulf War to avoid destruction. American-made F-4, F-5 and F-14 fighters dating from the 1970s remain the backbone of the Iranian air force.

So military threat has absolutely nothing to do with it. Washington is knee deep in harms’ way and on the verge of starting a war with Iran solely on account of a misguided notion that the Persian Gulf is an American Lake that needs to be policed by the US Navy; and, more crucially, that Washington has the right to control Iran’s foreign policy and determine what alliances it may and may not have in the region – including whether or not they pass muster with Bibi Netanyahu. Stated differently, the missions of protecting the oil supply lines and regulating the foreign policy of what amounts to a two-bit economic power is straight out of the playbook of Empire First. As such, it amounts to a foolish policy of putting America’s actual security last.

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When your own party turns against you, it’s time to pay attention.

Senate Blocks Arms Sales To Saudi Arabia In Bipartisan Trump Rebuke (ZH)

The Senate voted on Thursday to block billions of dollars of armaments to Saudi Arabia in what the New York Times described as a “sharp and bipartisan rebuke of the Trump administration’s attempt to circumvent Congress” by declaring an emergency over Iran. “In the first of a series of three back-to-back votes, Republicans joined Democrats to register their growing anger with the administration’s use of emergency power to cut lawmakers out of national security decisions, as well as the White House’s unflagging support for the Saudis despite congressional pressure to punish Crown Prince Mohammed bin Salman after the killing last October of the journalist Jamal Khashoggi”. -NYT

The vote marks the sharpest division between the White House and lawmakers to date – and is the second time in recent months that the administration has faced bipartisan pushback against foreign policy. In April, both the House and Senate voted to cut off military assistance to Saudi Arabia for use in Yemen under the 1973 War Powers Act, only for Trump to veto the measure (the second of his presidency). And once again, Trump will use his veto power to override Congress: “While the Democratic-controlled House is also expected to block the sales, Mr. Trump has pledged to veto the legislation, and it is unlikely that either chamber could muster enough support to override the president’s veto”. -NYT

“This vote is a vote for the powers of this institution to be able to continue to have a say on one of the most critical elements of U.S. foreign policy and national security,” said New Jersey Democrat Sen. Bob Menendez, lead sponsor of the resolutions of disapproval. “To not let that be undermined by some false emergency and to preserve that institutional right, regardless of who sits in the White House.” 22 pending arms sales to three Arab nations were announced in late May utilizing an emergency provision contained in the Arms Export Control Act. In total, $8.1 billion in munitions are part of the sales.

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Call that an economy?

More Spent On S&P 500 Buybacks Than All 2018 R&D (Axios)

Total research and development spending in the U.S. last year totaled $608 billion, according to data from the Federal Reserve, while corporations in the S&P 500 spent $806 billion buying back their own stock. The total for all companies was well over $1 trillion. What it means: In 2018, the 500 biggest U.S. companies spent 33% more on their stock buyback programs than the country is investing in research and development. The trend looks to be continuing this year as the U.S. is on pace to spend $642 billion on R&D in 2019 and poised to surpass last year’s $1.085 trillion total in buyback spending.

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Starting to sound serious.

China Concerned Over Possible US Dollar Shortage Risk (SCMP)

Anbang Insurance Group’s plan to sell its condos at the Waldorf Astoria hotel in New York is the latest in the string of high-profile Chinese divestments that underscores China’s concern that the nation is running short of US dollars. The Chinese holding company bought the Waldorf for a record US$1.95 billion in 2014, but under pressure from the Chinese government, is reported to be seeking buyers for the 375 flats at the hotel despite a glut of unsold luxury flats in Manhattan. In total, it is aiming to shed a portfolio of assets that includes 15 hotels having, like other highly leveraged Chinese conglomerates with overseas investments, been placed under scrutiny by Beijing.

Chinese real estate mogul Wang Jianlin’s Dalian Wanda Group has dumped US$25 billion in assets since 2017, while troubled conglomerate HNA Group was forced to sell everything from Hong Kong land parcels, to its stakes in Deutsche Bank, Hilton Grand Vacations as well as its airlines. Chinese oil giant CEFC China Energy also wants to sell 100 properties worldwide. The government’s dramatic about-face from encouraging aggressive overseas acquisitions to cracking down on risky lending and overseas transfers underscores worries over the risk that the nation could run short of enough US dollars to make the interest and principal payments on its mounting debt at a time when the current account balance is coming under pressure.

“These companies are selling their assets because they don’t have enough US dollars,” said Kevin Lai, chief economist for Asia excluding Japan at Daiwa Capital Markets. “China does not want to use its US$3 trillion foreign reserves for the debt repayments, so that is why these companies need to sell their assets.” On the surface, China should be the last country to worry about a US dollar shortage given that its US$3.1 trillion worth of foreign exchange reserves is the largest help by any nation.

But analysts believe China’s reserves may be insufficient to pay for its massive imports and debt payments in response to a worse-case scenario caused by the ongoing trade war with the United States, particularly since many of its assets cannot readily be turned into cash to help the central bank to save a crashing financial system or sharp devaluation of the yuan’s exchange rate. “In reality, they don’t have as much as US$3.1 trillion of liquid reserves,” said Rabobank analyst Michael Every. “I would estimate they probably only have a little bit more liquid reserves than what they hold in US Treasuries.”

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Fuel fools.

US Spend Ten Times More On Fossil Fuel Subsidies Than Education (F.)

A new International Monetary Fund (IMF) study shows that USD$5.2 trillion was spent globally on fossil fuel subsidies in 2017. The equivalent of over 6.5% of global GDP of that year, it also represented a half-trillion dollar increase since 2015 when China ($1.4 trillion), the United States ($649 billion) and Russia ($551 billion) were the largest subsidizers. Despite nations worldwide committing to a reduction in carbon emissions and implementing renewable energy through the Paris Agreement, the IMF’s findings expose how fossil fuels continue to receive huge amounts of taxpayer funding. The report explains that fossil fuels account for 85% of all global subsidies and that they remain largely attached to domestic policy.


Had nations reduced subsidies in a way to create efficient fossil fuel pricing in 2015, the International Monetary Fund believes that it “would have lowered global carbon emissions by 28 percent and fossil fuel air pollution deaths by 46 percent, and increased government revenue by 3.8 percent of GDP.” The study includes the negative externalities caused by fossil fuels that society has to pay for, not reflected in their actual costs. In addition to direct transfers of government money to fossil fuel companies, this includes the indirect costs of pollution, such as healthcare costs and climate change adaptation. By including these numbers, the true cost of fossil fuel use to society is reflected.

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Yeah, try and sell that to your voters.

Bring on Higher Oil Prices: They’ll Boost the US Economy (WS)

Powered by the iffy situation in the Persian Gulf, the Strait of Hormuz, and the Gulf of Oman, with attacks on tankers and now the downing of a US drone, the price of crude oil got a little nervous in recent days. WTI jumped about 6% today to over $57 a barrel. But this was just a minor uptick in the overall scheme of things: The US, which has become the largest oil producer in the world, is in the middle of its second oil bust in five years:

P These two oil busts are largely a consequence of surging US crude oil production. During the oil bust of 2014-2016, the price of WTI collapsed by over 75%, careening from $107 per barrel to a low of $27 per barrel in 18 months, before starting to rebound. In the process, a slew of oil-and-gas drillers filed for bankruptcy. For a while it looked like the shale boom, where all the growth in production had come from, was running out of money, and therefore out of fuel. Production fell sharply from early 2015 through much of 2016, but then new money from Wall Street appeared, and production began to soar again, hitting new records all along the way.


Shale wells produce a variety of liquid hydrocarbons (they also produce gaseous hydrocarbons which are not included here). This production of crude oil and petroleum products soared from just over 7 million barrels per day (bpd) in 2010 to 16.6 million bpd currently, according to EIA data:

P The US used to be the largest net importer of crude oil and petroleum products in the world. Between 2005 and 2008, “net imports” (imports minus exports) of crude oil and petroleum products exceeded 12 million bpd. But surging production in the US has slashed imports. And recently exports have surged, and the trade in crude oil and petroleum products is now nearly balanced between the US and the rest of the world. And the net imports are heading toward zero – the point where the US imports as much as it exports. In February, net imports were down to just 176,000 barrels a day, the lowest in the EIA data going back to 1971. In March, the most recent data available, net imports were 842,000 barrels a day:

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“We have a stability and growth pact that focuses on stability and not on growth. We want to invert this order..”

Defiant Italy Urges Changes To EU Rules (R.)

Italy’s prime minister defied European Union concern over its debt on Thursday, saying the bloc’s fiscal rules should focus on growth rather than stability, and blaming partners for unfair tax competition and excessive surpluses. Arriving at a meeting of European leaders in Brussels, Giuseppe Conte dismissed warnings over Rome’s growing debt and said Italy was complying with EU fiscal rules. “We have a stability and growth pact that focuses on stability and not on growth. We want to invert this order,” Conte told reporters. Under current rules, EU states with large public debts should gradually reduce them, but Rome’s debt increased last year and is forecast to expand further until 2020.


Conte said the Italian government will complete the assessment of its finances in a meeting on Wednesday after which he expects new estimates to point to a 2019 deficit of around 2.1% of output, below the EU commission’s expectations. It is unclear, however, whether this would be enough for the EU Commission to stop a disciplinary procedure against Italy, which Brussels has said would be warranted on the basis of 2018 data and EU forecasts. [..] At the summit where EU leaders are discussing the bloc’s top jobs for the coming years, Conte echoed belligerent tones used by Italy’s deputy prime minister and far-right leader Matteo Salvini in attacking other EU members for unfair competition. He said there was something wrong in the fact that Italian firms relocate to other EU states for tax reasons – a probable reference to low corporate levies and lenient regulatory approaches in places like Luxembourg, the Netherlands or Ireland.

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“..you are not big enough to have an important position, important enough on the world stage, on your own.”

UK Will Be ‘Diminished’ After Brexit – Dutch PM Rutte (Pol.eu)

No U.K. prime minister would be able to mitigate the economic impact of Brexit on Britain or sustain its global power outside of the EU, especially after a no-deal exit, Dutch Prime Minister Mark Rutte warned Conservative leadership candidates today. Speaking ahead of the European Council summit in Brussels, he told BBC Radio 4’s “Today” program this morning: “With a hard Brexit — even with a normal Brexit — the U.K. will be a different country. It will be a diminished country. “It is unavoidable. Because you are not any longer part of the European Union and you are not big enough to have an important position, important enough on the world stage, on your own.”

The leader of the Netherlands, who described himself as an “Anglophile,” also said the next occupant of Downing Street must be clear about what they want from the EU if they aim to modify the so-called Political Declaration on the future relationship between the two sides; however he ruled out any reopening of the Withdrawal Agreement struck by outgoing British premier Theresa May. He dismissed claims by leadership hopeful Boris Johnson that the U.K. could be granted a Brexit transition period after a no-deal departure. “As Boris Johnson would say, Brexit is Brexit, and a hard Brexit is a hard Brexit,” Rutte said. “I don’t see how you can sweeten that.”

Home Secretary and Johnson’s rival Sajid Javid’s claim that he could renegotiate the controversial backstop plan directly with Dublin also got short shrift from Rutte, who said Ireland is an integral part of the EU and “we cannot have a backdoor” to the single market. Both Johnson and Javid have vowed to take Britain out of the EU, deal or no deal, by the current deadline of October 31 if they fail to renegotiate the exit plan with Brussels before then. The Dutch leader warned that any no-deal departure would be “chaos.” He said if a new British PM wanted an extension to continue negotiating on Brexit, something Environment Secretary Michael Gove has proposed, they would have to be clear about “making changes to the red lines the U.K. is currently holding.”

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Will the courts dare turn against Lenin Moreno?

Ecuador Judge Frees Ola Bini, Swedish Programer Close To Assange (R.)

An Ecuadorean judge on Thursday ordered that a Swedish citizen and personal friend of WikiLeaks founder Julian Assange be freed, two months after he was detained for alleged participation in a hacking attempt on the government. But Ola Bini, a 36-year-old software developer who has lived in Ecuador for five years, remains under investigation in the case and will be barred from leaving the country, according to the court ruling. Bini was detained in April at the Quito airport before boarding a flight to Japan, hours after Ecuador withdrew asylum for Assange, who had lived at its London embassy for almost seven years while facing spying charges related to WikLeaks’ 2010 publication of secret U.S. diplomatic cables.


Ecuador’s Interior Minister Maria Paula Romo had accused him of seeking to destabilize the Andean country’s government and compromising its national security. Bini has denied those allegations, but has acknowledged being close to Assange. “His right to freedom was violated,” judge Patricio Vaca said, reading the Thursday court ruling. “We accept the habeas corpus action proposed by the Swedish citizen Ola Bini, who can be immediately freed.” Bini worked at the Quito-based Center for Digital Autonomy, an organization focusing on cybersecurity and data privacy. His lawyer, Carlos Soria, told journalists on Thursday that he would ask “international courts” to determine any “prejudice” to the case that may have resulted from his arrest. “We will take actions against everyone because the court has determined that his detention was arbitrary. Now they will have to pay,” Soria said. “We will demonstrate Ola Bini’s innocence.”

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Better do it fast.

Ten Cities Ask EU For Help To Fight Airbnb Expansion (G.)

Ten European cities have demanded more help from the EU in their battle against Airbnb and other holiday rental websites, which they argue are locking locals out of housing and changing the face of neighbourhoods. In a joint letter, Amsterdam, Barcelona, Berlin, Bordeaux, Brussels, Krakow, Munich, Paris, Valencia and Vienna said the explosive growth of global short-stay lettings platforms must be on the agenda of the next set of European commissioners. In April the advocate general of the European court of justice found in non-binding opinion that under EU law Airbnb should be considered a digital information provider rather than a traditional real estate agent.

That status, if confirmed by the court, would allow Airbnb and similar platforms to operate freely across the bloc and, crucially, relieve them of any responsibility to ensure that landlords comply with local rules aimed at regulating holiday lets. European cities believe homes should be used first and foremost for living in, the cities said in a statement released by Amsterdam city council. Many suffer from a serious housing shortage. Where homes can be rented out more lucratively to tourists, they vanish from the traditional housing market. The cities said local authorities must be able to counter the adverse effects of the boom in short-term holiday lets, such rising rents for full-time residents and the continuing touristification of neighbourhoods, by introducing their own regulations depending on the local situation .

“We believe cities are best placed to understand their residents needs”, they said. “They have always been allowed to regulate local activity through urban planning and housing rules. The advocate general seems to imply this will no longer be possible when it comes to internet giants”. After several years of strong growth, Airbnb currently has more than 18,000 listings in Amsterdam and Barcelona, 22,000 in Berlin and nearly 60,000 in Paris. Data from the campaign group InsideAirbnb last year suggested that more than half were whole apartments or houses, and that even in cities where short-term lets were restricted by local authorities, up to 30% were available for three or more months a year.

Many cities say the short-term holiday lettings boom is contributing to soaring long-term rents, although speculation and poor social housing provision are also factors. Last year Palma de Mallorca voted to ban almost all listings after a 50% increase in tourist lets was followed by a 40% rise in residential rents.

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The Big Burp.

The Dangerous Methane Mystery (CP)

The East Siberian Arctic Shelf (“ESAS”) is the epicenter of a methane-rich zone that could turn the world upside down. Still, the ESAS is not on the radar of mainstream science, and not included in calculations by the IPCC (Intergovernmental Panel on Climate Change), and generally not well understood. It is one of the biggest mysteries of the world’s climate puzzle, and it is highly controversial, which creates an enhanced level of uncertainty and casts shadows of doubt. The ESAS is the most extensive continental shelf in the world, inclusive of the Laptev Sea, the East Siberian Sea, and the Russian portion of the Chukchi Sea, all-in equivalent to the combined landmasses of Germany, France, Great Britain, Italy and Japan.

The region hosts massive quantities of methane (“CH4”) in frozen subsea permafrost in extremely shallow waters, enough CH4 to transform the “global warming” cycle into a “life-ending” cycle. As absurd as it sounds, it is not inconceivable. Ongoing research to unravel the ESAS mystery is found in very few studies, almost none, except by Natalia Shakhova (International Arctic Research Center, University of Alaska/Fairbanks) a leading authority, for example: “It has been suggested that destabilization of shelf Arctic hydrates could lead to large-scale enhancement of aqueous CH4, but this process was hypothesized to be negligible on a decadal–century time scale. Consequently, the continental shelf of the Arctic Ocean (AO) has not been considered as a possible source of CH4 to the atmosphere until very recently.”


[..] early-stage warning signals are clearly noticeable; ESAS is rumbling, increasingly emitting more and more CH4, possibly in anticipation of a “Big Burp,” which could put the world’s lights out, hopefully in another century, or beyond, but based upon a reading of her latest report in Geosciences, don’t count on it taking so long. Shakhova’s research is highlighted in a recent article in Arctic News: “When Will We Die?” d/d June 10, 2019, which states: “Imagine a burst of methane erupting from the seafloor of the Arctic Ocean that would add an amount of methane to the atmosphere equal to twice the methane that is already there.”

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Jun 202019
 
 June 20, 2019  Posted by at 9:36 am Finance Tagged with: , , , , , , , , , , , , ,  


Pablo Picasso The artist and his model 1933

 

The Odds Of A Recession In The Next Year (Colombo)
$12 Trillion Of Negative-Yielding Bonds Are A Distress Signal (Qz)
There’s Not Much The Fed Can Do To Address A Liquidity Crisis – DDMB (FuW)
The Omnipresent Surveillance State (Whitehead)
China: The Perfect High-Tech Totalitarian State (Bergman)
Iran Says Has Shot Down US Drone Over Its Territory (AFP)
‘Credible Evidence’ Saudi Crown Prince Liable For Khashoggi Murder (Pol.eu)
Trump Plan To Sell Arms To Saudis Faces Senate Vote (R.)
FBI Was Warned Early And Often That Manafort File Might Be Fake (Hill)
US Beekeepers Lost 40% Of Honeybee Colonies Over Past Year (G.)
Himalayan Glaciers Melting Twice As Fast As Last Century (AFP)

 

 

“..bubbles are forming in global debt, China, Hong Kong, Singapore, emerging markets, Canada, Australia, New Zealand, European real estate, the art market, U.S. stocks, U.S. household wealth, corporate debt, leveraged loans, U.S. student loans, U.S. auto loans, tech startups, shale energy, global skyscraper construction, U.S. commercial real estate, the U.S. restaurant industry, U.S. healthcare, and U.S. housing once again.”

The Odds Of A Recession In The Next Year (Colombo)

According to the New York Fed’s recession probability model, there is a 30% probability of a U.S. recession in the next 12 months. The last time that recession odds were the same as they are now was in July 2007, which was just five months before the Great Recession officially started in December 2007. July 2007 was also notable because that is when Bear Stearns’ two subprime hedge funds lost nearly all of their value, which ultimately contributed to the investment bank’s demise and the sharp escalation of the U.S. financial crisis.

Many bullishly-biased commentators are trying to downplay the warning currently being given by the New York Fed’s recession probability model, essentially saying “So? There is only a 30% chance of a recession in the next year, which means that there is a 70% chance that there won’t be a recession in the next year!” The reality is that, as valuable as this model is, it has greatly underestimated the probability of recessions since the mid-1980s. For example, this model only gave a 33% probability of a recession in July 1990, which is when the early 1990s recession started. It only gave a 21% probability of a recession in March 2001, which is when the early-2000s recession started. It also only gave a 39% probability of a recession in December 2007, which is when the Great Recession started.


[..] The New York Fed’s model is based on the Treasury yield curve, which is based on U.S. interest rates. The early-1980s recessions were anomalous because they occurred as a result of Fed Chair Paul Volcker’s unusually aggressive interest rate hikes that were meant to “break the back of inflation.” I have found that only considering New York Fed recession probability model data after 1985, and normalizing that data so that the highest reading during that time period is set to 100%, gives more accurate estimates of recession probabilities in the past three decades. For example, this methodology warned that there was an 85% chance of a recession in December 2007, when the Great Recession officially started (the standard model only gave a 39% probability). This methodology is warning that there is a 64% chance of a recession in the next 12 months, which is quite alarming.

The reason why a two-thirds chance of a recession in the next year is so alarming is because the next recession is not likely to be a garden-variety recession or a mere ebb of the business cycle, as I explained two weeks ago. Not only has global debt increased by $70 trillion since 2008, but scores of dangerous new bubbles have inflated in the past decade thanks to ultra-low interest rates and quantitative easing programs. These bubbles are forming in global debt, China, Hong Kong, Singapore, emerging markets, Canada, Australia, New Zealand, European real estate, the art market, U.S. stocks, U.S. household wealth, corporate debt, leveraged loans, U.S. student loans, U.S. auto loans, tech startups, shale energy, global skyscraper construction, U.S. commercial real estate, the U.S. restaurant industry, U.S. healthcare, and U.S. housing once again. I believe that the coming recession is likely to be caused by (and will contribute to) the bursting of those bubbles.

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Crazy experiments.

$12 Trillion Of Negative-Yielding Bonds Are A Distress Signal (Qz)

If reading financial markets is usually as inscrutable as reading tea leaves, bond investors have decided now is the time to send a message in big, bold letters. They want central banks to know they are concerned. Concerned about the strength of the global economy. Concerned about the US-China trade war. Concerned about geopolitics, particularly in the Middle East. Concerned about persistently low inflation. Investors are rushing to get their hands on the safest assets available, such as government bonds. So much so, that the amount of bonds with negative yields—meaning investors know they will get back less than what they paid if they hold the debt to maturity—has ballooned. Investors are anticipating a global shift in monetary policy towards lower interest rates, and loosening of financial conditions.


Meanwhile, the expectation of more stimulus has helped push stock markets close to record highs. Almost $12 trillion of investment grade corporate and government bonds have negative yields, predominately in Europe and Japan, according to Barclays data, the Financial Times reports. That’s the largest amount since the middle of 2016 when the UK voted to leave the European Union and the Bank of England restarted its bond-buying program, known as quantitative easing (QE), in response. Today, half of all European government bonds have a negative yield, with the total amount outstanding at €4.4 trillion ($5 trillion), compared to €3.3 trillion at the end of January, according to data from Tradeweb. At the end of May, 20% of European investment-grade corporate debt had negative yields.

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“..why do you insist on using this antiquated broken method? One of the staffers raised his hand and said if we didn’t use it, then the models would not work.”

There’s Not Much The Fed Can Do To Address A Liquidity Crisis – DDMB (FuW)

Ms. DiMartino Booth, why is the Federal Reserve bad for America?
Because of its intellectual dishonesty. The Fed noticed around 2009 that if they had had a more reliable and realistic inflation gauge on which to set policy, they would have seen the crisis coming. But despite that recognition, they chose to do nothing about it.

Are there more realistic inflation gauges?
Several Federal Reserve Districts have come up with alternative gauges. The underlying inflation gauge from the New York Fed for example also includes asset price inflation. And it runs about one percentage point higher than what the Fed measure is – they prefer the core Personal Consumption Expenditures Price Index, the core PCE.

What would monetary policy look like with a more realistic inflation gauge?
Monetary policy would be much different. The Fed would not have been able to maintain a monetary policy as easy as it has done over the last couple of years. Central bankers are hiding behind the core PCE being at 1,6%. They’re saying that this gives them cover to not normalize interest rates. But even the core Consumer Price Index has been north of 2% for 14 months.

What does this mean for current monetary policy?
Former Fed Chair Janet Yellen lead the slowest rate hiking campaign in the history of the Fed. Had she been using a more realistic inflation gauge, she would not have left current Chair Jay Powell with having to play catch-up. He wasn’t able to normalize interest rates, nor to run down the balance sheet as much as he would have been able to otherwise – and had Ben Bernanke not insisted on the 2% inflation target.

What is the reason behind the inflation target of 2%?
Alan Greenspan and Paul Volcker said that the best inflation rate as far as households and businesses are concerned is 0%. There is nothing that is damaging to a household about inflation being non-existent. As Greenspan and Volcker both pointed out: If you have 2% inflation steadily for 50 years, the value of the dollar in your wallet is diminished. Inflation is corrosive as a factor of time.

What about the risk of falling into deflation?
A deflation in wages, as we saw during the Great Depression, is the worst-case scenario. But Japan has served as a modern-day reminder that households are not going to be injured by very very low levels of inflation. In a disinflationary environment with a decent level of growth, you’re not running that risk. You’re still going to have job creation and economic growth. But you’re not going to have the pressure of rising prices on households. Housing makes up 33% of the average US household budget, and housing inflation has gone through the roof in recent years. Not that it’s captured correctly in the metric that the Fed uses.

So, why is the Fed aiming for 2%?
When Stanley Fisher was vice chair, he asked the same question during his first Federal Reserve meeting. He said, why do you insist on using this antiquated broken method? One of the staffers raised his hand and said if we didn’t use it, then the models would not work.

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“Until they become conscious they will never rebel, and until after they have rebelled they cannot become conscious.”

—George Orwell

The Omnipresent Surveillance State (Whitehead)

We are increasingly ruled by multi-corporations wedded to the police state. What many fail to realize is that the government is not operating alone. It cannot. The government requires an accomplice. Thus, the increasingly complex security needs of the massive federal government, especially in the areas of defense, surveillance and data management, have been met within the corporate sector, which has shown itself to be a powerful ally that both depends on and feeds the growth of governmental overreach.

In fact, Big Tech wedded to Big Government has become Big Brother, and we are now ruled by the Corporate Elite whose tentacles have spread worldwide. For example, USA Today reports that five years after the 9/11 terrorist attacks, the homeland security business was booming to such an extent that it eclipsed mature enterprises like movie-making and the music industry in annual revenue. This security spending to private corporations such as Google, Amazon, Microsoft and others is forecast to exceed $1 trillion in the near future.

The government now has at its disposal technological arsenals so sophisticated and invasive as to render any constitutional protections null and void. Spearheaded by the NSA, which has shown itself to care little to nothing for constitutional limits or privacy, the “security/industrial complex”—a marriage of government, military and corporate interests aimed at keeping Americans under constant surveillance—has come to dominate the government and our lives. At three times the size of the CIA, constituting one third of the intelligence budget and with its own global spy network to boot, the NSA has a long history of spying on Americans, whether or not it has always had the authorization to do so.

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All states tend towards the same model.

China: The Perfect High-Tech Totalitarian State (Bergman)

In China, censorship, now largely automated, has reached “unprecedented levels of accuracy, aided by machine learning and voice and image recognition”, according to a recent Reuters report. It quotes Chinese censors as commenting: “We sometimes say that the artificial intelligence is a scalpel, and a human is a machete… When I first began this kind of work four years ago there was opportunity to remove the images of Tiananmen, but now the artificial intelligence is very accurate”. China’s severe censorship runs parallel to its severe suppression of religious freedom.

The President of the Religious Freedom Institute, Thomas F. Farr, at a November 2018 hearing at the Congressional-Executive Commission on China, described China’s religious suppression as “the most systematic and brutal attempt to control Chinese religious communities since the Cultural Revolution”. As in other Communist regimes, such as that of the former Soviet Union, the Communist ideology does not tolerate any competing narratives. “Religion is a source of authority, and an object of fidelity, that is greater than the state,” Farr wrote. “This characteristic of religion has always been anathema to history’s totalitarian despots, such as Stalin, Hitler, and Mao…”

The brutal religious and cultural oppression of Tibetans in China has been ongoing for nearly 70 years, but China has not only sought to destroy the Tibetan religion. Christianity, for instance, was seen from the beginning as a threat to the People’s Republic of China when it was established in 1949. “This was especially true at the height of the Cultural Revolution (1966–1976), when places of worship were demolished, closed, or reappropriated and religious practices were banned”, according to the Council on Foreign Relations. Some Christian clerics have been imprisoned for nearly 30 years. In recent years, oppression of Christians in China has apparently surged. Since the late 1990s, the Chinese regime has also targeted the Falun Gong.

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Why did it fly there?

Iran Says Has Shot Down US Drone Over Its Territory (AFP)

Iran’s Revolutionary Guard said Thursday it had shot down a US “spy drone” over its territory after it violated Iranian airspace, according to Iranian state television. “The US-made Global Hawk surveillance drone was brought down by its Air Force” in the country’s southern coastal province of Hormozgan, the Revolutionary Guard added, according to the English-language Press TV. State television did not provide pictures of the drone. The incident comes at a time of heightened tensions between Iran and the United States. The US has accused Iran of being behind a series of operations against oil tankers in highly sensitive Gulf waters.


Tehran has denied involvement and instead suggested Washington could be the author of the attacks, using the operation to justify force against Iran. Hormozgan borders the Strait of Hormuz, where the tanker attacks took place. The relationship between Tehran and Washington has been particularly strained since the US last year quit the multilateral 2015 nuclear deal and reimposed sanctions on Iran. [..] Tehran’s top security official said Wednesday there was no reason to worry about a conflict breaking out. “There will be no war (between Iran and the US) since there is no reason for a war,” said rear admiral Ali Shamkhani, secretary of Iran’s Supreme National Security Council, quoted by the official news agency IRNA.

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UN special rapporteurs are not taken serious.

‘Credible Evidence’ Saudi Crown Prince Liable For Khashoggi Murder (Pol.eu)

There is “credible evidence” that Saudi Arabia’s crown prince and other high-level officials are liable for the murder of Jamal Khashoggi, a United Nations expert said in a report released Wednesday. The 101-page report by Agnès Callamard, the U.N. special rapporteur on extrajudicial executions, calls on the U.N. secretary-general to initiate a follow-up criminal investigation into the killing of Khashoggi at the Saudi consulate in Istanbul last October. “There is credible evidence warranting further investigation of high-level Saudi Officials’ individual liability, including the Crown Prince’s,” Callamard wrote.


Riyadh maintains that Khashoggi’s death was caused by a “rogue” operation, but Mohammed bin Salman, Saudi Arabia’s crown prince and de facto ruler, has long been suspected of ordering the journalist’s murder. The U.S. Central Intelligence Agency reached the same conclusion in November. “No conclusion is made as to guilt,” Callamard wrote in her report, referring to bin Salman — also known as MBS — and high-level government officials such as former top advisor Saud al-Qahtani. “The only conclusion made is that there is credible evidence meriting further investigation, by a proper authority, as to whether the threshold of criminal responsibility has been met.”

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Will the GOP turn against MBS?

Trump Plan To Sell Arms To Saudis Faces Senate Vote (R.)

The U.S. Senate will vote on Thursday on legislation seeking to block President Donald Trump’s plan to complete $8 billion in arms sales to Saudi Arabia and the United Arab Emirates, lawmakers said, making clear they want a harder line against what they see as human rights abuses by the two countries. Trump declared an emergency tied to threats from Iran in order to go ahead with the military sales in defiance of congressional objections. Majority Leader Mitch McConnell announced an agreement on Wednesday to hold the vote, after a group of lawmakers, including some of Trump’s fellow Republicans, last month filed 22 separate resolutions of disapproval objecting to the deals.


Backers of the resolutions said they thought the measures had a good chance of passing both the Senate and House, but acknowledged the difficulty of garnering the two-thirds support to override an expected veto from Trump. Bipartisan support for the action was a rare rebuke of the president by his fellow Republicans, who generally have provided overwhelming support for Trump’s policies. There has been increasing frustration with Saudi Arabia in Congress for months, over the devastating human toll of the air campaign in Yemen it is waging with the UAE. Many senators also want Saudi Arabia held accountable for the murder of Saudi journalist Jamal Khashoggi at a Saudi consulate in Turkey.

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What a mess this is becoming.

FBI Was Warned Early And Often That Manafort File Might Be Fake (Hill)

When the final chapter of the Russia collusion caper is written, it is likely two seminal documents the FBI used to justify investigating Donald Trump’s 2016 campaign will turn out to be bunk. And the behavior of FBI agents and federal prosecutors who promoted that faulty evidence may disturb us more than we now know. The first, the Christopher Steele dossier, has received enormous attention. And the more scrutiny it receives, the more its truthfulness wanes. Its credibility has declined so much that many now openly question how the FBI used it to support a surveillance warrant against the Trump campaign in October 2016.

At its best, the Steele dossier is an “unverified and salacious” political research memo funded by Trump’s Democratic rivals. At worst, it may be Russian disinformation worthy of the “garbage” label given it by esteemed reporter Bob Woodward. The second document, known as the “black cash ledger,” remarkably has escaped the same scrutiny, even though its emergence in Ukraine in the summer of 2016 forced Paul Manafort to resign as Trump’s campaign chairman and eventually face U.S. indictment. In search warrant affidavits, the FBI portrayed the ledger as one reason it resurrected a criminal case against Manafort that was dropped in 2014 and needed search warrants in 2017 for bank records to prove he worked for the Russian-backed Party of Regions in Ukraine.

There’s just one problem: The FBI’s public reliance on the ledger came months after the feds were warned repeatedly that the document couldn’t be trusted and likely was a fake, according to documents and more than a dozen interviews with knowledgeable sources. For example, Ukraine’s top anticorruption prosecutor, Nazar Kholodnytsky, told me he warned the U.S. State Department’s law enforcement liaison and multiple FBI agents in late summer 2016 that Ukrainian authorities who recovered the ledger believed it likely was a fraud. “It was not to be considered a document of Manafort. It was not authenticated. And at that time it should not be used in any way to bring accusations against anybody,” Kholodnytsky said, recalling what he told FBI agents.

Likewise, Manafort’s Ukrainian business partner Konstantin Kilimnik, a regular informer for the State Department, told the U.S. government almost immediately after The New York Times wrote about the ledger in August 2016 that the document probably was fake. Manafort “could not have possibly taken large amounts of cash across three borders. It was always a different arrangement — payments were in wire transfers to his companies, which is not a violation,” Kilimnik wrote in an email to a senior U.S. official on Aug. 22, 2016. He added: “I have some questions about this black cash stuff, because those published records do not make sense. The timeframe doesn’t match anything related to payments made to Manafort. … It does not match my records. All fees Manafort got were wires, not cash.”

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Monsanto.

US Beekeepers Lost 40% Of Honeybee Colonies Over Past Year (G.)

Beekeepers across the US lost four in 10 of their honeybee colonies over the past year, as the worst winter on record for tracked bee populations raised fresh concerns over the plight of the crucial pollinators. Over the past winter, 37% of honeybee colonies were lost to beekeepers, the worst winter decline recorded in the 13-year history of a nationwide survey aimed at charting bees’ fortunes. Overall, 40% of colonies died off over the entire year to April, which is above the 38% average since the survey began. Researchers said the numbers were concerning given the intensive efforts to stem the loss of honeybees, which pollinate an estimated $15bn in US crops each year, enabling the farming of foods including apples, melons, cherries, almonds and blueberries.

Alarm over honeybee numbers has grown since 2006, when a phenomenon called colony collapse disorder became widely known. This problem, in which the majority of worker bees abandon the colony, has since receded but beekeepers are now faced with more general die-offs linked to disease, pesticide use and habitat loss. “It’s disconcerting that we’re still seeing elevated losses after over a decade of survey and quite intense work to try to understand and reduce colony loss,” said Geoffrey Williams, assistant professor of entomology at Auburn University. “We don’t seem to be making particularly great progress to reduce overall losses.”

[..] Native wild bee species, such as the American bumblebee, are also thought to be in sharp decline. The troubles faced by bees are part of a broader trend of stunning drops in insect abundance around the world, although the exact contours of this crisis are obscured by a lack of data in many places.

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Water for 2 billion people?!

Himalayan Glaciers Melting Twice As Fast As Last Century (AFP)

Himalayan glaciers are melting twice as fast now as they were before the turn of the century, according to a new study that relied on recently declassified Cold War-era satellite imagery. The study, which appeared in Science Advances on Wednesday, is the latest indication that climate change is eating the Himalayan glaciers, threatening water supplies for hundreds of millions of people downstream across South Asia. “This is the clearest picture yet of how fast Himalayan glaciers are melting over this time interval, and why,” said lead author Joshua Maurer, a doctoral candidate at Columbia University in New York.


Scientists combed 40 years of satellite observations spanning 2,000 kilometers (1,243 miles) across India, China, Nepal and Bhutan, and found that the glaciers have been losing the equivalent of a foot-and-a-half (45 centimeters) of ice each year since 2000. Many of the 20th-century observations came from recently declassified US spy satellite imagery. The figure is double the amount of melting that took place from 1975 to 2000.

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Jun 192019
 
 June 19, 2019  Posted by at 9:00 am Finance Tagged with: , , , , , , , , , , ,  


Pablo Picasso The circus 1933

 

The Fed Just Released a Damning Indictment of Capitalism (NYMag)
Russia to US: Drop Middle East Troop Plan And Stop Provoking Iran (R.)
Iran At The Center Of The Eurasian Riddle (Escobar)
The Sino-Russian Masterplan To End US Dominance In Middle East (Bodansky)
Russia, China, Block US Effort To Halt North Korea Fuel Deliveries (AFP)
US Lawmakers Call For Facebook To Pause Cryptocurrency Project (R.)
Japan Exports Slide For 6th Straight Month (R.)
Japanese Businesses See Economy Peaking Out, Want More Stimulus (R.)
The Truth vs Your Truth (Jim Kunstler)
Canada Approves Contentious Oil Pipeline Expansion (R.)
Koch-Oil Big Lies and Ecocide Writ Large in Canada (CP)
Canadian Permafrost Thaws 70 Years Early (R.)

 

 

“The fundamental challenge in combating inequality is that wealth begets more wealth.”

The Fed Just Released a Damning Indictment of Capitalism (NYMag)

In 2011, Michael Norton of Harvard Business School and Dan Ariely of Duke University published a study on Americans’ views of how wealth was distributed in their society, and how they felt it should be distributed. They found that, in the average American’s ideal world, the richest 20 percent would own 32 percent of national wealth. In reality, the top quintile owned 84 percent as of 2011. And that share has grown in the intervening years. Today, the one percent alone commands roughly 40 percent of all America’s wealth. Given all this, any politician who insists that American capitalism is “already great” is clearly a far-right extremist whose indifference to inequality puts him or her wildly out of step with ordinary people. But is it the case that Warren and Sanders would take things too far in the other direction?

Not remotely. I do not have the relevant data or skills to project precisely how the full implementation of either candidate’s agenda would influence America’s wealth distribution. But neither candidate is calling for a series of reforms that would place the United States far outside the Western European norm. In fact, both Warren and Sanders have cribbed their signature policies from European nations. As the 2018 World Inequality Report demonstrated, policy choices do matter — and income inequality is much lower in Western Europe than it is in the U.S.

But even Scandinavia’s social democracies feature far more inequitable distributions of wealth than Americans think to be fair, according to Ariely and Norton’s survey. What’s more, it will take a lot of redistribution just to prevent America’s current wealth gap from growing even larger. The fundamental challenge in combating inequality is that wealth begets more wealth. Those who can afford to invest in bonds get to collect annual interest payments; those who invest in stocks or real estate typically see their capital assets annually appreciate. Thus, most years, our nation’s collective capital stock directs loads of passive income to America’s wealthiest citizens.

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Things are shifting. And not a little bit.

Russia to US: Drop Middle East Troop Plan And Stop Provoking Iran (R.)

Russia told the United States on Tuesday to drop what it called provocative plans to deploy more troops to the Middle East and to cease actions that looked like a conscious attempt to provoke war with Iran. The comments, from Deputy Foreign Minister Sergei Ryabkov to Russian news agencies, followed an announcement from Acting U.S. Defense Secretary Patrick Shanahan a day earlier who said Washington planned to send around 1,000 more troops to the Middle East for defensive purposes. President Hassan Rouhani said on Tuesday that Iran would not wage war against any nation and the Kremlin called for restraint from all sides.


Ryabkov told reporters that Moscow had repeatedly warned Washington and its regional allies about what he called the “unthinking and reckless pumping up of tensions in an explosive region.” “Now what we see are unending and sustained U.S. attempts to crank up political, psychological, economic and yes military pressure on Iran in quite a provocative way. They (these actions) cannot be assessed as anything but a conscious course to provoke war,” Ryabkov was cited as saying. If Washington did not want war it had to show it, he said. “If that’s really how it is then the U.S. should step back from reinforcing its military presence,” said Ryabkov.

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“Xi was adamant; Beijing will keep developing ties with Tehran “no matter how the situation changes”.

Iran At The Center Of The Eurasian Riddle (Escobar)

With the dogs of war on full alert, something extraordinary happened at the 19th summit of the Shanghai Cooperation Organization (SCO) late last week in Bishkek, Kyrgyzstan. Virtually unknown across the West, the SCO is the foremost Eurasian political, economic and security alliance. It’s not a Eurasian NATO. It’s not planning any humanitarian imperialist adventures. A single picture in Bishkek tells a quite significant story, as we see China’s Xi, Russia’s Putin, India’s Modi and Pakistan’s Imran Khan aligned with the leaders of four Central Asian “stans”. These leaders represent the current eight members of the SCO. Then there are four observer states – Afghanistan, Belarus, Mongolia and, crucially, Iran – plus six dialogue partners: Armenia, Azerbaijan, Cambodia, Nepal, Sri Lanka and, crucially, Turkey.

The SCO is bound to significantly expand by 2020, with possible full membership for both Turkey and Iran. It will then feature all major players of Eurasia integration. Considering the current incandescence in the geopolitical chessboard, it’s hardly an accident a crucial protagonist in Bishkek was the ‘observer’ state Iran. Iranian President Hassan Rouhani played his cards masterfully. Rouhani speaking directly to Putin, Xi, Modi and Imran, at the same table, is something to be taken very seriously. He blasted the US under Trump as “a serious risk to stability in the region and the world”. Then he diplomatically offered preferential treatment for all companies and entrepreneurs from SCO member nations committed to investing in the Iranian market.

[..] Xi was adamant; Beijing will keep developing ties with Tehran “no matter how the situation changes”. Iran is a key node of the New Silk Roads, or Belt and Road Initiative (BRI). It’s clear for the leadership in Tehran that the way forward is full integration into the vast, Eurasia-wide economic ecosystem. European nations that signed the nuclear deal with Tehran – France, Britain and Germany – can’t save Iran economically.

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“..advance negotiations with all key oil producers – including Saudi Arabia, Iraq, and Iran – on substituting the petrodollar with a basket of currencies where the yuan, the euro and the ruble dominate.”

The Sino-Russian Masterplan To End US Dominance In Middle East (Bodansky)

Russian Pres. Vladimir Putin’s early June 2019 summit in Moscow with People’s Republic of China (PRC) Pres. Xi Jinping seems likely to have a disproportionate influence on the next phases of the crises unfolding in the greater Middle East, and therefore on the future of the region. The escalating confrontation between Iran and the US is both influencing and influenced by the mega-trends set by Russia and the PRC. Although the key meetings took place on June 5, 2019, the seeds of the new joint strategy were already planted during the May 13, 2019, summit in Sochi between Russian Foreign Minister Sergei Lavrov and Chinese State Councilor and Foreign Minister Wang Yi. They went over all the key topics in preparation for the Putin-Xi summit.

On June 5, 2019, Presidents Vladimir Putin and Xi Jinping met in Moscow and decided to not only markedly upgrade the bilateral relations and alliance of their countries, but to use the new relations in order to shape the long-term posture of the entire Eastern Hemisphere in their favor. Emphasis was to be put on the Eurasian Sphere (the Kremlin’s high priority) and the New Silk Road (the Forbidden City’s high priority), as well as the Korean Peninsula which is most important for both. One of the first major confrontations with the US by Russia and the PRC was to be over the greater Middle East. The main reason was the advance negotiations with all key oil producers – including Saudi Arabia, Iraq, and Iran – on substituting the petrodollar with a basket of currencies where the yuan, the euro and the ruble dominate.

Using the currency basket would enable the sellers and buyers to go around the US-imposed sanctions and quotas. Indeed, Beijing and Moscow were now enticing the oil producers with huge, long-term export deals which were both financially lucrative and politically tempting by offering guarantees for the well-being of the participating governments. The crux of the proposal is regional and includes flagrant disregard of the US sanctions on Iran. However, the key to the extent of the commitment of both Beijing and Moscow lies in the growing importance and centrality of the New Silk Road via Central Asia. Persia had a crucial rôle in the ancient Silk Road, and both the PRC and Russia now expect Iran to have a comparable key rôle in the New Silk Road.

The growing dominance of heritage-based dynamics throughout the developing world, including the greater Central Asia and the greater Middle East, makes it imperative for the PRC to rely on historic Persia/Iran as a western pole of the New Silk Road. It is this realization which led both Beijing and Moscow to give Tehran, in mid-May 2019, the original guarantees that Washington would be prevented from conducting a “regime change”.

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Hands off Iran. Hands off Korea.

Russia, China, Block US Effort To Halt North Korea Fuel Deliveries (AFP)

Russia and China on Tuesday blocked an American initiative that aimed to halt fuel deliveries to North Korea, which Washington accuses of exceeding its annual ceiling for 2019, diplomatic sources said. Moscow and Beijing said more time was needed to study the US request, which was backed by 25 UN members including Japan, France and Germany, according to the sources. A week ago, the United States, in a report, accused North Korea of breaching the United Nations-imposed ceiling on fuel imports by carrying out dozens of ship-to-ship transfers this year.


The cap on fuel imports is among a series of tough sanctions adopted by the UN Security Council in response to North Korea’s ballistic missile and nuclear tests. The United States insists that “maximum pressure” from the sanctions must remain on North Korea until it agrees to dismantle its weapons program. Washington had asked that a United Nations sanctions committee rule that the annual cap of 500,000 barrels had been exceeded and order all countries to halt fuel deliveries. Countries on the sanctions committee, including Russia and China, had until Tuesday to raise objections to the request to cut off fuel shipments to North Korea.

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They simply don’t understand.

US Lawmakers Call For Facebook To Pause Cryptocurrency Project (R.)

Maxine Waters, who chairs the House Financial Services Committee, said Facebook should halt development of the product, dubbed Libra, until Congress and regulators can review the issue, and called on company executives to testify before Congress. “Facebook has data on billions of people and has repeatedly shown a disregard for the protection and careful use of this data,” she said in a statement. “With the announcement that it plans to create a cryptocurrency, Facebook is continuing its unchecked expansion and extending its reach into the lives of its users.” Her comments came after Representative Patrick McHenry, the senior Republican on her panel, also sought a hearing on Facebook’s new initiative. A Facebook representative said the company looked forward to answering lawmakers’ questions.


Facebook’s announcement was met with immediate backlash from U.S. lawmakers and regulators across the globe, who are concerned that Facebook is already too massive and careless with users’ privacy. “Facebook is already too big and too powerful, and it has used that power to exploit users’ data without protecting their privacy. We cannot allow Facebook to run a risky new cryptocurrency out of a Swiss bank account without oversight,” said Senator Sherrod Brown, the top Democrat on the Senate Banking Committee, in a statement. [..] French Finance Minister Bruno Le Maire called for more regulation of tech companies. “This instrument for transactions will allow Facebook to collect millions and millions of data, which strengthens my conviction that there is a need to regulate the digital giants,” he said in an interview on Europe 1 radio.

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Meanwhile, Japan is sinking.

Japan Exports Slide For 6th Straight Month (R.)

Japan’s exports fell for a sixth straight month in May as China-bound shipments of semiconductor manufacturing equipment and car parts weakened, in a sign of a deteriorating outlook for growth as the trade-reliant economy faces persistent pressure from slowing external demand. Sluggish exports have been a source of concern among Japanese policymakers, especially as a bruising U.S.-China tariff war has upended supply chains and hit global growth, trade and investment.


“The business sentiment of Japanese firms, and in particular exporters, is falling depending on the extent of U.S.-China trade tensions, and that will suppress exporters’ capital expenditure,” said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities. “I think that will be a negative for Japan’s economy.” Ministry of Finance (MOF) data showed on Wednesday that exports declined 7.8% in May from a year earlier, down for the sixth straight month. The fall in shipments compared with a 7.7% annual decrease expected by economists in a Reuters poll, and followed a 2.4% year-on-year fall in April.

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But the BOJ already owns half the country…

Japanese Businesses See Economy Peaking Out, Want More Stimulus (R.)

Japan’s economy is likely to stop expanding this year and into next with the Sino-U.S. trade war and a planned sales tax hike expected to crimp activity, a Reuters poll of Japanese companies found, with most calling for fresh stimulus to prop up growth. The gloomy outlook suggests that Prime Minister Shinzo Abe’s reflationary policy mix, known as “Abenomics”, is sputtering. “A combination of the U.S.-China trade friction and the tax hike in October will almost certainly tip Japan into recession,” an electric machinery maker wrote in the monthly survey.The Corporate Survey found 42% of respondents see the economy contracting into next year, while 52% believe growth will remain stagnant.


Just 5% foresee it expanding, the June 4-13 poll showed. China and United States, the world’s two largest economies, have been locked in a tit-for-tat tariff war for nearly a year, which has curbed global trade and upended supply chains, pressuring Japan’s exports and factory output. Some 55% of Japanese firms said harsher U.S. punitive tariffs against China were affecting their business profits, with much higher proportions of transport machinery firms and chemicals makers taking a hit, the Reuters Corporate Survey showed. [..] To keep the economy from faltering, nearly two-thirds of companies called for fresh stimulus, with a quarter of respondents wanting an individual income tax cut and nearly as many demanding the government postpone the sales tax hike.

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“..America is too far gone intellectually to sort all this out.”

The Truth vs Your Truth (Jim Kunstler)

America’s relationship with authority is in grievous disrepair with Robert Mueller as exhibit-A — a would-be Moses-like figure, only with feet of clay and a head rotting like the proverbial fish of institutional corruption. He announced in his May 29th “news conference” — in which he refused to entertain questions — that he preferred not to testify in any further inquiries about his Special Counsel investigation. What a cheeky fellow! It was, perhaps, a message to Reps. Nadler, Schiff, and comrades on the various congressional committees to (hint hint) not even bother calling him. But Mr. Mueller was, after all, a mere employee of the US Department of Justice, not a herald of God Almighty.

I rather imagine that the Attorney General, Mr. Barr, has a few additional questions he would like to ask his “old friend.” Will Mr. Mueller, this Greta Garbo of jurisprudence, coyly demur? And on what basis, exactly? I don’t think he can get away with it. The complexities of RussiaGate make all previous government scandals look as simple as Pin the Tail on the Donkey. The Internet will prove to be both its doing and its undoing. The much abused and perverted official “truths” of the matter were amplified by the Internet. And, of course, these “truths” were enlisted in service of Mrs. Clinton and the rogue bureaucracy looking to defend her (and themselves) at all costs. The cost turns out to be the dismemberment of thinking itself in America.

It is now taken for granted that anyone who persists in thinking for him/her/zheself will be tossed out of the Internet’s large “social media” arenas in Mark Zuckerberg’s and Jack Dorsey’s quest to purify history. They will not succeed. But they have certainly succeeded in needlessly antagonizing Russia, shoving foreign policy debate into sequestered game rooms that are at once halls-of-mirrors and echo chambers, and making the world a much more dangerous place. There is also a pretty fair percentage chance that America is too far gone intellectually to sort all this out.

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Justin trying to lose the next election.

Canada Approves Contentious Oil Pipeline Expansion (R.)

Canada on Tuesday approved as expected a hotly contested proposal to expand the western Canadian crude oil pipeline it bought last year, providing hope for a depressed energy industry but angering environmental groups. Construction on the expansion of the Trans Mountain pipeline is scheduled to resume this year, Prime Minister Justin Trudeau told a news conference. A senior government official, speaking on condition of anonymity, said earlier that Ottawa expected legal challenges to the approval. The project would triple Trans Mountain’s capacity to carry 890,000 barrels per day from Alberta’s oil sands to British Columbia’s Pacific coast, alleviate congestion on existing pipelines and diversify exports away from the United States.


Trudeau, who faces a tough fight in a national election scheduled for October, has been under pressure both from western Canadian politicians who accuse him of doing too little for the oil industry, and from environmental groups, which see the oil sands as a highly polluting source of crude production. “This isn’t an either/or proposition. It is in Canada’s national interest to protect our environment and invest in tomorrow, while making sure people can feed their families today,” he said, adding he knew some people would be disappointed.

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Make Canada a colony again.

Koch-Oil Big Lies and Ecocide Writ Large in Canada (CP)

As we know, big lies can run free across borders with few joining the dots. For example, no media reports that China’s growing dispute with Canada is based on Canada’s enforcement of the Trump administration’s unilateral and illegal embargo against oil-competitor Iran. A cynical reply is that this is predictable. Canada attacks any designated US Enemy in junior partnership with global corporate command. But this time there is a new twist. Canada is attacking itself without knowing it. A US Big-Oil backed juggernaut of Conservative provincial governments and the federal Opposition are well advanced in a Canada campaign to reverse longstanding parliamentary decisions, environmental laws, climate action initiatives, Supreme Court directions, first-nations negotiations, and bring down the government of Canada.

Yet no-one in public or media circles has joined the dots. Canada’s vast tar-sands deposits are world famous as surpassing Saudi Arabia oil-field capacities in total barrels of potential yield. Great Canada! Yet few notice that over two-thirds of the entire tar-sands operations are owned by foreign entities sending their profits out of Canada, and almost all its raw product is controlled for refining and sale in the US. What is especially kept out of the daily news is the incendiary fact that the infamous, election-interfering and oft-EPA-convicted Koch brothers have a dominant stake in the toxic crude of the Alberta tar-sands seeking a massive BC-pipeline out to their US refineries.

Koch-owned industries have already extracted countless billions of their near $100-billion fortune from the tar-sands and deployed their well-known voter-manipulations to change the balance of power in Canada as they have done in the US. The objective is the same in both cases – ever more tax-free, publicly subsidized and state-enforced control by US Big Oil of Alberta’s massive oil resources with no government regulations or interferences in the way.

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Methane. Running around my brain.

Canadian Permafrost Thaws 70 Years Early (R.)

Permafrost at outposts in the Canadian Arctic is thawing 70 years earlier than predicted, an expedition has discovered, in the latest sign that the global climate crisis is accelerating even faster than scientists had feared. A team from the University of Alaska Fairbanks said they were astounded by how quickly a succession of unusually hot summers had destabilized the upper layers of giant subterranean ice blocks that had been frozen solid for millennia. “What we saw was amazing,” Vladimir E. Romanovsky, a professor of geophysics at the university, told Reuters by telephone. “It’s an indication that the climate is now warmer than at any time in the last 5,000 or more years.” With governments meeting in Bonn this week to try to ratchet up ambitions in United Nations climate negotiations, the team’s findings, published on June 10 in Geophysical Research Letters, offered a further sign of a growing climate emergency.

The paper was based on data Romanovsky and his colleagues had been analyzing since their last expedition to the area in 2016. The team used a modified propeller plane to visit exceptionally remote sites, including an abandoned Cold War-era radar base more than 300 km from the nearest human settlement. Diving through a lucky break in the clouds, Romanovsky and his colleagues said they were confronted with a landscape that was unrecognizable from the pristine Arctic terrain they had encountered during initial visits a decade or so earlier. The vista had dissolved into an undulating sea of hummocks – waist-high depressions and ponds known as thermokarst. Vegetation, once sparse, had begun to flourish in the shelter provided from the constant wind.

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God in his wisdom made the fly.
And then forgot to tell us why.

– Ogden Nash

 

 

 

 

Jun 182019
 
 June 18, 2019  Posted by at 9:38 am Finance Tagged with: , , , , , , , , , ,  


Winslow Homer Camping in the Adirondacks (Wood engraving) 1874

 

China Warns US Against Opening Mideast ‘Pandora’s Box’ (CNA)
UN Officials: US Planning A ‘Tactical Assault’ In Iran (JPost)
The Coming Show Trial of Julian Assange (Chris Hedges)
Assange Judge Refuses To Recuse Herself Despite Evidence Of Bias (Can.)
Julian Assange and the Scales of Justice (CP)
FBI Never Saw CrowdStrike Unredacted or Final Report (McGovern)
Deep State Players Lash Out At Trump (Noble)
Swelling US Corporate Debt Raises Risk Of Global Financial Meltdown (Nikkei)
Who Bought the $1 Trillion of New US Government Debt Over The Past Year? (WS)
How Japan Turned Against Its ‘Bazooka’-Wielding Central Bank Chief (R.)
Boeing’s 737 MAX Name Change (F.)
Investors Demand Higher Premiums For Risky Australian Mortgage Bonds (R.)
Fiscal Money Can Make or Break the Euro (Varoufakis)

 

 

That is a better term than just about everyone realizes.

China Warns US Against Opening Mideast ‘Pandora’s Box’ (CNA)

China on Tuesday (Jun 18) warned against opening a “Pandora’s box” in the Middle East after the United States announced the deployment of 1,000 additional troops to the region amid escalating tensions with Iran. Foreign Minister Wang Yi also urged Tehran to not abandon the nuclear agreement “so easily” after Iran said it would exceed its uranium stockpile limit if world powers fail to fulfil their commitments under the agreement in 10 days. Fears of a confrontation between Iran and the United States have mounted since last Thursday when two tankers were attacked. The United States has blamed Iran, more than a year after President Donald Trump withdrew from a 2015 nuclear deal.


Iran has denied having any role in the attacks. The Chinese government’s top diplomat, Wang told reporters at a briefing that China was “of course, very concerned” about the situation in the Gulf, and called on all sides to ease tension and not head towards a clash. “We call on all sides to remain rational and exercise restraint, and not take any escalatory actions that irritate regional tensions, and not open a Pandora’s box,” Wang said. “In particular, the US side should alter its extreme pressure methods. Any unilateral behaviour has no basis in international law,” Wang said, warning that it could create “an even greater crisis”.

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I have my questions about this Jerusalem Post article, but they did publish it.

UN Officials: US Planning A ‘Tactical Assault’ In Iran (JPost)

Is the US going to attack Iran soon? Diplomatic sources at the UN headquarters in New York revealed to Maariv that they are assessing the United States’ plans to carry out a tactical assault on Iran in response to the tanker attack in the Persian Gulf on Thursday. According to the officials, since Friday, the White House has been holding incessant discussions involving senior military commanders, Pentagon representatives and advisers to President Donald Trump. The military action under consideration would be an aerial bombardment of an Iranian facility linked to its nuclear program, the officials further claimed. “The bombing will be massive but will be limited to a specific target,” said a Western diplomat.


The decision to carry out military action against Iran was discussed in the White House before the latest report that Iran might increase the level of uranium enrichment. The officials also noted that the United States plans to reinforce its military presence in the Middle East, and in the coming days will also send additional soldiers to the area. The sources added that President Trump himself was not enthusiastic about a military move against Iran, but lost his patience on the matter and would grant Secretary of State Mike Pompeo, who is pushing for action, what he wants.

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“We know what will be done to Assange. It has been done to thousands of those we kidnapped and then detained in black sites around the world.”

The Coming Show Trial of Julian Assange (Chris Hedges)

On Friday morning I was in a small courtroom at Westminster Magistrates’ Court in London. Julian Assange, held in Belmarsh Prison and dressed in a pale-blue prison shirt, appeared on a video screen directly in front of me. Assange, his gray hair and beard neatly trimmed, slipped on heavy, dark-frame glasses at the start of the proceedings. He listened intently as Ben Brandon, the prosecutor, seated at a narrow wooden table, listed the crimes he allegedly had committed and called for his extradition to the United States to face charges that could result in a sentence of 175 years. The charges include the release of unredacted classified material that posed a “grave” threat to “human intelligence sources” and “the largest compromises of confidential information in the history of the United States.” After the prosecutor’s presentation, Assange’s attorney, Mark Summers, seated at the same table, called the charges “an outrageous and full-frontal assault on journalistic rights.”

The publication of classified documents is not a crime in the United States, but if Assange is extradited and convicted it will become one. Assange is not an American citizen. WikiLeaks, which he founded and publishes, is not a U.S.-based publication. The message the U.S. government is sending is clear: No matter who or where you are, if you expose the inner workings of empire you will be hunted down, kidnapped and brought to the United States to be tried as a spy. The extradition and trial of Assange will mean the end of public investigations by the press into the crimes of the ruling elites. It will cement into place a frightening corporate tyranny. Publications such as The New York Times and The Guardian, which devoted pages to the WikiLeaks revelations and later amplified and legitimized Washington’s carefully orchestrated character assassination of Assange, are no less panicked. This is the gravest assault on press freedom in my lifetime.

[..] We know what will be done to Assange. It has been done to thousands of those we kidnapped and then detained in black sites around the world. Sadistic and scientific techniques of torture will be used in an attempt to make him a zombie. Assange, in declining health, was transferred two weeks ago to the hospital wing of the prison. Because he was medically unable to participate when the hearing was initially to be held, May 30, the proceeding was reset. Friday’s hearing, in which he appeared frail and spoke hesitantly, although lucidly, set the timetable for his extradition trial, scheduled to take place at the end of February. All totalitarian states seek to break their political prisoners to render them compliant. This process will define Assange’s existence over the next few months.

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“her husband had been exposed by WikiLeaks”

Assange Judge Refuses To Recuse Herself Despite Evidence Of Bias (Can.)

UN Rapporteur on Torture Nils Melzer told US journalist Chris Hedges that Lady Arbuthnot “has a strong conflict of interest” and that “her husband had been exposed by WikiLeaks”. Hedges adds that Assange’s lawyers have asked the judge “to recuse herself”, but that “she has refused”. However, Lady Arbuthnot was forced to recuse herself in August 2018 after an investigation by the Observer into her husband’s business dealings with Uber. The judge ruled in favour of Uber but stepped down from the case when it was shown that SC Strategy’s client the QIA had taken a stake in Uber.


And there are other precedents. For example, retired high court judge Lady Butler-Sloss was forced to resign as chair of the panel tasked with examining allegations of child abuse within institutions. This was after she admitted to a family conflict of interest (Sir Michael Havers, her brother, was attorney-general during the period when most of the alleged abuse occurred). Given the evidence relating to her family background, it may be time for Lady Arbuthnot to recuse herself once more, and for the extradition proceedings to be halted.

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Did the US overplay its hand?: “Each of Assange’s possible defences are strengthened by the 17 counts of espionage”

Julian Assange and the Scales of Justice (CP)

Massimo Moratti, Amnesty International’s Deputy Director for Europe, is certain that the Wikileaks publisher will suffer grave mistreatment if extradited to the United States. “The British government must not accede to the US extradition request for Julian Assange as he faces a real risk of serious human right violations if sent there.” This will further add substance to the potential breach of Article 3 of the Human Rights Convention, a point reiterated by Agnes Callamard, Special rapporteur on extra-judicial executions. Ecuador, she argues, permitted Assange to be expelled and arrested by the UK, taking him a step closer to extradition to the US which would expose him to “serious human rights violations.” The UK had “arbitrary [sic] detained Mr Assange possibly endangering his life for the last 7 years.”

On May 31, Nils Melzer, UN Special Rapporteur on torture, concluded after visiting Assange in detention that the publisher’s isolation and repeated belittling constituted “progressively severe forms of cruel, inhuman or degrading treatment or punishment, the cumulative effects of which can only be described as psychological torture.” The issue of Assange’s failing health is critical. An important feature of his legal team’s argument is the role played by the UK authorities in ensuring his decline in physical and mental terms. The argument in rebuttal, disingenuous as it was, never deviated: you will get treatment as long as you step out of the Ecuadorean embassy.

There is also another dimension which the distracted Javid failed to articulate: the sheer political character of the offences Assange is being accused of. Espionage is a political offence par excellence, and the UK-US extradition treaty, for all its faults, retains under Article 4 the prohibition against extraditing someone accused of political offences, including espionage, sedition, and treason. As John T. Nelson notes in Just Security, “Each of Assange’s possible defences are strengthened by the 17 counts of espionage”.

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They never finished the report.

FBI Never Saw CrowdStrike Unredacted or Final Report (McGovern)

CrowdStrike, the controversial cybersecurity firm that the Democratic National Committee chose over the FBI in 2016 to examine its compromised computer servers, never produced an un-redacted or final forensic report for the government because the FBI never required it to, the Justice Department has admitted. The revelation came in a court filing by the government in the pre-trial phase of Roger Stone, a long-time Republican operative who had an unofficial role in the campaign of candidate Donald Trump. Stone has been charged with misleading Congress, obstructing justice and intimidating a witness. The filing was in response to a motion by Stone’s lawyers asking for “unredacted reports” from CrowdStrike in an effort to get the government to prove that Russia hacked the DNC server.

“The government … does not possess the information the defandant seeks,” the filing says. In his motion, Stone’s lawyers said he had only been given three redacted drafts. In a startling footnote in the government’s response, the DOJ admits the drafts are all that exist. “Although the reports produced to the defendant are marked ‘draft,’ counsel for the DNC and DCCC informed the government that they are the last version of the report produced,” the footnote says. In other words CrowdStrike, upon which the FBI relied to conclude that Russia hacked the DNC, never completed a final report and only turned over three redacted drafts to the government. These drafts were “voluntarily” given to the FBI by DNC lawyers, the filing says.

“No redacted information concerned the attribution of the attack to Russian actors,” the filing quotes DNC lawyers as saying. In Stone’s motion his lawyers argued: “If the Russian state did not hack the DNC, DCCC, or [Clinton campaign chairman John] Podesta’s servers, then Roger Stone was prosecuted for obstructing a congressional investigation into an unproven Russian state hacking conspiracy … The issue of whether or not the DNC was hacked is central to the Defendant’s defense.” The DOJ responded: “The government does not need to prove at the defendant’s trial that the Russians hacked the DNC in order to prove the defendant made false statements, tampered with a witness, and obstructed justice into a congressional investigation regarding election interference.”

At a time of high tension in the 2016 presidential campaign, when the late Sen. John McCain and others were calling Russian “hacking” an “act of war,” the FBI settled for three redacted “draft reports” from CrowdStrike rather than investigate the alleged hacking itself, the court document shows. Then FBI Director James Comey admitted in congressional testimony that he chose not to take control of the DNC’s “hacked” computers, and did not dispatch FBI computer experts to inspect them, but has had trouble explaining why. In his testimony, he conceded that “best practices” would have dictated that forensic experts gain physical access to the computers. Nevertheless, the FBI decided to rely on forensics performed by a firm being paid for by the DNC.

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Hmmm: “For a campaign to hire a law firm, an American law firm who then turns around and hires an American research company that then contracts out with a foreign individual, that is not illegal.”

Deep State Players Lash Out At Trump (Noble)

When ABC’s George Stephanopoulos asked Trump whether his son, Donald Trump Jr., should have contacted the FBI after being invited in 2016 to meet with a Russian national who allegedly offered dirt on Hillary Clinton, the president answered, “Give me a break – life doesn’t work that way.” The ensuing exchange led Stephanopoulos to ask the president: “Your campaign this time around, if foreigners, if Russia, if China, if someone else offers you information on opponents, should they accept it or should they call the FBI?” Trump responded that, perhaps, the person in question should do both; look at the information being offered and notify the FBI. Stephanopoulos suggested this amounts to foreign interference in an American election, to which Trump responded: “It’s not an interference [sic]. They have information – I think I’d take it. If I thought there was something wrong, I’d go maybe to the FBI – if I thought there was something wrong.”

The wailing and gnashing of teeth that followed this interview prompted the anti-Trump cable networks to bring in two men who were embroiled in the Russia collusion hoax. One of these men, Andrew McCabe, was fired from the FBI and is fortunate not to have yet been charged with multiple counts of lying to federal investigators. The other is hysterical Trump critic Brennan, who is almost certainly a subject of the ongoing Department of Justice investigation into the genesis of the Russia collusion conspiracy theory. McCabe feigned horror at the idea that the president would be open to receiving information on a potential election opponent from a foreign source.

At the same time, however, he dismissed the idea that the Hillary Clinton campaign had done anything wrong in 2016 when it paid for Russian-sourced and unverified information to use against Trump. When asked by CNN’s Chris Cuomo about a possible analogy between the two situations, the former FBI official said: “There’s no equivalence between those two examples … For a campaign to hire a law firm, an American law firm who then turns around and hires an American research company that then contracts out with a foreign individual, that is not illegal.”

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Credit is cyclical.

Swelling US Corporate Debt Raises Risk Of Global Financial Meltdown (Nikkei)

Surging U.S. business debt, already at historic levels, is posing a potentially huge risk for the global financial system and the world economy, raising concerns among market players and policymakers. Experts are growing increasingly uneasy about both the quality and quantity of debt in the U.S. corporate sector as the amount of loans to borrowers with lower credit ratings and already high levels of debt is increasing. A newly created index shows corporate debt levels are now even higher than before the dot-com bubble or the global financial crisis triggered by the 2008 collapse of U.S. investment bank Lehman Brothers.

Some experts warn that the ticking debt bomb in the U.S. corporate sector could eventually explode, triggering a new global financial meltdown. In a speech delivered on May 20, Federal Reserve Chairman Jerome Powell sounded the alarm about rising levels of business debt, although he dismissed comparisons between the current situation and the conditions in U.S. mortgage markets before the financial crisis. Views about the risks from rising corporate borrowing “range from ‘This is a return to the subprime-mortgage crisis’ to ‘Nothing to worry about here,'” Powell said. “At the moment, the truth is likely somewhere in the middle.”

One important concept for understanding the implications of corporate America’s borrowing binge for the financial system and the world economy is the credit cycle — the cyclical expansion and contraction of access to credit over time. Many policymakers and market players are beginning to fear that the U.S. corporate credit cycle is approaching its peak and will soon enter a phase of contraction.

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“.. Investors, mostly US institutional and individual investors but also some foreign investors, have gone nuts over it..”

Who Bought the $1 Trillion of New US Government Debt Over The Past Year? (WS)

The US gross national debt soared by $960 billion over the 12-month period through April. Over the same period, all foreign investors combined increased their holdings by $253 billion. This leaves $707 billion that someone else must have bought. Who? Nope, not the Fed. It shed $271 billion in Treasury securities over the 12 months as part of its QE unwind, bringing its holdings down to $2.12 trillion by the end of April. US government entities piled on $102 billion in Treasury securities over the 12 months, bringing their total to $5.83 trillion. This “debt held internally” is held by government pension and disability funds, the Social Security Trust Fund, etc., that have invested their beneficiaries’ money in Treasury securities, rather than stocks or other instruments.

This “debt held internally” is owed the beneficiaries of those funds and is a real debt of the US government. To summarize: Over the 12 months, foreign investors added $253 billion; the Fed got rid of $271 billion; and US government funds acquired $102 billion. All three combined, accounted for a net increase of Treasury holdings of $84 billion. But the total gross national debt soared by $960 billion over the same period. Someone must have bought the remaining $876 billion. But who? The only one left… American institutions and individuals added $876 billion of Treasuries to their holdings, bringing them to $7.64 trillion.


US banks held nearly $500 billion of them, according to the FDIC. Other US institutional holders include pension funds, mutual funds, hedge funds, corporations such as Apple, and others. Individuals also hold a portion of these Treasury securities, either indirectly via bond funds or pension funds, or directly via their brokers or at Treasury. All combined, American institutions and individuals held 34.7% of the US gross national debt. Ironically, there is no shortage of demand for this debt – despite the charade of the debt-ceiling-default threat hanging over it. On the contrary. Investors, mostly US institutional and individual investors but also some foreign investors, have gone nuts over it, bidding up prices and thereby pushing down yields, with the 10-year yield today settling at 2.09%.

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Kuroda’s as clueless and delusional as Draghi and Powell.

How Japan Turned Against Its ‘Bazooka’-Wielding Central Bank Chief (R.)

Convincing skeptics on the board to embrace negative rates wasn’t easy, according to previously unreported accounts of the events on that fateful night. The policy had been studied for years in Japan but shunned as too controversial. On the brown-carpeted eighth floor of the BOJ building, bank bureaucrats visited the offices of swing voters on the board to make the case. A dashboard on the eighth floor lights up in red to show whenever a board member has visitors. That night, the lights stayed on “for hours and hours for some of them,” one person said. “You could see there was heavy lobbying going on.”

The shift to negative rates carried by a narrow 5-4 vote. Almost immediately, it was clear within the BOJ that the move was a mistake. It crushed long-term interest rates, didn’t weaken the yen as hoped and angered commercial bankers, who felt blindsided by a policy that crimped their profits. In retrospect, the move marked the death knell of “Kuroda-nomics,” as the governor’s plan for reflating the Japanese economy became known. In the most detailed account of these efforts, reported here, BOJ technocrats went to work tip-toeing back Kuroda’s radical program.

Three years on, there is a broad consensus that Japan’s experiment in shock-and-awe monetary policy has failed. An intense debate is under way within the BOJ over why Kuroda’s assumptions about how he could fundamentally change the trajectory of the economy proved wrong and what the bank’s next steps should be. The picture that emerges is of a central bank under pressure and at a moment of reckoning.

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Yeah, that will work…

Boeing’s 737 MAX Name Change (F.)

Boeing doesn’t have any immediate plans to rename its embattled 737 MAX aircraft despite CFO Greg Smith saying he was open to the idea earlier Monday. In an interview with Bloomberg at the Paris airshow, Smith said, “We’re committed to doing what we need to do to restore it. If that means changing the brand to restore it, then we’ll address that.” After the interview, the company told Reuters it isn’t currently working on a name change at the moment. “Our immediate focus is the safe return of the Max to service and re-earning the trust of airlines and the traveling public. We remain open minded to all input from customers and other stakeholders, but have no plans at this time to change the name of the 737 MAX,” said Boeing spokesman Paul Bergman.


The idea for a name change comes from President Donald Trump, who weighed in on Boeing’s myriad safety and public relations issues in March. “What do I know about branding, maybe nothing (but I did become President!), but if I were Boeing, I would FIX the Boeing 737 MAX, add some additional great features, & REBRAND the plane with a new name,” he tweeted. All 737s are still grounded: All 371 Boeing 737 MAX planes were grounded worldwide in March following two deadly crashes that claimed 346 lives. Investigators are focusing on design flaws in a component of the plane’s automated flight controls called the maneuvering characteristics augmentation system, or MCAS. Boeing said last month that it has completed the software update necessary to address the aircraft’s safety issues, but the Federal Aviation Administration still has to approve the change.

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Not a good sign.

Investors Demand Higher Premiums For Risky Australian Mortgage Bonds (R.)

Investors in Australian mortgage bonds are demanding higher premiums to buy the riskiest tranches of new debt, as a slowing economy stokes concerns a property downturn could get worse and increase home loan defaults. High-yield investors are receiving up to 40 basis points more than they were last year to buy the lower-rated and unrated portions, according to an analysis of recent deals by large lenders including AMP, National Australia Bank and Members Equity Bank. That marks an important shift from a near decade-long run of relatively stable spreads for the lower-rated residential mortgage backed securities (RMBS), as the previously red-hot property prices have turned sharply lower, particularly in the major Sydney and Melbourne markets.


“When you are looking at those lower unrated tranches, they are deteriorating as one would expect at the late stage of the [property] cycle,” said George Boubouras, chief investment officer at Atlas Capital. “We see them as a leading indicator of risk, and they have been getting riskier.” Home prices in Australia’s heavily populated eastern states have fallen rapidly since late-2017 due to souring economic conditions, pushing problem home loans to their highest level since the aftermath of the global financial crisis, according to Standard & Poor’s.

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Varoufakis explains the difference between his plans and those of Salvini. Not the easiest topic, but interesting.

Fiscal Money Can Make or Break the Euro (Varoufakis)

It’s a curious feeling to watch your plan being deployed to do the opposite of what you intended. And that’s the feeling I’ve had since learning that Italy’s government is planning a variant of the fiscal money that I proposed for Greece in 2015. My idea was to establish a tax-backed digital payment system to create fiscal space in eurozone countries that needed it, like Greece and Italy. The Italian plan, by contrast, would use a parallel payment system to break up the eurozone. Under my proposal, each tax file number, belonging to individuals or firms, would be automatically provided with a Treasury Account (TA) and a PIN number with which to transfer funds from one TA to another, or back to the state.

One way TAs would be credited was by paying arrears into them. Taxpayers owed money by the state could opt for part or all of those arrears to be paid into their TA immediately, instead of waiting for months to be paid normally. That way, multiple arrears could be eliminated at once, thus liberating liquidity across the economy. For example, suppose Company A is owed €1 million ($1.1 million) by the state, while owing €30,000 to an employee and another €500,000 to Company B. Suppose also that the employee and Company B owe, respectively, €10,000 and €200,000 in taxes to the state. If the €1 million is credited by the state to Company A’s TA, and Company A pays the employee and Company B via the system, the latter will be able to settle their tax arrears. At least €740,000 in arrears will have been eliminated in one fell swoop.

Individuals or firms could also acquire TA credits by purchasing them directly, via web-banking, from the state. The state would make it worth their while by offering buyers significant tax discounts (a €1 credit purchased today could extinguish taxes of, say, €1.10 a year from now). In essence, a new dis-intermediated (middlemen-free) public debt market would emerge, allowing the state to borrow small, medium, and large sums from the private sector in exchange for tax discounts. When I first discussed the idea, staunch defenders of the status quo immediately challenged the legality of the proposed system, arguing that it violated the treaties establishing the euro as the sole legal tender. Expert advice that I had received, however, indicated that the system passed legal muster. A eurozone member state’s treasury has the authority to issue debt instruments at will, and to accept them in lieu of taxes.

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Jun 172019
 
 June 17, 2019  Posted by at 9:13 am Finance Tagged with: , , , , , , , , , , , ,  


Pablo Picasso The sculptor and his statue 1933

 

The Bleak Mood Of Pre-Brexit UK (O.)
Boeing May Never Recover From 737 Debacle (Auerback)
Huawei Prepares For 40%-60% Fall In International Smartphone Shipments (R.)
Huawei Moves To Russia-China Operating System (Escobar)
Deutsche Bank To Set Up €50 Billion Bad Bank (R.)
How Wall Street Got Rich Off The Fresh Market Deal (Cohan)
Japan Demands More Proof From US That Iran Attacked Tankers (JT)
The S-400 Is a Formidable Threat to US Arms Industry (Pieraccini)
While Lam Relents, Hong Kong Calls Massively For Her Ouster (AT)
Chinese Activists Seek UN Investigation Into Tiananmen Crackdown (R.)

 

 

Broken. Completely.

The Bleak Mood Of Pre-Brexit UK (O.)

The survey by BritainThinks reveals an astonishing lack of faith in the political system among the British people, with less than 6% believing their politicians understand them. Some 75% say that UK politics is not fit for purpose. As the Conservative party focuses on who its new leader should be, and the Brexit impasse continues with no solution in sight, 86% think the UK needs a strong leader more than ever – but only 21% think the next prime minister, whoever it may be, will be up to the job. Some 52% believe the country is heading for a Boris Johnson premiership.

Pollster Deborah Mattinson said she was shocked by the findings. “I have been listening to people in focus groups since the late 1980s and I cannot recall a time when the national mood was more despairing. ‘Broken’, ‘sad’, ‘worried’, ‘angry’– the negatives tumble out, as does the long list of grievances. I’m hearing anxieties voiced in a way that I haven’t heard since the 1990s: a rundown NHS, job insecurity, teacher shortages.” BritainThinks polled more than 2,000 people and hosted several focus groups in London and Leicester to gauge the national mood.

Almost three-quarters of the British public believe the divisions on Brexit between Leavers and Remainers will deepen and get worse within the next year. Two-thirds feel depressed by rising poverty and homelessness. While people say Brexit has made them more politically engaged – 40% are paying more attention since the 2016 referendum, rising to 50% in those aged between 18 and 24 – the polling suggests the bitter political debate over leaving the EU has shattered public trust in the way the nation is governed. Some 83% feel let down by the political establishment and almost three-quarters (73%) believe the country has become an international laughing stock and that British values are in decline.

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Ralph Nader says the 737 MAX should never fly again.

Boeing May Never Recover From 737 Debacle (Auerback)

Many of us are familiar with the acronym “FUBAR.” A recent New York Times article on the Boeing 737 fiasco provides a perfect illustration of the concept. We’re now learning that the company “built deadly assumptions” into its newly designed 737 Max aircraft and, specifically, its Maneuvering Characteristics Augmentation System (MCAS). Even worse, the Times account concludes that the recent air crashes that have resulted in a worldwide grounding of the Boeing Max plane “might have been avoided, if employees and regulators had a better understanding of MCAS” and if the US Federal Aviation Authority (FAA) itself was not operating with outdated data on the software changes (which Boeing failed to provide).

The analysis is excellent as far as it goes. But the most damning fact only briefly hinted at in the article is that the problems were evident as early as 2012, some five years before the newest 737 version was marketed and sold across the globe. “At its core, this was a hardware problem, not a software issue. Even when Boeing was using a relatively “safer” version of the early MCAS software (that was later changed to a more dangerous version), the new 737 still had an engine too large to be accommodated in its traditional spot on the plane, which ultimately distorted “the relationship between the engine’s ‘thrust’ and its center of gravity,” as I’ve written before. The resultant aerodynamic problems could not be solved with a software “solution,” no matter how “safe” the original MCAS version (that was ultimately changed to an even more dangerous version) was purported to be.”

Just don’t expect any blowback from Washington. The whole episode provides yet another sick illustration of how the entire system of governance in the US has degenerated into a fully fledged “predator state.” About the only good thing that might emerge from this whole fiasco is that Boeing will provide future Master of Business Administration students with a textbook example of how not to manage a crisis. Likewise, future historians and political scientists will marvel in incredulity at the magnitude of corruption that enveloped the US during this very dark time in the life of the republic. Assuming, of course, that there still anything left worth studying by that point.

[..] Recall that the genesis of this disaster was a problem of hardware, not just MCAS. The extra lift of the far larger-diameter engines of the 737 Max (placed on a different position on the wing) caused the plane to pitch up whenever it approached stall angles of attack at both high and low speeds. This is a problem that should have become glaringly obvious to the greenest of aerodynamics personnel at Boeing the moment the first wind-tunnel model was tested at angles of attack higher than stall (it may have even been obvious on even earlier fluid-dynamics computer-simulation results).

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“.. In order to offset overseas decline, Huawei is aiming to grab up to half of China’s smartphone market in 2019..”

Huawei Prepares For 40%-60% Fall In International Smartphone Shipments (R.)

Huawei Technologies Co Ltd is preparing for a 40% to 60% decline in international smartphone shipments, Bloomberg reported on Sunday. The Chinese technology company is looking at options that include pulling the latest model of its marquee overseas smartphone, the Honor 20, according to the article, which cited people familiar with the matter. The device will begin selling in parts of Europe, including Britain and France, on June 21, the report said. Executives will be monitoring the launch and may cut off shipments if the sales are poor, it said. Marketing and sales managers at the tech giant are internally expecting a drop in volumes of anywhere between 40 million to 60 million smartphones this year, the report said. In order to offset overseas decline, Huawei is aiming to grab up to half of China’s smartphone market in 2019, Bloomberg said.

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Be careful what you wish for. Sanctions made Russia stronger too.

Huawei Moves To Russia-China Operating System (Escobar)

Google cuts Huawei off Android; so Huawei may migrate to Aurora. Call it mobile Eurasia integration; the evolving Russia-China strategic partnership may be on the verge of spawning its own operating system – and that is not a metaphor. Aurora is a mobile operating system currently developed by Russian Open Mobile Platform, based in Moscow. It is based on the Sailfish operating system, designed by Finnish technology company Jolla, which featured a batch of Russians in the development team. Quite a few top coders at Google and Apple also come from the former USSR – exponents of a brilliant scientific academy tradition.

In 2014, Russian entrepreneur Grigory Berezkin started co-owning Jolla, and from 2016 his Mobile Platform company started developing a Russian version of the operating system. In 2018, Rostelecom, a state company, bought a 75% share in Open Mobile Platform. Ahead of the St Petersburg International Economic Forum last week, Huawei chairman Guo Ping discussed the possibility of adopting Aurora with Russian minister of digital development and communications, Konstantin Noskov. According to Guo, “China is already testing devices with the Aurora pre-installed.” In Moscow, before moving to St Petersburg, Presidents Putin and Xi Jinping discussed multiple possible deals; and these include Huawei-Aurora, as well as where to locate some of Huawei’s production lines in Russia.

Aurora could be regarded as part of Huawei’s fast-evolving Plan B. Huawei is now turbo-charging the development and implementation of its own operating system, HongMeng, a process that started no less than seven years ago. Most of the work on an operating system is writing drivers and APIs (application programming interfaces). Huawei would be able to integrate their code to the Russian system in no time. HongMeng, for its part, is a key project of Huawei 2012 Laboratories, the innovation, research and technological development arm of the Shenzhen colossus. No Google? Who cares? Tencent, Xiaomi, Vivo and Oppo are already testing the HongMeng operating system, as part of a batch of one million devices already distributed.

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Mutti is not happy.

Deutsche Bank To Set Up €50 Billion Bad Bank (R.)

Deutsche Bank is planning to overhaul its trading operations by creating a “bad bank” to hold tens of billions of euros of assets and shrinking or shutting its U.S. equity and trading businesses, the Financial Times reported on Sunday. The bad bank would house or sell assets valued at up to 50 billion euros ($56.06 billion)- after adjusting for risk – and comprise mainly long-dated derivatives, the FT reported, citing four people briefed on the plan. With the creation of the bad bank, Chief Executive Officer Christian Sewing is shifting the German lender away from investment banking and focusing on transaction banking and private wealth management, the newspaper said.


As part of the restructuring, the lender’s equity and rates trading units outside continental Europe will be shrunk or closed entirely, the report said. The bank is planning cuts at its U.S. equities business, including prime brokerage and equity derivatives, to win over shareholders unhappy about its performance, four sources familiar with the matter told Reuters in May. “As we said at the AGM on May 23, Deutsche Bank is working on measures to accelerate its transformation so as to improve its sustainable profitability. We will update all stakeholders if and when required,” Deutsche Bank said in an emailed statement on Sunday in response to the FT report.

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Grand theft auto made legal.

How Wall Street Got Rich Off The Fresh Market Deal (Cohan)

Take the case of the March 2016, $1.36 billion cash buyout of a supermarket chain, Fresh Market, by Apollo Global Management, the firm started by Leon Black nearly 30 years ago that now manages more than $300 billion. In that deal Apollo teamed up with Ray Berry, the company’s founder, and his son, Brett, to buy out the company’s public stockholders. Before the buyout the Berrys owned about 10% of the public Fresh Market. They agreed to roll over that stake into the newly private Fresh Market, giving them about the same ownership in the private company—worth somewhere between $136 million and $930 million, if the alchemy of leveraged buyouts worked out. Apollo would own the remaining 90% of the equity of the private company.

Because the deal was, in effect, a management buyout of the company, Fresh Market set up a special three-member committee of independent directors to evaluate the Apollo proposal, as well as any others that might come in over the transom after the company decided to put itself up for sale shortly after September 1, 2015. As professional referees, the special committee hired JPMorgan Chase as its financial adviser, and Cravath, Swaine & Moore as one of its legal advisers. Their job was to evaluate the various proposals to buy Fresh Market, a collection of 186 stores in 27 states as of March 2016, and to make sure that the one chosen was, in the parlance of Wall Street, “fair” to the public shareholders of the company “from a financial point of view.”

That’s when things got interesting, especially since Apollo was the only final bid the company received. According to a class action shareholder lawsuit that is still wending its way through the Delaware Court of Chancery, Apollo used its long-standing financial ties to JPMorgan Chase and Cravath to co-opt the process for the benefit of itself and the Berrys, allowing them to buy the company on the cheap. In effect, the lawsuit alleges, by teaming up with the Berrys on an exclusive basis, Apollo was able to buy Fresh Market knowing that its competition for the company would be at a severe disadvantage, without being able to count on the Berrys support, and that JPMorgan Chase would likely bless the fairness of the deal.

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Japan, Germany, Corbyn…

Japan Demands More Proof From US That Iran Attacked Tankers (JT)

The Japanese government has been requesting the United States for concrete evidence to back its assertion that Iran is to blame for the attacks on two tankers near the Strait of Hormuz on Thursday, government sources said Sunday. The request came after U.S. Secretary of State Mike Pompeo gave a statement hours after the attacks blaming Iran but without offering proof. The Department of Defense later released a video allegedly showing an Iranian patrol boat removing an unexploded mine attached to the side of the Japanese-operated tanker Kokuka Courageous. But Japanese government officials remain unconvinced, the sources said. “The U.S. explanation has not helped us go beyond speculation,” said one senior government official.


Japan has been seeking more concrete evidence through various channels, including Foreign Minister Taro Kono who is likely to have made the request during a call with his counterpart on Friday, the sources said. Pompeo said in a press conference Thursday that the United States’ assessment was based on their “intelligence, the weapons used, the level of expertise needed to execute the operation, recent similar Iranian attacks on shipping, and the fact that no proxy group operating in the area has the resources and proficiency to act with such a high degree of sophistication.” A source close to Prime Minister Shinzo Abe said, “These are not definite proof that it’s Iran.” “Even if it’s the United States that makes the assertion, we cannot simply say we believe it,” he said.

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AI at its best.

The S-400 Is a Formidable Threat to US Arms Industry (Pieraccini)

The US finds itself faced with a situation it has not found itself in over the last 50 years, namely, an environment where it does not expect to automatically enjoy air superiority. Whatever semblance of an air defense that may have hitherto been able to pose any conceivable threat to Uncle Sam’s war machine was rudely dismissed by a wave of cruise missiles. To give two prime examples that occurred in Syria in 2018, latest-generation missiles were intercepted and shot down by decades-old Russian and Syrian systems. While the S-400 system has never been employed in Syria, it is noteworthy that the Serbian S-125 systems succeeded in identifying and shooting down an American F-117 stealth aircraft during the war in the Balkans.

There is a more secret aspect of the S-400 that is little disclosed, either within Russia itself or without. It concerns the S-400’s ability to collect data through its radar systems. It is worth noting Department of Defense spokesman Eric Pahon’s alarm over Turkey’s planned purchase of the S-400: “We have been clear that purchasing the S-400 would create an unacceptable risk because its radar system could provide the Russian military sensitive information on the F-35. Those concerns cannot be mitigated. The S-400 is a system built in Russia to try to shoot down aircraft like the F-35, and it is inconceivable to imagine.

Certainly, in the event of an armed conflict, the S-400’s ability to shoot down fifth-generation aircraft is a huge concern for the United States and her allies who have invested so heavily in such aircraft. Similarly, a NATO country preferring Russian to American systems is cause for alarm. This is leaving aside the fact that the S-400 is spreading around the world, from China to Belarus, with dozens of countries waiting in line for the ability to seal their skies from the benevolent bombs of freedom. It is an excellent stick with which to keep a prowling Washington at bay.

[..] The ability of the S-400 to collect data on both the F-35 and F-22 – the crown jewels of the US military-industrial complex – is a cause for sleepless nights for US military planners. What in particular causes them nightmares is that, for the S-400 to function in Turkey, it will have to be integrated into Turkey’s current “identification friend or foe” (IFF) systems, which in turn are part of NATO’s military tactical data-link network, known as Link 16.

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2 million. Beijing has said it stands behind her.

While Lam Relents, Hong Kong Calls Massively For Her Ouster (AT)

Hong Kong’s embattled Chief Executive Carrie Lam issued a public apology Sunday evening (June 16) as hundreds of thousands of protestors dressed in black clogged the city’s streets in another massive protest demanding her resignation and the scrapping of a contentious bill that would allow for the extradition of suspects to mainland China. A day after Lam announced a surprise decision to indefinitely postpone the bill in a press conference on Saturday, the city’s leader vowed to “sincerely and humbly accept all criticism and to improve and serve the public” in a statement released at 8:30 pm as chanting crowds stood outside the gates of her office calling for her to step down.


“Carrie Lam’s press conference yesterday just made Hong Kong people angrier. We don’t think she will step down, but we must force her out,” said 27-year-old Chiew minutes before demonstrators began marching from Victoria Park in the scorching afternoon heat with the aim of forcing the government to rescind, rather than postpone, the controversial bill. Gripped by a surge of mass dissent, the Asian financial hub has been thrust into political crisis amid the largest political demonstrations and some of the worst scenes of violence since Hong Kong’s return to Chinese rule in 1997. Organizers from the Civil Human Rights Front said almost two million people took part in Sunday’s march.


Protest organizers said almost two million people took part in a mammoth June 16 protest march. Photo: Nile Bowie

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Yeah, that’s going to happen.

Chinese Activists Seek UN Investigation Into Tiananmen Crackdown (R.)

More than 20 Chinese activists who took part in the Tiananmen Square pro-democracy movement called on Monday on the United Nations’ top human rights body to investigate Beijing’s deadly crackdown 30 years ago. Wang Dan and 21 others, backed by the group Chinese Human Rights Defenders, said they had submitted the complaint to the U.N. Human Rights Council, a Geneva forum which opens a three-week session on June 24. “We request the HRC investigate the gross violations of human rights and fundamental freedoms committed by the Chinese government during its military assault on peaceful protests,” they said in statement.


They also sought action over “the consistent pattern of human rights violations in persecuting Chinese citizens during the past three decades who broke the silence” about the events of June 3-4, 1989. The anniversary remains taboo in China. Beijing has not held a public inquiry nor permitted an independent investigation, the statement said. Beijing enjoys strong support among developing countries at the Human Rights Council, a 47-member state forum that has never adopted a resolution on China since being set up in 2006.

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Jun 152019
 
 June 15, 2019  Posted by at 9:41 am Finance Tagged with: , , , , , , , , , , , ,  


Arnold Böcklin Mermaids at play 1886

 

Freeing Julian Assange: Part Two (Suzie Dawson)
Well Guess What? He Was Right Again! Free Julian Assange (CJ)
DOJ Bloodhounds on the Scent of John Brennan (Ray McGovern)
System To Circumvent US Sanctions On Iran Ready Soon: German FM (AlJ)
Jeremy Corbyn Challenges UK Government’s Iran Tanker Accusations (BBC)
Brexit Britain Wallows In Dangerous Talk Of National Humiliation (O’Toole)
All Eyes On Fed As Stock Market Pines For Rate Cut (R.)
US Commercial Real Estate Is Another Dangerous Bubble In The Making (Colombo)
The “Deficits Don’t Matter” Folly (Stockman)
Beijing Yields To Hong Kong’s Financial Clout (R.)
Meanwhile, over on Planet Japan (Simon Black)

 

 

Trump was merely added years after the Russia-WikiLeaks slander had started.

Freeing Julian Assange: Part Two (Suzie Dawson)

The public has been led to believe that the 2016 election and the resulting Mueller Report is the definitive evidence that WikiLeaks was somehow in cahoots with Russia, reinforcing the premise that they were in a political alliance with, or favoured, Donald Trump and his Presidential election campaign. Prominent Russiagate-skeptics have long pointed out the multitude of gaping holes inherent in those theories, including the advocacy group Veteran Intelligence Professionals for Sanity (VIPS) who have produced credible forensic work analysing the 2016 WikiLeaks releases, that resoundingly debunks officials claims.


In the course of researching this article, I stumbled across a major discovery that augments that: the false notion of WikiLeaks being a front for Russian intelligence isn’t new – it has been pushed by media since 2009. It turns out the circulation of the WikiLeaks-Russia myth was a tried and true diversionary, smear tactic that was simply regurgitated in 2016. Julian Assange believed that UK intelligence agencies were behind the pushing of that narrative, and he was publicly stating so at the end of last decade. He wouldn’t make such claims lightly, and other emerging facts support his suspicion.

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“Otherwise you are just the establishment’s PR firm.”

Well Guess What? He Was Right Again! Free Julian Assange (CJ)

“Today’s the day that journalism gets put on trial,” Dimmack said. “And it’s interesting that behind me there are this many cameras. There haven’t been this many cameras for quite a while. It’s interesting that when Julian was dragged out and kidnapped from within that Ecuadorian embassy, all of you guys had actually gone home, and it was a Russian TV station that actually caught it, Ruptly. It’s almost as if you don’t care.”

“For seven years you have smeared and slandered that man who is going to appear on video in that court in about fifteen minutes,” Dimmack told the mainstream press, right to their fucking faces. “You are all responsible for what has happened today! All of you in the media! Every one of you. You have got blood on your hands. When he released those documents that Chelsea Manning gave him, all he did was the job of a publisher. That’s it. Right now Julian Assange is going to court and put on trial for exposing war criminals as war criminals. And all of you for seven years have smeared and slandered him. You should be ashamed of yourselves.”

“You have all got a chance right now to actually do a U-turn and repair some of the damage that you have done over the last seven years,” Dimmack roared. “The Fourth Estate is extremely important. You know this. This is why journalism is such a noble profession; you are meant to hold power accountable, not to suck up to it sycophantically and just repeat propaganda. Otherwise you are just the establishment’s PR firm.” “Stand up for Julian Assange and tell the truth,” he continued. “Ask yourselves why is it for seven years you have printed lie after lie after lie about him? Why is it for seven years you have said that he went to the Ecuadorian embassy to escape a rape charge? No he didn’t! How many times have I said it? He went in there to escape extradition to the United States.” “Well guess what?” Dimmack concluded, gesturing to the courthouse. “He was right again! Free Julian Assange.”

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More Russiagate.

DOJ Bloodhounds on the Scent of John Brennan (Ray McGovern)

The New York Times Thursday morning has bad news for one of its favorite anonymous sources, former CIA Director John Brennan. The Times reports that the Justice Department plans to interview senior CIA officers to focus on the allegation that Russian President Vladimir Putin ordered Russian intelligence to intervene in the 2016 election to help Donald J. Trump. DOJ investigators will be looking for evidence to support that remarkable claim that Special Counsel Robert Mueller’s final report failed to establish. Despite the collusion conspiracy theory having been put to rest, many Americans, including members of Congress, right and left, continue to accept the evidence-impoverished, media-cum-“former-intelligence-officer” meme that the Kremlin interfered massively in the 2016 presidential election.

One cannot escape the analogy with the fraudulent evidence of weapons of mass destruction in Iraq. As in 2002 and 2003, when the mania for the invasion of Iraq mounted, Establishment media have simply regurgitated what intelligence sources like Brennan told them about Russia-gate. No one batted an eye when Brennan told a House committee in May 2017, “I don’t do evidence.” As we Veteran Intelligence Professionals for Sanity have warned numerous times over the past two plus years, there is no reliable forensic evidence to support the story that Russia hacked into the DNC. Moreover, in a piece I wrote in May, “Orwellian Cloud Hovers Over Russia-gate,” I again noted that accumulating forensic evidence from metadata clearly points to an inside DNC job — a leak, not a hack, by Russia or anyone else.

So Brennan and his partners, FBI Director James Comey and National Intelligence Director James Clapper were making stuff up and feeding thin but explosive gruel to the hungry stenographers that pass today for Russiagate obsessed journalists. With Justice Department investigators’ noses to the ground, it should be just a matter of time before they identify Brennan conclusively as fabricator-in-chief of the Russiagate story. Evidence, real evidence in this case, abounds, since the Brennan-Comey-Clapper gang of three were sure Hillary Clinton would become president. Consequently, they did not perform due diligence to hide their tracks.

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From Monday. A few days later, the tankers were attacked. And not with mines either.

System To Circumvent US Sanctions On Iran Ready Soon: German FM (AlJ)

A European payment system designed to circumvent US sanctions on Iran will be ready soon, Germany announced on Monday. German Foreign Minister Heiko Maas met Iranian President Hassan Rouhani and Foreign Minister Mohammad Javad Zarif in Tehran as part of European efforts to salvage the historic JCPOA nuclear pact and defuse rising US-Iranian tension. Iran and Germany held “frank and serious” talks on saving the 2015 deal with world powers, Zarif told a joint press conference. “Tehran will cooperate with EU signatories of the deal to save it,” Zarif said. Maas said earlier the payment system, known as INSTEX, (Instrument in Support of Trade Exchanges) will soon be ready to go after months of work.


“This is an instrument of a new kind so it’s not straightforward to operationalise it,” he said, pointing to the complexity of trying to install a totally new payment system. “But all the formal requirements are in place now, and so I’m assuming we’ll be ready to use it in the foreseeable future,” added Maas about the system for barter-based trade with Iran. A cautious thaw in relations between Tehran and Washington began in 2015 when the deal was struck between six world powers and Iran, limiting its nuclear activity. But tensions with the US have mounted since President Donald Trump withdrew Washington from the accord in 2018 and reimposed sweeping sanctions. Iran has criticised the European signatories of the JCPOA for failing to salvage the pact after Trump pulled the US out. “There is a serious situation in the region. An escalation of tension is becoming uncontrollable and military action wouldn’t be in line with the interests of any party,” Maas said.

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From Skripal to Iran.

Jeremy Corbyn Challenges UK Government’s Iran Tanker Accusations (BBC)

Jeremy Corbyn has questioned whether the government has “credible evidence” to show Iran is behind the attacks on two oil tankers in the Gulf of Oman. Foreign Secretary Jeremy Hunt said responsibility for Thursday’s attack in the Gulf of Oman “almost certainly” lies with the Iranian regime. But the Labour leader tweeted that there was no evidence for this. Mr Hunt responded that Mr Corbyn’s comments were “pathetic” and said he should back British intelligence. It is the second time in the past few weeks that tankers appear to have been attacked in the region and comes amid escalating tension between Iran and the United States.


The US military released video footage which it said proved Iran was behind Thursday’s attacks on the Norwegian and Japanese tankers – something Iran has categorically denied. The UK Foreign Office said it was “almost certain” that a branch of the Iranian military – the Islamic Revolutionary Guard Corps – attacked the two tankers on 13 June, adding that “no other state or non-state actor could plausibly have been responsible”. “These latest attacks build on a pattern of destabilising Iranian behaviour and pose a serious danger to the region,” Mr Hunt said. However, in a tweet Mr Corbyn questioned that assessment and said the UK should ease tensions in the region, not fuel a military escalation.

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And it works!

Brexit Britain Wallows In Dangerous Talk Of National Humiliation (O’Toole)

Launching his bid for the Tory leadership this week, Dominic Raab announced, histrionically: “We’ve been humiliated as a country.” For those of us who do not live on planet Brexit, this might have been mistaken for a belated reaction to the genuinely demeaning spectacle of Donald Trump’s state visit a week earlier. But, of course, like almost all of his fellow contenders to be the next prime minister, Raab was playing his part in a strange performance in which the national honour has been so horribly besmirched by the European Union that it can be salved only by taking the pain of a no-deal Brexit.

Perhaps if you keep acting out phoney feelings, you end up not being able to recognise the real thing. Brexit Britain has been wallowing in a hyped-up psychodrama of national humiliation. It is, indeed, one of the very few things that remainers and leavers still share, even if they feel mortified for very different reasons. In relation to the EU, this sense of humiliation is wildly overplayed. But when Trump comes to town and really does degrade Britain, the sense of wounded dignity that ought to be felt seems curiously absent.

[..] how come the idea of national humiliation has loomed so large in Brexit? Shortly before the missed departure date of 29 March, a Sky Data poll asked: “Is the way Britain is dealing with Brexit a national humiliation?” Ninety per cent of respondents said yes. This idea of collective abasement is everywhere in the Brexit narrative. A random sample of headlines from across the spectrum tells the story: “Brexit and the prospect of national humiliation” (Financial Times); “Voice of the Mirror: Theresa May’s Brexit is a national humiliation”; “A national humiliation: Never was so much embarrassment caused to so many by so few” (Telegraph); “‘Humiliating to have to beg’ for EU exit, says Arlene Foster” (Irish Times). And so, endlessly, on.

There is something hysterical in this constant evocation of humiliation. It is a cry of outraged self-regard: how dare they treat us like this? Yes, of course, the Brexit debacle has reduced Britain’s prestige around the world. And the withdrawal agreement negotiated by Theresa May is indeed a miserable thing when compared with the glorious visions that preceded it. But Britain has not been humiliated by the EU – the deal was shaped by May’s (and Arlene Foster’s) red lines. Britain did not get what the Brexiters fantasised about, but it did get what it actually asked for. That’s not humiliation.

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Markets my ass. The only thing that’s left is the Fed. Markets are dead.

All Eyes On Fed As Stock Market Pines For Rate Cut (R.)

The Federal Open Market Committee meeting next week is shaping up as a pivotal one for Wall Street, with stocks primed for a selloff should the Fed fail to take an even more dovish tilt after policymakers raised expectations for a rate cut in recent weeks. The benchmark S&P 500 has rallied more than 5% this month as softening economic data coupled with comments by Fed officials heightened expectations the Fed will cut rates by the end of the year and, at the very least, telegraph it is leaning toward a later rate cut at its June 18-19 meeting. Those gains came on the heels of a selloff in May of nearly 7% in the S&P, largely fueled by investor concerns that trade wars were escalating, slowing the economy and putting it at risk of falling into a recession.


Bets for a rate cut were amplified by comments from Fed Chairman Jerome Powell on June 4, who said the central bank will respond “as appropriate” to the risks from a global trade war and other developments, and after a weak May payrolls report on June 7. Bank of America Merrill Lynch Chief Economist Michelle Meyer expects the Fed’s “dot plots” projection of interest rates, which represents the anonymous, individual rate projections of Fed policymakers for the next few years, to shift lower as officials start to factor in cuts. However, “the median dot will signal a Fed on hold,” Meyer said in a note. “The market has somehow convinced themselves that we are in an easing cycle. I am not sure how we got so far ahead of ourselves,” said Art Hogan, chief market strategist at National Securities in New York.

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Virtual wealth in a virtual reality.

US Commercial Real Estate Is Another Dangerous Bubble In The Making (Colombo)

As a result of the Fed’s ZIRP and QE programs in the past decade, virtually all types of assets soared in value: stocks, bonds, art, classic cars, farmland, residential real estate, and commercial real estate. On average, U.S. commercial real estate prices have surged by 111%, or more than double, since their 2009 low. Interestingly, most people don’t realize that U.S. commercial real estate also experienced a bubble from 2004 to 2008 at the same time as the U.S. housing bubble. This early bubble inflated for many of the same reasons as the housing bubble, which were ultra-low borrowing costs and loose lending standards. From 2004 to 2008, commercial real estate prices rose 66%, but crashed by nearly 40% during the 2008 financial crisis. Commercial real estate prices have increased even more in the current bubble (111% vs. 66%), which means that the coming commercial real estate bust is likely to be even worse than the 2008 bust.

As discussed earlier, low interest rate environments often cause dangerous bubbles to develop by encouraging borrowing booms. Like the U.S. commercial real estate bubble of 2004 to 2008, commercial real estate lending has flourished during the current bubble. Since 2012, total commercial real estate loans at U.S. banks have increased by an alarming $700 billion or 50%.

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“There haven’t been any cataclysmic consequences, so why worry about it?”

The “Deficits Don’t Matter” Folly (Stockman)

Well, that was timely. The US Treasury just posted a record $207 billion deficit for May and record monthly spending of $440 billion. That brought the rolling 12 month deficit to just shy of the trillion dollar mark at $986 billion. The timely part is two-fold. First, it just so happens that May marked month #119 of the current expansion, making it tied for the duration record with the 1990s cycle. But even JM Keynes himself would be rolling in his grave in light of the chart below. To wit, even by the lights of hardcore Keynesians of yore, fiscal deficits were supposed to be falling sharply at the end of a business cycle or even moving into surplus as they did in 1999-2000, not erupting toward 5% of GDP as has now happened.

The second timely note, of sorts, is that the Wall Street Journal was Johnny on the Spot this AM with a front page story entitled, “How Washington Learned to Love Debt and Deficits”. The story’s quote from the current Dem Chairman of the House Budget Committee, John Yarmouth, says it all. There simply has never been such bipartisan complacency about the nation’s public finances in all of modern history – including during the biggest borrow and spend days of FDR, LBJ and every president since Gerald Ford: “Rep. John Yarmuth (D., Ky.), House Budget Committee chairman, says he rarely hears from constituents concerned about rising deficits and debt. Many voters’ attitudes, he says: “There haven’t been any cataclysmic consequences, so why worry about it?”

The WSJ story is a dog’s breakfast of rationalizations, non sequitirs, political double-talk and Keynesian tommyrot. What is the most telling, however, is that it was co-authored by Jon Hilsenrath, who was the paper’s long-time Fed reporter. Yet it contains not a single word about the role of central banks in fostering the utter collapse of fiscal responsibility described by his lengthy report. So for want of doubt, here is the culprit. The central banks of the world have expanded their balance sheets by upwards of $22 trillion since the turn of the century, thereby massively monetizing the erupting public debt of the US and most of the world via fiat credit snatched from thin air.

So did that massive $22 trillion “buy” order from the central banks weigh heavily on the supply of funds side of the scales in the fixed income market, thereby driving bond prices skyward and yields ever lower? Why, goodness gracious, yes it did!

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Really?

Beijing Yields To Hong Kong’s Financial Clout (R.)

Beijing has yielded to Hong Kong’s unique economic status. Carrie Lam, chief executive of the special administrative region, on Saturday indefinitely suspended a bill that would have allowed extradition to the mainland, responding to mass rallies and violent street protests that rocked the city. It’s a defeat for her, and leaves the central government embarrassed. But for the Chinese Communist Party, preserving Hong Kong’s financial role still trumps the desire for more political control. Lam took office in 2017, and is considered a reliable Beijing loyalist. Pushing through the extradition bill, however, came from her, she said. Either way, the central government endorsed it enthusiastically as well. Yet the strength and breadth of the protests caught both Lam and Beijing off guard.


The backlash was not confined to democracy advocates, much less to a radical minority that began calling for independence after the Occupy movement in 2014. It extended to anyone who distrusted the Chinese legal system. In the end, that seemed to be almost everyone. Some tycoons began moving funds out of Hong Kong to Singapore in advance of the bill’s passage, Reuters reported, a hint of the outflows before the 1997 handover from Britain. And not only did the pro-Beijing camp fail to mobilise against the demonstrations in force – as it did in 2014 – the conservative business community began expressing public doubts about the agenda almost immediately. Financial markets wobbled. Worse still, U.S. politicians threatened to re-evaluate Hong Kong’s unique status, which could affect everything from visas to trade.

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We’re all on planet Japan. Pension systems everywhere are imploding.

Meanwhile, over on Planet Japan (Simon Black)

It was only a few days ago that the Japanese government’s Financial Services Agency published its oddly-titled “Annual Report on Ageing Society”. (Like everything in Japan, English translations often hilariously miss the mark…) This is a report that the Ministry of Finance puts out every year. And as the name implies, the report discusses the state of Japan’s pension fund, and its future prospects for taking care of its senior citizens. Bear in mind that Japan has the oldest population in the world; Japan ranks #2 in the world for average age (46.9, just behind Monaco), #1 in the world for the greatest percentage of citizens over the age of 70, and #1 in the world for life expectancy. In a nutshell, this means that Planet Japan has more people collecting pension benefits, for more years, than anywhere else.

Yet at the same time, Japan’s pension fund is completely insolvent. There simply aren’t enough people paying into the system to make good on the promises that have been made. At present there are only 2 workers paying into the pension program for every 1 retiree receiving benefits in Japan. The math simply doesn’t add up, and it’s only getting worse. Planet Japan’s birth rate is infamously low, and the population here is actually DECLINING. So, fast forward another 10-15 years, and there will be even MORE people collecting pension benefits, and even FEWER people paying into the system. This year’s ‘Annual Report on Ageing Society’ plainly stated this reality; it was a brutally honest assessment of Japan’s underfunded pension program.

The report went on to tell people that they needed to save their own money for retirement because the pension fund wouldn’t be able to make ends meet. This terrified a lot of Japanese workers and pensioners. So the government stepped in to quickly solve the problem… by making the report disappear. Prime Minister Shinzo Abe apologized for the report, calling it “inaccurate and misleading.” And Finance Minister Taro Aso– himself a pensioner at age 78 (though in typical Japanese form he looks like he’s 45)– simply un-published the report.

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Jun 142019
 
 June 14, 2019  Posted by at 9:39 am Finance Tagged with: , , , , , , , , , , , ,  


Henri Matisse Woman with a hat 1905

 

US Consults Allies On How To Protect Shipping In Wake Of Tanker Attacks (R.)
Julian Assange Is Not On Trial, British Justice Is (Wight)
The Hitlerization of Jeremy Corbyn – Among Others (Hopkins)
US Retirement Savings Gap Grows By $3 Trillion Each Year (MW)
The Fed Is Pushing On A String
The State of the Canadian Debt Slaves (WS)
Canada Rejects Idea Of Halting Extradition Of Top Huawei Executive To US (R.)
Elizabeth Warren To Propose Cancelling Up To $50,000 In Student Debt (MW)
UK Government Blew Billions on “Help to Buy” Scheme (DQ)
Varoufakis, Kotzias And The Dwindling ‘Progressive Army’ (K.)
School’s Purpose is Indoctrination (Carbone)
Carnival Cruise Ships Pollute 10 Times More Than All Cars in Europe (D.)

 

 

There are Japanese ships in the Persian Gulf literally every moment of every day. But Iran only decides to attack them when the first Japanese PM ever(?!) visits the country. Bolton is dementing.

US Consults Allies On How To Protect Shipping In Wake Of Tanker Attacks (R.)

The United States is discussing with its allies a variety of options on how to protect international shipping in the Gulf of Oman in the wake of tanker attacks that Washington has blamed on Iran, senior Trump administration officials said on Thursday. Two officials, speaking to a small group of reporters on condition of anonymity, said the United States wants to ensure the freedom of navigation in the Strait of Hormuz and make sure international commerce is not disrupted. Two oil tankers were attacked on Thursday and left adrift in the Gulf of Oman. “We don’t think this is over,” one official said of the possibility of more such attacks. The official said options are being reviewed.


“We’re discussing and will be discussing with our partners and allies suggestions on how we collectively can take steps to ensure, one, that we maintain freedom of navigation and international commerce is not disrupted and, second, that we protect our forces’ interests and our commercial assets and those of our partners and allies,” the official said. The official said the attacks appeared “designed to have a political outcome” and suggested it could have been an attempt to disrupt a visit to Tehran by Japanese Prime Minister Shinzo Abe. “We are going to obviously evaluate our presence in the region and the growing threat and make subsequent decisions,” the official said. “We have to look at the threat, as we always do, to our personnel and our forces but the threat to a strategic chokepoint. There’s a significant amount of trade that transits the Strait of Hormuz every day.”

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Another hearing today.

Julian Assange Is Not On Trial, British Justice Is (Wight)

The most honest man in Britain today is Julian Assange, while the most dishonest are those who are engaged in his ongoing persecution. The latest instalment in that persecution is a court hearing in London on June 14, where details of the request for his extradition to the US, it is expected, will be revealed for the first time. The formal request for the extradition of the founder of WikiLeaks was made to the UK by US authorities earlier in the week – and with British Home Secretary Sajid Javid signing the relevant papers sanctioning it, the final decision on whether Julian Assange’s extradition to the US goes ahead now rests with the courts.

[..] In revealing to the world the beast of US hegemony that resides behind the velvet curtains of democracy and human rights, Julian Assange exposed the lie upon which this American Empire (and make no mistake, it is an empire) depends. It depends on it in order to persuade its supposed beneficiaries – i.e. people living in the West – to continue to suspend disbelief as to the reality of a system they’ve been conditioned to believe is rooted in values that emanate from the human heart rather than from the heart of the machine. The end result is that in exposing this lie, Assange and WikiLeaks became a bigger threat to the ability of US hegemony to function normally than a million bayonets. As such, it became imperative that he, as the founder and face of WikiLeaks, be destroyed.

Britain’s role in this process couldn’t be any more sordid or shameful. Its legal system and judiciary has effectively been turned into a subsidiary of its US counterpart; its function not to dispense justice but to deliver a man into the arms of injustice. The fate to befall Assange proves that there’s a world of difference between believing that you live in a free society and behaving as if you do. He is the canary down the coalmine of Western democracy, signalling the warning that its foundations are rotten to the core.

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“..American Hitler (i.e., Donald Trump) will “push back” (i.e., intervene) against British Hitler (i.e., Jeremy Corbyn)..”

The Hitlerization of Jeremy Corbyn – Among Others (Hopkins)

Apparently, American Hitler and his cronies are conspiring with some secret group of “Jewish leaders” to stop British Hitler from becoming prime minister and wiping out all the Jews in Great Britain. Weird, right? But that’s not the weird part, because maybe American Hitler wants to wipe out all the Jews in Great Britain himself, rather than leaving it to British Hitler … Hitlers being notoriously jealous regarding their genocidal accomplishments. No, the weird part is that everyone knows that American Hitler does not make a move without the approval of Russian Hitler, who is also obsessed with wiping out the Jews, and with destroying the fabric of Western democracy. So why would Russian Hitler want to let American Hitler and his goons thwart the ascendancy of British Hitler, who, in addition to wanting to wipe out all the Jews, also wants to destroy democracy by fascistically refunding the NHS, renationalizing the rail system, and so on?

It doesn’t make a whole lot of sense, does it? In any event, here’s the official story. In “a recording leaked to The Washington Post,” and then flogged by the rest of the corporate media, Reichsminister des Auswärtigen, Mike Pompeo, told a group of unnamed “Jewish leaders” that American Hitler (i.e., Donald Trump) will “push back” (i.e., intervene) against British Hitler (i.e., Jeremy Corbyn) to protect the lives of Jews in Great Britain if British Hitler becomes prime minister (and is possibly already doing so now). The identities of these “Jewish leaders” have not been disclosed by the corporate media, presumably in order to protect them from being murdered by Corbyn’s Nazi hit squad.

Whoever they were, they wanted to know whether American Hitler and his fascist cabinet were “willing to work with [them] to take on actions if life becomes very difficult for Jews” after Jeremy Corbyn seizes power, declares himself Führer of Communist Britannia, and orders the immediate invasion of France. To anyone who has been closely following the corporate media’s relentless coverage of Jeremy Corbyn’s Nazi Death Cult (i.e., the UK Labour Party) and the global Anti-Semitism Pandemic, it comes as no real surprise that this group of “Jewish leaders” (whoever they are) would want to stop him from becoming prime minister. I doubt that their motives have much to do with fighting anti-Semitism, or anything else specifically “Jewish,” but … well, I’m kind of old-fashioned that way. I still believe there’s a fundamental difference between “the Jews” and the global capitalist ruling classes.

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Thanks to the Fed.

US Retirement Savings Gap Grows By $3 Trillion Each Year (MW)

Many Americans haven’t saved as much money as they need for retirement — and the gap is expected to widen dramatically in the next 30 years. The retirement savings gap — between what people have and should have — was $28 trillion in the U.S. in 2015, but by 2050, it’s expected to swell to $137 trillion, according to the World Economic Forum, a Cologny-Geneva, Switzerland-based nonprofit that researched international financial affairs. The disparity grows $3 trillion every year in the U.S.

The organization calculated this gap assuming most individuals’ retirement income sources would include a combination of government-provided pensions (such as Social Security), employer pensions in the public or private workforce and individual savings. They also analyzed the level of savings across expectations of income needs and life expectancies, assuming individuals would retire between 60 and 70 years old, for countries including China, Canada, Japan and the United Kingdom. The gap is most pronounced in the U.S., followed by China and Japan tied for $11 trillion in 2015. China is also expected to see a significantly wider discrepancy in 2050, at $119 trillion, followed by India, with an $85 trillion gap. Overall, the eight countries the WEF analyzed will see a $400 trillion disparity.

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Velocity of money and inflation.

The Fed Is Pushing On A String (Roberts)

Historically, the reason the Fed cuts rates, and interest are falling, is because the Fed has acted in response to a crisis, recession, or both. [..] Secondly, after a decade of QE and zero interest rates inflation, outside of asset prices, (as measured by CPI), remains muted at best. The reason that QE does not cause “inflationary” pressures is that it is an “asset swap” and doesn’t affect the money supply or the velocity of money. QE remains confined to the financial markets which lifts asset prices, but it does not impact the broader economy.

Unfortunately, the Fed is still misdiagnosing what ails the economy, and monetary policy is unlikely to change the outcome in the U.S., just as it failed in Japan. The reason is simple. You can’t cure a debt problem with more debt. Therefore, monetary interventions, and government spending, don’t create organic, sustainable, economic growth. Simply pulling forward future consumption through monetary policy continues to leave an ever growing void in the future that must be filled. Eventually, the void will be too great to fill.

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Time to start defaulting?

The State of the Canadian Debt Slaves (WS)

Canadian households are known around the world for their uncanny ability to pile on debt. And American debt slaves, who’d gotten trampled during the Great Recession, turn out to be lackadaisical these days in comparison. The share of disposable income (total incomes from all sources minus taxes) that Canadian households spent on making principal and interest payments on their ballooning mortgage debts and non-mortgage debts reached a new record of 14.9% in the first quarter, despite still ultra-low interest rates and despite the highest disposable income ever, according to data released today by Statistics Canada:

[..] So how do Canadian debt slaves stack up against American debt slaves? Statistics Canada released a report on just this topic at the end of March perhaps because authorities in Canada should get a tad nervous. [..] The annualized data it provided included the household debt-to-disposable income ratios for Canada and for the US through 2018. The ratio shows how large debt is relative to disposable income. For Canada, this ratio was 175% annualized in 2018, one of the highest in the world, and rising. For the US, it was 103%, and declining:

Canada’s household debts have continued to surge since the year 2000 except for a brief dip during the Financial Crisis. But US household debts plunged during years of deleveraging after the Financial Crisis, in part by consumers defaulting on their mortgages and credit cards. Household debts didn’t start growing again until 2013. And it took until 2017 before they surpassed the pre-Financial Crisis peak. But over the decade since the Financial Crisis, the US population has grown, and the number of working people has grown, and the national disposable income has increased, and so the ratio of household debt to disposable income has continued to drop.

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“..could make Canadians around the world less safe..”

Canada Rejects Idea Of Halting Extradition Of Top Huawei Executive To US (R.)

Canadian Foreign Minister Chrystia Freeland on Thursday dismissed a suggestion that Ottawa block the extradition of a top executive from China’s Huawei Technologies Co Ltd to the United States, saying it would set a dangerous precedent. Huawei’s Chief Financial Officer Meng Wanzhou, who was arrested on U.S. fraud charges in Vancouver last December, will challenge Washington’s extradition request at hearings that are set to begin next January. China angrily demanded Canada release Meng and detained two Canadians on spying charges. It has also blocked imports of Canadian canola seed and Prime Minister Justin Trudeau has said he fears further retaliation.


The Globe and Mail newspaper on Thursday said former Canadian Prime Minister Jean Chretien had floated the idea of the government intervening to stop the extradition case and thereby improve ties with Beijing. “When it comes to Ms Meng there has been no political interference … and that is the right way for extradition requests to proceed,” Freeland told a televised news conference in Washington. “It would be a very dangerous precedent indeed for Canada to alter its behavior when it comes to honoring an extradition treaty in response to external pressure,” she added, saying to do so could make Canadians around the world less safe.

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And what about all the others?

Elizabeth Warren To Propose Cancelling Up To $50,000 In Student Debt (MW)

Elizabeth Warren’s proposal to cancel student debt will soon be one step closer to reality — even if she doesn’t become president. The Democratic Senator of Massachusetts plans to introduce legislation in the coming weeks that mirrors her presidential campaign proposal to cancel at least a portion of the student debt held by many of the nation’s 44 million borrowers, her Senate office announced Thursday. Rep. James Clyburn, Democrat of South Carolina and the house majority whip, will introduce companion legislation in the House of Representatives. Warren’s office hasn’t yet released a draft of the legislative text, but the bill is slated to propose cancelling up to $50,000 in student debt for the bulk of student loan borrowers, her office said.


Under the proposal Warren released as part of her presidential campaign in April, borrowers with a household income of less than $100,000 would have $50,000 of their student debt cancelled and borrowers with an income between $100,000 and $250,000 would be eligible for some student debt cancellation — though not the full $50,000. Borrowers earning $250,000 or more would receive no debt cancellation. Her campaign estimated the plan would cost $640 billion, which would be paid through a tax on the ultra-wealthy. The idea of student debt cancellation has been popular in some circles for years, but Warren’s campaign proposal nudged it into the mainstream. Sen. Bernie Sanders, a Vermont independent seeking the Democratic nomination, has vowed to cancel “massive amounts of student debt,” though hasn’t offered specifics.

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All governments blow housing bubbles.

UK Government Blew Billions on “Help to Buy” Scheme (DQ)

Here’s how the scheme works: First-time property buyers get to put down a deposit of as little as 5% on a new-build home worth as much as £600,000 ($761,000) and receive an “equity loan” from the government. The size of the loan varies depending on where borrowers live. In London, where the price of property is an order of magnitude higher than in most other places, buyers can receive as much as 40% of the property price. Across the rest of the country the upper limit is 20%. The rest of the financing is covered by a traditional mortgage. While Help to Buy may have had a limited effect in terms of making housing affordable for first time buyers who are genuinely priced out of the market, it has proven to be effective at sustaining the UK’s all-important housing bubble by jacking up the prices of new-build houses, resulting in even less affordable housing.


Since Help to Buy was first launched in 2013, average UK house prices have increased by 35%, from £167,000 to £226,000, according to the Office for National Statistics. Through the scheme, the government has so far issued around 211,000 loans worth £11.7 billion ($14.8 billion) to home buyers. According to the NAO, this has helped increase sales of new-build properties from 61,357 a year in 2013-14 to 104,245 a year in 2017-18. That, in turn, has helped fuel a spike in profits for the UK’s biggest home builders. The nine largest builders dished out £2.3 billion in dividends in their most recent financial year, 39 times greater than the £53 million they paid out in 2012, a year before the scheme was introduced.

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Greeks have had enough of ‘left’; look what it brought them.

Varoufakis, Kotzias And The Dwindling ‘Progressive Army’ (K.)

Prime Minister Alexis Tsipras has been blindsided and thrown completely off his game plan. His narrative of a “progressive army” and a fresh rally of forces for elections “that will determine the future” is coming under constant attack. The Progressive Alliance was intended to move SYRIZA closer to the center so that it could resonate more strongly with the broader “progressive” section of voters – though what constitutes progressive and conservative in today’s world is a matter of debate – and to more fully acquire the characteristics of one of the two pillars of the two-party system, pushing center-left Movement for Change to the sidelines.

Tsipras’ plan, however, has been scuppered by two developments in the broader area of the Left, which are of significant symbolic importance and may affect the balance of power. What he hopes to achieve in the next few weeks is to convince many of the voters who chose not to vote in the European elections and who are mainly former supporters of SYRIZA to return to the fold and put their weight behind the big battle against the “socially insensitive, neoliberal” Kyriakos Mitsotakis of the opposition New Democracy party. His path in this ambitious plan, however, is littered with obstacles. The first was the surprisingly strong performance of Yanis Varoufakis’ DiEM25 party in the European elections, which shook things up.

There is now a party to the left of SYRIZA that is pro-European and has a leader with what a leftist voter might see as a convincing position. Moreover, he is neither Zoe Constantopoulou nor Panagiotis Lafazanis. He is a TV star who is in a position to boost his popularity thanks to his strong social media presence. It is also quite likely, if not certain, that he will make it into Parliament next month, and not just by scraping by with 3 percent. You can say a lot about Varoufakis, but what is certain is that he represents the thinking of a significant portion of the people who voted for SYRIZA in January 2015. He exercises charm over this portion of voters, and this is something that will be evident at the polls.

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Has been true for a very long time. Still poorly written though.

School’s Purpose is Indoctrination (Carbone)

The near sole purpose of present-day academia is indoctrination. This is a fairly bold thesis, but the evidence is in its favor. The increasingly progressive leftist agenda is sweeping through academia and conservatives are passively watching it happen. The main indoctrination stories you hear are those of radical professors on college campuses, outlandish majors created to forward social justice movements, and, on occasion, a political outburst by a high school teacher. Although these issues need addressing, by far the biggest – and the one that should scare everyone the most – is the silent indoctrination.


Indoctrination is no longer dependent upon the political beliefs of teachers. We are now past that. Course material is blatant political propaganda. Not just the course material for gender studies and similar. The core curricula of grade school through college. Sciences, economics, literature – any core course you can think of is politically influenced. The only course that may still be an exception is mathematics. Unless you account for the left-wing system of common core – which is a complete disaster. If you don’t believe this, sit through a grade school math class or open up your child’s text book. Disaster.

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But who ever measures sulfur oxides?

Carnival Cruise Ships Pollute 10 Times More Than All Cars in Europe (D.)

Commercial cruise lines are some of the world’s worst polluters, and Carnival is near the top of that list according to a study of European cruise line operators. Research found that Carnival alone is responsible for almost 10 times as much sulfur dioxide release as all 260 million of Europe’s cars combined. The study from Transport & Environment says that the 203 cruise ships that operated in European waters in 2017 emitted a combined total of 62 kilotons of sulfur oxides (SOx), which form airborne gases known to cause lung cancer and acid rain. During the same period, Europe’s 260 million known registered vehicles let out just 3.2 kilotons, the study found.

Of these 62 kilotons of SOx, more than half allegedly were the product of the 47 ships operated by Carnival Cruise Lines or its subsidiaries. Of the 20 worst offenders, seven are Carnival properties, which together made up half of the industry’s SOx emissions in Europe. Carnival denied any wrongdoing when asked for comment by Fast Company, pointed the finger at the rest of the maritime transportation industry, and insinuated that the study’s methodology was unscientific. [..] This statement arrived days after Carnival agreed to a $20 million fine and undergo increased scrutiny of its plastic and sewage disposal practices, which included dumping both directly into the ocean in large quantities. Carnival allegedly tried to hide these activities from regulators by falsifying records or pressuring the United States Coast Guard to relax the terms of its environmental compliance agreement.

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