Salvador Dalí The discovery of America by Christopher Columbus 1959
Let’s get one thing straight: Donald Trump is as American as apple pie (even if both are imports). He’s brash and loud and abrasive and entirely focused on money, he’s given to exaggeration, he stretches the truth, he constantly seeks to appear bigger and richer than he really is; he ticks all the boxes of what it is to be American.
Trump’s role in US society is that he’s a mirror for America, he’s not just holding up a mirror, he is the mirror. But many Americans don’t like what they see reflected in him. They’re really just looking at themselves, and their society, but they don’t want to acknowledge that. They just want to get away from the mirror, or preferably, break it. But when someone holds up a mirror to you, the idea is for you to learn something, not break it.
Of course not every individual American fits the picture, but he’s very much the almost perfect reflection of what the country, the society, has become. And one point in which Trump is different from other ‘leaders’ is that he doesn’t try to look different from what he is, he doesn’t play a role like just about every other politician does.
He has that in common with Bernie Sanders, which is ironic given how different the two men are. Neither tries to, or even has the ability to, concoct a cool and calculated attempt at pleasing their viewers and listeners and voters at every twist and turn. With both Bernie and the Donald what you see is what you get.
That they appeal to different groups of people is obvious. As is the fact that Sanders is much less of an (arche)typical American than Trump is. Which means he has to work harder to get his points across. Sanders appeals to a part of America that people have largely forgotten.
Another thing that is true for both is that they are candidates for parties that are deeply broken, and inside a system that has no tolerance for other parties. Which makes you wonder whether it’s not the system itself that is broken. Where Hillary Clinton’s people managed to shove aside Sanders in the Democratic primaries, Trump’s Republican party had no such ‘luck’. Trump’s too all-American.
Of course the next issue must be that neither truly represent either party. They’re both ‘outsiders’ who’ve taken over existing -but failing- structures. Where this leads is unclear. Trump is busy ‘sanitizing’ the GOP, aka draining the swamp’, a process that may or may not cost him his job, and the Democrats would do well to undertake a similar spring cleaning. But the incumbent squids have their tentacles everywhere. Then again, that didn’t stop Trump. So far.
Then we get to the litany in investigations that are being conducted. Special Counsel Robert Mueller has apparently laid the first charges in the Russia collusion investigation. Of course, like every single move in the case, this one too has to be as confusing and murky as possible. The indictment was sealed by a judge, and subsequently leaked to the press. Which is probably highly illegal.
We have no idea who’s going to be indicted, it will all be revealed on Monday. Or not. If Mueller’s team has confined itself to investigating whether the Trump campaign has colluded with the Russians, there wouldn’t seem to be too much at hand. But Deputy AG Rod Rosenstein authorized Mueller to pursue “any matters that arose or may arise directly from the investigation”, so the net is cast so broadly it sounds like anything goes.
They may go after Paul Manafort, known for his involvement with people in Russia and the Ukraine. Whether that included anything illegal is unclear. That it would have amounted to outright collusion by the Trump campaign is highly unlikely. Manafort has been gone from the Trump entourage since August 2016.
But there are so many people involved in the campaign, who knows? If you have a former FBI head hiring lawyers and researchers left and right for six months without any constraints, budgetary or otherwise, it would be baffling if they found nothing at all. Michael Flynn, Jared Kushner?
What’s more interesting to come out of this circus is the picture of Washington -all of it- as an absolute cesspool and shithole. That these are the people, on either side of the aisle, that get to make the decisions is so worrisome it should make people think of leaving the country.
You have a conservative group led by the Free Beacon, funded by hedge-funder Paul Singer, that starts an ‘opposition research’ project to dig up dirt on Trump during the primaries. When that fails to halt Trump, the DNC and Clinton campaign take over the funding and expand it to include Washington dirt digger firm Fusion GPS, who in turn hire Christopher Steele to produce a very dubious dossier. Fusion GPS execs all took the fifth when asked.
Somewhere along the way the FBI got involved too. That means James Comey and Robert Mueller. Who has such a ‘great reputation’ for being impartial. What a swamp it is. The echo chambers on both sides know exactly, and in advance, who’s to blame. But anyone who finds those chambers too deafening must be awfully confused and conflicted by now. Who to believe?
The Russia collusion thing has been going on for a long time, first in the press, then on Capitol Hill, in the FBI and then the Special Counsel. During the process, both the same FBI and the Hillary camp, including the DNC have been exposed as having ties to Russian elements.
No proof has been presented of Putin supporting Trump through illegal channels. Will Mueller’s indictment(s) be the turning point? If Mueller doesn’t deliver clear and strong, if he doesn’t have something and someone too obvious to dispute, the whole scene may get a lot more hostile.
Over the past week, we’ve witnessed the exits stage left of Senators Bob Corker and Jeff Flake, in sometimes dramatic fashion decrying anything Trump. Who simply reacts by saying neither would have been re-elected anyway (about Corker: “he couldn’t get elected dog-catcher in Tennessee”).
Essentially, what these guys do is try and play Trump’s game. But he’s much better at it than they are. The game has changed profoundly, and they missed out on that. Which is the number one reason why Trump got elected president, and none of the ‘old guard’ did. Well, that and all GOP candidates in the primary debates looked completely lost.
“It is time for our complicity and our accommodation for the unacceptable to end,” Flake said, in explosive remarks that were instantly labeled as a historic act of defiance. “There are times when we must risk our careers in favor of our principles. Now is such a time.” The senator delivered a 17-minute speech, framing the moment as an existential crisis for the party, taking direct aim at Trump’s conduct and what his presidency symbolized in a lacerating critique. It was an extraordinary event that would have otherwise been regarded as a major breach of decorum. But this is Washington in 2017. The norms have already been broken.
A handful of Flake’s colleagues sat stony-faced in the chamber as he implored Republicans not to acquiesce on core principles in the pursuit of appeasing Trump’s angry nationalist base. “We must stop pretending that the degradation of our politics and the conduct of some in our executive branch are normal,” he said. Flake went on, thrusting the knife even further into Trump, though avoiding naming him: “Reckless, outrageous, and undignified behavior has become excused and countenanced as ‘telling it like it is’ when it is actually just reckless, outrageous, and undignified.”
Among those who bore witness to Flake’s remarks was John McCain, the senior senator from Arizona who just a week previously blasted “half-baked, spurious nationalism” in a coded attack on so-called “Trumpism”. Mitch McConnell, the Senate majority leader, looked on stoically. As the speech reached its conclusion, one senator applauded: Ben Sasse, a young Republican from Nebraska who, like Flake, declined to endorse Trump in the 2016 election. Many of the Senate’s 52 Republicans were nowhere to be found.
They had just left a closed-door lunch with the president, dining over chicken marsala, green beans and Trump’s favorite, meatloaf, before a major push to overhaul the tax code. Much of the meeting featured Trump – characteristically – singing his own praises, according to some attendees. There was general discussion of taxes, but few specifics from a president who takes little interest in the policy details. It was nonetheless a cordial meeting, by Trump’s standards, embodied by the takeaway quote of John Kennedy, of Louisiana: “Nobody called anyone an ignorant slut.”
Many anti-Trump voices now speculate that he will try to fire Robert Mueller. Given how close the longtime FBI chief is to many of the parties involved, that might not be that crazy, but it would be explosive. He could also recuse himself on exactly those grounds. He won’t.
Then again, if he stays on, he will have to broaden his investigation to include the Clintons, the DNC and possibly the FBI itself. From the New York Post, and yes, I know what they are, but if I quote one article each from both sides of the echo chamber, maybe I find some balance:
Their claim that nobody in the campaign or the DNC knew anything about the deal doesn’t pass the smell test. When as much as $12 million goes out the window for a document that aimed to win the election — and failed — everybody knows something. While the link to Clinton answers some questions, it raises others. For example, while it is certain her campaign spread the dossier among the media last summer, it remains uncertain whether the dossier was used by the White House and the FBI to justify snooping on the Trump campaign. One hint that it was is that Comey, while still in office, called the document “salacious and unverified,” but briefed Obama and President-elect Trump on its contents last January.
[..] the FBI never denied reports that it almost hired Steele, the former British spy, to continue his work after the campaign. The mystery might soon be solved because the FBI, after months of stonewalling, agreed last week to tell Congress how it used the dossier and detail its contacts with Steele. If the bureau did use the dossier to seek FISA warrants to intercept communications involving the Trump campaign, it would mean the FBI used a dirty trick from the candidate of the party in power as an excuse to investigate the candidate from the opposition party. Somewhere, Richard Nixon is wondering why he didn’t think of that.
There is also the issue of the “unmasking” of Trump associates caught up in the snooping, with the names leaked to anti-Trump media. It is essential to investigate that angle, but it would lead right to the Obama White House, which is why Mueller is not the man for the job. As for Clinton, the dossier revelation was not her only new problem. In fact, the second blow might be the most serious yet. At the urging of Congress and Trump, the Justice Department lifted its gag order on an informant who can now testify to Congress about bribery and other wrongdoing surrounding Moscow’s gaining control of 20% of US uranium production.
The 2010 transaction was approved by Obama officials, including Clinton, then secretary of state. About the same time, Bill Clinton was paid $500,000 for a speech to a Russian bank involved in the transaction. Later, tens of millions of dollars — $145 million by one estimate — were said to be donated to the Clinton Foundation by individuals having a stake in the deal. The informant’s lawyer, Victoria Toensing, told Fox News the speech fee and the donations amount to a “quid pro quo” for Hillary Clinton’s help. “My client can put some meat on those bones and tell you what the Russians were saying during that time,” Toensing said.
Is it a disgrace that Trump is president? Perhaps it is. Ideally, the country should do much better. But he didn’t get America into the troubled situation it’s in. He is not the rot in the system, he just lays it bare. He simply came along at the appropriate moment to expose what the country has become, and to what extent its political system has devolved into a veritable swamp of special interests and incumbent squids.
And Trump hasn’t won a thing yet. Don’t be surprised if the whole sordid Harvey Weinstein tale is used, if not set up from the start, to go after the Donald. In a cynical link to that, George H.W. Bush has been accused of groping women, at the same time his role in the JFK assassination was questioned. He was the only American who didn’t remember where he was when the murder took place. Turns out, the CIA operative happened to be in Dallas.
Interestingly, Trump will fly to Asia on November 3. By then we should know who Mueller has indicted. Will Trump even be allowed to return? It would be better for America if he is, because there are a lot of lessons left to be learned.
Just before the release Thursday, Trump wrote in a memorandum that he had “no choice” but to agree to requests from the CIA and FBI to keep thousands of documents secret because of the possibility that releasing the information could still harm national security. Two aides said Trump was upset by what he perceived to be overly broad secrecy requests, adding that the agencies had been explicitly warned about his expectation that redactions be kept to a minimum. “The president and White House have been very clear with all agencies for weeks: They must be transparent and disclose all information possible,” White House Principal Deputy Press Secretary Raj Shah said Friday.
Late last week, Trump received his first official briefing on the release in an Oval Office meeting that included Chief of Staff John Kelly, White House Counsel Don McGahn and National Security Council legal adviser John Eisenberg. Trump made it clear he was unsatisfied with the pace of declassification. Trump’s tweets, an official said, were meant as a signal to the intelligence community to take seriously his threats to release the documents in their entirety. According to White House officials, Trump accepted that some of the records contained references to sensitive sources and methods used by the intelligence community and law enforcement and that declassification could harm American foreign policy interests. But after having the scope of the redactions presented to him, Trump told aides he did not believe them to be in the spirit of the law.
On Thursday, Trump’s top aides presented him with an alternative to simply acquiescing to the agency requests: He could temporarily allow the redactions while ordering the agencies to launch a new comprehensive examination of the records still withheld or redacted in part. Trump accepted the suggestion, ordering that agencies be “extremely circumspect” about keeping the remaining documents secret at the end of the 180-day assessment. “After strict consultation with General Kelly, the CIA and other agencies, I will be releasing ALL JFK files other than the names and addresses of any mentioned person who is still living,” Trump wrote in a Friday tweet. “I am doing this for reasons of full disclosure, transparency and in order to put any and all conspiracy theories to rest.”
The November election did not put an end to the Republican Party’s civil war – a chasm between the establishment in Washington and grassroots activists that deepened with the rise of the Tea Party movement of 2009. Trump has only amplified it. Flake, after all, was not alone in his scathing criticism of the president. All week, a feud between Trump and Bob Corker, the Republican chair of the Senate foreign relations committee, soared to new heights – or depths. It culminated in Corker issuing his own stunning rebuke of Trump. “When his term is over, the constant non-truth-telling, the name-calling, the debasement of our nation, will be what he will be remembered most for,” Corker told CNN. Corker announced his own retirement last month, joining the ranks of a small but growing number of Republicans who have come to see Trump’s presidency as a moment of reckoning.
On one side is Trump, the most unpopular president in modern US history, ushered in by a grassroots movement with Steve Bannon, the former White House chief strategist, at its helm. On the other is the old guard of Republican leaders, struggling to distance themselves from Trump’s toxicity and a party base that he increasingly drives with racially motivated nationalism. Critics like Flake, Corker and McCain subscribe to the views espoused by Republican presidents back to Ronald Reagan – a belief in limited government, moderate positions on immigration and trade – but Bannonites have waged war on “globalists” and used race and class to drive a wedge between the establishment and a rancorous base unmoored by the economic and cultural dislocation of the last 20 years.
The friction has prompted a battle for the soul of the Republican party. A strategist aligned with Bannon told the Guardian that Trump’s victory unleashed an insurgent movement that wants to overthrow the party establishment in Washington. “The strategy is to make everyone look over their shoulders,” the Bannon ally said, “so they understand that they are no longer in charge of the Republican party.” As reports of Flake’s retirement surfaced, another ally of Bannon swiftly celebrated the news by claiming “another scalp”. The departure of another moderate senator – at least, a moderate within the current Republican party – was the latest victory in Bannon’s mission to reshape the conservative movement.
White House leaks say Powell will be next Fed head. Rickards expects Kevin Warsh. But yeah, Trump will be in Asia after November 3. What effect does that have on the Mueller thingy?
President Trump is expected to nominate the next Federal Reserve chair within a matter of days. As I’ve explained before, Donald Trump has the opportunity to appoint a higher percentage of the Board of Governors of the Federal Reserve system at one time than any president since Woodrow Wilson. President Wilson signed the Federal Reserve Act during the creation of the Fed in 1913 when they had a vacant board. At that time, the law said the secretary of the Treasury and the comptroller of the currency were automatically on the Fed’s board of governors. But besides that, President Wilson selected all of the other participating members. Due to vacancies he inherited and key resignations, Trump now has the opportunity to fill more seats on the Fed’s Board of Governors than any president since then. That’s pretty amazing when you think about it.
To review, the Federal Reserve’s Board of Governors is made up of seven appointees. That means that they can make a majority decision with four votes. If you’re reading about the Fed, you might also see reference to “regional reserve bank presidents.” These are roles within the Federal Reserve System, but the real power is found on seven-member Board of Governors. Trump will own the Fed. Meaning, whatever the president wants monetary policy to be, he’ll get. In other words, Donald Trump will be able to shape the Fed’s majority. But the tricky part is figuring out how he plans to shape it… During the campaign season, Trump called China and other nations currency manipulators. That signaled he believed the dollar was too strong and wanted it to weaken. But then the North Korean nuclear crisis rose to the fore.
Trump backed off his threats against China because China has the most economic influence over North Korea, and Trump wanted China to use that leverage to convince the North to back off its nuclear program. But China didn’t deliver as Trump had hoped, and a trade war with China is now likely. That’s especially true now. Chinese president Xi Jinping has solidified his hold on power after the Chinese Politburo re-appointed him yesterday. Xi had avoided rocking the boat in recent months while his position was uncertain. But now that his lock on power is secure, Xi can afford to be much more confrontational with Trump. Trump’s trade policy has led many to believe that Trump will appoint a lot of “doves” to the Board. But don’t be surprised if Trump goes with a hard-money board. In fact, that’s what I expect. These will be hard-money, strong-dollar people, contrary to a lot of expectations.
Now, it also happens that the deal for Tenex to buy Uranium One had to be approved by nine federal agencies and signed off on by Secretary of State Hillary Clinton, which she did shortly after her husband Bill Clinton was paid $500,000 to give a speech in Moscow sponsored by a Russian bank. The Clinton Foundation also received millions of dollars in “charitable” donations from parties with an interest in the Tenex / Uranium One deal. It happened, too, that the CEO of Uranium One at the time of the Tenex sale, Frank Guistra, was one of eleven board members of the Clinton Foundation. The informant remained undercover for the FBI for five years. None of the Clinton involvement was included in the previously mentioned federal bribery and racketeering prosecutions.
Meanwhile, the informant had signed a nondisclosure agreement with the Obama Justice Department, only just lifted last week. As of this morning, the story is absent from The New York Times, formerly the nation’s newspaper of record. The FBI’s credibility is at stake in this case. Robert Mueller, who was Director of the agency during the Tenex/Uranium One deal, with all its Clintonian-Russian undertones, is in the peculiar position now as special prosecutor for the Russian election “meddling” alleged to involve President Trump. Whatever that investigation has turned up is not known publicly yet, but the massive leaking from government employees that turned the story into roughly 80% of mainstream legacy news coverage the past year, has ceased — either because Mueller has imposed Draconian restraints on his own staff, or because there is nothing there.
The FBI has a lot to answer for in overlooking the Clinton connection to the Uranium One deal. The informant, soon to be attached to a name and a face, is coming in from the cold, to the warm, wainscoted chambers of the house and senate committees. I wonder if Mr. Trump, or his lawyers, will find grounds to attempt to dismiss Special Prosecutor Mueller, given what looks like Mueller’s compromised position vis-à-vis Trump’s election opponent, HRC. It’s hard to not see this thing going a long way — at the same time that financial markets and geopolitical matters are heading south. Keep your hats on.
[..] the great Central Bank liquidity tide, which generated over $2 trillion in central bank purchasing power in 2017 alone – and which as Bank of America said last month is the only reason why stocks are at record highs, is now on its way out. This was a point first made by Deutsche Bank’s Alan Ruskin two weeks ago, who looked at the collapse in global vol, and concluded that “as we look at what could shake the panoply of low vol forces, it is the thaw in Central Bank policy as they retreat from emergency measures that is potentially most intriguing/worrying.
We are likely to be nearing a low point for major market bond and equity vol, and if the catalyst is policy it will likely come from positive volatility QE ‘flow effect’ being more powerful than the vol depressant ‘stock effect’. To twist a phrase from another well know Chicago economist: Vol may not always and everywhere be a monetary phenomena – but this is the first place to look for economic catalysts over the coming year.” He showed this great receding tide of liquidity in the following chart projecting central bank “flows” over the next two years, and which showed that “by the end of next year, the combined expansion of all the major Central Bank balance sheets will have collapsed from a 12 month growth rate of $2 trillion per annum to zero.”
Shortly after, Fasanara Capital’s Francesco Filia used this core observation in his own bearish forecast, when he wrote that “the undoing of loose monetary policies (NIRP, ZIRP), and the transitioning from ‘Peak Quantitative Easing’ to Quantitative Tightening, will create a liquidity withdrawal of over $1 trillion in 2018 alone. The reaction of the passive community will determine the speed of the adjustment in the pricing for both safe and risk assets.”
Fast forward to today, when Bank of America’s Barnaby Martin is the latest analyst to pick up on this theme of great liquidity withdrawal. Looking at (and past) the ECB’s announcement, Martin writes that “as expected, Mario Draghi took a knife to the ECB’s quantitative easing programme yesterday. From January 2018, monthly asset purchases will decline from €60bn to €30bn, and continue for another 9m (and remain open ended). The ECB now joins an array of central banks across the globe that are either shrinking their balance sheets or heavily scaling back bond buying.” [..] However, as Ruskin and Filia warn, Martin underscores that it is the bigger point that is ignored by markets, namely that it is all about the “flow” of central bank purchases.
And in this context, the BofA strategist warns that it will take just over a year before the global liquidity tide not only reaches zero, but turns negative… some time in early 2019. Chart 1 shows year-over-year changes in global asset purchases by central banks (we also include China FX reserves here). Given this year’s slowdown in ECB and BoJ QE (the latter, in particular, is striking in USD terms), we are well past the peak in global asset buying by central banks. But with the Fed now embarking on balance sheet shrinkage, the start of 2019 should mark the point where year-over-year asset purchases finally turn negative – a trend change that will come after four straight years of expansion.
It’s not only the government that is obsessed with lending to prop up property owners and developers – the banking sector is keen, too. The report sets out the way UK banks mostly lend abroad, with loans to UK businesses accounting for just 5% of total UK bank assets, compared with 11% in France, 12% in Germany and 14% on average across the rest of the eurozone. Property loans to businesses and individuals in the UK account for more than 78% of all loans to individuals and non-financial businesses – which means those outside the Square Mile. After stripping out real estate, loans to UK businesses account for just 3% of all banking assets. As a transmission mechanism for diverting the nation’s savings into worthwhile, productive businesses, the banks fail miserably. And the rest of the financial sector is just as bad.
The IPPR report accused hedge funds, proprietary traders (which use investment bank cash) and high-frequency traders – a group that collectively makes up 72% of trades in on the London market – of paying themselves depending on performance against rivals and over short timescales, “not long-term value creation”. This spivvy trading arena has the knock-on effect of making short-term demands on the boards of listed companies. Such is the pressure to avoid being caught in traders’ headlights that in a survey of more than 400 executives, some 75% said they “would sacrifice positive economic outcomes” if it helped smooth their profit figures from one quarter to the next. The report argues that this self-absorbed world of stock market trading needs to support longer-term investment in a way that also benefits savers and business owners.
Sacked Catalonian president Carles Puigdemont on Saturday called for peaceful “democratic opposition” to the central government’s takeover of the region following its unilateral declaration of independence from Spain. Puigdemont, whose regional government was dismissed by Spanish Prime Minister Mariano Rajoy on Friday, accused Madrid of “premeditated aggression” against the will of the Catalans. Rajoy removed Puigdemont, took over the administration of the autonomous region and called a new election after Catalonia’s parliament declared itself an independent nation on Friday. The bold if to all appearances futile action marked a potentially dangerous escalation of Spain’s worst political crisis in the four decades since its return to democracy.
“It’s very clear that the best form of defending the gains made up until now is democratic opposition to Article 155,” Puigdemont said in a brief statement he read out in the Catalan city of Girona, referring to the legal trigger for the takeover. But he was vague on precisely what steps the secessionists would take as the national authorities are already moving into Barcelona and other parts of Catalonia to enforce control. Spanish government spokesman Inigo Mendez de Vigo said it would welcome Puigdemont’s participation in the regional elections it has called for Dec. 21. “I‘m quite sure that if Puigdemont takes part in these elections, he can exercise this democratic opposition,” Mendez de Vigo told Reuters TV in an interview.
[..] Puigdemont signed the statement as President of Catalonia, demonstrating he did not accept his ousting. “We continue persevering in the only attitude that can make us winners. Without violence, without insults… and also respecting the protests of the Catalans who do not agree with what the parliamentary majority has decided,” he said.
A Russian official said the region no longer can be treated inappropriately by the United States. The Russian Foreign Ministry has warned the United States that Latin American and the Caribbean are no longer its “backyard.” Foreign Affairs spokesperson Maria Zajarova said the region has tired of the United State’s attempt to control its people by political, social or military force. “The countries of Latin America and the Caribbean have long ceased to be the U.S. backyard,” Zajarova said. In addition, she said the region has had many opportunities to “put Washington in its place on the inappropriateness of its conduct regarding Latin America,” urging the United States to respect international law and the sovereignty of nations, in order to “avoid conflicts.”
“Each state has its objectives, but we should start from common game rules and, at the same time, respect national interests,” she said. “All actors must respect international law instead of ignoring it and proclaiming themselves special states, this is the only way of preserving our own interests, and interacting and avoiding conflicts,” Zajarova added. The Russian official said development in the region in economics, politics, and science has shown “such potential that they can’t be treated as if an older brother were addressing other members of the lesser developed family.” Russia recently said it hopes countries around the world “refrain from the policy of pressure and sanctions” against countries in the region such as is being done in Venezuela, calling the attempts “counterproductive.”
The Trump administration is exploring ways to relocate tens of thousands of Puerto Ricans to the U.S. mainland for an extended period as parts of the territory remain devastated more than a month after Hurricane Maria. Officials at the U.S. Department of Housing and Urban Development late last week started to develop a plan to provide housing to some of Puerto Rico’s displaced population, according to people familiar with the matter. And given the shortage of available options on the island, the possibility of evacuating large numbers to the mainland has emerged as an option. Two of the people who spoke to HUD officials said using large commercial cruise liners had been suggested to move residents en masse.
The most recent push for a solution began after a meeting on Friday that included officials from HUD, the Federal Emergency Management Agency, the White House and others, according to the people. But it’s unclear if the White House or any agencies outside of HUD are coordinating with the housing agency, or if the ideas are only being developed within the department for now. Agency officials in the past two days have contacted executives in the housing industry, investment managers with ties to Puerto Rico, and others in an attempt to brainstorm potential solutions, said the people [..] Thousands of Puerto Rico residents have already fled to Florida and elsewhere since Maria struck as a Category Four storm on Sept. 20.
Much of the territory, including the outer islands of Vieques and Culebra, remains without electricity. Potable drinking water is scarce in some areas, and thousands of miles of roads are still closed. The evacuation idea is in the earliest stages, and given immense logistical challenges it may never come to pass. An orchestrated mass movement and temporary resettlement would require coordination between various parts of the government and a willingness by local communities to house any evacuees, at a substantial cost.
Independent islands in the Caribbean are fearful that their infrastructure will be left in ruins as countries such as the UK focus relief and aid efforts on their own overseas territories. Gaston Browne, prime minster of Antigua and Barbuda, said his country was being overlooked in relief efforts because it was an independent island and had a higher per capita income than some Caribbean countries. “Technically, the Queen is still our head of state, which means there should be some empathy,” he said. “But I think because we are independent, and they’re looking at some artificial per capita income criteria, we are being overlooked.” The island of Barbuda was devastated by Hurricane Irma in September, with 95% of all properties on the island destroyed. When it was feared Barbuda would be struck again by Hurricane Jose a few days later, all 2,000 residents were evacuated to the larger sister island of Antigua.
The evacuees are living with friends and family on Antigua, or in large shelters run by the government in technical colleges, churches and a cricket stadium. People have begun to return to the island for a few days at a time to start the clear-up, often sleeping in tents on their lawns. Barbuda still has no water or electricity. Browne praised developing countries that had offered help, naming Cuba, Venezuela and the Dominican Republic, as well as Qatar, China and India. Even the small Caribbean island of Dominica pledged $250,000 before Dominica itself was hit and devastated by Hurricane Maria, Browne said. “We reciprocated afterwards by pledging $300,000,” he added “Even among countries that were devastated, there is a form of human cooperation to help each other.”
A new power is loose in the world. It is nowhere and yet it’s everywhere. It knows everything about us – our movements, our thoughts, our desires, our fears, our secrets, who our friends are, our financial status, even how well we sleep at night. We tell it things that we would not whisper to another human being. It shapes our politics, stokes our appetites, loosens our tongues, heightens our moral panics, keeps us entertained (and therefore passive). We engage with it 150 times or more every day, and with every moment of contact we add to the unfathomable wealth of its priesthood. And we worship it because we are, somehow, mesmerised by it. In other words, we are all members of the Church of Technopoly, and what we worship is digital technology.
Most of us are so happy in our obeisance to this new power that we spend an average of 50 minutes on our daily devotion to Facebook alone without a flicker of concern. It makes us feel modern, connected, empowered, sophisticated and informed. Suppose, though, you were one of a minority who was becoming assailed by doubt – stumbling towards the conclusion that what you once thought of as liberating might actually be malign and dangerous. But yet everywhere you look you see only happy-clappy believers. How would you go about convincing the world that it was in the grip of a power that was deeply hypocritical and corrupt? Especially when that power apparently offers salvation and self-realisation for those who worship at its sites?
It would be a tough assignment. But take heart: there once was a man who had similar doubts about the dominant power of his time. His name was Martin Luther and 500 years ago on Tuesday he pinned a long screed on to the church door in Wittenberg, which was then a small and relatively obscure town in Saxony. The screed contained a list of 95 “theses” challenging the theology (and therefore the authority) of the then all-powerful Catholic church. This rebellious stunt by an obscure monk must have seemed at the time like a flea bite on an elephant. But it was the event that triggered a revolution in religious belief, undermined the authority of the Roman church, unleashed ferocious wars in Europe and shaped the world in which most of us (at least in the west) grew up. Some flea bite.
[..] Why not, I thought, compose 95 theses about what has happened to our world, and post them not on a church door but on a website? Its URL is 95theses.co.uk and it will go live on 31 October, the morning of the anniversary. The format is simple: each thesis is a proposition about the tech world and the ecosystem it has spawned, followed by a brief discussion and recommendations for further reading. The website will be followed in due course by an ebook and – who knows? – perhaps eventually by a printed book. But at its heart is Luther’s great idea – that a thesis is the beginning, not the end, of an argument.
The world’s super-rich hold the greatest concentration of wealth since the US Gilded Age at the turn of the 20th century, when families like the Carnegies, Rockefellers and Vanderbilts controlled vast fortunes. Billionaires increased their combined global wealth by almost a fifth last year to a record $6tn – more than twice the GDP of the UK. There are now 1,542 dollar billionaires across the world, after 145 multi-millionaires saw their wealth tick over into nine-zero fortunes last year, according to the UBS/PwC Billionaires report. Josef Stadler, the lead author of the report and UBS’s head of global ultra high net worth, said his billionaire clients were concerned that growing inequality between rich and poor could lead to a “strike back”. “We’re at an inflection point,” Stadler said. “Wealth concentration is as high as in 1905, this is something billionaires are concerned about.
The problem is the power of interest on interest – that makes big money bigger and, the question is to what extent is that sustainable and at what point will society intervene and strike back?” Stadler added: “We are now two years into the peak of the second Gilded Age.” He said the “$1bn question” was how society would react to the concentration of so much money in the hands of so few. Anger at so-called robber barron families who built up vast fortunes from monopolies in US rail, oil, steel and banking in the late 19th century, an era of rapid industrialisation and growing inequality in America that became known as the Gilded Age, led to President Roosevelt breaking up companies and trusts and increasing taxes on the wealthy in the early 1900s. “Will there be similarities in the way society reacts to this gilded age?,” Stadler asked. “Will the second age end or will it proceed?”
European Central Bank policy makers implicitly assume their newly-extended bond-buying program will be tapered to a halt by the end of next year so long as the inflation outlook improves, according to officials with knowledge of the discussions. The Governing Council, which met on Thursday, focused on the first nine months of next year for its quantitative-easing program and didn’t formally debate options for what to do after that, said the people, asking not to be named because the talks are private. While tapering would be possible, extending the program without changing the pace of purchases is also a credible option if inflation doesn’t show sufficient progress, one of them said. Whether to set a firm end-date on the bond-buying program has been a key sticking point for some officials.
The council agreed to cut monthly purchases in half, to €30 billion ($35 billion), and President Mario Draghi said that a “large majority” backed the decision to include a pledge to extend again if needed. He added that “it’s never been our view that things should stop suddenly.” The meeting came after governors were presented with several scenarios at a seminar on Wednesday, according to the people. Those included a reduction to 40 billion euros a month through June, and a 12-month tapering through December, similar to the Federal Reserve’s exit from its own program. The latter scenario wasn’t considered a realistic policy option, one of the people said. Governors also looked at a three-month scenario that would see buying after September tapered in monthly steps to 20 billion euros, 10 billion euros and 5 billion euros, another official said.
Since the beginning of the year, the Federal Reserve has been heavily discussing, warning rather, they were going to begin to “unwind” their gargantuan balance sheet. As Michael Lebowitz recently penned in his subscription-only article “Draining The Punchbowl:” “Since QE was first introduced, the S&P 500 has gained 1,546 points. All but 355 points were achieved during periods of QE. Of those remaining 355 points, over 80% occurred after Trump’s victory.” That is a pretty amazing set of stats. I have previously noted the high correlation of the financial markets relative to the ongoing liquidity operations of the Federal Reserve. I have updated that analysis to show the reduction in the balance according to the Fed’s proposed schedule.
While the market stumbled following the end of QE in the United States, global QE, as shown in the charts of the major global Central Banks picked up the slack.
But now, the ECB has already begun discussing their plans to begin cutting the amount of their QE program by half in the coming year. The hope, of course, by Central Bank officials is that global economies are now humming along at a pace strong enough to withstand the reduction of “emergency measures.” Of course, the real question is whether the Central Bank’s “measures” of economic strength are accurate. While there are certainly indicators such as GDP growth, production, and employment measures which suggests that global economies are indeed on a cyclical upswing, there are also numerous measures which suggest the opposite.
With the Fed trying to raise interest rates, and reduce the balance sheet simultaneously, the “tightening of monetary policy” is a drag on economic growth and ultimately the stock market. But as I stated above, while the Fed is currently “discussing” the reduction of their balance sheet beginning in October, they actually haven’t. In fact, just last week the Fed increased their balance sheet by over $13.5 billion dollars. No wonder the stock market shot higher.
The fastest monthly fall in high street sales since the height of the recession in 2009 has raised fears for the retail sector ahead of the crucial Christmas trading period. A survey by the the CBI found that 50% of retailers suffered declining sales in October while only 15% benefited from an increase, leaving a rounded balance of -36%, the lowest since March 2009. The business lobby group said the survey showed retailers were “feeling the pinch” from rising inflation, which has eaten into consumer incomes and squeezed profit margins. Uncertainty surrounding the outcome of the UK’s Brexit negotiations has also preyed on consumer confidence, which has declined sharply over the past 18 months and depressed spending. Figures estimating GDP growth in the third quarter showed the services sector holding up despite recent declines in wages adjusted for inflation.
However, the construction sector fell into recession. Rain Newton-Smith, the CBI chief economist, said: “While retail sales can be volatile from month to month, the steep drop in sales in October echoes other recent data pointing to a marked softening in consumer demand.” The gloomy CBI survey came as Debenhams warned of an “uncertain” environment on the high street in the run up to Christmas after suffering a 44% dive in profits. [..] Warm autumn weather and low consumer confidence in the wake of the Brexit vote have also combined to deliver a “grim” October, according to the John Lewis boss, Paula Nickolds, who revealed last week that shoppers are continuing to put off expensive household purchases. That comes after the UK retail sector recorded its lowest growth rate in four years for the three months to the end of September, according to official data.
Only 15% of MPs surveyed answered correctly when asked a true/false question on whether banks create money when they make loans. Almost two-thirds of the 50 MPs surveyed by Dods for campaign group Positive Money wrongly thought banks can’t create money, while a quarter admitted they didn’t know. In a far from stellar field Conservative MPs outperformed slightly “in this regard”, with 19% answering correctly, compared to only one in 20 Labour MPs. More than three-quarters of the MPs surveyed incorrectly believed that only the government has the ability to create new money. Some 23% knew this to be false, with Labour performing better than the Conservatives. The Bank of England has previously intervened to point out that most money in the UK begins as a bank loan.
In a 2014 article the Bank pointed out that “whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.” The perception of money creation has been complicated further by the unorthodox use of quantitative easing, in which the government creates money electronically, which is then used to buy financial assets. Fran Boait, executive director of Positive Money, said: “Despite their confidence in telling the public that there is ‘no magic money tree’ to pay for vital services, politicians themselves are shockingly ignorant of where money actually comes from. “There is in fact a ‘magic money tree’, but it’s in the hands of commercial banks, such as Barclays, HSBC and RBS, who create money whenever they make loans.”
Sometimes you have to love the naivety of the markets. At this week’s Communist Party Congress meeting in Beijing, the governor of the PBoC (People’s Bank of China) said the following; “If we are too optimistic when things go smoothly, tensions build up, which could lead to a sharp correction, what we call a ‘Minsky moment’. That’s what we should particularly defend against.” Yet instead of focusing on this dire warning, markets are busy trying to discount the chance of a Powell Fed or a Republican tax cut. Although both of these developments would be important, China is the tail that wags the dog. Full stop. Figure out China, and all the other financial market forecasts become that much easier. Some might argue this “Minsky moment” warning is nothing more than a Central Bank whistling in the wind.
Didn’t Greenspan caution about a similar concern with his “irrational exuberance” speech? And didn’t that end up being a complete non-event? Yet I would argue that China is not the same as other countries. Although there are market elements to their economy, to a large degree, China is still a command economy. If Chinese leadership wants a particular outcome, they can just demand it, and it will happen. So when the head of the PBoC warns about a “Minsky moment”, it’s probably not a good idea to load up on financial assets. For the longest time, China exported goods and imported developed nation debt and other financial assets. They had already started down the road of re-balancing their economy away from this export driven model, but this recent development confirms that the old playbook should be thrown out the window.
The global financial system is changing, and China is leading the way. Their moves will reverberate for years in the future. The Chinese authorities have just put up the warning flag, and you would be foolish to not believe it. This long term warning coincides with my belief that over the short term, the risks are all to the downside. I have been banging the drum on the fact that the Chinese government have done everything in their power to keep markets stabilized through their Communist Party Congress. They haven’t even hidden this fact. From the big sign above the Shenzhen Securities Exchange building that read “Use every effort to protect the stability of stock market for 20 days,” to the recent release that the Chinese government has asked firms to delay bad result during Congress, the message is clear.
Catalonia’s leader Carles Puigdemont on Thursday said he would not hold a new regional election to break the deadlock between Madrid and separatists wanting to split from Spain, sharpening a political crisis that could turn into direct confrontation. Puigdemont had been expected to announce an election to head off moves by Madrid to take direct control of the autonomous region in the next few days. But, speaking in the courtyard of the regional government headquarters in Barcelona, Puigdemont said the central government had not provided sufficient guarantees that holding an election would prevent the imposition of direct rule. “I was ready to call an election if guarantees were given. There is no guarantee that justifies calling an election today,” Puigdemont said.
He said it was now up to the Catalan parliament to move forward with a mandate to break from Spain following an independence referendum that took place on Oct. 1 – a vote which Madrid had declared illegal and tried to stop. Some independence supporters are pushing him to unilaterally declare independence. Late on Thursday, the regional government’s business head resigned over his opposition to a unilateral declaration, a sign of growing division in the separatist movement. Puigdemont’s stand sets the stage for the Spanish Senate on Friday to approve the take-over of Catalonia’s institutions and police, and give the government in Madrid the power to remove the Catalan president.
But this could spark confrontation on the streets as some independence supporters have promised to mount a campaign of civil disobedience. Spanish Deputy Prime Minister Soraya Saenz de Santamaria, speaking in a Senate committee, said: “The independence leaders have shown their true face – they have promised a dream but are performing tricks.” The aim of Article 155 – the constitutional trigger for direct rule – was to permit any election to take place in a normal and neutral situation, she said. The Spanish government has said it would call such a vote within six months of taking over Catalonia.
Calls for a boycott of Catalan food, cars and other goods, to punish the region for its separatist push, are worrying businesses who fear the economy will suffer. “You have to hit them where it hurts the most: the wallet,” a Twitter user wrote under the hashtag #boycottcatalanproducts. “We Spaniards who do not want Spain to be broken up… we can take action by adopting dissuasive steps of an economic nature,” reads a Facebook page calling for consumers to snub Catalan products. Appeals for a boycott have become more urgent since Catalonia’s separatist regional government held a banned independence referendum on October 1 in defiance of Spain’s central government and courts. The campaign targets Catalonia’s key agriculture and food sectors, with consumers urged to shun cava, a sparkling wine, Estrella Damm beer, as well as Vichy Catalan and Font Vella bottled water.
Medicines are also on the list to hurt Catalonia’s important pharmaceutical sector, as well as cars made by Seat, German carmaker Volkswagen’s Spanish unit in the region. Products made by foreign multinationals in Catalonia, including Nestle and Unilever, have also been swept up in the campaign. Mobile phone applications help consumers identify which products come from the rebel region. The impact of the boycott campaign is hard to measure to date. “We have had some clients who have bought less,” especially in Madrid, Rosa Rebula, a manager at cava producer Rosell i Formosa, told AFP. But she said the company will only be able to confirm the trend in November — a peak period for sales of cava ahead of the Christmas holiday season.
CIA/FBI got to Trump? They’ve had 50 years to redact docs, but need 6 months more? Best comment I read: A whole generation knows where they were when Kennedy was shot, except George HW Bush. Turns out he was in Dallas.
The US government released 2,800 documents on Thursday, but President Donald Trump delayed the release of others, saying he had “no choice” but to consider “national security, law enforcement and foreign affairs concerns” raised mostly by the FBI and CIA. One of the first interesting documents to be unearthed, as journalists, scholars and the public pored over them, was a memo written by director J Edgar Hoover that said the FBI had warning of a potential death threat to Oswald, who was then in police custody. “There is nothing further on the Oswald case except that he is dead,” Hoover wrote on 24 November 1963. “Last night we received a call in our Dallas office from a man talking in a calm voice and saying he was a member of a committee organized to kill Oswald.
[..] The files comprise almost the final 1% of records held by the federal government and their publication follows a release in July when the record-keepers, the National Archives, posted 3,801 documents online, mostly formerly released documents with previously redacted portions. An administration official told reporters on Thursday that the files that remain secret have information that “remains sensitive depending on its context”. Trump ordered the agencies to review those redactions over the course of six months, the official said, to ensure more documents reach the public. The next deadline for documents is 26 April 2018. According to the National Archives, 88% of records related to Kennedy’s murder were already fully open and another 11% released but partially redacted. In total, that makes for about 5m pages.
The newly released documents also reveal that Soviet Union leaders considered Oswald a “neurotic maniac who was disloyal to his own country and everything else”, according to an FBI memo documenting reactions in the USSR to the assassination. The Soviet officials feared a conspiracy was behind the death of Kennedy, perhaps organised by a rightwing coup or JFK’s successor Lyndon Johnson. They also feared a war in the aftermath of Kennedy’s death, according to the memo: “Our source further stated that Soviet officials were fearful that without leadership, some irresponsible general in the United States might launch a missile at the Soviet Union.”
Australia’s High Court ruled on Friday that Deputy Prime Minister Barnaby Joyce is ineligible to remain in parliament, a stunning decision that cost the government its one-seat parliamentary majority and forced a by-election. The Australian dollar fell a quarter of a U.S. cent after the unexpected decision. Australian Prime Minister Malcolm Turnbull said he accepted the court’s ruling, even though it was “clearly not the outcome we were hoping for”. Turnbull did not name a new deputy leader during a short news conference in Canberra soon after the court’s ruling. The Australian leader had been scheduled to travel to Israel on Saturday for a week-long visit but a spokesman for Turnbull told Reuters his departure has now been delayed. The spokesman said the new travel arrangements are still be finalised.
Turnbull’s center-right coalition is now in a precarious position. His Liberal Party is the senior party in a coalition with the smaller National Party, which Joyce led. He must now win the support of one of three independent lawmakers to keep his minority government afloat, with two sitting weeks of parliament left until it recesses for the year. At least two independent lawmakers have promised their support. Independent MP Bob Katter told Reuters he would support the government, but he may reconsider that if the coalition tried to block renewed efforts for a sweeping investigation into the scandal-ridden financial system. “I think we have the numbers for a commission into the banks and, if the government tries to block that, then I think we will get into murky waters,” Katter said. The opposition Labor Party immediately went on the attack and threatened to launch a legal challenge to every decision made by Joyce since last year’s election.
Shortly before she was sworn in as the new Prime Minister, Jacinda Ardern spoke to Checkpoint with John Campbell as she was on her way to Government House in a Crown car. She said she wants the new government to “feel different”, to be empathetic and kind. There was a significant part of her that was focused on the work that needed to be done, she said. “Once you’re there, get on with it.” She said she wanted the government to feel different. “I want it to feel like we are a government that’s truly focused on everybody. Perhaps I’m more acutely aware of that sense having now led a set of negotiations in our government that brings together a range of parties.
“I know I need to transcend politics in the way that I govern for this next term of Parliament but I also want this government to feel different, I want people to feel that it’s open, that it’s listening and that it’s going to bring kindness back. “I know that will sound curious but to me if people see they have an empathetic government I think they’ll truly understand that when we’re making hard calls that we’re doing it with the right focus in mind.” She said there were tough times during the coalition negotiations. “It’s not about just preserving people’s political careers. It’s not about power. It’s about being in a position to make a difference to people who need it most. “This will be a government that works with others. “There is a lot to do.” Asked if there was a central tenet to her approach to the new role, she said it was empathy.
“The old rule of thumb is that recessions come around every seven years..” But the old rule said nothing about QE. It talked about functioning markets, not what we see now.
The head of the US central bank is busy preparing America, its new president, and indeed the world, for rising interest rates – and for a new economic era. The story of US interest rates this decade is simple to the point of tedium. The key fed funds rate has been dragging along just above zero ever since the banking crash. In December 2015, it was nudged up by a quarter of a%age point by Ms Yellen and her colleagues at the Federal Reserve. A whole year later, they nudged it up again, which means that seven years after the notional end of the US recession it stands at mere 0.75%. That is set to change. Over the past few weeks, rate setters at the Fed have dropped broader and broader hints that interest rates will go up as soon as next Wednesday – and will keep going up.
Last Friday was the turn of Ms Yellen. Speaking in Chicago, she said: “We currently judge that it will be appropriate to gradually increase the federal funds rate if the economic data continue to come in about as we expect.” That is about as straightforward as you get in central-bank speak. Nor is that likely to be the end of the rises: according to the Fed’s charts, committee members now forecast three interest-rate rises this year alone, and more in 2018. There are geopolitical reasons to hold off making too early a move. Next month, France’s presidential election, in which rightwing, anti-euro candidate Marine Le Pen is leading the polls, kicks off. Last year, the Fed held off in June before the Brexit vote. While the timing is still moot, there are few betting that rates won’t rise.
Considering this, three observations can be made. First, even while all this briefing has been going on, US asset markets have remained remarkably buoyant. That is very different from the nerves exhibited by investors in US Treasury bonds in 2013, when Ms Yellen’s predecessor, Ben Bernanke, dared to suggest he might turn off the tap marked “easy money”. Even with a much more volatile figure in the White House, financial markets seem far more confident on the prospects for the US. Second, by raising rates now the Fed is giving itself vital room for manoeuvre ahead of the next downturn. The old rule of thumb is that recessions come around every seven years – which would mean, going by the National Bureau of Economic Research, that the next bust is not far away.
Make no mistake. Unlike most in the markets, I remain a secular bond bull and do not think this 35 year long bull bond market is over. I believe the US Fed has created another massive credit bubble that will, when it bursts, lay the global economy very low indeed. Combine this with the problems of a Chinese economy dependent on increasingly ineffective injections of credit to produce increasingly pedestrian GDP growth and you have a right global mess. The 2007/8 Global Financial Crisis will look like a soft-landing when the Fed blows this sucker sky high. The seeds for that debacle have already been sown with the Fed having presided over one of the biggest corporate credit bubbles in US history. All that is needed now is for the Fed to sprinkle life-giving rate hikes onto these, as yet dormant, seeds of destruction.
Accelerated Fed rate hikes will cause tremors in the Treasury bond markets, forcing rates up, most especially in the 2 year – just like 1994. But as yet another central bank-inspired global recession unfolds, I believe US 10y bond yields will ultimately converge with Japanese and European yields well below zero – in other words, buy 10y bonds on weakness! [..] For those few of us in the markets of a certain age, Orange County conjures up only one thing: 1994 goes down in infamy as one of the biggest ever bond market bloodbaths in history culminating at the end of the year with Orange County in California going bankrupt (younger clients in their late 20s will only know the OC as the mid-2000s teen programme based in Newport Beach, which I watched religiously with my then teenage son and daughter).
I remember the 1994 period as if it were yesterday (unlike yesterday itself). Despite the Fed telegraphing the series of rate hikes and market participants forecasting multiple hikes, it was most curious how the market went into total convulsion. I was chatting to my ‘similarly young’ colleague Kit Juckes about this and he reminded me that the whole yield curve gapped up some 50bp immediately! It was a bloodbath, especially for 2y paper.
Remember Nicole talking about multiple claims to underlying real wealth: “Our highly levered financial system is like a truckload of nitro glycerin on a bumpy road,” Gross says. “One mistake can set off a credit implosion where holders of stocks, high yield bonds, and yes, subprime mortgages all rush to the bank to claim its one and only dollar in the vault.”
Bill Gross has never been one to mince words – and his March investment outlook is no anomaly in his oeuvre of outspoken manifestos. In his latest investor letter, out Thursday morning, Janus Capital’s billionaire bond guru warns against putting too much faith in the market exuberance inspired by President Trump and his agenda. “‘Don’t lose it’ is my first and most important conceptual lesson for [my kids] despite the Trump bull market and the current ‘animal spirits’ that encourage risk, as opposed to the preservation of capital,” Gross writes. (Though more a matter of coincidence, the reference to animal spirits is a canny turn of phrase: JPMorgan chief Jamie Dimon said in an interview Thursday morning that business and consumer confidence has “skyrocketed” because Trump has “woken up the animal spirits.”)
Gross goes on: “Don’t be allured by the Trump mirage of 3-4% growth and the magical benefits of tax cuts and deregulation. The U.S. and indeed the global economy is walking a fine line due to increasing leverage and the potential for too high (or too low) interest rates to wreak havoc on an increasingly stressed financial system. Be more concerned about the return of your money than the return on your money in 2017 and beyond.” This not the first time Gross has gone after Trump: he levied criticism in November (“I write in amazed, almost amused bewilderment at what American voters have done to themselves,” he said at the time) and again in December (“investors must consider the negatives of Trump’s anti-globalization ideas”). But the rationale in his latest investor letter is different from his prior notes, centering less on Trump’s policies and more on the global credit situation.
The world economy, Gross says, currently holds more credit relative to GDP than it did at the beginning of the 2008 financial crisis. In the U.S., credit is 350% of annual GDP, “and the ratio is rising,” he says. In China, that ratio sits close to 300%. Gross acknowledges that capitalism depends on credit expansion, but says that credit creation has its limits, and interest rates must be carefully monitored so that borrowers can repay their debts. But if rates are too low, “the system breaks down,” because savers and pension funds can’t earn a high enough rate of return to service those debts. “Our highly levered financial system is like a truckload of nitro glycerin on a bumpy road,” Gross says. “One mistake can set off a credit implosion where holders of stocks, high yield bonds, and yes, subprime mortgages all rush to the bank to claim its one and only dollar in the vault.”
The US cognitive linguist George Lakoff characterises politics as a clash between two opposing models of parenting. Rightwingers subscribe to the strict, responsible parent with a firm grip on the purse strings, while leftwingers prefer the nurturing, providing version. Everyone is currently in thrall to the strict-parent model. Politicians and supposedly impartial broadcasters are constantly noting that, of course, “times are tight”. The beneficent state is a luxury we can no longer afford. “We can’t go back to 1945,” government ministers intone wearily, as if explaining to a child, before blithely announcing a return to other mid-century relics – such as grammar schools. Despite being thoroughly discredited by economists, and despite Theresa May’s promised investment programme, the zombie creed of austerity staggers on.
On what basis, exactly, do we live in straitened times? Yes, there’s the cost and uncertainty of Brexit. But a year or two ago, it was something else – the fallout from the recession, or turbulence in the eurozone. This is opportunistic shock doctrine stuff, where any bungling failure or general sense of global adversity can lend partisan political choices the air of necessity. The annual ritual of the budget reanimates the pernicious myth that the economy is like a household budget. Since we have our own currency, we actually enjoy capacious fiscal elasticity. The “strict” parent is really a mean parent. The “fairer funding formula”, by which the government is proposing to take money from some schools to give to supposedly more deserving ones, is a pointless zero-sum game. Instead of making children fight over measly slivers of cake, why not just bake a bigger one?
There are extraordinary funds in private hands, if only we conceived of them as part of our common wealth. A report last week by property consultants Knight Frank predicted that the number of UK-based ultra-high-net-worth individuals (those with more than £24m in assets) will rise by 30% over the next decade. There is more than £10trn squirrelled away in the UK. The NHS costs £110bn a year; total government spending on education is £85bn a year. We are being schooled in an extraordinary cognitive dissonance, with luxury housing developments springing up in plain sight across the capital. If you question the basis on which we deem these evident riches untouchable, you are dismissed as hopelessly naive. There’s something doubly infantilising about this reaction: aren’t you aware that belts need to be tightened? And don’t you know the difference between public and private money?
The U.S. government must get a grip on the massive opening that the CIA, through its misfeasance, nonfeasance and malfeasance, has created. If Tuesday’s WikiLeaks document dump is authentic, as it appears to be, then the agency left open electronic gateways that make all Americans vulnerable to spying, eavesdropping and technological manipulation that could bring genuine harm. That the CIA has reached into the lives of all Americans through its wholesale gathering of the nation’s “haystack” of information has already been reported. It is bad enough that the government spies on its own people. It is equally bad that the CIA, through its incompetence, has opened the cyberdoor to anyone with the technological skills and connections to spy on anyone else.
The constant erosion of privacy at the hands of the government and corporations has annihilated the concept of a “right to privacy,” which is embedded in the rationale of the First, Third, Fourth, Ninth and Fourteenth Amendments to the U.S. Constitution. It is becoming increasingly clear that we are sliding down the slippery slope toward totalitarianism, where private lives do not exist. We have entered a condition of constitutional crisis that requires a full-throated response from the American people. I have repeatedly warned about the dangers of the Patriot Act and its successive iterations, the execrable national security letters that turn every FBI agent into a star chamberlain, the dangers of fear-based security policies eroding our republic. We have crossed the threshold of a cowardly new world, and it’s time we tell the government and the corporations who have intruded to stop it.
WikiLeaks founder Julian Assange on Thursday accused the CIA of “devastating incompetence” for failing to protect its hacking secrets and said he would work with tech companies to develop fixes for them. “This is a historic act of devastating incompetence, to have created such an arsenal and then stored it all in one place,” Assange said. “It is impossible to keep effective control of cyber weapons… If you build them, eventually you will lose them,” Assange said. Assange was speaking in a press conference streamed live from Ecuador’s embassy in London, where he has been living as a fugitive from justice since 2012. He said his anti-secrecy website had “a lot more information” about the Central Intelligence Agency’s hacking operation but would hold off on publishing it until WikiLeaks had spoken to tech manufacturers.
“We have decided to work with them to give them some exclusive access to the additional technical details we have so fixes can be developed and then pushed out. “Once this material is effectively disarmed by us we will publish additional details about what has been occurring,” he added. [..] WikiLeaks itself said the documents, hacking tools and code came from an archive that had circulated among US government hackers and private contractors. “The CIA has been so careless to produce this material. So do various cyber mafia already have it? Do foreign intelligence agencies already have it? It’s quite possible numerous people already might have it,” Assange said.
China expressed concern on Thursday over revelations in a trove of data released by Wikileaks purporting to show that the CIA can hack all manner of devices, including those made by Chinese companies. Dozens of firms rushed to contain the damage from possible security weak points following the anti-secrecy organization’s revelations, although some said they needed more details of what the U.S. intelligence agency was up to. Widely-used routers from Silicon Valley-based Cisco were listed as targets, as were those supplied by Chinese vendors Huawei and ZTE and Taiwan supplier Zyxel for their devices used in China and Pakistan.
Chinese Foreign Ministry spokesman Geng Shuang said China expressed concern about the reports and reiterated its opposition to all forms of hacking. “We urge the U.S. side to stop listening in, monitoring, stealing secrets and internet hacking against China and other countries,” Geng told a daily news briefing. China is frequently accused by the United States and other countries of hacking attacks, which it always denies. The Chinese government has its own sophisticated domestic surveillance program and keeps tight control of the internet at home, saying such measures are needed to protect national security and maintain stability.
Unfortunately it was only in hindsight that Truman came to see the “Iron Law of Oligarchy” at work, which posits that all organizations – particularly government bureaucracies – eventually fall under the control of an elite few. That elite, he came to understand, did not include the president or his cabinet:
Truman: I think [creation of the CIA] was a mistake. And if I’d know what was going to happen, I never would have done it. [..] But it got out of hand. The fella … the one that was in the White House after me never paid any attention to it, and it got out of hand. Why, they’ve got an organization over there in Virginia now that is practically the equal of the Pentagon in many ways. And I think I’ve told you, one Pentagon is one too many. Now, as nearly as I can make out, those fellows in the CIA don’t just report on wars and the like, they go out and make their own, and there’s nobody to keep track of what they’re up to. They spend billions of dollars on stirring up trouble so they’ll have something to report on. They’ve become … it’s become a government all of its own and all secret. They don’t have to account to anybody.
That’s a very dangerous thing in a democratic society, and it’s got to be put a stop to. The people have got a right to know what those birds are up to. And if I was back in the White House, people would know. You see, the way a free government works, there’s got to be a housecleaning every now and again, and I don’t care what branch of the government is involved. Somebody has to keep an eye on things. And when you can’t do any housecleaning because everything that goes on is a damn secret, why, then we’re on our way to something the Founding Fathers didn’t have in mind. Secrecy and a free, democratic government don’t mix. And if what happened at the Bay of Pigs doesn’t prove that, I don’t know what does. You have got to keep an eye on the military at all times, and it doesn’t matter whether it’s the birds in the Pentagon or the birds in the CIA.
“..by the time he was assassinated, Kennedy was at full war against the U.S. national-security establishment. He was challenging all of their Cold War assumptions. He was proposing peaceful coexistence with what the CIA and the military had said was an implacable foe that was determined to take over America. And he was doing the unthinkable — making friends with the Soviet Union (i.e., Russia), Cuba, and the communist world.”
Kennedy came into office as a standard cold warrior. That is, like most Americans in the 1950s and 1960s, he had bought into the notion that had been inculcated into the American people since the end of World War II — that America’s wartime partner and ally, the Soviet Union (i.e., Russia), was coming to get us and subject the American people to communism. To combat what was billed as an international communist conspiracy based in Moscow, Americans were told, it would be necessary to adopt the same type of governmental structure that existed in Russia — a national-security apparatus grafted onto America’s original limited-government structure that had been established by the Constitution. That apparatus included a giant, permanent, and ever-growing military establishment, or what President Eisenhower would later call “the military-industrial complex.”
It also consisted of a secretive agency called the CIA, which would come to wield omnipotent powers within what continued to be billed as a “limited government.” Such powers would include assassination, regime-change operations, foreign coups, kidnapping, torture, rendition, involuntary medical experimentation (e.g., MKULTRA), spying and surveillance of Americans — the types of things that characterized the KGB and even the Hitler’s Gestapo. Kennedy believed in this apparatus. Even though it had been adopted without a constitutional amendment, he believed it was necessary to keep America free and safe from the Reds, who, it was said, were coming to get us. He experienced his first dose of reality a few months after being sworn into office, when the CIA presented its secret plan to invade Cuba and effect regime change there.
The plan called for using CIA-trained Cuban exiles to do the invading, with the U.S. government denying any role in the operation. Kennedy’s job, under the CIA plan, would be to lie about U.S. involvement in the invasion, thereby making him America’s liar-in-chief (and indirectly subjecting him to blackmail by the CIA). The CIA assured Kennedy that the invasion could succeed without U.S. air support, and JFK made it clear that no air support would be furnished. The CIA lied. In fact, they knew that there was no way that the operation could succeed without air support. But they figured that once the invasion got underway, Kennedy would have no effective choice but to change his mind and provide the needed air support. It was a classic CIA set up of a newly elected president.
When the invasion started to fail, the CIA urged the president to change his mind. He refused to do so, and the invasion force was easily defeated. The CIA considered Kennedy’s action to be a grave betrayal of America and the CIA’s Cuban “freedom fighters.” Kennedy publicly took responsibility for the debacle but privately he was outraged. He knew that the CIA had set him up, with the aim of maneuvering him into intervening with air support. He fired the much-revered and much-respected CIA Director Allen Dulles (who, in a classic conflict of interest, would later be appointed to the Warren Commission). Reflecting his disdain for the CIA, Kennedy promised to “splinter the CIA into a thousand pieces and scatter it to the winds.”
China lashed out at the United States for its “terrible human rights problems” in a report on Thursday, adding to recent international criticism of Washington on issues ranging from violence inflicted on minorities to U.S. immigration policies. The U.S. State Department’s annual report on rights in nearly 200 countries last week accused China of torture, executions without due process, repression of political rights and persecution of ethnic minorities, among other issues. In an annual Chinese response to the U.S. report, China’s State Council, or cabinet, said the United States suffered from rampant gun violence and high levels of incarceration. U.S. airstrikes in Iraq and Syria had caused thousands of civilian deaths, according to the report, which was carried by the state-run Xinhua news agency.
“With the gunshots lingering in people’s ears behind the Statue of Liberty, worsening racial discrimination and the election farce dominated by money politics, the self-proclaimed human rights defender has exposed its human rights ‘myth’ with its own deeds,” the State Council said. “The United States repeatedly trampled on human rights in other countries and wilfully slaughtered innocent victims,” it said, referring to deaths in U.S. drone strikes. On Wednesday, the U.N. High Commissioner for Human Rights, Zeid Ra’ad al-Hussein, said U.S. President Donald Trump’s comments about migrants, Mexicans and Muslims were “harmful and fuel xenophobic abuses” and that his immigration policies could lead to breaches of international law. Trump’s derogatory campaign rhetoric against Muslims and Mexican immigrants won enthusiastic backing from prominent white supremacists who embrace anti-Jewish, anti-black and anti-Muslim ideologies, though the president has disavowed their support.
One way to gauge China’s longer term intentions is to assess what Chinese leaders are saying today. President Xi Jinping has articulated a vision for China over the next few decades. This vision has been termed the “Chinese Dream” or the “great rejuvenation of the Chinese nation.” These slogans capture goals, milestones, and timelines. In terms of timeframe, the Chinese refer to the “two one hundreds”: i) the centenary of the founding of the Chinese Communist Party in 2021; and ii) the centenary of the founding of the People’s Republic of China in 2049. By 2021 China hopes to become what the Chinese call a “moderately well-off society.” By mid-century China hopes to be on par with other developed countries.
Most measures for tracking China’s progress are socio-economic in nature: disposable income, socioeconomic equality, access to higher education, access to healthcare and so forth. To achieve these objectives, China still hews to the basic principle laid out by paramount leader Deng Xiaoping, namely, peace and development. The concept of peace and development derives from the notion that China needs a peaceful external environment to develop economically. But there are also external components to China’s long term goals, particularly China’s relations with the rest of the world. President Xi Jinping offers some hints. He has discussed the prospects for “democratizing” the international system. This is code for a transition from a unipolar world dominated by the United States to a multipolar world.
As China rises, China envisions the emergence of a new global configuration in which China is a great power among other coequal great powers, including the European Union, India, and Russia, in the international system. This aligns with the “rise of the rest” hypothesis. As China gets very strong, it would also seek to amend the rules that have governed the current international order in ways that accommodates China’s interests as a great power. China’s rise thus raises a series of important questions about the implications for Asia. What does China want in East Asia as it rises? Would China seek to become the dominant power in East Asia? Would it seek a dramatically reduced role for the United States? More troubling, would China seek a Sino-centric regional order in which many of its neighbors, including Japan, must acquiesce to its strategic prerogatives?
“..German industrial new orders dropping by 7.4% on the month in January – the biggest monthly fall since 2009 [..] January figures showed a drop of 10.5% in domestic demand and a contraction of 4.9% in foreign orders.”
Germany is often described as the “powerhouse” of Europe, but the health of the world’s fourth largest economy is not as rosy as most people think, according to one economist. “The crack in Germany’s economy has become most evident in consumer spending. Retail sales volumes have slowed consistently since growth rates peaked in mid-2015. They have crashed in the last six monthly reports,” Carl Weinberg, chief economist at High Frequency Economics, said in a note earlier this week. Hard data shows that Germany’s economy has been facing problems for at least the past six months, despite an uptick in growth at the end of last year. At the same time, income has been slowing dramatically and the reasons behind this are far from clear.
“As domestic demand is imploding, so is foreign demand,” Weinberg added. “Exports are flat year-on-year. This is not to say that net exports are not rising. However, the flat gross exports mean industrial output to make goods for export is not growing.” “Without growth of either exports or domestic consumer spending, industrial production has stalled,” Weinberg said. On Tuesday, data showed German industrial new orders dropping by 7.4% on the month in January – the biggest monthly fall since 2009. According to Reuters, a breakdown of the January figures showed a drop of 10.5% in domestic demand and a contraction of 4.9% in foreign orders.
In this episode of the Keiser Report, Max and Stacy discuss why neoliberalism didn’t make us richer. In the second half, Max interviews professor Steve Keen about Quantitative easing (QE) and its role in financial crisis.
Home prices in 31% of the U.K.’s local authority districts have risen more than the total average take-home pay of workers in the area over the past two years, according to Halifax. While homeowners would have to sell their houses to realize those gains, it illustrates how quickly prices have risen, as well as how hard it is for new buyers to get on the property ladder. Rising house prices have helped underpin consumption, the backbone of Britain’s economy, even as wage increases have been more modest. Still, the distribution of gains highlight regional disparities. More than 90% of the areas were in London, the South and East of England, the report published Friday said.
The biggest gap was in Haringey, a borough in the north of the capital city, where house prices increased by an average of 139,803 pounds ($169,805), exceeding average take-home earnings by 91,450 pounds or 3,810 pounds per month. “While it’s no longer unusual for houses to ‘earn’ more than the people living in them in some places, there are clearly local impacts,” said economist Martin Ellis. “Homeowners in these areas can build up large levels of equity quickly, but for potential buyers whose wages have failed to keep pace, the cost of buying a home has become more unaffordable.” The only areas where earnings exceeded house price increases were the North East, Scotland and Northern Ireland.
Donald Tusk has won a second term as European council president, overcoming bitter opposition from Poland that has left the country isolated in Europe. Tusk, a former Polish prime minister, was re-elected on Thursday with overwhelming support to lead the council, the body that organises EU leaders’ meetings, for a second term lasting two and a half years. His reappointment until the end of 2019 means he will play a crucial role in Britain’s negotiations to leave the EU. The Pole, from the pro-European centre-right Civic Platform party, overcame strong resistance from his own government, led by the Eurosceptic Law and Justice party (PiS). The outcome was never in doubt, but is a blow for the Warsaw government, which responded with fury. “We know now that it [the EU] is a union under Berlin’s diktat,” the Polish foreign minister, Witold Waszczykowski, told Polish media, echoing persistent claims by PiS that the EU is controlled by Berlin.
Despite its anger, however, Poland was left isolated as other countries including traditional central European allies lined up to back Tusk, a popular choice to guide the EU through difficult Brexit talks and tense debates on migration. News of his re-election was broken by Belgium’s prime minister, Charles Michel, who tweeted his congratulations less than two hours after the meeting had started. In a rare formal vote, 27 of the EU’s 28 governments supported Tusk. The Polish prime minister, Beata Szydlo, confirmed that Poland would retaliate by blocking the EU summit communique, a statement summarising EU policy on economic growth, migration and the western Balkans. But the document can still be approved in a different procedure, a manoeuvre likely to deepen the wedge between Warsaw and other EU capitals.
Around one in six U.K. households had “great difficulty” or “difficulty” in making ends meet in 2015, according to Eurostat. While that’s below the estimated average of 26% across the European Union, it’s more than triple the proportion of struggling Swedes and about double the%age in Germany. With inflation forecast to accelerate this year and grocers such as Wm Morrison Supermarkets Plc warning price increases will soon hit, British consumers look set to face a further squeeze on living standards this year.
Obviously, like hopefully many people, I’ve been following the WikiLeaks CIA revelations, and closely. It’s too early for too many conclusions, if only because WikiLeaks has announced much more will flow from that same pipeline. But one thing is already clear: the CIA is -still- a club that sees enemies behind every tree, and behind every TV set too. Which is not as obvious a world view as it may seem; it’s just something we’ve become used to.
Moreover, as we see time and again, organizations like the CIA and NATO have no qualms about ‘creating’ enemies if they are in short supply. The flavor du jour has now been, for years, Russia, but don’t be surprised if another one is cultivated alongside it. ISIS, China, North Korea, plenty of options, and plenty of media more than willing to aid the cultivation process. It’s a well-oiled machine geared towards making something out of nothing, a machine very adept at making you believe anything it wants you to.
In this way, our friends can become our enemies, and our enemies our friends. What gets lost in translation is that this way in reality we become our own worst enemies. While the upper and most secretive layers of society, filled with folk of questionable psychological constitution -sociopaths and psychopaths-, get to chase their dreams of wealth and power, those who try to live normal decent lives are, for that very purpose, increasingly subjected to poverty, misery and fear. As our economies decline further, this will only get worse.
Who needs your -conscious- vote or voice if these can be easily manipulated? Or do you not think you’re being manipulated? How many of you, American or European, think Russia is an actual threat to you? I’m afraid by now there’s a majority on each continent who perceive Putin as an evil force. The president of a country that spends one-tenth on its military of what the US does. Trump’s announced military spending increase alone is almost as much as Russia spends in a whole year.
If Putin is really the threat he’s made out to be, to both Europe and the US, he must be extremely smart; merely devious wouldn’t do it. A man who can be an active threat to two entire continents and almost a billion people while spending a fraction on building that threat of what those he threatens do, must be a genius. Or the victim of media-politico manipulation.
But we don’t stop there. As the CIA spying and hacking files once again make abundantly clear, America increasingly seeks its enemies at home. This may be presented in the shape of Donald Trump, or terrorists on US soil, imported or not, but claiming that we can still tell a real threat from an invented one is no longer credible. We are led along on a propaganda leash 24/7, and the best thing about it is we believe we are not. That’s why it’s a good idea to pay close attention to what WikiLeaks is telling us.
The most extreme example of the political machinery turning our friends into enemies is probably right there, in the WikiLeaks and whistleblower corner of society. Earlier today I wrote:
The CIA spent a huge wad of taxpayer money on this, and then lost it all. It’s early days to say what this will mean for the agency’s abilities, and the nation’s safety, as well as that of American citizens, but it’s not good. Question is: who’s going to investigate how this could have happened? (Snowden and Kim Dotcom could)… And who’s going to repair the damage done? Anyone could be spying on your phone and your TV by now, not just the CIA -as if that wouldn’t be bad enough.
Then later I saw I wasn’t the only one who had thought of this:
Edward Snowden and Kim Dotcom and Julian Assange and Chelsea Manning are ‘the enemy’, so say our ‘leaders’. They have received this honorable label for exposing secrets these same leaders were trying to hide from us. Secrets most of us, if we think it over, would say should not be kept from us. The NSA spying on the American people, or the CIA turning your phones and TVs and cars into objects that can be used against you, these are things that don’t belong in our societies.
Still, as I’ve always said, if they can do it -from a technical point of view-, they will, damn the law. So we will have to make very sure the laws keep up with these developments, or we’re defenseless. The Obama administration hasn’t been much help with this, and the rest of Washington won’t be either, they’re not just part of the machine, they are the engine that drives the machine. Obama allegedly gave in to the CIA for fear of ending up like JFK and the rest, along with the press, is under control too.
So perhaps Trump is our best chance at putting a stop to this coup, this deep state, from taking over. If we still can. And for that we might well need Snowden and Dotcom and Assange, who are not the enemies they are made out to be, they are the smartest among us, or at least they belong right up there. And they are not only the smartest, they are the bravest too. Locking them up would be a huge disservice to our societies, it would be much better to ask them to help us figure out what game the hell is being played.
One thing the WikiLeaks files accomplished is they made and and all accusations of Russian hacking, and of links between Trump and Russia, utterly meaningless in one fell swoop. Because the CIA has acquired the capability, both through hacking Russian files and through coding, to leave ‘footprints’ that make it look like the Russians left them. And the only ‘proof’ there ever was for all these accusations was based on these footprints. That’s one narrative that must now be restarted from scratch -just one of many.
All we need now is for Trump to figure out who his enemies are, and who his friends. He already knows the CIA is not his friend, but has he figured out yet that the whistleblowers are not his enemy? And has his crew? Kim Dotcom is right, Trump is in real danger, he’s been watched, and being watched, 24/7. Whether Obama ordered that or not is not very relevant. There are more urgent matters at hand.
And somewhere along the way he’s going to have to figure out that chasing women and children around the country and out of it is not just ugly, it’ll cost him too much sympathy too. But so far all protests come from the Democrats and their supporters, who have all been left voiceless and shapeless by the election and now see their Russian conspiracy narratives blown to smithereens too, so why wouldn’t he please his own voters for a bit longer?
Well, for one thing, because he has to start to realize he’s going to need very broad support, and soon, be a president for all Americans so to speak, to fend off the CIA et al, and in what may be the hardest thing to do, he needs to invoke transparency, explain to people exactly what he does, and why, to drain the deep swamp.
If he fails in all this, and for now the odds point in that direction, those who protest him today will feel validated, right, and winners. They will be tragically wrong. Because if Trump loses this, the CIA wins. And then we will all live in 1984 for as far into the future as we can see.
I know there’s a lot that’s not to like about Trump and Bannon and all those guys. However, look at it this way: they are the only ones who can keep the doors of the vault from slamming shut for the rest of our lives, leaving time for y’all to wake up and find a president who doesn’t seek to turn your friends into your enemies. At least you’ll still have that choice.
With present-day Washington, Democrat or Republican, there’s no such choice. They’re CIA, as are the media. Kim Dotcom tweeted this too today:
Let’s see. On February 18, I wrote an essay called “Not Nearly Enough Growth To Keep Growing”, in which I said “..the Automatic Earth has said for many years that the peak of our wealth was sometime in the 1970’s or even late 1960’s”.
That provoked a wonderfully written reaction from long-time Automatic Earth reader Ken Latta, which I published on February 23 as “When Was America’s Peak Wealth?”. Ken put peak wealth sometime in the late ’50s to early 60’s. As I said then, I really liked his definition of ‘wealth’ as being “best measured by the capacity to be utterly wasteful”. The article spawned a series of nice comments, for some reason largely by people in his age bracket (Ken’s 73).
Which is nice, but it poses as many questions as it provides answers. Like: why does the Automatic Earth have so many ‘older’ readers? Should that be a reason for worry? And also: why don’t the young react in equal numbers? Don’t younger Americans have as many ideas as the generation(s) before them about when America’s peak wealth might have occurred?
Must one have been an eye-witness to the decline to know that it happened? Do only old farts ponder these things? Are there lessons to be learned, be they personal or history-wide? Interesting, all of it, if you ask me. Do younger people not acknowledge that peak wealth is behind us, and perhaps occurred before they were even born? Me, I like history lessons, and Ken’s for sure.
Tomorrow, I’ll have another take on all this written by Charles A. Hall, Emeritus Professor at State University of New York College of Environmental Science and Forestry, Syracuse. Charlie thinks neither Ken nor myself have given nearly enough attention to the role energy plays in wealth, and the peak thereof.
But first, here’s Ken Latta’s response to the comments on his article.
Ken Latta: The responses to my article on peak wealth were so thought-provoking that a follow-up article seemed appropriate. You can’t cover the history of the world in one blog post and I appreciate the additional ideas from the commentariat.
John Day: I remember 1969 as better than 1970. That first moon landing was a real high point for all of us. Everybody thought 1971 sucked. Things were different after November 1963. LBJ was a “sonofabitch”, as he put it. It’s hard to nail a year down, but after we lost our president, things were never the same.
John Day: Reminded us of a substantial breaking point the assassination of John Kennedy represented to the flow of history. But, history has its own problems. The finer details are oh so often swamped by a popular narrative. JFK was way more beloved dead than alive. Like Trump he could draw big crowds, but he very narrowly beat Nixon. Detractors favored referring to him as weak on foreign affairs.
I clearly recall were I was when the news came in about him being shot in Dallas. I was hanging out with some of my squadron mates in our team office when our Captain came by to inform us. He was African-American and clearly disturbed by it. It was much less concerning to the enlisted ranks. He had not been popular with most of us. It was a divided nation even then. I think his mourners should not forget that JFK presided over the early stages of the Viet-Nam adventure. With Green Berets and meddling in the South Viet-Nam government’s affairs, as is our custom.
It was just another case of his bad luck really. The American War on Viet-Nam could have happened to Eisenhower. My older brother was staged in a Korean Port waiting for orders to board a troop ship for transport to what was then still usually known as French Indo-China to support the French Army in their losing battle against the Viet Minh. But, Ike was a fairly sensible man and called it off.
V. Arnold: Wow, great thread. I’m 72 and was there also; I remember it pretty much as you tell it. I’d agree with your time-line also as to when peak wealth occurred. The beginning of the downturn was very late in the 50’s/early 60’s with our war in Vietnam and then; Nixon going off the gold standard. That allowed the next chapter of crony capitalism.
I attribute an accelerating deterioration to Friedman and his Chicago School of Economics and the age of the neo-liberal. Don’t forget Reagan; I felt the effects of his union busting first hand with stagnant wages until I retired over seas in 2007. I hope to read more of your writings from time to time. Cheers.
V. Arnold: Wrote very derogatory words about Uncle Miltie Friedman and the Chicago School of Terror. For that I salute him or her. Hell is too good for Milton and his apostles.
Forget Reagan? Not as long as I live. I also remember where I was when he was declared the next president. Sitting in the nicest bar in the little mountain town of Boulder Creek, Ca, nursing a drink. The bar was crowded and broke into loud celebration at the news. All I could think of was how f**king doomed we were. How I wish I had been wrong.
Hotrod: Thank you for your thought provoking article. I sometimes look at the health of the surviving car companies after WWII as a bellwether to the shape of the economy. Hudson, Nash, Studebaker, Packard all were struggling mightily by the mid 50’s. For the farming community the peak was about 1952. After the post war demand had been met, and greatly exceeded, farming declined into a real recession during the middle and late 50’s and never was quite the same.
Since then, machinery and technology, mostly purchased on credit, has kept production up and prices down for farmers, typically at or below the cost of production. Many of these labor saving and production enhancing tools stand unused, but are still being paid for. The only exception to this situation is massive drought, or massive flooding which can temporarily insert profitability to those not affected.
Hotrod: Reminisced on the tribulations of many car makers [Hudson, Nash, Studebaker, Packard], some of them long established, in the early 1950’s. I remember that too. I think a substantial part of their problems probably stemmed from not having enough dealerships. People were traveling more and wanted reassurance that a dealer with parts and experienced mechanics would be available in the next town. I think it actually surprising that those companies lasted as long as they did. Actually Nash and I think it was Packard merged to become American Motors and lasted another three decades.
He (my assumption) also mentioned farming and its trials. Farming is not the easy route to riches. The compensation has always been that if you hadn’t pledged your feal to the Lord of a Manor or signed up to be a share cropper, you were your own boss.
The late 40’s thru early 50’s were pretty good on our farm. When I was a little tike, we had an already ancient Macormick-Deering 10-20 tractor and a team of draught horses. My eldest brother having been told of his tour of northern and central Europe under the guidance of a man named Patton, wrote to dad asking him to take the money he had been sending home and buy a new tractor. All dad could find at a local dealer was a Minneapolis-Moline as they were about the only company allowed to build tractors during the war.
Many of them were shipped to England to help the British increase their food production. That was the only brand new tractor our family has ever owned right up to this day. My nephew still has it, but it’s in bits and pieces now. By around 1950 we were fully mechanised. Shortly after dad died in 1959, my brother rented out the land got himself a factory job. The prices of equipment steadily increased. The value of crops did not.
Crop prices did increase substantially about a decade ago, but not nearly enough to pay for new equipment unless you operated a very large farm. And more recently crops have declined in value again. I think a lot of farmers are in trouble.
Patricia: I am worried. Everybody who comments here is in their 70s as I am. Is that because we have more time to reflect and write down our thoughts or is it because the youth of today aren’t interested in anything except Facebook? If that is the case then I am so glad I am at the end of my life but what about my darling grandchildren.
Patricia: Expressed concern over whether the prevalence here of geezers was due to us having too much time on our hands or the youth having no time for anything except Facebook. Based on my own family, I can say that their devotion to Facebook is tempered by addiction to gaming. I mean video not casino. I think we can say that Patricia is right on both counts.
I too feel a certain gratitude for having been born during the war years with the expectation that I may be expired before the ordure collides with the air circulator. We oldies do have a psychological quandary with regard to our descendants. Knowing as we do that it’s coming. I too have grandchildren and a great grandchild. I desperately wanted to make them aware and try to offer some guidance.
What I learned was that they are at least vaguely aware of the looming threats and don’t want to hear more about it. They know there isn’t really much they can do about it. I think they believe that when it happens they will just do what they can to deal with it. All things considered (apologies to the Canadian Broadcasting Corporation, I wonder if that program is still on) that is probably about the best attitude any of us can have.
What bothers me most about our youth is what they don’t seem to know. I’m talking about the kinds of knowledge that will likely be very useful when things get stinky. Larding debt onto the kids so they could go to college and learn computer science, physics, art history and how to be a social justice warrior was probably to their detriment.
I don’t exactly know what would be absolutely best for them to know, but I’m pretty sure it isn’t those kinds of things. I tend to believe that it will be good to know, as examples, how to shoot, how to fish, how to tell the difference between weeds and food, how to loosen rusted bolts and how to turn hemp into rope in addition to dope.
Donald Trump has issued a video outlining his policy plans for his first 100 days in office and vowing to issue a note of intent to withdraw from the Trans-Pacific Partnership “from day one”. In the brief clip posted to YouTube on Monday, the president-elect said that “our transition team is working very smoothly, efficiently, and effectively”, contradicting a wealth of media reports telling of chaos in Trump Tower as Trump struggles to build a team. He said that he was going to issue a note of intent to withdraw from the TPP trade deal, calling it “a potential disaster for our country”. Instead he said he would “negotiate fair bilateral trade deals that bring jobs and industry back”.
Hours before Trump’s announcement, Japan’s prime minister, Shinzo Abe, warned that the TPP would be “meaningless” without US participation. Speaking to reporters in Buenos Aires on Monday, Abe conceded that other TPP countries had not discussed how to rescue the agreement if Trump carried out his promise to withdraw. Abe, a vocal supporter of the 12-nation agreement, appears to have failed in his recent attempts to coax Trump out of his “America first”, protectionism. The TPP, which excludes China, is thought to have been high on Abe’s agenda when he became the first foreign leader to meet the president-elect in New York last week.
While details of their 90-minute meeting have not been released, Abe would have used the time to try to persuade Trump to go back on his campaign threat to pull the US out of TPP on day one of his presidency. “The TPP would be meaningless without the United States,” Abe said, after Japan and other TPP countries had discussed the agreement on the sidelines of the Apec summit in Lima at the weekend. He added that the pact could not be renegotiated. “This would disturb the fundamental balance of benefits,” he said.
Dollar liquidity is under severe strain. There’s only one reserve currency. And letting this push up the value of the USD without limit will hurt the US in the end.
As Donald Trump threatens to turn away from the rest of the world, the Fed will find itself under increasing pressure to extend a helping hand outwards. That’s the prognosis from Credit Suisse Director of U.S. Economics Zoltan Pozsar, who contends that the U.S. central bank needs to take a much more activist approach to ensuring adequate availability of the world’s reserve currency in light of recent regulatory changes that have raised bank funding costs and constrained sources of dollar funding. The liquidity financial institutions can draw upon has been drained by new rules that require banks to hold vast buffers of easy-to-sell assets, on the one hand, and a larger-than-expected exodus from prime money-market funds linked to financial reforms implemented in October, on the other.
That’s induced a pick-up in bank funding costs that looks to be permanent, the analyst said. That means that when foreign banks need dollars, they’re increasingly forced to procure them through currency swaps from U.S. banks and asset managers — who are themselves balance-sheet constrained. The cost of converting local currency payments in euros and yen into dollars is now at its most expensive since 2012, as implied by persistently negative cross-currency basis swap rates. The net result is an “existential trilemma” for the Federal Reserve, as it is forced to choose between two of the following three objectives: shoring up banks’ balance sheets, stabilizing costs for onshore and offshore dollar borrowing, and an independent monetary policy.
The best possible solution, according to Pozsar, is for the U.S. central bank to let its own balance sheet go: serving as a “dealer of last resort” by way of “elephant size quantitative eurodollar easing,” in other words, that it should allow the unlimited use of its dollar swap lines to prevent foreign banks’ dollar borrowing costs from getting too high in an environment of constrained bank balance sheets. “The tool to use is the Fed’s dollar swap lines but the aim would no longer be to backstop funding markets, but to police the range within which various cross currency bases trade,” Pozsar writes, arguing for the “fixed-price, full-allotment broadcast of eurodollars globally” by the U.S. central bank.
Dollar strength and rising U.S. interest rates under President-elect Donald Trump would intensify pressure on capital outflows from China, forcing its policy makers to choose between tightening capital controls or a drastic floating of the currency in coming months. That’s according to Victor Shih, a University of California at San Diego professor who studies China’s government and finance and specializes in tracking politics at the most elite level. “Given the Chinese government’s consistent preference for control, we may see much more Draconian capital controls before a decision to float the currency can be made,” Shih said in an interview in Beijing. “The main objective is to avoid a panicky float.”
Federal Reserve Chair Janet Yellen has indicated a rate hike could be appropriate “relatively soon,” and investors anticipate Trump’s proposals to cut taxes and boost infrastructure will spur faster U.S. growth and inflation. At the same time, the record indebtedness of China’s companies limits the government’s ability to raise interest rates because doing so would increase the cost of repaying debt. China may face a stark choice between abandoning recent policy changes to tie the yuan more to a basket of currencies and letting it float more freely or stringent capital controls sometime in the next six to 18 months, said Shih. The Communist Party’s preference for control suggests economic reform is unlikely to accelerate, Shih said. He sees China following Russia toward slower growth and rising currency volatility.
Eurozone governments are increasingly relying on hedge funds to help them meet their borrowing needs, which risks leaving them vulnerable to a debt market sell-off driven by a class of investors dubbed “fast money” for their speculative approach. With banks playing a less active part in the sovereign debt market because of pressures on their balance sheets, several countries have turned to hedge funds to sell their targeted amount of bonds, according to data, officials and bankers. Hedge funds tend to look for quick returns on investments, which could increase the volatility of government bond markets as they face several tests of sentiment in coming months.
A populist revolt that propelled Donald Trump and the Brexit vote is sweeping the developed world and threatens to unseat established leaders in an Italian referendum next month, and Dutch, French and German elections in 2017. Any such political shocks, compounded by rising bond market volatility, could potentially trigger a sell-off – a risk that stirs painful memories of the region’s debt crisis in 2010-2012 when a bond rout led to several countries unable to pay their debts and raised fears the euro zone could unravel. Hedge funds have been particularly active in the market for long-dated bonds as they offer the higher risk and reward that they traditionally seek.
Spain, Italy, Belgium and France have sought to lock in record-low borrowing rates this year with 50-year bond issues for €3-5 billion. Each of them reported a historically high allocation of 13-17% to hedge funds. By contrast, just three years ago, Spain, Italy and Belgium were selling only 4-7% of their syndicated bond sales to that community of investors.
Companies in the S&P 500 Index will spend most of their sizable cash hoard buying back stock next year, analysts at Goldman Sachs write in a new note. If so, it would be only the second time in the past 20 years that buybacks have accounted for the largest share of cash usage. Much of this, Goldman says, would be due to the enacting of plans President-elect Donald Trump proposed on the campaign trail, such as a tax holiday for overseas income and changes to the corporate tax code. “A significant portion of returning funds will be directed to buybacks based on the pattern of the tax holiday in 2004,” the team, led by Chief U.S. Equity Strategist David Kostin, write. They estimate that $150 billion (or 20% of total buybacks) will be driven by repatriated overseas cash.
They predict buybacks 30% higher than last year, compared to just 5% higher without the repatriation impact. Other areas that will see a boost include capital expenditures, research and development, as well and mergers and acquisitions. Here’s a broader look at how the analysts see firms allocating their cash in 2017. Other Wall Street banks have started looking at the potential impacts of repatriation as well. A new note from Morgan Stanley analysts Todd Castagno and Snehaja Mogre says that this is one of the top questions they are receiving from clients, and that most are overestimating how much cash will be brought back from overseas.
“The often cited $2.5 trillion statistic [of cash for repatriation] represents accumulated foreign earnings that companies have declared permanently reinvested abroad for GAAP accounting purposes,” they write. “We estimate that only 40% of this amount, or roughly $1 trillion, is available in the form of cash and marketable securities. Thus, the other $1.5 trillion has been reinvested to support foreign operations and exists in the form of other operating assets, such as inventory, property, equipment, intangibles and goodwill.” The note did not provide more detail on how much of that available cash the analysts expect to be used for buying back stock.
Can America still reverse this, or is it too late? “You haven’t just lost the industrial capacity, you have lost the skill-base as well, you don’t have the engineers and designers anymore.”
Once you have transferred all your capacity offshore, it’s very hard to reverse the process. You haven’t just lost the industrial capacity, you have lost the skill-base as well, you don’t have the engineers and designers anymore. They used to build news versions every year; now they are gone. What [Trump] can do on the fiscal front is his plan to invest in infrastructure. If he goes into this massive program as he has talked about and insists on a made-in-America policy, which he will do, that will provide the financing for the reindustrialization to occur. I’m not worried about a potential deficit because he has the world reserve currency in his hands and the Fed can print as much of it as necessary.
Then, if you produce all the infrastructure components onshore, you don’t even need trade tariffs. In my opinion, this wouldn’t be a trade barrier under WTO rules, but this could be the first dispute he has with the WTO. Because there is demand by the government and the components have to be manufactured onshore, capital needs to be invested and workers trained for the job. On top, you have the increases in productivity through infrastructure, another positive.
Epoch Times: What about tariffs? Mr. Keen: It’s not going to be peaceful, and there will be repercussions for American companies. Trump is used to playing hardball, and now he will have to negotiate with bureaucrats and their corporate backers. There will be attempts to control what Trump does through the WTO and it will be interesting to see how successful those attempts will be.
World Merchandise Exports in trillions of dollars. (World Bank)
America didn’t get what it expected, but perhaps it got what it deserved, good and hard. Daddy’s in the house and he busted straight into the nursery and now the little ones are squalling in horror. Mommy was discovered to be a grifting old jade who ran the household into a slum and she’s been turned out to solemnly await the judgment of the courts, nowhere to run, nowhere to hide. The kids on campus have gone temporarily insane over this domestic situation and some wonder if they’ll ever get over it. Trump as The USA’s Daddy? Well, yeah. Might he turn out to be a good daddy? A lot of people worry that he can’t be. Look how he behaved on the campaign trail: no behavioral boundaries… uccchhh. He even lurches as he walks, like Frankenstein.
Not very reassuring — though it appears that somehow he raised up a litter of high-functioning kids of his own. Not a tattoo or an earplug among them. No apparent gender confusion. All holding rather responsible positions in the family business. Go figure…. Judging from the internal recriminations among Democratic Party partisans playing out in the newspapers, it’s as if they all woke up simultaneously from a hypnotic trance realizing what an absolute dud they put up for election in Hillary Clinton — and even beyond that obvious matter, how deeply absurd Democratic ideology had become with its annoying victimology narrative, the incessant yammer about “diversity” and “inclusion,” as if pixie dust were the sovereign remedy for a national nervous breakdown. But can they move on from there?
I’m not so sure. For all practical purposes, both traditional parties have blown themselves up. The Democratic Party morphed from the party of thinking people to the party of the thought police, and for that alone they deserve to be flushed down the soil pipe of history where the feckless Whigs went before them. The Republicans have floundered in their own Special Olympics of the Mind for decades, too, so it’s understandable that they have fallen hostage to such a rank outsider as Trump, so cavalier with the party’s dumb-ass shibboleths. It remains to be seen whether the party becomes a vengeful, hybrid monster with an orange head, or a bridge back to reality. I give the latter outcome a low percentage chance.
Mommy is all about feelings and Daddy’s role is action and that is another reason that Hillary lost and Trump won. We’ve heard enough about people’s feelings and it just doesn’t matter anymore. You’re offended? Suck an egg. Someone appropriated your culture? Go shit in your sombrero. What matters is how we’re going to contend with the winding down of Modernity — the techno-industrial orgy that is losing its resource and money mojo. The politics of sacred victimhood has got to yield to the politics of staying alive.
Executives and anchors from the country’s five biggest television networks met with President-elect Donald Trump at Trump Tower on Monday afternoon. And they got an earful. Trump vented about media coverage, according to sources who spoke on the condition of anonymity. He was highly critical of CNN and other news organizations. But while Trump showed disdain for the news media, he also answered questions; listened to the journalists’ arguments about the importance of access; and committed to making improvements. A source in the room told CNNMoney that there was “real progress” made with regards to media access to Trump and his administration. One specific topic was the importance of the “press pool,” a small group of journalists that traditionally travels with the president.
The hour-long meeting was off the record, meaning the participants agreed not to talk about the substance of the conversations. But Trump senior adviser Kellyanne Conway, who arranged the meeting, said afterward that it was “very cordial, candid and honest.” While there was “no need to mend fences,” she said, “from my own perspective, it is great to hit the reset button, it was a long, hard-fought campaign.” Some of the attendees were struck by Trump’s anti-media posture. During the meeting, Trump revived some of the specific arguments he made weeks before winning the presidency. According to Politico, among Trump’s complaints, even as he asked for a “cordial” relationship, was that NBC had used unflattering pictures of him. But one of the participants told CNNMoney that Trump also asked for a positive relationship between his White House and the media.
The participant said that a New York Post account – which had a source describing it as Trump giving the assembled members of the media a “dressing down” like a “firing squad” – was overstated. Conway herself has also criticized the Post report. [..] NBC’s Chuck Todd and Lester Holt; CNN’s Wolf Blitzer and Erin Burnett; CBS’s Norah O’Donnell, Charlie Rose, John Dickerson, and Gayle King; and ABC’s George Stephanopoulos, David Muir and Martha Raddatz were some of the anchors seen entering Trump Tower shortly before 1 p.m. Several executives from the network news divisions were also spotted on the way into Trump Tower, including ABC News president James Goldston; CNN president Jeff Zucker; Fox News co-presidents Bill Shine and Jack Abernethy; NBC News president Deborah Turness; MSNBC president Phil Griffin; and CBS News vice president Chris Isham.
“But if I get hit by a bus, or a drone, or dropped off an airplane tomorrow, you know what? It doesn’t actually matter that much to me, because I believe in the decisions that I’ve already made.”
Former US National Security Agency contractor Edward Snowden on Monday downplayed the importance of President-elect Donald Trump and again defended his decision to leak documents showing massive surveillance of US citizens’ communications. “Donald Trump is just the president. It’s an important position. But it’s one of many,” Snowden told an internet conference in Stockholm, speaking via a video link from Russia, where he has been living as a fugitive. The 33-year-old is wanted in the United States to face trial on charges brought under the tough Espionage Act after he leaked thousands of classified documents in 2013 revealing the vast US surveillance of private data put in place after the September 11, 2001 attacks.
He said he was not worried about the Trump administration stepping up efforts to arrest him and stood by his decision to leak the classified material. “I don’t care,” he said. “The reality here is that yes, Donald Trump has appointed a new director of the CIA who uses me as a specific example to say that, look, dissidents should be put to death. “But if I get hit by a bus, or a drone, or dropped off an airplane tomorrow, you know what? It doesn’t actually matter that much to me, because I believe in the decisions that I’ve already made.”
US president-elect Donald Trump has suggested that Nigel Farage, controversial leader of the United Kingdom Independence party, should be the UK’s ambassador to the US. “Many people would like to see @Nigel_Farage represent Great Britain as their Ambassador to the United States,” Trump tweeted on Monday evening. “He would do a great job!” In a brief call with BBC Breakfast, Farage said he had been awake since 2am UK time when the tweet was first posted. The Ukip leader said he was flattered by the tweet, calling it “a bolt from the blue” and said he did not see himself as a typical diplomatic figure “but this is not the normal course of events”. But a Downing Street spokesman said: “There is no vacancy. We already have an excellent ambassador to the US.”
Farage, a member of the European parliament and on-again-off-again leader of Ukip for a decade, recently suggested he could launch an eighth bid to become an MP. Seven previous attempts were unsuccessful. It is unprecedented for an incoming US president to ask a world leader to appoint an opposing party leader as ambassador, and the statement puts British prime minister Theresa May in a difficult position. The role of UK ambassador to the US is among the most prestigious in the diplomatic service. Sir Kim Darroch, formerly the UK’s national security adviser and permanent representative to the European Union (EU), took over the role in January this year. The Ukip leader has previously said it was “obvious” that Darroch should resign his post, calling him part of the “old regime”.
But he told Sky News at that time he did not see himself as Darroch’s replacement: “I don’t think I will be the ambassadorial type. Whatever talents or flaws I have got I don’t think diplomacy is at the top of my list of skills.”
Richard Branson’s Virgin Group is to help bankroll a campaign set up in secret by Blairite former ministers and advisers to derail Brexit, The Independent can reveal. An email seen by The Independent highlights the scale of backing the group has already secured. It shows the campaign has been months in the planning and claims “substantial progress” has already been made, including the identification of “an excellent potential CEO”. The memo was written by Alan Milburn, who was one of Tony Blair’s closest cabinet allies. It reveals the group has heavy financial, political and corporate backing and is receiving advice and support from a host of high-level business and communications organisations. High-profile MPs including former Deputy Prime Minister Nick Clegg and Labour MP Chuka Umunna are believed to have had contact with the group, as have celebrities such as Bob Geldof.
Freuds, a leading public relations agency that was founded by Matthew Freud, a close friend of both Mr Blair and David Cameron, is understood to have been commissioned to manage the strategy and marketing of the campaign. The email says: “We have been beavering away over the last few months to get a Europe campaign up and running. I’m pleased to say that substantial progress has been made.” “I have met the Freuds team several times and we are making good progress. “I have been in discussions with an excellent potential CEO to lead the campaign. “Virgin … are keen to help … Since we last spoke [they] have offered a further £25k, plus bigger office space, help with legal advice and a possible secondment. “I have held discussions with Stronger In, Chuka Umunna, a new organisation called Common Ground, Bob Geldof and a number of senior politicians across the party spectrum.”
The UK saw $1.5tn (£1.2tn) wiped off its wealth during 2016 after the Brexit vote sent the pound tumbling and the stock market into reverse, according to a survey by Credit Suisse. A fall in values at the top-end of the property market also contributed to about 400,000 Britons losing their status as dollar millionaires and one of the biggest drops in wealth among the major economies. But the UK remained third for the number of ultra-high-net-worth individuals, who own more than £50m in assets, behind the US and China. And the UK’s top 1% of richest people also continued to own 24% of the nation’s wealth, the report said.
Across the globe, the richest 1% own more wealth than the rest of the world put together, continuing the dominance seen in last year’s report. A recovering in the global stock markets in recent weeks is also likely to reverse some of the losses suffered by pension savers and wealthy individuals. Oxfam said the huge gap between rich and poor was “undermining economies, destabilising societies and holding back the fight against poverty”.
The findings from the Credit Suisse Research Institute’s seventh annual global wealth report that found the overall growth in global wealth remained flat in 2016, following a trend that emerged in 2013 and contrasting sharply with the double-digit growth rates witnessed before the global financial crisis of 2008. Michael O’Sullivan, chief investment officer in Credit Suisse’s wealth management arm: “The impact of the Brexit vote is widely thought of in terms of GDP but the impact on household wealth bears watching. “Since the Brexit vote, UK household wealth has fallen by $1.5tn. Wealth per adult has already dropped by $33,000 to $289,000 since the end of June. In fact, in US dollar terms, 406,000 people in the UK are no longer millionaires.”
German Chancellor Angela Merkel’s “days are numbered,” according to the leader of France’s right-wing National Front party, Marine Le Pen. Merkel confirmed on Sunday she would run for a fourth term in 2017, however, Le Pen says the German leader does not fit the mood of the times. Speaking to CNBC on Monday, the National Front’s presidential candidate claims Merkel is isolated given she represents the status quo while the pace of change in Europe is accelerating. Turning to another international relationship, Le Pen said it would be natural for France to retain relations with Russia given the close history of the two countries. Arguing she sees no reason why we cannot live in a multi-polar world, she lambasted the U.S. for taking the world into the Cold War, saying it put France and Europe at great risk, given they were caught in the middle.
The numbers look a bit shaky, but the trend is glaringly obvious. The Troika is dismantling what until just a few years ago was an absolute world class health system.
For a sixth consecutive year, Greece has been unable to stem the flow of doctors leaving the country. The numbers emigrating during 2016 have been high again, with most opting for work in other European countries. The only difference this year is that there has been a slight dip in those leaving for the UK, which may be due to Brexit. Overall, the Athens Medical Association (ISA) issued a total of 1,018 certificates between January 1 and October 24 allowing Greek doctors to practice abroad. During the whole of 2015, ISA issued 1,521 such documents, which was slightly higher than the 1,380 it produced in 2014 and 1,488 in 2013. The year which saw the highest level of emigration among Greek doctors was in 2013, when ISA issued 1,808 certificates. In total, between 2010 and this year, ISA has readied paperwork for more than 9,300 medical professionals looking to leave Greece.
[..] While Greek doctors pursue their futures abroad, the Greek National Health System (ESY) is buckling due to the shortage of medical staff. According to the Federation of Greek Hospital Doctors’ Unions (OENGE), Greece lacks some 6,000 specialized doctors. The vast majority of doctors hired over the last few years were on fixed-term contracts, which is not a very attractive proposition for those in the medical field. According to the Health Ministry, ESY employs 1,464 auxiliary doctors at the moment. “The medical world has been seriously affected by the crisis over the last few years,” ISA president Giorgos Patoulis told Kathimerini. “The proliferation of mostly young doctors and the low rate at which they are absorbed into the public or private sector creates serious challenges for them in finding work and drives wages down.
“In combination with the government’s failure to set out a sustainable and effective health policy, this has caused an unprecedented migratory wave. This leaves us facing a paradox: Even though there is a plethora of young doctors who are unemployed, the health system is getting old and collapsing due to a lack of personnel.”
In early 2010, artist, activist and mother, Persephone Pearl, headed to the Bristol Museum. Like many concerned about the fate of the planet, she was in despair over the failed climate talks in Copenhagen that winter. She sat on a bench and looked at a stuffed animal behind glass: a thylacine. Before then, she’d never heard of the marsupial carnivore that went extinct in 1936. “Here was this beautiful mysterious lost creature locked in a glass case,” she said. “It struck me suddenly as unbearably undignified. And I had this sudden vision of smashing the glass, lifting the body out, carrying the thylacine out into the fields, stroking its body, speaking to it, washing it with my tears, and burying it by a river so that it could return to the earth.”
[..] .. grief doesn’t occur only when we lose loved ones. Ask anyone who has seen a local forest they once played in as a child demolished for another cookie-cutter development or has watched as fewer bees and butterflies show up in their garden each summer. Or ask any conservationist who has to witness year-after-year as the species they work with slowly vanish, ask any marine biologist about coral reefs or any Arctic biologist about sea ice. Grief can extend far beyond our human parochialism. “We realised that there was a hunger for a way of grieving ecological loss through ritual,” said Porter who in 2011 directed a Funeral for Lost Species through her group, Feral Theatre. This was an outdoor theatrical performance in a churchyard that included various traditional forms of mourning and tilted between somber and whimsical.
Porter believes many people are simply “stuck in a kind of denial” when it comes to extinction, biodiversity loss and environmental crises. “If we face it honestly and fully we have to face our own collective shadow, our out-of-control destructive urges and acts. These are terrible, terrifying things to face alone,” she said. Part of this denial is also due to our growing disconnect from nature. “Many humans now solely interact with domesticated animals and plants. Some have no experience whatsoever of intact forest, field, and aquatic community. The total loss of other community members, their families, and life affirming ways then is an utterly distant abstraction,” Hollingsworth said. “Yet in grief, as in love, humans are wired for intimacy. “
A thylacine, or Tasmanian tiger, in captivity sometime in the 1920s. The thylacine was killed off by European settlers in Australia who erroneously viewed it as a sheep killer. Photograph: Popperfoto
