Feb 122017
 
 February 12, 2017  Posted by at 10:47 am Finance Tagged with: , , , , , , , , , ,  4 Responses »
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Model wearing Dior on the banks of the Seine, Paris 1948

 


Does UK’s Lucrative Arms Trade Come At The Cost Of Political Repression? (G.)
UK Journalists Who Obtain Leaked Official Material Could Face Jail (Tel.)
Women And Children ‘Raped, Beaten And Abused’ In Dunkirk’s Refugee Camp (G.)
Bank For International Settlements Warns Of Looming Debt Bubble (F.)
Trump Regime Was Manufactured By A War Inside The Deep State (Nafeez Ahmed)
Banking, Credit & Norway (Steve Keen)
Greece Says Bailout Deal Close, But Will Not Accept ‘Illogical’ Demands (G.)
Greece 2017: Numbers And Facts About 8 Years Of Recession (AthensLive)
Tsipras Warns IMF, Germany To Stop ‘Playing With Fire’ Over Greek Debt (AFP)
Yanis Varoufakis: Grexit ‘Never Went Away’ (AlJ)
Why Falling Home Prices Could Be a Good Thing (NYT)
Army Veterans Return To Standing Rock To Form Human Shield Against Police (G.)
France’s Bumbling Search for a Candidate to Stop Le Pen (Spiegel)
A $500 Billion Plan To Refreeze The Arctic Before The Ice Melts (G.)

 

 

Look, Guardian, this is a good piece. But your editor destroys it by adding a headline with a question mark. Reality is, Britain is nothing but a front for a criminal racket. Its arms sales -both abroad and to its own forces- are responsible for the misery of countless deaths and maimed and refugees each and every year. Which your PM phrases as “..the UK will be at the forefront of a wider western effort to step up our defence and security partnership.” But you as a paper don’t have to play that game. Just tell your readers what is happening, and what has happened for decades. You live by blood and destruction.

Does UK’s Lucrative Arms Trade Come At The Cost Of Political Repression? (G.)

On 24 January 2015 a private jet touched down in Saudi Arabia’s capital, Riyadh. On board were a handful of Foreign Office officials, security personnel and the then prime minister, David Cameron, who was visiting the kingdom to pay his condolences following the death of King Abdullah bin Abdulaziz. The decision to charter the jet – at a cost to the taxpayer of £101,792 – raised eyebrows among Whitehall mandarins. But when it comes to Saudi Arabia, normal UK rules don’t seem to apply. For decades the two kingdoms have quietly enjoyed a symbiotic relationship centred on the exchange of oil for weapons. Analysis of HM Revenue and Customs figures by Greenpeace EnergyDesk shows that in 2015 83% of UK arms exports – almost £900m – went to Saudi Arabia. Over the same period, the UK imported £900m of oil from the kingdom.

Now this relationship has come under scrutiny as a result of a judicial review brought by the Campaign Against Arms Trade (CAAT), which has sent alarm bells ringing in Whitehall. The case follows concerns that a coalition of Saudi-led forces may have been using UK-manufactured weapons in violation of international humanitarian law during their ongoing bombardment of Yemen, targeting Iranian-backed Houthi forces loyal to the country’s former president. The legal challenge comes at a crucial time for the UK’s defence industry, which makes about 20% of arms exported globally. In recent years Ministry of Defence cutbacks have led to the sector looking abroad for new sales, and the government, with one eye on the post-Brexit landscape, is keen on the strategy. Last month Theresa May heralded a £100m deal involving the UK defence giant BAE and the Turkish military, and many defence experts see this as a sign of things to come.

But the policy – as the Saudi case makes clear – is controversial. Many of the UK’s biggest customers have questionable human rights records and there are concerns exported weapons are used for repression or against non-military targets. Thousands have died in the Yemen campaign, with the Saudis accused of targeting civilians. Four-fifths of the population is in need of aid, and famine is gripping the country. But despite this, and protests from human rights groups and the United Nations, the UK has continued to arm the Saudi regime, licensing about £3.3bn of weapons to the kingdom since the bombing of Yemen began in March 2015.

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Orwell meets Samuel Beckett.

UK Journalists Who Obtain Leaked Official Material Could Face Jail (Tel.)

Campaigners have expressed outrage at new proposals that could lead to journalists being jailed for up to 14 years for obtaining leaked official documents. The major overhaul of the Official Secrets Act – to be replaced by an updated Espionage Act – would give courts the power to increase jail terms against journalists receiving official material. The new law, should it get approval, would see documents containing “sensitive information” about the economy fall foul of national security laws for the first time. In theory a journalist leaked Brexit documents deemed harmful to the UK economy could be jailed as a consequence. One legal expert said the new changes would see the maximum jail sentence increase from two years to 14 years; make it an offence to “obtain or gather” rather than simply share official secrets; and to extend the scope of the law to cover information that damages “economic well-being”.

John Cooper QC, a leading criminal and human rights barrister who has served on two law commission working parties, added: “These reforms would potentially undermine some of the most important principles of an open democracy.” Jodie Ginsberg, chief executive of Index on Censorship, said: “The proposed changes are frightening and have no place in a democracy, which relies on having mechanisms to hold the powerful to account. “It is unthinkable that whistle blowers and those to whom they reveal their information should face jail for leaking and receiving information that is in the public interest.” Her organisation has accused the Law Commission, the Government’s statutory legal advisers, of failing to consult fully with journalists before making its recommendations in a 326-page consultation published earlier this month. “It is shocking that so few organisations were consulted on these proposed changes given the huge implications for public interest journalism in this country,” said Ms Ginsberg.

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And this, too, is Britain, in 2017. And way before that too.

Women And Children ‘Raped, Beaten And Abused’ In Dunkirk’s Refugee Camp (G.)

Children and women are being raped by traffickers inside a refugee camp in northern France, according to detailed testimony gathered ahead of fresh legal action against the UK government’s approach to the welfare of unaccompanied minors. Corroborating accounts from volunteers, medics, refugees and security officials reveal that sexual abuse is common within the large camp at Dunkirk and that children and women are forced to have sex by traffickers in return for blankets or food or the offer of passage to the UK. Legal proceedings will be issued by London-based Bindmans against the Home Office, which is accused of acting unfairly and irrationally by electing to settle only minors from the vast Calais camp that closed last October, ignoring the child refugees gathered in Dunkirk, 40 miles away along the coast.

The legal action, brought on behalf of the Dunkirk Legal Support Team and funded by a crowd justice scheme, says the Home Office’s approach was arbitrary and mean-spirited. On Wednesday the government’s approach to child refugees provoked widespread indignation when the home secretary, Amber Rudd, announced the decision to end the “Dubs scheme”, having allowed just 350 children to enter the UK, 10% of the number most MPs and aid organisations had been led to believe could enter. [..] On Friday the archbishop of Canterbury said the government’s decision meant that child refugees would be at risk of being trafficked and even killed. Justin Welby’s warnings of what could happen if child refugees were denied the opportunity of safe passage are graphically articulated in the testimonies gathered over several months by the Observer.

Accounts from those at the camp, which currently holds up to 2,000 refugees, of whom an estimated 100 are unaccompanied minors, portray a squalid site with inadequate security and atrocious living conditions. The Dunkirk Legal Support Team says the failure of the authorities to guard the site has allowed the smugglers to take control. One volunteer coordinator, who has worked at the camp’s women’s centre since October 2016, said: “Sexual assault, violence and rape are all far too common. Minors are assaulted and women are raped and forced to pay for smuggling with their bodies.” Testifying on condition of anonymity, she added: “Although the showers are meant to be locked at night, particularly dangerous individuals in the camp have keys and are able to take the women to the showers in the night to force themselves on them. This has happened to women I know very well.”

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Looming, right?

Bank For International Settlements Warns Of Looming Debt Bubble (F.)

So you thought the world was deleveraging after the housing and derivatives bubble of 2008, hey? Well…fooled you! Global debt-to-GDP is now at a comfortable record high and the Bank for International Settlements, aka the central bank of central banks, noted on Friday that over the last 16 years, debts of governments, households and corporations has gone up…everywhere. In the U.S., debt is up 63%. The Eurozone, Japan, U.K., Canada and Australia average around 52%. And emerging markets, led by China, leverage is up 85%. In some important emerging economies like Brazil major cities are on the verge of bankruptcy. Rio is CCC credit thanks to mismanagement of a deep sea oil bonanza and over spending on the FIFA World Cup and the 2016 Olympics.

“The next financial crisis is likely to revolve around how this debt burden is managed,” warns Neil MacKinnon, an economist with VTB Capital in London. “In the U.K., most crises are related to boom and busts in the housing market, where there is an approximate 18-year cycle suggesting that the next bust will be in 2025.” That’s quite a ways away. And for London real estate, they always have the Saudis, the Russians and the Chinese to save them. But further south, in countries like France and Italy, credit downgrades are expected. And guess which southern European country is back to give us all headaches again? Greece! Greece is making headlines once more for its inability to work out a debt deal with its lenders. There is now a rift between the EU and the IMF over Greek debt sustainability.

Most of the debt is with the European Commission itself, so German policy makers are basically the lenders and so far are not willing to take a haircut on bond prices. The IMF predicts that the Greek debt-GDP ratio, now at 180%, will soar to 275% all the while primary fiscal surplus is currently at zero. That means Greece’s debt to GDP is like Japan, only without the power of the Japanese economy to back it up. Greece is broke. “Greece is caught in a debt-trap which has shrunk the Greek economy by 25%,” notes MacKinnon. They owe Europe around €7 billion in July. Good luck with that. Jaime Caruana, General Manager for the Bank for International Settlements hinted in a speech in Brussels on Monday that the core central banks might not know what they’re in for.

“We need to escape the popular models that prevent us from recognizing the build-up of vulnerabilities,” Caruana said. “Getting all the right dots in front of you does not really help if you do not connect the dots. Right now, I worry that even though we have data on aggregate debt, we are not properly connecting the dots and we are underestimating the risks, particularly when the high levels of debt are aggravated by weak productivity growth in many countries. The standard of evidence for precautionary action has to be the preponderance of evidence, not evidence beyond a shadow of doubt. Waiting for fully compelling evidence is to act too late.”

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Long and deep from Nafeez.

Trump Regime Was Manufactured By A War Inside The Deep State (Nafeez Ahmed)

President Donald Trump is not fighting a war on the establishment: he’s fighting a war to protect the establishment from itself, and the rest of us. At first glance, this isn’t obvious. Among his first actions upon taking office, Trump vetoed the Trans Pacific Partnership, the controversial free trade agreement which critics rightly said would lead to US job losses while giving transnational corporations massive power over national state policies on health, education and other issues. Trump further plans to ditch the TTIP between the EU and US, which would have diluted key state regulations on the activities of transnational corporates on issues like food safety, the environment and banking; and to renegotiate NAFTA, potentially heightening tensions with Canada. Trump appears to be in conflict with the bulk of the US intelligence community, and is actively seeking to restructure the government to minimize checks and balances, and thus consolidate his executive power.

His chief strategist, Steve Bannon, has completely restructured the National Security Council under unilateral presidential authority. While Bannon and his Chief of Staff Richard ‘Reince’ Priebus now have permanent seats on the NSC’s Principals’ Committee, the Director of National Intelligence and the Chairman of the Joint Chiefs of Staff are barred from meetings except when requested for their expertise. The Secretary of Energy and US ambassador to the UN have been expelled entirely. Trump’s White House has purged almost the entire senior staff of the State Department, and tested the loyalty of the Department of Homeland Security with its new ‘Muslim ban’ order. So what is going on? One approach to framing the Trump movement comes from Jordan Greenhall, who sees it as a conservative (“Red Religion”) Insurgency against the liberal (“Blue Church”) Globalist establishment (the “Deep State”).

Greenhall suggests, essentially, that Trump is leading a nationalist coup against corporate neoliberal globalization using new tactics of “collective intelligence” by which to outsmart and outspeed his liberal establishment opponents. But at best this is an extremely partial picture. In reality, Trump has ushered in something far more dangerous: The Trump regime is not operating outside the Deep State, but mobilizing elements within it to dominate and strengthen it for a new mission. The Trump regime is not acting to overturn the establishment, but to consolidate it against a perceived crisis of a wider transnational Deep System. The Trump regime is not a conservative insurgency against the liberal establishment, but an act of ideologically constructing the current crisis as a conservative-liberal battleground, led by a particularly radicalized white nationalist faction of a global elite.

The act is a direct product of a global systemic crisis, but is a short-sighted and ill-conceived reaction, pre-occupied with surface symptoms of that crisis. Unfortunately, those hoping to resist the Trump reaction also fail to understand the system dynamics of the crisis.

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If you want to know what ails us, it doesn’t get much clearer than this.

Banking, Credit & Norway (Steve Keen)

This was an invited talk during Oslo University’s “Week of Current Affairs”, so though my talk covered the global issues of credit and economic cycles, I paid particular attention to Norway, which is one of the 9 countries I have identified as very likely to experience a credit crunch in the next few years.

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But illogical demans are all there is.

Greece Says Bailout Deal Close, But Will Not Accept ‘Illogical’ Demands (G.)

Greek PM Alexis Tsipras said on Saturday he believed the country’s drawn-out bailout review would be completed positively but repeated that Athens would not accept “illogical” demands by its lenders. He warned all sides to “be more careful towards a country that has been pillaged and people who have made, and are continuing to make, so many sacrifices in the name of Europe”. Greece and its international lenders made clear progress on Friday toward bridging differences over its fiscal path in coming years, moving closer to a deal that would secure new loan disbursements and save the country from default. “(The review) will be completed, and it will be completed positively, without concessions in matters of principle,” Tsipras told a meeting of his leftist Syriza party. Reaching agreement would release another tranche of funds from it latest €86 billion bailout, and facilitate Greece making a major €7.2 billion debt repayment this summer.

European and IMF lenders want Greece to make €1.8 billion – or 1% of GDP – worth of new reforms by 2018 and another €1.8 billion after then and the measures would be focused on broadening the tax base and on pension cutbacks. But further cutbacks, particularly to pensions which have already gone through 11 cuts since the start of the crisis in 2010, are hard to sell to a public worn down after years of austerity. Representatives of Greece’s lenders are expected to return to Athens this week to report on whether Greece has complied with a second batch of reforms agreed under the current bailout, its third. “We are ready to discuss anything within the framework of the (bailout) agreement and within reason, but not things beyond the framework of the agreement and beyond reason,” Tsipras said. “We will not discuss demands which are not backed up by logic and by numbers,” he said.

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One minute of devastating numbers.

Greece 2017: Numbers And Facts About 8 Years Of Recession (AthensLive)

While Greece is back in the headlines, we got together some numbers and facts about eight years of economic recession.

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Well, they won’t stop.

Tsipras Warns IMF, Germany To Stop ‘Playing With Fire’ Over Greek Debt (AFP)

Greek PM Alexis Tsipras on Saturday warned the IMF and German Finance Minister Wolfgang Schaeuble to “stop playing with fire” in the handling of his country’s debt. Opening a meeting of his Syriza party, Tsipras said he was confident a solution would be found, a day after talks between Greece and its creditors ended in Brussels with no breakthrough. He urged a change of course from the IMF. “We expect as soon as possible that the IMF revise its forecast.. so that discussions can continue at the technical level.” Referring to Schaeuble, Tsipras also called for German Chancellor Angela Merkel to “encourage her finance minister to end his permanent aggressiveness” towards Greece. Months of feuding with the IMF has raised fears of a new debt crisis.

Greece is embroiled in a row with its eurozone paymasters and the IMF over debt relief and budget targets that has rattled markets and revived talk of its place in the euro. Eurogroup chief Jeroen Dijsselbloem said progress had been made in the Brussels talks with Greek Finance Minister Euclid Tsakalotos and other EU and IMF officials. But he provided few details. The Athens government faces debt repayments of €7.0 billion this summer that it cannot afford without defusing the feud that is holding up new loans from Greece’s €86 billion bailout. Breaking the stalemate in the coming weeks is seen as paramount with elections in the Netherlands on March 15 and France in April through June threatening to make a resolution even more difficult.

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Mostly rehashing Yanis’ time as FinMin. That’s a shame, because his views on today are much more interesting.

Yanis Varoufakis: Grexit ‘Never Went Away’ (AlJ)

With the UK on the cusp of leaving the European Union and Greece increasingly facing the same fate, is it over for the beleaguered body? An “epidemic” washing over other European countries may see the end of the EU, warns Yanis Varoufakis, Greece’s former finance minister. “The right question is: Is there going to be a eurozone and the European Union in one or two years’ time?” asks Varoufakis, who served as finance minister for five months under the Syriza government. Italy is already on the way out, Varoufakis tells UpFront. “When you allow an epidemic to start spreading from a place like Greece to Spain … to Ireland, then eventually it gets to a place like Italy,” says Varoufakis. “As we speak, only one political party in Italy wants to keep Italy in the eurozone.”

When asked about his failure to pull Greece out of its debt crisis during his tenure as finance minister, Varoufakis blamed the so-called troika – the IMF, the EU Commission and the European Central Bank – by intentionally sabotaging any debt-repayment agreement. “They were only interested in crushing our government, making sure that there would be no such mutually advantageous agreement,” says Varoufakis, who claims Greece was being used as a “morality tale” to scare voters in other European countries away from defying the troika. “The only reason why we keep talking about Greece … is because it is symptomatic of the architectural design faults and crisis of the eurozone.”

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To pop the bubble? To allow people to live where their families do?

Why Falling Home Prices Could Be a Good Thing (NYT)

Suppose there were a way to pump up the economy, reduce inequality and put an end to destructive housing bubbles like the one that contributed to the Great Recession. The idea would be simple, but not easy, requiring a wholesale reframing of the United States economy and housing market. The solution: Americans, together and all at once, would have to stop thinking about their homes as an investment. The virtues of homeownership are so ingrained in the American psyche that we often forget that housing is also a source of economic stress. Rising milk prices are regarded as a household tragedy for some, and spiking gas prices stoke national outrage. But whenever home prices go up, it’s “a recovery,” even though that recovery also means millions of people can no longer afford to buy.

Homes are the largest asset for all but the richest households, but shelter is also a basic necessity, like food. We have a variety of state and federal programs devised to make housing cheaper and more accessible, and a maze of local land-use laws that make housing scarcer and more expensive by doing things like prohibiting in-law units, regulating how small lots can be, and capping the number of unrelated people who can live together. Another big problem: High rent and home prices prevent Americans from moving to cities where jobs and wages are booming. That hampers economic growth, makes income inequality worse and keeps people from pursuing their dreams. So instead of looking at homes as investments, what if we regarded them like a TV or a car or any other consumer good? People might expect home prices to go down instead of up.

Homebuilders would probably spend more time talking about technology and design than financing options. Politicians might start talking about their plans to lower home prices further, as they often do with fuel prices. In this thought experiment, housing prices would probably adjust. They would be somewhat cheaper in most places, where population is growing slowly. But they would be profoundly cheaper in places like super-expensive San Francisco. That was the conclusion of a recent paper by the economists Ed Glaeser of Harvard and Joe Gyourko at the Wharton School of the University of Pennsylvania. The paper uses construction industry data to determine how much a house should cost to build if land-use regulation were drastically cut back. Since the cost of erecting a home varies little from state to state — land is the main variable in housing costs — their measure is the closest thing we have to a national home price.

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Hope they get their media organized so news can get out. If it does it could be the worst PR disaster ever.

Army Veterans Return To Standing Rock To Form Human Shield Against Police (G.)

US veterans are returning to Standing Rock and pledging to shield indigenous activists from attacks by a militarized police force, another sign that the fight against the Dakota Access pipeline is far from over. Army veterans from across the country have arrived in Cannon Ball, North Dakota, or are currently en route after the news that Donald Trump’s administration has allowed the oil corporation to finish drilling across the Missouri river. The growing group of military veterans could make it harder for police and government officials to try to remove hundreds of activists who remain camped near the construction site and, some hope, could limit use of excessive force by law enforcement during demonstrations. “We are prepared to put our bodies between Native elders and a privatized military force,” said Elizabeth Williams, a 34-year-old Air Force veteran, who arrived at Standing Rock with a group of vets late Friday.

“We’ve stood in the face of fire before. We feel a responsibility to use the skills we have.” It is unclear how many vets may arrive to Standing Rock; some organizers estimate a few dozen are on their way, while other activists are pledging that hundreds could show up in the coming weeks. An estimated 1,000 veterans traveled to Standing Rock in December just as the Obama administration announced it was denying a key permit for the oil company, a huge victory for the tribe. The massive turnout – including a ceremony in which veterans apologized to indigenous people for the long history of US violence against Native Americans – served as a powerful symbol against the $3.7bn pipeline. Since last fall, police have made roughly 700 arrests, at times deploying water cannons, Mace, rubber bullets, teargas, pepper spray and other less-than-lethal weapons.

Private guards for the pipeline have also been accused of violent tactics. “We have the experience of standing in the face of adverse conditions – militarization, hostility, intimidation,” said Julius Page, a 61-year-old veteran staying at the vets camp. Dan Luker, a 66-year-old veteran who visited Standing Rock in December and returned this month, said that for many who fought in Vietnam or the Middle East it was “healing” to help water protectors.“This is the right war, right side,” said Luker, a Vietnam vet from Boston. “Finally, it’s the US military coming on to Sioux land to help, for the first time in history, instead of coming on to Sioux land to kill natives.” Luker said he was prepared to be hit by police ammunition if necessary: “I don’t want to see a 20-something, 30-something untrained person killed by the United States government.”

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Good overview of what is only 2 months away and could change Europe dramatically. Opinionated, but then that’s Der Spiegel.

France’s Bumbling Search for a Candidate to Stop Le Pen (Spiegel)

[..] even if Fillon survives as a candidate, he will be so damaged that he has virtually no chance of winning. Last week, in fact, his own party began discussing a “Plan B” so openly that it was almost disrespectful. Juppé is one possible replacement candidate being discussed, but the names of some young conservatives have also been circulating. Regardless, none of these alternatives would be as capable of taking voters away from Marine Le Pen and her project “Marine 2017” as the pre-scandal Fillon would have been. This, of course, is welcome news for Marine Le Pen, who transformed the fascist clique surrounding her father into a modern party, the right-wing populist Front National, with her at the center. Over the weekend, she introduced “140 proposals for France” as she launched the main segment of her campaign.

Yet even as she hits the stump, she is comfortably secure in the knowledge that she has the support of at least one-quarter of the country’s voters no matter what she says and no matter what others might say about her. She has been accused of having systematically misappropriated EU funds for party purposes in the European Parliament. She is no longer able to hide the fact that she is sparring over the direction of the party with her own niece, Marion Maréchal-Le Pen. But it doesn’t matter: Her polling numbers have remained constant at 25%, indicating that it is very likely she will attract enough voters to make it into the second round of voting in the presidential election. The only question is who will be her challenger? Who will become the “lesser of two evils” of this campaign?

Will it be Socialist candidate Hamon, with his foolhardy plan of introducing an unconditional basic income for all French, starting at €600 and later rising to €750? The plan would likely lead to €380 billion in additional annual spending for the French government. Or will it be Emmanuel Macron? There is no doubt that he has the charisma of a leader, but he also has some weaknesses that make him prone to attack, including two that could become particularly dangerous. The first is a resume that is hardly consistent with the image of a young hero shaking up an ossified political system. Macron studied at France’s elite École nationale d’administration (ENA), he’s a wealthy former banker who worked at Rothschild before becoming an adviser to François Hollande. He has long been part of the elite on which he has declared war.

Then there’s Macron’s second problem: With the exception of a relatively refreshing and clear commitment to the EU, at least for a Frenchman, he doesn’t have much of a platform. He has said he will announce his plans in late February, once his movement’s hundreds of thousands of volunteers, organized in working groups across the country, assemble policy proposals on diverse issues. If this operation is successful and Macron does indeed produce a coherent political platform, it will represent yet another grassroots miracle for France. But is such a thing even possible? Can a new political course -neither left nor right, but simply correct and good- really be formulated by the masses? There is plenty of hope surrounding Macron, but mockery is never far away. A French comedian could be heard last week on the radio, still an important opinion-shaping media in France, saying that washing machines have more programs than Macron.

Recent polls showed him pulling in 23% of the vote. Leftist Jean-Luc Mélenchon, a man who thinks quite highly of himself and his ideas, stands at around 10%. Mélenchon is promising to allow people to retire at the age of 60 and draw full pension benefits and is calling for a monthly minimum wage of 1,300 euros. He wants France and the European Union to recognize Palestine as a state, he is calling for France to withdraw from NATO and is demanding the renegotiation of the EU treaties. Next.

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Someday some fool will actually execute some of these schemes. Why stop the causes if you can play God?

A $500 Billion Plan To Refreeze The Arctic Before The Ice Melts (G.)

Physicist Steven Desch has come up with a novel solution to the problems that now beset the Arctic. He and a team of colleagues from Arizona State University want to replenish the region’s shrinking sea ice – by building 10 million wind-powered pumps over the Arctic ice cap. In winter, these would be used to pump water to the surface of the ice where it would freeze, thickening the cap. The pumps could add an extra metre of sea ice to the Arctic’s current layer, Desch argues. The current cap rarely exceeds 2-3 metres in thickness and is being eroded constantly as the planet succumbs to climate change. “Thicker ice would mean longer-lasting ice. In turn, that would mean the danger of all sea ice disappearing from the Arctic in summer would be reduced significantly,” Desch told the Observer.

Desch and his team have put forward the scheme in a paper that has just been published in Earth’s Future, the journal of the American Geophysical Union, and have worked out a price tag for the project: $500bn. It is an astonishing sum. However, it is the kind of outlay that may become necessary if we want to halt the calamity that faces the Arctic, says Desch, who, like many other scientists, has become alarmed at temperature change in the region. They say that it is now warming twice as fast as their climate models predicted only a few years ago and argue that the 2015 Paris agreement to limit global warming will be insufficient to prevent the region’s sea ice disappearing completely in summer, possibly by 2030. “Our only strategy at present seems to be to tell people to stop burning fossil fuels,” says Desch. “It’s a good idea but it is going to need a lot more than that to stop the Arctic’s sea ice from disappearing.”

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Feb 052017
 
 February 5, 2017  Posted by at 8:59 pm Finance Tagged with: , , , , , , , , ,  3 Responses »
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Hugo Simberg The Wounded Angel 1903

 


US Appeals Court Denies Request To Restore Trump’s Immigration Ban (R.)
DHS Suspends Actions On Travel Ban; ‘Standard Policy’ Now In Effect (R.)
Trump Tells O’Reilly He ‘Respects’ Putin in Super Bowl Interview (Fox)
As Trump Weighs Thaw With Putin, EU Set to Renew Its Blacklist (BBG)
Goldman Throws Cold Water On Trump Agenda (CNBC)
Economists Say Action On Carbon Is Vital, Or Say Nothing At All (Age)
Japan – It’s Finally Happening (Muir)
Le Pen Kicks Off Campaign With Promise Of French ‘Freedom’ (R.)
Theresa May Abandons ‘Home Owning Democracy’ of Thatcher and Tories (G.)
Attention Trade Warriors: Germany’s Surplus is on the Wane (BBG)
Dennis Kucinich Rages Against The Military-Industrial-Complex (FB)
NATO, Not Russia, Has Deployed Tanks To Poland & Baltic States – Galloway (RT)
Varoufakis Calls on PM Tspiras to Ditch Bailout Restructuring (GR)
Varoufakis Urges Tsipras To Ditch Negotiations, Adopt “Parallel System” (KTG)
UK: Refugees Heading To Europe To Be Sent To Asia And Latin America (Ind.)

 

 

It was always going to the Supreme Court. More interesting right now is how strongly this is dividing the White House team. Kelly refused to enact some of Bannon’s demands. Tillerson and Mattis are not sitting comfortable either. And the legal team has gained in standing, a lot. Trump cannot afford too many of these snags, even if they love the attention and controversy coming from it. All in all, a good thing that the legal system gets tested, never a thing to fall asleep on.

US Appeals Court Denies Request To Restore Trump’s Immigration Ban (R.)

A U.S. appeal court late on Saturday denied an emergency appeal from the U.S. Department of Justice to restore an immigration order from President Donald Trump barring citizens from seven mainly Muslim countries and temporarily banning refugees. “Appellants’ request for an immediate administrative stay pending full consideration of the emergency motion for a stay pending appeal is denied,” the ruling by the U.S. Court of Appeals for the Ninth Circuit said. It said a reply from the Department in support of the emergency appeal was due on Monday. The Department filed the appeal a day after a federal judge in Seattle ordered Trump’s travel ban to be lifted. The president’s Jan. 27 order had barred admission of citizens from the seven nations for 90 days.

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Law.

DHS Suspends Actions On Travel Ban; ‘Standard Policy’ Now In Effect (R.)

A Seattle federal judge on Friday put a nationwide block on U.S. President Donald Trump’s week-old executive order that had temporarily barred refugees and nationals from seven countries from entering the United States. The judge’s temporary restraining order represents a major setback for Trump’s action, though the White House said late Friday that it believed the ban to be “lawful and appropriate” and that the U.S. Department of Justice would file an emergency appeal. As a result of the ruling, the Department of Homeland Security suspended its enforcement of the ban, announcing on Saturday that “standard policy and procedures” were now in effect. “In accordance with the judge’s ruling, DHS has suspended any and all actions implementing the affected sections of the Executive Order entitled, “Protecting the Nation from Foreign Terrorist Entry into the United States,” DHS said in a statement.

“DHS personnel will resume inspection of travelers in accordance with standard policy and procedure,” it stated, adding that the Justice Department would file an emergency stay to “defend the president’s executive order, which is lawful and appropriate.” The move came on the heels of the State Department announcing it was reversing the revocation of visas that left countless travelers stranded at airports last weekend. The move all but ensures a protracted public and legal battle over one of Trump’s most controversial policies, barely two weeks after he was inaugurated. Early Saturday morning, Trump criticised the ruling as “ridiculous” and warned of big trouble if a country could not control its borders.

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Quite right. Putin bashing is a losing strategy.

Trump Tells O’Reilly He ‘Respects’ Putin in Super Bowl Interview (Fox)

On Sunday, Bill O’Reilly will hold a special Super Bowl pre-game interview with President Trump at 4 p.m. ET on your local FOX broadcast station. In a special preview, Trump revealed his plans for dealing with Russian President Vladimir Putin. O’Reilly asked Trump whether he “respects” the former KGB agent: “I do respect him, but I respect a lot of people,” Trump said, “That doesn’t mean I’m going to get along with him.” Trump said he would appreciate any assistance from Russia in the fight against ISIS terrorists, adding that he would rather get along with the former Cold War-era foe than otherwise. “But, [Putin] is a killer,” O’Reilly said. “There are a lot of killers,” Trump responded, “We’ve got a lot of killers. What do you think? Our country’s so innocent?”

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For the EU, like NATO, Putin bashing is the only thing left that provides a reason to be. That’s just dangerous.

As Trump Weighs Thaw With Putin, EU Set to Renew Its Blacklist (BBG)

The European Union plans to renew asset freezes and travel bans against key allies of Russian President Vladimir Putin who are accused of destabilizing Ukraine, at a time when Donald Trump is weighing warmer ties with Moscow. Four EU officials said member governments intend by mid-March to prolong the sanctions for another six months on more than 100 Ukrainians and Russians. Among them: Arkady Rotenberg, co-owner of SMP Bank and InvestCapitalBank, and Yury Kovalchuk, the biggest shareholder in Bank Rossiya, the Brussels-based officials said. The officials spoke on condition of anonymity because the deliberations are confidential. Trump, who had a phone call with Putin on Jan. 28, has left open the possibility of easing the U.S.’s sanctions against Russia.

Former President Barack Obama drew up the American penalties in coordination with the 28-nation EU after Putin annexed the Ukrainian region of Crimea in 2014 and lent support to separatist rebels. “The Europeans are waiting to see what hand grenade Trump throws into the Russia-Ukraine pond,” Michael Emerson, a foreign-policy expert at the CEPS think tank in Brussels, said by phone. With the asset freezes and travel bans due to expire on March 15, “European politicians and diplomats will be cautious and stick to the status quo,” he said. The planned renewal of the blacklist highlights the EU’s political commitment to a policy that Angela Merkel and Francois Hollande guided in step with Obama. The European sanctions against Russia resemble the U.S. penalties and include a separate set of curbs – prolonged for another six months just before Trump took office on Jan. 20 – on Russia’s financial, energy and defense industries.

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Volatility.

Goldman Throws Cold Water On Trump Agenda (CNBC)

The policy halo effect that provided ballast to the stock market and fueled investor optimism is already being dimmed by political realities, according to Goldman Sachs, which may have negative implications for economic growth. In a note to clients on Friday, the investment bank noted President Donald Trump’s agenda was already running into bipartisan political resistance, with doubts growing about potential tax reform and a repeal of the Affordable Care Act, among other marquee Trump administration initiatives. Just two weeks into his tenure, “risks are less positively tilted than they appeared shortly after the election ,” Goldman wrote. Growing resistance to Trump’s executive orders on immigration and financial reform has galvanized opposition while dividing members of the president’s own Republican Party.

It has also curbed the enthusiasm of investors, who sent stocks on a roller-coaster ride this week as they struggled to reconcile the new restrictions on immigration with Trump’s professed pro-business bent. “While bipartisan cooperation looked possible on some issues following the election, the political environment appears to be as polarized as ever, suggesting that issues that require bipartisan support may be difficult to address,” the bank added. The balance of risks “are less positively tilted than they appeared shortly after the election,” Goldman said, which may blunt the force of future growth. Amid reports that top GOP members are reportedly becoming nervous about the impact of a full-fleged repeal of health care, that political pushback “does not bode well for reaching a quick agreement on tax reform or infrastructure funding, and reinforces our view that a fiscal boost, if it happens, is mostly a 2018 story.”

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Steve on Twitter: “Coulnd’t resist it: sanctimonious carbon price pap, & belief market can solve an ecological problem just baug me. So my satirical gene fired.”

Economists Say Action On Carbon Is Vital, Or Say Nothing At All (Age)

There is no consensus. Economists either believe it is vital that Australia becomes a low-carbon intensity economy, or that the issue is so unimportant – or perhaps that it is so politically divisive – that they choose not to volunteer an opinion. Asked about the importance of reducing the country’s carbon footprint and how best to do it, more than half of 27 economists from industry, consultancy, academia and finance questioned for the annual BusinessDay Scope survey agreed it was a must. Another 10 left the question blank. Whether this indicates a lack of interest or the contentious nature of climate change policy is unclear. But none of those who did answer made the case that cleaning up the economy did not matter. They overwhelmingly said action should be swift and include a market-based carbon pricing scheme.

[..] Steve Keen, of London’s Kingston University, made what – we think – was a similar point about the importance of climate action, albeit less conventionally. “Nah mate! Wassa matta, dontcha own a pair of budgie smugglers?” he wrote. “It’s all a conspiracy by Marxists anyway to undermine the Ostralyan way of life – you know, burning stuff and damn well enjoying it rather than whingeing. “A bit a coal never hurt anyone, matter of fact it tastes even better than a raw onion!”

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“I am shorting JGBs with both fists.”

Japan – It’s Finally Happening (Muir)

I still shake my head at the stupidity. One of the most overindebted countries in the history of modern finance trading with a 0% thirty year bond. Professor Malkiel – stick that in your pipe and smoke it. But into that panic a crazy thing happened. Worried its bonds would trade at negative yields and pressure the financial system, the Bank of Japan pegged its 10 year yield at 0%. In doing so, the Bank of Japan moved from a set rate of balance sheet expansion to one that varies based on whether that peg is either too high, or too low. If the equilibrium level of 10 year rates was in fact below 0%, the Bank of Japan would be forced to sell bonds to keep rates stuck at 0%. If there was demand for credit and 10 year rates moved higher, then the BoJ would be forced to buy bonds to keep them from declining.

The BoJ program was a little more nuanced, and there were some caveats, but at its heart, the BoJ was giving up control of its balance sheet so it could peg a specific part of the yield curve. Of course Central Banks do this all the time. The difference is they usually operate at the front part of the curve, and when there is too much demand or supply, they change the rate. When the Bank of Japan took this unprecedented step, I walked away from my short JGB position. I figured there were better fixed income markets to short. Yet I highlighted that by pegging the 10 year rate, the Bank of Japan had not eliminated volatility, but merely postponed it. Eventually the Bank of Japan’s massive balance sheet expansion would kick in. At that point, inflation would pick up, credit would be demanded and the Bank of Japan would be forced to defend the 0% peg.

Yet this defending would be expansionary as they would be forced to buy bonds and expand the amount of base money, which if not offset with a decline in the velocity of money, would create more inflation, etc… All of this would be occurring with an already highly supercharged Japanese Central Bank balance sheet. I have been sitting and waiting for this expansionary feedback loop to kickstart. Until recently, the Bank of Japan had not been forced to buy any bonds to keep the rate pegged at 0%. When 10 year rates drifted far enough above 0%, the Bank of Japan made a bid to buy an unlimited number of bonds at a level below the market, which scared the market back to the pegged level. But this week the market decided to test the BoJ’s resolve.

The JGB 10 Year bond spiked through the previous high yield on news the Bank of Japan would not be expanding their balance sheet quite as aggressively as expected in their regular QE program. As yields popped through the previous 0.10% yield ceiling, the Bank of Japan came charging into the market. The BoJ bid 3-4 basis points through the market with unlimited size to push yields back down to the 0.10% level. What does this mean? The market is finally saying the demand for credit is enough to force the Bank of Japan to buy bonds to keep rates down. And that was the signal I was waiting for. I am shorting JGBs with both fists. It probably won’t happen tomorrow, nor the next day. Heck it probably won’t even happen next month, but we have reached the point where I need to be short JGBs.

The pressure will continue to build and when it finally bursts, the torrent will be overwhelming and quick. Although many traders think they will be able to climb on board, it will most likely be extremely difficult – like jumping on a raft bouncing down a raging river, it always seems way easier than it is. I hate German bunds, but I now have a fixed income instrument I hate even more. I expect bund yields to double or even triple in the coming quarters, but JGBs will eventually trade significantly though bunds. It would be just like the Market Gods to finally usher in the JGBs collapse once all the hedge fund guys had given up on it…

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Count her out at your own peril.

Le Pen Kicks Off Campaign With Promise Of French ‘Freedom’ (R.)

French far-right leader Marine Le Pen kicked off her presidential campaign on Saturday with a promise to shield voters from globalization and make their country “free”, hoping to profit from political turmoil to score a Donald Trump-style upset. Opinion polls see the 48-year old daughter of National Front (FN) founder Jean-Marie Le Pen topping the first round on April 23 but then losing the May 7 run-off to a mainstream candidate. But in the most unpredictable election race France has known in decades, the FN hopes the scandal hitting conservative candidate Francois Fillon and the rise of populism across the West will help convince voters to back Le Pen. “We were told Donald Trump would never win in the United States against the media, against the establishment, but he won… We were told Marine Le Pen would not win the presidential election, but on May 7 she will win!” Jean-Lin Lacapelle, a top FN official, told several hundred party officials and members.

In 144 “commitments” published at the start of a two-day rally in Lyon, Le Pen proposes leaving the euro zone, holding a referendum on EU membership, slapping taxes on imports and on the job contracts of foreigners, lowering the retirement age and increasing several welfare benefits while lowering income tax. The manifesto also foresees reserving certain rights now available to all residents, including free education, to French citizens only, hiring 15,000 police, curbing migration and leaving NATO’s integrated command. “The aim of this program is first of all to give France its freedom back and give the people a voice,” Le Pen said in the introduction to the manifesto.

[..] “This presidential election puts two opposite proposals,” Le Pen said in her manifesto. “The ‘globalist’ choice backed by all my opponents … and the ‘patriotic’ choice which I personify.” If elected, Le Pen says she would immediately seek an overhaul of the European Union that would reduce it to a very loose cooperative of nations with no single currency and no border-free area. If, as is likely, France’s EU partners refuse to agree to this, she would call a referendum to leave the bloc.

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Horse barn.

Theresa May Abandons ‘Home Owning Democracy’ of Thatcher and Tories (G.)

A major shift in Tory housing policy in favour of people who rent will be announced by ministers this week as Theresa May’s government admits that home ownership is now out of reach for millions of families. In a departure from her predecessor David Cameron, who focused on advancing Margaret Thatcher’s ambition for a “home-owning democracy”, a white paper will aim to deliver more affordable and secure rental deals, and threaten tougher action against rogue landlords, for the millions of families unable to buy because of sky-high property prices. Ministers will say they want to change planning and other rules to ensure developers provide a proportion of new homes for “affordable rent” instead of just insisting that they provide a quota of “affordable homes for sale”.

They will also announce incentives to encourage landlords to offer “family-friendly” guaranteed three-year tenancies, new action to ban unscrupulous landlords who offer sub-standard properties, and a further consultation on banning many of the fees that are charged by letting agents. A senior Whitehall source said: “We want to help renters get more choice, a better deal and more secure tenancies.” They added that the government did not want to scare people off from renting out homes, but offer incentives to encourage best practice and isolate the worst landlords. By emphasising the rights of renters, as well as trying to boost house building, the white paper will mark a turning point for a party that since the 1980s, and the first council house sales, has promoted home ownership as a badge of success, while neglecting the interests of renters.

The Tory manifesto for the 2015 general election spelt out plans for 200,000 new “starter homes” that could be bought by first-time buyers at 20% discounts, but said little about promoting the interests and improving the lot of so-called “generation rent”. Cameron also pushed the idea of getting people on the housing ladder through shared ownership schemes, an idea that is no longer such a priority. The white paper will be seen as part of May’s deliberate break with Cameron, and her drive to create a country “that works for everyone, not just the privileged few”.

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Makes no difference anymore to Greece and Italy.

Attention Trade Warriors: Germany’s Surplus is on the Wane (BBG)

The Trump administration appears intent on escalating the long-standing U.S. practice of attacking Germany’s current-account surplus. Good news for those on the receiving end: It has probably peaked. As officials like National Trade Council director Peter Navarro rail against the trade imbalance that dominates the balance of payments between the two countries, pensioners, home-buyers and immigrants are quietly working to bring that $297 billion current-account surplus down. According to research by Deutsche Bank, demographics and a housing boom are two factors that will drive the current account balance – the difference between what a country earns from abroad and what it spends – to its lowest level in seven years by 2020.

That may offer little consolation to the German delegation when it hosts a Group of 20 meeting of finance ministers in March, as they’ll likely face intensified criticism for allowing such an imbalance to continue. Germany has long faced flak, both within the euro area and outside it, for failing to encourage greater domestic spending and imports to balance out its external excess. Still, while the weaker euro will continue to make German exports attractive in the U.S. – think expensive sedans, high-tech machinery – there are countervailing factors at play on the other side of the equation. “In the medium term we expect the demographic development and the solid domestic economy, driven by a sustained positive development on the property market, to push the surplus down to 7 percent of GDP,” Deutsche Bank economist Heiko Peters said by phone.

A rising share of pensioners in the German population, who normally have less money to save than people in jobs, will crimp household savings rates, while an increasing number of immigrants such as refugees will contribute to boosting German imports, Peters wrote in a study first published last year. And with housing valuations outpacing income and rent growth since 2009, home owners feel richer, save less toward retirement and borrow against their property. That leads to rising imports of building materials to fuel the property boom and increased demand for foreign consumer goods on the back of the wealth effect. 7% of GDP is still a mighty big number for an economy as large as Germany’s. “That’s still a relatively high level until 2020,” Peters says. “But an even greater demographic effect is then expected for 2020-2025, and the surplus should then decline clearly further.”

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Another ‘curious’ WaPo feat.

Dennis Kucinich Rages Against The Military-Industrial-Complex (FB)

I have dedicated my life to peace. As a member of Congress I led efforts to avert conflict and end wars in countries such as Afghanistan, Iraq, Lebanon, Libya, Syria and Iran. And yet those of us who work for peace are put under false scrutiny to protect Washington’s war machine. Those who undermine our national security by promoting military attacks and destroying other nations are held up as national leaders to admire. Recently Rep. Tulsi Gabbard and I took a Congressional Ethics-approved fact finding trip to Lebanon and Syria, where we visited Aleppo and refugee camps, and met with religious leaders, governmental leaders and people from all sides of the conflict, including political opposition to the Syrian government.

Since that time we have been under constant attack on false grounds. The media and the war establishment are desperate to keep hold of their false narrative for world-wide war, interventionism and regime change, which is a profitable business for Washington insiders and which impoverishes our own country. Today, Rep. Gabbard came under attack yet again by the Washington Post’s Josh Rogin who has been on a tear trying to ruin the reputations of the people and the organization who sponsored our humanitarian, fact-finding mission of peace to the Middle East. Rogin just claimed in a tweet that as community organization I have been associated with for twenty years does not exist. The organization is in my neighborhood. Here’s photos I took yesterday of AACCESS-Ohio’s marquee.

It clearly exists, despite the base, condescending assertions of Mr. Rogin. Enough of this dangerous pettiness. Let’s dig in to what is really going on, inside Syria, in the State Department, the CIA and the Pentagon. In the words of President Eisenhower, let’s beware (and scrutinize) the military-industrial-complex. It is time to be vigilant for our democracy.


These leaders of the Christian faith in Aleppo begged for the US to stop funding terrorists in #Syria. They expressed that before international interventions (covert and overt) Syrians lived in peace without concern as to whether they were Christian, Muslim or Jew.

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Line of the day: “Why are we spending £160bn on renewing Trident when we now know its missiles are more likely to hit Australia if they were aimed at Russia?..”

NATO, Not Russia, Has Deployed Tanks To Poland & Baltic States – Galloway (RT)

British Defense Secretary speech on “Russian threat” is a desperate attempt to “save jobs and budgets” for the Cold War crowd, which is worried the new US leader will not consider Russia an enemy, broadcaster and former British MP George Galloway told RT. Addressing a group of university students, the UK’s defense secretary Michael Fallon warned of a resurgent Russia and said that it is becoming aggressive. RT: What did you make of Michael Fallon’s speech? George Galloway: Well, Michael Fallon puts the ‘squeak’ in the word ‘pipsqueak.’ He is of course the defense minister of a small and semi-detached European power with not much military prowess and which wants to feel big about itself.

And these people, and he’s not alone – the military industrial complex in the United States is up to the same game – they are desperately thrashing around to save their jobs, to save their budgets, to save their roles as muscle-men in the world. And Fallon got used to, as did other European powers, going around the world, threatening people with America’s army. Now America’s army is not quite so reliable, because America has a President who might not want to use the army in the way that these people want him to, at least one hopes not. And so they desperately seek to continually exacerbate the existing tensions with Russia to defend their own relevance. The people are asking, “What’s NATO for?”

The people are asking, “Why are we spending £160bn on renewing Trident when we now know its missiles are more likely to hit Australia if they were aimed at Russia? And in any case Russia has thousands of nuclear weapons, and we only a handful.” So it’s all pretty pitiful, actually. Right down to the audience of university students, hoping that none of them would challenge him. I’d like him to debate these matters with me, he knows me well, he comes from the same town in Scotland as me. I’d really love to get my metaphorical hands on him to have some of these matters out. The truth is that the European Union is having to come to terms with the fact that the US now has a President that doesn’t want war with Russia and they – who have built their entire 50-60 years of history on the possibility of war with Russia – are all at sea, except we don’t have that many battleships left either.

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Greece turning into an impoverished prison camp is a feature not a bug.

Varoufakis Calls on PM Tspiras to Ditch Bailout Restructuring (GR)

Yanis Varoufakis wrote in an op-ed in Efimerida ton Syntakton on Saturday. The former finance minister called on Prime Minister Alexis Tspiras to adopt a plan originally proposed by Varoufakis while he was still in office. The plan would unilaterally restructure the loans the ECB holds. In addition according to BitCoin Magazine and reiterated in the former FM’s op-ed a payment system that could operate in euros but which could be changed into drachmas “overnight” if necessary would be implemented along with a parallel payment system. “This two-pronged preparation is the only way to prevent another excruciating retreat by the prime minister in the short-term and [German Finance Minister Wolfgang] Schaeuble’s plan in the long-term,” Varoufakis wrote. Varoufakis has been a vocal protester to Greek bailout plans and restructuring as it stands now, hence his resignation. He firmly believes that the current plan could lead to Greece leaving the Eurozone of their own accord.

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More on that. “In reality there was never a basis for hope that the toxic 3rd bailout would be gradually rationalized, in terms that the European Commission would support Athens so that the austerity and anti-social IMF measures would relax..”

Varoufakis Urges Tsipras To Ditch Negotiations, Adopt “Parallel System” (KTG)

Former finance minister Yanis Varoufakis strikes back and urges Prime Minister Alexis Tsipras to turn his back on Greece’s lenders, adopt a parallel payment system and to unilaterally restructure the loans held by the ECB. In an op-ed in Efimerida ton Syntakton, Varoufakis, Varoufakis calls on Tispras to prepare for rupture with creditors in order to avoid rupture. “This two-pronged preparation is the only way to prevent another excruciating retreat by the prime minister in the short term and [German Finance Minister Wolfgang] Schaeuble’s plan in the long term,” Varoufakis wrote. In his article, Varoufakis suggested that Schaeuble’s strategy is to lead Greeks to the point of exhaustion so they ask to leave the euro themselves.

Noting that the “parallel payment system was already designed in 2014”, Varoufakis stresses that Tsipras had “two delusions” that led the government to the current impasse: A) that on the night of the referendum, the dilemma was between Schaeuble’s Grexit Plan and the 3rd bailout, and B) that the obedience to the 3rd bailout could be politically manageable through a parallel, society-friendly program. Both of these “working assumptions” were based only on autosuggestion, the ex finance minister stresses adding that he tried to explained this to the Prime Minister on the night of the referendum

“In reality there was never a basis for hope that the toxic 3rd bailout would be gradually rationalized, in terms that the European Commission would support Athens so that the austerity and anti-social IMF measures would relax, the IMF would force Berlin to accept debt restructuring and lower primary surpluses, the ECB would include Greece in the bond purchase program (QE),” Varoufakis wrote. He accused leading European negotiators of lying. “That Moscovici [EU Monetary Affairs Commissioner], Coerer [ECB] and Sapen [French finance minister] might have given such promises was not an excuse. Since May 2015 we were fully aware that these gentlemen know how to lie and fail to deliver on their promises when they do not lie.”

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Completely devoid of any comprehension or compassion. Moral Bankruptcy. Throw money at it, that should work… And then keep bombing, British involvement in that makes a lot of profit.

UK: Refugees Heading To Europe To Be Sent To Asia And Latin America (Ind.)

Refugees heading to Europe will be urged to settle in Asia and Latin America instead, under a new £30m British aid package. Theresa May announced the scheme at an EU summit in Malta, arguing it showed the Government is “stepping up its support for the most vulnerable refugees”. The package will see Britain provide lifesaving supplies for people facing freezing conditions across Eastern Europe and Greece, including warm clothing, shelter and medical care. However, it will also pay for better infrastructure in far-flung countries willing to take refugees who had hoped to settle in Europe. The move builds on an existing scheme run by The UN Refugee Agency (UNHCR), but it is the first time Britain’s aid budget has been used to bolster it. It risks adding to criticism that the Prime Minister is unwilling for the UK to accept a reasonable share of the refugees and migrants fleeing Syria and other war zones.

Only a few thousand Syrian refugees have been resettled in Britain – and the Government has refused to take part in an EU-wide programme to co-ordinate the continent’s response to the crisis. Government sources stressed that people would only be diverted to countries in Asia and Latin America if they were willing to be resettled there. The Department for International Development is expected to release a list of interested countries later. In Malta the Prime Minister insisted the focus of the £30m programme was “helping migrants return home rather than risk their lives continuing perilous journeys to Europe”. It would provide assistance to refugees and migrants across Greece, the Balkans, Libya, Egypt, Tunisia, Morocco, Algeria and Sudan. Priti Patel, the International Development Secretary, said: “Conflict, drought and political upheaval have fuelled protracted crises and driven mass migration. We cannot ignore these challenges.

The package will be delivered by UNHCR, the International Organisation for Migration (IOM) and NGO collective Start Network. Its aim is to:

* provide 22,400 life-saving relief items including tents, blankets, winter clothes such as hats and gloves and hygiene kits including mother and baby products

* help more than 60,000 people with emergency medical care, legal support and frontline workers to identify those at risk of violence and trafficking

* allow up to 22,000 people to reunite with family members they have become separated from

* help countries in Asia and Latin America that “might be able to resettle refugees put the infrastructure and systems in place to do so”

* provide more than 1,500 refugees in Egypt, including those fleeing Syria and other conflicts, with urgent health assistance and educational grants for students to go back to school

* provide a migrant centre in Sudan to enable “voluntary returns home when safe”, replicating a successful scheme in Niger.

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Feb 012017
 
 February 1, 2017  Posted by at 9:21 pm Finance Tagged with: , , , , , , , , ,  5 Responses »
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Théodore Géricault The Raft of the Medusa 1819

 

Benoît Hamon won the run-off for the presidential nomination of the Socialist party in France last weekend. The party that still, lest we forget, runs the country; current president François Hollande is a Socialist, even if only in name, but he did win the previous election. Hamon ran on a platform of shortening the workweek from 35 to 32 hours, legalizing cannabis and ‘easing’ the country into a universal basic income of €750/month per capita. He’s way left of Hollande, who has a hilariously low approval rating of 4%.

Hamon doesn’t appear to have much chance of winning the presidency in the two voting rounds taking place on April 23 and May 7, but we all know how reliable election predictions are these days, and in that regard France is as volatile as the next country. With conservative runaway favorite François Fillon accused of having paid his wife $1 million for doing nothing and Marine Le Pen, already desperately short on funds, targeted by the EU over money, who knows what and who will decide the election? Hamon may simply be the only one left standing on the day after the vote.

I bring up Hamon, about whom I know very little, not least because he was more or less a late minute addition to the field that was supposed to have been an easy win for his former boss Manuel Valls, I bring up Hamon because he confirms something I’ve been talking about for a while. That is, the fact that ‘leftist France’ chooses to go even more left than expected, goes a way towards proving my ‘theory’ that voters in many if not most western countries will move away from their respective political centers, and towards extremes.

This is an inevitable consequence of traditional, less extreme, politicians and parties having all become clustered together in shapeless and colorless blobs in the center, both in the US and in most European countries, combined with the fact that all of their policies -especially economic ones- have spectacularly failed vast amounts of people (or voters, if you will).

The failure of their policies has been hidden from sight by interest rates squashed like bugs, ballooning central bank balance sheets, real estate bubbles, fabricated economic data, and fantasy stories in their media that seem(ed) to affirm the ‘recovery’ tales, but they all ‘forgot’ to -eventually- line up reality with the fantasies. They never made 99% of people actually more comfortable. The entire politics-economics-media deus ex machina has failed because it was/is based on lies and fake news, meant to hide economic reality (i.e. negative growth), and this will have grave consequences.

People have started noticing this despite the official and media-promoted data. And they’re not going to “un-notice”. Not only don’t people -once they find out- like having been lied to for years, they dislike worsening living conditions even more. And that’s all they get; the only people who get it better are the rich, because without that the machinery can’t continue pumping up the ‘official’ numbers.

 

And what do you get? People complain about Trump. And they focus on one of his -seemingly- crazy ideas: temporarily closing US borders to refugees from nations with large Muslim populations. Which is a fine thing to resist, because yes, it’s a pretty silly idea, but why haven’t they paid similar attention to how they’ve been lied to for years on both the economy and on Syria, on how Obama became the Drone King and how many innocent people lost their lives because of that?!

To how favorite all-American gal Hillary screwed up Northern Africa when she declared We Came We Saw He Died and the death of Libya’s Gaddafi, who gave his country the highest living standards in the region, free education and free health care, but was murdered by Hillary’s US troops, co-created the chaos that led to so many people wanting to flee their homelands in the first place?

Why is that? Why are there protests when people are halted at an American border crossing but not when American and British and French and Australian forces blow the very same people’s homes to smithereens? Could that have something to do with where the protesters get their information? With how much they know about what’s happening in the world before it reaches their doorsteps?

Yes, people are suffering, and it’s very unfair what’s happening to many caught in the Trump Ban, but does anyone really believe that that’s where it started, that this is the first time (or even a unique time) that protest is warranted, or more so? And if not, why is it happening? Because people only notice stuff when it hits them in the face, I would presume, but who among the protesters would volunteer to agree they live their lives with blinders on? Not many, I would venture. So why do we see what we do? Where were you when Obama ordered yet another child, a family, which hadn’t yet made it to a US airport but might as well have, to be collateral damage?

I get why you’re protesting the Trump ban, but I don’t get why that’s your prime focus. I am guessing that most of the protesters would not have voted Trump in the first place, and would have been much happier -to put it mildly- for Hillary to be president right now. But if you would have paid attention in history class, you would know that it was Hillary who brought the refugees to your welcome mats to begin with.

Take it a step further, like to the January 21 women’s march, and you would realize that the vast majority of the refugees would have much preferred to stay where they grew up, where the women in their families, their sisters and aunts and daughters used to live. Most of whom are gone now, they’re either dead or diaspora-ed to Jordan, Turkey, Alberta, Sweden, Greece. All on account of Obama and his crew. Who of course blamed it on Assad and Putin. “I killed 1000 children, but I had to because those guys are so dangerous….”

This generation of refugees, of the huddled masses that the Statue of Liberty is supposed to teach you about, didn’t come to America because it’s the promised land; they came because America turned their homeland into a giant pile of rubble surrounded by garbage heaps and minefields. I don’t know if you’ve ever seen pictures of Aleppo before it was destroyed, but I dare you to tell me there is even one existing American city today that’s more beautiful than Aleppo was before Americans and their allies reduced it to dust. Here you go. This is Aleppo before America got involved in Syria:

 

 

There’s very little left of that beautiful city, with its highly educated people and their lovely happy children. And none of that has anything at all to do with Donald Trump! I don’t want to give you pics of what Aleppo looks like now. I want you to remember how lovely it was before ‘we’ moved in, years go. Sure, what you hear and see in the west is that Assad and Putin are the bad guys in this story. But now that the US/EU supported ‘rebels’ are gone, dozens of schools are reopening, and medical centers, hospitals. Who are the bad guys now?

And yeah, Trump is an elephant, and elephants are always awkward and they’re messy and they tend to kick things over and when they make mistakes those tend to be huge, but how much valuable china does the US really have left anyway? Isn’t it all perhaps just a sliver off target, the demos, the outrage and indignation? Is the idea that your army can destroy people’s living environments with impunity without you protesting in anything approaching a serious way, and that then you get to demand, through protest, that those same people are allowed entry into your country? That’s way too late to do the right thing.

 

I started out making the point that as our politico-economic systems are failing, voters will move away from the center that devised and promoted those systems, and that this will happen in many countries. The US could have had Bernie Sanders as president, but the remaining powers in the center made that impossible. Likewise, many European countries will see a move towards either further left or further right.

Since the former is mostly dormant at best, while the latter has long been preparing for just such a moment, many nations will follow the American example and elect a right wing figurehead. This will cause a lot of chaos, but that’s not necessarily a bad thing. People need to wake up and become active. The recent US demonstrations may be a first sign of that, even though they look largely out of focus. More than anything else, people need a mirror, they need to acknowledge that because they’ve been in a state of mindless self-centered slumber for so long, they have work to do now.

And that work needs to consist of more than yelling at the top of your lungs that Trump and Le Pen and Wilders are such terribly bad people. For one thing because that will only help them, for another because they were not the people who put you to sleep or were supporting mindless slaughter in faraway nations or were making up ‘official’ numbers as your economies were dumped into handbaskets on their way to hell. So ask yourselves, why did you believe what Obama was saying, or Merkel, or Cameron, Sarkozy, Rutte, you name them, while you could have known they were just making it all up, if only you had paid attention?

Why? What happened? Why did the term ‘fake news’ only recently become a hot potato, even though you’ve been bombarded with fake and false news for years? Is it because you were/are so eager to believe that your economy is recovering that any evidence to the contrary didn’t stand a chance? If so, do realize that for many people that was not true; it’s why they voted for the people you now so despise. Is it perhaps also because you’re so eager to believe your ‘leaders’ do the right thing that you completely miss out on the fact that they’re not? And whose fault is that?

 

In yet another angle, people claim that the planet’s in great peril because Trump doesn’t ‘believe’ in climate change. But it’s not Trump’s who’s the danger when it comes to climate change, you are, because you’re foolish enough to believe that things like last year’s infinitely bally-hood Paris Agreement (CON21) will actually ‘save’ something. That belief is more dangerous than a flat-out denial, because it lulls people into sleep, while denial keeps them awake.

It’s the idea that there’s still time to rescue the planet that’s dangerous, because it’s the perfect excuse to keep on doing what you were doing without having to feel too much guilt or remorse. You’re not going to save a single species with your electric car or whatever next green fad there is, the only way to do that is through drastic changes to your society and your own behavior.

That’s not only true with respect to the climate, it’s just as valid with respect to the refugees on your doorstep. If you want to rescue them, and those who will come after them, the only thing that makes any difference is making sure the bombing stops, that the US and European war machines are silenced. If you don’t do that, none of these protests are of any use. So sure, yeah, by all means, protest, but make sure you protest the real issues, not just a symptom.

That doesn’t mean you should shut the door in the face of these frail forms fainting at the door, that’s just insane, but it does mean that after welcoming your guests, you will also have to make sure what brought them there must stop. If you stop killing and maiming these people, and help rebuild Aleppo and a thousand other places, they won’t need to come to your door anymore.

 

As for the political field, unrest will continue and grow because the end of economic growth means the end of centralization, and our entire world, politically, economically, what have you, is based on these two things. Today, unrest is the only growth industry left. And it’s not going away anytime soon. It’s a new day, a new dawn, it’s just that unfortunately this is not going to be a pretty one.

Still, none of it is unexpected. The Automatic Earth has been saying for years, and with us quite a few others, that this was and is inevitable. Of course there are those who say that we cried wolf, but we’ll take that risk any day. Saw a nice very short video of Mike Maloney saying in 2011 that Obama would have to double US debt between 2008 and 2016 just to keep the entire system from starting to collapse, running to stand still, Alice, Red Queen and all. And guess what?

There’s the recovery as it’s been sold to you. It’s all been borrowed, to the last penny. Will Donald Trump double US debt once again? Will the EU countries do the same? How about Japan and China? And to think that federal debt isn’t even the worst threat, personal debt is, and so many of us carry so much of that, and try to pass off our mortgaged homes as assets, not debt. An increasingly desperate game on all fronts.

Jan 232017
 
 January 23, 2017  Posted by at 10:08 am Finance Tagged with: , , , , , , , , ,  7 Responses »
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DPC Looking south on Fifth Avenue at East 56th Street, NYC 1905


We’ve Been in Decline for 40 Years – Trump is a Chance to Rethink – Eno (G.)
The Coming Unhappiness With Trump – Egon von Greyerz (KWN)
Trump’s Infrastructure, Defense Plans Will Lead To Ruin – Ron Paul (CNBC)
China’s Central Bank ‘Playing Dangerous Game’ To Prop Up Yuan (SCMP)
EU Is Dead But Doesn’t Know This Yet – Marine Le Pen (DS)
We Need An Alternative To Trump’s Nationalism. It’s Not The Status Quo (YV)
George Soros and the Women’s March on Washington (Nomani)
These are the Countries with the Biggest Debt Slaves (WS)
“Billion-Year” Gambian President Was Installed By The CIA (SCF)
Greek Supreme Court To Decide On Fate Of Eight Turkish Servicemen (Kath.)
UK Government ‘Sneaks Out’ Its Own Alarming Report On Climate Change (Ind.)
The Last Time Oceans Got This Warm Sea Levels Were 20 to 30 Feet Higher (LAT)

 

 

Only fitting that the best description of how I feel about this can be found in an interview about music.

We’ve Been in Decline for 40 Years – Trump is a Chance to Rethink – Eno (G.)

He has called himself an optimist. In the past. I ask him if he still is, post-2016. Yes, he says, there is a positive way to look at it. “Most people I know felt that 2016 was the beginning of a long decline with Brexit, then Trump and all these nationalist movements in Europe. It looked like things were going to get worse and worse. I said: ‘Well, what about thinking about it in a different way?’ Actually, it’s the end of a long decline. We’ve been in decline for about 40 years since Thatcher and Reagan and the Ayn Rand infection spread through the political class, and perhaps we’ve bottomed out. My feeling about Brexit was not anger at anybody else, it was anger at myself for not realising what was going on. I thought that all those Ukip people and those National Fronty people were in a little bubble.

Then I thought: ‘Fuck, it was us, we were in the bubble, we didn’t notice it.’ There was a revolution brewing and we didn’t spot it because we didn’t make it. We expected we were going to be the revolution.” He draws me a little diagram to explain how society has changed – productivity and real wages rising in tandem till 1975, then productivity continuing to rise while real wages fell. “It is easily summarised in that Joseph Stiglitz graph.” The trouble now, he says, is the extremes of wealth and poverty. “You have 62 people worth the amount the bottom three and a half billion people are worth. Sixty-two people! You could put them all in one bloody bus … then crash it!” He grins. “Don’t say that bit.” (Since we meet, Oxfam publish a report suggesting that only eight men own as much wealth as the poorest 3.6 billion people in the world – half the world’s population.)

[..] He is still thinking about the political fallout of the past year. “Actually, in retrospect, I’ve started to think I’m pleased about Trump and I’m pleased about Brexit because it gives us a kick up the arse and we needed it because we weren’t going to change anything. Just imagine if Hillary Clinton had won and we’d been business as usual, the whole structure she’d inherited, the whole Clinton family myth. I don’t know that’s a future I would particularly want. It just seems that was grinding slowly to a halt, whereas now, with Trump, there’s a chance of a proper crash, and a chance to really rethink.”

Read more …

Not his fault. As I wrote in November 8’s America is the Poisoned Chalice.

The Coming Unhappiness With Trump – Egon von Greyerz (KWN)

“The new US Administration has taken over with the conviction that they will “make America great again.” I really hope they will succeed because a strong US would be good for the world. Sadly, the odds of achieving that admirable objective are totally stacked against them. At the end of the next 4 years there is a risk that this Administration will be more hated than any government since Carter and probably even more hated than Carter. The coming unhappiness with Trump and his team will not arise because of the actions they take. They will clearly do everything in their might to make America great again. But the probabilities are totally against them to achieve this goal. They are taking over power at a time when debt has grown exponentially since the 1970s. They are also assuming power of a country that has not achieved a proper budget surplus for well over half a century. Even worse, the US has not had a positive trade balance since the early 1970s.

So here we have a country that has been living above its means for decades and has no real chance of changing this vicious cycle. The Federal debt is at $20 trillion and has been growing at the rate of 9% per year for the last 40 odd years. The forecast for the next four years is that the growth of the debt will accelerate. Total US debt is over $70 trillion or over 3.5x GDP. But that is just a fraction of the US liabilities. Unfunded liabilities are over $200 trillion. And you can add to that to the real gross derivative positions of US banks, which most likely more than $500 trillion. The success of a president in the US is closely linked to the performance of the stock market. Therefore, the best chance for a president to be loved by the American people and re-elected is for stocks to go up. P/Es on the S&P index are now at 70% above their historical mean – hardly a position from which it is likely to surge. Corporate borrowings have also surged since the Great Financial Crisis started.

In 2006 US corporate debt was just over $2 trillion. Today it is more than 3x higher at $7 trillion! At the same time, cash as a%age of corporate debt is declining and is now down to 27%. Within this massive increase in debt, there are major defaults looming in many areas like car loans, student loans and the fracking sector where potential write offs could be in the trillions of dollars. Another disaster which is guaranteed to happen in the US and the rest of the world is the coming pension crisis. Most people in the West have zero or a minimal pension. And even for the ones who have proper pension plans, they are greatly underfunded. It is estimated that US state and local government pensions are underfunded to the extent of a mind-blowing $6 trillion. And this is after a long period of surging stocks and bonds. Imagine what will happen to these pensions when stocks and bonds collapse, which is very likely to happen in the next few years.

Read more …

Look here, CNBC, introducing Ron Paul as a “well-known Trump critic” is insane. Fake labeling.

Trump’s Infrastructure, Defense Plans Will Lead To Ruin – Ron Paul (CNBC)

For all the fanfare that greeted President Donald Trump at his inauguration on Friday, the next four years of his presidency could very well be marred by a weakening economy as a result of “injurious” policies. That’s according to past Texas Congressman and former presidential candidate Ron Paul, who joined CNBC’s “Futures Now” last week to echo his past sentiments about the new president. Most notably, the well-known Trump critic believes that the President’s proposed plans could overspend the economy into trouble and drive the Federal Reserve to interfere. “With his massive increase in infrastructure and the military, I think there’s going to be a lot more spending,” said Paul. “The debt is going to be much bigger [and] I think that will put more pressure” on the Federal Reserve, he said, with the central bank already planning to tighten interest rates.

“You have good times, and then you have bad times to compensate for the artificially good times,” he added. “So we’ll have a downturn and that will be a real challenge for the new administration.” Although most of Wall Street appears bullish about the short-term economic outlook under Trump’s fiscal policy plans, some economists have been less than sanguine. Paul’s critique echoed that of David Stockman, a former Reagan-era budget director who also warned CNBC last week that Trump’s plans would ultimately lead to financial calamity. Paul had refused to endorse Trump from early on in the election cycle, claiming that the now President would divide the Republican Party. Much of Paul’s criticism of Trump lies with the latter’s proposed border taxes, which Paul believes is actually more of a “tariff” that would block free trade. “I think that right now, I’d fear most the retaliation [from other countries] and the burden it’s going to place on the consumer,” said Paul.

Read more …

“Floatation does not mean a large devaluation,” he said. “Actually, a one-off devaluation [of the yuan] doesn’t need to be big

No, I don’t think so. A devaluation must be big, because you can’t risk having to repeat it. And floatation will mean a large loss of value no matter what. When you float, you can’t manipulate anymore.

China’s Central Bank ‘Playing Dangerous Game’ To Prop Up Yuan (SCMP)

China’s central bank is playing a dangerous game using the country’s foreign reserves to defend the yuan because it could leave the nation defenceless in an increasingly volatile world, a state researcher has warned. Zhang Ming, senior fellow at the Institute of World Economics and Politics under the Chinese Academy of Social Sciences, said the People’s Bank of China (PBOC) should take a hands-off approach to the currency and focus on safeguarding foreign exchange reserves. “Forex reserves are valuable assets that [China] can use at critical times. It’s a pity that they are being sold heavily in the market,” Zhang said. “It should be the last resort.” Zhang said the PBOC was betting on “the weakening of the US dollar and a domestic economic rebound”.

The country’s forex reserves have shrunk by almost a $1 trillion since June 2014 as the central bank has sought to prevent a large fall in the yuan against the U.S. dollar. Zhang call’s for Beijing to reverse tack and abandon its heavy intervention in the foreign exchange market is gaining traction among researchers. Zhang Bin, another researcher at the Chinese Academy of Social Sciences, agreed that Beijing should free up controls on the yuan’s exchange rate by reducing government intervention in the market. “Floatation does not mean a large devaluation,” he said. “Actually, a one-off devaluation [of the yuan] doesn’t need to be big, and [the currency] may rebound as well. By doing this it will help the domestic economy,” he said.

Read more …

She’s dead on, I’ve been saying this for years, and she’s getting it handed to her on a silver platter the same way Trump was.

EU Is Dead But Doesn’t Know This Yet – Marine Le Pen (DS)

Far-right National Front leader Marine Le Pen said on Sunday that France has to leave the European Union as she claimed that staying in the bloc is no longer a viable option for the country. Speaking in an interview with France’s BGNES, Le Pen said the EU is dead but it does not know this yet, stating that the bloc has failed economically, socially as well as security-wise. She said the recent economic growth, unemployment and poverty indicators prove the EU’s failure, adding that the bloc is also incapable of protecting its own borders against what she called as “Islamic terrorism”. With voters across Europe moving to the right, most polls currently show a Fillon-Le Pen runoff is the most likely scenario in May. National Front leader Le Pen told a meeting of rightwing populist parties in Germany on Saturday that Europe was about to “wake up” following the victory of Donald Trump in the US election and the British vote to leave the EU.

Read more …

I get what Varoufakis thinks and says, but I also think renewed nationalism is backed into the cake by now. Where I differ from most is I don’t see that as a disaster, not necessarily. It’s the EU that is a disaster.

We Need An Alternative To Trump’s Nationalism. It’s Not The Status Quo (YV)

Thatcher’s and Reagan’s neoliberalism had sought to persuade that privatisation of everything would produce a fair and efficient society unimpeded by vested interests or bureaucratic fiat. That narrative, of course, hid from public view what was really happening: a tremendous buildup of super-state bureaucracies, unaccountable supra-state institutions (World Trade Organisation, Nafta, the European Central Bank), behemoth corporations, and a global financial sector heading for the rocks. After the events of 2008 something remarkable happened. For the first time in modern times the establishment no longer cared to persuade the masses that its way was socially optimal.

Overwhelmed by the collapsing financial pyramids, the inexorable buildup of unsustainable debt, a eurozone in an advanced state of disintegration and a China increasingly relying on an impossible credit boom, the establishment’s functionaries set aside the aspiration to persuade or to represent. Instead, they concentrated on clamping down. In the UK, more than a million benefit applicants faced punitive sanctions. In the Eurozone, the troika ruthlessly sought to reduce the pensions of the poorest of the poor. In the United States, both parties promised drastic cuts to social security spending. During our deflationary times none of these policies helped stabilise capitalism at a national or at a global level. So, why were they pursued?

Their purpose was to impose acquiescence to a clueless establishment that had lost its ambition to maintain its legitimacy. When the UK government forced benefit claimants to declare in writing that “my only limits are the ones I set myself”, or when the troika forced the Greek or Irish governments to write letters “requesting” predatory loans from the European Central Bank that benefited Frankfurt-based bankers at the expense of their people, the idea was to maintain power via calculated humiliation. Similarly, in America the establishment habitually blamed the victims of predatory lending and the failed health system.

It was against this insurgency of a cornered establishment that had given up on persuasion that Donald Trump and his European allies rose up with their own populist insurgency. They proved that it is possible to go against the establishment and win. Alas, theirs will be a pyrrhic victory which will, eventually, harm those whom they inspired. The answer to neoliberalism’s Waterloo cannot be the retreat to a barricaded nation-state and the pitting of “our” people against “others” fenced off by tall walls and electrified fences.

Read more …

Russia threw out Soros, Hungary wants to, so does FYROM. Who’s next?

George Soros and the Women’s March on Washington (Nomani)

In the pre-dawn darkness of today’s presidential inauguration day, I faced a choice, as a lifelong liberal feminist who voted for Donald Trump for president: lace up my pink Nike sneakers to step forward and take the DC Metro into the nation’s capital for the inauguration of America’s new president, or wait and go tomorrow to the after-party, dubbed the “Women’s March on Washington”? The Guardian has touted the “Women’s March on Washington” as a “spontaneous” action for women’s rights. Another liberal media outlet, Vox, talks about the “huge, spontaneous groundswell” behind the march. On its website, organizers of the march are promoting their work as “a grassroots effort” with “independent” organizers. Even my local yoga studio, Beloved Yoga, is renting a bus and offering seats for $35.

The march’s manifesto says magnificently, “The Rise of the Woman = The Rise of the Nation.” It’s an idea that I, a liberal feminist, would embrace. But I know — and most of America knows — that the organizers of the march haven’t put into their manifesto: the march really isn’t a “women’s march.” It’s a march for women who are anti-Trump. As someone who voted for Trump, I don’t feel welcome, nor do many other women who reject the liberal identity-politics that is the core underpinnings of the march, so far, making white women feel unwelcome, nixing women who oppose abortion and hijacking the agenda. To understand the march better, I stayed up through the nights this week, studying the funding, politics and talking points of the some 403 groups that are “partners” of the march. Is this a non-partisan “Women’s March”?

Roy Speckhardt, executive director of the American Humanist Association, a march “partner,” told me his organization was “nonpartisan” but has “many concerns about the incoming Trump administration that include what we see as a misogynist approach to women.” Nick Fish, national program director of the American Atheists, another march partner, told me, “This is not a ‘partisan’ event.” Dennis Wiley, pastor of Covenant Baptist United Church of Christ, another march “partner,” returned my call and said, “This is not a partisan march.” Really? UniteWomen.org, another partner, features videos with the hashtags #ImWithHer, #DemsInPhily and #ThanksObama. Following the money, I pored through documents of billionaire George Soros and his Open Society philanthropy, because I wondered:

What is the link between one of Hillary Clinton’s largest donors and the “Women’s March”? I found out: plenty. By my draft research, which I’m opening up for crowd-sourcing on GoogleDocs, Soros has funded, or has close relationships with, at least 56 of the march’s “partners,” including “key partners” Planned Parenthood, which opposes Trump’s anti-abortion policy, and the National Resource Defense Council, which opposes Trump’s environmental policies. The other Soros ties with “Women’s March” organizations include the partisan MoveOn.org (which was fiercely pro-Clinton), the National Action Network [..]. Other Soros grantees who are “partners” in the march are the American Civil Liberties Union, Center for Constitutional Rights, Amnesty International and Human Rights Watch.

Read more …

Well, they call their debts assets…

These are the Countries with the Biggest Debt Slaves (WS)

Americans have been on a borrowing binge. To buy their favorite cars and trucks, they’ve loaded up on $1.14 trillion in auto loans. Young and not so young Americans are mortgaging their future with student loans that now amount to $1.28 trillion. Credit card and other debts are at $1.12 trillion. And mortgage debt stands at $8.82 trillion. So, total household debt was $12.35 trillion, according to the New York Fed’s Household Debt and Credit Report for the third quarter 2016. That’s a massive amount of debt. Many consumers are struggling with it. Student loans are seeing enormous default rates, and repayment rates are far worse than previously disclosed. And “debt slaves” has become a term in the financial vernacular. But it isn’t nearly enough debt…

Neither for the New York Fed whose President William Dudley, in a speech a few days ago, practically exhorted households to borrow more against the equity in their homes so that they blow this cash and drive up retail sales: “Whatever the timing, a return to a reasonable pattern of home equity extraction would be a positive development for retailers, and would provide a boost to aggregate growth,” he mused, with nostalgic thoughts of 2008. Nor for the global rankings of debt slaves, where US households squeaked into the ignominious 10th place, barely ahead of Portugal! I mean, come on! Portugal!! There are many ways to measure household indebtedness and debt burdens. Comparing total household debt to the overall size of the economy as measured by GDP is one of the measures. And per this household-debt-to-GDP measure, the Americans are 10th place with 78.8% and look practically prudent compared to the peak just before the Financial Crisis.

[..] And here’s some inevitable food for a terrifying thought: The countries with highly indebted households, so the top of the list, are mostly countries were central-bank policy rates are very low or even negative, and where mortgage rates are super low. What happens to those housing markets, the households, the banks, and the overall economies when interest rates rise even a little and that whole equation of perennially ballooning debt falls apart? We already know what happens.

Read more …

You might be tempted to name this an unbelievable story, but then you realize this is what the US is good at. Reads like a spy novel, a film script.

“Billion-Year” Gambian President Was Installed By The CIA (SCF)

Gambian President and dictator Yahya Jammeh, facing a combined military force composed of Senegalese army troops, the Nigerian air force, and troops from Mali, Ghana, and Togo, has agreed to relinquish the presidency of Gambia. On December 1, 2016, Jammeh was defeated for re-election in a surprise upset by his little-known rival Adama Barrow. Jammeh received only 45% of the vote. During the election campaign Jammeh vowed in an interview with the BBC to «rule for one billion years». After initially conceding defeat to Barrow, Jammeh reneged on his promise to step down and announced he would remain as president. The Economic Community of West African Countries (ECOWAS) decided that Jammeh had to go, a stance ironically supported by the United States, which had assisted Jammeh in overthrowing Gambia’s democratically-elected president, Sir Dauda K. Jawara, in 1994.

After Jammeh refused ECOWAS’s, the African Union’s, and the United Nations Security Council’s demands to leave office and permit Barrow to assume the presidency, ECOWAS mobilized its military forces. On January 19, 2017, Barrow was sworn in as president in the Gambian embassy in Dakar, the Senegalese capital. Hours later, Senegalese troops began to enter Gambia and Nigerian air force jets buzzed the Gambian capital of Banjul. The presidents of Mauritania and Guinea flew to Banjul to urge Jammeh to leave office peacefully. Jammeh’s fate was sealed when Major General Ousman Badjie, the commander of the Gambian armed forces, recognized Barrow as Gambia’s commander-in-chief.

The demand from the United States for Jammeh to relinquish power was a display of absolute hypocrisy since Washington had not only installed Jammeh into power but two successive U.S. presidents warmly welcomed the military ruler to the White House. Jammeh, who owns a $3.5 million mansion in Potomac, Maryland, was warmly greeted by President Barack Obama at the 2014 and 2015 U.S.-Africa Leaders’ Summits in Washington. President George W. Bush greeted Jammeh at the U.S.-Africa Business Summit in Washington in 2003. With the protection of the State Department’s Diplomatic Security Service, Jammeh’s Moroccan-born wife, Zineb Jammeh, ran up huge totals at the Washington area’s fashionable shopping malls. She also settled on Sam’s Club, a wholesale discount store, to buy massive amounts of household goods. Jammeh is a textbook case of CIA-sponsored kleptocracy on a grand scale.

Under Jammeh, Gambia continued to be a strategic ally of the United States. The kleptocratic Gambian leader permitted the U.S. National Aeronautics and Space Administration (NASA) to maintain an emergency landing site for NASA’s space shuttle in the country and Gambia participated with the U.S. Central Intelligence Agency in the post-9/11 rendition program. Before being installed as Gambia’s dictator, Jammeh had received training from the Pentagon. Merely a lieutenant in the Gambian National Army. In 1993, Jammeh attended the notorious «School of the Americas» in Fort Benning, Georgia. The school has trained some of Latin America’s most notorious military dictators and death squad commanders. While in Fort Benning, Jammeh was made an honorary citizen of the state of Georgia. The following year, and before he launched his coup, Jammeh attended the Military Police Officers Basic Course (MPOBC) at Fort McClellan, Alabama.

[..] It was during the administration of President Bill Clinton that the green light was given for Jammeh to be installed in a CIA-led coup in Gambia. On July 24, 1994, President Jawara was at his palace in Banjul entertaining the commanding officer of the visiting U.S. Navy tank landing ship, the USS La Moure County. Also present was U.S. ambassador to Gambia, Andrew Winter, a career foreign service officer who represented a new breed of U.S. ambassador – one that routinely and publicly involved himself in the domestic political affairs of the nation to which they were posted. While Jawara and the ship’s commander exchanged diplomatic niceties, junior army officers, led by Jammeh, staged a coup against the democratically elected government.

Read more …

Only one decision makes any sense.

Greek Supreme Court To Decide On Fate Of Eight Turkish Servicemen (Kath.)

The Greek Supreme Court on Monday is to rule whether eight Turkish servicemen who fled to Greece after July’s failed coup should be extradited. Three separate panels of Greek judges have already ruled that the Turkish officers’ lives may be put at risk if they were to be returned to Turkey, where Prime Minister Recep Tayyip Erdogan has launched a tough crackdown on dissent since the summer’s coup attempt. Diplomatic circles that fear a rejection of Turkey’s request could put a further strain on ties between Athens and Ankara, particularly at a time when Cyprus reunification talks also hang in the balance, have been keeping a close eye on proceedings. The issue has also drawn attention from intellectuals and the media in Greece and other parts of Europe, who see it as a test of the bloc’s fundamental principles and values. All eight servicemen have denied involvement in the coup attempt and say they fear for their lives if they are returned to Turkey.

Read more …

What a surprise.

UK Government ‘Sneaks Out’ Its Own Alarming Report On Climate Change (Ind.)

The Government has been accused of trying to bury a major report about the potential dangers of global warming to Britain – including the doubling of the deaths during heatwaves, a “significant risk” to supplies of food and the prospect of infrastructure damage from flooding. The UK Climate Change Risk Assessment Report, which by law has to be produced every five years, was published with little fanfare on the Department for Environment, Food and Rural Affairs’ (Defra) website on 18 January. But, despite its undoubted importance, Environment Secretary Andrea Leadsom made no speech and did not issue her own statement, and even the Defra Twitter account was silent. No mainstream media organisation covered the report.

One leading climate expert accused the Government of “trying to sneak it out” without people noticing, saying he was “astonished” at the way its publication was handled. In the report, the Government admitted there were a number of “urgent priorities” that needed to be addressed. It said it largely agreed with experts’ warnings about the effects of climate change on the UK. These included two “high-risk” issues: the damage expected to be caused by flooding and coastal erosion; and the effect of rising temperatures on people’s health. The report concluded that the number of heat-related deaths in the UK “could more than double by the 2050s from a current baseline of around 2,000 per year”. It said “urgent action” should be taken to address overheating in homes, public buildings and cities generally, and called for further research into the effect on workers’ productivity.

The Government also recognised that climate change “will present significant risks to the availability and supply of food in the UK”, the report said, partly because of extreme weather in some of the world’s main food-growing regions. The report also said the public water supply could be affected by shortages and that the natural environment could be degraded. Bob Ward, policy and communications director at the Grantham Research Institute on Climate Change and the Environment in London, said he was “astonished” at the way such a report had been slipped out. “Defra did very little to publicise it – they didn’t even tweet about it,” he said. “It’s almost as if they were trying to sneak it out without people realising. I have no idea what they were thinking.”
.

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You better start swimming or you’ll sink like a stone.
For the times they are a-changing.

The Last Time Oceans Got This Warm Sea Levels Were 20 to 30 Feet Higher (LAT)

Ocean temperatures today are about the same as they were more than 100,000 years ago – at a time when sea levels were 20 to 30 feet higher. The findings, published in the journal Science, highlight the key role that human activity has played in global warming and underscore concerns about the future impact of rising sea levels. Over millions and billions of years, the Earth has gone through periods of cooling (when water freezes out of the oceans, causing glaciers to grow and sea levels to fall) and warming (when the ice melts and sea levels rise). Scientists often look for clues hidden in layers of ancient rock and ice to determine what conditions were like in that long-gone climate.

The last interglacial period, which took place some 129,000 to 116,000 years ago, is a particularly intriguing chapter in Earth’s relatively recent history because of what it could tell us about today’s climate, said lead author Jeremy Hoffman, a paleoclimatologist at the Science Museum of Virginia. “The last interglacial is extremely interesting because it’s the last time period in recent Earth history when global temperatures were a little bit higher and global sea level was about 6 to 9 meters higher – but carbon dioxide in the atmosphere was roughly at what it was during the pre-industrial era,” said Hoffman, who conducted the work as a doctoral student at Oregon State University. “So it’s a really interesting scientific question: What is it about the last interglacial that’s so unique, that gave rise to higher sea levels?”

The problem is, researchers often assume climate change happened synchronously across the globe — that is, if it grew warm in one part, it also heated up in the others, and if it cooled in one area, it was cooling everywhere else at the same time. It’s already clear from climate patterns today that this simply isn’t the case, Hoffman said. Even if Earth overall is warming at a given point in time, for example, some spots might be getting cooler while others heat up. “What we know about how climate and temperature change on this planet is, it’s not all at the same time or at the same rate,” he said. “You can see these even today in human-caused climate change, how that’s playing out on a global scale.”

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Jan 192017
 
 January 19, 2017  Posted by at 11:27 am Finance Tagged with: , , , , , , , , ,  11 Responses »
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Photograph: Palani Mohan/Getty Images


Anxious European Leaders Seek An Early Audience With Trump, Before Putin (AP)
Hands off EU, Trump; We Don’t Back Ohio Secession: Juncker (R.)
Jamie Dimon Says Eurozone May Not Survive (BBG)
In Europe We See Only One Loser From Brexit – And It Won’t Be Us (Quatremer)
Marine Le Pen Centers Presidential Run on Getting France Out of Eurozone (WSJ)
By Ripping NATO, Trump Makes Europe Nervous and Arms Trade Happy (BBG)
Steve Keen Exposes Next Global Economic Shockwaves (FinFeed)
How Deutsche Bank Made €367 Million Disappear at Monte dei Paschi (BBG)
Earth Breaks Heat Record In 2016 For Third Year In A Row (AFP)
‘A Cat In Hell’s Chance’ (Simms)
Over Half of World’s Wild Primate Species Face Extinction (G.)
If you were an elephant … (Foster)

 

 

I’m sorry, I’m trying, but I just can’t NOT find this funny. My article earlier today: He’s Just Not That Into You.

Anxious European Leaders Seek An Early Audience With Trump, Before Putin (AP)

European leaders, anxious over Donald Trump’s unpredictability and kind words for the Kremlin, are scrambling to get face time with the new American president before he can meet with Russian President Vladimir Putin, whose provocations have set the continent on edge. One leader has raised with Trump the prospect of a U.S.-EU summit early this year, and the head of NATO — the powerful military alliance Trump has deemed “obsolete” – is angling for an in-person meeting ahead of Putin as well. British Prime Minister Theresa May is working to arrange a meeting in Washington soon after Friday’s inauguration. For European leaders, a meeting with a new American president is always a sought-after – and usually easy-to-obtain – invitation.

But Trump has repeatedly defied precedent, making them deeply uncertain about their standing once he takes office. Throughout his campaign and in recent interviews, Trump has challenged the viability of the EU and NATO, while praising Putin and staking out positions more in line with Moscow than Brussels. “There are efforts on the side of the Europeans to arrange a meeting with Trump as quickly as possible,” Norbert Roettgen, the head of the German Parliament’s foreign committee and a member of Chancellor Angela Merkel’s party, told AP. In fact, eager to stage an early show of Trans-Atlantic solidarity, Donald Tusk – the former Polish prime minister who heads the EU’s Council of member state governments – invited Trump to meet with the EU early in his administration, according to a EU official.

But a senior Trump adviser essentially rebuffed the offer, telling the AP this week that such a gathering would not be a priority for the incoming president, who wants to focus on meetings with individual countries, not the 28-nation bloc. Trump backs Britain’s exit from the EU, casting the populist, anti-establishment movement as a precursor to his own victory. In a recent joint interview with two European newspapers, Trump said of the EU, “I don’t think it matters much for the United States.” Such rhetoric alone was enough to set off alarm bells in Europe. And Trump’s praise for Putin and promise of closer ties to Moscow have deepened the uncertainty.

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“..he was sure no EU state wanted to follow Britain’s example and leave the bloc..”

Hands off EU, Trump; We Don’t Back Ohio Secession: Juncker (R.)

Donald Trump should lay off talking about the break-up of the European Union, the bloc’s chief executive said on Wednesday, pointing out that Europeans do not push for Ohio to secede from the United States. In pointed remarks on the eve of Trump’s inauguration as U.S. president, Jean-Claude Juncker said the new administration would realize it should not damage transatlantic relations but added it remained unclear what policies Trump would now pursue. Juncker told Germany’s BR television, according to a transcript from the Munich station, that he was sure no EU state wanted to follow Britain’s example and leave the bloc, despite Trump’s forecast this week that others would quit:

“Mr. Trump should also not be indirectly encouraging them to do that,” Juncker said. “We don’t go around calling on Ohio to pull out of the United States.” Juncker, the president of the European Commission, said he had yet to speak to Trump — contrary to what the President-elect said earlier this week. Juncker said Trump had confused him with European Council President Donald Tusk. “Trump spoke to Mr. Tusk and mixed us up,” said Juncker, taking a jab at the American billionaire’s grasp of his new role. “That’s the thing about international politics,” he said. “It’s all in the detail.”

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If even Jamie Dimon can understand it…

Jamie Dimon Says Eurozone May Not Survive (BBG)

The euro region could break up if political leaders don’t get to grips with the discontent that’s spurring support for populist leaders across the continent, JPMorgan Chase CEO Jamie Dimon said. Dimon said he had hoped European Union leaders would examine what caused the U.K. to vote to leave and then make changes. That hasn’t happened, and if nationalist politicians including France’s Marine Le Pen rise to power in elections across the region “the euro zone may not survive,” Dimon, 60, said in a Bloomberg Television interview with John Micklethwait. “What went wrong is going wrong for everybody, not just going wrong for Britain, but in some ways it looks like they’re kind of doubling down,” Dimon said in the interview Wednesday at the annual meeting of the World Economic Forum in Davos.

Unless leaders address underlying concerns, “you’re going to have the same political things about immigration, the laws of the country, how much power goes to Brussels.” Dimon’s remarks on Europe were unusually pessimistic, coming in a wide-ranging interview in which he also criticized regulations that he said stunt economic growth. But he reiterated optimism for President-elect Donald Trump. Minutes later, Goldman Sachs CEO Lloyd Blankfein also expressed concern about Europe, telling CNBC that leaders are facing a backlash in the midst of a long, complicated process to create an economic bloc. “That’s complicated, that’s very hard to do,” said Blankfein. “It’s not done, and it’s not accomplished. We’re finding the pain of that.” [..] The bottom line is that Europe must become more competitive, Dimon said. “I say this out of respect for the European people, but they’re going to have to change,” he said. “They may be forced by politics, they may be forced by new leadership.”

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Journalist Jean Quatremer is Mr. Europe. He’s been called an ‘ayatollah of European federalism’.

In Europe We See Only One Loser From Brexit – And It Won’t Be Us (Quatremer)

When someone wants the impossible, in French we say that they want “the butter, the money from the butter, and the dairymaid’s smile”. In more vulgar usage we say they want something rather more from the dairymaid than a smile. This is precisely what we can take away from Theresa May’s speech on the “hard Brexit” she wants. It is “hard” only for the other 27 states but “soft” for Britain – because May wants to keep all the benefits of EU membership and concede nothing in return. That is not really a surprise since she had already announced it in October during the Conservative party conference. She even considers that any other kind of agreement would be unacceptable, because it would amount to “punishing” the British.

May is threatening to turn Britain into a tax haven by way of retaliation, if, by some misfortune, the Europeans refuse to bend to the demands of Her Glorious Majesty’s subjects. We might think we are dreaming, but no: it is either arrogance or recklessness (or, more likely, a mixture of the two). Let’s sum up: on the one hand, of course, May would like a clear, “clean break” with the union, which means no longer sitting in its institutions, contributing to the budget or respecting EU law. On the other hand, she does not want the status of some kind of “partial or associate” member, which would imply having to meet EU’s requirements in all kinds of areas.

Thus far, we get it: the UK will be treated like any other third country – Zimbabwe, for instance. That’s clear and “clean”. But after that it gets complicated, at least for a continental mind that lacks the subtleties of reflection of a product of Oxbridge. Because May considers it possible for British companies to retain the greatest possible access to the single market, in particular to negotiate sectoral customs agreements with the union. And that’s where things get interesting. Because customs duty or no, importing goods into a market presupposes compliance with local norms and standards: to be clear, if the British want to export their cars (which are in fact German or Japanese cars) to the continent, they need to respect European laws. That means submitting (I know, what an awful word) to those laws. So in reality, the clear, “clean break” could only concern one part of UK industry – the part that manufactures for the local market.

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Le Pen is smartening up. She’s a true contender now.

Marine Le Pen Centers Presidential Run on Getting France Out of Eurozone (WSJ)

National Front leader Marine Le Pen is seeking to turn May’s presidential election into a referendum on the European Union by detailing a strategy to pull France from the bloc and its single currency if she wins. She last ran in 2012 with an initial promise of a sharp and sudden break from the euro, but this time Ms. Le Pen has sought broader support from a splintered French electorate. She says she would organize an orderly exit rather than crashing out with unpredictable consequences. If elected, she and top National Front officials say, her administration will spend its first six months negotiating the creation, along with other disappointed euro nations, of a basket of shadow European currencies. A newly reinstated franc, she says, would eventually be pegged to that basket, replacing the euro.

Ms. Le Pen says other countries struggling to meet European rules would be willing to enter into talks on pulling the EU apart. The threat of having to leave the euro, she says, has been used to blackmail Greece and other Southern European countries into implementing austerity programs their people reject. “The euro has not been used as a currency, but as a weapon—a knife stuck in the ribs of a country to force it to go where the people don’t want to go,” Ms. Le Pen said this month. “Do you think we accept living under this threat, this tutelage? It’s absolutely out of the question.”

[..] An attempt by France, the eurozone’s second-largest economy, to pull out would be far more challenging than Brexit, which doesn’t touch on currency questions. A “Frexit” would likely unleash chaos across the currency union and undermine the broader EU in a way Britain’s departure wouldn’t. No country has attempted to leave the euro, and French polls show that while people want to claw back control from Brussels, a majority wouldn’t vote to leave the currency. The complications of an exit weren’t as clear to Ms. Le Pen in 2012, when she garnered only 17.9% of the presidential vote with her push for a clean break with the euro. “We set off on the idea in 2012 of an immediate exit, slamming the door,” said Jean-Richard Sulzer, a senior economic adviser to Ms. Le Pen. “Things were said too quickly, but this time Marine is much more prudent.”

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Yeah, why not blame Trump for that too.

By Ripping NATO, Trump Makes Europe Nervous and Arms Trade Happy (BBG)

Donald Trump is right to say America’s NATO allies aren’t paying their fair share. But, to the delight of the arms industry, that may be changing. Trump himself is the change-maker. He reaffirmed his skepticism about the North Atlantic Treaty Organization, and his readiness to make deals with Russia, in European media interviews published last weekend. Trump isn’t famous for his policy consistency, but those positions have held fairly steady – leaving European leaders wondering whether they can still rely on the American security umbrella. “Let’s not fool ourselves,” German Chancellor Angela Merkel said last week. “There is no infinite guarantee.”

So Merkel’s Germany, and many other European nations, are boosting military budgets. The plans predate Trump, and under NATO rules they should’ve been carried out long ago. The alliance expects its members to spend 2% of GDP on defense. But it’s no secret that most of them don’t. The shortfall added up to about $121 billion last year at 2010 prices, according to Bloomberg calculations based on NATO country estimates.

Since Trump is promising to increase America’s already enormous military budget too, the prospect of a European arms-shopping spree is a win-win for suppliers. Investors have noticed: From Raytheon to Lockheed Martin to Thales, defense contractors have hit all-time highs since Trump’s election. “This is the best market for defense in many years, across the board,” said Richard Aboulafia, an aerospace analyst with the Teal Group in Fairfax, Virginia. NATO was established after World War II to protect western democracies against the Soviet Union. A key tenet is that an attack on any alliance member is considered an attack on all. And that’s what Trump has questioned. If Russia moved against one of NATO’s Baltic members, Trump told the New York Times in July, he’d come to their aid only after reviewing whether they have “fulfilled their obligations to us.”

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Brilliant! Please don’t miss this!

It’s just that I thought Steve made his own Melania doll (no kidding.) And then she started talking.

Steve Keen Exposes Next Global Economic Shockwaves (FinFeed)

Steve, who is Trump going to be pouring drinks for, as in economic growth and benefits, in 2017?

Steve Keen: He is trying to pour it just for his own economy. And this is going to be the dramatic challenge he faces. Because he is someone who actually knows a lot about money and banks and debt, having used it extensively in his own professional career.

Lelde Smits: And succeeded and failed and hopefully learnt from the failures.

Steve Keen: He’s turned failure into success in many, many ways, and let’s not go there in terms of how beneficial that was for his various suppliers but he understands going bankrupt, he understand re-organisation, he understands finance.

Lelde Smits: So where is this liquid in 2017?

Steve Keen: He’s going to realise at some point he owns his own bank now. Because he’s running the country he is going to spend.

Lelde Smits: So we have the Federal Reserve right?

Steve Keen: The Federal Reserve is there and can top him up as much as it likes.

Lelde Smits: So when does this stop Steve? That’s the magic question.

Steve Keen: It never has to stop. He’s going to enable the American economy to spend dramatically. Taxation is going to be cut. There will be an increase in government spending. There will be a large deficit coming out of that. So the government is going to be creating a lot of money and running a lot of infrastructure projects and so on. There are 4 million Americans who aren’t employed now who were employed in 2000. They are people who are going to get jobs in construction and start spending domestically and so on. And Trump is going to see that as boosting up the American economy. It’s all about Buy America, Made in America and so on.

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How different do we think this is from what happened with Goldman and Greece? How to hide losses 101.

How Deutsche Bank Made €367 Million Disappear at Monte dei Paschi (BBG)

On Dec. 1, 2008, most of the world’s banks were still panicking through the financial crisis. Lehman Brothers had collapsed. Merrill Lynch had been sold. Citigroup and others had required multibillion-dollar bailouts to survive. But not every institution appeared to be in free fall. That afternoon, at the London outpost of Deutsche Bank, the stolid-seeming, €2 trillion German powerhouse, a group of financiers met to consider a proposal from a team led by a trim, 40-year-old banker named Michele Faissola. The scion of an Italian banking family, Faissola was the head of Deutsche’s global rates unit, a division that created and sold financial instruments tied to interest rates. He’d been studying the problems of one of Deutsche’s clients, Italy’s Banca Monte dei Paschi di Siena, which, as the crisis raged, was down €367 million ($462 million at the time) on a single investment.

Losing that much money was bad; having to include it in the bank’s yearend report to the public, as required by Italian law, was arguably much worse. Monte dei Paschi was the world’s oldest bank. It had been operating since 1472 [..] . If investors were to find out the extent of its losses in the 2008 credit crisis, the consequences would be unpredictable and grave: a run on the bank, a government takeover, or worse. At the Deutsche meeting, Faissola’s team said it had come up with a miraculous solution: a new trade that would make Paschi’s loss disappear. The bankers in the room had seen some financial sleight of hand in their day, but the maneuver that Faissola’s staffers proposed was audacious.

They described a simple trade in two parts. For one half of the deal, Paschi would make a sure-thing, moneymaking bet with Deutsche Bank and use those winnings to extinguish its 2008 trading losses. Of course, Deutsche doesn’t give away money for free, so for the second half of the deal, the Italians would make a bet that was sure to lose. But while the first transaction was immediate, the second would play out slowly, over many years. No sign of the €367 million sinkhole would need to show up when Paschi compiled its yearend financial reports.

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New records set in 2005, 2010, 2014, 2015 and 2016.

Earth Breaks Heat Record In 2016 For Third Year In A Row (AFP)

Last year, the Earth sweltered under the hottest temperatures in modern times for the third year in a row, US scientists said Wednesday, raising new concerns about the quickening pace of climate change. Temperatures spiked to new national highs in parts of India, Kuwait and Iran, while sea ice melted faster than ever in the fragile Arctic, said the report by the National Oceanic and Atmospheric Administration. Taking a global average of the land and sea surface temperatures for the entire year, NOAA found the data for “2016 was the highest since record keeping began in 1880,” said the announcement. The global average temperature last year was 1.69 Fahrenheit (0.94 Celsius) above the 20th century average, and 0.07 degrees F (0.04 C) warmer than in 2015, the last record-setting year, according to NOAA.

This was “not a huge margin to set a new record but it is larger than the typical margin,” Deke Arndt, chief of NOAA global climate monitoring, said on a conference call with reporters. A separate analysis by the US space agency NASA also found that 2016 was the hottest on record. The World Meteorological Organization in Geneva confirmed the US findings, and noted that atmospheric concentrations of both carbon dioxide and methane reached new highs. The main reason for the rise is the burning of fossil fuels like oil and gas, which send carbon dioxide, methane and other pollutants known as greenhouse gasses into the atmosphere and warm the planet. The mounting toll of industrialization on the Earth’s natural balance is increasingly apparent in the record books of recent decades. “Since the start of the 21st century, the annual global temperature record has been broken five times (2005, 2010, 2014, 2015 and 2016),” said NOAA.

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Denial is a river in the Arctic.

‘A Cat In Hell’s Chance’ (Simms)

What’s so special about 2C? The simple answer is that it is a target that could be politically agreed on the international stage. It was first suggested in 1975 by the environmental economist William Nordhaus as an upper threshold beyond which we would arrive at a climate unrecognisable to humans. In 1990, the Stockholm Environment Institute recommended 2C as the maximum that should be tolerated, but noted: “Temperature increases beyond 1C may elicit rapid, unpredictable and non-linear responses that could lead to extensive ecosystem damage.” To date, temperatures have risen by almost 1C since 1880. The effects of this warming are already being observed in melting ice, ocean levels rising, worse heat waves and other extreme weather events.

There are negative impacts on farming, the disruption of plant and animal species on land and in the sea, extinctions, the disturbance of water supplies and food production and increased vulnerability, especially among people in poverty in low-income countries. But effects are global. So 2C was never seen as necessarily safe, just a guardrail between dangerous and very dangerous change. To get a sense of what a 2C shift can do, just look in Earth’s rear-view mirror. When the planet was 2C colder than during the industrial revolution, we were in the grip of an ice age and a mile-thick North American ice sheet reached as far south as New York. The same warming again will intensify and accelerate human-driven changes already under way and has been described by James Hansen, one of the first scientists to call global attention to climate change, as a “prescription for long-term disaster”, including an ice-free Arctic.

Nevertheless, in 1996, a European Council of environment ministers, that included a young Angela Merkel, adopted 2C as a target for the EU. International negotiators agreed the same in 2010 in Cancun. It was a commitment repeated in the Paris Climate Accord of 2015 where, pushed by a new group of countries called the Climate Vulnerable Forum, ambitions went one step further, agreeing to hold temperature rises to “well below 2C above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5C”.

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I don’t know how much longer I can witness this. At what point do we set up a private army?

“The industries at work in tropical forest areas are expected to be served by an extra 25 million km of roads by 2050..”

Over Half of World’s Wild Primate Species Face Extinction (G.)


Top row l-r: brown-headed spider monkey, chimpanzee, Western gorilla; Bottom row l-r: Bornean orangutan, Siau Island tarsier, ring-tailed lemur. Composite: Alamy and Getty Images

More than half of the world’s apes, monkeys, lemurs and lorises are now threatened with extinction as agriculture and industrial activities destroy forest habitats and the animals’ populations are hit by hunting and trade. In the most bleak assessment of primates to date, conservationists found that 60% of the wild species are on course to die out, with three quarters already in steady decline. The report casts doubt on the future of about 300 primate species, including gorillas, chimps, gibbons, marmosets, tarsiers, lemurs and lorises. Anthony Rylands, a senior research scientist at Conservation International who helped to compile the report, said he was “horrified” at the grim picture revealed in the review which drew on the International Union for the Conservation of Nature (IUCN) red list, peer-reviewed science reports and UN databases.

“The scale of this is massive,” Rylands told the Guardian. “Considering the large number of species currently threatened and experiencing population declines, the world will soon be facing a major extinction event if effective action is not implemented immediately,” he writes in the journal Science Advances, with colleagues at the University of Illinois and the National Autonomous University of Mexico. The most dramatic impact on primates has come from agricultural growth. From 1990 to 2010 it has claimed 1.5 million square kilometres of primate habitats, an area three times the size of France. In Sumatra and Borneo, the destruction of forests for oil palm plantations has driven severe declines in orangutan populations. In China, the expansion of rubber plantations has led to the near extinction of the northern white-cheeked crested gibbon and the Hainan gibbon, of which only about 30 or animals survive.

More rubber plantations in India have hit the Bengal slow loris, the western hoolock gibbon and Phayre’s leaf monkey. Primates are spread throughout 90 countries, but two thirds of the species live in just four: Brazil, Madagascar, Indonesia and the Democratic Republic of the Congo (DRC). In Madagascar, 87% of primate species face extinction, along with 73% in Asia, the report states. It adds that humans have “one last opportunity” to reduce or remove the threats facing the animals, to build conservation efforts, and raise worldwide awareness of their predicament. The market for tropical timber has driven up industrial logging and damaged forest areas in Asia, Africa and the neotropics. Mining for minerals and diamonds have also taken a toll. On Dinagat island in the Philippines, gold, nickel and copper mining endanger the Philippine tarsier. In the DRC, hunters working around the tin, gold and diamond mine industry are the greatest threat to the region’s Grauer’s gorilla. The industries at work in tropical forest areas are expected to be served by an extra 25 million km of roads by 2050, further fragmenting the primates’ habitats.

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If you were an elephant … You would still feel love, hurt and grief.

“Perhaps one of the reasons we’re so keen to deny non-human creatures minds, consciousness and personhood is that, if they’re people, they’re embarrassingly better people than we are. They build better communities; they live at peace with themselves and aren’t, unlike us, actively psychopathic towards other species. ”

If you were an elephant … (Foster)

If you were an elephant living wild in a western city, you’d be confused and disgusted. You’d have one two-fingered hand swinging from your face – a hand as sensitive as tumescent genitals, but which could smash a wall or pick a cherry. With that hand you’d explore your best friends’ mouths, just for the sake of friendship. With that hand you’d smell water miles away and the flowers at your feet. You’d sift it all, triaging. Category 1: immediate danger. Category 2: potential threat. Category 3: food and water. Category 4: weather forecasts – short and long range. Category 5: pleasure. Grumbles from trucks and cabs would shudder through the toxic ground, tickle the lamellar corpuscles in your feet and ricochet up your bones. You’d hear with your feet, and your femurs would be microphones.

As you walked 10 miles for your breakfast you’d chatter with your friends in 10 octaves. A nearby human would throb like a bodhran as subsonic waves bounced around her chest. Even if it swayed with grass instead of being covered in concrete and dog shit, the city would be far, far too small for you. You’d feel the ring roads like a corset. You’d smell succulent fields outside, and be wistful. But you’d make the most of what you had. You’d follow a labyrinth of old roads, relying on the wisdom of long-dead elephants, now passed down to your matriarch. You’d have the happiest kind of political system, run by wise old women, appointed for their knowledge of the world and their judgment, uninterested in hierarchy for hierarchy’s sake, and seeking the greatest good for the greatest number.

No room here for the infantile phallocentric Nietzscheanism that is destroying modern human culture. If you were a boy you’d be on the margins, drifting between family groups (but never allowed to disrupt them) or shacked up with your bachelor pals in the elephant equivalent of an unswept bedsit (though usually your behaviour would be gentler, more convivial and more urbane than cohabiting human males). Your function would be to inseminate, and that’s all. Government would be the business of the females. You’d be a communitarian. Relationality would be everything. It’s not that you couldn’t survive alone, although there would certainly be a survival benefit from being a member of a community, just as humans live longer if they are plugged into a church, a mosque or a bowling club.

Yes, at some level your altruism might be reciprocal altruism, where you scratch my back if I scratch yours, or kin selection, where you are somehow persuaded to sacrifice yourself if your death or disadvantage will preserve a gene in a sufficiently closely related gene-bearer. But at a much more obvious and important level you’d be relational – joyously shouldering the duties that come with community – because it made you happy. Why do elephants seek out other elephants? Not primarily for sex, or for an extra arsenal of receptors to pick up the scent of poachers, or because they assume that the others will have found particularly nutritious food, but because they like other elephants.

[..] As an elephant, you’d have a mind. You would, no doubt at all, be conscious. All the evidence agrees. None – absolutely none – disagrees. You’d have a sense of yourself as distinct from other things. When you looked out contemptuously at humans, wondering why they ate obviously contaminated food, opted to be miserable and alone, or wasted energy on pointless aggression and anxiety, it would be your contempt, as opposed to generic elephantine contempt, or reflexive contempt that bypassed your cerebral cortex, or the contempt of your sister. It would be you looking out, and you’d know it was you.


Photograph: Palani Mohan/Getty Images

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Jan 192017
 
 January 19, 2017  Posted by at 7:25 am Finance Tagged with: , , , , , , , , ,  7 Responses »
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Marlon Brando screentest 1951

I’m trying, I swear, to get into the fold, but I just can’t NOT find this hilarious. On the eve of his presidency, Donald Trump tells European leaders, by not telling them diddly-squat, that he doesn’t think they matter all that much. It’s not just that his vision of the EU, and its importance, is very different from theirs, he also remembers very well what many of them have said about him in the run-up to his election for the presidency.

Europe’s leaders, with the exception of Nigel Farage and Marine Le Pen, have been ridiculing and outright demonizing Trump ever since he declared his candidacy. They’ve said similar things about him that they say about Vladimir Putin, and in the 2016 fake news avalanche they’ve thrown the two together in various ways and for reasons they claim are obvious, with quite a few Hitler quips thrown in for good measure.

Now, for some reason they all seem to think it’s important to meet with Trump before he meets with Putin, as if his view of the world, and that of his entire government, is so unbalanced it could be decided at the toss of a coin. Trump is having none of it. After having been compared to anything that’s considered worst under the sun, who’s going to blame him?

Donald Trump feels, and largely rightly so, that the principle of innocence before being proven guilty was abandoned with much fervor by many, and certainly across the EU. The result is that now he’s simply not that into them. He’s been shown no respect at all, and he has not forgotten that. And it leads to a situation that’s brilliantly entertaining.

The EU, like the Obama/Clinton cabal, have dug in their heels and then dug some more when it comes to Putin, and by -their, not his- association also to Trump. They never thought he’d be elected, and now that he has been they don’t know what to do with themselves (how about an apology for starters?).

AP reports, even if once again you have to read between all the innuendo and opinionated humbug (grow up, AP!):

Anxious European Leaders Seek An Early Audience With Trump

European leaders, anxious over Donald Trump’s unpredictability and kind words for the Kremlin, are scrambling to get face time with the new American president before he can meet with Russian President Vladimir Putin, whose provocations have set the continent on edge. One leader has raised with Trump the prospect of a U.S.-EU summit early this year, and the head of NATO — the powerful military alliance Trump has deemed “obsolete” — is angling for an in-person meeting ahead of Putin as well. British Prime Minister Theresa May is working to arrange a meeting in Washington soon after Friday’s inauguration.

For European leaders, a meeting with a new American president is always a sought-after — and usually easy-to-obtain — invitation. But Trump has repeatedly defied precedent, making them deeply uncertain about their standing once he takes office. Throughout his campaign and in recent interviews, Trump has challenged the viability of the EU and NATO, while praising Putin and staking out positions more in line with Moscow than Brussels. “There are efforts on the side of the Europeans to arrange a meeting with Trump as quickly as possible,” Norbert Roettgen, the head of the German Parliament’s foreign committee and a member of Chancellor Angela Merkel’s party, told AP.

In fact, eager to stage an early show of Trans-Atlantic solidarity, Donald Tusk — the former Polish prime minister who heads the EU’s Council of member state governments— invited Trump to meet with the EU early in his administration, according to a European Union official. But a senior Trump adviser essentially rebuffed the offer, telling the AP this week that such a gathering would not be a priority for the incoming president, who wants to focus on meetings with individual countries, not the 28-nation bloc.

Trump backs Britain’s exit from the European Union, casting the populist, anti-establishment movement as a precursor to his own victory. In a recent joint interview with two European newspapers, Trump said of the EU, “I don’t think it matters much for the United States.”

So far so good, but then the rhetoric starts again. Only, it does so by calling Trump’s words ‘rhetoric’:

Such rhetoric alone was enough to set off alarm bells in Europe. And Trump’s praise for Putin and promise of closer ties to Moscow have deepened the uncertainty. Trump has raised the prospect of dropping U.S. sanctions on Moscow and has appeared indifferent to Russia’s annexation of territory from Ukraine. The hacking of his opponents during the U.S. election, and Trump’s dismissal of the CIA’s warnings about Russia’s involvement, added a dose of spy drama.

Trump’s sentiments mark a dramatic shift in Republican views of Europe, just a generation after George H.W. Bush famously greeted the collapse of the Iron Curtain by calling for a “Europe whole and free.” Trump’s top national security adviser has been in close contact with the Russian ambassador to the U.S., conversations that have involved setting up a phone call between the Putin and the president-elect, transition officials have said. But Trump currently has no plans to meet with Putin, according to the senior adviser, who insisted on anonymity in order to discuss the transition team’s internal planning.

Why on earth would Trump NOT meet with Putin? Because of all the unsubstantiated blubber his opponents have showered over him in their attempts to derail his campaign? If anything, that would probably make him all the more determined to set up such a meeting. Moreover, there’s a lot of damage that needs to be repaired in US-Russia relations, damage done by the former administration and the press it has a love relationship with.

[..] Aides have signaled that one of Trump’s first foreign leader meetings at the White House will be with May, who became prime minister following Britain’s vote to leave the EU. The president-elect’s team is also working on early invitations to Washington for the leaders of Mexico and Canada, according to the Trump adviser. Barring other arrangements, Trump and Putin’s first meeting of the year might not come until July when the Group of 20 leaders gather in Hamburg, Germany — though Trump has yet to say whether he plans to attend international summits.

If he does, some European leaders could get an audience with him in May at a planned NATO summit and a gathering of the more elite Group of Seven in Italy. Russia had been a member of that group, but the U.S. and Europe ousted Putin after the annexation of Crimea from Ukraine. One of the first tests of Trump’s loyalties may well be whether he seeks to bring Russia back into that fold.

“If we start to equate democracies and non-democracies, allies and adversaries, this is setting a very dangerous precedent,” said Heather Conley, director of the Europe program at the Center for Strategic and International Studies. She said that if Trump were to reach out to Putin ahead of the Europeans upon taking office, “it would be a real cautionary note” for long-standing U.S. allies.

Guys! You lost! You lost big. Get a grip. It’s a different world out there. Adapt accordingly or fade away. Something tells us the adaptation process will prove too much for most of Europe’s current leaders. That will necessarily mean that most won’t be leaders for long.

Europe will have to move closer to Putin as Trump does so. The war mongering posture of the past decade or so will have to go. This will be very hard to do for those leaders who have called both men everything awful in the world. Those who can’t will have to leave. Like Juncker:

Hands off EU, Trump; We Don’t Back Ohio Secession: Juncker

Donald Trump should lay off talking about the break-up of the European Union, the bloc’s chief executive said on Wednesday, pointing out that Europeans do not push for Ohio to secede from the United States. In pointed remarks on the eve of Trump’s inauguration as U.S. president, Jean-Claude Juncker said the new administration would realize it should not damage transatlantic relations but added it remained unclear what policies Trump would now pursue.

Juncker told Germany’s BR television, according to a transcript from the Munich station, that he was sure no EU state wanted to follow Britain’s example and leave the bloc, despite Trump’s forecast this week that others would quit: “Mr. Trump should also not be indirectly encouraging them to do that,” Juncker said. “We don’t go around calling on Ohio to pull out of the United States.”

Juncker, the president of the European Commission, said he had yet to speak to Trump – contrary to what the President-elect said earlier this week. Juncker said Trump had confused him with European Council President Donald Tusk. “Trump spoke to Mr. Tusk and mixed us up,” said Juncker, taking a jab at the American billionaire’s grasp of his new role. “That’s the thing about international politics,” he said. “It’s all in the detail.”

It’s clear that in many countries, growing segments of both the population and the political sphere are thinking and talking about following Britain’s example. Juncker had better address their concerns than trying to ignore and deny them, or he will guarantee to achieve the opposite of what he wants.

That Donald Trump was elected in the first place is a surefire sign that many things were going very wrong in the world. Brexit is a sign of the exact same thing. Elections and other votes coming up in Europe will be the next in line, and it doesn’t even matter who wins them; many will be far too close for comfort for the existing order.

Meanwhile, watching the spectacle unfold from a distance, we find it impossible not to be highly amused by the former world order seeing their own words and actions backfire on them. And that has nothing to do with being pro-Trump or pro-Le Pen.

Jan 112017
 
 January 11, 2017  Posted by at 10:54 am Finance Tagged with: , , , , , , , , ,  5 Responses »
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Dorothea Lange Hoe culture in the South. Poor white, North Carolina 1936


Trump Said to Be Told of Unverified Russian Intelligence (BBG)
BuzzFeed Publishes Unsubstantiated Report On Trump (G.)
4Chan Claims To Have Fabricated Anti-Trump Report As A Hoax (ZH)
Michael Cohen: ‘It Is Fake News Meant to Malign Mr. Trump’ (Atlantic)
Tillerson To Face Questions On Russian Ties At Confirmation Hearing (R.)
Meryl Streep, Obama Prosecuted Whistleblowers & Bombed Weddings (Ryan)
Banks Forced To Cover Tracks Of China’s Forex Regulator (R.)
Boeing: 3 More Waves of Layoffs in 2017, Orders Collapse, Shares Rise (WS)
Euro May Not Exist In 10 Years, French Pres. Candidate Macron Says (CNBC)
Le Pen Says All French Banks Have Refused to Meet With Her (BBG)
Greek Severe Weather: Refugees Freeze, Aid Industry Fails (G.)

 

 

What an incredible story. What has the country turned into? What happened to verifying sources, stories? So strike out BuzzFeed as a news source. And John McCain. Any story that contains his name is fake.

Trump Said to Be Told of Unverified Russian Intelligence (BBG)

U.S. intelligence officials have informed President-elect Donald Trump about unsubstantiated reports they’ve received that the Russian government had compiled potentially damaging personal and financial information on him, a person familiar with the situation said. CNN reported earlier on Tuesday that as part of a briefing on Russian attempts to meddle in the presidential election, U.S. spy chiefs included a two-page summary of memos compiled by a former British intelligence operative about alleged Kremlin operations to gather prejudicial information on Trump and Democratic candidate Hillary Clinton. The FBI hasn’t been able to verify the information in the documents, CNN said.

BuzzFeed later published the entire 35-page compilation of memos, which contain potentially damaging but uncorroborated information about Trump and his associates. The person confirmed that the document was the same as the material in the government’s possession. The aim of the alleged Russian government intelligence-gathering was to leverage the information to shift U.S. policy toward Russia, including by potentially blackmailing Trump, according to the memos. President Barack Obama also was briefed on the documents. Trump denounced “FAKE NEWS – A TOTAL POLITICAL WITCH HUNT!” on Twitter at about 8:20 p.m. in New York, without mentioning or linking to any of the reports.

He retweeted a Trump Organization official, Executive Vice President Michael Cohen, who tweeted that “I have never been to Prague in my life” with a picture of the front of his passport. One of the memos alleged that Cohen had met with “Kremlin officials” in Prague in August 2016. Trump then tweeted an article by Lifezette, a website run by conservative radio host Laura Ingraham, that was critical of the BuzzFeed report.

Read more …

BuzzFeed is like WaPo. Done. No credibility. Cheap clickbait chasing.

BuzzFeed Publishes Unsubstantiated Report On Trump (G.)

BuzzFeed’s decision to publish an intelligence report filled with salacious and unsubstantiated claims about Donald Trump’s purported behaviour in Russia has triggered a political storm and debate over media ethics. The news website posted the unredacted documents on Tuesday, just 10 days before Trump’s inauguration, with a warning that the contents contained errors and were “unverified and potentially unverifiable”. The decision to put the claims in the public domain forced other media outlets to repeat the allegations or ignore a story that lit up the internet. Some critics rounded on BuzzFeed, calling it irresponsible. The documents, reportedly compiled by a British former intelligence agent, alleged that the Kremlin was “cultivating, supporting and assisting” Trump for at least five years.

They also alleged that Russian spies exploited the president-elect’s “personal obsessions and sexual perversion” to gather compromising material. The president-elect denied and denounced the claims in a series of tweets. “FAKE NEWS – A TOTAL POLITICAL WITCH HUNT.” The memos were compiled by the former intelligence officer on behalf of some of Trump’s Republican opponents in the primaries, and later by Democrats. Other media outlets including the Guardian obtained and reviewed the documents in recent weeks but declined to publish because there was no way to independently verify them. The stakes rose on Tuesday when CNN reported that America’s intelligence chiefs gave Trump and Barack Obama a two-page summary of the reports last week. CNN and The Guardian also reported that Senator John McCain delivered a copy to FBI director James Comey last month, but withheld the documents’ most eye-opening details, citing lack of corroboration.

Read more …

This is what America has become. Not Trump’s doing.

4Chan Claims To Have Fabricated Anti-Trump Report As A Hoax (ZH)

In a story that is getting more surreal by the minute, a post on 4Chan now claims that the infamous “golden showers” scene in the unverified 35-page dossier, allegedly compiled by a British intelligence officer, was a hoax and fabricated by a member of the chatboard as “fanfiction”, then sent to Rick Wilson, who proceeded to send it to the CIA, which then put it in their official classified intelligence report on the election. Here is 4Chan’s explanation of how the story came to light:

And a summary posted on pastebin:

On january 10, Buzzfeed posted a story under the byline of Ken Bensinger, Mark Schoofs and Miriam elder titled “these reports Allege Trump Has Deep Ties To Russia” and posted a link to a document alleging, among other things, that russia has been cultivating trump for 5+ years, that trump has been in constant contact with the kremlin for information on his opponents, and perhaps most inflammatory, that there are many recorded instances of blackmail of trump in sexual misconduct. A prominent claim is that trump rented the presidential suite of the Ritz Carlton Hotel in moscow, where he knew that the Obamas had slept in; he them hired a number of prostitutes to perform a ‘golden shower’ (pissplay) on the bed and in the room. https://www.buzzfeed.com/kenbensinger/these-reports-allege-trump-has-dee…
https://assets.documentcloud.org/documents/3259984/Trump-Intelligence-Al…

Noted #nevertrump voice Rick Wilson later commented on twitter, stating that the report “gave a new meaning to Wikileaks” (https://twitter.com/TheRickWilson/status/818982395202379777) and that the report was the reason everybody was fighting so hard against the election of Trump. (https://twitter.com/TheRickWilson/status/818983514335047680)

The remarkable thing? It’s all fake. And not only fake; it’s a prank perpetuated by 4chan, on Rick Wilson himself. A post on 4chan on october 26 stated “mfw managed to convince CTR and certain (((journalists))) on Twitter there’ll be an October surprise on Trump this Friday” along with a picture of a smug face with a hash name. http://archive.4plebs.org/pol/thread/94704894/#94705224

on november 1, a person without a picture but is assumed to be the same person posted “So they took what I told Rick Wilson and added a Russian spy angle to it. They still believe it. Guys, they’re truly fucking desperate – there’s no remaining Trump scandal that’s credible.” https://archive.4plebs.org/pol/thread/95568919/#95571329

on january 10, moments after the story broke and began to gain traction on social media, a person with the same smug grin face, and the same hash title for the picture, stated “I didn’t think they’d take it so far.” http://boards.4chan.org/pol/thread/106514445#p106520376

This story has taken on something of a life of it’s own. Going through Rick Wilson’s twitter, you can find many different stories from the time that he had shown the story to a wide number of anti-trump news sources, trying to find a news organization that would actually publish the story. During that time period, he referred to it often as ‘the thing’, and often playing coy with followers on the content with the story with anybody who was not also a #Nevertrumper. Unconfirmed sources has people as high up as John McCain giving the story to FBI Director James Comey to attempt to verify the story. Given that Rick Wilson runs in Establishment circles, it is not an impossible scenario that long-serving senators are falling for what amounts to a 4chan troll trump supporter creating an ironic October Surprise out of wholecloth to punk a GOPe pundit who derogatorily referred to them as single men who masturbate to anime.

While this entire incident is laughable, and even more so if the 4Chan account is accurate, what makes it quite tragic, is that it is no longer possible to dismiss the “fake news” angle to an intelligence report. And if the CIA is compromised, what is left for “news outlets” like CNN and BuzzFeed, which were all too eager to run with the story without any attempt at verification?

Read more …

Maybe Cohen should sue BuzzFeed?

Michael Cohen: ‘It Is Fake News Meant to Malign Mr. Trump’ (Atlantic)

Donald Trump and his lawyer on Tuesday night denied allegations in an explosive, unverified dossier that describes a purported Russian operation to compromise Trump. Trump tweeted that the document, which was referred to in a CNN report and later published in full on BuzzFeed News, was “FAKE NEWS – A TOTAL POLITICAL WITCH HUNT!” Trump was reacting to allegations in a memo originating from research reportedly compiled by a former British intelligence officer that purports to show that the Russian government has compromising information on Trump. The document also makes specific claims about contacts between people working for Trump and Russian officials. It alleges that Michael Cohen, special counsel to Trump, was central to “the ongoing secret liaison relationship between the New York tycoon’s campaign and the Russian leadership,” and that he met secretly with Kremlin officials in Prague in August 2016.

Reached by telephone on Tuesday night, Cohen denied the dossier’s allegations. The story is “totally fake, totally inaccurate,” Cohen said. “I’m telling you emphatically that I’ve not been to Prague, I’ve never been to Czech [Republic], I’ve not been to Russia,” Cohen said. “The story is completely inaccurate, it is fake news meant to malign Mr. Trump.” Cohen said that during the time the report places him in Prague, he was actually with his son visiting USC and meeting with the baseball coach. A USC baseball source confirmed Tuesday night that Cohen and his son had visited USC on August 29th. Cohen said that he was in Los Angeles from the 23rd through the 29th of August, and that the rest of the month he was in New York. He said that his only trip to an EU country over the summer had been a vacation to Italy in July. Cohen also tweeted a photo of his passport: “I have never been to Prague in my life. #fakenews.” Trump retweeted Cohen’s tweet.

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They won’t get to Tillerson.

Tillerson To Face Questions On Russian Ties At Confirmation Hearing (R.)

President-elect Donald Trump’s pick for secretary of state, Rex Tillerson, faces tough questioning at his confirmation hearing on Wednesday over his ties to Russian President Vladimir Putin as both Democrats and Republicans worry about Moscow’s increasingly aggressive behavior. The central question facing Tillerson, 64, the former chairman of Exxon Mobil, is how effectively he can transform himself from a Big Oil “dealmaker” to being America’s top diplomat with little government experience. According to excerpts from his opening statement released before the hearing, Tillerson will say that Russia poses a danger and NATO allies are right to be alarmed at a resurgent Moscow. He will argue, however, that Russia’s resurgence happened in the “absence of American leadership” and will call for open and frank dialogue with Moscow.

“We must be clear-eyed about our relationship with Russia,” Tillerson will say. “Russia today poses a danger but it is not unpredictable in advancing its own interests,” according to the transcript of his remarks. “We need an open and frank dialogue with Russia regarding its ambitions, so that we know how to chart our own course,” he will say. He will also emphasize the need to destroy Islamic State, and will criticize China’s behavior in the South China Sea and call on Beijing to pressure North Korea. Tillerson’s confirmation hearing comes at a time of rising tensions with Russia over its role in the U.S. presidential election and an assessment by U.S. intelligence agencies that Russia was behind the hacks of political figures in an effort to help Trump win the Nov. 8 election. Moscow has denied the allegations. Tillerson opposed U.S. sanctions against Russia in 2014 over its annexation of Crimea from Ukraine because he thought they would be ineffective.

Read more …

There was a good take down from Piers Morgan of all people on the same topic.

Meryl Streep, Obama Prosecuted Whistleblowers & Bombed Weddings (Ryan)

Streep’s anti-Trump speech on Sunday night at the Golden Globes was a sublime performance. It was delivered with emotion and grace. A real tear-jerker for anyone worried about the oncoming era of Trump. And yet… it also stank. It reeked, in fact. Of pure, unadulterated hypocrisy. Because Streep, sadly, is that common breed of liberal Hollywood hypocrite. You know, the ones whose bleeding heart credentials are suddenly nowhere to be found when the occupant of the White House is a cool Democrat who’s besties with Beyonce. In her impassioned speech, Streep called on her peers and fans to join with her in donating to the Committee to Protect Journalists: “We need the principled press to hold power to account, to call them on the carpet for every outrage. That’s why our founders enshrined the press and its freedoms in our constitution,” she said.

She’s right, of course. But one wonders is Streep even aware, for instance, that the Obama administration has prosecuted more whistleblowers than all of his predecessors combined? It’s a tradition Trump is likely to continue, of course, but it’s rather strange that the issue never crossed her mind until now. And where was Streep – only suddenly concerned about how “violence incites violence” – when Obama was helping Saudi Arabia level Yemen, bombing funerals and wedding parties? Or when his “humanitarian intervention” in Libya went so disastrously wrong that it turned the country into a failed state, allowing the terrorist group ISIS to flourish? Or when the great uniter earned himself the nickname “The Drone King” as he expanded the US drone program and conducted ten times more strikes than George W. Bush? Also a tradition Trump will likely be only too happy to uphold.

Where was Streep as the Nobel Peace Prize winner bombed not one, two or three — but seven different countries? To be fair to Streep, she probably didn’t notice because the “principled press” didn’t seem to either. Funny thing about that too, since Streep and her friends are worried about Trump’s apparent disdain for foreigners: All of the countries bombed by the Obama administration were Muslim countries. And where was Streep when Obama’s administration was negotiating on behalf of Al Qaeda-linked “moderate” rebels in Syria? In fact, where were all the hypocrites in the room, as Obama spent 2016 dropping 26,171 bombs? Oh that’s right, they were partying in his house!

Read more …

“You must control your forex deficit, but you can’t say that SAFE is controlling capital outflows..”

Banks Forced To Cover Tracks Of China’s Forex Regulator (R.)

China’s forex regulator is telling banks to keep its instructions about curbing capital outflows secret and to ensure that research analysts keep any negative views about the yuan’s prospects to themselves, several bankers said. Both demands are seen as an attempt by the authorities to prevent alarm that could trigger further declines in the yuan, the bankers from local and foreign banks said. The yuan lost more than 6% against the dollar last year and is at eight-year lows, prompting a flurry of restrictive measures on capital outflows from the State Administration of Foreign Exchange (SAFE), including setting limits on banks’ currency volumes in some cities or provinces and requiring approval for ever smaller transactions.

SAFE, which is part of the People’s Bank of China, is insisting in oral instructions to dozens of banks that they don’t reveal its role in such restrictions, six bankers said, which was damaging their relationships with clients since they were unable to explain why they were turning away business. SAFE and the PBOC have yet to respond to requests for comment. SAFE’s reticence began at least as far back as August, when its Shanghai branch called at least 20 of the major foreign and domestic banks operating in the city to a meeting with the regional heads of several SAFE departments. A representative from an international bank attending the meeting said there were no written instructions, but a high-ranking SAFE official told them explicitly what was expected of them. “You must control your forex deficit, but you can’t say that SAFE is controlling capital outflows,” the official told the bankers.

Read more …

World trade is collapsing.

Boeing: 3 More Waves of Layoffs in 2017, Orders Collapse, Shares Rise (WS)

This is not the way to start your workday… to find this email from your boss in your inbox: “As we enter 2017, our plan calls for us to reduce our Engineering staff. I realize some of this news is unpleasant. But I wanted to respect your right to know what is occurring this year.” But that’s what happened on Tuesday at Boeing. Hammered by slowing aircraft sales and a declining order book, Boeing warned on Tuesday in an internal memo that it would conduct involuntary and voluntary layoffs of engineers in Washington state, southern California, and South Carolina, according to The Seattle Times. The memo did not mention the size of the staff cuts. The memo by John Hamilton, VP of engineering at Boeing Commercial Airplanes, summed the situation up this way: “We continue to operate in an environment characterized by fewer sales opportunities and tough competition.”

These staff cuts come on top of the cuts in 2016, when Boeing slashed its workforce in Washington state down by 9.3%. That’s 7,357 jobs. Business has been tough. In 2016, deliveries fell by 14 jets from a year ago, to 748. Net orders dropped 13% from an already rotten level in 2015, to just 668, down 53% from 2014. And the lowest level since 2010! Of these orders, 550 were for the 737 model. But Boeing only sold 58 Dreamliners, and analysts are speculating that it will need to cut production. And it only sold 17 of its twin-aisle long-range 777, its most profitable plane. In December, Boeing said it would slash production of the 777 by 40%. Order cancellations in 2016 jumped by 67% to 180 airplanes, another sign that airlines are getting increasingly cautious – and nervous.

Boeing had already given a foretaste of these job cuts on December 19, without going into specifics. It showed that it is slashing jobs faster and more aggressively than forecast in early 2016. The new CEO, Kevin McAllister, who’d succeeded Ray Conner in November, is getting his feet on the ground, so to speak. And Boeing shares hit an all-time high. [..] orders have plunged 53% in two years, order cancellations have soared, deliveries have dropped, production is getting cut, as wave after wave of layoffs sweep out engineers and productions worker – but no problem. In this wondrous era of ours, stocks can only go up no matter what. Boeing closed up on Tuesday, at $159.07 a share, just a buck shy of its all-time high in December:

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No kidding: “The dysfunctioning of the euro is of good use to Germany, I have to say..”

Euro May Not Exist In 10 Years, French Pres. Candidate Macron Says (CNBC)

The euro may not exist in 10 years’ time if Paris and Berlin fail to bolster the single currency union, French presidential candidate Emmanuel Macron said on Tuesday, adding the current system benefited Germany at the expense of weaker member states.Macron was economy minister under Socialist President Francois Hollande until he resigned last year to create his own political movement and stand as an independent candidate in this year’s presidential election.”The truth is that we must collectively recognise that the euro is incomplete and cannot last without major reforms,” Macron said in a speech at the Humboldt University in Berlin. Speaking in English, he added: “It has not provided Europe with full international sovereignty against the dollar on its rules. It has not provided Europe with a natural convergence between the different member states.”

France must implement labour market reforms and revamp its education system to revive growth, while Germany must accept that more investment instead of austerity can boost growth across the euro zone area, the centrist politician said. “The dysfunctioning of the euro is of good use to Germany, I have to say,” said Macron, adding that a lack of trust between France and Germany was blocking major reforms that would increase solidarity among the 19 members of the euro zone.”The euro is a weak Deutsche Mark,” said Macron. “The status quo is synonymous, in 10 years’ time, with the dismantling of the euro. “He proposed the creation of a euro zone budget to finance growth-oriented investments and to extend financial assistance to struggling member states.

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“It’s the banks who decide who can run and who can’t.”

Le Pen Says All French Banks Have Refused to Meet With Her (BBG)

National Front leader Marine Le Pen said French banks have refused to meet with her to discuss the possibility of financing her presidential campaign. All the other candidates have received funding from French banks, Le Pen said in an interview on France 2 television. “The fact that the banks won’t lend to us, playing a political role, poses a real problem for democracy,” she said. “It’s the banks who decide who can run and who can’t.” The leader of the anti-euro, anti-immigrant National Front said she is looking for foreign banks for financing.

In France public funds are provided to candidates for campaign expenses after presidential elections provided they win at least 5% of the vote. Typically candidates borrow during campaign with the idea of using public funds to repay the loans after the vote. Polls suggest Le Pen will win at least 20% of votes in the first round of the presidential election on April 23.

Read more …

Nobody puts the NGOs under fire? What about the EU? People will have to die first. And even then, all there is, is the aid industry that is obviously criminally dysfunctional.

Greek Severe Weather: Refugees Freeze, Aid Industry Fails (G.)

In northern Greece, where the deep freeze worsened at the weekend, the plight of refugees living in tents in abandoned industrial warehouses was further complicated by water and electricity cuts. NGOs attributed the chaos to the absence of a national response plan, saying despite warnings of bitterly cold weather the state had been woefully ill-prepared. But international organisations also said the shocking images highlighted Europe’s inhumane policies towards refugees and migrants. “What we are seeing on the islands is the manifestation of the way Europe is failing to provide dignity for some of the world’s most vulnerable,” said Panos Navrozidis, country director of the International Rescue Committee in Greece.

“It is imperative that people are moved off the Greek islands. The IRC warned of these life-threatening conditions months ago yet still now with this weather we face a life-or-death situation.” With resources stretched to breaking point in a nation itself dealing with economic and social crisis, the beleaguered government has appealed to other EU member states to expedite the process of taking in asylum seekers. Under an emergency relocation plan, agreed as part of the EU-Turkey deal, the 28-member bloc vowed to accept 63,302 refugees from Greece. To date only 7,280 have been relocated from the country, according to European commission data released this week.

Brawls between rival ethnic groups, attacks by far-right xenophobes, and frustration and uncertainty over what lies ahead have exacerbated tensions in camps. In September, thousands were forced to flee Moria after members of Greece’s neo-fascist Golden Dawn party set fire to the facility. In what it described as “an extremely urgent appeal”, the anti-racist group Keerfa said government-run installations in Athens, including a former military barracks at Malakasa, had to be closed immediately because hundreds of detainees, among them children, toddlers and disabled people were “literally freezing”.

Read more …

Jan 092017
 
 January 9, 2017  Posted by at 10:34 am Finance Tagged with: , , , , , , , , , ,  7 Responses »
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AFP Photo/Johannes EISELE Giant Trump Chicken


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FBI Arrests Volkswagen Exec on Conspiracy Charges in Emissions Scandal (NYT)
UK Motorists Launch Class-Action Suit Against VW (G.)
Le Pen: I’ll Come To Brussels And Dismantle France’s Relationship With EU (EUK)
Beppe Grillo Calls For Five Star Movement Vote On Quitting Farage Bloc (G.)
New Cold Snap, Heavy Snowfall Causes Problems Across Greece (Kath.)

 

 

Hear hear!

Locating Fascism on the Home Map (Ford)

In decadence and decline, the U,S. has produced two strong strains of fascism that now vie for supremacy. The First Black President, now outgoing, represents the “cosmopolitan, global obsessed” variety of fascist. Donald Trump hails from an older fascist strain, “crude and petty, too ugly for global prime time.” At this stage in history, the two corporate parties seem incapable of producing anything other than fascists of one kind or the other.

Barack Obama was a savior – of a drowning ruling class. Under his administration, Wall Street rose from near-death to new heights of speculative frenzy, awash in capital brutally extracted from the vanishing assets and past and future earnings of the vast majority of the population, or gifted in the form of trillions in free money at corporate-only Federal Reserve windows. The Big Casino, reduced to a rubble of its own contradictions in 2008, ushered in the New Year just shy of the once-fantastical 20,000 mark. Analysts credited Donald Trump’s victory for the bankers’ bacchanal, but it was Obama who made the party possible by overseeing the restructuring of the U.S. economy to accommodate and encourage the hyper-consolidation of capital – another way to describe the deliberate deepening of economic (and political) inequality. Having accomplished the mission assigned him by Wall Street in return for record-breaking contributions to his first campaign, Obama is said to be angling for a hot-money squat in Silicon Valley, the super-rich sector that was most supportive of his presidency.

Meanwhile, Hillary Clinton is melting quicker than the Wicked Witch of the West, principally due to the failure of traditionally Democratic working (and out of work) people of all races to turn out on November 8 – a perfectly understandable response to a party and a system that offers them absolutely nothing but grief, in ever quickening increments. The merciless downsizing of the American worker is a central element of Obama’s legacy. Real wages had been frozen or declining for decades. However, economic restructuring in the Age of Obama demanded that millions of workers be crushed all the way through the floor to a lower level of hell: temporary, contract, not-really-a-job, part-time “gig” employment. If the 1930s squatter shanty-towns called “Hoovervilles” were testaments to President Herbert Hoover’s economic policies, then the maddeningly precarious, no guaranteed hours, no benefits, zero job security, fraction of a shift, arbitrarily scheduled employment of today should be called ObamaJobs. A new study by economists at Princeton and Harvard universities shows that an astounding 94% of the 10 million jobs created during the First Black President’s two terms in office were ObamaJobs.

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“Risk has been priced out of the market..”

‘The Bull Market Is In Its Final Inning’ (CNBC)

As investors await the Dow Jones 20,000 with baited breath, one widely followed chart watcher believes the current market rally is actually on its last legs. On Friday, blue chip shares in the Dow Industrial Average flirted with the psychologically charged 20,000 level, which have largely been driven higher by anticipation over President-elect Donald Trump’s business-friendly policies. Yet a few observers think the party is nearly over, and the punch bowl is about to run dry. “Risk has been priced out of the market,” said Sven Henrick of NorthmanTrader.com on CNBC’s “Futures Now.” Henrich, who is known online as the Northman Trader, said that despite the abundance of optimism on the part of investors, technical indicators could be pointing to some near-term pain.

According to the Northman’s chartwork, every time the S&P 500 Index has hit new highs, it eventually retreats back towards its 25-day moving average line, which would translate to a 4% pullback from current levels. The S&P 500 has rallied 6% since the election, and hit an intraday record high on Friday. “I would expect that at some point there would be a buying opportunity for people who may want to invest in this market,” said Henrich. “But if this line breaks, we may see significantly more downside that we’ve seen in previous corrections as well.” What’s more, Henrich also believes that the S&P 500 has continued to trade in a “bearish wedge pattern” that began just after the end of the last recession.

The wedge pattern Henrich speaks of consists of two trend lines: One that runs along the S&P’s highs and a second that runs along its lows, that look to meet sometime in 2017. It is at that point that Henrich believes the rally will have run its course, and a downside will soon follow. On a fundamental basis, the Northman Trader is troubled by “record debt levels” that the global governments have incurred. “In 2016, the U.S. government ran a deficit of over $600 billion,” explained Henrich.” “If we now add tax cuts and stimulus spending, you’re either going to have to cut a significant amount of programs somewhere, or you’re going to end up with an even larger deficit.”

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For domestic use only?

Chinese Warns Trump: End One China Policy And China Will Take Revenge (R.)

State-run Chinese tabloid Global Times warned U.S. President-elect Donald Trump that China would “take revenge” if he reneged on the one-China policy, only hours after Taiwan’s president made a controversial stopover in Houston. Taiwanese President Tsai Ing-wen met senior U.S. Republican lawmakers during her stopover in Houston on Sunday en route to Central America, where she will visit Honduras, Nicaragua, Guatemala and El Salvador. Beijing had asked Washington not to allow Tsai to enter the United States and that she not have any formal government meetings under the one China policy. A photograph tweeted by Texas Governor Greg Abbott shows him meeting Tsai, with a small table between them adorned with the U.S., Texas and Taiwanese flags. Tsai also met Texas Senator Ted Cruz.

“Sticking to (the one China) principle is not a capricious request by China upon U.S. presidents, but an obligation of U.S. presidents to maintain China-U.S. relations and respect the existing order of the Asia-Pacific,” said the Global Times editorial on Sunday. The influential tabloid is published by the ruling Communist Party’s official People’s Daily. Trump triggered protests from Beijing last month by accepting a congratulatory telephone call from Tsai and questioning Washington’s commitment to China’s position that Taiwan is part of one China. “If Trump reneges on the one-China policy after taking office, the Chinese people will demand the government to take revenge. There is no room for bargaining,” said the Global Times.

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“..mimic his signature hand gestures with their tiny wings.”

It’s Gonna Be Huge: China Factory Hatches Giant Trump Chickens (AFP)

A Chinese factory is hatching giant inflatable chickens resembling Donald Trump to usher in the Year of the Rooster. The five-metre (16-foot) fowls sport the distinctive golden mane of the US president-elect and mimic his signature hand gestures with their tiny wings. Cartoon figures of animals from the Chinese zodiac are ubiquitous around Chinese New Year at the end of this month. The balloon factory is selling its presidential birds for as much as 14,400 yuan ($2,080) on Chinese shopping site Taobao for a 10-metre version.


A golden mane and tiny wings that mimic his hand gestures – the resemblence of inflatable chickens produced for the Chinese New Year to US President-elect is unmistakable (AFP Photo/Johannes EISELE)

“I saw his image on the news and he has a lot of personality, and since Year of the Rooster is coming up I mixed these two elements together to make a Chinese chicken,” factory owner Wei Qing told AFP. “It is so funny, so we designed it and tried to sell it and it turned out to be popular.” The cartoon balloon appeared to be based on a sculpture designed by US artist Casey Latiolais, which was unveiled at a shopping mall last month in Taiyuan, capital of the northern province of Shanxi. Wei said he was not aware that the American designer had created the original, but added that “there are some differences in the facial expression. And that one is glass. Ours is inflatable.”

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“If we do get any reforms this year, they are going to be Potemkin reforms. The veneer will look like they are moving to a market economy, and the reality will be anything but.”

How Meaningful Will China “Opening Up” Markets To Foreigners Be? (BBG)

China’s recent policy of opening its markets to foreigners is expected to continue this year, but there are questions about how meaningful the change will be amid a clampdown on money leaving the country. While China loosened restrictions on its interbank bond market and relaxed rules for offshore investors trading stocks, it also saw $762 billion head overseas in the first 11 months of last year, according to Bloomberg Intelligence estimates, as investors sought safety in foreign assets. That helped push the yuan down 6.5% against the dollar in 2016, the most since 1994. Seeking to stem the flow, mainland authorities tightened rules that contributed to MSCI Inc. refusing to add Chinese-listed shares to its global indexes.

China’s regulators have indicated that this year foreigners might be allowed to access commodity futures and bond derivatives, while MSCI will again consider adding mainland stocks. But concerns remain about how open China’s markets will be, especially on the issue of taking assets out of the country. The contrast highlights the tension authorities face between inviting more investment while keeping control of the financial sector. “I’d describe China’s strategy as a pipeline strategy. Essentially what they do is to create various pipelines of inflows and outflows,” said John Greenwood, London-based chief economist at Invesco Asset Management. “The problem is the flows are always in the opposite direction of what they want.”

Among last year’s steps, Beijing lifted almost all quotas on China’s interbank bond market and scrapped some constraints under the Qualified Foreign Institutional Investor program, which governs how offshore funds invest in mainland markets. The Shenzhen-Hong Kong stock exchange link, the second between the mainland and the former British colony, opened in December. Expectations then rose as an official with the People’s Bank of China said the central bank is committed to further opening the interbank market, including giving foreign investors access to foreign-exchange and interest-rate derivatives to hedge risks, and expanding trading hours. Even as China opens up to incoming funds, it has been clamping down on outflows.

Officials have banned the use of friends’ currency quotas, made it more difficult to buy insurance policies in Hong Kong and prepared restrictions on overseas acquisitions by Chinese companies. Grants of new quotas for domestic fund managers to invest overseas were frozen, according to data compiled by Bloomberg. The tightening of outflow rules makes it hard for some to say that the country is fully embracing financial reform. “We have already seen in China’s case, markets only work when they go up. You are not allowed to go down,” said Michael Every at Rabobank in Hong Kong. “If we do get any reforms this year, they are going to be Potemkin reforms. The veneer will look like they are moving to a market economy, and the reality will be anything but.”

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“500,000-plus corruption investigators..” Who are corrupt.

China Tightens Rules After Anti-Corruption Staff Caught Up In Graft (R.)

China’s top anti-corruption watchdog has tightened supervision of its 500,000-plus corruption investigators, after some of its own staff were caught in graft probes. The Central Commission for Discipline Inspection (CCDI) said in a statement on its website late on Sunday that a new regulation would be applied to procedures such as evidence collection and case reviews, without providing further details. “Trust cannot replace supervision,” the CCDI said in the statement, released after it held an annual 3-day meeting. “We must make sure the power granted by the (Communist) Party and the people is not abused,” it said.

State newspaper the China Daily, which did not indicate its sources, said the new regulation would set clear standards on how to handle corruption tips, how to handle ill-gotten assets, and would encourage audio and video recordings to be made throughout interrogations. More than 7,900 disciplinary officials have been punished for wrongdoing since 2012, the newspaper said, citing CCDI figures. Of those, 17 were CCDI staffers who were put under investigation for graft, it said. On Friday, state news agency Xinhua quoted Chinese President Xi Jinping as saying that the battle against corruption “must go deeper”, and called for the Communist Party to be governed “systematically, creatively and efficiently”.

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Stuck.

China’s Pyrrhic Growth Victory Spurs 2017 Shift To Contain Risks (BBG)

As China’s top leaders tallied the cost of another year of debt-fueled growth at a December meeting, the imperative for stability as a leadership reshuffle loomed later this year prompted an unexpected conclusion. The price was too high, the leaders agreed, according to a person familiar with the situation. The buildup of debt used to fuel smokestack industries from steel to cement had helped win the short-term battle for growth, but the triumph itself undermined the foundations of long-term expansion, the leaders decided, according to the person, who asked not to be named because the meeting was private. What followed was an order to central and local government officials that if they are forced to choose this year, stability must be the priority while everything else, including the growth target and economic reform, is secondary, said another four people familiar with the situation.

Other concerns aired at the meeting that contributed to the policy shift were the short-term risk of a confrontation with the U.S. under President-elect Donald Trump over trade or Taiwan, and longer-term challenges including how to spur the innovation needed to prevent economic stagnation as well as cleaning up toxic air that enrages and poisons citizens, said the person. Left unsaid was that economic growth underpins the legitimacy of Communist Party rule. “China’s reaching the point where it has to pick its poison and giving up a half%age point of growth would be far less politically damaging than instability in the bond or currency markets,” said David Loevinger, a former China specialist at the U.S. Treasury and now an analyst at fund manager TCW in Los Angeles. “Looking past the Party Congress later in the year, President Xi Jinping may realize that unlike his predecessor, Hu Jintao, he can’t kick the can to his successor, even more so if he plans on extending his term” beyond 2022.

At the December meeting, officials expressed alarm over the nation’s rapid accumulation of total debt, with some present noting that other nations have experienced crises after allowing debt to climb to about 300% of gross domestic product, the person said. China’s credit boom may have pushed overall debt at the end of 2016 to 265% of GDP. Also aired at the meeting was the risk that China falls into the so-called Thucydides trap, a theory attributed to the eponymous Greek philosopher that says a rising power will clash with an established force. So menacing is the array of economic and political challenges confronting the nation that some leaders at the meeting said there’s no prospect for yuan appreciation against the dollar until at least 2020, said the person. “Tapping the brakes may help avoid the economy skidding off the road,” said Frederic Neumann at HSBC in Hong Kong.

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Interesting point of view.

The Rise, Fall and Comeback Of China’s Economy Over The Last 800 Years (BI)

China’s economy led its European counterpart by leaps and bounds at the start of the Renaissance. China was so far ahead, in fact, that economic historian Eric L. Jones once argued that the Chinese empire “came within a hair’s breadth of industrializing in the fourteenth century.” At the start of the 15th century, China already had the compass, movable type print, and excellent naval capacity. In fact, Chinese Admiral Zheng He commanded expeditions to Southeast Asia, South Asia, Western Asia, and East Africa from about 1405-1433 – about a century before the Portuguese reached India. He also had ships several times the length of Christopher Columbus’ Santa Maria, the largest of Columbus’ three ships that crossed the Atlantic.

Still, it’s hard to understand the magnitude of the shift China’s economic fortunes have seen just with historical anecdotes. And so, in a recent note to clients, Macquarie Research’s Viktor Shvets included two fascinating charts showing the changes China saw over the last 800 years, which we included below. The first chart shows the estimated percent share of a given country’s economy as a part of the overall world economy. In the 15th and 16th centuries, China was about 25-30% of the global economy, but come 1950-1970, after the destruction of World War II and under the rule of Mao Zedong, it was under 5%. Today, its economy is about 17% of the global economy – roughly the same as the US.

The second chart compares GDP per capita in China, Japan, and the US to the British GDP per capita measured in 1990 US dollars. In this case, the British GDP per capita in each year is 100, so if a number from China, Japan, or the US is above 100, then its GDP per capita is greater than in Britain, and if the number falls below 100, per capita output is lower than that in Britain. As Shvets writes, on a per capita basis, China was the wealthiest part of the world in the 1200-1300s — aside from Italy. Even as late as the 1600s it was roughly on par with the Brits. However, after that, the GDP per capita relative to Britain declines all the way up to the 1970s, when it was below 10% of the British standard of living. Around 1990, it starts to pick up again, but it has yet to recover to levels seen in 1200-1600.

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And what does this say about China?

Australia Predicts Dramatic Fall In Iron Ore Prices (BBC)

Shares in Australian mining companies have fallen after the government forecasted a dramatic decline in iron ore prices. The government forecast an iron ore price of $46.70 a tonne by 2018, almost half the current level of $80. The current price is supported by resurgent demand from China. But the Department of Industry, Innovation and Science said that demand was unlikely to continue over the coming years. The department also lowered its forecast for iron ore exports by 2% to 832.2 million tonnes for the fiscal year 2016-17. Australia is the world’s biggest supplier of iron ore and shares in the country’s main mining companies fell after the report was released. Hardest hit was Fortescue Metals which fell more than 3% in early trade, while commodity giants BHP Billiton and Rio Tinto also saw their shares prices drop. In its forecast early last year, the department had predicted an iron ore price of $44.10 per tonne, but an increase in Chinese demand spurred the price to above $80.

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This guy’s been lying outright to US authorities.

FBI Arrests Volkswagen Exec on Conspiracy Charges in Emissions Scandal (NYT)

The Federal Bureau of Investigation has arrested a Volkswagen executive who faces charges of conspiracy to defraud the United States, two people with knowledge of the arrest said on Sunday, marking an escalation of the criminal investigation into the automaker’s diesel emissions cheating scandal. Oliver Schmidt, who led Volkswagen’s regulatory compliance office in the United States from 2014 to March 2015, was arrested on Saturday by investigators in Florida and is expected to be arraigned on Monday in Detroit, said the two people, a law enforcement official and someone familiar with the case. [..] In a statement, Jeannine Ginivan, a spokeswoman for Volkswagen, said that the automaker “continues to cooperate with the Department of Justice” but that “it would not be appropriate to comment on any ongoing investigations or to discuss personnel matters.”

Lawsuits filed against Volkswagen by the New York and Massachusetts state attorneys general accused Mr. Schmidt of playing an important role in Volkswagen’s efforts to conceal its emissions cheating from United States regulators. Starting in late 2014, Mr. Schmidt and other Volkswagen officials repeatedly cited false technical explanations for the high emissions levels from Volkswagen vehicles, the state attorneys general said. In 2015, Mr. Schmidt acknowledged the existence of a so-called defeat device that allowed Volkswagen cars to cheat emissions tests. Volkswagen eventually said that it had fitted 11 million diesel cars worldwide with illegal software that made the vehicles capable of defeating pollution tests. [..] James Liang, a former Volkswagen engineer who worked for the company in California, pleaded guilty in September to charges that included conspiracy to defraud the federal government and violating the Clean Air Act. But Mr. Schmidt’s arrest brings the investigation into the executive ranks.

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Settling the UK alone could cost VW £3.6 billion.

UK Motorists Launch Class-Action Suit Against VW (G.)

Thousands of British motorists have launched a lawsuit against Volkswagen over the “dieselgate” emissions scandal, in a claim that could end up costing the carmaker billions of pounds. The group of 10,000 VW owners has filed a class action lawsuit against the German car firm, seeking £30m, or £3,000 each. If VW ends up having to pay the amount to each one of the 1.2 million people in the UK who own affected cars, including its Skoda, Audi and Seat marques, it would cost the company around £3.6bn.The German firm has yet to reach a settlement with British and European owners affected by the scandal, in which the company admitted using “defeat devices” to cheat emissions tests, making its cars appears greener than they were.

It has not compensated British owners despite reaching a £15bn settlement with 500,000 US drivers, offering instead to fix affected vehicles. The class action suit, which is being led by law firm Harcus Sinclair, is expected to claim that drivers should be compensated because they paid extra for what they thought were clean diesel cars. In fact, the claimants will allege, the cars emitted far higher levels of NOx – a mixture of pollutants nitrogen oxide and nitrogen dioxide – than stated. Damon Parker, head of litigation at Harcus Sinclair, told the Daily Mail that claimants were “angry and believe that VW might get away with it”. “They feel that they have been left with no choice but to take legal action,” Parker said. “We have paved the way for consumers who trusted but were let down by VW, Audi, Seat and Skoda to seek redress through our courts.

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My guess is pollsters and media will get this as wrong as they got Brexit and Trump.

Le Pen: I’ll Come To Brussels And Dismantle France’s Relationship With EU (EUK)

Marine Le Pen announced her first foreign visit would be to Brussels to dismantle France’s relationship with the EU if elected president later this year. The National Front leader has been a long-time critic of the EU and has promised to push back the sprawling European superstate and take back sovereignty to France. The 48-year-old said: “I would go to Brussels to immediately launch negotiations allowing me to give back to the French people their sovereignty.” The right-wing leader attacked the faltering euro currency as one of the root problems of the EU and described her main economic proposals as “economic patriotism, intelligent protectionism and a return to monetary independence”. She added: “The euro is a major obstacle to the development of our economy.”

Le Pen mooted that she was in favour of maintaining a form of common currency mechanism between France and the EU to help prevent sharp currency fluctuations. Recent opinion polls predicted that Le Pen would finish second in April’s first round of voting – putting her through to the next round in a run-off against Les Repubicain’s François Fillon. If pollsters are correct, France would be guaranteed a right-wing leader after five years of left-wing leadership from Francois Hollande.

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Farage got his price, Grillo still has nothing. Weird to ally himself with Verhofstadt, but it’s how Brussels is set up: you either force yourself into some group or you don’t count.

Beppe Grillo Calls For Five Star Movement Vote On Quitting Farage Bloc (G.)

The founder of Italy’s populist Five Star Movement (M5S) has asked members to vote on splitting from a Eurosceptic bloc of MEPs co-chaired by Nigel Farage. Beppe Grillo, a comedian turned politician, said in a post on his blog that since Farage had led Ukip to Britain voting to leave the EU, the two parties no longer shared common goals and he recommended leaving the Europe of Freedom and Direct Democracy (EFDD). “Recent events in Europe, such as Brexit, have led us to reconsider the nature of the EFDD group,” Grillo wrote. “With the extraordinary success of the leave campaign, Ukip achieved its political objective: to leave the EU. “Let’s discuss the concrete facts: Farage has already abandoned the leadership of his party and British MEPs will leave the European parliament in the next legislature. Until then, our British colleagues will be focused on developing the choices that will determine the UK’s political future.”

Grillo and Farage forged an alliance over lunch in Brussels after 2014’s European elections, in which Ukip took the largest share of the vote in Britain and M5S came second in Italy after winning 17 seats. Both said at the time that the group was aimed at “restoring freedom and national democracy”, with Farage adding: “Expect us to fight the good fight to take back control of our countries’ destinies.” In a move that would see his party mesh with European liberals, Grillo has called an online referendum, scheduled for Sunday and Monday, on breaking away and instead forming a new group with the Alliance of Liberals and Democrats for Europe (ALDE), led by the former Belgian prime minister, Guy Verhofstadt, who is also the EU’s chief Brexit negotiator. Grillo has long called for a referendum on Italy’s membership of the euro currency, but not on Italy leaving the EU.

With ALDE’s 68 MEPs, the alliance could become the “third political force in the European parliament”, Grillo wrote, while pointing to the fact that his party had only voted alongside Ukip about 20% of the time within the past few years. He said the two shared values linked to “direct democracy, transparency, freedom and honesty”. “With our vote we can make a difference and influence the result of many important decisions to counter the European establishment,” Grillo added. Farage said in a statement: “In political terms it would be completely illogical for Five Star to join the most Euro fanatic group in the European parliament. The ALDE group doesn’t support referenda or the basic principle of direct democracy. ALDE are also the loudest voice for a EU army. I suspect if Five Star joins ALDE it’s support will not last long.” A Ukip spokesman said: “Both Ukip and Five Star are free to choose to stay or quit a political relationship. While it’s interesting that some Five Star MEPs adamantly wish to stay in the EFDD group, as adults we wish them all the best whatever they do.”

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The scandal spreads and deepens. Tens of millions have been handed to NGOs to prepare for winter, and they simply haven’t done it. While those of us that could make it happen don’t have the money. People have to die first?

New Cold Snap, Heavy Snowfall Causes Problems Across Greece (Kath.)

A new cold snap brought snowfall to many parts of the country, leaving the Sporades islands of Alonissos and Skopelos without a ferry connection to the mainland and the Aegean islands of Lesvos and Chios struggling to care for hundreds of migrants amid freezing temperatures. Schools remained closed in many parts of the country due to heavy snowfall, including in the northern suburbs of Athens. According to meteorologists, the bad weather is set to continue through Wednesday. From Monday evening, the cold snap is forecast to spread to eastern Macedonia, Thrace, Halkidiki, the northern Aegean, the Sporades and across Crete. Storms are also likely at sea.


Moria camp, Lesbos, Jan 7

Temperatures are set to drop to -16 degrees Celsius in western Macedonia. The icy conditions left many households in the Thessaloniki region without water as pipes froze or broke. Most schools in the region were to remain closed on Monday due to heavy snowfall and low temperatures. The cold snap has made road travel risky in many parts of the country with motorists advised to fit their cars with anti-skid chains in northern areas.


Moria camp, Lesbos, Jan 7

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Jan 072017
 
 January 7, 2017  Posted by at 10:28 am Finance Tagged with: , , , , , , , , , ,  3 Responses »
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Arthur Rothstein Highway marker in Polk County, Florida 1937


Here Is The US Intel Report Accusing Putin Of Helping Trump Win (ZH)
A Case Study in the Creation of False News (Paul Craig Roberts)
Obama Set For Pardon Frenzy As He Leaves Office (AFP)
Worst. Recovery. Ever. (ZH)
How Many Bombs Did the United States Drop in 2016? (CFR)
Le Pen Says Brexit Isn’t a Disaster and France Should Be Next (BBG)
Economics Is Driven By Ideology, Not Science (Pettifor)
The Labor Market: The End Of The Innocence? (DiMartino Booth)
Canadian Woman Arrested In Turkey For Saying Erdogan Jails Journalists (CBC)
Giant Iceberg Poised To Break Off From Larsen C Antarctic Shelf (G.)

 

 

I’m so tired of this. No, ‘trust us’ is not good enough anymore. That is why Trump won, because it’s no longer enough to say ‘because we say so’. People don’t trust CIA et al. And you can’t turn that back on its head and demand trust now. You lost! I get so frustrated they even locked up my Facebook account again. There’s always people who want to complain about those who don’t toe lines.

Here Is The US Intel Report Accusing Putin Of Helping Trump Win (ZH)

The farce is complete. One week after a joint FBI/DHS report was released, supposedly meant to prove beyond a reasonable doubt that Russia intervened in the US presidential election, and thus served as a diplomatic basis for Obama’s expulsion of 35 diplomats, yet which merely confirmed that a Ukrainian piece of malware which could be purchased by anyone, was responsible for spoofing various email accounts including that of the DNC and John Podesta, moments ago US intelligence agencies released a more “authoritative”, 25-page report, titled “Assessing Russian Activities and Intentions in Recent US Elections”, and which not surprisingly only serves to validate the media narrative, by concluding that Russian President Vladimir Putin ‘ordered’ an effort to influence U.S. presidential election.

Specifically, the report concludes the following: “We assess Russian President Vladimir Putin ordered an influence campaign in 2016 aimed at the US presidential election. Russia’s goals were to undermine public faith in the US democratic process, denigrate Secretary Clinton, and harm her electability and potential presidency. We further assess Putin and the Russian Government developed a clear preference for President-elect Trump.” What proof is there? Sadly, again, none. However, as the intelligence agencies state, “We have high confidence in these judgments”… just like they had high confidence that Iraq had weapons of mass destruction. And while the report is severely lacking in any evidence, it is rich in judgments, such as the following:

“We assess Russian President Vladimir Putin ordered an influence campaign in 2016 aimed at the US presidential election. Russia’s goals were to undermine public faith in the US democratic process, denigrate Secretary Clinton, and harm her electability and potential presidency. We further assess Putin and the Russian Government developed a clear preference for President-elect Trump. We have high confidence in these judgments. “We also assess Putin and the Russian Government aspired to help President-elect Trump’s election chances when possible by discrediting Secretary Clinton and publicly contrasting her unfavorably to him. All three agencies agree with this judgment.”

At this point a quick detour, because the intel agencies responsible for drafting the report then explain how “confident” they are: “CIA and FBI have high confidence in this judgment; NSA has moderate confidence.” What do these distinctions mean? High confidence generally indicates judgments based on high-quality information, and/or the nature of the issue makes it possible to render a solid judgment. However, high confidence judgments still carry a risk of being wrong. Moderate confidence generally means credibly sourced and plausible information, but not of sufficient quality or corroboration to warrant a higher level of confidence. In other words, while not carrying the infamous DHS disclaimer according to which last week’s entire joint FBI/DHS report is likely garbage, the US intel agencies admit they may well be “wrong.”

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“Trump is supposed to side with the CIA which is trying to destroy him.”

A Case Study in the Creation of False News (Paul Craig Roberts)

For many weeks we have witnessed the extraordinary attack by the CIA and its assets in Congress and the media on Donald Trump’s election. In an unprecedented effort to delegitimize Trump’s election as the product of Russian interference in the election, the CIA, media, senators and representatives have consistently made wild accusations for which they have no evidence. The CIA’s message to Trump is clear: Get in line with our agenda, or we are going to mess you over. It is clear that the CIA is warring against Trump. But the CIA’s media assets have turned the facts on their head and are blaming Trump for having a negative view of the CIA. Consider the January 4 Wall Street Journal article by Damian Paletta and Julian E. Barnes, which begins: “President-elect Donald Trump, a harsh critic of U.S. intelligence agencies . . .”

The two presstitutes set up their false news story by putting the shoe on the other foot. It is Trump who is the harsh critic rather than the victim of the CIA’s harsh accusations. Set up this way, the story continues: “White House officials have been increasingly frustrated by Mr. Trump’s confrontations with intelligence officials. ‘It’s appalling,” the official said. “No president has ever taken on the CIA and come out looking good.’” Now that the story is Trump taking on the CIA and not the CIA taking on Trump, the case can be built against Trump: Analysts accustomed to more cohesion with the White House are “jarred” by Trump’s skepticism of the CIA’s assessment that Putin got him elected. Trump is supposed to respond to the allegation by saying: I am not legitimate. Here take back the presidency.

WikiLeaks’ Assange has stated unequivocally that there was no hack. The information came to WikiLeaks as a leak, which suggests that it came from inside the Democratic National Committee. That Trump sees it this way means, according to one unidentified official that “It’s pretty horrifying to me that he’s siding with Assange over the intelligence agencies.” You see, Trump is supposed to side with the CIA which is trying to destroy him. Has the CIA shot itself in both feet? How can the agency control policy by manipulating the information fed to the President when the President does not trust the agency?

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Leonard Peltier has been in jail for 40 years for a set-up. Forget about Snowden and Chelsea. Not going to happen.

Obama Set For Pardon Frenzy As He Leaves Office (AFP)

A Rastafarian prophet, a former Taliban captive and thousands of minor drug traffickers have one thing in common: Their names have been submitted to President Barack Obama for clemency before he leaves office in two weeks. Some US presidents have used this regal power of leniency in a pointed way near the end of their term in office. On the last day of his term in 2001, Democratic president Bill Clinton granted pardon in a highly controversial move to late fugitive trader Marc Rich, whose ex-wife had been a major donor to Democrats. Sixteen years later, Obama is fielding pressure from all sides to grant unlikely pardons or commutations of sentences to people whose supporters say have been unjustly sentenced or sought out by the justice system.

Among them is Bowe Bergdahl, a US Army sergeant held captive for five years by the Taliban before his release in a prisoner swap, who is due to be court-martialed for desertion. Leonard Peltier, a Native American activist convicted for the 1975 deaths of two FBI agents in what his supporters say was a setup, is also hoping to enjoy Obama’s good graces. Then there’s Edward Snowden, who made the shattering revelation in 2013 of a global communications and internet surveillance system set up by the United States. The 33-year-old, a refugee in Russia, is backed by numerous celebrities like actress Susan Sarandon and singer Peter Gabriel, as well as Amnesty International and the American Civil Liberties Union. If Obama fails to pardon Snowden, his supporters say he may face the death penalty under the incoming administration of Republican Donald Trump, who has called him a “terrible traitor.”

In another leak case, Chelsea Manning is serving a 35-year sentence in solitary confinement for handing 700,000 sensitive military and diplomatic documents to WikiLeaks, some of them classified. Activists say her sentence is excessive and point to the psychological frailty of the transgender soldier who has already made two suicide attempts. Even though the White House has dismissed a possible pardon for Snowden and Manning, their supporters are still hoping for a final magnanimous gesture from a president about to leave the constraints of his high office on January 20.

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We know.

Worst. Recovery. Ever. (ZH)

As the champagne glasses clink in Washington over a record-breaking streak of job growth on record (as the percent of the population employed slumped), and the fastest wage growth since the start of the recovery (for managers), we just wanted to remind a few blinkered media types that Obama’s “recovery” has officially been the worst recovery in US history (despite adding almost $10 trillion to the national debt)… When ‘fake news’ and ‘peddling fiction’ meet fact… Not quite as rosy an economic handover to Trump as The White House would like everyone to believe.

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Peace, man!

How Many Bombs Did the United States Drop in 2016? (CFR)

As President Obama enters the final weeks of his presidency, there will be ample assessments of his foreign military approach, which has focused on reducing U.S. ground combat troops (with the notable exception of the Afghanistan surge), supporting local security partners, and authorizing the expansive use of air power. Whether this strategy “works”—i.e. reduces the threat posed by extremists operating from those countries and improves overall security and governance on the ground—is highly contested. Yet, for better or worse, these are the central tenets of the Obama doctrine.

In President Obama’s last year in office, the United States dropped 26,171 bombs in seven countries. This estimate is undoubtedly low, considering reliable data is only available for airstrikes in Pakistan, Yemen, Somalia, and Libya, and a single “strike,” according to the Pentagon’s definition, can involve multiple bombs or munitions. In 2016, the United States dropped 3,027 more bombs—and in one more country, Libya—than in 2015.

Most (24,287) were dropped in Iraq and Syria. This number is based on the percentage of total coalition airstrikes carried out in 2016 by the United States in Operation Inherent Resolve (OIR), the counter-Islamic State campaign. The Pentagon publishes a running count of bombs dropped by the United States and its partners, and we found data for 2016 using OIR public strike releases and this handy tool.* Using this data, we found that in 2016, the United States conducted about 79% (5,904) of the coalition airstrikes in Iraq and Syria, which together total 7,473. Of the total 30,743 bombs that the coalition dropped, then, the United States dropped 24,287 (79% of 30,743).

To determine how many U.S. bombs were dropped on each Iraq and Syria, we looked at the percentage of total U.S. OIR airstrikes conducted in each country. They were nearly evenly split, with 49.8% (or 2,941 airstrikes) carried out in Iraq, and 50.2% (or 2,963 airstrikes) in Syria. Therefore, the number of bombs dropped were also nearly the same in the two countries (12,095 in Iraq; 12,192 in Syria). Last year, the United States conducted approximately 67% of airstrikes in Iraq in 2016, and 96% of those in Syria.

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Quick, Carney, cause chaos, or Le Pen will win…

Le Pen Says Brexit Isn’t a Disaster and France Should Be Next (BBG)

French presidential candidate Marine Le Pen said the U.K. economy is weathering Brexit, giving her confidence to seek an immediate renegotiation of France’s relationship with the European Union if elected. “Brexit has not been a disaster,” Le Pen said at a meeting with English-language reporters in Paris on Friday. “The economic signals are good.” National Front leader Le Pen, who polls suggest will reach the presidential runoff in May, said she would seek talks with France’s EU partners “the day after my election” and put the result to a national referendum. She said the goal is to take back what she called “the four sovereignties”: control of borders, economic policy, money and legislation. France should dump the euro and return to a national currency, though the exchange rate could be linked to some sort of European currency mechanism, Le Pen said.

“I’ll give six months to these talks, and if at the end we have won back our sovereignty, I will tell the French to vote to stay in this Europe of nations and liberty,” she said. “If we don’t, I’ll suggest that they vote to leave.” Polls suggest Le Pen would finish second in the first round of France’s presidential elections on April 23, and lose a May 7 runoff to center-right candidate Francois Fillon. An Elabe poll released Thursday showed independent Emmanuel Macron gaining on Le Pen, taking second place in some hypothetical matchups. Le Pen, whose party received a $8.5 million loan from a Russian bank in 2014, said she doesn’t fear Russian meddling in France’s election. That follows U.S. intelligence findings that Russian officials directed hacking attacks to help elect Trump, whom she said she supports because his anti-globalist views were better for France.

“Every time big corporations, big finance don’t get what they want, they say it’s a conspiracy of the Russians,” she said. “It makes one laugh.” While the U.S. shouldn’t lecture anyone given its history of spying on allies, improved ties between Russia and the U.S. are in France’s interest, especially if they can cooperate on combating Islamic militants, Le Pen said. “I think that Mr. Trump and Putin can repair ties, and I hope so,” she said. “We don’t want to see an increase in tensions between the U.S. and Russia for a very selfish reason: we are in the middle.”

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Should we let economists ‘heal’ their own field, or is it too late for that?

Economics Is Driven By Ideology, Not Science (Pettifor)

As someone who correctly predicted the financial crisis (first in 2003 and later in a 2006 book) I support Andy Haldane’s assertion that the economics profession is “to some degree in crisis”. He is not the first to argue this. The retiring head of the UK Treasury admitted in 2016 that economists failed to spot the build-up of risk before 2007 and were guilty of what he called “a monumental collective intellectual error”. It is a collective intellectual failure that I believe has played a key role in the rise of political populism. The Bank of England’s chief economist was also right to compare the challenges facing economists to the famous “Michael Fish” moment, where everyone was assured that a hurricane wouldn’t hit before it did, bringing with it much devastation, in 1987.

Meteorologists have since transformed their field and improved forecasts. But that is not true of the economics profession. The dominant economic model of financial liberalisation, monetary policy dominance and fiscal austerity remains intact. In their defence, economists can’t be faulted for getting forecasts wrong. Political events such as Brexit are not easy to predict. But unlike economists, meteorologists have a deep understanding of the major forces shaping outcomes in their fields, even when they get precise forecasts wrong. Mainstream economists, by contrast, lack that deep understanding of the economic forces driving outcomes. The reason is not hard to understand. The field of meteorology is not underpinned by policy or by an agenda. Economics, by contrast, is dogged by ideology.

It is ideology, not science, that leads economists to wrongly assert that the market in money is like the market in widgets, and must not be regulated or tampered with by governments. That financial flows across borders must be “free”, regardless of whether they cause instability. That bankers are simply intermediaries between savers and borrowers – and do not create credit out of thin air. That monetary and fiscal policies that serve the finance sector with bailouts are tolerable, while those that serve the poor must be resisted. That the reasoning that informs the micro-economy can be extrapolated to reach conclusions about the macro-economy. In other words, the fallacy that the budgets of households (the micro-economy) can be aggregated and compared to the budgets of governments (the macro-economy).

Unsurprisingly, these flawed theories and models are a great comfort to financial elites – which is why so many economists are hired and funded by big banks, corporations and the wealthy. And it explains why their words and ideas are repeated by the media outlets that faithfully serve the status quo or “the establishment”. Very little has been done to transform the dominant economic model of financial and trade liberalisation or to limit economists’ almost religious belief in the efficiency of markets and hostility to public intervention.

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“Let me take a long last look, before we say goodbye..”

The Labor Market: The End Of The Innocence? (DiMartino Booth)

One of the first of life’s lessons we all learned is that we need not rush life; it will do that for us and in the end against our will. The inspiration for this wisdom could well have sprung from Ecclesiastes wherein we read these peaceful words: To every thing there is a season, and a time to every purpose under the heaven. Co-writers Don Henley and Bruce Hornsby embraced the spirit of this message as the 1980’s were coming to a close. You must agree 1989’s The End of the Innocence, that haunting and mournful ballad, was just the coda needed to move on to the last decade of the last century. “Let me take a long last look, before we say goodbye,” the song asks of the listener who can’t help themselves but to listen.

Many veteran investors, those who don’t need to be reminded about the Reagan era because they were there, may be feeling a bit more wistful as they peer over the horizon. They have lived through extraordinary economic times and maybe even recall the early 1970’s, the last time initial jobless claims were at their current historically low levels. They know, in other words, this can’t go on forever, that we are nearing the end of our own innocence. Federal Reserve Chair Janet Yellen has been adamant that economic cycles can’t die of old age. At the end of this month, we can proclaim to be living through the third longest expansion in postwar times. The parlor game occupying those on the Street these days entails devising scenarios that can push us into the second, or dare we dream, longest expansion of all.

The Wall Street Journal perfectly captures the infectious optimism, the yearning to keep that dream alive, by asking this in a headline: How Low Can the Unemployment Rate Go? Rather than keep you in suspense, the article’s answer is as follows: “Assuming the economy adds around 200,000 jobs a month in 2017 and the labor-force participation rate stays relatively constant, the unemployment rate would fall to 3.9% by the end of the year, according to a model maintained by the Federal Reserve Bank of Atlanta.” If we do get there, a big if, we are sure to be staring down the barrel of appreciably higher interest rates and a flat, if not by then, inverted yield curve. The only precedent is, you guessed it, that which occurred in 2000, when the unemployment rate hit 3.6% as the longest cycle of all time was finally flaming out. Economics 101 teaches one tenet above all – that the unemployment rate is the most lagging within the data universe.

A recent visit with Dr. Gates, that steel-eyed sleuth, corroborated this maxim. “The unemployment rate is the single, most visible economic indicator for households. It’s easy to understand, black and white. Up is bad, down is good,” Gates observed. “If we keep getting downside surprises, it will feed even more consumer optimism. That happens late in the cycle.” What goes hand in hand with these late cycles guideposts? Since you asked, that optimism Gates cites tends to correlate with households overreaching their paychecks, which is exactly what we’re seeing. When adjusted for inflation, credit card borrowing is up 4.5% over last year, a full two percentage points above wage income, which is up 2.5% over the same period. That’s a new high for the current cycle. At 2.9%, inflation-adjusted spending is also running ahead of wage income.

These data are validated by separate data that shows state withholding tax collections are way off last year’s figures. “Vulnerabilities in household demand don’t happen overnight; they take time to rise to the surface,” Gates cautioned. “Households aren’t overstretched yet, but they’re getting there. Just like corporations substitute debt for profits late in the cycle, households also are starting to do just as they ride the wave of Trump optimism. Eventually this will run its course.”

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So is Canada going to stand up to him?

Canadian Woman Arrested In Turkey For Saying Erdogan Jails Journalists (CBC)

A Canadian woman has been arrested in Turkey for allegedly insulting the country’s president in comments posted on Facebook, her Turkish lawyer said Thursday. Ece Heper, 50, was arrested in the city of Kars in northeastern Turkey, and charged on Dec. 30, Sertac Celikkaleli told The Canadian Press. Heper, a dual Canadian-Turkish citizen, had been in the country since mid-November, according to her friends. “She is intense and opinionated, for sure,” Birgitta Pavic said from her Toronto home. “But everything is intense over there right now, especially criticizing the government.” At issue, her friends and lawyer said, are several recent Facebook posts about Turkish President Recep Tayyip Erdogan.

In one posted on Dec. 28, Heper accused Erdogan of jailing journalists who suggest there is evidence Turkey is supporting the Islamic State of Iraq and the Levant, known as ISIS or ISIL. Global Affairs Canada said they are aware of a Canadian citizen detained in Turkey and are providing consular assistance, but wouldn’t divulge further information, citing privacy laws. Heper has a log home in Norwood, Ont., about 150 kilometres northeast of Toronto, Pavic said, where she lives with five dogs she rescued from Turkey “that are like her children.” Her parents are dead and she is estranged from her brother, Pavic said, so her friends are taking up the cause to help her out.

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We’re just going to watch it happen, ain’t we? That’s all we’re capable of.

Giant Iceberg Poised To Break Off From Larsen C Antarctic Shelf (G.)

A giant iceberg, with an area equivalent to Trinidad and Tobago, is poised to break off from the Antarctic shelf. A thread of just 20km of ice is now preventing the 5,000 sq km mass from floating away, following the sudden expansion last month of a rift that has been steadily growing for more than a decade. The iceberg, which is positioned on the most northern major ice shelf in Antarctica, known as Larsen C, is predicted to be one of the largest 10 break-offs ever recorded. Professor Adrian Luckman, a scientist at Swansea University and leader of the UK’s Midas project, said in a statement: “After a few months of steady, incremental advance since the last event, the rift grew suddenly by a further 18km during the second half of December 2016. Only a final 20km of ice now connects an iceberg one quarter the size of Wales to its parent ice shelf.”

The separation of the iceberg “will fundamentally change the landscape of the Antarctic Peninsula” and could trigger a wider break-up of the Larsen C ice shelf, he added. “If it doesn’t go in the next few months, I’ll be amazed,” Luckman told BBC News. Ice shelves are vast expanses of ice floating on the sea, several hundred metres thick, at the edge of glaciers. Scientists fear the loss of ice shelves will destabilise the frozen continent’s inland glaciers. And while the splitting off of the iceberg would not contribute to rising sea levels, the loss of glacial ice would. Martin O’Leary, also of Swansea University, said: “It just makes the whole shelf less stable. If it were to collapse there would be nothing holding the glaciers up and they would start to flow quite quickly indeed.”

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Jan 052017
 
 January 5, 2017  Posted by at 10:22 am Finance Tagged with: , , , , , , , , ,  1 Response »
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Pablo Picasso The Dream 1932


Chinese Media Say ‘Big Sticks’ Await Trump If He Seeks Trade War (BBG)
Donald Trump Plans Revamp of Top US Spy Agency and CIA (WSJ)
Schumer Calls Eight Trump Cabinet Picks ‘Troublesome’ (BBG)
Ford’s Truck Trumps Mexico and Tesla (BBG)
So What’s The Big Idea, European Union? (G.)
Italy’s 5 Star Movement Part Of Growing Club Of Putin Sympathisers In West (G.)
Beppe Grillo Accuses Journalists Of ‘Manufacturing False News’ (DM)
Ukraine Moves To Blacklist Le Pen Over Crimea Comments (R.)
UK Credit Binge Approaching Levels Not Seen Since 2008 Crash (G.)
China Can’t Quit the Dollar (Balding)
India’s Cash Woes Are Just Beginning (BBG)
Head of Russian Central Bank Named European Banker of the Year (RT)
Steve Keen: Rebel Economist With A Cause (AFR)

 

 

Xi has all the state media, and all Trump has is Twitter. Isn’t it fun? Then again, for Xi to let the Global Times come with this sort of childish language is below him.

Chinese Media Say ‘Big Sticks’ Await Trump If He Seeks Trade War (BBG)

Chinese state media warned U.S. President-elect Donald Trump that he’ll be met with “big sticks” if he tries to ignite a trade war or further strain ties. “There are flowers around the gate of China’s Ministry of Commerce, but there are also big sticks hidden inside the door – they both await Americans,” the Communist Party’s Global Times newspaper wrote in an editorial Thursday in response to Trump’s plans to nominate lawyer Robert Lighthizer, who has criticized Beijing’s trade practices, as U.S. trade representative.

The latest salvo from state-run outlets followed others last month aimed at Peter Navarro, a University of California at Irvine economics professor and critic of China’s trade practices whom Trump last month named to head a newly formed White House National Trade Council. Those picks plus billionaire Wilbur Ross, the nominee for commerce secretary, will form an “iron curtain” of protectionism in Trump’s economic and trade team, the paper wrote. The three share Trump’s strong anti-globalization beliefs and seem unlikely to keep building the current trade order, it said, adding that they will be more interested in disrupting the world trade order.

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Don’t think they saw this coming. And that’s perhaps not so intelligent. The CIA leaked a lot of wild anti-Trump stuff during the election campaign, and now claims he MUST trust them. But if he leaves the same people in place, when will they turn on him again?

Donald Trump Plans Revamp of Top US Spy Agency and CIA (WSJ)

President-elect Donald Trump, a harsh critic of U.S. intelligence agencies, is working with top advisers on a plan that would restructure and pare back the nation’s top spy agency, people familiar with the planning said, prompted by a belief that the Office of the Director of National Intelligence has become bloated and politicized. The planning comes as Mr. Trump has leveled a series of social media attacks in recent months and the past few days against U.S. intelligence agencies, dismissing and mocking their assessment that the Russian government hacked emails of Democratic groups and individuals and then leaked them last year to WikiLeaks and others in an effort to help Mr. Trump win the White House.

One of the people familiar with Mr. Trump’s planning said advisers also are working on a plan to restructure the CIA, cutting back on staffing at its Virginia headquarters and pushing more people out into field posts around the world. The CIA declined to comment on the plan. “The view from the Trump team is the intelligence world [is] becoming completely politicized,” said the individual, who is close to the Trump transition operation. “They all need to be slimmed down. The focus will be on restructuring the agencies and how they interact.”

In one of his latest Twitter posts on Wednesday, Mr. Trump referenced an interview that WikiLeaks editor in chief Julian Assange gave to Fox News in which he denied Russia had been his source for the thousands of emails stolen from Democrats and Hillary Clinton advisers, including campaign manager John Podesta, that Mr. Assange published. Mr. Trump tweeted: “Julian Assange said ‘a 14 year old could have hacked Podesta’—why was DNC so careless? Also said Russians did not give him the info!”

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This will dominate the news going forward. Main question: what crazy stories will the WaPo come up with to discredit the nominees? Should be interesting. Meanwhile: YOU LOST, Schumer. Big time. Stop digging.

Schumer Calls Eight Trump Cabinet Picks ‘Troublesome’ (BBG)

Senate Democratic leader Chuck Schumer said his party views eight of Donald Trump’s Cabinet choices as being “the most troublesome” and wants at least two days of hearings for each of them. “We have asked for fair hearings on all of those nominees,” Schumer of New York told reporters Wednesday in Washington. “There are a lot of questions about these nominees.” Confirmation hearings begin next week for a number of the president-elect’s Cabinet picks, and several already overlap on a single day, Jan. 11. Majority Leader Mitch McConnell said minutes earlier that he hopes the Senate would be ready to confirm some of the nominees shortly after Trump is inaugurated on Jan. 20, just as it did when President Barack Obama first took office.

Under current Senate rules, Democrats can delay Senate confirmation of nominees but can’t block them on their own. Schumer’s office said the eight nominees targeted by Democrats for extra scrutiny are Rex Tillerson for secretary of State, Betsy DeVos for Education, Steven Mnuchin for Treasury, Scott Pruitt for the Environmental Protection Agency, Mick Mulvaney for budget director, Tom Price for Health and Human Services, Andy Puzder for Labor and Wilbur Ross for Commerce. Schumer said he wants their full paperwork before hearings are scheduled, adding that only a few have turned it in while most haven’t. Schumer said he also wants their tax returns, particularly because some are billionaires and given the potential for conflicts of interest.

The hearing for DeVos is scheduled for Jan. 11, “and we don’t have any information on her, and she in addition has a $5 million fine outstanding that she’s refused to pay,” Schumer said. Democrats have called on a political action committee led by DeVos to pay a $5.2 million fine imposed by Ohio officials over campaign finance violations in 2008. “There are so many issues about so many of them that to rush them through would be a disservice to the American people,” the Democratic leader said. While many of Obama’s nominees were confirmed quickly, his team had its paperwork in early, Schumer said.

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Our God is the car.

Ford’s Truck Trumps Mexico and Tesla (BBG)

On its first day back from the holidays, America’s auto industry began with a Mexican standoff and ended with Tesla just being off. Ford announced early on Tuesday it was scrapping plans to build a new plant in Mexico, apparently under pressure from President-elect Donald Trump. The PEOTUS then turned his signature industrial-policy-by-tweet on General Motors, threatening them over shipping Mexican-made Chevy Cruze cars back home .Meanwhile, after the market closed on Tuesday, Tesla Motors Inc. reported it missed its (reduced) guidance for vehicle deliveries in 2016. The stock fell in after-hours trading, as some were clearly caught by surprise – a reaction that, let’s face it, is itself a bit surprising at this point. In any case, a timely tour of the Gigafactory scheduled for Wednesday will no doubt snap the market’s attention back away from those pesky number thingies.

What links these stories is Ford’s other announcement on Tuesday morning, which got a bit lost in the shuffle; namely, its plans to electrify some of its marquee models – including the F-150 pickup truck.Rather than a battery-only version or even a plug-in hybrid model, Ford is committing merely to a basic hybrid version of the F-150 by 2020 – more Priusizing than Teslarizing it. So we aren’t about to see Ford’s trucks vanish from gasoline stations anytime soon. But this is still a big deal. The F-Series is America’s biggest-selling vehicle and represents one of every three full-size pickups sold. Also, pickups are archetypal gas guzzlers, and gas guzzlers are doing really well right now because of cheap gasoline. And even as Trump lobs Twitter-bombs at the car-makers’ foreign factories, his administration also looks likely to ease up on fuel-efficiency standards.

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So What’s The Big Idea, Guardian? How can you have your own Jennifer Rankin in Brussels, Thomas Kirchner and Alexander Mühlauer of Suddeutsche Zeitung and Cécile Ducourtieux of Le Monde, all contribute to a long article, and still not touch on a single one prime issue with the EU? How do you do it?

So What’s The Big Idea, European Union? (G.)

A few weeks ago, a significant anniversary in Maastricht slipped by almost unnoticed: 25 years ago, the historic treaty that ushered in the euro was drafted. But there was no fanfare, no commemoration in the European parliament, no mention at all by the commission. There was just a rather lacklustre speech by the EU president, Jean-Claude Juncker, in which he lamented that people were not sufficiently proud of what had been achieved on 9 December 1991. This air of resignation perfectly epitomises an EU in retreat. Battered, bothered and bewildered on all sides by a succession of crises – Brexit, the euro, refugees – the union is short of ideas, perhaps shorter than it has ever been. In his state of the union speech last autumn, the very best that Juncker could come up with was free Wi-Fi for every EU town and village by 2020, though even this sounded more like an aspiration than a concrete policy.

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Oh, wait, that hollow ‘article’ on the EU was just a lead in to this Guardian smear piece in the honored tradition of the WaPo. Up to and including “Russian interference in Italian elections”.

Italy’s 5 Star Movement Part Of Growing Club Of Putin Sympathisers In West (G.)

Ten years ago, in the wake of the murder of the leading Russian journalist Anna Politkovskaya, a popular comedian-turned-blogger in Italy named Beppe Grillo urged tens of thousands of his readers to go out and buy Putin’s Russia, her searing exposé of corruption under the leadership of Vladimir Putin. “Russia is a democracy based on the export of gas and oil. If they didn’t export that, they would go back to being the good old dictatorship of once upon a time,” Grillo wrote in a mournful 2006 post about the journalist’s murder. But today, Grillo’s position on Russia has radically changed. He is now part of a growing club of Kremlin sympathisers in the west – an important shift given that the comedian has become one of the most powerful political leaders in Italy and his Five Star Movement (M5S), the anti-establishment party he created in 2009, is a top contender to win the next Italian election.

[..] As the M5S’s rhetoric has become pro-Russian, it is simultaneously becoming more critical of the EU, including a vow to hold a referendum on the euro. Such a vote would be likely to have a destabilising effect on European unity, even if in practice it would be difficult to execute a departure from the single currency. Grillo has also called for a “review” of the EU’s open borders under the Schengen agreement, in response to the shooting in Milan of Anis Amri, the suspected terrorist behind last month’s attack on a Berlin Christmas market.

[..] Foreign diplomats in Rome said it was easy to overestimate the M5S’s chances of winning the next Italian election and that expected changes to Italy’s electoral rules would make an M5S victory difficult. That calculation is based on the fact that the M5S has always opposed forging governing alliances with other parties, which has made it impossible so far for the party to achieve a majority coalition in parliament. But a handful of diplomats have also suggested that the ruling Democratic party, which is still led by former prime minister Matteo Renzi, may not be fully alert to the potential threat of Russian interference in Italian elections, and is not as concerned about the issue as it should be.

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This is Italy, so what does the other side say? Fascism. To propose a public jury on what news is false is fascism. As Italy is no. 77 in the World Press Freedom Index. This will get very ugly.

Beppe Grillo Accuses Journalists Of ‘Manufacturing False News’ (DM)

The leader of Italy’s populist Five Star movement has caused a stir by accusing the country’s journalists of ‘manufacturing false news’. Comic Beppe Grillo, founder of the anti-euro movement, lashed out at print and TV journalists, accusing them of fabricating news to keep his party, the Five Stars, down. ‘Newspapers and television news programmes are the biggest manufacturers of false news in the country, with the aim of ensuring those who have power keep it,’ he said on his blog on Tuesday. He called for ‘a popular jury to determine the veracity of the news published,’ and said in cases of fake news ‘the editor must, head bowed, make a public apology and publish the correct version at the start of the programme or on the paper’s front page’.

Grillo said members of the general public ‘picked at random’ would be shown newspaper articles and programmes and asked ‘to determine their accuracy.’ The blog was accompanied by a montage of the banners and logos of Italy’s main newspapers and television news programmes. The media world was enraged by comments, as were politicians from Italy’s traditional parties. The news director of the private TG La7 channel, Enrico Mentana, said he would sue the comedian, while journalists’ union FNSI slammed the ‘lynching of all journalists’. The opposition Five Stars was running neck-and-neck with the ruling centre-left Democratic Party (PD) before Matteo Renzi’s downfall last month and Grillo is campaigning hard for the next general election, which could be held in coming months.

What Grillo is proposing ‘is called Fascism, and those who play it down are accomplices,’ PD senator Stefano Esposito said. The centre-right Forza Italia (FI) party, founded by ex-prime minister Silvio Berlusconi, said Grillo wanted a ‘minculpop 2.0’, a reference to the propaganda and censorship ministry under dictator Benito Mussolini. Grillo has had a difficult relationship with the media since launching the Five Stars (M5S) in 2009, banning members from appearing on talk shows and giving international media priority over their Italian counterparts at his rallies. His claim that journalists were to blame for the country’s poor standing on the World Press Freedom Index – where it ranks 77th – was dismissed by the editor in chief of the Repubblica daily.

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The Crimeans voted in huge numbers to join -stay with- Russia, but you can’t say that. Not even if it’s true and you live 2000 miles away. I doubt Le Pen was planning any trips to Kyiv anytime soon to begin with, but so who’s next? She can’t go to Poland anymore either soon? But still get elected president of France? Bring it on.

Ukraine Moves To Blacklist Le Pen Over Crimea Comments (R.)

Ukraine indicated on Wednesday it would bar French presidential candidate Marine Le Pen from entering the country after comments she made that appeared to legitimize Russia’s annexation of Crimea in 2014. Le Pen’s office dismissed the threat, saying she had no intention of visiting Ukraine. Kiev is nervous about the shifting political landscape in 2017. U.S. President-elect Donald Trump has adopted a friendlier tone toward Russia while another French presidential candidate, Francois Fillon, favours lifting sanctions against Moscow. Relations between Ukraine and Russia soured after Russia’s annexation of Crimea and the subsequent outbreak of pro-Russian separatist fighting in eastern Ukraine that has killed around 10,000 people, despite a ceasefire being notionally in place.

Alluding to Le Pen, the Ukrainian foreign ministry said in a statement: “Making statements that repeat Kremlin propaganda, the French politician shows disrespect for the sovereignty and territorial integrity of Ukraine and completely ignores the fundamental principles of international law. “…Such statements and actions in violation of the Ukrainian legislation will necessarily have consequences, as it was in the case of certain French politicians, who are denied entry to Ukraine,” it said. The far right leader was quoted by French television as saying Russia’s annexation of Crimea was not illegal because the Crimean people had chosen to join Russia in a referendum, a position Kiev vehemently disputes. The referendum was also declared illegal by the United Nations General Assembly.

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What keeps Britain together. Credit and whining. And fog. Boy, what a sorrowful place it’s becoming.

UK Credit Binge Approaching Levels Not Seen Since 2008 Crash (G.)

A credit boom that is close to levels not seen since the 2008 financial crash should set alarm bells ringing in Theresa May’s government, debt charities have warned. The latest figures from the Bank of England show unsecured consumer credit, which includes credit cards, car loans and second mortgages, grew by 10.8% in the year to November to £192.2bn, picking up pace on the previous month to grow at its fastest rate in more than 11 years. In September 2008, the month that Lehman Brothers collapsed and the banking crash triggered a worldwide recession, the level of UK consumer credit debt hit a peak of £208bn. Credit card debts, which accounted for £66.7bn of the total, hit a record high last month as Britons used the plastic to fund shopping as never before in the run-up to Christmas.

The debt charity StepChange said the rise in debt levels would leave thousands of families vulnerable to higher levels of inflation and changes in income from wage cuts, divorce or redundancy. Its head of policy, Peter Tutton, said: “Levels of outstanding borrowing are approaching the 2008 peak, and the growth rate of net lending is at its highest since 2005. Alarm bells should be ringing. “Previous experience shows how such increases in the levels of borrowing can leave households over-indebted and vulnerable to sudden changes in circumstances and drops in income that can pitch them into hardship. “Lenders, regulators and the government need to ensure that the mistakes made in the lead-up to the financial crisis are not repeated and that there are better policies in place to protect those who fall into financial difficulty.”

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All you need, as if it wasn’t obvious: “..the link between the yuan and the dollar remains as tight as ever. In November 2016, 98% of turnover in China’s foreign-exchange market took place between those two currencies.”

China Can’t Quit the Dollar (Balding)

China’s leaders are hardly disguising their fears about money leaving the country. They’ve just imposed new disclosure rules limiting how Chinese – who are allowed to convert up to $50,000 worth of yuan into foreign currency each year – can spend that money overseas. Simultaneously, they’re striving to tamp down worries about the tumbling yuan, which has fallen to an eight-year low against the U.S. dollar. At the end of December, the government added 11 currencies to the basket against which it now values the yuan. While the Chinese currency fell 6.5% against the dollar in 2016, its value measured against the broader basket has remained largely stable since July. The idea, at least in part, is to persuade ordinary Chinese that their nest eggs are safe in renminbi. Unfortunately, this latest effort isn’t likely to work any better than earlier ones.

The yuan remains inextricably bound to the U.S. dollar – and everyone knows it. The People’s Bank of China created the exchange-rate basket roughly a year ago. The goal was twofold – to shift attention away from the yuan’s precipitous decline against the dollar and to reduce China’s dependence on the U.S. currency. The latter was widely seen as humiliating – an affront to a rising superpower and the world’s second-largest economy. That resentment helped drive China’s effort – since stalled – to internationalize its currency. Yet any cursory review makes clear that the link between the yuan and the dollar remains as tight as ever. In November 2016, 98% of turnover in China’s foreign-exchange market took place between those two currencies. Flows of capital into and out of China show an only slightly less lopsided pattern.

Between them, the U.S. and Hong Kong dollars (the latter is hard-pegged to the U.S. currency) account for 91% of China’s non-yuan international bank transactions. The smaller currencies that make up nearly half of the basket comprise only 1.7% of international bank payments and receipts. Even the BIS estimates that 80% of China’s local loans in foreign currency are denominated in dollars. That’s the number that really matters: If the yuan continues to fall against the dollar, companies are going to have a harder time paying back those loans regardless of what the renminbi is or isn’t worth against the government’s official basket. All this is clear to ordinary investors. During my nearly eight years in China, I’ve never heard any Chinese citizen worry about the value of the yuan against the Emirati dirham.

So as long as the yuan continues to depreciate in dollar terms, Chinese are going to look for ways to get their money out of the country, despite any barriers the government might throw in their way. China’s options for preventing further outflows are limited. The PBOC could continue to deplete the country’s $3 trillion in foreign exchange reserves in an effort to prop up the yuan. That’s a risky game, though, as it reduces the stockpiles of hard currency needed to repay foreign-denominated debt and provide liquidity for international trade. As others have argued, reserves should be deployed strategically, not squandered defending bad policy.

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I see helicopter money. Digital basic income will come too late. At the every least half the people don’t even have plastic. And Modi can’t afford to wait for that.

India’s Cash Woes Are Just Beginning (BBG)

“Give me 50 days, friends,” Indian Prime Minister Narendra Modi asked citizens after he canceled 86% of the country’s currency notes. After Dec. 30, if Indians saw his decision as flawed, he promised to “suffer any punishment.” But, he said confidently, if they could bear 50 days of disruption, they would have the “India of their dreams.” It is now January. While Modi’s deadline has passed, the pain hasn’t. Indeed, it may just be beginning: Measured by the purchasing managers’ index, or PMI, Indian manufacturing actually began to contract last month for the first time in all of 2016. This can’t be blamed on sluggish global demand; the equivalent measure from China suggested that manufacturing there is expanding quicker than expected. Indian companies are suffering from supply-chain disruptions and customers with no cash in their wallets.

True, in some ways things aren’t as bad, at least in metropolitan India, as they were a few weeks ago. The lines at ATMs are shorter and the government even felt comfortable enough to raise the limits for ATM withdrawals from 2,500 rupees a pop to 4,500 rupees (from $37 to $66). But overall cash limits haven’t been eased; most Indians can still only withdraw 24,000 of their own hard-earned rupees – a little over $350 – a week, or 50,000 rupees if one has a business account. That’s simply not enough cash to keep supply chains going. Lines at ATMs thus aren’t the most useful indicator. Even if more cash is getting into the economy, the question is whether Indians are still artificially constrained in how much cash they can access. If so, things haven’t returned to “normal.” And the longer there’s a cash constraint, the larger the ripple effect on the economy.

Here’s a thought experiment, based on how informal, cash-based economies work. For the first or second month that you’re short of cash, your creditors and your debtors, the people you buy from and the people you sell to, are all short of cash as well. Plus, everyone knows the cash crunch isn’t your fault; it doesn’t reveal any adverse information about how healthy your business is or isn’t. So you extend and receive credit relatively easily. Things can run on such relationships for awhile in the informal economy. But when the outside world – the formal economy – intrudes, the system breaks down. When it comes time to pay your electricity bill, or a loan installment to the banks, you’re forced to call in your debts. You may not face enough formal demands in the first month or two to pose a problem. But as time passes, they add up.

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Way ahead of you! I wrote this in April 2015: Russia’s Central Bank Governor Is Way Smarter Than Ours.

Head of Russian Central Bank Named European Banker of the Year (RT)

Elvira Nabiullina, the head of Russia’s central bank, has been named the best Central Bank Governor in Europe in 2016 by the international financial magazine, The Banker. The influential publication praised her for having “helped steer the country through the difficulties,” with Russia “set to return to economic growth in 2017.” “Having started 2016 with consumer price inflation of 12.9% – highs not seen since 2008 – Ms Nabiullina highlighted the need to lower inflation to improve economic growth in Russia,” the outlet writes in an article dedicated to the award. Established in 1926, The Banker is considered one of the leading international finance magazines, read in almost 180 countries.

“Ms Nabiullina’s efforts saw the rate drop below 6% by the end of 2016,” the magazine writes. This, as inflation in Russia “had never fallen under 6,1%”, according to the publication, citing figures by the International Monetary Fund going back to 1992. Nabiullina said she viewed the past year as a kind of turning point with regard to inflation. “Importantly, in 2016 there was a turning point in the sentiment of the population and professionals regarding inflation expectations,” she is quoted as saying by the outlet. “At the beginning of 2016, inflation expectations of market participants were well above our target, but now they have reduced to close to our [end-2017] 4% inflation target, at between 4.5% and 4.7%.”

In December last year, the chief of the IMF, Christine Lagarde lauded Nabiullina for doing “a fantastic job” while tackling the financial problems in Russia, and inflation in particular. Nabiullina served as economic adviser to Russian President Vladimir Putin between 2012 and 2013, when she was appointed to head Russia’s Central Bank. She was Minister of Economic Development and Trade for 5 years from September 2007 to May 2012. Forbes rates Nabiullina 56th among the world’s 100 most powerful women. In 2015, Nabiullina was named central bank governor of the year by Euromoney magazine.

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Even on vacation he still finds a way to get his face in the media.

Steve Keen: Rebel Economist With A Cause (AFR)

Keen’s views and policy prescriptions remain firmly and proudly unconventional – unworkable even. But as somebody who saw the GFC coming when most did not, and as a long-time disciple of the now in-vogue Austrian economist Hyman Minsky, it may be that Keen’s economic views are finally entering mainstream thought. In a sign of the times, none other than the new chief economist of the World Bank, Paul Romer, has admitted that “for more than three decades, macroeconomic theory has gone backwards”. In a piece titled The trouble with macroeconomics, Romer in September wrote that “theorists dismiss mere facts by feigning an obtuse ignorance about such simple assertions as ‘tight monetary policy can cause a recession’.”


Australian private and government debt as a percentage of GDP. Steve Keen

And there is a strong need for fresh remedies. There is more debt in the world now than before the GFC – a crisis precipitated by excess borrowing. Low and zero interest rates and unconventional monetary policies such as QE have pumped up asset prices but done little to spark productivity gains or business investment in advanced economies. Private debt in Australia is now equivalent to around 210% of GDP, from 180% in 2007. Australian households are more indebted than ever, the RBA says. Keen is perhaps most critical of central bankers’ unwillingness to incorporate the link between credit growth and financial stability into their decision making. “Conventional economic thinking completely ignores where money comes from,” Keen says. “All this theory is effectively based on the idea that money is like nuts that chipmunks drop from trees and you can run out of it and if you don’t have enough of it you are going to starve over winter, and it’s a completely naive view of a monetary economy.”

While he acknowledges that RBA governor Philip Lowe has signalled a greater emphasis on “financial stability”, household indebtedness still continues to climb. “The Reserve Bank were so backward in their thinking. Their argument was, ‘oh well, the level of debt doesn’t matter because the households that have the debt are wealthy and they can continue servicing it’. But the real problem is demand for the economy comes out of turnover of the existing money plus credit. “Now, if you are relying on credit growth being equivalent to 15% of GDP, which is where it was in Australia just over six months ago, you’ve got to continue borrowing that 15% of GDP every year to maintain that trajectory. “If you simply stabilise, then, bang!, 15% of demand disappears. And that’s what we face and what I think will happen [in 2017].”

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