May 032022
 


Andy Warhol Judy Garland 1978

 

Supreme Court Has Voted To Overturn Abortion Rights, Draft Opinion Shows (Pol.)
SCOTUS Draft To Overturn Roe v. Wade Leaked (TCS)
Upon Reread, It Looks Like FAKE NEWS (CTH)
This Is Why Nancy Pelosi And Adam Schiff Were In Kyiv Yesterday (CTH)
New Pure-bred ‘Schrödinger-seizable’ Euros (Vilches)
“Disinformation” is Just a Boot in Your Face (Kunstler)
The Clinton Campaign Is About To Lose Its Privilege Fight (Techno Fog)
Ghosting Propaganda (Dodsworth)
Fraudulent Trial On Ivermectin Published By World’s Top Medical Journal (Kory)
Your Face Is Now a Weapon of War (NI)
The Vacuum Effect of the US Dollar (Lacalle)

 

 

 

 

SBU

 

 

Cernovich:
Hack of the Supreme Court’s email must be presumed, even if that turns out to be inaccurate after a full investigation. This is far too important an issue to speculate that it was a leak. Immediate Special Counsel appointment, unlimited budget.

 

 

 

 

Not acceptable. How can the judges work this way? Was this leaked, or is the court’s email system compromised?

Supreme Court Has Voted To Overturn Abortion Rights, Draft Opinion Shows (Pol.)

The Supreme Court has voted to strike down the landmark Roe v. Wade decision, according to an initial draft majority opinion written by Justice Samuel Alito circulated inside the court and obtained by POLITICO. The draft opinion is a full-throated, unflinching repudiation of the 1973 decision which guaranteed federal constitutional protections of abortion rights and a subsequent 1992 decision – Planned Parenthood v. Casey – that largely maintained the right. “Roe was egregiously wrong from the start,” Alito writes. “We hold that Roe and Casey must be overruled,” he writes in the document, labeled as the “Opinion of the Court.” “It is time to heed the Constitution and return the issue of abortion to the people’s elected representatives.”

Deliberations on controversial cases have in the past been fluid. Justices can and sometimes do change their votes as draft opinions circulate and major decisions can be subject to multiple drafts and vote-trading, sometimes until just days before a decision is unveiled. The court’s holding will not be final until it is published, likely in the next two months. The immediate impact of the ruling as drafted in February would be to end a half-century guarantee of federal constitutional protection of abortion rights and allow each state to decide whether to restrict or ban abortion. It’s unclear if there have been subsequent changes to the draft.

No draft decision in the modern history of the court has been disclosed publicly while a case was still pending. The unprecedented revelation is bound to intensify the debate over what was already the most controversial case on the docket this term. The draft opinion offers an extraordinary window into the justices’ deliberations in one of the most consequential cases before the court in the last five decades. Some court-watchers predicted that the conservative majority would slice away at abortion rights without flatly overturning a 49-year-old precedent. The draft shows that the court is looking to reject Roe’s logic and legal protections.

A person familiar with the court’s deliberations said that four of the other Republican-appointed justices – Clarence Thomas, Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett – had voted with Alito in the conference held among the justices after hearing oral arguments in December, and that line-up remains unchanged as of this week. The three Democratic-appointed justices – Stephen Breyer, Sonia Sotomayor and Elena Kagan – are working on one or more dissents, according to the person. How Chief Justice John Roberts will ultimately vote, and whether he will join an already written opinion or draft his own, is unclear.

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“The court’s holding will not be final until it is published, likely in the next two months.”

SCOTUS Draft To Overturn Roe v. Wade Leaked (TCS)

In an unprecedented turn of events, someone leaked a SCOTUS initial draft majority opinion to overturn Roe v. Wade to Politico. “We hold that Roe and Casey must be overruled,” writes Justice Samuel Alito in the leaked document. “It is time to heed the Constitution and return the issue of abortion to the people’s elected representatives.” “…. Roe was egregiously wrong from the start. Its reasoning was exceptionally weak, and the decision has had damaging consequences. And far from bringing about a national settlement of the abortion issue, Roe and Casey have enflamed debate and deepened division.”

The justices that support striking down Roe v. Wade and making abortion a state issue are Justice Alito, Justice Thomas, Justice Barrett, Justice Kavanaugh, and Justice Gorsuch, with Justice Roberts being a flip vote and the three Democrat Justices opposing the overruling. As many have pointed out, leaking a draft of a SCOTUS vote is unprecedented and appears to be a clear attempt to instigate left-wing riots across the country to pressure justices not to overturn Roe v. Wade. There are many potential reasons for doing this. As Politico notes, “Justices can and sometimes do change their votes as draft opinions circulate and major decisions can be subject to multiple drafts and vote-trading, sometimes until just days before a decision is unveiled.


“The court’s holding will not be final until it is published, likely in the next two months.” Moreover, the leak will have huge ramifications regarding the upcoming midterms and even the 2024 general election, as both sides will indefinitely utilize the decision (and even the draft vote if it’s dropped) as the ultimate wedge issue to argue that if Americans don’t vote for a particular candidate, then Roe v. Wade will or won’t be overturned. As it stands, many on Twitter are already calling for the Biden administration to pack the courts, and the Supreme Court has been barricaded as they await the impending riots likely to pop off tomorrow afternoon.

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Twitter thread by Sundance. “The leak is real, the news is fake. Alito opinion is real. The justice’s concurrances or formal alignments are not. How does the court respond to an accurate Alito opinion, and a non factual alignment?

Why would Politico want to participate in a strategically explosive political effort to manufacture a fear of a not real SCOTUS opinion based on fabricated claims?”

Upon Reread, It Looks Like FAKE NEWS (CTH)

Having read the Politico article carefully, my original suspicions have shifted a bit. “Exclusive: Supreme Court has voted to overturn abortion rights, draft opinion shows “We hold that Roe and Casey must be overruled,” Justice Alito writes in an initial majority draft circulated inside the court.” First, Politico is in the Domestic DOJ/FBI pipeline with the New York Times. CNN = State Dept. WaPo = CIA/Intel. NYT/Politico = FBI/DOJ. So the outlet sourcing leans toward DOJ and Justice Branch coverage. Which makes sense given the leaker is inside SCOTUS giving stolen documents to Politico. However, there’s no citation in the article for the actual alignment of the other justices with the Alito opinion. Factually there’s nothing other than Politico author supposition for judicial alignment with Alito opinion.

There’s nothing cited in the politico report that would indicate this is anything more than just Alito telling his peers what his position on the oral arguments was/is. Essentially, here’s my draft of what I believe. There’s nothing more than that present. Reread it. With no factual citation for the claim that Clarence Thomas, Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett are in concurrence, the article framework could likely be much ado about absolutely nothing. It’s one justice’s opinion, which is not surprising as Alito has already outlined this opinion before. Nothing else. Every reaction is complete projection based on unsubstantiated claims (of concurrences) by the Politico journalist. The “majority” is the part that matters…. and there is zero evidence to substantiate a claim that a majority decision exists.

Upon reread, it looks like FAKE NEWS. Then you switch to motive. Why would Politico want to participate in a strategically explosive political effort to manufacture a fear of a not real SCOTUS opinion based on fabricated claims? The answer to that question is found in the immediate reaction from the political left. Just the accusation alone is enough to trigger the most extreme of leftist base political demands. From that perspective, everyone is reacting to a carefully coordinated con job…. that carries the odor of Ron Klain, the DNC, and a desperately needed political reset for 2022 all over it.

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“U.S. taxpayers are also going to subsidize farming in Europe and fund the climate change initiatives by paying for the development of alternate energy sources.”

This Is Why Nancy Pelosi And Adam Schiff Were In Kyiv Yesterday (CTH)

The details of the Joe Biden $33 billion supplemental budget allocation have been released. I would strongly urge everyone to read the proposal which now heads to congress for passage. The spending request outlines a massive amount of money for various ideological foreign policy initiatives under the guise of Ukraine relief (it isn’t). The proposal outlines a kickback and bribery scheme. Some of the spending includes an allocation of funds to the State Dept including funds to USAID to “provide $8.8 billion to the Department of State for economic support and assistance to the people of Ukraine and other affected countries, including direct budgetary support, as well as support for food security, democracy, anticorruption, cybersecurity, counter-disinformation, human rights, atrocity documentation, energy, and emergency infrastructure needs.” The request specifically authorizes the transfer of these funds globally, outside of Ukraine.

Apparently, the State Dept is going to set up an international version of DHS “disinformation governance board.” But wait, it gets worse… U.S. taxpayers are also going to subsidize farming in Europe and fund the climate change initiatives by paying for the development of alternate energy sources. “This would include [$500 million] support for small- and medium- sized agrobusinesses during the fall harvest and for natural gas purchases by the Ukrainian state energy company.” Mechanisms to legalize defense contractor kick-backs: “This request would authorize Ukraine to utilize Foreign Military Financing Program funds appropriated in this Act and prior Acts to the Department of State to contract directly with U.S. companies to procure defense related materials which would facilitate the delivery of military assistance and security sector support.”


Mechanisms to spread the money all over government institutions without prior approval: …”This request would provide the authority to reprogram funds appropriated in this Act and prior Acts making appropriations for the Department of State, foreign operations, and related programs for assistance to Ukraine without regard to any minimum amounts specifically designated in such Acts. This authority would provide the needed flexibility to match resources with evolving needs and decrease reliance on new appropriations.” The last segment is a massive change in the U.S. government power to seize Russian private property and assets, sell them to whoever Biden chooses, and then give the proceeds of the sales to U.S. politicians, friends, family members, or perhaps Ukraine President Volodymyr Zelenskyy.

 

 

Pelosi Ze -again-

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“This will necessarily impact beyond belief a still clueless population which continues to play the role of vassal puppets to Anglo-Saxon malignant dictates..”

New Pure-bred ‘Schrödinger-seizable’ Euros (Vilches)

The EU had already promoted and achieved all-around chaos regarding very simple yet absolutely essential trading terms urgently to be agreed with the Russian Federation. As if that were not enough, now adding fuel to the fire EU member countries continue to dangerously play their traditional fiddles while declaring that “ some contracts are holier than others, didn´t you know ? ” This daring criterion also means getting back to square one with an ever larger and riskier conflict while everybody´s patience is running thin. If Europe does not reverse course within a very limited time frame it will needlessly smash itself head-on against a very harsh reality. Once triggered, the subsequent uncontrolled demolition cannot rewind no matter how many desperate “emergency meetings” EU officials call for.

The EU has now come up with a ground-breaking legal criterion that international jurisprudence should rapidly adhere to and possibly improve. Thus it could include it in Treaties and other important legislation and, in view of its apparent virtues, even apply it ex-post-facto such as in this case. By the way, with this new international flat-Earth public policy, the EU would be the only party entitled to unilaterally uphold some contracts and not others per its own wishes and convenience as if it were a God-given right. Not anybody else, no way. So Europe, supposedly the cradle of Western civilization, is now trying hard to earn “The Joker” award disregarding the livelihood of at least 800 million human beings plus serious negative impact upon the rest of the world. Granted, history will not be kind with EU leaders.

Obviously, in view of the above, the interruption of Russian imports – including very specific, exclusive, and unreplaceable grades of Russian natural gas, oil, and coal – is now definetly in the cards for some or all European countries. This will necessarily impact beyond belief a still clueless population which continues to play the role of vassal puppets to Anglo-Saxon malignant dictates without actually following how they are being had. Four weeks ago, in view of the massive seizure of its legitimate funds, Russia was left with the only option of requiring Rubles as payment for its exports as such currency is exclusively under Russia´s purview and thus cannot be freezed and/or seized by any stakeholder, EU included. And negotiations were making very definite progress along such lines up until the past week.

A month ago, the only real problem was for EU countries to find Rubles other than by selling their “theoretical” gold bullion vaulted in the UK and the US which many claim is either non-existent or highly encumbered with many dozens of claimees standing in line. So the alternative viable solution wisely found up until last week was to convert euros into Rubles at Russia´s Gazprombank as it had not been sanctioned – at least not yet – as possibly the EU had foreseen its role for the proposed solution at hand. So Vladimir Putin, President of Russia, took the trouble to personally explain the exact simple two-step payment procedure by phone conversation with German Chancellor Olaf Scholz. By the way, the procedure is so simple and so straight-forward that even tie-wearing boomers can understand it.

But now European governments and energy companies are proudly rejecting the idea of paying in Rubles on the basis that gas import contracts clearly specify that the allowed currencies to be used for payment are only euros or dollars, not Rubles. Accordingly, they argue that one side of the deal – in this case the Russian Federation – cannot change such contractual obligation by its own decision (!). The EU now says “This is an absolutely clear circumvention of the EU sanctions.” “Opening a Ruble account at Gazprombank in and by itself may breach the EU sanctions…”

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“If Mr. Biden is still on-the-scene in January next year, he’ll be the first president not only impeached but convicted and removed by the Senate..”

“Disinformation” is Just a Boot in Your Face (Kunstler)

Now we have the Disinformation Governance Board to be run by a TikTok musical comedy star, Nina Jankowicz, an instant laughingstock, since retailing disinformation has been her main occupation in the scant years she’s been on the Deep State scene. Ms. Jankowicz is a notorious RussiaGate hoaxer and psy-op agent in the October 2020 emergence of Hunter Biden’s laptop. She has zero credibility as anything but a professional falsifier. Her Disinfo Governance Board has no authority to regulate anything. It’s just a lame charade that can only draw more attention to the Left’s hatred of truth and reality. The Left pretends that free speech is a threat to civilization because, as usual, they are projecting psychologically. Their world is a mirror. In fact, the Left is a threat to civilization.

Behind all this is the growing panic in the Left that they are culpable for an enormous raft of crimes committed against their own country, and will eventually end up in court, in prison, or worse. Mr. Durham is just the leading edge of what will eventually be a heavy blade of judgment falling down on their necks. He’s busy sorting out the “Russia collusion” flimflam that turned into a coup to oust Mr. Trump, but that is only the beginning. In November, the Democrats will lose control of Congress and its oversight powers of agency operations, and in 2023 there will be inquiries galore into the neo-Jacobin craziness imposed on our country by the folks behind “Joe Biden.”

That includes such dicey matters as the several years of malevolent mismanagement of Covid-19, which looks more and more like a deliberate effort to kill a large number of citizens, and then moving along to the behind-the-scenes official support for those 2020BLM /Antifa riots, the ballot shenanigans around the last presidential election, the colossal failure to enforce border security (featuring Homeland Security Secretary Alejandro Majorkis), the Biden Regime’s conduct in provoking and prolonging the war between Russia and Ukraine, and (not least) the overseas moneygrubbing of President Biden’s family, as documented in Hunter’s laptop. I’m sure I left a few things out.

If Mr. Biden is still on-the-scene in January next year, he’ll be the first president not only impeached but convicted and removed by the Senate. And if for some reason he avoids criminal prosecution for treason out of some pitiful need for the government to maintain official decorum before the rest of the world, his brothers and his degenerate son may not be so lucky.

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“..the DNC and Hillary for America violated the law by hiding the real purpose of payments meant for Fusion GPS as “legal and compliance consulting.”

The Clinton Campaign Is About To Lose Its Privilege Fight (Techno Fog)

As part of the prosecution of former Clinton Campaign/DNC lawyer Michael Sussmann: Special Counsel Durham is seeking the following e-mails/communications that have been either redacted or hidden from his review: Documents involving Fusion GPS’s provision of opposition research and media-related strategies to Hillary for America, the DNC, and Perkins Coie. This includes the Fusion GPS/Perkins Coie contract and 38 e-mails and attachments between and among Fusion GPS, Rodney Joffe, and Perkins Coie. Communications between Fusion GPS and Rodney Joffe relating to the Alfa Bank allegations, and “other emails that precede, and appear to relate to, those communications.” This include emails between Joffe and Laura Seago, whom Durham has subpoenaed as a trial witness.

The Clinton Campaign (including Robby Mook and John Podesta), Fusion GPS, Perkins Coie, Rodney Joffe, and the DNC are fighting to keep these e-mails and records secret, reasoning Fusion’s “role was to provide consulting services in support of the legal advice attorneys at Perkins Coie were providing to” the Clinton Campaign. That argument – that Fusion GPS was helping with “legal advice” – is hopefully the last conspiracy theory they’ll provide to the public, after Fusion GPS has already poisoned the America, through the FBI, DOJ, and the press, with baseless allegations of secret back-channels between Trump Organization and Russian marketing servers, piss tapes, and broader allegations of Trump/Russia collusion.

Today, Special Counsel Durham addressed those arguments by providing to the court the FEC findings where the agency found “probable cause to believe” the DNC and Hillary for America violated the law by hiding the real purpose of payments meant for Fusion GPS as “legal and compliance consulting.” In support, he provided the First (link) and Second (link) General Counsel Reports, which recommend that the Federal Election Commission find the DNC and Hillary for America violated election laws (52 USC 30104(b)(5)(A)) “by misreporting the payee of the funds paid to Fusion GPS through Perkins Coie LLP.” While much of the information in these now-public reports has been known for years (Glenn Simpson’s testimony to Congress, for example), they provide additional context – and newly uncovered details – on how the FEC dismantled the bogus Hillary for America/DNC Billing.

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“He emblemised wartime courage as Father Christmas does the spirit of giving.”

Ghosting Propaganda (Dodsworth)

He was not written into existence by “Ukrainians” but by the Ukrainian authorities. The Ukraine Security Service originally showed a fighter pilot on Telegram, with a caption calling the Ghost of Kyiv an “angel” for downing 10 Russian planes. The Ukrainian military released a photograph on Facebook of the Ghost of Kyiv in March 2022 with the caption, “Hello, occupier, I’m coming for your soul!” His name evoked the dark hero of a fairy tale. His feats were exaggerated, gathering mythic status. Whereas an ‘ace’ might eliminate 5 enemy aircraft, the Ghost was reputed to have downed about 40 Russian pilots. He didn’t seem real. And now we know that he was a purposeful piece of propaganda. He emblemised wartime courage as Father Christmas does the spirit of giving.

[..] This has not been the only Ukrainian propaganda. (Of course there has been Russian propaganda too, but it’s not for this article.) BBC Breakfast used old footage of a Russian parade to show the invasion of Ukraine. It’s hard to see how it was used in error, but that’s the claim. An early, blurry video claiming to show a Ukrainian girl confronting a Russian soldier actually showed a Palestinian girl confronting an Israeli soldier. Billboards declaring “Be brave like Ukraine” were displayed in London, Rome, New York, Amsterdam, Washington and Stockholm. A powerful campaign entitled “Stop Bloody Energy” – again in English, for us and the international audience – linked buying Russian fuel directly with funding the Russian war campaign and calls on us to stop financing terror and genocide.

The masterfully produced but gruesome video includes real life footage of dead bodies. (Not necessarily verified.) The video is produced by Ukrainian energy companies. The irony is that every modern machine of war uses oil. (We’ve also never seen anything like this to persuade us of the immorality of buying goods from China which is arguably ethnically cleansing the Uyghurs.) Ukrainian propaganda has been enthusiastically received. Social media avatars switched from masked faces to Ukraine flag colours overnight. Beyond the support which is natural and due to a country which has been invaded, I wonder if the enthusiasm also signalled the relief of having a good old-fashioned baddie. During Covid, we were all vectors of disease and potential ‘enemy agents’. Once more, the enemy is located in a distant snowy country with a red button at his fingertips. We can follow a war which pits us against Russkies, not our neighbours, families and co-workers, and sink into a fear which is familiar. It’s close, but not too close.

Azov

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BMGF = Bill and Melinda Gates Foundation.

Fraudulent Trial On Ivermectin Published By World’s Top Medical Journal (Kory)

Big Pharma (Pfizer and BMGF from what it looks to me) dropped another nuclear bomb on ivermectin 3 weeks ago with their successful publication of the fraudulent Brazilian TOGETHER trial. They did it in one of the world’s top read and rated medical journals, the New England Journal of Medicine (NEJM), a journal born in the year 1812, but captured by Pharma for who knows how long now. This is an open secret as per former Editor Marcia Angell in the book Drug Companies & Doctors: A Story of Corruption: “It is simply no longer possible to believe much of the clinical research that is published, or to rely on the judgment of trusted physicians or authoritative medical guidelines. I take no pleasure in this conclusion, which I reached slowly and reluctantly over my two decades as an editor of The New England Journal of Medicine.” -Dr. Marcia Angell.

First off, the saddest part of this fraud is that the TOGETHER trial’s published conclusion brazenly contradicted the data within the manuscript as it actually showed an 81% “Bayesian” probability of the superiority of ivermectin. But media and science reporters no longer critically analyze the data or questions the abstract’s conclusion, instead they all trumpet headlines in unison that “ivermectin doesn’t work in COVID.” Further contributing to the catastrophic toll of human life due to yet another deployment of “the Diversion,” a Disinformation tactic that Big Pharma employs when “science inconvenient to their interests” emerges.

Their first successful Disinformation campaign was against hydroxychloroquine in 2020, and despite Robert Kennedy’s in-depth, highly referenced and detailed exposing of the numerous sinister actions against HCQ in his best-selling book called “The Real Anthony Fauci,” they are again having success against ivermectin (just not as much – I would credit the work of the physician leaders and science experts of numerous non-profit, non-conflict-of-interest groups such as the US’s FLCCC, American Association of Physicians and Surgeons, Truth For Health, Covid Early Treatment Fund, South Africa’s Transformative Health Justice, UK’s World Council for Health, the Canadian COVID Care Alliance, and the anonymous C19early.com group among others).

Yet real people, real families, across the world destroyed each day by a lack of access to or support for safe, effective, early treatments with repurposed, generic medicines such as ivermectin, fluvoxamine, or hydroxychloroquine. All a direct result of Big Pharma and BMGF tactics like this one. Time to remind ourselves that BMGF is not a philanthropic organization but rather a corporation with massive investments in vaccines (and many other problematic industries) that has been corrupting public health the world over in service of the vaccine industry for decades now, none more so than in the last two years. By the way, what kind of philanthropist organization.. increases its wealth in a global pandemic?

MEP

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“it plans to have scraped 100 billion facial images from the internet.”

Your Face Is Now a Weapon of War (NI)

Who owns your face? You might think that you do, but consider that Clearview AI, an American company that sells facial recognition technology, has amassed a database of ten billion images since 2020. By the end of the year, it plans to have scraped 100 billion facial images from the internet. It is difficult to assess the company’s claims, but if we take Clearview AI at face value, it has enough data to identify almost everyone on earth and end privacy and anonymity everywhere. As you read these words, your face is making money for people whom you’ve never met and who never sought your consent when they took your faceprint from your social media profiles and online photo albums. Today, Clearview AI’s technology is used by over 3,100 U.S. law enforcement agencies, as well as the U.S. Postal Service.

In Ukraine, it is being used as a weapon of war. The company has offered its tools free of charge to the Ukrainian government, which is using them to identify dead and living Russian soldiers and then contact their mothers. It would be easy to shrug this off. After all, we voluntarily surrendered our privacy the moment we began sharing photos online, and millions of us continue to use websites and apps that fail to protect our data, despite warnings from privacy campaigners and Western security services. As so many of us sympathize with Ukraine and are appalled by Russia’s brutality, it is tempting to overlook the fact that Ukraine is not using Clearview AI to identify dead Ukrainians, which suggests that we are witnessing the use of facial recognition technology for psychological warfare, not identification. Some people will be fine with the implications of this: if Russian mothers have to receive disturbing photos of their dead sons, so be it.

To understand why we might want to rethink the use of facial recognition technology in conflict, consider the following thought experiments. First, imagine that it was Russia that had scraped Ukrainian biometric data from the internet to build a facial recognition technology tool which it was using to identify dead Ukrainians and contact their mothers. Liberal democracies would likely condemn these actions and add them to its growing list of Russia’s barbaric actions. Second, imagine a conflict in which the United States was fighting against an opponent who had taken American faceprints to train its facial recognition technology and was using it to identify dead American soldiers and contact their mothers. This would almost certainly cause howls of protest across the United States. Technology executives would be vilified in the press and hauled before Congress, where lawmakers might finally pass a law to protect Americans’ biometric data.

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“..the US dollar has created the conditions to be the most demanded currency simply because other central banks have been much more reckless.”

The Vacuum Effect of the US Dollar (Lacalle)

April 2022 will go down in history as a milestone that has only been seen on three previous occasions since 1973. A month in which the S&P500 Index and US Treasuries have fallen at the same time, 5% and 2% respectively. Additionally, the US dollar has appreciated against the main currencies with which it trades and reaches a new year high. Years of monetary laughing gas have not diminished the strength of the US dollar as world reserve currency, rather the opposite. Now we witness the vacuum effect. Inflows into the US dollar in a period of risk aversion. The PBOC, the Central Bank of China has had to give in and allow an aggressive devaluation of the yuan, although it tried to keep the currency stable via capital controls and a daily fixing.

The government-programmed weakness of the yuan is probably designed to provide a boost to the Chinese economy in a slowdown and dissolve part of the yuan-denominated debt. However, it reduces the Chinese yuan’s appeal as an alternative to the US dollar as global investors may fear both the central bank fixing as well as the tight capital controls imposed in China. It is not surprising, for example, that many commodity-exporting countries’ currencies have weakened against the US dollar despite rising exports and foreign exchange inflows. From the Norwegian krone to the currencies of major exporters, it seems only the Brazilian real appears to be holding strong… and that’s because it’s had several atrocious years, so it is more a bounce than an appreciation.

[..] It is very worrying that the European Central Bank is allowing the euro to get dangerously close to parity with the US dollar because of its obsession with staying far away from the normalization process of other central banks. The global demand for euros is falling, and the trade surplus that supported the European currency is diminishing. All those who defend a weak euro should look at reality. Empirical evidence shows that the eurozone does not export more due to a weak euro, but with products of higher added value. With a weak euro, imports skyrocket and become more expensive. Thus, the US dollar has created the conditions to be the most demanded currency simply because other central banks have been much more reckless.

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Ron Johnson

 

 

 

 

Seneff

 

 

Musk and mum

 

 

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Sep 282020
 


Dorothea Lange Abandoned cafe in Carey, Texas “Carey is fast becoming a ghost town of the Texas plains.” 1937

 

New York Times Mysteriously Obtains Trump Financial Records (RS)
New York Times Fails at Outlining President Trump’s Taxes Again (CT)
Project Veritas Uncovers ‘Ballot Harvesting Fraud’ In Minnesota (NYP)
Appellate Court Halts Wisconsin Ballot-Counting Extension (AP)
As Mueller Probe Fizzles, Anti-Trump Cabal Hatches New Collusion Tale (Smith)
COVID-19 Patients Who Get Enough Vitamin D Are 52% Less Likely To Die (DM)
New Covid Fines Of Up To £10,000 Come Into Force In England (G.)
Amy Coney Barrett: A New Feminist Icon (Pol.)
Federal Judge Gives Temporary Reprieve To TikTok (NBC)
Azerbaijan & Armenia Carry On Fighting Over Contested Nagorno-Karabakh (RT)

 

 

Will we ever find out who leaked Trump’s tax returns from Cyrus Vance’s offices? And does anyone still care that this is highly illegal?

 

 

 

 

 

 

ZeroHedge Nothing Illegal

Balding tax returns

 

 

The New York Times once upon a time had intelligent journalists with a lot of integrity working -hard- for it. Now they go an yet another fishing trip looking to catch something illegal, but they fail, and still try to dress it all up as something terrible. No pride, no integrity.

New York Times Mysteriously Obtains Trump Financial Records (RS)

The New York Times reports that it has obtained President Trump’s ‘tax information” going back “over two decades.” The leak is from New York County (Manhattan) District Attorney Cyrus Vance, Jr., or one of his underlings. We know Vance has obtained all of the financial records Trump had on file with Deutsche Bank, his primary lender. We know Deutsche Bank complied with the subpoena. And, via the New York Times, we know that these records go back into the 1990s or, in the parlance of the day, “over two decades.” If the New York Times is correct, Trump’s finances being something of a hot mess is not a shocker. Trump has been on the edge of bankruptcy before and has employed mighty financial kung fu to stay solvent.

[..] From the tenor of the article, they think the revelation that Trump was getting a $72.9 million tax refund and only paying $750 in federal income taxes will be damaging. I really doubt that will be the case. There are things in this story that lead me to believe that either the people writing it are stupid or they think you are stupid. For instance: “In fact, those public filings offer a distorted picture of his financial state, since they simply report revenue, not profit. In 2018, for example, Mr. Trump announced in his disclosure that he had made at least $434.9 million. The tax records deliver a very different portrait of his bottom line: $47.4 million in losses.” These two things are not incompatible, and the fact that you declare earnings on a report that asks for earnings and not profit is not deceptive. The technical term is “compliance.”

By far, the most notable thing about this story is the willingness of the New York Times to engage in election interference by timing their release within 60 days of the election (that’s the standard, right? 60 days?). That and the role that seems to have been played by the Manhattan DA’s office in leaking records ostensibly demanded from Deutsche Bank as part of a criminal investigation to facilitate a political hit. The fact that a district attorney’s office is using such records as part of a political attack on the President within 60 days of an election is unprecedented (that’s the word, right? unprecedented?). The actions by Vance or his office virtually guarantee that any tax returns released to that office will find similar use as political ammunition.

There is a good chance that this story was intended to launch much closer to the election had the scope and extent of Hunter Biden’s financial shenanigans and the degree to which the ChiComs have their tentacles sunk into Sundown Joe not come to light…and will get even more light, I suspect, on Tuesday night. When the dust settles on this, I think the story is going to be “very rich guy with a fascination for high-risk business ventures pays lots of brilliant tax lawyers and accountants a crap-load of money to minimize and avoid (but not evade) income taxes and says he makes more money than he really does to golf partners.”

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Excellent question from sundance: “Now let’s figure out how DC politicians making $200k/yr are able to become multi-millionaires while holding office..”

New York Times Fails at Outlining President Trump’s Taxes Again (CT)

Once again the New York Times attempts to make an issue out of President Trump’s real estate holdings working as a tax shelter and reducing income taxes. In the article the Times completely obfuscates the way income taxes are strategically offset by depreciation, mortgage interest and the entire reason why real estate ownership is viewed as a business. John Carney writing for Breitbart gets it: […] So imagine our guy took out an $8 million mortgage at five percent, paying $2 million cash. Now he’s got to pay $400,000 in mortgage payments. He wants to make at least that much so he charges tenants an aggregate of $425,000, which after upkeep comes out to $410,000 of net income. (Remember, if the bank didn’t think he could make more in rent than the mortgage payment, it probably wouldn’t have lent him the money.)

“The interest payment on the loan–let’s call it $390,000–is deductible from his income, leaving him with $20,000 in net income. He gets to keep that and pay no taxes on it, however, because he still gets to apply the $370,000 depreciation charge. He tells the IRS he lost $350,000. Under our tax code, ordinary business expenses can be deducted in the year they are incurred. But when a business pays for a long-lasting item expected to produce income–like machinery, vehicles, or an apartment building–it is considered a capital investment. Instead of getting to write-off the cost all at once, the business is required to write it off over the course of decades. After the 1986 tax code, this was set at 27.5 years for residential real estate.” d

Anyone who has ever operated a business knows that offsetting income is one of the primary reasons to be self-employed. Additionally, the Times completely skips over the tens-of-millions in payroll taxes paid by the Trump organization and tens-of-millions in property and sales taxes paid by all of the various Trump properties. In the commercial real estate market it is common sense to offset income tax liabilities with a host of valid annual expenses, long-term capital depreciation and mortgage interest payments. With over 500 individual business entities within the Trump organization the ability to offset income in one asset with expenses in another is simply good accounting.

Additionally, President Trump donates his $400,000 government salary back to the U.S. government. So to accuse President Trump of only paying $750 in income taxes totally ignores all of the other donations and tax payments he makes. In practical terms no President before Trump has ever had his actual business portfolio so deeply connected to the success of the American economy. It doesn’t cost the American taxpayer a dime to have President Trump in office…. Now let’s figure out how DC politicians making $200k/yr are able to become multi-millionaires while holding office. Anyone?

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It’s getting serious. O’Keefe says they have been filming this for months.

Project Veritas Uncovers ‘Ballot Harvesting Fraud’ In Minnesota (NYP)

A ballot-harvesting racket in Democratic Rep. Ilhan Omar’s Minneapolis district — where paid workers illegally gather absentee ballots from elderly Somali immigrants — appears to have been busted by undercover news organization Project Veritas. One alleged ballot harvester, Liban Mohamed, the brother of Minneapolis city council member Jamal Osman, is shown in a bombshell Snapchat video rifling through piles of ballots strewn across his dashboard. “Just today we got 300 for Jamal Osman,” says Mohamed, aka KingLiban1, in the video. “I have 300 ballots in my car right now . . . “Numbers don’t lie. You can see my car is full. All these here are absentee ballots. . . . Look, all these are for Jamal Osman,” he says, displaying the white envelopes.

“Money is the king in this world . . . and a campaign is driven by money.” The video, posted on July 1, was obtained by Project Veritas and included in a 17-minute video expose released Sunday night. Under Minnesota law no individual can be the “designated agent” for more than three absentee voters. The allegations come just five weeks before a presidential election plagued with predictions of voter fraud. Both President Trump and Attorney General Bill Barr have warned that the increased use of mail-in ballots, due to COVID-19 concerns about in-person voting, are vulnerable to fraud, especially when unsolicited ballots are mailed to all voters in certain states.

Project Veritas’ investigation in Minneapolis will pour gasoline on the fire, only 48 hours before Trump debates Joe Biden in the first presidential debate Tuesday, addressing topics including election security. “Our investigation into this ballot harvesting ring demonstrates clearly how these unscrupulous operators exploit the elderly and immigrant communities” said James O’Keefe, founder and CEO of Project Veritas. The alleged involvement of Ilhan Omar, a controversial member of the Squad, and frequent Trump target, is claimed on camera by two people in Veritas’ investigation, including whistleblower Omar Jamal, a Minneapolis community leader and chair of the city’s Somali Watchdog Group.

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First of how many?

Appellate Court Halts Wisconsin Ballot-Counting Extension (AP)

A federal appeals court on Sunday temporarily halted a six-day extension for counting absentee ballots in Wisconsin’s presidential election, a momentary victory for Republicans and President Donald Trump in the key presidential battleground state. As it stands, ballots will now be due by 8 p.m. on Election Day. A lower court judge had sided with Democrats and their allies to extend the deadline until Nov. 9. Democrats sought more time as a way to help deal with an expected historic high number of absentee ballots. The Democratic National Committee, the state Democratic Party and allied groups including the League of Women Voters sued to extend the deadline for counting absentee ballots after the April presidential primary saw long lines, fewer polling places, a shortage of workers and thousands of ballots mailed days after the election.


U.S. District Judge William Conley ruled Sept. 21 that ballots that arrive up to six days after Election Day will count as long as they’re postmarked by Election Day. Sunday’s action puts Conley’s order on hold until the 7th Circuit U.S. Court of Appeals or U.S. Supreme Court issues any further action. [..] State election officials anticipate as many as 2 million people will cast absentee ballots to avoid catching the coronavirus at the polls. That would be three times more absentee ballots than any other previous election and could overwhelm both election officials and the postal service, Conley wrote. If the decision had stood it could have delayed knowing the winner of Wisconsin for days. The Republican National Committee, the state GOP and Wisconsin’s Republican legislators argued that current absentee voting rules be left in place, saying people have plenty of time to obtain and return their ballots.

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Second installment of a two-part excerpt from Lee Smith’s book “The Permanent Coup: How Enemies Foreign and Domestic Targeted the American President”.

“According to the story the CIA officer and his colleagues would tell, Trump was again in league with a foreign power to defeat a rival candidate. They rotated Ukraine in for Russia and Biden for Clinton.”

As Mueller Probe Fizzles, Anti-Trump Cabal Hatches New Collusion Tale (Smith)

Just two days after the curtain dropped on the Mueller investigation, Ciaramella was rebooting the collusion narrative. According to the story the CIA officer and his colleagues would tell, Trump was again in league with a foreign power to defeat a rival candidate. They rotated Ukraine in for Russia and Biden for Clinton. The operation’s personnel drew from the same sources as the Russia collusion operation — serving officials from powerful government bureaucracies, the CIA, Pentagon, and State Department, as well as elected officials, political operatives, and the press. Therefore, the process was also the same: The actors would work the operation through the intelligence bureaucracy and the media to start an official proceeding, in this case an impeachment process. The play was set to begin.

Ciaramella first expressed his concern to a CIA lawyer. Frustrated that his action wasn’t moving quickly enough, he turned to the intelligence community inspector general responsible for oversight of all 17 of the nation’s agencies. On August 12, he filed a whistleblower’s report with ICIG Michael Atkinson. It was a version of the dossier, allegations based on second- and thirdhand sources. Steele said that his information came from anonymous Russians; Ciaramella claimed his came from unnamed Americans. “In the course of my official duties,” wrote Ciaramella, “I have received information from multiple U.S. Government officials that the President of the United States is using the power of his office to solicit interference from a foreign country in the 2020 U.S. elections.”

He even replicated a key feature from Steele’s memos that helped the FBI obtain the FISA warrant. The dossier alleged that the Trump campaign had agreed to two Ukraine-related quid pro quos. One, in exchange for the hack and release of DNC emails, the Trump team would sideline Ukraine as campaign issue. Two, in exchange for dropping Ukraine-related sanctions on Russia, a Putin ally promised Trump advisers energy deals. Ciaramella also alleged a Ukraine-related quid pro quo. His August 12 report added a detail missing from the July 26 memo. He claimed in his document he’d learned earlier in July that Trump had “issued instructions to suspend all security assistance to Ukraine.” With this, the CIA official had planted the seed that would grow into the basis of the impeachment charges brought against Trump:

The president had withheld foreign aid in exchange for something that would benefit him personally — an investigation of his political rival. Ciaramella and his confederates had simply taken the boastful blunder Biden made in front of the Manhattan audience and hung it on Trump. Now he was the one using U.S. aid to secure a favor from a Ukrainian president. It was an audacious move, but the Ciaramella dossier was also a defensive maneuver. “It was born out of desperation,” says one of his former colleagues. “He wasn’t just trying to protect Biden,” says the source, a former senior Obama administration intelligence official. [..] When he finds out Trump may get the Burisma investigation restarted, he’s worried for himself, too.”

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And 54 percent less likely to catch coronavirus in the first place. And if you do anyway, zinc hinders virus (RNA) replication in your cells. Two simple and cheap ways to protect yourselves and your loved ones.

COVID-19 Patients Who Get Enough Vitamin D Are 52% Less Likely To Die (DM)

People who get enough vitamin D are at a 52 percent lower risk of dying of COVID-19 than people who are deficient for the ‘sunshine vitamin,’ new research reveals. Vitamin D plays a crucial role in the immune system and may combat inflammation. These features may make it a key player in the body’s fight against coronavirus. Rates of vitamin D deficiency are also higher in some of the same groups who have been hardest hit by coronavirus: people of color and elderly people. It’s by no means a causal link, but suggests that vitamin D could play a role in who gets COVI-19, who gets sickest from it, and who is spared altogether.

Boston University’s Dr Michael Holick found in his previous research that people who have enough vitamin D are 54 percent less likely to catch coronavirus in the first place. Following on that work, he and his team have found that people who don’t get enough of the vitamin are far more likely to become severely ill, develop sepsis or even die after contracting coronavirus. Because vitamin D deficiency is common in people with other disease that raise coronavirus risks, it’s impossible to say exactly how many lives would be spared if we all got our daily dose of the sunshine vitamin. But we know that about 42 percent of the US population is vitamin D deficient. If that rate held true for the more 203,000 Americans who died of coronavirus, perhaps some 85,000 would have fared better with improved vitamin D levels.

In Britain 20 per cent of the population suffer from the deficiency, according to the British Nutrition Foundation. When the rate is applied to the UK’s 41,936 deaths from coronavirus, it suggests 8,387 of them could have been helped with improved levels of Vitamin D. ‘This study provides direct evidence that vitamin D sufficiency can reduce the complications, including the cytokine storm (release of too many proteins into the blood too quickly) and ultimately death from COVID-19,’ Dr Holick said. Dr Holick and his colleagues took blood samples from 235 patients admitted to hospitals in Tehran for COVID-19. Overall, 67 percent of the patients had vitamin D levels below 30 ng/mL.

There isn’t a clear marker for the ideal level of vitamin D, but 30 ng/mL is considered a sufficient. Anything below that is ‘insufficient,’ but won’t necessarily have broad-ranging health consequences, while levels below 20 ng/mL are considered ‘deficient.’ About 60 percent of elderly people living in nursing homes, for example, are thought to be vitamin D deficient. The most likely explanation is that they simply spend too much time indoors. Sunlight is our primary source of vitamin D. When we are exposed to ultraviolet (UV) radiation in rays of sunshine, it reacts with cholesterol in our skin, triggering the production of vitamin D. In an increasingly indoor world, rates of vitamin D deficiency have climbed.

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Behind a paywall, the Times reports pub curfew does not apply to bars in Parliament. Way to go.

New Covid Fines Of Up To £10,000 Come Into Force In England (G.)

A new, more robust chapter in English coronavirus regulations begins on Monday, with fines of up to £10,000 for people who refuse to self-isolate when asked, and enforcement including tip-offs from people who believe that others are breaching the rules. The changes come with the duty to self-isolate moving into law. It becomes a legal obligation if someone is told to do so by test-and-trace staff, but not for those simply using the Covid-19 phone app, which is anonymous. At the same time, the government is introducing a new system of payments of £500 for people on lower incomes who are unable to work because of the mandatory 14-day self-isolation, a system being implemented by councils.

The two-pronged approach, intended to create better compliance with self-isolation rules, was described by the health secretary, Matt Hancock, as “imperative” in helping keep down coronavirus infection rates. According to a health department statement setting out the new system, local authorities are expected to have their test-and-trace support schemes up and running within two weeks, with those self-isolating before then given backdated payments as needed. However, the Local Government Association, which represents councils, has warned it will be “challenging” for these to be set up at speed, adding that “urgent clarity is needed about how councils will be reimbursed for costs of setting up these schemes and the payments themselves”.

To be eligible for the payment, people must have been told to self-isolate by test and trace – having tested positive for coronavirus or being in close contact with someone who has – as well as having lost income as a result, and be recipients of one or more of a series of benefits, including universal credit, income support and housing benefit. Those who do not self-isolate when told to could face fines, which start at £1,000 and rise to £10,000 for repeat offences, or those who instigate breaches of the law, such as an employer who orders or permits people to come to work when they should not. Test-and-trace call handlers will check on those told to self-isolate, with police taking a role in areas or groups seen as high risk, as well as acting on tip-offs from neighbours or others who spot suspected breaches, the government announcement said.

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We need tolerance of people who do not think exactly like we do.

Amy Coney Barrett: A New Feminist Icon (Pol.)

Amy Coney Barrett has been praised for her topflight legal mind, even by those who disagree with her. At 48 years old, she is poised to help shape the court for a generation or more. But that’s not all her elevation to the high court has the potential to accomplish. Barrett’s expected confirmation should serve as a catalyst for rethinking the most powerful social movement in the last half century: feminism. Over the last week, as Justice Ginsburg’s body laid in repose outside the Supreme Court, the nation has rightly celebrated Ginsburg’s trailblazing 1970s legal advocacy, one which pushed both law and culture to reexamine the ways in which women had been pigeonholed as caregivers and men as providers. The late justice’s antidiscrimination wins opened up a new era in which both men and women could respectably and responsibly engage in both avenues of fulfillment, according to their personal talents and circumstances.

But Ginsburg also viewed abortion rights as central to sexual equality, and her leadership helped give rise to a movement that remains laser focused on abortion to this day. Yet rather than make women more equal to men, constitutionalizing the right to abortion as the court did in Roe has relieved men of the mutual responsibilities that accompany sex, and so has upended the duties of care for dependent children that fathers ought equally to share. Barrett embodies a new kind of feminism, a feminism that builds upon the praiseworthy antidiscrimination work of Ginsburg but then goes further. It insists not just on the equal rights of men and women, but also on their common responsibilities, particularly in the realm of family life. In this new feminism, sexual equality is found not in imitating men’s capacity to walk away from an unexpected pregnancy through abortion, but rather in asking men to meet women at a high standard of mutual responsibility, reciprocity and care.

At Barrett’s Senate confirmation hearing in 2017, Sen. Dianne Feinstein tellingly remarked, “You are controversial because many of us that have lived lives as women really recognize the value of finally being able to control our reproductive systems, and Roe entered into that, obviously.” Barrett’s life story puzzles older feminists like Feinstein because bearing and raising a bevy of children has long implied retaining a traditional life script — like staying home with the children — that Barrett has obviously not heeded. To be sure, few mothers of seven could become federal judges, never mind Supreme Court justices. Barrett – “generationally brilliant,” according to her Notre Dame colleague, O. Carter Snead — is likely alone in this set.

It all seems so unlikely: She has risen to the pinnacle of her profession while at once being “radically hospitable” to children, as Snead has described her. An enigma to many, she doesn’t easily fit into any ideological box. If we’re really intent as a country on seeing women flourish in their professions and serve in greater numbers of leadership positions too, it would be worthwhile to interrupt the abortion rights sloganeering for a beat and ask just how this mother of many has achieved so much.

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Much ado about an app. China’s worried about the source code.

Federal Judge Gives Temporary Reprieve To TikTok (NBC)

A federal judge granted a temporary reprieve Sunday to TikTok, the short-form video app that was facing a Trump administration-imposed midnight deadline that would have prevented users from downloading it. The order from U.S. District Judge Carl Nichols of Washington, D.C., allows U.S. app stores to continue offering downloads. Nichols did not rule on a second, more comprehensive ban that would halt U.S. companies from working with TikTok. In a statement, TikTok said that it was pleased with the ruling and that it “will continue defending our rights for the benefit of our community and employees.”


“At the same time, we will also maintain our ongoing dialogue with the government to turn our proposal, which the president gave his preliminary approval to last weekend, into an agreement,” it said. TikTok, which is owned by the Chinese company ByteDance, struck a deal with Oracle this month to move the company’s headquarters to the United States. The software giant would oversee its operations. Walmart is also involved in the deal. TikTok has been under scrutiny from the Trump administration for nearly a year over concerns that the Chinese government could gain access to American users’ data. President Donald Trump said in July that he would ban the app. Trump said this month that he had given his “blessing” to the deal and that he had approved it in concept.

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This is real war. Stop it.

Azerbaijan & Armenia Carry On Fighting Over Contested Nagorno-Karabakh (RT)

Intense hostilities between Armenian and Azeri forces continued overnight along the border of the disputed Nagorno-Karabakh region. Both sides claimed local victories and reported inflicting heavy casualties on one another. Azerbaijan and Armenia, two historical rivals, kept on fighting throughout Sunday night and Monday morning despite mounting calls from international leaders to hold fire and disengage troops. There have been skirmishes “of different intensity” overnight on the Nagorno-Karabakh border, a spokesperson for the Armenian Defense Ministry reported earlier on Monday. “The adversary resumed offensive using artillery and armor, including the heavy flamethrower system TOS,” the official revealed.

The Armenian military are deterring the attack, “inflicting significant losses on the enemy in manpower and equipment.” Baku, meanwhile, blamed its arch-nemesis for targeting civilian-populated areas. On Monday morning, Armenian forces have been shelling Terter, a border town of roughly 19,000 people, Azerbaijan’s Defense Ministry told the media. “Proper measures” will be taken if the bombardment doesn’t stop, the ministry warned. Previously, Baku suggested at least 550 Armenian soldiers were killed or injured in the Azeri “counteroffensive,” along with dozens of tanks, howitzers, and air defense systems lost in action. Yerevan promptly rebuked the claim as “unfounded.” Nagorno-Karabakh itself reported a loss of 31 Armenian soldiers in the fighting.

The lingering hostilities broke out previously on Sunday morning. Yerevan accused Baku of using combat aircraft and heavy artillery to bomb targets within Nagorno-Karabakh, a disputed region administered and populated by ethnic Armenians but claimed by Azerbaijan as part of its territory. Baku, in turn, said it had counter-attacked in response to Armenian “provocations.” Both sides – which have fought on numerous occasions since the Soviet Union’s demise – sent reinforcements to the frontline and blamed one another for targeting civilians.

Read more …

 

 

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“We are victims of the post-Enlightenment view that the world functions like a sophisticated machine, to be understood like a textbook engineering problem and run by wonks. In other words, like a home appliance, not like the human body.”
– Nassim Nicholas Taleb

 

 

 

 

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Jun 062017
 
 June 6, 2017  Posted by at 9:32 am Finance Tagged with: , , , , , , , , , , ,  1 Response »


Pablo Picasso Les femmes d’Alger 1955

 

Trump Set To Make First Moves At Completely Revamping The Fed (CNBC)
Trump’s ‘Been Clear To Me’ To Try To Rebuild Russia Ties: Tillerson (R.)
Contractor Charged With Leaking Document About US Election Hacking (R.)
How The Intercept Outed Reality Winner (ErrataS)
China’s Biggest Bank Is Wall Street’s Go-To Shadow Lender (BBG)
One Belt, One Road, and One Debt Hangover (Rickards)
Qatar Stocks Tumble 7% As Six Arab Nations Cut Diplomatic Ties (CNBC)
Qatar’s Real Power Is As The World’s Largest LNG Exporter (BBG)
Britain’s Economic Model Is Broken: This Is Our First Post-Crash Election (G>)
Simple Numbers Tell Story Of Police Cuts Under Theresa May (G.)
Earnings vs. Profits & The Bull Market (Roberts)
US M&A: One Of The Scariest Charts To Look At – Citi (BI)
IMF’s Lagarde Offers Eurozone Greek Debt Compromise, Handelsblatt Says (R.)
The Euro’s Future Demands Trust (K.)
An Occupied Hotel In Greece Models How To Welcome Refugees (WNV)

 

 

Well, it’ll be different alright. Given the Fed’s actions over the past decade, it can hardly get wrose.

Trump Set To Make First Moves At Completely Revamping The Fed (CNBC)

President Donald Trump appears ready to remake the Federal Reserve in an image that will be considerably different than what investors have known for many years. The president is prepared to nominate Randal Quarles and Marvin Goodfriend to two of three vacancies at the central bank, according to multiple press accounts that have not been disputed by the administration. Quarles likely would assume the role vacated by Daniel Tarullo to oversee the nation’s banking system. White House officials did not respond to a CNBC request for comment. Should Trump nominate the two men and they receive confirmation, it will represent the first steps in a possible substantial remaking of a Fed that has practiced ultra-loose monetary policy for the past decade but has been tight on banking regulations.

Trump will have the opportunity to name one more person now, then can fill two even more critical vacancies in 2018 — that of Chair Janet Yellen and Vice Chair Stanley Fischer. If the Quarles and Goodfriend moves are indicators of what’s to come, things could start getting less comfortable for Yellen. Both are considered solidly conservative, in line with the Republican president and Congress but perhaps not with Yellen. “Clearly, these appointees are a significant departure from the crowd that we’ve had on the board,” said Christopher Whalen, head of Whalen Global Advisors and a former investment banker and long-time financial analyst. “Yellen is probably the most left-wing Fed chair we’ve ever had. I also think both Quarles and Goodfriend have much better grounding in the financial markets. That would be refreshing.”

Yellen, however, may not think so, particularly if the coalition she has carefully crafted since taking the chair’s seat in 2014 starts to unravel. “I welcome these additions,” Whalen said. “Hopefully they put a banker in the third slot. Then eventually Yellen’s going to leave because she’s going to start losing votes.”

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Kiwis flipping birds.

Trump’s ‘Been Clear To Me’ To Try To Rebuild Russia Ties: Tillerson (R.)

U.S. President Donald Trump told his top diplomat that the dispute over probes into links between his inner circle and Russia should not undermine U.S. efforts to rebuild relations with Moscow, Secretary of State Rex Tillerson said on Tuesday. Speaking in New Zealand after a trip to Australia, Tillerson reiterated the U.S. commitment to the Asia-Pacific region as global leaders have expressed growing mistrust over the Trump administration, which has withdrawn from key international agreements since taking office. At home, Trump’s administration has been plagued by questions over links to the Russian government. Tillerson said Trump told him to try to improve ties with Russia regardless of the U.S. political backdrop.

“I can’t really comment on any of that because I don’t have any direct knowledge,” Tillerson told a news conference in Wellington, when asked how worried he was that the U.S. political crisis could take down the Trump administration. “The president’s been clear to me: do not let what’s happened over here in the political realm prevent you from the work that you need to do on this relationship and he’s been quite clear with me… that we might make progress. I’m really not involved in any of these other issues,” he said after a meeting with New Zealand Prime Minister Bill English.

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This is another very curious story, and it’s not just the girl’s name, Reality Leigh Winner. Still, even The Intercept jumps to conclusions:

“Russian military intelligence executed a cyberattack on at least one U.S. voting software supplier and sent spear-phishing emails to more than 100 local election officials just days before last November’s presidential election, according to a highly classified intelligence report obtained by The Intercept.”

Even though they know that when signs point to Russia, it’s probably not Russial, the caveat only come later:

“While the document provides a rare window into the NSA’s understanding of the mechanics of Russian hacking, it does not show the underlying “raw” intelligence on which the analysis is based. A U.S. intelligence officer who declined to be identified cautioned against drawing too big a conclusion from the document because a single analysis is not necessarily definitive.”

If the raw intelligence is not available, how can one draw the Russia conclusions? The Intercept now blindly trusts US intelligence agents? And that’s not all, see next article…

Contractor Charged With Leaking Document About US Election Hacking (R.)

The U.S. Department of Justice on Monday charged a federal contractor with sending classified material to a news organization that sources identified to Reuters as The Intercept, marking one of the first concrete efforts by the Trump administration to crack down on leaks to the media. Reality Leigh Winner, 25, was charged with removing classified material from a government facility located in Georgia. She was arrested on June 3, the Justice Department said. The charges were announced less than an hour after The Intercept published a top-secret document from the U.S. National Security Agency that described Russian efforts to launch cyber attacks on at least one U.S. voting software supplier and send “spear-phishing” emails, or targeted emails that try to trick a recipient into clicking on a malicious link to steal data, to more than 100 local election officials days before the presidential election last November.

While the charges do not name the publication, a U.S. official with knowledge of the case said Winner was charged with leaking the NSA report to The Intercept. A second official confirmed The Intercept document was authentic and did not dispute that the charges against Winner were directly tied to it. The Intercept’s reporting reveals new details behind the conclusion of U.S. intelligence agencies that Russian intelligence services were seeking to infiltrate state voter registration systems as part of a broader effort to interfere in the election, discredit Democratic presidential candidate Hillary Clinton and help then Republican candidate Donald Trump win the election. The new material does not, however, suggest that actual votes were manipulated.

Read more …

… but it gets weirder. Soon after the Intercept published the story and docs, the leaker was arrested. How? She could easily be traced back to these docs. Was the Intercept not aware of this? That’s hard to believe, leaked documents is what they do. Was someone careless? We haven’t seen any excuses made. Did they knowingly give her up? Is this then the end of the Intercept?

How The Intercept Outed Reality Winner (ErrataS)

Today, The Intercept released documents on election tampering from an NSA leaker. Later, the arrest warrant request for an NSA contractor named “Reality Winner” was published, showing how they tracked her down because she had printed out the documents and sent them to The Intercept. The document posted by the Intercept isn’t the original PDF file, but a PDF containing the pictures of the printed version that was then later scanned in. The problem is that most new printers print nearly invisibly yellow dots that track down exactly when and where documents, any document, is printed. Because the NSA logs all printing jobs on its printers, it can use this to match up precisely who printed the document. In this post, I show how.

You can download the document from the original article here. You can then open it in a PDF viewer, such as the normal “Preview” app on macOS. Zoom into some whitespace on the document, and take a screenshot of this. On macOS, hit [Command-Shift-3] to take a screenshot of a window. There are yellow dots in this image, but you can barely see them, especially if your screen is dirty.

We need to highlight the yellow dots. Open the screenshot in an image editor, such as the “Paintbrush” program built into macOS. Now use the option to “Invert Colors” in the image, to get something like this. You should see a roughly rectangular pattern checkerboard in the whitespace.

It’s upside down, so we need to rotate it 180 degrees, or flip-horizontal and flip-vertical:

Now we go to the EFF page and manually click on the pattern so that their tool can decode the meaning:

This produces the following result:

The document leaked by the Intercept was from a printer with model number 54, serial number 29535218. The document was printed on May 9, 2017 at 6:20. The NSA almost certainly has a record of who used the printer at that time.

Read more …

“With 260-to-1 Leverage A Chinese Giant Takes On Goldman In US Repo”

China’s Biggest Bank Is Wall Street’s Go-To Shadow Lender (BBG)

High up in a New York City skyscraper, China’s biggest bank is playing in the shadows of American finance. The prize for Industrial & Commercial Bank of China isn’t stocks, bonds or currencies. It’s the grease in the wheels of all those markets: repurchase agreements. By exploiting a loophole in rules intended to keep U.S. banks from getting “too big to fail,” the state-owned ICBC has become a go-to dealer in repos in just a few short years, alongside longtime powerhouses like Goldman Sachs Group Inc. The short-term loans allow investors to borrow money by lending securities, serving a vital role in day-to-day trading on Wall Street. ICBC’s rise reflects not only China’s global ambitions in high finance, but also how post-crisis rules have let a whole host of new players profit from the murky world of shadow banking, largely beyond the reach of bank regulators.

As big banks face tougher standards, they’re being replaced by brokers, asset managers and foreign firms like ICBC, which can use more leverage and take greater risks. That has some regulators worried non-bank lenders are once again emerging as a threat to financial stability, less than a decade after panic in the repo market wiped out Lehman Brothers. “The concern is that non-bank dealers are becoming a larger part of the repo market,” said Benjamin Munyan, who specializes in shadow banking and regulation at Vanderbilt University’s Owen Graduate School of Management. “These intermediaries are outside the scope of our traditional Federal Reserve safety net.” In some ways, the development is emblematic of how steps taken to stamp out financial risk-taking in one area have created unforeseen risks in another. But it also highlights the willingness and ability of firms to jump through whatever holes regulators leave or create.

In a repo, firms borrow money by putting up securities like Treasuries as collateral. The cash can then be used to buy higher-yielding assets, something hedge funds often do. When the agreement expires, the borrower “repurchases” the collateral, paying interest to the lender. The process can be repeated over and over, boosting a firm’s leverage, as long as the assets backing the repo maintain their value. During the credit crisis, reliance on such short-term funding helped bankrupt Lehman and imperiled the financial system. Bailouts put the biggest securities firms under Fed supervision as banks, and Dodd-Frank regulations forced them to shrink their assets. A key provision has been the enhanced capital requirements, which made it prohibitively expensive for large U.S. banks to warehouse low-yielding Treasuries and finance repos.

Read more …

China runs out of collateral.

One Belt, One Road, and One Debt Hangover (Rickards)

China is not only one of the world’s largest debtors, it is one of the world’s largest creditors. China uses debt not in the customary financial manner, but as a political tool to generate employment and maintain social stability. Likewise China uses loans and investment as a tool to advance its strategic interests. This may be good geopolitics in the short run, but it will be a disaster economically in the long run. Just as Chinese state owned enterprises (SOEs) can’t repay debts to Chinese banks, China’s foreign partners will not be able to repay debts to China itself. These twin disasters-in-the-making may converge in such a way that China’s assets disappear or become illiquid at exactly the time they are most needed to bail-out its own banking system.

China has launched four major overseas investment initiatives in the past ten years. The oldest is their sovereign wealth fund, China Investment Corporation, or CIC, established in 2007. Sovereign wealth funds are a way for countries to invest their reserves in securities other than safe instruments such as U.S. Treasury notes. CIC today has assets of over $800 billion, spread among stocks, corporate bonds, hedge funds, private equity, commodities, and commercial real estate. Some of CIC’s investments are directly-owned enterprises, including gold mines in Zimbabwe. While these assets may outperform Treasury notes over time, they are also illiquid, and would tend to decline in value during a financial panic. This means that about 20%, of China’s reserves are unavailable for critical tasks such as bailing out the banking system or defending the currency.

[..] The problem with One Belt, One Road is that many of the potential recipients of development loans are not highly creditworthy or have a track record of defaulting on debts or requiring substantial debt restructuring in order to stay current. As with Chinese bank loans to SOEs, the NDB, AIIB, and One Belt, One Road efforts are not primarily economic but political. China is seeking to use its economic clout to create jobs and control critical infrastructure. [..] As with its other policies, China will turn liquid assets into illiquid assets in order to pursue its ambitions. This could make sense if nothing goes wrong. But, things will go wrong. China will face a monumental liquidity crisis sooner than later and find that its liquid assets have been turned into bridges to nowhere.

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This thing has been developing over decades.

Qatar Stocks Tumble 7% As Six Arab Nations Cut Diplomatic Ties (CNBC)

Qatar’s stock market tumbled more than 7% on Monday as six of the Middle Eastern country’s neighbors reportedly severed diplomatic relations with Doha for allegedly supporting terrorism. The key stock index in Doha slipped shortly after Monday’s open – the benchmark’s sharpest fall in more than seven years – before paring some its losses to trade down 7.2% at around 3:00 p.m. local time. Six countries, including Saudi Arabia and Egypt, had all coordinated on Monday to accuse the wealthy Gulf state of supporting terrorism, which Qatar has denied. Investors viewed the diplomatic withdrawal as a major breakdown between powerful Gulf nations, who are also close U.S. allies. While Saudi Arabia – the world’s leading crude oil exporter – said Qatar had supported “Iranian-backed terrorist groups,” Qatar described the joint decision as having “no basis in fact” and was therefore “unjustified”.

Political tensions in the region had been building in recent weeks as Egypt, Saudi Arabia, Bahrain and the United Arab Emirates – all countries to have cut relations with Doha on Monday – had blocked Qatari-based news sites in May. However, Monday’s decision was reported to be based on Qatar’s alleged role in supporting Islamist groups and its stance concerning Iran – a regional rival to Saudi Arabia. Qatar, a member of the U.S. coalition against the so-called Islamic State, has frequently and consistently rejected accusations from Iraq’s Shia leaders that it has provided financial backing to ISIS. “Whilst Qatar is the member of the U.S. coalition against IS, wealthy individuals have reportedly made donations to extremist groups and the government is also accused of supporting extremists – allegations that Qatar vehemently deny,” Tamas Varga, oil associates analyst at PVM, said in an email on Monday.

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If I remember, the UK gets 90% of its LNG from Qatar.

Qatar’s Real Power Is As The World’s Largest LNG Exporter (BBG)

Oil markets seem impervious to geopolitical risk. As four Arab neighbors imposed an unprecedented embargo on Qatar on Monday, oil prices briefly jumped 1.6 percent before falling back. The fuel to watch, though, is not oil, but gas. If this dispute is not resolved quickly, it may mean a hot summer in the Gulf. The problem has been simmering for a long time, with three of Qatar’s Gulf Cooperation Council colleagues blaming it for backing Islamist groups including the Muslim Brotherhood, and being too friendly with Iran. But in a dramatic escalation shortly after U.S. President Donald Trump’s visit to Saudi Arabia, the United Arab Emirates and Bahrain, along with Egypt, the shaky official government of Yemen and Libya’s contested eastern government broke relations with Doha and imposed a ban on air, land and sea travel.

Much of Qatar’s food and key equipment comes by land from Saudi Arabia, or reshipments through Dubai’s Jebel Ali port. Qatar is one of the smallest oil producers in OPEC, at 618,000 barrels per day, but condensate (light oil) and natural gas liquids – byproducts of its giant North Field – add about another 1.3 million barrels per day. It will stay in the OPEC production cuts deal, and even if it does not, its contribution is small. Its real power comes from being the world’s largest liquefied natural gas exporter. Qatar’s liquefied natural gas and oil exports should not be affected, even if Saudi and Emirati waters are barred to its ships. They can sail via Iranian waters and then pass the Strait of Hormuz via the usual shipping lane in Omani territory, or stay in the Iranian sector if Oman joins its GCC colleagues in the blockade. Any attempt to stop Qatari exports would be a major crisis, and would invite a serious response from major LNG customers Japan, South Korea, China and India.

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So is Britain’s political model.

Britain’s Economic Model Is Broken: This Is Our First Post-Crash Election (G>)

Mayism could mean Brexit Britain renaming itself Poundland – cheap goods and cheap workers – or it might mean a reversion to some kind of one-nation Toryism. Her party just doesn’t know. Were it not for the Tories’ slim majority, their crisis would be far more exposed. The sofa class don’t do political economy, more’s the pity, but if they did they’d see the contradictions of Conservatism in 2017. The party of capital is now pursuing a policy – hard Brexit – hated by capital. The political arm of the City is about to rip a hole through the City. All these paradoxes are given almost physical representation on our tellies every night by May herself – a populist who doesn’t actually like people.

As a non-believer in New Labour, Corbyn has no such ideological awkwardness, while John McDonnell is one of the few people in the Labour party who didn’t subcontract out their economic thinking to Brown and Ed Balls. But still, their team admit they have a way to go in rethinking Britain’s economy – and they are having to do so against a famously hostile parliamentary party. The result is Corbyn’s manifesto, which is chiefly remarkable for its unabashed defence of basic social democratic values. It’s the programme you imagine Brown would like to have delivered – if only he hadn’t been so busy triangulating.

But behind the scenes, the party is doing much deeper thinking. I have seen an internal Labour report commissioned by McDonnell. It forms one part of what could be a far more radical programme after Thursday night. Some of the lines in it will give the Daily Mail stories for days – such as calling for a overhaul of the BBC trust (which is “dominated by appointees from the corporate and financial sectors”) and hundreds of millions in public money to be spent on establishing workers co-ops. For the sympathetic reader, however, it contains some of the most imaginative thinking around economic democracy to come out of the party in decades (not saying much, sadly). In that, it sits alongside the speeches made by Corbyn’s team last week about the need for “industrial patriotism”, and to give public backing to new sectors.

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More cuts are being prepared.

Simple Numbers Tell Story Of Police Cuts Under Theresa May (G.)

Police numbers, including the number of armed police officers, have fallen sharply under Theresa May’s watch first as home secretary between 2010 and 2016 and then as prime minister. The simple numbers tell the story. In 2010 May as home secretary made the mistake that Margaret Thatcher never made in the 1980s and agreed to a Treasury demand to cut police budgets by 18%. Over the next five years the number of police officers in England and Wales fell from a peak of 144,353 in 2009 to 122,859 in 2016. At the same time the number of specialist armed police officers has fallen from a peak of 6,796 in 2010 to 5,639 in 2016. As the graph shows it would appear to be an open and shut case that cuts in police officer numbers have had an impact on the capacity of the police to respond.

May was told in 2010 that in cutting police funding she was making a mistake that Thatcher never made when she instinctively realised that there would come a crucial moment when the country, and her premiership, would depend entirely on the resilience of the thin blue line. May took a different approach as home secretary that was not without foundation. She argued that with the big continuing falls in crime that had been seen since the mid-1990s it was not necessary to maintain such a large police force. Anyway, it was argued, there was no direct link between the number of officers and the level of crime.

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What you get after years of having zero price discovery. It gets worse as we go along.

Earnings vs. Profits & The Bull Market (Roberts)

As I have discussed previously, the operating and reported earnings per share are heavily manipulated by accounting gimmicks, share buybacks, and cost suppression. To wit: “The tricks are well-known: A difficult quarter can be made easier by releasing reserves set aside for a rainy day or recognizing revenues before sales are made, while a good quarter is often the time to hide a big ‘restructuring charge’ that would otherwise stand out like a sore thumb. What is more surprising though is CFOs’ belief that these practices leave a significant mark on companies’ reported profits and losses. When asked about the magnitude of the earnings misrepresentation, the study’s respondents said it was around 10% of earnings per share.“ However, if we analyze corporate profits (adjusted for taxes and inventory valuations) we find a very different story. Since the lows following the financial crisis, the S&P 500 has grown by 266% versus corporate profit growth of just 98%.

Important Note: The profits generated by the Federal Reserve’s balance sheet are included in the corporate profits discussed here. As shown below, actual corporate profitability is weaker if you extract the Fed’s profits from the analysis. As a comparison, in the first quarter of 2017, Apple reported a net income of just over $17 billion for the quarter. The Fed reported a $109 billion profit.

With corporate profits still at the same level as they were in 2011, there is little argument the market has gotten a bit ahead of itself. Sure, this time could be different, but it usually isn’t. The detachment of the stock market from underlying profitability suggests the reward for investors is grossly outweighed by the risk. But, as has always been the case, the markets can certainly seem to “remain irrational longer than logic would predict.” This was something Jeremy Grantham once noted: “Profit margins are probably the most mean-reverting series in finance, and if profit margins do not mean-revert, then something has gone badly wrong with capitalism. If high profits do not attract competition, there is something wrong with the system, and it is not functioning properly.” Grantham is correct. As shown, when we look at inflation-adjusted profit margins as a percentage of inflation-adjusted GDP we see a clear process of mean reverting activity over time. Of course, those mean reverting events are always coupled with a recession, crisis, or stock market crash.

More importantly, corporate profit margins have physical constraints. Out of each dollar of revenue created there are costs such as infrastructure, R&D, wages, etc. Currently, one of the biggest beneficiaries to expanding profit margins has been the suppression of employment, wage growth, and artificially suppressed interest rates which have significantly lowered borrowing costs. Should either of the issues change in the future, the impact to profit margins will likely be significant. The chart below shows the ratio overlaid against the S&P 500 index.

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Well, if you don’t know what something’s worth, how are you going to justify purchasing it? At some point that stops.

US M&A: One Of The Scariest Charts To Look At – Citi (BI)

The slowdown in US dealmaking since 2015 is cause for concern, Citi’s equity strategists say. “In some respects, one of the scariest charts to look at currently is the number of announced mergers & acquisition deals over the past year or two,” Tobias Levkovich, the chief US equity strategist at Citi, said in a note on Friday. “M&A lawyers argue the ‘uncertainty’ factor, which has come about recently, given some unpredictable aspects of the new Trump administration, has been the issue. It only may explain the last six months, but the trend has been poor for about two years or more. In the past, there has been some correlation with the S&P 500 and thus it could generate more legitimate fears than some of the other excuses that are put forth for not wanting to buy American equities.”

This year through June 5, 7,561 deals were announced, the lowest count since 2013, according to S&P Global Market Intelligence. M&A volume reached a record $2.055 trillion that year, the firm’s data show, slipping in 2016 to $1.7 trillion. More dealmaking signals, in part, that companies are placing big bets on the long-term growth of certain pockets of the market. Levkovich said tough antitrust measures from European authorities and the Department of Justice antitrust division may be slowing dealmaking.

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Please let it stop.

IMF’s Lagarde Offers Eurozone Greek Debt Compromise, Handelsblatt Says (R.)

IMF Managing Director Christine Lagarde has offered Greece’s European creditors a way out of their impasse over Athens’s debts that would allow the eurozone to release a tranche of aid later this month. The IMF believes Greece needs a debt haircut, which Germany rejects. Lagarde suggested agreeing a deal whereby the IMF would stay on board in the bailout, as Berlin wants, but not pay out further aid until debt relief measures are clarified. “There can therefore be a program in which the disbursement only takes place when the debt measures have been clearly outlined by the creditors,” she told Handelsblatt in pre-released comments to run in its Tuesday edition. The compromise could allow eurozone finance ministers to give the go-ahead for their next payment of their tranche of aid at their meeting on June 15, Handelsblatt said.

“It is a possibility for an agreement,” Lagarde said. Greece has about €7 billion of debt maturing in July, a sum it will not be able to repay unless it gets new loans out of its current bailout worth up to 86 billion euros, the third aid program since its debt crisis began. Eurozone finance ministers failed to agree with the IMF last month on debt relief terms for Greece. They did not release new loans to Athens but recognized it had made significant progress with reforms. Greece hopes that eurozone finance ministers will offer enough clarity in June on debt relief measures that could be carried out after its bailout ends in 2018, to show investors that its debt – now at 197% of GDP – will be sustainable and help it return to bond markets as early as this summer.

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Trust in the Troika has proven to be a very expensive mistake.

The Euro’s Future Demands Trust (K.)

The European Commission presented its proposal for possible ways to deepen Europe’s Economic and Monetary Union a few days ago, as part of the public debate on the EU’s future. It went unnoticed in Greece, which is a pity, because if all that is proposed is adopted, the Greek problem will be overcome; also, if the mechanisms and procedures now in place had existed from the start, our country would not have hit a dead end. The question now is how Greece will be part of a system that was established because of the Greek crisis but from which our country is still excluded.

For the Greeks – sinking in recession, insecurity and isolation – the ironies are many. Presenting the proposals in Brussels on Wednesday, Commission Vice President Valdis Dombrovskis said: “The euro is one of Europe’s most significant achievements. It is much more than just a currency. It was conceived as a promise of prosperity. To keep that promise for future generations, we need the political courage to work on strengthening and completing Europe’s Economic and Monetary Union now.” Pierre Moscovici, commissioner for economic and financial affairs, added: “The euro is already a symbol of unity and a guarantee of stability for Europeans. We now need to make it a vehicle for shared prosperity. Only by reversing economic and social divergence in the euro area will we be able to defeat the dangerous populism that this fuels.”

The indirect references to Greece are clear. This is where the euro’s weaknesses first appeared, this is where the political center was torn apart and fringe groups gained power, this is where confidence in the common currency and in solidarity is being tested. The Commission’s proposals focus on completing a genuine financial union, achieving a more integrated economic and fiscal union, on greater democratic accountability and strengthening euro-area institutions (including a full-time Eurogroup chair and a European Monetary Fund). The Commission noted the euro’s successes, adding, “And yet it is only 25 years since the Treaty of Maastricht paved the way for the single currency and only 15 years since the first coin was used.” So we ask: As the currency is so new, and as the necessary mechanisms and procedures are only now being instituted, why is Greece continually an outcast? How can we pretend all is well with the euro? .

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Nice thing is the City Plaza is not really occupied, nor a squat. The former employees own everyhting inside the building.

An Occupied Hotel In Greece Models How To Welcome Refugees (WNV)

It is almost summer in Europe. Temperatures are rising, and many are preparing for vacations somewhere in the Mediterranean, which means searching for accommodation online. “No pool, no minibar, no room service, and nonetheless: the best hotel in Europe” reads the City Plaza Hotel’s homepage. A joke? Yes. A lie? Not at all. While this hotel in Athens, Greece might not offer those conventional services, it provides something far better: Free housing, medical care and meals for hundreds of people who have had to flee their countries. [..] Over the course of the year, the hotel has provided decent housing for over 1,500 refugees — 400 at any one time — in times of undignified detention camps. It is a model of self-organization and solidarity with refugees — who share living quarters with locals — in times of rising racism and nationalism.

[..] Thousands of homeless refugees are living in the streets of Athens, including families with small children. In response to this crisis, the Greek state set up more than 49 detention centers and camps. Activists and refugees had another idea of how to respond. On April 22, 2016 they took over the City Plaza — which, like many businesses since the economic collapse, had been abandoned for six years. Along with eight other self-organized shelters occupied by refugees and activists around the city, the hotel offers displaced people a safe and dignified alternative to the miserable, unhygienic and cruel conditions of the detention facilities. When the City Plaza went bankrupt in 2010, the management failed to pay the employees their final salaries. According to a court ruling, since they were unable to pay the workers monetarily, everything that is inside the building belongs to the workers.

However, the owner prevented auctioning the hotel for years. When the seven-story building was finally occupied last year, the former hotel employees declared that they were happy to offer and share everything. And the activists running City Plaza now support the workers and are planning common efforts to meet the demands of both the former workers and the refugees. The refugees’ demands include access to housing, education and employment. By providing everything that is needed themselves, the project proves that decent living conditions for everyone is possible, even in a country as burdened by crisis as Greece. And the warm reception that the refugees have received by those living near the hotel demonstrate that poverty is not an obstacle to welcoming people with open arms. “The neighbors bring some clothes, some food — you know, they are warm. Although their lives are also ruined, they see in the ruins of their lives, the ruins of the lives of other people,” said Maria, one of the Greek activists running the hotel.

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Apr 052017
 
 April 5, 2017  Posted by at 8:43 am Finance Tagged with: , , , , , , , , , ,  1 Response »


DPC Times Square seen from Broadway 1908

 

JPMorgan CEO Jamie Dimon Warns ‘Something Is Wrong’ With the US (BBG)
US Housing Boom Is Anything But as Ownership Loses Appeal (A. Gary Shilling)
Young Americans Are Killing Marriage (BBG)
The Comex Is The World’s Most Corrupted Market (IRD)
The Real Russiagate (Paul Craig Roberts – Michael Hudson)
Fed Leak Probe Dooms Lacker But Leaves Key Question: Who Leaked? (BBG)
I Tried To Ask Yellen About The Fed Leak (Da Costa)
Australia’s Household Debt Crisis Is Worse Than Ever (Abc.au)
Australian Economy At Risk As Debt Bomb Grows (Aus.)
Chinese Brokers Are Muscling in on Asia’s Junk Bond Underwriters
Zombie Nation: In Japan, Zero Public Companies Went Bust in 2016 (BBG)
The World’s Best Economist (PCR)
New Zealand Post To Deliver KFC (AFP)

 

 

Actually, a lot is wrong. Including Dimon talking his book and people thinking he’s doing something else, like trying to help anyone other than himself.

JPMorgan CEO Jamie Dimon Warns ‘Something Is Wrong’ With the US (BBG)

JPMorgan CEO Jamie Dimon has two big pronouncements as the Trump administration starts reshaping the government: “The United States of America is truly an exceptional country,” and “it is clear that something is wrong.” Dimon, leader of world’s most valuable bank and a counselor to the new president, used his 45-page annual letter to shareholders on Tuesday to list ways America is stronger than ever – before jumping into a much longer list of self-inflicted problems that he said was “upsetting” to write. Here’s the start: Since the turn of the century, the U.S. has dumped trillions of dollars into wars, piled huge debt onto students, forced legions of foreigners to leave after getting advanced degrees, driven millions of Americans out of the workplace with felonies for sometimes minor offenses and hobbled the housing market with hastily crafted layers of rules.

Dimon, who sits on Donald Trump’s business forum aimed at boosting job growth, is renowned for his optimism and has been voicing support this year for parts of the president’s business agenda. In February, Dimon predicted the U.S. would have a bright economic future if the new administration carries out plans to overhaul taxes, rein in rules and boost infrastructure investment. In an interview last month, he credited Trump with boosting consumer and business confidence in growth, and reawakening “animal spirits.” But on Tuesday, reasons for concern kept coming. Labor market participation is low, Dimon wrote. Inner-city schools are failing poor kids. High schools and vocational schools aren’t providing skills to get decent jobs. Infrastructure planning and spending is so anemic that the U.S. hasn’t built a major airport in more than 20 years.

Corporate taxes are so onerous it’s driving capital and brains overseas. Regulation is excessive. “It is understandable why so many are angry at the leaders of America’s institutions, including businesses, schools and governments,” Dimon, 61, summarized. “This can understandably lead to disenchantment with trade, globalization and even our free enterprise system, which for so many people seems not to have worked.”

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I like Shilling. But this reeks of nonsense. It’s not about appeal, it’s about getting poorer.

US Housing Boom Is Anything But as Ownership Loses Appeal (A. Gary Shilling)

By many measures, the U.S. housing market seems in very good shape. The National Association of Realtors in Washington said last week that contracts to buy existing homes jumped 5.5% in February, the biggest increase since July 2010. Fannie Mae’s National Housing Survey showed that Americans expect home prices to rise a robust 3.2% over the next year as its sentiment index reached a record high. So, are boom times ahead for housing? Not quite. To understand why, it helps to revisit recent history. The housing bubble of the early 2000s was driven by subprime mortgages and other loose-lending practices. The subsequent collapse left many potential new homeowners with inadequate credit scores, not enough money for a down payment and insufficient job security to buy a house.

They also saw, for the first time since the 1930s, that not only house prices fall nationwide, but nosedive by a third. Homeownership plunged and those who did form households moved into rental apartments instead of single-family houses. That drove rental vacancy rates down and starts of multi-family housing – about two-thirds of which are rentals – up to 396,000 units, more than the earlier norm of 300,000 starts at annual rates. But single-family housing starts – even with the rebound to an 872,000 annual rate from the bottom of about 400,000 – are still far below the pre-housing bubble average of more than 1 million. Despite the recovery in house prices, rents have risen at a much faster pace. As a share of median income, rents have jumped while mortgage costs have fallen. The latest data from the National Association of Realtors show its Housing Affordability Index was up 52% in the fourth quarter of 2016 from the early 2007 low.

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Yesterday we saw IMF head Lagarde saying the loss of productivity can be solved with education. But the younger have had a boatload more education than their parents.

Young Americans Are Killing Marriage (BBG)

There’s no shortage of theories as to how and why today’s young people differ from their parents. As marketing consultants never cease to point out, baby boomers and millennials appear to have starkly different attitudes about pretty much everything, from money and sports to breakfast and lunch. New research tries to ground those observations in solid data. The National Center for Family and Marriage Research at Bowling Green State University set out to compare 25- to 34-year-olds in 1980—baby boomers—with the same age group today. Researcher Lydia Anderson compared U.S. Census data from 1980 with the most recent American Community Survey data in 2015. The results reveal some stark differences in how young Americans are living today, compared with three or four decades ago.

In 1980, two-thirds of 25- to 34-year-olds were already married. One in eight had already been married and divorced. In 2015, just two in five millennials were married, and only 7% had been divorced. Baby boomers’ eagerness to get married meant they were far more likely than today’s young people to live on their own. Anderson looked at the share of each generation living independently, either as heads of their own household or in married couples. The chance that Americans in their late twenties and early thirties live with parents or grandparents has more than doubled. In 1980, just 9% of 25- to 34-year-olds were doing so. In 2015, 22% lived with parents or grandparents. Millennials are also less likely than boomers to be living with kids—and to be homeowners.

It’s easy to look at these figures and say millennials are lagging behind their boomer parents. However, even as young Americans delay marriage, kids, and homeownership, they’re ahead of their parents by one measure: education.

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Dazzling. “Historically, when the amount of paper exceeds the amount of underlying commodity that is available for delivery by more than 20-30%, the CFTC intervenes by investigating the possibility of market manipulation. But never with gold and silver.”

The Comex Is The World’s Most Corrupted Market (IRD)

If you were to poll the public about comparing the investment returns between gold, silver and stocks during the first quarter of 2017, it’s highly probable that the majority of the populace would respond that the S&P 500 outperformed the precious metals. That’s a result of the mainstream media’s unwillingness to report on the precious metals market other than to disparage it as an investment. In reality, among silver, gold, the Nasdaq 100 and the S&P 500, the S&P 500 had the lowest ROR in Q1. Silver led the pack at 14%, followed by tech-heavy Nasdaq 100 at 11.1%, gold at 8.6% and the S&P 500 at 4.8%. Put that in your pipe and smoke it, Cramer. Imagine the performance gold and silver would have turned in if the Comex was prevented from creating paper gold and silver in amounts that exceeded the quantity of gold and silver sitting in the Comex vaults.

As an example, as of Friday the Comex is reporting 949k ozs of gold in the registered accounts of the Comex vaults and 9 million ozs of total gold. Yet, the open interest in paper gold contracts as of Friday totaled 41.7 million ozs. This is 44x more paper gold than the amount of physical that has been designated – “registered” – as available for delivery. It’s 4.6x more than the total amount of gold sitting on Comex vaults. With silver the situation is even more extreme. The Comex is reporting 29.5 million ozs of silver as registered and 190.2 million total ozs. Yet, the open interest in paper silver is a staggering 1.08 billion ozs. 1.08 billion ozs of silver is more silver than the world mines in a year. The paper silver open interest is 5x greater than the total amount of silver held in Comex vaults; it’s an astonishing 37x more than the amount of silver that is available to be delivered.

This degree of imbalance between the open interest in CME futures contracts in relation to the amount of the underlying physical commodity represented by those contracts never occurs in any other CME commodity – ever. Historically, when the amount of paper exceeds the amount of underlying commodity that is available for delivery by more than 20-30%, the CFTC intervenes by investigating the possibility of market manipulation. But never with gold and silver. The Comex is perhaps the most corrupted securities market in history. It is emblematic of the fraud and corruption that has engulfed the entire U.S. financial and political system. The U.S. Government has now issued $20 trillion in Treasury debt for which it has no intention of every redeeming. It’s issued over $100 trillion in unfunded liabilities (entitlements, pensions, etc) for which default is not a matter of “if” but of “when.”

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“..We are now in a position to see the real story behind “Russiagate.” It’s not about Russia, except incidentally…”

The Real Russiagate (Paul Craig Roberts – Michael Hudson)

Wall Street Journal editorialist Kimberley A. Strassel poses the real question: Why hasn’t the Trump administration had the Secret Service arrest Comey, Brennan, Schiff, the DNC and Hillary for trying to overthrow the President of the United States? “Mr. Nunes has said he has seen proof that the Obama White House surveilled the incoming administration—on subjects that had nothing to do with Russia—and that it further unmasked (identified by name) transition officials. This goes far beyond a mere scandal. It’s a potential crime.” What we are watching is turning out to be traces of a plot against a government elected by the American people. Attempts by House national security committee Chairman Devin Nunes have been countered with demands by his potential victims to recuse himself so as to stop his exposé of how “Team Obama was spying broadly on the incoming administration.”

[..] We are now in a position to see the real story behind “Russiagate.” It’s not about Russia, except incidentally. The Obama regime abused the government’s surveillance powers and spied on Donald Trump and other Republicans in order to build a dossier for the DNC to leak to the press in an attempt to slander or compromise Trump and throw the election to Hillary. They’ve been caught, but we can now see that they took steps to protect themselves against this. They prepared a cover story. They pretend they were not spying on Trump, but on Russians – which only by fortuitous happenchance turned up incriminating smoke against Trump. This cover story was buttressed by the fake news story prepared by former MI6 freelancer Christopher Steele.

As Whitney reports, Steele “was hired as an opposition researcher last June to dig up derogatory information on Donald Trump.” Unvetted and unverified information paid for by so-called informants “somehow” found its way into U.S. intelligence agency reports. These reports were then leaked to Democrat-friendly media. This is where the crime lies. Obama regime and DNC were using these agencies for domestic political use, KGB style. The Obama/Clinton cover story is now falling to pieces. That explains the desperation in the attack by Adam Schiff, the ranking Democrat on the House Intelligence Committee, on Committee Chairman Devin Nunes to stop the exposure. Russiagate is not a Trump/Putin collusion but a domestic spy job carried out by Democrats. Law requires Trump to arrest those responsible and to put them on trial for treason and conspiracy to overthrow the government of the United States.

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They end the investigation without answering the question that started it?!

Fed Leak Probe Dooms Lacker But Leaves Key Question: Who Leaked? (BBG)

The Federal Reserve’s inspector general says it will be ending its investigation into the 2012 release of confidential information. Even after the scandal cut short the career of one top Fed official, the answer to the most important question remains a mystery. Who did the initial leaking? Richmond Fed President Jeffrey Lacker resigned abruptly Tuesday as he announced his role in the unauthorized disclosure of information to Medley Global Advisors about policy options that the central bank was considering in 2012. His explanation suggested he was confirming facts the Medley analyst already knew. It was a sudden career stop for a Fed president who was frequently in opposition to the Fed board consensus on interest-rate policy, and the news will likely revive questions in Congress about the value of the central bank’s discretion and transparency.

“The story is not over today,” said Andrew Levin, a professor at Dartmouth College who was previously a special adviser at the Fed board and helped then-Vice Chair Janet Yellen develop the Fed’s policy on external communication. “There are a number of distinct details that suggest that Lacker wasn’t the main source of information.” Aaron Klein, a fellow at the Brookings Institution and the former chief economist on the Senate Banking Committee, said the Lacker statement “is not a full and complete accounting of what happened.” “The Fed, internally and its inspector general, would be wise to fully explore every aspect of what happened here because today’s actions and statements by Lacker raise more questions than they answer,” he said.

[..] Lacker’s carefully worded statement, distributed by his attorney, said he “crossed the line to confirming information that should have remained confidential.” The investigation into Lacker has concluded and no charges will be brought against him, the attorney said. He also said the Medley analyst “introduced into the conversation an important non-public detail” about one of the policy options under consideration. Lacker says he didn’t decline to comment “and the interview continued.” His statement doesn’t suggest that he tipped the Medley analyst initially. Indeed, the Fed board’s own investigation said “a few Federal Reserve personnel” had contact with the Medley analyst.

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Lacker the only leaker? Doesn’t quite look that way.

I Tried To Ask Yellen About The Fed Leak (Da Costa)

I once asked Janet Yellen a rather straightforward question that would echo for much longer than I expected. It was March 2015, and the Federal Reserve was under pressure from Congress to reveal details about an internal investigation into how key details of its interest rate policy deliberations had made their way into a report by a private sector firm. I was a reporter at the Wall Street Journal, and I asked the following at a press conference:

Let’s make something clear: Like any journalist, I love a good leak. But this was not your typical leak of important information to a journalist who then reported it to the public. This was the sharing of private, market-sensitive details with a private party – Medley Global Advisors – which then shared that information with its clients. The leak, it should be noted, happened all the way back in 2012 but it was still being discussed in 2015 because – despite the Fed’s internal investigation – nobody seemed to have gotten to the bottom of what had happened. And back in 2012, any read on what the Federal Reserve might do to suppress interest rates as the US economy continued to crawl out of the Great Recession, could lead to huge profits for the traders who bet on such things. These days, traders are thinking about the next rate hike.

Back then, interest rates were already at zero and the real insight gleaned from Medley’s report was how aggressively the Fed would work to keep them there by using its balance sheet. My question to Yellen had to do with basic public trust in the Fed. Why should the American people believe the central bank is working in its best interests if policymakers chat privately with movers and shakers on Wall Street? This was an alarming trend I had been reporting on since 2010, when I co-authored a report for Reuters entitled “Cozying up to big investors at Club Fed.” In it, my colleagues and I detailed other instances of market-moving information inappropriately being shared with investors, a trend we first observed when Fed officials speaking to bankers and hedge fund managers at conferences would suddenly go silent when a reporter walked by.

After the Yellen press conference, I took two weeks of paid leave for the birth of my daughter. When I returned, my editor at the paper told me I would no longer be attending Fed press conferences. No reason was given, and I left the job a few months later. Market bloggers speculated the Fed had “banned” me from the press conference. I have no reason to think that was the case because the central bank let me back in as soon as I changed news organizations. Fast-forward to April 4, 2017: Richmond Fed President Jeffrey Lacker resigns abruptly after admitting he was a source of the leak. As soon as I saw the news, the whole press conference incident flashed before my eyes. But Lacker’s admission that the Medley leak originated with him doesn’t entirely settle the matter. We know Yellen also met with Medley herself. Why? What did she say to them? Former Fed economist and Treasury official Seth Carpenter was also under scrutiny on the issue. What were the results of the Fed’s own investigation? And of Congress’?

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Meanwhile in the gutter….

Australia’s Household Debt Crisis Is Worse Than Ever (Abc.au)

Mr Russell told me there had been a big increase in debt-distressed Australians calling the [National Debt] helpline in recent months unable to pay their utilities bills. Naturally, he explained, rent and mortgage repayments take priority over the utilities bills because, in the order of survival priorities, you first need a roof over your head. Generally speaking, though, the National Debt helpline told me the rising cost of living is becoming crippling. Utilities bills, mortgage repayments and credit card debt, are all contributing to household financial stress. Last year over 150,000 calls were made to the National Debt Helpline. This year, monthly call volumes for the helpline are already 20% higher, compared to 2016. Based on current call volumes, the NDH predicts that there will be over 182,000 calls this year.

Martin North is the principal of financial research firm Digital Finance Analytics. He crunched the numbers and calculated that, in March, of the 3.1 million mortgaged households, around 22% were in “mild mortgage stress”. That’s up 1.5% on February, and is directly related to the even the smallest of interest rate increases by some of the big four banks. That means those households are managing to make their mortgage repayments, but only by cutting back on other expenditure, or putting more on credit cards, and generally hunkering down. Then there are those Australians under extreme levels of financial stress. Data from Digital Finance Analytics show 1% of households are in severe stress. That means they’re behind with their repayments, and are trying to dig their way out by refinancing, selling their property, or seeking help from services like the National Debt Helpline.

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Ha ha: “Our banks are resilient and they are soundly capitalised,” he said.”

Australian Economy At Risk As Debt Bomb Grows (Aus.)

The rampant debt-fuelled surge in the Sydney and Melbourne property markets will threaten the health of the national economy if it continues, Reserve Bank governor Philip Lowe has warned. However, Treasurer Scott Morrison has talked down drastic action on house prices after a “strong intervention” from Dr Lowe. The RBA is worried that housing debts are rising more than twice as fast as household incomes and that banks are lending to people who cannot afford to repay their debts. The concern has been that the longer the recent trends continued, the greater the risk to the future health of the Australian economy, Dr Lowe told a business dinner in Melbourne last night. “Stretched balance sheets make for more volatility when things turn down.” “For many people, the high debt levels and low wage growth are a sobering combination.”

The chairman of the government’s Financial System Inquiry, former Future Fund chairman David Murray, yesterday sounded a further alarm on the housing boom, saying a crisis on the scale of the 1890s great property collapse could not be ruled out. “What people should do is look at the 1890s, which was caused by a housing land boom,” he told The Australian. “To say it won’t happen and simply ignore it is wrong.” Half of the nation’s banks closed their doors following the 1890s crash. “Many people say a crisis has a low probability of occurrence, but the problem with that view is that whatever the probability, the severity can be very high if it occurs”, Mr Murray, who is also a former Commonwealth Bank chief executive, said. “It shouldn t be allowed to grow & it’s too big a risk to take.”

[..] House prices in Australia’s capital cities have risen 12.9% compared with this time last year, with a surge of 18.9% in Sydney and 15.9% in Melbourne, according to data released on Monday by property analytics firm CoreLogic. [..] Dr Lowe dismissed fears that the banks would be undermined by a housing downturn, saying the Council of Financial Regulators did not believe the boom was a threat to financial stability. “Our banks are resilient and they are soundly capitalised,” he said.

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In China, the shadow banks are taking over…

Chinese Brokers Are Muscling in on Asia’s Junk Bond Underwriters

China’s brokerages are out-muscling global investment banks to win more underwriting business in Asia’s junk bond market amid record offerings, as they increasingly help borrowers from the nation raise foreign currency debt. Haitong Securities topped the league table for high-yield notes denominated in dollars, euro and yen from companies in Asia excluding Japan in the first quarter, according to data compiled by Bloomberg. China Merchants Securities moved up four places to fifth. While HSBC rose three places to second, Standard Chartered and UBS slid to eighth and 11th from first and second in the first quarter of 2016. Junk bonds offer more lucrative fees than high-grade bonds, giving an extra boost to financial institutions that can expand in the business.

As Chinese firms have flocked to the offshore high-yield market, mainland banks and brokerage firms have grabbed market share away from international peers. Issuance of junk notes in dollars, euro and yen from Asia excluding Japan swelled to a record $14.6 billion in the first quarter, with nearly 70% from Chinese companies. “It’s increasingly competitive and Chinese banks are effectively buying market share with their balance sheet,” said Veronique Lafon-Vinais at the Hong Kong University of Science and Technology. Alexi Chan, global co-head of debt capital markets at HSBC, said that the significant rise in Asia high-yield bond sales reflected the “constructive market sentiment” and “positive outlook for China’s economy.”

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… and in Japan, the zombies take over.

Zombie Nation: In Japan, Zero Public Companies Went Bust in 2016 (BBG)

Corporate Japan achieved a rare feat in the fiscal year that ended last week. Not one of its almost 4,000 publicly-traded firms filed for bankruptcy protection. Yet that’s no reason to celebrate, according to analysts who see Japan’s easy credit conditions standing in the way of a much-needed, corporate restructuring to flush out failing companies and make room for new businesses. “It’s totally unhealthy,” says Martin Schulz, an economist at Fujitsu Research Institute in Tokyo. “Japan’s business cycle isn’t working. When no old companies go out of business, no new ones can come in because there isn’t room. The old companies will always compete on price, simply because they can.”

The last time not a single Japanese corporate titan went belly up was a four-year stretch 26 years ago, according to a report published this week by research firm Teikoku Databank. Back then, though, an overheated Japanese economy averaged 5.5% growth per year and then hit a wall when stock and real estate asset bubbles burst. This time, ultra-low interest rates and government loan guarantees left over from the global financial crisis are keeping companies afloat. Prime Minister Shinzo Abe touts fewer business failures as an economic success, but critics say too-easy credit is keeping “zombie” firms alive, worsening labor shortages, and excess competition is putting downward pressure on prices.

The Austrian economist Joseph Schumpeter in 1942 coined the term “creative destruction” to describe the messy way that capitalism reinvents itself. Japan may be stuck in a rut because it refuses to take the economic pain needed for a revival. Yet it’s hardly the only country keeping companies on life support. A January study by the OECD blamed zombies – defined as firms with persistent difficulties paying interest on debt – for slowing productivity, and thus causing sluggish growth, in the developed world. In South Korea, where the shipping industry has been hit by slumping global trade, state-run banks last month agreed to lend Daewoo Shipbuilding $2.6 billion and swap debt for equity to prevent a default. It was the second time in less than two years that the troubled shipbuilder was bailed out.

In China, roughly 10% of the country’s publicly-traded companies are “among the walking dead,” being kept alive by continuous support from government and banks, according to research by He Fan, an economist at Beijing’s Renmin University. Banks keep lending, often because they don’t want to own up to their bad debts. Meanwhile, the government fears the unemployment that would result if so many troubled firms were left to wither away.

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“..the owners of property along the subway line experience a rise in property values. They owe their increased wealth and their increased incomes from the rental values of their properties to the expenditure of taxpayer dollars. If these gains were taxed away, the subway line could have been financed without taxpayers’ money.”

The World’s Best Economist (PCR)

If you want to learn real economics instead of neoliberal junk economics, read Michael Hudson’s books. What you will learn is that neoliberal economics is an apology for the rentier class and the large banks that have succeeded in financializing the economy, shifting consumer spending power from the purchase of goods and services that drive the real economy to the payment of interest and fees to banks. His latest book is J is for Junk Economics. It is written in the form of a dictionary, but the definitions give you the precise meaning of economic terms, the history of economic concepts, and describe the transformation of economics from classical economics, where the emphasis was on taxing incomes that are not the product of the production of goods and services, to neoliberal economics, which rests on the taxation of labor and production.

This is an important difference that is not easy to understand. Classical economists defined “unearned income” as “economic rent.” This is not the rent that you pay for your apartment. Economic rent is an income stream that has no counterpart in cost incurred by the receipient of the income stream. For example, when a public authority, say the city of Alexandria, Virginia, decides to connect Alexandria with Washington, D.C., and with itself, with a subway paid for with public money, the owners of property along the subway line experience a rise in property values. They owe their increased wealth and their increased incomes from the rental values of their properties to the expenditure of taxpayer dollars. If these gains were taxed away, the subway line could have been financed without taxpayers’ money.

It is these gains in value produced by the subway, or by a taxpayer-financed road across property, or by having beachfront property instead of property off the beach, or by having property on the sunny side of the street in a business area that are “economic rents.” Monopoly profits due to a unique positioning are also economic rents. Hudson adds to these rents the interest that governments pay to bondholders when governments can avoid the issuance of bonds by printing money instead of bonds. When governments allow private banks to create the money with which to purchase the government’s bonds, the governments create liabilities for taxpayers than are easily avoidable if, instead, government created the money themselves to finance their projects. The buildup of public debt is entirely unnecessary.

No less money is created by the banks that buy government bonds than would be created if the government printed money instead of bonds. The inability of neoliberal economics to differentiate income streams that are economic rents with no cost of production from produced output makes the National Income and Product Accounts, the main source of data on economic activity in the US, extremely misleading. The economy can be said to be growing because public debt-financed investment projects raise the rents along subway lines. “Free market” economists today are different from the classical free market economists. Classical economists, such as Adam Smith, understood a free market to be one in which taxation freed the economy from untaxed economic rents. In neoliberal economics, Hudson explains, “free market” means freedom for rent extraction free of government taxation and regulation. This is a huge difference.

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I got nothing. We’re doomed.

New Zealand Post To Deliver KFC (AFP)

New Zealand Post has announced its couriers will home-deliver KFC fast food, in a trial that could provide a recipe for success as letter volumes continue to dwindle. Under a pilot scheme that started this week in the North Island town of Tauranga, KFC customers can order online and have their food delivered by NZ Post drivers. KFC operator Restaurant Brands NZ said that while it knew how to produce food, it had no experience in logistics, making the postal service a natural fit. “NZ Post has an extensive delivery distribution network around New Zealand, and KFC is available in most towns nationwide,” chief executive Ian Letele said.

“With the support of NZ Post, we hope to service the home delivery needs of many more KFC customers throughout New Zealand.” New Zealand Post has struggled in the digital age as email and texts have replaced traditional “snail mail”. The state-owned service slashed 2,000 jobs, or 20% of its workforce in 2013, and two years later moved to three-day-a-week deliveries, down from six. It said in its last financial statement that the fall in letter deliveries meant it was losing up to NZ$30 million ($21 million) a year in revenue. However, it said parcel volumes were up due to rising online orders and NZ Post was concentrating on capturing more e-commerce business.

Read more …

May 182015
 
 May 18, 2015  Posted by at 1:36 pm Finance Tagged with: , , , , , , , , ,  9 Responses »


Esther Bubley Soldiers with their girls at the Indianapolis bus station 1943

Whenever secret or confidential information or documents are leaked to the press, the first question should always be who leaked it and why. That’s often more important than the contents of what has been leaked. And since there’s been a lot of hullabaloo about a leaked document the past two days, here’s a closer look. Spoiler alert: the document(s) don’t reveal much of anything new, despite the hullabaloo.

On Saturday, Paul Mason at Channel 4 in Britain posted an IMF document(s) that according to him says, among other things, that the IMF expects a June 5 Grexit – in one form or another – if there is no agreement before that date between Athens and its creditors, ‘the institutions’ (of which the IMF itself is one).

The leaking is simply what it is as long as we don’t know the how and why. But the question will remain why somebody takes the risk to leak something only a small and select group of people are privy to. Is it leaked because it’s politically important, does Paul Mason pay a lot of money for leaks? Or is it perhaps an intentional leak, in this case ordered by IMF higher-ups? And if so, for what reason? A veiled threat?

Fact is that when you look through the documents Mason published, you notice that he adds his own interpretation to them. Mason, to whom documents seem to be leaked on a regular basis – he wrote about 2 more leaked documents 3 months ago – for instance suggests quite strongly in his write up at Channel 4 that June 5th is the date for a possible default.

However, the documents don’t mention that date. They only talk about June, not June 5. Mason writes about IMF ‘staff’: “They point to the €1.5 billion due to the IMF in June as the first vulnerable payment.”

The €1.5 billion is not one payment, though. The first June payment, at least according to a Bloomberg overview , which is indeed scheduled for June 5, is ‘only’ €310 million. There are then subsequent payments to the IMF scheduled on June 12 (€348 million), June 16 (€581 million), and June 19 (another €348 million). These are rough numbers, there are slightly different ones doing the rounds; still, they’ll do.

But June 5 is by no means carved in stone as a default date (€310 million might be feasible for Athens), though Mason does make it seem like that. Every single day counts now in the negotiations. And a €310 million payment on June 5 would buy Greece at least another week. Which may prove crucial. For both sides of the negotiating table. Greece might even miss one or two payments; the consequences of such a move would be mainly a political decision, meaning there’s some room to move.

We noticed, by the way, another example of ‘Masonic’ interpretation in the video that accompanies the article. In it, Mason claims (at about 1:10) that “..the writer of this document thinks Greek pensions are too generous even now.” While it’s possible that he talked to the writer, or received additional information that he doesn’t mention, fact is that the document doesn’t corroborate his statement in the video. There’s no mention of this claim. Maybe it’s Paul Mason’s own opinion?! Take a listen:

The main sticking points with the ‘institutions’ now seem to be ‘labor reform’ (i.e. down with the unions -how IMF can you get?-) and pensions. Syriza has once again said this morning that it refuses to cave in on either. And there’s also the case of the 4000 or so re-hired cleaning ladies and school guards. The well-paid negotiators from Brussels and Washington want them out of their poorly paid jobs again. Not going to happen on Tsipras’ watch.

Yanis Varoufakis has already made clear what Syriza thinks should be done with the debt it owes to Europe: it should be swapped for paper with a repayment schedule that stretches way into the future. Looking at (re)payment schedules, it becomes clear this is not just a hollow idea. If Europe would allow for such a swap, Greece’s debt picture would change radically overnight. It would take away a large part of the burden this year:

And when this year is over, everything looks a lot sunnier:

The biggest speedbump in Greece’s repayment schedule is summer 2015. Take that away and things look completely different. All the institutions need to do is to provide Greece with some leeway. It’s very possible to do so. If the EC, ECB and IMF decide not to allow for that leeway, there can -again- be only one conclusion, as I said before: Greece Is Now Just A Political Issue.

The ‘big kahuna’ issue for Syriza has been, ever since it won the elections in late January, that its voters want something seemingly impossible: an end to austerity combined with continued membership of the eurozone. ‘The institutions’ won’t let Greece have both. Which has a lot to do with the fact that polls show continued support for euro membership in Greece; it’s one big hammer that Tsipras can be banged over the head with, day after day.

‘The institutions’, and indeed the international media, expect Greece to cave in to their demands for more austerity at the ‘final moment’, because the alternative would not only be horrific – at least presumably -, it would go against the wishes of the Greek people. What not a lot of people seem to understand is that Syriza can’t give in, because it would mean the end of Syriza.

However, if the institutions force a Greece default, that would bring a potential disintegration of the eurozone much closer than it is today. And whoever says they’re confident it can be contained are delusional liars. The risks for all three, EC, ECB and IMF, would far outstrip the few billion euros on which they may receive repayment a few years later. And they should not want these risks. Not if they have functioning neurons left.

But the biggest threat to the negotiations may not come from the institutions after all. It may well come from inside Syriza. As the Greek Analyst site reported this morning:

Call For “Rupture Now” By The Political Secretariat & Central Committee Of Syriza

Prominent members of the Central Committee and the Political Secretariat of Syriza are preparing an event for tomorrow, Tuesday May 19. Quoting from the event description, as well as the title of the invitation-pamphlet, the message of the event seems quite clear: “the only way out [of the impasse] is the choice of rupture with the lenders.” :

The Moment of Truth For Syriza: “Rupture now with the lenders.”

The moment of truth has arrived. The lenders are pressuring the government to sign a Memorandum agreement of neoliberal strategy (privatizations, demolition of the insurance-pension system and of the labour rights, ENFIA, VAT tax, etc.)

It turns out that the agreement of the 20th of February facilitated, objectively, this attack and “creative ambiguity” favored the powerful. The assumption that a radical program of anti-austerity can be build with the tolerance of the neoliberal steering wheels of the Eurozone proved wrong. Now, we are moving to the critical hour of decisions for the government, the party of SYRIZA, and the social majority.

We need to choose between the signing of the looming austerity agreement and the rupture with the lenders. SYRIZA cannot be turned into a party of austerity; neither can the government implement the Memorandum. This is the reason why, both domestically and abroad, proposals for the internal “cleansing” of SYRIZA and governmental solutions for “national unity” are put on the table.

For all those reasons, the only way out is the choice of rupture with the lenders. With a suspension of repayments [of the debt], measures that restrict the “freedom” of capital flight, governmental control over the banks, taxation of capital and of the rich for the financing of pro-people measures, support of this policy with any and all possible means, and with the possible break from the EMU.

For all of the above, we invite you to discuss in the open event of Rproject on Tuesday 19/5 in 7:00pm at ESIEA. Today, the future of workers, unemployed, pensioners, young people is judged. And at the same time, the future of the Radical Left in Greece, but also internationally.

Anatole Kaletsky thinks Syriza will blink. I saw that a few days ago with all of its assumptions and I thought: whatever. I don’t even think Kaletsky knows what Syriza is. There are too many opinions and too many assumptions out there that see the negotiations as just that: negotiations (that will end badly for Tsipras and Varoufakis). But Syriza is not just another thirteen in a dozen political party. It comes with principles that it will not and cannot sell to the highest bidder. That, more than anything else, makes this a political issue.