May 272018
 
 May 27, 2018  Posted by at 9:03 am Finance Tagged with: , , , , , , , , , , , , ,  


Edvard Munch Separation 1896

 

The ECB Is Preventing An Italian Rerun Of The Euro Crisis – For Now (MW)
Italy President Under Pressure To Accept Eurosceptic Minister (R.)
We’re Engaging In Self-Deception And Unsupported Hopefulness (Ron Paul)
Putin Warns “US Sanctions Hurt Trust In Dollar As Reserve Currency” (ZH)
Erdogan Calls On Turks To Convert Dollar, Euros Into Lira (R.)
Spain’s Ciudadanos Party Open To Alternative Candidate To Oust PM Rajoy (R.)
Daimler Threatened With Recall Of Over 600,000 Diesel Models (R.)
British Arms Exports To Israel Reach Record Level (G.)
Koreas Discuss Non-Aggression Pledge, Peace Treaty Ahead Of Summit (R.)
How Did The Swedish Matter End? (Justice4Assange)

 

 

Draghi must save Italy. Even if he doesn’t like its government.

The ECB Is Preventing An Italian Rerun Of The Euro Crisis – For Now (MW)

As a result of the ECB’s purchases, only 32% of Italian government bonds are still held by foreign investors, Solveen noted, and only a third of those are held outside the eurozone. That compares with more than 40% before the sovereign debt crisis. [..] The ECB’s deposit rate stands at negative 0.4%, while its key lending rate stands at 0%. Rates wont’ rise soon, Solveen notes, and that’s curbing the rise of short-term bond yields. It also means Italy will be able to issue new bonds with low coupons, at least in the two-to-three-year maturity range, he said, which should also anchor long-end yields.

And since the average duration of Italian bonds has risen significantly in recent years, Italy’s Treasury can shift its issuance back toward shorter-dater maturities if needed. But it’s weakness at the short end of the yield curve—the line plotting yields across all debt maturities—that might be most troubling for investors right now. “Strong selling pressure at the short end is noteworthy…, while there have been a few other such episodes since the start of QE, this is the strongest one,” said Luca Cazzulani, deputy head of fixed income at UniCredit, in Milan (see chart below).

An important near-term test looms Monday when the Treasury is due to sell 2-year zero-coupon notes and inflation-indexed BTPs. The auction round “will be closely watched and results are likely to drive BTPs more than usual,” Cazzulani said, in a note. “Considering the still fragile market environment, pressure ahead of the auction should not come as a surprise.” Both auctions are smaller than usual, which should help keep supply pressures low, he said. Solveen said that while the new government’s policies are unlikely to trigger a new sovereign debt crisis, the situation underlines the fundamental differences in economic policy thinking within the eurozone.

“The ECB’s very expansionary monetary policy and the resulting cyclical economic recovery can conceal this fact to some extent but, at the next recession at the latest, the difference could become very apparent again and prove a real test for the monetary union,” he said.

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Power games. The establishment protests.

Italy President Under Pressure To Accept Eurosceptic Minister (R.)

Italy’s would-be coalition parties turned up the pressure on President Sergio Mattarella on Saturday to endorse their eurosceptic pick as economy minister, saying the only other option may be a new election. Mattarella has held up formation of a government, which would end more than 80 days of political deadlock, over concern about the far-right League and anti-establishment 5-Star Movement’s desire to make the 81-year-old economist Paolo Savona economy minister. Savona has been a vocal critic of the euro and the European Union, but he has distinguished credentials, including in a former role as an industry minister. Formally, Prime Minister-designate Giuseppe Conte presents his cabinet to the president, who must endorse it.

Conte, a little-known law professor with no political experiences, met the president on Friday without resolving the deadlock. “I hope no one has already decided ‘no’,” League leader Matteo Salvini shouted to supporters in northern Italy. “Either the government gets off the ground and starts working in the coming hours, or we might as well go back to elections,” Salvini said. Later 5-Star leader Luigi Di Maio said he expected there to be a decision on whether the president would back the government within 24 hours. 5-Star also defended Savona’s nomination. “It is a political choice … Blocking a ministerial choice is beyond (the president’s) role,” Alessandro Di Battista, a top 5-Star politician, said.

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“Everybody’s practically euphoric and Trump is a good cheerleader. But, there is a lot of weakness behind the numbers..”

We’re Engaging In Self-Deception And Unsupported Hopefulness (Ron Paul)

When you think about it, I was born in 1935, in the middle of the Depression. I remember my early life. I remember when I was 3 years old and 5 years old and the Depression lasted through World War II and the conditions were such as I remember very clearly, but it wasn’t a big deal for me even though we lived in close quarters and we didn’t have a lot of shoes and were just skimping by. So, we went through a Depression and World War II. Those were pretty tough times and since that time — since the war issue’s always been a big issue with me — I remember the tragedies of World War II. We had relatives in Germany, so it always caught my attention. Then we had the Korean War. I could remember my mother saying, “another war this soon?”

We just got over one, so she was negative on that and then we had the Vietnam War and I knew that I probably would be drafted and that was one of the reasons that helped me move toward medicine. So, those were pretty bad times. Think of the people that were dying over those first 30 or 40 years. Things weren’t great economically either. In America, we were not even allowed to own gold. Those were conditions that existed that changed for the better to some degree. Philosophically, I think, we’re still on the wrong track overall, although some things have improved. Once again, we’re able to own gold. The United States government and I pushed it along when I was in Congress to mint gold coins again and talk about monetary policy.

Philosophically, we are making progress in some areas, though, and I give a lot of credit to the institutions that do this, like the Mises Institute and FEE. And of course, I want to participate in changing foreign policy and we keep working on that through the Ron Paul Institute. But, on the downside of all this, I see we’re on a disastrous course even though the official economic indicators look great and wonderful. Everybody’s practically euphoric and Trump is a good cheerleader. But, there is a lot of weakness behind the numbers, and we’re engaging in self-deception and unsupported hopefulness that things will be all good, there will be no inflation or high unemployment, and there’ll be no major war. I think when I look at the seeds that have been sown, the future looks rather bleak in many ways, even compared to what it was like as we finished World War II and Vietnam.

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“Breaking the rules is becoming the new rule..”

Putin Warns “US Sanctions Hurt Trust In Dollar As Reserve Currency” (ZH)

Despite his absence from Vladimir Putin’s annual economic showcase – which included such US allied luminaries as Japanese Prime Minister Shinzo Abe, French President Emmanuel Macron, China’s Vice President Wang Qishan and IMF chief Christine Lagarde – the conversation kept coming back to President Trump. Led by an unusually outspoken Putin, Macron – who seemed more enamored with Putin than the rest, agreed with the Russian president’s concerns over the erosion of trust and the specter of a global crisis brought on by Washington’s disruptions. “The free market and fair competition are being squeezed by confiscations, restrictions, sanctions,” Putin said. “There are various terms but the meaning is the same – they’ve become an official part of the trade policy of certain countries.”

The “spiral” of U.S. penalties is targeting “an ever larger number of countries and companies,” undermining “the current world order,” he said. Macron replied: “I fully share your point of view.” Such warnings only confirm Mr Putin’s world view. Without mentioning the US, he complained that the multilateral economic world order was being “crushed” by a proliferation of exceptions, restrictions and sanctions. The “darkest cloud” on the economic horizon is the “determination of some to actually rock the system,” Lagarde said, prompting Wang, a new point-man for Chinese foreign policy, to agree. “Politicizing economic and trade issues, and brandishing economic sanctions, are bound to damage the trust of others,” he said.

[..] The global economy is facing a threat of a spiraling protectionist measures that can lead to a devastating crisis, Vladimir Putin warned. Nations must find a way to prevent this and establish rules on how the economy should work. The Russian president spoke out against the growing trend of using unilateral restrictions to achieve economic advantage, as he addressed guests of the St. Petersburg International Economic Forum (SPIEF) on Friday. “The system of multilateral cooperation, which took years to build, is no longer allowed to evolve. It is being broken in a very crude way. Breaking the rules is becoming the new rule,” he said. Putin sharply criticized the sanctions, saying they signal “not just erosion but the dismantling of a system of multilateral cooperation that took decades to build.”

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Which will cause them to do the exact opposite.

Erdogan Calls On Turks To Convert Dollar, Euros Into Lira (R.)

Turkish President Tayyip Erdogan called on Turks on Saturday to convert their dollar and euro savings into lira, as he sought to bolster the ailing currency which has lost some 20 percent of its value against the U.S. currency this year. “My brothers who have dollars or euros under their pillow. Go and convert your money into lira. We will thwart this game together,” Erdogan said at a rally in the eastern city of Erzurum ahead of parliamentary and presidential elections on June 24.

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One moment they claim to have gotten it done, the next they start all over again..

Spain’s Ciudadanos Party Open To Alternative Candidate To Oust PM Rajoy (R.)

Spain’s center-right Ciudadanos party said on Saturday it would be willing to back an unspecified neutral candidate to oust Prime Minister Mariano Rajoy over a far-reaching graft case engulfing members of his People’s Party (PP). Jose Manuel Villegas, secretary-general of Ciudadanos, told a news conference his party could work with the opposition Socialists to support an alternative candidate in a no-confidence vote to unseat its former ally Rajoy, who leads a minority government beset by numerous corruption scandals. Rajoy said on Friday he would fight the no-confidence vote and finish his four-year term, ruling out early elections.

Pro-business Ciudadanos (meaning Citizens in English) declined to support the no-confidence motion put forward by Socialist leader Pedro Sanchez earlier that day. But Villegas said on Saturday his party could back a “practical candidate” who was neither Sanchez nor Ciudadanos leader Albert Rivera. To succeed, the two parties would need to agree a joint candidate to replace Rajoy and on other questions such as calling a snap election. They would also need the backing of leftist party Podemos. A no-confidence vote requires the candidate to gather 176 or more votes in Spain’s lower house, a difficult task in the fragmented parliament where nationalists, among them two Catalan separatist parties, could be decisive if the larger parties cannot reach an agreement.

Speaking to Cope radio on Saturday, Socialist Secretary General Jose Luis Abalos said the party would not work with Catalan separatist parties and called on Ciudadanos to support Sanchez’s bid to replace Rajoy as PM in exchange for a promise to call snap elections soon after taking office. [..] The graft case, which relates to the use of a slush fund by the PP in the 1990s and early 2000s to illegally finance campaigns, has plagued Rajoy since he took office in 2011. He has always denied wrongdoing. 29 people related to the PP, including a former treasurer and other senior members, were convicted on Thursday of offences including falsifying accounts, influence-peddling and tax crimes. They were sentenced to a combined 351 years behind bars.

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They just keep at it. Jail time is required.

Daimler Threatened With Recall Of Over 600,000 Diesel Models (R.)

Daimler faces a recall order for more than 600,000 diesel-engine vehicles including C-Class and G-Class models because of suspected emissions manipulation, German magazine Der Spiegel reported on Friday. Germany’s KBA vehicle authority is probing concrete suspicions that the affected cars were fitted with illicit defeat devices designed to manipulate emissions levels, the magazine said, without citing sources. Daimler said on Friday it had not received a formal summons from KBA regarding its C-Class and G-Class models, a precursor to a recall, but declined to comment in detail on the Spiegel report.

The report comes a day after the KBA ordered Daimler to recall the Mercedes Vito van model fitted with 1.6 liter diesel Euro-6 engines because of engine control features to reduce exhaust emissions which KBA said breached regulations. Daimler has said it is appealing the KBA findings on the Vito and will go to court if necessary. Since rival Volkswagen admitted in 2015 to cheating U.S. emissions tests, German carmakers including VW, Daimler and BMW have faced a backlash against diesel technology in which they have invested billions of euros.

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And that calls for a royal visit…

British Arms Exports To Israel Reach Record Level (G.)

British defence contractors are selling record amounts of arms to Israel, new figures reveal, just days after it was confirmed that Prince William will represent the UK government on a visit to the country next month. Figures from the Campaign Against Arms Trade reveal that last year the UK issued £221m worth of arms licences to defence companies exporting to Israel. This made Israel the UK’s eighth largest market for UK arms companies, a huge increase on the previous year’s figure of £86m, itself a substantial rise on the £20m worth of arms licensed in 2015. In total, over the past five years, Israel has bought more than £350m worth of UK military hardware.

Licences issued to UK defence contractors exporting to Israel last year include those for targeting equipment, small arms ammunition, missiles, weapon sights and sniper rifles. In 2016 the UK issued licences for anti-armour ammunition, gun mountings, components for air-to-air missiles, targeting equipment, components for assault rifles, components for grenade-launchers and anti-riot shields. Human rights groups have questioned the wisdom of sending a senior royal to a country whose use of lethal force last month has been the subject of concern from the UK government.

“After the appallingly excessive response of the Israeli security forces at the Gaza border, tensions in the occupied Palestinian territories are likely to be close to boiling point when Prince William makes this historic visit,” said Kerry Moscogiuri, Amnesty International UK’s campaigns director.

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Kim makes a call, and they meet less than 24 hours after. That is a big change all by itself.

Koreas Discuss Non-Aggression Pledge, Peace Treaty Ahead Of Summit (R.)

North and South Korea are discussing a possible non-aggression pledge by the United States to the North and a start of peace treaty talks to address Pyongyang’s security concerns before a North Korea-U.S. summit, a senior South Korean official said on Sunday. South Korean President Moon Jae-in and North Korean leader Kim Jong Un held a surprise second meeting on Saturday after U.S. President Donald Trump called off his talks, set for June 12 in Singapore, before floating a reinstatement of the plan.

“For the success of the North Korea-U.S. summit, we’re exploring various ways of clearing North Korea’s security concerns at the working level,” the senior South Korean presidential official told reporters. “That includes an end to hostile relations, mutual non-aggression pledge, a launch of peace treaty talks to replace the current armistice,” the official said. The two Koreas are also in talks over a three-way declaration of the end to 1950-53 Korean War but there has not been any agreement yet over a tripartite summit, the official said.

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Everyone’s deleting emails. The FBI is all over this. Assange was framed. If prosecutors are not independent, this is what you get. And she’s a lousy liar to boot.

How Did The Swedish Matter End? (Justice4Assange)

The extradition warrant from Sweden was revoked on 19 May 2017, when the prosecutor also closed the entire underlying investigation. Having obtained Mr. Assange’s testimony, the prosecutor decided it would be disproportionate to proceed. The investigation had already been found to be baseless by Stockholm’s senior prosecutor, Eva Finne, who found that the conduct alleged by the police “disclosed no crime at all”. SMS messages from the alleged complainant made public in 2015 showed that she “did not want to accuse Assange of anything”, that she felt “railroaded by police and others around her”, and “police made up the charges”.

The UK’s role in the Swedish affair was exposed in emails obtained under Freedom of Information Act which revealed that Sweden moved to drop the investigation in 2013, but the UK Crown Prosecution Service persuaded Sweden to keep it alive. Emails show the UK advised Sweden not to interview Mr. Assange in the UK in 2011 and 2012. UK prosecutors admitted to deleting key emails concerning Assange and engaged in elaborate attempts to keep correspondence from the public record. The Swedish prosecutor admitted to deleting an email from an FBI agent about Assange which she received in 2017, and claimed it could no longer be recovered (Video in English and Swedish):

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May 242018
 
 May 24, 2018  Posted by at 9:15 am Finance Tagged with: , , , , , , , , , , , ,  


Wassily Kandinsky Contrasting Sounds 1924

 

Every Fed Tightening Cycle ‘Creates A Meaningful Crisis Somewhere’ (MW)
Fed Minutes Show Support For June Hike And Calm About Inflation Outlook (MW)
US Launches Auto Import Probe (R.)
China Signals To State Giants: ‘Buy American’ Oil And Grains (R.)
Turkey Halts Lira’s Free Fall – But It’s Not Out Of The Woods Yet (MW)
Argentines Brace For Another Crisis As Nation Again Seeks IMF Help (R.)
US Birth Rates Are Falling Because This Is A Harsh Place To Have A Family (G.)
Yulia Skripal Gives First Interview (RT)
NHS Needs £2,000 In Tax From Every Household To Stay Afloat (Ind.)
Trump’s Blocking Of Critics On Twitter Violates Constitution – US Judge (R.)
Hitting Toughest Climate Target Will Save World $30 Trillion In Damages (G.)
The Mediterranean Diet Is Gone: Region’s Children Are Fattest In Europe (G.)

 

 

Take their power away?!

Every Fed Tightening Cycle ‘Creates A Meaningful Crisis Somewhere’ (MW)

Federal Reserve rate increases are a lot like shaking an overripe fruit tree. That’s the analogy offered by Deutsche Bank macro strategist Alan Ruskin in a note late Wednesday, in which he urged clients not to “overcomplicate” the macro picture. “A starting point should be that every Fed tightening cycle creates a meaningful crisis somewhere, often external but usually with some domestic (U.S.) fallout,” he wrote. To back it up, Ruskin offered the following history lesson:

“Going back in history, the 2004-6 Fed tightening looked benign but the US housing collapse set off contagion and a near collapse of the global financial system dwarfing all post-war crises. The late 1990s Fed stop/start tightening included the Asia crisis, LTCM and Russia collapse, and when tightening resumed, the pop of the equity bubble. The early 1993-4 tightening phase included bond market turmoil and the Mexican crisis. The late 1980s tightening ushered along the S&L crisis. Greenspan’s first fumbled tightening in 1987 helped trigger Black Monday, before the Fed eased and ‘the Greenspan put’ took off in earnest. The early 80s included the LDC/Latam debt crisis and Conti Illinois collapse. The 1970s stagflation tightening was when the Fed was behind ‘the curve’ and where inflation masked a prolonged decline in real asset prices.”

So what about now? The fed funds rate stands at 1.50% to 1.75% following a series of slow rate increases that began in December 2015, lifting it from near zero. The degree of tightening might seem pretty tame, but Ruskin notes that it comes after a period of “extreme and prolonged” accommodation and is also taking forms that economists and investors don’t fully understand as swollen balance sheet begins to shrink.

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The stronger the dollar the more likely rate hikes get.

Fed Minutes Show Support For June Hike And Calm About Inflation Outlook (MW)

Federal Reserve officials in their meeting in early May confirmed they planned to raise interest rates in June and were not concerned they were behind the curve on inflation. “Most participants judged that if incoming information broadly confirmed their economic outlook, it would likely soon be appropriate for the FOMC to take another step in removing policy accommodation,” the minutes said. Traders in the federal funds futures market see more than a 90% chance of a June rate hike. Although inflation hit the Fed’s 2% target in the latest reading for March, for the first time in a year, officials were not convinced it would remain there for long.

“It was noted that it was premature to conclude that inflation would remain at levels around 2%, especially after several years in which inflation had persistently run below the Fed’s 2% objective,” the minutes said. Only a “few” officials thought inflation might move “slightly” above the 2% target. “It has taken them so long to get there, with so many fits and starts, they are not quite sure it’s going to stay there,” said Michael Arone, chief investment strategist for State Street Global Advisors. Arone said the minutes were consistent with three total hikes this year although the Fed gave itself wiggle room if inflation picks up markedly. “They didn’t take [a fourth hike] off the table,” he said.

On the trade dispute with China, officials said the possible outcome on inflation and growth remained “particularly wide,” but there was some concern the dispute would hurt business confidence.

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Up to 25% tariffs. How about building better cars? Or weaning yourself off the addiction?

US Launches Auto Import Probe (R.)

The Trump administration has launched a national security investigation into car and truck imports that could lead to new U.S. tariffs similar to those imposed on imported steel and aluminum in March. The national security probe under Section 232 of the Trade Expansion Act of 1962 would investigate whether vehicle and parts imports were threatening the industry’s health and ability to research and develop new, advanced technologies, the Commerce Department said on Wednesday. “There is evidence suggesting that, for decades, imports from abroad have eroded our domestic auto industry,” Commerce Secretary Wilbur Ross said in a statement, promising a “thorough, fair and transparent investigation.”

Higher tariffs could be particularly painful for Asian automakers including Toyota, Nissan, Honda and Hyundai, which count the United States as a key market, and the announcement sparked a broad sell-off in automakers’ shares across the region. The governments of Japan, China and South Korea said they would monitor the situation, while Beijing, which is increasingly eyeing the United States as a potential market for its cars, added that would defend its interests. “China opposes the abuse of national security clauses, which will seriously damage multilateral trade systems and disrupt normal international trade order,” Gao Feng, spokesman at the Ministry of Commerce, said at a regular news briefing in Beijing on Thursday which focused largely on whether it is making any progress in its trade dispute with Washington.

[..] Roughly 12 million cars and trucks were produced in the United States last year, while the country imported 8.3 million vehicles worth $192 billion. This included 2.4 million from Mexico, 1.8 million from Canada, 1.7 million from Japan, 930,000 from South Korea and 500,000 from Germany, according to U.S. government statistics. At the same time, the United States exported nearly 2 million vehicles worldwide worth $57 billion. German automakers Volkswagen, Daimler and BMW all have large U.S. assembly plants. The United States is the second-biggest export destination for German auto manufacturers after China, while vehicles and car parts are Germany’s biggest source of export income. Asked if the measures would hit Mexico and Canada, a Mexican source close to the NAFTA talks said: “That probably is going to be the next battle.”

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For now it’s all opaque.

China Signals To State Giants: ‘Buy American’ Oil And Grains (R.)

China will import record volumes of U.S. oil and is likely to ship more U.S. soy after Beijing signalled to state-run refiners and grains purchasers they should buy more to help ease tensions between the two top economies, trade sources said on Wednesday. China pledged at the weekend to increase imports from its top trading partner to avert a trade war that could damage the global economy. Energy and commodities were high on Washington’s list of products for sale. The United States is also seeking better access for imports of genetically modified crops into China under the deal. As the two sides stepped back from a full-blown trade war, Washington neared a deal on Tuesday to lift its ban on U.S. firms supplying Chinese telecoms gear maker ZTE, and Beijing announced tariff cuts on car imports.

But U.S. President Donald Trump indicated on Wednesday that negotiations were still short of his objectives when he said any deal would need a “different structure”. China is the world’s top importer of both oil and soy, and already buys significant volumes of both from the United States. It is unclear how much more Chinese importers will buy from the United States than they would have otherwise, but any additional shipments would contribute to cutting the trade surplus, as demanded by Trump. Asia’s largest oil refiner, China’s Sinopec will boost crude imports from the United States to an all-time high in June as part of Chinese efforts to cut the surplus, two sources with knowledge of the matter said on Wednesday.

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Erdogan defeated?

Turkey Halts Lira’s Free Fall – But It’s Not Out Of The Woods Yet (MW)

Turkey’s central bank intervened to halt the free fall of the Turkish lira on Wednesday, but it isn’t clear whether policy makers will be able to stave off a full-fledged currency crisis. The Central Bank of the Republic of Turkey raised its late liquidity window lending rate by 300 basis points on Wednesday, in a surprise move that put a halt to the lira selloff — at least for now. The lending rate now sits at 16.5%, compared with 13.5% before. The U.S. dollar had rallied to a historic high against Turkey’s lira on Wednesday, buying 4.9233 lira at the high, before the path reversed on the back of the CBRT’s action and the lira found its feet again. The buck last bought 4.7015 lira. In the year to date, the Turkish currency has dropped more than 20% against the dollar, according to FactSet data.

The euro-lira pair behaved similarly, first rallying to an all-time high but paring the rise after the rate increase. The euro last bought 5.5084 lira. The U.S. and eurozone are two of Turkey’s most important trading partners. The central bank has been operating in a peculiar environment given that Turkey’s inflation has been hitting double digits and its currency keeps sliding to historic lows. Moreover, the government of President Recep Tayyip Erdogan has been critical of the central bank, calling for lower interest rates.

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Rising dollar.

Argentines Brace For Another Crisis As Nation Again Seeks IMF Help (R.)

Maria Florencia Humano opened a clothing store in 2016, convinced that Argentina’s long history of economic crises had ended under pro-business President Mauricio Macri. She will shutter it later this month, unable to make rent or loan payments. Soaring interest rates and a plunging currency have upended her dream and returned Argentina to a familiar place: asking the IMF for a lifeline. Humano’s decision comes just weeks after a somber Macri announced in a televised May 8 speech that Argentina would start talks with the IMF. He is seeking a credit line worth at least $19.7 billion to fund the government through the end of his first term in late 2019. The unexpected move surprised investors and stoked Argentines’ fears of a repeat of the nation’s devastating 2001-2002 economic collapse.

Many here blame IMF-imposed austerity measures for worsening that crisis, which impoverished millions and turned Argentina into a global pariah after the government defaulted on a record $100 billion in debt. Word of a potential bailout sent thousands of angry Argentines into the streets this month, some with signs declaring “enough of the IMF.” As recently as a few months ago, analysts were hailing Argentina as an emerging-market success story. Now some are predicting recession. Macri’s popularity has plummeted. [..] Macri’s free-market credentials earned him a 2017 invitation to the White House to meet U.S. President Donald Trump, who just last week on Twitter hailed the Argentine leader’s “vision for transforming his country’s economy.”

But economists say Macri badly damaged his credibility in December when his administration weakened tough inflation targets. The central bank followed with a January rate cut to goose growth, even as consumer prices kept galloping. Rising U.S. interest rates did not help. Argentina is saddled with more than $320 billion in external debt, equivalent to 57.1% of GDP, much of it denominated in dollars. Jittery investors hit the exits. The peso swooned. The central bank sold $10 billion in reserves trying to prop up the peso, forcing Macri to seek assistance from the IMF.

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And getting harsher all the time.

US Birth Rates Are Falling Because This Is A Harsh Place To Have A Family (G.)

America’s birth rate has fallen to a 30-year low, let the hand-wringing and finger-pointing begin. It’s those selfish women, wanting careers before kids! Or, gasp, not wanting kids at all! It’s all those abortions! It’s Obama’s fault! The reality is, for all its pro-family rhetoric, the US is a remarkably harsh place for families, and particularly for mothers. It’s a well-known fact, but one that bears repeating in this context, that the US is one of only four countries in the world with no government-subsidized maternity leave. The other three are Lesotho, Swaziland, and Papua New Guinea, countries that the US doesn’t tend to view as its peer group.

This fact is met with shrugs from those who assume that companies provide maternity leave. Only 56% do, and of those, just 6% offer full pay during maternity leave. This assumption also ignores the fact that 36% of the American workforce, a number expected to surpass 50% in the next 10 years, are contract laborers with no access to such benefits. That gig economy you keep hearing so much about, with its flexible schedule and independence? Yeah, it sucks for mothers. That doesn’t stop companies and pundits from pushing it as a great way for working moms to balance children and career. As a gig-economy mother myself, I can tell you exactly how great and balanced it felt to go back to work two hours after giving birth.

If they return to work, mothers can look forward to an increasingly large pay gap for every child they have, plus fewer promotions. Who could resist? The option for one parent to stay home with kids is increasingly not economically viable for American families, either. A data point that got far less attention than the falling birth rate was released by the Bureau of Labor Statistics last month: 71.1% of American mothers with children under 18 are in the workforce now. It’s not just because they want to be (not that there’s anything wrong with that), but increasingly because they have to be in order to support the family.

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Scripted interview?

Yulia Skripal Gives First Interview (RT)

In her first interview since surviving an alleged nerve agent attack, Yulia Skripal said she eventually wants to return to Russia. She has not shed any light on what happened in March in Salisbury. “I came to the UK on the 3rd of March to visit my father, something I have done regularly in the past. After 20 days in a coma, I woke to the news that we had both been poisoned,” Skripal said in a video that was recorded by Reuters. She reiterated her words in a handwritten statement. She and her father, Sergei Skripal, a former Russian double-agent, were found unconscious on a public bench in the British city of Salisbury on March 4. The UK government immediately accused Russia of being behind their poisoning, but it has yet to provide evidence for the claim.

Skripal did not comment on who she thought was to blame for her poisoning. “I still find it difficult to come to terms with the fact that both of us were attacked. We are so lucky to have both survived this attempted assassination. Our recovery has been slow and extremely painful,” she said. “The fact that a nerve agent was used to do this is shocking. I don’t want to describe the details but the clinical treatment was invasive, painful and depressing.” She also said that she was “grateful” for the offers of assistance from the Russian Embassy, “but at the moment I do not wish to avail myself of their services.” Skripal reiterated what she had said in an earlier written statement released by British police: “no one speaks for me, or for my father, but ourselves.”

Following the release of the interview, Russia’s Foreign Ministry spokeswoman addressed Yulia Skripal in a comment to RT. “We’d like Yulia Skripal to know that not a single day passed without the Foreign Ministry, Russia’s Embassy in London trying to reach her with the main purpose to make sure she was not held against her will, she was not impersonated by somebody else, to get the first-hand information about her and her father’s condition,” Maria Zakharova said.

Russia’s Embassy in the UK welcomed the release of the interview, stating: “we are glad to have seen Yulia Skripal alive and well.” The video itself and the wording of the written statements, however, raised concerns with Russian diplomats, who urged London once again to allow consular access to Yulia “in order to make sure that she is not held against her own will and is not speaking under pressure.” Skripal said that the ordeal had turned her life “upside down,” both “physically and emotionally.” She added that she was now focused on helping her father to make a full recovery, and that “in the long term I hope to return home to my country.”

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With the level of incompetence in UK politics, the NHS looks beyond salvation.

NHS Needs £2,000 In Tax From Every Household To Stay Afloat (Ind.)

Taxes will “almost certainly” have to rise over the coming years simply to prevent the National Health Service and social care system from slipping further into crisis, a major new report concludes. The Institute for Fiscal Studies and the Health Foundation state that the NHS, which has been suffering the most severe fiscal squeeze since its foundation over the past eight years, now requires an urgent increase in government spending in order to cope with an influx of older and sicker patients. Funding the projected increases in health spending through the tax system would need taxes to rise by between 1.6 and 2.6% of GDP – the equivalent of between £1,200 and £2,000 per household, the experts said.

The two organisations say that state funding growth rate, which has been just 1.4% a year since 2010, will have to more than double to between 3.3% and 4% over the next 15 years if government pledges, such as bringing down waiting times and increasing the provision of mental health services, are to stand any chance of being delivered. They also say that to finance this increase the government would “almost certainly need to increase taxes”. “If we are to have a health and social care system which meets our needs and aspirations, we will have to pay a lot more for it over the next 15 years. This time we won’t be able to rely on cutting spending elsewhere – we will have to pay more in tax,” said the IFS’s director Paul Johnson.

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Raises some interesting questions. I can block him, but he cannot block me. I can all him “Corrupt Incompetent Authoritarian” and much much worse, and he’s going to have to swallow it.

Trump’s Blocking Of Critics On Twitter Violates Constitution – US Judge (R.)

Trump has made his @RealDonaldTrump Twitter account an integral and controversial part of his presidency, using it to promote his agenda, announce policy and attack critics. He has blocked many critics from his account, which prevents them from directly responding to his tweets. U.S. District Judge Naomi Reice Buchwald in Manhattan ruled that comments on the president’s account, and those of other government officials, were public forums, and that blocking Twitter users for their views violated their right to free speech under the First Amendment of Constitution. Eugene Volokh, a University of California Los Angeles School of Law professor who specializes in First Amendment issues, said the decision’s effect would reach beyond Trump.

“It would end up applying to a wide range of government officials throughout the country,” he said. The U.S. Department of Justice, which represents Trump in the case, said, “We respectfully disagree with the court’s decision and are considering our next steps.” Twitter, which is not a party to the lawsuit, declined to comment on the ruling. Buchwald’s ruling was in response to a First Amendment lawsuit filed against Trump in July by the Knight First Amendment Institute at Columbia University and several Twitter users. The individual plaintiffs in the lawsuit include Philip Cohen, a sociology professor at the University of Maryland; Holly Figueroa, described in the complaint as a political organizer and songwriter in Washington state; and Brandon Neely, a Texas police officer.

Cohen, who was blocked from Trump’s account last June after posting an image of the president with words “Corrupt Incompetent Authoritarian,” said he was “delighted” with Wednesday’s decision. “This increases my faith in the system a little,” he said. Novelists Stephen King and Anne Rice, comedian Rosie O’Donnell, model Chrissy Teigen, actress Marina Sirtis and the military veterans political action committee VoteVets.org are among the others who have said on Twitter that Trump blocked them. Buchwald rejected the argument by Justice Department lawyers that Trump’s own First Amendment rights allowed him to block people with whom he did not wish to interact.

“While we must recognize, and are sensitive to, the president’s personal First Amendment rights, he cannot exercise those rights in a way that infringes the corresponding First Amendment rights of those who have criticized him,” Buchwald said. She said Trump could “mute” users, meaning he would not see their tweets while they could still respond to his, without violating their free speech rights.

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Said it before: putting it in monetary terms is counter-productive. Only when we recognize that it’s not about money will we do something.

Hitting Toughest Climate Target Will Save World $30 Trillion In Damages (G.)

Achieving the toughest climate change target set in the global Paris agreement will save the world about $30tn in damages, far more than the costs of cutting carbon emissions, according to a new economic analysis. Most nations, representing 90% of global population, would benefit economically from keeping global warming to 1.5C above pre-industrial levels, the research indicates. This includes almost all the world’s poorest countries, as well as the three biggest economies – the US, China and Japan – contradicting the claim of US president, Donald Trump, that climate action is too costly. Australia and South Africa would also benefit, with the biggest winners being Middle East nations, which are threatened with extreme heatwaves beyond the limit of human survival.

However, some cold countries – particularly Russia, Canada and Scandinavian nations – are likely to have their growth restricted if the 1.5C target is met, the study suggests. This is because a small amount of additional warming to 2C would be beneficial to their economies. The UK and Ireland could also see some restriction, though the estimates span a wide range of outcomes. The research, published in the journal Nature, is among the first to assess the economic impact of meeting the Paris climate goals. Data from the last 50 years shows clearly that when temperatures rise, GDP and other economic measures fall in most nations, due to impacts on factors including labour productivity, agricultural output and health.

The scientists used this relationship and 40 global climate models to estimate the future economic impact of meeting the 1.5C target – a tough goal given the world has already experienced 1C of man-made warming. They also assessed the long-standing 2C target and the impact of 3C of warming, which is the level expected unless current plans for action are increased.

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It’s not gone. But it is under threat.

The Mediterranean Diet Is Gone: Region’s Children Are Fattest In Europe (G.)

For kids in Greece, Spain and Italy, the Mediterranean diet is dead, according to the World Health Organisation, which says that children in Sweden are more likely to eat fish, olive oil and tomatoes than those in southern Europe. In Cyprus, a phenomenal 43% of boys and girls aged nine are either overweight or obese. Greece, Spain and Italy also have rates of over 40%. The Mediterranean countries which gave their name to the famous diet that is supposed to be the healthiest in the world have children with Europe’s biggest weight problem. Sweets, junk food and sugary drinks have displaced the traditional diet based on fruit and vegetables, fish and olive oil, said Dr Joao Breda, head of the WHO European office for prevention and control of noncommunicable diseases.

“The Mediterranean diet for the children in these countries is gone,” he said at the European Congress on Obesity in Vienna. “There is no Mediterranean diet any more. Those who are close to the Mediterranean diet are the Swedish kids. The Mediterranean diet is gone and we need to recover it.” Children in southern Europe are eating few fruit and vegetables and drinking a lot of sugary colas and other sweet beverages, said Breda. They snack. They eat sweets. They consume too much salt, sugar and fat in their food. And they hardly move. “Physical inactivity is one of the issues that is more significant in the southern European countries,” he said. “A man in Crete in the 60s would need 3,500 calories because he was going up and down the mountain.”

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May 192017
 
 May 19, 2017  Posted by at 9:43 am Finance Tagged with: , , , , , , , , , , ,  


Jean-Michel Basquiat Untitled 1982

 

Swedish Prosecutors Drop Julian Assange Rape Investigation (AP/R.)
Australia Economy Among ‘Walking Dead Of Household Debt’ – Steve Keen (NCA)
US Household Debt Hit Record in First Quarter (WSJ)
Why Government Surpluses Is A Terrible Idea – Steve Keen (Renegade)
How Can The Greeks Save More Money? A Monetary Parable. (Steve Keen)
Greek Parliament Approves More Austerity Measures Amid Protests (DW)
Trump Aims to Balance Budget With Deep Cuts, Bullish Growth Projections (WSJ)
Get Ready for Quantitative Tightening (Rickards)
ECB Tapering to Cause “Disorderly Restructuring” of Italian Debt, Return to Lira (DQ)
Russia-US Relations Have Become ‘Extremely Paranoid’ – Sberbank CEO (CNBC)
Western Democracy – As Represented By The US – Is Crumbling (Global Times)
Secret Plans To ‘Protect’ France In The Event Of Le Pen Victory Emerge (G.)
What Jeremy Corbyn Whispered In My Ear (Ind.)
Study Of Healthcare Quality In 195 Countries Names The Best And Worst (AFP)
50 Years Since Indigenous Australians First ‘Counted’, Little Has Changed (G.)

 

 

Time for legal action against Sweden and the prosecutors.

Swedish Prosecutors Drop Julian Assange Rape Investigation (AP/R.)

Swedish prosecutors said on Friday they would drop a preliminary investigation into an allegation of rape against WikiLeaks founder Julian Assange, bringing to an end a seven-year legal standoff. “Chief Prosecutor Marianne Ny has today decided to discontinue the preliminary investigation regarding suspected rape concerning Julian Assange,” the prosecutors office said in a statement. Assange, 45, has lived in the Ecuadorian Embassy in London since 2012, after taking refuge there to avoid extradition to Sweden over the allegation of rape, which he denies. He has refused to travel to Stockholm, saying he fears further extradition to the US over WikiLeaks’ release of 500,000 secret military files on the wars in Afghanistan and Iraq. In 2015 lawyers for Julian Assange have claimed victory after a Swedish prosecutor bowed to pressure from the courts and agreed to break the deadlock in the WikiLeaks founder’s case by interviewing him in London.

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“Stop making housing into an asset.” “Make housing a place for people to actually live.”

Australia Economy Among ‘Walking Dead Of Household Debt’ – Steve Keen (NCA)

Australia has become the “walking dead of debt” due for a financial reckoning that could shock the housing market “bubble” within months. That’s according to “anti-economist” Professor Steve Keen who defines Australia as a “zombie to be” given soaring personal debt that has created a government-induced property bubble ripe to burst. “Australia has simply delayed its day of reckoning,” he told news.com.au in reference to the global financial crisis that shocked many countries around the world from 2008 but left the lucky country relatively unscathed after a series of government interventions. The Kingston University Professor claims first homeowners grants rolled out by successive governments have artificially kept prices high creating a form of “instant prosperity” that politicians are loath to stop.

“The housing bubble makes the politicians look good because A, people are feeling wealthier, and B … people are borrowing money to spend,” he said. “Then the government runs a balanced budget and looks like it really knows what it’s doing” “It hasn’t got a f***ing clue frankly, because what’s actually happening is the reason it’s making that money is credit is expanding,” he said. “It’s the old classic story, you’re criticising a party because someone’s laced the punchbowl. You try to take the punchbowl away from the party you’re a very unpopular person but you need to because what’s actually happening is people are getting intoxicated with credit”. His latest book, Can We Avoid Another Financial Crisis? argues Australia, along with Belgium, China, Canada and South Korea, is a “zombie” economy sleepwalking into a crunch that could come between 2017 and 2020.

“Both [Australia and Canada] will suffer a serious economic slowdown in the next few years since the only way they can sustain their current growth rates is for debt to continue growing faster than GDP,” he writes. [..] For Prof Keen, the solution for governments to an overheated housing market is obvious: “Stop making housing into an asset.” “Make housing a place for people to actually live. So you go back to saying ‘what’s desirable is affordable houses’ and affordable means it doesn’t cost a first homebuyer more than three or four years’ income to get a property,” he said. As for those struggling to get on the ladder in the meantime? “The only thing you can do in the middle is say I’m just not going to join in, and if it happens on a collective level …. it’s game over for the bubble because the bubble only works if more people keep taking out more leverage.”

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Wait till house prices start falling.

US Household Debt Hit Record in First Quarter (WSJ)

The total debt held by American households reached a record in early 2017, exceeding its 2008 peak after years of retrenchment against a backdrop of financial crisis, recession and modest economic growth. Much has changed over the past 8.5 years. The economy is larger, lending standards are tighter and less debt is delinquent. Mortgages remain the largest form of household borrowing but have become a smaller share of total debt as consumers take on more automotive and student loans. “The debt and its borrowers look quite different today,” New York Fed economist Donghoon Lee said. He added: “This record debt level is neither a reason to celebrate nor a cause for alarm.” The total-debt milestone, announced Wednesday by the Federal Reserve Bank of New York, was a long time coming.

Americans reduced their debts during and after the 2007-09 recession to an unusual extent: a 12% decline from the peak in the third quarter of 2008 to the trough in the second quarter of 2013. New York Fed researchers, looking at data back to the end of World War II, described the drop as “an aberration from what had been a 63-year upward trend reflecting the depth, duration and aftermath of the Great Recession.” In the first quarter, total debt was up about 14% from that low point as steady job gains, falling unemployment and continued economic growth boosted households’ income and willingness to borrow. The New York Fed report said total household debt rose by $149 billion in the first three months of 2017 compared with the prior quarter to a total of $12.725 trillion.

The pace of new lending slowed from the strong fourth quarter. Mortgage balances rose from the final three months of 2016, while home-equity lines of credit were down. Automotive loans rose, as did student loans, but credit-card debt fell along with other types of debt. The data weren’t adjusted for inflation, and household debt remains below past levels in relation to the size of the overall U.S. economy. In the first quarter, total debt was about 67% of nominal gross domestic product versus roughly 85% of GDP in the third quarter of 2008. Balance sheets look different now, with less housing-related debt and more student and auto loans. As of the first quarter, about 68% of total household debt was in the form of mortgages; in the third quarter of 2008, mortgages were roughly 73% of total debt. Student loans rose from about 5% to around 11% of total indebtedness, and auto loans went from roughly 6% to about 9%.

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Can we finally try to understand this, all of us?

Why Government Surpluses Is A Terrible Idea – Steve Keen (Renegade)

In this Renegade Short, Professor Steve Keen explains why the government isn’t supposed to balance its accounts like a household.

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TomDickHaria.

How Can The Greeks Save More Money? A Monetary Parable. (Steve Keen)

The EU’s “Stability and Growth Pact” has as one of its primary rules that “The Member States undertake to abide by the medium-term budgetary objective of positions close to balance or in surplus…” I explore what this objective implies in the context of a model of the economy of “TomDickHaria”: what happens to its collective GDP where one member tries to achieve the surplus goal set out in the “Stability and Growth Pact?

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The Troika makes sure Greece will keep drowning.

Greek Parliament Approves More Austerity Measures Amid Protests (DW)

All 153 lawmakers in Prime Minister Alexis Tsipras’ governing coalition backed the legislation that includes new pension cuts and lower tax breaks, which are expected to save Greece €4.9 billion ($5.4 billion) until 2021. All opposition lawmakers present in the 300-seat chamber rejected the package required by international lenders before the release of more aid. Athens needs the bailout funds to repay €7.5 billion of debt maturing in July this year. Relief measures will only kick in if Greece meets fiscal targets stipulated by its creditors. “Our country is being turned into an austerity colony,” leading opposition conservative Kyriakos Mitsotakis said during debate on the bill, describing added cuts as a “nightmare” for low-earners.

Tsipras countered that its passage would enable Greece from summer next year to stand on its own feet, without the intervention of creditors such as the IMF. He accused the opposition of constantly warning of a catastrophe that “hasn’t come.” Government spokesman Dimitris Tzanakopoulos told Skai TV that Greek creditors the IMF and Germany were “in the final stretch of very tough negotiations” over a compromise that should allow Greece to return to bond markets in 2018. Thursday’s austerity package lowers the income tax exception from €8,600 down to about €5,700 but increases benefits for low-income tenants, parents with children and subsidies for child care. Public stakes are to be reduced through sales of holdings in Greece’s PPC electricity utility, railways, Athens’ international airport and the Thessaloniki port.

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Same as it ever was. Fantasy numbers have ruled the day for many years.

Trump Aims to Balance Budget With Deep Cuts, Bullish Growth Projections (WSJ)

President Donald Trump next week will propose the U.S. can balance the federal budget over 10 years with substantial cuts to safety-net programs such as food stamps and other anti-poverty efforts, combined with a tax and regulatory overhaul that speeds up the nation’s economic growth rate, a senior White House budget official said. The president’s budget, due for release Tuesday, will spare the two largest drivers of future spending—Medicare and Social Security—leaving trillions in cuts from other programs. That includes discretionary spending cuts to education, housing, environment programs and foreign aid already laid out by the administration, in addition to new proposed reductions to nondiscretionary spending like food stamps, Medicaid and federal employee-benefit programs.

The budget release, which will be unveiled while Mr. Trump is visiting Europe and the Middle East, shows how his economic policy team is trying to forge ahead on his agenda even as distracting political controversies, such as the recent firing of FBI director James Comey, swirl around Washington. On Thursday, Treasury Secretary Steven Mnuchin testified on Capitol Hill, his first such appearance since his February confirmation, where he expressed confidence Congress could advance a revamp of the tax code this year. House Republicans held their first hearing on the proposed tax overhaul, following a series of meetings between lawmakers and top administration officials Wednesday.

The White House’s budget proposal next week builds upon an earlier outline in March that called for a nearly 10% boost in defense funding next year, offset by around $54 billion in cuts for nondefense programs. [..] Among the more controversial elements of the budget will be the administration’s growth forecasts. The White House projects the nation’s economic growth rate will rise to 3% by 2021, compared with the 1.9% forecast under current policy by the Congressional Budget Office. It’s unusual to see the White House’s growth forecasts differ from the CBO and other blue-chip projections by such a large margin over such a long stretch of the 10-year budget window.

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Another crazy experiment by the Fed bookworms.

Get Ready for Quantitative Tightening (Rickards)

Despite yesterday’s market sell-off, the Fed is still on track to raise interest rates in June. Wednesday’s action is no more than a speed bump for the Fed. It will not stop the Fed from moving forward with another 0.25% rate increase. The Fed is embarking on a new path, a path that started several years with QE (quantitative easing). QE is the name for the method the Fed uses to ease monetary conditions when interest rates are already zero. Conventional monetary policy calls for interest rate cuts to stimulate growth and inflate asset prices when the economy is in a recession. What does a central bank do when interest rates are already at zero and you can’t cut them anymore? One solution is negative interest rates, although the evidence from Japan and Europe indicates that negative rates do not have the same effect as rate cuts from positive levels. The second solution is to print money! The Fed does this by buying bonds from the big banks.

The banks deliver the bonds to the Fed, and the Fed pays for them with money from thin air. The popular name for this is quantitative easing, or QE, although the Fed’s technical name is long-term asset purchases. The Fed did QE in three rounds from 2008 to 2013. They gradually tapered new purchases down to zero by 2014. Since then, the Fed has been stuck with $4.5 trillion of bonds that it bought with the printed money. When the bonds mature, the Fed buys new ones to maintain the size of its balance sheet. But now the Fed wants to “normalize” its balance sheet and get back down to about $2 trillion. They could just sell the bonds, but that would destroy the bond market. Instead, the Fed will let the old bonds mature, and not buy new ones. That way the money just disappears and the balance sheet shrinks. The new name for this is “quantitative tightening,” or QT. You’ll be hearing a lot about QT in the months ahead.

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Tapering, QT, it’s all just more ‘uncharted territory’.

ECB Tapering to Cause “Disorderly Restructuring” of Italian Debt, Return to Lira (DQ)

Here’s the staggering scale of the Italian government’s dependence on the ECB’s bond purchases, according to a new report by Astellon Capital: Since 2008, 88% of government debt net issuance has been acquired by the ECB and Italian Banks. At current government debt net issuance rates and announced QE levels, the ECB will have been responsible for financing 100% of Italy’s deficits from 2014 to 2019. But now there’s a snag. Last month, the size of the balance sheet of the ECB surpassed that of any other central bank: At €4.17 trillion, the ECB’s assets have soared to 38.8% of Eurozone GDP. The ECB has already reduced the rate of purchases to €60 billion a month. And it plans to further withdraw from the super-expansionary monetary policy. To do this, according to Der Spiegel, it wants to spread more optimistic messages about the economic situation and gradually reduce borrowing.

[..] By the halfway point of 2018 the ECB would have completed tapering and it would then use the second half of the year to move away from negative interest rates. So far, most current ECB members have shown scant enthusiasm for withdrawing the punch bowl. The reason most frequently cited for not tapering more just yet is their lingering concern about the long-term sustainability of the Eurozone’s recent economic turnaround. The ECB’s binge-buying of sovereign and corporate bonds has spawned a mass culture of financial dependence across Europe, while merely serving to paper over the cracks that began forming — or at least became visible — in some Eurozone economies during the sovereign debt crisis. In many places the cracks are even bigger than they were back then. This is the elephant in the ECB’s room, and by now it’s too big to ignore.

In one country alone, the cracks are so large that they could end up fracturing the entire single currency project. That country is Italy. Astellon Capital’s report on Italy’s dependence on ECB bond purchases poses the question: If the ECB tapers its purchase of Italian bonds further, who would pick up the slack? The Italian banks, which are themselves deep in crisis mode and whose balance sheets are already filled to the gills with Italian bonds? Hardly. When QE ends, the banks are more likely to become net sellers, rather than net buyers, of Italian debt. The only way for the game to continue is if over the next six years non-banks increase their purchase activity up to seven times that of the past nine years. In other words, the very same investors who have used QE as the perfect opportunity to offload the immense risk of holding Italian liabilities onto the Bank of Italy’s, and then onto the Eurosystem’s, would need to step back into the market in a massive way, just at a time that the country in question is on the verge of a full-blown banking crisis.

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No kidding.

Russia-US Relations Have Become ‘Extremely Paranoid’ – Sberbank CEO (CNBC)

Diplomatic relations between America and Russia have deteriorated to such an extent that contacts between the two countries have become extremely paranoid of one another, the chief executive of Russia’s largest bank has told CNBC. “From what we see here in Russia and from the programs we see from the U.S., the unfolding situation is fairly complex. And there are certain signs of a certain… paranoid attitude to Russia and to every single contact with Russia real or imagined,” Herman Gref, Sberbank CEO, said via a translator. [..] When asked whether Gref harbored any concerns about the consequences of having met with Trump in the past, he replied, “I think the situation has become extremely paranoid for one to suspect that these sort of contacts could lead to political consequences.”

Speaking in January at the World Economic Forum in Davos, Sberbank’s CEO had predicted the Trump administration could re-establish close ties with the Kremlin and expressed his hope the newly-elected U.S. president could mark a “new beginning” for the two countries. On Friday, Gref suggested it was still too early to judge the success of Trump’s presidency however conceded that, for the time-being at least, relations between American and Russia were unlikely to change for the better. Moscow is currently enduring the sharp end of tough international sanctions from Washington[..] . “Well, I have to say that this has had an effect on us in the last two years… The inability to access international markets is painful for us,” Gref said. “You know, sanctions were put in place for political reasons and most likely their removal will also be motivated by politics…

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China’s official government paper.

Western Democracy – As Represented By The US – Is Crumbling (Global Times)

The American elite still refuse to accept Trump after his 100 days in the Oval Office. He is at odds with the mainstream media; insiders have constantly leaked information to the media. Now some commentators have compared the exposure of the Comey memo to the Watergate scandal. As Congress is under Republican control, few believe there will be a move to impeach the president, but these latest revelations will certainly further erode Trump’s presidential authority. At the beginning of the corruption scandal, few believed that South Korean president Park Geun-hye would be impeached either. Could this be a reference for Trump’s case? But evidence of Park’s illegal activities was solid, while it will be more complicated to make determinations over whether Trump obstructed justice and leaked classified intelligence.

To impeach Trump will need more evidence from further investigation. To completely discredit Trump among voters, the present scandal is not enough as it does not add to the negative image of Trump. Many just think Trump often speaks off the cuff, which ends up in silly blunders. If there is a major substantive scandal over and above him speaking out of turn then that will be another thing. But this is not the case at the moment. Every country has its own troubles. The US model represents Western democracy, but it is crumbling, and the resulting social division has become more and more serious. The US Deputy Attorney General Rod J. Rosenstein appointed a special counsel to oversee the investigation into link between Russia and the 2016 US presidential election and related matters on Wednesday.

More juicy details will continue to appear and the rifts may become wider. Trump will become one of the most frequently accused Americans. The US won’t be engulfed by chaos if its president is caught in a lawsuit. Someone has pointed out that no matter how chaotic the White House and Capitol Hill are, the overall operation of the US will not be a major problem as long as the enterprises and social organizations in the country are stable. This is seen as an advantage of the American system. Although American society is relatively stable, the political tumult can’t be taken as an advantage of the US system. The fact is that US politics is in trouble, and the benefits brought by its system are being squandered.

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Democracy as a threat to the state.

Secret Plans To ‘Protect’ France In The Event Of Le Pen Victory Emerge (G.)

It was never written down and never given a name, but France had a detailed plan to “protect the Republic” if far right leader Marine Le Pen was elected president, French media have reported. “It was like a multi-stage rocket,” an unnamed senior official told l’Obs magazine. “The philosophy, and the absolute imperative, was to keep the peace, while also respecting our constitutional rules.” [..] L’Obs cited three anonymous sources with knowledge of the emergency plan that would have been put into effect had Le Pen reached the Elysée palace, saying it was devised by a small group of ministers, chiefs of staff and top civil servants. The magazine said the plan was aimed mainly at preventing serious civil unrest and “freezing” the political situation by convening parliament in emergency session and maintaining the outgoing prime minister in office.

Police and intelligence services were particularly concerned by the threat of “extreme violence” from mainly far left protesters in the event of a Le Pen victory as the country would have found itself “on the brink of chaos”. Even before the first round of voting on 23 April, a confidential note drawn up by the intelligence services announced that “without exception, every local public safety directorate has expressed its concern”, Le Parisien reported. Regional police chiefs were asked on 21 April to detail their crowd control and deployment plans, l’Obs said. Under France’s ongoing state of emergency, more than 50,000 police and gendarmes and 7,000 soldiers were already on duty. On 5 May, two days before the second round that Macron won by 66% to Le Pen’s 34%, the national public safety directorate warned in another note that protesters were ready to use “fireworks, mortars and incendiary bombs”.

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“If you do what you believe in, you’re strong. It’s when you don’t do what you believe in that you’re weak. And we are strong.”

What Jeremy Corbyn Whispered In My Ear (Ind.)

When I shook his hand, I told him that I work for a charity and freelance as a journalist, writing on politics and social justice issues. I expressed my disappointment that Labour (and particularly Corbyn himself) doesn’t get a fair hearing from many news outlets. He spoke in my ear: “If you do what you believe in, you’re strong. It’s when you don’t do what you believe in that you’re weak. And we are strong.” The unveiling of Labour’s manifesto today was a display of strength. Labour is promising a Britain that works for everyone, where whole swathes of society aren’t left behind. The transformative manifesto will take the financial burden from the shoulders of those who can least afford to carry it, and place it upon the top 5% of earners and arrogantly tax-dodging corporations.

The Britain we currently live in is untenable for young people, university students, teachers, NHS workers, policemen, the disabled, people with long-term illnesses, people who can’t find work, first-time buyers, and those living in rented accommodation. Britain is working for a wealthy few, and Labour’s manifesto highlights the fact, often forgotten, that this is not inevitable. At Bradford University, a huge cheer went up when Corbyn promised to scrap tuition fees and end hospital parking charges. The scandal of zero hours contracts would be a thing of the past under Labour, as will NHS cuts and rises in VAT and income tax for 95% of earners. The manifesto is a document filled with long-overdue, common sense policies.

It addresses the important questions that accompany the Brexit process, including concerns about the protection of jobs and hard-won workers’ rights. It puts children and young people first, promising to invest in them through a National Education Service rather than rely on the failed academies experiment or a ridiculous and divisive reintroduction of grammar schools. In-work poverty is unacceptable. My partner and I both work two jobs and we struggle to make ends meet. We don’t indulge in avocado toast but finding enough for a deposit on a mortgage is sadly out of reach. The pledge to build one million new homes and introduce a £10 living wage by 2020 is crucial for young couples and for anyone working in poorly paid or part-time jobs, notably in care work and service industry roles. If Labour’s manifesto and the promise of more public ownership will transport us to the 1970s, where do we currently live? 1870, perhaps?

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Single payer rules. Supreme.

Study Of Healthcare Quality In 195 Countries Names The Best And Worst (AFP)

Neither Canada nor Japan cracked the top 10, and the United States finished a dismal 35th, according to a much anticipated ranking of healthcare quality in 195 countries, released Friday. Among nations with more than a million souls, top honours for 2015 went to Switzerland, followed by Sweden and Norway, though the healthcare gold standard remains tiny Andorra, a postage stamp of a country nestled between Spain (No. 8) and France (No. 15). Iceland (No. 2), Australia (No. 6), Finland (No. 7), the Netherlands (No. 9) and financial and banking centre Luxembourg rounded out the first 10 finishers, according to a comprehensive study published in the medical journal The Lancet.

Of the 20 countries heading up the list, all but Australia and Japan (No. 11) are in western Europe, where virtually every nation boasts some form of universal health coverage. The United States – where a Republican Congress wants to peel back reforms that gave millions of people access to health insurance for the first time – ranked below Britain, which placed 30th. The Healthcare Access and Quality Index, based on death rates for 32 diseases that can be avoided or effectively treated with proper medical care, also tracked progress in each nation compared to the benchmark year of 1990.

Virtually all countries improved over that period, but many – especially in Africa and Oceania – fell further behind others in providing basic care for their citizens. With the exceptions of Afghanistan, Haiti and Yemen, the 30 countries at the bottom of the ranking were all in sub-Saharan Africa, with the Central African Republic suffering the worst standards of all. “Despite improvements in healthcare quality and access over 25 years, inequality between the best and worst performing countries has grown,” said Christopher Murray, director of the Institute for Health Metrics and Evaluation at the University of Washington, and leader of a consortium of hundreds of contributing experts.

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“Dogs and cats and pigs and sheep were counted in Australia before Aboriginal people”

50 Years Since Indigenous Australians First ‘Counted’, Little Has Changed (G.)

Sol Bellear, a former rugby league player for South Sydney Rabbitohs and Aboriginal rights activist, sits in the soft autumn sunshine at a cafe intersecting Redfern Park and the oval that remains the spiritual home of his beloved club. He sips a Red Bull “heart starter” and English breakfast tea. And he shakes his head while contemplating the anniversaries of what ought to have been transformative moments for Aboriginal and Torres Strait Islander people – starting with the 1967 “citizenship” referendum that first made their existence in Australia “official”. “Things should be so much better for Aboriginal people. I think the country saw 1967 as the end of the fight,” Bellear says.

“Before 1967, we weren’t counted in the census or anything as people. Dogs and cats and pigs and sheep were counted in Australia before Aboriginal people.” Indigenous people had never previously been officially included among the Australian citizenry, nor counted in the Commonwealth census – so the federal government could not legislate for them. But on 27 May 1967, more than 90% of the Australian electorate voted at the “citizenship” referendum to effectively bring Indigenous people into the Commonwealth. “After the referendum, though, it was like the work was done for the rest of the country and governments – when it was actually just the bloody beginning,” Bellear says. “Every little thing we’ve won since, we’ve had to fight for.”

2017 is also the 25th anniversary of two more critical moments in the story: the Mabo decision – a High Court ruling that led to native title land rights, and former prime minister Paul Keating’s landmark “Redfern speech” (“We committed the murders – we took the children from their mothers”). It was Bellear who introduced Keating at Redfern Park. This was the first time an Australian prime minister had frankly, without qualification, acknowledged the violence, sickness, dispossession and ongoing oppression that colonialism had imposed on Indigenous people. Yet a quarter of a century on, Bellear says his country remains deaf to all the non-government reports into Indigenous lives – and to the savage critiques of Commonwealth policies that purported to make them better.

[..] Aboriginal and Torres Strait Islanders constitute some 3% of the country’s overall population – yet in 1991, they comprised 14% of Australia’s prisoners. A quarter of a century later, that figure was up to 27% – while more than 150 Indigenous people had died in custody in the intervening 25 years. In some parts of Australia, many more young Indigenous men complete prison terms than high school. The Indigenous rate of imprisonment is 15 times the age-standardised non-Indigenous rate. As Thalia Anthony pointed out in her 2015 book Indigenous People, Crime and Punishment, rates of Indigenous incarceration in Australia today match those of black imprisonment in apartheid South Africa.

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