Jan 222019
 
 January 22, 2019  Posted by at 10:55 am Finance Tagged with: , , , , , , , , , , , , , ,  


Pablo Picasso Female bust 1922

 

Pre-Davos Survey Shows Sixfold Rise In Global CEOs’ Gloom (G.)
In Versailles, Macron Vows To Reform To Avoid King’s Fate (R.)
The Garden Of Eden Is No More -David Attenborough (G.)
With Kamala Harris In The Race, Trump Stands No Chance Of Winning (Ind.)
Alexandria Ocasio-Cortez, Crusher of Sacred Cows (Matt Taibbi)
Theresa May: Second Referendum Would Threaten ‘Social Cohesion’ (G.)
Labour Calls For Vote On Holding Second Brexit Referendum (G.)
Xi Warns China Against ‘Black Swans’ Of Economic Volatility (G.)
US To Formally Seek Extradition Of Huawei Executive Meng Wanzhou (R.)
Greek Households Have Lost 28% Of Their Assets (K.)
Facebook And Twitter Can Work Out Who You Are Even If You Don’t Use Them (Ind.)
Greenland’s Ice Melting Four Times Faster Than In 2003 (Ind.)

 

 

And what are they gloomy about? Inequality? Species extinction? Warfare? Nope! They are gloomy about growth.

Pre-Davos Survey Shows Sixfold Rise In Global CEOs’ Gloom (G.)

Pessimism among chief executives has risen sharply in the past 12 months as the leaders of the world’s biggest companies have taken fright at rising protectionism and the deteriorating relationship between the US and China. The survey of chief executives conducted by the consultancy firm PwC to mark the start of the World Economic Forum in Davos showed a sixfold increase to 30% in the number of CEOs expecting global growth to slow during 2019. PwC said the rise in pessimism was unsurpassed in the 22 years it had been conducting the survey, with the downbeat mood a contrast to the bullishness of early 2018, when global growth was strong and stock markets were soaring.

The survey showed that the most pronounced shift was among CEOs in North America, where optimism about global growth dropped from 63% in 2018 to 37%. PwC said this was probably due to the fading impact of Donald Trump’s tax cuts and emerging trade tensions. “CEOs’ views of the global economy mirror the major economic outlooks, which are adjusting their forecasts downward in 2019,” PwC’s global chairman, Bob Moritz, said. “With the rise of trade tension and protectionism it stands to reason that confidence is waning.”

The unease about global economic growth had influenced CEOs’ confidence about their companies’ short-term prospects. Thirty-five percent of CEOs said they were very confident in their own organisation’s growth prospects over the next 12 months, down from 42% last year. While the US retained its position as the top international market for growth over the next year, many CEOs have been turning to other markets, PwC said.

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Macron does his own little Davos. And elects to huddle and hobnob with billionaires instead of talking to his people. Just like the King did 226 years ago.

Macron’s idea of reform is weakening labor laws, and more Europe. Precisely what the Yellow Vests don’t want.

In Versailles, Macron Vows To Reform To Avoid King’s Fate (R.)

President Emmanuel Macron told dozens of the world’s most powerful executives on Monday that he would not follow the path of guillotined French royals and would continue to reform the French economy despite a sometimes violent popular revolt. For the second year running, Macron hosted corporate A-listers like Microsoft Chief Executive Satya Nadella, Snapchat’s Evan Spiegel and JPMorgan CEO Jamie Dimon at a pre-Davos dinner at Versailles. Exactly 226 years after the decapitation of Louis XVI, who failed to plug the crown’s dismal finances and quell popular discontent over a sclerotic feudal society, Macron started his speech by invoking the king and his wife Marie-Antoinette. “If they met such an end, it is because they had given up on reforming,” Macron told the guests, according to his office.

His office said earlier that foreign companies including medical products company Microport, Mars, Procter & Gamble, Cisco and others would announce investments in France totaling more than 600 million euros. The dinner was an opportunity to reassure investors of Macron’s resolve to reform the economy after images of protesters angry at his policies attacking public monuments, boutiques, banks and riot police were beamed around the world. “There are questions about the protests’ magnitude, about the violence, because these images are shocking for foreigners,” a source at Macron’s office said before the summit. “Last year, the summit was in a totally different dynamic, it was all about ‘France is back’. Here we’re in a tougher part of the mandate domestically and that requires more explanations,” the source added.

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Really, David, you couldn’t have picked a place with more deaf ears for your message than Davos. All those politicians and wealthy folk owe their positions to the very process that eradicated the Garden of Eden.

The Garden Of Eden Is No More -David Attenborough (G.)

Sir David Attenborough has warned that “the Garden of Eden is no more”, as he urged political and business leaders from around the world to make a renewed push to tackle climate change before the damage is irreparable. Speaking at the start of the World Economic Forum (WEF) in Davos, Switzerland, the 92-year-old naturalist and broadcaster warned that human activity has taken the world into a new era, threatening to undermine civilisation. “I am quite literally from another age,” Attenborough told an audience of business leaders, politicians and other delegates. “I was born during the Holocene – the 12,000 [year] period of climatic stability that allowed humans to settle, farm, and create civilisations.” That led to trade in ideas and goods, and made us the “globally connected species we are today”.

That stability allowed businesses to grow, nations to co-operate and people to share ideas, Attenborough explained, before warning sombrely: “In the space of my lifetime, all that has changed. “The Holocene has ended. The Garden of Eden is no more. We have changed the world so much that scientists say we are in a new geological age: the Anthropocene, the age of humans,” he declared. In a stark warning to the world leaders and business chiefs flocking to the WEF this week, Attenborough warned that the only conditions that humans have known are changing fast. “We need to move beyond guilt or blame, and get on with the practical tasks at hand.”

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This old-guard wishful thinking seems the point to the opposite of what the headline says. Or maybe it was meant as humor?!

With Kamala Harris In The Race, Trump Stands No Chance Of Winning (Ind.)

Kamala Harris just ruined Donald Trump’s day. With her much anticipated declaration today, she immediately installed herself as a front-runner in the race to be the Democrat intent on taking down the president in 2020. “Let’s do this together: For ourselves, for our children, for our country,” she said. And with those carefully chosen words, Trump’s chances of reelection entered a death spiral. She is everything he is not. In US elections the White House often swings to the opposite of what has gone before. And whether it is gender, race, age, or ideals, Harris represents the diametric opposite of the present incumbent. She is, in many ways, the “female Obama”.

The political symbolism of a woman of colour declaring her candidacy on Martin Luther King Jr Day was lost on precisely no one. Certainly not on Trump, who will be feverishly trying to dream up a dismissive nickname for Harris. Such schoolyard tactics are unlikely to work. This daughter of a Jamaican-born father and Indian-born mother is a candidate of substance. She will spend the next year hammering Trump on his race relations record, specifically his comments after the neo-Nazi riots in Charlottesville. And voters will soon come to know the story of how, as a toddler, Harris was taken to civil right marches by her parents and shouted “Fweedom!” from her stroller. Within her own party too Harris is breaking the mould. Joe Biden and Bernie Sanders are widely expected to enter the race in the coming weeks. But both are septuagenarian white men.

Beto O’Rourke, for all his progressive credentials, is a millionaire internet entrepreneur. None of that is representative of the Democratic Party today. It was notable in a recent analysis of social media interactions that Harris was an easy second to Alexandria Ocasio-Cortez, the young congresswoman, for the most engagement among Democrat politicians. She is connecting with the youth of the party. At 54 she is two decades younger than Biden and Sanders. Videos of her questioning of Brett Kavanaugh, Trump’s controversial pick for the US Supreme Court, went viral, as have other episodes from her time on the Senate Judiciary Committee. And although she was only elected to the Senate in 2016, inexperience does not seem an argument that will fly for her opponents.

[..] When it came to announcing, Harris got one of the biggest platforms, a spot on Good Morning America, a sign the US TV networks know she is the real deal. It was a typically direct announcement, and Harris sought to address some of the concerns more national security-focused Democrat voters might have. She stressed her 20 years as a prosecutor in California, and her commitment to “keeping America safe”. Spelling out areas where she would take on Trump, she vowed to restore “America’s moral authority in the world”, working with allies he has snubbed. Most of all, she vowed to “stand up and fight”. And that is what the Democratic base most wants to hear.

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Forget Kamala. Chris Cillizza of all people gets it right: “..the social media profiles of both [AOC and Trump] allow them to “end-run the so-called ‘media filter’ and deliver their preferred message… directly to supporters.” Both expose the hollow sound of the system, each from their own side, but in the end it’s the same thing, because it’s the same system.

AOC is too young to be elected, but not to become very powerful inside the party. Incumbent heads will roll because of her, and whoever becomes the candidate can’t risk losing her support.

For me it’s nothing more to do with supporting AOC than it does with supporting Trump. It’s about exposing the rot in the system. Davos and all that.

Alexandria Ocasio-Cortez, Crusher of Sacred Cows (Matt Taibbi)

The Beltway press mostly can’t stand her. A common theme is that, as a self-proclaimed socialist, she should be roaming the halls of Rayburn and Cannon in rags or a barrel. Washington Examiner reporter Eddie Scarry tweeted a photo of her in a suit, saying she didn’t look like “a girl who struggles.” High priest of conventional wisdom Chris Cillizza, with breathtaking predictability, penned a column comparing her to Donald Trump. He noted the social media profiles of both allow them to “end-run the so-called ‘media filter’ and deliver their preferred message… directly to supporters.” The latter issue, of course, is the real problem most of Washington has with “AOC”: her self-generated popularity and large social media presence means she doesn’t need to ask anyone’s permission to say anything.

[..] I have no idea if Ocasio-Cortez will or will not end up being a great politician. But it’s abundantly clear that her mere presence is unmasking many, if not most, of the worst and most tired Shibboleths of the capital. Moreover, she’s laying bare the long-concealed fact that many of their core policies are wildly unpopular, and would be overturned in a heartbeat if we could somehow put them all to direct national referendum. Take the tax proposal offered by Ocasio-Cortez, which would ding the top bracket for 70 percent taxes on all income above $10 million. The idea inspired howls of outrage, with wrongest-human-in-history Alan Greenspan peeking out of his crypt to call it a “terrible idea,” Wisconsin’s ex-somebody Walker saying a 5th grader would know it was “unfair,” and human anti-weathervane Harry Reid saying “you have to be careful” because voters don’t want “radical change quickly.”

Except polls show the exact opposite. Almost everyone wants to soak the rich. A joint survey by The Hill and Harris X showed 71 percent of Democrats, 60 percent of Independents, and even 45 percent of Republicans endorse the Ocasio-Cortez plan. Is it feasible? It turns out it might very well be, as even Paul Krugman, who admits AOC’s rise makes him “uneasy,” said in a recent column. He noted the head of Barack Obama’s Council of Economic Advisers estimated the top rate should be even higher, perhaps even 80 percent. We’ve been living for decades in a universe where the basic tenets of supply-side economics — that there’s a massive and obvious benefit for all in dumping piles of money in the hands of very rich people — have gone more or less unquestioned.

Now we see: once a popular, media-savvy politician who doesn’t owe rich donors starts asking such questions, the Potemkin justifications for these policies can tumble quickly. There is a whole range of popular policy ideas the Washington political consensus has been beating back for decades with smoke and mirrors, from universal health care to legalized weed to free tuition to expanded Social Security to those higher taxes on the rich. As we’ve seen over and over with these swipes on Ocasio-Cortez, the people defending those ideas don’t realize how powerful a stimulant for change is their own negative attention. If they were smart, they’d ignore her. Then again, if politicians were smart, they’d also already be representing people, not donors. And they wouldn’t have this problem.

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First one to jump party lines wins.

Theresa May: Second Referendum Would Threaten ‘Social Cohesion’ (G.)

Theresa May reiterated her opposition to a second Brexit referendum on Monday night, claiming it would threaten Britain’s “social cohesion” and insisting the centrepiece of her strategy remained negotiating changes to the Irish backstop. With just 67 days to go until Britain is due by law to leave the European Union, May exasperated MPs and business groups by offering scant evidence that she was willing to change course. Giving a statement in the House of Commons, the prime minister outlined three changes she claimed had emerged from discussions with colleagues in the six days since her Brexit deal was rejected by MPs with a crushing margin of 230:

• A more consultative approach to the next phase of negotiations, with MPs, business groups and unions more involved. • Stronger reassurances on workers’ rights and environmental standards, “with a guarantee that not only will we not erode protections for workers’ rights and the environment but we will ensure this country leads the way”. • Another attempt to address the concerns of Tory and Democratic Unionist party MPs about the Irish backstop – which she could then discuss with Brussels. May dismissed the idea of extending article 50 and stepped up warnings about the potential consequences of asking the public to vote again on Brexit. “There has not yet been enough recognition of the way that a second referendum could damage social cohesion by undermining faith in our democracy,” she said.

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Corbyn doesn’t want a referendum. He dreams of elections, and even of winning those.

Labour Calls For Vote On Holding Second Brexit Referendum (G.)

Labour has said the Commons should be able to vote on whether to hold a second referendum in an amendment the party submitted on Monday night to Theresa May’s Brexit update. It is the first time the party has asked MPs to formally consider a second poll, although the carefully worded compromise amendment did not commit the party’s leadership to backing a referendum if such a vote were to take place. The wording called for May’s government to hold a vote on two options – its alternative Brexit plan and whether to legislate “to hold a public vote on a deal or a proposition” that is supported by a majority in the Commons.

The intervention came as the party’s leadership seeks to deal with divisions between Jeremy Corbyn and some of the leader’s closest allies who are sceptical about a second referendum and those who are more enthusiastic such as Brexit spokesman Sir Keir Starmer. The party’s alternative Brexit plan, which would be the subject of a separate vote if the amendment were carried, proposes that the UK remain in a post-Brexit customs union with the European Union and have a strong relationship with the single market. Citizens’ rights and consumer standards would be harmonised with the EU’s. Corbyn said: “Our amendment will allow MPs to vote on options to end this Brexit deadlock and prevent the chaos of a no-deal. It is time for Labour’s alternative plan to take centre stage, while keeping all options on the table, including the option of a public vote.”

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Xi gets nervous.

Xi Warns China Against ‘Black Swans’ Of Economic Volatility (G.)

Chinese president Xi Jinping has warned officials to be vigilant against any threats to the party’s “political security”, underlining uncertainty in Beijing as the economy falters. Xi spoke at a study session for top provincial leaders, ministers, and other party leaders on Monday, the same day official economic data showed the Chinese economy last year grew at its weakest pace in almost 30 years, pulled down by weakening spending, investment, and trade. Yet Xi’s remarks focused more on the “political” and “ideological security” as the country’s main priorities going forward. He stressed the campaign would be focused on training the next generation to uphold “socialism with Chinese characteristics”, the Chinese Communist party’s adaptation of Marxism-Leninism.

“Now the main front of the ideological struggle is on the internet, and the main audience of the internet is young people. Many domestic and foreign forces are trying to develop supporters of their values and even to cultivate opponents of the government,” Xi said. A slowing Chinese economy risks rising rates of unemployment and financially squeezed households and businesses, threatening social stability. “There is no political security. There is only regime security,” said Li Datong, a former journalist and outspoken commentator. “They see the risks of rebellion. As the economy becomes worse, people from all walks of the society can become opponents.”

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Canada’s ambassador to the United States complains that Canadians pay the price for Justin bending over backwards for the US.

US To Formally Seek Extradition Of Huawei Executive Meng Wanzhou (R.)

The United States will proceed with the formal extradition from Canada of Huawei executive Meng Wanzhou, Canada’s ambassador to the United States told the Globe and Mail, in a move certain to ratchet up tensions with China. David MacNaughton, in an interview with the Canadian newspaper published on Monday, said the U.S. has told Canada it will request Meng’s extradition, but he did not say when the request will be made. The deadline for filing is Jan. 30, or 60 days after Meng was arrested on Dec. 1 in Vancouver. Meng, the daughter of Huawei Technologies Co Ltd founder Ren Zhengfei, was arrested at the request of the United States over alleged violations of U.S. sanctions on Iran.

She was released on bail last month and is due in court in Vancouver on Feb. 6. Relations between China and Canada turned frosty after the arrest, with China detaining two Canadian citizens and sentencing to death a Canadian man previously found guilty of drug smuggling. [..] In an article published on Monday, a former Canadian spy chief said Canada should ban Huawei from supplying equipment for next-generation telecoms networks, while Canada’s government is studying any security implications. Some of Canada’s allies such as the United States and Australia have already imposed restrictions on using Huawei equipment, citing the risk of it being used for espionage. Huawei has repeatedly said such concerns are unfounded, while China’s ambassador to Canada last week said there would be repercussions if Ottawa blocked Huawei.

[..] In Monday’s interview, MacNaughton said he had complained to the United States that Canada was suffering from Chinese revenge for an arrest made at the U.S.’s request. “We don’t like that it is our citizens who are being punished,” the Globe and Mail cited MacNaughton as saying. “(The Americans) are the ones seeking to have the full force of American law brought against (Ms. Meng) and yet we are the ones who are paying the price. Our citizens are.”

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Strange headline. What they mean is value. And yeah, property prices are ‘recovering’, because foreigners are buying up the country. If you don’t think that’s a problem, imagine the same happening where you live.

Greek Households Have Lost 28% Of Their Assets (K.)

Greek households lost 27.9 percent of their assets in the decade from 2008 to 2018, Alpha Bank notes in its weekly financial bulletin. The lender’s analysts say that this drop was the biggest in the eurozone, followed by those recorded in Spain, Italy and Cyprus, while Germany recorded significant gains during the same period. Portugal also saw a rise, even though the country also went through an economic streamlining program, as it has benefited from the increase in property prices in recent years.

Households in Greece have recorded the biggest decline in the eurozone’s non-financial wealth after their counterparts in Spain, a development that mainly results from the slide in the Greek property market in previous years. Nevertheless, realty is currently showing signs of recovery in terms of both residential and commercial properties, with the house price index climbing 1.3 percent in January-September 2018 on an annual basis, while the price indexes for offices and retail spaces have climbed 7.4 percent and 3.1 percent respectively. The Alpha bulletin notes that household expectations regarding their spending capacity, employment conditions and the general economic situation are on the rise.

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For Facebook and Twitter, read CIA and MI6.

Facebook And Twitter Can Work Out Who You Are Even If You Don’t Use Them (Ind.)

Facebook and Twitter can be used to work out huge details of your personal life – even if you never actually use them, according to a new study. It is still possible to predict the kind of things you might say simply by looking at the sort of people you hang around with, a new study has found. The research undermines the idea that personal choice is the central part of privacy and that it is possible to opt out of tracking and data collection by social networks on your own, the researchers say. In the research, a team of scientists from the University of Vermont and the University of Adelaide took more than more than thirty million public posts on Twitter from 13,905 users.

They found it was possible to use the messages from eight or nine of a person’s contacts to predict what a person might post next – as accurately as if they were looking at a person’s own Twitter feed. Even if a person left the social network or never actually joined, researchers can guess a person’s future posting or activities with 95 per cent accuracy, the scientists write. It also means that signing up to a social network like Facebook really means you are handing over possible data on your friends, too, the researchers warn. “There’s no place to hide in a social network,” says Lewis Mitchell, a co-author on the new study.

The researchers actually showed that there is a mathematical upper limit on how much predictive information about a person can be held on a social network. But it doesn’t matter whether that information is being provided by the person being profiled or someone else entirely, they found. “You alone don’t control your privacy on social media platforms,” said UVM professor Jim Bagrow. “Your friends have a say too.”

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Oh well, talk to Davos and they’ll solve it all.

Greenland’s Ice Melting Four Times Faster Than In 2003 (Ind.)

Greenland‘s ice is melting far faster than initially thought and may have reached a “tipping point”, with the rate of ice loss now four times quicker than it was in 2003, a new study suggests. Scientists researching rises in global sea levels examined the country’s southeast and northwest regions and found that the largest amount of ice loss was sustained away from Greenland’s glaciers. “Whatever this was, it couldn’t be explained by glaciers, because there aren’t many there,” said Michael Bevis, the study’s lead author. “It had to be the surface mass – the ice was melting inland from the coastline. It’s because the atmosphere is, at its baseline, warmer,” Mr Bevis added. “What’s happening is sea surface temperature in the tropics is going up; shallow water gets warmer and the air gets warmer.”

The team’s study suggests that an increasing amount of water will flow from Greenland into the ocean during the summer months, further contributing to the rising sea levels. “We knew we had one big problem with increasing rates of ice discharge by some large outlet glaciers,” said Mr Bevis. “But now we recognise a second serious problem: increasingly, large amounts of ice mass are going to leave as meltwater, as rivers that flow into the sea.”

Read more …

Jan 202019
 
 January 20, 2019  Posted by at 11:09 am Finance Tagged with: , , , , , , , , , , , ,  


Pablo Picasso Woman in an armchair (Olga) 1922

 

Pelosi Rejects Trump Shutdown Deal Before President Announces It (O.)
Battle Royale (Jim Kunstler)
No President Since Lincoln Treated Worse Than Me – Trump (RT)
Theresa May Wants Irish Treaty To Break Brexit Impasse (R.)
One Thing To Be Grateful To Brexit For: Britons Are Buying Less On Credit (G.)
‘The Gilets Jaunes Are Unstoppable’ (Guilluy)
Yellow Vests Defy Macron ‘National Debate’ In 10th Saturday Of Protests (F24)
Fannie Mae And Freddie Mac Regulator Has Plan To End Conservatorship (MW)
‘The Goal Is To Automate Us’: The Age Of Surveillance Capitalism (O.)

 

 

Pelosi and her ilk act as if they won the elections. They must be smart enough to know Trump does what he says he will?!

Pelosi Rejects Trump Shutdown Deal Before President Announces It (O.)

Donald Trump forged ahead on Saturday and proposed a deal to end the US government shutdown, despite Democrats having rejected it before he began to speak. If its timing was striking, the rejection was no surprise. In exchange for temporary concessions on the status of threatened migrant groups, the president doubled down on his demand for a border wall. A senior House Democratic aide told the Guardian the party, which has vowed not to give Trump funding for any wall, was not consulted. Speaking from the White House, the president outlined a plan that would extend protections for young undocumented migrants brought to the US as children, known as Dreamers, and individuals from some Central American and African nations, in exchange for $5.7bn for a wall on the US-Mexico border.

“A wall is not immoral,” he said, adding: “The radical left can never control our borders. I will never let that happen.” “As a candidate for president,” he said, “I promised I would fix this crisis, and I intend to keep that promise one way or the other.” Trump spoke as the partial shutdown of the federal government, the longest in US history, rolled through its 29th day. Prompted on 22 December over Trump’s demand for a wall, the partial closure of departments and services has left around 800,000 federal workers without pay. Hundreds of thousands of contractors are also going without a check.

Before the president took the podium, House speaker Nancy Pelosi panned his proposal. “Democrats were hopeful that the president was finally willing to re-open government and proceed with a much-need discussion to protect the border,” she said in a statement. “Unfortunately … his proposal is a compilation of several previously rejected initiatives, each of which is unacceptable and in total do not represent a good faith effort to restore certainty to people’s lives. It is unlikely that any one of these provisions alone would pass the House, and taken together, they are a non-starter.”

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“..a little dust-up in the meadows and cornfields known as the Civil War..”

Battle Royale (Jim Kunstler)

The effrontery of Ms. Pelosi, Speaker of the House, in cancelling Mr. Trump’s State of the Union address in the chamber she controls is perhaps the worst insult to institutional protocol since the spring day in 1856 when Congressman Preston Brooks (D-SC) skulked into the senate chamber and smashed Senator Charles Sumner (R-Mass) about the head within an inch of his life with a gold-headed walking stick. Brooks’s attack was launched after Sen. Sumner gave his “Bleeding Kansas” speech, arguing that the territory be let into the union as a “free” state, and denouncing “the harlot slavery,” whom he imputed was Rep. Brooks’s dearest consort.

Many of us — except perhaps students immersed in intersectional gender studies — know how that worked out: a little dust-up in the meadows and cornfields known as the Civil War. We’re about at that level of animosity today in the two federal houses of legislature, though it is very hard to imagine how Civil War Two might play out on the ground. Perhaps opposing mobs (not even armies) meet in the Walmart parking lots of Pennsylvania and go at it demolition derby style, with monster trucks bashing their enemies’ Teslas and Beemers. Throw in clown suits instead of blue and gray uniforms and we’ll really capture the spirit of the age.

Not to be outdone, days after the SOTU cancellation, the Golden Golem of Greatness cancelled a Democratic Party grandstanding junket to the Middle East, led by Ms. Pelosi. A US Air Force bus has just departed for Andrews Air Force Base, where an Air Force jet waited for the junketeers. But then, with impeccable timing, Mr. Trump cancelled the junket — denying the use of military aircraft as Commander-in-Chief — and forcing the bus back to town with its load of elected dignitaries and their luggage — making the reasonable suggestion that they fly a commercial airline instead.

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Trump trolling America.

No President Since Lincoln Treated Worse Than Me – Trump (RT)

Not since Abraham Lincoln has a US president been treated so badly by the media, Donald Trump lamented in a series of Twitter rants before going to Delaware to honor the four Americans killed in Syria. “Will be leaving for Dover to be with the families of four very special people who lost their lives in service to our Country,” Trump wrote on Twitter on Saturday. Two US troops, a civilian and a contractor were killed in a suicide bombing in the Kurdish-controlled northern Syrian city of Manbij on Wednesday. But the president had no intention to focus on his surprise visit to Dower Airforce Base in Delaware for too long.

His next Twitter post was dedicated to a completely different subject, as Trump cited former House Speaker, Newt Gingrich, who – according to him – said: “There has been no president since Abraham Lincoln who has been treated worse or more unfairly by the media than your favorite President, me!” At the same time, he insisted that “there has been no president who has accomplished more in his first two years in office!” Trump’s invocation of Lincoln prompted reactions from his supporters and opponents.

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May cannot have a bilateral treaty with Irleand that would essentially be designed to bypass the EU, as long as Ireland is part of the EU.

Theresa May Wants Irish Treaty To Break Brexit Impasse (R.)

British Prime Minister Theresa May plans to seek a bilateral treaty with the Irish government as a way to remove the contentious backstop arrangement from Britain’s divorce deal with the European Union, a newspaper reported. The Sunday Times said aides to May thought a deal with Ireland would remove the opposition to her Brexit plan from the Democratic Unionist Party that supports May’s minority government and from pro-Brexit rebels in her Conservative Party. However the Irish edition of the same newspaper quoted a senior Irish government source as saying the bilateral treaty proposal was “not something we would entertain” and a second senior political source as saying it would not work with the European Commission.

May suffered a heavy defeat in parliament on Tuesday when Conservative lawmakers and members of other parties rejected her Brexit plan by an overwhelming majority. That left Britain facing the prospect of no deal to smooth its exit from the EU in little more than two months’ time. May is due to announce on Monday how she plans to proceed. Many Conservatives and the DUP oppose the backstop that the EU insists on as a guarantee to avoid a hard border between the Irish Republic and Northern Ireland. Earlier on Saturday, Ireland’s foreign minister Simon Coveney said Dublin’s commitment to the Brexit divorce deal struck with the British government was “absolute,” including the border backstop arrangement. The Sunday Times also said a group of lawmakers in Britain’s parliament would meet on Sunday to consider ways they could suspend the Brexit process, wresting control away from May’s government.

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There’s that question again: a sign of confidence or despair?

One Thing To Be Grateful To Brexit For: Britons Are Buying Less On Credit (G.)

A sharp decline in household spending on the never-never, and especially spending on credit cards, is a trend that must surely be welcomed. The Bank of England said last week in its quarterly credit health check that high street banks were about to witness the biggest decline in such borrowing since records began 12 years ago. Threadneedle Street said its index of demand for credit card lending over the three months to the end of March had dropped to -20.7 from -7.2. That is a far cry from the summer of 2017, when consumer borrowing soared above £200bn and MPs across the political spectrum became alarmed at the return of binge buying on plastic.

At that time, with wages flat or at least not rising by more than inflation, policymakers feared that households were supplementing their incomes with borrowing to the degree that they had in the run-up to the 2008 financial crash. Regulators reacted to the rise by telling banks to tighten up their lending criteria. Most institutions obeyed, as anyone tracking the trend for borrowing across 2018 can see. So far, so good. That, after all, was supposed to be how the regulators looked after the interests of the country and its economy, and kept individual households from borrowing more than they could afford to repay.

However, it also seems clear that another force was at play – the Brexit effect, which began to have an impact once it became clear that Theresa May’s government was struggling to find a formula that could win over a majority in the House of Commons. The fall in sentiment since last summer has proved to be dramatic – far sharper than the banks would ever have expected from a few little tweaks to their lending rules. And the lack of consumer borrowing has been felt in few places more than it has in the car industry. Since 2010, cars have increasingly been sold through complex lease deals that fall under the credit figures. By 2017, nine out of 10 cars were being sold this way. Then came the diesel emissions scandal and a confused government reaction, which discouraged sales.

Brexit made the situation worse. Consumers were already reluctant to make major purchases such as a new home, or big-ticket household items like furniture. Next on the list of things not to buy was a car. Figures from the industry show that car sales in the UK declined by almost 7% in 2018. With a major slice of credit no longer in demand, the borrowing figures were bound to tumble. The shocking element of the story is how much harm a fall in personal lending can cause to the British economy, which has already suffered a lopsided expansion since the financial crash.

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Excellent essay on what the Yellow Vests actually are.

‘The Gilets Jaunes Are Unstoppable’ (Guilluy)

‘Paris creates enough wealth for the whole of France, and London does the same in Britain. But you cannot build a society around this. The gilets jaunes is a revolt of the working classes who live in these places. ‘They tend to be people in work, but who don’t earn very much, between 1000€ and 2000€ per month. Some of them are very poor if they are unemployed. Others were once middle-class. What they all have in common is that they live in areas where there is hardly any work left. They know that even if they have a job today, they could lose it tomorrow and they won’t find anything else. ‘Not only does peripheral France fare badly in the modern economy, it is also culturally misunderstood by the elite. …

One illustration of this cultural divide is that most modern, progressive social movements and protests are quickly endorsed by celebrities, actors, the media and the intellectuals. But none of them approve of the gilets jaunes. Their emergence has caused a kind of psychological shock to the cultural establishment. It is exactly the same shock that the British elites experienced with the Brexit vote and that they are still experiencing now, three years later. ‘The Brexit vote had a lot to do with culture, too, I think. It was more than just the question of leaving the EU. Many voters wanted to remind the political class that they exist. That’s what French people are using the gilets jaunes for – to say we exist. We are seeing the same phenomenon in populist revolts across the world. [ … ]

‘The Parisian economy needs executives and qualified professionals. It also needs workers, predominantly immigrants, for the construction industry and catering et cetera. Business relies on this very specific demographic mix. The problem is that ‘the people’ outside of this still exist. In fact, ‘Peripheral France’ actually encompasses the majority of French people. [ … ] Think of the ‘deplorables’ evoked by Hillary Clinton. There is a similar view of the working class in France and Britain. They are looked upon as if they are some kind of Amazonian tribe. The problem for the elites is that it is a very big tribe.

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Really, you think Macron can have his national debate? “..98 cases of serious injuries, including 15 cases of people losing an eye..”

Yellow Vests Defy Macron ‘National Debate’ In 10th Saturday Of Protests (F24)

Around 84,000 “Yellow Vest” demonstrators marched all around France on Saturday, marking a 10th straight weekend of anti-government protests, defying attempts by President Emmanuel Macron to channel their anger into a series of town hall debates. In Paris, Protesters assembled by the Invalides plaza near the National Assembly and marched through the city’s Left Bank in freezing temperatures. These demonstrations were largely peaceful but, according to reporters, clashes broke out late in the afternoon between police and demonstrators, some wearing masks, in Paris’ central Invalides district. Protesters threw firecrackers, bottles and stones at the police who responded with water cannon and tear gas to push them back.

Authorities said there were around 7,000 protesters in Paris, some of whom gathered near the world-famous Champs Elysees, while there were similar demonstrations in major cities across France. Rallies took place in Toulouse, Lyon, Rouen and other cities. According to the French Interior Ministry, some 84,000 people marched across France on Saturday, as many as last week. In the French capital though, there were fewer protestors on this 10th consecutive weekend than on the previous Saturday, when there were 8,000.

[..] the protesters behind the biggest crisis in Macron’s presidency remain fully mobilised. The centrist leader is hoping that the launch this week of a “grand national debate” on policy will mark a turning point. [..] many yellow vests have announced plans to boycott the discussions scheduled in dozens of towns and villages, seeing them as an attempt to drain support from a movement that erupted in mid-November over fuel taxes and quickly broadened into a campaign of weekly protests that have regularly ended in clashes with police and destruction of property. The growing number of demonstrators to suffer serious injuries at the hands of the police has compounded their anger towards the state. The “Disarm” collective, a local group that campaigns against police violence, has counted 98 cases of serious injuries, including 15 cases of people losing an eye, mostly after being hit by rubber bullets.

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Probably means they see a huge plunge come in housing.

Fannie Mae And Freddie Mac Regulator Has Plan To End Conservatorship (MW)

The acting director of the Federal Housing Finance Agency has told the agency’s employees that the regulator will announce a plan within weeks to take the government-sponsored enterprises out of conservatorship. Joseph Otting, who is leading the FHFA as Mark Calabria awaits Senate confirmation, said at an all-hands meeting on Thursday that a plan to lift Fannie Mae and Freddie Mac out of the conservatorship that has permeated the institutions since the financial crisis will soon be announced, according to an attendee of that gathering. A spokesperson for the agency confirmed there was discussion about ending Fannie and Freddie conservatorship but denied there was any talk of timing or details.

“Acting Director Otting held the internal meeting to meet FHFA staff and establish open lines of communication,” the FHFA said. “He mentioned, as he previously has, that Treasury and the White House are expected to release a plan for housing that will include details about reform and will likely include a recommendation for ending Fannie Mae and Freddie Mac conservatorships. [Treasury] Secretary Mnuchin has said that the goal of the [Trump] administration is to take the GSEs out of conservatorship. Acting Director Otting said that he and FHFA will work to advance that plan.” Fannie and Freddie were rushed into government control at the height of the financial crisis. Then, in 2012, the terms of the 2008 bailout were amended to steer the quarterly profits of both enterprises to Treasury. That wiped out holders of the companies’ stock, and they’ve fought the federal government in court ever since.

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Shoshana Zuboff’s new book The Age of Surveillance Capital sounds like a treat.

‘The Goal Is To Automate Us’: The Age Of Surveillance Capitalism (O.)

Surveillance capitalism is a human creation. It lives in history, not in technological inevitability. It was pioneered and elaborated through trial and error at Google in much the same way that the Ford Motor Company discovered the new economics of mass production or General Motors discovered the logic of managerial capitalism. Surveillance capitalism was invented around 2001 as the solution to financial emergency in the teeth of the dotcom bust when the fledgling company faced the loss of investor confidence. As investor pressure mounted, Google’s leaders abandoned their declared antipathy toward advertising. Instead they decided to boost ad revenue by using their exclusive access to user data logs (once known as “data exhaust”) in combination with their already substantial analytical capabilities and computational power, to generate predictions of user click-through rates, taken as a signal of an ad’s relevance.

Operationally this meant that Google would both repurpose its growing cache of behavioural data, now put to work as a behavioural data surplus, and develop methods to aggressively seek new sources of this surplus. The company developed new methods of secret surplus capture that could uncover data that users intentionally opted to keep private, as well as to infer extensive personal information that users did not or would not provide. And this surplus would then be analysed for hidden meanings that could predict click-through behaviour. The surplus data became the basis for new predictions markets called targeted advertising.

Here was the origin of surveillance capitalism in an unprecedented and lucrative brew: behavioural surplus, data science, material infrastructure, computational power, algorithmic systems, and automated platforms. As click-through rates skyrocketed, advertising quickly became as important as search. Eventually it became the cornerstone of a new kind of commerce that depended upon online surveillance at scale. The success of these new mechanisms only became visible when Google went public in 2004. That’s when it finally revealed that between 2001 and its 2004 IPO, revenues increased by 3,590%.

[..] Google began by unilaterally declaring that the world wide web was its to take for its search engine. Surveillance capitalism originated in a second declaration that claimed our private experience for its revenues that flow from telling and selling our fortunes to other businesses. In both cases, it took without asking. Page [Larry, Google co-founder] foresaw that surplus operations would move beyond the online milieu to the real world, where data on human experience would be free for the taking. As it turns out his vision perfectly reflected the history of capitalism, marked by taking things that live outside the market sphere and declaring their new life as market commodities.

We were caught off guard by surveillance capitalism because there was no way that we could have imagined its action, any more than the early peoples of the Caribbean could have foreseen the rivers of blood that would flow from their hospitality toward the sailors who appeared out of thin air waving the banner of the Spanish monarchs. Like the Caribbean people, we faced something truly unprecedented. Once we searched Google, but now Google searches us. Once we thought of digital services as free, but now surveillance capitalists think of us as free.

Bowie in 1999. He was a long way ahead.

Read more …

Jan 142019
 
 January 14, 2019  Posted by at 7:41 pm Finance Tagged with: , , , , , , , , , , , , ,  


Johannes Vermeer The soldier and the laughing girl 1657

 

There will be elections for the European Parliament on May 23-26 2019. They will likely change the face of Europe more than anything has done since the EU was founded. That is not some wild prediction. Many European countries have held elections since the last European elections in 2014, and just about all had outcomes that shook up domestic political ratios.

In most cases, countries went from traditional parties to newly founded ones. France erased the Socialists and center-right in 2017, and the final round of the presidential elections was between Marine Le Pen’s Front National and Emmanuel Macron’s brand-new En Marche. Macron won sort of by default, because France as a country would never have voted for Le Pen.

In Italy, M5S and Lega have taken over. In Germany, Merkel’s CDU/CSU coalition lost bigly though it remained the biggest party, but Angela lost her ‘socialist’ SPD partner which gave up so much it didn’t want to be in government anymore. In Spain, Mariano Rajoy’s center right lost enough to cede power to the Socialists who came up tops because they played a smart game, not because the Spanish wanted it to rule.

We don’t have to go through all 27/28 different countries to establish that there are almost tectonic shifts happening all over, away from traditional parties and towards whoever showed up without insanely extreme views. And if you think this move is now completed, you may want to think again.

It’s amusing to realize that the country with the biggest political shift, the UK, is the only one that still hangs on to its traditional parties, and seeks its protest voice in a different way, namely through Brexit. That is, Britain shows it can get no satisfaction from the EU, whereas in the other major EU nations the dissatisfaction is projected onto domestic parties.

The underlying thought is the same: people are fed up with incumbent politicians and their affiliation with the European project. And nobody in Brussels really appears to be willing to realize this: the only thing they talk about is more Europe. But all these changes will now be reflected in the power politics of the European parliament.

And they do know that. They just hope they can limit the damage through the model in which power is divided in Europe. And to get any of that power, national parties need to find partners from other countries to form European parties (blocks) with. You need parties from at least 7 other nations to run for the European Parliament.

 

There are really only two parties in that parliament that really matter: the center right European People’s Party (EPP) which has 217 MEPs (members of European Parliament), and the center-left Progressive Alliance of Socialists & Democrats (S&D) which has 190 MEPs. Then there are the European Conservatives and Reformists – 74 MEPs, the Alliance of Liberals and Democrats for Europe (ALDE) – 70 MEPs, the European United Left/Nordic Green Left (GUE) – 52 MEPs, and the European Greens/European Free Alliance – 50 MEPs.

These numbers, like the national ones, are set to change, a lot. How exactly is hard to predict, because it’s not clear which block which -relatively- new party will be part of. But it’s not a wild guess to think that at the end of May the division of powers will not be left vs right (both of which are pretty much fake anyway), but pro-EU and anti-EU. Or rather, More Europe vs Less Europe.

Germany’s up-and-coming real right-wing AfD at their conference this weekend voted in a resolution that calls for getting rid of the European Parliament itself, calling it undemocratic, and claiming the “competence to make laws is exclusively for nation states.” Similar sentiments play out in Italy, Poland, Hungary and many other member states.

Given the changes in vote ratios mentioned before, it’s hard to see the More Europe model survive the elections. But that of course doesn’t keep the main parties (blocks) from running outspoken pro-Europe candidates to replace Jean-Claude Juncker as head chief after the elections. The EPP has German Europe stalwart Manfred Weber as ‘Spitzenkandidat’, the so-called Socialists/Democrats have Dutch Frans Timmermans, Juncker’s right-hand man.

They think they will be able to continue business as usual, and accumulate more power and sovereignty in the process, while support for the EU crumbles more by the day. But that’s all in the far far future, that is a whole 4 months away. And who knows what Europe will look like by then? Brussels sure doesn’t seem to know, or want to.

 

In Germany, the entire political system will have to reinvent itself after Merkel. And as said before, with an entire new look as far as vote numbers go. Far right and the Greens are on their way to becoming new power blocks, the Christian center right CDU/CSU and the formerly left SPD are on their way to much less support.

This is a pattern that plays out all over Europe, but what happens in Germany is, because of the way the EU is set up, crucial for all EU member states. Nothing happens in Europe without approval from Berlin. And what will the other 26 remaining members do when that level of power moves towards the AfD?

Of even more immediate concern may be Germany’s economic performance. Because the latest signs are not encouraging. Germany and Holland have done very well, but that is because they have all the others as their ‘domestic’ market. And now not even that turns out to be enough. Germany’s numbers are going down fast:

 

 

Then again, for now, worries about Germany will be trumped by those about France and Britain. The numbers of Yellow Vests in the streets of France was much larger again the past weekend than the last few ones. Macron keeps on making ever bigger mistakes. This Saturday, his riot police was filmed carrying semi-automatic weapons with live ammo. As he claimed that many of his people want to get things without making any effort.

Macron all along has tried to drive a wedge between the protesters and the people. But a large majority of the people support the protests, even if they don’t don a yellow vest. Still, Paris claims that the protesters are not the Republic, and they’re trying to overthrow democracy. When the Yellow vests approached government buildings last weekend, government spokesman Benjamin Griveaux fled, saying: “It wasn’t me who was attacked, it was the Republic.” Ergo: Not the people are the Republic, the government is. That should sell well.

For a very large number of French this sounds like they are not actually considered French by their own government. And now Macron insists on holding a national debate, in which everyone can have their say, but at the same time he insists he will not change his policies, which are what the Yellow Vests are protesting in the first place.

What they see is that Little Napoleon hasn’t hardly appeared in public for a very long time (big no-no!), but he does try to dictate to them what democracy is, and then in the same breath that they only have the choices he gives them. Protests are only allowed if the government gives permission, Paris proclaims.

Macron has cancelled his spot in the upcoming Davos spectacle for the wealthy and powerful, and I bet you the thought has crossed his mind that if he went he wouldn’t be allowed back in to his country. Not decisive, but that thought surely counts. He’s seen the whole Let Them Eat Cake scenario play out in his mind’s eye. Before putting his hand over his heart while looking in the mirror.

Macron does everything wrong than he can. And in that France has a lot in common with our for now last topic, subject, victim, take your pick, the UK.

 

Tomorrow Theresa May is going to lose another vote, and even if she doesn’t, chaos is still guaranteed. Both the Leave and the Remain camps, opposites as they are, are divided into countless other camps, and there is no way there will ever be an agreement. You’d have a hard time finding even just two people who think Brexit means the same, let alone millions.

I wrote earlier today I wondered how come Britain is so quiet in the face of that, with the Yellow Vests example just a few miles away. And I really don’t know. Maybe we’ll find out tomorrow. The EU has hinted Brexit may not happen until the summer, not on March 29. But that’s the EU, and that’s what the Brexit vote was meant to move away from, not let them dictate even more.

Theresa May basically sat on her hands for two years, and wanted to do the work in 6 months, but that was always going to be a pipedream. The UK, in 40-odd years of EU membership, signed up to thousands of pieces of legislation, which contain hundreds of thousands of pages of legalese. All that must be checked, if need be changed, negotiated about, voted on, etc.

Not something anyone can do in half a year, and that has nothing to do with liking the EU or not. May has held her country hostage for the entire time she’s been PM, and she does that even more now, as she’s saying it’s either her deal or no Brexit at all. She’s decided No Deal is not an option. Which may be wise in view of all those documents, but who is she to decide eth entire nation future for decades to come? She wasn’t even elected as PM.

We’ll know more tomorrow after that Parliament vote, which May will lose. Or will we? If Brussels accepts a major delay in Brexit, chances are May will stay in office, and we’ll have 4-5-6 more months of the same road to nowhere. Second referendum, general election? Poisoned chalices all of them.

Even if May wins the vote Tuesday, because she’s scared a sufficient number of MPs into a catatonic state, nothing will change either. All possible outcomes are guaranteed to have a large group of people standing against them. All options will create the appearance of a small group of people dictating life-changing events for everyone else.

Where are the British Yellow Vests? The mayor of Poland’s second-biggest city, Gdansk, was stabbed to death in public on a stage where he held a speech, Is that where we’re going?

And lest we forget, what happens in Europe is not very different from what happens in the US; things merely play out slightly differently in different locations. In the US, as in the UK, there are no whole new parties taking over, no AfD and Macron and Yellow Vests and Salvini, but there is Trump and Brexit.

The common denominator is people’s anger with the economic models that leave them scrambling to make do, all the while seeing their lives being taken away from them bit by bit while whoever’s in power keeps bankers and other rich folk contented.

It’s not much use seeing all this as separate incidents or developments. It’s a big wave that will reshape the world as we know it. Let Them Eat Cake has gone global, and there’s not nearly enough cake to go round.

 

 

Jan 142019
 
 January 14, 2019  Posted by at 10:40 am Finance Tagged with: , , , , , , , , , , , , , , ,  


Ivan Aivazovsky Moonlight Reflecting On Water c1850

 

EU Preparing To Delay Brexit Until At Least July (G.)
Theresa May Says No Brexit More Likely Than No Deal (Ind.)
May: Failing To Deliver Brexit “Catastrophic” For British Democracy (AFP)
China Says Its 2018 Trade Surplus With US Was $323 Billion, Highest Ever (CNBC)
China Investment Into North America And Europe Falls 73% In 2018 (R.)
French Police Deploy Semi-Automatic Weapons, Live Ammunition vs Yellow Vests (DM)
Macron Blasted For Saying Many French Want ‘Something For Nothing’ (RT)
Macron Seeks To Turn ‘Anger Into Solutions’ In Open Letter To France (G.)
Trump: Report FBI Investigated Him As Possible Russian Agent Is Insulting (G.)
WaPo Recycles Russiagate Memes In Latest Gossip About Trump-Putin Collusion (RT)
Trump Taunts Jeff Bezos, Elizabeth Warren Amid New Russia Revelations (MW)
Trump Threatens To ‘Devastate Turkey Economically’ If It Attacks Kurds (RT)
Integrity Initiative: By All Means Smear & Attack, But Be Honest About It (RT)

 

 

It’s undeniably Brexit week starting today. And none of the chaos has abated. No matter what happens, one group or another will fight it.

EU Preparing To Delay Brexit Until At Least July (G.)

The EU is preparing to delay Brexit until at least July after concluding that Theresa May is doomed to fail in getting her deal through parliament. The country’s 29 March deadline for exiting the EU is now regarded by Brussels as highly unlikely to be met given the domestic opposition facing the prime minister and it is expecting a request from London to extend article 50 in the coming weeks. A special leaders’ summit to push back Brexit day is expected to be convened by the European council president, Donald Tusk, once a UK request is received. EU officials said the length of the prolongation of the negotiating period allowed under article 50 would be determined based on the reason put forward by May for the delay.

A “technical” extension until July is a probable first step to give May extra time to revise and ratify the current deal once Downing Street has a clear idea as to what will command a majority in the Commons. An EU official said: “Should the prime minister survive and inform us that she needs more time to win round parliament to a deal, a technical extension up to July will be offered.” Senior EU sources said that a further, lengthier extension could be offered at a later date should a general election or second referendum be called although the upcoming May elections for the European parliament would create complications. One EU diplomat said: “The first session of the parliament is in July. You would need UK MEPs there if the country is still a member state. But things are not black and white in the European Union.”

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And that’s her own doing.

Theresa May Says No Brexit More Likely Than No Deal (Ind.)

Theresa May will travel to the Leave stronghold of Stoke-on-Trent on the eve of the crucial vote to warn MPs that blocking her deal risks stopping Brexit altogether. The prime minister is expected to say that public faith in the democratic process and in politicians would suffer “catastrophic harm” if the referendum result is overruled. Addressing workers at a factory in Stoke, which voted 69.4 per cent in favour of Brexit, Ms May will argue on Monday that parliament has a duty to honour the decision of the British people. She is expected to say: “In June 2016, the British people were asked by MPs to take a decision: should the United Kingdom remain a member of the European Union or should it leave?

“In that campaign, both sides disagreed on many things, but on one thing they were united: what the British people decided, the politicians would implement. “In the run-up to the vote, the government sent a leaflet to every household making the case for remain. It stated very clearly: ‘This is your decision. The government will implement what you decide.’ “Those were the terms on which people cast their votes. If a majority had backed remain, the UK would have continued as an EU member state. “No doubt the disagreements would have continued too, but the vast majority of people would have had no truck with an argument that we should leave the EU in spite of a vote to remain or that we should return to the question in another referendum.

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I can do a shorter version of this headline: “May Catastrophic For British Democracy”.

May: Failing To Deliver Brexit “Catastrophic” For British Democracy (AFP)

Prime Minister Theresa May was on Monday to ramp up warnings to MPs poised to reject her EU divorce deal that failing to deliver Brexit would be “catastrophic” for British democracy. On the eve of Tuesday’s monumental vote in parliament on her withdrawal agreement – forged from 18 months of gruelling negotiations with European leaders – May is set to address factory workers in Stoke, a Brexit-backing city in central England. The embattled leader, who is widely expected to lose the House of Commons vote by a wide margin, will make a final bid for support by warning Brexit-supporting MPs that they risk sabotaging the whole process, and reminding EU supporters of their democratic responsibilities.

“We all have a duty to implement the result of the referendum,” she was to say, according to extracts released early. “I ask MPs to consider the consequences of their actions on the faith of the British people in our democracy,” May is expected to say, asking what the response would have been if parliament tried to take Britain out of the EU had Remain had won the 2016 vote. She is also set to later make a statement to parliament, setting out reassurances from Brussels over contentious aspects of the deal, although there appears little prospect of her unveiling anything with legal force. Leave-supporting MPs fear one provision in the deal for a “backstop”, designed to prevent a hard border between the British province of Northern Ireland and the Republic of Ireland, would keep Britain indefinitely tied into a form of EU customs union.

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Over 90% of China’s surplus now is with the US.

China Says Its 2018 Trade Surplus With US Was $323 Billion, Highest Ever (CNBC)

Despite U.S. President Donald Trump launching a high-stakes trade war against Beijing last year, China on Monday announced that its 2018 trade surplus with Washington was its largest in more than a decade. China’s surplus with the U.S. grew 17 percent from a year ago to hit $323.32 billion in 2018, according to government data. It was the highest on record dating back to 2006, according to Reuters. Exports to the U.S. rose 11.3 percent on-year in 2018, while imports from the U.S. to China rose a meager 0.7 percent over the same period. China’s overall trade surplus for 2018 was $351.76 billion, the government said. Exports in the whole of 2018 rose 9.9 percent from 2017 while imports grew 15.8 percent over the same period, official dollar-denominated data showed.

While the surplus with the U.S. may have risen, last year’s overall Chinese trade surplus was the lowest since 2013, even though export growth was the highest since 2011, according to Reuters’ records. China’s General Administration of Customs said on Monday that the biggest worry in trade this year is external uncertainty and protectionism, forecasting the country’s trade growth may slow in 2019. China’s overall December exports unexpectedly fell 4.4 percent from a year earlier, the biggest monthly drop in two years, the customs data showed on Monday. Imports also unexpectedly contracted in December — falling 7.6 percent, marking the biggest decline since July 2016.

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“Investment into the United States fell by 83 percent but, by contrast, grew by 80 percent into Canada. In Europe, despite an overall decline, Chinese FDI into countries like Germany, France and Spain also actually grew.”

China Investment Into North America And Europe Falls 73% In 2018 (R.)

Chinese foreign direct investment into North America and Europe fell by 73 percent to a six-year low last year as the United States tightened scrutiny of deals and Chinese restrictions on outbound investment bit, law firm Baker & McKenzie said. The figures reflected the impact of escalating trade and political friction between Washington and Beijing. After taking divestitures into account, net Chinese FDI flows into the United States actually turned negative. Investment into the United States fell by 83 percent but, by contrast, grew by 80 percent into Canada. In Europe, despite an overall decline, Chinese FDI into countries like Germany, France and Spain also actually grew.

Completed Chinese FDI deals in the two Western regions fell to $30 billion in 2018 from $111 billion the year before, Baker & McKenzie said in a report prepared with research firm Rhodium Group. Even after stripping out the effect of the $43 billion takeover of Syngenta by ChemChina in 2017, the underlying drop in deal volumes was 40 percent. Tougher regulatory scrutiny also led to the cancellation of 14 Chinese investment deals in North America, with a combined value of $4 billion, and seven in Europe worth $1.5 billion.

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They shouldn’t have done that.

French Police Deploy Semi-Automatic Weapons, Live Ammunition vs Yellow Vests (DM)

French riot police have deployed semi-automatic weapons with live ammunition against Yellow Vest protestors for the first time. Officers were filmed brandishing Heckler & Koch G36 weapons by the Arc de Triomphe in Paris on Saturday afternoon. The presence of semi-automatic rifles at a demonstration by unarmed French citizens shows how President Emmanuel Macron’s law and order crisis spirals. It comes after former conservative minister Luc Ferry called for live fire to be used against the ‘thugs’ from the Yellow Vest movement who he says ‘beat up police’. Riot police were on crowd control duty today facing off a mob of Gilet Jaunes or Yellow Vests – named after the bright high-visibility clothing.

Live ammunition 30 cartridge magazines could be seen as officers marched the streets, although none were used as 5000 police were deployed on the streets of the French capital. Yellow Vest protestor Gilles Caron said: ‘The CRS with the guns were wearing riot control helmets and body armour – they were not a specialised firearms unit. ‘Their job was simply to threaten us with lethal weapons in a manner which is very troubling. We deserve some explanations.’

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Everytime you think Macron made his worst error, he proves you wrong.

Macron Blasted For Saying Many French Want ‘Something For Nothing’ (RT)

President Emmanuel Macron criticized the citizens of France for not making enough effort, as the Yellow Vest protests against his economic policies entered their ninth week. The statement was met with fury. “Many of our citizens think that it’s possible to obtain something without proper effort,” he said on Friday. “Sometimes people forget that alongside rights there are also duties,” Macron declared. He also repeated this idea in reference to “French youth.” The president’s comments did not go over well with some politicians from both the left and right, who reacted with sarcasm and indignation. “At first I thought it was fake as the president should not pour fuel to the fire but it is so in fact,” Olivier Faure, one of the parliamentary leaders of the Socialist Party, tweeted.

Faure’s right-wing counterpart from the Gaullist Republican party, Laurent Wauquiez, also accused Macron of stoking tensions at such an inappropriate time. The chairman of the right-wing ‘Patriots’, Florian Philippot, came out with a no less fiery rejoinder. “No sense of effort from the nurses who toil, from the unemployed who slave away, from single mothers?” Philippot asked angrily. The nationalist politician also used Macron’s clumsy words as an opportunity to rally the troops for ‘Act 9’ of the Yellow Vest protests. [..] The Yellow Vests forced the government to suspend fuel tax hikes. However, the Macron administration has no intention of changing its overall policies.

Earlier in January, the president’s spokesman, Benjamin Griveaux, claimed that the protests are full of agitators who have the aim of “overthrowing the government.” French PM Edouard Philippe said this week that the Yellow Vest demonstrations are caused by people’s anger in “response to the global financial crisis” and the authorities failing to hear their concerns. On January 15, Macron will launch a three-month national debate to address the country’s burning issues. According to the French study center ELABE, around 41 percent of the people plan to participate in the debate. Meanwhile, ‘Angry France’, a group associated with the Yellow Vests, turned down Macron’s invitation to take part in the national debate, branding it a “political trap.”

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Macron’s police deploy semi-automatic weapons with live ammunition, he accuses the French people of being a bunch of lazy crybabies, and then he wants to force them into a ‘debate’ while saying he doesn’t intend to change his policies.

Macron Seeks To Turn ‘Anger Into Solutions’ In Open Letter To France (G.)

Emmanuel Macron has launched a two-month “great national debate” in France with a 2,330-word open letter to the country. The French president hopes the nationwide public consultation will take the sting out of the widespread public anger behind the rise of the gilets jaunes (yellow vests) movement and the civil unrest across France. In the letter, Macron said he was open to ideas and suggestions but insisted the government would not go back on previous reforms or key measures in his 2017 election campaign. “No questions are banned,” Macron writes. “We won’t agree on everything, that’s normal, that’s democracy. But at least we’ll show that we are a people who are not afraid to speak, to exchange views and debate. And perhaps we’ll discover that we might even agree, despite our different persuasions, more often than we think.”

Macron has been rocked by the ferocity of almost two months of angry protests by gilets jaunes. On Saturday a ninth weekend of demonstrations took place across France. The letter, to be published in French newspapers on Monday, marks the start of a nationwide consultation in which citizens are invited to give their views on four central themes: taxation; the organisation of the state and its public administration; ecological transition; and citizenship and democracy. Macron’s missive asks a number of questions, including: what taxes should be reduced?; what spending cuts might be a priority?; is there too much administration?; how can the people be given a greater say in running the country? Macron said the proposals collected during the debate would build a new “contract for the nation”, influence political policymaking and establish France’s stance on national, European and international issues.

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We’re bumbling into full-in madness: “On Saturday night, Trump was asked by a Fox News host whether he had ever worked for Russia. “I think it’s the most insulting thing I’ve ever been asked,” he said. He did not give a yes or no answer.”

Not answering a question like that is now held against Trump.

Trump: Report FBI Investigated Him As Possible Russian Agent Is Insulting (G.)

On Saturday night, Trump was asked by a Fox News host whether he had ever worked for Russia. “I think it’s the most insulting thing I’ve ever been asked,” he said. He did not give a yes or no answer. As for his conversations with Putin, he said: “I’m not keeping anything under wraps, I couldn’t care less.” On Sunday, Democrats said the latest revelations raise serious questions about Trump’s relationship with Putin and Russia. “Why is he so chummy with Vladimir Putin – this man who is a former KGB agent, never been a friend to the United States, invaded our allies, threatens us around the world, and tries his damndest to undermine our elections?” Senator Dick Durbin, an Illinois Democrat, said on ABC’s This Week. “Why is this President Trump’s best buddy? I don’t get it.”

Mark Warner of Virginia, the top Democrat on the Senate intelligence committee, said it was suspicious that Trump has “parroted” the policies of Putin. “I do think it’s curious that throughout that whole summer when these investigations started, you have Vladimir Putin policies almost being parroted by Donald Trump,” he said on CNN’s State of the Union. “You had Trump say only nice things about Putin – he never spoke ill about Russia. The Republican campaign doctrines softened on Russia and decreased their willingness to defend Ukraine.” Warner said the US government still does not know what took place in Trump’s meetings with Putin, including another in Helsinki last summer where Trump appeared to embrace Putin’s claim, rejected by US intelligence, that his country had nothing to do with an interference effort in the 2016 election.

[..] Ron Johnson, a Wisconsin Republican senator and chair of the homeland security committee, said he had only heard “innuendo” about Trump’s interactions with Russia, not any evidence of improprieties. He said there were legitimate reasons to want to guard the president’s conversations with Putin. “This is not a traditional president,” he told CNN. “He has unorthodox means, but he is president of the United States. It is pretty much up to him in terms of who he wants to read into his conversations with world leaders. He was burned by leaks in other areas and he was pretty frustrated.”

Senator Lindsey Graham of South Carolina, a close ally of the president, was more forceful, telling Fox News Sunday: “I am going to ask the FBI director: ‘Was there a counterintelligence investigation opened up regarding the president as being a potential agent of the Russians?’ I find it astonishing. “If this really did happen, Congress needs to know about it. How could the FBI do that? What kinds of checks and balances are there?”

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“The super-secret meeting with Putin in Hamburg was also attended by then-secretary of state Rex Tillerson. Does this mean that Tillerson is also a deep-cover KGB agent? Tillerson even released a readout after the meeting – following completely standard, but apparently unsatisfactory protocol..”

The self-contradictory report goes on to explain how, as part of Trump’s obsession with ultra-secret Putin pow-wows, the president “generally has allowed aides to listen to his phone conversations” with the Russian leader.

WaPo Recycles Russiagate Memes In Latest Gossip About Trump-Putin Collusion (RT)

Donald Trump’s reluctance to provide unfettered access to his conversations with Vladimir Putin has upset nameless American officials, the Washington Post has revealed. The US president dismissed the story as absurd and offensive. According to the revered paper, Trump has “gone to extraordinary lengths to conceal details” of his face-to-face conversations with Putin. During a meeting with the Russian leader in Hamburg in 2017, Trump even purportedly confiscated the notes of his own interpreter, who was then instructed not to discuss what had transpired with other administration officials.

Various (and of course nameless) US officials have now apparently complained to the Washington Post about how they’ve been left in the dark about five conversations that Trump had with the Russian leader, colorfully described by the newspaper as “one of the United States’ main adversaries.” The story’s thinly veiled assumption is of course that Donald Trump has used his handful of private meetings with Putin to receive secret instructions from Moscow – impose new sanctions on Russia, bomb Syria, send lethal weapons to Ukraine, shred the Iran deal and missile treaties, and so forth. The creatively framed story suffers from a few other inconvenient plot holes. The super-secret meeting with Putin in Hamburg was also attended by then-secretary of state Rex Tillerson.

Does this mean that Tillerson is also a deep-cover KGB agent? Tillerson even released a readout after the meeting – following completely standard, but apparently unsatisfactory protocol. The self-contradictory report goes on to explain how, as part of Trump’s obsession with ultra-secret Putin pow-wows, the president “generally has allowed aides to listen to his phone conversations” with the Russian leader. Trump “allies” interviewed by the Post said that the president’s caution when it comes to meeting with Putin may be “driven by embarrassing leaks that occurred early in his presidency.” This theory is of course way less fun than the airtight idea that Trump is actually a Russian agent – that’s why WaPo only gave it one sentence.

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“Leading, your honor”. He didn’t ‘dodge’ answering the question, he simply didn’t answer it.

Trump Taunts Jeff Bezos, Elizabeth Warren Amid New Russia Revelations (MW)

As questions about his relationship with Russia continue to swirl, President Donald Trump spent his Sunday night lashing out at perceived enemies, taunting Washington Post owner -and Amazon CEO- Jeff Bezos over his divorce and mocking Sen. Elizabeth Warren’s Native American heritage. “So sorry to hear the news about Jeff Bozo being taken down by a competitor whose reporting, I understand, is far more accurate than the reporting in his lobbyist newspaper, the Amazon Washington Post,” Trump tweeted. A little background: On Saturday, the Post reported that Trump has gone to extraordinary lengths to conceal notes and transcripts of his one-on-one meetings with Russian President Vladimir Putin.

The Post noted that withholding details of those potentially important meetings was prevented “even high-ranking officials in his own administration from fully knowing what he has told one of the United States’ main adversaries.” (Separately, the New York Times reported Friday that the FBI opened an investigation into whether Trump was working for Russia after he fired FBI Director James Comey in 2017. In an telephone interview with Fox News on Saturday, Trump was asked if he has ever worked for Russia, but dodged answering the question.)

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What if the Americans who want to stay in Syria provoke Turkish attacks on Kurds?

Trump Threatens To ‘Devastate Turkey Economically’ If It Attacks Kurds (RT)

Donald Trump has warned its NATO ally to beware of the devastative wrath of US economic pressure if Turkey dares to attack the Kurdish allies America is leaving behind in its “long overdue” pull-out of troops from Syria. The US military, Trump promised, will still use an “existing nearby base,” apparently in Iraq, to attack the Islamic State (IS, formerly ISIS/ISIL) militants if the terrorist organization re-emerges in Syria. Using his typical mode of communication to reaffirm the withdrawal of American troops from the ground, the US president warned Ankara against seeing this as an opportunity to stage any military campaign against Syrian Kurds. “Will devastate Turkey economically if they hit Kurds,” Trump tweeted, urging Ankara to create a “20-mile safe zone.”

At the same time, Trump urged the Kurd-dominated Syrian Democratic Forces (SDF), which the US trained and armed for years, not to “provoke” Turkey. In an apparent gesture to save face, following a questionable outcome of four years of uninvited American presence in Syria and an abrupt withdrawal, Trump has once-again credited the US military for destroying IS, disregarding the fact that most of the country was liberated from terrorists by the Syrian army, with the help of the Russian military. “Russia, Iran and Syria have been the biggest beneficiaries of the long term US policy of destroying ISIS in Syria – natural enemies. We also benefit but it is now time to bring our troops back home. Stop the ENDLESS WARS!” Trump tweeted.

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The way Brexit is manhandled is not even the UK’s deepest low.

“..pushing conspiracies about Labour leader Jeremy Corbyn’s links to the Kremlin. That’s not a good look for an organization which receives cash from the Foreign Office.”

Integrity Initiative: By All Means Smear & Attack, But Be Honest About It (RT)

We’ve all met those people who describe themselves as laid back, when in reality they’re just one loud noise from a mouth frothing breakdown. So when something describes itself as having integrity, be wary. Enter the Integrity Initiative (II), Britain’s very own government funded influence network which is currently in the process of having its underpants revealed to the world. There’s no doubting it’s an initiative, the jury’s out on the other bit. Some of the people behind it are alleged former spies (can you be a former spy?), a calling not often linked to integrity. There’s a good chance you may not know much about the Integrity Initiative, the mainstream media is not exactly straining to tell you about it.

Labour MP Chris Williamson suggests that’s because a number of mainstream journalists have signed up to work with it. The only time II briefly attracted the attention of the mainstream world was when it became clear it had been pushing conspiracies about Labour leader Jeremy Corbyn’s links to the Kremlin. That’s not a good look for an organization which receives cash from the Foreign Office. It describes itself as non-partisan, but then as we’ve discussed, it also has “Integrity” in the title. Maybe it can get away with it, always worth a try I suppose. It also claims to be “combating propaganda and disinformation,” but as you’ll see for yourself on its Twitter account, it’s simply a stream of invective and criticism about Russia. If you want to spend cash smearing an entire nation, fine, fill your boots, but don’t then act all moral about it.

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Jan 092019
 
 January 9, 2019  Posted by at 11:15 am Finance Tagged with: , , , , , , , , , , ,  


René Magritte Where Euclid walked 1955

 

Trump Calls Illegal Immigration A ‘Crisis,’ Doesn’t Declare Emergency (AP)
House Democrats To Test Republicans On Trump’s Wall Demand (R.)
Cross-Party Alliance Of MPs Tells May: We Will Stop No-Deal Brexit (G.)
May May Have To Draw Up New Brexit Plan Three Days After Commons Defeat (G.)
Brexit Moment in 80 Days, No One Knows What’ll Happen (DQ)
China’s Stability Is at Risk (Christopher Whalen)
China To Introduce Policies To Strengthen Domestic Consumption (R.)
Apple Cuts Q1 Production Plan For New iPhones By 10% (R.)
Tim Cook Says Apple’s ‘Ecosystem Has Never Been Stronger’ (MW)
Germany Heads for a Technical Recession (WS)
France Moves To Ban All Protests, Major Crackdown On Yellow Vests (ZH)

 

 

Trump should be careful about doing underwhelming speeches. But America’s political problems are clear, and will not be solved anytime soon. That is, too many old people in charge. Limit number and length of terms in Washington. Get rid of Schumer and Pelosi.

PS: CNN reports Rod Rosenstein is stepping down.

Trump Calls Illegal Immigration A ‘Crisis,’ Doesn’t Declare Emergency (AP)

In a somber televised plea, President Donald Trump urged congressional Democrats to fund his long-promised border wall Tuesday night, blaming illegal immigration for the scourge of drugs and violence in the U.S. and framing the debate over the partial government shutdown in stark terms. “This is a choice between right and wrong,” he declared. Democrats in response accused Trump appealing to “fear, not facts” and manufacturing a border crisis for political gain. Addressing the nation from the Oval Office for the first time, Trump argued for spending some $5.7 billion for a border wall on both security and humanitarian grounds as he sought to put pressure on newly empowered Democrats amid the extended shutdown.

Trump, who will visit the Mexican border in person on Thursday, invited the Democrats to return to the White House to meet with him on Wednesday, saying it was “immoral” for “politicians to do nothing.” Previous meetings have led to no agreement as Trump insists on the wall that was his signature promise in the 2016 presidential campaign. Responding in their own televised remarks, Democratic House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer accused Trump of misrepresenting the situation on the border as they urged him to reopen closed government departments and turn loose paychecks for hundreds of thousands of workers. Negotiations on wall funding could proceed in the meantime, they said. Schumer said Trump “just used the backdrop of the Oval Office to manufacture a crisis, stoke fear and divert attention from the turmoil in his administration.”

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Better negotiate. Digging in doesn’t help.

House Democrats To Test Republicans On Trump’s Wall Demand (R.)

As a partial U.S. government shutdown neared the three-week mark, Democrats on Wednesday were set to test Republicans’ resolve in backing President Donald Trump’s drive to build a wall on the border with Mexico, which has sparked an impasse over agency funding. House of Representatives Speaker Nancy Pelosi and her fellow Democrats who took control of the chamber last week plan to advance a bill to immediately reopen the Treasury Department, the Securities and Exchange Commission and several other agencies that have been in partial shutdown mode since Dec. 22. Democrats are eager to force Republicans to choose between funding the Treasury’s Internal Revenue Service – at a time when it should be gearing up to issue tax refunds to millions of Americans – and voting to keep it partially shuttered.

In a countermove, the Trump administration said on Tuesday that even without a new shot of funding, the IRS would somehow make sure those refund checks get sent. But it was the Republican president’s insistence on a massive barrier on the border that dominated the Washington debate and sparked a political blame game. In a nationally televised address on Tuesday night, Trump asked: “How much more American blood must be shed before Congress does its job?” referring to murders he said were committed by illegal immigrants.

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79 days to go. The real mess starts now.

Cross-Party Alliance Of MPs Tells May: We Will Stop No-Deal Brexit (G.)

Theresa May faces a concerted campaign of parliamentary warfare from a powerful cross-party alliance of MPs determined to use every lever at their disposal to prevent Britain leaving the EU without a deal in March. The former staunch loyalist Sir Oliver Letwin signalled that he and other senior Conservatives would defy party whips, repeatedly if necessary, to avoid a no-deal Brexit, as the government suffered a humiliating defeat during a debate on the finance bill in the Commons. Letwin and 16 other former government ministers were among 20 Conservatives who banded together with the home affairs select committee chair, Yvette Cooper, and the Labour leadership to pass an anti no-deal amendment.

They defeated the government by 303 votes to 296 – a majority of seven – making May the first prime minister in 41 years to lose a vote on a government finance bill. The move came after the PM conceded to senior ministers she was on course to lose next week’s historic Brexit vote, as the first cabinet meeting of the new year exposed deep divisions about the best way out of the deadlock. May told her cabinet she would respond swiftly with a statement to the House of Commons if she failed to win MPs’ backing for her deal next Tuesday. But cabinet sources said it was unclear what course she planned to take – and the general mood was of how “boxed in” the government was.

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If/when she loses next Tuesday.

May May Have To Draw Up New Brexit Plan Three Days After Commons Defeat (G.)

MPs will attempt to force the government to return with an alternative to Theresa May’s Brexit deal within three days of her plan being defeated in parliament. Another five-day debate leading up to a vote on May’s deal on 15 January will start on Wednesday, opened by the Brexit secretary, Stephen Barclay. Before that, MPs must approve a business motion to allow the debate and vote to go ahead, which a cross-party group of MPs, led by the Conservative Dominic Grieve, hope to amend if the Speaker allows it. The amendment says that following defeat of the government’s plan, which is widely anticipated, “a minister of the crown shall table within three sitting days a motion … considering the process of exiting the European Union under article 50”.

Other MPs who have signed the amendment include the former Tory cabinet minister Sir Oliver Letwin and ex-Tory ministers Jo Johnson, Guto Bebb and Sam Gyimah. It has also been backed by Labour MPs including Stephen Doughty and Chris Leslie. Sarah Wollaston, the Conservative chair of the health select committee, who also signed the amendment, said the aim was to prevent the government “running down the clock” towards no deal. Previously, the Commons had mandated the government to make a statement within 21 days.

“If and when the PM’s plan is voted down on Tuesday, MPs can’t be made to wait potentially until 12 Feb for the next vote. The situation is too urgent now,” Leslie said. A previous amendment by Grieve that the Commons voted through before Christmas means that any statement the government brings forward after a defeat is in itself amendable – allowing MPs to put forward their own alternatives for the future of the Brexit process.

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$1 trillion to leave London, but that still leaves $7-8 trillion.

Brexit Moment in 80 Days, No One Knows What’ll Happen (DQ)

With just 80 days remaining until Brexit Day, March 29, nerves are fraying on both sides of the English Channel. Nowhere is this more true than in the City of London where the Square Mile’s dominance of the global financial industry faces its biggest threat in decades. In the City’s worst-case scenario — a crash-out Brexit on March 29 — London-based firms that have not prepped properly for this outcome could be cut off from the continent altogether. Since moving key operations and staff across the channel is a costly, complex, timely undertaking, many companies have preferred to play a waiting game. But the clock continues to tick down, and as the risk of a disorderly exit grows, inaction is becoming a risky strategy.

Since the EU Referendum in June 2016, only 36% of the financial services companies in London have said they are considering or have confirmed relocating operations and/or staff to Europe, according to the latest edition of Ernst&Young’s Brexit Tracker (which monitors 222 financial services firms in the UK). This rises to 56% (27 out of 48) among universal banks, investment banks, and brokerages. A total of 20 companies have already announced a transfer of assets out of London to Europe. “Not all firms have publicly declared the value of the assets being transferred, but the Brexit Tracker has followed public announcements worth around £800 billion ($1 trillion),” the report says.

This figure echoes findings by a study published in November by German trade group Frankfurt Main Finance (FMF), which estimated that London is poised to lose €800 billion ($900 billion) in balance-sheet assets by March 29. According to German Bank Helaba, Frankfurt alone has attracted 25 lenders looking to move part of their operations out of the City of London, including Barclays, Lloyds Banking Group, Citigroup, Morgan Stanley, Credit Suisse, UBS, Nomura and Standard Chartered Bank.

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“Contrary to the positive foreign narrative about “growth” in China, CBB contends that deflation is the bigger threat compared to inflation.”

“The CCP is happy to tolerate or even encourage wealth creation, but only so long as it does not become a problem.”

China’s Stability Is at Risk (Christopher Whalen)

The western view of China’s political economy is driven partly by anecdote, partly by accepting Beijing’s propaganda/economic data as fact. Foreign investors have convinced themselves that the Chinese Communist Party (CCP) is superior in terms of economic management, this despite ample evidence to the contrary, thus accepting the official view is easy but also increasingly risky. In a December 15 speech , Renmin University’s Xiang Songzuo warned that Chinese stock market conditions resemble those during the 1929 Wall Street Crash. He also suggested that the Chinese economy is actually shrinking. But this apostate view was quickly rejected by legions of captive western economists and investment analysts whose livelihood depends upon “selling China” to credulous foreign audiences.

Facts aside, the perception of China is what matters to global investors, part of a larger pathology of hope-based investment allocation that eschews those rare bits of hard data that disagree with the positive narrative. China growth, Tesla profitability, or the mystical blockchain all require more credulity than ever before. For example, in the first half of 2016 global capital markets stopped due to fear of a Chinese recession. Credit spreads soared and deal flows disappeared. But was this really a surprise? In fact, the Chinese government had accelerated official stimulus in 2015 and 2016 to counter a possible slowdown and, particularly, ensure a quiet domestic scene as paramount leader Xi Jinping was enshrined into the Chinese constitution.

Today western audiences are again said to be concerned about China’s economy and this concern is justified, but perhaps not for the reasons touted in the financial media. The China Beige Book (CBB) fourth-quarter preview, released December 27, reports that sales volumes, output, domestic and export orders, investment, and hiring fell on a year-over-year and quarter-over-quarter basis. Headed by Leland Miller, CBB is a research service that surveys thousands of companies and bankers on the ground in China every quarter.

Contrary to the positive foreign narrative about “growth” in China, CBB contends that deflation is the bigger threat compared to inflation. “Because of China’s structural problems, deflation has very clearly emerged as the bigger threat in a slowing economy than inflation. Consumer demand has weakened, and you see that reflected in retail and services prices,” CBB Managing Director Shehzad Qazi said in an interview.

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Groundhog Day. China’s been promoting domestic stuff for years, but that only really ever worked in real estate loans. Domextic spending is even falling right now.

China To Introduce Policies To Strengthen Domestic Consumption (R.)

China plans to introduce policies to boost domestic spending on items such as autos and home appliances this year, state television CCTV quoted a senior state planning official as saying on Tuesday. Ning Jizhe, vice chairman of National Development and Reform Commission (NDRC), said in an interview with CCTV that the policies will be part of wider efforts to strengthen domestic consumption in China, the world’s second largest economy. The state planner will also introduce policies in house leasing and services, as well as elderly and child care, with plans to also lower investment barriers in other sectors such as culture and sports. He also said that the NDRC planned to move ahead with a second batch of major foreign-invested projects in the first quarter of 2019, which could include new energy ventures, according to an interview transcript published by state news agency Xinhua.

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China mobile phone shipments down 16%.

Apple Cuts Q1 Production Plan For New iPhones By 10% (R.)

Apple, which slashed its quarterly sales forecast last week, has reduced planned production for its three new iPhone models by about 10 percent for the January-March quarter, the Nikkei Asian Review reported on Wednesday. That rare forecast cut exposed weakening iPhone demand in China, the world’s biggest smartphone market, where a slowing economy has also been buffeted by a trade war with the United States. Many analysts and consumers have said the new iPhones are overpriced. Apple asked its suppliers late last month to produce fewer-than-planned units of its XS, XS Max and XR models, the Nikkei reported, citing sources with knowledge of the request. The request was made before Apple announced its forecast cut, the Nikkei said.

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Tim, credibility is a big issue in your position. Be careful. Besides, just because you talk to Jim Cramer doesn’t mean you have to sound like him.

Tim Cook Says Apple’s ‘Ecosystem Has Never Been Stronger’ (MW)

Apple Inc. stock has taken a beating in recent months, but Chief Executive Tim Cook defended his company Tuesday, and expressed optimism that trade tensions with China would soon ease. Apple shares have fallen by more than one-third since their peak on Oct. 3, and tumbled further last week after the tech giant warned of disappointing iPhone sales in its holiday quarter. But in an interview Tuesday with CNBC’s Jim Cramer, Cook said the company was still going strong, and its naysayers were full of “bologna.” “Here’s the truth, what the facts are,” Cook said about reports of slow iPhone XR sales, according to a CNBC transcript.

“Since we began shipping the iPhone XR, it has been the most popular iPhone every day, every single day, from when we started shipping, until now. . . . I mean, do I want to sell more? Of course I do. Of course I’d like to sell more. And we’re working on that.” Slower sales in China also contributed to Apple’s lowered forecast, and Cook said Tuesday he believes that situation to be “temporary.” “We believe, based on what we saw and the timing of it, that the tension, the trade-war tension with the U.S. created this more-sharp downturn,” he said. Cook said he’s “very optimistic” a trade deal between the U.S. and China will be reached. “I think a deal is very possible. And I’ve heard some very encouraging words,” he said.

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On top of Merkel stepping down.

Germany Heads for a Technical Recession (WS)

OK, this is embarrassing in the land of super-stimulus via the ECB’s negative-interest-rate policy and years of QE that were supposed to perform miracles: Production in Germany’s industry, which includes construction, dropped 1.9% in November from the prior month (seasonally adjusted), the German statistical agency Destatis reported this morning. This drop is also embarrassing because economists polled by The Wall Street Journal had expected a 0.3% gain. The agency also downwardly revised October, to a monthly decline of 0.8%. This makes three months in a row of declines. In November, compared to a year earlier (adjusted for inflation and calendar differences, but not for seasonality), the production index dropped an ugly 4.7%:

Production was down in all major segments, including energy and construction which are focused on Germany itself, rather than exports. [..] Industrial production is a big power in the German economy. And the trend is not good. Germany’s GDP already declined in the third quarter:

The declines in production in October and November put Germany a step closer to “negative economic growth,” as it’s called euphemistically, for two quarters in a row. If this occurs, it would be a technical recession. And it’s not going to get a lot better soon: Destatis reported yesterday that new orders in manufacturing – a harbinger for future production – dropped 4.3% in November from a year ago (adjusted for inflation and calendar differences); and it revised down October’s orders to a year-over-year drop of 3.0%.

[..] this economic slowdown is occurring despite, or perhaps because of, the mother of all stimuli engineered by a major central bank – negative interest rates and massive QE – that has benefited a few hedge funds who were able to front run the ECB’s bond buys and make a quick buck, and bond traders for a while, as bond prices were rising due to falling yields. And it has allowed even junk-rated companies to borrow money for a song from beaten down investors, savers, and pension funds. But this stopped a year ago.

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France does everything wrong.

France Moves To Ban All Protests, Major Crackdown On Yellow Vests (ZH)

France is signaling it’s making preparations for a massive new crackdown on the gilets jaunes or “yellow vests” anti-government protests that have gripped the country for seven weeks. A new law under consideration could make any demonstration illegal to begin with if not previously approved by authorities, in an initiative already being compared to the pre-Maiden so-called “dictatorship law” in Ukraine. In the name of reigning in the violence that has recently included torching structures along the prestigious Boulevard Saint Germain in Paris, and smashing through the gates of government ministry buildings, the French government appears set to enact something close to a martial law scenario prohibiting almost any protest and curtailing freedom of speech.

Prime Minister Edouard Philippe presented the new initiative to curtail the violence and unrest while targeting “troublemakers” and banning anonymity through wearing masks on French TV channel TF1 on Monday. He said the law would give police authority crack down on “unauthorized demonstrations” at a moment when police are already arresting citizens for merely wearing a yellow vest, even if they are not directly engaged in protests in some cases. PM Philippe said the government would support a “new law punishing those who do not respect the requirement to declare [protests], those who take part in unauthorized demonstrations and those who arrive at demonstrations wearing face masks”.

Philippe’s tone during the statements was one of the proverbial “the gloves are off” as he described the onus would be on “the troublemakers, and not taxpayers, to pay for the damage caused” to businesses and property.

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Jan 082019
 
 January 8, 2019  Posted by at 10:39 am Finance Tagged with: , , , , , , , , , , , , ,  


Pablo Picasso Bather on the beach 1920

 

German Industrial Production Unexpectedly Slumps (WSJ)
China’s Current GDP Growth Likely Less Than 6% (CNBC)
Samsung Warns Of 29% Profit Drop (BBC)
UK Not Looking To Extend Article 50, Brexit Minister Says (R.)
UK MPs Raise Safety Fears With Police (G.)
Yanis Varoufakis Says France’s Macron Is a ‘Spent Force’ (BBG)
A Farewell to “Bargain Shopping” (Kunstler)
Rival Fiefdoms Emerge In Scramble Over Trump’s Syria Withdrawal (AlM)
Turkey To Ask US To Hand Over Military Bases In Syria (R.)
China Approves Five GMO Crops For Import (R.)
India’s Top Court Backs Monsanto On GMO Cotton Patents (R.)
Ecuador To Audit Julian Assange’s Asylum & Citizenship (PBR)
WikiLeaks Tells Reporters 140 Things Not To Say About Julian Assange (R.)
140 “False And Defamatory” Statements About Julian Assange (ZH)
Warming Of Oceans Equivalent To An Atomic Bomb Per Second For 150 Years (G.)

 

 

Just what Europe needs: a recession in Germany.

German Industrial Production Unexpectedly Slumps (WSJ)

German industrial production unexpectedly slumped in November, adding to recent evidence that a nine-year recovery in Europe’s largest economy is foundering. The data underscore how trade tensions and weaknesses in emerging markets are putting a brake on Germany’s longrunning economic upswing, and could delay any move by the ECB to lift short-term interest rates. Production in Germany’s key industrial sector, adjusted for inflation and seasonal swings, fell 1.9% in November from the previous month, the country’s statistics agency said Tuesday. Economists polled by The Wall Street Journal had expected a 0.3% gain. It was the second consecutive monthly fall in German industrial output and comes after data Monday showed an ongoing decline in new manufacturing orders.

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Has been for years.

China’s Current GDP Growth Likely Less Than 6% (CNBC)

China’s current economic growth is likely below the 6 percent level amid faltering domestic demand, an economist said Tuesday. Recent signals about the world’s second-largest economy point to weaker growth, including tech giant Apple recently lowering revenue guidance for the first quarter as it blamed a variety of factors including Chinese demand. And, on Monday, Hong Kong-listed automaker Geely said it missed its sales target in 2018 and was forecasting flat sales in 2019. “It’s intriguing that the domestic demand part is the weak part — the external demand is not that bad,” said Taimur Baig, chief economist at DBS Group Research.

“Particularly weak” domestic demand was possibly signaling structural changes in the Chinese economy, Baig told CNBC’s “Capital Connection.” For its part, DBS forecasts China’s GDP growth to be “sub-6 percent” currently, Baig said. Last year, China reported economic growth of 6.5 percent in the third quarter — marking its weakest pace since the global financial crisis. Still, the country’s official growth target for 2018 was around 6.5 percent.

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Everyone has a phone who wants one.

Samsung Warns Of 29% Profit Drop (BBC)

Samsung Electronics expects to post a 29% drop in quarterly operating profit as demand for smartphones and memory chips slows. The firm forecasts operating earnings of 10.8 trillion Korean won ($9.7bn; £7.6bn) for the last three months of 2018. It marks the first quarterly profit drop in two years as strong demand for chips had boosted earnings at the firm. Samsung also faces fierce competition from Apple and Chinese rivals. In a statement on Tuesday, the firm cited lacklustre demand and rising competition for its darkening outlook. “We expect earnings to remain subdued in the first quarter of 2019 due to difficult conditions for the memory business,” the South Korean tech giant said in a statement. It forecasts revenue will decline 11% to 59 trillion won.

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But I betcha they’re talking about it.

UK Not Looking To Extend Article 50, Brexit Minister Says (R.)

The United Kingdom will leave the European Union on March 29 and is not looking to extend the Article 50 exit process, Brexit Secretary Stephen Barclay said on Tuesday. The Daily Telegraph reported that British and European officials are discussing the possibility of extending Britain’s formal notice to withdraw from the EU amid fears a Brexit deal will not be approved by March 29. “The government’s policy is clear on this, the prime minister has said it on many an occasion: We are leaving the European Union on the 29th of March. We are not looking to extend,” Barclay told Sky News. When asked if any lawmakers in the Conservative Party had changed their minds on opposing May’s deal, Barclay said: “Some have said they are much more open to but it is obviously challenging.”

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The lunatics have long ruled the asylum.

UK MPs Raise Safety Fears With Police (G.)

Dozens of MPs have written to the UK’s most senior police officer to raise concerns about safety outside parliament after the Conservative MP Anna Soubry faced chants from protesters on Monday calling her a “Nazi”. At least 55 parliamentarians signed the letter to the Metropolitan police commissioner, Cressida Dick, after the Commons Speaker, John Bercow, urged officers to do more to protect MPs and Soubry criticised the lack of police response to the abuse. Scotland Yard later confirmed it had opened an investigation into whether any offences had been committed when chants of “Soubry is a Nazi” could clearly be heard while the pro-remain MP was being interviewed by BBC News on Abingdon Green, a grassed area outside parliament used by broadcasters.

It is the second time in recent weeks that Soubry has been targeted by a small group of pro-Brexit protesters wearing yellow vests, some of whom have links to the far right. On the earlier occasion, she was surrounded by shouting men calling her a traitor. The MPs’ letter to Dick reads: “After months of peaceful and calm protests by groups representing a range of political views on Brexit, an ugly element of individuals with strong far-right and extreme-right connections, which your officers are well aware of, have increasingly engaged in intimidatory and potentially criminal acts targeting members of parliament, journalists, activists and members of the public.

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No doubt there.

Yanis Varoufakis Says France’s Macron Is a ‘Spent Force’ (BBG)

Yanis Varoufakis, former Greek Finance Minister and founder of the Democracy in Europe Movement 2025, discusses political risks in Europe and his view that French President Emmanuel Macron is a “spent force.” He speaks on “Bloomberg Surveillance.”

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Remember when stores employed half the town? You see much progress since then? First boxstores, then Amazon. Have they made people happier?

A Farewell to “Bargain Shopping” (Kunstler)

What’s up is the international implosion of the bad debt, and the fading illusion that it doesn’t matter. It has any number of ways to express itself, from store closings, to dissolving pensions, to stock market instability, to divorce, homelessness, and war. It’s what you get from a hyper-financialized economy that doesn’t really produce wealth but only steals it from somewhere else. It’s not the fault of “capitalism,” which, in theory just stands for the management of a society’s savings. America doesn’t save, it borrows. Zero interest rates made savings a mug’s game, and zero interest rates were necessary to extend the borrowing far beyond the credible boundaries of repayment.

Debt isn’t capital, it just pretends to be for a period of time. Wall Street made its trillions off the time-value of that pretense and now time is up. Even in the hardship economy we’re sailing into, people will need to buy and sell things and it is very hard to see how that fundamental process of exchange might be reorganized going forward. Back in the 1990s I attended many a town meeting (in many towns) where chain stores applied for permits to set-up operations. It was often contentious. There was always a contingent of locals — organized by the chains themselves — waving placards that said “We Want Bargain Shopping.” And there were the short-sighted town officials drooling over the real estate tax “ratables” that chain stores represented.

Their adversaries feared that their locally-owned Main Street businesses would be killed, and that was exactly what happened, in very short order. You could see it coming from a thousand miles away. Now the Big Boxes are going down. Boo Hoo…. What will emerge out of the current disorder? Perhaps Generations X-Y-and-Z will recognize an opportunity to go into business — as an alternative to purchasing a degree in gender studies for $200,000 (at 6 percent interest). There will be lots of opportunities, even in a world with generally less shopping. But it may require a deeper collapse to sweep away the impediments, both practical and mental, before that awareness turns to action.

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Trying to frustrate the withdrawal.

Rival Fiefdoms Emerge In Scramble Over Trump’s Syria Withdrawal (AlM)

Even after Secretary of Defense Jim Mattis resigned over the decision, two of President Donald Trump’s top advisers have offered different messages about his intentions for a Syria withdrawal. Secretary of State Mike Pompeo has asserted, in both internal briefings and public interviews, that Trump’s instructions are clear and the troops are coming out, while saying the administration’s overall goals for the region have not changed. Meanwhile, national security adviser John Bolton, currently traveling in Israel and Turkey with a press pool in tow, has said any US withdrawal from Syria will be conditions-based, and won’t occur until the so-called Islamic State in Syria (IS or ISIS) is fully defeated and unless Turkey guarantees protection for Syrian Kurdish fighters that Ankara considers terrorists.

“There are objectives that we want to accomplish that condition the withdrawal,” Bolton told journalists traveling with him in Israel on Sunday. “The timing of the withdrawal occurs as a result of the fulfillment of the conditions and the establishment of the circumstances that we want to see. And once that’s done, then you talk about a timetable.” Pompeo offered a different emphasis in an internal briefing to State Department Syria watchers last week, sources said: We are leaving. Pompeo, in a Jan. 3 briefing to State Department personnel who work on Syria, “made clear we are leaving. Period,” a former US official, speaking not for attribution, told Al-Monitor. “He did not mention Iran. Or [Syrian President Bashar al-]Assad. He said we are leaving. That was it. Then he left.”

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Trump better watch out that there isn’t an all-out bloody war between Turkey and the Kurds coming.

Turkey To Ask US To Hand Over Military Bases In Syria (R.)

Turkey will ask U.S. officials in talks on Tuesday to hand over its military bases in Syria to Ankara or destroy them, the Hurriyet newspaper reported, a request that could further complicate discussions over the U.S. withdrawal from Syria. U.S. National Security Adviser John Bolton was meeting with his Turkish counterpart Ibrahim Kalin on Tuesday, days after Bolton added a condition to the U.S. withdrawal, saying Turkey must agree to protect the United States’ Kurdish ally, the YPG militia, which Ankara views as a terrorist group. President Donald Trump said last month he was bringing home the some U.S. 2,000 troops in Syria, saying they had succeeded in their mission to defeat Islamic State.

His abrupt move sparked concern among officials in Washington and allies abroad and prompted Defense Secretary Jim Mattis to resign. The YPG has been the key U.S. ally in its fight against Islamic State, support that has long caused tension between Washington and Ankara. Turkey views the YPG as an extension of the outlawed Kurdistan Workers Party (PKK), which has waged a three-decade insurgency in Turkey’s mainly Kurdish south east. “Give them or destroy them,” a Hurriyet newspaper headline said, referring to what it said were 22 U.S. military bases in Syria. It cited unspecified sources as saying Turkey would not accept Washington handing them over to the YPG.

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Monsanto profits from the trade talks.

China Approves Five GMO Crops For Import (R.)

China approved five genetically modified (GM) crops for import on Tuesday, the first in about 18 months in a move that could boost its overseas grains purchases and ease pressure from the United States to open its markets to more farm goods. The United States is the world’s biggest producer of GM crops, while China is the top importer of GM soybeans and canola. U.S. farmers and global seed companies have long complained about Beijing’s slow and unpredictable process for approving GM crops for import, stoking trade tensions between the world’s two largest economies. The approvals, announced on the agriculture ministry’s website, were granted while a U.S. trade delegation is meeting with its counterparts in the Chinese capital this week.

“It’s a goodwill gesture towards the resolution of the trade issue,” said a China representative of a U.S. agricultural industry association. “It’s been in the system for a long time but they chose today to release this good news,” he added, declining to be identified due to the sensitivity of the matter. Two of the newly approved products – BASF’s RF3 canola and Bayer-owned Monsanto’s glyphosate-tolerant MON 88302 canola – had been waiting six years for permission. The other approved products were DowDuPont’s DP4114 corn and DAS-44406-6 soybean, as well as the SYHT0H2 soybean developed by Bayer CropScience and Syngenta but now held by BASF.

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Devastating.

India’s Top Court Backs Monsanto On GMO Cotton Patents (R.)

India’s Supreme Court ruled on Tuesday that U.S. seed maker Monsanto can claim patents on its genetically modified (GM) cotton seeds in the world’s biggest producer of the fibre. The decision on appeal overturns an earlier ruling by the Delhi High Court that Monsanto – which has been bought by German drug and crop chemical maker Bayer AG – was unable to claim patents on GM cotton seeds. The outcome is positive for foreign agricultural companies such as Monsanto, Bayer, Dupont Pioneer and Syngenta which have been concerned that they could lose patents on GM crops in India.

“This is a very good move as most international companies have stopped releasing new technology in the Indian market due to the uncertainty over patent rule,” said Ajit Narde, a leader of the Shetkari Sanghatana, a farmers’ body, which has been demanding access to new technologies. Access to advanced technology was important to help Indian farmers to compete with rivals overseas, Narde said.

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Trying to find a way out, so the IMF loan can come in.

Ecuador To Audit Julian Assange’s Asylum & Citizenship (PBR)

Ecuador has begun a “Special Examination” of Julian Assange’s asylum and citizenship as it looks to the IMF for a bailout, the whistleblowing site reports, with conditions including handing over the WikiLeaks founder. Former Ecuadorian President Rafael Correa tweeted an image of the letter he received from the State Comptroller General on December 19, which outlines the upcoming examination by the Direction National de Auditoria. The audit will “determine whether the procedures for granting asylum and naturalization to Julian Assange were carried out in accordance with national and international law,” and will cover the period between January 1, 2012 and September 20, 2018. Assange has been in the Ecuadorian Embassy in London since he sought asylum there in 2012.

He was granted Ecuadorian citizenship last December in a bid to protect him from being extradited to the US where he fears he faces secret charges for publishing US government cables and documents. “Because of their hatred and persecution, we are the laughing stock of the world,” Correa said of the audit. WikiLeaks tweeted the news on Wednesday, joining the dots between the audit and Ecuador’s consideration of an International Monetary Fund bailout. The country owes China more than $6.5 billion in debt and falling oil prices have affected its repayment abilities. According to WikiLeaks, Ecuador is considering a $10 billion bailout which would allegedly come with conditions such as “the US government demanded handing over Assange and dropping environmental claims against Chevron,” for its role in polluting the Amazon rainforest.

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Not sure such an extensive format is the way to go. The Guardian gets away with stonewalling its fake Assange news.

WikiLeaks Tells Reporters 140 Things Not To Say About Julian Assange (R.)

WikiLeaks on Sunday advised journalists not to report 140 different “false and defamatory” statements about its founder Julian Assange, who has been holed up in the Ecuadorean embassy in London since June 2012. It was not immediately clear what prompted the advice to media organizations, but WikiLeaks singled out Britain’s Guardian newspaper for publishing what it said was a false report about Assange. The Guardian did not immediately respond late on Sunday to a Reuters request for comment. The Australian set up WikiLeaks as a channel for publishing confidential information from anonymous sources. He is a hero to some for exposing what supporters cast as government abuse of power and for championing free speech, but to others he is a rebel who has undermined the security of the United States.

WikiLeaks angered Washington by publishing hundreds of thousands of secret U.S. diplomatic cables that laid bare often highly critical U.S. appraisals of world leaders from Russian President Vladimir Putin to members of the Saudi royal family. “There is a pervasive climate of inaccurate claims about WikiLeaks and Julian Assange, including purposeful fabrications planted in large and otherwise ‘reputable’ media outlets,” Wikileaks said an email sent to media organizations and marked “Confidential legal communication. Not for publication.” “Consequently journalists and publishers have a clear responsibility to carefully fact-check from primary sources and to consult the following list to ensure they are not spreading, and have not spread, defamatory falsehoods about WikiLeaks or Julian Assange.”

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Tyler has the entire list.

140 “False And Defamatory” Statements About Julian Assange (ZH)

WikiLeaks is sick and tired of mainstream media outlets publishing inaccurate and at times defamatory claims about its founder, Julian Assange. So in a recent email to journalists who regularly cover the organization, Wikileaks described 140 “false and defamatory” claims about its founder, who has been living inside the Ecuadorian embassy in London since June 2012. According to Reuters, WikiLeaks accused the Guardian of publishing a false report about Assange, though it was not immediately clear what specific report prompted the warning. The Guardian has refused to comment on the allegations.

The 5,000 word email claimed it was defamatory to suggest that Assange had ever been an “agent or officer of any intelligence service,” or that he had ever been employed by the Russian government, or that he is – or has been – closely connected with the Russian state. Some of the claims were more bizarre, like claiming that Assange was a pedophile, rapist, murder or a member of the Muslim Brotherhood. Others pertained to personal hygiene, like that Assange bleaches his hair, or has poor grooming habits. They also said it was defamatory to claim that Assange is a hacker or that he is not an Australian citizen.

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How many people can understand this?

Warming Of Oceans Equivalent To An Atomic Bomb Per Second For 150 Years (G.)

Global warming has heated the oceans by the equivalent of one atomic bomb explosion per second for the past 150 years, according to analysis of new research. More than 90% of the heat trapped by humanity’s greenhouse gas emissions has been absorbed by the seas, with just a few per cent heating the air, land and ice caps respectively. The vast amount of energy being added to the oceans drives sea-level rise and enables hurricanes and typhoons to become more intense. Much of the heat has been stored in the ocean depths but measurements here only began in recent decades and existing estimates of the total heat the oceans have absorbed stretch back only to about 1950. The new work extends that back to 1871. Scientists have said that understanding past changes in ocean heat was critical for predicting the future impact of climate change.

A Guardian calculation found the average heating across that 150-year period was equivalent to about 1.5 Hiroshima-size atomic bombs per second. But the heating has accelerated over that time as carbon emissions have risen, and was now the equivalent of between three and six atomic bombs per second. “I try not to make this type of calculation, simply because I find it worrisome,” said Prof Laure Zanna, at the University of Oxford, who led the new research. “We usually try to compare the heating to [human] energy use, to make it less scary.” She added: “But obviously, we are putting a lot of excess energy into the climate system and a lot of that ends up in the ocean,. There is no doubt.” The total heat taken up by the oceans over the past 150 years was about 1,000 times the annual energy use of the entire global population.

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Jan 072019
 
 January 7, 2019  Posted by at 10:54 am Finance Tagged with: , , , , , , , , , , , ,  


Berthe Morisot Julie and her boat 1884

 

China Has a Dangerous Dollar Debt Addiction (Balding)
China Drops Hints Of Trade Pain Ahead (BV)
US and China To Resume Trade Talks With Both Eager For Compromise (G.)
May To Hold Parliamentary Brexit Vote On January 15 (R.)
Theresa May Pleads For EU To Give Ground And Rescue Brexit Deal (G.)
Germany and Ireland Step Up Efforts To Find Brexit Border ‘Fix’ (G.)
Average UK Unsecured Household Debt Hits Record £15,400 (G.)
UK Car Sales Record Biggest Fall Since Financial Crisis (R.)
France’s Macron Reeling As Tough Stance Against ‘Yellow Vests’ Backfires (R.)
The Euro: A Mindless Idea – Ashoka Mody (Spiked)

 

 

$1.2 trillion will have to be rolled over this year. There are $90 billion of offshore renminbi deposits in Hong Kong available to buy dollars. Good luck.

China Has a Dangerous Dollar Debt Addiction (Balding)

China’s foreign debt has been rising rapidly, and that’s becoming an increasingly big problem — for the country and, potentially, the world. Officially, China lists its outstanding external debt at $1.9 trillion. For a $13 trillion economy, that’s not a major amount. But focusing on the headline number significantly understates the underlying risks. Short-term debt accounted for 62% of the total as of September, according to official data, meaning that $1.2 trillion will have to be rolled over this year. Just as worrying is the speed of increase: Total external debt has increased 14% in the past year and 35% since the beginning of 2017. External debt is no longer a trivial slice of China’s foreign-exchange reserves, which stood at just over $3 trillion at the end of November, little changed from two years earlier. Short-term foreign debt increased to 39% of reserves in September, from 26% in March 2016.

The true picture may be more precarious. China’s external debt was estimated at between $3 trillion and $3.5 trillion by Daiwa Capital Markets in an August report. In other words, total foreign liabilities could be understated by as much as $1.5 trillion after accounting for borrowing in financial centers such as Hong Kong, New York and the Caribbean islands that isn’t included in the official tally. Circumstances aren’t moving in China’s favor. The nation’s companies rushed to borrow in dollars when there was a 3% to 5% spread between Chinese and U.S. interest rates and the yuan was expected to strengthen. Borrowing offshore was cheaper and offered the additional bonus of likely currency gains. Now, the spread in official short-term yields has shrunk to near zero and the yuan has been depreciating for most of the past year. Refinancing debt in dollars has become harder, and more risky.

Beijing’s policies have exacerbated the buildup of foreign debt. To promote Xi Jinping’s Belt and Road Initiative, the president’s landmark foreign policy endeavor, China has been borrowing dollars on international markets and lending around the world for everything from Kenyan railways to Pakistani business parks. With this year and 2020 being the peak years for repayments, China faces dollar funding pressure. To repay their dollar debts, Chinese firms will either have to draw from the central bank’s foreign-exchange reserves (a prospect Beijing is unlikely to allow) or buy dollars on international markets. This creates a new set of problems. There are only 617 billion yuan ($90 billion) of offshore renminbi deposits in Hong Kong available to buy dollars. If China was to push firms to bring debt back onshore, this would necessitate significant outflows that would push down the yuan’s value against the dollar.

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More trickle down fails.

China Drops Hints Of Trade Pain Ahead (BV)

While a cut in the reserve requirement ratio, China’s fifth in a year, was not surprising, the 100-basis point shift that started off 2019 was larger than anticipated. Of course, demand for cash tends to spike around this time of year, due to both the Chinese New Year holiday and tax deadlines, but the economy is cooling uncomfortably fast. Official figures may show growth slowed to 6.3% in the fourth quarter, Standard Chartered reckons. Friday’s announcement adds to other easing measures: People’s Bank of China officials last month announced a new policy tool to encourage lenders to disburse their cash more widely. The “targeted medium-term lending facility” will make cheaper funding available to banks that the PBOC judges to be doing their part by lending more to small companies.

It’s certainly not full-blown monetary stimulus yet; the central bank has not fired its heavier artillery, such as a benchmark rate cut. The market has also been kept waiting for reductions to cost of borrowing from the PBOC’s more important channel, its regular medium-term lending facility. But the overall direction of travel is clear, and both recent moves point to structural issues that worry pessimists: the extra liquidity pumped into the system does not seem to be translating into more loans for smaller companies, which may signal deeper problems with capital allocation, not to mention the private sector’s nervousness about politics in 2019.

All of this is bad news for Beijing’s trade negotiators, when they hold talks with U.S. counterparts face-to-face this week. As the pain mounts, they may be pushed to yield more in order to gain relief. They could, for example, agree to formally drop the controversial “Made in China 2025” plan, or to announce concrete measures to beef up enforcement of intellectual property rights. Trump said on Sunday that weakness in China’s economy will push officials to negotiate. He may be right.

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Tariffs rose Jan 1. It’s getting urgent.

US and China To Resume Trade Talks With Both Eager For Compromise (G.)

US officials arrived in China for the first face-to-face negotiations since a 90-day truce was declared in a trade war between Washington and Beijing, in the hope of ending a bruising confrontation between the world’s two largest economies. Hopes that the sixth round of negotiations between the two sides could yield a breakthrough helped Asian shares rise on Monday, combined with optimism about the state of the global economy on the back of strong US jobs figures on Friday. In Tokyo, the Nikkei soared more than 3% and there were also strong positive moves in Shanghai, Hong Kong and Sydney. US and Chinese trade representatives were set to hold talks on Monday and Tuesday.

After failing to reach an agreement in December when Donald Trump and Xi Jinping met, both sides agreed to suspend tariff increases while holding discussions on technology transfers, as well as intellectual property theft and cybersecurity. If no agreement is reached, US tariffs on $200bn of Chinese goods will increase in March to 25% from the current 10%. Trump said on Sunday that China was under pressure to do a deal amid signs of a slowdown in its economy. “I think China wants to get it resolved. Their economy’s not doing well. I think that gives them a great incentive to negotiate,” he said. “China’s slowdown is occurring across the board, affecting almost every industry and region,” said Scott Kennedy, a trade expert focused on China at the Center for Strategic and International Studies. “Resolving the trade war or at least finding some common ground with Washington will be needed to fully restore confidence,” he said.

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Whatever the outcome, chaos guaranteed. You can jot down next Tuesday night in your agenda for that.

May To Hold Parliamentary Brexit Vote On January 15 (R.)

Prime Minister Theresa May will hold a delayed parliamentary vote on her Brexit deal on Tuesday, January 15, the BBC reported on Monday, citing government sources. May was forced to pull the vote on her deal in December after she said it would be defeated by a large majority. The government had previously said the vote would be held in the week of January 14. May said on Sunday that Britain would be in uncharted territory if her Brexit deal is rejected by parliament, despite little sign that she has won over sceptical lawmakers.

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In case you were still wondering who will be blamed.

Theresa May Pleads For EU To Give Ground And Rescue Brexit Deal (G.)

Theresa May is preparing to make another desperate plea to EU leaders to offer a concession on the Irish backstop as she attempts to win over Brexiters who have vowed to vote down the government’s deal. The prime minister on Sunday promised to hold the meaningful vote in parliament in the week beginning 14 January despite growing opposition from Conservative backbenchers and the Democratic Unionist party, whose votes are required to push the deal through parliament. As MPs prepare to return to Westminster with the crucial Commons vote looming on the withdrawal agreement, Downing Street insisted that new compromises could still be won from Europe that would ensure the safe passage of May’s plan.

The hope of new developments came as opposition to the prime minister’s deal hardened. The hurdles facing May include: • Brexiters say the government faces a disaster if it fails to ditch the current deal, with DUP deputy leader Nigel Dodds describing the Irish backstop as “toxic”. • EU sources say talks to be held in Dublin on Tuesday between Leo Varadkar and Germany’s foreign minister, Heiko Maas, will not seek to reopen negotiations over the 585-page withdrawal agreement. • Senior MPs including Yvette Cooper and Nicky Morgan are launching a parliamentary campaign to rewrite government legislation to block a no-deal Brexit. • Chris Patten, the former Conservative Party chairman, called for a second referendum on the UK’s decision to leave the EU. • More than 200 MPs have signed a letter calling for Theresa May to rule out a no-deal Brexit. Tory ex-minister Dame Caroline Spelman, who organised the letter with Labour’s Jack Dromey, said the group had been invited to see the prime minister on Tuesday.

In an interview on Sunday, May said the vote, which was due to be held last month and postponed, would go ahead next week, as she sought further clarification from the EU to address MPs’ concerns. She also said she would look at giving parliament a greater say in how the UK’s future relationship would be negotiated, but refused to say exactly what that might be. Asked if there had been any changes she could offer to backbenchers who were expected to vote down her deal, she told BBC1’s Andrew Marr Show: “What we will be setting out over the next few days are assurances in three areas: first are measures specific to Northern Ireland; the second is a greater role for parliament as we take these negotiations forward into the next stage for our future relationship; and third – and we are still working on this – is further assurances from the European Union to address the issues that have been raised.”

Whitehall sources insisted that a compromise could still be found with the EU and that further planned announcements will be made this week that would win over MPs opposed to the deal. “We will be working flat out. There will be further contacts with the EU leaders. The issue of the backstop is not yet over,” the source said.

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“The EU cannot now give another concession ahead of the vote because if the deal isn’t ratified, it means any new concessions will simply be banked again to no benefit at all. It would be pointless.”

Germany and Ireland Step Up Efforts To Find Brexit Border ‘Fix’ (G.)

Germany’s foreign affairs minister is to fly to Dublin on Tuesday for Brexit talks as relations with Ireland intensify in an attempt to find a “fix” that will help Theresa May get the EU withdrawal agreement ratified. Heiko Maas will address an annual gathering of Ireland’s global diplomatic corps and take part in an unofficial fourth round of talks between Ireland and German leaders since Thursday. He will make the address in English, with a large German media contingent accredited, a reflection of how significant his speech is deemed back in Berlin. Last week the taoiseach, Leo Varadkar, had a lengthy telephone call with Angela Merkel. He then flew to Munich to address a meeting of her coalition partners, the CSU, and on Friday met the Germany chancellor’s successor as CDU leader, Annegret Kramp-Karrenbauer, for discussions on Brexit and the future of Europe.

The emerging Irish-German nexus on the Irish border backstop “fix” is being seen as significant in Irish political circles, where people also point to the fact that Varadkar speaks German and has a good working relationship with Merkel. They point out it was Merkel, not the taoiseach, who requested the phone call with Varadkar last Thursday. The talks lasted 40 minutes and were, according to Varadkar, “an opportunity to kind of brainstorm a bit as to what we could do to assist prime minister Theresa May in securing ratification of the withdrawal agreement”. But informed EU sources say Brexiters should not raise their hopes of a reopening of negotiations. The “fix” will be further details in the political declaration on the future relationship and not the 585-page withdrawal agreement. “That is locked,” said one EU source.

There is deep frustration that the British cannot see how far the EU went to break the impasse on the Irish border talks, yielding to May’s demands for a UK-wide customs arrangement. One EU source said: “The EU was totally opposed to this in 2017 and again in March and June in 2018. It then emerged out of the tunnel in the autumn as the solution, but the Brexiters did not see it for what it was – a major concession. [..] “They are now looking for more concessions, but they just can’t be given. The Brits banked this major concession and just did nothing with it. People can’t understand why it wasn’t sold as a victory for May. “The EU cannot now give another concession ahead of the vote because if the deal isn’t ratified, it means any new concessions will simply be banked again to no benefit at all. It would be pointless.”

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That’s about $20,000. Not including mortgages and student loans.

Average UK Unsecured Household Debt Hits Record £15,400 (G.)

Britain’s household debt mountain has reached a new peak, with UK homes now owing an average of £15,385 to credit card firms, banks and other lenders, according to the TUC. The trade union body said household debt rose sharply in 2018 as years of austerity and wage stagnation forced households to increase their borrowing. The TUC said in its annual report on the nation’s finances that the amounts owed by British households rose to a combined £428bn in the third quarter of 2018. Each household owed £886 more than it did 12 months previously, it said. The figures do not include outstanding mortgage debts but do include student loans.

The level of unsecured debt as a share of household income is now 30.4%, the highest level it has ever been at. It is well above the £286bn peak in 2008 before the financial crisis, the TUC said. That figure also included student loans, but tuition fees then were £3,000 a year compared with up to £9,250 now. [..] The TUC general secretary, Frances O’Grady, said: “Household debt is at crisis level. Years of austerity and wage stagnation has pushed millions of families deep into the red. The government is skating on thin ice by relying on household debt to drive growth. A strong economy needs people spending wages, not credit cards and loans.”

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They’re going to stay home?!

UK Car Sales Record Biggest Fall Since Financial Crisis (R.)

British new car sales in 2018 fell at their fastest rate since the global financial crisis a decade ago, hit by a slump in demand for diesel, stricter emissions rules and waning consumer confidence due to Brexit, according to an industry body. Demand dropped by nearly 7% last year to 2.37 million vehicles, the largest fall since registrations nosedived 11.3% in 2008, preliminary data from the Society of Motor Manufacturers and Traders (SMMT) showed. A nearly 30% drop in demand for diesel was the most significant factor in the decline. Diesel has been pummelled since the Volkswagen emissions cheating scandal of 2015, prompting a crackdown and higher levies.

But the industry also warned that Britain’s departure from the European Union due at the end of March risks the future of a sector which employs over 850,000 people and has been one of Britain’s few manufacturing success stories since the 1980s. “It’s still hard to see any upside to Brexit,” said SMMT Chief Executive Mike Hawes. “Everyone recognises that Brexit is an existential threat to the UK automotive industry and we hope a practical solution will prevail,” he said, calling for lawmakers to back Prime Minister Theresa May’s deal to guarantee a transition period. [..] After record highs in 2015 and 2016, demand fell in 2017 and some analysts see car demand as a leading indicator which could be a harbinger for future economic performance. Britain’s economy slowed to a crawl at the end of 2018, the housing market is stalling and lending to consumers growing at its slowest pace in nearly four years, according to data released on Friday.

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Macron is not just a fool himself, he’s surrounded by them as well. His spokesman after fleeing his office out of a back door as protesters invaded the courtyard and smashed up several cars said: “It wasn’t me who was attacked.” “It was the Republic.”.

Because the government is the Republic. The population is not.

France’s Macron Reeling As Tough Stance Against ‘Yellow Vests’ Backfires (R.)

Emmanuel Macron intended to start the new year on the offensive against the ‘yellow vest’ protesters. Instead, the French president is reeling from more violent street demonstrations. What began as a grassroots rebellion against diesel taxes and the high cost of living has morphed into something more perilous for Macron – an assault on his presidency and French institutions. The anti-government protesters on Saturday used a forklift truck to force their way into a government ministry compound, torched cars near the Champs Elysees and in one violent skirmish on a bridge over the Seine punched and kicked riot police officers to the ground.

The French authorities’ struggle to maintain order during the weekend protests raises questions not just over policing tactics but also over how Macron responds, as he prepares to bring in stricter rules for unemployment benefits and cut thousands of public sector jobs. On Sunday evening, Macron wrote on Twitter: “Once again, the Republic was attacked with extreme violence – its guardians, its representatives, its symbols.” His administration had hardened its stance against the yellow vests after the protest movement appeared to have lost momentum over the Christmas holidays.

The government would not relent in its pursuit of reforms to reshape the economy, government spokesman Benjamin Griveaux said on Friday, branding the remaining protesters agitators seeking to overthrow the government. Twenty-four hours later, he was fleeing his office out of a back door as protesters invaded the courtyard and smashed up several cars. “It wasn’t me who was attacked,” he later said. “It was the Republic.”

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“There is a Euro, which is a single currency in an incomplete monetary union, with a set of fiscal rules that are evidently economically illiterate..”

The Euro: A Mindless Idea – Ashoka Mody (Spiked)

[..] most serious of all is the notion of common economic development as a basis for Europe. It was briefly true after the Treaty of Rome in 1957, which opened up the borders, but the momentum ran out within two decades. You open borders, but once they’re open, there’s not a lot more you can do. Even the gains from the so-called Single Market are very limited beyond a certain point. Every economist understands that. On the Euro, there was never any question that it was a bad idea. Nicholas Kaldor, an economist at Cambridge University, wrote in March 1971 that a single currency was a terrible idea, both as economics and as politics. And Kaldor has been proven right time and again.

But the entire European establishment just ignores every subsequent warning from well-regarded economists, and produces defensive counternarratives. For example, I often hear that Europe needs fixed exchange rates in order to have a Single Market. Why? Germany is trading a lot with Poland, Hungary and the Czech Republic, which are in the Single Market, but have different currencies. These fluctuate, but the trade continues apace. You don’t need a single currency for a Single Market.

spiked: When did your critique of the European project emerge? Was it during your involvement in the Irish bailout? Mody: When I finished at the IMF I planned to write a book on the Euro crisis. And I began writing it as an IMF economist would – what happened before the crash, the bubble, the bubble bursting, the panic, the fact it wasn’t well managed, and so on. But I soon realised that something wasn’t right here. And so I spent two years tracing the history of the Euro, and asking the question: what brought the Euro into existence in its current form? You see, it is not just that there is a Euro. There is a Euro, which is a single currency in an incomplete monetary union, with a set of fiscal rules that are evidently economically illiterate – and nobody questions the fact that they are economically illiterate, that they lack a necessary fiscal backstop and the necessary fiscal union. So why does it exist?

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Jan 062019
 
 January 6, 2019  Posted by at 10:25 am Finance Tagged with: , , , , , , , , , , , ,  


Paul Gauguin Osny, rue de Pontoise, Winter 1883

 

You Won’t Hear The Ugly Truth From The Fed (Henrich)
Yellow Vests Torch Cars In Chaos Of France’s 8th Weekend Of Clashes (Exp.)
If Corbyn Backs Brexit, He Faces Electoral Catastrophe (O.)
Brexit Deal Critics Risking Democracy – May (BBC)
EU Dashes May’s Hopes Of Landing Better Brexit Deal (Ind.)
Hackers Release 9/11 Papers, Say Future Leaks To Burn Down US Deep State (RT)
Documents Link UK Govt-Funded Integrity Initiative To Anti-Russia Narrative (RT)
Fears Grow In Africa That The Flood Of Funds From China Will Start To Ebb (O.)
It’s Nancy Pelosi’s Smile That Gets Me (Jim Kunstler)
Ex–NY Times Editor Jill Abramson Says Fox Took Her Words Out Of Context (AP)

 

 

Because the Fed IS the ugly truth.

It is sad that so many people still look at the Fed to save the “markets”. Sad and blind. Like nobody has any interest in having functioning markets and societies, and it’s all only about a quick buck.

You Won’t Hear The Ugly Truth From The Fed (Henrich)

In March 2009 markets bottomed on the expansion of QE1 (quantitative easing, part one), which was introduced following the initial announcement in November 2008. Every major correction since then has been met with major central-bank interventions: QE2, Twist, QE3 and so on. When market tumbled in 2015 and 2016, global central banks embarked on the largest combined intervention effort in history. The sum: More than $5 trillion between 2016 and 2017, giving us a grand total of over $15 trillion, courtesy of the U.S. Federal Reserve, the European Central Bank and the Bank of Japan:

When did global central-bank balance sheets peak? Early 2018. When did global markets peak? January 2018. And don’t think the Fed was not still active in the jawboning business despite QE3 ending. After all, their official language remained “accommodative” and their interest-rate increase schedule was the slowest in history, cautious and tinkering so as not to upset the markets. With tax cuts coming into the U.S. economy in early 2018, along with record buybacks, the markets at first ignored the beginning of QT (quantitative tightening), but then it all changed. And guess what changed? Two things. In September 2018, for the first time in 10 years, the U.S. central bank’s Federal Open Market Committee (FOMC) removed one little word from its policy stance: “accommodative.” And the Fed increased its QT program. When did U.S. markets peak? September 2018.

[..] Global central banks did the dirty work for the Fed between 2016 and 2017, adding ever more artificial liquidity. But then the ECB slowed its QE program and finally ended it in late 2018. How did the DAX (German stock index) handle all that removal in artificial liquidity? Not well.

[..] don’t mistake this rally for anything but for what it really is: Central banks again coming to the rescue of stressed markets. Their action and words matter in heavily oversold markets. But the reality remains, artificial liquidity is coming out of these markets. [..] What’s the larger message here? Free-market price discovery would require a full accounting of market bubbles and the realities of structural problems, which remain unresolved. Central banks exist to prevent the consequences of excess to come to fruition and give license to politicians to avoid addressing structural problems.

Read more …

Macron still does everything wrong. Now he chides the protesters for not accepting a debate on his terms.

Yellow Vests Torch Cars In Chaos Of France’s 8th Weekend Of Clashes (Exp.)

The yellow vest protesters who have entered their eighth week of street rallies are trying to topple President Macron and his administration, according to a French government spokesman. The movement made up largely of working and lower middle-class citizens has won widespread public approval as it is seen by many as a means of making the voices of ordinary men and women heard. But after months of unrest in Paris and other French cities, Benjamin Griveaux said the gilets jaunes are not interested in the three-month debate on the reforms promised by Mr Macron, but instead want to overthrow the young president. Speaking at a press conference on Friday after the weekly cabinet meeting, Mr Griveaux said members of the movement “seek insurrection and basically want to overthrow the government”.

He added: “They are henceforth involved in a political struggle to contest the legitimacy of the government and of the president of the republic. “Those who called for a debate don’t want to participate in a big national debate.” Mr Macron said he intends to write a letter to the French people this month outlining how he will deliver his ambitious plans. [..] ‘Angry France’, one of the group which makes up the yellow vests, rejected the president’s offer of a national debate. A statement issued by the group read: “Mr President, this movement that you don’t recognise is nevertheless spreading and strengthening itself even as your fellow citizens are cudgelled, gassed and detained for hours in an unbelievable lack of respect for citizens’ rights.”

Read more …

Corbyn has already built a disaster.

Westminster voting intention:

CON: 40% (-1)
LAB: 34% (-5)
LDEM: 10% (+3)
GRN: 4% (-)
UKIP: 4% (+1)

via @YouGov, 21 Dec – 04 Jan
Chgs. w/ 17 Dec

If Corbyn Backs Brexit, He Faces Electoral Catastrophe (O.)

I have seldom seen a poll on a subject dividing the nation for which the lessons are so clear. The biggest survey yet conducted on Brexit shows that Remain would comfortably win a referendum held today – and that Labour would crash to a landslide election defeat if it helped Brexit go ahead. YouGov questioned more than 25,000 people between 21 December and last Friday. It tested two referendum scenarios. If the choice is Remain versus the government’s withdrawal agreement, Remain leads by 26 points: 63% to 37%. If the choice is Remain versus leaving the EU without a deal, Remain wins by 16 points: 58% to 42%. The difference is explained by the views of those who voted Leave in 2016.

Many of them want a clean break with Brussels, but back away from an agreement that fails to redeem the promise in 2016 to “take back control”. Among all voters, only 22% support the government’s deal. Among Leave voters the figure is not much higher: 28%. The larger point is that the nature of the choice has changed since 2016 – 52% voted Leave when it was a general aspiration with little apparent downside. Today support for Brexit is significantly lower when Leave is more clearly defined. This pattern is familiar to referendums in different countries: many people support the broad idea of change, but back away when the details are laid out. They want “change”, but not “this change”. That is clearly the case today: 80% of people who voted Leave two years ago still say they want Brexit to go ahead; but the figure falls to 69% if the choice is a “no deal” Brexit, and only 55% if the referendum offers the withdrawal agreement.

The rest say they don’t know, or switch to Remain. (The respective loyalty rates on the other side – Remain voters in 2016 who would stick with Remain today – are significantly higher.) [..] The conventional voting intention question produces a six-point Conservative lead (40% to 34%). This is bad enough for an opposition that ought to be reaping electoral dividends at a time when the government is in crisis. However, when voters are asked how they would vote if Labour failed to resist Brexit, the Conservatives open up a 17-point lead (43% to 26%). That would be an even worse result than in Margaret Thatcher’s landslide victory in 1983, when Labour slumped to 209 seats, its worst result since the 1930s.

Read more …

“..fewer than one in four voters..” support May’s deal. But opposing it risks democracy. You tell me.

Brexit Deal Critics Risking Democracy – May (BBC)

The prime minister has urged MPs to back her Brexit deal, saying it is the only way to honour the referendum result and protect the economy. Writing in the Mail on Sunday, Theresa May said her critics – both Remainers and Brexiteers – risk damaging democracy if they oppose her plan. But a poll carried out for the People’s Vote campaign suggests fewer than one in four voters support her Brexit deal. MPs are due to vote on whether to back Mrs May’s Brexit plan next week. The UK is due to leave the EU on 29 March 2019 – regardless of whether there is a deal with the EU or not. A deal on the terms of the UK’s divorce and the framework of future relations has been agreed between the prime minister and the EU – but it needs to pass a vote by MPs in Parliament before it is accepted.

The House of Commons vote had been scheduled to take place in December but Mrs May called it off after it became clear that not enough MPs would vote for her deal. The debate on the deal will restart on Wednesday, with the crucial vote now expected to take place on 15 January. Writing in the Mail, Mrs May said: “The only way to both honour the result of the referendum and protect jobs and security is by backing the deal that is on the table.” She said “no one else has an alternative plan” that delivers on the EU referendum result, protects jobs and provides certainty to businesses.

“There are some in Parliament who, despite voting in favour of holding the referendum, voting in favour of triggering Article 50 and standing on manifestos committed to delivering Brexit, now want to stop us leaving by holding another referendum,” she said. “Others across the House of Commons are so focused on their particular vision of Brexit that they risk making a perfect ideal the enemy of a good deal. “Both groups are motivated by what they think is best for the country, but both must realise the risks they are running with our democracy and the livelihoods of our constituents.”

Read more …

May is now holding the entire country hostage.

She’s going to have to have that vote soon. But today’s Telegraph reports she wants to delay it again. Because she knows she will lose.

EU Dashes May’s Hopes Of Landing Better Brexit Deal (Ind.)

Theresa May’s hopes of securing the legally binding changes needed to win support for her Brexit deal are fading, after EU sources said it was unlikely there would be a new European summit to approve them. An emergency council like the one held in November would be needed to sanction any changes that would have legal force. But diplomats have told The Independent that any concessions offered would be unlikely to require a meeting. It means any alterations or new language secured by the prime minister will probably not satisfy enough rebel Tories or her DUP partners in government to win the Commons vote expected in the coming weeks. Only this week the DUP warned the prime minister that unless Brussels gave significant ground on the hated Irish backstop it would not support her plans.

MPs return to Westminster next week and begin several days of debate on Ms May’s deal before it is put to a vote that most people expect the prime minister to lose. Downing Street has been trying to play down expectations that Ms May will secure a major change before the vote due on 15 or 16 January, but there had been talk that European officials are holding back one concession that they could make to the UK later in the year. But even for those changes to have legal force, a new summit would need to be called as currently there is only one scheduled for the end of March – far too late to do anything meaningful before the UK drops out of the EU on 29 March. European insiders told The Independent that the idea of a summit had been considered, but this was now looking less likely.

Read more …

They want a lot more money.

Hackers Release 9/11 Papers, Say Future Leaks To Burn Down US Deep State (RT)

The Dark Overlord hacker group has released decryption keys for 650 documents it says are related to 9/11. Unless a ransom is paid, it threatened with more leaks that will have devastating consequences for the US ‘deep state’. The document dump is just a fraction of the 18,000 secret documents related to the September 11, 2001 terrorist attacks believed to have been stolen from insurers, law firms, and government agencies. The Dark Overlord initially threatened to release the 10GB of data unless the hacked firms paid an unspecified bitcoin ransom. However, on Wednesday, the group announced a “tiered compensation plan” in which the public could make bitcoin payments to unlock the troves of documents.

A day later, the Dark Overlord said that it had received more than $12,000 in bitcoin – enough to unlock “layer 1” and several “checkpoints,” comprised of 650 documents in total. There are four more layers that remain encrypted and, according to the group, “each layer contains more secrets, more damaging materials… and generally just more truth.” The hackers are asking for $2 million in bitcoin for the public release of its “megaleak,” which it has dubbed “the 9/11 Papers.” [..] By design, the “layer 1” documents – if authentic – do not appear to contain any explosive revelations. The publications focus mostly on testimonies from airport security and details concerning insurance pay-outs to parties affected by the 9/11 attacks. However, the data dump suggests that the group is not bluffing.

Read more …

British smear is second to none.

Documents Link UK Govt-Funded Integrity Initiative To Anti-Russia Narrative (RT)

The Integrity Initiative, a UK-funded group exposed in leaked files as psyop network, played a key role in monitoring and molding media narratives after the poisoning of double agent Sergei Skripal, newly-dumped documents reveal. Created by the NATO-affiliated, UK-funded Institute for Statecraft in 2015, the Integrity Initiative was unmasked in November after hackers released documents detailing a web of politicians, journalists, military personnel, scientists and academics involved in purportedly fighting “Russian disinformation.” The secretive, government-bankrolled “network of networks” has found itself under scrutiny for smearing UK Labour leader Jeremy Corbyn as a Kremlin stooge – ostensibly as part of its noble crusade against anti-Russian disinformation.

Now, new leaks show that the organization played a central role in shaping media narratives after Sergei Skripal and his daughter Yulia were mysteriously poisoned in Salisbury last March. It’s notable that many of the draconian anti-Russia measures that the group advocated as far back as 2015 were swiftly implemented following the Skripal affair – even as London refused to back up its finger-pointing with evidence. Days after the Skripals were poisoned, the Institute solicited its services to the Foreign & Commonwealth Office, offering to “study social media activity in respect of the events that took place, how news spread, and evaluate how the incident is being perceived” in a number of countries. After receiving the government’s blessing, the Integrity Initiative (II) launched ‘Operation Iris,’ enlisting “global investigative solutions” firm Harod Associates to analyze social media activity related to Skripal.

Read more …

China’s taken the place of the IMF.

Fears Grow In Africa That The Flood Of Funds From China Will Start To Ebb (O.)

Concerns over Chinese growth could spell problems for Africa and other parts of the developing world. Beijing funded an overseas investment boom in the past few decades as it strove to become the world’s second largest economic superpower, while also buying vast amounts of the natural resources produced by emerging nations. The scale of the expansion forms part of China’s multibillion-dollar “Belt and Road” Initiative, a state-backed campaign to promote its influence around the world, while providing stimulus for its own slowing economy. The transcontinental development project launched by China’s president, Xi Jinping, in 2013 aims to improve infrastructure links between Asia, Europe and Africa, with the aim for China to reap the benefits from increasing levels of global trade.

Mounting tensions between China and the US, however, have acted as a handbrake on rising levels of world trade. The IMF forecasts Chinese growth will slow to 6.2% this year from about 6.6% in 2018, due to escalations in the trade dispute that erupted last year. There are also rising fears over the rapid growth of debt in China used to fuel its expansion over the past decade. With Chinese investment in some African nations worth more than some of those states’ own domestic spending, analysts fear the prospect of weaker investment in future and fading demand for commodity exports. Figures from the United Nations’ development agency, Unctad, show that weakness in global commodity prices in 2014 and 2015 caused foreign direct investment flows into Africa to fall from $55bn in 2015 to $42bn in 2017, showing how Africa might be hit by a Chinese slowdown.

Read more …

“Nancy’s smile is full of malice and bad faith..”

It’s Nancy Pelosi’s Smile That Gets Me (Jim Kunstler)

It’s Nancy Pelosi’s smile that gets me…oh, and not in a good way. It’s a smile that is actually the opposite of what a smile is supposed to do: signal good will and good faith. Nancy’s smile is full of malice and bad faith, like the smiles on representations of Shiva-the-Destroyer and Huitzilopochtli, the Aztec sun god who demanded thousands of human hearts to eat, lest he bring on the end of the world. It’s not exactly the end of the world in Washington D.C., but as the old saying goes: you can see it from there! It’s out on the edge of town like one of those sinister, broken-down circuses from the Ray Bradbury story-bag, with its ragtag cast of motheaten lions, crippled acrobats, a crooked wagon full of heartbroken freaks, and a shadowy ringmaster on a mission from the heart of darkness.

The new Democratic majority congress has convened in the spirit of a religious movement devoted to a single apocalyptic objective: toppling the Golden Golem of Greatness who rules in the House of White Privilege. They’re all revved up for inquisition, looking to apply as many thumbscrews, cattle prods, electrodes, waterboards, and bamboo splinters as necessary in pursuit of rectifying the heresy of the 2016 election. The simpleton California congressman Brad Sherman (D-30th dist.) couldn’t contain his glee, like a seven-year-old boy about to pull the wings off a fly. As soon as the Democratic majority was sworn in, he filed his articles of impeachment to impress his Wokester San Fernando Valley constituents out for deplorable blood.

That was even a bit too much for Madam Speaker who reminded Sherman that some scintilla of a predicate crime was required — but surely would be available when Special Counsel Robert Mueller hurls down his tablets of accusation from on high.

Read more …

But Kurtz simple quoted directly from her book?! Here’s thinking she got a few angry calls. Genre: if you ever want to work in this town again….

Ex–NY Times Editor Jill Abramson Says Fox Took Her Words Out Of Context (AP)

Jill Abramson, the former editor of the New York Times, said Fox News took her criticism of the newspaper’s Trump coverage in her upcoming book “totally out of context” for a story that appeared this week. The Fox News story, headlined “Former NY Times editor rips Trump coverage as biased,” quotes from Abramson’s book, “Merchants of Truth.” She wrote that although current Times executive editor Dean Baquet publicly said he didn’t want the newspaper to be the opposition party, “his news pages were unmistakably anti-Trump.” With an audience perceived to be mostly liberal, “there was an implicit financial reward for the Times in running lots of Trump stories, almost all of them negative,” she wrote in the book.

In a Saturday tweet, Trump commended Abramson as “100% correct” about the paper’s “[h]orrible and totally dishonest reporting on almost everything they write” and suggested it justified his calling the Times “fake news”. [..] Abramson was executive editor of the New York Times Co. flagship from 2011 to 2014 before being fired following a dispute with Baquet, then one of her deputies. She said in an email interview with the Associated Press that the Fox article’s author, “Media Buzz” host Howard Kurtz, had ignored compliments that she had for the Times and the Washington Post. “His article is an attempt to Foxify my book,” she wrote in the email, saying her book was “full of praise” for the New York Times and the Washington Post “and their coverage of Trump.”

Kurtz said in a phone interview with the AP that he was “sorry to see Jill back away from her own words” and that his report was accurate. “I would have written this story the same way if I were working for any news organization,” said Kurtz, a former Washington Post media columnist. “Her sometimes harsh criticism of her former paper’s Trump coverage leaps off the page and is clearly the most newsworthy element in the book because of her standing as a former executive editor.” [..] Abramson wrote that the more anti-Trump the Times was perceived to be, the more it was mistrusted for being biased. The late publisher Adolph Ochs’s promise to cover the news without fear or favor “sounded like an impossible promise in such a polarized environment, where the very definition of ‘fact’ and ‘truth’ was under constant assault,” she wrote in the book.

Read more …

Jan 012019
 
 January 1, 2019  Posted by at 10:58 am Finance Tagged with: , , , , , , , , , , , ,  


Alfred Sisley Snow at Louveciennes 1878

 

Looking Forward To Dow 11,000 (Bear’s Lair)
US Stocks Post Worst Year In A Decade, S&P Falls More Than 6% In 2018 (CNBC)
European Stocks End 2018 With Deep Losses; Worst Year In A Decade (CNBC)
FTSE 100 Tumbles By 12.5% In 2018 – Its Biggest Fall In A Decade (G.)
Chinese Markets’ 2018 Performance Was Their Worst In A Decade (CNBC)
China December Manufacturing Activity Contracts Even More Than Expected (CNBC)
Lessons From Two Decades Of The Euro (Ind.)
The Delusional Leaders of the Eurozone (Steve Keen)
‘Nostradamus’ Macron Mercilessly Mocked On Twitter (RT)
France Starts Taxing Google, Apple, Facebook, and Amazon (RT)
Russia’s $75 Trillion In Resources Is Why Sanctions Are Impossible (RT)
“I See No Way Out”: Countless Americans Still Living Paycheck To Paycheck (ZH)
Putin Says Still ‘Open To Dialogue’ With US (AFP)
Giuliani Says Assange Should Not Be Prosecuted (Lauria)

 

 

Happy New Year, everyone!

Be sure to stay with the Automatic Earth in 2019 to keep up with the biggest possible picture. And do consider sponsoring us.

Here’s a good way to start the new year. Martin Hutchison explains the many advantages of a 50% drop in the Dow. A functioning economy for one.

The Dow’s at 23,000 right now.

Looking Forward To Dow 11,000 (Bear’s Lair)

[..] owing to decades of funny money the market has got far ahead of its equilibrium value, which is now around 11,000 on the Dow, half the present level. It is worth examining what a world with Dow 11,000 will look like. Dow 11,000 isn’t just a random number. The Fed changed monetary policy definitively at its meeting in February 1995, and on the same day, the Dow Jones Industrial Index broke through 4,000 for the first time — with the Fed changing its policy decisively to an easier trend, it was natural for the market to rise. Since stock prices should rise approximately in line with the economy’s expansion, that Dow 4,000 is equivalent to Dow 11,000 today, taking account the rise of around 175% in nominal GDP between the first quarter of 1995 and today.

So, if the Dow were around 11,000 today, it would be at the same relative valuation as it was in February 1995. That was not an ultra-low level; the Dow was almost 50% above its peak of October 1987 and after all, that day in February 1995 was the first time the Dow had ever reached the exalted level of 4,000. The world of Dow 11,000, after the next bear market and perhaps partial recovery, will have quite a lot of our current economic landscape missing. Far too many Fortune 500 companies have overindulged in stock buybacks, leaving them in some cases with no equity at all. As the stock market decline continues, many of those companies will be forced to recapitalize themselves, generally at share prices far below where they bought back shares.

For some of them, this emergency recapitalization will prove to be insufficient, and a second recapitalization will prove unavailable in the market. At that point, those companies will be forced to file for bankruptcy. The chances are, the victims will include some very large names indeed. [..] in our Dow 11,000 world it would no longer be attractive for companies to repurchase their shares in large volumes – the cost of debt and equity capital would be too great to be balanced by the modest short-term earnings boost from doing so. [..] A further consequence of our new Dow 11,000 world will be a re-balancing of the wealth distribution. Asset prices would be much lower, capital scarcer and borrowing more expensive, so there will be far fewer billionaires and the explosion in earnings of the Top 0.01% will reverse.

Read more …

A series of headlines depicts how many stats are at their owrst in 10 years.

US Stocks Post Worst Year In A Decade, S&P Falls More Than 6% In 2018 (CNBC)

Wall Street concluded a tumultuous 2018 on Monday as the major stock indexes posted their worst yearly performances since the financial crisis. After solid gains on Monday, the S&P 500 and Dow Jones Industrial Average were down 6.2% and 5.6%, respectively, for 2018. Both indexes logged in their biggest annual losses since 2008, when they plunged 38.5% and 33.8%, respectively. The Nasdaq Composite lost 3.9% in 2018, its worst year in a decade, when it dropped 40%. The S&P 500 and Dow fell for the first time in three years, while the Nasdaq snapped a six-year winning streak. 2018 was a year fraught with volatility, characterized by record highs and sharp reversals.

This year also marks the first time ever the S&P 500 posts a decline after rising in the first three quarters. For the quarter, the S&P 500 and Nasdaq plunged 13.97% and 17.5%, respectively, their worst quarterly performances since the fourth quarter of 2008. The Dow notched its worst period since the first quarter of 2009, falling nearly 12%. A sizable chunk of this quarter’s losses came during a violent December. The indexes all dropped at least 8.7% for the month. The Dow and S&P 500 also recorded their worst December performance since 1931 and their biggest monthly loss since February 2009.

Read more …

US, EU, where did all that virtual wealth vanish into?

European Stocks End 2018 With Deep Losses; Worst Year In A Decade (CNBC)

European stocks closed higher on the final day of 2018 but marked the year as its worst in a decade. The pan-European Stoxx 600 closed 0.38% higher. The FTSE 100 closed trading on the final day of the year, down 0.2%. The French CAC, meanwhile, closed more than 1% higher. U.K.’s FTSE index is down more than 12% since the start of the year and has suffered its biggest one-year fall since the financial crisis in 2008 as investors digest uncertainty surrounding the country’s exit from the European Union. The pan-European Stoxx 600 has ended the year down 13% – its worst since the financial crisis. The DAX, has followed a similar trajectory, down more than 18% since the start of the year.

Read more …

Not much of the FTSE losses can be Brexit-related, it’s very much in line with everyone else.

FTSE 100 Tumbles By 12.5% In 2018 – Its Biggest Fall In A Decade (G.)

Britain’s leading stock market index has suffered its worst year in a decade as economic worries, Brexit uncertainty and the trade war between the US and China all spooked investors. The FTSE 100 tumbled by 12.5% during 2018, its biggest annual decline since 2008, wiping out more than £240bn of shareholder value. The blue-chip index of top UK shares ended the year at 6,728 points, down from 7,687 on the last trading day of 2017. The sell-off has inflicted significant losses on pension funds, major fund managers and small investors alike.

[..] Some investors are deeply concerned that the US economy could be slowing, even as the country’s central bank raises interest rates despite protests from Donald Trump. “Markets are torn between recession fears and the hope that it is just another false alarm,” said Holger Schmieding of the German bank Berenberg. “As the saying goes, financial markets tend to predict nine out of five recessions. For economists, it is probably the other way around, though. Economic fundamentals remain mostly positive. What we may have to fear for 2019 is fear itself and the risk of extraordinary political stupidity well beyond the usual mishaps of life.”

Read more …

China’s numbers are even worse than the rest.

Chinese Markets’ 2018 Performance Was Their Worst In A Decade (CNBC)

This year has not been a great one for Chinese stocks. In fact, it’s been the worst in a decade. The Shanghai composite, the mainland’s major share average, ended the trading year at 2,493.90 — that was approximately 24.6% lower than its final close of 2017. All 10 sectors of the index were down significantly in the year, with information technology being the worst performer as it fell 34%, according to Chinese financial services firm Wind Information. Even the best performing sector, utilities, dropped 11%. That puts the Shanghai composite’s performance at its worst since 2008, the year of the global financial crisis, when it plunged more than 65%.

Those dramatic losses were also seen elsewhere in China, with the Shenzhen composite plummeting about 33.25% and the Shenzhen component plunging around 34.44% in 2018 as compared to their last close of 2017. The Shenzhen component’s performance was also its worst since 2008, when it dove 63%, according to Wind Information. As shares on the mainland were pummeled, Hong Kong stocks performed a bit better. The Hang Seng index notched a decline of only 13.61% for 2018.

Read more …

The question becomes whether China can lead everybody down.

China December Manufacturing Activity Contracts Even More Than Expected (CNBC)

Activity in China’s manufacturing sector contracted for the first time in more than two years in the month of December amid a domestic economic slowdown and Beijing’s ongoing trade dispute with the U.S. The Chinese National Bureau of Statistics said on Monday official manufacturing Purchasing Managers’ Index (PMI) was 49.4 — lower than the 49.9 analysts expected in a Reuters poll. The December reading was the weakest since February 2016, according to Reuters’ record. That was worse than November’s official manufacturing PMI, which was 50.0. A reading above 50 indicates expansion, while a reading below that signals contraction. In particular, new export orders contracted for a seventh straight month, with that measure falling to 46.6 from 47.0 in the previous month.

Meanwhile, China’s official non-manufacturing PMI came in at 53.8, which was higher than the reading of 53.4 in November. The services sector accounts for more than half of the Chinese economy and the “bright spot” of the improved on-month expansion in December points to a rebalancing of the Chinese economy toward more consumption, Nomura economists wrote in a note on Monday. [..] Even before the escalation in trade tensions with the U.S. this year, Beijing was already trying to manage a slowdown in its economy after three decades of breakneck growth. China’s worse-than-expected PMI reading on the last day of 2018 suggests a challenging start to 2019, said Frederic Neumann, co-head of Asian Economics Research at HSBC.

“China is a good gauge in terms of temperature about what’s going on in the global industrial cycle,” Neumann told CNBC’s “Squawk Box.” The “PMI numbers out today suggest the economy is still decelerating. That’s going to weigh down not just Chinese GDP growth but really global trade,” Neumann said. In fact, Nomura economists warned that “the worst is yet to come,” for China. “Looking ahead, we see more headwinds to growth from weakening domestic demand, the ongoing credit downcycle, a cooling property sector and lingering China-U.S. trade tensions,” the economists wrote.

Read more …

Watch the European elections in May. They will be like an earthquake.

Lessons From Two Decades Of The Euro (Ind.)

Twenty years ago an “accounting currency” was born. This was the single currency of what became known as the “eurozone”: the euro. Now this wasn’t the notes and coins that most of us associate with the euro. Those were only introduced three years later in January 2002. That was the moment when the single currency became tangible in the lives of hundreds of millions of people across Europe, and the old deutschmarks, guilders, francs, lira, pesetas and all the ancient constituents of the European monetary mosaic were consigned to history. What happened on 1 January 1999 was the creation of a rigidly fixed exchange rate and interest rate regime for all those national currencies, so they could all be valued in a common unit.

The euro was not yet tangible, but it existed in the ether and in the foreign exchange markets. It has been a turbulent two decades for the single currency since that launch. [..] many economists would snort at the very idea of the euro being a success. Since 2000 eurozone GDP growth per capita measured (at purchasing power parity) has underperformed that of the US and the UK, growing by 15% versus 19% and 20% respectively. Yet that’s less important than the fact that the single currency was in the throes of existential crisis between 2010 and 2015, when it looked like the eurozone was about to disintegrate as nations such as Greece, Italy, Ireland and Portugal came under unbearable pressure in the bond markets.

[Some] argue that the single currency has been unjustly scapegoated for failures of national governments, especially Italy, to reform their labour markets and wider domestic economies. This, they contend, is the reason, not the euro, that such a gulf has opened up between the economic performance of the strong economies such as Germany and the Netherlands and those such as Greece and Italy. Unemployment rates in the former countries are at record lows, while in the latter group they have still not recovered their pre-recession rates. But pessimists say that this ignores the extent to which the structure of the single currency facilitated destabilising investment booms in the peripheral states before the 2008 financial crisis and then prevented an appropriate monetary adjustment in its wake. Their view is that such are the structural contradictions within the single currency that the existential crisis is destined to re-emerge at some point – and it may not take 20 years.

Read more …

The Yellow Vests may well be the no. 1 political force across Europe for the May European elections.

The Delusional Leaders of the Eurozone (Steve Keen)

I had forgotten that this was the 20th anniversary of the start of the Euro. But the Eurocrats in Brussels hadn’t. Some hours before the New Year commenced, Juncker and friends put out a press release extoling the virtues of the Euro. Virtues such as “unity, sovereignty, and stability … prosperity”. Well so much for New Year cheer. With this one tweet, the EU put 2019 on track to be even worse than 2018. Using any of those words to describe the Euro—apart perhaps from “unity”, since the same currency is used across most of continental Europe now—is a travesty of fact that even Donald Trump might baulk at.

Sovereignty? Tell that to the Greeks, Italians or French, who have had their national economic policies overridden by Brussels. Stability? Economic growth has been far more unstable under the Euro than before it, and Europe today is riven with political instability which can be directly traced to the straitjacket the Euro and the Maastricht Treaty imposed. Prosperity? Let’s bring some facts into Juncker’s fact-free guff. I’ll start with Phil’s point about Greece. Greece’s GDP has fallen at Great Depression rates since the Eurozone imposed its austerity policies on it, and nominal GDP today is more than 25% below its peak.

Now of course that could be blamed on the Greeks themselves, so let’s look compare economic growth in the entire Eurozone to the USA (minus Ireland and Luxembourg, since in the former case their data is massively distorted by data revisions, and the latter has highly volatile data as well, and is so small—under 600,000 people—that it can safely be ignored).


Figure 2: Real economic growth rates

[ ..] the real comparison is with growth since the crisis. The USA’s average post-crisis growth rate has been anaemic at 1.4%, but this is positively dynamic in comparison to the entire Eurozone’s average post-crisis growth rate of 0.2%. Europe has basically been stagnant for a decade, thanks to the Euro and the austerity policies that are inseparable from it, courtesy of the Maastricht Treaty that Juncker is so proud to have signed. In reality, the Euro has brought low growth, economic instability, and political discord to Europe. Yet Europe’s unaccountable leaders spin it as an unbridled positive, at a time when ordinary citizens of Europe are donning Yellow Vests and bemoaning their plight.

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18% support. 82% not support.

‘Nostradamus’ Macron Mercilessly Mocked On Twitter (RT)

Looking back at 2018 and the French president’s vows to unite the nation, disappointed twitteratti noted the situation in the country, divided by the Benalla affair and the Yellow Vests riots, is not so rainbow-bright after all. “In my view, 2018 will be the year of national cohesion,” the centrist Macron ambitiously wrote in his New Year’s Eve message a year ago. That prediction hasn’t aged well, and Twitter noticed. We saw that [cohesion] with the Benalla affair and Yellow Vests,” one user noted, adding that “words are no longer enough to conceal poor management of the country and decisions that go against the interests of [French] people.” “What clairvoyance”,”#nostradamus”, the sarcastic comments went on.

And, if 2018 was thought to be the year of unity, many people got worried about imminent 2019. “And after the cohesion of the nation, what would you call Year 2019?” Others said that Macron was right, and there was “cohesion” in the country – against his government, that is. France has never been as fractured as it was in 2018, one more person noted, adding that the president probably divided the nation “to better reign” over it.

“King for the Rich,” “King of bling-bling”, “President of the Wealthy”, “Jupiter” – these are a few nicknames given to Macron both by fellow politicians and by ordinary folk online. Even his New Year’s trip to the posh resort of Saint-Tropez on the eve of planned Yellow Vests rallies came in for harsh criticism. “Saint-Tropez is the bling-bling symbol of France, it [embodies] success, the absence of problems,” Benjamin Cauchy, one of the Yellow Vests’ leaders, said, pointing out that it’s not as sunny in the rest of the protest-plagued country as in the French Riviera.

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Wonder how they arrive at their rates. And to what extent they’re bound to them if the EU decides to raise higher ones.

France Starts Taxing Google, Apple, Facebook, and Amazon (RT)

Tech giants will now pay more tax in France, after the country decided not to wait for the rest of the EU to introduce the measure. The so-called GAFA tax targeting major digital firms comes into force on January 1. The French government hopes to raise €500 million ($572 million) with levies specifically aimed at multinational tech firms, including Google, Apple, Facebook, and Amazon, Finance Minister Bruno Le Maire said, announcing the move in December. He stressed that “the tax will be introduced whatever happens.” Paris has been pushing for what it sees as fairer taxation of the big-tech firms in the European Union. Progress on the issue has stalled in Brussels, as the 28-member bloc is divided on imposing the levies on Silicon Valley giants.

Any changes must receive unanimous approval by member states. Critics say that the big-tech firms are making money from European countries’ economies, but use their complex structure to route some of their profits to low-tax member states. The opposing block is led by Ireland, which has become a sort of Mecca for US tech companies, and hosts many of their headquarters. Estonia and Sweden are also among those who do not favor France’s bid, fearing that the taxes could trigger US retaliation. The EU has been discussing plans for a three-percent tax on the revenues of large internet companies that make money from user data or digital advertising. However, the last round of talks on the matter in November resulted in no significant progress, apparently pushing France to move forward with it alone.

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Always interesting numbers, but says not a word about why sanctions are impossible.

Russia’s $75 Trillion In Resources Is Why Sanctions Are Impossible (RT)

The country with the largest mineral reserves in the world, Russia, is the second top exporter of rare earth minerals. Its natural resources are estimated at tens of trillions of dollars. It has abundant supplies of oil, natural gas, timber and valuable minerals, such as copper, diamonds, lead, zinc, bauxite, nickel, tin, mercury, gold and silver. Most of those resources are located in Siberia and the Far East. Russia’s mining industry, which is the country’s second largest after oil and gas, accounts for a significant share of its GDP and exports. The country is among the top three producers of mineral commodities such as platinum, gold and iron ore. It is also the world’s largest producer of diamonds and palladium.

The Ural Mountains have vast amounts of minerals while most deposits of coal, oil, gas and timber are located in Siberia. Russia is the world’s fifth largest producer of coal, with reserves of about 175 billion tons. Most of those mines are in Siberia and the Urals. The timber industry, which is worth about $20 billion annually, is also a significant economic contributor to the Russian economy. The country’s fishing industry is the fourth largest in the world. The value of Russia’s resources is huge and, according to statistics, is estimated at $75 trillion. In comparison, the US natural resources are worth approximately $45 trillion while China’s stand at $23 trillion.

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The entire political system guarantees this will get worse in 2019.

“I See No Way Out”: Countless Americans Still Living Paycheck To Paycheck (ZH)

A recent Philly.com article noted that, despite the supposed economic “boom”, professionals like real estate agents, farmers, business executives and even computer programmers are all still living paycheck to paycheck. Responding to a Washington Post inquiry on Twitter, millennials, Generation Xers and baby boomers that work in a range of geographic areas claim that they have simply been unable to save as rent, childcare and student loans have all gotten in the way. Americans living paycheck to paycheck were highlighted in a recent report from the Federal Reserve that showed four in ten adults say they couldn’t produce $400 in an emergency without going into debt or selling something. And now a partial government shutdown that is seeing nearly 800,000 federal workers not getting paid has fueled the discussion on Twitter about how brief income lapses can be disastrous for some households.

Another Twitter user wrote: “Broke my lease to accept new fed job for which I have to attend 7 months of training in another state. Training canceled with shutdown. Homeless. Can’t afford short(?)-term housing/have to work full-time for no pay/returning Christmas presents.” Those involved in the conversation on Twitter have been using the hashtag #ShutdownStories in response to Rep. Scott Perry of Pennsylvania, who asked reporters last week: “Who’s living that they’re not going to make it to the next paycheck?” Heidi Shierholz, a former chief economist at the Department of Labor, has the answer: “It’s astronomical what people need just to make it month to month. Given the high cost of transportation, housing, health care. … There is often no wriggle room.”

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Always.

Putin Says Still ‘Open To Dialogue’ With US (AFP)

Russian President Vladimir Putin has reassured his US counterpart Donald Trump that Moscow remains “open to dialogue” despite the year ending without the hoped-for warming of relations, the Kremlin said on Sunday. “Russian-US relations remain an important factor in order to guarantee strategic stability and international security,” the presidency said in a New Year statement. Putin “has confirmed that Russia is open to dialogue with the United States on the maximum number of subjects,” the statement added. In December 2017, Putin said he hoped to “normalise” relations with Donald Trump but the chances of that evaporated with multiple investigations of Moscow’s alleged meddling in US politics.

Washington this year dramatically announced its intention to pull out of a key Cold War-era nuclear weapons deal – the Intermediate-Range Nuclear Forces treaty – to which Putin responded that Moscow would develop new missiles. Putin also sent messages to other heads of state including Britain’s Theresa May and Turkish President Recep Tayyip Erdogan. In his message to May, Putin wished the British people “wellbeing and prosperity” in 2019.

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Now let’s hear Trump say it.

Giuliani Says Assange Should Not Be Prosecuted (Lauria)

Rudy Giuliani, a lawyer for President Donald Trump, said Monday that WikiLeaks publisher Julian Assange had done “nothing wrong” and should not go to jail for disseminating stolen information just as major media does. “Let’s take the Pentagon Papers,” Giuliani told Fox News. “The Pentagon Papers were stolen property, weren’t they? It was in The New York Times and The Washington Post. Nobody went to jail at The New York Times and The Washington Post.” Giuliani said there were “revelations during the Bush administration” such as Abu Ghraib. “All of that is stolen property taken from the government, it’s against the law. But once it gets to a media publication, they can publish it,” Giuliani said, “for the purpose of informing people.”

“You can’t put Assange in a different position,” he said. “He was a guy who communicated.” The U.S. government has admitted that it has indicted Assange for publishing classified information, but it is battling in court to keep the details of the indictment secret. As a lawyer and close advisor to Trump, Giuliani could have influence on the president’s and the Justice Department’s thinking on Assange. Giuliani said, “We may not like what [Assange] communicates, but he was a media facility. He was putting that information out,” he said. “Every newspaper and station grabbed it, and published it.” Giuliani also said there was no coordination between the Trump campaign and WikiLeaks. “I was with Donald Trump day in and day out during the last four months of the campaign,” he said.

“He was as surprised as I was about the WikiLeaks disclosures. Sometimes surprised to the extent of ‘Oh my god, did they really say that?’ We were wondering if it was true. They [the Clinton campaign] never denied it.” Giuliani said: “The thing that really got Hillary is not so much that it was revealed, but they were true. They actually had people as bad as that and she really was cheating on the debates. She really was getting from Donna Brazile the questions before hand. She really did completely screw Bernie Sanders.” “Every bit of that was true,” he went on. “Just like the Pentagon Papers put a different view on Vietnam, this put a different view on Hillary Clinton.”

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Dec 282018
 
 December 28, 2018  Posted by at 10:33 am Finance Tagged with: , , , , , , , , , , , ,  


Berthe Morisot After luncheon1881

 

Investors Fear Historic Market Rebound Was Just A ‘Wicked Bear Trap’ (MW)
US Stocks Follow Record-Breaking Rise With Day Of Wild Swings (G.)
VIX Is About To Do Something It Hasn’t Done Since 2011 (MW)
Watch Out When Men Of War Come To The Rescue (Fisk)
Giuliani: Mueller Must Be Investigated For Destruction Of FBI Evidence (Hill)
Donald Trump ‘Worst Perpetrator’ Of Fake News: UN Special Rapporteur (Pol.eu)
Macron ‘Lost Authority’ After Caving To Yellow Jackets, Says Oettinger (Pol.eu)
Corbyn Wants May To Recall MPs Early Over Critical Brexit Vote (Ind.)
Brexit’s Aura Of Inevitability Is Vanishing (Kaletsky)
Turning Brexit Into a Celebration of Democracy (Varoufakis)
Crime and Punishment in an Age of the Jungle (Vallianatos)

 

 

Catchy, but A Christmas Carol might be a better example. ‘Investors’ believe the ghosts are real, just like they believe markets are real. Read yesterday’s 2019: Zombie Markets Before The Fall to understand why that is nonsense.

Investors Are Speechless: “It’s Like Watching Pulp Fiction” (ZH)

With market action becoming increasingly surreal and the panicked, vertigo-inducing bear market rallies (spawned by a record $64 billion pension fund reallocation into stocks in a historically illiquid market) reminiscent of the chaos observed at the depths of the financial crisis, it is only appropriate that some of the quotes Bloomberg picked for its daily wrap piece which commemorated the biggest intraday reversal since 2010, be just as surreal. “Investors are becoming desensitized,” Bryce Doty, SVP at Sit Investment Associates, told Bloomberg, then continued the verbal poetry: “It’s like watching ‘Pulp Fiction.’ Halfway through, the violence doesn’t even bother you anymore.”

He’s right, although whereas the market “violence” in past weeks was one directional, this week it has developed a twist to trap both the bulls and bears, and while the latest Dow swing (of nearly 1000 points) was only slightly bigger than the average up-and-down move last week, back then equities were merely tumbling, now it tends to drop early in the day then soar in afternoon trading. So fast forwarding to the post-Christmas chaos – which this website explicitly warned about when last Friday we said to “Brace For Seismic Volatility” – strategists are starting to ask: if days like these are now normal, is there a context in which the whole three-month rout starts to feel routine?

There are the optimists like Jim Kelleher, director of research at Argus Research, who said market turmoil that happens when the economy is holding up reminds him of past stock declines that ended gently. Unless evidence emerges of deep global growth erosion, what’s going on now “will prove to be shorter and more shallow than the declines experienced in ‘classic’ bear markets.” Others are not so sure: “Investors are wondering if this will be a crash,” said Dave Campbell, a principal at San Francisco’s BOS, who nonetheless still managed to put a favorable spin on events.

“The risks are there, but they’re always there. They’re more heightened but it’s not the most likely outcome. The economy continues to grow – maybe a little more slowly – but next year markets will have hit their lows and we’ll be on the rebound.” Then there are those who echo what we asked yesterday, namely if this is only a bear market rally, although granted a very furious one: as Bloomberg writes in its second end of day wrap, “on the surface, the rally is good news for investors searching for a bottom after a three-month sell-off sent the S&P 500 to the brink of a bear market. But days like this are rarely good omens.”

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What’s happening is much more profound than bear markets.

Investors Fear Historic Market Rebound Was Just A ‘Wicked Bear Trap’ (MW)

It’s been a rough three months, and a particularly difficult December, for stocks, however. The Nasdaq is in a bear market while the Dow and S&P 500 are solidly in correction territory and nursing hefty December losses and year-to-date declines. Some market watchers find big bounces in such an environment less than convincing. Russ Mould, investment director at AJ Bell, offered up the table below in a Thursday note. It takes a look back at the 20 biggest one-day percentage gains for the S&P 500 going back to 1970, a stretch that includes nearly 12,800 trading days.

[..] Bulls can take encouragement from the fact that three of the 17 other days that saw an advance of 5% or more came immediately in the aftermath of the October 1987 crash, “when buying did prove a good plan,” while two more came in March 2009, when the S&P 500 hit bottom and began its current bull run. But here’s the rub: Eight of those gains of 5% or more came during the 2007-09 bear market and three more occurred during the downturn of 2000-03, “to suggest there is still a risk that this year’s Boxing Day bonanza could be no more than a wicked bear trap set to lure investors into more trouble,” Mould wrote ahead of Thursday’s open, saying that traders and investors “will be looking out for a couple of further definitive signals before they decide it really is time to buy on the dips following this year’s Christmas selloff.”

Indeed, market veterans warn that massive, one-day rallies are often more characteristic of downturns, occurring as selloffs lead to significantly oversold technical conditions that leave markets ripe for short covering only to give way to renewed selling once the frenzy of forced buying is exhausted. Investors who short a stock are essentially betting that its price will fall by first borrowing the shares, but those traders can be forced to buy shares back if prices suddenly swing higher, which, in turn, can amplify price swings.

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When is all this cheap money going to bail out?

US Stocks Follow Record-Breaking Rise With Day Of Wild Swings (G.)

US stock markets seesawed again on Thursday as a record-breaking day of gains gave way to selling once again before rising again in late trading. By lunchtime all the major US markets were in the red, with the Dow Jones Industrial Average down 1.4%, the S&P 500 losing 1.5% and the Nasdaq off 1.9%. But most US markets ended the day in the black with the Dow up 1.13%, the S&P adding 0.85% and the Nasdaq 0.38%. After a series of often wild swings the US stock markets are still on course to end the year in bear market territory – triggered when markets fall 20% from their most recent high. A bear market would be the first in close to a decade.

Michael Antonelli, managing director, institutional sales trading at Robert W Baird in Milwaukee, said he expected more dramatic days aheads. “There’s only two more sessions left before the end of the year. I would expect volatility to reign. It’s dug in like a tick,” he said. Stocks had fallen for four consecutive days through Monday. Wednesday’s rally – with the Dow adding close to 5% and a record 1,080 points – could have signaled a turning point. Markets closed up in Japan and Australia but European markets sank again on Thursday, with the FTSE closing down 1.5% in London, sinking to it’s lowest level since July 2016 (a month after the Brexit vote). Germany’s DAX closed down 2.3% and France’s CAC fell 0.6%

Stock markets have become increasingly volatile in recent months and recorded both record losses and record gains this week. The Dow Jones plummeted 653 points on Monday, capping its worst week in a decade and marking its “worst day of Christmas Eve trading ever”.

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The low VIX shows you how out of touch the financial world is. There can be only one reason for it: the Fed.

VIX Is About To Do Something It Hasn’t Done Since 2011 (MW)

It shouldn’t come as a surprise to anyone paying attention that stock-market volatility is on the rise. But here’s a statistic that underlines the phenomenon. The Cboe Volatility Index, commonly known as the VIX and often, if not sometimes derisively, referred to as Wall Street’s fear gauge, was on track Thursday to close above 30 for the fourth day in a row. The index, an options-based measure of expected volatility over the coming 30-day period, traded at 32.92 in recent action, up 2.51 points. According to data compiled by Dow Jones Market Data, that would be the longest streak since a 14-day run that ended in November 2011, surpassing a three-day period seen in August 2015. The index has a long-term average near 20.

It’s certainly been a week of whipsaw trading for investors. The S&P 500, Dow Jones Industrial Average and Nasdaq Composite all falling more than 2% in Monday’s holiday-abbreviated session to post the worst Christmas Eve performance in Wall Street history, only to roar back on Wednesday to more than reverse those declines as the S&P and Dow jumped 5% each and the Nasdaq gained 5.8%. On Thursday, stocks were back under pressure, with the Dow giving up more than half of the previous day’s 1,086-point gain.

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Robert Fisk is done. Comparing Putin to Hitler on the brink of 2019 is all we need to know. BTW, Mattis DID consider running.

Watch Out When Men Of War Come To The Rescue (Fisk)

When a general popularly known as James “Mad Dog” Mattis abandons a really mad American president, you know something has fallen off the edge in Washington. Since the Roman empire, formerly loyal military chiefs have fled crackpot leaders, and Mattis’s retreat from the White House might have the smell of de Gaulle and Petain about it. De Gaulle was confronted by an immensely powerful hero of the people – the Lion of Verdun – who was, in his dotage, about to shrug off the sacred alliance with Britain for Nazi collaboration (for which, I suppose, read Putin’s Russia). The decision was made to have nothing to do with Petain, or what Mattis now refers to as “malign actors”. De Gaulle would lead Free France instead.

Mattis has no such ambitions – not yet, at any rate – although there are plenty of Lavals and Weygands waiting to see if Trump chooses one of them for his next secretary of defence. Besides, history should not grant Trump and Mattis such an epic panorama. After all, no Trump tweet could compare with Petain’s 1916 “We’ll get them!” (“on les aura”) slogan, and the dignified, cold and fastidious de Gaulle would never have lent himself to the rant Mattis embarked upon in San Diego in 2005: “You go into Afghanistan, you got guys who slap women around for five years because they didn’t wear a veil. You know, guys like that ain’t got no manhood left anyway. So it’s a hell of a lot of fun to shoot them. Actually, it’s a lot of fun to fight. You know, it’s a hell of a hoot. It’s fun to shoot some people. I’ll be right upfront with you, I like brawling.”

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If investigations like this are not held, the US risks becoming a very volatile place.

Giuliani: Mueller Must Be Investigated For Destruction Of FBI Evidence (Hill)

Rudy Giuliani has an unmistakable New Year’s message for special counsel Robert Mueller: It is time for the chief investigator in the Russia case to be investigated in 2019. In wide-ranging interviews with Hill.TV’s Buck Sexton and me on Wednesday and Thursday, President Trump’s defense lawyer pointedly accused Mueller’s office of destroying evidence by allowing text messages from now-fired FBI official Peter Strzok and his FBI lover, Lisa Page, to be erased in the Russia probe. “Mueller should be investigated for destruction of evidence for allowing those text messages from Strzok to be erased, messages that would show the state of mind and tactics of his lead anti-Trump FBI agent at the start of his probe,” Giuliani said.

The Justice Department inspector general (IG) reported this month that it found large gaps in the preservation of official government text messages between Strzok and Page, the two top FBI agents who helped to start the Russia probe in 2016, who were having an affair at the time, and who expressed disdain for Trump. The report said a technical glitch was to blame for the FBI’s failure to save those text messages, but the IG was able to recover more than 19,000 from the early part of the Russia probe before Mueller was named special prosecutor. However, the IG said it was unable to recover messages from the time Strzok and Page worked for Mueller’s office in spring and summer 2017 because the memories of both FBI officials’ government phones were wiped clean by technicians.

That erasure occurred after Strzok and Page left Mueller’s team over revelations they exchanged anti-Trump text messages, including one string in which they talked about stopping Trump from becoming president. “That should be investigated, damn it, that should be investigated fully. You want a special counsel, get one for that,” Giuliani said.

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Really? The UN is going to pick sides? Against Trump and pro Big Tech?

Donald Trump ‘Worst Perpetrator’ Of Fake News: UN Special Rapporteur (Pol.eu)

The President of the United States is the “worst” perpetrator of misinformation on the internet, the U.N. Special Rapporteur on Freedom of Expression and Opinion David Kaye said in an interview published today. “Governments are real offenders when it comes to disinformation,” said Kaye. “In my own country, the United States, the worst perpetrator of false information is the President of the United States.” The problem of fake news emanating from governments should be covered by journalists, the rapporteur said. Platforms such as Google, Facebook or Twitter can help the broader fight against disinformation — bots, foreign interference… — but should not remove content, Kaye said.

“The platforms, I think, can do things that are more technical as long as they are not evaluating content. There are things they can do. They can’t just zap it and say, “This is fake news, it’s off the platform.” According to Kaye, platforms should focus on reducing spam and bot accounts rather than on policing content. And even bots are “tricky, because there are good bots and bad bots.” Google, Facebook and Twitter are under intense pressure from the European Commission to tackle fake news ahead of the European election in May 2019.

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When did the Yellow Vests become an insect species?

Macron Lost Authority After Caving To Yellow Jackets – EU’s Oettinger (Pol.eu)

The EU will accept a French budget deficit above the EU’s 3 percent ceiling in 2018 “as a one-time exception,” Budget Commissioner Günther Oettinger said in an interview published Thursday. Oettinger told the Funke media group of German newspapers that French President Emmanuel Macron had “lost authority with his budget for 2019” by upping his spending in response to the Yellow Jackets protests, “but he remains a strong supporter of the European Union.” Brussels reviewed the French budget several weeks ago and won’t be revisiting it, Oettinger added. “It crucial now that Macron continues his reform agenda, especially in the labor market, and that France remains on its growth track.”

“Under this condition, we will tolerate a national debt higher than 3 percent as a one-time exception. However, it must not continue beyond 2019.” Oettinger also told the Funke media group that there’s still a chance Britain’s parliament will vote in favor of Prime Minister Theresa May’s Brexit deal in January and that “there is certainly no majority for a disorderly Brexit or for a new referendum.” If the U.K. leaves the bloc without a Brexit deal, it will become “a third country like Morocco or Azerbaijan,” Oettinger said. He added that if Britain withholds its divorce payment in 2019, Germany would be left footing the bill “in the mid-three-digit range” of hundreds of millions of euros.

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The sudden urgency is too late.

Corbyn Wants May To Recall MPs Early Over Critical Brexit Vote (Ind.)

Jeremy Corbyn has challenged Theresa May to cut short the Christmas recess and recall parliament early in the new year in order to bring forward a critical vote on the Brexit deal. In an interview with The Independent, the Labour leader said he believed the prime minister and her allies were engaged in a “cynical manoeuvre” to run down the clock and offer MPs the “choice of the devil or the deep blue sea”. His remarks come as the Commons prepares to vote on the UK-EU deal in the week beginning 14 January – in what is being billed as the most significant moment in parliament for a generation.

With just 91 days remaining until Britain formally leaves the European Union, Mr Corbyn also reiterated it is a matter of “when, not if” Labour attempts to force a general election by tabling a motion of no confidence in the government, which he signalled will come in the aftermath of Ms May’s deal failing to receive MPs’ backing. But he refused to be drawn on whether a Labour government would seek to extend Article 50, given that just weeks would remain for any renegotiation of Britain’s exit from the bloc, and claimed: “Lots of things are possible, the EU has longform on reopening and extending negotiations, but let’s not jump too many hoops when we haven’t arrived at them.”

Speaking in his constituency office in Islington, north London, ahead of Christmas Day, he poured scorn on the prime minister’s decision earlier this month to pull a vote on the deal in the face of near-certain defeat and instead begin a last-ditch attempt to seek assurances from the EU to assuage Brexiteers’ concerns over the contentious issue of the Irish backstop. Pressed on whether he believed Ms May should now recall parliament a week early, on 2 January, the Labour leader replied: “Well it is in her hands to recall parliament. I want us to have a vote as soon as possible, that’s what I’ve been saying for the past two weeks, and if that means recalling parliament to have the vote let’s have it.

“But it looks to me the government has once again reneged on that and tried to put it back another week. We need to have that vote so a decision of parliament can be made. What I suspect is that it’s a completely cynical manoeuvre to run down the clock and offer MPs the choice of the devil or the deep blue sea.”

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For some, perhaps.

Brexit’s Aura Of Inevitability Is Vanishing (Kaletsky)

In times of political turmoil, events can move from impossible to inevitable without even passing through improbable. In early 2016, the idea of Britain leaving the European Union seemed almost as absurd as the next American president being the six-time bankrupt and serial sex pest Donald Trump. A few months later, Brexit and the Trump presidency were universally acknowledged as the inevitable consequence of an anti-elitist, anti-globalization backlash that was predictable decades ago. This sense of inevitability, far more than genuine anti-European conviction, is what has discouraged Britain from changing its mind about a pointless and self-destructive policy that few voters cared about until 2016.

The message from post-Brexit polling and focus groups has been: “We all know that Brexit has to happen, so why don’t the politicians just get on with it?” But with the Brexit process now moving toward its climax, another outcome is moving from impossible to inevitable: Britain could soon change its mind and decide to stay in the EU. This reversal of fortune could begin next month, when Prime Minister Theresa May is expected to lose the decisive parliamentary vote on her Brexit deal. If and when this defeat happens, May will face two unpalatable options. She could preside over a “No Deal” rupture with Europe — tantamount to a declaration of economic war against the EU — and risk a 2008-level economic crisis accompanied by a border upheaval in Ireland that could reignite the “Troubles.”

Or she could break her extravagant promises to honor the “people’s instruction” from the 2016 referendum and allow a new popular vote that might cancel Brexit. To avoid this invidious choice, May could try one last time to push her proposals through Parliament after losing the vote scheduled for the week of January 14. But if this last-ditch effort fails, her choices will be reduced to a No Deal rupture with Europe and a new referendum.

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Varoufakis is basically right, but I can’t see a three-year People’s Debate tackling 6 issues. Brits will think: we can’t even deal with one issue. And an extension of a transition period until 2022 is hard to see, too.

Turning Brexit Into a Celebration of Democracy (Varoufakis)

With weeks left before the UK leaves the EU by default, none of the three main options on offer – a no-deal Brexit, Prime Minister Theresa May’s withdrawal agreement with the EU, and rescinding Article 50 in order to remain in the EU – commands a majority in Parliament or among the population. Each generates maximum discontent: The no-deal scenario strikes most as a dangerous plunge into the unknown. May’s deal appalls Remainers and is seen by most Leavers as the kind of document only a country defeated at war would sign. Lastly, a Brexit reversal would confirm Leavers’ belief that democracy is allowed only when it yields results favored by the London establishment.

The conventional wisdom in Britain is that this impasse is lamentable, and that it proves the failure of British democracy. I disagree on both counts. If any of the three immediately available options were endorsed, say, in a second referendum, discontent would increase and the larger questions plaguing the UK would remain unanswered. Britons’ reluctance to endorse any Brexit option at present is, from this perspective, a sign of collective wisdom and a rare opportunity to come to terms with the country’s great challenges while re-thinking the UK’s relationship with the EU. But to seize it, the UK must invest in a “People’s Debate,” leading, in time, to a “People’s Decision.”

The People’s Debate must address six issues: the British constitution, including the creation of an English parliament or multiple regional English assemblies; the electoral system and the role of referenda; the Irish question, including the possibility of joint UK-Irish sovereignty over Northern Ireland; migration and freedom of movement; Britain’s economic model, particularly the outsize role of finance and the need to boost green investment across the country; and of course the UK-EU relationship.

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Proudly poisoning your food for 100 years.

Crime and Punishment in an Age of the Jungle (Vallianatos)

[..] studies funded by EPA and others have been connecting farmers’ sprays to ecocide, disease and death. I traced the catastrophic decline of honeybees to the neurotoxic pesticides of the farmers. This brought me in touch with a caring beekeeper from Colorado named Tom Theobald. He was telling me his days as a beekeeper were coming to an end. In December 2018, he summarized 44 years of living with honeybees and the poisoners of honeybees. “Almost every problem we face,” he said, “can be traced to a Criminal Corporatism and an out of control Capitalism. If there is a profit to be made, there is little regard paid to the consequences. If challenged, we get denial, diversion, excuses and junk science. It simply doesn’t matter how many people are sickened or die, how many species are pushed to extinction or how seriously the planet is compromised.”

[..] We are fortunate we have a reliable history of that irresponsible age by Deborah Blum, director of the Knight Science Journalism Program at MIT. A prolific and outstanding writer, Blum is telling a story that illuminates both early twentieth century, but, perversely, our own times. Her timely book, The Poison Squad: One Chemist’s Single-Minded Crusade for Food Safety at the Turn of the Twentieth Century (Penguin Press, 2018) paints an unforgettable picture of an American table full of “adulterated” food. Milk and meat were routinely treated with formaldehyde, a carcinogen used for embalming of corpses. Wine drinkers drank a liquid that had nothing to do with grapes. Wine was made from “tannin and coal tar.”

The poisonous copper sulphate dressed canned vegetables. The cleaning chemical borax coated butter. Honey had nothing to do with real honey. It was rather a version of “thickened, colored corn syrup.” Coffee was usually “sawdust, or wheat, beans, peas and dandelion seeds, scorched black and ground to resemble the genuine article.” Bread was baked with alum or chalk, or “sawdust chopped up very fine or gypsum in powder… Terra alba just out of the mine.” There was no law against the poisonous adulteration of food and drink. However, the adulteration of food, Blum says, gave sickness and death, potentially to huge number of Americans. Tainted milk alone killed thousands of children in New York City every year.

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