Sep 112019
 
 September 11, 2019  Posted by at 9:22 am Finance Tagged with: , , , , , , , , ,  2 Responses »


Robert Frank White Tower, New York 1948 (Frank died yesterday, aged 94)

 

 

To everyone used to receiving Automatic Earth posts in their email, I’m sorry but since Saturday they’re suddenly bouncing again en masse. This makes me very tired by now, but I’ll look for a solution. I suspect there may be a connection between this and Google accusing me of violating their rules, without telling me what rules I’m supposed to have violated.

 

 

Trump Fires National Security Adviser John Bolton (Ind.)
‘You’re Fired!’ Trump Cuts Loose Of His Dog Of War (George Galloway)
In A Fracturing World, Central Banks Still Stuck Together (R.)
European Banks Paid ECB €23 Billion Since 2014… And Now Face Disaster (ZH)
Brexit’s Puppet Master Has More Strings To Pull (R.)
Ireland, Boris Johnson Both Eye Return To EU’s Original Brexit Backstop (Ind.)
Johnson Can’t Escape The Clutches Of May’s Zombie Brexit Deal (Behr)
Israel PM Netanyahu Vows To Annex Occupied Jordan Valley (BBC)
Netanyahu’s Jordan Valley Annexation Pledge Is a PR Stunt (RT)
California Passes Landmark Gig Economy Rights Bill (BBC)
‘One America News’ Claims Defamation In $10 Million Suit vs Rachel Maddow (ZH)

 

 

There are still people who are sad to see him go.

Trump Fires National Security Adviser John Bolton (Ind.)

Donald Trump said he fired John Bolton, writing in a tweet he “disagreed strongly with many of his suggestions” and adding he would announce a replacement for his hawkish national security adviser sometime next week. “I informed John Bolton last night that his services are no longer needed at the White House,” the president wrote on Tuesday. “I disagreed strongly with many of his suggestions, as did others in the Administration, and therefore I asked John for his resignation, which was given to me this morning.” “I thank John very much for his service,” he added. “I will be naming a new National Security Advisor next week.” Mr Bolton then tweeted a statement of his own shortly after the president’s announcement, writing: “I offered to resign last night and President Trump said, ‘Let’s talk about it tomorrow.'”


Mr Bolton also reportedly told CNN’s Robert Costa shortly after his dismissal: “Let’s be clear, I resigned, having offered to do so last night.” The reason for Mr Bolton’s departure was not immediately clear, although it has been suggested that he disagreed with the president’s aborted plan to hold peace talks with the Taliban at Camp David this week, days before the 18th anniversary of the 9/11 attacks. Mr Bolton was also an outspoken advocate of regime change in Iran. Although Mr Trump unilaterally withdrew the United States from the nuclear deal that his predecessor Barack Obama signed with Tehran, he is known to oppose military action in the Middle East.

Read more …

“So, farewell then, John Bolton. You killed a lot of folks. Thanks to God and President Trump you will kill no more.”

‘You’re Fired!’ Trump Cuts Loose Of His Dog Of War (George Galloway)

The blowing up of Donald Trump’s attempt to end the 18-year Afghan War was the straw which broke the camel’s back for the US president, who on Tuesday fired his national security adviser John Bolton.
Trump’s attempt to bring to a close the longest war in US history – longer, in fact, than their direct involvement in WWI, WWII and the Vietnam War put together – was to be his own “Camp David moment.” It would have mimicked both Carter and Clinton’s “triumphs” there with Arafat and Begin and Arafat and Rabin (neither of which have in fact turned out to be triumphs but were wonderful photo-ops).

Bolton’s rearguard action and the Taliban’s killing of a single US soldier there in the week of the summit brought the Camp David caper crashing down, much to the president’s fury, and prompted Secretary of State Mike Pompeo to boast that the US had killed a thousand Taliban in the previous 10 days. But it was not one damn thing, but one damned thing after another, which has caused the final forking of the “bureaucratic tape-worm” John Bolton, who has slithered through every right-wing administration in living memory.

[..] John Bolton, like so many others, was a “chicken-hawk,” always ready to fight to the last drop of somebody else’s blood. He evaded the draft during the Vietnam War because as he said himself “I didn’t want to die face down in a South East Asian rice paddy.” Nothing wrong with that, if he hadn’t continued to “support” the war and wave off to the paddy-fields the 58,000 Americans who did die, face-down, in the war he dodged. So, farewell then, John Bolton. You killed a lot of folks. Thanks to God and President Trump you will kill no more.


Kevin Lamarque | Reuters

Read more …

But what if they start competing?

In A Fracturing World, Central Banks Still Stuck Together (R.)

The last time major central banks shifted gears together, it was a cooperative move to keep the financial crisis of a decade ago from becoming a full-bore, worldwide depression. Now, a new round of global ratecutting risks taking on a competitive edge as policymakers try to stay ahead of rising trade tensions, a volatile investment climate, and a shift in the political mood from shared support for globalization to a more zero-sum battle over a slower-growing world economy.

[..] If the Fed and ECB do as expected at their upcoming meetings, BOJ officials will be torn between how a stressed financial system may respond to ever lower rates, and how Japanese exporters may be damaged if the yen rises in value as a result of the actions of those other central banks. European officials, disappointed that elected leaders haven’t spent aggressively to boost economic growth, are sparring over how much lower already negative rates can go without causing problems, how expansive other ECB programs should become, and what good any of it might do. At the Fed, policymakers are split over whether to cut a lot, a little or not at all.

In each case, officials are reckoning with the fact that their economies and financial systems have become so tied together that fully independent policymaking, insofar as it ever was possible, may be a thing of the past. “We really thought monetary policy had things under control,” and would be able to offset whatever programs elected leaders chose to pursue, even a trade war, said Tara Sinclair, an economics professor at George Washington University. “Does that work in a super low interest rate world and in a very integrated world?” when central banks may have lost much of their traditional influence over the domestic economy.

Read more …

What purpose does the ECB serve?

European Banks Paid ECB €23 Billion Since 2014… And Now Face Disaster (ZH)

Earlier this morning, there was an added wobble in European bond prices after an unconfirmed MNI report said the ECB could delay the launch of QE on Thursday and make it data dependent. While skeptics quickly slammed the story, saying it was just a clickbait by MarketNews … it does highlight just how sensitive the bond market is to an announcement of aggressive easing by the ECB when it meets on Thursday, Sept 12, where consensus generally expects a significant easing package, including a -20bp rate cut (followed by -10bp cut later on), coupled with roughly €30 billion in sovereign debt QE for 9-12 months, coupled with enhanced forward guidance.

There is just one problem: while it is unclear if any further easing by the ECB will do anything to stimulate the Eurozone economy, one thing is certain – further easing will only cripple Europe’s banks. In fact, as Goldman writes in its ECB preview, “further rate cuts are a very uncomfortable prospect for the [banking] sector” and estimates that a -20bp cut could lead to an aggregate €5.6bn (-6%) profit cut for 32 €-banks under the bank’s coverage; worse, a further -10bp cut, as per GS macro forecasts, increases the hit to -10% (-€8.3 bn). Overall, 19 banks in Goldman’s coverage face a >10% EPS cut, and 8 banks face as much as a 20% EPS hit.

Then there is Europe’s head on collision with a recession: the weakening rate outlook has been accompanied by >20% fall in €-bank shares (SX7E) since 2H18 and -4% cuts to their consensus Net Interest Incomes (for 2020E). According to Goldman, so far ~40% of the share price decline could be explained by NII cuts; the rest falls into the ‘other’ domain, “where political risk features notably.” Here is the problem in one sentence, and chart: since negative rates were introduced in 2014, European Banks have paid €23BN to the ECB!

Read more …

“He is one of the smartest people I have ever worked with. He thinks several steps ahead, thrives on chaos and has sat in a bunker for three years thinking about this: so what is he going to do?”

Brexit’s Puppet Master Has More Strings To Pull (R.)

Cummings, who alongside fellow campaigner Matthew Elliott, drove Vote Leave to victory in the 2016 referendum is cast by allies as a ruthless strategist who cares little for the conventions of traditional British politics. He provoked a row inside Westminster when he sacked a 27-year-old adviser to finance minister Sajid Javid. The adviser, Sonia Khan, was escorted by armed police from Downing Street without Javid’s knowledge. Former Prime Minister John Major cast Cummings as an overmighty “political anarchist” who should be sacked as Johnson’s de-facto chief of staff before he poisoned British politics beyond repair.

Cummings’s response? “Trust the people” – a slogan used by government advisers to cast Johnson’s Brexit-supporting team as the true servants of the people fighting a London political and financial elite that wants to thwart their will. Foreign Secretary Dominic Raab said on Monday that the United Kingdom was in dangerous territory as voters were concluding that parliament was hindering Brexit. He said the government would respect the law but that interpretations of the law can sometimes be complex. “At this point, our view is that resignation is the most likely,” U.S. investment bank JPMorgan said. “In our view, neither seeking to defy the law, nor encouraging the EU not to grant an extension, are likely to succeed.”

The Cabinet Manual, which sets out the laws, rules and conventions on the operation of government, says if the prime minister resigns on behalf of the government then Queen Elizabeth will invite the person who appears most likely to be able to command the confidence of lawmakers to serve as prime minister and form a government. A Conservative Party lawmaker said he thought Johnson would resign soon after the EU summit, ensuring that he is not blamed for any delay to Brexit. “The question is: what has Cummings got up his sleeve?” said a former Conservative adviser. “He is one of the smartest people I have ever worked with. He thinks several steps ahead, thrives on chaos and has sat in a bunker for three years thinking about this: so what is he going to do?”

Read more …

“..the Northern Ireland-only backstop..”

Ireland, Boris Johnson Both Eye Return To EU’s Original Brexit Backstop (Ind.)

The British and Irish governments are both eyeing a return to the EU’s original Brexit backstop plan, rejected by Theresa May, as a way of breaking the deadlock, reports suggest. The so-called “Northern Ireland-only” backstop was rejected by the former prime minister during talks because it put a customs and regulatory border down the Irish sea – a move strongly opposed by the DUP and many Tories. It was replaced in the withdrawal agreement by the current UK-wide backstop – which was rejected by Brexiteers for another reason: because it could tie the whole UK to the EU customs union indefinitely.

[..] In an interview with the Irish Times, Ireland’s EU commissioner Phil Hogan – who is set to be put in charge of trade talks with the UK – said the direction of travel was towards the old backstop. “Yes,” he replied when asked whether it was back on the agenda. “The taoiseach has indicated in the last 24 hours that the Northern Ireland-only backstop is quite an interesting idea to revisit.” He added: “I remain hopeful that the penny is finally dropping with the UK that there are pragmatic and practical solutions can actually be introduced into the debate at this stage – albeit at the eleventh hour – that may find some common ground between the EU and the UK.” British officials in Brussels flatly deny that there is any intention to return to the original backstop. A UK spokesperson said that “any deal must involve the abolition of the anti-democratic backstop”.

[..] A return to something resembling the Northern Ireland-only backstop could ultimately make sense politically for Mr Johnson, given he may no longer have to rely on DUP votes for a majority after a general election – if he wins a majority, as polls suggest is possible. The DUP’s opposition to a border in the Irish sea would no longer be as much of an issue. The change would also technically allow Mr Johnson to claim he had ditched the current backstop, which he has put down as a red line. Whether moving back to a Northern Ireland-only situation would be accepted by Tory Brexiteers as satisfactory is another matter.

Read more …

Affable Boris vs Bullying Boris.

Johnson Can’t Escape The Clutches Of May’s Zombie Brexit Deal (Behr)

One reason to suppose that Johnson is malleable on the detail is that on 29 March he voted for May’s deal – the same one he denounces as an affront to democracy. The hypocrisy is not surprising, but it does illuminate that tension in Johnson’s self-image, between the wannabe statesman and the Trump tribute act. One enjoys the hobnobbing with world leaders at global summits, the other is an accomplice in vandalising the architecture of a rules-based international order.

The same tension is expressed in domestic politics. There is affable Boris who thought he could charm his way to an elegant Brexit solution, unify his party and woo the country with a healing message. He was barged aside by bullying Boris who purges dissent from his party and stokes division in the country. One belongs to the old Tory party that venerated stability and reached out to liberal voters. The other leads a new revolutionary leaver party, recruiting admirers of Nigel Farage for a nationalist insurgency.

The Downing Street calculation appears to be that a majority is most easily won by stripping the Conservative party down and reassembling it as something unconservative. Johnson will run as a populist tribune, the man who would rather be “dead in a ditch” than surrender to tricky continentals and their Westminster collaborators. It might work. Current polling doesn’t offer much of a guide when the vital choices have been punted to the end of October. That doesn’t leave much time for the prime minister to tweak May’s Brexit deal and, in defiance of all the odds, persuade a hostile parliament to vote for it. But that doesn’t mean he has given up on the idea.

Read more …

Election time.

Israel PM Netanyahu Vows To Annex Occupied Jordan Valley (BBC)

Israeli PM Benjamin Netanyahu has vowed to annex part of the occupied West Bank if he is returned to office next week. He would apply “Israeli sovereignty over the Jordan Valley and northern Dead Sea”, a policy certain to be backed by the right-wing parties whose support he would need for a coalition. Palestinian diplomat Saeb Erekat said such annexation moves would “bury any chance of peace”. Israel has occupied the West Bank since 1967 but stopped short of annexation. Mr Netanyahu, who leads the right-wing Likud party, is campaigning ahead of general elections next Tuesday. Polls suggest Likud is neck-and-neck with the opposition centrist Blue and White party and may struggle to form a governing coalition.


Palestinians claim the whole of the West Bank for a future independent state. Mr Netanyahu has previously insisted that Israel would always retain a presence in the Jordan Valley for security purposes. In a televised speech the PM said: “There is one place where we can apply Israeli sovereignty immediately after the elections. “If I receive from you, citizens of Israel, a clear mandate to do so… today I announce my intention to apply with the formation of the next government Israeli sovereignty over the Jordan Valley and northern Dead Sea.” Mr Netanyahu also said he would annex all Jewish settlements in the West Bank, but this would need to wait until the publication of US President Donald Trump’s long-awaited plan for a peace agreement between Israelis and Palestinians.

Read more …

“..he could be indicted as early as mid-October..”

Netanyahu’s Jordan Valley Annexation Pledge Is a PR Stunt (RT)

Israeli leader Benjamin Netanyahu has been desperate to drum up voter support across various sections of the Israeli population as the September 17 election inches closer, and his most recent pledge to annex the Jordan Valley, a part of the occupied West Bank, is no more than yet another empty campaign promise, political and defense commentator Amir Oren told RT. “He cannot annex any inch of the occupied territories… the most important [reason] is that peace with Egypt and with Jordan is based upon the UN Security Council resolution 242 from November of 1967 forbidding the acquisition of territories by force.”


Netanyahu knows that risking the collapse of the entire regional security system is a “non-starter,” and his grand announcement is merely a “way to focus attention on himself,” Oren argued. The PR stunt is also aimed at helping Netanyahu to rebrand himself as a strong leader able to deal with the Iran ‘menace’ and the Palestinian issue, as most recently he has been making headlines for the allegations of corruption he faces. “He is trying to shift attention from his corruption scandals, he could be indicted as early as mid-October, he wants people to talk about himself as a world-class leader in league with Putin and Trump.”

Read more …

The gig economy is an even hollower term than the service economy.

California Passes Landmark Gig Economy Rights Bill (BBC)

Lawmakers in California have passed a law that paves the way for gig economy workers to get holiday and sick pay. Assembly Bill 5, as its known, will affect companies such as Uber and Lyft, which depend on those working in the gig economy. Some estimates suggest costs for those firms would increase by 30% if they have to treat workers as employees. But opponents of the bill say it will hurt those that want to work flexible hours. The business models of gig economy companies are already under strain – Uber lost more than $5bn in the last quarter alone.


Some estimates suggest that having to treat workers as employees, rather than independent contractors, could increase costs by as much as 30%. Uber and rival ridesharing service Lyft joined forces to push back again the bill. They suggested a guaranteed minimum wage of $21 per hour instead of the sweeping changes the bill would bring. But that pledge wasn’t enough to sway California’s Senate, and the state’s governor Gavin Newsom is expected to soon sign the bill into law.

Read more …

High time someone takes Maddow to court, but Sputnik is not a strong point.

‘One America News’ Claims Defamation In $10 Million Suit vs Rachel Maddow (ZH)

Conservative television network One America News (OAN) is suing Rachel Maddow for $10 million after she referred to the network as “paid Russian propaganda”. OAN filed the defamation suit in federal court in San Diego, according to AP. OAN is a small, family owned conservative network that is based in San Diego and has received favorable Tweets from the President. It is seen as a competitor to Fox News. OAN’s lawsuit claims that Maddow’s comments were retaliation after OAN President Charles Herring accused Comcast of censorship. The suit said that Comcast refuses to carry its channel because “counters the liberal politics of Comcast’s own news channel, MSNBC.”

It was about a week after Herring e-mailed a Comcast executive when Maddow opened her show by referring to a Daily Beast report that claimed an OAN employee also worked for Sputnik News, which has ties to the Russian government. Maddow said: “In this case, the most obsequiously pro-Trump right-wing news outlet in America really literally is paid Russian propaganda. Their on-air U.S. politics reporter is paid by the Russian government to produce propaganda for that government.” Except Maddow, likely still upset from spending 3 years trying to promulgate a Russian hoax that didn’t exist, didn’t quite get her facts straight. Big surprise.

OAN said in its lawsuit that while reporter Kristian Rouz was associated with Sputnik News, he worked solely as a freelancer for them and was not a staff employee of OAN. And the lawsuit includes a statement from Rouz stating that while he has written some 1,300 articles over the past 4 and a half years for Sputnik, he has “…never written propaganda, disinformation, or unverified information.

Read more …

 

 

 

 

 

Aug 022019
 


Pablo Picasso Bathers with a toy boat 1937

 

The Giant Sucking Sound of Financial Repression (WS)
Dutch Bank ING Warns Against Further ECB Money Printing (R.)
Trump’s $300 Billion China Tariff Threat Sends Markets Into Tailspin (G.)
Rate Cut Odds Surge After Tariff Announcement (ZH)
US Tariffs Risk Reviving Chinese Zombies (R.)
The EU Has New People In Charge. It’s Not Good News For US Tech Firms (CNBC)
EU Governments Seek Name For IMF Head (R.)
Boris Johnson’s Commons Working Majority Cut To One (BBC)
Expecting Ireland To Be Servile Is Part Of A Long British Tradition (G.)
Irish Peace Is Too Precious To Be Squandered By The Brexit Ultras (G.)
Boeing To Change 737 MAX Flight-Control Software To Address Flaw (R.)
Rachel Maddow Ratings Tank After Collusion Narrative Implodes (Ryan)

 

 

The war on savings and pensions continues unabated. Central banks are in so deep there’s no way out anymore. But what happens when you want to, or have to, retire?

The Giant Sucking Sound of Financial Repression (WS)

It’s called interest-rate repression. Or more poetically, financial repression. It’s where central banks manipulate interest rates down to where investments with little credit risk, such as Treasury securities, FDIC-insured savings accounts and CDs, pay little or no interest, or pay less interest than the rate of inflation. People such as savers and retirees, and institutions such as pension funds, that depend on this cash flow have lost their income stream. In addition, the purchasing power of their principal is getting gradually wiped out by inflation. How much money are we talking about? In the US alone, this interest rate repression impacts nearly $40 trillion. This includes savings products, Treasury securities, municipal bonds, and high-grade corporate debt.

$40 Trillion with a T. A 2% reduction across the board cuts this income by $800 billion a year. And this has had an impact. Central banks have accomplished this interest-rate repression by pushing short-term rates to zero or below zero, and by buying bonds and other assets to push long-term rates down too. These were emergency measures during the Financial Crisis that have become the “new normal,” as it has been called. This new normal has been going on for over a decade now. Other central banks, including the ECB and the Bank of Japan, pushed their policy rates below zero. This, in addition to vast asset buying binges by those central banks, produced $13 trillion in negative yielding bonds. But that’s a different universe of idiocy that we’re not going to get into today. We’re going to stick to US conditions.

To the Fed’s credit, it is the only major central bank that has raised its policy-rate target a bit, from near-zero to a range between 2.25% and 2.5%, which are still historically low rates. But it is under immense pressure by Wall Street and by the White House to cut rates again. So now we have this situation where short-term Treasury yields are low, and long-dated Treasury yields are even lower. How much money are we talking about here? Let’s see. There are $22 trillion in Treasury securities. They’re held by individuals and institutions, including insurance companies, pension funds, and the Social Security Trust Fund. Then there is high-grade corporate debt. The category of triple-A to single-A-rated debt is about $3.3 trillion. These yields have been pushed down too.

Then there are $3.8 trillion in municipal bonds outstanding. Many of them trade below US Treasury yields. For example, the GO bonds of California, which is not exactly a paragon of fiscal rectitude. During trading last Thursday, the California 10-year yield was 1.76%. This was about one-third of a percentage point below the US Treasury 10-year yield of 2.08% on the same day. Then there are $9.4 trillion in savings products, mostly savings accounts and CDs at banks. There are also about $3 trillion in checking accounts, payroll accounts, etc., but they’re not included here. These are just savings products. So let’s add these categories up: They amount to $39 trillion.

Read more …

“There is no shortage of money in the market.”

Dutch Bank ING Warns Against Further ECB Money Printing (R.)

Ralph Hamers made his plea as central banks redouble efforts to keep the cost of borrowing at historic lows to buoy the economy, a policy that weighs on bank profits and makes it costly to hold deposits. “I don’t think QE is a recipe to support an uncertain environment,” Hamers told journalists, referring to so-called quantitative easing to print fresh money. “There is no shortage of money in the market.” Although bankers have previously made similar complaints, Hamers’ blunt comments carry weight because his bank is one of Europe’s largest, with 38 million customers. ING, the largest Dutch bank, cautioned on Thursday that rock-bottom interest rates would pressure future earnings, as it announced a 1.4 billion euro net profit in the second quarter of the year.


“Looking ahead, we expect that persistently low interest rates will put pressure on net interest income,” Hamers said, referring to the bank’s chief earnings pillar from activities such as lending. European Central Bank President Mario Draghi has all but pledged to loosen monetary policy further amid a continued economic deterioration of Europe’s euro currency bloc, still grappling with the aftermath of a debt crisis. Officials recently told Reuters that an interest rate cut in September appeared certain, while government bond buys were also likely. Draghi recently said the outlook looked bleak as a global trade war hit Europe’s manufacturers.

Read more …

Did he do it to push Powell?

Trump’s $300 Billion China Tariff Threat Sends Markets Into Tailspin (G.)

Donald Trump’s surprise decision to escalate the trade war with tariffs on another $300bn of Chinese goods has sent global financial markets into a tailspin. After sharp falls on Wall Street in the wake of the US president’s announcement on Twitter on Thursday, Asian share prices plummeted on Friday morning as growing hopes that the world’s two economic superpowers would be able to reach a deal were dashed. In Tokyo the Nikkei was down 2.3%, with a similar fall in Hong Kong and Shanghai. The Kospi was down 0.8% in Seoul while in Sydney the benchmark ASX200, which passed its pre-global financial crisis all-time high on Tuesday, fell 0.3%. On the commodities markets the price of Brent crude oil plunged 7%, its biggest fall for four years, although it recovered 2.5% on Friday to $62.01.


Trump’s decision was also likely to increase the chances of another cut in US interest rates with the prospect of worsening trade with China forcing the Federal Reserve to loosen monetary policy again in September. It follows Wednesday’s 0.25% reduction, which was widely seen as not being enough to please the president who has been very vocal in calling for lower rates to boost the economy. As a signal of lower rates to come, the 10-year US bond yield fell almost 12 basis points on Thursday to 1.902%, hitting the lowest level since Trump won the presidential election in November 2016. The US dollar also fell and stockmarkets in Europe and the US were braced for a turbulent last day’s trading of the week. The FTSE100 is set to drop 1% at the opening and the Dow 0.3%.

Read more …

“It’s very logical to conclude that if trade tensions increase, given what Powell said, that would be something he would look at to evaluate a further cut.”

Rate Cut Odds Surge After Tariff Announcement (ZH)

Earlier today, we wrote a post titled “What Would It Take For The Fed To Not Cut Again?”, with Goldman providing a stylized answer, although in retrospect, the post should have been titled “What Would It Take For The Fed To Cut Again”, as that is what the market was far more concerned about after yesterday’s hawkish Powell press conference. In any case, Goldman hinted at the one specific catalyst that could force the Fed to cut more: “We also see risks in the other direction, especially on a significant escalation of tariffs against China.” To this, we said that “if an acceleration in the trade war with China is what the Fed will need to cut more, it’s pretty clear what that means for the chances of any trade deal between Washington and Beijing, since even Trump now understands that if he keeps escalating trade war with China, Powell will have no choice but to eventually cut to 0% (and lower).”

Just a few hours later, we were proven right in suggesting that an escalation in the trade war is inevitable and imminent when Trump tweeted that he would hike tariffs on $300BN in Chinese imports to 10% starting September 1, ending the tentative ceasefire with Beijing with a bang, and sending risk prices sharply lower. And yes, while Trump did suffer a modest drop in his favorite polling indicator – i.e., the stock market – which “cratered” as much as 1.5% below its all time high – far more importantly Trump also called Powell’s bluff, and effectively forced the Fed to prepare for more rate cuts as the trade war with China – which Powell explicitly highlighted as a condition that would result in more easing – is set to escalate further.

Late today, Bloomberg confirmed as much noting that traders “fixated on a timeline in which Powell seems to suggest cooling trade tensions reduced the need for future rate reductions — and a day later Trump revs the tensions back up”, just as we said he would. “It fits the pattern of a president bent on getting the central bank to submit, many thought”, the Bloomberg authors concluded. “Powell was very careful to say that he was looking at three things, one of which was global growth and the extent to which that is risked by trade tensions,” said Ellen Hazen, senior vice president and portfolio manager for F.L. Putnam, which has $2.2 billion under management. “It’s very logical to conclude that if trade tensions increase, given what Powell said, that would be something he would look at to evaluate a further cut.” Precisely, hence our prediction first thing this morning.

Read more …

Really? Xi is going to build more bridges to nowhere?

US Tariffs Risk Reviving Chinese Zombies (R.)

President Donald Trump is threatening new levies on $300 billion of Chinese goods entering the United States, after Shanghai talks proved inconclusive this week. That might not prod Chinese officials into striking a deal, but it is likely to raise some unwelcome zombies. Trump is among those who claim the Chinese economy is on the brink of the abyss. And it’s true that as a truce in trade negotiations gets more elusive the country’s business community is being forced to price in a new status quo. Their country has stumbled into a cold war with the world’s largest economy, a nuclear-armed military colossus that controls the world’s foremost trading currency. But a $13 trillion economy growing at 6.2% is hardly imploding, and a country where private consumption makes up roughly two-fifths of nominal GDP has padding against a downturn in trade.


Tensions exacerbate economic problems of China’s own making, though. There is a massive stack of non-performing debt incurred by government banks that mis-allocated capital after the global financial crisis. And there are still plenty of inefficient state-backed companies that compete with China’s private sector, driving down profitability across the board. If the new 10% tariffs kick in on Sept. 1 as Trump threatened on Thursday, President Xi Jinping may re-open a playbook that reformist officials have been trying to close. The central government has already pushed localities to ramp up infrastructure spending, and there may be more to come. Construction investment creates jobs immediately, and the government can order banks to lend, and order state firms to build.

Read more …

Trump won’t like this.

The EU Has New People In Charge. It’s Not Good News For US Tech Firms (CNBC)

New officials at the heart of the EU will likely keep America’s big tech firms under close scrutiny, experts have told CNBC. The European Commission — the EU’s executive arm — has fined companies such as Google for disrespecting its competition rules, it’s asked Ireland to collect unpaid taxes from Apple and is currently investigating Amazon. It has also proposed different laws that seek to limit online content and there’s little evidence that anything will change under the EU’s new leadership. Dexter Thillien, a senior industry analyst at Fitch Solutions, told CNBC via telephone Wednesday that Europe is keen to continue to be seen as the global leading force in tech regulation. Thillien explained that Europe saw a loophole in global tech regulation and felt the need to act.


“Europeans have all the negatives but none of the positives,” he said, referring to the fact that Europe has not created any large tech firms but has had to deal with the presence of Silicon Valley behemoths. “The European Commission has become more assertive making big tech companies pay their fair share of taxes. If anything, the incoming Commission looks even more determined to do so,” Florian Hense, an economist at Berenberg, told CNBC via email. Ursula von der Leyen, the president-elect of the Commission, said during a speech earlier this month that “if (tech companies) are making these profits by benefiting from our education system, our skilled workers, our infrastructure and our social security, if this is so, it is not acceptable that they make profits, but they are barely paying any taxes because they play our tax system.”

Read more …

A European under Washington’s thumb.

EU Governments Seek Name For IMF Head (R.)

European Union finance ministers are set on Friday to choose the bloc’s candidate to lead the International Monetary Fund from a list of four names, a spokeswoman for the French government said. The list includes Jeroen Dijsselbloem, the Dutch former head of euro zone finance ministers; Nadia Calvino, the Spanish economy minister; Olli Rehn, the Finnish central bank governor; and Bulgaria’s World Bank chief executive Kristalina Georgieva. Mario Centeno, the Portuguese chairman of euro zone finance ministers, said on Thursday he was pulling out of the race “in this stage of the process”, adding that he would be available if needed for a compromise solution.


Britain did not field a candidate because it could not come up with a name on time, a European official said. It had been expected to name a candidate and the deadline was extended by a few hours on Thursday to allow it to do so. France is leading the process to select a European candidate. The top job at the Washington-based global lender has historically been filled by a European. Outgoing IMF head Christine Lagarde is taking over from Mario Draghi as European Central Bank president.

Read more …

is that enough to push through a no-deal Brexit?

Boris Johnson’s Commons Working Majority Cut To One (BBC)

The Liberal Democrats have won the Brecon and Radnorshire by-election, leaving new PM Boris Johnson with a Commons working majority of just one. Jane Dodds overturned an 8,038 majority to beat incumbent Conservative Chris Davies by 1,425 votes. Mr Davies stood again after being unseated by a petition following his conviction for a false expenses claim. It was the first electoral test for Mr Johnson just eight days after becoming prime minister. It is the quickest by-election defeat for any new prime minister since World War Two.


Now, with the thinnest possible working majority, he will have to rely heavily on the support of his own MPs and his confidence-and-supply partners the DUP to get any legislation passed in key votes. It was also a bad night for Labour, whose vote share dropped by 12.4% as it was beaten into fourth place by the Brexit Party. The result means the Lib Dems now have 13 MPs. Ms Dodds, who is the Welsh Liberal Democrat leader, said: “My very first act as your new MP when I get to Westminster will be to find Mr Boris Johnson, wherever he’s hiding, and tell him to stop playing with the future of our community and rule out a no-deal Brexit.”

Read more …

“Paddy should know his place..”

Expecting Ireland To Be Servile Is Part Of A Long British Tradition (G.)

Boris Johnson’s approach to Ireland is part of an ignoble tradition in British politics. At its heart is the false assumption that superiority in resources and military prowess equates to a superiority in intellectual power and moral rectitude. In short, the idea that might is right and that, ultimately, Paddy should know his place. This assumption shaped and even, at times, dominated, policy on Ireland for centuries before independence. It runs through 19th-century British depictions of the Irish as incapable of self-government, unreliable, lazy and inferior. For Benjamin Disraeli, a British prime minister who shares some personal characteristics with the current incumbent, the Irish were “wild, reckless, indolent, uncertain and superstitious”.

Most obviously, this sense of superiority and a refined “moral” stance was clearly manifest in government policy during the Great Famine of 1845-49, which caused the deaths of more than one million people on the island of Ireland. This consistently damaging strain of thought continued into the 20th century, with British military and economic power often used crudely to address deep-rooted political conflicts in Ireland, which refused, and continue to refuse, to allow for simple solutions. Ireland, the thinking went, should be the handmaiden for glorious Britannia – and this servile position is for Ireland’s own benefit and ultimately serves Irish interests.

Of course, within this particular strain of British political thought, the history of violence and tragedy in Ireland is sometimes portrayed as a product of Irish recalcitrance – a tendency towards disorder and conflict that fails to recognise the beneficence of British policy on the island. Britain, it is often suggested, is a guarantor of Irish stability, addressing and suppressing the inherent conflicts in Irish society, rather than a highly disruptive force that has often recklessly pursued its own interests at a serious cost to its nearest neighbour.

Read more …

“Tories of influence” told him privately that Leo Varadkar, Ireland’s taoiseach “isn’t bright” and “the Irish will blink”.

Irish Peace Is Too Precious To Be Squandered By The Brexit Ultras (G.)

In The Ultras, the brutal, brilliant novel by Eoin McNamee set during the Troubles, the protagonist (based on the real-life undercover British intelligence officer Robert Nairac) finds himself in the company of dangerous men like himself. The Ultras plot terrible events and create dark polities while forcing everyone else to live with their consequences. “Ultra meaning beyond,” wrote McNamee. “Ultra meaning extreme.” The so-called war cabinet formed by the new British prime minister, Boris Johnson, and whose course the maverick arch-Brexiteer Dominic Cummings now charts, of course bears no resemblance to the characters in the war of the Ultras imagined by McNamee.

But the sheer velocity and ferocity of their opening salvoes about crashing out of the EU with no deal on October 31 unless the backstop – the insurance policy to avoid a hard border in Ireland – is abolished, raise the kind of alarm that we in Ireland have not felt since the dark years of the Troubles. The political fear is that this new breed of “Brexit Ultras” (Johnson’s cabinet with Nigel Farage’s Brexit party snapping at its heels) could deliberately pursue a no-deal EU exit at the expense of a volatile Irish peace. The sabre-rattling and pre-emptive blame-shifting of course is intended to shore up political support in the UK ahead of a possible general election, but also to intimidate Ireland into abandoning the backstop while shaking the unity of the EU27.

Europe, with its own demons to face, has its red lines too and will not sacrifice the single market or its external borders, or jeopardise the wider integrity of the European project. Ireland, and the fragile peace process that has been built over the past 20 years, falls between these two positions. And while it is still early days for the Johnson premiership, we have a deteriorated state of Anglo-Irish relations following his ascent to power. How real is the damaging rhetoric emanating from London and the anti-Irish tropes spewing from much of the British media? David Yelland, the former editor of the Sun, revealed that he had been shocked when “Tories of influence” told him privately that Leo Varadkar, Ireland’s taoiseach “isn’t bright” and “the Irish will blink”. “It seems, amazingly, that this is the actual policy of HMG under Johnson,” tweeted Yelland. “They are anti-Irish, arrogant, dangerous and wrong.”

Read more …

Well, actually, they’re going to change hardware: a second flight control computer and a second angle-of-attack sensor. Both of which are altready on board, but not used.

Boeing To Change 737 MAX Flight-Control Software To Address Flaw (R.)

Boeing Co plans further changes to the software architecture of the 737 MAX flight-control system to address a flaw discovered after a test in June, two people briefed on the matter said late on Thursday. The redesign, first reported by the Seattle Times, involves using and receiving input from both flight control computers rather than one. The move comes in response to an effort to address a problem discovered in June during a Federal Aviation Administration(FAA) simulator test. This is on top of earlier announced changes to take input from both angle-of-attack sensors in the MCAS anti-stall system linked to two deadly crashes that led to a global grounding of the plane.


Boeing still hopes to complete the software redesign by the end of September to submit to the FAA for approval, the sources said. For decades, 737 models have used only one of the flight control computers for each flight, with the system switching to the other computer on the following flight, according to people familiar with the plane’s design. The FAA said in June that it had identified a new risk that would need to be addressed before the plane could be ungrounded. Under a scenario where a specific fault in a microprocessor caused an uncommanded movement of the plane’s horizontal tail, it took pilots too long to recognize a loss of control known as runaway stabilizer, a Boeing official said at the time.

Read more …

Crazy bag lady.

Rachel Maddow Ratings Tank After Collusion Narrative Implodes (Ryan)

Once a shining beacon of hope for Russiagate true believers, it looks like Rachel Maddow has left her best days behind her; MSNBC’s conspiracy queen has seen her show plummet to fifth place in cable news ratings. What happened? You rise fast and fall hard in the fickle world of television. Just last April, Maddow overtook Fox News’ Sean Hannity to claim the title of most-watched host across cable news. She had become a reliable source for Russigate aficionados to get their daily dose of crazy. Sadly for Maddow, the latest data released by Nielsen shows her show in fifth place with a total audience of 2.4877 million viewers for July – behind Hannity, Tucker Carlson, Laura Ingraham and The Five (all Fox News shows).


For context, in January this year, Maddow still boasted an audience of nearly 3.3 million, which means she shed around 800,000 viewers in just six months. Maddow was also in fifth place among viewers in the 25-54 age range – the group most-favored by advertisers. Ouch. Once dubbed “the smartest person on TV” by Forbes (really), this is certainly not the big payoff Maddow was expecting, having dedicated three years of her career to breathlessly covering every twist and turn in the anticlimactic Trump-Russia “collusion” drama.

Read more …

 

Ship with dolphins.Wall painting from Akrotiri, Thera island (Santorini), Greece.17th century BC.

 

 

 

 

 

Mar 152017
 
 March 15, 2017  Posted by at 9:46 am Finance Tagged with: , , , , , , , , ,  Comments Off on Debt Rattle Ides of March 2017


Russell Lee Proprietor of small store in market square, Waco, Texas 1939

 

MSNBC’s Non-Story: Trump Made $150 Million, Paid 25% Tax Rate (ZH)
The Most Important Chart To See Before The Dutch Election (Ed Harrison)
Fragmentation Is the Solution, Not the Problem (CHS)
Economists Are Political Actors (Sapir)
One Chart That Captures the Debate Over Quantitative Easing (BBG)
Fed Expected To Raise Rates As US Economy Flexes Muscle (R.)
Britain Is Politically Dead From The Neck Down (Monbiot)
Turkish Paradoxes (K.)
World’s Spiders Eat More “Meat” Than All Of Mankind (G.)
Monsanto Accused of Ghostwriting Papers on Roundup Cancer Risk (BBG)
Monsanto Colluded With EPA, Could Not Prove Roundup Doesn’t Cause Cancer (ZH)
Greece: A Year of Suffering for Asylum Seekers (HRW)
As Greek Crisis Grinds On, Children Pay Price (K.)

 

 

Boomerang.

MSNBC’s Non-Story: Trump Made $150 Million, Paid 25% Tax Rate (ZH)

While Rachel Maddow drones on with the coherence of Janet Yellen, losing thousands of viewers by the minute, the MSNBC anchor was promptly scooped not only by the White House which revealed her “secret” one hour in advance, but also by the Daily Beast which reported that its contributor David Cay Johnston had obtained the first two pages of Trump’s 2005 federal income tax return, allegedly receiving them in the mail, and posted his “analysts” on his website, DCReport.org. According to the documents, Trump and his wife Melania paid $38 million in total income tax, consisting of $5.3 million in regular federal income tax, and an additional $31 million of “alternative minimum tax,” or AMT.

The White House statement confirmed the finding: “Before being elected President, Mr. Trump was one of the most successful businessmen in the world with a responsibility to his company, his family and his employees to pay no more tax than legally required,” the White House said in a statement. “That being said, Mr. Trump paid $38 million dollars even after taking into account large scale depreciation for construction, on an income of more than $150 million dollars, as well as paying tens of millions of dollars in other taxes such as sales and excise taxes and employment taxes and this illegally published return proves just that.” As the Beast notes, 2005 was the year that Trump, then a newly minted reality star, made his last big score as a real-life real estate developer, when he sold two properties, one on Manhattan’s west side and one in San Francisco, to Hong Kong investors, accounting for the lion’s share of his income that year.

“It is totally illegal to steal and publish tax returns,” the White House statement concluded. “The dishonest media can continue to make this part of their agenda, while the President will focus on his, which includes tax reform that will benefit all Americans.” But the real story here is that there is no story: what MSNBC confirmed is that Trump made more money than some of his critics said he made in the period in question, and more importantly, that he paid a generous effective income tax rate, well above the 14.1% rate paid by Mitt Romney, and even higher than the 13.5% federal tax rate paid by Bernie Sanders in 2014.

Read more …

Three articles in a row that deal with decentralization, each from their own angle. Most important chart I don’t know, but a good indicator of the entire west moving away from traditional parties. The majority of votes may go to new parties, not established ones.

The Most Important Chart To See Before The Dutch Election (Ed Harrison)

The present Prime Minister of the Netherlands, Mark Rutte, is the first Prime Minister from a party other than the two traditional centrist parties, the PvdA and the CDA, and their predecessor parties since the Dutch constitution and voting system was fundamentally changed in 1917. Clearly, we are seeing a change in voting patterns. But what is even more remarkable is that right now poling for parties that have always been in opposition is almost half of the vote for this election. Why it matters: We are in the midst of an economic upswing in Europe and globally as well. By all macro accounts, the Dutch economy is performing well. Yet, between them, previous ruling coalition parties —the VVD, PvdA, CDA, D66 and CU — are projected to only get 52% of the vote.


Source: Legatum Institute

They could even get fewer votes than the parties that have never been in government during the 100 years of the modern Dutch electoral system. People talk about voters turning to populists. But what happens to electoral patterns in a recession — or another sovereign debt crisis? And how would more populist platforms or parties in Europe deal with the existing economic orthodoxy, dominated by the stability and growth pact’s 3 and 60% deficit-debt hurdles? The next coalition in the Netherlands could be unstable, as it is likely to be cobbled together to exclude the PVV. Overall, the political risks in Europe may be high right now, but depending on how the economy does, the risks can rise further still.

Read more …

As I’ve addressed many times. Centralization is in the past.

Fragmentation Is the Solution, Not the Problem (CHS)

The fragmentation of political consensus (i.e. the consent of the citizenry) is presented by the Powers That Be and their media servants as being a disaster. The implicit fear is real enough: how can we rule the entire nation-empire if it fragments?\ As I noted the other day, fragmentation terrifies the Establishment of racketeers and insiders, for when the centrally-enforced rentier skims and scams collapse, those who own and control the rentier skims, scams and rackets will lose the source of their wealth and power. To understand why fragmentation is the solution rather than the problem, we have to look at how power is leveraged in centralized government. Let’s take the recent increase in a common pinworm treatment from $3 to $600: Pinworm prescription jumps from $3 to up to $600 a pill (via J.F.).

In a top-down, centralized hierarchy of political power (i.e. the central state), the pharmaceutical company only needs to lobby a few authorities in the central state to impose its rentier skim/scam on the entire nation. Lobbying/bribing a relative handful of federal officials and elected representatives is remarkably inexpensive: a financier or corporation only needs to focus on these few key players, and smoothing the PR pathway via a highly concentrated corporate media. A mere $5 million spent in the right places guarantees $100 million in future profits– profits earned not from open competition in a transparent market, but profits plundered as rentier skims: the product didn’t get any better or effective when the price leaped from $3 to $600, and competition was squelched by regulatory capture and high barriers to entry.

Now imagine if the pharmaceutical company had to lobby/bribe officials in each of America’s 3,142 counties to impose its rapacious rentier skim on the populace of each county. The lobbying/bribing effort will be orders of magnitude more costly and complex, and the national corporate media is less effective at the local level, where community groups and local media have some influence. If we look at the source of the 2008 Global Financial Meltdown, we find that the centralization of capital and power were the primary enablers of the meltdown. If the financial system were composed of 1,200 local banks, each of which had to comply with local and state regulations instead of five behemoth banks that had the capital and klout to buy Washington D.C.’s approval of their leverage and shady dealings, some hundreds of the smaller banks might have failed–but the system would have survived.

Read more …

Sapir is interesting. But economics is still not a science. Also addresses decentralization.

Economists Are Political Actors – Sapir (AHT)

[..] economists have appropriated a power that is not theirs. They have indeed penetrated the inner workings of the ruling apparatus. This is true at the State level, as to that of major international organizations, whether it is in the European Union, the OECD or the WTO. They are thus increasingly inclined to intervene on all social and political problems. But when they occur, it is by mixing an experts position and a position of political actors. This poses an immediate problem. For, if the expert is legitimate to speak on behalf of an acquaintance, the political actor must comply with the rule of democratic debate. By having it both ways, economists are exonerated from the problem of verification. The problem, therefore, is to know in which space one speaks, in that of pure competence or in that of political choices. If it is in the latter, it is no longer possible to accept that the “expertise” alone can decide the debate, expertise which can no longer be verified because any judgment would combine elements of competence and political values.

If one is in the political space, then the question of legitimacy arises. Now, this question immediately refers to the higher-level issue of sovereignty. In the space of politics, one asks first who is legitimate, and who is sovereign. But there is a problem that is deeper. The scientific credibility they claim to be is far from being indisputable, or undisputed. There are very serious reasons for this, which I explained in a book dating back to the early 2000s [1]. The very way in which the majority of the profession, the economists of the mainstream, understands the object of its work, is today debated and strongly criticized [2]. The methods used by these economists, the models on which they are based, are openly contested. [..] In fact, economists do politics, what nobody ever thinks to reproach them for, but they do politics by pretending not to do so, and by delegitimizing in advance any critical discourse. This is, of course, a serious attack on democracy.

[..] It is wrong here to speak of “Europe” as if it were an institution or a federation. The only reality of Europe is a historical reality, diverse, and above all a cultural reality. If you go to Vladivostok in Russia, you are in a European city. What is now a problem for democracy is the existence of the European Union, which is an institution and of which we can follow the evolution from the origin, that is to say the Maastricht Treaty. Indeed, the evolution of the European Union since 2007-2009 is a real problem. There, yes, unquestionably, we are in the presence of a structure that tends to develop itself without control or responsibility. The statements of Jean-Claude Juncker in the Greek election of January 2015 testify it [37].

The behavior of the EU and the institutions of the Euro zone call for an overall reaction because these institutions contest this freedom that is sovereignty [38]. Let us remind here the quotation from Mr. Jean-Claude Juncker, the successor of the ineffable Barroso at the head of the European Commission: “There can be no democratic choice against European treaties”. This revealing statement dates from the Greek election of January 25, 2015, which precisely saw the victory of SYRIZA. In a few words, everything is said. It is the quiet and satisfied affirmation of the superiority of non-elected institutions over the voting of voters, of the superiority of the technocratic principle over the democratic principle.

Read more …

The mother of all asset bubbles.

One Chart That Captures the Debate Over Quantitative Easing

Not all price increases are created equal. Goldman Sachs raises questions about the success of the efforts by the Federal Reserve and its peers to spark inflation in the wider economy with a chart showing what’s happened with prices in the largest developed economies since the start of 2009. A replication of their analysis shows a big spread in gains. While wages would never show swings on par with the likes of high-yield bonds, the chart does illustrate how well financial markets recovered from the 2007 to 2009 meltdowns. By contrast, consumer price inflation, incomes and other such gauges of the “real” economy have put in muted performances. For politicians, the chart sums up the frustrations that have helped propel the populism that Brexiteers and Donald Trump rode to victory.

Few would question that the real economy would have been in much worse shape without the Fed, ECB and Bank of Japan’s determination to avert a financial-industry meltdown last decade, an effort that saw their balance sheets balloon by trillions of dollars. [..] Economic growth and wage increases have disappointed in recent years, depressed by poor productivity gains and historically low labor-force participation – dynamics that lie outside the purview of central banks. Now that monetary policy makers are leaving the onus on governments to address growth, and contemplating the easing off of stimulus, the big question for investors is how resilient markets will be. For now, optimism prevails – everything from corporate-bond premiums to emerging-market bonds are flashing confidence. It’s perhaps no wonder: though the Fed has ended its QE, continuing programs at the ECB and BOJ are driving almost $200 billion of purchases a month, according to Deutsche Bank estimates.

Read more …

Yawn…

Fed Expected To Raise Rates As US Economy Flexes Muscle (R.)

The Federal Reserve is expected to raise interest rates for the second time in three months on Wednesday, encouraged by strong monthly job gains and confidence that inflation is finally rising to its target. A rate hike at the conclusion of the Fed’s latest two-day policy meeting is already baked into bond yields and financial markets overall, with investors putting the likelihood of such a move at 95%, according to CME Group’s FedWatch program. Attention is turning instead to whether the U.S. central bank will signal an even faster pace of monetary tightening this year than the current three rate hikes that it projected at the December policy meeting.

“Expectations have some catching up to do regarding the Fed’s need to ‘lean into the wind’ of rising inflation, strong growth, robust sentiment, easy financial conditions, and the likelihood of fiscal stimulus in 2018,” analysts from Goldman Sachs wrote ahead of the meeting. They said they regarded a fourth rate increase this year as a “close call.” A rate increase on Wednesday would push the Fed’s target overnight lending rate to a range of between 0.75% and 1.00%, still low but approaching the range that the central bank has typically operated within. The Fed is scheduled to release its latest policy statement along with updated economic forecasts at 2 p.m. EDT. Fed Chair Janet Yellen is due to hold a press conference half an hour later.

Read more …

“Will my family and I truly be better off by going it alone? Will we really be more safe and secure?”

Britain Is Politically Dead From The Neck Down (Monbiot)

Here is the question the people of Scotland will face in the next independence referendum: when England falls out of the boat like a block of concrete, do you want your foot tied to it? It would be foolish to deny that there are risks in leaving the United Kingdom. Scotland’s economy is weak, not least because it has failed to wean itself off North Sea oil. There are major questions, not yet resolved, about the currency it would use; its trading relationship with the rump of the UK; and its association with the European Union, which it’s likely to try to rejoin. But the risks of staying are as great or greater. Ministers are already trying to reconcile us to the possibility of falling out of the EU without a deal.

If this happens, Britain would be the only one of the G20 nations without special access to EU trade – “a very destructive outcome leading to mutually assured damage for the EU and the UK”, according to the Commons foreign affairs committee. As the government has a weak hand, an obsession with past glories and an apparent yearning for a heroic gesture of self-destruction, this is not an unlikely result. On the eve of the first independence referendum, in September 2014, David Cameron exhorted the people of Scotland to ask themselves: “Will my family and I truly be better off by going it alone? Will we really be more safe and secure?” Thanks to his machinations, the probable answer is now: yes.

In admonishing Scotland for seeking to protect itself from this chaos, the government applies a simple rule: whatever you say about Britain’s relationship with Europe, say the opposite about Scotland’s relationship with Britain. In her speech to the Scottish Conservatives’ spring conference, Theresa May observed that “one of the driving forces behind the union’s creation was the remorseless logic that greater economic strength and security come from being united”. She was talking about the UK, but the same remorseless logic applies to the EU. In this case, however, she believes that our strength and security will be enhanced by leaving. “Politics is not a game, and government is not a platform from which to pursue constitutional obsessions,” she stormed – to which you can only assent.

Read more …

“And the last of the paradoxes is that Turkish electoral law prohibits pre-election rallies abroad..”

Turkish Paradoxes (K.)

What Turkish President Recep Tayyip Erdogan is trying to accomplish is perfectly clear: He wants to win the April 16 referendum on constitutional reform and thus gain the enhanced powers his ambitious nature so covets, some of which he already enjoys after turning last summer’s failed coup into an opportunity. His strategy is also clear: criminalizing any opposition, be it in actions or mere words, mainly at the expense of journalists and the Kurds, as well as condemning in summary fashion anyone perceived as being pro-Gulen. The second part of his strategy involves exporting his edginess and bullying rhetoric, first and foremost to the Aegean at the expense of Greece, and then to the European Union in a bid to win favor among Gray Wolves voters.

The Turkish president is also trying to strong-arm Western Europe into recognizing his prerogative (and that of his subordinates, though only those who vote his way next month) to a right that he himself openly scorns and denies his opponents. History is full of such paradoxes. Another is that while Erdogan accuses the West of Islamophobia, he is doing everything in his power to strengthen this sentiment because it will benefit him at the polls, as for years he has been cultivating the myth that he is the leader of all of Islam, both in the East and the West. In contrast to Erdogan, what the EU is trying to achieve vis-a-vis Ankara is not so clear, neither in terms of strategy nor even in tactics. Overall, it’s hard to know what it’s thinking about Turkey’s “European prospects” and, more specifically right now, about the pre-election speeches of Turkish pro-Erdogan officials in EU member-states.

Pre-election anxiety strengthened by the rising popularity of anti-systemic, anti-migrant, far-right forces, has been instrumental in Europe as well, especially in the Netherlands and Germany. It has resulted in bans against Turkish officials that demonstrate fear rather than faith in the strength of democracy, even when it is exposed to the test of regimes which are hardly democratic, such as Turkey. Meanwhile, fears that the European Union’s refugee deal with Turkey may collapse have prevented the German and Dutch leaderships from openly condemning the human rights violations in Turkey, resulting in them basically swallowing profound insults from Erdogan and some of his ministers referring to fascists and Nazis. Here’s another paradox: Turkey, which didn’t exactly shine in the war against Nazism, condemning the Netherlands, a victim of Nazism.

And the last of the paradoxes is that Turkish electoral law prohibits pre-election rallies abroad.

Read more …

I’d be interested to see a study like this done for bats. They eat a lot of insects. And there are lots of them: 1/3 of all mammals is a bat I recall reading.

World’s Spiders Eat More “Meat” Than All Of Mankind (G.)

The world’s spiders eat 400-800m tonnes of insects every year – as much meat and fish as humans consume over the same period, a study said Tuesday. In the first analysis of its kind, researchers used data from 65 previous studies to estimate that a total of 25m metric tonnes of spiders exist on Earth. Taking into account how much food spiders need to survive, the team then calculated the eight-legged creatures’ annual haul of insects and other invertebrates. “Our estimates … suggest that the annual prey kill of the global spider community is in the range of 400-800m metric tons,” they wrote in the journal The Science of Nature. This showed just how big a role spiders play in keeping pests and disease-carriers at bay – especially in forests and grasslands where most of them live.

“We hope that these estimates and their significant magnitude raise public awareness and increase the level of appreciation for the important global role of spiders,” the study authors wrote. For context, the study points out that humans consume about 400m tonnes of meat and fish every year, while whales feed on 280-500 tonnes and seabirds about 70m tonnes of seafood. There are about 45,000 known spider species, all of them meat-eating. And the critters can travel far to feed, swinging from place to place on silken threads that allow them to cover up to 30km (19 miles) in a day. Spiders are found everywhere from the Arctic to the most arid of deserts, in caves, on ocean shores, sand dunes and flood plains, the study authors said.

Read more …

Unbelievable.

Monsanto Accused of Ghostwriting Papers on Roundup Cancer Risk (BBG)

Monsanto was accused in court documents of ghostwriting scientific literature that led a U.S. regulator to conclude a key chemical in its Roundup weed killer shouldn’t be classified as carcinogenic. Lawyers suing the company on behalf of farmers and others, who claim exposure to glyphosate caused their non-Hodgkin’s lymphoma, alleged in a court filing which was partially blacked out until Tuesday that the Environmental Protection Agency “may be unaware of Monsanto’s deceptive authorship practice.” The filing was made public by a federal judge in San Francisco handling the litigation. The judge said last month he’s inclined to require a retired EPA official to submit to questioning by plaintiffs’ lawyers who contend he had a “highly suspicious” relationship with Monsanto.

The former official oversaw a committee that found insufficient evidence to conclude glyphosate causes cancer and left his job last year after his report was leaked to the press. The plaintiff lawyers said in the filing that Monsanto’s toxicology manager and his boss were ghost writers for two of the reports, including one from 2000, that the EPA committee relied on to reach its conclusion. Among the documents unsealed Tuesday was a February 2015 internal e-mail exchange at the company about how to contain costs for a research paper. The plaintiff lawyers cited it to support their claim that the EPA report is unreliable, unlike a report by an international agency that classified glyphosate as a probable carcinogen.

“A less expensive/more palatable approach” is to rely on experts only for some areas of contention, while “we ghost-write the Exposure Tox & Genetox sections,” one Monsanto employee wrote to another. The names of outside scientists could be listed on the publication, “but we would be keeping the cost down by us doing the writing and they would just edit & sign their names so to speak,” according to the e-mail, which goes to on say that’s how Monsanto handled the 2000 study.

Read more …

And this is even more unbelievable. After 25 years of Roundup being on the market, not one cancer study has been done.

Monsanto Colluded With EPA, Could Not Prove Roundup Doesn’t Cause Cancer (ZH)

newly unsealed court documents released earlier today seemingly reveal a startling effort on the part of both Monsanto and the EPA to work in concert to kill and/or discredit independent, albeit inconvenient, cancer research conducted by the World Health Organization’s International Agency for Research on Cancer (IARC)….more on this later. But, before we get into the competing studies, here is a brief look at the ‘extensive’ work that Monsanto and the EPA did prior to originally declaring Roundup safe for use (hint: not much). As the excerpt below reveals, the EPA effectively declared Roundup safe for use without even conducting tests on the actual formulation, but instead relying on industry research on just one of the product’s active ingredients.

“EPA’s minimal standards do not require human health data submissions related to the formulated product – here, Roundup. Instead, EPA regulations require only studies and data that relate to the active ingredient, which in the case of Roundup is glyphosate. As a result, the body of scientific literature EPA has reviewed is not only primarily provided by the industry, but it also only considers one part of the chemical ingredients that make up Roundup.” Meanwhile, if that’s not enough for you, Donna Farmer, Monsanto’s lead toxicologist, even admitted in her deposition that she “cannot say that Roundup does not cause cancer” because “[w]e [Monsanto] have not done the carcinogenicity studies with Roundup.”

[..] In early 2015, once it became clear that the World Health Organization’s IARC was working on their own independent study of Roundup, Monsanto immediately launched their own efforts to preemptively discredit any results that might be deemed ‘inconvenient’. That said, Monsanto, the $60 billion behemoth, couldn’t possibly afford the $250,000 bill that would come with conducting a legitimate scientific study led by accredited scientists. Instead, they decided to “ghost-write” key sections of their report themselves and plotted to then have the independent scientists just “sign their names so to speak.”

Finally, when all else fails, you call in those “special favors” in Washington D.C. that you’ve paid handsomely for over the years. And that’s where Jess Rowland, the EPA’s Deputy Division Director for the Office of Chemical Safety and Pollution Prevention and chair of the Agency’s Cancer Assessment Review Committee, comes in to assure you that he’s fully exploiting his role as the “chair of the CARC” to kill any potentially damaging research…”if I can kill this I should get a medal.”

Read more …

Even HRW has moved to using the politically correct ‘asylum seekers’. for refugees.

Greece: A Year of Suffering for Asylum Seekers (HRW)

The EU-Turkey deal has trapped thousands of people in abysmal conditions on the Greek islands for the past year, while denying most access to asylum procedures and refugee protection, Human Rights Watch said today. This assessment of conditions is released ahead of the first anniversary of the agreement, signed on March 18, 2016. To carry out the deal, the Greek government has adopted a containment policy, keeping asylum seekers confined to the islands, including in the so-called refugee hotspots and other reception facilities, to facilitate speedy processing and return to Turkey. But continued arrivals, the mismanagement of aid funding, and the slow pace of decision-making, as well as the positive decisions of Greek appeals committees rejecting summary returns to Turkey as unsafe, have led to overcrowded and abysmal conditions on the Greek islands.

These factors, combined with the Greek authorities’ failure to properly identify vulnerable asylum seekers for transfer to the mainland, have resulted in deteriorating security conditions, unnecessary suffering, and despair. “The EU-Turkey deal has been an unmitigated disaster for the very people it is supposed to protect – the asylum seekers trapped in appalling conditions on Greek islands,” said Eva Cossé, Greece researcher at Human Rights Watch. “Greek authorities should ensure that people landing on Greece’s shores have meaningful access to asylum and put an end to the containment policy for asylum seekers. The deal’s flawed assumption that Turkey is a safe country for asylum seekers would allow Greece to transfer them back to Turkey without considering the merits of their asylum claims.

But in the months after the deal was completed, Greek asylum appeals committees have rightly ruled in many instances that Turkey does not provide effective protection for refugees and that asylum applications should be admitted for regular examination on their merits in Greece. Following EU pressure, however, Athens changed the composition of the appeals committees in June, and the restructured committees have ruled in at least 20 cases that Turkey was a safe country, even though it excludes non-Europeans from its refugee protection. That finding was challenged by two Syrian asylum seekers at Greece’s highest court, the Council of State, which heard their case on March 10. No one has yet been forcibly returned to Turkey on the grounds that their asylum application was inadmissible because they could obtain effective protection in Turkey. But if the Council of State turns down the appeal, it could pave the way for mass returns of asylum seekers to Turkey.

Read more …

Boy, the sadness…

As Greek Crisis Grinds On, Children Pay Price (K.)

In Greece’s grinding economic crisis, a home for abused children is now taking in those whose parents are struggling to feed them. It is perhaps the darkest sign of economic devastation in Greece, where traditionally strong family ties are starting to crumble after years of depression. A quarter of Greece’s workforce is unemployed and a quarter of its children live in poverty, according to United Nations figures, forcing parents to depend on grandparents for handouts. But pensions too have been cut a dozen times. In Athens, the Model National Nursery, set up a century ago for orphans of war, can hardly keep up with the number of parents turning to it for help. Unable to cover their basic needs, parents leave their children in the home all week.

Iro Zervaki, its head, says at least 40 children are on the waiting list, four times as many as a couple of years ago. The home sleeps 25 in a bare room with rows of beds draped in blue blankets, and lacks the staff and funds to increase capacity, she said. Most places are for abused children. Dozens of other children, all aged two to five, come in daily, but the days away from their parents are long. “We had incidents where children even attempted to leave, to run away, to go to their mother,” Zervaki said. In the buzzing playground, a little girl tugged the social worker’s blouse and yelled: “Miss! When will I go to my mum?” “They can’t tell the days apart so every day they ask: ‘Is it Friday?’” Anthoula Zarmakoupi, the social worker, said. “They know mum will pick them up at the weekend.”

Read more …