Feb 142019
 
 February 14, 2019  Posted by at 10:42 am Finance Tagged with: , , , , , , , , , , ,  


Pablo Picasso Guitar 1925

 

Australia’s $7 Trillion Question: How Low Will House Prices Go (SMH)
US Mortgage Applications Drop Despite Lower Rates: Industry is Baffled (WS)
Surge In Delinquencies Threatens US Auto Loan Bubble (Colombo)
$1 Trillion Amazon Pays $0 In Income Taxes, Gets $129 Million Rebate (RT)
EU Officials: UK Only ‘Pretending To Negotiate’ Over Brexit (G.)
UK Has Rolled Over Just £16bn Out Of £117bn Trade Deals (G.)
Labour MPs Warn Corbyn: Back A Second Referendum Or We Quit (G.)
Hardline Brexiters Threaten To Vote Down Theresa May’s Motion (G.)
Maduro Claims Foes ‘Totally Failed’ To Topple Him As Efforts Falter (G.)
Venezuela Envoy Elliott Abrams Loses His Cool In Congress (ZH)
Germany Pulls Rank on Macron and Washington over Nordstream 2 (SCF)
Bikes Put Spanner In Works Of Dutch Driverless Car Schemes (G.)
Exposure To Glyphosate Increases Risk Of Cancer By 41% – Study (G.)

 

 

As I said yesterday, after 27 years without a recession, the no. 1 instrument to battle complacency, excesses and zombies, Australia is a fire hazard. At the same time, of course, after 27 years so many people have never seen a recession that nobody expects one anymore.

Australia’s $7 Trillion Question: How Low Will House Prices Go (SMH)

Industry experts say property prices in Sydney and Melbourne, which have led a slump in Australia’s $7 trillion residential property market, are likely headed lower before they hit rock bottom. The Australian Bureau of Statistics released figures this week showing new lending to owner occupiers fell 6.4% during December last year, outpacing the fall in lending to property investors, which dropped by 4.6%. The total value of new lending to households has now dropped 19.8% in the past year — the biggest annual fall in home loans since the height of the global financial crisis. “The lending numbers are atrocious; it tells us that property markets in Sydney and Melbourne are in a tailspin,” says Louis Christopher, managing director of property researcher SQM Research.

The issue is mostly access to credit and, for at least for past six months, banks have been scrutinising the spending of borrowers more closely when assessing their loans, Christopher says. Doron Peleg, chief executive of RiskWise Property Research, says the weak lending figures also show how those who would normally be entering the property market are now shying away in anticipation of lower prices. The Westpac-Melbourne Institute Index out this week showed consumers in Sydney and Melbourne have poor property price expectations. “Buyer sentiment has been hit as residential property, particularly in Sydney and Melbourne, is seen as a depreciating asset,” Peleg says.

[..] Many property experts are expecting a peak-to-trough drop in property prices of between 15% and 20%. “Without an interest-rate cut or regulatory changes there will be tough times ahead for the property market,” RiskWise’s Peleg says. [..] Tim Lawless, the head of research at property researcher CoreLogic, is expecting a peak-to-trough fall of up to 20% for both Sydney and Melbourne before prices start to level out in 2020. However, Lawless says the price declines should be kept in perspective. Sydney house and apartment prices have risen by more than 70% in the past decade, while Melbourne prices have gained even more, he says. This is despite recent price falls of more than 12% from their peak in Sydney in mid-2017 and 8% in Melbourne from a top in late 2017, he says.

Read more …

The Omen.

US Mortgage Applications Drop Despite Lower Rates: Industry is Baffled (WS)

A month ago, mortgages reappeared in the housing-hype circus, when it was widely reported that mortgage applications “soared” and “jumped.” Both types of mortgage applications did so: those used to purchase a home (purchase mortgages) and those used to refinance an existing mortgage (refinance mortgages). The jump in mortgage applications was ascribed to “plunging” mortgage interest rates. It was seen as a big sign that the weakening housing market was about to turn around. But that hope has gotten unwound.

Today, the Mortgage Bankers Association (MBA) reported that its purchase mortgage index – which tracks applications (not approvals) for conventional and government mortgages to purchase a single-family house – fell 6% from the prior week and was down 5% from the same week last year – despite falling mortgage rates, which should have cranked up home buying and mortgage activity. It was the fourth week in a row of drops:

The Purchase Mortgage Index is considered a reliable indicator of impending home sales, and so this decline, given the lower mortgage rates, mystifies the industry.“Application activity fell last week – even with rates decreasing – as renewed uncertainty about the domestic and global economy likely held potential homebuyers off the market,” said MBA Associate VP of Industry Surveys and Forecasts, Joel Kan, in the report. “The 30-year fixed-rate mortgage dropped to its lowest level since last March, and was 52 basis points lower than its recent high last November,” he said.

You can practically hear between the lines, so to speak, the bafflement in his voice about this decline in purchase mortgage applications in light of the decline in mortgage rates. The MBA also reported today that the average interest rate for 30-year fixed-rate mortgages with conforming loan balances inched down to 4.65%, back where it had been last April (chart via Investing.com):

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AKA the Thelma and Louise economy.

Surge In Delinquencies Threatens US Auto Loan Bubble (Colombo)

My concerns about the U.S. automobile bubble are being confirmed. As Bloomberg reports: “More Americans than ever are at least three months behind on their auto loans, a sign that the U.S. economy may have little growth left in the tank. The number of loans at least 90 days late exceeded 7 million at the end of last year, the highest total in the two decades the Federal Reserve Bank of New York has kept track. Expressed as a percentage of total debt, the delinquency rate is the highest since 2012, as overall borrowing has also increased.

The data show not all Americans are benefiting from the strong labor market, New York Fed economists say. Consumers with the weakest credit have driven deteriorating performance of auto debt: The share of subprime borrowers who fell well behind on car payments the last three months of the year was the highest since the second quarter of 2010.

As I’ve been warning for the past couple years, the U.S. automobile sales boom is a byproduct of a bubble in auto loans:

The auto sales and auto loan bubble is a byproduct of ultra-cheap credit conditions in the past decade since the Great Recession. Interest rates are now rising, which threatens the auto bubble: It’s only a matter of time before the U.S. auto sales and loan bubble experiences a serious bust. Rising delinquencies are just the start, I’m afraid. Booms fueled by cheap credit always end the same way – in a terrible bust. Ignore the voices that say “this time will be different!”

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And the people who lost their retail jobs don’t pay income taxes either anymore.

$1 Trillion Amazon Pays $0 In Income Taxes, Gets $129 Million Rebate (RT)

Trillion-dollar-company Amazon skated through 2018’s tax filings without paying a cent for the second year in a row. The e-commerce behemoth, which made $11 billion last year, will pay no taxes at all, thanks to 2017’s tax reform. Rather than pay the standard 21% corporate income tax rate, Amazon is actually claiming a tax rebate of $129 million, which works out to a logic-defying rate of -1%. Aside from the nebulous “tax credits,” which the company does not have to spell out in its public filings, Amazon is also claiming a tax break for executive stock options, according to the Institute for Taxation and Economic Policy – a longstanding loophole that permits profitable corporations to dodge federal and state income taxes on almost half their profits.

While President Donald Trump’s 2017 tax reform legislation lowered corporate tax rates from 35% to 21%, it was sold as an incentive for companies to keep their money in the US, instead of stashing it overseas where the IRS couldn’t touch it. Now that Amazon and Netflix have both made headlines for using the new regulations to avoid paying anything at all, it remains to be seen whether the legislation’s failure to close corporate loopholes will leave the US holding the bag for fiscal year 2018 as the country’s national debt inches past $22 trillion – a record high.

Amazon’s tax windfall doesn’t even take into account the billions in tax breaks the state governments of Virginia and New York offered the company to open a second (and third) headquarters in their states, though there are rumors that New York is getting cold feet about the unprecedented corporate giveaway. Amazon didn’t pay any taxes in 2017 either, though it raked in a comparatively paltry $5.6 billion in profits and extracted a slightly larger $137 million refund.

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“Verhofstadt asked Lidington four times what the British proposal was and “four times didn’t get an answer”, according to the EU official, who described the encounter as “very surreal”.”

EU Officials: UK Only ‘Pretending To Negotiate’ Over Brexit (G.)

The British government is “pretending to negotiate” with the European Union and has not presented any new proposals to break the Brexit deadlock, according to EU officials. Theresa May’s de-facto deputy, David Lidington, and the Brexit secretary, Stephen Barclay, met senior EU officials and MEPs in Brussels and Strasbourg this week, but the talks yielded no obvious results. The British side thinks a crucial process has begun and hopes progress will have been made by 27 February when MPs are expected to have another crunch Brexit vote. However, on Wednesday night European council president Donald Tusk said the EU27 was still waiting for proposals. “No news is not always good news,” he tweeted, after meeting with the EU’s chief negotiator Michel Barnier.

“EU27 still waiting for concrete, realistic proposals from London on how to break Brexit impasse,” Tusk said. Barnier, has said current talks with the UK do not even qualify as negotiations. In a call on Tuesday morning with Guy Verhofstadt, chief Brexit representative for the European parliament, Barnier said there were “no negotiations” with the British. “These are courtesy calls at best and we have nothing new to say,” Barnier was reported to have said, by a source familiar with the conversation. Verhofstadt had asked the EU negotiator for an update, following Barnier’s meeting with Barclay over dinner at the British ambassador’s residence in Brussels, where they dined on North Sea sole, roast duck and British cheese, washed down with sancerre and saint-émilion wines.

“They are pretending to negotiate while they still don’t know what they want and how they want it,” the source said, who described this week’s meetings as “kicking up dust” and a series of “photo opportunities and pictures”. “We are willing to negotiate, but there is nothing on the table from the British side.” Verhofstadt asked Lidington four times what the British proposal was and “four times didn’t get an answer”, according to the EU official, who described the encounter as “very surreal”.

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Don’t be so negative: they got a hard-fought deal with the Seychelles!

UK Has Rolled Over Just £16bn Out Of £117bn Trade Deals (G.)

The government’s push to roll over EU trade deals from which the UK currently benefits has yielded agreements covering only £16bn of the near-£117bn of British trade with the countries involved. Despite frenetic efforts by ministers to ensure the continuity of international trade after the UK leaves the EU on 29 March, the international trade secretary, Liam Fox, has so far only managed to secure deals with seven of the 69 countries that the UK currently trades with under preferential EU free trade agreements, which will end after Brexit.

Fox’s department has yet to sign agreements with several major UK trading partners – including Canada, Japan, South Korea and Turkey – while sources have said that sufficient progress is unlikely to be made before the Brexit deadline in less than 50 days’ time. Canada, Japan, South Korea and Turkey alone accounted for goods exports worth £25bn in 2017 and imports of merchandise worth £28.6bn, with the UK currently able to access these markets on preferential terms as part of membership of the EU. Fox sought to downplay the significance of the deals in parliament on Wednesday, saying all of the countries involved only accounted for about 11% of total UK trade in 2018, with the smallest 20 nations worth less than 0.8%.

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I’ve been wondering why any politician in Britain is still in their jobs.

Labour MPs Warn Corbyn: Back A Second Referendum Or We Quit (G.)

Jeremy Corbyn faces up to 10 resignations from the Labour frontbench if he fails to throw his party’s weight behind a fresh attempt to force Theresa May to submit her Brexit deal to a referendum in a fortnight’s time, frustrated MPs are warning. With tension mounting among anti-Brexit Labour MPs and grassroots members, several junior shadow ministers have told the Guardian they are prepared to resign their posts if Corbyn doesn’t whip his MPs to vote for a pro-referendum amendment at the end of the month. Corbyn has been struggling to balance the conflicting forces in his party over Brexit, as the clock ticks down towards exit day on 29 March..

Many party members and MPs would like him to take a lead in seeking to block Brexit before time runs out – but some frontbenchers are equally adamant they could never support a referendum. Len McCluskey, the general secretary of the Unite union and a close ally of Corbyn, risked stoking the conflict in the party on Wednesday when he argued that stopping Brexit was “not the best option for our nation”. “My view is that, having had a 2016 referendum where the people have voted to come out of the EU, to try and deflect away from that threatens the whole democratic fabric on which we operate,” he told Peston on ITV. “I’m saying that in reality it is not the best option for our nation.”

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43 days. Both extremities, hard brexit and 2nd referendum, think they have a chance of winning it all.

Hardline Brexiters Threaten To Vote Down Theresa May’s Motion (G.)

Hardline Brexit supporters are threatening to inflict yet another Commons defeat on Theresa May because they fear the government is effectively ruling out leaving the EU with no deal. Members of the Tory European Research Group are unhappy with the wording of a No 10 motion because it endorses parliament’s vote against any Brexit without a withdrawal agreement. The motion for debate on Thursday simply affirms “the approach to leaving the EU” backed by the Commons on 29 January, when an amendment was passed in favour of an attempt to replace the Northern Ireland backstop with “alternative arrangements”.

The motion was thought to be fairly uncontroversial until pro-Brexit supporters realised it also encompassed a second amendment passed on that day, which ruled out a no-deal Brexit. The amendment, tabled by Dame Caroline Spelman, “rejects the United Kingdom leaving the European Union without a withdrawal agreement and a framework for the future relationship”. The ERG group, led by arch-Brexiter Jacob Rees-Mogg, is planning either to vote against or abstain on Thursday’s government motion, potentially causing another embarrassing parliamentary loss for the prime minister. However, talks with government whips will continue on Thursday in an attempt to find a compromise.

An ERG MP said many of its members were “not minded to support such a clumsily worded motion” that effectively ruled out a no-deal Brexit. Another said the group would not trust verbal assurances from No 10 that no deal was still on the table as such promises from the dispatch box had not been honoured many times in the past.

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How far away is a false flag?

Maduro Claims Foes ‘Totally Failed’ To Topple Him As Efforts Falter (G.)

Venezuela’s embattled leader, Nicolás Maduro, has claimed he has seen off a dramatic opposition challenge to his rule, as those efforts appeared to falter and the United States conceded it was “impossible to predict” how long he might remain in power. In an interview with Euronews, Maduro boasted that his political foes had “failed totally” in their quest to topple him. Opponents “could march every single day of their lives” and achieve nothing, Maduro said. Venezuela’s newly emboldened opposition continues to insist Maduro’s days are numbered, with about 50 governments now recognizing its leader, Juan Guaidó, as the country’s legitimate president.

Tens of thousands of supporters poured back on to the streets of Caracas and other major cities on Tuesday to demand the resignation of a politician they accuse of leading their oil-rich country into economic ruin. But three weeks after Guaidó electrified the previously rudderless opposition movement by declaring himself interim leader, there are signs his campaign risks losing steam. An anticipated mass defection of military chiefs – which opposition leaders admit is a prerequisite to Maduro’s departure – has not materialized, and Maduro’s inner-circle has begun claiming it has weathered the political storm. “In the end, nothing will come of [this challenge]. We will prevail,” Maduro’s second-in-command, Diosdado Cabello, tweeted on Wednesday.

[..] Opposition leaders have spent recent days trying to dampen expectations that Maduro’s exit is imminent. Juan Andrés Mejía, an opposition leader and Guaidó ally, admitted that goal “could take some time”. “We want it to end very soon because we know that every day that passes by people are suffering. But Maduro still has control of the military and basically that is the reason we haven’t been able to move things forward,” he told the Guardian.

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Shaking up US politics since 2016. And c’mon, Abrams is a war criminal, he should be facing a court, not Congress.

Venezuela Envoy Elliott Abrams Loses His Cool In Congress (ZH)

Rep. Ilhan Omar clashed with newly minted Venezuela Envoy Elliott Abrams during a Wednesday hearing in front of the House Foreign Relations Committee discussing the role of the US military in Central America. “Mr. Abrams, in 1991 you pleaded guilty to two counts of withholding information from Congress regarding your involvement in the Iran-Contra affair, for which you were later pardoned by president George H.W. Bush,” began Omar. “I fail to understand why members of this committee or the American people should find any testimony that you give today to be truthful.” “If I could respond to that…” interjected Abrams. “It was not a question,” shot back Omar.

After a brief exchange in which Abrams protested “It was not right!” Omar cut Abrams off, saying “Thank you for your participation.” Omar: “On February 8, 1982, you testified before the Senate foreign relations committee about US policy in El Salvador. In that hearing you dismissed as communist propaganda, a report about the massacre of El Mozote in which more than 800 civilians – including children as young as two-years old – were brutally murdered by US-trained troops. During that massacre, some of those troops bragged about raping 12-year-old girls before they killed them. You later said that the US policy in El Salvador was a “fabulous achievement.” “Yes or no – do you still think so?” asked Omar.

Abrams replied: “From, the day that Duarte was elected in a free election, to this day, El Salvador has been a democracy. That’s a fabulous achievement.” Omar shot back: “Yes or no, do you think that massacre was a fabulous achievement that happened under our watch?” Abrams protested: “That is a ridiculous question- to which Omar shot back, “Yes or no,” cutting him off. “Yes or no, would you support an armed faction within Venezuela that engages in war crimes, crimes against humanity or genocide, if you believe they were serving US interests as you did in Guatemala, El Salvador and Nicaragua?” “I am not going to respond to that question, I’m sorry. I don’t think this entire line of questioning is meant to be real questions, and so I will not reply.” said Abrams.

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US accuses Russia of energy blackmail, tries to blackmail Germany. Germans will never accept not being independent when it comes to energy. Moreover, their economy is teetering.

Germany Pulls Rank on Macron and Washington over Nordstream 2 (SCF)

It was billed politely as a Franco-German “compromise” when the EU balked at adopting a Gas Directive which would have undermined the Nord Stream 2 project with Russia. Nevertheless, diplomatic rhetoric aside, Berlin’s blocking last week of a bid by French President Emmanuel Macron to impose tougher regulations on the Nord Stream 2 gas project was without doubt a firm rebuff to Paris. Macron wanted to give the EU administration in Brussels greater control over the new pipeline running from Russia to Germany. But in the end the so-called “compromise” was a rejection of Macron’s proposal, reaffirming Germany in the lead role of implementing the Nord Stream 2 route, along with Russia. The $11-billion, 1,200 kilometer pipeline is due to become operational at the end of this year.

Stretching from Russian mainland under the Baltic Sea, it will double the natural gas supply from Russia to Germany. The Berlin government and German industry view the project as a vital boost to the country’s ever-robust economy. Gas supplies will also be distributed from Germany to other European states. Consumers stand to gain from lower prices for heating homes and businesses. Thus Macron’s belated bizarre meddling was rebuffed by Berlin. A rebuff was given too to the stepped-up pressure from Washington for the Nord Stream 2 project to be cancelled. Last week, US ambassador to Germany Richard Grenell and two other American envoys wrote an op-ed for Deutsche Welle in which they accused Russia of trying to use “energy blackmail” over Europe’s geopolitics.

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Why on earth is that government pushing driverless cars?

Bikes Put Spanner In Works Of Dutch Driverless Car Schemes (G.)

The Dutch government is working with Germany and Belgium on establishing “truck platooning” – where one human-driven vehicle leads a convoy of autonomous ones — on major roads. Under the plans, about 100 driverless trucks would drive the “Tulip corridors” at night – from Amsterdam to Antwerp, and from Rotterdam to the Ruhr valley – fully maximising the routes through which the Netherlands distributes its goods using 5G technology and 1,200 smart traffic lights. The Dutch infrastructure minister, Cora van Nieuwenhuizen, has announced a “driving licence” for self-driving cars, through which it would certify new autonomous models, and a framework of legislation – known as the Experimenteerwet zelfrijdende auto’s – is being prepared.

But a report by the professional service company KPMG highlights a major problem for Dutch ministers in introducing the technology to urban centres, where the bicycle is increasingly king. Driverless cars detect other road users using a variety of cameras or laser-sensing systems to ensure that they stop if an object is detected in their path. But the varying sizes and agility of cyclists, with their sudden changes in speed and loose adherence to the rules of the road, present a major challenge to the existing technology. That challenge is particularly stark in the Netherlands, where 17 million people own 22.5m bicycles. More than a quarter of all trips made by Dutch residents are by bike. Of all trips of a distance of up to five miles, a third are made by bicycle, with the rate only dropping to 15% for trips up to 10 miles in length.

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Is it that hard to understand that pesticides and herbicides are the worst idea ever? Poison kills, cut it out.

Exposure To Glyphosate Increases Risk Of Cancer By 41% – Study (G.)

A broad new scientific analysis of the cancer-causing potential of glyphosate herbicides, the most widely used weed killing products in the world, has found that people with high exposures to the popular pesticides have a 41% increased risk of developing a type of cancer called non-Hodgkin lymphoma. The evidence “supports a compelling link” between exposures to glyphosate-based herbicides and increased risk for non-Hodgkin lymphoma (NHL), the authors concluded, though they said the specific numerical risk estimates should be interpreted with caution. The findings by five US scientists contradict the US Environmental Protection Agency’s (EPA) assurances of safety over the weed killer and come as regulators in several countries consider limiting the use of glyphosate-based products in farming.

Monsanto and its German owner Bayer face more than 9,000 lawsuits in the US brought by people suffering from NHL who blame Monsanto’s glyphosate-based herbicides for their diseases. The first plaintiff to go to trial won a unanimous jury verdict against Monsanto in August, a verdict the company is appealing. The next trial, involving a separate plaintiff, is set to begin on 25 February , and several more trials are set for this year and into 2020. Monsanto maintains there is no legitimate scientific research showing a definitive association between glyphosate and NHL or any type of cancer. Company officials say the EPA’s finding that glyphosate is “not likely” to cause cancer is backed by hundreds of studies finding no such connection.

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Feb 052019
 
 February 5, 2019  Posted by at 10:54 am Finance Tagged with: , , , , , , , , , , , , , ,  


René Magritte Meditation 1936

 

How Much Could Negative Rates Have Helped the US Recovery? (FRBSF)
Bill Gross Retires (R.)
SOTU (Jim Kunstler)
EU Goods Will Be Waved Through British Ports In Case Of No Deal Brexit (Sun)
Nissan Was Offered Secret UK State Aid To Cope With Brexit (G.)
Merkel Says ‘Still Time’ To Find Brexit Solution (AFP)
An Italian Debt Crisis Could Take Down The EU (ZH)
Australia Central Bank Stays Calm As Shoppers Go Missing (R.)
Recognising Juan Guaidó Risks A Bloody Civil War In Venezuela (Ponceleon)
The Venezuelan Coup and Gilets Jaunes: Great-Power Politics (Pieraccini)
Italy Vetoes EU Recognition Of Venezuelan Opposition Leader Guaido (RT)
Twitter Erupts After 2,000 Pro-Venezuelan Accounts Are Deleted (Telesur)

 

 

As Trump has dinner with Powell, some San Francisco Fed theorist waxes enthusiastically about what more the Fed could have done. Not pre-2008, when the crisis caused by Fed policies erupted, but post-2008, when it tried to repair the damage it had done -and ‘failed’. Get these guys out of your economy or you’re going to see a real crisis. The Fed serves rich people only. All these people claim to defend a free market, but the Fed is the biggest enemy of a free market.

How Much Could Negative Rates Have Helped the US Recovery? (FRBSF)

The Federal Reserve responded aggressively to the most recent financial crisis and the Great Recession of 2007-2009 by cutting the target for its benchmark short-term interest rate, known as the federal funds rate, to a range just above zero in December 2008, where it stayed until the end of 2015. Traditionally, it has been assumed that nominal interest rates cannot fall below zero, known as the “lower bound.” Ever since 2008, researchers have debated how much monetary policy was constrained by this lower bound and how much it affected economic outcomes. To work around this constraint, the Federal Reserve turned to unconventional monetary policy tools such as forward guidance and large-scale asset purchases.

Other central banks—in Switzerland, Sweden, Japan, and the euro area—took unconventional policy one step further and challenged the traditional view on the lower bound by setting their target rates below zero. In this Economic Letter, I consider whether pushing rates below zero would have improved economic outcomes in the United States in the aftermath of the financial crisis. Model estimates suggest that reducing the effective lower bound for the federal funds rate to –0.75% would have reduced economic slack by as much as one-half at the trough of the recession and sped up the ensuing recovery. While the boost to the economy would have been negligible after 2014, inflation would have been higher throughout the recovery by about half a percentage point on average.

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Alternative headline: Fed policies killed Bill Gross. Can’t support stocks without killing bonds. It’s about pensions, don’t you know.

Bill Gross Retires (R.)

Bill Gross, once the bond market’s most influential investor, will retire from Janus in coming weeks, ending attempts to reclaim the stature he enjoyed leading the world’s largest fixed-income investing firm. Gross, who turned to investing after serving as U.S. naval officer, co-founded Pacific Investment Management Co in 1971, attaining rock-star status in investing circles as he attracted hundreds of billions of dollars in assets. Under his watch, Pimco blossomed into a $2 trillion asset-management powerhouse, one so influential that the U.S. Federal Reserve tapped it to help implement its program of emergency bond purchases in the financial crisis in 2008. At Janus, however, Gross was unable to repeat his earlier success, with the performance of the fund he managed ranking near the bottom. Gross told Reuters on Friday that low rates are distorting returns.

His tenure at Pimco ended abruptly and acrimoniously in September 2014, when he was ousted. His flagship Total Return Fund – which hit a peak of $292.9 billion in assets in April 2013 – was hemorrhaging assets. At the end of April 2015, the Pimco Total Return Fund had lost its title as the world’s biggest bond mutual fund to the Vanguard Total Bond Market Index Fund, which had $117.3 billion of assets. “You have to give Bill a lot of credit because he was the prime mover, popularizing active management,” Dan Fuss, vice chairman at Loomis, Sayles & Co LP, and one of Gross’ biggest competitors, said in a telephone interview. “I had hoped he’d be out and about and stay in the business because I know he would have wound up doing a good job.”

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Here’s hoping he rips them all another one. That the SOTU may be as exciting as the Super Bowl was dull.

SOTU (Jim Kunstler)

It’s conceivable, in a nation that absolutely can’t make sense of itself, that Mr. Trump’s annual report to congress will be as incomprehensible as this year’s Superbowl halftime show. Even the weather in Atlanta was a complete mystery with Maroon 5’s front man, Adam Levine, capering half-naked in tattoo drag amid artificial fires-of-hell, and then local hero rapper Big Boi’s triumphal entry in a limo, nearly lost inside what looked like the pelt of a giant ground sloth — an eight-year-old’s idea of what it means to be important. Or maybe it was just all code for two sides of the climate change debate. You can be sure the atmosphere will be frosty to the max when the Golden Golem of Greatness lumbers down the aisle of congress’s house on Tuesday night.

I wouldn’t be surprised if the Democratic majority turns its backs on him during the always excruciating preliminaries and then just walks out of the chamber. Don’t expect the usual excessive rounds of applause from the president’s own party this time, either, in the big, half-empty room. They don’t know what to do about him at this point… or what to do with themselves, for that matter. The running theme for State of the Union (SOTU) messages going back to Ronald Reagan is American Wonderfulness, so expect at least forty minutes of national self-esteem therapy, which nobody will believe. Throw in another ten minutes of elevating sob stories about “special guests” up in the galleries. But leave a little time for Mr. Trump to roll a few cherry bombs down the aisles. He must be good and goddam sick of all the guff shoveled at him for two years.

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Smugglers rejoice!

EU Goods Will Be Waved Through British Ports In Case Of No Deal Brexit (Sun)

GOODS shipped to Britain from the EU are to be waved through 20 UK ports without checks in a No Deal to avoid huge jams – HMRC has declared. In official advice released today, HM Revenue & Customs said that “for a temporary period” it would allow “most” shipments into the country before companies have even informed them they’ve arrived. Exporters would have just over 24 hours to then fill in an electronic declaration. The revelation comes just months after HMRC bosses warned the UK’s post-Brexit customs system would not work properly for two years in a No Deal. HMRC chief John Thompson told MPs last year that the Government would have a choice to make – whether to keep trade moving, ensure security at the border, or collect revenues.

Insiders said it appeared that HMRC had decided it was essential to keep trade moving rather than risk huge queues on the way to ports such as Dover or at Eurotunnel terminals. Hauliers have been furious at the lack of guidance from HMRC and the Government over how the customs system would work in the event of a No Deal. Today’s “updated guidance” warns that anyone importing into Brexit Britain will have to fill out a customs form before checking goods onto a ferry or train on the EU side. But it adds: “For a temporary period, HMRC will allow most goods moving from the listed roll on roll off locations to leave the UK port or train station before you’ve told us that the goods have arrived.”

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What other secret plans are there?

Nissan Was Offered Secret UK State Aid To Cope With Brexit (G.)

The business secretary has been forced to admit the existence of a previously secret package of state aid to Nissan that could have been worth up to £80m had the carmaker gone ahead with plans to manufacture a new model X-Trail in Sunderland after Brexit. Greg Clark released a letter dated October 2016 in which he pledged tens of millions of taxpayer support and promised the Japanese company it would not be “adversely affected” after the UK left the EU. Yet, at the time the commitments were first made, Downing Street had said “there was no special deal for Nissan” and Clark refused six times to answer a question about what was on offer when interviewed on the BBC. He even appeared to suggest no money was involved. Asked on BBC One’s Question Time about the deal, he said: “There’s no chequebook. I don’t have a chequebook.”

Clark and the government had repeatedly refused to release the 2016 letter until the promises turned out to be worthless, because Nissan had abandoned its future investment plan, partly because of uncertainty over Brexit. The four-page document, sent by Clark to Nissan’s then chief executive, Carlos Ghosn, committed the government to “a package of support in areas such as skills, R&D and innovation” which “could amount to additional support of up to £80m”. The state aid package ultimately turned out to be worth £61m when it was formally awarded to Nissan in June 2018, a fact only acknowledged by Clark in a second letter sent on Monday to the Labour MP Rachel Reeves, who chairs the business select committee.

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Merkel seems to open a door just to slam it shut again the next instant.

“..she was clear that any solution could only come via the political declaration attached to the withdrawal agreement – rather than re-opening talks on the actual exit deal.”

Merkel Says ‘Still Time’ To Find Brexit Solution (AFP)

There is still time to find a solution to Britain’s exit from the EU, German Chancellor Angela Merkel said Tuesday, voicing optimism on a political deal over the tricky “backstop” that has stymied progress. Speaking to Japanese and German business leaders in Tokyo, Merkel stressed that “on the one hand, time is pressing” and businesses using “just-in-time” delivery processes could not afford lengthy customs procedures. However, she added: “From a political point of view, there is still time. Two months is not a long time but there is still time, and this should be used by all sides.” Britain is poised to leave the EU at the end of March following a 2016 referendum. Merkel acknowledged the issue of the unpopular Northern Ireland backstop provision was “complicating” Brexit talks.

The backstop is intended to ensure there is no return to a hard border with Ireland, but Brexit supporters fear it will keep Britain tied to EU customs rules. She said the issue with the backstop was a “problem that is precisely defined and therefore one should be able to find a precisely defined solution”. “But this solution depends on the question of what the future relationship between Britain and the EU will be like and what type of trade deal we sign with each other,” added the chancellor. Throwing the ball into London’s court, she stressed: “It will be very important for us to know what exactly the British side sees as its future relationship with the EU.” [..] she urged “creativity” and “goodwill” to find a solution. However, she was clear that any solution could only come via the political declaration attached to the withdrawal agreement – rather than re-opening talks on the actual exit deal.

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French banks. And Wall Street.

An Italian Debt Crisis Could Take Down The EU (ZH)

Plagued by another run of bank bailouts and simmering tensions between the partners in its ruling coalition, Italy’s brief reprieve following the detente between its populist rulers and angry bureaucrats in Brussels is already beginning to fade. As Bloomberg reminded us on Monday, Italy’s $1.7 trillion pile of public debt – the third largest sovereign debt pool in Europe – is threatening to set off a chain reaction that could hammer banks from Rome, to Madrid, to Frankfurt – and beyond. Just the mention of the precarity of Italian debt markets “can induce a shudder of financial fear like no other” in bureaucrats and businessmen alike – particularly after Italy’s economy slid into a recession during Q4. While much of Italy’s debt burden is held by its banks and private citizens, lenders outside of Italy are holding some €425 billion ($486 billion) in public and private debt.

The Bloomberg analysis of Italy’s financial foibles follows more reports that Italy’s ruling coalition between the anti-immigrant, pro-business League and the vaguely left-wing populist Five-Star Movement has become increasingly strained. Per BBG, the two parties are fighting a battle on two fronts over the construction of a high speed Alpine rail and a legal case involving League leader Matteo Salvini over his refusal to let the Dicotti migrant ship to dock in an Italian port last summer. After M5S intimated that it could support the investigation, the League warned that such a move would be tantamount to “blackmail” against Salvini, whose lieutenants have been pushing for him to take advantage of the party’s rising poll numbers and push for early elections later this year. However, Salvini has rebuffed these demands, warning that there’s nothing stopping Italian President Sergio Mattarella from calling for a new coalition instead of new elections.

[..] To keep operating without massive budget cuts (something neither party in the ruling coalition has shown any sign of supporting) Italy must sell 400 billion euros ($457 billion) of debt per year. But since Italy’s banks hold so much of the country’s debt, declines in the price of Italian bonds inevitably hurts the shares of Italian banks, and also forces them to hold more capital on their books to ensure liquidity from the ECB. This creates the potential for a negative feedback loop known as the “doom loop”. Put another way, “a government crisis could drag down the banking system or a banking crisis could suck in the government.”

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And the Chinese withdraw.

Australia Central Bank Stays Calm As Shoppers Go Missing (R.)

Australia’s central bank warned of risks to growth on Tuesday but wrongfooted rate bears by steering clear from an explicit easing signal, even as data showed shoppers slashed spending during Christmas in another sign of cooling economic momentum. The Reserve Bank of Australia (RBA) left rates at a record low 1.50 percent for a 30th straight month, saying accommodative policy was supporting the economy and that further progress was expected in reducing unemployment and lifting inflation over time. The local dollar jumped as the statement sounded less dovish than the markets had wagered on.

“The main message from the RBA today was that they are still positive on the growth outlook, and particularly on the labor market, and they see the economy as still on track towards lifting inflation back to their target,” said HSBC Australia’s chief economist Paul Bloxham. Yet, interest rates futures continued to price in a 50-50 chance of a rate cut by the end of the year, reflecting the deteriorating growth momentum in the face of rising global and domestic risks. Lowe expects Australia’s A$1.8 trillion economy ($1.3 trillion) to expand at an above-trend rate of around 3 percent this year. That is a slightly more cautious view compared to “a little above 3 percent” in its previous statement.

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Temir Porras Ponceleon was chief of staff to Nicolás Maduro from 2007 to 2013. He is now a visiting professor at Sciences Po, Paris.

Stangely missing from this piece: the CIA.

Recognising Juan Guaidó Risks A Bloody Civil War In Venezuela (Ponceleon)

Falsely presented as a “fresh face”, Guaidó first came to prominence in 2007, as a member of a generation of students who led protests against Chávez’s socialism, despite his landslide presidential victory in 2006. Guaidó is part of an opposition that never stopped challenging Chávez’s popular legitimacy even in his heyday, and who naturally doubled down as soon as the less assertive Maduro took office. The challenges to Maduro’s legitimacy began the moment he was elected. His presidential opponent, Henrique Capriles, labelled the 2013 election a fraud (without providing any supporting evidence). Capriles called on his followers to ventilate their “anger” in the streets, a move resulting in the killing of a number of Chavistas.

In January 2014 Guaidó’s political party, Voluntad Popular, launched a nationwide insurrectionary movement aimed at forcing Maduro out of office. This was only nine months into Maduro’s term, and long before the country faced any serious economic or social problems. In fact, in early 2014 oil prices were at record highs, and Venezuelans were still enjoying their highest levels of income ever, in terms of GDP per capita. [..] And then oil prices collapsed in June 2014, leaving an ill-prepared country frozen in inaction. Living standards started to deteriorate, and while a Maduro-led Chavismo remained a large and organised political force, it lost its dominance. Maduro suffered a humiliating defeat in the December 2015 legislative elections, which allowed an opposition coalition to seize a potentially devastating two-thirds supermajority in the national assembly.

[..] Unless the international community is willing to risk a needless war on the American continent, it must urgently create conditions for a national dialogue aimed at reaching a political agreement. [..] The idea that Maduro has managed to remain in office during the past six years solely through corruption and the use of force is a gross misrepresentation. It ignores that, beyond the president, the Chavismo social movement counts millions of supporters, primarily from lower-income communities, and is strongly embedded within the Venezuelan military.

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“The protests seen in France and the interference in the domestic politics of Venezuela highlight Western double standards, which stand in contrast to the respect for international law maintained by China, India and Russia.”

The Venezuelan Coup and Gilets Jaunes: Great-Power Politics (Pieraccini)

In France on November 17, 2018, hundreds of thousands of citizens, angered by the diminishing quality of their lives, the social iniquity in the country, and the widening gap between rich and poor, took to the streets in protest. The protests can easily be encapsulated in the following slogan: “We the people against you the elite.” This slogan has been a recurring theme throughout the West over the last three years, shaking up the British establishment with the pro-Brexit vote, discombobulating the United States with Trump’s victory, overturning Italy with the Lega/Five-Star government, and bringing Merkel’s star crashing down in Germany.

Now it is the turn of Macron and France, one of the least popular leaders in the world, leading his country into chaos, with peaceful protests drawing a bloody response from the authorities following ten weeks of unceasing demonstrations. In Venezuela, Western elites would like us to believe that the situation is worse than in France in terms of public order, but that is simply a lie. It is a media creation based on misinformation and censorship. In Europe, the mainstream media has stopped showing images of the protests in France, as if to smother information about it, preferring to portray an image of France that belies the chaos in which it has been immersed for every weekend over the last few months.

In Caracas, the right-wing, pro-American and anti-Communist opposition continues the same campaign based on lies and violence as it has customarily conducted following its electoral defeats at the hands of the Bolivarian revolution. The Western mainstream media beams images and videos of massive pro-government Bolivarian rallies and falsely portrays them as anti-Maduro protests. We are dealing here with acts of journalistic terrorism, and the journalists who push this narrative, instigating clashes, should be prosecuted by a criminal court of the Bolivarian people in Caracas.

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Good on them. All these EU countries don’t deem it needed to explain why they do it, other than: Maduro is a dictator. Well, his approval rating is higher than any of theirs.

Italy Vetoes EU Recognition Of Venezuelan Opposition Leader Guaido (RT)

Rome has effectively derailed an EU statement meant to recognize Juan Guaido as Venezuela’s interim leader if President Nicolas Maduro fails to set up snap elections, a Five Star Movement source confirmed to RT. Italy announced the veto at an informal meeting of EU foreign ministers that started on January 31 in Romania, the source said. The statement, which was supposed to be delivered by EU foreign affairs chief Federica Mogherini recognized Guaido as interim president if snap elections were not held. The European Parliament is the first European body to recognize Guaido “as the only legitimate interim president of the country until new free, transparent and credible presidential elections can be called in order to restore democracy.”

The parliament urged the EU to follow suit but the effort stalled due to internal discord. A range of European nations have separately recognized the opposition chief as Venezuela’s acting president, including the UK, France, Sweden, Spain, and Austria. The coordinated move came after an eight-day deadline for Maduro to call presidential elections expired on Monday. The US announced that it is backing the new interim leader and pledged their full support immediately after what has been labeled “a coup” by officials in Caracas. However Russia, China, Turkey and Iran said they see Maduro as the only legitimate leader, warning against meddling in Venezuela’s domestic affairs.

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Orwell.

Twitter Erupts After 2,000 Pro-Venezuelan Accounts Are Deleted (Telesur)

Nearly 2,000 pro-Venezuelan Twitter accounts have been removed for “engaging in a state-backed influence campaign,” the social media company said in a blog post on Thursday. A total of 1,196 social media accounts based in Venezuela suspected of attempting to “influence domestic audiences” were purged last week. Another 764 accounts were deleted, although the San Francisco-based company told users, “We are unable to definitively tie the accounts located in Venezuela to information operations of a foreign government against another country.” Allegations of censorship soon filled the site’s timeline.

Television host for the investigatory series, Empire Files, Abby Martin tweeted, “While pro-coup Venezuelans & right-wing exiles dominate the media sphere, tech companies are actively censoring pro-government accounts they say are working to “influence” people.” Another journalist, Ben Norton, accused the company of catering to “U.S. government interests:” Twitter is now removing thousands of accounts supposedly linked to Venezuela’s sovereign government. This comes after Twitter suspended Venezuelan government accounts 1.5 years ago. Social media corporations act as an extension of US government interests.” In another blog post, Twitter announced the release of five new datasets which were allegedly created in relation to suspected foreign interference efforts it had encountered.

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Feb 042019
 
 February 4, 2019  Posted by at 10:30 am Finance Tagged with: , , , , , , , , , , , , ,  


René Magritte Morning star 1938

 

Maduro Warns White House Will Be ‘Stained With Blood’ If Trump Invades (G.)
Regional Bloc Plans Pressure Campaign Against Venezuela’s Maduro (R.)
Austerity And Welfare Cuts Main Driver Behind Brexit Vote (Ind.)
Hard Brexiters Say Only Acceptable Way Forward Is To Remove Backstop (G.)
Theresa May Launches Committee To Find Irish Backstop Alternatives (Ind.)
UK Home Secretary Dismisses Speculation Of Snap General Election In June (G.)
Macron Blames Social Media & Russia For Yellow Vests (RT)
NBC News Claims Russia Supports Tulsi Gabbard (Greenwald)
D-Day For Australian Banks As Bombshell Inquiry Report Set For Release (R.)
MAGA Misses the Eurasia Train (Escobar)
The Chinese Were White – Until White Men Called Them Yellow (SCMP)
Animals And Birds Under Increasing Threat From Plastic Waste (G.)
Bacteria Glues Plastic Together Posing Even Deadlier Threat To Sea Life (Ind.)

 

 

Maduro has been practicing the Trump style.

Maduro Warns White House Will Be ‘Stained With Blood’ If Trump Invades (G.)

Venezuela’s embattled leader, Nicolás Maduro, has warned Donald Trump he will leave the White House “stained with blood” if he insists on pursuing what he called a “dirty” imperialist conspiracy to overthrow him. “Stop. Stop, Trump! Hold it right there! You are making mistakes that will leave your hands covered in blood and you will leave the presidency stained with blood,” Maduro warned during a combative interview with the Spanish journalist Jordi Évole. “Why would you want a repeat of Vietnam?” He also rejected European calls for elections, saying: “We don’t accept ultimatums from anyone. I refuse to call for elections now – there will be elections in 2024. We don’t care what Europe says.” He added: “You can’t base international politics on ultimatums. That’s the stuff of the empire, of colonial times.”

Tens of thousands of Venezuelan protesters streamed through the capital, Caracas, on Saturday to demand the exit of a president who has led the oil-rich South American nation into economic collapse and humanitarian crisis. [..] in his television interview Maduro – who came to power after the 2013 death of his political mentor, Hugo Chávez – signalled that he had no plans to go anywhere. “If the north American empire attacks us, we will have to defend ourselves … We aren’t going to hand Venezuela over,” Maduro said. The UN estimates that more than 3 million Venezuelans have fled overseas in recent years to escape hyperinflation, shortages of food, medicine and healthcare and chronic insecurity. That number is expected to rise to more than 5 million this year.

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Trump and Trudeau, a happy couple. And of course Canada belongs in a regional bloc with Venezuela, it’s right next door.

Regional Bloc Plans Pressure Campaign Against Venezuela’s Maduro (R.)

A major bloc of Latin American nations and Canada will discuss on Monday how to maintain pressure on Venezuelan President Nicolas Maduro to hold new elections as he faces widespread calls to resign after last year’s disputed presidential vote. Sources briefed on the matter said that the 14-nation Lima Group looked set, though, to hold off imposing further sanctions on the Maduro government when it meets in Ottawa. Most group members say Maduro should quit in favour of opposition leader Juan Guaido – who declared himself interim president last month – and are calling for a new presidential election in the troubled OPEC nation.

The United States, which is not a member of the group, also wants Maduro gone. “How can we continue to support the opposition to keep the pressure up on the regime and push for new elections? Certainly that’s something we’ll be looking at,” said a Canadian government official. Maduro, who has overseen an economic collapse and the exodus of millions of Venezuelans, said in an interview that aired on Spanish television channel Antena 3 on Sunday: “We don’t accept ultimatums from anyone,” adding: “I refuse to call for elections now – there will be elections in 2024.” [..] Trudeau spoke on Sunday to Guaido and the two “discussed the importance of the international community sending a clear message regarding the illegitimacy of the Maduro regime,” Trudeau’s office said.

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How the Tories got their Brexit.

Austerity And Welfare Cuts Main Driver Behind Brexit Vote (Ind.)

Welfare cuts and other austerity measures implemented under the Conservatives pushed vital swing voters to back Brexit and won the EU referendum for the Leave campaign, according to a new report. Research published by the Social Market Foundation suggests the best indicator of a person’s referendum vote was not age or education, but happiness or sadness about their personal finances – with unhappy people tending to vote Leave and contented ones preferring Remain. The report, which analysed the level of cuts in each area of the UK alongside each area’s growth in support for Ukip, argues that had it not been for austerity, the referendum would not have turned out the way it did.

It found that in districts that received the average austerity shock, Ukip vote shares were on average 11.62 percentage points higher in the most recent local elections prior to the referendum than in districts with little exposure to austerity. As well as area-level analysis, the report looked at individual-level data and found that some people directly affected by welfare cuts shifted their political support to Ukip and rejected the political establishment. “Households exposed to the bedroom tax increasingly shifted to support Ukip and experienced economic grievances as they fell behind with their rent payments due to the cuts,” the paper stated.

As much as 9 percentage points of the 52 per cent support for Leave – around 3 million votes – was decided by concern about austerity and related issues, the researchers estimated. It suggests that without the effect of the “austerity shock” on welfare and public services, the Leave share of the referendum vote could have been as low as 43 per cent, delivering a comfortable win for Remain.

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Ruled out by EU.

Hard Brexiters Say Only Acceptable Way Forward Is To Remove Backstop (G.)

Hard Brexiters have warned Theresa May that the only proposal they are likely to support to break the Brexit impasse is a version of the “Malthouse compromise”, which envisages removing the backstop from the draft European Union exit treaty. Steve Baker, vice chair of the European Research Group, said that he and other Conservative Eurosceptics could not support the alternative they believed Theresa May favoured – an addendum to the existing EU withdrawal agreement. Baker is one of five backbench MPs who will meet Steve Barclay, the Brexit secretary, on Monday, in the first meeting of a new working group aimed at examining whether technological solutions could eliminate the backstop.

The “Malthouse compromise” – named after the junior minister, Kit Malthouse, who brokered it – is a proposal to replace the unpopular backstop with alternative technological arrangements to prevent the return of a hard border in Ireland. It is supported by Baker, other Eurosceptics and the pro-remain former ministers Nicky Morgan and Damian Green, both of whom will attend further meetings with Barclay on Tuesday and Wednesday. “As far as I’m concerned the Malthouse compromise is the only game in town if we’re going to reach an agreement in Brussels,” Baker said, indicating that only rewriting the draft withdrawal agreement to remove the backstop would satisfy Tory Brexiters.

Last week MPs voted in favour of an amendment in the name of Sir Graham Brady, a senior Conservative, to examine the possibility of new customs arrangements but it is unclear that the necessary technology exists. May also instructed Geoffrey Cox, the attorney general, to examine two other proposals that could be taken to Brussels – whether it would be possible to time-limit the backstop or to introduce a unilateral exit mechanism for the UK.

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53 days to go: plenty time to waste.

Theresa May Launches Committee To Find Irish Backstop Alternatives (Ind.)

Theresa May has been accused of “wasting valuable time” in the countdown to Britain’s exit from the EU as she announced plans to establish a Commons group probing alternative plans for the Irish border post-Brexit. Despite the prime minister’s hopes of reopening the withdrawal agreement already being dashed by EU leaders with just 53 days to go until Brexit, the new committee made up of senior Tory MPs will meet for the first time on Monday. Brexit secretary Stephen Barclay is expected to attend the sessions, alongside support from officials at HM Revenue and Customs, the Cabinet Office, and No 10. The group will aim to provide “alternative arrangements” to the backstop – the EU’s insurance policy in the withdrawal agreement that aims to avoid a hard border in Ireland.

[..] But the EU’s deputy chief negotiator, Sabine Weyand, has already dismissed using existing technology as an alternative solution to the question of the Irish border. “We looked at every border on this Earth, every border the EU has with a third country – there’s simply no way you can do away with checks and controls,” she said last week. Ireland’s deputy prime minister Simon Coveney also rubbished the idea of “alternative arrangements”, adding in The Sunday Times: “This is not a new concept. The EU is committed to trying to agree alternative arrangements to replace the backstop. We want a comprehensive future relationship in place by the end of 2020 so the backstop is never used.

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So they leave on March 29 and hold elections 2-3 months later?

UK Home Secretary Dismisses Speculation Of Snap General Election In June (G.)

Sajid Javid has said “the last thing we want is a general election”, emphasising that the government is still hoping to secure a time limit or unilateral exit mechanism for the Irish border backstop. The home secretary dismissed newspaper reports that Downing Street strategists were considering holding a snap general election on 6 June, if Theresa May cannot get her Brexit deal through parliament before the 29 March deadline. “The last thing we want is a general election, the people will never forgive us for it,” Javid told the BBC’s The Andrew Marr Show. “They want politicians to get on with the job. They have been given a very clear mandate, now it’s our job to get on with it.”

There are signs that the Conservatives have started to gear up for a possible snap election, with the party’s chief executive, Sir Mick Davis, placing the Tories on a “war footing” last week and increased fundraising activities under the cover of the local elections in May. A poll by Opinium for the Observer showed the Conservatives seven points ahead of Labour on 41%, but few people believe the party would risk going to the country under May’s leadership after the disaster of 2017, when its overall majority was lost. “I know that Conservative party headquarters is planning on only one set of elections, which is the local government elections. The last thing this country wants is an election; they want parliament to deliver Brexit in an orderly way,” Javid said.

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“[far] rightists, leftists, and the Russians.”

Macron Blames Social Media & Russia For Yellow Vests (RT)

Who is at fault for Yellow Vest protests raging in France since November? For President Emmanuel Macron it’s not actual economic problems or his own decisions, but the right, the left, social media and, of course, “Russes.” Macron blasted the nation’s mainstream media for failing to control the narrative and argued that social networks and “the Russians” are driving all content instead, with traditional outlets falling into line. The president’s calculated outburst was published by the weekly Le Point on Friday, just before the Yellow Vests officially marked the 12th consecutive week of staging large-scale protests against the government.

The president dismissed Eric Drouet, the 33-year-old trucker who emerged as a prominent figure in the protests, as “a media product, a product of social networks,” and claimed that the demonstrators are being “advised from outside,” without elaborating. He argued that 90 percent of the chatter online about the Yellow Vests comes from the “[far] rightists, leftists, and the Russians.” Yet, 18 months after bending the French party system to his will and his triumphant win against bien-pensant pariah Marine Le Pen, Macron’s excuses for disappointing expectations are running thin. His first cannonade in what was intended to be a sweeping march of modernity, was a labor reform that he claimed would help small businesses. It was met with protests from unions, public sector workers who said it made firing easier, and those fearing loss of benefits.

In a preview of what has now become the norm, Macron dismissed the opponents of his policies as “slackers.” [..] The government has already suspended the fuel tax hike that caused the traffic law-mandated vests to be put on in the first place, while the president has promised to raise the minimum wage. But for many demonstrators these actions are belated, and do not address underlying issues. “It’s not enough. We still have to fight the current taxes, the ones that have been in place for years. We should have woken up years ago, and now we have to make up for the years we missed,” one of the original and most popular Yellow Vests, Ghislain Coutard, told Deutsche Welle, adding that Macron should “come out of his hole and face” the people.

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It’s a model that works inside the echo chamber.

NBC News Claims Russia Supports Tulsi Gabbard (Greenwald)

NBC News published a predictably viral story Friday, claiming that “experts who track websites and social media linked to Russia have seen stirrings of a possible campaign of support for Hawaii Democrat Tulsi Gabbard.” But the whole story was a sham: the only “experts” cited by NBC in support of its key claim was the firm, New Knowledge, that just got caught by the New York Times fabricating Russian troll accounts on behalf of the Democratic Party in the Alabama Senate race to manufacture false accusations that the Kremlin was interfering in that election. To justify its claim that Tulsi Gabbard is the Kremlin’s candidate, NBC stated: “analysts at New Knowledge, the company the Senate Intelligence Committee used to track Russian activities in the 2016 election, told NBC News they’ve spotted ‘chatter’ related to Gabbard in anonymous online message boards, including those known for fomenting right-wing troll campaigns.”

What NBC – amazingly – concealed is a fact that reveals its article to be a journalistic fraud: that same firm, New Knowledge, was caught just six weeks ago engaging in a massive scam to create fictitious Russian troll accounts on Facebook and Twitter in order to claim that the Kremlin was working to defeat Democratic Senate nominee Doug Jones in Alabama. The New York Times, when exposing the scam, quoted a New Knowledge report that boasted of its fabrications: “We orchestrated an elaborate ‘false flag’ operation that planted the idea that the [Roy] Moore campaign was amplified on social media by a Russian botnet.’”

[..] In any event, NBC News, to smear Gabbard as a Kremlin favorite, relied on a group that it heralded as “experts” without telling its audience about the major fraud which this firm just got caught perpetrating in order – on behalf of the Democratic Party – to fabricate claims of Kremlin interference in the Alabama Senate race. That’s because the playbook used by the axis of the Democratic Party, NBC/MSNBC, neocons and the intelligence community has been, is and will continue to be a very simple one: to smear any adversary of the establishment wing of the Democratic Party – whether on the left or the right – as a stooge or asset of the Kremlin (a key target will undoubtedly be, indeed already is, Bernie Sanders).

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They’ll just paper it all over.

D-Day For Australian Banks As Bombshell Inquiry Report Set For Release (R.)

The Australian government is due to release on Monday the final recommendations of the independent inquiry that exposed systemic wrongdoing in Australia’s financial sector last year, likely leading to sweeping changes to the country’s banking industry. The big banks, insurers, pension funds and regulators who oversee the financial industry are bracing for a brutal summary of their misdeeds and weaknesses, and a list of tough recommendations including possible criminal charges. The Royal Commission was a quasi-judicial independent body led by a former high court judge that was tasked by the government, reluctantly at first, with investigating financial sector misconduct following a string of banking scandals.

For 11 months its public hearings shocked the country and wiped more than A$60 billion ($43.4 billion) from top financial stocks as investors factored in the prospect of tougher regulation, higher compliance costs and thinner margins. Regulators were also grilled by the commission’s barristers about why they seemed reluctant to crack down on wrongdoing, sometimes penalizing firms with little more than a mildly worded press release. “There will be nothing positive in the recommendations because the banks have clearly breached various obligations in the laws, and obligations to good customer service,” said Matthew Wilson, a banking analyst at Deutsche Bank.

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Pepe appears blind to China’s multiple bubbles. I could see them halt any expansion and close their borders first to sort out the financial mess.

MAGA Misses the Eurasia Train (Escobar)

We should know by now that the heart of the 21st Century Great Game is the myriad layers of the battle between the United States and the partnership of Russia and China. Even the U.S. National Defense Strategy says so: “The central challenge to U.S. prosperity and security is the reemergence of long-term, strategic competition by … revisionist powers.” The recently published assessment on U.S. defense implications of China’s global expansion says so too. The clash will frame the emergence of a possibly new, post-ideological, strategic world order amidst an extremely volatile unpredictability in which peace is war and an accident may spark a nuclear confrontation.

The U.S. vs. Russia and China will keep challenging the West’s obsession in deriding “illiberalism,” a fearful, rhetorical exercise that equates Russian democracy with China’s one party rule, Iran’s demo-theocracy and Turkey’s neo-Ottoman revival. It’s immaterial that Russia’s economy is one-tenth of China’s. From boosting trade that bypasses the U.S. dollar, to increasing joint military exercises, the Russia-China symbiosis is poised to advance beyond political and ideological affinities. China badly needs Russian know-how in its military industry. Beijing will turn this knowledge into plenty of dual use, civilian-military innovations.

The long game indicates Russia and China will break down language and cultural barriers to lead Eurasian integration against American economic hegemony backed by military might. One could say the Eurasian century is already upon us. The era of the West shaping the world at will (a mere blip of history) is already over. This is despite Western elite denials and fulminations against the so-called “morally reprehensible,” “forces of instability” and “existential threats.” Standard Chartered, the British financial services company, using a mix of purchasing power exchange rates and GDP growth, has projected that the top five economies in 2030 will be China, the U.S., India, Japan and Russia. These will be followed by Germany, Indonesia, Brazil, Turkey and the UK. Asia will extend its middle class as they are slowly killed off across the West.

[..] Beijing is realizing it can’t meet its geo-economic goals on energy, security, and trade without bypassing the U.S. dollar. According to the IMF, 62 percent of global central bank reserves were still held in U.S. dollars by the second quarter of 2018. Around 43 per cent of international transactions on SWIFT are still in U.S. dollars. Even as China, in 2018, was the single largest contributor to global GDP growth, at 27.2 percent, the yuan still only accounts for 1 percent of international payments, and 1.8 per cent of all reserve assets held by central banks.

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Our history. A proud story. We bring democracy and freedom and prosperity.

The Chinese Were White – Until White Men Called Them Yellow (SCMP)

How did East Asians come to be referred to as yellow-skinned? It was the result of a series of racial mappings of the world and had nothing to do with the actual colour of people’s skin. In fact, when complexion was mentioned by an early Western traveller or missionary or ambassador (and it very often wasn’t, because skin colour as a racial marker was not fully in place until the 19th century), East Asians were almost always called white, particularly during the period of first modern contact in the 16th century. And on a number of occasions, even more revealingly, the people were termed “as white as we are”. The term yellow occasionally began to appear towards the end of the 18th century and then really took hold of the Western imagination in the 19th.

But by the 17th century, the Chinese and Japanese were “darkening” in published texts, gradually losing their erstwhile whiteness when it became clear they would remain unwilling to participate in European systems of trade, religion, and international relations. Calling them white, in other words, was not based on simple perception either and had less to do with pigmentation than their presumed levels of civilisation, culture, literacy, and obedience (particularly if they should become Christianised). Swedish botanist and physician Carl Linnaeus decided that varieties of homo sapiens could be similarly separated into four continental types, one of which was called homo asiaticus. The colour of that group, he said, was fuscus, which can be best translated as “dark”. This was in 1735.

Evidently there was some difficulty deciding on a precise colour for Asian Man, since the other three types, European, African, and American, could be “unproblematically” identified according to already accepted stereotypes of white, black, and red. In the tenth edition of Linnaeus’ taxonomy, however, published in 1758, fuscus was silently changed to luridus, meaning “lurid”, “sallow”, or “pale yellow”. The reasons for this alteration were never explained, although luridus also appeared in several of Linnaeus’ botanical publications to characterise unhealthy and toxic plants. Was Asian Man also to be viewed as sickly or dangerous?

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Animals and birds? You sure about that?

Animals And Birds Under Increasing Threat From Plastic Waste (G.)

Wildlife and pets are under increasing threat from plastic waste and litter, according to new data from the RSPCA, which shows the number of incidents of animals hurt by plastic litter has risen sharply on previous years. Plastic litter led to 579 cases of damage to wildlife or pets that were reported to the animal charity in England and Wales in 2018, up from 473 in 2015. That rise came against a background of falling damage to animals from other forms of litter, down from 4,968 reported incidents in 2015 to 4,579 last year. Water birds and marine animals were particularly at risk, with 28 incidents involving seals hurt by plastic litter in 2018, compared with five in 2015. Among birds, swans were among the worst affected, followed by geese and gulls.

Plastic has become an increasing focus of concern, as it does not break down in the natural environment and can continue to cause problems in waterways for years. The government has increased charges on disposable plastic bags to discourage their overuse, and businesses from supermarkets to consumer goods companies are changing their practices to use less plastic packaging in response to public concerns. But the biggest source of damage to wildlife from litter comes from angling, according to the RSPCA’s findings, with discarded equipment such as lines, nets and hooks causing more than 3,200 of last year’s reports.

“[Fishing] lines can wrap around necks, causing deep wounds in flesh and cutting off the blood supply,” said a spokeswoman for the charity. “Hooks can pierce beaks or feet, become embedded in skin or get caught in the bird’s throat, and weights can be swallowed causing internal injuries and blockages.”

Read more …

It just got a whole lot scarier. Has plastic been banned where you live yet?

Bacteria Glues Plastic Together Posing Even Deadlier Threat To Sea Life (Ind.)

Plastic in the oceans is being turned into an even greater threat to small sea creatures than previously thought because bacteria are sticking particles of it together, scientists have discovered. Glue-like substances secreted by bacteria are sticking tiny bits of plastic to form larger clusters that marine animals could mistake for food, experts fear. They also worry that the clumping could divert the natural flow of food from the ocean surface to the seafloor, leading to deep sea creatures being starved. Researchers at Heriot-Watt University in Edinburgh staged experiments with seawater, adding plastics in conditions simulating the ocean surface. Within minutes, the minuscule pieces of plastic grouped together with bacteria, algae and other organic particles to form larger clumps.

The scientists are said to have been surprised to discover that large masses of biopolymers – molecules made by organisms – formed the bulk of the plastic clusters. About eight million tonnes of plastic are thrown into the ocean each year, research shows. Team member Stephen Summers said: “This is a first step towards understanding how nanoplastics interact with natural biopolymers throughout the world’s oceans. “This is very important, as it is at this small scale that much of the world’s biogeochemistry occurs.” The clumps became visible to the naked eye. “The fact that these agglomerates become large enough to see raises concern, as they are likely to be seen as a food source by small marine animals,” he said.

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Jan 252019
 
 January 25, 2019  Posted by at 10:59 am Finance Tagged with: , , , , , , , , , , , ,  


Giuseppe Arcimboldo Four elements – Fire 1566

 

Trump, Pence, Pompeo Star In The Pirates Of The Caribbean (Galloway)
US Pulls Out Venezuela Staff, Urges Americans to Leave (G.)
Venezuela’s Juan Guaidó Offers Nicolás Maduro Amnesty If He Goes Quietly (G.)
US Seeks To Divert Crucial Oil Revenue From Maduro (Ind.)
Don’t Criticize Trump — We Need Him, Dutch Prime Minister Says (CNBC)
UK Firms Ramp Up Stockpiling Due To Brexit Disruption Fears (Ind.)
UK MPs Drop Plan To Table Cross-Party ‘People’s Vote’ Amendment (G.)
The Financial Secret Behind Germany’s Green Energy Revolution (Ellen Brown)
Davos Elites Fear They’re On A Toboggan Ride To Hell (Pol.eu)
CO2 Levels Expected To Rise Rapidly In 2019 (Ind.)

 

 

Yes, Jimmy Carter once called Venezuela’s election process “the best in the world” when he was there as an observer. But in March 2018, the opposition called on the UN not to send any observers as that would only legitimize the process. So now the US picks an unelected puppet.

Trump, Pence, Pompeo Star In The Pirates Of The Caribbean (Galloway)

Even though Chavez was one of the most electorally successful politicians on the planet in a democratic process described by former US president Jimmy Carter as “the best in the world,” US presidents Bush, Obama and Trump routinely called him a dictator. Before they drop the bombs, they drop the narrative, of course. And the disinformation bombardment in Venezuela has been one of the longest bombing runs in history. Massive sums of US money have been spent on media distortion, subversion, sabotage, military coups, and threats of invasion throughout the Chavez-Maduro era. The gold-toothed Venezuelan emigres who fled to Miami with their ill-gotten gains have long been effectively a coup in the making.

The recruitment of neighboring Colombia into “associate membership” of NATO, the propeling of Brazil’s Bolsonaro (another NATO applicant) to power, and plans for US military bases there have all been in preparation for this day. Although many such crimes have been committed across all continents for centuries by the US, none have constituted such comic-opera gangsterism as this latest – more ‘Bugsy Malone’ than ‘The Godfather.’ An almost random figure whose name was largely unknown until this week has disdained to put himself up for election as president of the republic, instead pronouncing himself to actually be the president, and has even sworn himself in! All the “experts” on Syria, Ukraine and Russia are scrambling to studios, practicing in the taxi how to say his name.

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Most Americans would be working in the oil industry. Sure, let them leave. And then watch prices at the pump.

US Pulls Out Venezuela Staff, Urges Americans to Leave (G.)

The US state department has urged its citizens to “strongly consider” leaving Venezuela and ordered out non-emergency government staff as the head of the country’s armed forces warned of a civil war sparked by a US-backed “criminal plan” to unseat Nicolás Maduro. In a live address to the nation on Thursday, the defence minister, Vladimir Padrino, accused the Venezuelan opposition led by Juan Guaidó, the United States and regional allies such as Brazil of launching an attempted coup against Maduro that risked bringing “chaos and anarchy” to the country. “We are here to avoid, at all costs … a conflict between Venezuelans. It is not civil war, a war between brothers that will solve the problems of Venezuela. It is dialogue,” said Padrino.

In a significant blow to Venezuela’s newly energized opposition, the defence minister declared unwavering support for “our commander-in-chief, the citizen Nicolás Maduro”. “We members of the armed forces know well the consequences [of war], just from looking at the history of humanity, of the last century, when millions and millions of human beings lost their lives,” Padrino added, flanked by the top brass of Venezuela’s armed forces. Further bolstering Maduro’s position, the Russian president, Vladimir Putin, spoke to the Venezuelan leader by telephone and issued his first comments on the crisis, which he insisted was “provoked from abroad”, according to a Kremlin statement.

On Thursday night, Guaidó used his first TV interview since the crisis to offer Maduro and his inner circle amnesty if they agreed to a peaceful transition. The 35-year-old said he was determined to bring Maduro’s “dictatorship” to an end, stabilise his economically devastated nation and organise free elections “as soon as possible”.

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He went into hiding before making his offer. C’mon, let’s get serious. A mini-coup failed miserably, the army stands pat, time for a fresh story to fill the papers.

Venezuela’s Juan Guaidó Offers Nicolás Maduro Amnesty If He Goes Quietly (G.)

Venezuela’s embattled president, Nicolás Maduro, and his inner circle could be granted an amnesty if he agrees to relinquish power and submit to a peaceful political transition, his opposition challenger Juan Guaidó has said. In a high-stakes political gamble, Guaidó on Wednesday declared himself Venezuela’s legitimate interim president and was quickly recognised as such by powers including the United States, Brazil, Canada and Colombia. On Thursday British foreign secretary, Jeremy Hunt, said his government believed Guaidó was “the right person to take Venezuela forward” but China, Russia and Turkey all backed Maduro, who claims he is the victim of a coup attempt masterminded by the US. The US state department has now urged US citizens to “strongly consider” leaving Venezuela and ordered out non-emergency government staff.

[Guaidó] indicated Maduro – who was sworn in for his second six-year term on 10 January despite a storm of international condemnation – could himself be offered an amnesty if he agreed to step aside. “This amnesty, these guarantees are on the table for everyone who is prepared to put themselves on the side of the constitution in order to recover the democratic order,” he said. “In periods of transition similar things have happened [before],” Guaidó told the broadcaster Univisión, pointing to previous pardons in Chile and Venezuela in the 1970s and 1950s. “We cannot discount any element,” he added, insisting that such a move would not represent either impunity or forgetting.

Maduro – who has vowed to resist what he calls a “gringo” plot to unseat him – has given little public hint he will accept such an offer although addressing the supreme court in Caracas on Thursday he insisted: “I’m ready for dialogue, for understanding, for negotation, for agreement.” However, in the same speech Maduro also attacked Guaidó, accusing him of being a pawn in a US-backed plot to destroy the leftist Bolivarian revolution he inherited after Hugo Chávez’s death in 2013. “Will we legitimise a puppet government imposed from abroad? We will allow our constitution to be violated … ? No!” said Maduro, blaming what he branded an attempted coup on Donald Trump’s “madness”.

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See what I said on CITGO yesterday.

US Seeks To Divert Crucial Oil Revenue From Maduro (Ind.)

Mr Trump’s national security adviser, the hawkish John Bolton, revealed the US was seeking to ensure Venezuelan oil revenue goes to Mr Guaido, and not Mr Maduro, who was sworn in for a second term just two weeks ago following an election most of the opposition boycotted. If the US were able to enact such a move it would add further pressure to the embattled Venezuelan leader, whose country’s already ailing economy heavily depends on its oil revenues. “What we’re focusing on today is disconnecting the illegitimate Maduro regime from the sources of his revenues,” Mr Bolton told reporters at the White House, according to Reuters. “We think [it is] consistent with our recognition of Juan Guaido as the constitutional interim president of Venezuela that those revenues should go to the legitimate government.”

Of potentially vital importance, earlier on Thursday, the nation’s military leadership declared its support for Mr Maduro and told the US not to interfere. In a televised speech on Thursday, defence minister Vladimir Padrino Lopez said Mr Maduro was the country’s “legitimate president” and that the opposition was seeking to carry out a “coup”. “I warn the people that there is a coup underway against our democracy and our president Nicolas Maduro,” Mr Padrino said, according to Telesur. “As soldiers, we work for peace and not for war.” He added: “Those of us who lived through the coup of 2002 have it etched into our minds, we never thought we’d see that again, but we saw it yesterday.

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Rutte’s been in office for so long he gets to have an own view.

Don’t Criticize Trump — We Need Him, Dutch Prime Minister Says (CNBC)

President Donald Trump has found support from an unlikely source in Europe — Dutch Prime Minister Mark Rutte — who told CNBC that the president could be a catalyst for much-needed reforms. “The U.S. has voted and Trump is the president and maybe he will be re-elected … So we have to work with him, and I think he is an opportunity,” Rutte told CNBC’s Geoff Cutmore at the World Economic Forum in Davos, Switzerland. “He is an opportunity to make changes to some of those multilateral institutions that we hold dearly, like the World Trade Organization (WTO) which is not functioning very well. Or take the United Nations or European Union — there are many issues to solve,” he added.

“So my point would be instead of thinking ‘oh we would have liked Hillary Clinton to win,’ or ‘I wish (former President Barack) Obama was still there,’ but guys Trump is president, make use of his presidency and his critique of those international institutions is sometimes very valid.” Trump has made himself unpopular in most European circles for his criticism of hallowed, well-established institutions such as the NATO and the WTO (Trump threatened to pull the U.S. out of both) and the European Union (which Trump said was formed in order to take advantage of the U.S. in terms of trade). He has also threatened to impose tariffs on European goods and cars; hardly the policies that would make most liberal politicians, like Mark Rutte, warm to Trump. “In this world, international structures are absolutely necessary, but sometimes it vexes me when I hear the white wine-sipping elite in Amsterdam saying ‘Trump is very wrong,'” Rutte said

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Sounds very late. 9 weeks left?!

UK Firms Ramp Up Stockpiling Due To Brexit Disruption Fears (Ind.)

UK companies have ramped up stockpiling ahead of Brexit as export opportunities for manufacturers weakens, according to new research from Lloyds Bank. The lender’s international trade index shows that export growth fell to its weakest level in almost three years in the fourth quarter of 2018. Exports of consumer goods held up well, Lloyds said, but the transport sector was hit by changing emissions regulations and new rules about diesel vehicles. Exports in the service sector fell in the last three months of 2018, bringing to an end three four years of growth.

Political uncertainty at home and abroad, along with weakening economic growth in key markets, were cited as the drivers for the export downturn. Meanwhile, the data showed that UK manufacturers had increased stockpiling efforts over recent months due to the threat of shortages and disruption posed by Brexit. The UK Manufacturing PMI Index for purchases of stocks jumped up to 53.7 for the month of December, from 51.1 in the previous month. Gwynne Master, managing director and global head of trade for Lloyds Bank Global Transaction Banking, said: “We should be mindful of the impact of fluctuating trading conditions and global and domestic political uncertainty on the UK’s exporters.

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The only thing that really made sense. Because it breaks party lines. Gone.

UK MPs Drop Plan To Table Cross-Party ‘People’s Vote’ Amendment (G.)

A cross-party amendment to push for a second EU referendum will not be tabled in the Commons as it would have little chance of being passed without formal support from Labour, the MPs organising it have announced. Sarah Wollaston, the Conservative MP who has led efforts on a so-called “people’s vote” amendment, said that without the backing of Jeremy Corbyn, “at the moment we would not have the numbers”. However, the Liberal Democrats have tabled a similar amendment and have called for Labour to back the idea. Speaking outside parliament alongside the Labour MPs Luciana Berger and Chuka Umunna, Wollaston urged Corbyn to think again. “We would like to appeal again to him to give his unequivocal backing to a people’s vote, in which case we could make progress,” she said.

Labour has not ruled out supporting a second referendum and the party is keeping its options open. There is disquiet among some of its MPs and shadow ministers that backing such an option could anger leave-backing Labour voters. Wollaston argued that a second referendum was still the best option to end the Brexit deadlock. “People have a right to change their minds, and the mandate from the first referendum – over two years ago and based on entirely unrealistic promises and outright lies – has expired.” But without Labour backing, she said, “that amendment could not pass, and so with great regret we will not be laying that amendment”.

Berger said that with 30 scheduled Commons sittings left before the current Brexit date, there was “an urgent need for leadership”. “Regrettably, the Labour leadership won’t commit to an achievable policy,” she said. “And yet we know that the majority of Labour voters, supporters and members want a final say on any Brexit deal. At a time when Labour should be championing a people’s vote, the leadership avoids answering that call.”

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That revolution is overhyped, but the US and German public bank story is good.

The Financial Secret Behind Germany’s Green Energy Revolution (Ellen Brown)

KfW’s role in implementing government policy parallels that of the Reconstruction Finance Corporation (RFC) in funding the New Deal in the 1930s. At that time, U.S. banks were bankrupt and incapable of financing the country’s recovery. President Franklin D. Roosevelt attempted to set up a system of 12 public “industrial banks” through the Federal Reserve, but the measure failed. Roosevelt then made an end run around his opponents by using the RFC that had been set up earlier by President Herbert Hoover, expanding it to address the nation’s financing needs.

The RFC Act of 1932 provided the RFC with capital stock of $500 million and the authority to extend credit up to $1.5 billion (subsequently increased several times). With those resources, from 1932 to 1957 the RFC loaned or invested more than $40 billion. As with KfW’s loans, its funding source was the sale of bonds, mostly to the Treasury itself. Proceeds from the loans repaid the bonds, leaving the RFC with a net profit. The RFC financed roads, bridges, dams, post offices, universities, electrical power, mortgages, farms and much more; it funded all of this while generating income for the government.

The RFC was so successful that it became America’s largest corporation and the world’s largest banking organization. Its success, however, may have been its nemesis. Without the emergencies of depression and war, it was a too-powerful competitor of the private banking establishment; and in 1957, it was disbanded under President Dwight D. Eisenhower. That’s how the United States was left without a development bank at the same time Germany and other countries were hitting the ground running with theirs.

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Just ignore these people. They have nothing. They’re the past.

Davos Elites Fear They’re On A Toboggan Ride To Hell (Pol.eu)

Populists movements around the world, left and right, disagree in detail but are united around one big idea: The political and economic elites running modern societies are very powerful people who know what they are doing. What they are doing is often bad — greedy, exploitative, short-sighted — but they are doing it with purpose and confident control. A different possibility, however, hung in the alpine air this week at the annual convening of elites here at the World Economic Forum: These alleged masters of the universe came off nearly as perplexed and anxious about the future as the populist forces inveighing against them.

They have money. They have entourages. They have commanding views, both literal (from mountain chalets here) and metaphorical (from government offices and CEO suites back home). That doesn’t mean they have a clue. Foreboding about the future was a prevailing theme at this year’s Davos, sometimes even with dash of dystopian prophecy. This brooding was accompanied often, in speeches and interviews, by a rueful acknowledgment that government leaders are desperately improvising — often with bleak results — to meet the political crises of the moment, much less the long-term technological and climatological challenges of the age. In key Western capitals, governance is failing. China is exploiting. Global temperatures are rising.

Tech titans are groveling. Prospects for economic downturn are rumbling. Little wonder that, instead of triumphant optimism about the forces of globalization sometimes associated with Davos, some voices here made it sound like modern life is on a toboggan ride to hell. “Everybody agrees that there are dark clouds on the horizon, and there are risks,” said United Nations Secretary-General António Guterres, in an address here Thursday.

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Due to the 1,500 private jets in Davos.

CO2 Levels Expected To Rise Rapidly In 2019 (Ind.)

This year will see one of the biggest CO2 surges in more than six decades of measurements, according to the Met Office. Rising emissions due to the world’s continued appetite for fossil fuels will combine with reduced absorption of greenhouse gas by withering grasslands and forests. Describing the prediction as “worrying and compelling”, scientists said it was an urgent reminder that the time to cut out carbon is now. CO2 levels will be at a record high once again after emissions reached unprecedented levels last year, dashing hopes the world had finally hit “peak carbon”. Besides fossil fuels pumping out the harmful gas, natural weather fluctuations will exacerbate the problem as they hamper the ability of carbon sinks to store it. In 2019 an upward swing in tropical Pacific Ocean temperature will make many regions warmer and drier.

As drought sets in and plants dry out, they will be less capable of sucking CO2 from the atmosphere, and massive deforestation in places like the Amazon is making this problem even worse. The new predictions were based on monitoring at the Mauna Loa observatory in Hawaii, which has registered a 30 per cent increase in the concentration of CO2 since 1958. “Carbon sinks have saved us from what has already happened – the future rise would have been about double if it wasn’t for the sinks. So we are lucky they exist, to be honest,” Professor Richard Betts of the Met Office Hadley Centre told The Independent. “But the sinks themselves are affected by the climate, and that’s an important thing because it shows that as climate change continues in the future it may affect their strength.”


Forecast CO2 concentrations at the Mauna Loa station for 2019 (orange), along with previous forecast concentrations and the real observed data (Met Office)

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Jan 242019
 
 January 24, 2019  Posted by at 9:08 pm Primers Tagged with: , , , , , , , , , , , , , , ,  


René Magritte The black flag 1937

 

One thing I am not is an expert on Venezuela. What I know is the country has the world’s largest oil reserves, mainly in the Orinoco Belt, but they come in a form of tar sands that while they are not as hard to exploit as Canada’s (viscosity), they’re far from easy, and buried deep. And I know Venezuela had Hugo Chávez as its president, who, for a socialist, was quite successful at what he did (depending who you ask).

And I know of course that the US yesterday recognized an opposition leader, Juan Guaido, as the ‘real’ president of Venezuela, instead of the elected Nicolas Maduro, whom Chávez picked as his successor. Soon as I read that, I thought: CIA. If Chávez, and Maduro, are hated in one place in the world, look no further than Langley, Virginia.

So I looked up a few articles I though would be interesting to read. The first comes from a site called Venezuela Analysis, an entity recommended for Venezuela news. They had the article below, but also this enlightening picture:

Note: in 2002, coincident with the attempted coup against Chávez, half the employees at state oil company PDVSA went on strike. They must have felt like clowns, too, 48 hours later.

The article explains what happened in terms you can find everywhere (but are perhaps good to note), except for the last bit:

 

Venezuelan Opposition Leader Guaido Declares Himself President, Recognized by US and Allies

Opposition leader Juan Guaido swore himself in as “interim president” of Venezuela on Wednesday, a move which was immediately recognized by the United States and regional allies. “As president of the National Assembly, before God and Venezuela, I swear to formally assume the competencies of the national executive as interim president of Venezuela,” he declared before an opposition rally in eastern Caracas.

Guaido had already proclaimed on several occasions that he was “ready” to assume the responsibilities of the executive branch, as the US was reportedly considering recognizing him as “interim president.” US authorities reacted swiftly, with President Donald Trump, Secretary of State Mike Pompeo and Senator Marco Rubio immediately voicing their recognition of Guaido as Venezuela’s interim president.

“I will continue to use the full weight of United States economic and diplomatic power to press for the restoration of Venezuelan democracy,” Trump said in a statement. Washington’s regional allies, including Canada, Brazil, Argentina, Colombia and other members of the so-called Lima Group, were quick to follow suit, giving their backing to the 35-year-old opposition politician.

The Lima Group had set the tone in early January with a statement refusing to recognize Maduro’s second term. Meanwhile, Cuba and Bolivia expressed their support for Maduro, while Uruguay and the new Lopez Obrador government in Mexico refused to recognize Guaido as president and called for dialogue to “avoid an escalation of violence.” Russia and Turkey likewise indicated that their relations with Maduro administration were unchanged.

This last paragraph may be the most important and revealing bit of news we see today:

[..] Torino Capital Chief Economist Francisco Rodriguez, who advised defeated opposition presidential candidate Henri Falcon last year, wrote on Twitter that the recognition from the Trump administration makes it possible for Guaido, or a presumed transition government, to take charge of Venezuelan assets on US soil, such as state oil company PDVSA’s largest subsidiary, CITGO. It could also prevent the Venezuelan government from invoicing payments for oil shipments.

Without CITGO life becomes hard for Maduro, very hard. The company has extensive refining and chemicals capacity in the Houston area, but the US hasn’t been able to touch it until now. If they get enough allies to recognize their CIA puppet as president, they can close it down, sell it off to Exxon, anything they want. But we’re not there yet.

Russia has been very outspoken in its opinions about what’s going on. Its Rosneft oil company has large assets in Venezuela. Just like China has huge loans outstanding in the country. And though it’s hard to gauge how strong the people’s support is for Maduro (don’t believe everything you read), there’s no doubt where the army stands. The whole top brass was on TV today pledging loyalty to the government.

Turkey also came out strong in favor of Maduro. A Turkish site named Yeni Safak talks about social media as an intelligence tool:

 

CIA Launches Media Campaign To Ignite Protests Against Venezuela’s Maduro

The CIA is backing Washington’s decision to recognize Venezuela’s opposition leader Juan Guaido as president by manipulating the public opinion against democratically-elected President Nicolas Maduro and the legitimate government over social media platforms. [..] Millions of posts designed to instigate Venezuelans against the country’s legitimate president, Nicolas Maduro, were shared in a very short time to kindle a social unrest against Maduro.

Assoc. Prof. Dr Levent Eraslan unveiled the striking details of the U.S’s perception and deception strategies [..] Stressing the U.S. national intelligence’s strategy report in 2019 that consists Pentagon’s intervention in Venezuelan politics, Eraslan said, “The role of ‘machine learning’ and providing data to decision makers by determining political instabilities through social media were emphasized in the report.”

Noting that thousands of tweets that have been shared from different accounts in the last two days, “People are being called to take streets to overthrow the elected president. The efforts to trigger rebellion and push this process into a bloody situation through social media networks such as Twitter, YouTube, and Facebook can be observed,” he concluded.

This is from Volkan at DutchTurks; nothing is new (except Facebook as a regime change instrument):

 

 

Hugo Chávez was president of Venezuela from 1999 to his death of cancer in 2013. Whatever you may think of the man, and you don’t have to think hard to know what the CIA thought of him, have you ever wondered why the rampant runaway inflation the country has suffered lately, and which has been blamed by many on ‘socialism’, was not happening while socialist Chávez was alive? This from a site named War Is Boring provides at least some ideas as to why.

 

To Understand Venezuela’s Crisis, Look to the Past … and the CIA

Chavez died of cancer in 2013, and now five years later it seems that his socialist dream, like Allende’s, has failed. Under his successor Pres. Nicolas Maduro, Venezuela has descended into economic and political chaos. Hyperinflation has beset the country, with prices rising at an annualized rate of 1,000,000 percent.

Shortages of basic necessities such as toilet paper and bread have caused mass unrest, culminating in violent protests. Now there is open talk about the need to overthrow Maduro or remove him from power, perhaps through U.S. military intervention.

[..] In Venezuela the figure of Chavez precluded an overthrow of the government there. We know this for a fact because a coup against him in 2002 lasted a matter of hours before mass uprisings and a lack of support from the military forced the plotters to surrender. Chavez was a controversial figure, hated by significant elements of Venezuelan society, but beloved by a majority of the largely poor country and respected by the military.

Chavez announced the return of his cancer in the fall of 2012 and died in March 2013. The current economic crisis kicked into high gear in the late summer of 2012, with inflation — typically high, but manageable — suddenly growing at an exponential rate. The cause typically cited by Western media — a precipitous fall in oil prices — occurred a full two years after the crisis began.

 

[..] Since 2012 Venezuela has faced a twin plague of shortages and rampant inflation. Venezuelan economist Pasqualina Curcio makes the case in her 2016 book The Visible Hand of the Market: Economic Warfare in Venezuela that both phenomena cannot be explained through normal economics, but rather by political causes.

Shortages have been a feature of Venezuelan life since Chavez came to power in 1999, with their magnitude growing over time. Yet over the course of years when Venezuela saw steadily and then sharply increasing shortages both imports and domestic production were also rising. If more products are being brought into the country, and more are being produced, but consumers are experiencing shortages, it begs the question of where the stuff went.

[..] As for inflation, the factors typically involved with currency devaluation–a shortage of foreign reserves or increased liquidity–have not coincided with inflation spikes. Nor has the state hoarded foreign currency as many claim. Curcio shows that 94 percent of foreign reserves were distributed to the private sector, and these distributions have grown over time.

It appears that manipulation of currency black markets — a phenomenon that happened in Chile under Allende as well — and then adoption of this inflated exchange rate by importers to spike the costs of necessary goods, services, and industrial inputs neatly produces the sort of induced inflation plaguing Venezuela today.

Russian foreign minister Lavrov put it nice and succinctly:

The US, which is paranoid about somebody interfering in their elections, even though they have no proof of that, themselves are trying to rule the fates of other peoples. What they actually do is interfere in their internal affairs. There is no need for [US special counsel Robert] Mueller to determine that.

American regime change in other countries is something that perhaps the rest of the world is getting tired of. America instigating chaos in its own southern backyard, like it has for years in the Middle East and North Africa, is getting old in the eyes of many. And the CIA can get Trump to support their puppet, but Trump knows nothing about Venezuela, other than that there’s lots of oil there, and that makes him a CIA puppet too.

Not a good idea.

A lot of what has led up to the present coup has been the US flexing its financial muscle. But the American economy isn’t doing all that great, so it’s not just flexing that muscle, it’s also stretching it. And yeah, there’s an old set of Venezuelan domestic interests that has been faithful, just like there was one in Cuba, but that’s all in the past. That was way back when the US could get away with bullying the whole neighborhood.

And it shouldn’t want to do that anymore. Neither the bullying nor the living in the past.

Not good ideas either.

 

 

Jan 242019
 
 January 24, 2019  Posted by at 10:40 am Finance Tagged with: , , , , , , , , , , , , , , ,  


Giuseppe Arcimboldo Four elements – Air 1566

 

Russia And Key Allies Vow To Stand By Maduro In Venezuela Crisis (G.)
Trump Delays State Of The Union (ZH)
Julian Assange Launches Legal Challenge Against Trump Administration (G.)
US Prosecutors Press Witnesses To Testify Against Assange: WikiLeaks (R.)
Hundreds Of Companies To Flee UK Because Of Brexit (Ind.)
EU Will Never Accept Theresa May’s Brexit ‘Plan-B’ – Barnier (Ind.)
No-Deal Brexit ‘Poses Threat To Global Stability’ – CBI Head in Davos (G.)
Australia Heatwave Breaks All-Time Records (G.)
How The Clinton Machine Flooded The FBI With Trump-Russia Dirt (Solomon)
EU Commissioner Avramopoulos Says Greece-FYROM Name Deal ‘Is Problematic’ (K.)
Planetary Collision Created Moon, Seeded Earth With Life-Producing Elements (RT)

 

 

The CIA couldn’t get to Chavez, but the moment he passed this became inevitable. Why Trump supports an unelected puppet while Russia, China, and Venezuela’s own army do not is anyone’s guess. The power of Langley.

Russia And Key Allies Vow To Stand By Maduro In Venezuela Crisis (G.)

Venezuela’s opposition leader, Juan Guaidó, has declared himself the interim president and has won the backing of the US, the EU and most of the regional bloc called the Lima Group – but a number of key allies remained steadfast in support of president Nicolás Maduro. Russia, a major Venezuelan ally, considers attempts to force Maduro from power to be illegal, Vyacheslav Volodin, the speaker of Russia’s lower house of parliament, was quoted as saying on Thursday by the Interfax news agency. Franz Klintsevich, a senator and retired colonel, has warned that Moscow could wind up its military cooperation with Venezuela if Maduro, who he called the legitimately-elected president, was ousted.

Other MPs criticised US actions against Maduro. “The US is trying to carry out an operation to organise the next ‘colour revolution’ in Venezuela,” said Andrei Klimov, deputy chairman of the foreign affairs committee of the upper house of parliament, using a term for the popular uprisings that unseated leaders in Georgia, Ukraine and Kyrgyzstan. Another committee member, Vladimir Dzhabrailov, said: “I do not think that we can recognise this – it is, in essence, a coup.” Russia’s largest oil company, Rosneft, is heavily invested in the South American nation’s oil fields, which produce declining amounts of crude each month. [Turkish President] Erdogan telephoned Maduro and offered his support, a spokesman said on Thursday.

China has not yet publicly declared its support for Maduro but Venezuela has been one of Beijing’s closest allies in Latin America, and the largest recipient of Chinese financing, as much as £38bn in loans by 2017. China is Venezuela’s largest creditor, prompting concerns that as Venezuela’s economy spirals, state assets could fall into Chinese hands, as was the case with Sri Lanka’s Hambantota port. Mexico, part of the 14-member Lima Group, departed from the regional bloc’s call for democratic transition and said it would stick to its “constitutional principles of non-intervention”. It joined with Uruguay – the only other prominent Latin American country still recognising Maduro – in calling for additional talks between the government and opposition to find a “peaceful solution”.

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And why not. Things are not ugly enough yet.

Trump Delays State Of The Union (ZH)

After more than a week of back-and-forth with the Democratic leadership, President Trump has called off his search for an alternative venue for the State of the Union according to a pair of tweets sent late Wednesday night. Instead, he will reschedule the speech after the shutdown has ended due to the difficulty in finding a venue “that can compete with the history, tradition and importance of the House Chamber!” Trump blamed the decision to reschedule on Pelosi, and rightfully so. The Democratic leader is refusing to pass a resolution needed to formally invite the president to give the address at the Capitol. But lest Americans accuse her of pursuing political ends, Pelosi argued that “security concerns” motivated her to cancel the speech ue to both the Secret Service and DHS being affected by the shutdown, though both have assured the president that security wouldn’t be an issue if the SOTU was allowed to move forward.

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It’s absolutely nuts that it’s the Guardian, never having apologized for its fake piece about Assange and Manafort in November, which now comes with this, and even cites its own involvement in Assange’s initial leaks.

It’s like nothing ever happened.

Julian Assange Launches Legal Challenge Against Trump Administration (G.)

Julian Assange, the fugitive WikiLeaks founder whose diplomatic sanctuary in the Ecuadorian embassy appears increasingly precarious, is launching a legal challenge against the Trump administration. Lawyers for the Australian activist have filed an urgent application to the Washington-based Inter-American Commission of Human Rights (IACHR) aimed at forcing the hand of US prosecutors, requiring them to “unseal” any secret charges against him. The legal move is an attempt to prevent Assange’s extradition to the US at a time that a new Ecuadorian government has been making his stay in the central London apartment increasingly inhospitable.

[..] The IACHR monitors human rights in the Americas and hears appeals on individual cases. The Trump administration, however, has boycotted its recent hearings. The 1,172-page submission by Assange’s lawyers calls on the US to unseal any secret charges against him and urges Ecuador to cease its “espionage activities” against him. Baltasar Garzón, the prominent Spanish judge who has pursued dictators, terrorists and drug barons, is the international coordinator of Assange’s legal team. He has said the case involves “the right to access and impart information freely” that has been put in “jeopardy”.

The Trump administration is refusing to reveal details of charges against Assange despite the fact that sources in the US Department of Justice have confirmed to the media that they exist under seal. “The revelation that the US has initiated a prosecution against Mr Assange has shocked the international community”, the legal submission to the IACHR states. The US government “is required to provide information as to the criminal charges that are imputed to Mr Assange in full”. The application alleges that US prosecutors have begun approaching people in the US, Germany and Iceland and pressed them to testify against Assange in return for immunity from prosecution. [..] In December, the New York Times reported that Ecuador’s new president, Lenin Moreno tried to negotiate handing over Mr Assange to the US. in exchange for “debt relief”..

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The Feds like traitors.

US Prosecutors Press Witnesses To Testify Against Assange: WikiLeaks (R.)

U.S. federal prosecutors have stepped up efforts to pressure witnesses to testify against WikiLeaks founder Julian Assange, WikiLeaks said on Wednesday, in connection with what it said were secret criminal charges filed by the Trump administration. [..] A spokesman for the federal prosecutors’ office in Alexandria, Virginia, which has taken the lead for several years in investigations into WikiLeaks, did not respond to a request for comment on this story. According to the document filed to the human rights commission, one of the people contacted by Alexandria prosecutors was Jacob Appelbaum, a Berlin-based U.S. computer expert and hacker. Appelbaum told Reuters that while prosecutors offered him broad immunity from prosecution, he had no interest in cooperating or testifying before a grand jury.

Another potential witness targeted by U.S. prosecutors was David House, a Massachusetts computer programmer, the document said. House was involved in setting up a group to support Chelsea Manning, a U.S. soldier who passed on military communications to WikiLeaks and was jailed by U.S. authorities. House could not be reached. The American Civil Liberties Union which represented him in connection with the Manning case did not respond to requests for comment. The Justice Department also contacted American activist and computer scientist, Jason Katz. Katz, who has lived in Iceland since 2011, did not respond to a request for comment sent to that country’s Pirate Party, of which he was a founding member.

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“The Netherlands has sometimes appeared better prepared for Brexit than the UK..” Everyone is.

Hundreds Of Companies To Flee UK Because Of Brexit (Ind.)

More than 250 companies are in touch with the Dutch government about moving to the Netherlands because of Brexit, officials have said. The trade and investment arm of the country’s government has been soliciting moves from companies worried about access to the EU market, with Britain set to leave the single market and customs union. A number of high-profile companies have already announced a decision to cross the North Sea, most recently Japanese electronics giant Sony specifically citing Brexit. Last year Panasonic also announced it was moving to Amsterdam. Michiel Bakhuizen, a spokesman for the Netherlands Foreign Investment Agency (NFIA), told the AFP news agency that the number of firms in talks was growing.

“The number of businesses we are in contact with for a possible arrival is growing. At the start of 2017 it was 80, at the start of 2018 150, and now it’s more than 250,” he said. [..] The Netherlands has sometimes appeared better prepared for Brexit than the UK, with advanced plans to recruit as many as 1,000 extra border officials to deal with potential disruption and extra bureaucracy caused by the UK’s exit. In addition to private businesses, the UK has also lost a key EU agency to Amsterdam: the European Medicines Agency, which employs around 900 highly skilled workers. The Netherlands is not the only country to benefit from the UK’s policies. The EY financial services tracker reported earlier this month that 80 out of the 222 finance companies it follows have publicly said they are considering or have confirmed the relocation of UK staff and operations to the continent.

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“..opposing a no deal will not stop a no deal from happening at the end of March..”

EU Will Never Accept Theresa May’s Brexit ‘Plan-B’ – Barnier (Ind.)

The EU’s chief Brexit negotiator has ruled out ever accepting Theresa May’s Brexit plan B, in a major blow to the prime minister’s bid to get MPs to back her plan. Michel Barnier said repeated requests for a time limit on the controversial backstop had already been discussed and rejected twice by EU leaders. But he also signalled there could be a way to avoid a hard border in Ireland in the event of a no deal, telling an EU committee on Wednesday: “We will have to find an operational way of carrying out checks and controls without putting back in place a border.” In a separate joint interview with continental newspapers Mr Barnier said “we cannot tie the backstop to a time limit” as suggested by the prime minister.

He said the withdrawal agreement on the table was “the only possible option” for Britain and also ruled out the possibility of a so-called “managed no deal” as advocated by some Tory Brexiteers. “In the case of no deal, action will of course be taken to ensure that planes can land but … the ‘no deal’ cannot be a sum of mini-deals and be a situation of ‘business as usual’,” he [said]. “Even an agreement for an ordered Brexit will cause disruptions and have serious consequences. The ‘no deal’ even more so.” At the committee the chief negotiator elaborated, warning that the only way to avoid the UK crashing was to endorse another option on the table. “There appears to be a majority in the Commons to oppose a no deal but opposing a no deal will not stop a no deal from happening at the end of March”, he told the committee. “To stop no deal, a positive majority for another solution will need to emerge.”

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The cold and snowy air gets to people’s heads.

No-Deal Brexit ‘Poses Threat To Global Stability’ – CBI Head in Davos (G.)

Fears are growing internationally that a no-deal Brexit poses a threat to the stability of the global economy, the head of Britain’s leading business body has warned. Carolyn Fairbairn, director-general of the CBI, said the failure to sort out Britain’s departure from the European Union was damaging Britain’s brand abroad and had joined a list of systemic risks to the world economy. Speaking at the World Economic Forum in Davos, Fairbairn said there was mounting concern at the potential for a no-deal Brexit to cause damage well beyond the UK. The CBI held a private breakfast for UK business leaders in Davos attended by the head of the International Monetary Fund, Christine Lagarde. The UK chancellor, Philip Hammond, will address a CBI lunch on Thursday.

Fairbairn told the Guardian: “At my meetings at Davos, there is a recognition that the causes of vulnerability of the global economy now include Brexit.” The annual gathering of the WEF has been marked this year by anxiety about slowing growth and the trade dispute between the US and China. Fairbairn said Brexit had now catapulted up the list of worries. “It is everyone’s interest that Britain leaves the EU in a way that works for the British economy, the European economy and indeed the global economy,” she said.

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Port Augusta’s 49.5ºC is 121.1ºF.

Australia Heatwave Breaks All-Time Records (G.)

Temperature records have tumbled across South Australia, with the city of Adelaide experiencing its hottest day on record, as the second heatwave in as many weeks hit southern parts of Australia. Adelaide hit 46.6C on Thursday afternoon, the hottest temperature recording in any Australian state capital city since records began 80 years ago. The Red Lion, a pub in the city’s Elizabeth North suburb, promised to hand out free beers if the mercury rose above 45C. By 1pm, there was a line out the door and round the block.In Port Augusta, 300km north-west, an all-time record was also set, as the city hit 49.5C.

Last week, temperatures in Adelaide, home to 1.3 million people, hit 45C, sending homelessness shelters into a “code red”, and sparking fears of another mass fish death in the Menindee Lakes in the neighbouring state of New South Wales. In central and western Australia, local authorities were forced to carry out an emergency animal cull, shooting 2,500 camels – and potentially a further hundred feral horses – who were dying of thirst.

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As soon as I read Victoria Nuland’s name I know what is going on.

How The Clinton Machine Flooded The FBI With Trump-Russia Dirt (Solomon)

Then-senior State Department official Jonathan Winer, who worked for then-Secretary John Kerry, wrote that Steele first approached him in the summer with his Trump research and then met again with him in September. Winer consulted his boss, Assistant Secretary for Eurasia Affairs Victoria Nuland, who said she first learned of Steele’s allegations in late July and urged Winer to send it to the FBI. (If you need further intrigue, Winer worked from 2008 to 2013 for the lobbying and public relations firm APCO Worldwide, the same firm that was a contractor for both the Clinton Global Initiative and Russia’s main nuclear fuel company that won big decisions from the Obama administration.) When the State Department office that oversees Russian affairs sends something to the FBI, agents take note.

But Steele was hardly done. He reached out to his longtime Justice Department contact, Bruce Ohr, then a deputy to Deputy Attorney General Sally Yates. Steele had breakfast July 30, 2016, with Ohr and his wife, Nellie, to discuss the Russia-Trump dirt. (To thicken the plot, you should know that Nellie Ohr was a Russia expert working at the time for the same Fusion GPS firm that hired Steele and was hired by the Clinton campaign through Sussmann’s Perkins Coie.) Bruce Ohr immediately took Steele’s dirt on July 31, 2016, to then-FBI Deputy Director Andrew McCabe. When the deputy attorney general’s office contacts the FBI, things happen. And, soon, Ohr was connected to the agents running the new Russia probe.

Around the same time, Australia’s ambassador to London, Alexander Downer, reached out to U.S. officials. Like so many characters in this narrative, Downer had his own connection to the Clintons: He secured a $25 million donation from Australia’s government to the Clinton Foundation in the early 2000s. Downer claims WikiLeaks’s release of hacked Clinton emails that month caused him to remember a conversation in May, in a London tavern, with a Trump adviser named George Papadopoulos. So he reported it to the FBI. The saturation campaign kept building. Sometime in September, Winer and Nuland got another version of Steele-like research suggesting Trump-Russia collusion, this time from known associates of the Clintons: Sidney Blumenthal and Cody Shearer. Again, it was sent to the FBI.

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A rare wiser voice: “..the government should have sought to achieve a national consensus”

Vote is later today, riots are certain. How bad is it going to get?

EU Commissioner Avramopoulos Says Greece-FYROM Name Deal ‘Is Problematic’ (K.)

EU Commissioner for Migration Dimitris Avramopoulos on Wednesday described the name deal reached between Greece and the Former Yugoslav Republic of Macedonia (FYROM) as “problematic,” arguing it favors the latter. “The Prespes agreement is not balanced, and therefore it is problematic. The geographic qualifier on which all [Greek] governments agreed on is one thing, but the historic qualifier, attempted through the agreement, is another,” he was quoted as saying by state-run news agency ANA-MPA. He said ethnicity and language constitute national identity and, in the case of the Prespes accord, they “open the way for irredentist, nationalist policies.” Avramopoulos said the government should have sought to achieve a national consensus on the name dispute before making the deal.

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And then I saw God.

Planetary Collision Created Moon, Seeded Earth With Life-Producing Elements (RT)

The elemental building-blocks of life arrived on Earth when it collided with a “Mars-sized planet” 4.4 billion years ago – an impact that also created the Moon, a new study has found. Carbon, nitrogen, sulfur, and other volatile elements integral to life were transferred to Earth’s outer layers through collision with a slightly smaller planet rich in these elements at the beginning of its existence. This impact produced the moon and, eventually, gave rise to carbon-based life, according to a new model of Earth’s development devised by petrologists at Rice University. In a collision with Earth, the volatile materials could transfer from the Mars-sized planet to Earth’s surface, but wouldn’t permeate to its core, which does not interact with its outer layers.

This model solves a mystery that has puzzled geologists for decades regarding why these vital elements exist in all layers of Earth except its molten core. “The core doesn’t interact with the rest of Earth, but everything above it, the mantle, the crust, the hydrosphere and the atmosphere, are all connected,” explained Damanveer Grewal, lead author of the study, which was published in Science Advances. “Material cycles between them.” The collision theory resembles existing models in which a meteorite is responsible for seeding the volatile elements on Earth. Unfortunately, the carbon to nitrogen ratio in such meteorites (called carbonaceous chondrites) is much lower than the ratio found in Earth’s non-core material. Additionally, the collision theory explains why the moon and Earth have the same elemental composition – they were once part of the same sphere.


© Rasjdeep Dasgupta

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Jan 052019
 
 January 5, 2019  Posted by at 10:32 am Finance Tagged with: , , , , , , , , , , , , ,  


Alfred Sisley A Village Street in Winter 1893

 

Dow Up 700 Points As Powell Says Fed Will Be Patient With Rate Hikes (CNBC)
US Gains 312,000 Jobs, Shatters Wall Street Forecasts (MW)
Fed’s Mester: Rates Near Neutral Mean Fed Can ‘Take Our Time’ (R.)
Fed’s Balance Sheet Reduction Reaches $402 Billion (WS)
Trump Threatens ‘National Emergency’ Over Wall (BBC)
Mueller Given More Time To Investigate Trump Collusion With Russia (Ind.)
China’s Faltering Economy Gives US Stronger Hand In Trade Talks – Trump (R.)
China Cuts Banks’ Reserve Ratios By 1% As Economy Slows (R.)
“Radical” Ocasio-Cortez Teases 70% Tax On Super Wealthy (ZH)
Lima Group Countries Say Won’t Recognize New Maduro Mandate (AFP)
US Senator: Turkey Must Choose Between US Jets and Russian Missiles (K.)
Europe’s Right Wing Takes Aim at the EU (Spiegel)

 

 

Yeah, yeah, whatever. Jesse Colombo shared this graph, saying the green bar at the far right depicts what happened yesterday.

Dow Up 700 Points As Powell Says Fed Will Be Patient With Rate Hikes (CNBC)

Stocks rallied on Friday after Federal Reserve Chairman Jerome Powell said the central bank will be patient in raising rates, quelling fears of tighter monetary policy in the near future. The Dow Jones Industrial Average rose 700 as Boeing, UnitedHealth and 3M outperformed. The S&P 500 rallied 3.2 percent, with the tech sector gaining more than 4 percent. The Nasdaq Composite climbed 4.1 percent. “As always, there is no preset path for policy,” Powell said.

“And particularly with muted inflation readings that we’ve seen coming in, we will be patient as we watch to see how the economy evolves.” Powell also said the central bank would not “hesitate” to change its balance-sheet reduction plan if it was causing problems. Fears that the Fed may be making a policy error by tightening too fast have contributed to the recent skittishness in financial markets, according to several market experts.

“I think he did what the market hoped he would do,” said Tom Essaye, founder of The Sevens Report. “What he did with these comments is he acknowledged that they need to be more flexible.” “This is worth a bounce, but at the same time, the major issues facing the market are not resolved. We have a potential earnings problem in this market; we have a potential economic growth problem in this market,” Essaye added. “Today’s rally is more a result of the overextended downside from yesterday.”

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Big number, but apparently not high quality.

US Gains 312,000 Jobs, Shatters Wall Street Forecasts (MW)

The U.S. gained 312,000 new jobs in December, capping off the biggest increase in hiring in three years and showing that second longest economic expansion in U.S. history still has plenty of staying power despite growing worries about a slowdown. The surge in hiring was the largest since February. Economists surveyed by MarketWatch had forecast a 182,000 increase. Hiring in November and October was also stronger than originally reported, the government said Friday. The unemployment rate, meanwhile, rose to 3.9% from a 49-year low of 3.7%. The percentage of working-age Americans in the labor force climbed to a one-and-a-half-year high as more people looked for jobs. That’s usually seen as a good sign since it means people think work is easier to find.

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That whole neutral rate thing is just made up by a bunch of academics.

Fed’s Mester: Rates Near Neutral Mean Fed Can ‘Take Our Time’ (R.)

From rising wages to a slowdown in housing, economic evidence is mounting that the U.S. Federal Reserve is at or near a neutral level of interest rates where it can take stock of where the economy stands before deciding on its next moves, Cleveland Federal Reserve president Loretta Mester said on Friday. The comments from a usually hawkish reserve bank president, made in an interview on the sidelines of the American Economic Association annual meeting, add to the sense that the roughly quarterly pace of rate hikes enacted by the Fed for the past two years may take a pause this year absent a surprise jump in inflation or faster-than-expected economic growth.

“We are in a new world,” Mester said, where the obvious need to raise rates has given way to a situation where economic growth is expected to slow, wages are rising on the basis of low unemployment, interest rate sensitive sectors of the economy like housing have ebbed, and the unemployment rate has roughly “stabilized” at a low level. Taken together, Mester said, those are the sorts of developments one would expect in an economy where interest rates were near a neutral level that was neither encouraging nor holding back economic activity. “We really need to be looking at the data and having the economy tell us, do we need to move more? Do we need to move more, faster? Can we wait?” Mester said. “We should take our time and assess….We may be where we need to be.” Overall, she said she felt the Fed was in a “really good spot.”

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Powell can walk back the rates, but he can’t just re-purchase this half trillion in assets. And the ECB and BoJ are leaving the game as well.

Fed’s Balance Sheet Reduction Reaches $402 Billion (WS)

The Fed started the QE unwind in October 2017. As I covered it on a monthly basis, my ruminations on how it would unwind part of the asset-price inflation and Bernanke’s “wealth effect” that had resulted from QE were frequently pooh-poohed. They said that the truly glacial pace of the QE unwind was too slow to make any difference; that QE had just been a “book-keeping entry,” and that therefore the QE unwind would also be just a book-keeping entry; that QE had never caused any kind of asset price inflation in the first place, and that therefore the QE unwind would not reverse that asset-price inflation, or whatever. But in October last year, when all kinds of markets started reversing this asset price inflation, suddenly, the QE unwind got blamed, and the Fed – particularly Fed Chairman Jerome Powell – has been put under intense pressure to cut it out. Yet it continues:

The Fed shed $28 billion in assets over the four weekly balance-sheet periods of December. This reduced the assets on its balance sheet to $4,058 billion, the lowest since January 08, 2014, according to the Fed’s balance sheet for the week ended January 3. Since the beginning of this “balance sheet normalization,” the Fed has now shed $402 billion. According to the Fed’s plan released when the QE unwind was introduced, the Fed is scheduled to shed “up to” $30 billion in Treasuries and “up to” $20 billion in MBS a month – now that the QE unwind has reached cruising speed – for a total of “up to” $50 billion a month. [..] Over the four weeks from December 6 through January 3, the Fed’s holdings of Treasury securities fell by $18 billion to $2,223 billion, the lowest since January 15, 2014. Since the beginning of the QE-Unwind, the Fed has shed $243 billion in Treasury securities:

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Both sides think they are winning this one.

Trump Threatens ‘National Emergency’ Over Wall (BBC)

US President Donald Trump has said he could declare a national emergency to build a US-Mexico border wall without the approval of Congress. It came after he met senior Democrats, who refused his requests for funding. The stand-off has seen Mr Trump withhold support for a bill to fully fund the government until he gets money for the border wall. He said he was prepared for the partial government shutdown – now in its third week – to last years. Around 800,000 federal workers have been without pay since 22 December. Trump aides and lawmakers will meet later on Saturday in a fresh bid to resolve the impasse.

The Republican president initially gave a positive account of the 90-minute meeting at the White House, describing it as “very productive”. But when asked whether he had considered using emergency presidential powers to bypass congressional approval of funding, Mr Trump said he had. “I may do it. We can call a national emergency and build it very quickly. That’s another way of doing it.” “I’m very proud of doing what I’m doing,” the president added. “I don’t call it a shutdown, I call it doing what you have to do for the benefit and safety of our country.” House Speaker Nancy Pelosi said Friday’s meeting had been “contentious”, while Senate Democratic leader Chuck Schumer said: “We told the president we needed the government open. He resisted.”

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Pretty crazy, even if not unexpected.

Trump on Twitter: “How do you impeach a president who has won perhaps the greatest election of all time, done nothing wrong (no Collusion with Russia, it was the Dems that Colluded), had the most successful first two years of any president, and is the most popular Republican in party history 93%?”

Mueller Given More Time To Investigate Trump Collusion With Russia (Ind.)

Robert Mueller has been given additional time to carry out his investigation into Russia’s alleged interference in the 2016 election, and possible collusion between Moscow and the Trump campaign. In a development that may surprise those who have suggested the special counsel’s work was drawing to a close, a judge in Washington DC granted a six-month extension to the grand jury being used to examine evidence. The jury had been impanelled in July 2017 for a standard 18-month term and was set to expire this week. The extension granted by federal judge Beryl Howell means the investigation will continue for some time yet. AP said federal criminal procedure rules allow such extensions when a judge determines it is in the public interest. The extension can only last up to six months.

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High level trade talks next week. Time for China to show some flexibility.

China’s Faltering Economy Gives US Stronger Hand In Trade Talks – Trump (R.)

Donald Trump has said China’s weakening economic growth puts the United States in a strong position as negotiators from the world’s two largest economies prepare for trade talks on Monday. US officials are heading to Beijing this weekend for the first face-to-face talks since Trump and China’s president, Xi Jinping, agreed in December to a 90-day truce in the trade war as they sought to strike a deal. “I think we will make a deal with China,” Trump told reporters at the White House after a meeting with Democratic and Republican lawmakers about the US government shutdown. “I really think they want to. I think they sort of have to.” Beijing on Friday cut bank reserve requirements for a fifth time this year amid slowing growth at home and the punishing US tariffs on exports.

“China’s not doing well now. And it puts us in a very strong position. We are doing very well,” Trump said. “I hope we’re going to make a deal with China. And if we don’t, they’re paying us tens of billions of dollars worth of tariffs – not the worst thing in the world.” [..] The president also downplayed the effects of the economic woes on Apple, which this week blamed slowing iPhone sales in China for a rare reduction in its quarterly sales forecast. When asked if he was concerned about Apple’s revenue cut and share price drop, Trump said: “No, I’m not. I mean look, they’ve gone up a lot.”

Shares of Apple rebounded on Friday after a 10% nosedive on Thursday on the revenue warning. The shares closed at $148.26 on Friday, down about 5.1% for the week. For the 2018 full year, Apple shares fell 7%, although they are up about 24% since Trump took office in January 2017. “They’re going to be fine. Apple is a great company,” Trump said, adding he had repeated his advice to Apple boss Tim Cook to build his company’s products in the United States. “Apple makes its product in China. China is the biggest beneficiary of Apple, more than us, because they build their product mostly in China,” Trump said. “I want Apple to make their iPhones and all of the great things that they make in the United States. And that’ll take place.”

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RRRs are still quite high, true enough. But they’re merely a reflection on the risks inherent in these banks.

China Cuts Banks’ Reserve Ratios By 1% As Economy Slows (R.)

China’s central bank said on Friday it was cutting the ratio of cash that banks must hold as reserves by 100 basis points (bps), or 1 percent, as it looks to reduce the risk of a sharper slowdown in the world’s second-biggest economy. The cut in banks’ reserve requirement ratios (RRR) is the first in 2019 and the fifth in a year by the People’s Bank of China (PBOC) as the economy faces its weakest growth since the global financial crisis and mounting pressure from U.S. tariffs. The reduction is being made in two equal stages, effective Jan. 15 and Jan. 25, the PBOC said. The reserve requirement ratios (RRRs) are currently 14.5 percent for large banks and 12.5 percent for smaller banks. Further cuts in the RRR had been widely expected this year, especially after a spate of weak data in recent months showed China’s economy was continuing to lose steam. The size of the move was on the upper end of market expectations.

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Ocasio fills a void that no other Democrat -at least not incumbent- fits in. That is very similar to what happened with Trump. Pelosi and Schumer will fight her every step of the way.

As for 70% tax rates on highest income and wealth brackets, in the 1950s and 60s those rates were as high as 90%.

“Radical” Ocasio-Cortez Teases 70% Tax On Super Wealthy (ZH)

Rep. Alexandria Ocasio-Cortez (D-NY) suggested in a “60 Minutes” interview scheduled to air Sunday that the highest-earning Americans may need to pay an income tax rate as high as 60 to 70 percent to combat carbon emissions, reports Politico. Speaking with Anderson Cooper in a “60 Minutes” interview scheduled to air Sunday, Ocasio-Cortez said a dramatic increase in taxes could support her “Green New Deal” goal of eliminating the use of fossil fuels within 12 years, a goal which even she acknowledges is ambitious. “What is the problem with trying to push our technological capacities to the furthest extent possible?” Ocasio-Cortez asked. “There’s an element where yeah, people are going to have to start paying their fair share in taxes.”

Ocasio-Cortez pointed out that in a progressive tax rate system, not all income for a high earner is taxed at such a high rate. Rather, rates increase on each additional level of income, with dramatic increases on especially high earnings, such as $10 million. -Politico [..] Ocasio-Cortez relished Anderson Cooper’s characterization of the tax plan as “radical,” before comparing herself to Abraham Lincoln and Franklin D. Roosevelt. “I think that it only has ever been radicals that have changed this country,” said Ocasio-Cortez. “Yeah, if that’s what radical means, call me a radical.”

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Why don’t they first demand the CIA gets out?

Lima Group Countries Say Won’t Recognize New Maduro Mandate (AFP)

Foreign ministers from 12 Latin American countries and Canada said Friday their governments would not accept Nicolas Maduro as Venezuela’s president when he is sworn in for a second six-year term next week. The 14-member Lima Group – with the exception of Mexico – said it would not grant recognition to Maduro’s hardline socialist government, after meeting in the Peruvian capital to discuss ways to step up international pressure on the regime, which has presided over the oil-rich country’s economic collapse. Peru’s Foreign Minister Nestor Popolizio said the group had delivered “a strong political message” ahead of Maduro’s inauguration on January 10.

Maduro was re-elected on May 20 in a ballot boycotted by the main opposition parties and widely condemned by the international community, including the United States which called it a “sham.” “The main message is undoubtedly the non-recognition of the Venezuelan regime’s new term,” Popolizio told reporters. “It is very important that the Lima Group has issued this statement to continue exerting pressure with a view to the restoration of democracy in Venezuela,” the Peruvian minister said. The Group, of which Canada is a member, said Maduro should temporarily transfer power to the opposition-controlled National Assembly until free elections can be held.

[..] Venezuela hit back at the Lima Group, accusing it of fomenting a coup at the behest of the US, which has sanctioned Venezuelan officials and entities. Caracas expressed its “great bewilderment at the extravagant declaration of a group of countries of the American continent which, after receiving instructions from the United States through a videoconference, have agreed to encourage a coup d’etat,” according to a statement read by Venezuela’s foreign minister, Jorge Arreaza. The United States, which is not a member of the group created after deadly anti-Maduro protests in 2017, participated in the meeting for the first time. Secretary of State Mike Pompeo commented by video conference from Washington.

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Turkey allegedly already signed the Russia deal.

US Senator: Turkey Must Choose Between US Jets and Russian Missiles (K.)

Turkey needs to choose between the Lockheed Martin F-35 fighter jets it has ordered from the United States or the acquisition of the Russian S-400 missile system, Democratic Senator Chris Van Hollen told Kathimerini in a recent interview at Congress. Van Hollen warned that Turkey may be subject to US sanctions if it buys the Russian systems under the August 2018 Countering America’s Adversaries Through Sanctions Act (CAATSA), which penalizes governments that buy weapons from Moscow.

“I want to be clear that I am not opposed to the sale of F-35s to Turkey. The big problem I have is that Turkey is a NATO ally and they are saying that they are planning to proceed with the purchase of the Russian S-400 system,” he told Kathimerini. “So I am very much opposed to the F-35 sale going through if the Turks follow through on their plan to purchase the Russian air defense system. The reason is that it would compromise the security of the F-35s and potentially the security of all other NATO aircraft.” “In my view Turkey has a very simple choice. They can purchase the F-35s or they can purchase the S-400. But they can’t have both,” Van Hollen said.

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Oh, those terrible right wingers. Look what they want, it’s f*cking anarchy: “The right wing hopes to transform the European elections into a kind of plebiscite: What kind of Europe do people want?” The Horror! The Horror!

Europe’s Right Wing Takes Aim at the EU (Spiegel)

Right-wing populists have become a feature in the political landscape of almost every European Union member state, while in Italy, Austria, Poland, Hungary, Slovakia, Denmark and Finland, they are either part of the government or support the government. They are no longer merely a fringe phenomenon or a passing anomaly. Rather, they are a movement that could continue to grow — and they are doing all they can to position themselves as such. Despite all of their differences, the target of their ire is the same: the cosmopolitan elite, liberal opinion leaders in the media and EU bureaucrats in Brussels. Their best enemies? German Chancellor Angela Merkel and French President Emmanuel Macron, the latter having proven to be a tireless promoter of deeper European integration.

From the perspective of the right wing, the plans pushed by Macron and his supporters can mean only one thing: Further impositions on “normal people,” upon whom much has already been imposed — things like smoking bans, gay marriages, refugees and expensive environmental protection regulations. The populists claim they are the only ones who speak for the majority of Europeans. And one of their primary goals is a Europe free of immigration. They call their concept the “Europe of Nations.” The right wing hopes to transform the European elections into a kind of plebiscite: What kind of Europe do people want? Open or closed? Traditionalist or tolerant? Should the European bloc become a political union with fewer powers reserved for the nation-states or should it merely be something like a free-trade area in which each individual country can chart its own course?

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Nov 042017
 
 November 4, 2017  Posted by at 9:27 am Finance Tagged with: , , , , , , , , ,  


Henri Cartier Bresson Shanghai 1947

 

Funny Facts Friday (David Stockman)
October Payrolls, Average Hourly Earnings Miss Big (ZH)
Record 95.4 Million Americans Not in Labor Force, 968,000 Exit In 1 Month (ZH)
Manafort Money Laundering Charge In Russia Probe May Face Challenges (R.)
Swamp-O-Rama (Jim Kunstler)
How Democrats Can Beat The Republican Tax Cut (Bartlett)
European Arrest Warrant Issued For Catalan Leader Carles Puigdemont (G.)
America’s Opioid Crisis Is About To Get Worse (ZH)
‘No Deal’ Brexit To Add £930 A Year To UK Shopping Bills (G.)
Stalked By Default Fears, Venezuela Calls Creditor Meeting (AFP)
The Greek Island Camp Where Only The Sick Or Pregnant Can Leave (G.)

 

 

“there has been no gain in employed prime age male workers during the entirety of this century!”

Funny Facts Friday (David Stockman)

The funny numbers came in a veritable torrent today. For instance, the so-called U-3 unemployment rate dropped to a 17-year low of 4.1% for October. Yet the same BLS household survey which posted the lowest unemployment rate since early 2000 showed that the number of employed Americans actually sank by 484,000 last month. How’s that? Well, easy as pie according to the data mavens at the BLS. It seems that the number of persons not in the labor force soared by 969,000 in October. So, yes, with a smaller numerator and an even smaller denominator they came up with a better – nay, awesome – unemployment rate. Then again, none of the talking heads on bubblevision even mentioned the staggering loss of 484,000 jobs during the month because they ignore the household survey’s job count entirely in favor of the establishment survey number (up 261,000) – even though the former drives the unemployment rate, which they crow about endlessly.

This cherry-picking of the data is quite understandable, however, when you consider what is really buried in the household survey and is completely ignored by the stock peddlers. To wit, not so awesome at all is the fact that during October there was an all-time record of 95.4 million persons not in the labor force and another 6.5 million that were jobless – meaning 102 million Americans (16 and older) don’t have jobs. That compares to 42 million retired workers on social security. Consequently, there are 60 million adult Americans who are housewives, students, disabled, food stamp and welfare recipients, social security dependents, dwellers in mom’s basement or denizens of the illegal drug, gambling or sex trades.

To be sure, we don’t have any special opinion on the merits of these pursuits, but we do have a point of view on the societal and fiscal math. Namely, the diminishing relative ranks of workers and tax mules in American society are going to buckle under the weight of baby boom retirements and soaring welfare and public sector health care costs in the years just ahead. In that context, one of the most striking numbers in today’s report is that 53.0 million prime age men 25 to 54 years old were employed in October, 2017. As is evident in the chart below, that is down by 1.5 million jobholders since the pre-crisis peak in May 2007 and virtually identical to the number in January 2001. Stated differently, there has been no gain in employed prime age male workers during the entirety of this century!

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“..on a monthly basis, there was no wage increase at all..”

October Payrolls, Average Hourly Earnings Miss Big (ZH)

Well, with virtually everyone expecting a 300K+ payrolls number after last month’s negative hurricane-distorted print, and with whispers of a 400K print floating around, it only made sense that not only would payrolls disppoint, printing at 261K, one standard deviation below the 310K consensus estimate (and that even with a whopping 89,000 waiters and bartenders added) .. but also that the far more important average hourly earnings number, which was expected to rise at a 2.7% rate Y/Y, also missed, printing at 2.4% instead with September revised lower to 2.8%. Worse, on a monthly basis, there was no wage increase at all, printing at 0.0% (technically it was a 1 cent decline), below the 0.2% expected, and the lowest since June 2015.

Average weekly earnings also disappointed, declining by 35 cents to $912.63, the first decline since May. It is also notable that after the September surge, the number of employed Americans per the Household Survey tumbled by 484K in October, to 153.961 million. That said, the real action this time was found in previous months, where September was revised higher from -33.000 to +18,000 while August was revised up from +169,000 to +208,000, for a total two month revision of +90,000. Additionally, the unemployment rate dropped to a new cycle low, declining from 4.2% to 4.1%, below the 4.2% expected, while the underemployment rate declined to 7.9%, the lowest since the start of the century.

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“..the civilian labor force shrunk by whopping 765,000 in one month.”

Record 95.4 Million Americans Not in Labor Force, 968,000 Exit In 1 Month (ZH)

In what was otherwise a mediocre jobs report, in which the establishment survey reported that a lower than expected 261K jobs were added to the post-Hurricane economy, the biggest surprise was not in the Establishment survey, but the household, where the unemployment rate tumbled once more, sliding to a new cycle low of 4.1%, for all the wrong reasons, because a quick look at the participation rate metrics showed that in October there was a sharp decline, with the labor force part. rate sliding from 63.1% to 62.7%, back to 4 decade lows…… driven by one disturbing metric: the number of people who exited the labor force soared by a near record 968,000 in October – the third highest on record – pushing the total number of people not in the labor force to a record 95.385 million, as the civilian labor force shrunk by whopping 765,000 in one month.

This took place as the number of employed Americans declined by 484,000, however since the unemployment rate denominator dropped more, it translated into an actual decline in the unemployment rate! So much for economist hopes that potential workers from the fringes are coming back to the labor force. Of course, the implication is even worse: with more slack being created in the form of workers who are leaving, not entering, the labor force, this creates a buffer for wage growth, and suggests that any hope for rapidly rising wages has once again been derailed.

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Not clear what they will be left with. FARA seems hard to prosecute.

Manafort Money Laundering Charge In Russia Probe May Face Challenges (R.)

When the lawyer for the former campaign manager of President Donald Trump attacked the money laundering charge brought against his client as flimsy, some legal experts say he may have pinpointed a potential weakness in the indictment by U.S. special counsel Robert Mueller. Paul Manafort and his associate Rick Gates both pleaded not guilty on Monday to charges that they failed to disclose they were lobbying for pro-Russia former Ukrainian President Viktor Yanukovich between 2006 and 2015 and laundered tens of millions of dollars by funneling the money through dozens of companies, partnerships and bank accounts.

In a court filing on Thursday, Manafort defense lawyer Kevin Downing said the money laundering count, the most serious facing his client with a 20-year maximum sentence, was based on a “tenuous legal theory” tying it to his failure to register as a foreign agent of the former Ukrainian leader. [..] The language of the filing and defiant statements Downing made outside the courthouse following Manafort’s arraignment on Monday suggest the lawyer is planning an aggressive defense of the charges, the first to be made public from Mueller’s probe into Russian interference in the 2016 presidential election. The Kremlin has denied meddling and Trump has said there was no collusion. Neither Trump nor his campaign was mentioned in the indictments issued on Monday.

Downing will also be seeking to suppress evidence he said was improperly obtained by search warrant, according to an additional filing on Friday. Manafort’s Virginia home was raided by FBI agents over the summer. The money laundering statute targets financial transactions involving the proceeds of “specified unlawful activity.” According to the Manafort indictment, the unlawful activity was his violation of the U.S. Foreign Agent Registration Act (FARA). Though the money laundering statute includes FARA violations, Seattle tax lawyer John Colvin said the charge against Manafort was not as straightforward as most other cases. “It doesn’t fit the normal paradigm” of money-laundering cases involving criminal activity like drug trafficking, Colvin said. “It seems like a stretch to me.”

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“Are there any like me out there who would like to see both parties tossed onto the garbage barge of history?”

Swamp-O-Rama (Jim Kunstler)

Now comes the news from Donna Brazille, on-again-off-again Democrat Party chair, that the primary elections were elaborately rigged by HRC functionaries to buy control of her nomination. Let’s not even go into the bidding for the Christopher Steele “dossier” alleging kinky sexual romps in Moscow by Donald Trump, or the activities in Ukraine of Tony Podesta’s DC lobbying company — that’s Tony, brother of John Podesta, Clinton campaign chief, whose emails remain a truffle cache for the rooting dogs of the DOJ, if they were actually on-the-task. I write this as a still-registered Democrat myself — though I consider myself their enemy now, yet hardly a Trump partisan. Are there any like me out there who would like to see both parties tossed onto the garbage barge of history?

Of course, to say that also means throwing out a cargo of terrible ideas and beliefs, not just two clown cars of personalities. Identity politics, zero interest rate policy, American Exceptionalism, endless debt, nation-building in foreign lands, FASB-157, sanctuary cities, Title IX coercion, racketeering in health care and higher ed, market interventions, ambiguous borders… is just some of the cargo that needs to be dumped overboard with both parties. Watergate begins to look as quaint and simple as a game of Chutes and Ladders compared to RussiaGate. Not only are both parties implicated one way or another in multiple nefarious schemes, plots, and intrigues, but the Department of Justice and its subsidiary, the FBI, look culpable in a range of cover-ups and mis-directions. If the DOJ becomes disabled, how does any of this get resolved?

The whole extravaganza is heading toward a constitutional crisis that might clean out the system like a Death Wish coffee enema. Sentiment may arise for Mr. Mueller to step aside, if President Trump doesn’t make the rash decision to simply fire him. The latter would certainly foment a constitutional crisis that could include an effort to run Trump over with the 25th amendment. In the event, we’ll be in a new kind of civil war.

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New deal.

How Democrats Can Beat The Republican Tax Cut (Bartlett)

To get back on offense, I think Democrats should stop trying to compete with Republicans on more distributionally fair tax cuts. When you can’t win, don’t play the game. Instead, they should say, if Republicans are willing to increase the deficit by $1.5 trillion, let’s use that money for something the country really needs that will create a vastly greater number of jobs. That is a giant infrastructure program. There is no need to detail the myriad of ways that the money could be spent without coming close to exhausting the available projects. Roads, bridges, schools, hurricane repair projects, sea walls and such to protect against future climate catastrophes, the power grid and many, many more. Civil engineers periodically publish long lists of urgent infrastructure needs.

Not only would a big infrastructure program be capital that will pay off for decades, just as Republican Dwight Eisenhower’s national highway program did, but it will create vastly more jobs than any kind of tax cut, especially the one Republicans are proposing that would largely benefit the wealthy while providing no incentives for job creation or investment. The Congressional Budget Office has long provided estimates to Congress showing that direct spending by government on infrastructure has a much more powerful effect on economic growth than any type of tax cut. A February 2015 report showed that purchases of goods and services by the federal government would raise GDP by as much as $2.50 for every $1 spent. Grants to state and local government for infrastructure could create as much as $2.20 for every $1 spent.

By contrast, according to the same report, a temporary tax cut for the wealthy, such as Republicans propose today, would create at most 60 cents of GDP for every $1 of foregone revenue. A tax cut for the middle class is much better, creating as much as $1.50 of GDP for every $1 of revenue loss. Corporate tax cuts are the worst, creating at most 40 cents of GDP for every $1 of revenue loss. Some may say that these estimates are high, given that we are close to full employment, according to many economists. But the additional stimulus would draw many discouraged workers back into the labor force, especially if it created upward pressure on wages, which workers desperately need. Higher wages will raise consumer spending that will further increase growth.

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This is going spectacularly off the rails. Brussels can no longer insist it’s a domestic Spanish issue. Because Puidgemont is in …. Brussels.

European Arrest Warrant Issued For Catalan Leader Carles Puigdemont (G.)

A Spanish judge has issued an international arrest warrant for Catalonia’s ousted president a day after she jailed eight members of the region’s separatist government pending possible charges over last week’s declaration of independence. In the latest twist in Spain’s worst political crisis in four decades, a national court judge on Friday issued a European arrest warrant for Carles Puigdemont in response to a request from state prosecutors. Puigdemont flew to Brussels earlier this week with a handful of his deposed ministers after Spanish authorities removed him and his cabinet from office for pushing ahead with the declaration despite repeated warnings that it was illegal. Puigdemont’s Belgian lawyer has already said his client will fight extradition without seeking political asylum.

Puigdemont was summoned to appear at Spain’s national court on Thursday to give evidence relating to possible charges of sedition, rebellion and misuse of public funds, but failed to appear. He has said he would only return to Spain if he were offered guarantees that the judicial process he would face were fair. Late on Friday, Puigdemont told the Belgian public TV channel RTBF that he would put his faith in the Belgian courts. He said: “I will not flee from justice. I will go towards justice, but real justice. I’ve told my lawyers to tell the Belgian justice system that I’m completely available to cooperate. “It’s obvious it’s politicised. The guarantees are not there for a fair, independent trial.”

It was Puigdemont first interview since arriving in Brussels on Monday and it he claimed there was “enormous influence of politics over the judiciary in Spain”. He said: “It’s not normal that we risk 30 years in prison, it’s extremely barbaric, we can not talk about democracy.” Puigdemont said he was ready to stand in the election, adding: “It’s possible to run a campaign from anywhere. We consider ourselves a legitimate government. “There must be a continuity to tell the world what’s going on in Spain … It’s not with a government in jail that the elections will be neutral, independent, normal.”

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Better make it a national emergency right now.

America’s Opioid Crisis Is About To Get Worse (ZH)

The simple chart below from the United Nation’s Office on Drugs and Crime beautifully illustrates the next leg up in America’s opioid crisis. If you thought today’s situation was bad – think again. Afghanistan, the world’s largest producer of opium just logged a record crop harvest this year doubling last year’s production. Some how – some way, Afghanistan’s opium will find its way into a neighborhood near you. According to VOANEWS, Last year, poppies were cultivated on 201,000 hectares, yielding 4,700 tons of opium, up 46% from 2015. Sources told VOA’s Pashto service more than 10,000 tons of opium were produced this year. Opium then can be refined into heroin. The U.N. Office on Drugs and Crime estimated that opium accounted for some 16% of the country’s GDP last year, including more than two-thirds of the entire agricultural sector. In addition to fueling insecurity, violence and insurgency, the drug production is discouraging private and public investment, a UNODC report said.

This is a bad sign for President Trump who opted to call the opioid crisis a ‘public emergency’ rather than a full-blown ‘national emergency’. Highlights from Trump’s opioid crisis speech: In 2016, more than two million Americans had an addiction to prescription or illicit opioids. Since 2000, over 300,000 Americans have died from overdoses involving opioids. Drug overdoses are now the leading cause of injury death in the United States, outnumbering both traffic crashes and gun-related deaths. In 2015, there were 52,404 drug overdose deaths — 33,091 of those deaths, almost two-thirds, involved the use of opioids. The situation has only gotten worse, with drug overdose deaths in 2016 expected to exceed 64,000. This represents a rate of 175 deaths a day.

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What happens when you transfer your food production abroad. Look, Cuba and Russia used it to their advantage.

‘No Deal’ Brexit To Add £930 A Year To UK Shopping Bills (G.)

Households face increases of up to £930 in their annual shopping bills if Britain walks away from Brexit talks without a trade deal, according to new research that reveals a disproportionate impact on poorer families and the unemployed. Meat, vegetables, dairy products, clothing and footwear would be subject to the largest consumer price rises under a “no-deal” scenario, according to a study published in the authoritative National Institute Economic Review, adding to inflationary pressures that have already forced the first interest rate rise in a decade this week. Stalled negotiations resume next week in Brussels, but the government is also about to publish a trade bill that would result in Britain being required to apply swingeing new tariffs on European imports if it falls back on World Trade Organisation rules.

Since WTO tariffs are highest for fresh food – reaching 45% for dairy products and 37% for meat – and much of this is currently imported from Europe, the team of economists predict an inflationary surge that could match that already inflicted by the falling pound. This would impact most on those least able to afford it, as poorer households typically spend a much higher proportion of their income on food and other essentials. For the 2m worst-affected households, the study predicts their weekly expenditure will rise by 2-4.7%, equivalent to £400-930 extra a year. “The overall increase in price in the affected goods is estimated to be 2.7% and this translates into an increase in the overall cost of living of 0.8-1.1% for a typical family, with the unemployed and families, those with children and pensioners hit hardest,” conclude the economists from the University of Sussex and Resolution Foundation.

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America takes revenge on Chavez.

Stalked By Default Fears, Venezuela Calls Creditor Meeting (AFP)

Venezuela on Friday called foreign creditors to a November 13 meeting in Caracas aiming to restructure its estimated $150 billion debt, as credit-rating agencies dealt the crisis-stricken country another blow with double downgrades. Standard & Poor’s cut the nation’s long-term foreign currency rating to “CC” from “CCC-” over growing concerns of the risk of a debt default in the oil-producing country, while fellow agency Fitch cut the long-term debt rating to “C” from “CC.” The increasingly dire warnings followed President Nicolas Maduro’s calls to “investors across the whole world and to holders of Venezuelan debt” to attend a Caracas meeting November 13 “to start a process to refinance and renegotiate the external debt.”

His vice president, Tareck El Aissami, who is leading a commission tasked with the restructuring, said the government is seeking “sovereign commitments” for a debt renegotiation. Flanked by the ministers in charge of the economy, finance and energy, El Aissami confirmed the country had on Friday started to pay out $1.2 billion due to service the debt of state oil company PDVSA. Maduro announced Thursday that Venezuela would begin talks to refinance the debt immediately after that payment was made. El Aissami, one of the Venezuelan officials sanctioned by the United States due to alleged ties to drug trafficking, said the talks with creditors will “establish the groundwork to renegotiate the terms of the foreign debt of the Republic and of PDVSA.”

“We will begin a sovereign renegotiation of our debt and we will continue to comply fully, transparently, as our government has done historically,” he said in a televised statement. He noted that since 2014 Venezuela, which has the largest proven crude oil reserves in the world, has paid nearly $72 billion in principal and interest payments on the debt. Maduro has repeatedly blamed the United States for the country’s woes, saying Washington is trying to strangle Venezuela with sanctions. US sanctions imposed on Venezuela in August ban US trade in any new bonds issued by the Venezuelan government or PDVSA — a needed step in any restructuring. El Aissami denounced the “continued aggression, permanent sabotage, blockade and financial persecution” he said US President Donald Trump has imposed on the people of Venezuela.

But he said the sanctions really hurt bondholders and financial institutions. Much of Venezuela’s debt is held by China and Russia, to be paid off in oil – the resource that underpins the Venezuelan economy. The country has less than $10 billion in foreign currency reserves. Analysts were pessimistic about Venezuela’s chances of successfully restructuring its debt. “Venezuela’s options to keep up with its payments are shrinking rapidly, mainly because any restructuring needs to be matched with clear and credible economic reforms capable of winning the trust and support of bond-holders,” said Diego Moya-Ocampos, an analyst at London-based IHS Markit.

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People will make themselves sick, self harm, just to get off the islands.

The Greek Island Camp Where Only The Sick Or Pregnant Can Leave (G.)

Eida was two months pregnant when she suffered a miscarriage. A month later, the 18-year-old Syrian refugee still feels angry and despondent. Not just that she lost a child. But that being pregnant was her ticket off the Greek island of Samos – and out of a squalid, barren, barb-wired camp. The young woman is one of around 3,000 refugees in Samos, one of the five Greek “hotspot” islands in the eastern Aegean Sea, designated by the EU to act as a barricade against massive irregular migrant arrivals from Turkey. Since March 2016, when Brussels concluded a controversial agreement with Ankara to curb migrant flows, only vulnerable cases are transferred from the hotspots to the Greek mainland. Eida had hoped to become one of those cases.

The rest are left with two options: languish under deplorable conditions in the camps until their asylum claims are examined, or pay local smuggling networks €1,000 or more to get ferried to the mainland. Anastasia Theodoridou, head of social services at Samos state hospital, says she routinely deals with cases like Eida’s. “Dozens of women come to the hospital desperate to find out they are pregnant. Other refugees are eager for a diagnosis of any serious condition. And if there is nothing wrong with them, they bring their spouses and children. Maybe one of them might have a chance of a diagnosis.” According to internal documents, the Samos hospital has handled 7,857 visits by refugees since the start of the year.

The grotesque paradox of refugees hoping to be ill to get favourable treatment casts a shadow on the EU’s narrative about the success of its response to the refugee crisis.The rosy outlook from Brussels is often based on statistics that show a sharp reduction in irregular daily crossings and deaths in the Aegean. This in turn has resulted in a broad desertion of the tragedy by the international community: journalists have long since gone home, NGOs are packing up, volunteers are few and far between and official funding has been reduced. But despite substantial EU support to Athens – €430m has been contracted according to the European commission – conditions at the Greek hotspots remain appalling. With the focus now shifting to refugees crossing the sea from Libya, Tunisia or Algeria, the situation here is still no less dramatic than a year ago. It is still a massive crisis, albeit a somewhat forgotten one.

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May 202017
 
 May 20, 2017  Posted by at 9:05 am Finance Tagged with: , , , , , , , , , ,  


Minor White Windowsill Daydreaming Rochester NY 1958

 

The Housing Moment Investors Dread Is Here (DDMB)
Home Ownership Among Young UK Families Halves In 20 Years (TiM)
A Monster Eating the Nation (Jim Kunstler)
Democrats Are Falling For Fake News About Russia (Vox)
Harvard Study Reveals Extent of Anti-Trump Media Bias (HeatSt.)
Comey’s 2007 Brush With Scandal: Jim’s Loyalty Was More To Chuck Schumer (SD)
Constitutional Crisis In Washington? More Like Attempted Coup (David Goldman)
Brazil Plea-Bargain Testimony Says President Took $4.6 Million In Bribes (R.)
Maduro to Trump: ‘Get Your Dirty Hands Off Venezuela!’ (R.)
Theresa May To Create New, Government Controlled Internet in UK (Ind.)
Arctic Stronghold of World’s Seeds Flooded After Permafrost Melts (G.)
Varoufakis Claims Tsipras Pressured Him To Accept Creditors’ Demands (K.)
‘They Stole My Money’: Greek Dreams Of Retirement Turn Sour (AP)
Teen Refugees Trapped In Greece Turn To Prostitution (Spiegel)

 

 

Cracks in the mirage.

The Housing Moment Investors Dread Is Here (DDMB)

Amid the carnage in the auto sector, economists have sought solace in the comforts of home, sweet home. A recent Census release suggests that Millennials, long sidelined, have finally started to tiptoe into the home-buying market. The reception to the data was so effusive that other reports, suggesting housing has reached a much different sort of turning point, were lost in the fray. The good news is that the trend is unequivocal, based purely on supply and demand. The bad news is in the actual message. The May University of Michigan Consumer Sentiment survey showed a six-year low among those who think it’s a good time to buy a house and a 12-year high among those who say it’s a good time to sell. Disparities of this breadth tend to coincide with break points and that’s just where we’ve landed in the cycle.

The beginning of May officially marked the advent of a buyers’ market, defined simply as sellers outnumbering buyers by a wide enough margin to trigger falling prices. Yes, it’s the moment buyers have been waiting for. It is also the moment private equity investors, those who’ve crowded out natural buyers, have been dreading. Three factors determine home sales: interest rates, unemployment and prices. The recent decline in interest rates has provided some semblance of relief; purchase applications have bounced off April’s levels, when they were down four% over last year. April and May are obviously critical to the spring sales season. The low unemployment rate would seem to be a huge plus if it wasn’t for the stress building around thousands of layoff announcements across the retail and auto sectors that won’t find their way into this most lagging of economic indicators for months.

That is not to say those getting pink slips don’t know their fate, which should influence home sales going forward. Price is the one bright spot, with one glaring caveat: Falling home prices tend to be associated with a negative macroeconomic backdrop, which does not bode well for any buyer of, well, anything. Dig into the Federal Reserve’s recently released first quarter Senior Loan Officer Survey and you will see nothing of note on the residential mortgage side – banks reported that both loan demand and lending standards remained unchanged in the first three months of the year. But that is the here and now. Demand and supply in the auto sector, where pricing has been under pressure for some time, looked quite similar to that for houses several months back.

According to the Fed survey, at minus 13.3%, demand for auto loans flat-lined in deeply negative territory, as was the case in last year’s fourth quarter, the worst levels of the current expansion. This data point corroborated the Michigan survey, which showed that those who said it was a good time to buy a car fell to the lowest level since August 2014. Meanwhile, demand for credit card loans slid to minus 10.2% from minus 8.3% in the last three months of last year. In the event you’re detecting a trend, households are sending out distress signals that have just begun to be picked up in housing, even as household debt levels recapture their pre-crisis highs.

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A radical change to an entire society, and one that will take decades to absorb.

Home Ownership Among Young UK Families Halves In 20 Years (TiM)

The number of young family owning their own homes has halved across large parts of the country in the space of a generation, and the struggle to get on the housing ladder is not restricted to the South East. Research by The Resolution Foundation found that 31% of 25 to 34-year-olds surveyed were home owners in 2016, compared to 58% in 1994. Regionally, 30% of those surveyed in West Yorkshire owned homes last year, compared to 61% in 1994. Similarly, in Greater Manchester, home ownership levels fell to 29% from 59% over the same 22-year period. The South West also suffered a decline, to 36% last year from 62% in 1994, while East Anglia fell to 34% from 61% in the same period. The decrease was most pronounced in outer London, where home ownership dropped to 20% in 2016 from 55% in 1994.

Big falls were also recorded in other areas of the South East including Brighton, Southampton, Reading and Milton Keynes, with home ownership in the younger age group bracket declined from to 34% last year from 64% in 1994. The Resolution Foundation argued that such a ‘seismic shift’ in home ownership puts the younger generation in a very different position from that of the older, baby boomer generation, leaving many more young families living in the private rented sector. Lindsay Judge, a senior policy analyst at the Resolution Foundation, said: ‘London house prices always dominate the headlines, but with all eyes on the capital we’re missing the bigger picture. ‘From Bristol to East Anglia and up to West Yorkshire, large swathes of young families across the country simply cannot afford to buy their own home.’This has implications for their living standards in the here and now, but also in the future when their children grow up and they approach retirement without this key asset to draw upon in old age.

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“Why do you suppose nations employ foreign ministers and ambassadors, if not to conduct conversations at the highest level with other national leaders? And might these conversations include matters of great sensitivity, that is, classified information?”

A Monster Eating the Nation (Jim Kunstler)

Is there any question now that the Deep State is preparing to expel President Donald Trump from the body politic like a necrotic organ? The Golden Golem of Greatness has floundered pretty badly on the job, it’s true, but his mighty adversaries in the highly politicized federal agencies want him to fail spectacularly, and fast, and they have a lot of help from the NY Times / WashPo / CNN axis of hysteria, as well as such slippery swamp creatures as Lindsey Graham. There are more problematic layers in this matter than in a Moldavian wedding cake. America has been functionally ungovernable for quite a while, well before Trump arrived on the scene. His predecessor managed to misdirect the nation’s attention from the cumulative dysfunction with sheer charm and supernatural placidity — NoDrama Obama.

But there were a few important things he could have accomplished as chief exec, such as directing his attorney general to prosecute Wall Street crime (or fire the attorney general and replace him with someone willing to do the job). He could have broken up the giant TBTF banks. He could have aggressively sponsored legislation to overcome the Citizens United SOTUS decision (unlimited corporate money in politics) by redefining corporate “citizenship.” Stuff like that. But he let it slide, and the nation slid with him down a greasy chute of political collapse. Which we find embodied in Trump, a sort of tragicomic figure who manages to compound all of his other weaknesses of character with a childish impulsiveness that scares folks. It is debatable whether he has simply been rendered incompetent by the afflictions heaped on by his adversaries, or if he is just plain incompetent in, say, the 25th Amendment way.

I think we’ll find out soon enough, because impeachment is a very long and arduous path out of this dark place. The most curious feature of the current crisis, of course, is the idiotic Russia story that has been the fulcrum for levering Trump out of the White House. This was especially funny the past week with the episode involving Russian Foreign Minister Lavrov and Ambassador Kislyak conferring with Trump in the White House about aviation security around the Middle East. The media and the Lindsey Graham wing of the Deep State acted as if Trump had entertained Focalor and Vepar, the Dukes of Hell, in the oval office. Why do you suppose nations employ foreign ministers and ambassadors, if not to conduct conversations at the highest level with other national leaders? And might these conversations include matters of great sensitivity, that is, classified information? If you doubt that then you have no understanding of geopolitics or history.

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The writer starts off quite right, but then veers off into this incomprehensible stuff: “There are even legitimate reasons to believe that Trump’s campaign worked with Russian hackers to undermine Hillary Clinton. That may or may not turn out to be true, but it is least plausible and somewhat supported by the available evidence.”

Legitimate reasons that may not be true? “Somewhat” supported by evidence? That’s where I stop reading.

Democrats Are Falling For Fake News About Russia (Vox)

President Donald Trump is about to resign as a result of the Russia scandal. Bernie Sanders and Sean Hannity are Russian agents. The Russians have paid off House Oversight Chair Jason Chaffetz to the tune of $10 million, using Trump as a go-between. Paul Ryan is a traitor for refusing to investigate Trump’s Russia ties. Libertarian heroine Ayn Rand was a secret Russian agent charged with discrediting the American conservative movement. These are all claims you can find made on a new and growing sector of the internet that functions as a fake news bubble for liberals, something I’ve dubbed the Russiasphere. The mirror image of Breitbart and InfoWars on the right, it focuses nearly exclusively on real and imagined connections between Trump and Russia. The tone is breathless: full of unnamed intelligence sources, certainty that Trump will soon be imprisoned, and fever dream factual assertions that no reputable media outlet has managed to confirm.

Twitter is the Russiasphere’s native habitat. Louise Mensch, a former right-wing British parliamentarian and romance novelist, spreads the newest, punchiest, and often most unfounded Russia gossip to her 283,000 followers on Twitter. Mensch is backed up by a handful of allies, including former NSA spook John Schindler (226,000 followers) and DC-area photographer Claude Taylor (159,000 followers). There’s also a handful of websites, like Palmer Report, that seem devoted nearly exclusively to spreading bizarre assertions like the theory that Ryan and Sen. Majority Leader Mitch McConnell funneled Russian money to Trump — a story that spread widely among the site’s 70,000 Facebook fans. Beyond the numbers, the unfounded left-wing claims, like those on the right, are already seeping into the mainstream discourse.

In March, the New York Times published an op-ed by Mensch instructing members of Congress as to how they should proceed with the Russia investigation (“I have some relevant experience,” she wrote). Two months prior to that, Mensch had penned a lengthy letter to Vladimir Putin titled “Dear Mr. Putin, Let’s Play Chess” — in which she claims to have discovered that Edward Snowden was part of a years-in-the-making Russian plot to discredit Hillary Clinton. Last Thursday, Sen. Ed Markey (D-MA) was forced to apologize for spreading a false claim that a New York grand jury was investigating Trump and Russia. His sources, according to the Guardian’s Jon Swaine, were Mensch and Palmer:

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First, media exposure was a main factor in winning Trump the election. Now, not so much.

Harvard Study Reveals Extent of Anti-Trump Media Bias (HeatSt.)

A major new study out of Harvard University has revealed the true extent of the mainstream media’s bias against Donald Trump. Academics at the Shorenstein Center on Media, Politics and Public Policy analyzed coverage from Trump’s first 100 days in office across 10 major TV and print outlets. They found that the tone of some outlets was negative in as many as 98% of reports, significantly more hostile than the first 100 days of the three previous administrations:

The academics based their study on seven US outlets and three European ones. In America they analyzed CNN, NBC, CBS, Fox News, the New York Times, the Washington Post and the Wall Street Journal. They also took into account the BBC, the UK’s Financial Times and the German public broadcaster ARD. Every outlet was negative more often than positive. Only Fox News, which features some of Trump’s most enthusiastic supporters and is often given special access to the President, even came close to positivity. Fox was ranked 52% negative and 48% positive. The study also divided news items across topics. On immigration, healthcare, and Russia, more than 85% of reports were negative. On the economy, the proportion was more balanced – 54% negative to 46% positive:

The study highlighted one exception: Trump got overwhelmingly positive coverage for launching a cruise missile attack on Syria. Around 80% of all reports were positive about that.

The picture was very different for other recent administrations. The study found that President Obama’s first 100 days got a good write-up overall – with 59% of reports positive. Bill Clinton and George W Bush got overall negative coverage, it found, but to a much lesser extent than Trump. Clinton’s first 100 days got 40% positivity, while Bush’s got 43%. Trump has repeatedly claimed that his treatment by the media is unprecedented in its hostility. This study suggests that, at least when it comes to recent history, he’s right.

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Comey has a past.

Comey’s 2007 Brush With Scandal: Jim’s Loyalty Was More To Chuck Schumer (SD)

[..] the current episode is not the first time Comey and his associates plotted to oust a sitting Republican official through highly orchestrated political theater and carefully crafted narratives in which Comey is the courageous hero bravely fighting to preserve the rule of law. To understand how Comey came to be FBI director in the first place, and how he operates in the political arena, it is important to review the last scandal in which Comey had a front-row seat: the 2007 U.S. attorney firings and the fight over the 2004 reauthorization of Stellar Wind, a mass National Security Agency (NSA) surveillance program designed to mitigate terrorist threats in the wake of the 9/11 attacks. The pivotal scene in the Comey-crafted narrative, a drama that made Comey famous and likely paved the road to his 2013 appointment by President Barack Obama to run the FBI, occurred in a Beltway hospital room in early 2004.

In Comey’s view, Comey was the last honest man in Washington, the only person standing between a White House that rejected any restraints on its power, and the rule of law protecting Americans from illegal mass surveillance. A former White House counsel and attorney general with extensive first-hand experience dealing with Comey, however, paints a very different picture of what happened in that hospital room, and disputes numerous key details. In this account, Comey’s actions showcase a duplicitous, secretive schemer whose true loyalties were not to the officials to whom he reported, but to partisan Democrats like Senate Minority Leader Chuck Schumer (D-N.Y.). To fully understand and appreciate Jim Comey’s approach to politics, the writings and testimony of Alberto Gonzales, who served as both White House counsel and attorney general during the events in question and is intimately aware of Comey’s history of political maneuvering, is absolutely essential.

Gonzales’s descriptions of his interactions with Comey, included in his 2016 book “True Faith And Allegiance,” are detailed and extensive. While his tone is measured, the language he uses to describe Comey’s actions in 2004 and 2007 leaves little doubt about the former top Bush official’s views on Comey’s character. Gonzales’s opinion is clearly colored by the fact that Comey cravenly used him to jumpstart his own political career by going public with surprise (and questionable) testimony that Gonzales had attempted to take advantage of a deathly ill man in order to ram through authorization of an illegal surveillance program. Bush’s Attorney General John Ashcroft had taken ill and was in the hospital at a pivotal time. The legal authorization of a surveillance program meant to find and root out terrorist threats was days from expiring.

What happened in Ashcroft’s hospital room in March of 2004 later became political fodder for a hearing in which Senate Democrats used Comey to dredge up the 2004 hospital meeting to tar Gonzales’ credibility and suggest he was unfit to continue serving as attorney general. As the 2004 and 2007 sagas show, Comey is clearly no stranger to using the unarguably legal dismissal of government employees as the backdrop for casting himself as the story’s protaganist standing up to the forces of corruption. “[I] told my security detail that I needed to get to George Washington Hospital immediately. They turned on the emergency equipment and drove very quickly to the hospital,” Comey testified. “I got out of the car and ran up — literally ran up the stairs with my security detail.” “I was concerned that, given how ill I knew the attorney general was, that there might be an effort to ask him to overrule me when he was in no condition to do that,” Comey said.

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It’s a politics and media crisis.

Constitutional Crisis In Washington? More Like Attempted Coup (David Goldman)

This is NOT a Constitutional crisis, contrary to press hype, but an attempted coup, as a senior Republican statesman told a private briefing this week. As Prof. Jonathan Turley of George Washington University wrote yesterday at TheHill.Com, the much-ballyhooed Comey memo is “pretty thin soup” as far as obstruction of justice is concerned. “Encouraging leniency or advocating for an associate may be improper,” Prof. Turley added, but it doesn’t come close to the legal threshold for impeachment, especially because no criminal proceedings were underway or even contemplated against Gen. Flynn. What exactly is going on? The Democrats never accepted the Trump election victory, and neither did the McCain wing of the Republican Party, which was humiliated and sidelined by Trump. The Wall Street Journal editorial page published a signed op-ed yesterday claiming that Trump’s alleged leak of covert intelligence to Russian Foreign Minister Lavrov showed his unfitness for office.

Presidents and Cabinet members leak secret intelligence frequently, but whether they are held to account for it is a political matter. Obama and his then Defense Secretary Leon Panetta leaked the fact that Seal Team 6 had killed Osama bin Laden as well as the fact that a Pakistani physician had tipped the US off to his whereabouts, life-threatening leaks for which Obama was given a free pass. The object of all of this, said the Republican statesman, is to persuade a sufficient number of Republican congressman and senators to abandon Trump and declare him “unfit” for office. Nothing quite like this ever has happened in American politics. Trump will NOT be caught in an impeachable offense, but his detractors will NOT give up–so a prolonged “cold civil war” (Prof. Angelo Codevilla’s phrase) is likely to paralyze policy-making in Washington for some time. That can’t be good for the stock market.

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He shouldn’t last the weekend.

Brazil Plea-Bargain Testimony Says President Took $4.6 Million In Bribes (R.)

Brazil’s top court released plea-bargain testimony on Friday accusing President Michel Temer and his two predecessors of receiving millions of dollars in bribes, the most damaging development yet in a historic political corruption probe. The testimony made public by the Supreme Court is from executives of the world’s largest meatpacking company, and raises serious doubts about whether Temer can maintain his grip on the presidency. The scandals that have engulfed Brazil’s political class and many business elites reduce the chances that Temer, a conservative who took office after leftist former President Dilma Rousseff was impeached last year, can push through economic reforms crucial for Latin America’s biggest country to recover from its worst recession on record.

The Supreme Court on Thursday said it approved an investigation of Temer for corruption and obstruction of justice. Calls for his resignation intensified, including an editorial in the O Globo newspaper, which is normally criticized by leftists for backing conservative politicians. “This is easily the worst moment in Brazil since we returned to democracy,” said Claudio Couto, a political scientist at the Getulio Vargas Foundation, a top university, calling the claims “the mother of all plea bargains.” “This testimony is hitting everyone, all the major political players and, most importantly, a sitting president,” he added.

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How is it possible that in no western media reports on Venezuela the CIA is ever mentioned? Think they left when Chavez died? Think the country implodes like this all by itself?

Maduro to Trump: ‘Get Your Dirty Hands Off Venezuela!’ (R.)

Venezuelan President Nicolas Maduro blasted Donald Trump on Friday after a fresh round of U.S. sanctions and strong condemnation of his socialist government from the U.S. leader. “Enough meddling … Go home, Donald Trump. Get out of Venezuela,” Maduro thundered in a speech carried on live TV. “Get your dirty hands out of here.” The Trump administration imposed sanctions on the chief judge and seven other members of Venezuela’s Supreme Court on Thursday as punishment for annulling the opposition-led Congress in a series of rulings this year. The new sanctions package was aimed at stepping up pressure on Maduro and his loyalists following a crackdown on street protests and efforts to consolidate his rule of the South American oil-producing country. At the White House on Thursday, Trump expressed dismay at how once-booming Venezuela was now mired in poverty, saying “it’s been unbelievably poorly run” and calling the humanitarian situation “a disgrace to humanity.”

Maduro had initially urged the world to give Trump a chance after he was elected in November but his government unleashed its strongest condemnation to date of the Republican president. “President Trump’s aggressions against the Venezuelan people, its government and its institutions have surpassed all limits,” said a government statement that accused Washington of seeking to destabilize Venezuela and foment foreign intervention. The statement also accused Washington of financing the Venezuelan opposition while ignoring problems at home like income inequality and rights violations. “The extreme positions of a government just starting off only confirmed the discriminatory, racist, xenophobic, and genocidal nature of U.S. elites against humanity and its own people, which has now been heightened by this new administration which asserts white Anglo-Saxon supremacy,” the statement said.

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Classic. Using fear, of terrorism, of pornography, etc., to clamp down on everyone’s freedom, according to a certain party’s views. No privacy for you, guys. Use your votes wisely.

Theresa May To Create New, Government Controlled Internet in UK (Ind.)

Theresa May is planning to introduce huge regulations on the way the internet works, allowing the government to decide what is said online. Particular focus has been drawn to the end of the manifesto, which makes clear that the Tories want to introduce huge changes to the way the internet works. “Some people say that it is not for government to regulate when it comes to technology and the internet,” it states. “We disagree.” Senior Tories confirmed to BuzzFeed News that the phrasing indicates that the government intends to introduce huge restrictions on what people can post, share and publish online. The plans will allow Britain to become “the global leader in the regulation of the use of personal data and the internet”, the manifesto claims.

It comes just soon after the Investigatory Powers Act came into law. That legislation allowed the government to force internet companies to keep records on their customers’ browsing histories, as well as giving ministers the power to break apps like WhatsApp so that messages can be read. The manifesto makes reference to those increased powers, saying that the government will work even harder to ensure there is no “safe space for terrorists to be able to communicate online”. That is apparently a reference in part to its work to encourage technology companies to build backdoors into their encrypted messaging services – which gives the government the ability to read terrorists’ messages, but also weakens the security of everyone else’s messages, technology companies have warned.

The government now appears to be launching a similarly radical change in the way that social networks and internet companies work. While much of the internet is currently controlled by private businesses like Google and Facebook, Theresa May intends to allow government to decide what is and isn’t published, the manifesto suggests.

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They never thought about this?

Arctic Stronghold of World’s Seeds Flooded After Permafrost Melts (G.)

It was designed as an impregnable deep-freeze to protect the world’s most precious seeds from any global disaster and ensure humanity’s food supply forever. But the Global Seed Vault, buried in a mountain deep inside the Arctic circle, has been breached after global warming produced extraordinary temperatures over the winter, sending meltwater gushing into the entrance tunnel. The vault is on the Norwegian island of Spitsbergen and contains almost a million packets of seeds, each a variety of an important food crop. When it was opened in 2008, the deep permafrost through which the vault was sunk was expected to provide “failsafe” protection against “the challenge of natural or man-made disasters”. But soaring temperatures in the Arctic at the end of the world’s hottest ever recorded year led to melting and heavy rain, when light snow should have been falling.

“It was not in our plans to think that the permafrost would not be there and that it would experience extreme weather like that,” said Hege Njaa Aschim, from the Norwegian government, which owns the vault. “A lot of water went into the start of the tunnel and then it froze to ice, so it was like a glacier when you went in,” she told the Guardian. Fortunately, the meltwater did not reach the vault itself, the ice has been hacked out, and the precious seeds remain safe for now at the required storage temperature of -18C. But the breach has questioned the ability of the vault to survive as a lifeline for humanity if catastrophe strikes. “It was supposed to [operate] without the help of humans, but now we are watching the seed vault 24 hours a day,” Aschim said. “We must see what we can do to minimise all the risks and make sure the seed bank can take care of itself.”

The vault’s managers are now waiting to see if the extreme heat of this winter was a one-off or will be repeated or even exceeded as climate change heats the planet. The end of 2016 saw average temperatures over 7C above normal on Spitsbergen, pushing the permafrost above melting point. “The question is whether this is just happening now, or will it escalate?” said Aschim. The Svalbard archipelago, of which Spitsbergen is part, has warmed rapidly in recent decades, according to Ketil Isaksen, from Norway’s Meteorological Institute. “The Arctic and especially Svalbard warms up faster than the rest of the world. The climate is changing dramatically and we are all amazed at how quickly it is going,” Isaksen told Norwegian newspaper Dagbladet.

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I don’t know if they still talk.

Varoufakis Claims Tsipras Pressured Him To Accept Creditors’ Demands (K.)

Former finance minister Yanis Varoufakis on Friday hit out at Prime Minister Alexis Tsipras, claiming that the premier had tried to scare him into yielding to creditors’ demands. “In the summer of 2015 Alexis Tsipras told me that I should fear a new Goudi,” Varoufakis told VICE magazine, referring to a military coup that took place in Greece in 1909 amid simmering social tensions. The former minister, who has launched his own party, DiEM25, said the alleged statement struck him as a threat aimed at forcing him to agree with Tsipras’s decision to give in to creditors. In a Skai TV interview last week, Varoufakis said Greece “will become Kosovo, a protectorate run by an employee of the European Union.”

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Greece’s problem is public debt, not private debt. The people did not cause the crisis, they only pay for it.

‘They Stole My Money’: Greek Dreams Of Retirement Turn Sour (AP)

It was supposed to be a time to look forward to. After decades of work, retirement was for many meant to provide a chance to slow down and enjoy life. A holiday, an evening out with old friends, the odd fishing trip. Instead, many Greek pensioners say they are struggling to get by. The government has repeatedly cuts old age benefits as part of the country’s three international bailouts and many retirees now say they are at breaking point financially. Some have unemployed children they try to help on shrinking pensions, others are seeing rising taxes eat into lifetime savings. A new austerity bill approved in parliament early Friday cuts their pensions even further, putting their plight in focus.

Greece once had a generous pension system – too generous to be sustainable, especially with an aging population. Retirement was possible from as early as the age of 55 after 30 years of work. Many had extra perks: public sector employees could retire as early as 52. Some women with young children could retire with a reduced pension at 50. But the financial crisis left Greece reliant on international creditors, who pushed for economic change – not least to pensions. The standard retirement age is now 67. Many early retirement provisions have been abolished. Including pensions, incomes have dropped 40% over the last seven years of crisis. Here is a look at the problem through the stories of four pensioners.

Mina Griva, 78, widow and former factory worker Griva’s husband, who worked in a steel plant in Greece, died eight years ago. Her initial widow’s pension of €998 ($1,110) and a €300 supplementary pension have been cut to €560 and €150 respectively. “They’ve destroyed us,” said Griva, who now helps out daily at a municipal care center for the elderly. “Pensioners are crying.” A mother of five, she uses her pension to help her son, who’s been unemployed for five years. She moved out of her small Athens apartment to give it to him, and lives in a single room on the last floor of the building. Now, she avidly watches political talk shows on TV to figure out how much further her pension will drop.

Griva left Greece in 1964 and worked for 15 years in Germany, initially as a cleaner in a cheese factory and later working an ironing press in a clothing factory. Times were tough in Greece then, and she worked double eight-hour shifts to send money home to her family. She saved, and eventually had enough to secure homes for her children, and a small apartment for herself. She thought she was securing her family’s future. “We left here to build something,” said Griva. Instead, the austerity measures ate into their lives, with new property taxes, layoffs and income cuts. “Now you can’t even buy a bread ring for your grandchildren,” she said. “I don’t know where this will go. Things are very, very hard.”

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Damn you, Brussels. Damn you, Merkel, Rutte, Hollande, Cameron, Renzi. You created this.

Teen Refugees Trapped In Greece Turn To Prostitution (Spiegel)

Mohammed is approached by a middle-aged man wearing greasy beige pants, a blue shirt and a blue baseball cap. Although the man speaks Greek, the 17-year-old boy from Afghanistan knows exactly what he wants. “No,” Mohammad repeatedly says in English, his voice cracking and his eyes filling with tears. But the man keeps pushing. “Come with me. I will give you food, pay you.” The man only stops when he realizes he is being watched. He then grudgingly walks away and sits down on a nearby bench. From there, he starts scouring the field again, searching for another boy. It was broad daylight on a sunny Tuesday morning on Victoria Square in the heart of Athens. The square has been a meeting place and a makeshift home for thousands of migrants since the refugee crisis hit Greece two years ago – and now it is increasingly becoming a prostitution hub for underage refugees.

Mohammad hasn’t gone that far yet, but he says it is only a matter of time until he goes home with a man. He has just 30 euros left in his pocket, and he is quickly losing hope. “When this money runs out, I fear I will have no other choice but do what the others are doing. Have sex with these older men. What should I do? I have no place to stay, nothing to eat. Should I just die in the park?” he says, finally bursting into tears. Mohammed says he lost his parents in an attack in Afghanistan. He has been in Athens for a month, he says, after fleeing his home alone and reaching the Greek island of Lesbos last February, where he registered as a minor. He then claimed to be an adult to escape the violence in the island’s notorious Moria camp. Since then, despite looking very much like a teenager, with pimples, a small stature and thin voice, he has been turned away from shelters for minors.

When night comes, Mohammad rolls himself up in a blanket on a corner of the square. His only possession is a yellow envelope that he guards closely. Inside, he keeps his refugee registration papers and a single-page CV. According to Mohammad’s papers, he applied for asylum in Lesbos in November 2016. The date set for his interview is January 4, 2018. It is mostly boys from Afghanistan, Pakistan and Syria – who either came alone or were separated from their families along their perilous journey to Europe – who are now waiting for their refugee claims to be processed in Greece. In the meantime, the authorities are supposed to look after them, but there are only 53 shelters with 1,272 spots. Of the approximately 2,000 registered minors, about 800 are housed in large camps, are in police custody or are homeless.

[..] Everyone – the authorities, the NGO workers, the police – know what is going on. But nobody seems willing or able to do anything about it. And this despite the fact that the adult clients are breaking the law, despite the fact that various institutions have devoted themselves to protecting young refugees. But prostitution is booming because the system is failing. Because Greece doesn’t have the resources to take care of underage refugees. Because the processing of asylum applications is chaotic and authorities from one agency don’t know what authorities from other agencies are doing. And because the boys need to file criminal complaints before their clients can be prosecuted.

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