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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