mass migration Archives - The Automatic Earth

They shot him in the head.
Raided his home.
Impeached him twice.
Indicted him 91 times.
Threatened him with life in prison.

And today — Trump is the President of the United States & undisputed Commander in Chief of the Republican Party.

Keep fighting. Keep going. We will win🇺🇸 pic.twitter.com/qfr0TMarb7
— Benny Johnson (@bennyjohnson) May 20, 2026

https://twitter.com/elonmusk/status/2057337929589039126?s=20

The SpaceX team is incredible! https://t.co/eqSByVrEW0
— Elon Musk (@elonmusk) May 21, 2026

Obama was a one-man Trojan Horse for radical Islam. He flooded America with Muslims by the millions in the dark of night and funded Iran’s efforts to build nuclear weapons. Let’s face the fact that every conspiracy theory about this traitor was true. https://t.co/3UeHPe0K6k
— James Woods (@RealJamesWoods) May 21, 2026

Are they imitating themselves, or Trump?

• Iranian President: Won’t Back Down (ZH)

Iranian President Masoud Pezeshkian has stated, “We will not bow our heads, our ministers and experts are working day and night, without a single day off.” He added, per state sources: “We are willing to sacrifice as much as possible for the honor and pride of Iran, and we are not afraid of martyrdom.” And just like that… Markets reversed earlier gains as Iran’s President said on state TV that they won’t back down in talks. The momentum then picked up when a “high-level source” told Al-Arabiya that the Pakistani Army Chief will not head to Tehran tonight.

The Pakistani were supposed to head to Iran only when the reach of an agreement was in sight, so this kind of denies the earlier reports of a US and Iran draft agreement. US stock indices erased more than half of earlier gains. We’ve seen the same reaction in oil, FX and bond markets but now they are consolidating. Still, Al Jazeera is reporting that “negotiators are very close to reaching a deal, and are currently working on a draft text. At the same time, another source told Al Jazeera that it is too early to judge whether a serious, final agreement is within reach.”
IRNA has cited a Pakistani official who says the talks are “moving in the right direct” – though it’s anyone’s guess at this point. The prior reported draft did not take up the nuclear issue. Trump continues to press the nuclear issue. US President Donald Trump has again pledged to seize Iran’s stockpile of highly enriched uranium as part of any agreement over Tehran’s nuclear program.
“Look, we’re going to make sure they don’t have a nuclear weapon or we’re going to have to do something very drastic. I believe when it’s put to the people of our country, they will all agree we cannot let Iran get a nuclear weapon,” Trump told reporters at the White House. Asked whether Iran could retain its enriched uranium, Trump replied: “No, we will get it. We don’t need it, we don’t want it, we’ll probably destroy it after we get it. But we’re not going to let them have it.”

Russia’s the best we can do for him. If Trump agrees.

• Ayatollah Orders Highly-Enriched Uranium To Remain In Iran (ZH)

,The illusion of a grand diplomatic breakthrough in the Middle East is once again colliding with reality. The White House has been busy trying to paint a picture of a total capitulation by Tehran, which hasn’t been demonstrated given its consistent position defying Washington’s demands on the nuclear issue. According to two senior Iranian officials speaking to Reuters, Iranian Supreme Leader Mojtaba Khamenei has drawn a hard line in the sand, ordering that Iran’s stockpile of uranium enriched to 60% remain strictly inside Iranian territory.

Reuters underscores that “Ayatollah Mojtaba Khamenei’s order could further frustrate U.S. President Donald Trump and complicate talks on ending the U.S.-Israeli war on Iran.” “Israeli officials have told Reuters that Trump has assured Israel that Iran’s stockpile of highly enriched uranium, needed to make an atomic weapon, will be sent out of Iran and that any peace deal must include a clause on this,” the report continues.The officials noted that within Tehran, there is deep suspicion that the ceasefire is in fact “a tactical deception by the US,” designed to lull Iran into a “false sense of security… before the fighting resumes.”
The fresh directive from from the supreme leader flies directly in the face of the narrative being spun by Washington and Tel Aviv, given Israeli officials maintain that President Trump explicitly promised Israel that Iran’s highly enriched stockpile would be completely removed from the country as part of any negotiated settlement. Trump has also recently proclaimed this publicly, for example in a phone interview with CBS News last month, wherein he confidently proclaimed that Iran “agreed to everything” and would cooperate fully to ship its enriched uranium out of the country.
Extraction of nuclear material would of course rely heavily on the assumption of total Iranian compliance, given Trump has also lately appeared to rule out out a hostile invasion force, stating, “No. No troops.” There seems to be widespread agreement among national security officials at this point that some kind of special forces op to covertly go in and take it would be tantamount to a ‘suicide mission’. According to more of what Trump (prematurely) proclaimed in the prior CBS interview: “Our people, together with the Iranians, are going to work together to go get it. And then we’ll take it to the United States.” The reality is all along the two sides’ positions have been very far apart, and largely unbending:
And on a potential deal: “We’ll be getting it together because by that time, we’ll have an agreement and there’s no need for fighting when there’s an agreement. Nice right? That’s better. We would have done it the other way if we had to” – he sought to explain. At the moment, Iranian officials are reportedly reviewing the latest updated US proposals for peace, having reportedly asked Pakistan for time to assess and study the American points for negotiations.”

I don’t quite get it. The date on that is May 1. What gives?

• Trump Posts Article Laying Out How To Crush Tehran In Three Moves (ZH)

President Trump on Thursday posted to Truth Social a New York Post article which was first published over two weeks ago, on May 1st, with the headline “Here’s how to crush Tehran in three moves.” Trump’s new social media post, issued without additional comment, comes just after news of Iranian Supreme Leader Mojtaba Khamenei having drawn a hard line in the sand, ordering that Iran’s stockpile of uranium enriched to 60% remain strictly inside Iranian territory. So now the world awaits what’s next at a moment the White House has renewed threats of massive military strikes if Iran doesn’t quickly come to the table and conform.

The NY Post article had straight-faced and without a hint of intended irony proclaimed: “President Trump has the upper hand.” That statement was issued on day 63 of Trump’s Iran war. Today is day 83. What did the interim look like as the world’s most powerful military force has been unable to reopen the Strait of Hormuz, amid constant threats to take new, bigger military action – but which never actually materializes (at least not yet) no matter how many times the Iranians reject Washington’s terms?
The below timeline and outline, stretching from last week into this one, basically illustrates the weekly Trump pattern that’s been on display going back many weeks at this point:
Wed: Iran wants a deal. They called us
Thu: We are looking at proposals
Fri: We might be close. Very close
Sat: Iran knows what to do
Sun: OBLITERATION. TOTAL. COMPLETE. They have 24 hrs.
Mon: The storm is coming
Tue: I’m giving it more time
This is what ‘winning’ looks like according to the NY Post, apparently. The publication also feels itself in a position to give ‘advice’ and guidance to the White House on executing a war. “His best path forward is to pursue three lines of effort in parallel,” author Richard Goldberg (of Foundation for Defense of Democracies) wrote. It must be remembered that very recently a former senior official from FDD Action, the think tank’s lobbying arm, joined Trump’s Iran negotiating team – his name is Nick Stewart.
Here are the three:
• Sustain the blockade and accompanying economic warfare to destabilize the regime’s hold on the state;
• Remake the world in America’s energy dominance image to mitigate long-term price impacts while undermining China’s global ambition to defeat the United States;
• Order the US military to forge a path through the Strait of Hormuz to restore freedom of navigation on our terms not Tehran’s.
…if only simply ordering a military “path through” was that easy!
“You might call the latter Operation Epic Passage — a combined naval and air mission of self-defense that offers escort to tankers and restores freedom of navigation, all while making clear to Tehran the devastating consequences of breaking cease-fire,” Goldberg, who openly boasts of his close ties to the Israeli government, also wrote. He further offered the mission name of “Blockade Plus”. After the opening days and weeks of Operation Epic Fury, when it became clear that the large-scale US and Israeli bombardment would not produced regime change in Iran, pundits widely questioned whether the Trump White House actually had a plan, or long-term strategic vision for the military mission.
And now, after more than 80 days in, the public gets Trump posting a NY Post article by a hawkish FDD writer, which seems more focused merely on ways to mitigate the blowback and ‘make the best’ of a failed regime change operation, in the wake of the administration’s constantly evolving stated goals.

“..more than one billion Class B shares when and if the company establishes “a permanent human colony on Mars with at least one million inhabitants,”

How long do you think it will take to get one million people living on Mars? Will Musk live to see it?

• Elon Musk Wants a Trillion-Dollar Payday, but There’s One Little Catch (Green)

The world finally got a peek at SpaceX’s closely held financials, after Elon Musk’s closely held space launch company filed for its initial public offering on Wednesday — and the details made a bigger splash than one of the company’s Starships making an uncontrolled water landing. The first shocker is that Musk’s salary last year was just $54,000. That’s about the same as a new human resources assistant or an apprentice electrician. That’s the only small figure you’ll see in the rest of this column because after this, the zeros get added on in a hurry. You know what? Forget the tease, and let’s go straight to the biggest figure.

In SpaceX’s nearly 400-page S-1 filing with the U.S. Securities and Exchange Commission, the company projects a Total Addressable Market (TAM) of $28.5 trillion. That’s a two and an eight and a five followed by 11 zeros. TAM is business jargon for “What’s the size of our market if everybody who needed our product or service actually bought our product or service?” SpaceX’s TAM includes launch customers, Starlink users, and xAI (that’s the company’s AI division) compute services. It’s the company’s compute ambitions that account for the lion’s share of the TAM.
Of the $28.5 trillion, “only about $2 trillion is directly related to space or the company’s Starlink network,” Ars Technica reported. “The remaining $26.5 trillion is believed to come from AI, largely from enterprise applications.” I had no idea how big xAI had already gotten until the Wall Street Journal revealed Wednesday night that “SpaceX is renting out compute capacity across its two large data centers to Anthropic, for some $1.25 billion a month.” And Anthropic is a rival. It’s no small feat when your competitor pays you nine figures, 12 times a year, for the privilege of using the same data centers you use for your LLM to run theirs. Nice work if you can get it, right?
“We believe we have identified the largest TAM in human history,” the company boasted in its S-1 report. “We believe our next trillion-dollar market is AI compute, which we contemplate will leverage our rockets and satellites for massive orbital deployment.” Putting computer centers in orbit solves the power problem with unlimited solar, and also clears a lot of regulatory hurdles. By hundreds of miles. The problem, of course, is getting all those birds flying. In January, SpaceX applied to the FAA for permission to launch one million satellites into Earth’s orbit to power xAI. One million satellites might be nothing more than a dream, but Starship — aka The Most Powerful Rocket in the World and Getting More Powerful All the Time — is key to realizing just a fraction of it.
The launch window for Starship Flight Test 12 opens at 6:30 p.m. Eastern today. So what’s this about Musk’s trillion-dollar payday? Musk’s salary might not be any bigger than a typical base-level IT support specialist’s, but he also has two yuge equity packages based on stellar performance. In March, SpaceX awarded Musk more than 300 million shares. But those shares only vest when and if the company completes construction of its “non-Earth-based data centers,” including 12 market cap goals that add $6.6 trillion in shareholder value. That’s more than triple the best current estimate of SpaceX’s worth. That’s not the big payout, however.
Musk will also earn more than one billion Class B shares when and if the company establishes “a permanent human colony on Mars with at least one million inhabitants,” and another series of market cap goals that increase the company’s worth by $7.5 trillion. With this IPO, Musk will almost certainly become the world’s first trillionaire. If he completes just one of the company’s two (admittedly ambitious) payouts, he’ll instantly become the first multitrillionaire.But let’s bring all this back down to Earth for a moment. Asa Fitch noted for the WSJ that “SpaceX made $18.7 billion of revenue last year. Getting to trillions will take quite a while, if it happens at all.”
That is an awfully big if. But if investors had to bet on anybody being able to do it — and they’ll finally get their chance with this IPO — it has to be the company’s $54,000 man.

Impressive wherever you look.

• SpaceX Files For Nasdaq IPO Under Symbol SPCX (ZH)

As expected, SpaceX filed its S1. The stock is expected to list on Nasdaq and Nasdaq Texas under the ticker “SPCX.” No specific share count, price range, or total offering size is finalized yet (placeholders are used). But, with expectations of a $1.5 trillion market cap, that means SPCX will trade at a 77x LTM Revenue multiple!

Mission and Overview SpaceX’s mission is to make life multiplanetary, advance scientific understanding of the universe, and extend consciousness to the stars. It positions itself as a vertically integrated builder across Space, Connectivity (Starlink), and AI (via xAI acquisition). The company has revolutionized space access with reusable rockets (Falcon family, Starship development), built the world’s largest LEO satellite constellation for broadband, and is scaling AI compute and frontier models (Grok) with real-time data from X.
Key Corporate Details
Dual-class structure: Class A (1 vote/share) and Class B (10 votes/share). Elon Musk (founder, CEO, CTO, Chairman) will retain dominant voting control post-IPO (majority of the board via Class B and overall voting power), making SpaceX a “controlled company” under Nasdaq rules. Basis of presentation: Financials include retrospective recasts for the xAI acquisition (Feb 2026) and X Holdings (via xAI, 2025), plus a 5-for-1 stock split (May 2026). Underwriters: Led by Goldman Sachs, Morgan Stanley, BofA, Citigroup, J.P. Morgan, and others.
Consolidated Financial Highlights (preliminary/selected):
Q1 2026: Revenue $4.69B, operating loss $1.94B, Adjusted EBITDA $1.13B. FY 2025: Revenue $18.67B, operating loss $2.59B, Adjusted EBITDA $6.58B. Heavy capex (especially AI) and Starship R&D; Starlink (Connectivity) is the current profit engine.
Business Segments (as of/through Q1 2026 and FY 2025)
Space (launches, Dragon, Starship development): Dominant global launch provider (>80% of mass-to-orbit in recent years, >99% Falcon success rate). Key vehicles: Falcon 9 (reusable, ~23t to LEO), Falcon Heavy (~64t), Dragon (cargo/crew to ISS), Starship (in testing, targeting full reusability and massive scale).Revenue: $619M (Q1 2026), $4.1B (2025). Still investing heavily in R&D/Starship.
Connectivity (Starlink):
~9,600 broadband/mobile satellites in LEO (~10.3M subscribers across 164 countries/territories as of Mar 31, 2026). High-speed, low-latency broadband (median ~225 Mbps peak for residential); expanding enterprise, government, maritime/aviation, and satellite-to-mobile (direct-to-phone, ~650 dedicated satellites, ~7.4M devices in ~30 countries). Strong growth: Revenue $3.26B (Q1 2026), $11.4B (2025, +~50% YoY); highly profitable at segment level.
AI (xAI/Grok/X integration):
Gigawatt-scale terrestrial AI training clusters (e.g., COLOSSUS); plans for orbital AI compute satellites (using solar power, starting ~2028).
Grok frontier models (truth-seeking, strong scientific reasoning benchmarks); integrated with X (~1.3B supported accounts, 550M MAUs, hundreds of millions of daily posts).
Revenue $818M (Q1 2026), $3.2B (2025), but heavy losses due to compute/infrastructure investments.
Here’s the financials visualized (xAI is represented by the green slabs)…

Free cash flow struggling under the weight of that giant green slabs…

So, xAI is the giant money suck while Starlink keeps the engine running (but despite breaking out in 2025, Starlink user growth seems to be slowing a little):

Finally, one thing that stood out was that Anthropic is paying xAI $1.25BN per month (through May 2029) to utilize ‘Colossus’ for AI compute.

Musk took to X to explain further his vision for this segment:
“As the recently expanded partnership with Anthropic demonstrates, SpaceX is offering AI compute as a service at significant scale.
We are in discussions with other companies to do the same.
Over time, especially with orbital data centers, we expect to serve AI at extremely high scale.

If you build it (in space), they will come?

As a Democrat, perhaps, yes.

• Is This the Beginning of the End for John Fetterman? (Matt Margolis)

John Fetterman’s chief of staff, Cabelle St. John, resigned on Wednesday, according to a source who spoke to Axios. She had been with the Pennsylvania Democrat since he first arrived in Washington roughly three-and-a-half years ago and was elevated to chief of staff in 2025. Her official last day is still weeks away, but the writing was on the wall long before this week. This isn’t a one-off. Fetterman experienced a staff exodus in 2025, and the pattern of turnover is a sign that his rare independent streak is just too much for his party to tolerate. Former aides have cited frustration with his unwavering support for Israel, his noticeably warmer relationship with President Donald Trump, and what they describe as a difficult working environment on a personal level.

“This is a guy who came in talking about being a champion for labor and he’s gone pretty quiet on it,” the former aide said last year. “This is a guy who, since Trump won, is, for lack of a better word, basically a useful idiot for Republicans. He’s supporting stuff, and it gives them cover to say, ‘Look it’s bipartisan, we got Fetterman.'” None of this seems to bother Fetterman. After Axios published the story, he fired off a text to the outlet dismissing the whole thing. “So much for the turnover issue. Clicks!” he wrote, attaching an image claiming other Senate offices have higher turnover rates.It sounds like he’s not exactly losing sleep over it.
In a recent appearance on Jesse Watters’ show, Fetterman cut to the heart of what separates him from the rest of his party. “Why can’t we just, you know, root for our military?” he said. “Why can’t we just say I don’t have to agree with everything the president has done or the kind of things that he says. But, you know, we should be on the side of America, and we should be on the side of civilization and the free world. And I’m on that side. And I don’t know why I’m the only Democrat that says those kinds of things at this point.”
And that’s the whole problem for his party, anyway. He’s asking a question that should have an obvious answer, and it doesn’t, because the modern Democratic Party instinctively opposes Trump on everything, including things that are just plain old stupid to oppose. They’re even whining about repairing the reflecting pool, for crying out loud.
The message from the left to Fetterman is: You’re not staying in your lane, and you have to be punished. Support the war in Iran? Support strong borders? Support Israel? Well, sorry, you’re way out of touch with the Democratic Party today. This isn’t a good sign for him. Sure, congressional staff experience turnover all the time, but how many Democratic staffers are going to want to join his staff to replace those who left? Working for Fetterman is likely to become a career-ender for those who want to work in Washington, and I can totally see Democrats using this as a means to pressure Fetterman into compliance.
The resignation of Fetterman’s chief of staff may be just the latest domino to fall, but the real question looming over Fetterman’s political future is whether this staff exodus marks the beginning of the end for a senator who refuses to play by his party’s rules. Democrats demand ideological conformity, and Fetterman’s rare independent streak will become a liability, making his office radioactive to potential staffers — staffers he needs to function.

We’ll see more about this. Funny it’s just a report, but everyone seems to call it an autopsy.

• The DNC 2024 Autopsy Is Here, and It’s a Disaster (Amy Curtis)

The DNC 2024 Autopsy Is Here, and It’s a Disaster. Last week, Kamala Harris was telling donors she wanted the DNC’s 2024 election report, probably better referred to as an autopsy, released. Now the report is coming out, and it’s bound to be a doozy. DNC Chair Ken Martin released a statement on the report, admitting it’s not up to his standards. And you’ll soon see why.

Read more about what I have to say here: https://t.co/9wochQttN5 pic.twitter.com/2REle6FPY3
— Ken Martin (@kenmartin73) May 21, 2026

Here’s what the statement says: “When I was elected DNC chair, I commissioned an after-action review of the 2024 election that I wanted to be honest and transparent, and with actionable and specific takeaways for the future of the Democratic Party. When I received the report late last year, it wasn’t ready for primetime — not even close — and because no source material was provided, it would have meant starting over. I could not in good faith put the DNC’s stamp of approval on the report that was produced.
After last November’s massive Democratic wins, I didn’t want to create a distraction, but by not putting the report out, I ended up creating an even bigger distraction. For that, I sincerely apologize. For full transparency, I am releasing the report as we received it, in its entirety, unedited and unabridged. It does not meet my standards, and it won’t meet your standards, but I am doing this because people need to be able to trust the Democratic Party and trust our word.
There’s a lot to parse in this statement. The first takeaway is that the DNC is such a mess that they looked at this report and had no way of actually fixing it. This tells us their party is just as big a disaster as this report. Second, the ‘massive Democratic wins’ Martin touts have largely been a disaster. Spanberger got smacked down by both the Virginia state Supreme Court and the U.S. Supreme Court, Democrats are losing House seats across the country, and approval of Congressional Democrats is at a new all-time low.

Hey Democrats, put down the champagne. Here are your numbers: 70% of voters DISAPPROVE of the way Democrats are handling their job. Only 21% approve. Only 41% of Democrats approve. PITIFUL. All-time LOW.
— Larry Sabato (@LarrySabato) June 11, 2025

Ouch.
Parts of the report are being summarized and shared online. The biggest takeaways are not surprises to those who paid attention. It turns out President Trump’s ‘they/them’ messaging was highly effective, Democrats neglected rural voters and local parties, and the Democrats failed to define themselves but relied on ‘not Trump’ messaging instead. We’re all aware that there was significant tension and backroom fighting between Kamala Harris’ campaign staff and the Biden administration. The autopsy shows the Biden team was criticized for not adequately preparing Kamala Harris.

DNC Chair Ken Martin released an incomplete 2024 election autopsy:

• Trump’s “they/them” attacks on Harris were seen as highly effective
• Biden team criticized for failing to prepare Harris
• Democrats accused of neglecting rural voters and local parties
• Report says party… pic.twitter.com/MXkcPA28ao
— Political Polls (@PpollingNumbers) May 21, 2026

There are also no mentions of Israel, Gaza, or Palestine.

Incredible. The DNC autopsy of 2024 is 192 pages.
*Zero* mentions of the words "Israel," "Palestine," or "Gaza."

(DNC Chair Ken Martin concedes the autopsy does not meet his standards, nor would it meet yours). https://t.co/t1202zQlCs pic.twitter.com/sNjgotf0lm
— Prem Thakker (@prem_thakker) May 21, 2026

This is sure to tick off both sides of the aisle. The Left’s anti-Israel, antisemitic base will say the Democrats’ position on Gaza was problematic, while other voters will see their increasingly antisemitic candidates and office holders as alarming.

What's going on here? In February, Axios reported that top party officials who worked on the autopsy of 2024 concluded that Kamala Harris lost significant support because of the Biden admin's approach to Gaza.

But the newly-released autopsy…doesn't even mention Gaza or Israel? https://t.co/mj0A5Zz237
— Prem Thakker (@prem_thakker) May 21, 2026

Law-bending.

• What Really Happened in Virginia’s Redistricting Case (Von Spakovsky)

“Shocking.” “Deflating.” “Sickening.” “It’s not good news.”

If someone heard the reactions of House Democratic lawmakers to the Virginia Supreme Court’s decision on the Commonwealth’s recent partisan gerrymandering scheme, they might be forgiven for assuming the ruling posed some kind of existential threat to the rule of law in the Commonwealth. In a letter to his party, House Minority Leader Hakeem Jeffries referred to the decision as “egregious” and “dripping with far-right partisanship,” the result of “MAGA extremists desperate to rig the midterm elections.”
Chalk these wildly hyperbolic statements up as yet another reason to disbelieve left-wing partisan hype. In fact, Jeffries must have been looking in the mirror when he made those claims, since it was Virginia Democrats’ “egregious” misbehavior “dripping with far-left partisanship” that was the culmination of “Democratic extremists trying to rig the midterm elections” in the state.The Virginia Supreme Court’s decision in Scott v. McDougle was, in fact, a full-throated defense of the state’s constitution, the rule of law, and the people of Virginia’s right to make informed decisions on possible alterations to the Commonwealth’s constitution.
What was lost in the frenzied hysteria of Democrats and their allies in the media in the immediate aftermath of the decision was that the majority opinion, written by Justice D. Arthur Kelsey, simply upheld the process outlined in the Constitution that was required to adopt the proposed redistricting amendment. The Democrats’ hasty process violated Article XII, Section 1 of the Virginia Constitution. There was no partisanship in the opinion at all, with the exception perhaps of the dissent by three justices who refused to enforce the constitutional requirements.
Article XII requires the General Assembly to vote on any proposed amendment to the Constitution twice, with a general election of members to the House of Delegates occurring between the two votes. The court’s ruling centers on that (supposedly) intervening House election, held in 2025, not the recent vote on the amendment itself. The Virginia Supreme Court found that the 2025 House election did not actually occur after the first time and before the second time the General Assembly voted on the amendment.
Early voting (Virginia law allows voting to start 45 days before Election Day) for the House of Delegates elections began on September 19, but the General Assembly didn’t vote on the proposed amendment until October 31 in a “special” session that was itself open to challenge. Accordingly, 1.3 million votes, 40% of the election total, had already been cast when the legislature approved the referendum. That was 1.3 million people who had already voted who had no way of knowing their future representative’s position on an amendment to their Constitution.
The violation of Article XII, Section 1 here is obvious—to everyone but the Virginia government, now entirely controlled by Democrats, which argued that when the state constitution said the Assembly’s vote needed to occur before the election, it meant Election Day. Justice Kelsey’s opinion masterfully dissects this argument as lacking any meaningful support from law or history.

“So we believe in making America great again. You can’t do that unless you protect your borders. I’d encourage our friends in the UK to follow the same path.”

• Vance Urges UK Patriots To Defend Their Culture Against Starmer (MN)

US Vice President JD Vance has sent a direct message of support to Britons standing up for their culture, telling attendees of the Unite the Kingdom rally to push forward despite Keir Starmer’s attempts to silence opposition to mass migration. The rally, held this past weekend in London and organised by Tommy Robinson, saw thousands of patriots turn out waving British flags. Starmer’s government had tried to sabotage the event by blocking visas for 11 foreign speakers it labelled “far-right agitators.”

The Prime Minister openly boasted about the bans on X, writing “I’ll always champion peaceful protest. But the Unite the Kingdom march organisers are peddling hatred and division. We’ve already blocked visas for far-right agitators who want to come here to spew their extremist views. They don’t speak for the decent, fair, respectful Britain I know.” He followed up: “Today the voices of division will be loud. They don’t speak for the country I know, one that belongs to all of us.” A video from the event captured a striking contrast, showing a left-wing woman in tears hugging her masked companion in fright at the sight of the national flag.
https://twitter.com/OliLondonTV/status/2056257812469018990?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E2056257812469018990%7Ctwgr%5E5764f5a7abbc04d69e0037cffdd0fe954dcbc4e6%7Ctwcon%5Es1_c10&ref_url=https%3A%2F%2Fmodernity.news%2F2026%2F05%2F20%2Fwatch-vance-urges-uk-patriots-to-defend-their-culture-against-starmer-mass-migration-betrayal%2F
Vance rejected the establishment narrative that wanting secure borders equals extremism. “To everybody in the UK who rejects 3rd world migration, I’d encourage them to just KEEP ON GOING! It’s OK to want to defend your culture!” Vance stated. He added, “All over the West is this idea that the way to generate prosperity is to bring in MILLIONS and millions of unvetted people and DROP them into your neighborhoods — and we simply reject that idea!” “It’s OK to want to live in a safe neighborhood. It’s okay to want your job to go to yourself and your neighbors and not to a stranger who you don’t even know. It is reasonable for the people in Western societies to want to control who comes into their country and who doesn’t,” Vance stressed.
He added: “A lot of people, frankly, a lot of people in the media have tried to persuade all of those people that it’s somehow racist to want to protect your borders… even though very often the very people who are most affected by low wage immigration are lower income black and Hispanic Americans right here in the United States of America, and I guarantee that’s true in the UK.” Vance concluded by drawing a direct link to America First: “So we believe in making America great again. You can’t do that unless you protect your borders. I’d encourage our friends in the UK to follow the same path.”
This latest intervention builds on Vance’s repeated clashes with Starmer and European leaders. He previously called out the British Prime Minister to his face over the UK’s free speech crackdown. The US later vowed to use its “full arsenal of tools” against Starmer’s policies. Vance has also long warned about the dangers of Europe’s migration experiment, describing it as “civilisational suicide” He has cautioned that Islamist extremists could seize control of European nukes within 15 years. Vance has also triggered globalist outrage with his blunt speeches on replacement-level migration.
While Starmer brands patriotic pushback as “hatred and division,” ordinary Britons at the rally made clear they simply want what Vance described as basic common sense: safe streets, jobs for locals, and control over their borders. Vance’s words arrive as frustration with open borders boils over across the West. Working-class communities on both sides of the Atlantic are paying the price through suppressed wages, overburdened services, and rising insecurity — effects the political class routinely dismisses. By standing with those who reject cultural erasure, Vance is highlighting a fundamental truth: people of free nations have the sovereign right to preserve their identity and security.

“..If this modality in the behavior of Europeans changes in favor of dialogue, we will only welcome it..”

• ‘Russians Ready For Conversation’ With Europe — Kremlin (TASS)

Russia is hearing statements from European capitals that they will have to talk to Moscow, and it confirms its readiness for such a conversation, Kremlin Spokesman Dmitry Peskov said when asked by TASS about Europe’s discussions of candidates for the role of negotiator with Russia. “Indeed, in the last 3-4 weeks we have heard statements from Mr. [Finnish President Alexander] Stubb, and we have also heard statements from Berlin that sooner or later it will be necessary to talk to the Russians directly,” he said.
“Russians are ready to engage,” Peskov noted. “We believe that talking is always better than leading to complete confrontation, which is exactly what the Europeans are doing now. If this modality in the behavior of Europeans changes in favor of dialogue, we will only welcome it,” he said. The very fact that expert discussions are underway in the EU around this topic is a good thing, Peskov said, adding that “just a few months ago, even such discussions weren’t taking place in Europe.”

According to Russian Foreign Ministry’s Ambassador-at-Large for the crimes of the Kiev regime Rodion Miroshnik, the European Union’s actions show a complete lack of willingness to follow a peaceful path

• Europe Seeks To Block Any Talks On Ukraine Settlement — Russian Diplomat (TASS)

European countries seek to sabotage any negotiations on a peaceful settlement of the Ukrainian conflict, Rodion Miroshnik, the Russian Foreign Ministry’s Ambassador-at-Large for the crimes of the Kiev regime, told TASS in an interview during a working visit to Bangkok.

“Judging by official statements from EU leaders and the so-called E3 group (the United Kingdom, Germany, and France – TASS), one can see an irreconcilable desire to derail any form of negotiations and reject a political and diplomatic path to resolving the conflict. They declare that they want talks, but at the same time they decide to issue yet another package of sanctions, allocate multi-billion-euro loans to Ukraine, and launch new programs to train Ukrainian troops and supply weapons. There is an old rule: look at what politicians do, not what they say. The European Union’s actions show a complete lack of willingness to follow a peaceful path,” he said.
“I believe it is not enough to simply say it would be good to talk to Russia, this must be backed by actions that would prove that the EU is ready to stop financing the bloodshed in Ukraine. It is no secret that if Western funding stops, the war will end. This is acknowledged both in the West and by all external observers. But for now, Western countries continue to supply weapons and finance Ukraine,” Miroshnik added.
Foreign ministers of EU countries are set to discuss candidates for a possible mediator role in talks with Russia, the Financial Times newspaper previously reported. According to sources cited by the paper, the issue will be raised at an informal meeting on May 27-28 in Cyprus. Potential candidates reportedly include former Italian and German prime ministers Mario Draghi and Angela Merkel, Finnish President Alexander Stubb and his predecessor Sauli Niinisto.
On May 9, Russian President Vladimir Putin, answering journalists’ questions, said that former German Chancellor Gerhard Schroeder is the preferred candidate for possible negotiations between the EU and Russia. Moscow has never been closed to negotiations, he added.

“Drills Are Intended To Send A Signal”:

• Russia Holds Massive Nuclear Drills On Land, Sea And Air (ZH)

Trucks carrying intercontinental ballistic missiles rumbled over forest roads, atomic-powered submarines set sail from Arctic and Pacific ports, and crews scrambled into warplanes as Russia and neighboring Belarus held the final stage of their joint nuclear drills Thursday. Russian President Vladimir Putin discussed the maneuvers in a video call with his Belarusian counterpart Alexander Lukashenko. “The use of nuclear weapons is an extreme, exceptional measure for ensuring the national security of our states,” Putin said, according to AP. Lukashenko earlier inspected Russian short-range nuclear-capable Iskander ballistic missiles at a military unit involved in the drills and declared: “I dreamed about this machine a long time ago.”

The three-day drills that began Tuesday come amid a surge in Ukrainian drone strikes. including on Moscow’s suburbs that killed three people and damaged several buildings and industrial facilities. The strikes made it harder for officials in the Kremlin to cast the conflict in Ukraine — now in its fifth year — as something so distant that it doesn’t affect the daily routines of Russian civilians.
Drills involve wide array of nuclear weapons
Russia’s Defense Ministry said the exercise involved 64,000 troops, over 200 missile launchers, more than 140 aircraft, 73 surface warships and 13 submarines, including eight armed with nuclear-tipped ICBMs. The drills focused on the “preparation and use of nuclear forces under the threat of aggression,” it said. The maneuvers also practice cooperation with Belarus, an ally that hosts Russian nuclear weapons. Russian arsenals in Belarus include its latest intermediate range nuclear-capable Oreshnik missile system.
Along with nuclear-tipped ground- and submarine-launched ICBMs, the maneuvers featured a broad assortment of short- and medium-range weapons. Unlike the intercontinental missiles that can destroy entire cities, tactical nuclear weapons intended for use against troops on the battlefield are less powerful. They include aerial bombs and warheads for short- and medium-range missiles and artillery munitions. The Defense Ministry said the Russian armed forces test-fired Yars and Sineva ICBMs, as well as medium-range sea-launched Zircon and air-launched Kinzhal missiles, noting that all missiles hit their designated practice targets. Belarusian troops test-fired a short-range Iskander ballistic missile inside Russia.
Putin has repeatedly reminded the world about Moscow’s nuclear arsenals since the war in Ukraine started in February 2022 to deter the West from ramping up support for Kyiv. In 2024, the Kremlin adopted a revised nuclear doctrine, noting that any nation’s conventional attack on Russia that is supported by a nuclear power will be considered a joint attack on his country. That threat was clearly aimed at discouraging the West from allowing Ukraine to strike Russia with longer-range weapons and appears to significantly lower the threshold for the possible use of Moscow’s nuclear arsenal.
The revised doctrine also placed Belarus under the Russian nuclear umbrella. Putin has said that Moscow will retain control of its nuclear weapons deployed in Belarus, which borders Ukraine and NATO members Latvia, Lithuania and Poland, but would allow its ally to select the targets in case of conflict. The maneuvers are held amid an increase in drone activity in the Baltic nations. On Tuesday, a NATO jet shot down a Ukrainian drone over southern Estonia. Ukraine apologized for that “unintended incident,” without specifying what had happened.
On Wednesday, an emergency announcement about a drone flying over Belarus prompted residents of the Lithuanian capital of Vilnius, including top officials and lawmakers, to take shelter and led to a brief closure of its airport. Ukrainian drones targeting Russia’s Baltic ports and energy facilities have recently crossed or come down in NATO territory on several occasions. Amusingly, instead of blaming the source, Ukraine, Western officials blamed Russian electronic jamming of the drones.
Russia’s Foreign Intelligence Service said Tuesday that Ukraine is preparing drone attacks against Russia from the territory of the Baltic countries and warned of retaliation It alleged Ukrainian military personnel had been deployed to Latvia and warned that the country’s membership in NATO wouldn’t protect it from “just retribution.” Latvian authorities said the allegation was not true. Last month, the Russian Defense Ministry published a list of factories in Europe that it said were involved in producing drones and their components for Ukraine. It warned that attacks on Russia involving drones manufactured in Europe are fraught with “unpredictable consequences.”
Some commentators interpreted the bellicose statements from Moscow and this week’s exercise featuring short- and medium-range nuclear weapons capable of reaching targets in Europe as part of Kremlin efforts to discourage Western allies from bolstering support for Ukraine. Asked what message the nuclear exercise was intended to send, Kremlin spokesman Dmitry Peskov responded that “any drills are intended to send a signal,” but wouldn’t elaborate.

“Europe is the ‘jungle’ now. No garden left to speak of.”

• Irrelevant Europe (J.B. Shurk)

Josep Borrell is a Spanish socialist who held several high-ranking positions in the European Union. Until 2024, he was a vice-president of the European Commission and the high representative of the European Union for foreign affairs and security policy. In that capacity, he ran Europe’s External Action Service, which is the diplomatic body that executes Europe’s foreign policy decisions around the world. He remains a man with a great deal of influence over European perspectives.

In 2022, Borrell created a bit of an international incident when he described Europe as a “garden” and the rest of the world as a “jungle.” “We have built a garden,” he told aspiring European diplomats in Bruges, Belgium. “Most of the rest of the world is a jungle. The jungle could invade the garden. The gardeners should take care of it.” As the head of the European Defense Agency, Borrell’s comments made strategic sense. As he said in that same speech, “The jungle has a strong growth capacity…Walls will never be high enough to protect the garden. The gardeners have to go to the jungle, Europeans have to be much more engaged with the rest of the world. Otherwise, the rest of the world will invade us, by different ways and means.”
Borrell’s speech came seven years after German Chancellor Angela Merkel’s decision to open her country’s borders to millions of Islamic immigrants. Originally touted as a humanitarian policy designed to temporarily shelter refugees from war-torn Syria, Germany’s generous welfare programs quickly became a magnet for young men across the Middle East and North Africa. When Merkel declared on August 31, 2015, “We can do this,” she initiated an all-of-society “welcome culture” that quickly produced a full-blown migrant crisis for the whole continent. Over ten years later, the influx of millions of Muslims into Europe has transformed school demographics and local politics, unleashed an explosion in sex crimes and anti-European violence, strained Europe’s hospital services and social safety nets, and exacerbated government debt.
Speaking after the “jungle” had already successfully invaded Europe’s “garden,” Borrell knew there was no way to put the genie back in the bottle. Merkel’s fateful decision to “welcome” Middle Easterners to Europe transformed cities and towns across Europe into the Middle East. Borrell also knew that the European Union’s patchwork defense agency did not have the requisite military and espionage assets to effectively protect the continent. So he tried to fashion his corps of young diplomats into a network of information and persuasion agents who could do Europe’s bidding around the world.
Borrell’s message got lost in the ensuing international kerfuffle over his “garden” / “jungle” division of the world. From Russia to Canada, Africa to Southeast Asia, every self-described “foreign policy expert” took umbrage at Borrell’s bluntness. Perpetually offended virtue-signalers hadn’t gotten so worked-up since President Trump had called Haiti a “shithole country” four years earlier. Just as Conan O’Brien felt compelled to white-knight for Haiti’s dystopian, cannibal gangland by visiting a heavily guarded resort in the Caribbean country and recklessly encouraging vacationers to join him, legions of politically correct snobs from around the planet recorded social media videos from their country estates in which they turned tsk-tsk-ing into a veritable lingua franca for the vicariously aggrieved.
All the “very best people” denounced Borrell for promoting a scarcely disguised restoration of European imperialism, colonialism, fascism, and genocide. Young international students enjoying university scholarships and living in Europe for free made sure to remind Borrell that “diversity is our strength.” Borrell’s socialist comrades beat him over the head with Europe’s prime directive: multiculturalism über alles. Mohammadbagher Forough, a random research fellow at the German Institute for Global and Area Studies, publicly reprimanded Europe’s foreign minister thusly: “This kind of comment puts a serious dent in the enterprise of European strategic autonomy. It upsets, at the most profound level, countries in the rest of the world, because of the history of colonialism.”
In other words, Europe’s “ruling class” and auxiliary straphangers condemned Borrell for daring to defend the beneficiaries of Western civilization. He was encouraged by threat of high-culture social banishment to follow Chancellor Merkel’s example in supplicating before the migrant hordes. The message was clear: Europe’s minister of defense cannot properly “defend” Europe unless he allows non-Europeans to take over the continent. It was further proof that Europe is irreparably lost.
Since his departure from the European Union’s foreign policy perch at the end of 2024, Borrell has spent most of his time in public lambasting President Trump’s global leadership. A staunch supporter of Ukraine who once threatened to “annihilate” the Russian army, Borrell has frequently defended the honor of Volodymyr Zelenskyy by claiming that Ukraine’s holdover president is leading “the resistance” and “deserves respect.” After President Trump described Zelenskyy as a “dictator without elections,” Borrell called the “accusation” the “height of dishonesty.” When President Trump and Vice President Vance took offense to Zelenskyy’s sense of entitlement and disregard for American taxpayers who have paid the salaries and pensions of Ukraine’s government workforce, Borrell screamed on X, “Trump and Vance have put on a disgraceful show. I am ashamed of that behavior.”
In response to Vance’s speech at the Munich Security Conference last year during which the vice president excoriated Europe’s crackdown on free speech and political dissent, Borrell lectured his erstwhile colleagues: “This is a declaration of political war against the European Union.” Going further, Europe’s former defense minister declared, “Europe must stop pretending that Trump is not an adversary and assert its technological, security, and political sovereignty with clarity and strength.”

The hydraulic pin holding the tower arm in place did not retract.

If that can be fixed tonight, there will be another launch attempt tomorrow at 5:30 CT. https://t.co/DJAdvDYQpH
— Elon Musk (@elonmusk) May 21, 2026

https://twitter.com/elonmusk/status/2057261488256303134?s=20 https://twitter.com/GuntherEagleman/status/2057605618085548082?s=20

We once considered a Cholesterol Level of 350 perfectly normal & healthy.

Then it was lowered to 300.
Then to 240.
Then to 190.

Now doctors want your levels as low as statins can force them — no matter what.

Every single time the “safe” number drops, millions more… pic.twitter.com/eqMDLuWKaB
— Valerie Anne Smith (@ValerieAnne1970) May 21, 2026

https://twitter.com/Rainmaker1973/status/2057327151964131432?s=20

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Debt Rattle January 23 2016

Jan 232016

January 23, 2016 Posted by Raúl Ilargi Meijer at 10:22 am Finance Tagged with: bubble, debt, ECB, EU, foodbanks, mass migration, oil, refugees, TBTF, VW 2 Responses »

DPC Cab stand at Madison Square, NY 1900

• Nearly $8 Trillion Wiped Off World Stocks In January (Reuters)

• Dow Could Fall 5,000 Points And Still Not Be ‘Cheap’ (MW)

• Mario Draghi Denies The ECB Bazooka Is Empty (AEP)

• Felix Zulauf: The Era Of QE Is Over (FuW)

• The ‘Recovery’ Was Built On Bubbles (Chang)

• China’s Banking Stress Looms Like Banquo’s Ghost In Davos (AEP)

• The EU Prioritizes The Old And The Rich (FT)

• Will The TBTF Banks Break Themselves Up? (Forbes)

• Moody’s Just Put $540 Billion In Energy Debt On Downgrade Review (ZH)

• North Sea Drilling Sinks to Record Low (BBG)

• Aberdeen: Once-Rich Oil City Now Relying On Food Banks (Guardian)

• Oil Services Giant Schlumberger Axes 10,000 Jobs (Guardian)

• UK Treasury ‘To Count £139 Million Of Made Up Money’ As Foreign Aid (Ind.)

• VW Blames Emissions Scandal on EU’s ‘Vague Testing Requirements’ (Ind.)

• VW Probe Finds Manipulation Was Open Secret In Department (Reuters)

• DEFEAT IS VICTORY (Dmitry Orlov)

• Top UN Official Says Mass Migration ‘Unavoidable Reality’ (AFP)

• Europe’s Refugee Crisis Claims At Least Another 46 Lives In Aegean (AP)

And January’s not over. 11 more months like that and we might land at a nice round number.

• Nearly $8 Trillion Wiped Off World Stocks In January (Reuters)

World stock market losses are approaching $8 trillion so far this year and investors last week poured the most money into government bond funds in a year, suggesting they fear the global economy could tip into recession, Bank of America Merrill Lynch said on Friday. The bank’s U.S. economists also said on Friday that the likelihood of the world’s largest economy entering a recession in the coming year has risen to 20% from 15%. While a repeat of the 2008-09 great recession “is a big stretch” and even the one-in-five chance of a normal recession remains low, they cut their 2016 growth forecast to 2.1% from 2.5%. Reflecting the increasingly bearish sentiment engulfing world markets, some $7.8 trillion was wiped off the value of global stocks in the three weeks to Jan. 21, BAML said.

“We cannot rule out a recession in the next year. Accidents will happen, and we are concerned about the lack of policy ammunition to deal with a major shock,” economists Ethan Harris and Emanuella Enenajor said in a note on Friday. “However, when markets are in such a fragile state there is a temptation to lose sight of the economic fundamentals. To us, the economy is okay and recession risks are low,” they said. Stocks around the world have had one of their worst Januarys on record, with slumping oil prices, deepening concern over China, and the Federal Reserve’s first interest rate hike in a decade all spooking investors. A recession is typically defined as two consecutive quarters of economic contraction.

The U.S. economy ground to a virtual standstill in the fourth quarter of last year, according to many estimates, and the manufacturing sector is already in recession. Earlier this week, economists at Citi said the risk of a global recession was rising, Morgan Stanley put the probability at 20% in a worst case scenario, and French bank Societe Generale said it was 10% and rising.

Not that hard to believe at all.

• Dow Could Fall 5,000 Points And Still Not Be ‘Cheap’ (MW)

Hard to believe, but the Dow Jones Industrial Average could fall by another 1,000 to 5,000 points and still not be “cheap” compared with long-term stock-valuation measures. That’s the stark conclusion from an analysis comparing current stock prices to underlying measures such as per-share revenue, earnings and corporate net worth. And it suggests that even if we are now overdue for a short-term bounce or rally of some kind, buying heavily into the latest sell-off isn’t the kind of one-way bet that value investors crave. Stocks are certainly much cheaper than they were a few weeks ago. After the worst start to a new year in Wall Street history, the Dow Jones Industrial Average is down about 10% since Jan. 1. Small-company stocks are now deep in a bear market after falling more than 20% from last spring’s highs.

But cheaper doesn’t necessarily mean cheap. Even after the sell-off, U.S. stocks are valued at around 1.4 times annual per-share revenue. FactSet says the average since 2001, when it began tracking the data, is 1.3 times revenue. So the Dow could fall another 7%, or over 1,000 points, and still be no lower than its modern-day average. And the picture looks even worse when you also add in those companies’ soaring debts. According to the Federal Reserve, nonfinancial corporations have increased their total debts since 2007 from $6.3 trillion to over $8 trillion. As FactSet says, total shares plus total debts — the so-called “enterprise value” — of U.S. public companies are now 2.4 times annual per-share revenue, compared with an average of 2.1 times since 2001.

Data from the U.S. Federal Reserve, meanwhile, say U.S. nonfinancial corporate stocks are now valued at about 90% of the replacement cost of company assets, a metric known as “Tobin’s Q.” But the historic average, going back a century, is in the region of 60% of replacement costs. By this measure, stocks could fall by another third, taking the Dow all the way down toward 10,000. (On Wednesday it closed at 15,767.) Similar calculations could be reached by comparing share prices to average per-share earnings, a measure known as the cyclically adjusted price-to-earnings ratio, commonly known as CAPE, after Yale finance professor Robert Shiller, who made it famous.

Draghi has made himself irrelevant.

• Mario Draghi Denies The ECB Bazooka Is Empty (AEP)

The ECB has ample ammunition to fight a fresh global downturn and is ready to act decisively to stave off deflation if necessary, Mario Draghi has assured nervous investors in Davos. The ECB’s president sought to play down the violent market squall of recent weeks, insisting that Europe’s economic recovery is well on track and may even accelerate as the refugee crisis leads to a surge of fiscal spending. “We have plenty of instruments. We have the determination, and the willingness of the governing council to act and deploy these instruments,” he said, speaking at the World Economic Forum. Signs that the ECB is preparing a fresh blast of stimulus have halted the increasingly ominous slide in global equities, but there are fears that the bounce of the last two days may soon fade.

Monetary experts fear that the law of diminishing returns for quantitative easing is setting in and that ever-more extreme measures by central banks are creating insidious new risks. Axel Weber, the former Bundesbank chief and now head of UBS, said the balance of advantage had already turned negative. “There is a very clear limit to what the ECB can achieve. The problem is that monetary policy has largely run its course,” he said in Davos. “The side effects of the medicine are getting stronger and stronger: the curative effects are getting weaker and weaker,” he said, adding that the current turmoil in the markets is the first taste of the hangover, evidence of the price we may have to pay. Mr Weber said the ECB was likely to keep pushing interest rates deeper in negative territory but this could backfire: “There is a big risk that it may actually drive cash out of the economy.”

Benoit Coeure, France’s member of the ECB executive, insisted that the latest stimulus measures have been a success. “QE is working. We’ve seen a tremendous improvement on European capital markets. Borrowing costs for companies have come down by 80 basis points, and 140 points for Italy,” he said. “We’re mindful of the consequences of monetary policy. But we’re not going to have a conversation next month on tapering or exiting the low-rates policy because that is in the best interest of Europe.” Mr Draghi said a mix of monetary stimulus, cheap oil, and the end of fiscal austerity was finally powering a lasting pick-up in European growth. “All these drivers should ensure a continuation of the recovery. I don’t think there is any reason to think things have changed,” he said.

The great unknown is whether the refugee crisis mushrooms out of control and further destroys confidence in Europe, or whether it acts as a ‘positive economic shock’ and a catalyst for change. “It could turn out to be the largest public expenditure we’ve had for a number of years. Our society will be changed by this. In which direction, we can only guess,” he said. There are already signs of a tectonic shift. Wolfgang Schauble, Germany’s finance minister, called for a multi-billion euro “Marshall Plan” to blanket the North Africa and most vulnerable areas of the Middle East with investment. He also called for a “coalition of the willing” to confront the migrant crisis head on before it causes the European project to unravel. “We can no longer wait for Brussels,” he said.

“China is the epicenter of the looming crisis. China in today’s cycle is what US housing was during the financial crisis in 2008.” “Since one and a half years China is doing everything wrong. It started with the government trying to prop up the stock market. China wanted to attract money from abroad in order to stem the capital outflows. However, this was contrary to the fundamentals as company earnings were falling during the entire bull market. That’s why it collapsed under its own weight in the end.”

• Felix Zulauf: The Era Of QE Is Over (FuW)

According to macro strategist Felix Zulauf, founder and president of Zulauf Asset Management and Vicenda Asset Management in Zug, the almost seven-year-old bull market is over. China is to the current cycle what the US housing market was for the Global Financial Crisis in 2008. It will take years to correct the excesses that were built up in China.

Mr. Zulauf, the markets had a terrible start into the new year. Is the almost seven-year old equity bull market over? Yes, the bull market came to an end last spring. A new bear market has begun. The coming downturn will be proportional to the excesses that were built up during the boom years. The bull market lasted for a very long time and was primarily fuelled by monetary excesses. And these excesses will now be corrected. And bear in mind, there is no longer any backstop for markets.

What do you mean? In the past, investors could count on the Fed to bail them out – the Greenspan and Bernanke Put, if you will. Now, however, the US central bank – and it’s still the world’s most important central bank – is keen on raising interest rates. It wants to normalize monetary policy and to end quantitative easing. As a consequence, a sudden about-turn in the Fed’s policy is unlikely.

How big a correction do you expect? A typical bear market in the US since the Second World War was about 23%. However, this time around I expect a more vicious downdraft. I expect the S&P 500 to drop to a range of 1200 to 1400 – right now the index stands at about 1870. Compared to its all-time high that’s a correction of almost 50%. The German Dax could fall to around 7000, while the Swiss Market Index will see a similar down-leg. There is a real chance of a bigger correction than many investors realize. This is particularly true when there is a weak economy – which I expect.

Do you think the Fed will continue to raise interest rates? Hardly. I think that the December rate hike will remain the only increase in this cycle and that there will be no additional moves. Depending on how severe the impact of the falling stock market will be on the economy, the Fed might even reverse their rate hike. That could happen towards the end of this year or at the beginning of 2017. The US economy could cool much more rapidly than many expect.

What makes you think that? Right now, inventories both in the US but also in many Asian economies are much higher than usual. If sales do not increase materially from current levels – and that is my base case – companies are forced to slash production. As a consequence, data from the manufacturing sector are bound to disappoint in the months ahead. At the same time the Fed balance sheet is shrinking slightly, whereas in China it is falling precipitously, while in Europe we have the situation that Mario Draghi’s verbal interventions might no longer work. We are at the end of an era.

The end of the era of quantitative easing? Exactly, the era of QE is over or at least nearing its end. Central banks and economists have learned that printing money does not solve any economic problems and does not lead to stronger growth. It did not even help to push inflation higher. The Fed’s interventions during the financial crisis in 2008 were crucial and the right thing to do. Everything that followed, however, was a mistake. In light of the lessons learned over the past years, I do not expect central banks to resort to quantitative easing again anytime soon.

“Their governments and financial sectors talked up anaemic recovery as an impressive comeback, propagating the myth that huge bubbles are a measure of economic health.”

• The ‘Recovery’ Was Built On Bubbles (Chang)

Those who put forward the narrative are now trying to blame China in advance for the coming economic woes. George Osborne has been at the forefront, warning this month of a “dangerous cocktail of new threats” in which the devaluation of the Chinese currency and the fall in oil prices (both in large part due to China’s economic slowdown) figured most prominently. If our recovery was to be blown off course, he implied, it would be because China had mismanaged its economy. China is, of course, an important factor in the global economy. Only 2.5% of the world economy in 1978, on the eve of its economic reform, it now accounts for around 13%. However, its importance should not be exaggerated. As of 2014, the US (22.5%) the eurozone (17%) and Japan (7%) together accounted for nearly half of the world economy. The rich world vastly overshadows China.

Unless you are a developing economy whose export basket is mainly made up of primary commodities destined for China, you cannot blame your economic ills on its slowdown. The truth is that there has never been a real recovery from the 2008 crisis in North America and western Europe. According to the IMF, at the end of 2015, inflation-adjusted income per head (in national currency) was lower than the pre-crisis peak in 11 out of 20 of those countries. In five (Austria, Iceland, Ireland, Switzerland and the UK), it was only just higher – by between 0.05% (Austria) and 0.3% (Ireland). Only in four countries – Germany, Canada, the US and Sweden – was per-capita income materially higher than the pre-crisis peak. Even in Germany, the best performing of those four countries, per capita income growth rate was just 0.8% a year between its last peak (2008) and 2015.

The US growth rate, at 0.4% per year, was half that. Compare that with the 1% annual growth rate that Japan notched up during its so-called “lost two decades” between 1990 and 2010. To make things worse, much of the recovery has been driven by asset market bubbles, blown up by the injection of cash into the financial market through quantitative easing. These asset bubbles have been most dramatic in the US and UK. They were already at an unprecedented level in 2013 and 2014, but scaled new heights in 2015. The US stock market reached the highest ever level in May 2015 and, after the dip over the summer, more or less came back to that level in December. Having come down by nearly a quarter from its April 2015 peak, Britain’s stock market is currently not quite so inflated, but the UK has another bubble to reckon with, in the housing market, where prices are 7% higher than the pre-crisis peak of 2007.

Thus seen, the main causes of the current economic turmoil lie firmly in the rich nations – especially in the finance-driven US and UK. Having refused to fundamentally restructure their economies after 2008, the only way they could generate any sort of recovery was with another set of asset bubbles. Their governments and financial sectors talked up anaemic recovery as an impressive comeback, propagating the myth that huge bubbles are a measure of economic health.

“A major Chinese devaluation would be a global earthquake, transmitting a wave of deflation through a world economy already uncomfortably close to a deflation-trap.”

• China’s Banking Stress Looms Like Banquo’s Ghost In Davos (AEP)

Bad debts in the Chinese banking system are four or five times higher than officially admitted and pose a mounting risk to the country’s financial stability, the world’s leading expert on debt has warned. Harvard professor Ken Rogoff said China is the last big domino to fall as the global “debt supercycle” unwinds. This is likely to expose the sheer scale of malinvestment that has built up during the country’s $26 trillion credit bubble. Prof Rogoff said the official 1.5pc rate of non-performing loans held by banks is fictitious. “People believe that as much as they believe the GDP data,” he told the World Economic Forum in Davos. The real figure is between 6pc and 8pc. He warned that unexpected problems can come “jumping out of the woodwork” once a debt denouement unfolds in earnest.

Banks are disguising the damage by rolling over bad loans and pretending all is well, with the collusion of regulators, but this draws out the agony and ultimately furs up the financial arteries. Ray Dalio, founder of Bridgewater, said the worry is that credit in China is still growing faster than the economy even at this late stage, storing up greater problems down the road. The efficiency of credit has collapsed. It now takes four yuan of extra debt to generate a single yuan of economic growth, compared to a ratio of almost one to one a decade ago. China’s foreign reserves have dropped by $700bn to $3.3 trillion as capital flight overwhelms the inflows from the country’s trade surplus. Mr Dalio said the historical pattern is that falls of this magnitude are typically followed by 25pc devaluation.

“It is not always easy for governments to maintain clear control over the currency,” he said. A major Chinese devaluation would be a global earthquake, transmitting a wave of deflation through a world economy already uncomfortably close to a deflation-trap. Fang Xinghai, a top financial adviser to Chinese president Xi Jinping, said his country is absolutely committed to the defence of its new trade-weighted currency basket. “It is the decided policy of China,” he said. Analysts say the central bank (PBOC) spent roughly $140bn defending the yuan in December, clear evidence that they have pinned their colours to the mast. Mr Fang admitted that the switch from a crawling dollar peg to the new regime had been badly handled. “We’re learning. We have to do a better job. Our system is not able to communicate seamlessly with the markets,” he said.

Yet he insisted that the yuan has been been basically stable on basket-basis for several months and stressed that the country is a net creditor with little reliance on foreign funding.”We have a sizeable current account surplus. There really is no basis for China to depreciate the currency,” he said. Mr Fang said a devaluation goes against the whole thrust of policy and the Communist Party’s strategic switch to consumption-led growth. “China is different from other developing countries. Our growth is largely fueled by domestic savings and capital. That gives us confidence to deal with whatever risks come out of financial markets,” he said. “If China was relying largely on foreign capital, you bet, any major financial risk could derail our growth. But China is different and this is a fact that a lot of people need to pay attention to,” he said.

The entire world does.

• The EU Prioritizes The Old And The Rich (FT)

A longer-term assessment would start with the founders of (western) European co-operation in the late 1940s. They did not contemplate integration as a way to supersede nation-states; rather they welcomed the revival of nation-states and saw co-operation as a way to help them flourish. Integration was not only unprecedented but also modest in scope. Economies flourished: growth was high, unemployment low and exchange controls curtailed cross-border capital flows, enabling governments to support managed capitalism through fiscal policy and strategic investment. It was in this era, so different in its core values from today, that the political capital was laid down for Europe, which the union is now spending so fast This phase ended in the mid-1970s. In the past 30 years, European institutions and law expanded even faster than membership.

The European Communities (later the EU) acquired a flag, and began to worry about political legitimacy. New institutions such as the Court of Justice and the European Central Bank acquired sweeping powers with little public discussion. The driving events were German reunification and a new conception of democracy, in which national parliaments were carefully monitored by judges and central bankers as supposedly independent guarantors of fiscal probity. The creation of a common currency, the euro, intensified this mistrust of parliaments, but nobody cared much before 2008 because growth was good and there was enough to go round. Now the money has dried up, what can the EU’s defenders say? That it provides peace? Voters take that for granted. That the euro remains strong? A great political project will never flourish on monetary stability alone.

That the EU encourages growth? Hardly. Democracy? Not when Europe is identified with a fiscal regime enforced by constitutional lawyers and central bankers that sees millions forever consigned to joblessness: an EU with an inflation rate of 0.1% and a youth unemployment rate of over 20% is a body that, to put it crudely, prioritises the old and the rich. No dream there unless something changes fast. It is no longer in supporting the union but in proposing resistance to it that nationalist politicians see the chance to burnish their democratic credentials. The union faces a deep crisis of institutional legitimacy. It is now commonly acknowledged that monetary policy has shot its bolt. That border controls are unenforceable, too. But it is the underlying legitimacy problem that awaits a change of heart on the part of the elites.

Interesting angle. But it begs the question who’s really in power.

• Will The Big Banks Break Themselves Up? (Forbes)

[..] midway through a half-hour conversation, Thomas B. Michaud, CEO of Keefe, Bruyette & Woods, begins to sound as if he’s an organizer of the Bernie Sanders campaign, not a CEO who’s contributed thousands to Jeb Bush’s Right To Rise PAC, and sees a lot of sense in (R-Ala.) Richard Shelby’s effort to give lenders relief from the Dodd Frank Act. “JPMorgan Chase is a trillion dollars bigger after the crisis than it was before the crisis. That’s almost unfathomable. You’ve got these big banks that were too-big-to-fail and their response was to get bigger,” Michaud says. He collects his thoughts and then lobs another bomb at the titans atop his industry. “My opinion is when you have a few big banks that dominate the market like they do, it can be anti-competitive. What we learned in the crisis is that the government will bail out the biggest banks… Not only is it dangerous to the tax payer, it is dangerous to the global economy,” he says.

A day earlier, it was Sanders who was in midtown Manhattan making these pronouncements, during an hour-long rally that caused #BreakEmUp to begin trending on Twitter. Sanders vowed to re-instate the Glass-Steagall Act, thus separating commercial banking from investment banking. “Within one year, my administration will break these institutions up so that they no longer pose a grave threat to the economy,” Sanders bellowed, to raucous applause. Michaud isn’t going to be stumping with Sanders on the campaign trail anytime soon. While Sanders vowed to invoke Section 121 of the Dodd Frank Act to break up the big banks, Michaud believes market forces may do that work before a new President even takes office. “The reality is we are not going to get a Glass Steagall re-enactment,” he says before adding, “the regulators are going to force the boards of directors to make that decision on their own because it is in the best interest of their shareholders.”

New rules are punitive enough that too-big-to-fail banks will have no choice but to trim down. The leverage that once gave megabanks their competitive advantage – and the ability to make money in virtually every corner of the market – is gone. CEOs are increasingly finding it hard justify many of their businesses to impatient shareholders. “The regulatory drumbeat is going to cause the biggest banks to disaggregate,” Michaud says, pointing out that General Electric divested most of its financial services operations last year because simply wasn’t as lucrative. He adds, “I have a lot of respect for Citigroup’s current management team. But they sell a business almost every few weeks I didn’t even know they owned.”

Michaud hasn’t invited FORBES to his offices just to wax about Wall Street’s biggest firms, but he sees their challenges as an opportunity for a different group of lenders – a crop of regional banks between $5 billion-to-$50 billion in assets such as Bank of the Ozarks in Arkansas, Columbia Banking System in the northwest, Pinnacle Financial in Nashville, and Eagle Bancorp in Maryland — which are taking market share and growing far-faster than the Citi’s and the JPMorgan’s of the world. “It used to be pre-crisis that the nation’s largest banks were the most profitable. That has dramatically changed,” Michaud says. The best profits and stock performance comes from mid-sized banks, not the trillion-dollar firms that get the attention of regulators, the media and presidential candidates.

“..the effect of slowing growth in China indicates a fundamental change..”

• Moody’s Just Put $540 Billion In Energy Debt On Downgrade Review (ZH)

One week ago, in the aftermath of the dramatic downgrade to junk of Asian commodity giant Noble Group, we showed readers the list of potential “fallen angel” companies, those “investment “grade companies (such as Freeport McMoRan whose CDS trades at near-default levels) who are about to be badly junked, focusing on the 18 or so US energy companies that are about to lose their investment grade rating. Perhaps inspired by this preview, earlier today Moody’s took the global energy sector to the woodshed, placing 175 global oil, gas and mining companies and groups on review for a downgrade due to a prolonged rout in global commodities prices that it says could remain depressed indefinitely. The wholesale credit rating warning came alongside Moody’s cut to its oil price forecast deck.

In 2016, it now expects the Brent and WTI to average $33 a barrel, a $10 drop for Brent and $7 for WTI. Warning of possible downgrades for 120 energy companies, among which 69 public and private US corporations, the rating agency said there was a “substantial risk” of a slow recovery in oil that would compound the stress on oil and gas firms. As first reported first by Reuters, the global review includes all major regions and ranges from the world’s top international oil and gas companies such as Royal Dutch Shell and France’s Total to 69 U.S. and 19 Canadian E&P and services firms. Notably absent, however, were the two top U.S. oil companies ExxonMobil and Chevron.

Moody’s said it was likely to conclude the review by the end of the first quarter which could include multiple-notch downgrades for some companies, particularly in North America, in other words, one of the biggest event risks toward the end of Q1 is a familiar one: unexpected announcements by the rating agencies, which will force banks to override their instructions by the Dallas Fed and proceed to boost their loss reserves dramatically. What Moody’s admitted is something profound, and which not even the equity holders of many energy companies have realized, namely that “Even under a scenario with a modest recovery from current prices, producing companies and the drillers and service companies that support them will experience rising financial stress with much lower cash flows,” it said.

This means far less value going to equity as the companies lurch ever deeper into financial distress, unless of course oil does rebound back to $100, which paradoxically can only happen – if only briefly – after a massive default wave (which ultimately will lower the all in cost of production). Worse, Moody’s also said that it sees “a substantial risk that prices may recover much more slowly over the medium term than many companies expect, as well as a risk that prices might fall further.” But the most dire warning from the rating agency which is suddenly showing far more perceptiveness than is typical, is the admission that China, as a source of global debt-funded demand, is no more: “Moody’s believes that this downturn will mark an unprecedented shift for the mining industry. Whereas previous downturns have been cyclical, the effect of slowing growth in China indicates a fundamental change that will heighten credit risk for mining companies.”

Might as well stop altogether.

• North Sea Drilling Sinks to Record Low (BBG)

The pace of drilling in the North Sea, the center of U.K. oil production for the past 40 years, has sunk to a record as crashing energy prices force explorers to abandon costly projects. Just 63% of oil and gas rigs in the U.K. North Sea were being used as of Jan. 19, according to data provider RigLogix. That’s the lowest since the Houston-based company started tracking their operation in 2000. In the Norwegian North Sea, the 71% rate is also the worst on record. Producers in the region, home of the Brent benchmark, boosted output the past two years as projects approved in the era of $100 oil came on stream. Yet crude’s subsequent plunge has forced many to shelve growth plans as they reduce spending and staff.

BP intends to eliminate 600 North Sea positions over the next two years, adding to more than 90,000 jobs the industry has cut in the area since the start of 2014. “In the U.K. North Sea, you’re looking anywhere between $15 and $45 a barrel for operating costs,” according to Kate Sloan, a Macquarie Group Ltd. analyst who said many older fields are at the top end of that range since they need specialized drilling to prolong their lives. “I wouldn’t expect anyone to be doing that kind of work so that takes quite a few of the rigs out of the market.” Drilling off Norway also has been expensive historically. A 2012 government-commissioned report showed drilling costs there were the highest in the world, as much as 45% higher than in the U.K. While companies operating off Norway can claim a portion of their costs back from the state, they’ve still put projects on hold.

There are many towns around the world like Aberdeen.

• Aberdeen: Once-Rich Oil City Now Relying On Food Banks (Guardian)

Former oil workers are queuing up to use food banks in Aberdeen, formerly one of the UK’s most prosperous cities, as 12-year lows in the price of crude this week propel the North Sea industry deeper into crisis. Hundreds of staff are being laid off every week as producers, drillers and service companies slash their spending in moves which are hurting local businesses, from estate agents to hoteliers and taxi drivers. Those claiming out of works benefits in the north-east of Scotland rocketed by 72% in December and the total number of UK oil-related jobs lost could already be 70,000, with some predicting 200,000 out of 400,000 could eventually go. Dave Simmers, who leads the Aberdeen Food Banks partnership, said demand for free access had soared in a city which is so dependent on oil and gas.

“The number of food parcels delivered in 2015 was double the number in 2014 and we are seeing increases all the time. People can be used to earning good money in the oil industry but when the pay checks stop the problems start,” Simmers added. “We had a man draw up in a Porsche outside and come in here. His house was going to be repossessed and the car was on credit and going to be handed back. Whoever you are, you can be two or three wage slips away from a hole.” Simmers said the social enterprise he runs, Community Food Initiatives North East, lead partner in the Aberdeen Food Banks partnership, has also lost a huge amount of revenue because it used to supply much more paid fruit to the industry – including to crews on offshore vessels anchored in the harbour just yards away.

Jake Molloy, a former oil worker and now Scottish regional officer for the Rail, Maritime, Transport (RMT) union said he has personally been made aware of more than 250 job losses in the last four days alone. “Every day I see HR1s [statutory redundancy notices] like these,” he said, shuffling sheets of paper and reading out: “150 at Petrofac, 90 at Sparrows, 70 at Gulfmark, 60 at ConocoPhillips … ” Molloy said that along with those actually losing their livelihoods, almost everyone is having their terms and conditions changed. “Offshore workers are being made to work an extra 320 hours a year for no extra pay, pension arrangements are being slashed and travel allowances removed in some cases.” His worst nightmare is that there is a growing backlog of maintenance work as oil companies cut spending, which could affect safety.

He is also worried that decommissioning of platforms will hasten an early end to some fields. Britain is one of the highest cost producers of oil in the world at around $60(£42) a barrel, not a good situation when the global price is about half that.

10,000 is just a start. Schlumberger employs over 100,000 people.

• Oil Services Giant Schlumberger Axes 10,000 Jobs (Guardian)

The world’s largest oilfield services company Schlumberger has lost more than $1bn and cut a further 10,000 jobs. Like others in the industry, Schlumberger has been hard hit by the fall in energy prices and the downturn in the sector. It warned on Thursday that it does not expect a turnaround in the near future. Schlumberger said it streamlined costs and cut 10,000 jobs during the last three months of 2015 to prepare for weaker business in early 2016. The company, which has principal offices in Paris, Houston, London and The Hague, had announced at least 20,000 job cuts earlier in 2015. It currently employs about 105,000 people. Amid an oil glut, crude prices are down about 38%, with natural gas prices down about 27% from a year ago.

The downturn has led energy companies to cut thousands of jobs over the past year. Earlier on Thursday, Southwestern Energy, the third-largest natural gas producer in the US, said it would cut 1,100 jobs, about 44% of its workforce. The Schlumberger chairman and CEO, Paal Kibsgaard, noted that the number of rigs exploring on land for oil and gas in the US fell to fewer than 700 at the end of 2015, down 68% from the 2014 peak. “The decrease in land activity was the sharpest seen since 1986,” he said, adding that “massive over-capacity in the land services market offers no signs of pricing recovery in the short to medium term.” Schlumberger’s fourth-quarter results were hurt by a 39% drop in revenue and huge accounting charges, producing a loss of $1.02bn.

Gee, what a surprise.

• UK Treasury ‘To Count £139 Million Of Made Up Money’ As Foreign Aid (Ind.)

The UK Treasury will count £139 million of “made up money” as overseas aid, according to debt campaigners. The UK Government enshrined in law a commitment to spend 0.7% of national income, or around £12 billion, on aid in 2015, finally meeting a target set by the UN in 1970. Under an agreement with Cuba on its debt to the UK, the Treasury is to count £139 million of cancelled late interest payments towards this target, or around 1.2% of the projected £12 billion spend. Debt campaigners have called the debt “made up money” that was never expected to be paid. The loans were backed by UK Export Finance, a Government arm that lends money to fund the purchase of UK Exports.

“British people think UK aid money should be used to reduce poverty and inequality around the world. But too often it is driven by the interests of British companies at the expense of increased poverty and inequality,” said Tim Jones, policy officer at the Jubilee Debt Campaign. The amount of interest to be written off is more aid that the UK gave to Kenya in total in 2014, according to data from Statista. Cuba defaulted on the original £42 million debt in 1987 and has since accrued £139 million in late interest payments at an annual interest rate of 11%. This money will be counted as Overseas Development Assistance in line with OECD rules over an 18-year repayment term, the Treasury said. “Debt cancellation has always been part of Britain’s development assistance and related aid targets, and is totally consistent with the internationally recognised definition of aid monitored by the OECD”, a Government spokesperson said.

Cuba reached a debt agreement with 14 Western governments last year. Under the agreement, $2.6 billion of late interest payments will be cancelled, all of which is likely to be counted as aid in the respective countries, Jubilee said. Cuba has agreed to repay the UK the £42 million that was lent originally, plus £21 million of contractual interest. If Cuba does not pay international lenders by October 31 each year, it will be charged 9% interest until payment, plus late interest for the portion in arrears, Reuters reported. “Government policy, which is the same for all countries, is to seek to recover as much debt as possible. The agreement to restructure Cuba’s debt is an important step for the Cuban economy,” the Treasury said. But debt campaigners said that the high annual interest rate charged to Cuba is higher than the interest rate the UK Government pays and that there was no expectation that it would ever be paid.

When in a hole… Look, emissions were like 20-40 times over limit. Nothing vague about that. But if VW feels like antagonizing both Europe AND the US, go right ahead.

• VW Blames Emissions Scandal on EU’s ‘Vague Testing Requirements’ (Ind.)

European carmakers have pleaded for time and understanding after the European Parliament announced a special inquiry into the Volkswagen emissions scandal that erupted last year. A cross-party committee of 45 MEPs will spend 12 months examining how VW was able to rig emissions tests with so-called “defeat devices” – software that cosmetically cut nitrogen oxide (NOx) exhaust emissions during regulators’ examinations. It will also look at whether the German car company was given political cover by the European Commission and national governments in the EU. But Dieter Zetsche, the chairman of Daimler and head of Mercedes-Benz Cars, said that the industry was committed to cleaner cars.

“Let me be clear: we fully accept our responsibility to bring down emissions,” he said in Brussels. “But rushing new measures will fail to bring the intended results.” Mr Zetsche – who is also the president of the European Automobile Manufacturers’ Association (ACEA) – blamed the scandal on the vague testing requirements. “We recognise what has gone wrong,” he added. “By definition, by physics, you get more emissions by full acceleration and a full load, at low temperatures and climbing a hill, than on a flat autobahn.” Up to 11 million VW diesel vehicles worldwide are thought to have been fitted with software to mask NOx emissions. The European Parliament’s inquiry will also look into whether governments knew about the defeat devices before the scandal emerged and why there were no defined penalties in place to deter such cheating.

Getting hard to mount any defense.

• VW Probe Finds Manipulation Was Open Secret In Department (Reuters)

Volkswagen’s development of software to cheat diesel-emissions tests was an open secret in the company department striving to make its engines meet environmental standards, Germany’s Sueddeutsche Zeitung newspaper said on Friday, citing results from VW’s internal investigation. Many managers and staff dealing with emissions problems in the engine-development department knew of or were involved in developing the “defeat devices”, said the newspaper, which researched the matter with regional broadcasters NDR and WDR. A culture of collective secrecy prevailed within the department, where the installation of the defeat software that would cause the carmaker’s biggest ever corporate crisis was openly discussed as long ago as 2006, Sueddeutsche said.

But it said there were exceptions: a whistleblower, who was himself involved in the deception and has been giving evidence to investigators hired by Volkswagen, alerted a senior manager outside the department in 2011. This manager, however, did not react, the newspaper said. Volkswagen has said that to the best of its knowledge only a small circle of people knew about the manipulation, which Europe’s biggest carmaker admitted to U.S. environmental authorities in September last year. It has said it is not aware of any involvement by top management or supervisory board members in the affair, which toppled its chief executive last year and is likely to cost billions of dollars for recalls, technical fixes and lawsuits.

“What they have produced is endless war financed by runaway debt which is leading to economic ruin. But ignorance helps a lot here.”

• DEFEAT IS VICTORY (Dmitry Orlov)

On the wall of George Orwell’s Ministry of Truth from his novel 1984 there were three slogans: WAR IS PEACE FREEDOM IS SLAVERY IGNORANCE IS STRENGTH. It occurred to me that these apply just a little bit too well to the way the Washington, DC establishment operates. War certainly is peace: just look at how peaceful Iraq, Afghanistan, Yemen, Libya, Syria and the Ukraine have become thanks to their peacemaking efforts. The only departures from absolute peacefulness which might be taking place there have to do with the fact that there are some people still alive there. This should resolve itself on its own, especially in the Ukraine, where the people now face the prospect of surviving a cold winter without heat or electricity.

Freedom is indeed slavery: to enjoy their “freedom,” Americans spend most of their lives working off debt, be it a mortgage, medical debt incurred due to an illness, or student loans. Alternatively, they can also enjoy it by rotting in jail. They also work longer hours with less time off and worse benefits than in any other developed country, and their wages haven’t increased in two generations. And what keeps it all happening is the fact that ignorance is indeed strength; if it wasn’t for the Americans’ overwhelming, willful ignorance of both their own affairs and the world at large, they would have rebelled by now, and the whole house of cards would have come tumbling down. But there is a fourth slogan they need to add to the wall of Washington’s Ministry of Truth. It is this: DEFEAT IS VICTORY.

The preposterous nature of the first three slogans can be finessed away in various ways. It’s awkward to claim that American involvements in Iraq, Afghanistan, Yemen, Libya, Syria or the Ukraine have produced “peace,” exactly, but various lying officials and assorted national teletubbies still find it possible to claim that they somehow averted worse (totally made-up) dangers like Iraqi/Syrian “weapons of mass destruction.” What they have produced is endless war financed by runaway debt which is leading to economic ruin. But ignorance helps a lot here.

Likewise, it is possible, though a bit awkward, to claim that slavery is freedom—because, you see, once you have discharged your duties as a slave, can go home and read whatever crazy nonsense you want on some blog or other. This is of course silly; you can stuff your head with whatever “knowledge” you like, but if you try acting on it you will quickly discover that you aren’t allowed to. “Back in line, slave!” You can also take the opposite tack and claim that freedom is for layabouts while we the productive people have to rush from one scheduled activity to another, and herd our children around in the same manner, avoiding “unstructured time” like a plague, and that this is not at all like slavery. Not at all. Not even close. Nobody tells me what to do! (Looks down at smartphone to see what’s next on today’s to-do list).

How is this not obvious? “It is impossible to stop. Those who believe in some way that we can erect fences and stop migration are living in Cloud Cuckoo Land..”

• Top UN Official Says Mass Migration ‘Unavoidable Reality’ (AFP)

Mass cross-border migration is an “unavoidable reality” and it is “impossible to stop” the flow of refugees in need of sanctuary, the United Nations’ top official in charge of migration said during a visit to Bangladesh. In an interview with AFP in Dhaka, Peter Sutherland, the UN’s special representative for migration, said the world needed to accept millions of people fleeing conflicts in Syria and elsewhere and find ways to live together. Sutherland is visiting Bangladesh for the Global Forum on Migration and Development in Dhaka where he said he would discuss the plight of Rohingya refugees in Bangladesh. The refugees, fleeing ongoing persecution in Myanmar – which Naypyidaw denies – have been living in Bangladeshi camps or jungle hideouts, some for generations, often without access to basic food or shelter.

The forum in Dhaka takes place as Europe is facing its biggest migration crisis since World War II, with more than a million asylum seekers arriving in Germany alone in 2015 – triggereing a fierce backlash. “We must find ways to be living together. Today (migration) is an unavoidable reality, we are living in the era of globalisation,” Sutherland said in the Bangladeshi capital late on Thursday. “It is impossible to stop. Those who believe in some way that we can erect fences and stop migration are living in Cloud Cuckoo Land,” he said. Turkey is currently hosting 2.2 million Syrian refugees, while between 2,000 and 3,000 people arrive daily in the main European landing point of Greece, although many die making the journey.

Sutherland criticised world leaders who stoke xenophobia for political gain and link refugees with a heightened terror threat. “They represent the world of yesterday, a world of conflict and not a world of consensus. They represent a world which creates division rather than harmony,” he said. “Humanity demands responsibility and care for those who need sanctuary.” The European Union’s passport-free Schengen area has come under huge strain from the migrant influx, with wealthier countries including Denmark and Sweden introducing border controls to deal with the flow of people.

No, it’s long since failed. About 800 human lives ago. “A manageable crisis has become a moral test that Europe is in danger of failing dismally..”

• Europe’s Refugee Crisis Claims At Least Another 46 Lives In Aegean (AP)

The death toll in Europe’s migration crisis rose Friday when two overcrowded smuggling boats foundered off Greece and at least 46 people drowned — more than a third of them children — as European officials remained deeply divided on how to handle the influx. More than 70 people survived, and a large air and sea search-and-rescue effort was underway off the eastern islet of Kalolimnos, the site of the worst accident. It was unclear how many people were aboard the wooden sailboat that sank there indeep water, leaving at least 35 dead. Coast guard divers were due to descend to the sunken wreck early Saturday, amid fears that more people had been trapped below deck.

At least 800 people have died or vanished in the Aegean Sea since the start of 2015, as a record of more than 1 million refugees and economic migrants entered Europe. About 85% of them crossed to the Greek islands from nearby Turkey, paying large sums to smuggling gangs for berths in unseaworthy boats. Rights groups said the deaths highlight the need for Europe to provide those desperate to reach the prosperous continent’s shores with a better alternative to smuggling boats. European policy toward its worst immigration crisis since World War II has diverged wildly so far. Germany — where most are heading — has welcomed those it considers refugees. Other countries, led by Hungary, have blocked or restricted them from entering and resisted plans to share the burden of refugees.

“These deaths highlight both the heartlessness and the futility of the growing chorus demanding greater restrictions on refugee access to Europe,” said John Dalhuisen, Amnesty International’s Europe and Central Asia program director. “A manageable crisis has become a moral test that Europe is in danger of failing dismally,” he said. The U.N. refugee agency said daily arrivals on the Greek islands have surged to more than 3,000 in the past two days, and it cited refugee testimony that smugglers have recently halved their rates amid deteriorating weather conditions. “It is tragic that refugees, including families with young children, feel compelled to entrust their lives to unscrupulous smugglers in view of lack of safe and legal ways for refugees to find protection,” said Philippe Leclerc of UNHCR Greece.