Dec 172018
 
 December 17, 2018  Posted by at 10:37 am Finance Tagged with: , , , , , , , , , , , ,  


Arnold Böcklin The Isle of Life 1888

 

Market Meltdown Could Spark Conditions ‘Worse Than 1929’- Ron Paul (CNBC)
For The First Month Since 2008, Not A Single Junk Bond Prices (ZH)
Starvation, Homelessness And More REAL Problems Pushed Aside By Brexit (Mi.)
Average UK Home Asking Price Dips £10,000 From October (G.)
No 10 Denies Making Plans For Second Brexit Referendum (G.)
May To Urge MPs Not To ‘Break Faith’ By Demanding People’s Vote (G.)
Saudi Arabia Rejects US Senate ‘Interference’ In Kingdom’s Affairs (AFP)
Turkey FM Says Saudis ‘Didn’t Share Anything’ On Khashoggi Murder (CNBC)
Turkey FM: Washington Is ‘Working On’ Gulen Extradition (CNBC)
US Ready To Fight To Last Brit (Garrison)
Trump Will Sit Down With Mueller ‘Over My Dead Body’ – Giuliani (Ind.)
FBI, CIA Told WaPo They Doubted Key Allegation In Steele Dossier (ZH)
Guardian Most Trusted Newspaper In Britain – Report (G.)

 

 

We’re just waiting for leveraged loans to go Poof.

Market Meltdown Could Spark Conditions ‘Worse Than 1929’- Ron Paul (CNBC)

Ron Paul is warning this year’s corrections could be a precursor to an epic market collapse that may come sooner than investors think. According to the former Republican presidential candidate, Wall Street is becoming more vulnerable to near-depression conditions within the next 12 months. “Once this volatility shows that we’re not going to resume the bull market, then people are going to rush for the exits,” Paul said Thursday on CNBC’s “Futures Now.” The relentlessly bearish former congressman added that “It could be worse than 1929.” During that year, the stock market began hemorrhaging, falling almost 90 percent and sending the U.S. economy into a tailspin.

Paul, a well-known Libertarian, has been warning Wall Street a massive market plunge is inevitable for years. He’s currently projecting a 50 percent decline from current levels as his base case, citing the ongoing U.S.-China trade war as a growing risk factor. “I’m not optimistic that all of the sudden, you’re going to eliminate the tariff problem. I think that’s here to stay,” he said. “Tariffs are taxes.” The scenario is exacerbating Paul’s chief reason behind his bearish call: 2008 financial crisis easy money policies. He contended the Federal Reserve’s quantitative easing has caused the “biggest bubble in the history of mankind.” “It’s so important to understand the original cause of the problem, and that is the Federal Reserve running up debt and letting politicians spend money,” he added.

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Damn vigilantes!

For The First Month Since 2008, Not A Single Junk Bond Prices (ZH)

Late last week, we reported that in the aftermath of a dramatic drop in loan prices, a record outflow from loan funds, and a general collapse in investor sentiment that was euphoric as recently as the start of October, the wheels had come off the loan market which was on the verge of freezing after we got the first hung bridge loan in years, after Wells Fargo and Barclays took the rare step of keeping a $415 million leveraged loan on their books after failing to sell it to investors. The two banks now “plan” to wait until January – i.e., hope that yield chasing desperation returns – to offload the loan they made to help finance Blackstone’s buyout of Ulterra Drilling Technologies, a company that makes bits for oil and gas drilling.

The reason the banks were stuck with hundreds of millions in unwanted paper is because they had agreed to finance the bridge loan whether or not there was enough demand from investors, as the acquisition needed to close by the end of the year. The delayed transaction means the banks will have to bear the risk of the price of the loans falling further, as well as costs associated with holding loans on their books. The pulled Ulterra deal wasn’t alone. As we reported previously, in Europe the market appears to have already locked up, as three loans were scrapped over the last two weeks. To wit, movie theater chain Vue International withdrew a 833 million pound-equivalent ($1.07 billion) loan sale.

While the deal was meant to mostly refinance existing debt, around 100 million pounds was underwritten to finance the company’s acquisition of German group CineStar. More deals were pulled the prior week when diversified manufacturer Jason Inc. became at least the fourth issuer to scrap a U.S. leveraged loan. Additionally, Perimeter Solutions also pulled its repricing attempt, Ta Chen International scrapped a $250MM term loan set to finance the company’s purchase of a rolling mill, and Algoma Steel withdrew its $300m exit financing. Global University System in November also dropped its dollar repricing.

[..] the FT picks up on the fact that the junk bond market – whether in loans or bonds – has frozen up, and reported that US credit markets have “ground to a halt” with fund managers refusing to fund buyouts and investors shunning high-yield bond sales as rising interest rates and market volatility weigh on sentiment (ironically it is the rising rates that assure lower rates as financial conditions tighten and the Fed is forced to resume easing in the coming year, that has been a major hurdle to floating-rate loan demand as the same higher rates that pushed demand for paper to all time highs are set to reverse). Meanwhile, things are even worse in the bond market, where not a single company has borrowed money through the $1.2tn US high-yield corporate bond market this month according to the FT. If that freeze continues until the end of the month, it would be the first month since November 2008 that not a single high-yield bond priced in the market

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“About a third of all kids are in “Dickensian” poverty.”

Starvation, Homelessness And More REAL Problems Pushed Aside By Brexit (Mi.)

I watched the ultimate damp squib -my friend’s mum says squid but I m pretty sure it’s squib- as it unfolded on Wednesday night. Theresa May had it confirmed that only 117 of her own MPs hate her. So, on she limps. She said she was going anyway but won’t say when -maybe not today, maybe not tomorrow, but soon and for the rest of our lives. In the process she revealed what this is really all about. Brexit must be delivered at all costs and it must be HER that does it. If not, she slinks off into the night with a legacy that adds up to nothing.

I watched it in one of the House of Commons bars with a friend of mine from Scotland. Good bloke. Hibs fan.And as we watched the ‘drama’ unfold we were talking about the real problems in the country. His mate helps direct people to foodbanks in Scotland. In one afternoon they saw five families, hungry and without food, seek help. Five different families. A mixture of out-of-work and in-work poverty. And across these five families there were 27 children. That is, in 2018, in Britain, 27 children going to bed hungry each night. It gets, as you can imagine, worse. One of the kids couldn’t go to school. Not through illness, mercifully, but because he didn’t have any shoes. One of the mums hadn’t eaten for three days. Three days without food. Starving so she could feed her kids.

There are lots more stories like this, about 4.1 million, in fact. About a third of all kids are in “Dickensian” poverty. In Britain, in the winter, in 2018. About 1.9 million pensioners live the same way. Last winter 94 people died on Scotland’s streets. Universal Credit has hit so hard some are turning to prostitution, others are eating out of bins. What happened this week is not going to make any of that better. Look at Scotland. Everything is viewed through the prism of independence and talk of a “second independence referendum”. That is the central aim of the Scottish National Party, so you can’t blame them for concentrating on it. But what it means is that, in the real world, people suffer. [..] here’s the thing about parliamentary sovereignty, and backstops, and Brexit, and independence, and the future of the Union: You can’t eat them.

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Only fools would buy homes in the UK right now. But yeah, there are lots of those over there.

Average UK Home Asking Price Dips £10,000 From October (G.)

Asking prices for homes coming on to the market in the UK are nearly £10,000 lower than they were in October, as the property market headed for its worst annual performance in almost a decade. The average asking price of a UK home dipped by 3.2%, or £9,719, between October and December to £297,527, according to the property website Rightmove, with prices dipping 1.7% and 1.5% in November and December respectively. A softening of prices at the end of 2018 meant that asking prices rose by just 0.7% over the year as a whole, the weakest rate of growth since 2010. The traditional hotspots of London and south-east England became the weakest spots this year, recording the biggest annual falls in asking prices.

This followed a 1% rise in UK asking prices in 2017. Rightmove is predicting zero growth in UK prices in 2019, against a backdrop of stretched affordability and Brexit uncertainty. The property market is a cornerstone of the British economy and drives a large proportion of consumer spending, from DIY to carpets and furniture. But with buyers and sellers reluctant to pay the current market prices, especially in the east and south of England where prices have rocketed in recent years, analysts expect the difficult conditions to radiate out from the property market to other areas of spending. And while a slowdown in prices will be welcomed by younger buyers and those on lower incomes, any falls in values are expected to add the pressure on MPs to agree a Brexit deal.

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That can’t NOT do it.

No 10 Denies Making Plans For Second Brexit Referendum (G.)

Theresa May will summon EU27 ambassadors to No 10 this week as she continues to seek reassurances over the Irish backstop, with Downing Street vehemently denying drawing up contingency plans for a second referendum. The education secretary, Damian Hinds, said on Sunday: “Government policy couldn’t be clearer. We are here to act on the will of the people clearly expressed in the referendum.” He added: “A second referendum would be divisive. We had the people’s vote, we had the referendum, and now we’ve got to get on with implementing it. Any idea that having a second referendum now would break through an impasse is wrong. It might postpone the impasse, but then it would extend it.”

May attacked the former Labour prime minister Tony Blair this weekend for advocating a second vote, saying: “There are too many people who want to subvert the process for their own political interests rather than acting in the national interest. “For Tony Blair to go to Brussels and seek to undermine our negotiations by advocating for a second referendum is an insult to the office he once held and the people he once served.” The prime minister appears determined to pursue her strategy of seeking legal guarantees on the backstop and then putting her deal to MPs after Christmas. She is sending the government’s most senior legal officer, Jonathan Jones, to Brussels this week.

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As millions of her people starve, May focuses on her legacy.

May To Urge MPs Not To ‘Break Faith’ By Demanding People’s Vote (G.)

Theresa May will urge MPs on Monday not to “break faith with the British people” by demanding a second referendum, as she faces intense pressure to give parliament a say on Brexit before Christmas. The prime minister will make a statement to MPs on last week’s European council summit in Brussels, from which she returned with little evidence of progress in securing legal reassurances on the Irish backstop. Jeremy Corbyn will take the opportunity to call on her to hold a vote on her Brexit deal this week, and senior Labour figures refuse to rule out an imminent no-confidence motion if she fails to do so. May, however, will use her appearance at the dispatch box to strongly reject the idea of a second referendum after Downing Street was forced to deny reports on Sunday that some of her key aides were secretly considering the idea.

“Let us not break faith with the British people by trying to stage another referendum,” the prime minister will tell MPs. “Another vote which would do irreparable damage to the integrity of our politics, because it would say to millions who trusted in democracy, that our democracy does not deliver. Another vote which would likely leave us no further forward than the last.” Her message is aimed partly at Conservative MPs, and some ministers, who have become increasingly convinced that a referendum is the only way out of the impasse at Westminster after the prime minister abruptly pulled plans for a vote on her deal last week. She also faces growing demands from within cabinet to present MPs with alternatives in non-binding indicative votes that might help to find options that could command a majority.

[..] May’s reluctance to hold a second referendum put her in rare agreement with her former foreign secretary, Boris Johnson. In his column in Monday’s Telegraph, he said the public would be “utterly infuriated” if Britain were to be put through the “misery and expense” of another referendum. However, the former Labour foreign secretary Margaret Beckett said: “It is highly significant that Downing Street felt it had to issue these advance extracts of Theresa May’s statement to the House of Commons on Sunday night, because officials know the prospect of a people’s vote is being discussed, not just in Westminster, but in the corridors of Whitehall, too. “The case for the public being given the final say is becoming so overwhelming that people from all parties, and of none, now recognise that this is the best way forward for our country.”

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They’re only too happy when the interference benefits them., as it has for many decades.

Saudi Arabia Rejects US Senate ‘Interference’ In Kingdom’s Affairs (AFP)

Saudi Arabia has rejected as “interference” a US Senate resolution to end American military support for a Riyadh-led war in Yemen, and another holding its crown prince responsible for the murder of Saudi journalist Jamal Khashoggi. “The Kingdom of Saudi Arabia rejects the position expressed recently by the United States Senate, which was based upon unsubstantiated claims and allegations, and contained blatant interferences in the Kingdom’s internal affairs, undermining the Kingdom’s regional and international role,” the statement carried by Saudi Press Agency on Sunday said.

“The Kingdom hopes that it is not drawn into domestic political debates in the United States of America, to avoid any ramifications on the ties between the two countries that could have significant negative impacts on this important strategic relationship.” On Thursday, the US Senate passed a resolution calling for an end to American military support to the Saudi-led coalition in the Yemen war, and asserted Congress’s right to decide on matters of war and peace. The measure, which passed by 56 votes to 41, marked the first time the Senate had invoked the 1973 War Powers Resolution to seek to curb the power of the president to take the US into an armed conflict. It marked a significant bipartisan rebuke to the Trump administration, which lobbied intensively against it.

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Maybe the US Senate can ask where the body is.

Turkey FM Says Saudis ‘Didn’t Share Anything’ On Khashoggi Murder (CNBC)

Turkey still hasn’t received actionable information on the murder of Saudi journalist Jamal Khashoggi, its foreign minster Mevlut Cavusoglu told CNBC Sunday. “So far we haven’t been provided any information from the ongoing investigation in Saudi Arabia. Their chief prosecutor got everything from us, he didn’t share anything with us. We want a transparent, credible, swift investigation on Saudi side as well,” Cavusoglu told the network’s Hadley Gamble at the annual Doha Forum in Qatar. The minister has previously vowed to get to the bottom of the case and hold those responsible to account. [..] Among the many questions remaining unanswered is that of the whereabouts of Khashoggi’s remains.

“We don’t know where the body is,” the minister said. “This is the main question – we need to find out. They said they had local collaborators; they haven’t provided the names of collaborators.” [..] Meanwhile, Cavusoglu said Saudi officials have listened to tapes of Khashoggi’s murder, contradicting earlier statements by Saudi foreign minister Adel al Jubeir that the Saudis had not heard them. [..] “You can hear very clearly that they planned in advance to kill him,” Cavusoglu said, reminding the audience that a forensic expert had been brought into the consulate to cut Khashoggi’s body apart. “From the beginning we’ve been willing to cooperate with Saudi Arabia as well, since all these perpetrators came from Saudi Arabia and now they are arrested there and we accepted immediately the proposal coming from them for cooperation with our prosecutors.”

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If true, that would be a really bad thing.

Turkey FM: Washington Is ‘Working On’ Gulen Extradition (CNBC)

Ankara and Washington have discussed the extradition of Turkish cleric Fethullah Gulen from the United States, Turkey’s foreign minister told CNBC Sunday. Turkey’s government has demanded Gulen’s return since the failed Turkish coup of 2016, which it accuses the cleric of orchestrating. “Last time when they met in Buenos Aires, Trump told Erdogan that they have been working on that, but we need to see concrete steps because it’s been already two years, almost three years,” Mevlut Cavusoglu told CNBC’s Hadley Gamble at the Doha Forum on Sunday. A former ally of President Recep Tayyip Erdogan, Gulen has lived in self-imposed exile in the U.S. for nearly 20 years.

He denies any involvement in the coup attempt, which saw rogue Turkish military personnel commandeer helicopters, jets and tanks, attack parliament and seize television stations. Political analysts suspected Trump might use Gulen as a bargaining chip in exchange for Turkish compliance in the scandal of Jamal Khashoggi. [..] But Trump told press last month that he was not considering extraditing the preacher to meet those ends.

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Ann Garrison interviews George Szamuely, a Hungarian-born scholar and Senior Research Fellow at London’s Global Policy Institute.

US Ready To Fight To Last Brit (Garrison)

GS: Well, of course Ukraine can ask for anything it likes. There’s no way in the world Turkey would try to stop Russian ships going through the Bosporus Strait. That would be a violation of the 1936 Montreux Convention and an act of war on the part of Turkey. It isn’t going to happen. As for the Kerch Strait, it is Russian territorial water. Ukraine is free to use it and has been doing so without incident since 2014. The only thing the Russians insist on is that any ship going through the strait use a Russian pilot. During the recent incident, the Ukrainian tug refused to use a Russian pilot. The Russians became suspicious, fearing that the Ukrainians were engaged in a sabotage mission to blow up the newly constructed bridge across the strait. You’ll remember that an American columnist not so long ago urged the Ukrainian authorities to blow up the bridge. That’s why the Russians accuse Kiev of staging a provocation.

AG: There’s a longstanding back channel between the White House and the Kremlin, as satirized in Dr. Strangelove. Anti-Trump fanatics keep claiming this is new and traitorous, but it’s long established. Obama and Putin used it to keep Russian and US soldiers from firing on one another instead of the jihadists both claimed to be fighting in Syria. Kennedy and Khrushchev used it to keep the Bay of Pigs crisis from escalating into a nuclear war. Shouldn’t Trump and Putin be talking on that back channel now, no matter how much it upsets CNN and MSNBC?

GS: Well, of course, they should. The danger is that in this atmosphere of anti-Russian hysteria such channels for dialogue may not be kept open. As a result, crises could escalate beyond the point at which either side could back down without losing face. What’s terrifying is that so many US politicians and press now describe any kind of negotiation, dialogue, or threat-management as treasonous collusion by Donald Trump.

Remember Trump’s first bombing in Syria in April 2017. Before he launched that attack, Trump administration officials gave advance warning to the Russians to enable them to get any Russian aircraft out of harm’s way. This perfectly sensible action on the part of the administration—leave aside the illegality and stupidity of the attack—was greeted by Hillary Clinton and the MSNBC crowd as evidence that the whole operation was cooked up by Trump and Putin to take attention off Russia-gate. It’s nuts.

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Why would there be a sit down with so much water under the bridge? What are the odds that Mueller would be impartial?

Trump Will Sit Down With Mueller ‘Over My Dead Body’ – Giuliani (Ind.)

Donald Trump will sit and talk to special counsel Robert Mueller “over my dead body”, his lawyer Rudy Giuliani has said, in the latest pushback against the investigation into possible collusion between the president’s election campaign and Moscow. As Mr Trump called his former personal lawyer Michael Cohen “a rat” for cooperating with the FBI, Mr Giuliani made clear Mr Mueller would not be offered an interview with the president. Mr Trump recently provided Mr Mueller’s team written answers to a series of questions, but on Friday CNN said the special prosecutor was still interested in an in-person interview. “Nothing has changed in that sense from the first day,” said a source.

Mr Giuliani, the former New York mayor who now serves as the president’s personal lawyer, on Sunday again firmly pushed back at such a notion. Asked on Fox News whether Mr Trump would take part in an interview, Mr Giuliani said: “Yeah, good luck, good luck – after what they did to [Michael] Flynn, the way they trapped him into perjury, and no sentence for him.” He added: “Over my dead body. But you know, I could be dead.” Mr Giuliani also attacked Mr Mueller’s investigation, saying the probe was a “joke”. “I am disgusted with the tactics they have used in this case,” he said. “What they did to Gen Flynn should result in discipline. They’re the ones who violated the law. They’re looking at a non-crime, collusion.”

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And WaPo declined to follow up on it. That’s American media for you.

FBI, CIA Told WaPo They Doubted Key Allegation In Steele Dossier (ZH)

FBI and CIA sources told a Pulitzer Prize-winning Washington Post reporter that they didn’t believe a key claim contained in the “Steele Dossier,” the document the Obama FBI relied on to obtain a surveillance warrant on a member of the Trump campaign. The Post’s Greg Miller told an audience at an October event that the FBI and CIA did not believe that former longtime Trump attorney Michael Cohen visited Prague during the 2016 election to pay off Russia-linked hackers who stole emails from key Democrats, reports the Daily Caller’s Chuck Ross. “We’ve talked to sources at the FBI and the CIA and elsewhere — they don’t believe that ever happened,” said Miller during the October event which aired Saturday on C-SPAN.

“We literally spent weeks and months trying to run down… there’s an assertion in there that Michael Cohen went to Prague to settle payments that were needed at the end of the campaign. We sent reporters to every hotel in Prague, to all over the place trying to – just to try to figure out if he was ever there, and came away empty.” -Greg Miller. Ross notes that WaPo somehow failed to report this information, nor did Miller include this tidbit of narrative-killing information in his recent book, “The Apprentice: Trump, Russia, and the Subversion of American Democracy.”

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Britian is as bad as the US.

Not the Onion, not April 1.

Guardian still hasn’t apologized for making up the Manafort-Assange story from scratch.

Guardian Most Trusted Newspaper In Britain – Report (G.)

The Guardian is the most trusted newspaper in Britain as well as being the most read quality news outlet, and the most popular quality news outlet among younger readers, according to industry figures released on Monday. The Guardian is now reaching more than 23 million British adults every month, with the organisation’s articles being read by 12 million Britons in a typical week and 4.1 million on the average day, aided by the decision to keep the website free for all readers. In addition, more than 97% of online readers think that reading the Guardian is time well spent, which is the highest score among all national publishers in the country. The figure rises to 99% among Guardian print readers.

Readers of the Guardian website were also substantially more likely to say that they felt a close connection to the outlet, that it offered them something they could not get elsewhere, and that they trusted its reporting. The Observer topped the equivalent rankings for Sunday newspapers. “This fantastic set of results demonstrates the Guardian’s unique position in the media,” said the editor-in-chief, Katharine Viner. “We see consistently high scores for trust and engagement from both our digital and print readers, and it is excellent news that the Guardian resonates so strongly with younger audiences, too.”

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Dec 162018
 
 December 16, 2018  Posted by at 10:45 am Finance Tagged with: , , , , , , , , , , ,  


Paul Klee Carnival in the snow 1923

 

Why The Fed Won’t Save The Stock Market (MW)
Why The US-China Trade Talks Will Work: The Personal Touch (Kuhn)
12 Months Of Bitcoin Misery (MW)
Failed By Both Major Parties, Betrayed Britain Lurches Towards The Abyss (G.)
British Minister Warns Brexit Is Stuck As No-Deal Or Referendum Loom (R.)
UN Climate Change Talks Avoid Contentious Issues In Draft Agreement (O.)
Deportations Under Trump Are On The Rise But Still Lower Than Obama’s (WaPo)
How The ‘Five Eyes’ Cooked Up The Campaign To Kill Huawei (SMH)
The Russia Investigations: A Case Still Unproven (NPR)
How Putin’s Russia Turned Humour Into A Weapon (BBC)
Late Night Swapped Laughs For Lusting After Mueller (S.us)

 

 

Where do we start? Because they killed it beyond salvation? Because to save it they would have to retreat completely? Because they have no idea what’s going on since all they know is based on false assumptions? Take your pick.

Why The Fed Won’t Save The Stock Market (MW)

Another brutal week left the stock market with its worst start to a December in 38 years, and a meeting of Federal Reserve policy makers might not offer the relief some investors are pining for when they conclude a two-day policy meeting on Wednesday, says one economist. How bad was it? Stocks ended a week of often whipsaw trading with a decided move to the downside Friday. The Dow Jones Industrial Average dropped nearly 500 points, leaving it more than 10% below its early October all-time closing high, meeting a widely used definition of a market correction. It joined the S&P 500 and the Nasdaq Composite which were already in correction mode. The S&P and Dow are negative for 2018, while the Nasdaq is clinging to a 0.1% year-to-date rise.

And it’s hardly an auspicious start to a month that’s historically a positive one for equities. Over the first nine trading days of the month, the Dow is down 5.6%, the S&P is off 5.8% and the Nasdaq is 5.7% in the red. That’s the worst start to a December for all three benchmarks since 1980, according to Dow Jones Market Data. That sounds bad, but it probably isn’t bad enough to convince the Fed to pause when it comes to interest-rate rises, said Tom Porcelli, chief U.S. economist at RBC Capital Markets, in a note. Remarks by Fed officials, including Jerome Powell, have led some investors to look for the central bank to potentially end the rate-hike cycle after delivering a December increase, but Porcelli argued that still strong economic data meant the debate should be more focused on the merits of policy makers’ expectations for three or more rises in 2019.

And while stock-market volatility has seen a significant uptick, “equities have not deteriorated enough to warrant a pause,” Porcelli said, noting that unlike, say, the emerging-market crisis of 1998 when stocks fell sharply, U.S. equities today are still basically flat year-to-date when it comes to total returns. “On that basis, it is also worth pointing out that you cannot make the case that there is a negative wealth effect at play that is feeding through to the macro backdrop,” he wrote.

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Everybody knows a solution must be found.

Why The US-China Trade Talks Will Work: The Personal Touch (Kuhn)

The dinner meeting between the two presidents, Xi Jinping and Donald Trump, lasted well longer than planned. Xi began with a well-prepared, detailed presentation that lasted 45 minutes and impressed even the US hardliners in attendance with its substance and resolve. Trump, as expected, extolled the meeting, but more meaningfully, I believe, China’s Ministry of Commerce immediately went on record to call the talks “very successful”. Other Chinese officials quickly affirmed that new measures would combat intellectual property theft. Even more significant, perhaps, rumours were afoot that major changes were in the works for “Made in China 2025,” including reductions in state subsidies for new technologies and a greater openness to participation by foreign companies.

The announcement that US Trade Representative Robert Lighthizer, a China hawk, was placed in charge of negotiations was greeted positively by Chinese officials who have long requested clarity in a single US point person with whom to negotiate. It is a socio-political principle that nationalistic hawks can often achieve peace more easily than globalist doves because it is more difficult for domestic detractors to undercut them as being “soft”. Regarding the apparent 90-day “drop dead” date, Larry Kudlow, Trump’s top economic adviser, said “If there’s good, solid movement and good action, he ‘[Trump] might be willing to extend.”

The arrest of Huawei’s CFO triggered accusations and counter accusations, but neither side, tellingly, called the trade talks into question. In fact, there were parallel affirmations the talks would continue. Peter Navarro, the White House adviser considered with good reason to be the most hawkish on China, said that stock markets should be “patient and optimistic”. Navarro, he of the “death by China” screed, said what? Optimistic! Moreover, when I speak to Chinese economists, I hear the conviction that many of the US demands – IPR protection, opening up markets, reductions in state subsidies – are precisely what China needs to do anyway.

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The swings forbid any notion of it being an investment.

12 Months Of Bitcoin Misery (MW)

Monday, Dec. 17, will mark one year since the price of bitcoin — the best-known cryptocurrency — hit an all-time high just shy of $20,000. For bulls who bought the hype, it’s been a long — and painful — ride down. At the time, the digital currency was up more than 1,000% for 2017, both the CME Group and Cboe had just launched bitcoin futures contracts, and everyone seemed to be making money as talk about the previously obscure crypto market made its way into the mainstream media. In retrospect, it appeared all too easy: Bitcoin rose 11 of the 12 weeks leading up to the Dec. 17 peak and logged gains in eight of the last nine months in 2017. Day traders were millionaires, analysts were predicting further drastic price increases and investors jumped on what looked like an endless gravy train.

According to Crypto Fund Research, 85 crypto-related funds launched in the first three months of 2018, and at Jan. 1 2018, there was $5.8 billion of assets under management in the crypto hedge fund industry, compared with $675 million a year earlier. But, in the blink of an eye, the tide turned: A January correction soon turned into a collapse and then turned into what was dubbed a prolonged crypto winter — a season that has yet to end. From their peaks, most major coins lost more than 80%. Bitcoin has shed as much as 85%. Ether, the popular currency that runs on the ethereum blockchain, fell as much as 95%, losing its title of the second-largest digital currency.

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Britain’s been too slow to ditch its old parties. Same as US. All over continental Europe, the process has started already.

Failed By Both Major Parties, Betrayed Britain Lurches Towards The Abyss (G.)

The seesaw is smashed. The pendulum is stuck. The tides are frozen. All the trusty images that used to help explain British politics have been scrambled by Brexit. Back in simpler times, a bad week for one politician or party translated into a good one for a rival. Seesaws went up and down. Pendulums swung. Tides flowed in and out. It is one of the unique characteristics of the Brexit crisis that it makes winners of none and losers of all. The past seven days have demonstrated that this is a wind so ill that it blows no one any good. The most deserved losers are the Brexit ultras. They finally launched their leadership coup and failed miserably. Without a plausible plan or a credible leader, these are the men who put the ass into assassin.

After all their prating about “taking back control”, they couldn’t even organise the removal of a mortally wounded prime minister. The Brexit fanatics have always been a minority of a minority and now no one can be in any doubt about that. And this same gang claim they could negotiate a superior agreement with the EU or handle a no-deal Brexit in 100 days that are left? Oh, please. Yet there was no humility in defeat from the ultras. It was with a poisonous lack of grace that they continued to demand Mrs May’s resignation even after she had prevailed in the confidence vote that they forced upon their party. You are entitled to belly laugh the next time that anyone tries to commend Jacob Rees-Mogg as a courteous gentleman.

The mask of phoney civility slipped when this serpent in a double-breasted suit continued to hiss for Mrs May’s head after his coup had failed. Alas for her, the defeat of her tormentors did not amount to a victory for the prime minister. To keep her job for now, she had to pledge to give it up before the next election. Mrs May purchased her survival in the currency of humiliation. [..] Mrs May remains imprisoned by the parliamentary maths, her past mistakes and her lack of dexterity. After all the to and fro between Westminster and European capitals, pinging from one side of the Channel to the other like a battered shuttlecock, there is no better prospect of her deal passing the Commons than there was on Monday when she swerved the vote.

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Now the Tories want a second vote?!

British Minister Warns Brexit Is Stuck As No-Deal Or Referendum Loom (R.)

Britain’s exit from the European Union was heading for an impasse, one senior minister said on Saturday, after a week in which Prime Minister Theresa May failed to win EU assurances on her deal and pulled a vote because UK lawmakers would defeat it. With just over 100 days until Britain leaves the bloc on March 29, Brexit remains up in the air with growing calls for a no-deal exit, a potentially disorderly divorce that business fears would be highly damaging, or for a second referendum. May pulled a vote on her deal on Monday after acknowledging it would be heavily defeated over concerns about the “backstop”, an insurance policy designed to avoid any hard land border for Ireland but which critics say could bind Britain to EU rules indefinitely.

Two days later, she survived a plot to oust her from those in her own party who support a hardline Brexit, showing the level of opposition she faced. May herself has acknowledged that Britain’s parliament appears deadlocked with no clear support for any option, with the small Northern Irish party that props up her government leading the criticism of her deal. “Brexit is in danger of getting stuck – and that is something that should worry us all,” pensions minister Amber Rudd wrote in Saturday’s Daily Mail newspaper. “If MPs (lawmakers) dig in against the prime minister’s deal and then hunker down in their different corners, none with a majority, the country will face serious trouble.”

[..] Rudd – one of five ministers who, according to newspapers, are leaning toward having a second referendum – said a no-deal scenario “mustn’t be allowed to happen” and urged lawmakers from all parties come together to stop it. “We need to try something different. Something that people do in the real world all the time, but which seems so alien in our political culture – to engage with others,” she said. “We need to acknowledge the risk that parliament could spend the next precious few months debating about preferred solutions and end up with no compromise, no agreement and no deal.”

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These conferences are simply the wrong way to treat the issue. Incumbent governments and industries owe their powers to what they must now change radically. That threatens those powers, so they’ll delay where they can.

UN Climate Change Talks Avoid Contentious Issues In Draft Agreement (O.)

The UN met on Saturday in Poland to discuss a draft agreement on climate change, which sources said was likely to pass, as exhausted delegates made compromises on some key issues but left other contentious problems to be resolved next year. The result will not be the breakthrough campaigners and some countries were hoping for, but will keep discussions alive on formulating key aspects of the implementation rules for the 2015 Paris accord. Delegates have been thrashing out a text on the complex mechanisms required to put the Paris goals into effect for the past two weeks, and appeared partly successful as the talks overran their Friday deadline and looked likely to continue into late afternoon on Saturday at least.

The text will give countries clarity on key points such as accounting for their greenhouse gas emissions and recording their carbon reductions. They will also go some way to encourage the stepping up of each country’s climate change efforts. Among the issues holding up progress is the highly technical question of what should happen to the market for carbon credits, held by some countries in recognition of their emissions-cutting efforts and their carbon sinks, such as forests. These credits count toward countries’ emissions-cutting targets. Brazil introduced wording that would benefit the country for its huge rainforest cover, but critics said contained loopholes that allowed for double counting of carbon credits would severely undermine the integrity of the system.

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Not to say what happens today is not bad, but that it’s happened for many years. it’s America, not Trump.

Deportations Under Trump Are On The Rise But Still Lower Than Obama’s (WaPo)

Amid President Trump’s push for tighter immigration policies, the United States deported more than 256,000 people in 2018 — the highest number since the Obama administration, new data shows. U.S. Immigration and Customs Enforcement Deputy Director Ronald D. Vitiello announced Friday that in the past fiscal year, which ended in September, ICE has detained “a record number” of people in the country illegally and that the number of those deported has risen about 13 percent since 2017. The data, which comes from a new agency report, shows that 145,262 of those deported were convicted criminals and that 22,796 had criminal charges pending against them. In addition, 5,872 were reported as known or suspected gang members, and 42 were believed to be terrorists, according to the report.

The number of families and unaccompanied children who were deported also increased. ICE said that 2,711 who were traveling in families and 5,571 unaccompanied children were removed from U.S. soil. “We’ve continued to achieve gains in all meaningful enforcement measurements,” Vitiello said, despite significant underfunding. The strain on resources is a consequence of current border crisis, he said. “With the continued surge and without congressional action to fund the agency at adequate levels, ICE may be forced to make difficult choices that could hamper our ability to fulfill our public safety or national security mission,” he added, noting that the agency does not want to release detainees as a result of budgetary constraints because it would create a public safety risk.

[..] Mary Bauer, deputy legal director for the Southern Poverty Law Center, said it is “appalling and morally unconscionable that this is the place where we find ourselves” — deporting people “without a sense of priorities.” “It used to be that there was a sense that they were looking for people who had committed serious crimes,” she said in a phone interview with The Washington Post. In fact, U.S. deportation numbers were higher during the Obama administration, reaching 409,849 in 2012, according to ICE’s Enforcement and Removal Operations reports. Data shows that in 2015 and 2016, however, the number of those deported dropped to 235,413 and 240,255, respectively.

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They’re all ruled by their intelligence services.

How The ‘Five Eyes’ Cooked Up The Campaign To Kill Huawei (SMH)

The man who runs an agency that unlocks electronic secrets had a poacher’s view of the threat: “Offence informs defence and defence informs offence. Or to put it another way, to catch a thief, you will need to think like one (or perhaps, be one).” Since then he has given a TV interview and opened a Twitter account with a lively first post; “Hi internet, ASD here. Long time listener, first time caller.” Burgess has even dabbled in some light trolling of Huawei. On November 21 when a Huawei executive boasted of successfully separating the core and access parts of a 5G network in New Zealand he tagged the ASD boss on his post. To the surprise of most Burgess replied; “Thanks for sharing. In my business I’ve never seen anything “fully isolated…”.

Seven days later New Zealand banned Huawei from supplying 5G equipment to mobile phone company Spark. Then on December 6, the head of the Canadian Security Intelligence Service, David Vigneault, who had hosted the annual Five Eyes gathering, used his first ever public speech to warn of an emerging threat. “CSIS has seen a trend of state-sponsored espionage in fields that are crucial to Canada’s ability to build and sustain a prosperous, knowledge-based economy,” he said. “I’m talking about areas such as AI [artificial intelligence], quantum technology, 5G, biopharma and clean tech. In other words, the foundation of Canada’s future growth.”

No one was in any doubt he was talking about China. A formal ban on Huawei and ZTE from Ottawa is expected within weeks. A day after the Canadian spy boss spoke, the head of MI6 was on his feet at his old Scottish university, St Andrews. In a speech described as “rare” he warned that “much of the evolving state threat is about our opponents’ increasingly innovative exploitation of modern technology”.

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Weakish piece, but the point must be made.

The Russia Investigations: A Case Still Unproven (NPR)

Editor’s Note: This story has been edited to make it clear that it is analysis and that the allegations of the Trump campaign conspiring with the Russians remain unproven.

Political and legal danger for President Trump may be sharpening by the day, but the case that his campaign might have conspired with the Russian attack on the 2016 election is still unproven despite two years of investigations, court filings and even numerous convictions and guilty pleas. Trump has been implicated in ordering a scheme to silence two women ahead of Election Day in 2016 about the alleged sexual relationships they had with him years before. That is a serious matter, or it might have been in other times, but this scheme is decidedly not a global conspiracy with a foreign power to steal the election.

More broadly, the president and his supporters say, the payments to the women in 2016 are penny ante stuff: Breaking campaign finance law, if that did take place, isn’t like committing murder, said one lawyer for the president. The “biased” Justice Department is just grasping at straws to use something against Trump because it hasn’t been able to locate a “smocking gun,” as Trump wrote this week, that would tie his campaign in with Russia’s active measures in 2016.

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What does the BBC want? For Russia to stop laughing? Look through your own coverage and see where Russia was accused of god knows what without proper evidence. If that happened to you, you’d be laughing too. There’s nothing else left. it’s not as if Russia is allowed to defend itself.

How Putin’s Russia Turned Humour Into A Weapon (BBC)

In the dying days of the Soviet Union, Russians used humour to escape the bleak reality of economic stagnation, food shortages and long queues. Political satire flourished on TV in the form of latex puppets during the 1990s, but it was quickly slapped down when Vladimir Putin came to power. In today’s Russia, where the media is largely controlled by the Kremlin and its allies, there is little room for genuine political humour unless it is used to deflect the blame from the government. Humour and ridicule were a key part of Moscow’s response when the UK said it was “highly likely” that Russia was behind the poisoning of former spy Sergei Skripal and his daughter, Yulia, in Salisbury.

Russian officials and media figures have since tried to turn the English phrase “highly likely” into a mocking catchphrase that implies Russia is being blamed for everything with the flimsiest of evidence. They have enlisted a range of popular figures from English literature, such as Agatha Christie’s Hercule Poirot and Conan Doyle’s Sherlock Holmes, to ridicule British allegations of Russian involvement in the poisoning which they denounce as unfounded. [..] One spoof job advert joked that the GRU was “looking for employees for its cyber-attack department, chemical weapons department and election-meddling unit. There is no need to apply – we will find you ourselves”. Ben Nimmo, an Atlantic Council researcher on Russian disinformation, told the BBC that attempts to create funny memes were part of the strategy as “disinformation for the information age”.

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Late night talk shows are dead. Smothered in the echo chamber.

Late Night Swapped Laughs For Lusting After Mueller (S.us)

If the late night ‘comedy’ of the Trump era has something resembling a ‘message,’ it’s that large segments of the nation’s liberal TV viewership are nervously tracking every Russia development with a passion that cannot be conducive to mental health – or for that matter, political efficacy. One feature of the Mueller saga is the enormous amount of energy that has been expended on venerating and defending him; energies which, at least theoretically, could have been directed toward doing something useful. The trend seems to reflect the total political enervation of this class of people – elite liberal culture-producers and consumers – who are still whipsawing between two-bit schemes to topple Trump, while in the process glossing over (or ignoring, or ridiculing) the structural forces which gave rise to Trump in the first place.

Their expressions of comedic angst actually render them more and more politically impotent. Democrats’ success in the midterms may have given the false assurance that a critical mass of the country actually respects this drivel. To understand how late night comedy got so uniquely tedious, it’s instructive to consider Colbert in particular. He first emerged as a protegée of Jon Stewart, whose Daily Show received such adulation in the early-and-mid 2000s because Stewart appeared to be doing something different and, yes, subversive – castigating the media for its illogical deference to power, a sorely needed antidote in the years of George W. Bush. (Whether this schtick was truly subversive is another question, but it did at least seem that way for a time.)

The popular TV comedians of today, conversely, are the polar opposite of subversive. Nothing about their daily pillorying of Trump challenges conventional wisdom, because unrestrained personal animus for Trump is the defining characteristic of conventional wisdom. When Bush was waging the Iraq War, he did so bolstered by a media consensus that cast him and his cause in an honorable light, and depicted his critics as screeching anti-war freaks. Even before he was inaugurated, Trump has been heaped with a level of scorn so ferocious that it would have made Dick Cheney blush.

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Dec 152018
 
 December 15, 2018  Posted by at 11:09 am Finance Tagged with: , , , , , , , , , , ,  


Vincent van Gogh Road menders at Saint-Remy 1889

 

US Banks See Biggest Unrealized Losses On Securities Since Q1 2009 (WS)
European Banks’ €300 Billion Race To The Bottom (BBG)
Global Debt Hits All-Time High Of $184,000,000,000,000 (RT)
Act V: Yellow Vests Prepare For Massive ‘Macron Resign’ Protest (RT)
Senior Tories Tell May To Work With Corbyn To Save Her Brexit Deal (Ind.)
Theresa May’s Brexit Strategy Left Brutally Exposed By Brussels Failure (G.)
Affordable Care Act Is Ruled Unconstitutional By A Federal Judge (CNBC)
Clinton Foundation Oversight Panel Hears Explosive Testimony (RT)
The War Against Globalism (Giraldi)
Yanis Varoufakis’s Internationalist Odyssey (Nation)

 

 

EU banks are disasters. US banks are too.

US Banks See Biggest Unrealized Losses On Securities Since Q1 2009 (WS)

The FDIC just released the aggregated third-quarter performance metrics of the 5,477 banks and thrifts it insures. The amount of their combined assets ticked up to $17.7 trillion. These assets – mostly loans but also investments of all kinds – include $3.6 trillion in securities (not including the securities in their trading accounts). And banks got hit by the biggest quarterly losses on those securities since the first quarter of 2009. Banks designate these securities either as “held-to-maturity” securities (valued at “amortized cost” or book value) and “available-for-sale” securities (valued at “fair value,” such as market value). For Q3, these were their unrealized losses – meaning, banks have not yet sold the securities:

• Available-for-sale securities: $51.5 billion in unrealized losses, or 2% of their amortized cost, as the FDIC said, “the highest loss level since first quarter 2009.” • Held-to-maturity securities: $32.8 billion in unrealized losses. • Both combined: $84.3 billion in unrealized losses. Note the damage done in 2018, after years of big gains: $83.4 billion in Q3; $66.4 billion in Q2; and about $55 billion in Q1; for a total so far this year about $200 billion in unrealized losses.

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And Draghi went for negative rates. One for the history books.

European Banks’ €300 Billion Race To The Bottom (BBG)

As we approach the end of a dismal year for European stocks, the question is: which sector had the worst year of them all? With a few trading sessions left before the end of 2018, banks and autos are in a tight race to the bottom. As of Thursday’s close, lenders are the biggest losers, with a quarter of their market value down the drain, a wipeout of roughly 300 billion euros in shareholders’ money. Banks haven’t seen such a bad year since the heat of the euro-zone sovereign debt crisis in 2011. As the final ECB meeting of the year confirmed, the central bank will keep rates unchanged at least until next summer and the grim outlook for the sector highlighted in one of our earlier Taking Stock columns remains valid.

Any attempt by the sector to break out from its downward trend in 2018 has so far failed. Perhaps it’s not a surprise as banks face a wall of worry from investors and nothing seems to be able to help them move forward. Repeated calls from some analysts that the sector is cheap hasn’t triggered any significant buying. A good example is Credit Suisse’s buyback and dividend announcement on Wednesday. That didn’t even raise investors’ interest with the stock hovering near its low. While any return of capital to shareholders is welcome, the dark clouds over its investment banking outlook seemed to weigh more.

Here’s the grim silver lining: …it doesn’t matter much to the rest of the market: Since the financial crisis a decade ago, the influence of banks over the broader European gauge has fallen dramatically, to a point where they now barely move the Stoxx 600. So what could help the shares regain their vigor? Although merger talk seems to find fruitful (speculative) ground, large cross-border deals remain a fantasy. But domestic love stories might be one theme to keep an eye on next year. Most prominent is the ongoing chatter about Deutsche Bank and Commerzbank, the worst and third-worst performing stocks in the Stoxx 600 Banks index. While any merger is far from certain, market reaction shows that investors, or at least algos and punters, are betting on any consolidation as the last resort to improve bottom-lines.

And if you are gloating at the “fortress balance sheet” US banks, as BMO’s Brad Wishak notes, price and time are playing a familair hand in US bank stocks… Finally, BofAML strategists summed it all up very succinctly this week: “What we learned in 2018: That central banks trump everything, when global liquidity peaked in Q1, markets peaked; that we remain in a deflationary world which cannot handle a 10-year Treasury yield above 3%; That investors have no satisfactory answers to the existential questions of ‘If not stocks, what?’, ‘If not tech, what?’ ‘If not the U.S. dollar, what?'”…

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Sometimes you wonder if even a grand jubilee could change this.

Global Debt Hits All-Time High Of $184,000,000,000,000 (RT)

The world’s debt currently exceeds $86,000 per person on average, according to the IMF. The US, China, and Japan are the top three global borrowers, accounting for more than half of the global debt. The IMF has calculated that their share of debt exceeds that of output. It stated that the emergence of China among the top ranking is, however, a relatively new development. Since the beginning of the millennium, China’s share in global debt surged from less than three percent to over 15 percent, underscoring the rapid credit surge in the aftermath of the global financial crisis. According to the IMF, global debt has reached a record high of $184 trillion in nominal terms.

That’s the equivalent of 225 percent of the world GDP in 2017. The debt figure is $2 trillion higher than the estimated number released by the fund in October, because it includes the debts of several countries who had not previously reported their updated data. “By including both the sovereign and private sides of borrowing for the entire world, the GDD (Global Debt Database) offers an unprecedented picture of global debt in the post-World War II era,” said the IMF. GDD is a comprehensive dataset covering public and private debt for 190 countries dating back to the 1950s.

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As I write this, things seem to be quiet still.

Act V: Yellow Vests Prepare For Massive ‘Macron Resign’ Protest (RT)

Paris is bracing for yet another round of Yellow Vest protests, with demonstrators planning to take to the streets on Saturday. More than 10,000 people have already RSVP’d on Facebook to the ‘Acte 5: Macron Démission’ march. The demonstration is scheduled to take place in the French capital on the Champs-Élysées. The organizers, consisting of some 15 groups, have outlined their list of demands on Facebook, saying they will continue their action against Macron until all their demands are met. “Our organizations support the demands of tax and social justice brought by the movement of yellow vests.

They call for demonstrations Saturday, December 15, for social justice and tax, for a real democracy, for equal rights, for a true ecological transition…” the planners said in a statement, as quoted by Le Parisien. Similar demonstrations are also expected to take place in other cities across the country. Security officials are gearing up for the protests, with Paris Police Chief Michel Delpuech stating that tens of thousands of cops will be deployed across France, and some 8,000 in Paris. “We need to be prepared for worst-case scenarios,” he said. Delpuech told RTL that authorities are aiming to be in “better control” of the situation than they were last weekend, when more than 125,000 people hit the streets of France, 10,000 of whom protested in Paris.

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But why should he?

Senior Tories Tell May To Work With Corbyn To Save Her Brexit Deal (Ind.)

Senior Tories have told Theresa May to open talks with Labour as her only hope of salvaging a Brexit deal, after the EU’s outright refusal to renegotiate left her strategy in tatters. A badly bruised prime minister was urged to stop trying to “go it alone”, accept her proposed agreement is dead and that she needs the help of other parties to push through softer exit terms. Nicky Morgan, the former education secretary, told The Independent that “cross-party support and proper discussions” were now essential, while Nick Boles, another former minister, said Ms May “must open cross-party discussions”.

The calls came after EU leaders dealt a devastating blow by scrapping written commitments, designed to help Ms May pass her deal through parliament, after disastrous talks failed to achieve a breakthrough. Brussels’ frustration at the prime minister’s inability to set out clearly what she wanted was laid bare when Jean-Claude Juncker, the European Commission president, branded the UK approach “nebulous”. At a press conference, Ms May put a brave face on, insisting her Brexit deal remained on track and that talks in the next few days would achieve “further clarification”.

[..] Jeremy Corbyn said the prime minister had “utterly failed in her attempts to deliver any meaningful changes to her botched deal”, calling for a Commons vote to kill it off without delay “Rather than ploughing ahead and dangerously running down the clock, the prime minister needs to put her deal to a vote next week so parliament can take back control,” he said. Nevertheless, Mr Boles said the route to success for Ms May was cross-party talks to “deliver their support for the deal”.

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She fled to Europe because she could, not to get anything done. The result is no Commons vote until after Christmas.

Theresa May’s Brexit Strategy Left Brutally Exposed By Brussels Failure (G.)

Theresa May has come home from Brussels empty-handed and without hope of further negotiations over the Irish backstop, with the failure to achieve any kind of breakthrough leaving her brutally exposed. Plans to work over Christmas on a legal guarantee over the temporary nature of the backstop had run into a brick wall, EU officials said, despite May’s claim that she would be holding further talks “in the coming days”. Brussels sources claimed May was just keeping up a pretence that the legal guarantee she had promised rebellious Tory MPs during this week’s leadership challenge was still on the cards.

Without clear evidence that she has made progress, May faces mounting jeopardy in Westminster, with Labour seriously considering tabling a vote of no confidence before Christmas, if it believes the prime minister’s DUP partners might support it. Jeremy Corbyn accused May on Friday of “dangerously running down the clock”. “The last 24 hours have confirmed that Theresa May’s Brexit deal is dead in the water. The prime minister has utterly failed in her attempts to deliver any meaningful changes to her botched deal,” he said. One shadow cabinet member said the moment at which Labour would table a no-confidence vote was getting “much, much closer”, but said it would depend on the stance of the DUP. “We are watching like hawks,” he added.

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Set up a bipartisan commission and get this solved. The US is a tragic laughing stock.

Affordable Care Act Is Ruled Unconstitutional By A Federal Judge (CNBC)

A federal judge in Texas ruled on Friday the Affordable Care Act unconstitutional, potentially threatening health-care coverage for millions of Americans and setting up a new legal showdown over former President Barack Obama’s signature policy initiative. U.S. District Court Judge Reed O’Connor of Texas issued the decision, declaring that key portions of the legislation were inconsistent with the Constitution. O’Connor’s ruling argued that the health-care law can not stand on its own since Congress last December repealed the individual mandate, which imposed a tax penalty on consumers who went uninsured. The mandate, which remains in effect for 2018, was a key part of ACA legislation, otherwise known as Obamacare. The mandate is the greater of $695 person per adult, or 2.5% of household income.

The lawsuit was backed by the Trump administration, and is likely to be appealed — which could mean the legislation will heard anew by the Supreme Court, which upheld Obamacare in a narrowly divided 2012 ruling. Medicare & Medicaid Services Administrator Seema Verma told reporters earlier this month that CMS has a plan to protect pre-existing conditions if the law is struck down. A CMS spokesperson late Friday told CNBC, “The recent federal court decision is still moving through the courts, and the exchanges are still open for business and we will continue with open enrollment. There is no impact to current coverage or coverage in a 2019 plan.”

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Government investigators who refuse to share documents with the House. Not just insane, but by now years of insanity.

Clinton Foundation Oversight Panel Hears Explosive Testimony (RT)

Fraud investigators have exposed the Clinton Foundation’s alleged misdeeds in a Congressional hearing, describing it as a de facto “foreign agent” devoted not to charity but to “advancing the personal interests of its principals.” The Clinton Foundation acted as an agent of foreign governments “early in its life and throughout its existence,” according to testimony by former government forensic investigator John Moynihan, which, if true, would not only render it in violation of the Foreign Agents Registration Act but also would violate its nonprofit charter, putting it on the hook for a massive quantity of unpaid taxes. Moynihan and fellow ex-government investigator Lawrence Doyle shared 6,000 pages of evidence with the IRS over 18 months ago, only to be met with silence.

They shared them with the FBI multiple times – ditto. Yet when the pair testified before the House Oversight and Government Reform Committee, they refused to turn over the documents, stating they did not want to interfere with any ongoing investigations. The committee chairman Rep. Mark Meadows (R-NC) said witnesses’ reluctance to share all the documents was hardly a “good foundation for truth and transparency,” while Rep. Jody Hice (R-GA) said he felt the duo was “using” the panel for their own benefit. “These are not our facts. They are not your facts. They are the facts of the Clinton Foundation,” said Moynihan, maintaining his interest in the case is purely financial – not political.

Testifying on their findings, Doyle highlighted the Foundation’s alleged “misuse of donated public funds,” explaining that it “falsely attested that it received funds and used them for charitable purposes which was, in fact, not the case. Rather the foundation pursued in an array of activities both domestically and abroad,” which included activities “properly characterized as profit-oriented and taxable undertakings of private enterprise, again failing the operational tests of philanthropy referenced above,” referring to the equally non-charitable pursuit of funding the Clinton Presidential Library. John Huber, appointed by former Attorney General Jeff Sessions to investigate the Clinton Foundation after Sessions recused himself from doing so, was conspicuously absent from the hearing, even though his job is to probe Clinton’s approval of the sale of US uranium assets to Russia.

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Globalism has been extremely destructive. Hard to defend.

The War Against Globalism (Giraldi)

The idea that republican or democratic government will eventually deteriorate into some form of tyranny is not exactly new. Thomas Jefferson advocated a new revolution every generation to keep the spirit of government accountable to the people alive. Call it what you will – neoliberalism, neoconservatism or globalism – the new world order, as recently deceased President George H.W. Bush once labeled it, characteristically embraces a world community in which there is free trade, free movement of workers and democracy. They all sound like good things but they are authoritarian in nature, destructive of existing communities and social systems while at the same time enriching those who promote the changes.

They have also been the root cause of most of the wars fought since the Second World War, wars to “liberate” people who never asked to be invaded or bombed as part of the process. And there are, of course, major differences between neoliberals and neoconservatives in terms of how one brings about the universal nirvana, with the liberals embracing some kind of process whereby the transformation takes place because it represents what they see, perhaps cynically, as the moral high ground and is recognized as being the right thing to do. The neocons, however, seek to enforce what they define as international standards because the United States has the power to do so in a process that makes it and its allies impossible to challenge.

The latter view is promoted under the phony slogan that “Democracies do not fight other democracies.” The fact that globalists of every type consider nationalism a threat to their broader ambitions has meant that parochial or domestic interests are often disregarded or even rejected. With that in mind, and focusing on two issues – wholesale unwelcome immigration and corrupt government run by oligarchs – one might reasonably argue that large numbers of ordinary citizens now believe themselves to be both effectively disenfranchised and demonstrably poorer as rewarding work becomes harder to find and communities are destroyed through waves of both legal and illegal immigration.

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I can still hope he succeeds, but it’s getting hard to see how.

Yanis Varoufakis’s Internationalist Odyssey (Nation)

Flanked by a dozen members of DiEM25, the pan-European movement launched in 2016 to “democratize” the continent’s institutions, Varoufakis announced that he would run for a seat representing Germany in the European Parliament. He would make his bid as a Greek, a European, and, you might even say, a Berliner—all to drive home a larger point about the necessity of thinking beyond borders. “No European people can be prosperous and free when other European countries are condemned to the permanent depression that eternal austerity creates,” he said. Persistent unemployment, cuts to welfare, and other suffocating economic policies across the continent help explain why Varoufakis chose Germany—a country he’s best known for antagonizing, precisely over its leaders’ support for austerity, in the fraught negotiations over Greece’s debt in 2015.

These circumstances are also the motivating force behind the Progressive International, an initiative that Varoufakis launched five days later in Burlington, Vermont, with DiEM25 and the Sanders Institute. Building broad-based coalitions takes time, and for now, the Progressive International is just a website with some inspiring language and a video. Its membership is also very Eurocentric. But Varoufakis hopes it will blossom into a global movement that helps leftists create coherent platforms, policies, and parties to defeat the “nationalist international” masterminded by Donald Trump’s former chief strategist, Steve Bannon. The logic is simple. Financiers have long had global networks; now, right-wing authoritarians do too, with coordinated social-media strategies and deep pools of dark money funding campaigns and disrupting elections around the globe.

It’s time for the left to go on the offensive and reclaim its tradition of internationalism: in Varoufakis’s words, to “mobilize workers, women, and the disenfranchised around the world” to prevent outright fascism from taking hold. This means local action, but it also means dreaming big. It’s a fuzzy plan, of course, and one that Varoufakis’s critics deem implausible. Aren’t ideas like “democratizing” the European Union and making global finance more “progressive” oxymorons? How will a ragtag group of leftists dream up a new monetary system and an ecological New Deal for the whole world when Goldman Sachs and ExxonMobil call the shots?

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Dec 142018
 
 December 14, 2018  Posted by at 10:13 am Finance Tagged with: , , , , , , , , , , , , ,  


Paul Signac Boulevard de Clichy under snow 1886

 

ECB To Halt €2.6 Trillion Stimulus Despite Eurozone Slowdown Concerns (G.)
Shipping Costs From China To The US More Than Doubled In 2018 (CNBC)
China Reports ‘Ugly’ Industrial Output And Retail Sales Growth (CNBC)
Average UK Worker Earns A Third Less Than In 2008 (PA)
EU Leaders Scrap Plans To Help Theresa May Pass Brexit Deal (Ind.)
Labour Plans To ‘Throw Kitchen Sink’ To Force May’s Hand On Brexit (G.)
There Should Be No Exit from Brexit (Spiegel)
My Plan To Revive Europe Can Succeed Where Macron, Piketty Failed (Varoufakis)
A World That Is the Property of the 1% (Nomi Prins)
Trump Inauguration Spending Under Criminal Investigation (CNBC)
US ‘Miscarriage Of Justice’ In Butina Case Denounced (RT)
US Senate Passes Resolution Saying MbS Responsible For Khashoggi Murder (Ind.)

 

 

No. 1 victim will be Italy. ECB was the only buyer of their bonds. And bit by bit Europe will realize Draghi has been spending them into a blind alley. 2019 promises to be a crazy year in Europe.

ECB To Halt €2.6 Trillion Stimulus Despite Eurozone Slowdown Concerns (G.)

The European Central Bank will halt its €2.6tn stimulus programme in January despite concerns that the eurozone is poised to slow down over the next couple of years. Mario Draghi, the ECB boss, warned that rising uncertainty had forced the bank to downgrade its outlook for the currency bloc next year and the effects would continue to be felt in 2020. Draghi, without mentioning the US-China trade war, Brexit or the Italian government’s dispute with Brussels, said: “The balance of risk is moving to the downside.” He said growth would be limited to 1.7% in 2019, “owing to the persistence of uncertainties related to geopolitical factors, the threat of protectionism, vulnerabilities in emerging markets and financial market volatility”.

The worse-than-expected outlook sent the euro tumbling on international exchanges as investors cut back their expectations for growth across the continent. Figures showing that the German economy contracted in the last quarter were a clear signal that the eurozone had come under pressure from weakening global trade, while the slowing of the bloc’s other two major economies – France and Italy – only added to the worsening outlook. However, the ECB said the recovery was strong enough that it could stop expanding its QE programme that has seen it pump €2.6tn into the eurozone economy to stoke growth and inflation from January.

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Fear of tariffs and trade wars cause US importers to front-load their orders, causing shipping to get much busier. The US imported much more, not less after Trump’s tariffs rhetoric.

Shipping Costs From China To The US More Than Doubled In 2018 (CNBC)

The price of shipping a container from China to the United States has risen dramatically in the last year due to uncertainty surrounding trade tensions between Washington and Beijing. That’s because Chinese exporters have been rushing to get goods to U.S. ports before new tariffs kick in, but data are suggesting that trend may soon run out of steam. China and the U.S., the world’s two largest economies, have been locked in a tit-for-tat tariff fight over the last year, levying duties on each other’s imports worth hundreds of billions of dollars in the last few months. Increasingly strong fears of an all-out trade war have inspired exporters to push forward shipment dates — a phenomenon called front-loading.

In fact, freight prices for containers going from China to the U.S. have surged more than 100 percent from a year ago as of the beginning of December, according to data from Freightos, an online freight marketplace, “Transpacific ocean freight peak season has been a bonanza, with prices still more than double last year,” said a report on the most recent Freightos data published on the Baltic Exchange’s news website. That was as freight rates for China to the U.S. West Coast jumped 128 percent while those from China to the U.S. East Coast surged 123 percent compared to the same period a year ago. In contrast, China to North Europe freight rates were up just 11 percent in the same period due to pre-Christmas cargoes.

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And that is after exports to the US were frontloaded because of tariffs. What’s going to happen after January 1?

China Reports ‘Ugly’ Industrial Output And Retail Sales Growth (CNBC)

China on Friday reported industrial output and retail sales growth for the month of November that missed expectations, according to data from the National Bureau of Statistics, as the world’s second-largest economy started to show signs of slowing amid a bitter trade dispute with the U.S. Industrial output in November grew 5.4 percent from a year ago — the slowest pace in almost three years as it matched the rate of growth seen in January to February 2016, according to Reuters records. The growth in industrial production was lower than the 5.9 percent analysts in a Reuters poll had predicted.

Retail sales rose 8.1 percent in November — the weakest pace since 2003, according to Reuters’ records — lower than the 8.8 percent the analysts expected. November retail sales growth was down from 8.6 percent in October. Fixed asset investment rose 5.9 percent from January to November, marginally higher than the 5.8 percent the economists had forecast. FAI rose 5.7 percent from January to October. [..] The weaker Chinese data in November shows that the positive impact of front-loading had begun to taper off and that downward pressure on the Chinese economy was increasing, wrote Sue Trinh, head of Asia foreign exchange strategy at RBC Capital Markets in Hong Kong. The industrial output and retail sales data released on Friday were “ugly,” she added in a Friday note.

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Why Brexit, you asked?

Average UK Worker Earns A Third Less Than In 2008 (PA)

Wages are still worth a third less in some parts of the country than a decade ago, according to a report. Research by the Trades Union Congress (TUC) found that the average worker has lost £11,800 in real earnings since 2008. The UK has suffered the worst real wage slump among leading economies, said the union organisation. The biggest losses have been in areas including the London borough of Redbridge, Epsom and Waverley in Surrey, Selby in North Yorkshire and Anglesey in north Wales, the studyfound.

Workers have suffered real wage losses ranging from just under £5,000 in the north-east to more than £20,000 in London, said the report. The TUC general secretary, Frances O’Grady, said: “The government has failed to tackle Britain’s cost-of-living crisis. As a result, millions of families will be worse off this Christmas than a decade ago. “While pay packets have recovered in most leading economies, wage growth in the UK is stuck in the slow lane. “Ministers need to wake up and get wages rising faster. This means cranking up the pressure on businesses to pay staff more, especially at a time when many companies are sitting on large profits.”

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“..European leaders were left amazed when she turned up without any developed requests or ideas…”

EU Leaders Scrap Plans To Help Theresa May Pass Brexit Deal (Ind.)

Theresa May‘s Brexit plan was dealt another major blow at a meeting with EU leaders on Thursday night in a disastrous turn of events that resulted in them scrapping written commitments to help her pass her deal through parliament. After arriving in Brussels with promises to help the prime minister, European leaders were left amazed when she turned up without any developed requests or ideas. The 27 heads of state and government subsequently decided to delete lines from their council conclusions saying the EU “stands ready to examine whether any further assurance can be provided” and that “the backstop does not represent a desirable outcome for the union”.

The key paragraphs appeared in leaked earlier drafts on the conclusions and their absence leaves a barebones statement that does the bare minimum to help the prime minister. The limited assurances provided in the statement are extremely unlikely to placate Ms May’s MPs, who have said they want major changes to the agreement. Accounts of the meeting suggest the prime minister’s speech, in which she called for help to get the agreement “over the line”, was repeatedly interrupted by Angela Merkel asking her what she actually wanted from them. Senior UK government officials admitted that the prime minister did not bring any documented proposals with her to the meeting. The approach puzzled EU diplomats, who for days before the conference had said they needed to see what proposals Ms May had come up with before they could respond to her request for aid.

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Labour lacks all strength. What have they been doing in the past 2 years?

Labour Plans To ‘Throw Kitchen Sink’ To Force May’s Hand On Brexit (G.)

Jeremy Corbyn will seek to increase pressure on Theresa May in parliament next week in a bid to prevent the Tories running down the clock on Brexit. As the prime minister urged EU leaders to offer fresh concessions in Brussels on Thursday, senior Labour sources stressed the party was determined to “turn up the heat” at home. May’s spokeswoman confirmed on Thursday that “there will be no meaningful vote before Christmas”, while the prime minister negotiates with her EU counterparts. But Labour fears May will only be able to win cosmetic changes to the backstop – and that she will use the ongoing talks as an excuse to avoid testing the will of parliament.

“There must be no more dither and delay, or attempts to run down the clock in an attempt to deny parliament alternative options,” Corbyn said on Thursday. “People and businesses need certainty. The prime minister should put her deal before parliament next week in our country’s interest,” he said, adding that there was “no time to waste”. The Labour leader has held meetings with the shadow Brexit secretary, Sir Keir Starmer, who has been pressing for the party to table a motion of no confidence in the government before parliament rises for a Christmas break next Thursday. That option has not been ruled out – depending on the reaction of Conservative backbenchers and the DUP when May reports back to MPs from the European council meeting on Monday.

But the party is also studying alternative, less drastic options, including tabling an urgent question on the government’s no-deal preparations; and demanding a three-hour emergency debate to allow parliament to set out its expectations for the latest negotiations over the backstop. It could also demand a full parliamentary debate of regulations readying the financial services sector for a no-deal Brexit, which are currently due to be considered in a committee. “Essentially we can throw the parliamentary kitchen sink at them,” said another senior Labour source, “with all the trimmings”. Some shadow ministers are more sceptical about calling a no-confidence vote early, fearing it would only unite the Conservatives behind May. One told the Guardian: “We’ve got to wait until January now.”

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Germans that don’t want a way back for Britain. But that’s not their decision.

There Should Be No Exit from Brexit (Spiegel)

For two years, the British government has been negotiating the terms of its withdrawal with the European Commission, and now Prime Minister Theresa May is unable to secure a majority for that deal in parliament. The more chaotic things get in London, the more tempting it will become for the country to exit from Brexit through the emergency door the European Court of Justice unlocked on Monday when it declared that the British government could unilaterally move to revoke Article 50. A second referendum that would provide democratic legitimacy to that step seems increasingly likely. But such a move could potentially have graver consequences than an orderly Brexit — both for Britain and the EU.

There’s a good and perhaps even compelling argument for a second referendum: Now that a deal with the EU is on the table, voters would at least finally know what it is they were voting on. In the first referendum in June 2016, that wasn’t even remotely the case. But the campaign ahead of a second referendum would in all likelihood be even more xenophobic and hate-filled than the first. That could in turn produce a British society that is even more divided than it already is today, particularly given that recent polls show the pro-EU camp winning a second referendum by a narrow margin. This time, however, it is likely that the losers would be even angrier and more disappointed than the losers of the first vote.

Many would feel that their long-desired Brexit had been stolen from them and would turn away from democracy in frustration. It would provide a significant boost to anti-European right-wing populists. And this would lead to problem No. 2: Such an outcome would also be uncomfortable for the rest of the EU. The European bloc is currently desperately seeking to find common ground on important policy areas including economic and monetary union, defense and immigration. A Britain that is hopelessly divided on domestic policy could cause significant damage were it still an EU member state.

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I’m wondering how much of any Green New Deal -there are quite a few- depends on investing billions in allowing energy consumption to stay at equal levels, just with a shift from fossil to something else. How many people propose a 10-20-50% cut in overall energy consumption?

My Plan To Revive Europe Can Succeed Where Macron, Piketty Failed (Varoufakis)

[..] the latest Piketty manifesto retains a hybrid parliamentary chamber, but forfeits any Europeanist ambition – all proposals for debt pooling, risk sharing and fiscal transfers have been dropped. Instead, it suggests that national governments agree to raise €800bn (or 4% of eurozone GDP) through a harmonised corporate tax rate of 37%, an increased income tax rate for the top 1%, a new wealth tax for those with more than €1m in assets, and a C02 emissions tax of €30 per tonne. This money would then be spent within each nation-state that collected it – with next to no transfers across countries. But, if national money is to be raised and spent domestically, what is the point of another supranational parliamentary chamber?

Europe is weighed down by overgrown, quasi-insolvent banks, fiscally stressed states, irate German savers crushed by negative interest rates, and whole populations immersed in permanent depression: these are all symptoms of a decade-long financial crisis that has produced a mountain of savings sitting alongside a mountain of debts. The intention of taxing the rich and the polluters to fund innovation, migrants and the green transition is admirable. But it is insufficient to tackle Europe’s particular crisis. What Europe needs is a Green New Deal – this is what Democracy in Europe Movement 2025 – which I co-founded – and our European Spring alliance will be taking to voters in the European parliament elections next summer.

The great advantage of our Green New Deal is that we are taking a leaf out of US President Franklin Roosevelt’s original New Deal in the 1930s: our idea is to create €500bn every year in the green transition across Europe, without a euro in new taxes. Here’s how it would work: the European Investment Bank (EIB) issues bonds of that value with the ECB standing by, ready to purchase as many of them as necessary in the secondary markets. The EIB bonds will undoubtedly sell like hot cakes in a market desperate for a safe asset. Thus, the excess liquidity that keeps interest rates negative, crushing German pension funds, is soaked up and the Green New Deal is fully funded. Once hope in a Europe of shared, green prosperity is restored, it will be possible to have the necessary debate on new pan-European taxes on C02, the rich, big tech and so on – as well as settling the democratic constitution Europe deserves.

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From 2009 to 2017, the number of billionaires that own as much as the poorest 50% of world population went from 380 to 8. At that rate, pretty soon the world’s richest individual will own that much.

A World That Is the Property of the 1% (Nomi Prins)

Thanks to the massive accumulation of wealth by a 1% skilled at gaming the system, the roots of a crisis that didn’t end with the end of the Great Recession have spread across the planet, while the dividing line between the “have-nots” and the “have-a-lots” only sharpened and widened. Though the media hasn’t been paying much attention to the resulting inequality, the statistics (when you see them) on that ever-widening wealth gap are mind-boggling. According to Inequality.org, for instance, those with at least $30 million in wealth globally had the fastest growth rate of any group between 2016 and 2017. The size of that club rose by 25.5% during those years, to 174,800 members.

Or if you really want to grasp what’s been happening, consider that, between 2009 and 2017, the number of billionaires whose combined wealth was greater than that of the world’s poorest 50% fell from 380 to just eight. And by the way, despite claims by the president that every other country is screwing America, the U.S. leads the pack when it comes to the growth of inequality. As Inequality.org notes, it has “much greater shares of national wealth and income going to the richest 1% than any other country.” That, in part, is due to an institution many in the U.S. normally pay little attention to: the U.S. central bank, the Federal Reserve. It helped spark that increase in wealth disparity domestically and globally by adopting a post-crisis monetary policy in which electronically fabricated money (via a program called quantitative easing, or QE) was offered to banks and corporations at significantly cheaper rates than to ordinary Americans.

[..] In our post-2008 era, people have witnessed trillions of dollars flowing into bank bailouts and other financial subsidies, not just from governments but from the world’s major central banks. Theoretically, private banks, as a result, would have more money and pay less interest to get it. They would then lend that money to Main Street. Businesses, big and small, would tap into those funds and, in turn, produce real economic growth through expansion, hiring sprees, and wage increases. People would then have more dollars in their pockets and, feeling more financially secure, would spend that money driving the economy to new heights — and all, of course, would then be well.

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It should not be possible to have this kind of investigation into one side and not the other, simultaneously.

Trump Inauguration Spending Under Criminal Investigation (CNBC)

Manhattan-based federal prosecutors are investigating whether some of the $107 million in donations to then President-elect Donald Trump’s inaugural committee were misspent, The Wall Street Journal reported Thursday. The Journal, citing people familiar with the matter, said the investigation arose in part from the slew of materials seized in April raids on Trump’s former personal lawyer, Michael Cohen, by federal prosecutors. Cohen on Wednesday was sentenced to three years in prison on charges that came in part from those April raids on his office and residence. The criminal probe is also looking into whether some of the committee’s top spenders traded money for access to the incoming Trump administration, as well as “policy concessions or to influence official administration positions,” sources told the Journal.

“Giving money in exchange for political favors could run afoul of federal corruption laws,” the newspaper explained. “Diverting funds from the organization, which was registered as a nonprofit, could also violate federal law.” Federal prosecutors have reportedly also questioned Richard Gates — the ex-partner of onetime Trump campaign chairman Paul Manafort — who pleaded guilty in February to conspiracy and lying charges lodged by special counsel Robert Mueller. Gates, who has cooperated with investigators in Mueller’s probe of Russian interference during the 2016 U.S. election, served as deputy chairman of Trump’s inaugural committee.

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Exactly what I said about the case a few days ago. It’s become accepted in the US to coerce guilty pleas with vile threats and ugly treatment.

US ‘Miscarriage Of Justice’ In Butina Case Denounced (RT)

Maria Butina’s only crime is that she is Russian, legal analysts told RT, attacking the US justice system for keeping her in solitary confinement until she admitted guilt to at least one of the many charges brought against her. “This is an utter and total miscarriage of justice,” retired CIA agent and whistleblower John Kiriakou told RT after Butina pleaded guilty to the charge of failing to register with the Justice Department as an agent of the Russian government. “You can see clearly, this is not about justice, this is not about criminal activity. This is about making a political point. This is about identifying Russia and Russians as the enemy of the United States, and punishing them.”

“We arrested this young woman because we need dirt on Trump and Russia. And she is Russian, political and pro-Trump,” US legal analyst Jennifer Breedon explained. “We are seeing [the Foreign Agents Registration Act – FARA] being used specifically as it relates to undermining the Donald Trump administration or conservatives really with anybody involved in Russia, friends with Russia or contacts.” The Russian gun activist was subjected to “unbearable pressure” from US authorities, by being kept in solitary confinement in the Alexandria detention center outside Washington, and only allowed to take an hour-long break from her “cage” per day. John Kiriakou believes this borderline “torture” could have forced her to admit to a crime she might never even have committed.

“This woman is not an enemy combatant. So, unless news surfaces that there was some kind of skirmish or issue within the jail… it seems to go against US policy and laws as to who is forced into solitary confinement, just based solely on the charges that were lodged against her,” Breedon said. “You are kept in a steel cage 23 hours a day. And for what? Because she failed to fill out a form to send to the Justice Department?” Kiriakou pondered. “It is no wonder people in solitary confinement in the United States commit suicide every day.”

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Nothing to do with defying Trump, he wants this. Imagine he would say this, and then be held responsible for $400 oil. It’s much easier to speak as senator than as president. And many of these senators have politically supported Saudi for decades. They’re merely cleaning up their own mess.

US Senate Passes Resolution Saying MbS Responsible For Khashoggi Murder (Ind.)

The Senate has passed a resolution saying Saudi Arabian Crown Prince Mohammed bin Salman is responsible for the murder of journalist Jamal Khashoggi. Defying Donald Trump’s desire to maintain close relations with Saudi Arabia including lucrative weapons deals, Senate Foreign Relations Committee chairman Bob Corker proposed the legislation, which has been backed by at least 10 of his fellow Republicans. The CIA is reported to have assessed with “high confidence” that Crown Prince Mohammed was involved in the order to kill Mr Khashoggi, partly based on the judgement that as the country’s de facto ruler he would have had to have known. Saudi authorities have blamed a “rogue” team of operatives for the killing and have repeatedly denied any involvement by the crown prince.

Mr Trump and a number of administration officials have sought to play down the CIA assessment, with Secretary of State Mike Pompeo saying this week that it has been reported “inaccurately”. The joint resolution calls for the Saudi government to ensure “appropriate accountability” for all those responsible for Mr Khashoggi’s death, calls on Riyadh to release Saudi women’s rights activists and encourages the kingdom to increase efforts to enact economic and social reforms. However, it is unclear if the House of Representatives will consider voting on the measure.

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Dec 132018
 
 December 13, 2018  Posted by at 10:36 am Finance Tagged with: , , , , , , , , , , , , , ,  


René Magritte After the water, the clouds 1926

 

‘Her Goose Is Cooked’ (G.)
Tory Resentment Of Irish Power Within EU (BBC)
Cohen Gets 3 Years, Says He Will Reveal All He Knows About Trump (Ind.)
Yellen, Fed Fear Corporate Debt Bubble, Investors Don’t (CNBC)
US Bank Stocks Spiral Down (WS)
ECB Worries Multiply Even As Money-Printing Presses Stop (R.)
ECB Caught Between Economic Risks And QE Exit (CNBC)
French Government To Face A No-Confidence Vote (CNBC)
Japan Picks The Character For ‘Disaster’ To Define 2018 (Tel.)
Wikileaks’ Assange Undergoes Medical Tests At Ecuador’s Urging (R.)
Assange Complains Of ‘More Subtle’ Silencing Than Khashoggi (RT)
Fentanyl Surpasses Heroin As Deadliest Drug In US (AFP)
Time Magazine Says The US ‘Remains A Free And Fair Press’ (CNBC)

 

 

Might as well do it this way. May survives confidence vote and can now prepare to defend the deal whose certain defeat made her delay Tuesday’s Parliament vote, a delay which led to the confidence vote in the first place. She still can’t win that one. It’s not so much May who is cooked, it’s the country.

‘Her Goose Is Cooked’ (G.)

No 10 will not be happy with today’s front pages, which are all about Theresa May’s survival in the no-confidence vote, but paint the win as less of a triumph for May than a pyrrhic victory. Let’s start with the good news for the prime minister. Two papers have come out in support of the her, with the Express featuring a picture of a smiling May and the headline: “Now just let her get on with it”.


Neil Henderson
(@hendopolis)

EXPRESS: Now just let her get on with it #tomorrowspaperstoday pic.twitter.com/jBhPRSqbAc

The Mail is similarly supportive: “Now let her get on with the job!”, saying that “despite two months of sabre-rattling by her hardline opponents, and deadlock over Brexit, almost two-thirds of Tory MPs backed her”.


Neil Henderson
(@hendopolis)

DAILY MAIL: Now let her get on with the job! #tomorrowspaperstoday pic.twitter.com/oaEihTtsOv

Others were less sympathetic. “Time to call it a May”, says the Sun, never one to miss the chance of putting a pun in a headline. The Sun says the prime minister was “left wounded last night after a battering by Tory Brexit rebels”.

The Sun
(@TheSun)

Tomorrow’s front page: Theresa May was left wounded after a battering by Tory Brexit rebels in a make-or-break confidence vote https://t.co/SZTSNZoCZq pic.twitter.com/3OO11Qrm85

The Mirror has: “It’s lame duck for Christmas”, saying May’s “goose is cooked”. The paper describes her as “wounded” and “battered” and says she only managed to survive the no-confidence vote “by promising not to fight the next election”.


Daily Mirror
(@DailyMirror)

Tomorrow’s front page: It’s lame duck for Christmas#tomorrowspaperstoday https://t.co/fFIeHwiekz pic.twitter.com/xL0ijW0Qzv

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Britain’s -Tory- elites still see Ireland as some backward place way beneath them. “The Irish really should know their place.”

Tory Resentment Of Irish Power Within EU (BBC)

A Tory grandee recently sidled up to me to express grave reservations about the Brexit process. “We simply cannot allow the Irish to treat us like this,” the former minister said about the negotiating tactics of the Taoiseach, Leo Varadkar. The Conservative MP was exasperated that the Republic of Ireland (population: 4.8m) has been able to shape the EU negotiating stance that has put such pressure on the UK (population: 66m). “This simply cannot stand,” the one-time moderniser told me. “The Irish really should know their place.” The remarks explained why Conservatives from both sides of the Brexit divide are so troubled by the negotiations. They also explain why Theresa May might find that any concessions from the EU over the Northern Ireland backstop may fall short of the demands of Tory MPs.

Over the last few months Tory MPs have asked in private how the Irish Republic can believe its relationship with the EU trumps its relationship with the UK. They cite economic reasons (the Irish Republic’s strong trading links with the UK) and the historical relationship. The MPs do of course acknowledge that left a troubled legacy. One minister familiar with Anglo-Irish relations points out that these Tories should bear in mind one date and one word to explain both the Irish and the EU’s approach. The date is 1973: when the Irish Republic joined the EEC at the same time as the UK and Denmark. That was the moment when Ireland took a giant political leap at the same time as the UK.

But it turned out to be arguably the biggest unilateral strategic move since Partition in the 1920s – a move that defined the modern Irish Republic as an independent state within Europe, with a wholly different approach to its larger neighbour.

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I’m afraid I missed something along the way. If you run for office in the US and someone tries to blackmail you, you can’t get rid of them, you need to have lawsuits, court cases etc., interfere with your campaign. Not doing so is illegal. But, as Candace Owens said today,

“Congress has a slush fund, made up of tax dollars, that is used to pay off & silence their alleged sexual assaults and affairs. To date, over 200 million dollars in 200 settlements have been paid since 1998. But tell us more about Trump’s possible campaign finance violations…”

Moreover, a US judge just sentenced Stormy Daniels to paying Trump’s legal costs. But he was still in the wrong? How is that possible?

Cohen Gets 3 Years, Says He Will Reveal All He Knows About Trump (Ind.)

Michael Cohen has warned that he has more to say about what he called the ”dirty deeds” of Donald Trump as the president’s former lawyer and fixer was sentenced to three years in prison for facilitating payments to two women who have had alleged affairs with Mr Trump. Cohen was sentenced to 36 months for tax fraud and for his role in the payment of hush money to porn star Stormy Daniels and the former Playboy model Karen McDougal. Both say they had affairs with Mr Trump before the 2016 presidential election. The judge in a district court in New York also handed Cohen an extra two months for lying to Congress about a proposed Trump Tower project in Russia.

The payments have implicated Mr Trump directly in criminal conduct according to a court filing from prosecutors last week, which said that Cohen was working in coordination with the president. Cohen’s adviser Lanny Davis, who was his attorney for the case, said after the sentencing that Cohen will disclose more information concerning Mr Trump, once Robert Mueller wraps up his investigation into Russian interference in the 2016 US presidential election and possible collusion with Trump campaign officials. “At the appropriate time, after Mr Mueller completes his investigation and issues his final report, I look forward to assisting Michael to state publicly all he knows about Mr Trump – and that includes any appropriate congressional committee interested in the search for truth and the difference between facts and lies,” Mr Davis said in a statement.

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Why is anyone still listening to Yellen?

Yellen, Fed Fear Corporate Debt Bubble, Investors Don’t (CNBC)

The corporate debt scaring policy experts like former Fed Chair Janet Yellen isn’t throwing too much of a fright into market participants. In fact, some of them are continuing to load up on lower-grade corporate debt because it’s managed to be a better performer than some of the investments considered to be safer. “Offense is the best defense,” Hans Mikkelsen, credit strategist at Bank of America Merrill Lynch, told clients in a note pointing out that BBB-rated companies are outperforming their A-rated counterparts. BBB is the last rung before junk, and the increasing level of company bonds going to that level is causing concern.

Some investors worry that the companies whose debt is in danger of slipping into high-yield territory will have trouble meeting their obligations during the next economic downturn. But Mikkelsen thinks those concerns are misplaced. The S&P 500 Triple-B investment-grade corporate bond index is down 2.9 percent year to date, which is not good. However, the group is outperforming the broader S&P 500/MarketAxess Investment Grade Corporate Bond Index, which is off 3.5 percent in 2018. The outperformance grows when isolating for risk-adjusted excess returns and runs counter to history when credit spreads are widening. Higher-quality bonds usually outperform in those cases, Mikkelsen noted.

“This outperformance of BBBs is noteworthy as one of [the] key investor concerns this year remains the possibility that large BBB-rated capital structures get downgraded to high yield during the next downturn,” Mikkelsen wrote. “We think this outperformance reflects in part a low recession probability being priced into credit spreads, as well as the fact that most large BBBs are unlikely to get downgraded to [high-yield] anytime soon as they tend to have stable cash flows and significant financial flexibility.”

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When do we start talking bailouts?

US Bank Stocks Spiral Down (WS)

On Tuesday, the US KBW Bank index, which tracks the largest 24 US banks and serves as a benchmark for the banking sector, dropped 1.2%, the fifth day in a row of declines, to the lowest close since September 7, 2017. The index is now back where it had been on December 1, 2016. Two years of big gains gone up in smoke. [..] But no, the index doesn’t include Goldman Sachs – which is big in other ways but not as a bank, and which has skidded 35% from its all-time peak in February. The index has now dropped 22.5% since the post-financial crisis peak on January 26:

So far in Q4, the index has dropped 14%. Unless a miraculous banking-Santa-Claus rally pulls banks out of their dive by the end of the quarter, a 14% decline would make it the worst quarterly decline since Q3 2011. If tax selling kicks in, given the losses bank-stock investors have taken so far this year, it could get worse in the coming days. Not even in Q3 2015, during the oil bust, when investors were fearing that banks would take steep losses on their loans to the oil industry, did shares drop this much.

The index is now back where it had first been a couple of years before its crazy peak in February 2007. Said peak occurred about a year before Bear Stearns toppled. During the subsequent collapse of banks stocks, it looked like the index would hit zero. After the bottom in March 2009, the Fed’s strategies to benefit the banks and those that owned them took hold, at the expense of depositors and other classes of US stake holders, such as renters or future home buyers. And it worked. But that era is now over. And the tax cut too has been baked in, and banks are left to fend for themselves:

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Those negative rates will come back to haunt Draghi. But when their damage becomes obvious, he’ll be living quietly in some splendid villa on Lake Como.

ECB Worries Multiply Even As Money-Printing Presses Stop (R.)

The European Central Bank is all but certain to formally end its lavish bond purchase scheme on Thursday but will take an increasingly dim view on growth, raising the odds that its next step in removing stimulus will be delayed. The long-flagged end of bond buys must be irreversible for the sake of credibility, but with France and Italy in political turmoil, a global trade war still looming large and growth slowing, ECB chief Mario Draghi will be keen to emphasize that other forms of support will remain. This leaves Draghi with yet another delicate balancing act: appear confident enough to justify the end of the 2.6 trillion euro ($2.95 trillion), four-year-long bond buying program, but also sound sufficiently concerned to keep investors expectations about further policy tightening relatively cool.

“Ending quantitative easing now looks more like the ammunition is running out rather than (being) based on a convincing economic outlook,” Societe Generale economist Anatoli Annenkov said. The ECB’s problem is that growth is weaker than policymakers thought even just weeks ago while the predicted rise in underlying inflation has failed to materialize, putting in doubt some of the bank’s assumptions about the broader economy. Overall inflation, the ECB’s primary objective, may be near the target now but falling oil prices suggest a dip in the months ahead and a solid rise in wages is not feeding through to prices, leaving the bank with an unexplained disconnect.

Highlighting this complication, the ECB is likely to cut growth and underlying inflation projections and may take a dimmer view on risks, all while Draghi argues that growth is merely falling back to normal after a recent run.

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What a failure Draghi has been. Same goes for all central bank heads in the past decades. They make sure banks are fine at the expense of citizens.

ECB Caught Between Economic Risks And QE Exit (CNBC)

ECB President Mario Draghi has to tread a fine line once again as he gives his latest update on euro area monetary policy on Thursday. While steering the bank out of its QE program and stressing interest rates and reinvestments going forward, Draghi is faced with an economy that may be slowing and a dreary inflation outlook. “We expect the ECB to announce at its meeting next Thursday an end to net-purchases under the APP programme,” said Natixis’ Dirk Schumacher in a note. “While there has been a clear weakening in the economic environment, the ECB will argue that the reinvestment of the stock of bond holdings will ensure a continuing accommodative policy stance justifying an end of the program,” he added.

On Thursday, the ECB also will publish its newest staff projections for economic growth and inflation for the next three years. While it is expected that the central bank will lower its outlook for growth for the next two years, the numbers are also expected to remain just punchy enough to underline the case to exit their purchase program. Another big topic for Thursday will be the design of the ECB’s reinvestments. “The ECB will likely maintain its guidance that it will fully reinvest the proceeds and thus keep its bond holdings constant ‘for an extended period of time’ and ‘for as long as necessary’ to put inflation on track towards its target,” said Florian Hense, Economist with Berenberg.

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Might work if Le Pen joins the left.

French Government To Face A No-Confidence Vote (CNBC)

Left-of-center lawmakers in France have tabled a motion of no confidence in the French government following repeated protests and scenes of violence. The “gilets jaunes” (“yellow vests”) crisis started as a demonstration against a carbon tax policy and planned fuel tax increases, but have morphed into wider discontent at the leadership of President Emmanuel Macron. Now representatives from the French Communist Party, the Socialist Party and the far-left populist movement France Unbowed (La France Insoumise) have come together to table the motion against Macron’s government.

The government of Georges Pompidou in 1962 was successfully toppled by such a motion but few believe this one will pass as Macron’s centrist La République En Marche! party enjoys a strong majority in the 577-seat house. “The French political system makes it extremely difficult to remove a President from office,” said the Deputy Director of Research at Teneo Intelligence in a note Wednesday. “The only political tool available to the opposition to expel Macron is the constitution’s impeachment procedure, which no one is currently considering,” he added.

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Seems appropriate, but what symbols are left for the much worse years to come?

Japan Picks The Character For ‘Disaster’ To Define 2018 (Tel.)

Japan has chosen the character for ‘disaster’ to symbolise 2018. The public chose the symbol following a series of natural disasters. In July, 200 people died in floods and millions were evacuated from their homes, and mere days later 65 people died in a heatwave that hospitalised more than 20,000 people. The country was also hit by an earthquake with a magnitude of 6.7 and was rocked by its strongest typhoon for 25 years. These numerous natural disasters have had an adverse effect on the Japanese economy, and the country’s GDP has gradually shrunk over the last three months, by 1.2 per cent.

The country also experienced societal problems this year, as stories of sexual harassment in the workplace and suicide rates came to light. The master of the ancient temple in Kyoto, Seihan Mori, wrote the symbol for ‘disaster’ in dark ink on traditional white washi paper to mark the vote. The competition has been run by the Kanji Aptitude Testing Foundation since 1995. In the annual poll, 21,000 of the 190,000 people who voted picked the character to summarise the years events, but the symbol for peace was a close runner-up.

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What kind of headline is this, Reuters? The UK has refused Assange medical care for years, and now you make it look like Ecuador, not Assange himself. makes it happen?

Wikileaks’ Assange Undergoes Medical Tests At Ecuador’s Urging (R.)

Wikileaks founder Julian Assange received a series of medical exams, Ecuador’s top attorney said on Wednesday, in line with a new set of rules for his asylum at the Andean country’s London embassy that prompted him to sue the government. Assange first took asylum in the embassy in 2012, but his relationship with Ecuador has grown increasingly tense, with President Lenin Moreno saying he does not like his presence in the embassy. The government in October imposed new rules requiring him to receive routine medical exams, following concerns he was not getting the medical attention he needed. The rules also ordered Assange to pay his medical and phone bills and clean up after his pet cat.

Inigo Salvador told reporters Ecuador did not have access to results of the tests, which were conducted by doctors Assange trusted, out of respect for his privacy. But he said Assange, who has sued Ecuador arguing that the new rules violate his rights, appeared coherent and lucid to him. On Wednesday, Assange appeared via videoconference in an Ecuadorean court to appeal a previous ruling that had upheld the new rules. Assange is concerned that Ecuador is seeking to end his asylum and extradite him to the United States, but Ecuador has said the United Kingdom told it he would not be extradited.

U.S. officials have acknowledged that federal prosecutors have been conducting a lengthy criminal probe into Assange and Wikileaks. Wikileaks published U.S. diplomatic and military secrets when Assange ran the operation. A lawyer for Assange said he did not know the results of the medical tests, and called on Ecuador to produce documentation proving that the UK would not extradite him to any country where his life was at risk.

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“..accused his Ecuadorean hosts of spying and feeding information to US authorities..”

Assange Complains Of ‘More Subtle’ Silencing Than Khashoggi (RT)

Julian Assange has accused his Ecuadorean hosts of spying and feeding information to US authorities, and slammed attempts to block his journalistic work as a more subtle way of silencing than the murder of Jamal Khashoggi. Suggesting there were “facts of espionage” inside the embassy, the WikiLeaks co-founder expressed concern during a hearing in Quito on Wednesday that Ecuadorean intelligence is not only spying on him, but sharing the data it has harvested with the FBI. Ecuadorean intelligence clearly spent a sizable amount of money equipping the embassy for surveillance, Assange added.

He accused Ecuadorean authorities of “comments of a threatening nature” relating to his journalistic work and compared attempts to silence him to the murder of Washington Post columnist Jamal Khashoggi, who was tortured and cut up in the Saudi embassy in Istanbul in October, but “more subtle.” The comparison elicited a harsh reaction from Ecuadorean Prosecutor General Inigo Salvador, who accused Assange of biting the hand that feeds him. Assange told the Ecuadorean court that the living conditions in the embassy were so detrimental to his health that they may put him in the hospital – and suggested that may be the point, because once he leaves the building, he’s fair game for UK and US authorities.

[..] Assange was in court appealing a strict set of rules handed down in October governing his conduct, which he has called a violation of human rights. He submitted 15 “facts of evidence” along with letters from individuals and groups barred from visiting him at the embassy. An earlier attempt to sue his hosts over the restrictive measures was ultimately dismissed by a judge last month, while Assange rejected E

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That stuff is very bad news.

Fentanyl Surpasses Heroin As Deadliest Drug In US (AFP)

The synthetic drug, fentanyl, has surpassed heroin as the deadliest drug in the United States, taking more than 18,000 lives in 2016, federal health officials said Wednesday. In 2016, the latest year for which full data is available, “29 percent of all drug overdose deaths mentioned involvement of fentanyl,” said the report from the National Center for Health Statistics, part of the US Centers for Disease Control and Prevention. Fentanyl is a powerful, synthetic narcotic that has been blamed for the deaths of rock stars including Prince and Tom Petty. It works on the brain like morphine or heroin, but is 50 to 100 times more potent, and can easily lead to overdose.

The rate of drug overdose deaths in the United States has tripled from 1999 through 2016, as the nation grapples with a persistent opioid epidemic. Fentanyl-related drug overdose deaths have doubled each year from 2013 through 2016, “from 0.6 per 100,000 in 2013 to 1.3 in 2014, 2.6 in 2015, and 5.9 in 2016,” said the report. Meanwhile, deaths from heroin and methamphetamine more than tripled from 2011 to 2016. Heroin was the top cause of drug overdose death from 2012 to 2015, said the report. The prescription painkiller Oxycodone ranked highest in 2011.

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Every word of this is broken. Time defends the MSM against Trump, but he didn’t create fake news. I like the term ‘abuse of truth’, that verges on doublespeak, as does ‘..the willingness to dismiss anything including credible news reporting as fake news”. And c’mon, free and fair press? Who believes that?

Time Magazine Says The US ‘Remains A Free And Fair Press’ (CNBC)

Despite the White House ramping up its rhetoric, the United States remains a free and fair press, Ben Goldberger the assistant managing editor of Time magazine told CNBC on Wednesday. The year 2018 has been marked by manipulation, abuse of truth, along with efforts by governments to instigate mistrust of the facts, the magazine said in an essay when it named killed and imprisoned journalists as Person of the Year for 2018 on Tuesday. “There’s no doubt that the rhetoric from the White House about the demonization of the media as ‘the enemy of the people,’ or the willingness to dismiss anything including credible news reporting as fake news, is incredibly worrisome and chilling,” Goldberger said. “But that said, I return to what I said about the United States — this remains a free and fair press.” “Journalists here enjoy legal protections that are the envy of those in virtually every other country,” he added.

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Dec 122018
 
 December 12, 2018  Posted by at 10:34 am Finance Tagged with: , , , , , , , , , , , , ,  


Joseph Mallord William Turner Sunrise over Plain, with Figures 1830

 

Tory MPs Trigger Vote Of No Confidence In Theresa May Today (G.)
1000s Remain In Custody In France After Preventive Arrests (RT)
Macron’s Multi-Billion Giveaways Could Cost France Dearly (CNBC)
Yellen Warns Of Another Financial Crisis: Gigantic Holes In The System (CNBC)
IMF Warns Storm Clouds Are Gathering For Next Financial Crisis (G.)
Trump Says Fed Shouldn’t Hike Rates, But Calls Powell ‘A Good Man’ (R.)
Greece Scraps Pension Cuts (R.)
‘Forced Tech Transfer’ Must Stop Or Be Regulated – EU Envoy To China (CNBC)
Ocasio-Cortez Already Reveals The Inner Workings Of Congress (CNBC)
Faking Moon Landing More Difficult Than Doing It (RT)

 

 

May could well be out by the end of the day.

Listening to May’s speech on this topic this morning was weird. Despite her government having gutted so much of Britain’s social systems, think NHS, think child poverty, she talks about a future in which she will be leaving nobody behind. But she already did just that, in spades. It’s Orwell.

Also worth enjoying: a few hours before the Tories triggered their vote, there was this headline: Labour Keeps Open Possibility Of December No-Confidence Vote. Boy, did they miss the boat there or what? Doesn’t exactly spell having your finger on the pulse, does it? Makes Jeremy Corbyn look like a man fast asleep. Amid all the chaos, they’re still being pre-empted by the people they should have long replaced.

Tory MPs Trigger Vote Of No Confidence In Theresa May Today (G.)

Conservative MPs have triggered a vote of no confidence in Theresa May, plunging the Brexit process into chaos as Tory colleagues indicated they no longer had faith in the prime minister to deliver the deal. Sir Graham Brady, the chair of the 1922 Committee, has received at least 48 letters from Conservative MPs calling for a vote of no confidence in May. Under party rules, a contest is triggered if 15% of Conservative MPs write to the chair of the committee of Tory backbenchers. A ballot will be held on Wednesday evening between 6pm and 8pm, Brady said, with votes counted “immediately afterwards and an announcement will be made as soon as possible”.

In a press release, he said: “The threshold of 15% of the parliamentary party seeking a vote of confidence in the leader of the Conservative party has been exceeded.” The prime minister will now need the backing of at least 158 Tory MPs to see off the Brexiters’ challenge, and her position would then be safe for 12 months. However, the prime minister could decide to resign if votes against her were below the threshold to topple her, but significant enough in number.

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Orwell reigns supreme. 4,500+ arrested. 4,000+ still behind bars. And here’s what the Macron government has to say about it: “..there were in fact no preventive arrests but only “preventive control” measures.”

1000s Remain In Custody In France After Preventive Arrests (RT)

The number of people arrested since the beginning of the massive popular protests that have gripped France for weeks has surpassed a staggering 4,500, with critics calling the actions of the authorities crackdown on democracy. The French police have detained a total of 4,523 people in connection to the so-called Yellow Vests protests that united tens of thousands of people across the country discontent with taxes polices and fuel prices hikes. Of those almost 4,100 still remain in police custody, the French BFM TV broadcaster reported, citing police sources. Earlier, the French Interior Minister Christophe Castaner confirmed that more than 1,900 people were arrested in connection to the protests in just one day – on Saturday, December 8.

More than 1,700 of them were taken into custody. However, the French media later reported that the number of those arrested on that day might in fact have reached 2,000 people. Part of those arrests seemed to be a preventive measure as they occurred before the protests. And the practice alarmed many. “When we [see] 1,000 people [detained] and 540 of them released two days later, it is obvious that there were at least 540 absolutely unjustified arrests,” a Paris lawyer, Raphael Kempf, told BFM, commenting on the issue. “Being locked up for 48 hours, they were deprived of their right to join a demonstration and this is shocking for a democratic country,” he added. The government, however, justified its approach by saying that there were in fact no preventive arrests but only “preventive control” measures.


Macron declaring his solidarity with the peuple from behind a gold desk.

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Napoleon is an emperor. He’s bigger than Brussels.

Macron’s Multi-Billion Giveaways Could Cost France Dearly (CNBC)

French President Emmanuel Macron announced tax cuts and wage rises on Monday in a bid to placate anti-government protesters, but the move will increase France’s budget deficit and is likely to create tensions with the European Commission. Macron promised on Monday to raise the minimum wage by 100 euros ($114) a month and that overtime will not be taxed or subject to social welfare charges. He also said the tax hike on pensions will be reversed for anyone with an income of below 2,000 euros a month, and encouraged companies to pay a tax-free end-of-year bonus.

[..] Macron’s promises might be a balm to some protesters, but economists note that they come at a cost. France’s borrowing costs rose on Tuesday with the spread between France and German ten-year bonds – seen as an indicator of risk sentiment – the widest since May 2017. The yield on France’s 10-year bond rose five basis points to 0.756 percent Tuesday before declining to 0.726 percent. Macron’s pledges are likely to get France into trouble with the European Commission for raising its budget deficit, the amount by which its spending exceeds its revenues, above the permitted limit of 2 percent of GDP. Macron’s announcement could also be a gift to Italy, given its own wrangling with the Commission over its spending plans for 2019.

“Macron’s sweeteners are coming at a cost,” Berenberg Economists Kallum Pickering and Florian Hense said in a research note Tuesday. “They add up to 10 billion euros or slightly more, equivalent to 0.4 percent of GDP. On top of the already announced 4 billion to cancel the fuel tax hike, this could push the 2019 deficit from 2.8 percent to 3.4 percent of GDP unless offset by savings, which will be difficult to find,” they noted. France’s debt-to-GDP will likely rise beyond 100 percent as a result of the concessions too.

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More Orwell: Yellen’s “The tools that are available to deal with emerging problems are not great in the United States.” Should be:“The tools that are available to deal with the problems I caused are not great in the United States.”

Yellen Warns Of Another Financial Crisis: Gigantic Holes In The System (CNBC)

Former Federal Reserve Chair Janet Yellen told a New York audience she fears there could be another financial crisis because banking regulators have seen reductions in their authority to address panics and because of the current push to deregulate. “I think things have improved, but then I think there are gigantic holes in the system,” Yellen said Monday night in a discussion moderated by New York Times columnist Paul Krugman at CUNY. “The tools that are available to deal with emerging problems are not great in the United States.” Yellen cited leverage loans as an area of concern, something also mentioned by the current Fed leadership. She said regulators can only address such problems at individual banks not throughout the financial system.

The former fed chair, now a scholar at the Brookings Institution, said there remains an agenda of unfinished regulation. “I’m not sure we’re working on those things in the way we should, and then there remain holes, and then there’s regulatory pushback. So I do worry that we could have another financial crisis.” In the wake of the financial crisis, some agency regulatory powers were vastly expanded, but others, for example, the ability of the Fed to lend to an individual company in a crisis, were curtailed. Current Fed officials have pushed back against criticism that their reforms are making the system riskier, saying they are making the system more efficient. Speaking in London in June 2017, shortly after leaving office, Yellen had said she did not believe there would be another financial crisis in our lifetimes because of financial reforms.

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What goes for Yellen and the Fed, also applies to the IMF: they apparently remain convinced that crises happen not because of, but despite them.

IMF Warns Storm Clouds Are Gathering For Next Financial Crisis (G.)

The storm clouds of the next global financial crisis are gathering despite the world financial system being unprepared for another downturn, the deputy head of the International Monetary Fund has warned. David Lipton, the first deputy managing director of the IMF, said that “crisis prevention is incomplete” more than a decade on from the last meltdown in the global banking system. “As we have put it, ‘fix the roof while the sun shines’. But, like many of you, I see storm clouds building and fear the work on crisis prevention is incomplete.” Lipton said individual nation states alone would lack the firepower to combat the next recession, while calling on governments to work together to tackle the issues that could spark another crash.

“We ought to be concerned about the potency of monetary policy,” he said of the ability of the US Federal Reserve and other central banks to cut interest rates to boost the economy in the event of another downturn, while also warning that high levels of borrowing by governments constrained their scope for cutting taxes and raising spending. Lipton said the IMF went into the last crash under-resourced before it was handed a war chest worth $1tn from governments around the world, while adding that it was important that national leaders had agreed to complete a review of the fund’s financial firepower next year. “One lesson from that crisis was the IMF went into it under-resourced; we should try to avoid that next time.”

[..] Against a backdrop of Donald Trump engaging in a bitter trade dispute with Beijing, he said China needed to lower trade barriers, while also impose tougher rules to protect intellectual property – a key complaint of the US president. Lipton suggested that Chinese trade policies that were once considered acceptable when it joined the World Trade Organization in 2001 as a $1tn economy may now be inappropriate as it had become a $16tn international superpower. However, he did warn that the US should not take an overly heavy-handed approach to reform, adding: “China has many reforms that it could carry out that would be in its own interest and in the interest of countries around the globe. But China feels they can’t take those steps, as they put it, with a gun to their head, in the midst of trade tensions.”

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“I think we are a rocket ship going up.”

Trump Says Fed Shouldn’t Hike Rates, But Calls Powell ‘A Good Man’ (R.)

President Donald Trump said on Tuesday it would be a mistake if the Federal Reserve raises interest rates when it meets next week, as it is expected to do, continuing his criticism of the U.S. central bank. “I think that would be foolish, but what can I say?” Trump told Reuters in an interview. Trump said he needed the flexibility of lower interest rates to support the broader U.S. economy as he fights a growing trade battle against China, and potentially other countries. “You have to understand, we’re fighting some trade battles and we’re winning. But I need accommodation too,” he said.

Trump named Jerome Powell as Fed chairman, but has repeatedly railed against him since he took over as head of the U.S. central bank last February. Trump in August told Reuters that he was not “thrilled” with Powell’s raising interest rates. Trump was more conciliatory in his comments about Powell on Tuesday, but still criticized the policies of the man he chose for the top Fed job. “I think he’s a good man. I think he’s trying to do what he thinks is best. I disagree with him,” Trump said. “I think he’s being too aggressive, far too aggressive, actually far too aggressive.” [..] “Are we heading for a recession?” Trump said. “In my opinion, we are doing really well. Our companies are doing really well. If the Fed is going to act reasonably and rationally, I think we’ll go – I think we are a rocket ship going up.”

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Round 14 of pension cuts is reversed. The rest remains.

Greece Scraps Pension Cuts (R.)

Greece’s Parliament on Tuesday voted to scrap plans to cut state pensions, in a motion led by the left-led governing coalition hoping to shore up its flagging support ahead of a general election next year. Eventually the bailout, worth up to 86 billion euros, expired in August without IMF assistance, and Athens has said better-than-expected public finances enable it to rescind the planned cutbacks. The European Commission has approved the government’s decision. “The time has come for people to be rewarded for their sacrifices,” Prime Minister Alexis Tsipras told lawmakers ahead of the vote, calling the step a “necessary breath for the people of labour … who saw their pensions and their dignity hurt.”

Pensioners, who are in many households the only people with an income due to the highest unemployment rate in the eurozone, have seen earnings shrink by up to 40 percent since Greece toppled into crisis in late 2009. Tsipras’s term ends in 2019. His SYRIZA party is trailing the conservative New Democracy by about 10 points in opinion polls. Since 2010, Greece has signed up to three international bailouts totalling almost 290 billion euros, and will remain heavily indebted for years to come. The country is monitored by its eurozone partners and the IMF to ensure it does not veer off post-bailout targets aimed at maintaining high budget surpluses in coming years.

New Democracy (ND) accused the government of increasing taxes and handing out benefits from budget revenues to win votes. “You are wearing the mask of the philanthropist just to tip people from their own savings,” ND leader Kyriakos Mitsotakis told Tsipras in parliament.

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“We believe in an open economy, we believe in globalization, but we need to make sure that these investments are conducive to growth.”
-Nicolas Chapuis, EU ambassador to China

Really?! Ask the people if they ‘believe’ in globalization. Ask the yellow vests.

‘Forced Tech Transfer’ Must Stop Or Be Regulated – EU Envoy To China (CNBC)

The European Union has a vested interest in promoting technology exchanges with China, but any transfers should be regulated, said the trade bloc’s ambassador to China on Wednesday. “For the last 40 years, EU companies have provided most of the foreign tech that is in China, about 50 percent of what is today in China,” said Nicolas Chapuis, ambassador of the EU delegation to China. However, the diplomat expressed concerns about China trading market access for technology. Beijing sometimes forces foreign companies to hand over their technological know-how in exchange for access to its massive domestic market.

The administration of U.S. President Donald Trump has demanded that China cease forced tech transfers, which have become a flashpoint in the U.S.-China trade war. “This has to stop or to be regulated,” Chapuis told CNBC at the European Chamber Annual Conference 2018 in Beijing. “Of course if a company wants to open its tech books to a Chinese company — all right, that’s not an issue, but it has to be regulated so that there is no so-called ‘forced tech transfer,'” Chapuis said. Beijing has claimed it will step up protection of intellectual property rights, but experts point out that the country still wields its state-controlled legal system to take whatever trade secrets it wants for its own companies.

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Anything better than Hillary and Schumer, I guess.

Ocasio-Cortez Already Reveals The Inner Workings Of Congress (CNBC)

Although her first day on the job is still weeks away, Alexandria Ocasio-Cortez is already pulling back the curtain on the inner workings of the Capitol. The New York Democrat, along with other incoming freshman lawmakers, is trying to usher in a culture of openness that is enabled by a vast social media following. With nearly 3 million followers combined on Facebook, Instagram and Twitter, Ocasio-Cortez has used the platforms to involve her supporters during the transition period before she takes office. Her enthusiastic and often pugnacious transparency campaign has earned her praise from inside and outside the Beltway. Yet it has also drawn criticism from several corners, including from President Donald Trump’s eldest son.

In a series of pictures and videos on Instagram dubbed “Congress Camp,” she gave an inside look into new-member orientation, from choosing an office to voting for House leadership, while also showcasing the unique quirks of life on Capitol Hill. “Guys, there are secret underground tunnels between all of these government buildings!” she whispers in one video. In another post, she polls her followers on whether she should choose an office with more space or one “close to our friends.” But Ocasio-Cortez isn’t just focusing on the novelty of her experience. Last week, she tweeted sharp criticism of an orientation for new members of Congress hosted by Harvard. The event featured corporate CEOs but no labor representatives.

Ocasio-Cortez hasn’t given any indication that she will let up, however. “Our ‘bipartisan’ Congressional orientation is cohosted by a corporate lobbyist group. Other members have quietly expressed to me their concern that this wasn’t told to us in advance,” she tweeted. “Lobbyists are here. Goldman Sachs is here. Where’s labor? Activists? Frontline community leaders?” Fellow freshman member Rashida Tlaib, D-Mich., echoed her criticisms. Tlaib said that Gary Cohn, former chief economic advisor to President Donald Trump and former Goldman Sachs executive, told the new members at orientation that they don’t “know how the game is played.” “No Gary, YOU don’t know what’s coming – a revolutionary Congress that puts people over profits,” Tlaib tweeted.

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Checking it twice.

Faking Moon Landing More Difficult Than Doing It (RT)

The head of the Russian space agency may joke about ‘verifying’ if the Americans landed on the moon, but there are no doubts for one Russian scientist, who weighed in on the decades-long conspiracy debate. The claim that NASA never landed astronauts on the moon and that evidence to the contrary was fabricated is among the most pervasive in popular culture and has been a point of fierce debates. Dmitry Rogozin, Russia’s space chief, even recently joked that Russia’s future lunar missions will give the country an opportunity to check whether Neil Armstrong’s footprints are actually out there.

That aside, people who actually study the moon for a living believe there is no need to launch spaceships just to prove the success of the Apollo program. Fabricating a lunar landing would probably be technologically impossible and anyway economically unnecessary, told RIA Novosti Yury Kostitsyn. The man heads the Institute of Analytical Chemistry, which is directly involved in developing sensors for space and was part of the Soviet robotic study of the moon. “Faking the landing of the American astronauts to the Moon would have been more complex and expensive than actually doing it,” the scientist assured. The key piece of evidence in his own field of knowledge is the moon soil, which the Americans said to have retrieved. It was studied in labs of many countries, including the USSR, and it’s definitely not from this planet.

“Falsifying moon soil is impossible. The Americans brought back to Earth about 300 kilos of it, most of it basalt,” he explained. “We have basalts on Earth too, but they are significantly different from the lunar ones in their chemical composition, properties, and structure. There are no rock formations older than 3.7 billion years, and what the Americans brought is over 4 billion years old, comparable to the age of the solar system.” (NB. There are actually rocks of earth origin dated over 4bn years, but the ones brought from the Moon are still older.) “There is nothing to argue about Americans landing on the moon between 1969 and 1972,” Kostitsyn stressed. “You won’t hear a single cosmonaut say they didn’t.”

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Dec 112018
 
 December 11, 2018  Posted by at 8:45 pm Primers Tagged with: , , , , , , , , , , ,  


Wilhelm Trübner A Gorgon‘s head 1891

 

The news still isn’t the news, and I’m getting afraid it never will be again, because not the news just simply sells so much better than plain old real events. Maria Butina suddenly popped back into the public eye, because she was either charged with something or confessed to it. And I’m thinking, excuse me, but that poor girl has been kept in isolation for how long now? And for what reason exactly?

I vividly remember thinking that when she first became ‘news’ for ‘infiltrating’ the NRA, for which there were plenty cute pictures taken, I remember thinking she would have been 22 or 23 years old when as a super- devious Russian redhead she allegedly penetrated the trillion dollar NRA, and the trillion dollar Republican Party, and the Trump campaign, which according to some people is now worth negative $1 trillion.

If any of said organizations allow for a 22-year old to take all of their most secret and damning secrets and send them to her alleged puppet master Vladimir Vladimirovich, I say they deserve everything they’re getting. But it IS the sort of thing that if you want to report it like it’s actual news, you sure need to be convincing, you need proof, that sort of thing, not the anti-Putin innuendo US media rely on as their main standard today. Butina with no proof is just a nice by now 30-year old girl who happens to be Russian.

As for the Trump campaign having a negative $1 trillion value, I derive that from all the people who’ve once again, after a handful Mueller tidbits, started saying the Donald will be impeached any moment now, and many around him will go to jail for decades. You know, I can read too, and that’s not what I see. Much of what I see comes down to the reasoning that Trump has not yet been impeached as President because .. he is the President.

Yes, that is pretty funny, but it’s not humor beyond my abilities, and I’m not a comedian by trade. We’re still, even after those Mueller bits, stuck with Papadopoulos who’s been framed and went to jail for 2 weeks for it (shame on Mueller for that, deep deep shame!), there’s Cohen who lost his tracks in between lying for Trump and lying about Trump, and Manafort, a thirteenth wheel on a wagon of which there are dozens in DC, fixers and handlers.

You tell me why Manafort faces years in jail while Rahm Emanuel became mayor of Chicago. But if you’d actually want to explain, I suggest you prepare well, maybe talk to a few lawyers in the process. Washington attracts shady characters like dung beetles to horse shit and honey bees to Mountain Dew, and only a special counsel would ever think of picking them off one by one if he can’t find any of the actual crimes that he was appointed for to find. Cue: Rahm Emanuel.

 

Meantime my pal in arms Jim Kunstler thinks Michael Flynn is laying low as Mueller whoops his ass because he can, only to hit back at Mueller as soon as he’s freed from what are at best shaky allegations. Talking to a Russian is not a crime, not even, or even especially, when you’re the security adviser to the next president.

Michael Flynn’s real suspicious job was advising Turkey on security issues, but then that’s not what Mueller targeted him for. So yeah, let Flynn rise. And once again, don’t let’s forget that he said when the whole circus began, that he saw no way he could defend himself against anything Mueller might have thrown at him, that his entire family was on the verge of bankruptcy.

“But you talked to a Russian!” say the news media. Cue mushroom clouds in the remote background. But don’t you see, Trump is a criminal with decades of crimes under his belt, and all of his family are too! Look, I don’t know these people, and I’m fine not knowing them, not my cup of tea, but how much time did any of them spend behind bars so far?

And now they would have to go to jail just because Donald was elected president and the DOJ appointed a friendly ex-FBI head special counsel on the basis of a dossier paid for by his political opponents? To what extent does that spell justice to you? Yes, feel free to cue Rahm Emanuel again.

See, if certain people can be sent to jail because they rise too high in certain circles that don’t want them to disturb the power inherent in their sphere, while other operatives from the exact same mold though perhaps another political affiliation, are nominated to lofty and lucrative careers and positions, isn’t there something awry?

Are any of them perfectly innocent? Hell no, but then if they were, they wouldn’t be in the positions they’re in, the very positions that allow Robert Mueller to target them. From that point of view, it obvious it’s just a little power game played out in front of your eyes, you who have nothing to do with it but think you’re supposed to have an opinion on it.

Is Donald Trump a worse and bigger criminal than George H.W. Bush was? One half of America can answer that in no time flat. The other is thinking they wouldn’t be so sure. How many people has the Donald condemned to death so far? And he’s already about half way through the time Bush41 spent in the White House.

Perhaps it’s not about who’s a criminal, but about who’s the prosecutor. And with Mueller’s role in the sordid Whitey Bulger tale, and his even more sordid testimony in the Iraq WMD fantasies that led to millions of legalized murders celebrated as victory by both Washington and the US media, which kettle is blaming which pot here?

 

But hey, I’m ready to be corrected. And it’s by no means just the US that feels twisted these days, either. How about French president Emmanuel Macron, who hadn’t addressed his people live for 10-12 days as the Yellow Vests protests just got worse and more violent by the day, and then yesterday decided to make his long awaited response to them through a pre-recorded video? Honestly, how far removed from reality can one be?

The only answer Macron has to the thousands of people who want him out, and who have been willing to express that opinion in 4 consecutive weekends, is money. He thinks if he gives them €100 a month extra, and some tax breaks, they’ll let them continue on his little Napoleon trip. Well, if they do, we’ll know who they are. But are they? I don’t think Macron counts on that.

And then, as Macron increasingly retreats into his little palace(s), cue Marie Antoinette, only to communicate with the unwashed masses who want him gone through pre-scripted and recorded promises of crumbs off his table in exchange for no power at all, British PM Theresa May reacts to her latest and ostensibly worst -though it’s hard to keep track- defeat by … fleeing the country.

That’s how its ‘leaders’ rule Europe these days. Angela Merkel says she’s gone, though she wants to be Chancellor until 2021 (that way no-one can hold her responsible for anything), Theresa May hops on a plane to Europe to grovel some hopelessly more in her already defeated stance.

And Macron has his servants shove crumbs off his table, a gesture that still costs him more than everything Salvini and Di Maio wanted to do in Italy which got them whistled down by Brussels. C’mon, who still believes in the EU? Everyone’s running away from it.

If Macron must hide from his own French people, how can he reform the EU? If May must flee the UK and go to the EU to get a Brexit deal, what’s her authority back home where 50% voted against that same EU?

And if Merkel can only remain in charge by relinquishing her power, who exactly’s going to run Europe? It’s kind of like the same question as for the US. Who’s going to run it? Not Trump, if Mueller and the Democrats have any say although they lost the election. Not Hillary, says about everyone else.

 

We all tend to think that these things are normal and eternal. Just politics. But all the usual suspects appear to be under siege. In Europe, France, UK, Germany are shaking heavily. Italy’s already overboard. That’s the biggest 4 EU members. That’s the EU. No certainties, no future, though the EU itself will never admit it, and instead just push for more EU.

And what’s certain politically in the US anymore? Trump has eviscerated the entire GOP, and I’m not saying that’s a bad thing. The Democrats killed off Bernie Sanders to allow Hillary to continue her dead before arrival power grab. She came she saw she lost.

My point, I think, is that political strongholds are being defeated everywhere at the same time. And when that happens, there’s always a reason for it. I think that reason can be found in the fact that the global economy is rumbling and crumbling as we speak, with politics and economics acting as precursors for one and other.

Like, Macron can only save his political ass by violating the EU budget terms he just chided Italy for. Merkel can only save her legacy by creating a situation she’s no longer responsible for. And Theresa May would be well advised, now that she’s on the continent, to simply stay there and let Britain figure things out without her.

The US won’t and can’t be so lucky. We’re still up for much more, marathon more, of Trump vs Mueller, and there will be many more courts and judges who have to speak on all of it before there’s anything even remotely resembling a conclusion. Because the whole Mueller circus -reluctantly- threatens to open up a Pandora swamp that’s been DC’s lifeblood forever.

Yeah, you got your Flynn and Manafort, but you also got your Podesta brothers. Yeah, there’s the Trump Foundation, but there’s also the Clinton Foundation, and Uranium One. Who’s worse? Good one!

Both things should be investigated, it shouldn’t just be Trump and Mueller, Hillary and the DNC and Comey etc etc also must be under the microscope. Or America will forever lose its faith in democracy. Not that there’s much of it left, mind you, but hey, at the very least it’s the thought that counts.

Bottom line: it all appears to be about local, domestic, national politics, but don’t be deceived: the global economy is tanking, and all of the political mayhem on all these levels is just a derivative of that. The dinosaurs want to live another day.

None of which is going to make your situation any better, but who knows, you just might feel better about it for a bit. Until you don’t.

 

 

Dec 112018
 
 December 11, 2018  Posted by at 10:44 am Finance Tagged with: , , , , , , , , , , , , ,  


Arnold Böcklin The Isle of the Dead III 1883

 

Jerome Powell Is Between A Rock And A Hard Place (Nomi Prins)
Macron Bows To Protesters’ Demands: “I Know I Have Hurt Some Of You” (G.)
‘Yellow Vests’ Denounce Macron Speech As ‘Charade’ (AFP)
Let’s Call The Whole Thing Off (Ind.)
Sturgeon Offers To Unite With Corbyn To Topple ‘Shambles’ Government (Ind.)
Pound Falls To Lowest In Almost Two Years Amid Brexit Uncertainty (G.)
Hedge Funds Make Big Bets Against Post-Brexit UK Economy (G.)
Mueller’s Investigation is Missing One Thing: A Crime (AC)
Jerome Corsi Sues Robert Mueller, DOJ, FBI, NSA, CIA For $350 Million (CNBC)
Not So Fast (Jim Kunstler)

 

 

I don’t know, Nomi. The whole thing just spells out to me how ridiculous things have become because of the powers the Fed has been given. The only sensible thing anyone can do, including Powell, is to retreat and let the market be reborn. Until then, any talk about ‘the market(s)’ has no meaning.

Jerome Powell Is Between A Rock And A Hard Place (Nomi Prins)

One of the major drags on the market, besides trade wars, has been uncertainty about whether the Fed will raise rates this month. Despite the verbal bravado of Federal Reserve Chairman, Jerome Powell, over how strong the U.S. economy is, he doesn’t live in a vacuum. Powell’s borne the brunt of President Trump’s recent accusations that the Fed’s hikes are what’s hurting the stock market and threatening the economy. That lead to a media debate over whether Powell would “cave” to Trump or demonstrate that the Fed is the independent body that it’s legally designed to be, and continue with planned hikes anyway. Powell’s recently indicated again that he planned to go ahead with another 0.25 rate hike when the Fed meets Dec. 19, which would be the fourth increase this year.

But on Nov. 28, he revealed something in his speech at the Economic Club of New York that I’ve been predicting. He dialed back talk about rate hikes. He said that rates were “just below” neutral. That contrasted sharply with his comments from Oct. 3rd when he said “We are a long way from neutral at this point.” In other words, he’s turned dovish. That’s a major shift in less than two months’ time. But why the change? It likely had much less to do with pressure from Trump than deteriorating economic and market conditions. Heavy market volatility was just starting to return when he his Oct. 3 comment. It’s only gotten worse since then. At some point, the wobbling in the financial markets must have gotten to him. As the Daily Reckoning’s, Brian Maher said, single-day losses of 300, 500, 700 — 800 points — seem almost commonplace now. “The stock market is a wreck of nerves these days,” he said, “like a man walking point in a dark enemy jungle.”

Read more …

After long deliberation with his spin doctors, lawyers and PR guys, Macron has decided to gamble on the protests being all about money. If handing out the billions he announced yesterday calms things down, even if it takes France out of the EU budget comfort zone, the protests were never about anything real. But if the yellow vests’ Act V next Saturday is anything like the first 4, he’s in deep doodoo.

Also: he was MIA for 10 days or so. And then his speech yesterday was pre-recorded. He still hasn’t communicated live with the French people.

Macron Bows To Protesters’ Demands: “I Know I Have Hurt Some Of You” (G.)

Emmanuel Macron has bowed to pressure from the street to announce a catalogue of emergency measures aimed at pacifying the gilets jaunes after weeks of civil unrest in France. In a long-awaited address on primetime television, the president tried to talk the protesters out of further action, promising a rise in the minimum wage and tax concessions. In a mea culpa, Macron said he had heard and understood protesters’ anger and indignation, which he said was “deep and in many ways legitimate”. He admitted he had not been able to provide solutions quickly enough since his election. “I may have given you the impression that this was not my concern, that I had other priorities. I take my share of responsibility. I know I have hurt some of you with my words,” he said.

The president began his pre-recorded 13-minute declaration saying the past few weeks of protests had “profoundly troubled the nation”, and that legitimate demands had led to “a series unacceptable violence”. He said the anger went back 40 years, but he added: “No anger justifies attacking a police officer, a gendarme, or damaging a shop or public building. When violence is unleashed, freedom ends.” Macron, elected on a centrist reforming programme 18 months ago, said he understood the anger and “distress” of those struggling to make ends meet at the end of the month who felt ignored and economically squeezed: “It is as if they have been forgotten, erased. This is 40 years of malaise that has risen to the surface. It goes back a long way, but it is here now.”

To help struggling workers, he said the government had been ordered to introduce “concrete measures” from 1 January, including increasing the minimum wage by €100 (£90) a month. Overtime would be exempt from tax and social charges, and a planned tax on pensions under €2,000 a month would be cancelled. All employers “who can” were asked to give workers a tax-free bonus at the end of the year. Macron said there would be greater public consultation on issues, but he would not go back on his wealth tax reforms. However, things would not “go back to normal … as if nothing has changed,” he said.. He concluded: “We are at a historic moment in our country. With dialogue, respect, and engagement, we will succeed. My only concern is you, my only combat is for you – our only battle is for France.”

Read more …

It may just make them madder.

‘Yellow Vests’ Denounce Macron Speech As ‘Charade’ (AFP)

Groups of “yellow vest” protesters across France responded scathingly to the “crumbs” offered by President Emmanuel Macron in a speech intended to defuse their revolt, but others acknowledged his efforts. “Nonsense,” “a charade”, “a bluff” and “a drop in the ocean,” were among the immediate reactions that greeted the head of state’s televised speech Monday evening announcing an increase in the minimum wage and a range of other financial measures. At a roundabout in the southern town of Le Boulou, some 150 “yellow vests” gathered around a loudspeaker listened carefully to the president’s words before starting to shout in chorus. “He is trying to do a pirouette to land back on his feet but we can see that he isn’t sincere, that it’s all smoke and mirrors,” said Jean-Marc, a car mechanic.

“It’s just window dressing, for the media, some trivial measures, it almost seems like a provocation,” said Thierry, 55, a bicycle mechanic who donned the yellow vest a fortnight ago. “All this is cinema, it doesn’t tackle the problems of substance,” he told AFP before taking part in blocking the Boulou turnpike on the French-Spanish border. “We’re really wound up, we’re going back to battle,” he said. Less than an hour after the presidential address, the A9 toll booth from Spain was completely paralysed, an AFP photographer said. “Maybe if Macron had made this speech three weeks ago, it would have calmed the movement, but now it’s too late,” said Gaetan, 34, one of the “Rennes Lapins Jaunes” (Yellow Rabbits of Rennes). “For us, this speech is nonsense.”

Read more …

Theresa May is as out of touch with her people as Macron is.

The main event yesterday in the Commons was a guy picking up the ceremonial mace, a 17th century piece of metal. Just to show how out of touch the politicians, and their entire nation, are.

Well, that and May annoucing she was going to flee the country. But why would the EU change its stance, or the deal May signed, just to save her career?

Let’s Call The Whole Thing Off (Ind.)

Theresa May has sparked anger across the Commons by refusing to say when MPs will vote on her Brexit deal, as she prepared to head to Brussels to plead with EU leaders for further concessions. The showdown was dramatically delayed, almost certainly until the new year, after the prime minister admitted a Tory revolt meant she was heading for a crushing defeat “by a significant margin”. But condemnation of Ms May for pulling back rose when Downing Street failed to set a new timetable for the vote, arguing it depended on when she could “get the assurances” from the EU to pass the deal. Government sources admitted a quick breakthrough was unlikely, suggesting the vote would be shelved until the new year and refusing to say it would even be held next month.

In extraordinary scenes, Labour MP Lloyd Russell-Moyle was ejected from the House of Commons for seizing the ceremonial mace in protest at the formal deferral of the vote by the government whips. Mr Russell-Moyle swung the antique symbol of parliamentary authority from its holder as Tory MPs screamed “expel him”. He was promptly asked to leave the chamber by John Bercow, the speaker. His intervention came moments after Labour leader Jeremy Corbyn secured an emergency debate on the delay on Tuesday.

Read more …

If May had had any actual opposition, this farce would have been long over.

Sturgeon Offers To Unite With Corbyn To Topple ‘Shambles’ Government (Ind.)

Nicola Sturgeon has appealed to Jeremy Corbyn “work together” to topple Theresa May’s government after a crucial vote on the prime minister’s Brexit deal was abandoned, promising the SNP will support a motion of no confidence if it is tabled by Labour. The Scottish first minister said delaying the vote was “pathetic cowardice” and vowed that her party would stand with Labour if it follows through with its plan to bring down the government with a confidence vote on Tuesday. It comes amid chaotic scenes in Westminster, where reports that the meaningful vote was being shelved broke just moments after a Downing Street spokeswoman told reporters it would go ahead.

Ms Sturgeon posted on Twitter: “So @jeremycorbyn – if Labour, as official opposition, lodges motion of no confidence in this incompetent government tomorrow, @theSNP will support & we can then work together to give people the chance to stop Brexit in another vote. “This shambles can’t go on – so how about it?” The Labour leader has not responded to her offer but the first minister’s comments will ramp up the pressure on the beleaguered prime minister, as she faces one of the biggest challenges of her premiership.

Read more …

Parity with the USD in early 2019?!

Pound Falls To Lowest In Almost Two Years Amid Brexit Uncertainty (G.)

The pound has dropped to its lowest level for almost two years amid the growing risks to the British economy from political paralysis over Brexit and on a no-deal scenario. Theresa May’s decision to delay the parliamentary vote on her Brexit plan to avoid an embarrassing defeat for the government sent sterling tumbling by more than 1.3% against the dollar and by almost 1% against the euro on the foreign exchanges. The pound slumped below $1.26 to the lowest level since April 2017 after the prime minister said her Brexit plan would have been rejected by a “significant margin” in a Commons vote pencilled in for Tuesday. Sterling was worth $1.2563 against the dollar late on Monday and €1.1062 against the euro.

Read more …

They now have a solid reason to push for a no-deal Brexit.

Hedge Funds Make Big Bets Against Post-Brexit UK Economy (G.)

A pair of hedge funds owned by prominent Brexit supporters have made significant bets against companies exposed to the British consumer including big high street names. Odey Asset Management, part-owned by Crispin Odey, and Marshall Wace, part-owned by Sir Paul Marshall, have declared short positions against consumer-exposed companies, including retailers, estate agents and banks, equivalent to £149m and £572m respectively – as rising political uncertainty threatens the economy. The retail sector is facing particular scrutiny from short sellers, who in effect wager significant sums on certain shares falling in value. Uncertainty among consumers, with the Brexit process reaching a crunch point, comes at a time when retailers are already struggling to adjust to the move from physical shops to online.

The hedge fund run by Odey, one of the most outspoken of the Brexit-backing hedge fund managers, holds a short position in Intu – the owner of shopping malls including the Trafford Centre in Greater Manchester – that represented £33m worth of shares in the company at the end of last week. He also holds a position against struggling department store Debenhams that is worth £5.3m. The firm also appears to be betting that Britons’ appetite for cars will fall, in line with surveys showing hesitation over big-ticket purchases. The firm has short positions against Lookers, a large dealership chain, and Auto Trader, the online used-car directory.

Read more …

Watergate started with a crime. Russiagate did not. It started with a dodgy dossier.

Mueller’s Investigation is Missing One Thing: A Crime (AC)

The primordial ooze for all things Russiagate is less-than-complete intelligence alleging that hackers, linked to the Russian government, stole emails from the Democratic National Committee (DNC) in 2016. The details have never been released, no U.S. law enforcement agency has ever seen the server or scene of the crime, and Mueller’s dramatic indictments of said hackers, released as Trump met with Putin in Helsinki, will never be heard of again, or challenged in court, as none of his defendants will ever leave Russia. Meanwhile, despite contemporaneous denials of the same, is it somehow now accepted knowledge that the emails (and Facebook ads!) had some unproven major effect on the election.

The origin story for everything else, that Trump is beholden to Putin for favors granted or via blackmail, is opposition research purchased by the Democrats and carried out by an MI6 operative with complex connections into American intelligence, the salacious Steele Dossier. The FBI, under a Democratic-controlled Justice Department, then sought warrants to spy on the nominated GOP candidate for president based on evidence paid for by his opponent. Yet the real spark was the media, inflamed by Democrats, searching for why Trump won (because it can’t be anything to do with Hillary, and “all white people and the Electoral College are racists” just doesn’t hold up).

Their position was and is that Trump must have done something wrong, and Robert Mueller, despite helping squash a Bush-era money-laundering probe, lying about the Iraq War, and flubbing the post-9/11 anthrax investigation, has been resurrected with Jedi superpowers to find it. It might be collusion with Russia or Wikileaks, or a pee tape, or taxes, packaged as hard news but reading like Game of Thrones plot speculation. None of this is journalism to be proud of, and it underlies everything Mueller is supposedly trying to achieve. [..] The core problem—at least that we know of—is that Mueller hasn’t found a crime connected with Russiagate that someone working for Trump might have committed. His investigation to date hasn’t been a search for the guilty party —Colonel Mustard in the library— so much as a search for an actual crime, some crime, any crime.

Read more …

Even if he’s legally right, what are his odds of winning?

Jerome Corsi Sues Robert Mueller, DOJ, FBI, NSA, CIA For $350 Million (CNBC)

Jerome Corsi, a conspiracy theorist and Roger Stone associate, has filed a federal lawsuit accusing special counsel Robert Mueller of illegally searching his phone records and leaking grand jury information. Corsi, an avid supporter of President Donald Trump, recently claimed he faces indictment by Mueller. Attorneys for Corsi, 72, filed the lawsuit Sunday night in U.S. District Court in Washington. In addition to Mueller, it targets the Justice Department, the National Security Agency, the FBI and the CIA. The attorneys are demanding $100 million in “general and compensatory damages” and $250 million in “punitive damages” from the agencies.

In the complaint, Corsi’s lawyers argue that their client’s Fourth Amendment right against unreasonable or unwarranted government searches and seizures was violated when “each and every one” of the defendants looked through his digital records without a warrant and probable cause. The complaint also accuses Mueller of directing his staff to leak information from his grand jury about Corsi to the media. Special counsel spokesman Peter Carr declined CNBC’s request for comment on the court filing. Mueller’s team has reportedly investigated for months whether Corsi learned in advance that WikiLeaks had received Hillary Clinton campaign chairman John Podesta’s emails, which U.S. intelligence services have concluded were stolen by Russian intelligence officers.

[..] Corsi also accuses the special counsel of trying to make him lie under oath that he was a liaison between Stone and WikiLeaks founder Julian Assange in the publication of stolen Democrats’ emails.

Read more …

Flynn’s revenge on Mueller?

Not So Fast (Jim Kunstler)

Gen. Flynn may actually have the goods on the fraud behind his own prosecution — namely, proof of exactly how he was set up by Mr. Obama, in particular his own tapes of conversations with Russian Ambassador Sergey Kislyak that would show something different than the transcripts Mr. Mueller used to entrap him on Lying-to-Federal-Prosecutors rap. That theory raises the question: why did he not use it in his own defense. The answer may simply be that he didn’t want to rack up $2.5 million in billable hours for defense attorneys and chose instead to tough it out for nearly two years until he could use the information he has. And that means he must wait until final sentencing when his case is complete.

That appears in the offing, perhaps even before Mr. Mueller releases his much panted-over final report. Of course, Mr. Mueller may have absolutely no idea what Gen. Flynn has got on him — hence the speculation about why the charging memo was so lenient. But that line of reasoning suggests that Gen. Flynn will just forget about the disgrace Mr. Mueller put him through and let bygones be bygones. That’s not how warriors roll. More likely, Gen. Flynn has something more severe in mind. For all of his horse-faced gravitas in the photos of his fleeting sightings, Mr. Mueller does not look to me like a man in a comfortable situation.

Read more …

Dec 092018
 
 December 9, 2018  Posted by at 10:31 am Finance Tagged with: , , , , , , , , , , , ,  


Edouard Manet Berthe Morisot with a bouquet of violets 1872

 

Incoming House Judiciary Chair Planning To End Probe Into FBI, DOJ (ZH)
France Is The New Tax Hell In Europe And Beyond (RT)
Paris Under Siege As Gilets Jaunes Open ‘Act IV’ – 4th Weekend Of Protest (O.)
No Hope Of Success And No Plan B – But Theresa May Won’t Blink (O.)
UK Cabinet Splits Over Second Referendum On Brexit Deal (G.)
Majority Of UK Now Wants To Remain In The EU – Poll (Ind.)
Theresa May Warns Of ‘Uncharted Waters’ Ahead Of Key Vote (BBC)
EU Will Negotiate If May Loses Commons Brexit Vote – Prodi (G.)
China Threatens Canada With ‘Grave Consequences’ If Huawei CFO Not Freed (R.)
Putin Doesn’t Rule Out Extending Turkish Stream Pipeline Into Greece (RT)
COP24 Fails To Adopt Key Climated Change Report (BBC)

 

 

But of course. Let’s invite more chaos in.

Incoming House Judiciary Chair Planning To End Probe Into FBI, DOJ (ZH)

During a break during former FBI Director James Comey’s heated closed-door testimony on Capitol Hill on Friday, incoming House Judiciary Chairman Jerry Nadler confirmed to reporters what many had already suspected: That Nadler (and probably his fellow Democratic leaders) would put the kibosh on the House’s investigation into alleged political bias at the highest levels of the FBI and DOJ as they launched an investigation into the Trump campaign – an investigation that eventually morphed into the Mueller probe. While Democrats prepare to ramp up investigations into everything from Trump’s “war on the media” to his involvement in his family business, Nadler told a group of reporters that he intends to end the House Judiciary Committee’s involvement in the Congressional probe as soon as he takes the reins next year.

Asked why he intends to end the committee’s involvement in the probe, Nadler responded that “it was a waste of time to begin with” and a “distraction” from the real-wrong doing here – that is, lawbreaking committed by Republicans, according to the Hill. “Yes, because it is a waste of time to start with,” Nadler said in response to a question about whether he would end the probe. Nadler characterized the Republican investigation as a political sideshow that aims to distract from special counsel Robert Mueller’s investigation into possible ties between the Trump campaign and Russia. “The entire purpose of this investigation is to be a diversion of the real investigation, which is Mueller. There is no evidence of bias at the FBI and this other nonsense they are talking about,” he continued.

If the House investigation into suspected FBI malfeasance is just a “sideshow”, as Nadler claims, how would he explain the fact that the FBI knew the allegations contained in the Steele dossier – the linchpin of the FBI’s FISA warrant application that kicked off the Russia probe in earnest – were bogus before applying for surveillance? Or the many conflicts of interest between senior FBI officials involved with the probe (Andrew McCabe, Bruce Ohr, Peter Strzok, and, yes, Comey himself) – or the fact that McCabe was fired following after the DOJ’s inspector general confirmed that McCabe had lied under oath to try and conceal the fact that he told an FBI spokesman to leak a story about the FBI’s investigation into the Clinton Foundation just days before the election. McCabe could still face criminal charges from his lies. But Congress’s attempt to hold the FBI accountable is just a “distraction?”

Read more …

Not unimportant when it comes to the yellow vests.

France Is The New Tax Hell In Europe And Beyond (RT)

While the dust has not yet settled in the streets of Paris, after sweeping protests against fuel tax hikes, it just so happens that France has taken the crown from Denmark as the most taxed country in 2017, the OECD found. Among the 34 developed members of the Organization for Economic Cooperation and Development (OECD), Emmanuel Macron leads the nation with the highest tax-to-GDP ratio, the organization reported. France leads with 46.2% of GDP against the average of 34.2% of other members, thus dropping the long-standing leader in the rating, Denmark.

The Scandinavian country’s numbers, meanwhile, shrank to 46%, down by 0.2 since last year. Sweden, Italy, and Greece round out the top five, while Mexico is the last on the list at 16.2%. Notably, tax revenues for OECD member states, on average, reached historically high levels in 2017, rising to 34.2% of GDP. It is up only slightly from 34%, the previous peak recorded by the organization in 2016.

Read more …

Quite the series of demands. But hard to gauge how much support they have; there are not leaders or anything.

Paris Under Siege As Gilets Jaunes Open ‘Act IV’ – 4th Weekend Of Protest (O.)

A charter of gilets jaunes’ “suggestions to end this crisis” has been circulating on Facebook. While far from “official” – the movement has no agreed representatives – it does illustrate the diverse, and sometimes contradictory, nature of their demands:

Economy/work A full review of taxation, with no citizen to be taxed at more than 25% of income; an immediate 40% increase in the minimum wage, pensions and benefits; “mass hirings” in the state sector to restore quality of services in hospitals, schools, etc; 5m new homes; make banks “smaller”.

Politics France’s constitution to be rewritten “by the people and for the interests of the people”; lobbying to be banned; France should leave the EU; recover €80bn lost to tax evasion each year; halt and/or reverse all privatisations; removal of “useless” speed cameras; reform of education system, removal of all “ideologies”; quadruple budget of judicial system, which must be simplified, free and accessible for all; break up media monopolies and end cosy relationship between media and the political class; open media up to the people.

Health/environment 10-year guarantee on products to end planned obsolescence; ban plastic bottles; limit power of pharmaceutical companies; ban GM foods, carcinogenic pesticides, monoculture; reindustrialise France to reduce imports and therefore pollution.

Geopolitics Pull France out of Nato and foreign wars; end the plunder of French-speaking Africa; prevent migration flows that cannot be welcomed or integrated given current “civilisational crisis”; scrupulous respect for international law and engagements.

Read more …

Tuesday is the big vote in the Commons. May looks certain to lose big. So, chaos in France AND the UK. Where are Britain’s yellow vests anyway?

No Hope Of Success And No Plan B – But Theresa May Won’t Blink (O.)

For several weeks Theresa May has been holding private meetings in Downing Street and the Commons with MPs [..] She has used all her powers of persuasion to try to win them around ahead of Tuesday’s historic “meaningful vote” on her deal. Tory whips have tried to cajole their wavering backbenchers day and night, arguing the case for the May deal and reminding the more ambitious among them where their best career interests lie. Two weeks ago May made the campaign a national one – writing directly to the people of Britain and asking them to put more pressure on their MPs to support her. A special Tory website called Back the Brexit Deal was launched by the party to rally grassroots Tories behind the cause, with limited success.

Constituency chairmen were lobbied heavily, too. Ominously for the prime minister, however, the ultra-hard sell has achieved almost nothing. Some Tories even think it has had the reverse effect to that intended – making people focus in more detail on her deal than they would have done, only for them to conclude they could never back it. One senior Conservative said the party machine had deployed every resource it could muster but had failed totally. “Whether it is our backbenchers, or the party faithful, or the public, it is the same. If anything, I think the whole ‘going to the country thing’ has made things worse.”

[..] By this weekend more than 100 backbench Tory MPs had declared themselves ready to vote against May’s deal. Surveys of Tory members show they are against, too, by a big majority. After a dreadful week in which May’s government was found to be in contempt of parliament for refusing to publish the full legal advice on Brexit, the chief whip, Julian Smith, has been telling No 10 that it is on course for a huge defeat. [..] More junior members of the government are rumoured to be ready to quit before Tuesday because they can’t live with the deal as it is. With two days to go, there is no sign May is ready to delay, change course or blink at all. One senior Tory said: “If she has a plan B, no one knows what it could be. It looks like a crisis with no solution. She seems ready to march on into the gunfire.”

Labour is keen to make out that Tuesday’s vote will be tighter than everyone expects. It is desperate to promote this view in case May limits a defeat to far less than 100. [..] But with all but a handful of the 257 Labour MPs, the entire block of 35 SNP members, all but one of the 11 Liberal Democrats, and the 10 DUP members set to vote against it – and more than 100 Tories on record as being opposed – the arithmetic points to a far worse outcome for the prime minister.

Read more …

Divisions everywhere. And opportunism. If you’re in the Cabinet, and May loses real bad, what’s your political future?

UK Cabinet Splits Over Second Referendum On Brexit Deal (G.)

A deep cabinet split has opened up over whether Theresa May should back a second referendum in a final attempt to end the political deadlock over Brexit, as senior Conservatives predicted on Saturday night that her blueprint for leaving the EU was heading for a crushing House of Commons defeat. Adding to a mounting sense of constitutional crisis ahead of Tuesday’s crucial parliamentary vote, No 10 is braced for more resignations of ministers and aides who want another referendum, or who believe May’s deal fails to deliver on Brexit. Will Quince, the Colchester MP and aide to the defence secretary Gavin Williamson, quit his post on Saturday night in protest at the Brexit deal.

Cabinet ministers have told the Observer that attempts to convince May to delay the vote to avoid one of the largest and most humiliating defeats in recent parliamentary history had not been heeded. This was despite what they saw as a clear danger that such a result could provoke a leadership challenge and split the party irrevocably. Some cabinet ministers now believe that May is so wedded to her Brexit deal that her only method of gaining approval will be through another referendum – and that the arguments for a second vote are emerging as stronger than those for a soft Brexit. The prime minister has so far refused to entertain any idea of a second public vote.

One cabinet source said it might prove to be the only way of saving May’s deal and her reputation. “She is so committed to her deal, and a second referendum could now be the only way of getting it. The polls have been remarkably stable for a while, but there does seem to be some kind of movement [to Remain], and that could well develop in the coming days and weeks.”

Read more …

1,500 people is not a large enough poll.

Majority Of UK Now Wants To Remain In The EU – Poll (Ind.)

A majority of the country now think Britain should remain inside the European Union, according to a new poll released days before the critical Brexit vote in parliament. The exclusive research for The Independent shows that, as of this month, 52% favour staying in the trading bloc. The data from pollsters BMG Research reveals support for remaining has grown month by month since the summer, and broke past 50% in December as the complex realities of Brexit were brought home to the country. The poll also revealed that almost half of people think the withdrawal agreement settled by Theresa May is a “bad deal” for Britain, with around as many saying MPs should reject the deal outright when they take the critical decision on Tuesday.

The BMG Research study lays waste to any hope that a concerted publicity drive, which has seen Ms May and her ministers tour the country to persuade people of its merits, has been a success. Instead it shines a light on the deep divisions that still exist, with none of the immediate alternative paths beyond Ms May’s plan – a second referendum, a Norway-style relationship or no deal – enjoying majority support. [..] In a further development ex-European Commission president Romano Prodi said Brussels could renegotiate the deal if MPs vote against it, creating the opportunity for Ms May to seek further concessions.

[..] When BMG asked some 1,500 respondents, “should the United Kingdom remain a member of the European Union, or leave the European Union”, 52% said “remain”, 40% said “leave”, six% said they did not know and one% refused to say. The remain option has been in the high 40s most of this year, but from September to October it rose one point and then another point to 49% in November, meaning it rose three points in December to its current level. When respondents were asked whether they believed the withdrawal agreement and political declaration on the future relations secured by Ms May are a “good deal” or a “bad deal”, 49% chose the latter. Just over one in ten, 13%, said it was a good deal,

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As in something to fear. Whereas her party strangling the poorer is not.

Theresa May Warns Of ‘Uncharted Waters’ Ahead Of Key Vote (BBC)

With two days to go until the crucial Brexit vote, the prime minister has warned MPs they face “uncharted waters” if they reject her deal. Speaking to the Mail on Sunday, the PM said a rejection of her proposals would mean “grave uncertainty” for the UK. She warned MPs their actions could lead to a general election, and there was a “very real risk of no Brexit”. Downing Street has also denied newspaper suggestions that Theresa May could postpone Tuesday’s vote. “The vote is going ahead,” a spokesman said. Last month, the UK agreed a Brexit deal with the EU – but it still needs to be approved by Parliament. Labour, the Liberal Democrats, the DUP, and dozens of Conservative MPs have said they cannot support the deal, meaning it is unlikely to pass.

If the deal is rejected, it is unclear what happens next – with Mrs May insisting her deal was best for the country. “When I say if this deal does not pass we would truly be in uncharted waters, I hope people understand this is what I genuinely believe and fear could happen,” Mrs May said. “It would mean grave uncertainty for the nation with a very real risk of no Brexit or leaving the European Union with no deal. “We have a leader of the opposition who thinks of nothing but attempting to bring about a general election, no matter what the cost to the country. “As someone who cares passionately about my country and my party, I believe Jeremy Corbyn getting his hands on power is a risk we cannot afford to take.”

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Who asked Prodi?

EU Will Negotiate If May Loses Commons Brexit Vote – Prodi (G.)

The EU will come back to the negotiating table if parliament votes down Theresa May’s deal with Brussels, according to Romano Prodi, a former European commission president. Prodi, who twice served as Italian prime minister and had Jean-Claude Juncker’s job until 2004, said that the EU needed to do everything it could to avoid the “economic catastrophe” of a no-deal Brexit. On signing an agreement with the British prime minister last month, Juncker described the draft withdrawal treaty and accompanying political declaration on the future relationship as “the deal – the only deal possible”.

May has also said there is no scope for any further negotiation in Brussels if her deal is rejected when it comes to a vote in the Commons on Tuesday, and that the consequence of it being rejected would be “no deal or no Brexit”. The chancellor, Philip Hammond, described those who believed there could be a renegotiation as “delusional”. But in an interview with the Observer, Prodi suggested it would still be possible to find a negotiated settlement in the increasingly likely event May suffers a heavy defeat in the Commons.

Asked how he expected the commission to respond after the vote, Prodi said: “Negotiate. We must keep free trade between us because it is in the British interests and European interest. The UK has no alternative – the EU is a large part of its trade. Always the problem of Northern Ireland, but it is possible. Common sense helps.” On the EU’s insistence there could be no more negotiations, Prodi added: “Look, when the British parliament has still to vote you are obliged to be in this position. But then of course the day after you start dealing. This is politics.”

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And Canada will seek to blame the US.

China Threatens Canada With ‘Grave Consequences’ If Huawei CFO Not Freed (R.)

China has warned Canada there would be severe consequences if it did not immediately release Huawei’s chief financial officer, calling the case “extremely nasty”. Meng Wanzhou was arrested in Canada on 1 December and faces extradition to the United States, which alleges that she covered up her company’s links to a firm that tried to sell equipment to Iran despite sanctions. The executive is the daughter of Huawei’s founder. If extradited to the US, Meng would face charges of conspiracy to defraud multiple financial institutions, a Canadian court heard on Friday, with a maximum sentence of 30 years for each charge. No decision was reached at the extradition hearing after nearly six hours of arguments and counter-arguments, and the hearing was adjourned until Monday.

In a statement on Saturday, China’s foreign ministry said the vice-foreign minister, Le Yucheng, had issued the warning to release Meng to Canada’s ambassador in Beijing, summoning him to lodge a “strong protest”. China’s official news agency Xinhua reported Le summoned the Canadian ambassador, John McCallum, in protest and urged Ottawa to release Meng immediately or face “grave consequences that the Canadian side should be held accountable for”. Adam Austen, a spokesman for the Canadian foreign minister, Chrystia Freeland, said on Saturday there was “nothing to add beyond what the minister said yesterday”. Freeland told reporters on Friday the relationship with China was important and valued, and Canada’s ambassador in Beijing has assured the Chinese that Meng would receive consular access.

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Greece wants to be everyone’s friend.

Putin Doesn’t Rule Out Extending Turkish Stream Pipeline Into Greece (RT)

Russia is ready to cooperate with Athens in the energy sector, President Vladimir Putin has said, not ruling out the prospect of extending the Turkish Stream gas pipeline into Greece. “We are ready to carry out large infrastructural energy projects together with Greece. It includes the possibility to link Southern Europe through Greece to the Turkish Stream,” Putin said on Friday during a joint conference with Greek Prime Minister Alexis Tsipras in Moscow. “A pipeline from Greece to Italy has been nearly completed. The pipe is built, yet there’s no gas there. Yet we’ll think together on how to fill this line with some real product,” Putin added.

“It’s certainly possible, I don’t rule it out, moreover I believe it to be quite realistic.” Such a project increases the significance of Greece as the “regional energy hub,” Tsipras said on his part, complaining, however, over “double standards” the EU bureaucrats have been showing over the Turkish Stream and other projects involving Russia. Greece used to be one of the countries to host a section of the now-deprecated South Stream gas pipeline. The project, however, met stiff resistance in Brussels, which pressed participating countries – namely Bulgaria – to stop working on it. The project was scrapped late in 2014, ultimately giving way to the Turkish Stream

The Turkish Stream was agreed by Russia and Turkey in October 2016. The first branch will deliver gas to Turkish consumers, while the second one will bring it to countries in southern and south-eastern Europe. In November, Putin and his Turkish counterpart, Recep Tayyip Erdogan, unveiled the offshore section of the pipeline, which is expected to be fully completed late in 2019. So far, there are plans to extend it into Bulgaria, Hungary and Serbia.

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Useless reports anyway. These conferences will not solve a thing. Our political systems don’t allow for that.

COP24 Fails To Adopt Key Climated Change Report (BBC)

Attempts to incorporate a key scientific study into global climate talks in Poland have failed. The IPCC report on the impacts of a temperature rise of 1.5C, had a significant impact when it was launched last October. Scientists and many delegates in Poland were shocked as the US, Saudi Arabia, Russia and Kuwait objected to this meeting “welcoming” the report. It was the 2015 climate conference that had commissioned the landmark study. The report said that the world is now completely off track, heading more towards 3C this century rather than 1.5C. Keeping to the preferred target would need “rapid, far-reaching and unprecedented changes in all aspects of society”. If warming was to be kept to 1.5C this century, then emissions of carbon dioxide would have to be reduced by 45% by 2030.

The report, launched in Incheon in South Korea, had an immediate impact winning praise from politicians all over the world. But negotiators here ran into serious trouble when Saudi Arabia, the US, Russia and Kuwait objected to the conference “welcoming” the document. Instead they wanted to support a much more lukewarm phrase, that the conference would “take note” of the report. Saudi Arabia had fought until the last minute in Korea to limit the conclusions of the document. Eventually they gave in. But it now seems that they have brought their objections to Poland. The dispute dragged on as huddles of negotiators met in corners of the plenary session here, trying to agree a compromise wording. None was forthcoming. With no consensus, under UN rules the passage of text had to be dropped.

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Dec 052018
 
 December 5, 2018  Posted by at 10:38 am Finance Tagged with: , , , , , , , , , , , , ,  


Wassily Kandinsky Painting with Houses 1909 (click for background)

 

Don’t Blame Trump The Tariff Man, The Fed Crashed The Market Today (F.)
Dow Plunges Nearly 800 Points On Rising Fears Of An Economic Slowdown (CNBC)
FAANG Stocks Shed $140 Billion In Tuesday’s Market Rout (CNBC)
The Art of Defaulting (Jensen)
Anarchists, Butchers And Finance Workers In Court Over Paris Riots (AFP)
French History Has Never Seen A Protest Like The Yellow Vest Movement (Qz)
Theresa May Suffers Worst Day In Her Career … Until Next Week (Ind. )
UK Inches Closer To New Brexit Referendum As MPs Take Back Control (Ind.)
Mueller Says Michael Flynn Gave Details Of Trump Team Russia Contacts (CNBC)
Hey, Mr. Trump! Tear Down That Deep State Wall (Stockman)
The Ghost of Christmas Present (Kunstler)
Australia’s Economy Slows, Debt-Laden Consumers A Deadweight (R.)

 

 

New York Fed chief John Williams said the US economy can handle more rate hikes..

Don’t Blame Trump The Tariff Man, The Fed Crashed The Market Today (F.)

Don’t believe the hype: today’s reversal in equity markets has little, if anything, to do with this weekend’s trade war ceasefire. Tuesday’s drop in U.S. and European stock markets are largely thanks to the Federal Reserve. Treasury Secretary Steve Mnuchin came out immediately on Monday saying that details of the trade truce in terms of products China intended to import more of, and a new timeline for talks, would not be available to the public. The market new that immediately, but everyone still believed, and still believes today, that a trade truce is a market positive. Mnuchin told CNBC yesterday that China made trade commitments worth around $1.2 trillion, but stressed that the details still need to be negotiated and that he was taking Xi Jinping at his word. All positives.

The Hang Seng and every index on the Shanghai Stock Exchange settled higher again today. The Chinese yuan moved through its 50 and 100 day moving average to settle even stronger against the dollar today at 6.83. The blame for Tuesday’s slide in the U.S. can be laid upon New York Fed chief John Williams. He said today that the U.S. economy can handle more rate hikes. This comes just after Jerome Powell spoke at The Economic Club in New York last week saying the Fed funds rate was close to neutral. For once, a Powell speech sent the markets higher. No one really knows precisely what the neutral rate is, though it is perceived to be somewhere between 3% and 3.5%.

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Unhinged?!

Dow Plunges Nearly 800 Points On Rising Fears Of An Economic Slowdown (CNBC)

Stocks fell sharply on Tuesday in the biggest decline since the October rout as investors worried about a bond-market phenomenon signaling a possible economic slowdown. Lingering worries around U.S.-China trade also added to jitters on Wall Street. The Dow Jones Industrial Average fell 799.36 points, or 3.1%, to close at 25,027.07 and posted its worst day since Oct. 10. At its low of the day, the Dow had fallen more than 800 points. The S&P 500 declined 3.2% to close at 2,700.06. The benchmark fell below its 200-day moving average, which triggered more selling from algorithmic funds. Financials were the worst performers in the S&P 500, plunging 4.4%.

[..] The yield on the three-year Treasury note surpassed its five-year counterpart on Monday. When a so-called yield curve inversion happens — short-term yields trading above longer-term rates — a recession could follow, though it is often years away after the signal triggers. Still, many traders believe the inversion won’t be official until the 2-year yield rises above the 10-year yield, which has not happened yet. Stocks began falling to their lows of the day after Jeffrey Gundlach, CEO of Doubleline Capital, told Reuters this inversion signals that the economy “is poised to weaken.” The flattening yield curve caused investors to bail on bank stocks on concern the phenomenon may hurt their lending margins. [..] Shares of J.P. Morgan Chase, Citigroup and Bank of America all declined more than 4%. Citigroup and Morgan Stanley both reached 52-week lows ..

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Are there people left who think they will regain these losses?

FAANG Stocks Shed $140 Billion In Tuesday’s Market Rout (CNBC)

Tech stocks are back in correction territory after a painful day for public exchanges. The tech-heavy Nasdaq Composite index fell nearly 4%, with tech stocks like Apple, Amazon, Alphabet and Facebook weighing most heavily. In total, the so-called FAANG stocks — Facebook, Amazon, Apple, Netflix and Alphabet-owned Google — shed more than $140 billion in market value by the end of the trading Tuesday. The losses extend pain periods for Apple, which has seen downturn in recent weeks, and Facebook, which is suffering a down year on the heels of several scandals. Amazon and Netflix, though, are each up more than 40% year-to-date despite getting caught in the rout. With Tuesday’s losses, Alphabet is hanging onto modest year-to-date gains, up just 0.8% in 2018.

Here’s how it shook out:
• Facebook fell 2.2%, losing $7.6 billion in implied market value
• Amazon fell 5.9%, losing $50.8 billion in implied market value
• Apple fell 4.4%, losing $38.5 billion in implied market value
• Netflix fell 5.2%, losing $6.5 billion in implied market value
• Alphabet fell 4.8%, losing $37.5 billion in implied market value

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Long term makes sense. h/t Tyler.

The Art of Defaulting (Jensen)

I always distinguish between short-term debt cycles and debt super-cycles. Short-term debt cycles move more or less in parallel with the underlying economic cycles and last on average 7-8 years – in line with the average length of economic cycles. Debt super-cycles are a different kettle of fish. They typically last 50-75 years and have (unbeknown to many) existed for thousands of years. According to Ray [Dalio], they even get a mention in the Old Testament, which described the need to wipe out debt every 50 years or so. It is referred to as the Year of Jubilee in the old book. Debt super-cycles always end with a big bang. The previous debt super-cycle ended with the breakout of World War II, and a new debt super-cycle commenced its life when the canons fell silent in 1945. We are now almost 75 years into the current super-cycle; i.e. it will go down in history as one of the longer ones.

What do debt crises have in common? To begin with, I should point out that the 41 major debt crises that Ray has identified since 1980 are part of an even bigger number of debt crises that he discusses in his new book, starting with the hyperinflationary debt crisis in Germany between 1918 and 1925. I should also point out that every crisis he brings up is a mid to late stage super-cycle crisis. Not one crisis is from the 1950s, 1960s or 1970s. The logic is quite simple. In the early stages of a debt super-cycle, adding debt is actually a good thing and spurs economic growth; i.e. debt crises rarely occur in the earlier stages of debt super-cycles and almost never cause a major slump in GDP. Only later in the super-cycle does more debt actually become a problem.

Back to my question – what do all these crises have in common? All debt cycles start with a period of healthy borrowings, which is good for GDP growth (stage 1 in Exhibit 1 below). It is also worth noticing that, in the early stages of a typical debt super-cycle, a dollar of added debt leads to approx. a dollar of GDP growth. The two grow more or less in line, but that changes dramatically later in the super-cycle – more on that below. Healthy borrowing eventually turns into what Ray calls the bubble stage (stage 2). At this stage, excesses are creeping in; borrowers assume that the good times will continue forever, so they continue to borrow, even if they cannot always afford it. Three conditions are typically prevalent during the bubble stage: 1. Debt grows faster than income. 2. Equity markets rally. 3. The yield curve flattens. All three conditions have been prevalent in recent years.

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They simply don’t like Macron.

Anarchists, Butchers And Finance Workers In Court Over Paris Riots (AFP)

What started out as protests against the introduction of new fuel taxes has spiralled into a broad opposition front to Macron and his pro-business economic reforms since he took power in May 2017. Stephane, a 45-year-old butcher from the Hautes Alpes area of eastern France, said it was the first time he had joined a demonstration like the one on the Champs-Elysees on Saturday. He was accused of charging head-first into a line of riot police, known as CRS. “I would have liked the CRS to come and shake us by the hand, to put themselves on the people’s side,” he told the court. Jeremy Onselaer, a 22-year-old from the Parisian suburbs, defied any stereotyping: the master’s student earns 2,500 euros a month working part-time in the finance department of the national postal service.

He was accused of building barricades in the street, attempting to harm police officers and possessing cannabis. His lawyer urged magistrates not to impose a restraining order that would have banned him from the capital, because he had studies to pursue at the Paris School of Business. The strain on police and the justice system caused by so many cases was also evident at the recently opened new Paris city court complex, designed by star Italian architect Renzo Piano. “The conditions for the defence are completely unacceptable,” one lawyer complained, adding that she had six clients and had spent only a few minutes with each of them. Many suspects opted to have their trials deferred to prepare their defence, with hearings set to resume next year.

In most cases, magistrates ordered the suspects to report to police regularly until their trials, starting on Saturday morning when another day of protests has been announced. There were also numerous cases of instant acquittals due to the flimsiness of evidence provided by police. A 50-year-old nurse from Nice walked free saying he had been randomly arrested while walking in the Bastille area of Paris. “Violence is not part of my thinking,” he said, adding that he was a regular practitioner of yoga and meditation.

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“Even its elected representatives disagree with one another about the future of the movement.”

Eh, there are not elected representatives. That’s exactly what they don’t want. There may be a small group who pick some reps, but that’s not the same thing.

French History Has Never Seen A Protest Like The Yellow Vest Movement (Qz)

France is a country that’s no stranger to protest movements—from the massive student demonstrations of 1968 to contemporary union-led strikes. But during the “yellow vest” protests that rocked the streets of Paris this weekend, protesters reached further back in their history, to the era of the French Revolution. Protesters marching along the Champs-Elysées on Saturday (Dec. 1) could be heard chanting slogans like “We are running the revolution” and “Macron to the Bastille.” The Arc de Triomphe bore a message in spray paint: “We have chopped off heads for less than this,” a reference to the death by guillotine of king Louis XVI and his wife, Marie-Antoinette.

Are the yellow vests modern Jacobins fighting contemporary tyranny—or are they something entirely different? Quartz spoke with Danielle Tartakowsky, a history professor at Paris 8 university who recently published a book about the French state, about how to contextualize the yellow vests within France’s history of protest movements. According to Tartakowsky, the current demonstrations are unlike any other, marking an important shift in France’s political landscape. Unlike in previous large-scale protest movements in France, the yellow vests began as an organic, grassroots movement, born of the frustration of a small group of individuals who organized the protests entirely on Facebook. Tartakowsky says that’s one way in which these protests are unique.

Typically, French protests on the left have been organized or supported by major labor unions, and protests on the right (such as the marches against the legalization of gay marriage in 2012) were typically organized by Catholic groups. The lack of institutional framework is one of the things that sets the yellow vests apart from previous political movements and give them independence from any particular party, politician, or political leaning. That is one of their strengths, says Tartakowsky, since it gives the movement broader appeal (link in French). But it is also a major weakness, since the movement suffers from a lack of coherent message and leadership. Even its elected representatives disagree with one another about the future of the movement.

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No Brexit or no Deal. Anything in between is crumbling.

Theresa May Suffers Worst Day In Her Career … Until Next Week (Ind. )

The door of the flat above 10 Downing Street flat clicks shut. In the kitchen, Philip May stops rotating the tin opener around the rim of the baked bean tin and turns his head toward the hallway. “Hello darling. How was your day?” An exhalation is heard, followed by the sound of breaking glass. In the living room, the cat quietly turns to stone. “Well I lost more votes than Gordon Brown managed in three years. My own government became the first in history to be found in contempt of parliament, which means that in the morning I’ve got to publish the legal advice on just how terrible my own Attorney General reckons Brexit will be. Yes, Philip, yes, the same chap who I got to introduce me at party conference.

Yes, yes I know he said Brexit was “an eagle mewing her mighty youth” and yes, now it turns out he’d rather be imprisoned in the Tower of London than admit in public to how bad he has said it will be in private. “The TV debate where I wanted to show the people just how useless Jeremy Corbyn is isn’t happening and everyone is already saying it’s because I’m too useless to do it. My oldest friends voted against me. The EU has decided Article 50 can be revoked unilaterally, which means Brexit could be stopped altogether. No, Philip, that’s not a good thing. What do you mean why? I can’t remember why. Oh, and I’ve just opened a five day debate on my Brexit deal that’s going to end with my last two years work being chucked out, and barring a miracle that isn’t going to happen, me being chucked out after.”

On a less busy day, the Prime Minister might have had time to include the fact that the Governor of the Bank of England is now at open civil war with the previous Governor of the Bank of England. And he had to tell MPs on the Treasury Select Committee who had accused him of ratcheting up Project Fear by publishing his analysis of what might happen if the UK leaves the EU without a deal, that he had only published it because they themselves had asked him to.

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Parliament should decide these things.

UK Inches Closer To New Brexit Referendum As MPs Take Back Control (Ind.)

The push for a final say referendum has taken decisive steps forward in London and Brussels just a week before parliament is expected to reject Theresa May’s Brexit plan. On Tuesday MPs made the significant move of backing a plan to give the Commons more power to dictate what happens if the prime minister’s approach is ditched. A few hours earlier in Brussels the European Court of Justice also signalled it was set to rule that the UK could unilaterally revoke Article 50 – killing off Brexit – if it wanted to. The twin developments deliver both a means for MPs to secure a new referendum and legal clarity that they could halt the Brexit process if the public then decided to remain in the EU.

The government’s weakness was once again underlined as it lost three consecutive votes – including one unprecedented defeat which resulted in Ms May’s administration being held in “contempt of parliament” for refusing to publish legal advice on the proposed Brexit deal. At the start of the week campaigners delivered petitions carrying almost 1.5 million names to Downing Street, which demanded the British public have a Final Say on Brexit through a people’s vote. While Ms May remains adamant there will be no new referendum, MPs are already looking ahead to how parliament can impose its will if her deal is rejected in the commons vote on 11 December – something which now seems inevitable. Conservative, Labour and Liberal Democrat MPs tabled and won a vote on a motion significantly increasing the ability of parliament to steer the path of government if Ms May’s plan is defeated.

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Flynn said he admitted a lie because he couldn’t afford his own defense. If he did anything truly wrong, it’s his deals with Turkey. But that’s not what this is about.

Mueller Says Michael Flynn Gave Details Of Trump Team Russia Contacts (CNBC)

Former national security advisor Michael Flynn has given special counsel Robert Mueller “first-hand” details of contacts between President Donald Trump’s transition team and Russian government officials, a bombshell court document filed Tuesday says. Mueller in a sentencing memo said Flynn’s “substantial assistance” to his probe warrants a light criminal sentence — which could include no jail time for the retired Army lieutentant general. That assistance, which includes 19 interviews with Mueller’s team and Justice Department attorneys, related to a previsouly unknown “criminal investigation,” as well as to Mueller’s long-running probe of the Trump campaign’s and transition team’s links or coordination with the Russian government.

“The defendant provided firsthand information about the content and context of interactions between the transition team and Russian government officials,” the memo says. Mueller’s memo almost completely blacks out details of what Flynn might have said. Trump’s ex-national security advisor is due to be sentenced Dec. 18 in U.S. District Court in Washington. He pleaded guilty last December to a single count of lying to federal agents about his conversations with Russia’s ambassador to the United States during the presidential transition in late 2016. Flynn has cooperated with Mueller’s ongoing probe since pleading guilty. “Given the defendant’s substantial assistance and other considerations set forth below, a sentence at the low end of the guideline range — including a sentence that does not impose a term of incarceration — is appropriate and warranted,” Mueller’s office wrote in the memo filed Tuesday.

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Stockman is no Trump fan.

Hey, Mr. Trump! Tear Down That Deep State Wall (Stockman)

When the Donald promised to “drain the swamp” during the 2016 election campaign, it did sound vaguely like an attack on Big Government, and at least a directional desire to shrink the state and let free market capitalism breathe. After 22 months in office, however, the truth is patently obvious: The only Swamp that Donald Trump wants to drain is one filled with his political enemies and policy adversaries at any given moment in time. Even then, you have to consult his tweetstorm ledger to know exactly who the swamp creatures de jure actually are. Still, the Donald’s daily Twitter assaults on the Deep State are a wondrous thing. They surely do undermine public confidence in rogue institutions like the FBI, CIA and NSA, which profoundly threaten America’s constitutional liberties and fiscal solvency.

Likewise, his frequently unhinged tweets also lather their congressional sponsors and beltway poo-bahs with well-deserved mud and opprobrium. And the Donald’s increasingly acrimonious public feuding with Deep State criminals like James Comey and John Brennan is just what the doctor ordered. The Deep State thrives and milks the public treasury so successfully in large part because the Imperial City’s corps of permanent policy apparatchiks like Comey and Brennan (and thousands more) pretend to be performing god’s work. So doing, they preen sanctimoniously to the adoration of their sycophants in the mainstream media, claiming to be above any governance or sanction from the unwashed electorate.

Attacking this rotten perversion of democracy, therefore, is the Donald’s real calling. While he lacks both the temperament and ideas to solve the nation’s metastasizing economic and social challenges and has no hope whatsoever to make MAGA, he is more than suited for his “Great Disrupter” mission. That is, the existing order needs to be discredited and brought down first, and on that score his primitive economic populism will more than do its part. As we have previously explained, Trump’s deadly combination of Fiscal Debauchery, Protectionism and Easy Money will eventually blow the nation’s debt and bubble-ridden economy sky-high.

Likewise, his crude rendition of America First is not a blueprint for rebooting America’s national security policy, but it is an existential threat to Empire First and the Deep State’s usurpation of constitutional government. And even as the Donald lurches to and fro on Russia, Korea, the Middle East, NATO, globalism and so-called allies, the main job is getting done. That is, the War Party’s self-appointed role as global policeman and the Indispensable Nation is getting thoroughly discredited.

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“For all the deformities of the EU, France still maintains a general quality-of-life so far above what is found in the US these days that we look like some left-behind evolutionary dead end here in this wilderness of strip-malls and muffler shops…”

The Ghost of Christmas Present (Kunstler)

It’s not hard to see why US life expectancy is going down, driven by the two new leading causes of death: opiate drugs and suicide — the former often in the service of the latter. The citizens of this land have exchanged just about everything that makes life worth living for the paltry rewards of “bargain shopping” and happy motoring. But the worst sacrifice is the loss of any sense of community, of face-to-face human transactions with people you know, people who have duties and obligations to one another that can be successfully enacted and fulfilled. Instead, you get to do all your business with robots, even including the robots fronting for companies that seek to ruin you. “Your call is important to us,” says the telephone robot at the hospital billing office dunning you to fork over $7,000 for the three stitches Little Skippy got when his best friend flew the drone into his forehead. “Please hold for the next available representative.” Who wouldn’t want to shoot themselves?

Interestingly, it’s the people of France who are going apeshit at this moment in history and not the much more beaten-down Americans. For all the deformities of the EU, France still maintains a general quality-of-life so far above what is found in the US these days that we look like some left-behind evolutionary dead end here in this wilderness of strip-malls and muffler shops. They live in towns and cities that are designed to bring people together in public. They support small business in spite of the diktats of Brussels. They maintain an interest in doing things well for its own sake. The French are rioting these days not simply over the cost of diesel fuel but because they’ve had enough impingements on their traditional ways of life and seek to arrest the losses.

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The first in a long series of overborrowed nations.

Australia’s Economy Slows, Debt-Laden Consumers A Deadweight (R.)

Australia’s economy slowed more than expected last quarter as consumers reacted to tepid wage growth by shutting their wallets, a disappointing outcome that sent the local dollar sliding as investors pushed out the chance of any rate hike. The news came as fears of a possible slowdown in the U.S. economy and the Sino-U.S. tariff slugged world shares and threatened future business investment. The gloomy report provides another blow to Australia’s center-right government, which is already lagging in polls ahead of a likely election in May. Wednesday’s report on GDP showed the economy expanded 0.3% in the third quarter, half of what economists had expected.

Second-quarter growth was unrevised at 0.9%. Annual GDP rose by a still-respectable 2.8% to A$1.8 trillion ($1.32 trillion), but confounded expectations in a Reuters poll for a 3.3% increase. The figures also imply growth in the year to June was 3%, rather than the originally report 3.4%. The data will not be welcomed by the Reserve Bank of Australia (RBA), which predicts growth of around 3-1/2% this year and next. “The RBA forecasts are now looking pretty optimistic,” said Tom Kennedy, senior economist at JPMorgan.

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