Aug 182020
 


Bettmann/Getty Minimum Wage 1963

 

Coronavirus Clusters Erupt At US Universities As Semester Begins (AP)
Sixty Seconds to Self-Sabotage (Cut)
They’re Angry, Not Stupid: Why Trump is Likely to Win Again (Greene)
Sanders: ‘The Future Of Our Planet Is At Stake’ In 2020 Election (JTN)
Democrats Seem All Too Willing to Surrender on Health Care Reform (Jac.)
Michelle Obama Speech Recorded Before Joe Biden Selected Kamala Harris (NYP)
Trump vs. Dems On Mail-in Voting (Chaffetz)
Trump Teases Upcoming Pardon For ‘Very Important’ Person (RT)
China’s Anti-Trump Election Meddling Raises New Alarm (Fox)
Kamala Harris Reportedly Owes $1M In Bills From Failed Presidential Run (NYP)
Twelve US Billionaires Have a Combined $1 Trillion (Ineq.org)
US States Seek $2.2 Trillion From OxyContin Maker Purdue Pharma (R.)
The Need for Debt-for-Climate Swaps (PS)
The Mathematical Model of Modern Monetary Theory (Steve Keen)
And in the End (Rolling Stone)

 

 

No, I didn’t watch the Dem convention. Never perform invasive surgery on myself either, for pretty much the same reason. But I did pick up a few tidbits. It all leaves a very elitist impression. Deplorables.

 

 

New global cases below 200,000, new deaths at 4,297. Not bad. Or is that just because it was Monday?

Several European countries are spiking in what is perhaps a second wave. Pretty lousy controls, which will lead to all kinds of renewed lockdowns. Unnecessary.

 

 

New cases only just above 40,000 in the US, it was 70,000 not long ago, with new deaths at “only” 589.

 

 

 

 

 

 

 

 

This sounds just plain dumb.

Coronavirus Clusters Erupt At US Universities As Semester Begins (AP)

From the dorms at North Carolina to the halls of Notre Dame, officials at universities around the US scrambled on Monday to deal with new Covid-19 clusters at the start of the fall semester, some of them linked to off-campus parties and packed clubs. North Carolina’s flagship university cancelled in-person classes for undergraduates just a week into the fall semester Monday. The University of North Carolina at Chapel Hill said it will switch to remote learning on Wednesday and make arrangements for students who want to leave campus housing. “We have emphasised that if we were faced with the need to change plans – take an off-ramp – we would not hesitate to do so, but we have not taken this decision lightly,” it said in a statement after reporting 130 confirmed infections among students and five among employees over the past week.


UNC said the clusters were discovered in dorms, a fraternity house and other student housing. Before the decision came down, the student newspaper, The Daily Tar Heel, ran an editorial headlined “UNC has a clusterf*** on its hands”. The paper said that the parties that took place over the weekend were no surprise and that administrators should have begun the semester with online-only instruction at the university, which has 19,000 undergraduates. “We all saw this coming,” the editorial said. Outbreaks earlier this summer at fraternities in Washington state, California and Mississippi provided a glimpse of the challenges school officials face in keeping the virus from spreading on campuses where young people eat, live, study – and party – in close quarters.

Read more …

The DNC pushed Bernie aside until he complied with the Biden “plan”. They do the same with AOC et al, without whom they may never have had control of the House. Instead, they have Republicans and billionaires speaking, along with has-beens like the Obamas and Clintons….

Sixty Seconds to Self-Sabotage (Cut)

When the Democratic National Committee released its schedule for its big socially distanced convention this week, we learned that New York Rep. Alexandria Ocasio-Cortez, inarguably among the party’s most dynamic figures, would have just sixty seconds to address the nation. [..] the relegation of Ocasio-Cortez, who electrifies multiple parts of a Democratic base, to one meager minute, a segment that—unlike speeches by some other presenters—will be pre-recorded, isn’t just a snub. The failure of a major political party to showcase one of its most talented politicians, a young person whose communicative reach and facility positions her to be among its leaders deep into our future, is self-sabotage.

[..] Why will this convention not show off more of the historic number of women who enabled their party to retake the House in 2018? Most of them won’t be prominently featured, but former Ohio Republican governor John Kasich, who ran for governor as a Tea Partier and signed eleven laws (comprising 21 restrictions) on abortion, including a 20 week ban and the prohibition of rape crisis centers advising survivors about the option of abortion, will be. He also worked to rob Ohio’s public workers of the right to bargain collectively (voters later overturned this measure). Not only is Kasich getting a plum spot on Monday, he’s used his time in the Democratic sun to diss Ocasio-Cortez, telling Buzzfeed that just because she “gets outsized publicity doesn’t mean she represents the Democratic Party. She’s just a part, just some member of it.”

So John Kasich, Republican, feels that Ocasio-Cortez, Democrat, gets outsized attention, even as he–along with his fellow Republicans Susan Molinari (Remember her? No? Weird) and former Hewlett-Packard and eBay CEO Meg Whitman–will get more featured airtime than she at her party’s convention. But this convention seems driven to thumb its nose not only at individual politicians, but at the social movements that have transformed civic participation and changed public opinion across the nation during the course of the Trump administration. Remember those women who retook the House in 2018? A bunch of them were first time candidates who were open about how their entrance into politics was grounded in their fury about the ubiquity and pervasiveness of sexual harassment and assault in the wake of Donald Trump’s election and the #metoo movement.

But the party that profited from their electoral success has offered prime speaking spots to two multiply-accused harassers: former president Bill Clinton and former New York mayor Michael Bloomberg. That Bloomberg’s presidential campaign met its lethal end at the hands of Massachusetts senator Elizabeth Warren, who in a February primary debate detailed his history of workplace harassment, red lining, and support of stop-and-frisk policing, all in her allotted sixty seconds (she only had a minute; an eternity was in it) makes his featured presence an insult to Warren, and the many Democrats who were far more inspired by her campaign than by his. And listen, I get it, and assume everyone else does too: Bloomberg is speaking to the Democratic convention because the Democrats need his money (he shifted $18 million from his campaign to the Democratic National Committee in March).

But if organizers had been paying attention these past two years, they might have learned that that’s actually part of the structural thing about harassment and those who get away with it: too often, you need their money.


Matt Taibbi’s drinking game bingo card for the DNC

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…and that attitude of trampling over the left leads to this… If you think BLM, Antifa, #MeToo are the only angry ones, you are mistaken.

They’re Angry, Not Stupid: Why Trump is Likely to Win Again (Greene)

The candidate Barack Obama spoke to blue-collar America. He campaigned on change that would rejuvenate careers and restore dignity. Working Americans in the swing states doubted that Hillary Clinton even knew they existed. They saw Obama as a last hope and supported him enthusiastically in the 2008 primaries and later in the general election, but he soon proved to be a disappointment. He, too, fell in love with Silicon Valley and Wall Street and neglected the people who needed him most. And they punished him: he won fewer states in 2012 than he had in 2008. People like the alternate me felt cheated by a guy who rocked a Brooks Brothers suit and talked a great game, then gave the Tech and Finance sectors everything they wanted and more.

Educated people from the best schools trusted Big Tech outfits because educated people from the best schools ran them. Elites imagine each other to be virtuous because they imagine themselves that way. Technology giants were understood not as hardy sprouts but would be treated instead with princess-and-the-pea levels of delicacy, thanks to a superstitious fear that it might all be brought to grief by, say, forcing companies with hundreds of billions in share value to tolerate an employees’ union, offer a minimum wage adequate for a decent life, or pay tax proportional to their reliance on public goods.

No one bears greater responsibility for the lack of empathy toward Old-Economy workers that led to Donald Trump’s victory than big-name Tech darlings and the New Democrats who coddled them, then openly ridiculed their own voter base: the people Hillary foolishly nicknamed “Deplorables;” that is, the millions of disappointed Obama voters who would happily have voted blue if they’d had confidence that the party would respect them, welcome them, and acknowledge their needs. But the New Economy is a gated community, shut firmly to them, whose most strenuous boosters have been the Clinton, Bush, and Obama Administrations. Old-school, working-class Democrats are unwelcome in the party they built. No one wants them tracking mud through the salon.

Donald Trump defeated Hillary Clinton in the swing states the same way Barack Obama had: by characterizing her as disdainful toward blue-collar Americans. It was a potent message among those who once had seen decent wages in return for honest work, lately reduced to Walmart greeters and Uber drivers. Humiliated by a labor market in which they had nothing to trade, the former working class understood that they also had nothing to lose. Liberal democracy and its supporting institutions shed their veneer of sanctity when dead-end employees can aspire only to dead-end management gigs. Call them “associates” and “technicians” all you want; they know who they’ve become and what others think of them. They are why Trump won in the swing states; he was propelled to victory by disillusioned Obama voters.

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I would have expected so much more from Bernie. Folds for the DNC twice in a row, and doesn’t volunteer to return any donations.

Can someone check how many times he said the same in 2016?! “Sanders called the 2020 election the most important in the modern history of the U.S.”

Sanders: ‘The Future Of Our Planet Is At Stake’ In 2020 Election (JTN)

Former 2020 Democratic presidential candidate Sen. Bernie Sanders urged his supporters Monday to vote for nominee Joe Biden, imploring that the “future of our planet is at stake” and that the “price of failure” for not electing Biden would be “just too great to imagine.” “The future of our democracy is at stake. The future of our economy is at stake. The future of our planet is at stake,” Sanders said on opening night of the Democratic National Convention. “We must come together, defeat Donald Trump and elect Joe Biden and Kamala Harris as our next president and vice president. My friends, the price of failure is just too great to imagine.” Sanders called the 2020 election the most important in the modern history of the U.S.

“We need an unprecedented response, a movement, like never before of people who are prepared to stand up and fight for democracy and decency,” said Sanders, a democratic-socialist who finished second in the 2016 and 2020 Democratic presidential primaries. “Our campaign ended several months ago but our movement continues and is getting stronger every day. Many of the ideas we fought for, that just a few years ago were considered radical are now mainstream but let us be clear, if Donald Trump is re-elected, all the progress we have made will be in jeopardy,” he also [said].

Sanders named areas where Biden has moved the progressive agenda forward, such as raising the minimum wage to $15 an hour, making it easier for workers to join unions,” creating 12 weeks of paid family leave and funding universal pre-K for 3 and 4-year olds. “Joe will rebuild our crumbling infrastructure and fight the threat of climate change by transitioning us to 100 percent clean electricity over the next 15 years. These initiatives will create millions of good paying jobs all across the country,” Sanders said. “We are the only industrialized nation not to guarantee health care for all people. While Joe and I disagree on the best path to get to universal coverage, he has a plan that will greatly expand health care and cut the cost of prescription drugs. Further, he will lower the eligibility age of Medicare from 65 to 60,” added Sanders, who worked with Biden on his final campaign platform.

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Bernie campaigner David Sirota has at least a little backbone.

Democrats Seem All Too Willing to Surrender on Health Care Reform (Jac.)

On the eve of a Democratic National Convention taking place as millions lose health care coverage, the health care industry is launching a new ad campaign pressing Democrats to back off from the party’s already compromised health care promises. That pressure seems to be having its intended effect on Capitol Hill, as congressional aides say the party will not push the initiative if Joe Biden wins the presidency. The signs of retreat come as health care industry profits are skyrocketing and the industry’s campaign cash has flooded into Democratic coffers. The Partnership for America’s Health Care Future (PAHCF) — a front group created by health insurance, pharmaceutical, and hospital lobbying groups to oppose “Medicare for All” — announced on Friday that it is launching a new national ad campaign to persuade Democrats to abandon their plans to create a public health insurance plan.

The group said it will run ads during the Democratic National Convention (DNC) this week. PAHCF is led by a former Hillary Clinton aide and run out of the offices of a DC lobbying firm led by former top Democratic congressional aides. A substantial “public option” plan — which polls show is wildly popular — was the centerpiece of recent policy negotiations between supporters of former vice president Joe Biden and progressive Vermont senator Bernie Sanders, who had been pushing for a more expansive Medicare for All program. A draft of the party platform, approved by DNC members late last month, includes a pledge to pass a public option, or a government-run health insurance plan that would compete with private insurers.

Within twenty-four hours of the launch of the industry’s new ads, however, anonymous Democratic congressional sources were telling the Hill that Democrats likely won’t bother with the public option fight next year if Biden wins the election. Instead, they said, the party will work to tweak its 2010 health care law, the Affordable Care Act (ACA), which has done little to limit insurance or hospital costs and has failed to ensure universal coverage. To justify the preemptive retreat, Democratic congressional aides told the newspaper that the party’s moderate crop of 2020 Senate challenger candidates could make it harder to pass a public option. That assertion comes even though every single one of those candidates is currently campaigning in support of a public option, according to a TMI review of campaign statements.

The situation echoes the Democratic promises and subsequent surrender on a public option that marked the debate over health care more than a decade ago — only this time around, the health care crisis is an even more acute emergency. While most developed countries have managed to contain COVID-19, the pandemic is spiraling out of control in the United States, and an estimated 27 million people have lost their employer-based health insurance plans, according to the Kaiser Family Foundation.

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And also recorded before Trump lost his brother?! Or wouldn’t she have cared? She did remember last night that she said it, right? Class? Grace? Where? We go low?

.. by contrast, “Joe knows the anguish of sitting at a table with an empty chair …

Michelle Obama Speech Recorded Before Joe Biden Selected Kamala Harris (NYP)

There was one glaring omission from Michelle Obama’s 20-minute Democratic National Convention speech Monday night — Kamala Harris. That’s because the former first lady recorded her rousing speech before Joe Biden selected Sen. Harris of California as his running mate. The speech was delivered remotely like all others at the DNC because of the coronavirus pandemic, and The Associated Press reports it was filmed before Harris was named last week as Biden’s VP candidate, indicating the choice was so close to the vest and down to the wire that even the Obamas were not in the loop. In her speech, Michelle Obama eloquently praised Biden and emotionally denounced Trump’s policies.

“Donald Trump is the wrong president for our country. He has had more than enough time to prove that he can do the job, but he is clearly in over his head. He cannot meet this moment. He simply cannot be who we need him to be for us,” she said. “It is what it is,” Obama added, quoting Trump’s recent remark on coronavirus deaths. “Right now, kids in this country are seeing what happens when we stop requiring empathy of one another,” Obama said. “They watch in horror as children are torn from their families and thrown into cages, and pepper spray and rubber bullets are used on peaceful protesters for a photo-op.”

She said that by contrast, “Joe knows the anguish of sitting at a table with an empty chair, which is why he gives his time so freely to grieving parents. Joe knows what it’s like to struggle, which is why he gives his personal phone number to kids overcoming a stutter of their own. His life is a testament to getting back up, and he is going to channel that same grit and passion to pick us all up, to help us heal and guide us forward.”

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The issue is not nearly as simple as some people would let you believe.

Trump vs. Dems On Mail-in Voting (Chaffetz)

With less than three months until the 2020 election and no end in sight for the coronavirus pandemic, a new debate over mail-in voting has begun. Swirling and sudden concerns about the United States Postal Service (USPS) have arisen from Democrats who are wildly accusing President Trump of cheating and manipulating the Postal Service in his favor. Conveniently they forget to mention the president is more than an arms-length away from how we vote, and the Postal Service is not under the thumb of his control. Senate Democrats joined Republicans to unanimously install postal leadership — of which, one is an Obama appointee.

No doubt President Trump has expressed deep concerns about the validity of the ballots, and rightfully so. Sending out millions of ballots without authenticating the inbound ballots is ripe for massive fraud. Democrats have desperately been seeking to legalize “ballot harvesting” (the collection and submission of ballots by someone other than the voter and without authentication) and other nefarious activities. It must be noted elections in the United States are administered by counties and certified by states. In other words, per the United States Constitution, elections are run locally and not by the executive branch of the federal government. The president has simply sought fair elections.

Ironically, it is House Speaker Nancy Pelosi’s H.R. 1 that seeks to federalize elections and give the president power he doesn’t currently have now. Her solution would create the problem she inaccurately blames Trump for today. [..] The president of the United States does not control the operations of the Postal Service nor does he select or appoint the Postmaster General. The Board of Governors does both of these things. The Postal Regulatory Commission sets rates, service levels and decides on postal closings, not the president. The governors are appointed by a president and confirmed by the United States Senate. No more than five of the nine governors may be from the same political party.

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Clickbait fodder.

Trump Teases Upcoming Pardon For ‘Very Important’ Person (RT)

US President Donald Trump said he would soon hand out a pardon to a “very important” person. While the details were left shrouded in mystery, he ruled out both his former advisor Michael Flynn and NSA whistleblower Edward Snowden. “Doing a pardon tomorrow on someone who is very, very important,” Trump told reporters on board Air Force One on Monday, offering little elaboration other than to say it would not be Flynn – his first National Security Advisor – nor the famed whistleblower. Despite repeatedly calling Snowden a “traitor” over the years, Trump has hinted at giving the whistleblower a reprieve on more than one occasion in the last week, saying he may have been treated “unfairly” and that he would “look at” allowing him to return home.


With the president explicitly ruling him out for Tuesday’s pardon, however, it appears Snowden will have to remain in Moscow for some time longer, where he was given asylum after leaking a massive cache of purloined documents from the National Security Agency in 2013, revealing Washington’s sweeping domestic and global spying apparatus.

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They’re starting a new competition.

China’s Anti-Trump Election Meddling Raises New Alarm (Fox)

Director of National Intelligence John Ratcliffe told Fox News that China poses “a greater national security threat” to the United States “than any other nation,” detailing a web of threats that includes “election influence and interference.” Intelligence officials say they are increasingly concerned about interference in the U.S. election by China, adding to existing concerns about meddling by Russia that have been around since 2016, as well as the threat of meddling from Iran. “China poses a greater national security threat to the U.S. than any other nation – economically, militarily and technologically. That includes threats of election influence and interference,” Ratcliffe told Fox News in a statement.

While Russia was widely seen as favoring now-President Trump and generally seeking to sow chaos in America during the 2016 election, the difference with China is it is seen to be seeking a Trump loss in November. Yet congressional Democrats like House Speaker Nancy Pelosi and House Intelligence Committee Chairman Adam Schiff, who ever since 2016 have issued dire warnings about Russian meddling, have not been quite so vocal about China’s potential to interfere in the 2020 election. Pelosi, D-Calif., last week said the threats of interference from Russia and China are “not equivalent,” while urging the intelligence community to put out more information about Russian efforts, saying Moscow is “actively 24/7 interfering in our election.”

Ratcliffe said the threat from China is actually significant, and he is “committing the IC resources needed to fully understand the threat posed by China and provide U.S. policymakers with the best intelligence to counter China’s broad and deep malign activities.” “China is concerned that President Trump’s reelection would lead to a continuation of policies that they perceive to be ‘anti-China,’” Ratcliffe explained, noting that the intelligence community has briefed “hundreds of members of Congress” to raise their concerns about China “and its increased efforts to impact the U.S. policy climate in its favor.” “Fair and free elections are a bedrock of American democracy, and the IC remains vigilant against the various activities by China, as well as other threat countries and actors, which seek to affect our electoral process,” Ratcliffe said.

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Great fundraiser, they said.

Kamala Harris Reportedly Owes $1M In Bills From Failed Presidential Run (NYP)

Kamala Harris, named Tuesday to be Joe Biden’s running mate, still has more than $1 million in unpaid bills left over from her failed 2020 presidential bid, according to a report. The California senator raised about $39 million for her White House bid in 2019 and spent about $40 million, leaving her campaign with just $116,380 in the bank at the end of June, Bloomberg News reported on Wednesday, citing Federal Election Commission filings. Harris ended her campaign last December amid falling poll numbers and a lack of fundraising.


International law firm Perkins Coie LLP was still owed $523,883 at the end of June, while TorchStone Global LLC, a corporate and private security company, was owed $160,702, the report said. California political consulting firm SCRB Strategies had $92,4087 in outstanding invoices. Donors have contributed slightly more than $48,000 to her campaign this year. The report noted that the campaign can’t be shuttered until all debts are paid under federal law. And while Biden raised $26 million in a day after announcing her selection, his campaign can do little to retire Harris’ campaign debt. It can donate $2,000 and the Democratic National Committee can contribute $5,000. But Biden can ask his donors to send funds to Harris’ campaign.

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Feel free to call this a failed society.

Twelve US Billionaires Have a Combined $1 Trillion (Ineq.org)

For the first time in US history, the top twelve U.S. billionaires surpassed a combined wealth of $1 trillion. On Thursday August 13th, these 12 had a combined $1.015 trillion. This is a disturbing milestone in the US history of concentrated wealth and power. This is simply too much economic and political power in the hands of twelve people. From the point of view of a democratic self-governing society, this represents an Oligarchic Twelve or a Despotic Dozen. The Oligarchic Dozen are Jeff Bezos ($189.4b), Bill Gates ($114b), Mark Zuckerberg ($95.5b), Warren Buffett ($80b), Elon Musk ($73b), Steve Ballmer ($71b), Larry Ellison ($70.9b), Larry Page ($67.4b), Sergey Brin ($65.6b), Alice Walton ($62.5b), Jim Walton ($62.3b) and Rob Walton ($62b).

Since March 18th, the beginning of the pandemic, this Oligarchic Dozen have seen their combined wealth increase $283 billion, an increase of almost 40 percent. Elon Musk has been the biggest pandemic profiteer, seeing his wealth triple from $24.6 billion on March 18th to $73 billion on August 13, an increase of $48.5 billion or 197 percent. Amazon co-founder Jeff Bezos was worth $189.4 billion on August 13, up $76 billion or 68 percent since March 18th. Facebook CEO Mark Zuckerberg was worth $95.5 billion on August 13, up $40.8 billion or 75 percent since March 18th.

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The Sacklers took out many billions, then declared bankruptcy. Now they’re “willing” to contribute more to a settlement than the entire company is worth. Sick.

US States Seek $2.2 Trillion From OxyContin Maker Purdue Pharma (R.)

U.S. states claimed they are owed $2.2 trillion to address harm from OxyContin maker Purdue Pharma LP’s alleged role in America’s opioid epidemic, accusing the drugmaker in new filings of pushing prescription painkillers on doctors and patients while playing down the risks of abuse and overdose. In filings made as part of Purdue’s bankruptcy proceedings that were disclosed on Monday, the states said Purdue, backed by the wealthy Sackler family, contributed to a public health crisis that has claimed the lives of roughly 450,000 people since 1999 and caused strains on healthcare and criminal justice systems. The filings cited more than 200,000 deaths in the U.S. tied directly to prescription opioids between 1999 and 2016.

In large states such as California and New York, claims alone totaled more than $192 billion and $165 billion, respectively. Forty-nine U.S. states, Washington, D.C. and various territories are making the claims. Oklahoma settled litigation with Purdue last year. Purdue filed for bankruptcy in 2019 under pressure from more than 2,600 lawsuits brought by cities, counties, states, Native American tribes, hospitals and others. The lawsuits said the company, and in some cases the Sacklers, used deceptive marketing and took other improper steps to flood communities with prescription opioids. The company and family have denied the allegations and pledged to help combat the opioid epidemic, including by providing addiction treatment drugs and overdose reversal medications under development.

[..] Purdue is only worth a bit more than $2 billion if liquidated. The company values a proposal to settle litigation, which includes providing addiction treatment and overdose-reversing drugs, at more than $10 billion. The Sacklers would contribute $3 billion and cede control of Purdue, with the company becoming a trust run on behalf of plaintiffs.

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These well-meaning people are mightily confused about growth:

“In the absence of new forms of liquidity support and major debt relief, the world economy cannot possibly return to pre-pandemic levels of growth..”

I think that means to want to return there.

“..the dramatic decline in the cost of renewable energy represents an opportunity for a big investment push in zero-carbon energy infrastructure, which itself would help to redress energy poverty and unsustainable growth.”

More growth? Isn’t growth itself the problem then? Never mind, anyone who talks about sustainable growth is not a serious person in my book.

The Need for Debt-for-Climate Swaps (PS)

In the absence of new forms of liquidity support and major debt relief, the world economy cannot possibly return to pre-pandemic levels of growth without risking severe climate distress and social unrest.Climate scientists tell us that in order to meet the targets outlined in the Paris climate accord, global net carbon-dioxide emissions must fall by about 45% by 2030, and by 100% by 2050. Given that the effects of climate change are already being felt around the world, countries urgently need to scale up their investments in climate adaptation and mitigation. But that will not be possible if governments are bogged down in a debt crisis. If anything, debt-service requirements will push countries to pursue export revenues at any cost, including by cutting corners on climate-resilient infrastructure and stepping up their own fossil-fuel use and extraction of resources.

This course of events would further depress commodity prices, creating a doom loop for producer countries. In light of these concerns, the G20 has called on the IMF “to explore additional tools that could serve its members’ needs as the crisis evolves, drawing on relevant experiences from previous crises.” One such tool that should be considered is a “debt-for-climate swap” facility. In the 1980s and 1990s, developing countries and their creditors engaged in “debt-for-nature swaps,” whereby debt relief was linked to investments in reforestation, biodiversity, and protections for indigenous people. This concept should now be expanded to include people-centered investments that address both climate change and inequality.

Developing countries will need additional resources if they are to have any chance of leaving fossil fuels in the ground, investing sufficiently in climate adaptation, and creating opportunities for twenty-first-century jobs. One source for such resources is debt relief conditioned on such investments. A policy tool of this type would not only put us on the path to recovery, but also could help to prevent future debt-sustainability problems that might emerge as more fossil-fuel holdings and non-resilient infrastructure become “stranded assets.” Moreover, the dramatic decline in the cost of renewable energy represents an opportunity for a big investment push in zero-carbon energy infrastructure, which itself would help to redress energy poverty and unsustainable growth.

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I should read Stephanie Kelton’s book, right?!

The Mathematical Model of Modern Monetary Theory (Steve Keen)

One Mathematical Model of Modern Monetary Operations

I confess immediately that I chose the title and subtitle for this post because their acronyms are palindromes. The subtitle is more accurate than the title, because this model considers only the monetary aspects of MMT: the Job Guarantee and inflation management components are not yet incorporated. But the monetary assertions of MMT remain in dispute in economic and political circles, so it is worth putting these into a mathematical model where their veracity can be tested. The primary stimulus for developing the model was the publication of Stephanie Kelton’s The Deficit Myth. Stephanie has written the book for non-technical readers, and she’s done a very good job: it’s a very easy read that explains why many conventional wisdoms about government spending are wrong.

But MMT is facing heavy resistance in political and economic circles, with my favourite to date being a motion before the US Congress, posted by Representative Kevin Hern, to resolve: “That the House of Representatives (1) realizes that deficits are unsustainable, irresponsible, and dangerous; and (2) recognizes— (A) that the implementation of Modern Monetary Theory would lead to higher deficits and higher inflation; and (B) the duty of the House of Representatives to condemn Modern Monetary Theory.”

The objective of this series of posts is to allow the assessment of the first part of this motion—the assertion that “deficits are unsustainable, irresponsible, and dangerous”. The models in this post are built in the Open Source system dynamics program Minsky, whose unique feature is the capacity to build models of financial flows using what are called Godley Tables (in honour of Wynne Godley, the pioneer of stock-flow-consistent-modelling). These tables enforce the “law of accounting” that (see Figure 1, A blank Godley Table).

Once an account is flagged as an “Asset” for one entity, Minsky knows that it has to also be shown as a “Liability” for another entity. This makes it possible to take an integrated look at the financial system, which allows us to assess Hern’s motion from the perspective of the entire monetary system, and not just the Government’s view of it.

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50 years later: ‘They broke up because Yoko sat on an amp!’

And in the End (Rolling Stone)

It’s a miserable Monday morning in January 1969, and the Beatles are trying to get back to where they once belonged. The Get Back project sounded like a perfect idea: just the four lads and their instruments, ready to hit the studio, return to their roots, conjure up some great songs out of thin air. Just like they used to. John, Paul, George, and Ringo have booked a TV concert special for January 18th — their first live show in years. They’ll rehearse for a couple of weeks, eyeball to eyeball, summon up genius on the spur of the moment. They’ve done it many times before. They’ve never not done it. The good news: Paul showed up today, and so did Ringo. So did the camera crew — these sessions are being filmed, so the Beatles can show a half-hour clip of rehearsal footage before their TV performance.

So here they are on Monday morning, ready to dazzle the world with a blast of spontaneous Beatles brilliance. Or at least Paul and Ringo are. Hey, has anyone heard from John and Yoko? Or George? With George, there’s a slight complication: He quit the band. On Friday, with the cameras rolling, he was trying to teach them a new song, “All Things Must Pass.” John, strung out on his new heroin habit, sneered at George with open contempt. George finally stormed out, muttering, “See you around the clubs.” John doesn’t take this seriously. “I think if George doesn’t come back by Monday or Tuesday, we ask Eric Clapton to play in it,” he says. “The point is, if George leaves, do we want to carry on the Beatles? I do. We should just get other members and carry on.” But now it’s Monday and still no George. No John and Yoko. (No Clapton, for that matter.) Paul and Ringo kill time jamming on a current radio hit, “Build Me Up Buttercup.”

But everyone gathers to discuss the crisis, complaining bitterly about Yoko’s constant presence. Surprisingly, the one who sticks up for her is Paul. He’s a sucker for a love story — he’s Paul McCartney, for God’s sake. But he also knows how much this romance means to his oldest, closest mate, his most troubled and cruel and impossible friend. “It’s not that bad,” he insists. “They want to stay together, those two. So it’s all right. Let the young lovers be together.” Paul has to chuckle, thinking about how future generations will look back at this — the Beatles, the greatest of all rock & roll bands, the world’s most legendary creative team, falling apart over such a trivial spat. Even on a winter morning as gloomy as this one, Paul breaks into a laugh. “It’s gonna be such an incredible sort of comical thing, like in 50 years’ time, you know. ‘They broke up because Yoko sat on an amp!'”

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Nadler Says Dems Unwilling To Negotiate Hunter Biden Testimony (Fox)
Warren Joins Bernie in Jabbing Biden on Social Security (Pol.)
Lindsey Graham Broke My Heart’ (Amy Klobuchar)
John Durham Investigaties Months Before Mueller Appointment (WE)
India’s Half-Finished “Ghost Towns” Leave Middle Class In Crisis (ZH)
Boris Johnson Urged To Publish Report On Russian Meddling (G.)
World’s Richest 2,000 People Hold More Than Poorest 4.6 Billion Combined (R.)
UN Decarbonisation Target For Shipping To Cost Over $1 Trillion (R.)
Oil Firms Risk Public Backlash If Profits Put Before Climate, Says IEA (G.)
EU Could Waste €29bn On Gas Projects Despite Climate Action Plan (G.)
Huge Dust Storms In Australia Hit Central New South Wales (AAP)

 

 

Warming up for the fight. Get your gloves on, check ’em twice, practice some jabs in front of the mirror, have a last drink of water and let the trainer put in your mouthguard. This may get ugly.

Nadler Says Dems Unwilling To Negotiate Hunter Biden Testimony (Fox)

Rep. Jerry Nadler, D-N.Y., one of the House impeachment managers, dismissed on Sunday any notion that Democrats would be willing to negotiate on witnesses called during the Senate trial – adding that Republicans who want to block or negotiate what witnesses testify are “part of the cover-up.” Nadler, who as chairman of the House Judiciary Committee led the writing of the articles of impeachment brought against President Trump, said that all “relevant witnesses must be heard” and balked at the idea of Democrats agreeing to having former Vice President Joe Biden’s son Hunter testify in exchange for the witnesses Democrats want to hear from.


“This whole controversy about whether there should be witnesses is really a question about does the Senate want to have a fair trial or are they part of the cover-up of the president,” Nadler said during an interview on CBS’ “Face The Nation.” Nadler added that “Hunter Biden has no knowledge of the accusations against the president.” “Any Republican senator who says there should be no witnesses, or even that witnesses should be negotiated, is part of the cover-up,” Nadler added.

Read more …

The Warren campaign has noticed Bernie’s gains after attacking Biden. They want a piece of the action.

Warren Joins Bernie in Jabbing Biden on Social Security (Pol.)

Elizabeth Warren hit Joe Biden for his past stances on changing Social Security and expressed solidarity with Bernie Sanders on the issue as the two liberal senators seek to move past their recent feud. “Bernie Sanders and I established the ‘Expand Social Security Caucus’ in the Senate,” Warren said in a quick interview as she hopped into her car outside a candidate forum in Iowa. “As a senator, Joe Biden had a very different position on Social Security, and I think everyone’s records on Social Security are important in this election.” Warren’s comments come as Sanders has been relentlessly bashing Biden for his past openness to freezing cost-of-living spikes or raising the retirement age as part of larger bipartisan deals — proposals that Sanders opposed during his time in Congress.


Warren linking arms with Sanders on the issue also comes after long-simmering tensions between the two exploded into the open this week. The campaigns have been trying to move on from the conflict — which climaxed Tuesday night when each accused the other of calling them a “liar” on the stage immediately following the debate —and are largely not responding to media questions about the rift. The Social Security issue provides a potential opportunity for a liberal tag-team against Biden as both senators have long fought to expand the program and have rolled out plans on the campaign trail.

Read more …

The NYT endorsed Warren and Klobuchar yesterday. Everyone yawned. At least seeing Klobuchar praise McCain and Poroshenko means there’s no doubt where she stands. War it is.

Lindsey Graham Broke My Heart’ (Amy Klobuchar)

Transcript from Sen. Amy Klobuchar interview with the editorial board of The New York Times:

Who has broken my heart? O.K., so here we go. Lindsey Graham’s broken my heart lately in the political system. Senator Lindsey Graham has transformed from a Trump critic, who called the president “xenophobic” and “race-baiting,” to one of his most staunch supporters. He told The Times Magazine, “If you don’t want to get re-elected, you’re in the wrong business.” Just because I like him and know him really well and traveled with him and Senator McCain all over the, all over the world. I’m just more thinking of Senator McCain and how much I miss him right now because I think he would have been really strong on Ukraine and on standing up against some of the things the president did and he’s no longer with us.

And Lindsey and McCain and I were actually on the front line with former President Poroshenko in a blizzard on New Year’s Eve, and I think about this now every New Year’s Eve — because John McCain wanted to show — after Trump got elected — wanted to show those countries that we were on their side. And so of course I was disappointed with how the Kavanaugh hearing was handled. I think everyone could see me on TV to see that, but I just hope that he has the ability to rise up here, and has a very important job right now as chair of the Judiciary Committee and certainly smart enough and has shown some tendency in the past to stand up for things and I just wish he would do it again when it comes to this conduct and a whole range of issues about our judicial system.

Read more …

Meanwhile, in the background:

John Durham Investigaties Months Before Mueller Appointment (WE)

A trail of documents has reportedly led Attorney General William Barr’s handpicked federal prosecutor to focus his inquiry into the origins of the Russia investigation on the first several months of President Trump’s tenure. John Durham, a U.S. attorney from Connecticut, is zeroing in on the period spanning from January 2017, when Trump took office, to May of that year. A “strong” paper trail, as CBS News senior investigative correspondent Catherine Herridge put it on Friday, has led the investigation into possible misconduct by federal law enforcement and intelligence officials to that time frame.

While Trump and his allies have championed Durham’s effort, Democrats have dismissed the allegations of wrongdoing during the Trump-Russia investigation and are concerned the inquiry may be an effort to discredit the work of special counsel Robert Mueller. Trump gave Barr full declassification authority for the endeavor. Barr and Durham have traveled around the world for the investigation, and Durham’s team has already asked witnesses about possible anti-Trump bias among former FBI officials.

The secretive DOJ inquiry includes scrutiny of former CIA Director John Brennan, former Director of National Intelligence James Clapper, former FBI special agent Peter Strzok, and British ex-spy Christopher Steele. In October, it was reported that Durham was expanding the scope of his investigation, adding agents and resources, to examine the post-election timeline up to the appointment of Mueller as special counsel in May 2017. The “investigation into the investigators” was reported to be upgraded to a criminal inquiry later that month, which would give Durham the power to impanel a grand jury and hand down indictments. Durham has also reviewed the Intelligence Community’s conclusions about Russian interference in the 2016 election.

Little else is known about the investigation other than that Durham is exploring whether a crime was committed by Kevin Clinesmith, a former FBI lawyer who was found by the Justice Department Inspector General Michael Horowitz to have altered a document during the FBI’s efforts to obtain a Foreign Intelligence Surveillance Act warrant renewal to continue wiretapping onetime Trump campaign adviser Carter Page. Among those known to be cooperating with Barr is retired Adm. Michael Rogers, the former director of the National Security Agency who has a history of uncovering FISA violations.

Read more …

US, EU, China, India, everyone gets their turn.

India’s Half-Finished “Ghost Towns” Leave Middle Class In Crisis (ZH)

If you thought the American housing market was a mess during the immediate aftermath of the collapse, wait until you read about what’s going in India. Rapid economic growth and the government’s gradual economic liberalization have caused the ranks to India’s middle class to boom. The emerging Hindu middle class is already reshaping Indian society: Prime Minister Narendra Modi owes his electoral victories to this group, and his reform agenda was designed with the goal of sheparding even more of the country’s 1.4 billion citizens into the higher income bracket.

Modi’s first term included several important reforms, including simplifying India’s byzantine tax system and instituting a simplified system for taxing goods and services (though some argue that it must still be simplified further. He’s also helped modernize the country’s bankruptcy laws. But as the country’s growing wealth has sparked a flight from India’s crowded urban slums to its more spacious suburbs, they’re struggling with a shortage of homes, a shortage that has been made even more intense thanks to roughly half a million apartments that have been sitting unfinished for years.

Across the country, outside major cities like New Delhi and Mumbai, hundreds of developments have been stranded by developers, many of which have declared bankruptcy, or simply run out of money to finish the projects, according to the Wall Street Journal. India’s banks, already saddled with bad loans, are refusing to lend any more money to the developers. As a result, millions of Indians who put up their life savings as a down payment on a new, yet-to-be-built apartment have essentially been left bereft, with no money and nowhere to live. Most are now making ends meet by cutting out any and all luxuries, and relying on friends and family, as they wait to see if the apartments they paid for will ever be finished.

Read more …

If the Royal Family can’t unite the nation, there’s always the Big Bad Wolf.

Boris Johnson Urged To Publish Report On Russian Meddling (G.)

The SNP’s leader at Westminster has written to Boris Johnson demanding that he take immediate steps to allow the suppressed report into Russia’s interference in the British political system to be published. Ian Blackford, the leader of the third-largest party in the Commons, called on the prime minister to begin appointing members of parliament’s intelligence and security committee, necessary to allow the controversial document to be released. “It is unacceptable that your government has repeatedly and intentionally failed to take steps to establish the committee and has sought to escape scrutiny on vital issues,” Blackford writes in a letter that has been shared with the Guardian.

“The public interest and the imperative is and has always been clear: lift your sanction on publishing this report and re-establish the intelligence and security committee so that it can be immediately published,” the SNP MP added. A report on Russia’s spying activities against the UK and its attempts to penetrate the British establishment had been prepared by the committee in the last parliament, and had been made ready to publish when the election was called. Members of the committee saw evidence of Russian infiltration in Conservative political circles, but it is unclear how much of that concern reached the final document, which some sources say was watered down even before it went to Johnson.

Ministers have repeatedly said there are no examples of “successful Russian interference” in the 2016 EU referendum or an election, although there is scepticism as to whether that has been properly investigated. The report was nevertheless awaiting final clearance from Downing Street, to check it did not contain any classified information, when the election was called. No 10 said it was not possible to clear it in time, a point disputed by the previous chairman of the committee, former MP Dominic Grieve. Downing Street eventually said after the election that the report was cleared. But its release depends on the appointment of nine cross-party backbench MPs and peers to the committee’s membership, a task that falls to Johnson after consulting with other parties.

Read more …

And what are you going to do about it?

World’s Richest 2,000 People Hold More Than Poorest 4.6 Billion Combined (R.)

The world’s richest 2,153 people controlled more money than the poorest 4.6 billion combined in 2019, while unpaid or underpaid work by women and girls adds three times more to the global economy each year than the technology industry, Oxfam said on Monday. The Nairobi-headquartered charity said in a report released ahead of the annual World Economic Forum of political and business leaders in Davos, Switzerland, that women around the world work 12.5 billion hours combined each day without pay or recognition. In its “Time to Care” report, Oxfam said it estimated that unpaid care work by women added at least $10.8 trillion a year in value to the world economy – three times more than the tech industry.


“It is important for us to underscore that the hidden engine of the economy that we see is really the unpaid care work of women. And that needs to change,” Amitabh Behar, CEO of Oxfam India, told Reuters in an interview. To highlight the level of inequality in the global economy, Behar cited the case of a woman called Buchu Devi in India who spends 16 to 17 hours a day doing work like fetching water after trekking 3km, cooking, preparing her children for school and working in a poorly paid job. “And on the one hand you see the billionaires who are all assembling at Davos with their personal planes, personal jets, super rich lifestyles,” he said.

Read more …

Davos counts in trillions. This is just shipping. And that is just 2.2% of CO2 emissions.

UN Decarbonisation Target For Shipping To Cost Over $1 Trillion (R.)

At least $1 trillion of investment in new fuel technology is needed to enable the shipping industry to meet U.N. targets for cuts in carbon emissions by 2050, a study published on Monday showed. The global shipping fleet, which accounts for 2.2% of the world’s CO2 emissions, is under pressure to reduce those emissions and other pollution. About 90% of world trade is transported by sea. U.N. shipping agency, the International Maritime Organization (IMO), aims to reduce the industry’s greenhouse gas emissions by 50% from 2008 levels by 2050, a target that will require the swift development of zero or low emission fuels and new ship designs using cleaner technology.

In the first study into costs, researchers estimated that the cumulative investment needed between 2030 and 2050 would be between $1 trillion to $1.4 trillion, or an average of $50 billion to $70 billion annually for 20 years. If the shipping industry was to fully decarbonise by 2050, this would require further investment of some $400 billion over 20 years, bringing the total to $1.4 trillion to $1.9 trillion. “Our analysis suggests we will see a disruptive and rapid change to align to a new zero carbon system, with fossil fuel aligned assets becoming obsolete or needing significant modification,” said Tristan Smith, reader at University College London’s (UCL) Energy Institute, which was involved in the study.

Apart from more than a decade of tough market conditions, the shipping industry is also contending with the exit of many European banks from providing finance, leaving a capital shortfall of tens of billions of dollars annually. Around 87% of investments needed would be in land-based infrastructure and production facilities for low-carbon fuels, the study said. This includes investments in the production of low-carbon fuels as well as the land-based storage and bunkering infrastructure needed for their supply. The remaining 13% of investments are related to the ships themselves including the machinery and onboard storage required for a ship to run on low-carbon fuel. “Sustainable investing is here to stay,” said Michael Parker, chairman of Global Shipping Logistics & Offshore at Citigroup.

Read more …

Let’s see what shareholders have to say.

Oil Firms Risk Public Backlash If Profits Put Before Climate, Says IEA (G.)

The world’s energy watchdog has warned the oil and gas industry that it risks a public backlash by failing to act on the climate crisis in favour of making short-term profits. The International Energy Agency (IEA) said oil companies must balance their desire for near-term returns and a long-term future by playing a much more significant role in combating the climate crisis. The IEA is preparing to make its most direct call for oil companies to help tackle the climate crisis at the World Economic Forum’s annual meeting in Davos on Tuesday. The oil and gas industry faces “twin threats” to its financial profitability and social acceptability, according to the IEA.


“There are already signs of both, whether in financial markets or in the reflexive antipathy towards fossil fuels that is increasingly visible in the public debate, at least in parts of Europe and North America,” it said. Fatih Birol, the IEA’s executive director, said: “No energy company will be unaffected by clean-energy transitions. Every part of the industry needs to consider how to respond. Doing nothing is simply not an option.” The report said that although some oil and gas companies have taken steps to support efforts to combat the climate crisis, the industry as a whole could play a much more significant role. Oil companies could do more now to help shrink the industry’s giant carbon footprint but most companies were yet to play a meaningful role, according to the report.

Read more …

Basically: be careful what you waste our money on.It’s fine to waste those €29bn on that climate action plan.

EU Could Waste €29bn On Gas Projects Despite Climate Action Plan (G.)

The European Investment Bank risks wasting €29bn (£25bn) of EU taxpayers’ money by overinvesting in gas projects which will be unnecessary under Europe’s climate action plans, according to a report. The EIB vowed late last year to end its support for fossil fuels within the next two years to become the world’s first “climate bank”, but 32 gas projects are still eligible for funding before the crackdown. The majority of these projects would waste billions of euros of taxpayers’ money, according to Artelys, an independent data science company, because they would be left as “stranded assets” in the move towards cleaner energy.

The report warns that gas investments will be unnecessary in the decades ahead because Europe already has enough infrastructure – such as pipelines and processing plants – to meet the continent’s future demand. The European commission set out a sweeping Green Deal plan late last year which aims to create a carbon-neutral EU by 2050, in part by increasing renewable energy and energy efficiency. Under Europe’s climate action roadmap, gas demand is expected to fall by almost 30% by 2030 compared with 2015 levels. But even in scenarios in which gas demand climbs higher, the report found that new investments in gas infrastructure would be “superfluous” from an economic perspective.

[..] Claude Turmes, Luxembourg’s energy minister, said it “makes absolutely no sense” that EU decision-makers are supporting investments in new gas infrastructure with public funds. “This report debunks the argument that these investments would be needed for the EU’s security of gas supply. We risk wasting €29bn on future stranded assets while locking our energy system into fossil gas addiction for the next 40 years,” he said.

Read more …

Some 90 years after the US dust bowl.

Huge Dust Storms In Australia Hit Central New South Wales (AAP)

Damaging winds produced by thunderstorms across central New South Wales have whipped up dust storms that turned daytime into night in some towns. The Bureau of Meteorology issued a series of severe thunderstorm warnings on Sunday evening for inland NSW with the associated winds generating massive dust clouds. Videos posted to social media showed dust storms descending on Dubbo and nearby towns that were so thick they blocked out the sun. A gust of 94 km/h was recorded at Parkes about 6.30pm while a gust of 107 km/h was recorded at Dubbo about 7.45pm, the bureau said.


A bureau meteorologist, Rose Barr, said Sunday’s significant rain was concentrated across central and northern parts of the state on, and east, of the ranges. Rain and hail also lashed Victoria, sparking almost 1500 calls for assistance with more severe weather on the way as bushfires continue. The State Emergency Service received 1453 calls for assistance since Sunday morning, more than 1000 of them for building damage. Many towns on the NSW mid-north coast and the northern rivers regions received between 100mm and 180mm from 9am to 10.30pm on Sunday. In the southern part of the state, high winds saw storms race overhead quickly, resulting in lower measured falls.

Read more …

Social behaviour of striped catfish.

 

 

 

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May 072019
 


Peter Paul Rubens Daniel in the lions’ den c1615

 

Zero Hedge ran an article about omissions from the Mueller report and/or investigation. It’s instructive, but there is more. First, some bits from that article:

Major Mueller Report Omissions Suggest Incompetence Or A Coverup

Robert Mueller’s 448-page “Investigation into Russian Interference in the 2016 Presidential Election” contains at least two major omissions which suggest that the special counsel and his entire team of world-class Democrat attorneys are either utterly incompetent, or purposefully concealing major crimes committed against the Trump campaign and the American people.

First, according to The Federalist’s Margot Cleveland (a former law clerk of nearly 25 years and instructor at the college of business at the University of Notre Dame) – the Mueller report fails to consider whether the dossier authored by former MI6 spy Christopher Steele was Russian disinformation, and Steele was not charged with lying to the FBI.

“The Steele dossier, which consisted of a series of memorandum authored by the former MI6 spy, detailed intel purportedly provided by a variety of Vladimir Putin-connected sources. For instance, Steele identified Source A as “a senior Russian Foreign Ministry figure” who “confided that the Kremlin had been feeding Trump and his team valuable intelligence on his opponents, including Democratic presidential candidate Hillary Clinton.”


Other supposed sources identified in the dossier included: Source B, identified as “a former top-level Russian intelligence officer still active inside the Kremlin”; Source C, a “Senior Russian Financial Officer”; and Source G, “a Senior Kremlin Official.” -The Federalist

As Cleveland posits: “Given Mueller’s conclusion that no one connected to the Trump campaign colluded with Russia to interfere with the election, one of those two scenarios must be true—either Russia fed Steele disinformation or Steele lied to the FBI about his Russian sources.”

Mueller identified only two principal ways Russia interfered in the 2016 presidential election: “First, a Russian entity carried out a social media campaign that favored presidential candidate Donald J. Trump and disparaged presidential candidate Hillary Clinton. Second, a Russian intelligence service conducted computer-intrusion operations against entities, employees, and volunteers working on the Clinton Campaign and then released stolen documents.”


Surely, a plot by Kremlin-connected individuals to feed a known FBI source—Steele had helped the FBI uncover an international soccer bribery scandal—false claims that the Trump campaign was colluding with Russia would qualify as a “principal way” in which Russia interfered in the 2016 presidential election.

[..] the only lawmaker to even mention this possibility has been Sen. Chuck Grassley (R-IA), who raised the issue with Attorney General William Barr last week: “My question,” said Grassley, “Mueller spent over two years and 30 million dollars investigating Russia interference in the election. In order for a full accounting of Russia interference attempts, shouldn’t the special counsel have considered whether the Steele dossier was part of a Russian disinformation and interfere campaign?” [..] Barr said that he has assembled a DOJ team to examine Mueller’s investigation, findings, and whether the spying conducted by the FBI against the Trump campaign in 2016 was improper.

 

Mueller’s second major oversight – which we have touched on repeatedly – is the special counsel’s portrayal of Maltese professor Joseph Mifsud as a Russian agent – when available evidence suggests he may have been a Western agent.

Weeks after returning from Moscow, Mifsud – a self-described Clinton Foundation member – ‘seeded’ the rumor that Russia had ‘dirt’ on Hillary Clinton with Trump campaign adviser George Papadopoulos on April 26, 2016, according to the Mueller report.

As Rep. Devin Nunes (R-CA) noted on Fox News on Sunday, “how is it that we spend 30-plus-million dollars on this, as taxpayers and they can’t even tell us who Joseph Mifsud is?” “…this is important, because, in the Mueller dossier, they use a fake news story to describe Mifsud. In one of those stories, they cherry- pick it,” Nunes added.

[..] As conservative commentator and former US Secret Service agent Dan Bongino notes of Mifsud, “either we have a Russian asset who’s infiltrated the highest echelons of friendly Intelligence Services, or we have a friendly who was setting up George Papadopoulos.”

 

This poses questions about Mueller, Mifsud and Steele and many other people and organizations involved, but the central question remains unaddressed: did Russia truly meddle and interfere in the 2016 election?

We don’t know, we have only Mueller’s word for that, and he’s ostensibly based it on reports from US intelligence, which has very obvious reasons to smear Russia. That Mifsud is presented as a Russian agent, with all the doubts about that which we have seen presented, doesn’t help this point.

That Steele hadn’t visited Russia since 1993 when he complied his dossier is not helpful either. His information could have originated with “the Russians”, or with US intelligence, and he would never have been the wiser. That is, even IF he was a straight shooter. What are the odss of that?

And of course the strongest doubts about Russian meddling and interference, along with offers of evidence to underline and reinforce these doubts, have been offered by Julian Assange and the Veteran Intelligence Professionals for Sanity (VIPS) group.

But as I’ve repeatedly said before, after Mueller had to let go of the “Russia collusion with the Trump campaign” accusation, he was free to let the “Russian meddling aided and abetted by Julian Assange” narrative stand, beacuse he didn’t have to provide proof for that, as long as he didn’t communicate with either the Russians (easy), the VIPS (whom he stonewalled) or Assange (who’s been completely silenced).

 

So we have -at least- 4 major omissions in the Mueller investigation and report:

1) the Mueller report failed to consider whether the dossier authored by former MI6 spy Christopher Steele was Russian disinformation (and Steele was not charged with lying to the FBI).

2) Mueller’s portrayal of Maltese professor Joseph Mifsud as a Russian agent – when available evidence suggests he may have been a Western agent.

3) Mueller declined to talk to the VIPS, who offered evidence that the DNC servers were not hacked but content was copied onto a disk at the server’s location

4) Mueller refused to hear Julian Assange, who offered evidence that it was not the Russians that had provided WikiLeaks with the emails.

 

Mueller was supposedly trying to find the truth about Trump’s ties to Russia/Putin, and he refused to see and hear evidence from two organizations, WikiLeaks and the VIPS, which he absolutely certainly knew could potentially have provided things he did not know. Why did he do that? There’s only one possible answer: he didn’t want to know.

Why not? Because he feared he would have had to abandon the “Russian meddling and interference” narrative as well. If, as both WikiLeaks and the VIPS insisted, the emails didn’t come from “the Russians”, all that would have been left is an opaque story about “Russians” buying $100,000 in Facebook ads. And that, too, is awfully shaky.

That’s an amount Jared Kushner acknowledged he spent every few hours on such ads during the – multi-billion-dollar – campaign. Moreover, many of these ads were allegedly posted AFTER the elections. And we don’t even know it was Russians who purchased the ads, that’s just another story coming from US intelligence.

It is not so hard, guys. “Omissions” or “oversight” is one way to put it, but there are others. Assange could have cleared himself of any claims of involvement in meddling and perhaps proven Guccifer 2.0 was not “Russian”. His discussions with the DOJ, preparations for which were in an advanced stage of development, were killed in 2017 by then-FBI head James Comey and Rep. Mark Warner.

Mueller never wanted the truth, he wanted to preserve a narrative. The VIPS, too, threatened that narrative by offering physical evidence that nobody hacked the emails. Mueller never reached out. Mueller, the former FBI chief, who must know who these men and women are. Here’s a list, in case you were wondering:

 

Steering Group, Veteran Intelligence Professionals for Sanity
• William Binney, former Technical Director, World Geopolitical & Military Analysis, NSA; co-founder, SIGINT Automation Research Center (ret.)
• Bogdan Dzakovic, former Team Leader of Federal Air Marshals and Red Team, FAA Security (ret.) (associate VIPS)
• Philip Giraldi, CIA, Operations Officer (ret.)
• Mike Gravel, former Adjutant, top secret control officer, Communications Intelligence Service; special agent of the Counter Intelligence Corps and former United States Senator
• James George Jatras, former U.S. diplomat and former foreign policy adviser to Senate leadership (Associate VIPS)
• Larry Johnson, former CIA Intelligence Officer & former State Department Counter-Terrorism Official, (ret.)
• Michael S. Kearns, Captain, USAF (ret.); ex-Master SERE Instructor for Strategic Reconnaissance Operations (NSA/DIA) and Special Mission Units (JSOC)
• John Kiriakou, former CIA Counterterrorism Officer and former Senior Investigator, Senate Foreign Relations Committee
• Karen Kwiatkowski, former Lt. Col., US Air Force (ret.), at Office of Secretary of Defense watching the manufacture of lies on Iraq, 2001-2003
• Clement J. Laniewski, LTC, U.S. Army (ret.)
• Linda Lewis, WMD preparedness policy analyst, USDA (ret.)
• Edward Loomis, NSA Cryptologic Computer Scientist (ret.)
• David MacMichael, former Senior Estimates Officer, National Intelligence Council (ret.)
• Ray McGovern, former US Army infantry/intelligence officer & CIA presidential briefer (ret.)
• Elizabeth Murray, former Deputy National Intelligence Officer for the Near East & CIA political analyst (ret.)
• Todd E. Pierce, MAJ, US Army Judge Advocate (ret.)
• Peter Van Buren,U.S. Department of State, Foreign Service Officer (ret.) (associate VIPS)
• Robert Wing, U.S. Department of State, Foreign Service Officer (former) (associate VIPS)
• Ann Wright, U.S. Army Reserve Colonel (ret) and former U.S. Diplomat who resigned in 2003 in opposition to the Iraq War

 

And then you lead a Special Counsel investigation, you spend 2 years and $30 million, you get offered evidence in what you’re investigating, and you just ignore these people?

And there are still people who want to believe that Robert Swan Mueller III is a straight shooter? They must not want to know the truth, either, then.

Here’s wondering if Bill Barr does, who’s going to investigate the Mueller investigation. Does he want the truth, or is he just the next in line to push the narrative?

Is there anyone in power left in America who has any courage at all to expose this B-rated theater?

Tulsi Gabbard has been reviled for talking to Assad. Why not talk to Assange as well, Tulsi? How about Rand Paul? We know he wanted to talk to Assange last year. Anyone?

 

 

 

 

Nov 032018
 


Winslow Homer Cloud shadows 1890

 

The World Has Two Years To Secure A Deal To Halt Species Extinction – UN (G.)
US Wage Growth Hits Nine-Year High (BBC)
America’s Wealth Bubble Is Boosting Consumer Confidence (Colombo)
Inside The Trump Gold Rush At CNN (VF)
Who’s Really ‘Undermining’ US Democracy? (Stephen Cohen)
Perpetual Hysteria ( Kunstler)
Trump Will Grant 8 Waivers To Buy Iranian Oil (CNBC)
Europe Vows To Defy US Sanctions Against Iran (RT)
Europe’s Top Banks Ease Past ECB’s Latest Stress Tests (CNBC)
Erdogan Says ‘Highest Level’ Saudi Officials Ordered Khashoggi Murder (RT)
Public Prosecutors Charge Catalan Independence Leaders With Rebellion

 

 

The actual headline of this Guardian piece is “Stop Biodiversity Loss Or We Could Face Our Own Extinction”. Mine is better, because it illustrates, providing it’s accurate, how hopeless the situation is. If only because of what’s already in the pipeline. The prospect of 2 more years of meetings doesn’t change a thing.

The World Has Two Years To Secure A Deal To Halt Species Extinction – UN (G.)

The world has two years to secure a deal for nature to halt a ‘silent killer’ as dangerous as climate change, says biodiversity chief

The world must thrash out a new deal for nature in the next two years or humanity could be the first species to document our own extinction, warns the United Nation’s biodiversity chief. Ahead of a key international conference to discuss the collapse of ecosystems, Cristiana Pasca Palmer said people in all countries need to put pressure on their governments to draw up ambitious global targets by 2020 to protect the insects, birds, plants and mammals that are vital for global food production, clean water and carbon sequestration.

“The loss of biodiversity is a silent killer,” she told the Guardian. “It’s different from climate change, where people feel the impact in everyday life. With biodiversity, it is not so clear but by the time you feel what is happening, it may be too late.” Pasca Palmer is executive director of the UN Convention on Biological Diversity – the world body responsible for maintaining the natural life support systems on which humanity depends. Its 196 member states will meet in Sharm el Sheikh, Egypt, this month to start discussions on a new framework for managing the world’s ecosystems and wildlife. This will kick off two years of frenetic negotiations, which Pasca Palmer hopes will culminate in an ambitious new global deal at the next conference in Beijing in 2020.

Conservationists are desperate for a biodiversity accord that will carry the same weight as the Paris climate agreement. But so far, this subject has received miserably little attention even though many scientists say it poses at least an equal threat to humanity. The last two major biodiversity agreements – in 2002 and 2010 – have failed to stem the worst loss of life on Earth since the demise of the dinosaurs. Eight years ago, under the Aichi Protocol, nations promised to at least halve the loss of natural habitats, ensure sustainable fishing in all waters, and expand nature reserves from 10% to 17% of the world’s land by 2020. But many nations have fallen behind, and those that have created more protected areas have done little to police them. “Paper reserves” can now be found from Brazil to China.

Read more …

3 days to midterms.

US Wage Growth Hits Nine-Year High (BBC)

Wages in the US grew at their fastest pace for nine years last month, the latest official figures show. The US Labor Department said wages grew at an annual rate of 3.1% in October, accelerating from a rate of 2.8% the month before. The economy also added 250,000 jobs last month, beating expectations, while the jobless rate remained at 3.7%. The report quickly became fodder for political debate ahead of next week’s high stakes congressional election. President Donald Trump celebrated the figures on Twitter as “incredible” and urged his followers to “Vote Republican”. In an unusual move, the White House also organised a briefing call for reporters to promote the gains.

The top Senate Democrat, Chuck Schumer of New York, issued a statement of his own, aiming to redirect voter attention. The latest numbers “may look good” but should be considered alongside other economic policies, he said. “When the average family sees their health care costs go up because of Republican actions, these numbers will mean little,” he said. Among economists, there was wider agreement that the jobs report pointed to strength in the US economy, despite recent worries that weakness may be emerging in some sectors such as housing and trade.

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There’s something wonderfully ironic in this. Getting your confidence from hot air.

America’s Wealth Bubble Is Boosting Consumer Confidence (Colombo)

ZeroHedge posted an interesting chart a few days ago showing how affluent Americans (those making over $50,000 a year) have not been more confident since the dot com bubble. While strong consumer confidence may seem like a good thing when taken at face value, the contrarian in me sees it as a warning of the kind of over-exuberance seen during bubbles like the dot-com bubble and housing bubble.

Unfortunately, I believe that the U.S. is experiencing an unsustainable, artificial household wealth bubble that is causing affluent consumers to be over-optimistic despite the fact that our economic boom is largely driven by cheap credit and is going to end in a painful bust. As I explained in a recent presentation, U.S. household wealth has surged by approximately $46 trillion or 83% since 2009 to an all-time high of $100.8 trillion. Since 1951, household wealth has averaged 379% of the GDP, while the Dot-com bubble peaked at 429%, the housing bubble topped out at 473%, and the current bubble has inflated household wealth to a record 505% of GDP (see the chart below):

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As I’ve said numerous times, Trump sells better than sex, and he’s keeping CNN alive. The suggestion that CNN allows both sides into teh debate is ludicrous, though.

Inside The Trump Gold Rush At CNN (VF)

Zucker was on the phone talking about why Trump sucks up so much of CNN’s oxygen. “People say all the time, ‘Oh, I don’t want to talk about Trump. I’ve had too much Trump,’ ” he told me. “And yet at the end of the day, all they want to do is talk about Trump. We’ve seen that, anytime you break away from the Trump story and cover other events in this era, the audience goes away. So we know that, right now, Donald Trump dominates.” Zucker, the guy who first brought our president to the small screen when he green-lighted The Apprentice in 2004 while running NBC, had arguably schooled Trump in the art of reality television.

Halfway through Trump’s first term, his instincts remain just as acute. If Fox News represents Trump’s base and MSNBC has become a friendly platform for the resistance, CNN is the arena where both sides show up for cantankerous battle. “On Fox, you rarely hear from people who don’t support Trump,” Zucker told me. “On MSNBC, you rarely hear from people who do support Trump. We want to be home to both those points of view.” He continued, as if rebuking a common critique of the network. “It is true some of these folks are not very good with the facts, but that’s O.K. in the sense that it’s our job then to call them out.”

[..] Even though CNN still trails Fox News and MSNBC in prime-time audience size, its ratings have never been better. The average number of people watching on a given day has been above 700,000 each year since 2016, compared to around 400,000 in the pre-Trump news cycle. That’s also considerably larger than any other time over the past 25 years, an astonishing feat given the ubiquity of news and the decline of cable.

https://twitter.com/i/status/1058528086680051712

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Russiagate undermines democracy.

Who’s Really ‘Undermining’ US Democracy? (Stephen Cohen)

Even though still unproven, charges that the Kremlin put Trump in the White House have cast a large shadow of illegitimacy over his presidency and thus over the institution of the presidency itself. This is unlikely to end entirely with Trump. If the Kremlin had the power to affect the outcome of one presidential election, why not another one, whether won by a Republican or a Democrat? The 2016 presidential election was the first time such an allegation became widespread in American political history, but it may not be the last. Now the same shadow looms over the November 6 elections and thus over the next Congress. If so, in barely two years, the legitimacy of two fundamental institutions of American representative democracy will have been challenged, also for the first time in history.

And if US elections are really so vulnerable to Russian “meddling,” what does this say about faith in American elections more generally? How many losing candidates on November 6 will resist blaming the Kremlin? Two years after the last presidential election, Hillary Clinton and her adamant supporters still have not been able to do so. We know from critical reporting and from recent opinion surveys that the origins and continuing fixation on the Russiagate scandal since 2016 have been primarily a product of US political-intelligence-media elites. It did not spring from the American people – from voters themselves. Thus a Gallup poll recently showed that 58 percent of those surveyed wanted improved relations with Russia. And other surveys have shown that Russiagate is scarcely an issue at all for likely voters on November 6. Nonetheless, it remains a front-page issue for US elites.

Indeed, Russiagate has revealed the low esteem that many US political-media elites have for American voters – for their ability to make discerning, rational electoral decisions, which is the bedrock assumption of representative democracy. It is worth noting that this disdain for rank-and-file citizens echoes a longstanding attitude of the Russian political intelligentsia, as recently expressed in the argument by a prominent Moscow policy intellectual that Russian authoritarianism springs not from the nation’s elites but from the “genetic code” of its people.

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Certainly looks like the Democrats need to hit some kind of bottom before they can rise again. If that ever happens.

Perpetual Hysteria ( Kunstler)

Back in the last century, when this was a different country, the Democrats were the “smart” party and the Republicans were the “stupid” party. How did that work? Well, back then the Democrats represented a broad middle class, with a base of factory workers, many of them unionized, and the party had to be smart, especially in the courts, to overcome the natural advantages of the owner class. In contrast, the Republicans looked like a claque of country club drunks who staggered home at night to sleep on their moneybags. Bad optics, as we say nowadays. [..] The Republican Party has, at least, sobered up some after getting blindsided by Trump and Trumpism. Like a drunk out of rehab, it’s attempting to get a life.

Two years in, the party marvels at Mr. Trump’s audacity, despite his obvious lack of savoir faire. And despite a longstanding lack of political will to face the country’s problems, the Republicans are being forced to engage on some real issues, such as the need for a coherent and effective immigration policy and the need to redefine formal trade relations. Meanwhile, the Democratic Party has become the party of bad ideas and bad faith, starting with the position that “diversity and inclusion” means shutting down free speech, an unforgivable transgression against common sense and common decency. It’s a party that lies even more systematically than Mr. Trump, and does so knowingly (as when Google execs say they “Do no Evil”).

[..] I hope that Democrats lose as many congressional and senate seats as possible. I hope that the party is shoved into an existential crisis and is forced to confront its astounding dishonesty. I hope that the process prompts them to purge their leadership across the board. If there is anything to salvage in this organization, I hope it discovers aims and principles that are unrecognizable from its current agenda of perpetual hysteria.

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Overreach. America’s anti-Iran stance hinges to a large extent on Saudi interests. Which have taken a huge hit.

Trump Will Grant 8 Waivers To Buy Iranian Oil (CNBC)

The Trump administration will grant eight jurisdictions special exceptions to continue importing oil from Iran after U.S. sanctions on the country snap back into place on Monday, according to cabinet members. President Donald Trump gave oil buyers 180 days to wind down purchases of Iranian crude when he pulled out of the Iran nuclear deal in May. The eight waivers will allow the jurisdictions to more gradually reduce their purchases after the Nov. 4 deadline. Oil market watchers have been closely monitoring the situation to determine how forcefully the Trump administration will enforce the sanctions.

State Department officials initially said importers must cut their purchases to zero by November, but administration officials subsequently telegraphed that some exceptions would be made. Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin on Friday declined to name the eight jurisdictions during a conference call with reporters. The officials said all of the countries or territories have significantly reduced their purchases and will be given more time to further reduce their imports. [..] Japan, India and South Korea are among the countries, and China is still negotiating a waiver, Bloomberg News reported earlier on Friday, citing a senior administration official. Pompeo confirmed on Friday that the EU is not one of the jurisdictions that will receive a waiver.

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Russia and China will stand by Iran. Europe may as well.

Europe Vows To Defy US Sanctions Against Iran (RT)

European countries have vowed to maintain “effective financial channels” and to keep trading with Tehran after the US announced that the EU is not among those spared from its sweeping sanctions against Iran. European countries suddenly discovered that they were not on the list of the ‘lucky ones’ that their ally, the US, decided to exempt from the new wave of all-encompassing sanctions it plans to unleash on Iran. The sanctions, targeting Iran’s shipping, finance and energy sectors, which come into force on November 5, are also designed to punish those countries that dared to do business with the Islamic Republic in defiance of the US pressure.

Only eight nations were graciously granted exemptions by the US, according to Secretary of State Mike Pompeo. However, Pompeo made it clear that the EU as a single entity is not on the list, sparking an angry reaction from the US’ western allies. Washington also specifically mentioned that it plans to target the special mechanism the EU has been creating to circumvent the restrictions, prompting its allies to fight back.

In response, the EU foreign policy chief Federica Mogherini, together with the foreign and finance ministers of Germany, France and the UK, vowed to maintain “effective financial channels with Iran” and in particular to continue buying the Islamic Republic’s oil and gas. They also said that despite Washington’s pressure the EU is still committed to establishing a “Special Purpose Vehicle” for Iran-EU trade. The European nations will seek to protect its companies engaged in “legitimate business with Iran,” the statement said, adding that the EU will cooperate with Russia and China in particular to achieve these goals.

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Central banks are incapable of doing stress tests that matter.

Europe’s Top Banks Ease Past ECB’s Latest Stress Tests (CNBC)

Results of the stress test of Europe’s bigger banks released Friday revealed that all of the financial institutions in the EU wide examination passed the European Central Bank’s “adverse scenario”. The stress tests were carried out by the European Banking Authority (EBA) and the Single Supervisory Mechanism (SSM) to gauge the health of the European banking system. The EBA said in findings published on their website that all 48 banks beat the common tier ratio of 5.5 percent under adverse stress. British bank Barclays ranked lowest in the test, scoring a common tier ratio of just 6.37 percent in the adverse scenario. Fellow U.K. bank Lloyds also performed poorly with a score of 6.8 percent.

Commenting after the results, the Bank Of England said the results showed that U.K. banks could absorb the effect of the EBA’s worst scenario. Europe’s biggest bank, Deutsche Bank, performed better than some forecasters had predicted, registering a core tier of 8.14 percent, again in an adverse scenario. EBA said under their adverse scenario, the capital depletion across the banks at the end of 2020 was 236 billion euros ($268 billion) and 226 billion euros on a “transitional and fully loaded basis respectively.” The ECB added that the EBA test showed that banks in Europe were now “more resilient to financial shocks.”

Italian banks were also under scrutiny but managed to record satisfactory scores according to banking regulators. Unicredit, Italy’s largest lender, scored a common tier ratio of 9.34 while UBI Banca scored 7.42 percent. The lowest score among Italian banks was for Banco BPM which registered 6.67 percent.

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Erdogan was insulted by the Saudi chief prosecutor visiting Ankara/Istanbul.

Erdogan Says ‘Highest Level’ Saudi Officials Ordered Khashoggi Murder (RT)

The killing of journalist Jamal Khashoggi was sanctioned at the “highest levels” of the Saudi government, Turkey’s President Recep Tayyip Erdogan said, trying to play kingmaker in Riyadh and bolster his credentials in the West. “We know that the order to kill Khashoggi came from the highest levels of the Saudi government,” the Turkish leader wrote in a surprise contribution to Friday’s Washington Post, vowing to “reveal the identities of the puppet masters” behind the murder. “No one should dare to commit such acts on the soil of a NATO ally again,” Erdogan wrote dramatically. “Had this atrocity taken place in the United States or elsewhere, authorities in those countries would have gotten to the bottom of what happened.”

“It would be out of the question for us to act any other way,” he added, noting that Ankara has already “moved heaven and earth to shed light on all aspects of this case.” The Turkish leader also used the opportunity to burnish his credentials in the West, saying that as a responsible NATO member, Turkey will not just leave this case uninvestigated and will act in exactly the same way as the US or any of its allies would in its place. Erdogan openly accused Riyadh of “trying to cover up the murder” by stalling the investigation and refusing to cooperate with the Turkish authorities, singling out the Saudi chief prosecutor Saud Al Mojeb, who visited Turkey earlier this week. “The refusal of the Saudi public prosecutor… to cooperate with the investigation and answer even simple questions is very frustrating,” he wrote, adding that Al Mojeb’s “invitation for Turkish investigators to Saudi Arabia … felt like a desperate and deliberate stalling tactic.”

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Franco’s still alive and kicking.

Public Prosecutors Charge Catalan Independence Leaders With Rebellion

The public prosecution on Friday morning filed its written accusation against Catalan secessionist leaders who are in pretrial detention for their role in the unauthorized referendum of October 1, 2017 and the unilateral independence declaration that followed. As expected, prosecutors are seeking a 25-year prison term for ex-deputy premier Oriol Junqueras for rebellion and misuse of public funds, and they also want the Catalan Republican Party (ERC) leader barred from holding public office for the next 25 years. Prosecutors are also seeking 17-year jail terms for Jordi Sànchez and Jordi Cuixart, the former heads of civic associations that campaigned actively for independence, and for Carme Forcadell, the former speaker of the Catalan parliament.

Other defendants in the upcoming trial face penalties ranging from economic fines to prison terms of 16 years. Meanwhile, Spain’s Solicitor General, who represents the Spanish state in the courts, has not accused Catalan secessionist leaders of rebellion. Instead, the written accusation focuses on the crimes of sedition and misuse of public funds in connection with the referendum and unilateral independence declaration. In its written accusation, the Solicitor General’s Office has called for Junqueras to be sentenced to 12 years in prison and a 12-year ban on holding public office.

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Sep 052018
 


Henri Matisse Luxury, calm and pleasure 1904

 

JP Morgan Warns Next Crisis To Have Flash Crashes And Social Unrest (CNBC)
Share Buybacks Boost Earnings (Roberts)
Mueller To Accept Written Answers From Trump In Russia Probe (Ind.)
Senior Diplomat Exposes US Meddling In Russian Election (ZH)
Google Bosses Expected To Snub Senate (BBC)
Mervyn King Attacks ‘Incompetent’ Brexit Approach (BBC)
Angela Merkel Admits Collapse Of Brexit Talks Cannot Be Ruled Out (G.)
Mark Carney Willing To Stay On As BoE Governor To Help ‘Smooth’ Brexit (Ind.)
US ‘Could Have Forced A Greek Debt Haircut’ – Ashoka Mody (K.)
Eight Bird Species Are First Confirmed Avian Extinctions This Decade (G.)

 

 

Yeah, I know, the Woodward book. No objective views available. Lots of sensational quotes subject to interpretation. Tons of voices saying for instance that Trump wanted Mattis to kill Assad, even ordered him to. But Woodward writes that Trump said: “Let’s fucking kill him! Let’s go in. Let’s kill the fucking lot of them..”. That doesn’t sound like an order. That’s a first reaction from someone who’s been fooled by his own staff into believing Assad was responsible. Normal first reaction. Not an order. We’ll get some more balance, but it won’t come from the MSM.

 

Liquidity, volatility, fighting in the streets.

JP Morgan Warns Next Crisis To Have Flash Crashes And Social Unrest (CNBC)

Sudden, severe stock sell-offs sparked by lightning-fast machines. Unprecedented actions by central banks to shore up asset prices. Social unrest not seen in the U.S. in half a century. That’s how J.P. Morgan Chase’s head quant, Marko Kolanovic, envisions the next financial crisis. The forces that have transformed markets in the last decade, namely the rise of computerized trading and passive investing, are setting up conditions for potentially violent moves once the current bull market ends, according to a report from Kolanovic sent to the bank’s clients on Tuesday. His note is part of a 168-page mega-report, written for the 10th anniversary of the 2008 financial crisis, with perspectives from 48 of the bank’s analysts and economists.

Kolanovic, a 43-year-old analyst with a Ph.D. in theoretical physics, has risen in prominence for explaining, and occasionally predicting, how the new, algorithm-dominated stock market will behave. The current bull rally, the longest in modern history by some measures, has been characterized by extended periods of calm punctuated with spasms of selling known as flash crashes. Recent examples include a nearly 1,600 point intraday drop in February and a 1,100 point decline in August 2015. “They are very rapid, sharp declines in asset values with sharp increases in market volatility,” Kolanovic, the bank’s global head of macro quantitative and derivatives research, said in a recent interview. But those flash crashes occurred during a backdrop of a U.S. economic expansion; the new market hasn’t been tested in the throes of a recession, he said.

“If you have these liquidity-driven sharp sell-offs that come at the end of the cycle, or maybe even causes the end of the cycle, then I think you can have a much more significant asset price correction and even more significant increase in market volatility,” Kolanovic said. [..] Kolanovic closes his report on an ominous note: “The next crisis is also likely to result in social tensions similar to those witnessed 50 years ago in 1968.”

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Tyler labeled it the graph of the decade. That may be a bit much, but it’s good to point out that earnings rise ONLY because there are so many fewer outstanding shares. Buybacks don’t only raise share prices, they raise earnings numbers too.

Share Buybacks Boost Earnings (Roberts)

[..] while top line SALES fell, bottom line revenue expanded as share buybacks and accounting gimmickry escalated for the quarter. The question is whether sales dramatically expanded in Q2? Given some of the recent economic data, we have our doubts and expect a smaller increase. (I will update this chart when S&P updates the sales/share figure for Q2) As shown in the chart below, the biggest support for earnings expansion in Q2 continues to be the dramatic decline in shares outstanding.

Of course, such should not be a surprise. Since the recessionary lows, much of the rise in “profitability” have come from a variety of cost-cutting measures and accounting gimmicks rather than actual increases in top-line revenue. While tax cuts certainly provided the capital for a surge in buybacks, revenue growth, which is directly connected to a consumption-based economy, has remained muted. Since 2009, the reported earnings per share of corporations has increased by a total of 353%. This is the sharpest post-recession rise in reported EPS in history. However, the increase in earnings did not come from a commensurate increase in revenue which has only grown by a marginal 44% during the same period and declined from 49% in Q1.

The reality is that stock buybacks create an illusion of profitability. If a company earns $0.90 per share and has one million shares outstanding – reducing those shares to 900,000 will increase earnings per share to $1.00. No additional revenue was created, no more product was sold, it is simply accounting magic. Such activities do not spur economic growth or generate real wealth for shareholders. However, it does provide the basis for with which to keep Wall Street satisfied and stock option compensated executives happy.

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if Mueller does anything in the public eye before the mid terms are over, expect chaos.

Mueller To Accept Written Answers From Trump In Russia Probe (Ind.)

Special Counsel Robert Mueller will accept written answers from President Donald Trump on whether his campaign conspired with Russia to interfere in the 2016 US election, but Mr Mueller is not ruling out a follow-up interview on that issue, Mr Mueller’s offer to accept written responses from the president on questions about possible collusion was contained in a letter that Mr Trump’s lawyers received on Friday, a person familiar with the matter said on Tuesday. Mr Trump’s legal team and Mr Mueller’s investigators have been negotiating for months over whether the president will be formally interviewed in the probe.

The president’s team have not yet answered the letter. After receiving the written responses, Mr Mueller’s investigators would decide on a next step, which could include an interview with Mr Trump, the person said. The letter was first reported by the New York Times. It was not immediately clear what those conditions mean for other avenues Mr Mueller is exploring, including whether the president sought to obstruct the Russia investigation through actions such as the firing last year of former FBI Director James Comey.

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And there is Google.

Senior Diplomat Exposes US Meddling In Russian Election (ZH)

As Russian citizens prepare to head to the polls on Sunday to vote in regional elections, a senior Russian diplomat has revealed that Moscow has uncovered a US interference effort involving a Silicon Valley tech giant and activists opposed to the government of Russian President Vladimir Putin. Following a briefing on the matter, senior Russian diplomat Andrey Nesterenko told Russia’s Interfax news agency that the US “certainly does” meddle in the Russian electoral processes, as RT reported. The revelation followed reports that Russia has resumed a major airstrike of a reputed terrorist stronghold in Idlib province over the objections of President Trump, who warned that such a strike would be a humanitarian disaster.

“Our collective opinion is that electoral sovereignty is a principle that all civilized nations should respect” the diplomat said, adding that Moscow will notify “our American partners that the actions of their media outlets allow us to state that they are close to breaking Russian law.” Specifically, Nesterenko was referring to a possible violation of Russian election laws by Google parent Alphabet, which hosted advertisements for an illegal campaign rally organized by Russian opposition leader Aleksey Navalny. Navalny is calling for protests to denounce the vote, which he believes is biased. To help spread the word, Navalny’s public movement is using paid ads on Google services like YouTube. However, holding an event dedicated to an election campaign on the same day as the vote goes against Russian law.

The Russian Central Election Commission, media watchdog Roskomnadzor, and the Russian Anti-monopoly Service have reportedly informed Google about these illegal activities being carried out on its platform. “Living in a proper law-abiding nation, we expect every actor to play by the rules. Especially an informed player. If the opposite happens, I believe we have tools at our disposal [to address that],” Andrey Kashevarov, the deputy head of FAS, said.

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It’s like an all-out power game.

Google Bosses Expected To Snub Senate (BBC)

When Silicon Valley companies once again appear in front of the US Senate on Wednesday, there will be one major absentee: Google. The Senate Intelligence Committee wanted to hear from Sundar Pichai, Google’s chief executive, or his boss Larry Page, the chief executive of Google’s parent firm, Alphabet. Barring a dramatic, last-minute change of plan, the BBC understands neither will attend. It would mark the first time a technology firm has refused to comply with the wishes of Congress since the wide-reaching inquiries into misinformation and meddling began in the wake of the 2016 election. Google had instead hoped to send Kent Walker, one of its top lawyers. The offer was abruptly shut down by the committee.

Its vice chairman, the Democratic Senator Mark Warner, said an empty chair would be left out to represent Google’s non-appearance. Eventually, senators may issue a subpoena, forcing an appearance under the threat of prosecution. “If Google thinks we’re just going to go away, they’re sadly mistaken,” said Senator Warner, speaking to Wired magazine. The hearing, scheduled to begin at 09:30 (13:30 GMT), is entitled “Foreign Influence Operations’ Use of Social Media Platforms”. As well as Google, Twitter and Facebook have been called to appear. Twitter will be represented by its chief executive, Jack Dorsey, while Facebook is sending its chief operating officer, Sheryl Sandberg. It will be the first time either executive has faced a congressional committee.

[..] The affair risks becoming a public relations crisis for Google, which just last week was doing its best to bat back claims from President Donald Trump that it was censoring conservative news outlets in its search results. The White House did not provide any evidence to support the president’s complaints, but the topic may well come up at Wednesday’s hearing. “I don’t know if it’s because [Page] wants to avoid being asked about those things or because they think they’re so important and so powerful that they don’t need to provide congressional testimony,” said Republican Senator Marco Rubio, speaking to the Washington Post. He also told the newspaper: “They should be careful with that. When a company gets too big to become accountable, they become a monopoly.”

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No kidding.

Mervyn King Attacks ‘Incompetent’ Brexit Approach (BBC)

Former Bank of England governor Lord King has blasted Brexit preparations as “incompetent”. The Brexit supporter said it “beggared belief” that the world’s sixth-biggest economy should be talking of stockpiling food and medicines. This left the government without a credible bargaining position, he said. “A government that cannot take action to prevent some of these catastrophic outcomes illustrates a whole lack of preparation,” he said. “It doesn’t tell us anything about whether the policy of staying in the EU is good or bad, it tells us everything about the incompetence of the preparation for it.” Lord King said the 11th-hour preparation for a no-deal Brexit had undermined the government’s negotiating position.

He added: “We haven’t had a credible bargaining position, because we hadn’t put in place measures where we could say to our colleagues in Europe, ‘Look, we’d like a free-trade deal, we think that you would probably like one too, but if we can’t agree, don’t be under any misapprehension, we have put in place the measures that would enable us to leave without one.'” He predicts that we will find ourselves with what’s been dubbed as Brino – Brexit in name only – which he said was the worst of all worlds. It’s also a state of affairs that he fears could drag on for years. “I think the biggest risk to the UK, and this is what worries me most, is that this issue isn’t going to go away, you know the referendum hasn’t decided it, because both camps feel that they haven’t got what they wanted.”

Lord King expressed regret and surprise that it was more difficult for a single country to present a united front than the other 27 EU members. He said: “They must have been really worried that they had 27 countries to try to corral, how could they have a united negotiating position, they were dealing with a country that was one country, made a clear decision, voted to leave, it knew what it wanted to do, how on earth could the EU manage to negotiate against this one decisive group on the other side of the Channel? “Well, the reality’s been completely the opposite. The EU has been united, has been clear, has been patient and it’s the UK that’s been divided without any clear strategy at all for how to get to where we want to go.”

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Maybe at this point Merkel should be more outspoken?

Angela Merkel Admits Collapse Of Brexit Talks Cannot Be Ruled Out (G.)

Angela Merkel has warned her country’s business leaders that the Brexit negotiations are in danger of collapse. With talks in Brussels at an impasse with just months to go before a deal needs to be agreed, the German chancellor made a rare intervention at a conference in Frankfurt. She told major players in the world of German finance on Tuesday: “We don’t want the discussions to break down. We will use all our force and creativity to make sure a deal happens. We don’t want these negotiations to collapse. But we also can’t fully rule that out because we still have no result.” The EU says it needs a deal to be struck on the withdrawal agreement covering citizens’ rights, the £39bn divorce bill and the Irish border, along with the political declaration on the future deal, by November at the latest.

The German chancellor has generally played a backseat role in the talks, preferring to intervene only at crunch points at EU summits. EU leaders are due to meet in Brussels in October, but an emergency summit is being pencilled in for 13 November in case the negotiations require an extra few weeks for agreement to be made. The leaders will be gathering at a summit in Salzburg later this month where the EU27 are planning a “carrot and stick” approach to Brexit, offering Theresa May warm words on the Chequers proposals to take to the Conservative conference alongside a sharp warning that they need a plan for Northern Ireland within weeks.

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Using the words ‘Brexit’ and ‘smooth’ in one sentence is just comedy. Wonder what they had to promise him. Knighthood?

Mark Carney Willing To Stay On As BoE Governor To Help ‘Smooth’ Brexit (Ind.)

Mark Carney told MPs on Tuesday that he was willing to stay on as governor of the Bank of England beyond his planned departure date in order to “smooth” the Brexit process. Mr Carney had planned to step down in June 2019 after six years in Threadneedle Street’s top job, two years fewer than BoE governors normally serve. But, asked by MPs on the Treasury Committee whether he would stay, Mr Carney said: “Even though I have already agreed to extend my time to support a smooth Brexit, I am willing to do whatever else I can in order to promote both a smooth Brexit and effective transition at the Bank of England.”

“The chancellor and I have discussed this. I would expect an announcement to be made in due course.” The comments come after mounting speculation in recent days that the Treasury would like Mr Carney to stay on in his role, providing more continuity during uncertain economic times. There are fears that few candidates will put themselves forward for the job as the Brexit negotiations reach a critical stage.

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“What was the basic demand of SYRIZA? To tie debt repayments to GDP and so reduce the level of austerity. Any good economist will tell you that was a very reasonable starting point for the negotiation.”

US ‘Could Have Forced A Greek Debt Haircut’ – Ashoka Mody (K.)

“The fundamental reason why the Greek crisis lasted so long was the extreme level of austerity that was imposed.” That is the verdict of Ashoka Mody, visiting professor in International Economic Policy at Princeton University, a former deputy director of the IMF’s European Department and one of the most eloquent critics of the policies of the troika in Greece and elsewhere. Mody, who recently published a long-form version of these critiques in his book “EuroTragedy: A Drama in Nine Acts”, spoke to Kathimerini about the Greek crisis and those to blame for it. We began by discussing what many consider the original sin of the bailout period: the decision not to restructure Greece’s debt in May 2010. What should the IMF have done?

“It should have insisted, it should have made the restructuring a condition of its participation,” the Indian-born economist said, mentioning that the staff report all but admitted the debt was unsustainable and that Dominique Strauss-Kahn later said he was in favor of debt relief. “The reason it didn’t happen was the ideological opposition of the European Central Bank – in this case supported by the US Treasury. Strauss-Kahn did not want to offend either the Americans or the Europeans. The stance of the US Treasury was critical – if its representative on the Executive Board had come out in favor of a restructuring, it would have happened. Instead, it sided completely with the European viewpoint – the Treasury secretary, Tim Geithner, believed that there should never be a restructuring in the midst of a crisis.”

Regarding the argument that the problem in Greece (compared with other bailout countries) was there was no ownership of reforms, Mody said: “It is indeed the case that IMF programs only succeed when there is ownership. The question is what were Greeks asked to own. The arithmetic of austerity was relentless, cruel. Whatever the Greeks did, with austerity on such a scale they could not have escaped the collapse in gross domestic product. And then things became even worse, because the recession led to targets being missed, which led to more measures! The IMF published studies at the time showing what a terrible idea it was to impose further austerity in a recession, how it worsens the debt-to-GDP ratio. Yet the IMF kept doing it in Greece, ignoring all its internal studies!”

[..] The conversation turned to 2015. How does he think the creditors should have handled SYRIZA differently? “Look, even before SYRIZA came to power, Wolfgang Schaeuble said that elections do not matter. On January 31, 2015, six days after the election, Erkki Liikanen, the head of the Finnish central bank, says that if the new government does not accept the program, the ECB will cut liquidity support for Greek banks. Four days later, the ECB withdraws the waiver [which allowed the banks to borrow cheaply from it, using Greek government bonds as collateral]. And in June, the Europeans close down the banks. What was the basic demand of SYRIZA? To tie debt repayments to GDP and so reduce the level of austerity. Any good economist will tell you that was a very reasonable starting point for the negotiation.”

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More of my friends are leaving every day. Some don’t even say goodbye.

Eight Bird Species Are First Confirmed Avian Extinctions This Decade (G.)

Spix’s macaw, a brilliant blue species of Brazilian parrot that starred in the children’s animation Rio, has become extinct this century, according to a new assessment of endangered birds. The macaw is one of eight species, including the poo-uli, the Pernambuco pygmy-owl and the cryptic treehunter, that can be added to the growing list of confirmed or highly likely extinctions, according to a new statistical analysis by BirdLife International. Historically, most bird extinctions have been small-island species vulnerable to hunting or invasive species but five of these new extinctions have occurred in South America and are attributed by scientists to deforestation.

Stuart Butchart, BirdLife International’s chief scientist, said the new study highlighted that an extinction crisis was now unfolding on large continents, driven by human habitat destruction. “People think of extinctions and think of the dodo but our analysis shows that extinctions are continuing and accelerating today,” he said. “Historically 90% of bird extinctions have been small populations on remote islands. Our evidence shows there is a growing wave of extinctions washing over the continent driven by habitat loss from unsustainable agriculture, drainage and logging.” More than 26,000 of the world’s species are now threatened, according to the latest “red list” assessment, with scientists warning that humans are driving a sixth great extinction event.


The Brazilian Spix’s macaw, as seen in the children’s movie Rio, is one of the eight birds to become extinct Photograph: Al Wabra Wildlife Preservation

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Mar 102018
 
 March 10, 2018  Posted by at 11:26 am Finance Tagged with: , , , , , , , , , , ,  2 Responses »


Pablo Picasso The Roaster 1938

 

Trump Tariffs Cause Massive Outflows From US Stocks – BofAML (R.)
Trump-Kim Meeting Contingent On ‘Concrete Steps’ By North Korea (Ind.)
What’s Coming Will Be Much Worse Than 2008 (Phoenix)
313k Jobs Added? Nice Try But It’s Fake News (IRD)
QE Unwind Is Too Slow, Says Fed Governor, Thus Launching First Trial Balloon (WS)
Forget About ‘Free Trade’ (CHS)
Europe’s Most-Leveraged Stocks Surge (BBG)
Cash May Disappear in China – PBOC (BBG)
Canada, Ukraine and Fascism (Carley)
Letter To America – An Opportunity And A Warning (RTB) /span>
Xi Jinping Says China’s Political System Can Be A Model For The World (Qz)
Countries Annoyed Russia Gets All The Credit For 2016 Election Meddling (Onion)
A Warning Cry From the Doomsday Vault (BBG)
West Way Behind Iran, Saudi Arabia When It Comes To Women In Science (Qz)

 

 

Really? Both the Dow and the S&P were up 1.75% yesterday.

Trump Tariffs Cause Massive Outflows From US Stocks – BofAML (R.)

A marked shift toward protectionism by President Donald Trump caused sharp outflows from U.S. large-cap stocks this week, Bank of America Merrill-Lynch (BAML) strategists said on Friday. Investors rushed into government bonds and other safer assets amid rising fears of an international trade war after Trump’s plans for tariffs on imported steel and aluminum met barbed responses from allies and trade bodies. Overall, investors pulled money out of equities, though the damage was mostly in the United States where $10.3 billion flowed out of U.S. equity funds, while global equity funds suffered just $0.4 billion of outflows, according to EPFR data cited by BAML. “As QE ends, protectionism begins,” wrote BAML strategists.

The risk-off mood drove investors into money market funds, pushing assets up to $2.9 trillion – the highest level since 2010. Safe-haven gold also drew in $0.4 billion. U.S. small caps were sheltered from the storm, the only U.S. sector to draw inflows, albeit tiny at $0.03 billion. U.S. large-cap stocks lost $10.1 billion. Flows into Japanese equities continued apace, with the market drawing in $4.1 billion in its 14th straight week of inflows, the longest streak of inflows since 2013. European stock funds managed to draw in $0.1 billion. Trump’s exemption of Canada and Mexico from the final tariffs announced late on Thursday soothed investors somewhat, and news the U.S. president would meet with North Korean President Kim Jong Un caused crude prices to rise.

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How can Kim say no?

Trump-Kim Meeting Contingent On ‘Concrete Steps’ By North Korea (Ind.)

Vice President Mike Pence has said the US made “zero concessions” in order to get an invitation to meet North Korean leader Kim Jong-un and talk about a possible end to Pyongyang’s nuclear weapons programme. Mr Pence said that President Donald Trump has “consistently increased the pressure” on North Korea, which has continued the development of its weapons – including an increasing number of missile tests in the last 12 months – despite numerous resolutions by the United Nations. Later at the White House, the press secretary made it clear that talks would only take place if Washington saw “concrete action” by North Korea towards denuclearisation. Mr Trump and Mr Kim are expected to meet before the end of May, although a date and location has yet to be set.

After months of escalating rhetoric between the nations the prospect of a thaw has been welcomed by world leaders. Ms Sanders said at a briefing on Friday that President Trump was “in a great mood” in the wake of the announcement, saying that the US was having conversations “from a position of strength” – with denuclearisation having always been the goal of the administration. It has taken many by surprise, including US Secretary of State Rex Tillerson, who had said just hours before the announcement that the US was a “long ways from negotiations”. But, Mr Tillerson said the President made the decision to accept the invite “himself”, a move he said was a “dramatic” reversal in posture for North Korea.

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“When a stock bubble bursts, investors lose money. When a sovereign bond bubble bursts, entire countries go bust..”

What’s Coming Will Be Much Worse Than 2008 (Phoenix)

While everyone is “high fiving” over stocks holding up, the bond market is back to imploding. Already Treasury yields have bounced and are soaring higher in one of the nastiest breakouts in over 20 years.

In a world awash in too much debt (global Debt to GDP is over 300%) this is a MAJOR problem. Most investors believe that the 2008 Crisis was the worst crisis of their lifetimes. They’re mistaken… what’s coming down the pike when the Bond Bubble blows up will be many times worse than 2008. The reason is that bonds, not stocks, represent the bedrock of the financial system. When a stock bubble bursts, investors lose money. When a sovereign bond bubble bursts, entire countries go bust (a la Greece in 2010). On that note, I want to point out that bond yields are not just rising in the US… we’re seeing them spike in Germany, Japan, and others.

This is a truly global problem, and if Central Banks don’t move to get it control soon, we’re heading into a MAJOR crisis.

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US jobs reports are meaningless. Maybe it’s time to recognize that before they blow up in your faces.

313k Jobs Added? Nice Try But It’s Fake News (IRD)


The census bureau does the data-gathering and the Bureau of Labor Statistics feeds the questionable data sample through its statistical sausage grinder and spits out some type of grotesque scatological substance. You know an economic report is pure absurdity when the report exceeds Wall Street’s rose-colored estimate by 53%. That has to be, by far, an all-time record-high “beat.” If you sift through some of the foul-smelling data, it turns out 365k of the alleged jobs were part-time, which means the labor market lost 52k full-time jobs. But alas, I loathe paying any credence to complete fiction by dissecting the “let’s pretend” report. The numbers make no sense. Why? Because the alleged data does not fit the reality of the real economy.

Retail sales, auto sales, home sales and restaurant sales have been declining for the past couple of months. So who would be doing the hiring? Someone pointed out that Coinbase has hired 500 people. But the retail industry has been laying off thousands this year. Given the latest industrial production and auto sales numbers, I highly doubt factories are doing anything with their workforce except reducing it. And if the job market is “so strong,” how comes wages are flat? In fact, adjusted for real inflation, real wages are declining. If the job market was robust, wages would be soaring. Speaking of which, IF the labor market was what the Government wants us to believe it is, the FOMC would tripping all over itself to hike the Fed Funds rate. And the rate-hikes would be in chunks of 50-75 basis points – not the occasional 0.25% rise.

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Balloons in a bubble.

QE Unwind Is Too Slow, Says Fed Governor, Thus Launching First Trial Balloon (WS)

So we have the first Fed Governor and member of the policy-setting FOMC who came out and said that the QE Unwind that began last October with baby steps isn’t fast enough. And because it’s so slow it may actually contribute to, rather than lower, the “financial imbalances.” In her speech, Kansas City Fed President Esther George pointed at the growth of the economy, the tightness in the labor market, the additional support the economy will get from consumers and companies as they spend or invest the tax cuts, etc., etc. And despite this growth, “the stance of monetary policy remains quite accommodative,” she said. She cited the federal funds rate – the overnight interest rate the Fed targets. The Fed’s current target range is 1.25% to 1.50%, which is “well below estimates of its longer-run value of around 3%,” she said.

The Fed would have to raise rates at least six more times of 25 basis points each, for a total of at least 1.5 percentage points, to bring the federal funds rate to around 3% and get back to neutral. If the Fed wanted to actually tighten after that, it would have to raise rates further. So far, so good. And then came her concerns about the Fed’s balance sheet. Under QE, the Fed acquired $1.7 trillion in Treasury securities and $1.78 trillion in mortgage-backed securities, for a total of about $3.5 trillion. After QE ended in October 2014, the Fed then maintained the levels by replacing maturing securities. But in October last year, it commenced the QE-Unwind and started to not replace some maturing securities. This has the effect of shrinking its balance sheet.

Just like the Fed “tapered” QE by phasing it out over the course of a year, it is also ramping up the QE-Unwind over the course of a year. But the pace of the QE-Unwind has been too slow, according to George – and this may be destabilizing the financial markets: “By the end of this year, however, only about a quarter of the increase to the Fed’s balance sheet resulting from the first round of large scale asset purchases will be unwound. These holdings of longer-term assets were intended to put downward pressure on longer term interest rates. Many investors responded, as would be expected, by purchasing riskier assets in a reach for higher yield. As a result, asset prices may have become distorted relative to the economic fundamentals.”

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Free trade is a deception tool.

Forget About ‘Free Trade’ (CHS)

The mobility of capital radically alters the simplistic 18th century view of free trade. In today’s world, trade can not be coherently measured as goods moving between nations, because capital from the importing nation owns the productive assets in the exporting nation. If Apple owns a factory (or joint venture) in China and collects virtually all the profits from the iGadgets produced there, this reality cannot be captured by the models of simple trade described by Ricardo. In today’s globalized version of “free trade,” mobile capital can arbitrage labor, currencies, interest rates, regulatory burdens and political favors by shifting between nations and assets. Trying to account for trade in the 18th century manner of goods shipped between nations is nonsensical when components come from a number of nations and profits flow not to the nation of origin but to the owners of capital.

[..] In a world dominated by mobile capital, mobile capital is the comparative advantage. Mobile capital can borrow billions of dollars (or equivalent) in one nation at low rates of interest and then use that money to outbid domestic capital for assets in another nation with few sources of credit. Mobile capital can overwhelm the local political system, buying favors and cutting deals, all with cash borrowed at near-zero interest rates. Mobile capital can buy up and exploit resources and cheap labor until the resource is depleted or competition cuts profit margins. At that point, mobile capital closes the factories, fires the employees and moves on. Where is the “free trade” in a world in which the comparative advantage is held by mobile capital?

And what gives mobile capital its essentially unlimited leverage? Central banks issuing trillions of dollars in nearly-free money to banks and other financial institutions that funnel the free cash to corporations and financiers, who can then roam the world snapping up assets and arbitraging global imbalances with nearly-free money. There’s nothing remotely “free” about trade based not on Ricardo’s simple concept of comparative advantage but on capital flows unleashed by central bank liquidity. The gains reaped by mobile capital flow to those who control mobile capital: global corporations, financiers and banks. No wonder labor’s share of the economy is stagnating across the globe while corporate profits reach unprecedented heights.

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Until the last drop: “A lot of companies have been living off debt and their business model won’t apply to higher interest rates.”

Europe’s Most-Leveraged Stocks Surge (BBG)

Investors shrugged off trade skirmishes and signals of fading monetary stimulus as they rewarded some of Europe’s most leveraged companies, putting the latter on track for their best weekly advance since December 2016. Stocks with the weakest balance sheets gained 4.5% this week, compared to 3.1% for their less-indebted counterparts, according to a Bloomberg analysis of Morgan Stanley data. Since these risky-debt companies were beaten up earlier in the year, they’re beginning to bounce back thanks to the risk-on rally, buoyed by largely positive earnings reports, said Hugh Cuthbert at SVM Asset Management. “Post the jitters that we saw at the start of February, they are more than likely to be beneficiaries”.

“The market appetite for risk will always benefit those guys when it’s high.” Still, it’s a small reprieve after they dropped more than 10% in the 25 trading days through last week. Even after the recent advance, shares of weak balance-sheet companies sit 7.7% below their January peak. The Morgan Stanley-compiled basket tracks 40 European companies with measures that include net debt to Ebitda and interest coverage ratios. The good times may be short-lived, however, as the ECB pares stimulus, said Cuthbert. “Look out, if we are in a tightening cycle,” he said. “A lot of companies have been living off debt and their business model won’t apply to higher interest rates.”

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A control tool Beijing finds hard to resist. Predictably.

Cash May Disappear in China – PBOC (BBG)

Just because China’s financial regulators are cracking down on cryptocurrencies doesn’t mean they’re souring on the idea of digital money. People’s Bank of China Governor Zhou Xiaochuan made that clear at a press conference in Beijing on Friday, saying physical cash may one day become obsolete. Zhou said the PBOC is looking into digital currencies as it pursues faster, cheaper and more convenient payment methods, even as he warned that cryptocurrencies like Bitcoin – more often used for speculation than payments – don’t serve the economy.

“We must prevent major mistakes that would lead to irreparable losses, so we are cautious,” Zhou said during what may be one of his last public appearances before his expected retirement. “We don’t like creating products for speculation and making people have the illusion that they can get rich overnight.” China, once home to the world’s most active Bitcoin exchanges, banned the venues last year amid a broad-ranging clampdown on virtual currencies. Yet the country is still the world leader in digital payments, thanks to the popularity of platforms developed by tech giants Alibaba and Tencent.

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Ink black history.

Canada, Ukraine and Fascism (Carley)

The most notorious of the Nazi collaborators who immigrated to Canada was Mykhailo Chomiak, a mid-level Nazi operative in Poland, who came under US protection at the end of the war and eventually made his way to Canada where he settled in Alberta. Had he been captured by the Red Army, he would quite likely have been hanged for collaboration with the enemy. In Canada however he prospered as a farmer. His grand-daughter is the “Ukrainian-Canadian” Chrystia Freeland, the present minister for external affairs. She is a well-known Russophobe, persona non grata in the Russian Federation, who long claimed her grandfather was a “victim” of World War II. Her claims to this effect have been demonstrated to be untrue by the Australian born journalist John Helmer, amongst many others.

In 1940 the Liberal government facilitated the creation of the Canadian Ukrainian Congress (UCC), one of many organisations used to fight or marginalise the left in Canada, in this case amongst Canadian Ukrainians. The UCC is still around and appears to dominate the Ukrainian-Canadian community. Approximately 1.4 million people living in Canada claim full or partial Ukrainian descent though generally the latter. Most “Ukrainian-Canadians” were born in Canada; well more than half live in the western provinces. The vast majority has certainly never set foot in the Ukraine. It is this constituency on which the UCC depends to pursue its political agenda in Ottawa.

After the coup d’état in Kiev in February 2014 the UCC lobbied the then Conservative government under Stephen Harper to support the Ukrainian “regime change” operation which had been conducted by the United States and European Union. The UCC president, Paul Grod, took the lead in obtaining various advantages from the Harper government, including arms for the putschist regime in Kiev. It survives only through massive EU and US direct or indirect financial/political support and through armed backing from fascist militias who repress dissent by force and intimidation. Mr. Grod claims that Russia is pursuing a policy of “aggression” against the Ukraine.

If that were true, the putschists in Kiev would have long ago disappeared. The Harper government allowed fund raising for Pravyi Sektor, a Ukrainian fascist paramilitary group, through two organisations in Canada including the UCC, and even accorded “charitable status” to one of them to facilitate their fund raising and arms buying. Harper also sent military “advisors” to train Ukrainian forces, the backbone of which are fascist militias. The Trudeau government has continued that policy. “Canada should prepare for Russian attempts to destabilize its democracy,” according to Minister Freeland: “Ukraine is a very important partner to Canada and we will continue to support its efforts for democracy and economic growth.”

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“It is the US government and NATO, and the people who own and control them, who are the threats and the enemies to the future of Humanity.”

Letter To America – An Opportunity And A Warning (RTB) /span>

There is no place that the US or NATO has gone into in the last 4 decades that is better off. Not one. In fact, there is no place that NATO or the US have intervened, (usually against international law) that hasn’t become a failed state, hell on Earth for the citizens, and a genuine danger to the surrounding regions and the world. It is the US government and NATO, and the people who own and control them, who are the threats and the enemies to the future of Humanity. But their days of disregarding international law and destroying weaker nations with impunity are now over, as of March 1st, 2018. The good people of America now have a huge opportunity, and a huge challenge. Russia spends less than one tenth what the USA spends on military and defense, but their military and weapons are superior in every measurable way.

The waste, corruption and abject venality of the US military industrial complex has wasted trillions on weapon systems that are now literally useless, and which have left the US military (and by extension the American people) defenseless before the power of Russia’s weapons, which are designed and produced to be effective rather than profitable. The opportunity is this – the USA can now reduce its military spending (the highest in the world) by 90% and still be safer than you are right now, spending almost a trillion dollars a year on useless weapons and a defenseless military. Safer, because as soon as the American People take control of their government enough to reduce your spending to ONLY as much as Russia spends, Russia will stop having reason to see the USA as an existential threat.

The less you spend, the safer you will be. The more you spend, the more likely World War Three, which will see you as the instigators and the losers. This gives the USA, starting as soon as you want, an extra $800 billion, per year, to spend on things that have actual worth, things you really need. Health care, free college education, fixing the rotting economy and infrastructure that are daily becoming more of a threat to the American people than Russia has ever been. Your challenge is that you must root out an entrenched and ruthless kleptocracy, built on deceit and oppression, and which is bent on war, and will stop at nothing to cling to its power. It is a huge task, an historic task, but in it lies your only hope. These parasites must be stopped, and if the American People are not up to the challenge, if they fail in their historic mission, they will leave it to the armies of the world, led by Russia, who will no longer tolerate those who want to rule the world.

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So-called democracy is no better.

Xi Jinping Says China’s Political System Can Be A Model For The World (Qz)

Chinese president Xi Jinping has repeatedly told the world that China is ready to lead on issues like free trade and climate change. Now, he’s ready to extend his leadership to political parties everywhere. At the big annual gathering of Chinese lawmakers and political advisors that kicked off March 3, Xi said that China is offering a “new type of political party system”—a Chinese solution that contributes to the development of political parties around the world, according to state media (link in Chinese). The Chinese Communist Party (CCP) has always said the country will never copy the political systems of other countries, in particular the Western notion of democracy.

But under Xi—the most powerful Chinese leader in four decades—China’s own one-party system is one that is ready to be exported to regimes everywhere. The term “new type of political party system” was first put forward by Xi when he delivered a speech to non-party political advisors on March 4. It’s not the first time that Xi has floated the idea that China’s political model can make a contribution to the world. This time, however, Chinese state media churned out a wave of articles to underscore the significance of this new phrase. In the past, “some people lacking self-confidence always use Western political theories to criticize China’s political party system,” wrote Wang Xiaohong at the party-backed Central Institute of Socialism, in a commentary widely circulated by Chinese news outlets.

But as Wang argues, Western political systems are associated, among other things, with fractured societies, inefficient government, and “endless power transitions and social chaos” as in the countries of the former Soviet Union, and in north Africa after the Arab Spring. “The new type of political party system has overcome all sorts of problems that the old [one] can’t overcome,” Wang argued. In China, there are eight so-called “democratic parties” that are allowed to participate in the political system, but they are almost completely subservient to the CCP. Every year in March, members of the minor parties meet with their communist counterparts in Beijing to provide advice on everything from healthcare to poverty reduction—largely for show.

The system—called “multi-party cooperation and political consultation under the CCP’s leadership”—has been used as evidence that China is also a democracy. The internationalization of China’s political system is in fact well underway. Since 2014, the Communist Party has hosted an annual summit in Beijing inviting political party leaders from around the world to hear about how it governs China. In recent years, the party has also brought young African politicians to China for training, in a bid to cultivate allies.

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About as valuable as what ‘serious’ press has to report.

Countries Annoyed Russia Gets All The Credit For 2016 Election Meddling (Onion)

Complaining that U.S. investigations into foreign interference in the election have gotten almost everything wrong, officials from dozens of countries around the world expressed irritation Friday that all of the credit for meddling in the 2016 presidential race was going to Russia. Resentful operatives from Serbia, Uruguay, Swaziland, and 45 other nations said they were incredibly annoyed that Kremlin-backed computer hackers and dark-money financiers were receiving all the media attention, while their own far superior efforts to undermine the U.S. electoral process had so far received no recognition at all.

“Do you have any idea how much more sophisticated our attacks on American democracy were than Russia’s?” Laotian president Bounnhang Vorachith said of his government’s efforts to spread misinformation about Democratic candidate Hillary Clinton on social media sites. “We spent millions building a sophisticated bot network that could craft false but believable stories portraying Trump in a good light. And it worked! It’s unbelievably frustrating to pull off something like that and then have all the glory go to someone else.” “Do you really think Russia could’ve hacked into [Clinton campaign chairman] John Podesta’s emails?” Vorachith continued. “Hell no. That was Laos.”

According to sources, every time the American media credits Russian oligarchs with funding election-tampering efforts, numerous foreign agents across the globe throw up their arms and storm out of the room, infuriated because Costa Rican and Nepalese money launderers reportedly did far more to finance such initiatives. These agents have also been known to toss aside newspapers in anger, shouting that Mongolia’s work busing thousands of people with dead voters’ names to cast ballots for Clinton in New Hampshire was more deserving of attention than anything Russia had accomplished.

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A bit more attention might go a long way.

A Warning Cry From the Doomsday Vault (BBG)

On this winter day, the world was upside down: it was raining in the Arctic Circle and snowing in Rome. The contradiction was not lost on those gathered at the Svalbard Global Seed Vault, located near the top of the world. The scientists, activists, executives and government officials were in Longyearbyen, to mark the 10-year anniversary of what has become known as the Doomsday Vault, which stores seeds of the world’s most important crops deep in a mountain against the apocalyptic consequences of climate change and war. The challenge they’re facing now is that the climate is changing far quicker than they’d imagined. The facility sprung a leak last year after construction had failed to take into account that the permafrost could melt.

Norway is now spending about $20 million to secure and improve the facility. But it’s not just the building. “Biodiversity is the building block to develop new plants and because of climate change we’re in a terrible need to quickly develop new varieties,” said Aaslaug Marie Haga, executive director of Crop Trust, a group established to support gene banks. “The climate is changing quicker than the plants can handle.” Svalbard is the farthest north one can travel commercially, about an 1 1/2 hour flight from northern Norway. The vault is about a 10 minute drive from town, past a coal-fired power plant and up a winding two-lane road. Unless armed with a high-caliber rifle, driving is essential, since leaving town also means venturing into polar bear country.

The site’s entrance, not far from the abandoned coal mine that served as the first Nordic seed vault, shines at night like a green beacon, lit up by an artwork of fiber optics, steel and glass called Perpetual Repercussion. The seeds are kept at minus 18 centigrade (-4 Fahrenheit) more than 100 meters into the mountain behind six steel doors. And in an ideal world, the vault would never have to be used. It’s meant to back up the plant gene banks around the world, organized under the International Treaty on Plant Genetic Resources for Food and Agriculture. But many of these facilities are vulnerable. One withdrawal from Svalbard has already been made by the group that ran the seed bank in Aleppo, Syria.

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Math as a female field. Nice.

West Way Behind Iran, Saudi Arabia When It Comes To Women In Science (Qz)

In Iran, nearly 70% of university graduates in science, technology, engineering and mathematics (STEM) are women—a higher percentage than in any other country. Nearby Oman, Saudi Arabia, and the United Arab Emirates (UAE) are close, each boasting over 60% female graduates in science, still more of the rest of the world. Young women in science are the rule, not the exception, in the Middle East. At least a third of STEM trained talent across the Muslim world is female, writes Saadia Zahidi in her new book Fifty Million Rising, which tracks the workplace progress achieved by Muslim women since the turn of the century. Only in Jordan, Qatar and the UAE are girls more comfortable with math than boys.

“The Muslim world has put high investment in education, and the payoff is coming now,” argues Zahidi, a World Economic Forum executive who leads education and gender equality initiatives. While observant Muslim societies are often associated with strict social codes for men and women, Western gender stereotypes about work don’t necessarily apply: Several Muslim countries have filled more than half of STEM jobs with female workers. Zahidi adds that in many cases, Muslim women are pioneering their role in the workforce, so they don’t have preconceived stereotypes about whether tech jobs, for example, constitute “feminine” career goals.

A study published in February found that the social and political gender equality typical of Scandinavian countries may be inversely related to women’s representation in STEM fields. This could be in part due to the fact that countries with greater parity between sexes tend to be wealthier, providing better government support to citizens and allowing women to accept less secure jobs.

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Feb 192018
 
 February 19, 2018  Posted by at 10:56 am Finance Tagged with: , , , , , , , , , ,  5 Responses »


Frank Larson Broadway Billboard Seven Year Itch 1955

 

Global Dividends Hit Record Of $1.25 Trillion In 2017, More To Come (R.)
Jittery US Bond Market Braces For Supply Wave (R.)
How Did America Go Bankrupt? Slowly At First, Then All At Once (CH)
London’s Housing Boom Is Over, Rightmove Says (BBG)
Average Price Of Newly Marketed UK Home Rises Above £300,000 Again (G.)
Ex-CIA Director Thinks US Hypocrisy About Election Meddling Is Hilarious (CJ)
German Carmakers In A Spin Ahead Of Diesel Ban Ruling (R.)
Sweden Is Getting Worried About Its Cashless Society (BBG)
Europe Is A Collection Of Filter Bubbles (BBG)

 

 

As is the case with buybacks, this is all money that execs decide NOT to invest in a company (productivity, modernization, maintenance), but in its stock value.

Global Dividends Hit Record Of $1.25 Trillion In 2017, More To Come (R.)

Global dividends rose 7.7% to an all-time high of $1.25 trillion (1 trillion euros) last year boosted by a buoyant world economy and rising corporate confidence, Janus Henderson said on Monday, predicting another record year ahead. The surge – the strongest since 2014 – was driven by increases in every region and almost every industry with record showings in 11 countries including the United States, Japan, Switzerland, Hong Kong, Taiwan and the Netherlands, the investment manager added. For 2018 Janus Henderson expects dividends to keep the same 7.7% growth rate to reach around $1.35 trillion, as corporate and economic growth remains strong even in more volatile financial markets. “Companies are seeing rising profits and healthy cash flows, and that’s enabling them to fund generous dividends.

The record payout last year was almost three-quarters higher than in 2009, and there is more to come,” Ben Lofthouse, Director of Global Equity Income at Janus Henderson, said. “The next few months are set fair, and we expect global dividends to break new records in 2018.” Adjusting for movements in exchange rates, special one-off dividends and other factors, global dividends rose 6.8% last year and are expected to rise another 6.1% in 2018. Janus said 2017’s dividend growth showed less regional divergence than in previous years, reflecting the broadly based global economic recovery, though Europe lagged behind. European dividends rose just 1.9% to $227 billion, weighed down by cuts from a handful of large companies in France and Spain, lower special dividends and a weak euro during the second quarter, when most dividends are paid, it said.

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How can more debt not be good?

Jittery US Bond Market Braces For Supply Wave (R.)

Bond investors, who have been on edge over signs of growing inflation and a possibly more aggressive Federal Reserve, will have their work cut out for them as the U.S. government seeks to sell $258 billion worth of debt this coming week. The Treasury Department began ramping up its debt issuance earlier this month to fund the expected growth in borrowing tied to the biggest tax overhaul in 30 years and a two-year federal spending package. Last year’s tax reform is expected to add as much as $1.5 trillion to the federal debt load, while the budget agreement would increase government spending by almost $300 billion over the next two years. Analysts worry the combination of a rising budget deficit, faster inflation and more Fed rate increases have ratcheted up the risk of owning Treasuries. Those concerns pushed benchmark 10-year Treasury yields up to 2.944%, a four-year peak last week.

Treasury bill and two-year yields have reached their highest level in more than nine years. The five-year Treasury yield is hovering at its highest levels in nearly eight years, while seven-year yield climbed to levels not seen since April 2011. The increase in U.S. yields may entice investors seeking steady income in the wake of the rollercoaster sessions on Wall Street and other stock markets this month, analysts said. [..] The heavy Treasury supply will kick off on Tuesday with $151 billion worth of bills including record amounts of three-month and six-month T-bills. The rest of the debt sales will spread over a holiday-shortened week with $28 billion of two-year fixed rate notes on Tuesday; $35 billion in five-year debt on Wednesday and $29 billion in seven-year notes on Thursday. The Treasury Department also plans to add $15 billion to an older two-year floating-rate issue.

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Everything is debt. Imagine what would happen if it wasn’t there. Or soon won’t be.

How Did America Go Bankrupt? Slowly At First, Then All At Once (CH)

Clearly, debt has surged since 2000 and particularly since 2008 versus decelerating net full time jobs growth. The number of full time employees is economically critical as, generally speaking, only these jobs offer the means to be a home buyer or build savings and wealth in a consumer driven economy. Part time employment generally offers only subsistence level earnings. But if we look at the change over those periods highlighted, we get a clear picture. Full time jobs are being added at a rapidly declining rate while federal debt is surging in the absence of the growth of full time employees.

And if we look at the federal debt added per full time job added (chart below)…broken arrow…broken arrow!!! That is $1.92 million dollars in new federal debt per net new full time employee since 2008. Compare that to the $30 thousand per net new full time employee from ’70 to ’80…or $140 thousand from ’80 to ’90…and nearly quadruples the $460 thousand per from ’00 to ’08. Despite a far larger total population and after ten years of “recovery” since ’08, this is likely as good as it gets. We are likely at or very near the top of this economic cycle. This pattern is likely to carry forward over the next decade and economic cycle…likely with disastrous results.

[..] US population growth has been decelerating since 1790 and debt to GDP rising (chart below). Originally, the combination of a relatively small population, high immigration, and high birth rates meant annual population growth in excess of 3% and relatively low debt to GDP. Over time, as the population grew, immigration slowed, and birth rates collapsed; US population growth tumbled. Since 1950 total annual population growth (black line in chart below) has decelerated almost 75% (from 2% to 0.6%) but more critically the annual population growth among the under 65 year old population has essentially ceased (as the yellow line in the chart shows) and more debt has been the resounding “solution”. Massive interest rate cuts to incent debt creation have been substituted for the decelerating organic growth.

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About time.

London’s Housing Boom Is Over, Rightmove Says (BBG)

London’s property market has moved out of its boom phase and home sellers need to be more realistic about their price demands, according to Rightmove. The February report from the home-listing website shows that asking prices were down 1% from a year earlier, a sixth consecutive fall. They rose 4.4% on the month, reflecting the usual jump at the start of the spring season. While multiple reports point to a cooling in London housing, the damage is being limited by cautious sellers, who aren’t flooding the market in a panic to dump property. That means the long-running supply-demand imbalance in the city is providing some support to prices. “End-of-the-boom prices normally readjust more quickly if there is an over supply,” Miles Shipside, Rightmove director, said in the report. However, “some would-be sellers are holding back, preventing a glut of competition from forcing prices downward,” he said.

The capital’s housing market was the worst performing in the U.K. in 2017 and there’s little to suggest any upturn is in store. Brexit uncertainty has damped demand, while years of rampant inflation has pushed ownership out of reach for many. The mean asking price in London this month was almost 630,000 pounds ($885,000), more than 20 times average U.K. earnings. For those who need a fast sale, Shipside’s advice is to “sacrifice some of the substantial price gains of the last few years.” The average time to sell a property in London is now 83 days, up from 73 days a year ago. Nationally, asking prices increased 0.8% in February from January, though that was below the 10-year average for the time of year. The average price of 300,000 pounds is up 1.5% year-on-year. That compares with gains of about 6% seen less than two years ago.

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But wait, this quotes Rightmove as well…

Average Price Of Newly Marketed UK Home Rises Above £300,000 Again (G.)

The average price of a UK property coming on to the market has risen by more than £2,400 in a month to just over £300,000 amid evidence of “record” levels of house-hunting activity, according to Rightmove. The website, which tracks 90% of the UK property market, said the national average asking price for a home had increased by 0.8% during the past month, following the 0.7% rise it reported in mid-January. However, some sellers may be over-pricing their properties: the average time to sell has risen once again and is now 72 days, compared with 67 days a month ago and 55 during the summer of 2017. In London, the average has climbed to 83 days. Rightmove said that while it was the norm for new sellers’ asking prices to be buoyant at the start of a new year, “this first complete month in 2018 is seeing more pricing optimism than the comparable period in 2017”.

In general, however, sellers were not being over-ambitious or setting too high a price, it added. The website, which claims to display a stock of more than one million properties to buy or rent, said the average asking price now stood at £300,001, compared with £297,587 a month ago. It described January as its “busiest month ever”, with a record 141m website visits. In all the UK regions it tracks, the typical price of a newly-marketed property rose during the past month, with the exception of south-west England, where the figure slipped back slightly. Scotland saw the biggest monthly increase, at 5.1%, while the north-east and Wales managed 3.6% and 3.5%. However, on a national basis, the annual rate of price growth “remains subdued” at 1.5%, said the website.

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Isn’t it?

Ex-CIA Director Thinks US Hypocrisy About Election Meddling Is Hilarious (CJ)

Take off the terrorist’s mask, and it’s the CIA. Take off the revolutionary’s mask, and it’s the CIA. Take off the Hollywood producer’s mask, and it’s the CIA. Take off the billionaire tech plutocrat’s mask, and it’s the CIA. Take off the news man’s mask, and guess what? It’s the motherfucking CIA. CIA influence is everywhere. Anywhere anything is happening which could potentially interfere with the interests of America’s unelected power establishment, whether inside the US or outside, the depraved, lying, torturing, propagandizing, drug trafficking, coup-staging, warmongering CIA has its fingers in it. Which is why its former director made a cutesy wisecrack and burst out laughing when asked if the US is currently interfering in other democracies.

Fox’s Laura Ingraham unsurprisingly introduced former CIA Director James Woolsey as “an old friend” in a recent interview about Special Prosecutor Robert Mueller’s indictment of 13 alleged members of a Russian troll farm, in which Woolsey unsurprisingly talked about how dangerous Russian “disinformation” is and Ingraham unsurprisingly said that everyone should really be afraid of China. What was surprising, though, was what happened at the end of the interview. “Have we ever tried to meddle in other countries’ elections?” Ingraham asked in response to Woolsey’s Russia remarks. “Oh, probably,” Woolsey said with a grin. “But it was for the good of the system in order to avoid the communists from taking over. For example, in Europe, in ’47, ’48, ’49, the Greeks and the Italians we CIA-”

“We don’t do that anymore though?” Ingraham interrupted. “We don’t mess around in other people’s elections, Jim?” Woolsey smiled and said said “Well…”, followed by a joking incoherent mumble, adding, “Only for a very good cause.” And then they both laughed. They laughed about this. They thought it was funny and cute. They thought it was funny and cute that the very allegation being used to manufacture support for world-threatening new cold war escalations against a nuclear superpower was something they both knew the United States does constantly, usually through Woolsey’s own CIA. The US government’s own data shows that it has deliberately meddled in the elections of 81 foreign governments between 1946 and 2000, including Russia in the nineties. That isn’t even counting the coups and regime changes it facilitated, including right here in my home Australia in the seventies.

The US meddles constantly in other democracies, not “for a good cause” as Woolsey claims, but to advance the agendas of the loosely allied plutocrats, intelligence and defense agencies which comprise America’s permanent government. It does this not to improve or protect the lives of ordinary Americans, but to make the rich richer and the powerful more powerful, usually at the expense of the money, resources, homes, governments, livelihoods and lives of people in other countries. It does this with impunity and without hesitation.

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Carmakers rule the country.

German Carmakers In A Spin Ahead Of Diesel Ban Ruling (R.)

A court will decide on Thursday whether German cities can ban heavily polluting cars, potentially wiping hundreds of millions of euros off the value of diesel cars on the country’s roads. Environmental group DUH has sued Stuttgart in Germany’s carmaking heartland, and Duesseldorf over levels of particulate matter exceeding EU limits after Volkswagen’s 2015 admission to cheating diesel exhaust tests. The scandal led politicians across the world to scrutinize diesel emissions, which contain the matter and nitrogen oxide (NOx) and are known to cause respiratory disease. There are around 15 million diesel vehicles on German streets and environmental groups say levels of particulates exceed the EU threshold in at least 90 German towns and cities.

Local courts ordered them to bar diesel cars which did not conform to the latest standards on days when pollution is heavy, startling German carmakers because an outright ban could trigger a fall in vehicle resale prices, and a rise in the cost of leasing contracts, which are priced on assumed residual values. The German states concerned, where the carmakers and their suppliers have a strong influence, appealed against the decisions, leaving Germany’s federal administrative court – the court of last resort for such matters – to rule on whether such bans can legally be imposed at local level.

“The key question is whether bans can already be considered to be legal instruments,” said Remo Klinger, a lawyer for DUH. “It’s a completely open question of law.” Paris, Madrid, Mexico City and Athens have said they plan to ban diesel vehicles from city centers by 2025, while the mayor of Copenhagen wants to ban new diesel cars from entering the city as soon as next year. France and Britain will ban new petrol and diesel cars by 2040 in a shift to electric vehicles.

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Big Brother is not worried.

Sweden Is Getting Worried About Its Cashless Society (BBG)

‘“No cash accepted” signs are becoming an increasingly common sight in shops and eateries across Sweden as payments go digital and mobile. But the pace at which cash is vanishing has authorities worried. A broad review of central bank legislation that’s underway is now taking a special look at the situation, with an interim report due as early as the summer. “If this development with cash disappearing happens too fast, it can be difficult to maintain the infrastructure” for handling cash, said Mats Dillen, the head of the parliamentary review. He declined to get into more details on what types of proposals could be included in the report. Sweden is widely regarded as the most cashless society on the planet. Most of the country’s bank branches have stopped handling cash; many shops, museums and restaurants now only accept plastic or mobile payments.

But there’s a downside, since many people, in particular the elderly, don’t have access to the digital society. “One may get into a negative spiral which can threaten the cash infrastructure,” Dillen said. “It’s those types of issues we are looking more closely at.” Last year, the amount of cash in circulation dropped to the lowest level since 1990 and is more than 40 percent below its 2007 peak. The declines in 2016 and 2017 were the biggest on record. An annual survey by Insight Intelligence released last month found only 25 percent of Swedes last year paid in cash at least once a week, down from 63 percent just four years ago. A full 36 percent never use cash, or just pay with it once or twice a year.

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There is no such thing as one Europe. And the more the EU promotes the narrative, the more that will become obvious.

Europe Is A Collection Of Filter Bubbles (BBG)

The EU can act in unison at times – for example, on Russia sanctions or, at least so far, on Brexit. But as French President Emmanuel Macron and German Chancellor Angela Merkel try for a closer union in the next few years, they will need to be mindful of the fact that there is no single narrative among the publics in different European countries on matters of economic importance. A recent paper for Bruegel, a Brussels-based think tank, vividly shows this by analyzing coverage of Europe’s recent financial crisis by four important centrist newspapers: Germany’s Sueddeutsche Zeitung, France’s Le Monde, Italy’s La Stampa and Spain’s El Pais. The total data set encompassed 51,714 news stories. The researchers fed them to a content analysis algorithm and then analyzed the results to construct generalized narratives. Their focus was on how blame for the crisis was attributed.

They found that only El Pais consistently attributed blame to Spain itself for its financial troubles during the euro crisis. “In Spain, the connection between the global financial crisis, the local housing bubble and the mismanagement of a previous period of impressive growth was more visible,” Porcaro explained to me. As one might expect, Sueddeutsche Zeitung blames the crisis on a departure from the traditional German social market economic model. Everyone except Germany seems to have contributed, according to the Munich paper — from greedy financial market players to financially imprudent Greeks to the ECB with its loose monetary policy. Le Monde, too, blamed the banks and speculators, but also German intransigence in handling the indebted southern Europeans.

And La Stampa focused on Italy’s role as a victim of circumstance, namely globalization and German-imposed austerity. Banks and financiers didn’t get much attention as culprits from the Italian newspaper, but the Italian political system and government did get some blame, as in Spain. Le Monde and La Stampa, according to the Bruegel paper, both “embrace a sense of desperation that goes far beyond purely economic considerations but calls into question the entire political system and social fabric.” It’s as if the euro area’s four biggest economies didn’t share a reality. The four quality dailies resemble the blind men in the Indian parable, feeling different parts of an elephant’s body, declaring the whole animal should look like a tree or a snake, then coming to blows when they can’t agree.

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Aug 212017
 
 August 21, 2017  Posted by at 9:28 am Finance Tagged with: , , , , , , , ,  7 Responses »


Elliott Erwitt Waiting for a Streetcar in Downtown Pittsburgh 1950

 

Ron Paul: 50% Stock Market Plunge ‘Conceivable,’ But Not Trump’s Fault (CNBC)
Zombies Propped Up As China’s Debt Swaps Surpass $100 Billion (BBG)
China’s Plunge Protection Team Claims “State Meddling” Stabilizes Markets (ZH)
House Of Cards: Lending Culture Is Leaving Australians Vulnerable (Abc)
Diesel Scandal Is A Risk To German Economy, Says Ministry (R.)
Britain and EU Clash Over Brexit Timetable for Trade Deal (BBG)
NAFTA Negotiations Start in Secrecy. Lobbying Heats Up (WS)
Beware the “The Cultural Civil War” Narrative (CHS)
Rob Ford, Donald Trump and the New Direction of Political Polarization (Towhey)
When Exactly Will the Eclipse Happen? (Wolfram)

 

 

Paul’s just guessing on the numbers, but the risks are obvious. And Trump will be blamed anyway.

Ron Paul: 50% Stock Market Plunge ‘Conceivable,’ But Not Trump’s Fault (CNBC)

Ron Paul’s sell-off prediction just got more severe. The former Republican Congressman from Texas believes escalating dysfunction in Washington will create even more pain for Wall Street. “A 50% pullback is conceivable,” Paul said on “Futures Now” recently. “I don’t believe it’s ten years off. I don’t even believe it’s a year off. ” According to his calculations, it would cut the S&P 500 Index in half, to 1212, and the blue-chip Dow Jones Industrial Average would collapse to 10,837. Paul noted that there’s a lot of chaos in Washington right now, with an “unpredictable president” and those who are inclined to “tear him apart” but if the market takes that big of a tumble, he doesn’t see it as Trump’s fault.

“It’s all man-made. It’s not the fault of Donald Trump in the last week. If the market crashes tomorrow and we have a great depression, he didn’t do it in six months. It took more like six or ten years to cause all these problems that we’re facing,” he said. What’s more, it would come at the expense of businesses who are counting on reforms such as tax cuts and fewer regulations, according to Paul. Paul, who is also known for his presidential runs, originally made his case for a somewhat more benign 25% downturn on June 29 on “Futures Now.” He argued Wall Street is overestimating the strength of the economy, and the Federal Reserve kept interest rates too low for too long. He said the situation for stocks could turn ugly as soon as October. Stocks will try to bounce back on Monday from multiple losing weeks in a row. The Nasdaq just saw its fourth consecutive week of losses. Meanwhile, the Dow & S&P 500’s losing streak now sits at two weeks.

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China’s way of propping up coal and steel. Too big to fail.

Zombies Propped Up As China’s Debt Swaps Surpass $100 Billion (BBG)

Almost a year after China rolled out steps to rein in soaring corporate leverage, concerns are rising that undeserving companies are benefiting while households are getting saddled with risks. China unveiled guidelines for debt-to-equity swaps in October, part of measures to trim the world’s biggest corporate debt loads. The idea was that healthy firms would use the program to cut interest-bearing borrowings, while bloated companies would be shunned. But it hasn’t always worked out that way, even as the total value of swaps reached 776 billion yuan ($116 billion) in the second quarter when volumes jumped to a record, according to Natixis. While China’s State Council said in October that zombie firms may not take part, 55% of the swaps last quarter were in the coal and steel industries, which are plagued by overcapacity, Natixis says.

The stakes are high for lenders and even individual investors, some of whom buy wealth management products repackaged from the swaps. The absence of a clear definition of “zombie” is part of the problem, according to Fitch Ratings. Views vary on whether further guidelines on the program released this month by the banking regulator will help address these issues. The program is attracting bad companies because they see debt-to-equity swaps as a way to get a bailout, said Chi Lo, Greater China senior economist at BNP Paribas Asset Management. “You can imagine the zombie companies will be just like cancer cells that eat into the system.”

The swaps generally work like this: A bank agrees to take over a company’s debt from its original lenders. The bank sets up a unit which has other shareholders that help share risk. The unit assumes the debt and conducts a transaction with the company to convert it into equity. It can then dispose of the stake. In the most recent draft guidelines released earlier this month by the China Banking Regulatory Commission, a bank is required to own no less than a 50% stake in the unit conducting the swaps. The guidelines also say that the units can sell bonds and borrow from the interbank market.

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That’s the same claim the Fed and ECB make, just in other words.

China’s Plunge Protection Team Claims “State Meddling” Stabilizes Markets (ZH)

It was two years ago, in June of 2015, when just as the Shanghai Composite was flirting with 5,000 and when literally the local banana stand guy was trading stocks, that the Chinese stock bubble burst, unleashing an unprecedented selling spree, a 40% drop in just two months, and Beijing’s nationalization of the stock market, courtesy of the domestic plunge protection team, the China Securities Regulatory Commission also known as the “National Team”. The decision by local authorities to effectively shut down price discovery had a huge confidence crushing impact on local investor confidence. As Gavekal Research put it overnight, “the lack of trust was crystallized by the decision in the summer of 2015 to “shut down” the equity markets for a while and stop trading in any stock that looked like it was heading south.

That decision confirmed foreign investors’ apprehension about China and in their eyes set back renminbi internationalization by several years, if not decades.” Understandably, with the realization that China (or any other nation for that matter), no longer has a an efficient, discounting stock market, but merely a policy tool meant to inspire confidence on the way up, and punish short sellers and “speculators” on the way down, the China Securities Regulatory Commission kept a low profile: after all why remind traders and investors that the local market only exists in the imaginations of several Beijing bureaucrats who sit down every day to decide the “fair value” of all market-traded equities. That changed last week, when for the first time in years, the Chinese Plunge Protection Team broke its silence and said that “state meddling has successfully stabilized China’s US$7 trillion stock market by curbing volatility and steering valuations to rational levels.”

For those stunned by the idiocy in the circular statement above, don’t worry it’s not just you: China indeed just said that the local market has become more efficient as a result of more manipulation. What is far more shocking, however, is that most central bankers around the world would agree with this statement.

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The banking system will fall with real estate, exposure to mortgage debt is 60%. And Australian banks own New Zealand banks.

House Of Cards: Lending Culture Is Leaving Australians Vulnerable (Abc)

A decade of housing price rises, low interest rates and relatively easy credit has left Australians carrying the second-highest level of household debt in the world. And despite efforts to tighten lending and to address problems in the lending culture, the ABC’s Four Corners program has learnt bank staff and mortgage brokers are still required to meet tough lending targets and some staff are threatened with dismissal if they do not meet the banks’ requirement to sign up more mortgages. The problems in the lending culture were acknowledged by the banks themselves earlier this year in a review conducted by the former public service chief, Stephen Sedgwick. Incentive payments and lending targets are still a primary motivator for bank staff. Internal performance expectations for Westpac bank lenders, obtained by Four Corners, include targets of six-to-nine home-finance requests a week and between two and three home-loan drawdowns a week.

Another economist who has raised the alarm is former banker Satiyajit Das. He said the 60% exposure to mortgage debt in Australia’s banks was “extremely high”. That figure “is at least 20% higher than Norway, and also higher than Canada, which is a very comparable economy to Australia”, he said. Australia’s feverish housing market has contributed but Mr Das said other countries that had experienced rapid house price rises did not have the same potentially dangerous exposure. “One of the biggest housing bubbles in the world is Hong Kong, but the Hong Kong banks have only got exposure to the housing market of around 15%,” he said. Exposure to housing debt at Australian levels, Mr Das said, would leave banks more vulnerable in the case of any housing downturn. “If there is a downturn then obviously the losses will build up quite quickly,” he said.

[..] Gerard Minack, the former head of developed market strategy at Morgan Stanley, said Australia had been led down this path by current tax arrangements and lenders who had been increasingly willing to leverage up borrowers. This, he said, had created “a massive affordability problem” that will exacerbate the pain associated with any downturn. Australia now has a household-debt-to-income ratio of 190%. “For every $1 of household income, there’s [nearly] $2 of debt,” Mr Minack said.

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Preparing Germans for a lenient attitude by their government (ahead of the Merkel re-election). Sorry guys, but carmakers are too big to fail. Can’t blame Angela…

Diesel Scandal Is A Risk To German Economy, Says Ministry (R.)

The emissions scandal ensnaring German carmakers is a risk to Europe’s largest economy, the finance ministry said on Monday. In its monthly report, the ministry named the issue, which broke out almost two years ago after Volkswagen admitted to cheating US diesel emissions tests, as a threat to Germany along with Britain’s decision to leave the European Union and protectionist trade policies by the US government. But it has said it was impossible to put a figure on the potential damage it could cause. The car industry is Germany’s biggest exporter and provides about 800,000 jobs. “Risks linked to how Brexit will shape out and future US trade policies remain,” the ministry said. “In addition, the so-called diesel crisis should be classified as a new risk to the German economy even though its effects are not possible to quantify at the moment.”

Strong household and state spending provided most of the impulse for the German economy in the second quarter when growth was measured at 0.6%. Weaker net foreign trade dampened growth, as exports grew strongly less than imports. The ministry said it expected the industrial sector to continue its upswing also in the third quarter, pointing to robust orders and strong business sentiment indicators. But the diesel crisis could cloud the German growth outlook, it said, adding: “Given the importance of the automotive industry [the diesel crisis) must be classified in the medium term as a risk to the overall economic development.” German politicians and car bosses agreed earlier in August to overhaul engine software on 5.3m diesel cars to cut pollution and try to repair the industry’s battered reputation.

EU antitrust regulators are also investigating allegations of a cartel among a group of German carmakers, a measure that could result in hefty fines for the companies. In April, Volkswagen was ordered to pay a $2.8bn criminal penalty in the United States for cheating on emissions tests. The company is also paying $1.5bn in a civil case brought by the US government and spending $11bn to buy back cars and offer other compensation. Back in Europe, German carmakers VW, Audi, Porsche, Mercedes and BMW face questions over whether they colluded to bring down the cost of components – including some used to control diesel emissions.

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How is it possible that just one party does these negotiations?

Britain and EU Clash Over Brexit Timetable for Trade Deal (BBG)

Britain and the European Union are at odds over how soon the Brexit talks can pivot towards a trade deal just a week before negotiations are set to resume. Adopting a provocative posture, U.K. Prime Minister Theresa May’s government declared at the weekend that it’s “stepping up pressure” on the bloc to shift the discussions away from the terms of separation as soon as October. The use of fighting words in the past has not budged the EU and in a sign the U.K. will be disappointed, Slovenian Prime Minister Miro Cerar told the Guardian that “the process will definitely take more time than we expected.”

Signs of fresh discord may unnerve investors after the pound last week under-performed all of its Group of 10 counterparts. By giving out more details of where it stands and spelling out its demands, the U.K. wants to change the narrative that it’s been too vague, and by doing so jolt the EU into talking trade sooner. With the clock ticking down to the U.K.’s March 2019 departure, and the two sides clashing over many key issues, Brexit Secretary David Davis seems bent on reviving a debate over whether talks should run in parallel rather than in the strict order the EU has laid out.

Such an ambition will draw short shrift from the EU. Its chief negotiator, Michel Barnier, last week reiterated that the other 27 governments won’t allow trade talks to start until “sufficient progress” has been made resolving residency rights, the U.K.’s exit bill and the border with Ireland. The original hope was to reach this milestone in October – in time for a summit of EU leaders – but that is now in doubt amid criticism within the EU of sluggish progress and a lack of detail from the British. “There are so many difficult topics on the table, difficult issues there, that one cannot expect all those issues will be solved according to the schedule made in the first place,” Slovenia’s Cerar told the Guardian. “What is important now is that the three basic issues are solved in reasonable time.”

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The NAFTA talks may well end up being as tough as the Brexit ones.

NAFTA Negotiations Start in Secrecy. Lobbying Heats Up (WS)

The first round of re-negotiating the North American Free Trade Agreement between the US, Canada, and Mexico began on Wednesday and is scheduled to last through Sunday. And the one thing we know about it is this: Despite promises in March by US Trade Representative Robert Lighthizer (USTR) that the negotiations would be transparent, the USTR now considers the documents and negotiations “classified” and they’ll be cloaked in secrecy. But corporate lobbyists have access. And they’re all over it. The Electronic Frontier Foundation put it this way: “Once again, following the failed model of the Trans-Pacific Partnership (TPP), the USTR will be keeping the negotiating texts secret, and in an actual regression from the TPP will be holding no public stakeholder events alongside the first round. This may or may not set a precedent for future rounds, that will rotate between the three countries every few weeks thereafter, with a scheduled end date of mid-2018.”

But during his confirmation hearing in March, Lighthizer had promised to make the negotiations transparent and to listen to more stakeholders and the public. The EFF reported at the time that in response to Senator Ron Wyden question – “What specific steps will you take to improve transparency and consultations with the public?” – Lighthizer replied in writing: “If confirmed, I will ensure that USTR follows the TPA [Trade Promotion Authority, aka. Fast Track] requirements related to transparency in any potential trade agreement negotiation. I will also look forward to discussing with you ways to ensure that USTR fully understands and takes into account the views of a broad cross-section of stakeholders, including labor, environmental organizations, and public health groups, during the course of any trade negotiation.

He said that “we can do more” to ensure that we “have a broad and vigorous dialogue with the full range of stakeholders in our country.” Senator Maria Cantwell tried to have Lighthizer address the skewed Trade Advisory Committees that currently advise the USTR, by asking: “Do you agree that it is problematic for a select group of primarily corporate elites to have special access to shape US trade proposals that are not generally available to American workers and those impacted by our flawed trade deals?” Lighthizer replied: “It is important that USTR’s Trade Advisory Committees represent all types of stakeholders to ensure that USTR benefits fully from a diverse set of viewpoints in considering the positions it takes in negotiations.”

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You’re being played.

Beware the “The Cultural Civil War” Narrative (CHS)

The play is as old as civilization itself: conjure up extremists (paying them when necessary), goad the formation of opposing extremists, then convince the populace that these extremists have been normalized, i.e. your friends and neighbors already belong to one or the other. This normalization then sets up the relentless demands to choose a side – the classic techniques of misdirection and false choice. Just as you’re sold a triple-bacon cheeseburger or a hybrid auto, you’re being sold a completely fabricated cultural civil war. There have always been extremists on every edge of the ideological spectrum, just as there have always been religious zealots. In a healthy society, these fringe pools of self-reinforcing fanaticism are given their proper place: they are outliers, representing self-reinforcing black holes of confirmation bias of a few.

In times of social, political and financial stress, such groups pop up like mushrooms. In times of media saturation, a relative handful can gain enormous exposure and importance because the danger they pose sells adverts and attracts eyeballs/viewers. Add a little fragmentation, virtue-signaling, demands for ideological conformity and voila, you get a deeply fragmented and deranged populace that is incapable of recognizing the dire straits it is in or recognizing the structural sources of its impoverishment and powerlessness. In other words, you get an easily mallable populace at false war with itself.

There is always common ground for those who dare to seek it. The Powers That Be are blowing up the bridges as fast as they can, whipping up fear and hatred of the Other, fanning the flames of extremism and claiming extremists are now normalized and everywhere. All of this is false. Would you buy an entirely manipulated cultural civil war if it was advertised as such? If not, then don’t buy into the false (but oh so useful to the ruling elites) narrative of an “inevitable cultural Civil War.”

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Excellent piece by G. Mark Towhey, “a key player on the team that helped elect Rob Ford as mayor of Toronto”.

Rob Ford, Donald Trump and the New Direction of Political Polarization (Towhey)

You are not a typical American. Not even close. The typical American doesn’t read lengthy articles in policy journals. The typical American gets up far too early in the morning, after too little sleep, works too hard for too long in a job that pays too little, before heading home, feeding the kids, cleaning the house, and collapsing into bed far too late. He or she has precious little time to consume news: a fleeting glimpse of pithy headlines, maybe a two-minute newscast on the radio if they drive to work or a few minutes of local TV news—mostly weather and sports scores. It is through this lens that typical Americans view the world beyond their personal experience and that of friends and family. It’s through this lens that they assess their government and judge their politicians.

These are the typical Americans who elected Donald Trump. They weren’t alone in voting for Trump, and they didn’t cast their ballots by mistake. They chose Trump because, out of the available alternatives, he best represented their view of the world. I am not a typical American, either. In fact, I’m a Canadian. I was a key player on the team that helped elect Rob Ford as mayor of Toronto—North America’s fourth largest city. I helped him craft a campaign platform that resonated with typical Torontonians and, later, helped him translate that platform into an actionable governing agenda. I helped him get things done. Three years later, Ford fired me as his chief of staff when I insisted that he go to rehab to address the personal demons that were destroying both him and his mayoralty. My experience with Ford has given me an unusual perspective on the recent presidential election, the Trump phenomenon, and the rise of a new and powerful political force that favors unorthodox candidates.

No, you and I are not typical at all. We have time to read (and, apparently, to write) long-form articles in policy journals. We can pause our breadwinning labor and child-rearing duties long enough to consider hypotheticals and to ruminate, now and then, on an idea or two. We may not recognize this as a luxury in our modern world, but we should. Amid all that rumination, however, we rarely stop to think that what motivates us does not necessarily excite typical Americans, the people who elected Donald Trump some six years after their northern cousins elected Rob Ford in Toronto. Almost by mistake, this bloc of typical citizens—overstressed, under-informed, concerned more with pragmatic quality of life issues than idealistic social goals—has become a powerful political movement. And we didn’t see them coming. Conventional political leaders seem to completely misunderstand them, and even their own champions often appear to disrespect them. They do so at their peril.

In 2010, Rob Ford was a dark horse candidate in the race to be mayor of Toronto. He later became internationally notorious for his very public battles with drug addiction and frequent appearances as a punch line in late-night television monologues. But his 2010 campaign was based on his understanding of the struggles typical residents endured and their limited time for politics. Ford boiled his campaign down to “Respect for Taxpayers” and “Stop the Gravy Train.” His message was concise and understandable. It fit on a bumper sticker. It could be passed by word of mouth from one person to the next without loss of meaning or impact. That it meant something different to everyone was not a weakness but a strength—no matter what you thought the “gravy train” was, everyone wanted it stopped.

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In case you want to know Absolutely Everything about the eclipse, here’s Stephen Wolfram.

When Exactly Will the Eclipse Happen? (Wolfram)

A total solar eclipse occurs when the Moon gets in front of the Sun from the point of view of a particular location on the Earth. And it so happens that at this point in the Earth’s history the Moon can just block the Sun because it has almost exactly the same angular diameter in the sky as the Sun (about 0.5° or 30 arc-minutes). So when does the Moon get between the Sun and the Earth? Well, basically every time there’s a new moon (i.e. once every lunar month). But we know there isn’t an eclipse every month. So how come? Well, actually, in the analogous situation of Ganymede and Jupiter, there is an eclipse every time Ganymede goes around Jupiter (which happens to be about once per week). Like the Earth, Jupiter’s orbit around the Sun lies in a particular plane (the “Plane of the Ecliptic”).

And it turns out that Ganymede’s orbit around Jupiter also lies in essentially the same plane. So every time Ganymede reaches the “new moon” position (or, in official astronomy parlance, when it’s aligned “in syzygy”—pronounced sizz-ee-gee), it’s in the right place to cast its shadow onto Jupiter, and to eclipse the Sun wherever that shadow lands. (From Jupiter, Ganymede appears about 3 times the size of the Sun.) But our moon is different. Its orbit doesn’t lie in the plane of the ecliptic. Instead, it’s inclined at about 5°. (How it got that way is unknown, but it’s presumably related to how the Moon was formed.) But that 5° is what makes eclipses so comparatively rare: they can only happen when there’s a “new moon configuration” (syzygy) right at a time when the Moon’s orbit passes through the Plane of the Ecliptic.

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