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Comey and the End of Conversation

May 102017
 
 May 10, 2017  Posted by at 3:32 pm Finance Tagged with: , , , , , , , , ,  8 Responses »


Ray K. Metzker Philadelphia 1962

 

You might have thought, and hoped, that recent events, such as the election of Trump as president of the US, or Brexit, or the rise of Marine Le Pen and other non-establishment forces in Europe, would, as a matter of -natural- course, have led to increased conversation and discussion between parties, entities, whose divisions were material in sparking these events.

But the opposite has happened, and continues to happen at an ever faster and fiercer pace. Various sides of various divides become ever more deaf to what other sides have to say. What still poses as conversation turns into blame games and shouting matches replete with innuendo, fake news and insinuations.

The mainstream media even find they are to an extent redeemed by this -at least financially-. Formerly last-gasp ‘news sources’, suffering from the advent of the interwebs, like the New York Times, CNN, HuffPo and WaPo, as well as Fox, Breitbart on the other side, and many others, have seen their reader- and viewerships expand over the past year as they turned into increasingly impenetrable echo chambers.

They may be losing a lot of potential attention -and revenues- from one side of the -former- debate, but that is more than made up for by rising attention from their faithful flocks. The public feel they need to have an opinion on political matters, and the media are more than willing to define, construct and phrase that opinion for them, to first confirm what people already think, and then raise it a notch or two, or three, or ten.

It works like a charm, and their finance people are looking at the numbers saying: whatever it is you guys do, keep on doing it and add some more, because we’re selling like hotcakes. Still, at least some of the writers must be wondering what exactly it is they’re doing, wondering how to define ‘journalism’ in this day and age.

All this represents a giant loss, one that not a single democracy can arguably tolerate for long, even if few of us seem to care. In democracies, it’s essential that people who do not agree, talk to each other, and do so all the time. The end of that conversation spells the end of democracy.

 

If anything in the future is revealed about a possible -political- connection between Trump and Russia, it will be gravely tainted by the fact that so much opinion posing as news, and so much news that was not real news, has been published about that possible connection already over the past year and change, without any evidence. The WaPo’s and HuffPo’s of the world will not even be vindicated by such a potential revelation anymore, because they lowered their journalistic levels to match those of the National Enquirer.

But even writing down something as neutral as that last paragraph is prone to lead to demonization from all kinds of ‘sources’. The Russian hack story has embedded itself so profoundly in certain corners of American and European society that it can no longer be denied or even questioned without being interpreted as suspect, if not an outright admission of guilt. All you need to know is there once was PropOrNot and its list of alleged 200 Russian propaganda sites.

It doesn’t matter how often Putin and Foreign Minister Lavrov and spokeswoman Maria Zakharova ask for proof of the accusations, because for a large and influential segment of western mainstream media that is a phase that has long since been passed. There is such an all-encompassing conviction that Russia hacked and otherwise influenced western elections that no proof is deemed necessary.

Or rather, the idea has taken on such a life of its own that things are taken to have been proven that never were. “News’, just like advertizing, has to a large extent become based on the concept of relentless repetition. Say something often enough and people will believe it, certainly when it confirms what they were looking to have confirmed to begin with. If the echo chambers fit enough lost souls, before you know it nobody asks for proof anymore.

 

It’s not about whether Trump is or has ever been guilty of anything he’s accused of, it’s that the insinuating narratives about that have long been written and repeated ad nauseam. It’s about whether the witch hunt exemplified by PropOrNot makes objective news gathering impossible. And the only possible response to that question must be affirmative. If only because you can’t tell one type of ‘news’ from the other anymore.

The MSM have focused on getting Hillary elected, and they failed miserably. So did she, of course, it wasn’t just them. A failure they attempt to hide from view behind a veil of never-ending anti-Russian stories that even now they still can’t prove. Which is where the FBI comes in. Sure, some of it may yet prove to be true, but even if that is so, that’s in the future, not today.

Does Trump deserve being resisted? It certainly looks that way much of the time. But he should be resisted with facts, not innuendo of yellow paper quality. That destroys the media, and the media are needed to maintain a democracy. That is both their task and their responsibility. They exist to inform people, but have instead turned into opinion-fabricating machines. Both because that expresses the opinions of their ownership, and because it’s commercially more attractive.

Take a step back and oversee the picture, and you’ll find that Trump is not the biggest threat to American democracy, the media are. They have a job but they stopped doing it. They have turned to smearing, something neither the NYT nor the WaPo should ever have stooped to, but did.

 

Democracy is not primarily under threat from what one party does, or the other, or a third one, it is under threat because parties have withdrawn themselves into their respective echo chambers from which no dialogue with other parties is possible, or even tolerated.

None of this is to say that there will be no revelations about some ties between some Russian entities or persons and some Trump-related ones. Such ties are entirely possible, and certainly on the business front. Whether that has had any influence on the American presidential election is a whole other story though. And jumping to conclusions because it serves your political purposes is, to put it mildly, not helping.

The problem is that so much has been said and printed on the topic that was unsubstantiated, that if actual ties are proven, that news will be blurred by what was insinuated before. You made your bed, guys.

A lot of sources today talk about how Trump was reportedly frustrated with the constant focus on the alleged Russia ties, but assuming those allegations are not true, and remember nothing has been proven after a year of echo-chambering, isn’t it at least a little understandable that he would be?

Comey was already compromised from 10 different angles, and many wanted him gone, though not necessarily at the same time . The same Democrats, and their media, who now scream murder because he was fired, fell over themselves clamoring for his resignation for months. That does not constitute an opinion, it’s the opposite of one: you can’t change your view of someone as important as the FBI director every day and twice on Sundays without losing credibility.

And yes, many Republicans played similar games. It’s the kind of game that has become acceptable in the Washington swamp and the media that report on it. And many of them also protest yesterday’s decision. Ostensibly, it all has to do not with the fact that Comey was fired, but with the timing. Which in turn would be linked to the fact that the FBI is investigating Trump.

But what’s the logic there? That firing Comey would halt that investigation? Why would that be true? Why would a replacement director do that? Don’t FBI agents count for anything? And isn’t the present investigation itself supposed to be proof that there is proof and/or strong suspicion of that alleged link between Russia and the Trump election victory? Wouldn’t those agents revolt if a new director threw that away with the bathwater?

Since we still run on ‘innocent until proven guilty’, perhaps it’s a thought to hold back a little, but given what we’ve seen since, say, early 2016, that doesn’t look like an option anymore. The trenches have been dug.

These are troubled times, but the trouble is not necessarily where you might think it is. America has an undeniable political crisis, and a severe one, but that’s not the only crisis.

 

 

Debt Rattle January 28 2017

Jan 282017
 
 January 28, 2017  Posted by at 10:23 am Finance Tagged with: , , , , , , , , , ,  6 Responses »


Wassily Kandinsky Autumn Landscape with Boats 1908

• US Economy Back Below “Stall Speed” (WS)
• Dow Hits 20,000 As US National Debt Reaches $20 Trillion (Snyder)
• US Auto Industry In Crisis Amid “Inventory Bubble” (ZH)
• Trump’s Crusade on Drug Pricing Puts Both Parties on the Spot (BBG)
• Trump Bars Door To Refugees, Visitors From Seven Nations (R.)
• EU Lacks Leadership to Tackle Global Crises – Czech Minister (BBG)
• ‘It Looks as if the World Is Preparing for War’ – Gorbachev (Time)
• Congresswoman Returns From Syria With ‘Proof’ Obama Funded ISIS (YNW)
• UN Agency Cuts Food Aid To 1.4 Million Displaced Iraqis (AlJ)
• The Media Is Now The Political Opposition (Paul Craig Roberts)
• Lifting of Sanctions Could Be Costly To Russia (Paul Craig Roberts)
• Want To Know How Society’s Doing? Forget GDP – Try These Alternatives (G.)
• Canada May Contribute To Dutch-Led International Abortion Fund (AFP)
• IMF Says Greece Debt ‘Explosive’ In Long Term (AFP)
• Greece: The Game Is On Again (Coppola)

 

 

Nothing is real. And nothing to get hung about. Strawberry Fields forever.

• US Economy Back Below “Stall Speed” (WS)

The consensus forecast by economists predicted that the US economy would grow at an rate of 2.2% in the fourth quarter, as measured by inflation-adjusted GDP. The forecasts ranged from 1.5% to 2.8%. The New York Fed’s “Nowcast” pegged it at 2.1%, and the Atlanta Fed’s “GDPNow” at 2.9%. And today, the Bureau of Economic Analysis reported that growth in the fourth quarter was a measly 1.9%. That was down from 3.5% in the third quarter, a spurt that had once again given rise to the now gutted hopes that the US economy would finally emerge from its stall speed. But instead it has slowed down. For the year 2016, the growth rate dropped to 1.6%. It was worse even than 2013, when GDP growth tottered along at 1.7%. And it matched the growth rate in 2011. Both 2016 and 2011 were the worst since 2009 when the US was in the middle of the Great Recession:

In fact, over the past 50 years, anytime the economy grew less than 2% in a year, it was either already in a recession for part of the year, or there’d be a recession the following year. Hence “stall speed” – a speed that is too slow to keep the economy from stalling altogether. [..] So stall speed for the year. But this time it’s different. This is the third year since the Great Recession when GDP growth dropped below 2%. The Fed’s policies of eight years of cheap credit have entailed soaring debt levels among companies, governments, and consumers – money borrowed from tomorrow that was spent today. Borrowing for productive investment is one thing. Borrowing for consumption is another: it boosts GDP but creates a debt overhang with no productive assets that generate income to service that debt in the future; that debt service for prior consumption then acts as a burden on future consumption.

Read more …

You can’t buy growth. You can just fake it for a while.

• Dow Hits 20,000 As US National Debt Reaches $20 Trillion (Snyder)

The Dow Jones Industrial Average provides us with some pretty strong evidence that our “stock market boom” has been fueled by debt.  On Wednesday, the Dow crossed the 20,000 mark for the first time ever, and this comes at a time when the U.S. national debt is right on the verge of hitting 20 trillion dollars. 

 

Is this just a coincidence?  As you will see, there has been a very close correlation between the national debt and the Dow Jones Industrial Average for a very long time.

 

For example, when Ronald Reagan took office in 1991, the U.S. national debt had just hit 994 billion dollars and the Dow was sitting at 951.  And as you can see from this chart by Matterhorn.gold via David Stockman, roughly that same ratio has held true throughout subsequent presidential administrations…

During the Clinton years the Dow raced out ahead of the national debt, but an “adjustment” during the Bush years brought things back into line. The cold hard truth is that we have been living way above our means for decades.  Our “prosperity” has been fueled by the greatest debt binge in the history of the world, and we are greatly fooling ourselves if we think otherwise.We would never have gotten to 20,000 on the Dow if Barack Obama and Congress had not gotten us into an extra 9.3 trillion dollars of debt over the past eight years. Unfortunately, most people do not understand this, and the mainstream media is treating “Dow 20,000″ as if it is some sort of great historical achievement…

“The average began tracking the most powerful corporate stocks in 1896, and has served as a broad measure of the market’s health through 22 presidents, 22 recessions, a Great Depression, at least two crashes and innumerable rallies, corrections, bull and bear markets. The blue chip reading finally cracked the 20,000 benchmark for the first time early Wednesday. During the current bull market, the second longest in history, the Dow has more than tripled since March 2009.”

Since Donald Trump’s surprise election victory, the Dow has now climbed by approximately 2150 points. And it took just 64 calendar days for the Dow to go from 19,000 to 20,000.  That is an astounding pace, and financial markets around the rest of the planet are doing very well right now too. In fact, global stocks rose to a 19 month high on Wednesday. So where do we go from here? Well, if Donald Trump wants to see Dow 30,000 during his presidency, then history tells us that he needs to take us to 30 trillion dollars in debt.

Read more …

“The last thing the auto industry needs is more capacity.”

• US Auto Industry In Crisis Amid “Inventory Bubble” (ZH)

Despite record U.S. auto sales last year, the number of vehicles on car-dealer lots remains near record highs, and, as J.D.Power analyst Thomas King warned this week, 2016 ended with an inventory “bubble” that will require less production or more incentives to clear. With near record high inventories of 3.9 million vehicles… U.S. auto inventory finished 2016 at about 66 days supply, up from 60 days a year earlier. Inventory would last 2.23 months at the November sales pace, according to the latest available data from the Census Bureau. The stock-to-sales ratio in 2016 is extremely elevated compared to historical norms…

More problematically, King warns, about one-third of inventory were older model-year vehicles, rather than more typical level of less than a quarter. Of course this massive stockpile hits just as President Trump pressures the auto-industry to onshore more jobs and more production… But as the industry automates, factories don’t create jobs like they used to, said Marina Whitman, a professor of business administration and public policy at the University of Michigan. “The American auto industry last year produced more cars than it ever had before, but they did it with somewhere between one-third and one-half the number of workers that they had decades ago,” said Whitman, who was an adviser to President Richard Nixon and GM’s chief economist from 1978 to 1992. “The last thing the auto industry needs is more capacity,” she said.

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Hilarious to see how much money all these people get from the industry. And insane.

• Trump’s Crusade on Drug Pricing Puts Both Parties on the Spot (BBG)

Donald Trump has a chance to rally his core supporters as well as left-wing Democrats, wrapping himself in the populist flag to take on the politically powerful drug industry. He is vowing to keep a campaign pledge to push legislation allowing Medicare to negotiate prescription drug prices, a practice currently prohibited by law. Proponents say this would reduce drug prices and Medicare costs for the federal government. Medicare pays for about 29% of prescription drugs in the U.S. and would have considerable leverage. Trump would be taking on the leaders of his own party, starting with House Speaker Paul Ryan. Most Republicans have long argued that giving Medicare such power is tantamount to government price-setting, which ideologically they oppose and which they say would stifle innovation and research in the drug industry.

Many of them receive huge campaign contributions from the industry’s sizable political war chest. There are arguments over the merits and effects, but the politics are clear cut. In a Kaiser Foundation poll last autumn, the public, by 82% to 17%, favored allowing the federal government to negotiate lower drug prices. Huge majorities say costly drug prices – in recent years they have risen about four times the rate of inflation – are a major concern. These costs are felt by some of Trump’s strongest supporters, non-college educated whites. And liberals, led by politicians like Bernie Sanders, champion a robust government role to keep drug prices down.

[..] There was an instructive vote in the Senate this month on a closely related issue, allowing the importation of cheaper drugs from Canada. It failed 52 to 46. But it garnered the support of 10 Republicans, including deficit hawks like Rand Paul of Kentucky and Utah’s Mike Lee. However, 13 Democrats, most of them beneficiaries of industry political contributions, voted against the measure. Subsequently, they have gotten a lot of flak from liberal groups, which especially have targeted Cory Booker of New Jersey. He received $49,830 from the industry in the last election. If Trump goes all out on this issue, it will be near impossible for most of these Democrats to side with the industry over a Republican president whom they accuse of representing the interests of the rich. And, knowledgeable Congress watchers say, a number of Republicans, in the face of White House pressure and public opinion, would cave, too.

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This is a bump the entire west must go through.

• Trump Bars Door To Refugees, Visitors From Seven Nations (R.)

President Donald Trump on Friday put a four-month hold on allowing refugees into the United States and temporarily barred travelers from Syria and six other Muslim-majority countries, saying the moves would help protect Americans from terrorist attacks. In the most sweeping use of his presidential powers since taking office a week ago, Trump paused the entry of travelers from Syria and the six other nations for at least 90 days, saying his administration needed time to develop more stringent screening processes for refugees, immigrants and visitors. “I’m establishing new vetting measures to keep radical Islamic terrorists out of the United States of America. Don’t want them here,” Trump said earlier on Friday at the Pentagon. “We only want to admit those into our country who will support our country and love deeply our people,” he said.

The order seeks to prioritize refugees fleeing religious persecution, a move Trump separately said was aimed at helping Christians in Syria. That led some legal experts to question whether the order was constitutional. One group said it would announce a court challenge on Monday. The Council on American-Islamic Relations said the order targets Muslims because of their faith, contravening the U.S. Constitutional right to freedom of religion. “President Trump has cloaked what is a discriminatory ban against nationals of Muslim countries under the banner of national security,” said Greg Chen of the American Immigration Lawyers Association. The bans, though temporary, took effect immediately, causing havoc and confusion for would-be travelers with passports from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen.

Trump has long pledged to take this kind of action, making it a prominent feature of his campaign for the Nov. 8 election, but people who work with Muslim immigrants and refugees were scrambling on Friday night to determine the scope of the order. [..] Trump’s order also suspends the Syrian refugee program until further notice, and will eventually give priority to minority religious groups fleeing persecution. Trump said in an interview with the Christian Broadcasting Network that the exception would help Syrian Christians fleeing the civil war there. Legal experts were divided on whether this order would be constitutional. “If they are thinking about an exception for Christians, in almost any other legal context discriminating in favor of one religion and against another religion could violate the constitution,” said Stephen Legomsky, a former chief counsel at U.S. Citizenship and Immigration Services in the Obama administration.

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But apparently he thinks this can change. Shame he doesn’t say how.

• EU Lacks Leadership to Tackle Global Crises – Czech Minister (BBG)

The EU is unable to work with global superpowers in addressing conflicts and crises because it lacks leadership, Czech Finance Minister Andrej Babis said. “Europe is very slow, very bureaucratic,” Babis said. “The problem is who will sit together at the table” with leaders of the U.S., U.K., Russia “to solve the problem in the Middle East, North Africa, the migration. Europe is always waiting for elections” in countries including Germany and France, he said. The Czech billionaire, whose party leads polls ahead of the fall general elections, has been critical of the bloc his country joined in 2004 and the way it tackled a series of issues, including the migration crisis. He rejected a call from his fellow Czech interior minister to lead separate talks with the U.K. on Brexit, saying the EU needs to stay united in the negotiations. Babis said he was surprised by the announced “hard Brexit,” and urged Britain to activate Article 50 of the EU’s Lisbon Treaty quickly to speed up the negotiations.

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He’s been here before.

• ‘It Looks as if the World Is Preparing for War’ (Gorbachev)

The world today is overwhelmed with problems. Policymakers seem to be confused and at a loss. But no problem is more urgent today than the militarization of politics and the new arms race. Stopping and reversing this ruinous race must be our top priority. The current situation is too dangerous. More troops, tanks and armored personnel carriers are being brought to Europe. NATO and Russian forces and weapons that used to be deployed at a distance are now placed closer to each other, as if to shoot point-blank. While state budgets are struggling to fund people’s essential social needs, military spending is growing. Money is easily found for sophisticated weapons whose destructive power is comparable to that of the weapons of mass destruction; for submarines whose single salvo is capable of devastating half a continent; for missile defense systems that undermine strategic stability.

Politicians and military leaders sound increasingly belligerent and defense doctrines more dangerous. Commentators and TV personalities are joining the bellicose chorus. It all looks as if the world is preparing for war. In the second half of the 1980s, together with the U.S., we launched a process of reducing nuclear weapons and lowering the nuclear threat. By now, as Russia and the U.S. reported to the Non-proliferation Treaty Review Conference, 80% of the nuclear weapons accumulated during the years of the Cold War have been decommissioned and destroyed. No one’s security has been diminished, and the danger of nuclear war starting as a result of technical failure or accident has been reduced. This was made possible, above all, by the awareness of the leaders of major nuclear powers that nuclear war is unacceptable.

I urge the members of the U.N. Security Council — the body that bears primary responsibility for international peace and security — to take the first step. Specifically, I propose that a Security Council meeting at the level of heads of state adopt a resolution stating that nuclear war is unacceptable and must never be fought. I think the initiative to adopt such a resolution should come from Donald Trump and Vladimir Putin — the Presidents of two nations that hold over 90% of the world’s nuclear arsenals and therefore bear a special responsibility.

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Tulsi Gabbard is a Democrat. Can we now please finally have a serious conversation about what the US has done to the Middle East/Northern Africa region? How are we ever going to atone for this if we don’t? Or would we rather continue in denial?

• Congresswoman Returns From Syria With ‘Proof’ Obama Funded ISIS (YNW)

Congresswoman Tulsi Gabbard told CNN that she has proof the Obama administration was funding ISIS and Al-Qaeda.Hawaii Rep. Gabbard went to Syria on a secret fact-finding mission to wade through the lies and propaganda and find out what is really happening on the ground. Immediately on her return CNN booked her for an “exclusive” interview – and Gabbard told them exactly what they didn’t want to hear: she has proof the Obama administration was funding ISIS and Al-Qaeda. Explaining to Jake Tapper that she met people from all walks of life in Aleppo and Damascus, Gabbard said that Syrians “expressed happiness and joy at seeing an American walking their streets.” But they also wanted to know “why is it that the United States, its allies and other countries, are providing support, are providing arms, to terrorist groups like Al-Nusra, Al-Qaeda, ISIS, who are on the ground there, raping, kidnapping, torturing, and killing the Syrian people?

“They asked me why is the United States supporting these terrorist groups who are destroying Syria – when it was Al-Qaeda who attacked the United States on 9/11, not Syria. “I didn’t have an answer for that.“ That was more than Jake Tapper, who was hostile from the beginning of the interview, could handle. His face screwed up, he lashed out, saying, “Obviously the United States government denies providing any sort of help to the terrorist groups you are talking about, they say they provide help for the rebel groups.“ If that was supposed to Tapper’s knockout blow, Gabbard saw it coming a mile away. Without missing a beat, she calmly deconstructed his ideological, and savagely wrong, talking points.

“The reality is, Jake – and I’m glad you bought up that point – every place that I went, every person I spoke to, I asked this question to them. And without hesitation, they said ‘there are no moderate rebels, who are these moderate rebels that people keep speaking of?’ “Regardless of the name of these groups, the strongest fighting force on the ground in Syria is Al-Nusra or Al-Qaeda and ISIS. That is a fact. There are a number of different other groups, all of them are fighting alongside, with or under the command of the strongest group on the ground that is trying to overthrow Assad.”

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We have so much to answer for.

• UN Agency Cuts Food Aid To 1.4 Million Displaced Iraqis (AlJ)

The World Food Programme (WFP) has slashed food rations distributed to 1.4 million displaced Iraqis by 50% because of delays in payments from donor states. The sharp cutbacks come at a time when a growing number of Iraqis flee the Islamic State of Iraq and the Levant (ISIL, also known as ISIS) group. At least 160,000 people have been displaced since October when the Iraqi military, backed by Kurdish forces and Shia militias. launched a military campaign to recapture Mosul from the armed group. WFP spokeswoman Inger Marie Vennize said the UN agency was talking to the United States – its biggest donor, Germany, Japan and others to secure funds to restore full rations.

“We have had to reduce [the rations] as of this month,” she was quoted by the Reuters news agency as saying. “The 50% cuts in monthly rations affect over 1.4 million people across Iraq,” she added. The effect is already being felt in camps east of Mosul, ISIL’s last major bastion in northern Iraq. “They are giving an entire family the food supply of one person … we want to go back home,” said Omar Shukri Mahmoud at the Hassan Sham camp. Safa Shaker, who fled with her extended family, said: “We are a big family and this ration is not going to be enough. “We escaped from [ISIL] in order to have a chance to live and now they have cut the aid. How are we supposed to live?” she added.

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I wouldn’t shoot from the hip as much as PCR does, but in essence he’s right. Old media, CNN, WaPo, NYT, have wasted so much of their credibility. And they’re not taking any step back from that. it’s till all just echo-chambering.

• The Media Is Now The Political Opposition (Paul Craig Roberts)

Stephen Bannon is correct that the US media—indeed, the entire Western print and TV media—is nothing but a propaganda machine for the ruling elite. The presstitutes are devoid of integrity, moral conscience, and respect for truth. Who else but the despicable Western media justified the enormous war crimes committed against millions of peoples by the Clinton, Bush, and Obama regimes in nine countries—Afghanistan, Iraq, Libya, Pakistan, Yemen, Syria, Somalia, Palestine, and the Russian areas of Ukraine? Who else but the despicable Western media justified the domestic police states that have been erected in the Western world in the name of the “war on terror”? Along with the war criminals that comprised the Clinton, Bush, and Obama regimes, the Western media should be tried for their complicity in the massive crimes against humanity.

The Western media’s effort to sustain the high level of tension between the West and Russia is a danger to all mankind, a direct threat to life on earth. Gorbachev’s warnings are correct. Yet presstitutes declare that if Trump lifts the sanctions it proves that Trump is a Russian agent. It is paradoxical that the Democrats and the liberal-progressive-left are mobilizing the anti-war movement to oppose Trump’s anti-war policy! By refusing to acknowledge and to apologize for its lies, euphemistically called “fake news,” the Western media has failed humanity in a number of other ways. For example, by consciously telling lies, the media has legitimized the suborning of perjury and false testimony used to convict innocent defendants in America’s “justice” system, which has about the same relation to justice as genocide has to mercy.

If the media can lie about world events, police and prosecutors can lie about crimes. By taking the role of the political opposition to Trump, the media has discredited itself as an honest critic on topics where Trump needs criticism, such as the environment and his tolerance of oppressive methods used by police. The presstitutes have ended all chance of improving Trump’s performance with reports and criticism. Trump needs moderating on the environment, on the police, and on the war on terror. Trump needs to understand that “the Muslim threat” is a hoax created by the neoconservatives and the military/security complex with the complicity of the presstitutes to serve the hegemony agenda and the budget and power of the CIA, Pentagon, and military industries.

If the US stops bombing and slaughtering Muslims and training and equiping forces to overthrow non-compliant Muslim governments such as Syria, Iraq, and Libya, “the Muslim threat” will disappear. Maybe Trump will add to his agenda breaking into hundreds of pieces the six mega-media companies that own 90% of the US media and selling the pieces to seperate independent owners who have no connection to the ruling elites. Then America would again have a media that can constrain the government with truth rather than use lies to act for or against the government.

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Russia knows.

• Lifting of Sanctions Could Be Costly To Russia (Paul Craig Roberts)

Tweets on social media say Trump is about to lift the sanctions placed on Russia by the Obama regime. Being a showman, Trump would want to make this announcement himself, not have it made for him by someone outside his administration. Nevertheless, the social media tweets are a good guess. Reports are that Trump and Putin will speak tomorrow. The conversation cannot avoid the issue of sanctions. Trump during his first week has moved rapidly with his agenda. He is unlikely to delay lifting the sanctions. Moreover, there is no cost to Trump of lifting them. The sanctions have no support in the US and Western business communities. The only constituency for the sanctions were the neoconservatives who are not included in the Trump administration.

Victoria Nuland, Susan Rice, Samantha Power are gone along with much of the State Department. So there is nothing in Trump’s way. President Putin is correct that the sanctions helped Russia by pushing Russia to be more economically independent and by pushing Russia toward developing economic relationships with Asia. Lifting the sanctions could actually hurt Russia by integrating Russia into the West. The Russian government should take note that the only sovereign country in the West is the United States. All the rest are US vassals. Could Russia escape the same fate? Anyone integrated into the West is subject to Washington’s pressure. The problem with the sanctions is that they are an insult to Russia. The sanctions are based on lies that the Obama regime told.

The real purpose of the sanctions was not economic. The purpose was to embarrass Russia as an outlaw state and to isolate the outlaw. Trump cannot normalize relations with Russia if he lets this insult stand. Therefore, the social media tweets are likely to be correct that Trump is about to lift the sanctions. This will be good for US-Russian relations, but perhaps not so good for the Russian economy and Russian sovereignty. The Western capitalists would love to get Russia deep in debt and to buy up Russia’s industries and raw materials. The sanctions were a partial protection against foreign influence over the Russian economy, and so the removal of the sanctions is like removing a shield as well as removing an insult.

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I like measuring well-being through grain prices, but at the same time I don’t think basic needs should be subject to the same ‘market forces’ as cellphones etc. As growth and globalism vanish, we should all produce out own basics.

• Want To Know How Society’s Doing? Forget GDP – Try These Alternatives (G.)

Here are the week’s leading indicators. The Dow Jones industrial average topped 20,000 points for the first time. British GDP grew 0.6% in the final quarter of 2016. The FTSE 100 and Germany’s DAX 30 persisted close to record highs, while US GDP softened slightly. Bored yet? I am. As a former financial journalist, I’m well acquainted with the merry-go-round of indicators that blip in and out of our lives like digital dopamine, telling us how well we’re doing. As a human being, I’m increasingly alarmed that these are just irrelevant numbers that have little or no bearing on how well we are really doing. [..] I’d rather suggest a series of other metrics that give a clearer indication of where humanity is at. Perhaps these are the key performance indicators we should hardwire into our reporting calendar:

Inequality ratios One of the lessons of the 20th century was that inequality breeds revolt and revolutions never end well. One of the lessons of the 21st century is that people seem to be determined not to learn the lessons of the 20th century. The Gini coefficient is a crude measure of how unequal societies are becoming. Some economists have been toying with another measure, the Palma ratio, which is better at discerning how much richer the richest cohort are getting, compared with the poorest. Both tell us much about our direction of travel.

Grain prices If we must focus on financial instruments, edible commodities are surely more interesting than stock and bond prices. You can’t eat a three-month Treasury bill, after all. In 2007/08, a wave of riots swept the developing world as the cost of basic foodstuffs soared. Governments fell. A dotted line joined that manifestation of unrest with the Arab spring four years later. Food matters. We routinely write that as many as a billion people on the planet are hungry, malnourished. That’s far more than the number with Dow Jones tracker funds.

Carbon dioxide, parts per million, in the atmosphere The most scary dataset of all. It goes up every year. And so do global temperatures. If this carries on for another couple of decades, people won’t be inspecting their portfolios – they’ll be foraging in the woods. Has anyone read The Road?

Antidepressant prescriptions A veritable bellwether for so much – from the wretched state we’re in psychologically to the inadequacies of our healthcare systems. Prescriptions have doubled in England in the past decade. An interest to declare: I take them, and believe they work for me. But I also firmly believe they are prescribed far too readily, by overstretched GPs who have only six minutes to speak to patients and little recourse to anything other than pills. Personally, I’d be willing to shave a couple of points off GDP in return for a more comprehensive programme to address this 21st-century epidemic.

Homelessness Not just in the UK, where it’s risen for six years in a row, but in California, Paris, Moscow. Surely, one of the first questions a newly arrived alien might ask upon landing in Britain would be “why do so many of you earthlings live outside?”, and not “how are my BT shares doing?”

Dependency ratio Admittedly, this is not a thrilling one to monitor as it doesn’t move much. But it is moving – and in the wrong direction for lots of developed countries. The dependency ratio is the number of working-age people compared with the number of children and those over retirement age. According to the Resolution foundation, there are currently seven dependants for every 10 working-age Britons, but this will increase to eight in the 2020s and nine by 2050.

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It’s not an abortion fund, it’s much wider than that: “sexual reproductive rights, including abortion”.

• Canada May Contribute To Dutch-Led International Abortion Fund (AFP)

Canada is considering contributing to a Dutch-led international fund to support abortion services in developing countries, set up in response to Donald Trump’s order to halt financing of NGOs that support the practice. A spokesman for Canada’s international development minister, Marie-Claude Bibeau, told AFP the minister had spoken with her Dutch counterpart about the fund, and was considering donating an unspecified sum to it or a similar measure that would support “sexual reproductive rights, including abortion” abroad. “Sexual health and reproductive rights will be at the heart of Canada’s new international assistance policy,” spokesman Louis Belanger said in an email.

“We will continue to explore opportunities to work together to advance women’s empowerment by expanding access to sexual and reproductive health services including abortion,” he said. Canada is set to unveil its new foreign aid strategy in the coming weeks. A decision on the fund would either be included or follow soon after that announcement. Trump on Monday signed a decree barring US government funding for foreign NGOs that support abortion. The restrictions prohibit them from also providing abortion information, counseling or referrals, or engaging in advocacy to promote abortion. Lilianne Ploumen, the Dutch minister for foreign trade and development cooperation, said when she announced the new fund that the Netherlands must do everything in its power to offset the US ban so that “women can remain in control of their own bodies”.

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Broken record.

• IMF Says Greece Debt ‘Explosive’ In Long Term (AFP)

Greece’s government debt remains “highly unsustainable,” and will be “explosive” in the longer run, requiring a more credible debt relief plan from Europe, the International Monetary Fund said in a report obtained by AFP. Addressing the debt burden of the beleaguered nation will require “significant debt relief” from European institutions, including dramatically extending the grace periods and maturities of the loans, the IMF said in it’s annual report on the Greek economy, which includes a debt sustainability analysis. The IMF board is due to discuss the report February 6. Even with full implementation of the economic reforms the country has agreed to, “Greece’s debt is highly unsustainable” and “will become explosive in the long run,” as the government will have to replace highly-subsidized official financing with market financing at much higher rates, the IMF said.

The pessimistic report, though in keeping with the fund’s repeated statements on the topic, makes it more unlikely the IMF stays on the sidelines of any new European loan deal for Greece. Months of bickering have delayed progress of Greece’s 86-billion-euro ($92.4 billion) bailout program agreed in 2015 and officials increasingly are worried that elections this year in the Netherlands, France and Germany could further poison any progress. The IMF report says that in order to “provide more credibility to the debt strategy for Greece, further specificity will be needed regarding the type and scope of debt relief to be expected” from Europe. This must include “ambitious extensions of grace and maturity periods, a full deferral of interest on European loans, as well as a locking in of the interest rate on a significant amount of European loans … to put debt on a sustained downward path.”

The IMF calls for extending the grace period until 2040, during which time no debt payments would be required, and extending the maturity of the loans to 30 years in some cases to 2070, dramatically longer than what Europe agreed to in 2012. At the heart of the dispute over the new loan program is a demand by the eurozone that Greece deliver a primary balance, or surplus on public spending before debt repayments, of 3.5% of GDP, far in excess of the 1.5% the IMF says is feasible. The target is very high – and most countries do not even come close – but Germany and other eurozone hardliners are insistent that Greece reach it for several years after its current program concludes in 2018. Eurogroup head Jeroen Dijsselbloem insisted on Thursday that the IMF remained committed to the Greek bailout program, despite repeated calls by the IMF for more realistic targets and more debt relief.

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1) The IMF is to a large extent playing a double role, and is comfortable in that role.

2) Yes, ‘pensions-to-GDP’ is very high in Greece, but that is only because other benefits simply don’t exist. Pensions can only be cut further if an unemployment benefits program is initiated. Everyone involved knows this, it’s just that some (IMF) prefer to act as if they don’t. Because such a program would cost money.

3) The demise of Greece as a nation is as much the shame of the IMF as that of Germany and the EU. The consequences of the demise will be too.

• Greece: The Game Is On Again (Coppola)

In 2015, Yanis Varoufakis tried to renegotiate the terms of the Greek bailout. He expected his peers in the Eurogroup to treat him as an equal. But they were expecting a repentant supplicant. Greece had sinned, it was receiving just punishment for its sins, and who did Varoufakis think he was, coming along and telling them that the treatment Greece was receiving was unjust and counterproductive? This misunderstanding made a bad situation far worse. It led eventually to Greece’s near-expulsion from the Euro and the breaking of Alexis Tsipras. And, of course, to Varoufakis’s resignation. Now it is the IMF’s turn to misread the psychological framing. This is not a four-handed poker game, it is a duel to the death. And it is not really about Greece. The surface conflict is between Greece and its creditors, but the underlying power struggle is between the German-led creditor bloc and the European Commission.

The eventual outcome will determine the shape of the Eurozone, and indeed the whole EU, in the future. Neither the Greek government nor the European Commission want the IMF involved. The only reason the IMF is still involved is that the creditors want it to be. And the reason the creditors want the IMF involved is that they do not trust the Commission to deliver the harsh penance they have prescribed for Greece. The IMF has been cast in the role of creditors’ second. Unfortunately, this is not how the IMF sees itself. It is still trying to act as a neutral broker, crafting a deal acceptable to both sides. It has repeatedly called for substantial debt relief, and has also demanded deep reforms to the Greek economy. But because it is no longer perceived as neutral, its call for debt relief is ignored while its reform initiative is inevitably seen as a disguised demand for more austerity.

[..] Greece’s pension expenditure as a proportion of GDP is the highest in the EU, even though payments are only about 70% of the EU average. That’s the problem with quoting fixed payments like pensions (and debt service) in relation to GDP: as GDP falls, the cost rises. The Greek economy is now about 27% smaller than it was in 2008, and still shrinking. The IMF’s case is that pension cost as a proportion of GDP is now unsustainable, and further, that the creditors are not going to agree to debt relief while pension cost remains so high. It is probably right on both counts. But once again, what really matters is the psychological framing.

[..] the IMF’s position is untenable. Since it can no longer credibly claim to be neutral, it must explicitly back one side or the other. If it backs neither, it will de facto be seen as supporting the creditors – and that is not consistent with its international mandate, since it effectively means giving up its quest for substantial debt relief (since the creditors have no desire to agree to this). But coming out in support of Greece probably means abandoning its long-standing commitment to ensuring fiscal sustainability through pension and tax reforms. It appears an impossible choice. If the IMF can concede neither of these, then it must do what it should have done long ago. Walk.

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Debt Rattle January 24 2017

Jan 242017
 
 January 24, 2017  Posted by at 10:09 am Finance Tagged with: , , , , , , , , , ,  8 Responses »


Jack Delano Cars being precooled at the ice plant, San Bernardino, CA 1943

• UK Supreme Court Rules Parliament Must Have Vote On Triggering Article 50 (G.)
• Global Markets Turn Back On Euro As Economic Woes Reinforce Dollar (Tel.)
• Trump Withdraws From TPP Amid Flurry Of Orders (G.)
• Beppe Grillo Agrees With ‘Moderate’ Trump, Blasts EU ‘Total Failure’ (Exp.)
• Trump is the start of Global Regime Change (Artemis)
• Protest In The Era Of Trump (Krieger)
• The White House Can’t Easily Repair Its Relationship With The Media (Atl.)
• Congressman Introduces Bill To Withdraw The US From The United Nations (MU)
• He Is Risen… But For How Long? (Jim Kunstler)
• Fed Debate Over $4.5 Trillion Balance Sheet Looms In 2017 (BBG)
• Greek Island Mayors Ask PM To Transfer Refugees To Mainland (Kath.)
• Thousands Of Refugee Children Sleeping Rough In Sub-Zero Serbia (G.)

 

 

A country well on its way to irrelevance.

• UK Supreme Court Rules Parliament Must Have Vote On Triggering Article 50 (G.)

Parliament’s approval is needed before the government can trigger article 50 and formally initiate the UK’s departure from the European Union, the supreme court has ruled. The government’s executive powers, inherited through the royal prerogative, are not sufficient to uproot citizens’ rights gained through parliamentary legislation such as the 1972 European Communities Act, the justices have declared. The justices ruled against the government by a majority of eight to three. The eagerly awaited decision by the largest panel of judges ever assembled in Britain’s highest court routes the protracted Brexit process through parliament, handing over to MPs and peers the authority to sanction the UK’s withdrawal. A summary of the decision, which has far-reaching constitutional implications, was delivered by the president of the supreme court, Lord Neuberger of Abbotsbury.

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So much for the overvalued dollar.

• Global Markets Turn Back On Euro As Economic Woes Reinforce Dollar (Tel.)

Banks are using the euro less and less in international transactions, with financiers preferring to use dollars – indicating the euro’s declining importance in the global economy. Economists believe sustained political risk in the eurozone, fears that the currency area could fall apart, and the continuing hangover from the sovereign debt crisis have all contributed to the currency’s relative decline. Figures from the Bank of International Settlements show that the euro is being used less in international banking, while the US dollar continues to grow in importance. At the end of September, the BIS figures show, outstanding cross-border business in US dollars amounted to $13.9 trillion (£11.1 trillion), a rise of almost $60bn over previous three months.

By contrast, outstanding cross-border claims in euros fell by almost $160bn to a total of $8.1 trillion. Overall claims globally amount to $28.2 trillion, meaning the US dollar accounts for almost 50pc of the total. The euro is next with 29pc, while the yen is in third place – its $1.7 trillion of claims is 6pc of the total. Sterling is fourth at $1.3 trillion, or a 5pc share. By contrast, in 2012, the euro was a bigger player, with around $11 trillion of cross-border claims, but has faded sharply since then. Around half of the decline in recent years is due to the euro’s fall in value relative to the dollar, making the euro transactions appear smaller when they are compared in a common currency. But the other half is made up in large part by the eurozone’s own problems.

The most fundamental is the fear that the currency area will be stuck in permanent low growth, making investments risky. With the rise of anti-EU politicians such as Marine Le Pen in France there is also the worry that, in extreme circumstances, the euro could break up. “Partly as a result of the sovereign debt crisis, we know from investors outside Europe that they have a lot of question marks about the viability of the eurozone,” said David Owen, chief European economist at Jefferies. He was joined by Alastair Winter at Daniel Stewart, who said: “It may not be politically correct but there is a case that the euro may not survive much beyond this year. The dollar is popular because it offers a standard for value, a bit like the old gold standard. All of the other major currencies present problems.”

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Why not so the same with TISA etc. at the same time?

• Trump Withdraws From TPP Amid Flurry Of Orders (G.)

Donald Trump has begun his effort to dismantle Barack Obama’s legacy, formally scrapping a flagship trade deal with 11 countries in the Pacific rim. The new president also signed executive orders to ban funding for international groups that provide abortions, and placing a hiring freeze on non-military federal workers. Trump’s decision not to join the Trans-Pacific Partnership (TPP) came as little surprise. During his election campaign he railed against international trade deals, blaming them for job losses and focusing anger in the industrial heartland. Obama had argued that this deal would provide an effective counterweight to China in the region. “Everyone knows what that means, right?” Trump said at Monday’s signing ceremony in the White House. “We’ve been talking about this for a long time. It’s a great thing for the American worker.”

The TPP was never ratified by the Republican-controlled Congress, but several Asian leaders had invested substantial political capital in it. Their countries represent roughly 13.5% of the global economy, according to the World Bank. Trump’s election opponent, the Democrat Hillary Clinton, had also spoken out against the TPP. The move also intensified speculation over the future of the 17-year-old North American Free Trade Agreement (Nafta). There were reports that Trump would sign an executive order on Monday to begin renegotiating terms with Canada and Mexico. He did move to reinstate a ban on providing federal money to international non-government organizations that perform abortions or provide information about them. The policy also prohibits taxpayer funding for groups that lobby to legalize abortion or promote it as a family planning method.

Republican administrations have tended to institute such a ban while Democrats have reversed it, most recently President Obama in 2009. Trump signed it one day after the anniversary of the supreme court’s 1973 Roe v Wade decision that legalized abortion in the US. Activists fear that the precedent is now under threat. The administration was criticized after footage appeared to show only one woman in the room as this executive order, along with the other two, were signed. Only four of Trump’s cabinet picks are women.

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Beppe knows the importance for Italy of ‘protectionism’. It’s the only way to keep Italian (small) business alive.

• Beppe Grillo Agrees With ‘Moderate’ Trump, Blasts EU ‘Total Failure’ (Exp.)

Italy’s populist Five Star Movement leader Beppe Grillo has welcomed Donald Trump’s extraordinary rise to power and dismissed the European Union (EU) as a total failure. Mr Grillo described the controversial new US President as a “moderate whose image has been distorted”. He declared he was “very optimistic” about the Trump presidency which he said would reignite the US economy and stop it from playing world police enforcer. In an interview with French magazine Journal du Dimanche, the former stand-up comic expressed his fundamental agreement with Mr Trump’s populist presidential platform. He said: “I read one of his books in which he says some really sensible things on the need, for example, to bring economic activity back to the United States.

“He said what he had to say about Chinese protectionism as well.” Mr Grillo said Mr Trump would use fiscal policy to entice large companies to keep their business in the US instead of taking it south of the border to Mexico and that he would also “relaunch small and medium enterprises”. He said: “Mr Trump will also recall the US Army stationed at the four corners of the world and I agree with all this.” The Italian nationalist accused the media of twisting the “moderate message” of Mr Trump who then “simply adapted to what was being said about him”. He said: “We consequently have a deformed perception of him.” Looking closer to home, M Grillo described the EU as “a total failure” that needed to be re-imagined.

He said: “It is an enormous apparatus, with two parliaments, in Brussels and Strasbourg, to please the French. “Europe was born with Jean Monnet but then was progressively transformed. “I liked the word ‘community’ but then it was called union for the currency, which was to be common and not unique.” He continued: “I am in favour of a different Europe, where each state can adopt its fiscal and monetary system. “I want the Eurobond, a 20% devalued euro for southern European countries, protecting our products against those arriving from abroad, and a revision of the 3% deficit budgetary rule. “I no longer feel the spirit of Europe.”

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From a much longer article on volatility trading.

• Trump is the start of Global Regime Change (Artemis)

Trump is the first “populist” US president since Andrew Jackson in 1829 and takes office with a mandate to reverse the course of globalization. Denial is not a strategy and it’s time to face the reality that is coming… the good, the bad, and the ugly. First off, stop underestimating this man – you don’t become leader of the free world through stupidity and luck. The rants and twitter storms are part of a strategy of media control and distraction. Trump knows that if you can’t win, then you change the rules of the game – this is what he has already done with American politics – and what he is about to do to the entire Post-Bretton Woods World Order. If you really want to know a person, watch what they do, and not what they say… or what they tweet. Trump’s business career was largely comprised of three core strategies 1) Leverage 2) Restructure 3) Brand… in that order.

Throughout the late 1970s and 1980s Trump rode a generational decline in interest rates and debt binge to purchase a range of high profile real estate projects including the Grand Hyatt (1978). Trump Tower (1983), the Plaza Hotel (1988) and the Taj Mahal (1988). In the 1990s he went through a total of 6 bankruptcies due to over-leveraged hotel and casino businesses in Atlantic City and New York. In the 2000s he pivoted to move away from debt-driven property investments to building a global brand through the “Apprentice” TV show. Trump will run the country as he ran his businesses…. He will lever, and lever, and lever, and lever… and lever… and then restructure his way to success, or whatever success is defined as by the broadest measure of popularity at any given time. Trumponomics, if it delivers, will be a supply side free for all: massive tax cuts, deficit spending to create jobs, financial and energy deregulation, business creation, and trade protectionism all driving inflation.

More importantly, Trump sees bankruptcy as a tool and not an obligation and will have no problem pushing the US to the limits of debt expansion. “I do play with bankruptcy laws, they’re very good to me!” he once said. Trump may be willing to bring the US to the brink of default if it produces middle class jobs and popularity, and what he understands is that nobody can stop him, not Europe, not China. In a Trump mindset, the US national debt and deficits, or prior commitments (e.g. NATO), are not to be taken seriously as long as we hold all the cards… namely the biggest military in the world, energy independence, world reserve currency, and the world’s largest buyer of consumer goods. He is dangerously right, these geo-political solvency tools are far more powerful than the bankruptcy laws he used to protect his casino assets… the US is just another, bigger, badder, more bankrupt casino with air craft carriers.

The media doesn’t seem to understand that Trump’s overtures to Russia and Taiwan are not diplomatic gaffes but rather forms of economic leverage. He is reminding Europe that NATO is nothing without the US, and reminding China that creditor nations lose trade wars. As a negotiating tactic, it may work … or may drive the world to a hot war… or both. Like it or not – the old rules are gone. Diplomacy has been replaced by Twitter, and the unexpected is now to be expected. Trump’s world is a zero-sum game – and this means a shock doctrine of US centric re-positioning in trade in a dramatic change from the post-World War II order. The US has the largest military, the best geography, best technology innovation, the largest economy, best demographics in the developed world, and shale-driven energy independence to boot.

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A discussion that makes a lot of sense. What is being protested? If this is unclear, isn’t that perhaps counterproductive? Can you effectively protest some of Trump’s measures after having demonized him in a wide and general fashion for a long time? Shouldn’t there be millions in the streets right NOW to protest the medieval Golden Gag Rule? Where are they?

• Protest In The Era Of Trump (Krieger)

The best way to control the opposition is to lead it.

[..] I’d say the most common sign seems to have been some derivative of “Women’s Rights = Human Rights.” I unquestionably agree with this statement, which begs the question, who doesn’t? Well many of the barbaric, feudalist monarchies in the Middle East for starters. Saudi Arabia being a prime example, a place where women are not permitted to drive. Fortunately for them, their money is still green and the Clinton Foundation took plenty of it (between $10 million and $25 million to be exact). Democrats protested that by rigging the primary for her. I didn’t personally attend any of the protests, so I asked my followers on Twitter who did attend to reach out to me and tell me about what they saw. I received lengthy responses from three people. One was a Gary Johnson voter, one a Hillary voter and one didn’t vote at all.

They all pretty much confirmed what you could deduct from the signs. It was a message of “women power,” seemingly focused on women’s rights, specifically abortion and contraception. This brings me to another observation, which will serve as a segue to the final thrust of this article. It appears the emotional driver of the protest was two fold — a serious concern that certain women’s rights will be rolled back, and a form of catharsis for people still reeling from the election loss. This is interesting, because the focal point appears to be not just driven by identify politics, but on preserving already existing rights. Ok, fine, but what about all the ills currently at play? The destruction of the middle class, the surveillance state, the fact that Wall Street owns every single administration no matter who wins. What about the wars and the rapidly metastasizing military-industrial-intelligence complex.

These are things that are currently happening, and have been getting worse under both Republican and Democratic administrations. Does it make sense for all this energy to be focused on a potential threat, as opposed to all of the many ongoing unethical, destructive aspects of American life in 2017? Which brings us to the most important point of this entire article. I don’t want to be too judgmental here. While much of the messaging from the Women’s March seems to have been pretty unserious and divorced from the reality of the many serious issues plaguing the nation, I want to see a silver lining here. I think there’s little doubt that Trump’s election resulted in a certain percentage of the population finally waking up to how much trouble this country is in.

The problem is that many of these people see Trump as the problem to be eliminated, as opposed to the symptom of a sick, destructive society that he actually is. This is where the entire “resistance” can be easily co-opted by the DNC and the rapidly emerging neocon/neoliberal alliance rooted in identity politics, which poses no actual threat to the people actually in power. In this sense, all of this potentially productive energy could tragically be redirected into simply bringing back the same Democratic types that were forcefully rejected during the 2016 election.

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The Trump White House couldn’t care less. “The Media” means the Old Media, and they get that.

• The White House Can’t Easily Repair Its Relationship With The Media (Atl.)

After harshly condemning the media over the weekend for its coverage of President Donald Trump’s inauguration, White House Press Secretary Sean Spicer struck a less combative tone during a press conference on Monday. But he nevertheless continued to argue that the media is trying to undermine the president, and stood by a debunked statement that the inauguration drew the “largest audience” of all time. “I believe we have to be honest with the American people,” Spicer said at the briefing, responding to a reporter’s question about his commitment to truth-telling. He added: “I’m going to come out here and tell you the facts as I know them, and if we make a mistake I’ll do our best to correct it.”

Later, however, he lamented that there is a “constant theme to undercut the enormous support” he said Trump has. “There’s an overall frustration when you turn on the television over and over again and get told that there’s this narrative.” The press secretary’s pledge to tell the truth may indicate that the administration hopes to improve its relationship with the media, or at least the appearance of it, following criticism and mockery of Spicer’s hostile interaction with reporters over the weekend. At the same time, his insistence that the media treats Trump with a double standard, and his complaints that the media has created an anti-Trump narrative, highlights how difficult it will be to repair the relationship between the administration and the media.

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Shake the cage.

• Congressman Introduces Bill To Withdraw The US From The United Nations (MU)

A new bill has been introduced which would allow the United States to withdraw from the United Nations, and is now beginning to turns heads.

Representative Mike Rogers from Alabama introduced H.R. 193 American Sovereignty Act of 2017 in early January but is just now getting media exposure. The full bill can be seen here on congress.gov. The bill requires: (1) the President to terminate U.S. membership in the United Nations (U.N.), including any organ, specialized agency, commission, or other formally affiliated body; and (2) closure of the U.S. Mission to the United Nations.

The bill prohibits: (1) the authorization of funds for the U.S. assessed or voluntary contribution to the U.N., (2) the authorization of funds for any U.S. contribution to any U.N. military or peacekeeping operation, (3) the expenditure of funds to support the participation of U.S. Armed Forces as part of any U.N. military or peacekeeping operation, (4) U.S. Armed Forces from serving under U.N. command, and (5) diplomatic immunity for U.N. officers or employees.

Clearly, many people would be in favor of such a move and many would oppose it. Many who would support the move believe that the United Nations Agenda 30 is a blueprint for a unipolar world order with a destructive agenda, as Zerohedge reported last year. Regardless of one’s beliefs or opinions on the UN being a front for  a new world order, this bill is a direct and bold move against the elite’s plans. For any nation to reclaim true sovereignty from the United Nations is setting a powerful example for the rest of the world. It sends a message that a country does not need a global governing body, but instead can run itself without global oversight.

Essentially, if the U.S. reclaimed sovereignty from the United Nations, it would be the equivalent of what Britain did by reclaiming it’s sovereignty from the European Union…times 10. Perhaps the biggest revelations to come from such news would be the eventual exposure of the level of theft, deception and criminal activity done by the registered corporation known as The United Nations (yes it is a registered corporation).

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“..the ruins of industry stand like tombstones on the landscape.”

• He Is Risen… But For How Long? (Jim Kunstler)

Returning to the first forty-eight hours of the new regime, first the ceremony itself: there was, to my mind, the disturbing sight of Donald Trump, deep in the Capitol in the grim runway leading out onto the inaugural dais. He lumbered along, so conspicuously alone between the praetorian ranks front and back, overcoat open, that long red slash of necktie dangling ominously, with a mad gleam in his eyes like an old bull being led out to a sacrificial altar. His speech to the multitudes was not exactly what had once passed for presidential oratory. It was not an “address.” It was blunt, direct, unadorned, and simple, a warning to the assembled luminaries meant to prepare them for disempowerment. Surely it was received by many as a threat.

Indeed an awful lot of official behavior has to change if this country expects to carry on as a civilized polity, and Trump’s plain statement was at face value consistent with that idea. But the disassembly of such a vast matrix of rackets is unlikely to be managed without generating a lot of dangerous friction. Such a tall order would require, at least, some finesse. Virtually all the powers of the Deep State are arrayed against him, and he can’t resist taunting them, a dangerous game. Despite the show of an orderly transition, a state of war exists between them. Anyway, given Trump’s cabinet appointments, his “swamp draining” campaign looks like one set of rackets is due to be replaced by a new and perhaps worse set.

Trump was correct that the ruins of industry stand like tombstones on the landscape. The reality may be that an industrial economy is a one-shot deal. When it’s gone, it’s over. Even assuming the money exists to rebuild the factories of the 20th century, how would things be produced in them? By robotics or by brawny men paid $15-an-hour? If it’s robotics, who will the customers be? If it’s low-wage workers, how are they going to pay for the cars and washing machines? If the brawny men are paid $40 an hour, how would we sell our cars and washing machines in foreign markets that pay their workers the equivalent of $1.50 an hour. How can American industry stay afloat with no export market? If we don’t let foreign products into the US, how will Americans buy cars that are far more costly to make here than the products we’ve been getting? There’s no indication that Trump and his people have thought through any of this.

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Eric Rosengren, stop it, you’re killing me: “If you think the economy is growing more rapidly then you want..”

• Fed Debate Over $4.5 Trillion Balance Sheet Looms In 2017 (BBG)

It’s time to talk about the balance sheet. Eight years after the Federal Reserve launched the first of three controversial bond-buying campaigns to help save the U.S. economy, its holdings are stuck at $4.5 trillion, and the question of when to let them shrink is beginning to simmer. Several policy makers have pushed publicly to get the debate started. How the discussion plays out could have big implications for the pace of future interest-rate hikes and for the dollar. “They should start framing this for the market,” said Michael Gapen, chief U.S. economist at Barclays Plc. Investors need to hear what the “balance of policy” will be between the balance sheet and the central bank’s main tool, the federal funds rate, he said.

The sheer weight of the balance sheet helps hold down long-term U.S. borrowing costs, which is why the Fed bought bonds in the first place. If officials allow holdings to mature without continuing their current practice of reinvesting the principal, they could push yields higher by reducing demand in the bond market. The topic has shot to renewed prominence as the outlook for the U.S. economy has brightened. The Fed has raised rates twice in the last 13 months and penciled in three quarter-point moves this year. Moreover, newly-inaugurated President Donald Trump has put expansionary fiscal policy on the horizon. If fiscal stimulus begins to overheat the economy, the Fed might tighten policy more sharply. St. Louis Fed President James Bullard said he’d prefer to use the balance sheet to do some of that lifting, echoing remarks by his Boston colleague Eric Rosengren.

“If you think the economy is growing more rapidly then you want, you can either continue to raise short-term rates, or you can also do balance sheet in conjunction with that,” Rosengren said in a Jan. 9 interview. At the very least, he said, the Fed should be talking about the issue soon. San Francisco Fed President John Williams, Atlanta’s Dennis Lockhart, Philadelphia’s Patrick Harker and Dallas chief Robert Kaplan have all agreed. None of them has expressed urgency, and the topic may not be on the agenda when the Federal Open Market Committee convenes again on Jan. 31. But each knows it can take the FOMC several meetings to make big decisions, and they are likely eyeing where rates will be a year from now. Rosengren is thought by Fed watchers to favor four hikes this year. “I don’t think it’s something they’ll do in 2017,” said Mark Zandi at Moody’s. “My guess is they view this as a 2018 project.”

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It’s not in Tsipras’ hands. The EU demands the refugees stay on the islands so they cannot move further north. The EU also makes sure conditions on the islands are miserable with the idea that this keeps others from coming to Europe. And thirdly, they claim moving refugees to the mainland would violate the treaty with Turkey.

• Greek Island Mayors Ask PM To Transfer Refugees To Mainland (Kath.)

The mayors of Lesvos, Chios, Samos, Kos and Leros on Monday jointly presented their demands for measures to ease severe overcrowding at migrant reception centers on their islands during a meeting in Athens with Prime Minister Alexis Tsipras. According to government sources, the meeting was held in a cordial climate and both sides agreed it remained imperative that an agreement between Ankara and the EU to curb human smuggling across the Aegean must not be allowed to collapse. However, though the sources described the mayors’ demands as “logical,” it remained unclear what action, if any, the government plans to respond with. In the meeting with Tsipras, which was also attended by senior officials of the Central Union of Municipalities and Communities of Greece (KEDKE), the mayors emphasized that the situation on the islands was very tense and required immediate action.

They called for the transfer of hundreds of migrants to facilities on the Greek mainland, the improvement of the asylum process so that migrants can leave islands without delay, and measures to boost local economies which have been hit hard by the refugee crisis on top of the country’s financial crisis. Separately, in comments to the News247.gr website, Migration Minister Yiannis Mouzalas remarked that the mass transfer of migrants to the Greek mainland would lead the EU-Turkey deal “to collapse.” He added that while in 2015 refugees accounted for 70 to 80% of arrivals, now 70% of arrivals are economic migrants. According to a report by the Athens-Macedonian News Agency, the interior and defense ministers of several Balkan and Central European countries are planning to meet in Vienna on February 8 to discuss ways of bolstering their borders against illegal immigration.

Read more …

Europe’s shameful disgrace deepens and widens.

• Thousands Of Refugee Children Sleeping Rough In Sub-Zero Serbia (G.)

Hundreds of new refugees and migrants, many of them children, are arriving in Serbia every day despite the prospect of sleeping rough in sub-zero temperatures and reports of violent treatment, Save the Children has said, as it calls on the EU to do more to help. The EU-Turkey deal, which was supposed to stem the flow of refugees arriving in Europe by boat, has meant many refugees are being forced to take a deadlier land route to cross the Balkans, with children as young as eight experiencing harsh weather conditions, dog bites and violent treatment by police and smugglers. Although Serbia is not part of the European Union, it borders Hungary, Bulgaria and Romania, and has become a transit point for those hoping to reach western Europe. About 6,000 people are stuck in Serbia not able to cross the border into Hungary, which is the direction of travel most would like to take.

Serbia does have asylum centres but when space becomes available, many migrants and refugees are too anxious to go to them, fearing that they will be detained indefinitely or deported illegally. Many of them are turning to smugglers for help instead, charities claim. In the past two months, Save the Children estimates that 1,600 cases of illegal push-backs from Hungary and Croatia have been alleged by refugees and migrants, who have been forced – often violently – back into Serbia, despite already having crossed its border. The UN’s refugee agency (UNHCR) confirmed in its weekly briefing that it was continuing to receive hundreds of reports of foreign nationals being expelled from EU countries in the Balkans and sent back to Serbia.

An average of 30 cases a day of “unlawful and clandestine push-backs” highlights a disregard for the human right to an individual assessment of the need for international protection, according to Save the Children. Belgrade “risks becoming a dumping zone, a new Calais where people are stranded and stuck” the humanitarian group Médecins Sans Frontières has warned.

[..] Save the Children estimates that there are up to 100 refugees and migrants arriving in Serbia every day and is supporting the government to refurbish safe spaces and support services prioritising lone children. About 46% of refugee and migrant arrivals in Serbia are children and 20% are unaccompanied. The UNHCR said at least five refugees had died of cold since the start of the year. “Saving lives must be a priority and we urge state authorities across Europe to do more to assist and protect refugees and migrants,” a UNHCR spokeswoman, Cecile Pouilly, told a press briefing in Geneva on Friday. This week, the Serbian authorities made additional temporary space available to get people off the snowy streets and into shelters. The charities have warned, however, that it still far from enough to meet the needs of people who are sleeping rough.

Read more …

Trump Moves as America Stands Still

Nov 232016
 
 November 23, 2016  Posted by at 4:24 pm Finance Tagged with: , , , , , , ,  11 Responses »


W. Eugene Smith Orson Welles 1942

 

Ever since the November 8 election, it’s been hard to write anything that makes actual sense, as evidenced by just about everything I’ve read in the past two weeks, little of which was particularly elevating, because just like before the vote, and just like in pre- and post-Brexit Britain, all there is left in the US are deeply dug-in heels.

Everything and everyone is standing still; dug-in heels do that for you. Problem is, of course, that standing still doesn’t get you anywhere. You’re going to have to move or you’ll be left behind. Somehow it’s wonderfully ironic that Donald Trump is the only main character in this play who’s moving, and he does so in more ways than one. It’s like he’s going head first against the latest braindead internet craze, mannequin. If he does it on purpose, I commend him for it.

Sure, one might say Obama has moved a little too, suggesting that a smooth transition of power is paramount, talking a whole different book from what he said about the Donald before November 8. But then Obama doesn’t have many other options. His job requires him to do it, and say it. Over the past few months, the impression has crept upon me that Obama is a mannequin, though not still and silent, but one machine-trained to say the perfect thing at the perfect moment. And then still lost.

 

As predicted pre-election by the precious few willing to ponder a view that’s not entirely partisan or one-sided, Trump now rolls back his most extreme views, and is not afraid to revisit climate change, or a potential Hillary investigation, nor does he shy away from denouncing the most outrageous right wing movements and viewpoints among his voters and supporters.

Not even if every single person he talks to as he builds his administration is automatically labeled a racist, or worse, by US media, politicians and others that have gotten lost in their anti-Trump trenches.

Donald Trump will keep doing what he’s always done: throw ideas out there, see where they land and show that he’s flexible about them. In the process he will make many of his supporters more flexible too. He is the leader, he is their leader. When he reconsiders his views of issues, he ‘invites’ them to do the same. As we move forward, we’ll see this attitude shave off a lot of the sharp edges. It’s all entirely predictable, it’s almost a better story than the Pied Piper.

Of course you san say that some of the views expressed by Trump voters, and the acts committed, don’t belong in America. You would be right. But what you can’t say is that Trump is the source of these acts and views. They were there already. They were ignored and left to fester for years, however, and because of that grew sharper and more pronounced as time went on, until someone finally came along and did not ignore them. Talk about predictable.

 

But without an actual conversation taking place, without people from both sides, gaping as their differences may seem, willing to leave their trenches and talk to Donald Trump, and about him, from something other than the moral heights they have convinced each other and themselves were theirs and theirs alone, without that conversation there’s only so much he can do. They have to move; he already does.

Mind you, he’s got plenty room to maneuver in what he does, because he won the election, and nobody else. He can fill his government with a bunch of weirdos and radicals, he’s got the mandate. But that’s not what he wants. Trump meant it when he said he wants to be a president for all Americans.

The last thing Donald Trump wants is to fail as president. he instead wants to be the best. That requires motion from all sides, though. What Trump wants and needs right now is for people to reach out to him, to tell him they’re willing to talk, that they’re willing to give him the benefit of the doubt, and work with him.

Don’t forget, he has to take on his own right wing camp -which will be a hard enough fight- as much as all those who see themselves as more liberal than he is (liberal is just a word in a country in which there is no left left). While at the same time those ‘liberals’ seem to spend all their waking hours exclusively trying to agree on what to call the people they see as America’s worst: are they neo-nazi’s, racists, white supremacists, bigots?

And as if that is not enough, all this comes with an outspoken implication that Trump is as bad as the worst of his voters. The anti-Trump camp are so busy with this that they fail to see the president-elect has long since moved away from what they thought his position was (was it ever?), and that they are the ones unwilling to talk, not him.

 

Mind you, this is as true for the right wing as for the left. Trump risks facing a lot of backlash from the right for not investigating Hillary, for softening his climate change view, for keeping some aspects of Obamacare, or some parts of the trade deals he has previously dismissed. He knows the risks.

The extreme right has misunderstood him as much as the ‘extreme liberal’ (a.k.a. the Hillary camp including the media). And if Britain is any guide, where 5 months after Brexit the main dish served is still made up of name calling and various other civilized pastimes, Trump has a long, windy and especially bumpy road ahead of him. America should perhaps count itself lucky that he’s a whole lot more flexible than the clowns performing on all sides of the aisles in the UK.

He’s willing to adapt, but that won’t do a lot of good if the other players are not. People may try to mock him for first bashing the New York Times and then, within 24 hours, calling it “a great great American jewel – world jewel”, but that’s only bad or inconsistent if you refuse to try and think like him.

Of course the New York Times, through history, has been a jewel of global media; it just didn’t act like one in the run-up to November 8. Pointing that out is not inconsistent from Trump’s angle: instead, it’s not difficult to make the case that it’s the New York Times that has been inconsistent, by leaving its journalistic standards -i.e. objectivity- behind to go after Trump.

After all, it’s hard to argue that the New York Times was NOT a partisan channel in the election. That so many other news media took the same position may have made it seem normal, but that doesn’t make it so.

Americans from all corners will have to come down from their morally righteous and politically correct mountains. They will then find that Donald Trump was way ahead of them.

 

And no, I am not a Trump supporter. But given the alternatives presented, I do find myself wondering if there was a single one amongst them more fit for the job than the Donald. Not that it matters anymore, the election is over and he won, recounts and discussions about electoral collages or not.

Is that really such a bad thing? Trump won. Which means the Democrats and Republicans did not. The Bush dynasty and Clinton dynasty did not. The incumbent elites did not. That is quite the clean up job. Does anyone want to argue such a clean up was not needed? Donald Trump is shaking up a world in which too many people and institutions across the political scene have been able to gain too much power and influence and wealth for too long, and it’s hard to see that as a big negative.

Besides, whether you like it or not, he’s your president. May I humbly suggest y’all make the best of what you got? Perhaps, and I must say perhaps because I should learn more about this, Trump’s talk Monday with Bernie Sanders-territory left-wing Democrat -and Hindu- Tulsi Gabbard, which may well land her a cabinet post, is indicative of what we may expect. So you got someone who’s left-wing, a woman, and very much not Christian. How many prejudices is that?

Gabbard wants the US to stop killing people in Syria. Is that a bad thing, anyone? She broke with the DNC when she figured out then-Chairwoman Debbie Wasserman Schultz was favoring Hillary and working against Bernie.

If Gabbard’s move is not enough to make you move and un-dig your heels, how about Bernie Sanders himself taking a seat in the Trump government? Would that do the trick? The Donald would love it. Bernie would be told he’s betraying his party, for sure, but we all know the party betrayed him first. He’s either got a few years left to do something real, or he can see himself be betrayed all over again in 2020.

By now, it’s not beyond the realm of possibilities. A National Government is something many nations have tried through history. It might not be a bad idea for the US, because the future sure is not made exclusively of moonshine and roses.

The keyword is flexibility, guys. You have a president-to-be who gets that. How about you?

 

 


JavierJuén 2016

 

 

No More Flyover Country

Nov 132016
 
 November 13, 2016  Posted by at 5:57 pm Finance Tagged with: , , , , , , , , ,  16 Responses »


Esther Bubley Waiting for Greyhound bus trip from Memphis to Louisville, KY 1943

 

Been scribbling several some post-election notes over the past few days, it seemed a good idea to not publish things too soon after the upset, even if I at least had the advantage that it wasn’t that much of a surprise or upset. But I’ve read far too many people too eager to write about how they haven’t moved an inch, and too many others who have -mostly reluctantly- moved but don’t know how or where to. It’s okay to think about such matters first, guys and dolls. Make that: it’s better. There’s too much nonsense out there as is. Why bother adding to the pile? Here’s a few thoughts in no particular order:

 

 

The transition we find ourselves in, into an era as profoundly different as it will be from the one that preceded it, can only possibly be chaotic. Smooth is not an option. Because it takes much time for people to recognize let alone accept that there is such a transition to begin with, and not everyone acknowledges or accepts it at the same time. Many never will at all, they will be left behind in their own realities tied down by the chains of what once was.

This transition is the one away from economic growth and globalization -centralization in general- and towards smaller, less centered and grandiose, politics and markets. It is not an idealistic transition towards self-sufficiency, it’s simply and inevitably what’s left once unfettered growth hits the skids. It doesn’t have to be anywhere near as bad as people would have you believe, or at least not necessarily so. What could make it real bad, though, is the widespread resistance and denial which seem certain to meet it.

Our entire worldviews and ‘philosophies’ are based on ever more and ever bigger and then some, and our entire economies are built upon it. That has already made us ignore the decline of our real markets for many years now. We focus on data about stock markets and the like, and ignore the demise of our respective heartlands and flyover countries, even as we experience Brexit and Trump and similar movements set to come to many more countries.

Donald Trump looks very much like the ideal fit for this transition – but nor because he understands the issue itself, or its implications. What matters is he promises to bring back jobs to America, and that’s what the country needs. Not so they can then export their products, but to consume them at home, and sell them in the domestic market.

That is the future of the world post-growth, and post-globalization. Every country and every society needs to focus on self-reliance, not as some idealistic luxury choice, but as a necessity. And that is not as bad or terrible as people would have you believe, and it’s not the end of the world. What would be terrible is if all we do is try and restart growth and globalization, because that would be a hideous waste of time and resources.

You’ll be flooded in the years to come, even more than today if you can imagine, with terms like protectionism and isolationism and even populism, but ignore all that. There’s nothing economically -let alone morally- wrong with people producing what they and their families and close neighbors themselves want and need without hauling it halfway around the world for a meagre profit, handing over control of their societies to strangers in the process.

There’s nothing wrong or negative with an American buying products made in America instead of in China. At least not for the man in the street. It’s not a threat to our ‘open societies’, as many claim. That openness does not depend on having things shipped to your stores over 1000s of miles, that you could have made yourselves at a potentially huge benefit to your local economy. An ‘open society’ is a state of mind, be it collective or personal. It’s not something that’s for sale.

 

 

Earlier this week I read what looks to be an apt observation: ‘Every white person in New York who didn’t vote for Trump is now out in the streets protesting against him’. But the people who protest now are miles off target and months too late: they should have stood up for Bernie when it became clear that the Hillary camp and the DNC conspired to oust him. Indeed, Bernie himself should have stood up back then, not for himself but for his supporters; they would have stood up with him.

Whether they all like it or not, being asleep and/or silent when big things happen that count, does carry a price. If you drop the ball, you can’t just pick it back up again and pretend it didn’t fall. Shouting ‘not my president’ in the wake of an election is a sign of weakness, no matter how well-intentioned. The protests should have taken place before the election, not after.

Moreover, to a large extent people are up in protest against the image the Hillary campaign and the media have painted of Trump, not the man himself. A difference they cannot see. Would these same people have been protesting if Hillary had won? No, they wouldn’t. But why?

Many voices expressed the wish that Americans would vote for Hillary, a story about a woman and a glass ceiling, instead of for the male and allegedly sexist and misogynist Donald Trump. Simply because she’s a woman, and it’s time for a female president.

These voices have been consistently and for a long time been blind to the fact that Hillary’s campaign and Foundation, in legal, shady and downright illegal ways, have long been financed to a substantial degree by uber-rich men in charge of Middle East oil extracting nations who have far more misogynist views and attitudes towards women than Trump will ever have.

These men carry things like misogyny, racism, xenophobia and homophobia high and proudly in their banners. Also, they’re well on their way towards obliterating not just an entire country in Yemen, but indeed an entire people, all with the enthusiastic support of Obama, Hillary and their friends and donors in the arms industry. And lest we forget, they sponsor ISIS too. Is that the future Americans want?

 

 

The bright side is the chances of a war with Russia have gone down substantially. While the odds have gone up dramatically of much fewer US servicemen and -women being sent abroad to engage in endless and countless battles and wars that never seemed to have much to do with the US, going back all the way to Korea and Vietnam.

How can either of these things can be perceived as negative? The continuation and expansion of -often proxy- hostilities versus Moscow would have been cast in stone had Hillary been elected, it was a milestone of her entire campaign. And a major part of this would have been fought at some desert location in the Middle East.

Where America has needlessly squandered the lives of many of its young and finest, to and in a mad scramble over control of oil resources which has resulted in nothing but a shapeless chaos that has equally needlessly killed millions of people, sent millions of others fleeing their homes and razed entire ancient civilizations, accomplishments that will follow America around the world for many years to come. Is that the future Americans want? Double down?

There’s -undeniably- still a risk that Donald Trump will succumb to the mighty hand of the military industrial complex. But at the same time, he may well be the country’s -and the world’s- best if not only chance at making that hand that much less mighty. There may be many things wrong with Trump -there are- but being in the pockets of arms manufacturers and other doctors of death is so far not among them, to our best knowledge.

 

 

Hillary and her crowd ran the entire election process from inside a cocoon, built largely on hubris and a lack of contact with the world outside. They had the media so much on their side that TV and newspapers became part of the Hillary cocoon, and reporters got locked into a groupthink mode that then in its turn infected the campaign itself.

What I mean is you can’t stop at saying Trump is a disaster, so let’s pick the other side, it was always very much a choice between two disasters. And at the same time, as I wrote at the Automatic Earth the day of the election, the US presidency is a poisoned chalice. There’s nothing simple about this.

Trump means a big clean-up for the GOP, and the Hillary loss means the chance for the Democrats to do the same. You bet those folks realize achingly well they could have won with Bernie. Hopefully that wing can take over substantially from the lying conniving machinery the DNC has turned out to be.

Someone summed it up as: Trump swept aside the Republicans, the Democrats, the Bush dynasty and the Clinton dynasty, all in one fell swoop, and we should perhaps be thankful to him for that.

 

 

Trump has run his campaign catering to the anger that exists among Americans. And people experience and label that as ‘terrible’ and ‘awful’. His Republican friends and opponents find it terrible, because it scares the bejeezus out of them, and they’re too scared to go anywhere near that anger. Trump embraced the anger. Because he knew from the start, instinctively, that it was the only way he could win.

And you can think like the majority of your peers do, that all that commingling with the anger, with racists and bigots and what have you, is inexcusable. But what you miss out on if you take that approach and hold on to it, is that in that case the anger does not get addressed at all. It’s instead left free to just wander over the land and fester and grow on society, out of reach of politics, media, everything.

A certain by now very vilified cartoonist explained that what Trump does is to ‘feel’ what the angry crowd wants, and then play into it by making over the top statements targeted at the anger. That way this crowd will follow him, gather around him. This has worked like a charm. But no, that doesn’t make him look like a certain German dictator.

Because it does not mean that Trump is going to literally do everything he said in the over the top statements he made. It’s all just a basic sales trick. Trump makes the angry people feel like he knows, and cares about, their grievances. Just like a car salesman makes you think he knows just what you want and need in a car, and praises the assets of that car in such a way that it touches that part of you which makes you want the car.

But that doesn’t mean at the end of the day he’ll drive the same car home that you just bought off of him. He makes you think he is like you, and knows what you want, so he can sell you that car. That’s all. He’s judged you to be the right ‘target’ for that vehicle.

That is how Trump has reeled in America’s hidden anger, how he has gathered its lost hidden mob. And before you say anything else, it’s perhaps a good idea to wonder where that anger would go without Trump. Because it’s not going to go away by itself. It’s been growing and festering for a long time, and it’s well-armed, lest you forget.

The question then becomes: would America be a better, or a safer, place if the entire angry part of its population had again, and still, been ignored by everyone? Or is it better to have them gathered under the umbrella of Donald Trump? Take your pick. Don’t be shy.

Another way to phrase the issue is this: without the exact same sales tactics that Trump used to ‘gather the anger’ around him, the TV ads (most ads in general) you see on a daily basis would look completely different. Whatever products these ads sell, from detergents to cars, they do it by referring to your unconscious, not your rational abilities.

The ads, like Trump, sell feelings, not facts (if you don’t get that, you’re lost).

Yet nobody would think of taking the companies whose products are advertized this way to court -nobody even gets really angry with them- because the happy smily people and unending open roads bathed in sunshine from the ads do not magically appear once you purchase the product. We would even find that crazy, that anyone might take the images shown in the ads, literally.

We should interpret Trump’s campaign words along those same lines, the same way we ‘undergo’ the ads that play to our subconscious. The problem is, how do you do that? How do you interpret what you are largely unaware of on a rational level?

The president-elect will now need the same skills in order to ‘come down that mountain’ without antagonizing each and every side of the discussion, of the nation. He’ll have to convince the liberal camp that he didn’t mean everything he said in a literal sense, while at the same time keeping his ‘angry mob’ satisfied that he will do enough of what he promised them.

That will take a lot of persuading. But at the same time that happens to be the one thing he’s really good at. He’ll have to convince his voters that he’s not breaking his promises, just adjusting them in ways that will, if at all possible, be even more beneficial to them than the original ones.

Difficult, but if he can convince them that there are signs, delivered relatively fast, that their living conditions are improving, he may succeed. They just vent their anger at people that are visibly not themselves, but that’s not where the anger stems from.

 

 

There are all sorts of nasty things going on, racists and supremacist etc. But you can’t say that Trump caused that to happen. The most you could say is that he gives the people involved in that stuff the idea that because someone finally hears them, they can, are allowed to, make themselves heard.

But just because a few loose cannons let loose, doesn’t mean America has 60 million loose cannons who all voted for Trump and should all be condemned including Trump himself for good measure because there’s a few incidents. Not only is that a misinterpretation of what goes on, it prevents you from understanding what lies behind.

Those incidents at least have a lot to do with the fact that so many ignored Americans live in what Washington has long considered flyover country. It would be a lot more positive and productive at this point in time if everyone looks at what they themselves have gotten wrong over the past years -not just this election campaign- before pointing fingers at everyone but themselves.

But seeing the dug-in heels in Britain almost five months after the Brexit vote, it’s hard to get your hopes up about people coming together, or even doing some genuine introspection. It’s easier to just remain stuck in your comfy little rut.

Thing is, the world is rapidly changing -it already has-, America is changing, Britain is, and many more countries will, it just takes an election to show how much. We’re transitioning to a next phase, and trying to deny we are with all our might, good luck and good night.

Or in a more poetic fashion – we can do that too-:

 

the blizzard of the world
has crossed the threshold
and it has overturned
the order of the soul

 

 

 

 

Debt Rattle October 23 2016

Oct 232016
 
 October 23, 2016  Posted by at 9:12 am Finance Tagged with: , , , , , , , , , ,  Comments Off on Debt Rattle October 23 2016


NPC Oldsmobile Golden Rocket 88 Holiday Sedan for 1957, Columbus GA 1908

• Financial Crises: 1987, 1997, 2007, 2017?! (BBG)
• Government Debt Isn’t The Biggest Threat To Australia’s Credit Rating (G.)
• Britain’s Leading Banks Set To Pull Out Of UK Early Next Year (G.)
• AT&T To Buy Time Warner In Deal Trump Says ‘Destroys Democracy’ (G.)
• Hillary Has ‘Nothing To Say’ About Email Revealing $12 Million Quid Pro Quo (DM)
• Obama Warned of Rigged Elections Back in 2008 (ZH)
• Trump Lays Out His Plan For First 100 Days In Office (ZH)
• Official Publication Says China Needs Xi As Mao-Like Strongman Leader (SCMP)
• Edward Snowden Is A Saint, Not A Sinner (Jimmy Wales)
• 75% Of Young Greeks, Italians Live With Their Parents (Kath.)
• Rescuers Save 2,400 Migrants In Mediterranean, Recover 14 Bodies (R.)

 

 

Fun with numbers.

• Financial Crises: 1987, 1997, 2007, 2017?! (BBG)

Next year ends in a 7. If you’re superstitious or a little loose with statistics, that makes us due for another financial crisis. The biggest one-day stock drop in Wall Street history happened in 1987. The Asian crisis was in 1997. And the worst global meltdown since the Great Depression got rolling in 2007 with the failure of mortgage lenders Northern Rock in the U.K. and New Century Financial in the U.S. You can’t really mark the next crisis down on your calendar, of course. The point is that crackups come fairly regularly. And some of the prerequisites for the next one do seem to be falling into place. The IMF may have gotten things about right in its annual Global Financial Stability Report, which was issued in October. It doesn’t sound an alarm but expresses concern.

Short-term risks have actually abated, the IMF says, pointing to rebounding commodity prices, which help some key emerging markets, and the prospect of easier money in developed markets. But, it says, “medium-term risks continue to build.” It cites the unsettled political climate, which makes entrenched problems harder to tackle; some weak financial institutions in developed markets; and heavy corporate debts in emerging markets. Risks that aren’t acute can build for a while before triggering a crisis. What’s indisputable is that debt, the tinder of almost every financial conflagration, is growing rapidly. At 225 percent of world gross domestic product, combined public and private debt outside the financial sector “is currently at an all-time high,” the IMF says. Debt fuels growth but also makes borrowers brittle. Debtors keep owing money even if they lose the ability to repay. If they default, their lenders are damaged and sometimes default on their own obligations, and so the dominoes fall.

Read more …

The last paragraphs of a piece that just can’t seem to get going, but ends ‘well’. Private debt is by far Australia’s main problem, as it is nearly everywhere else.

• Government Debt Isn’t The Biggest Threat To Australia’s Credit Rating (G.)

The new head of the Reserve Bank, Philip Lowe, told the house economics committee soon after taking over the position last month, that the effects of a ratings downgrade on borrowing costs are “quite small”. He suggested that rather than be the main game, that credit ratings were just “a useful reminder that we need to make sure the recurrent budget is on a good path”. But while our government debt remains “admirable” by international standards, as the secretary of the treasury, John Fraser, noted this week, our levels of private debt are extremely high – indeed fifth-highest in the world. Worryingly, the IMF in its recent fiscal monitor report noted the level of this debt was a concern for Australia’s ongoing financial stability.

Fraser noted this aspect as well in his appearance before the Senate estimates committee, telling the committee that the Treasury, “are also conscious that credit rating agencies are focusing on household debt as well as corporate and government debt”. Policies to lower private debt however are much more thin on the ground than are the cries about the need to cut government spending to reduce government debt. The shadow treasurer, Chris Bowen, this week raised the issue in an opinion piece published by Guardian Australia. He highlighted that the ALP’s policy on capital gains tax and negative gearing, which it took to the last election, was the type of policy proscribed by organisations like the IMF to temper our love of taking on more and more private debt.

Should S&P downgrade Australia’s credit rating, no doubt almost all commentary and debate will focus on government debt. But regardless of whether or not such a downgrade will cause interest rates for governments and companies to rise, private – not government – debt will remain the issue that most urgently needs to be addressed.

Read more …

Hubris. Largely.

• Britain’s Leading Banks Set To Pull Out Of UK Early Next Year (G.)

Britain’s biggest banks are preparing to relocate out of the UK in the first few months of 2017 amid growing fears over the impending Brexit negotiations, while smaller banks are making plans to get out before Christmas. The dramatic claim is made in the Observer by the chief executive of the British Bankers’ Association, Anthony Browne, who warns “the public and political debate at the moment is taking us in the wrong direction”. A source close to Brexit secretary David Davis said he and the chancellor Philip Hammond had last week sought to offer reassurance that they were determined to secure the status of the City of London.

However, the government’s stated intention to take control of the freedom of movement into the UK is widely recognised among officials to be a hammer blow to any chance of retaining the present terms of trade for banks, particularly given the bellicose rhetoric of major politicians on the continent. The so-called passporting rights for members of the single market allow UK-based banks to offer financial services to companies and individuals across the EU unimpeded, yet the French president François Hollande is among those who have insisted in recent weeks that hard Brexit will mean “hard negotiation” and that Britain will need to “pay the price” of leaving.

A hard Brexit would involve the UK leaving both the single market, a cental pillar of which is freedom of movement, and the customs union, which could potentially reintroduce tariff and non-tariff restrictions on British imports and exports. Browne warns that both British and European politicians who appear to be pursuing “anti-trade” goals need to recognise that “putting up barriers to the trade in financial services across the Channel will make us all worse off”. Browne, whose organisation has been in intense negotiations with the government, further warns the EU that banks based in UK are currently lending £1.1tn, therefore “keeping the continent afloat financially”, and that this arrangement is at risk.

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How many times has Time Warner been bought and sold now? Remember AOL?

• AT&T To Buy Time Warner In Deal Trump Says ‘Destroys Democracy’ (G.)

The telecoms giant AT&T has agreed to pay $85bn to buy the media powerhouse Time Warner and create one of the world’s largest media, TV and telecoms firms. The boards of the two companies unanimously approved the deal on Saturday. AT&T will pay $107.50 per Time Warner share, in a combination of cash and stock, worth $85.4 billion overall. The deal, which combines America’s second-largest wireless telecoms company with the owner of HBO, CNN, Cartoon Network and the Warner Brothers movies, is likely to face tough regulatory scrutiny due to fears it could lead to less consumer choice and higher prices. If approved, the deal would be the biggest in the world this year.

AT&T’s CEO, Randall Stephenson, says he does not anticipate government blocking the acquisition, which the company says is expected to go through by the end of 2017. Time Warner’s CEO, Jeff Bewkes, says he expects all of his company’s creative and business executives to stay on “for a number of years”. The Republican presidential nominee said on Saturday he would block the deal if he were elected. In a speech in Gettysburg, Pennsylvania, Donald Trump said AT&T’s purchase of Time Warner would give the combined group “too much concentration of power” and would “destroy democracy”. Speaking about his continuing battle with the “dishonest mainstream media”, Trump said: “They’re trying desperately to suppress my vote and the voice of the American people.

“As an example of the power structure I’m fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few.” Trump said he would also consider “breaking” up the last big media deal, Comcast’s acquisition of NBC Universal in 2013. “Deals like this destroy democracy,” he said.

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Hillary and her campaign blaming everything on Russia is prodoundly damaging to the US, and on the office of President of the Unted States in case she gets elected.

• Hillary Has ‘Nothing To Say’ About Email Revealing $12 Million Quid Pro Quo (DM)

A stone-faced Hillary Clinton refused to comment tonight on an email a top aide sent calling a Clinton Foundation quid pro quo a ‘mess’ of the former secretary of state’s own making. ‘I have nothing to say about Wikileaks, other than I think we should all be concerned about what the Russians are trying to do to our election and using Wikileaks very blatantly to try to influence the outcome of the election,’ Clinton said. The Democratic nominee was responding to a question posed by DailyMail.com during a media avail with reporters riding on her campaign plane.

Hacked emails revealed an internal disagreement among Clinton’s aides about her desire to hold a conference in Marrakech, Morocco.The country’s king made a $12 million pledge to fund the Clinton Global Initiative conference – but only if the the likely presidential candidate attended. Top confidante Huma Abedin bluntly wrote in a January 2015 email that ‘if HRC was not part of it, meeting was a non-starter.’ Then she warned: ‘She created this mess and she knows it.’ It was an uncharacteristic remark from Abedin, who is known for her abiding loyalty to Clinton over the years.

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Whatever direction the wind comes from.

• Obama Warned of Rigged Elections Back in 2008 (ZH)

At a campaign rally for Hillary Clinton on Thursday in Miami Gardens, Fla., President Obama condemned Donald Trump’s “rigged election” claims, describing these remarks as “dangerous.” “When you try to sow the seeds of doubt in people’s minds about the legitimacy of our election, that undermines our democracy,” he said. “When you suggest rigging or fraud without a shred of evidence, when last night at the debate, Trump becomes the first major party nominee in American history to suggest that he will not concede despite losing…that is not a joking matter,” Obama added.

Trump said at the third presidential debate that he would keep the United States “in suspense” as to whether he would accept the election results. Later, at a campaign rally, he promised in a jesting manner that he would accept the results “if I win” as the crowd roared. But despite condemning Trump for suggesting an election can be rigged, here is a clip of then-candidate Barack Obama in 2008 warning about voter fraud and suggesting Republicans could try to sway the election in their favor. A female audience member asked… “I would just like to know what you can do to reassure us that this election will not be rigged or stolen?” Obama replies…

 

 

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On politics, he sounds less than crazed.

• Trump Lays Out His Plan For First 100 Days In Office (ZH)

In a keynote speech in Gettysburg, Pa., about his plans for his first 100 days in office, Donald Trump laid out what he sees as the the core priorities of a Trump presidency, while focusing in the early part of the speech on attacks against Hillary Clinton and Wall Street, and repeating his core message by telling his audience that Washington and Wall Street are “rigged” against him and that he is the candidate to bring “the change that has to come.” “I am not a politician,” Trump told the crowd. “But when I saw the trouble our country was in, I felt I had to act.” Then, moments after promising Americans that he represented a break from the status quo, he promised to sue a number of women who have come forward to accuse him of sexual assault, calling them liars.

Trump also railed against the media for seeking to concentrate its power through mergers and for colluding with his accusers to align against his campaign. He added a new threat to his repeated criticisms of U.S. media companies, when he vowed that in his administration such mega mergers as that between AT&T and Time Warner, which was just announced, would not pass as it leads to “too much concentration of power in the hands of too few.” [..] In terms of soundbites, the following quotes stood out.

On the economy:
• “Change has to come from outside our very broken system.”
• “We’ve doubled our national debt to $20 trillion under President Obama.”
• “Nearly 1 in 4 Americans in their prime earning years isn’t even working.”
• “I am asking the American people to dream big once again.”
• “Will withdraw the U.S. from the Trans-Pacific Partnership.
• “Will cancel every un-Constitutional executive action, memorandum, and order issued by President Obama.”
• “We will cancel all federal funding of sanctuary cities.”
• “The veterans will finally be taken care of properly.”
• “If we follow these steps, we will once more have a government of, by, and for the people.”

In terms of actual political measures that Trump would propose and/or enact, he listed the following six:
1) “A Constitutional Amendment to impose term limits on all members of Congress.”
2) “A hiring freeze on all federal employees.”
3) “A requirement that for every new federal regulation, 2 existing regulations must be eliminated.”
4) “A 5-year ban on White House and Congressional officials becoming lobbyists after they leave government.”
5) “A lifetime ban on White House officials lobbying on behalf of a foreign government.”
6) “A complete ban on foreign lobbyists raising money for American elections.”

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We’ll see lots of this as things continue to slide downhill.

• Official Publication Says China Needs Xi As Mao-Like Strongman Leader (SCMP)

China needs a leader like Mao Zedong and President Xi Jinping fits the bill, according to a media outlet affiliated to the Communist Party. Analysts said the call to make Xi a strongman leader was an attempt to raise his status to the equivalent of “Great Leader”. The exhortation was made by Peoples’ Tribune, which is affiliated with party organ People’s Daily and came just ahead of a key meeting of top officials this week to lay the groundwork for the leadership reshuffle next year. The article, published on October 18, also echoed praise from senior politicians earlier this year, calling for Xi to be named “the core” of the party leadership – a term that carries strong political meaning.

China needed a strongman politician so the nation could again rise to greatness amid a time of strategic challenges and risks, it said. Xi, as party general secretary, was widely regarded by officials and the public as such a leader, it said. “There is no longer such salutation as ‘leader’ after Mao,” said Chen Daoyin, a political scientist at Shanghai University of Political Science and Law. Mao’s brief successor Hua Guofeng was once called “Wise Leader”, but no one used “leader” to address Deng Xiaoping, Jiang Zemin or Hu Jintao, Chen said. The magazine added that without the awareness of loyalty to the “core” leadership of the party there was a danger policies would never be adhered to outside the walls of Zhongnanhai, the nerve centre of the party and central government.

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Jimmy Wales is the founder of Wikipedia.

• Edward Snowden Is A Saint, Not A Sinner (Jimmy Wales)

Wikipedia is founded on a bedrock principle of neutrality, seeking to describe all relevant sides without taking a political stance. As an individual, I, too, try to stay out of most political debates — except where they directly impact my personal passion for the free flow of information. This is one of those times. When I founded Wikipedia in 2001, the Internet was a place where ordinary people could freely create and share with one another. Wikipedia emerged from that egalitarian spirit, as a community committed to the free exchange of knowledge. Our mission was and continues to be to collect the sum total of all human knowledge and make it available to everybody in their own language. Since its founding, Wikipedia has become one of the most popular websites in the world.

And we zealously guard the privacy of our users, both the 75,000 people who write the encyclopedia and the half-billion people who read it. In 2013, when Edward Snowden revealed the scope and scale of the system of mass surveillance that had been built by the National Security Agency and other national security agencies, we were horrified. It is thanks to Snowden that we can now participate in an informed and democratic debate about how the US government subverted the power of the Internet in the name of mass surveillance. As a result of what he disclosed, people began to realize their privacy had been massively eroded over the past decade, and not just by the NSA. They recognized that their personal information was being collected, stored, analyzed and shared.

Text messages, emails and phone records they thought were private were actually up for grabs, easily accessed by the US government either directly from major tech companies or by tapping the cables and switches that comprise the Internet’s “backbone.” And all of the surveillance was done without a warrant. That is why I’ve signed onto the campaign asking President Barack Obama to pardon Snowden. Without him, ordinary people around the world would still know little of the growing dragnet stifling the Internet’s enormous potential for good. As a result of Snowden’s actions, the Internet has become safer and users are better equipped to protect themselves. Since the disclosures began in 2013, the number of websites moving to HTTPS to encrypt traffic has skyrocketed. (This includes Wikipedia and US federal government websites.) Popular messaging apps like WhatsApp have adopted end-to-end encryption [..]

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And still there’s talk of recovery. And people who believe it, too.

• 75% Of Young Greeks, Italians Live With Their Parents (Kath.)

Three out of four Greeks aged between 15 and 24 were still living at home in 2014, according to a report by the OECD made public this month. The annual report, called “Society at a Glance,” found that southern European countries hardest hit by the debt crisis had the highest rates of young people remaining with their parents. Greece came second in the list of 35 OECD member states, after Italy, with 76% of young people reporting that they still lived at home. Italy and Greece were followed by Slovakia, Portugal and Spain, while northern European countries, namely Denmark, Sweden, Finland and Norway, had the lowest rates of young people remaining at home. Greece continues to have the highest rate of youth unemployment in the eurozone with more than half of young Greeks jobless and often obliged to live at home.

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Meanwhile, where human rights go to drown….

• Rescuers Save 2,400 Migrants In Mediterranean, Recover 14 Bodies (R.)

Rescuers pulled 2,400 boat migrants to safety on Saturday, the Italian coastguard said, adding 14 dead bodies had been recovered in the past two days. The migrants were on rubber boats and other small vessels, it said in a statement. Some 20 operations were carried out on Saturday alone, including rescues involving an Irish naval ship and boats from humanitarian groups Doctors Without Borders and Sea Watch. Doctors Without Borders said in a tweet on Saturday it believed 12 people had died during rescue operations, four of them children. More than 3,100 migrants have gone missing or died this year while trying to use the route from north Africa to Europe by boat, the International Organization for Migration estimates.

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Debt Rattle October 17 2016

Oct 172016
 
 October 17, 2016  Posted by at 9:24 am Finance Tagged with: , , , , , , , , ,  1 Response »


Harris&Ewing Ninth Street N.W., Washington, DC 1915

• Dangerous Idiots: The Liberal Media Elite and Working-Class Americans (Smarsh)
• If You Think Donald Is Bad, Imagine Donald Trump 2.0 (Carr)
• Big Central Bank Assets Jump Fastest in 5 Years to $21 Trillion (BBG)
• Euro ‘House Of Cards’ To Collapse, Warns ECB Prophet (AEP)
• Let The Pound Fall and The Economy Rise (G.)
• Europe’s Dramatic Fulcrum Point: Only Precedent Is 1930s (Hugh Hendry)
• 43% of Britons and 73% of Londoners Live in Substandard Homes (Ind.)
• Crowd-Funded Legal Case Wants To See Politicians Jailed For Brexit Lies (Ind.)
• Rattled German CEOs Seek “Revival of Germany Inc.” (WS)
• Will Italy Leave the EU? Follow the Money (BBG)
• 15 Swiss Banks In Money Laundering ‘Red Zone’ (R.)
• China’s Crony Capitalism: The Dynamics of Regime Decay (Econ.)
• The Oil Market is Bigger Than All Metal Markets Combined (VC)

 

 

A wonderfully rich, must-read, multi-layered expose of the distance between various groups of Americans. Makes me wish Joe Bageant were still alive to shine his light on the elections.

• Dangerous Idiots: The Liberal Media Elite and Working-Class Americans (Smarsh)

Last March, my 71-year-old grandmother, Betty, waited in line for three hours to caucus for Bernie Sanders. The wait to be able to cast her first-ever vote in a primary election was punishing, but nothing could have deterred her. Betty – a white woman who left school after ninth grade, had her first child at age 16 and spent much of her life in severe poverty – wanted to vote. So she waited with busted knees that once stood on factory lines. She waited with smoking-induced emphysema and the false teeth she’s had since her late 20s – both markers of our class. She waited with a womb that in the 1960s, before Roe v Wade, she paid a stranger to thrust a wire hanger inside after she discovered she was pregnant by a man she’d fled after he broke her jaw.

Betty worked for many years as a probation officer for the state judicial system in Wichita, Kansas, keeping tabs on men who had murdered and raped. As a result, it’s hard to faze her, but she has pronounced Republican candidate Donald Trump a sociopath “whose mouth overloads his ass”. No one loathes Trump – who suggested women should be punished for having abortions, who said hateful things about groups of people she has loved and worked alongside since childhood, whose pomp and indecency offends her modest, midwestern sensibility – more than she. Yet, it is white working-class people like Betty who have become a particular fixation among the chattering class during this election: what is this angry beast, and why does it support Trump?

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Former Australian foreign affairs minister and former NSW premier Bob Carr on the future after Trump.

• If You Think Donald Is Bad, Imagine Donald Trump 2.0 (Carr)

Amid the bleakness of Shakespeare’s King Lear one character, Edgar declares: the worst is not/so long as we can say “this is the worst”. Just when you think it can’t get any worse – Trump as candidate – here comes a more troubling prospect: the Trump next time, four years off, who defeats an unpopular President Clinton. It’s easy to tick off what gave the Republican nomination this time to a bossy, ignorant demagogue – the loss of industrial jobs, anxiety over borders and trade, racist resentment of minorities. Perhaps, as well, bewilderment at a multipolar world where America can’t get its way. None of these is about to fade. The anger of white working-class males, incited by Trump, is bound to simmer angrily at a distrusted woman in the White House imposing background checks for gun buyers and appointing three or four liberal justices to the Supreme Court.

After years of decline violent crime is increasing. The cost of Obamacare is rising and will need higher premiums and bigger subsidies. The Congressional Budget Office projects debt to rise from 2.9 to 4.9% of GDP over the decade. The US genius for innovation runs strong but the US system does a lousy job of distributing the gains. Stagnant real wages will feed grievance over immigration and there’s little a president can do about it. The US will continue to be defied – not just by Putin, even by President Duterte of the Philippines. North Korea or Syria are problems without solutions, leaving chauvinists to lament the US has never been more powerless. The truth is this catch cry has been thrown at every president since Harry Truman, including Ronald Reagan in his last years. But the US Right stridently insists America is surrounded by enemies.

The neo-cons who gave us Iraq and unleashed Islamic State are demanding America prove its greatness with new wars in the Middle East. If Clinton takes office on January 20 she will have been defined as “crooked Hillary” by Republican attacks over emails, the family foundation and paid speeches to Wall Street. Only one voter in three sees her as honest or trustworthy and she may have the lowest approval rating of any victor since polls began. No honeymoon. Little goodwill. Add lashings of misogyny to this toxic atmosphere and all is tailored for a Republican revival, and a revival with strong elements of Tea Party radicalism and Trump’s populist white nationalism. As a result the Republican Party of 2020 will be different from that of Reagan, the Bushes and McCain.

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Funny how they stick to the term ‘assets’.

• Big Central Bank Assets Jump Fastest in 5 Years to $21 Trillion (BBG)

The world’s biggest central banks are bulking up their balance sheets this year at the fastest pace since 2011’s European debt crisis to boost lackluster economic recoveries with asset purchases that are supporting stock and bond prices. The 10 largest lenders now own assets totaling $21.4 trillion, a 10% increase from the end of last year. Their combined holdings grew by 3% or less in both 2015 and 2014. The accelerating expansion of central banks’ balance sheets comes as debate rages over whether their asset purchases and continued low interest rates are creating bubbles, especially in the bond market. Such quantitative-easing programs are aimed at driving up the prices of the securities they purchase to lower bond yields, encourage investment and boost economic growth.

The growth of central-bank holdings has coincided with the mostly upward trend of stock and bond prices. As the top 10 expanded their balance sheets by 265% since mid-October 2006, the MSCI All Country World Index of equities gained 19% and the Bloomberg Barclays Global Aggregate Index of bonds advanced 50%. Over the past decade, the Swiss National Bank expanded its holdings the most among those with the largest portfolios, almost eight-fold in U.S. dollar terms. The Bank of Russia was the least aggressive with a 68% increase. As the biggest banks’ holdings grew 10.4% this year, the stock gauge gained 3% and the bond benchmark jumped 7.4%. The BOJ and the ECB together have expanded their assets by $2.1 trillion since Dec. 31, more than accounting for all of the top 10’s combined increase. The balance sheets of the PBOC and the Fed fell 2% or less as the Swiss and the Central Bank of Brazil boosted their holdings 15% or more.

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Ambrose agrees with Issing, but doesn’t like his explanations. The consequences of accepting that the euro has failed are too dire.

• Euro ‘House Of Cards’ To Collapse, Warns ECB Prophet (AEP)

The ECB is becoming dangerously over-extended and the whole euro project is unworkable in its current form, the founding architect of the monetary union has warned. “One day, the house of cards will collapse,” said Professor Otmar Issing, the ECB’s first chief economist and a towering figure in the construction of the single currency. Prof Issing said the euro has been betrayed by politics, lamenting that the experiment went wrong from the beginning and has since has degenerated into a fiscal free-for-all that once again masks the festering pathologies. “Realistically, it will be a case of muddling through, struggling from one crisis to the next. It is difficult to forecast how long this will continue for, but it cannot go on endlessly,” he told the journal Central Banking in a remarkable deconstruction of the project.

The comments are a reminder that the eurozone has not overcome its structural incoherence. A beguiling combination of cheap oil, a cheap euro, quantitative easing, and less fiscal austerity have disguised this, but the short-term effects are already fading. The regime is almost certain to be tested again in the next global downturn, this time starting with higher levels of debt and unemployment, and greater political fatigue. Prof Issing the lambasted the European Commission as a creature of political forces that has given up trying to enforce the rules in any meaningful way. “The moral hazard is overwhelming,” he said. The ECB is on a “slippery slope” and has in his view fatally compromised the system by bailing out bankrupt states in palpable violation of the Treaties.

“The Stability and Growth Pact has more or less failed. Market discipline is done away with by ECB interventions. So there is no fiscal control mechanism from markets or politics. This has all the elements to bring disaster for monetary union. “The no bail-out clause is violated every day,” he said, dismissing the European Court’s approval for bail-out measures as simple-minded and ideological. The ECB has “crossed the Rubicon” and is now in an untenable position, trying to reconcile conflicting roles as banking regulator, Troika enforcer in rescue missions, and agent of monetary policy. Its own financial integrity is increasingly in jeopardy. The central bank already holds over €1 trillion of bonds bought at “artificially low” or negative yields, implying huge paper losses once interest rates rise again.

[..] “During the first eight years, unit labour costs in Portugal rose by 30pc versus Germany. In the past, the escudo would have devalued by 30pc, and things more or less would be back to where they were.” “Quite a few countries – including Ireland, Italy and Greece – behaved as though they could still devalue their currencies,” he said. The elemental problem is that once a high-debt state has lost 30pc in competitiveness within a fixed exchange system, it is almost impossible to claw back the ground in the sort of deflationary world we face today. It has become a trap. The whole eurozone structure has acquired a contractionary bias. The deflation is now self-fulling. Prof Issing’s purist German ideology has no compelling answer to this.

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Ah! Happy days!

• Let The Pound Fall and The Economy Rise (G.)

It has been just like old times. The pound has been falling on the foreign exchanges and, like a patient in intensive care, there are daily bulletins about its health. Charts show that when adjusted for different patterns of trade down the ages it is at its lowest for 168 years. If you have been gouged by a foreign exchange desk at Heathrow airport, this is a bad thing. If you consider sterling to be a symbol of national virility, it is a bad thing. If you think that the future for the UK outside the European Union is unremittingly bleak, it is definitely a very bad thing. But put the Brexit vote to one side for a second and ask yourself the following questions:

Is the economy currently unbalanced? Is growth too dependent on consumer spending and asset price bubbles? Is the productive base of the economy too small? Is it a problem that the UK is running a balance of payments deficit worth 6% of GDP, bigger than ever before in peacetime? If your answer to these four questions is yes – as it should be – then you need to accept that there is an upside to the falling pound. Indeed, many of those who are now talking about a sterling crisis were last year bemoaning the fact that Greece – trapped as it was inside the eurozone – did not have the benefit of a floating currency and so had to use a brutal internal devaluation involving wage cuts, pension reductions and welfare retrenchment to restore its competitiveness.

[..] Britain has discovered a way of living beyond its means. Assets are sold to overseas buyers bringing capital into the country to offset the balance of payments deficit. It is the equivalent of a once well-to-do household that has fallen on hard times pawning the silver to keep up appearances. At some point, referendum or no referendum, the financial markets were going to say enough is enough and it is delusional to think otherwise. Running permanent balance of payment deficits amounts to borrowing growth from the future. Sooner or later, it has to be paid back and Brexit means it will be sooner. A weaker pound works by making exports cheaper and imports dearer.

The effect, as after all the other devaluations and depreciations of the past 100 years – 1931, 1949, 1967, 1976, 1992 and 2007 – will make the economy less dependent on consumers and more reliant on producers. Lord Mervyn King, a former governor of the Bank of England, thinks the latest fall in sterling is a good thing and he is right. There have been suggestions from some in the remain camp that the hollowing out of manufacturing will make it impossible to gain any benefit from the cheaper pound. This, frankly, is nonsense. The current account deficit will shrink as a result of stronger exports from the manufacturing and service sectors, the boost provided to the tourism industry, and because cheaper domestic goods and services will be substituted for more expensive imports. To say that dearer imports will make life more difficult for consumers is to miss the point. That’s how rebalancing works.

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“..just two years after the UK similarly rejected the gold standard back in 1931 there were just 12 remaining members versus the 45 that had previously been committed.”

• Europe’s Dramatic Fulcrum Point: Only Precedent Is 1930s (Hugh Hendry)

Since the Brexit referendum we have been developing our thoughts about what the Leave vote might mean, not just for the UK, but for the European project as a whole. An our main conclusion is that by doing the unthinkable and actually voting to leave, Brexit substantially increases the likelihood that other members of the European Union will also seek to break away. Remember, just two years after the UK similarly rejected the gold standard back in 1931 there were just 12 remaining members versus the 45 that had previously been committed. And the so far robust performance of the UK economy since the vote will do little to dissuade others from following suit.

So we have the precedent from a much earlier time (the 1930s) when the defection of just one member from a currency union caused the system to unwind rapidly. And we can clearly sense the seeds of another popular political revolt in other member countries; a flurry of upcoming elections and referendums provides an immediate catalyst. First of all we have the still too close to call US presidential election where a Trump victory would be hailed as a triumph for the same arguments that led to Brexit. Closer to home there is the Italian referendum on constitutional reform set for the first week in December, where it looks increasingly likely the government will be defeated.

Such a defeat would likely force Prime Minister Renzi to step down, potentially allowing populist parties to step into the resulting political vacuum and push a more nationalist agenda. 2017 is a big year for elections on the continent. In France both major parties have yet to decide on who will represent them in next year’s elections. But regardless of who the parties choose to run, both are likely to be pulled towards the distinctly anti-European nationalist agenda of Marine Le Pen who seems almost assured of reaching the second round run-off in the Presidential election next May.

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And I kid you not, some people will still fail to see where Brexit came from.

• 43% of Britons and 73% of Londoners Live in Substandard Homes (Ind.)

More than four in 10 homes in Britain are falling short of an acceptable standard to live in, according to an alarming new report from the housing charity Shelter. Britons were asked if their homes met a series of conditions which together make up what Shelter has dubbed the “Living Home Standard”, and 43% said their home failed the test. The charity said it came up with the new criteria for what constitutes an acceptable place to live in consultation with the public. From having an affordable rent to being free from mould, pests and safety hazards, the list sets a “not unreasonable” standard which all homes should be meeting, Shelter said. Yet despite working with thousands of cases every week where homes are not up to scratch, even Shelter was shocked by how far the country was falling short.

Nearly one in five homes failed the Living Home Standard based on a lack of decent conditions. Some didn’t have running hot and cold water, others were not structurally sound, and many had serious pest infestations or issues with mould and damp. The research, conducted by Ipsos Mori, found more than one in four of the nearly 2,000 surveyed said their homes failed basic standards of affordability. In these cases, people had to cut back on essentials like food and heating just to pay their rent or mortgage, or they were worried those payments could rise to a level they would no longer be able to afford. And one in 10 respondents failed the test due to instability, mostly renters on short term contracts worried they could be kicked out of their homes at short notice.

“At Shelter we see all these problems every single day through our services, we help thousands of people every week, but even then – 43% was higher than we imagined,” Anne Baxendale, Shelter’s campaign chief, told The Independent. The problem appears particularly pronounced in London, where a staggering 73% said their home failed the test on some level. “It is really shocking, and it is up and down the country. Yorkshire is least badly affected – and it’s still one in four [failing],” Ms Baxendale said. “It’s affects people living in every kind of home, and people of all ages, but particularly the young. This is the start out in life that we are giving young people.

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Comedy: “..the group wants to set a legal precedent in the common law that prevents political leaders from lying to the public..”

• Crowd-Funded Legal Case Wants To See Politicians Jailed For Brexit Lies (Ind.)

A crowd-funded project to prosecute politicians for “lying” during the EU referendum campaign has raised over £175,000 and now wants to see dishonest politicians jailed, the project’s founder has told The Independent. Marcus J. Ball, who founded the Brexit Justice campaign, says his team of lawyers are now building a case to take politicians to court to be held accountable for “dishonest” claims about Brexit. He set up the group online following the EU referendum citing his frustration at what he feels were misleading claims from some politicians during the campaign. After appealing for donations, he received more than £145,000 for legal fees as well as a salary of £32,000 for him to lead the project full time. Speaking to The Independent, Mr Ball admitted the project is a “highly ambitious and difficult challenge”.

However, he believes it is essential to make politicians accountable for broken promises: “We need to end this bizarre relationship we have with politicians, they are not untouchable. They are not above the law.” The 27-year-old, from Norwich, says the group wants to “set a legal precedent in the common law that prevents political leaders from lying to the public in the future. We also want to challenge the legitimacy of Brexit by legally establishing that it resulted from criminal wrongdoing on both sides.” Mr Ball said he is unable to discuss at this stage which politicians he will be singling out as the focus of the legal action. He told The Independent: “Now our solicitors have to build the case and formally instruct barristers, including some formidable QCs”.

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I don’t think too many people have signed up to my statement that globalization is over. But Germany leans there, even if it’s heavily dependent on exports.

• Rattled German CEOs Seek “Revival of Germany Inc.” (WS)

About 20 German industry chieftains, rattled by the hits German companies have recently taken, including Deutsche Bank and Volkswagen, spent Saturday and Sunday two weeks ago on the phone with each other. They were fretting about the future of Germany’s export-dependent industry and outlining solutions. Some of the participants have since talked to the German daily, Die Welt, which published its report on Sunday. Participants included Siemens CEO Joe Kaeser, BASF CEO Kurt Bock, Deutsche Bank CEO John Cryan, BDI (Association of German Industry) president Ulrich Grillo, and BDI General Manager Markus Kerber. How to protect key industries in Germany is also topic of a paper being worked on by the Economy Minister Sigmar Gabriel and his folks, the Welt reported.

They’re searching for “protective walls,” and are working on a “list of options for actions to protect key German industries.” Finance Minister Wolfgang Schäuble and Finance State Secretary Thomas Steffen are in on it. For months, top executives and politicians have been discussing the impact of foreign governments on the “pillars of the German economy.” The recent “re-nationalization” of economic policies in many countries, in parallel with the “destabilization of the world,” scares these managers. “We are in a new phase in global politics, in which many countries are reverting to their national interests, where globalization is being turned back,” Kerber explained. Other executives have used similar words in their confidential conversations. Everyone is looking for answers. Nothing has been decided. Solutions are being worked on “behind the scenes.” And it shows, the Welt said, that “protectionism is suddenly no longer a dirty word” in business and politics.

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JP Morgan and Qatar want to save Italy’s banks. That should never be allowed.

• Will Italy Leave the EU? Follow the Money (BBG)

Will Italy follow the UK’s example and leave the EU? Far-fetched as it may seem, capital flows suggest that some people aren’t waiting to find out. To keep the euro area’s accounts in balance, Europe’s central banks track flows of money among the members of the currency union. If, for example, a depositor moves €100 from Italy to Germany, the Bank of Italy records a liability to the Eurosystem and the Bundesbank records a credit. If a central bank starts building up liabilities rapidly, that tends to be a sign of capital flight. Lately, Italy’s central bank has been building up a lot of liabilities to the Eurosystem.

As of the end of September, they stood at about €354 billion, up €118 billion from a year earlier – and up €78 billion since the end of May, before the U.K. voted to leave the EU. The outflow isn’t quite as large as during the sovereign-debt crisis of 2012, but it’s still significant. The main beneficiary seems to be Germany, which has seen its credits to the Eurosystem increase by €160 billion over the past year. Here’s a chart showing the cumulative six-month flows between Italy and Germany and the rest of the euro area:

Why the accelerating outflows from Italy? One explanation is that people are worried about the state of the country’s banks, which are suffering the consequences of bad lending, poor governance and a new euro-area oversight system that makes rescues difficult. Another is political: Italian PM Matteo Renzi has staked his fate on a December government-reform referendum that, if it goes against him, could strengthen opponents who want to force a vote on whether Italy should remain in the EU. In that context, it’s not surprising that some depositors prefer not to hold Italian euros, given the chance that they might eventually be converted into lira. Either way, the capital flight doesn’t speak well of confidence in the European project – something EU leaders will have to keep in mind as they negotiate the terms of Britain’s exit.

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Empty threats.

• 15 Swiss Banks In Money Laundering ‘Red Zone’ (R.)

Roughly 15 Swiss banks are in a “red zone” of lenders particularly exposed to money laundering risks, the head of Swiss banking watchdog FINMA said in a newspaper interview published on Sunday. Swiss federal prosecutors last week said that they have opened criminal proceedings against Zurich-based Falcon Private Bank for alleged failure to prevent suspected money laundering linked to Malaysia’s scandal-tainted 1MDB fund. Falcon is the second Swiss bank, after BSI, to face a criminal investigation by Switzerland’s Office of the Attorney General over links to 1Malaysia Development Berhad (1MDB). The move is partly based on an investigation by FINMA, which has also opened proceedings against several other lenders.

“We have introduced a warning system in relation to money laundering risks,” FINMA Chief Executive Mark Branson said in an interview with Swiss newspaper SonntagsZeitung. “Roughly 15 banks are in the red zone here. That means they are particularly exposed.” Branson did not name the banks concerned but said that most of them are involved in asset management and often have clients from emerging markets, adding that the lenders were from all areas of the country and of various sizes. Asked whether any major Swiss banks were among them, he said: “I would not use the plural, but yes.”

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“To rebuild the loyalty of those who would continue to rule in the party’s name, its leaders went on to create the conditions in which officials at all levels could loot state property.”

• China’s Crony Capitalism: The Dynamics of Regime Decay (Econ.)

In 1989 the movement for democracy brought the Chinese Communist Party to within days of extinction. According to official reports, on one day alone, May 22nd, 6m people joined demonstrations in 132 cities across the country. The party’s immediate response was to use the people’s army to crush the people by force, in Tiananmen Square. To rebuild the loyalty of those who would continue to rule in the party’s name, its leaders went on to create the conditions in which officials at all levels could loot state property. Thus, the biggest democracy movement in history was countered by the greatest opportunity for predation the world has ever seen. China has never had a formal privatisation programme.

Instead, as Minxin Pei, a professor of government at Claremont McKenna College in California, writes in “China’s Crony Capitalism”, decentralising the rights of control over state property without clarifying the rights of ownership gave those who rule “maximum advantage to extract wealth from society”. Rights of control have been separated from rights of ownership in China—and where ownership is uncertain, control is key. Mr Pei’s book is quietly devastating. In sober, restrained language, he exposes the full gravity of corruption in China. Presenting a wealth of evidence, he shows that this is not the unfortunate by-product of rapid economic growth but the result of strategic choices by the party. With clinical precision, Mr Pei explains how corruption operates at every level, perverting each branch of the party-state and subverting the political authority of the regime.

The party cannot mitigate, let alone eradicate, “crony capitalism” because, since 1989, it has been “the very foundations of the regime’s monopoly of power”, the author argues. The conclusion, he believes, is that far from saving the regime, President Xi Jinping’s anti-corruption drive may accelerate its demise by creating divisions within the ruling elite even as it reinforces strong popular resentment of corruption. The state continues to hold the residual property rights to at least half of the net worth of the economy. Since 1978, when Deng Xiaoping launched his economic programme, the party-state has jealously guarded this walled garden for its officials and their business cronies. Throughout this time there has been some economic reform but no political reform. Thus the party, as Mr Pei points out, can only protect its interests with the full Leninist range of repressive instruments—and daily displays its willingness to do so.

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Jeff fails to mention the chemical industry. But great graphics.

• The Oil Market is Bigger Than All Metal Markets Combined (VC)

Ever since the invention of the internal combustion engine, oil has been one of the most crucial commodities on Earth. Without it, modern transportation as we know it would not be possible. Industries such as aviation, aerospace, automobiles, shipping, and the military would look nothing like they do today. Of course, as we now know, this has all come with some extreme drawbacks from an environmental perspective. And while new green technology and the lithium revolution will aid in eventually reducing the role of oil in transportation, the fact is we still use 94 million barrels per day of crude worldwide.

As a result, the energy industry continues to have huge amounts of influence on our lives. Special interest groups with a focus on energy have influence on a domestic level. Meanwhile, from a foreign policy angle, countries like Saudi Arabia and Russia wield additional geopolitical and economic power because of their natural resources. It’s even arguable that everything from the Gulf War to the more recent Middle East interventions in Libya, Syria, and Iraq have been at least partially to do with oil. This week’s chart of the week aims to help explain the influence that oil has on countries and markets by using a very simple perspective: the size of the crude oil market vs. all metal markets combined.

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Debt Rattle September 17 2016

Sep 172016
 
 September 17, 2016  Posted by at 9:01 am Finance Tagged with: , , , , , , , , , ,  1 Response »


DPC Near Lewiston, Minnesota – The Pulpit. 1899

• The Beginning of the End of the World (Umair Haque)
• US Household Net Worth Hits Record $89 Trillion, But There’s A Catch (ZH)
• China’s Holdings of US Treasuries Fall to Lowest Since 2013 (BBG)
• Trump’s Economic Plan: Some Decent Ideas, Lots Of Really Bad Fiscal Math (DS)
• US Is Investigating Bosch in Widening VW Diesel-Cheat Scandal (BBG)
• Why the Fed Destroyed the Market Economy (Gordon)
• IMF’s Lagarde: Big Salary, Big Ideas (TO Sun)
• House Intelligence Committee’s Terrible, Horrible, Very Bad Snowden Report (TCF)
• Western Media Credibility In Free Fall Collapse (Paul Craig Roberts)
• The Intellectual Yet Idiot (Taleb)
• The Existential Madness of Putin-Bashing (Robert Parry)
• Russia Says US Refuses To Share Syria Truce Deal With UN Council (R.)

 

 

Nice attempt by Haque, but no, some kind of ‘leadership’ would not solve our problems.

• The Beginning of the End of the World (Umair Haque)

The beginning of the end of the world means that yesterday’s model of prosperity – let’s call it capitalist liberal democracy – has reached its limits. It is like an aging machine that shudders and backfires more violently and regularly, because it is broken. And yet, we are unsure, as a world, where to go next.

Let’s take it in four levels. At the macro level, liberal capitalism’s a set of agreements and institutions. These agreements are being torn up, rejected, abandoned. Witness Brexit. The world is left in a state of void, just as the UK is now. Let me try to translate that: there is not a single leader in the world today who appears to have a vision for a stagnant global economy. The kind of great and radical vision that Keynes, Marshall, JFK had. Maybe we don’t agree with the vision – but what is important is that are visions to discuss, debate, inspire, cohere, lead. That level of vision is missing when it is most badly needed. Without such a vision, what happens?

A void of vision, leadership, direction to fix any of the existential threats of inequality, fragility, insecurity, at the global level inevitably means social discontent, decay, decline. Why be a part of societies and unions that step on your future? The beginning of the end of the world at the social level means: entire societies are beginning to fracture. As they fracture, so there is a return to tribalism, dynasty, feudal and authoritarian ways of ordering society. You don’t have to look much further than the US election to see it. In the void of democracy, feudalism is the darkness, and fascism is midnight. What happens when societies begin to splinter and fracture, regress and decline?

At the institutional level, the level of corporations and organisations, the end of the world means that there is now an even more severe power imbalance. Institutions hold far more power than relatively powerless, ossified, fractured states. And they exercise it. They set the terms and define the rules of trade, freedom, work, reward. What does that mean for people? At the personal level, the end of the world is already here. This is the first generation in modern history that’s going to suffer worse living standards than their parents. The question is: how much worse? Very badly worse. With stagnant incomes, no savings, this generation will never retire, vacation, advance, enjoy, or own. Their relationships, health, and productivity will suffer as a result. The quality of their lives is going to be long, bleak, and pointless. Worked to the grave to make a dwindling number of dynasties wealthy, largely by serving them hand and foot, not really enhancing human life.

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Tyler presents inequality as the catch, but the -admittedly related- asset bubble is a much bigger one.

• US Household Net Worth Hits Record $89 Trillion, But There’s A Catch (ZH)

As part of its quarterly Flow of Funds update, earlier today the Fed released snapshot of the US “household” sector as of June 30. What it revealed is that with $103.8 trillion in assets and a modest $14.7 trillion in liabilities, the net worth of the average US household rose to a new all time high of $89.1 trillion, up $1.1 trillion as a result of an estimated $474 billion increase in real estate values, and mostly $750 billion increase in various stock-market linked financial assets like corporate equities, mutual and pension funds. Household borrowing rose at a 4.4% annual rate, with total household liabilities grew growing by $200 billion from $14.5 trillion to $14.7 trillion, the bulk of which was $9.6 trillion in home mortgages. The breakdown of the total household balance sheet as of Q2 is shown below.

And while it would be great news if wealth across America had indeed risen as much as the chart above shows, the reality is that there is a big catch: as shown previously, virtually all of the net worth, and associated increase thereof, has only benefited a handful of the wealthiest Americans. As a reminder, from the CBO’s latest Trends in Family Wealth analysis, here is a breakdown of the above chart by wealth group, which sadly shows how the “average” American wealth is anything but. While the breakdown has not caught up with the latest data, it provides an indicative snapshot of who benefits.

Here is how the CBO recently explained the wealth is distributed: In 2013, families in the top 10% of the wealth distribution held 76% of all family wealth, families in the 51st to the 90th %iles held 23%, and those in the bottom half of the distribution held 1%. Average wealth was about $4 million for families in the top 10% of the wealth distribution, $316,000 for families in the 51st to 90th%iles, and $36,000 for families in the 26th to 50th %iles. On average, families at or below the 25th %ile were $13,000 in debt.

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Maybe Draghi and Kuroda can buy them all.

• China’s Holdings of US Treasuries Fall to Lowest Since 2013 (BBG)

China’s holdings of U.S. Treasuries fell in July to the lowest level in more than three years, as the world’s second-largest economy pares its foreign-exchange reserves to support the yuan. The biggest foreign holder of U.S. government debt had $1.22 trillion in bonds, notes and bills in July, down $22 billion from the prior month, in the biggest drop since 2013, according to U.S. Treasury Department data released Friday in Washington and previous figures compiled by Bloomberg. The portfolio of Japan, the largest holder after China, rose $6.9 billion to $1.15 trillion. Saudi Arabia’s holdings of Treasuries declined for a sixth straight month, to $96.5 billion.

The figures compare with official Chinese data showing that the nation’s foreign-exchange reserves were little changed in July at $3.2 trillion, though they’re down from a peak of close to $4 trillion in 2014. The reserves dropped $16 billion in August to the lowest level since 2011. The report, which also contains data on international capital flows, showed net foreign buying of long-term securities totaling $103.9 billion in July. It showed a total cross-border inflow, including short-term securities such as Treasury bills and stock swaps, of $140.6 billion. Net foreign selling of U.S. Treasuries was $13.1 billion in July, while foreigners scooped up a net $26.1 billion in equities, $20.7 billion of corporate debt and $38.9 billion in agency debt, according to the report.

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Stockman knows what he’s talking about on this issue, far more than most. Not perfect, but useful.

• Trump’s Economic Plan: Some Decent Ideas, Lots Of Really Bad Fiscal Math (DS)

[..] the Reagan White House—me included – fell for the theory of “dynamic scoring” and that the big cuts in the income tax rates would partially pay for themselves via revenue “flowback”. Back in those days the latter was expressed in an economic forecast known as Rosy Scenario, which assumed that in response to the supply side tax cuts, the US economy would get up on its hind legs and leap forward at a real GDP growth rate of more than 4% per year, and as far as the eye could see. What happened instead, of course, is that the US economy plunged into the drink of the deep 1982 recession and the Federal deficit soared to 5% of GDP—a truly shocking outcome back in those innocent days when the old-time fiscal religion still had roots inside the beltway.

And it would have also caused enormous economic havoc had not the Gipper’s advisors—me included—talked him to signing three tax bills over 1982-1984 that recaptured roughly 40% of the revenue loss from his cherished tax cuts. Even then, the public debt grew by 250% during Reagan’s eight years – or by more than under any peacetime President in American history. Yet even to this day the GOP politicians and their economic advisers profess a case of heavy duty amnesia about what happened, claiming that real GDP grew by upwards of 4.5% and that these results were proof positive that “dynamic scoring” of tax cuts is valid.

Worse still, they appear to have convinced Donald Trump of this same fallacious revisionist history because it was embedded at the core of the Thursday speech’s fiscal math. To wit, Trump claimed that $2.6 trillion or 60% of the revenue loss from his $4.4 trillion tax cut would be recouped by, yes, 4% economic growth as far as the eye can see.

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As Merkel pushes back.

• US Is Investigating Bosch in Widening VW Diesel-Cheat Scandal (BBG)

U.S. prosecutors are investigating whether Germany’s Robert Bosch, which provided software to Volkswagen, conspired with the automaker to engineer diesel cars that would cheat U.S. emissions testing, according to two people familiar with the matter. Among the questions the Justice Department is asking in the criminal probe, one of them said, is whether automakers in addition to VW used Bosch software to skirt environmental standards. Bosch, which is also under U.S. civil probe and German inquiry, is cooperating in investigations and can’t comment on them, said spokesman Rene Ziegler.

The line of inquiry broadens what is already the costliest scandal in U.S. automaking history. VW faces an industry-record $16.5 billion, and counting, in criminal and civil litigation fines after admitting last year that its diesel cars were outfitted with a “defeat device” that lowered emissions to legal levels only when it detected the vehicle was being tested. More than a half dozen big manufacturers sell diesel-powered vehicles in the U.S. The people familiar with the matter declined to say whether specific makers are under scrutiny. A second supplier may also be part of the widening probe: When prosecutors in Detroit outlined their case last week against a VW engineer who pleaded guilty to conspiracy in the matter, they said he had help from a Berlin-based company that is 50% owned by Volkswagen, described as “Company A” in a court filing. That company, according to a another person familiar with the matter, is IAV, which supplies VW and other automakers.

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“..the data told them to…”

• Why the Fed Destroyed the Market Economy (Gordon)

Kashkari’s a man with crazy eyes. But he’s also a man with even crazier ideas. After stating that politics is not part of presidential election year Fed policy, Kashkari explained how Fed policy is set. “We look at the data,” he said. In hindsight, this clarification was more revealing than the initial denial. Clearly, Kashkari’s never thought about what exactly it is he’s looking at when looking at the data. If he had, he’d likely conclude that the approach of using data to identify apparent aggregate demand insufficiencies and perceived supply gluts is crazy. Unemployment. GDP. Price inflation. These data points are all fabricated and fudged to the government number crunchers’ liking. What’s more, for each headline number there are a list of footnotes and qualifiers. Hedonic price adjustments. Price deflators. Seasonal adjustments. Discouraged worker disappearances. These subjective adjustments greatly affect the results.

Yet what’s even crazier is that Kashkari believes that by finagling around with the price of money the Fed can improve the outputs of their bogus data. According to central planners, better data – i.e. higher GDP, greater consumer demand, 2% inflation – means a better economy. But after 100-years of mismanagement, the last eight being in the radically extreme, the Fed has scored a big fat rotten tomato. The data still stinks – GDP’s still anemic. But the downside of their actions is downright putrid. Policy makers have pushed public and private debt well past their serviceable limits. They’ve debased the dollar to less than 5% of its former value and propagated bubbles and busts in real estate, stock markets, emerging markets, mining, oil and gas, and just about every other market there is. Aside from enriching private bankers, we now know the answer to why the Fed destroyed the market economy. According to Kashkari, the data told them to.

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“..a former French finance minister who has more than a passing knowledge of the debt crisis in the country formerly known as Greece..”

• IMF’s Lagarde: Big Salary, Big Ideas (TO Sun)

You probably didn’t get invited to the International Forum of the Americas conference held in Toronto this week. Neither did I. Just as well. From $700 for a “regular” one-day pass to $3,500 for an “executive club” three-day pass, the croissants and coffee must have been vastly superior to the fare at Tim Hortons. We both missed the opportunity to hear Christine Lagarde, the managing director of the IMF, pontificate on the rise of protectionist political rhetoric in the developed world. Lagarde drew criticism for praising Prime Minister Justin Trudeau’s fiscal plan from my friends Tony Clement, who’s in the running for the leadership of the federal Conservatives and Lisa Raitt, who hasn’t yet said whether she will run. Lagarde commented that she hoped Trudeau’s fiscal approach of spend now, pay later would go viral.

It’s an interesting take on how to build a strong, national economy, particularly from a former French finance minister who has more than a passing knowledge of the debt crisis in the country formerly known as Greece. The IMF has been intricately involved in the economic and political meltdown of Greece and, early in her tenure as managing director, Lagarde raised hackles by agreeing Greeks had “had a nice time” but it was now “payback time”. It’s hard to square the gap between praising Trudeau for “stimulus” spending and borrowing, while criticizing Greeks for not paying their way.

[..] I found Lagarde’s comments on the protectionist political wave sweeping over much of the developed world more interesting, and unintentionally, insightful. I had the pleasure of hearing her speak at a forum in New York. She is intelligent, informed and opinionated, all things I like. She’s also an elite, globe-traveling bureaucrat with a $500,000 tax-free salary and an expense account commensurate with a lifestyle unrecognizable to average folk. From her lofty, enlightened position Lagarde offered that blue-collar workers in developed countries should be offered educational opportunities. Apparently that will help them adjust to factory closings.

The author was a cabinet minister in the Conservative government of Ontario premier Mike Harris from 1995 to 2002.

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Barton Gellman takes down an idiot report.

• House Intelligence Committee’s Terrible, Horrible, Very Bad Snowden Report (TCF)

Since I’m on record claiming the report is dishonest, let’s skip straight to the fourth section. That’s the one that describes Snowden as “a serial exaggerator and fabricator,” with “a pattern of intentional lying.” Here is the evidence adduced for that finding, in its entirety.

“He claimed to have left Army basic training because of broken legs when in fact he washed out because of shin splints.” This is verifiably false for anyone who, as the committee asserts it did, performs a “close review of Snowden’s official employment records.” Snowden’s Army paperwork, some of which I have examined, says he met the demanding standards of an 18X Special Forces recruit and mustered into the Army on June 3, 2004. The diagnosis that led to his discharge, on crutches, was bilateral tibial stress fractures.

“He claimed to have obtained a high school degree equivalent when in fact he never did.” I do not know how the committee could get this one wrong in good faith. According to the official Maryland State Department of Education test report, which I have reviewed, Snowden sat for the high school equivalency test on May 4, 2004. He needed a score of 2250 to pass. He scored 3550. His Diploma No. 269403 was dated June 2, 2004, the same month he would have graduated had he returned to Arundel High School after losing his sophomore year to mononucleosis. In the interim, he took courses at Anne Arundel Community College.

“He claimed to have worked for the CIA as a ‘senior advisor,’ which was a gross exaggeration of his entry-level duties as a computer technician.” Judge for yourself. Here are the three main roles Snowden played at the Central Intelligence Agency (CIA). (1) His entry level position, as a contractor, was system administrator (one among several) of the agency’s Washington metropolitan area network. (2) After that he was selected for and spent six months in training as a telecommunications information security officer, responsible for all classified technology in U.S. embassies overseas. The CIA deployed him to Geneva under diplomatic cover, complete with an alias identity and a badge describing him as a State Department attache. (3) In his third CIA job, the title on his Dell business card was “solutions consultant / cyber referent” for the intelligence community writ large—the company’s principal point of contact for cyber contracts and proposals. In that role, Snowden met regularly with the chiefs and deputy chiefs of the CIA’s technical branches to talk through their cutting edge computer needs.

“He also doctored his performance evaluations…” Truly deceptive, this. I will tell the story in my book. Suffice to say that Snowden discovered and reported a security hole in the CIA’s human resources intranet page. With his supervisor’s permission, he made a benign demonstration of how a hostile actor could take control. He did not change the content of his performance evaluation. He changed the way it displayed on screen.

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But they control.

• Western Media Credibility In Free Fall Collapse (Paul Craig Roberts)

The latest from the Gallup Poll is that only 32% of Amerians trust the print and TV media to tell the truth. Republicans, 18 to 49 year old Americans, and independents trust the media even less, with trust rates of 14%, 26%, and 30%. The only group that can produce a majority that still trusts the media are Democrats with a 51% trust rate in print and TV reporting. The next highest trust rate is Americans over 50 years of age with a trust rate of 38%. The conclusion is that old people who are Democrats are the only remaining group that barely trusts the media. This mistaken trust is due to their enculturation. For older Democrats belief in government takes the place of Republican belief in evangelical Christianity.

Older Democrats are firm believers that it was government under the leadership of President Franklin D. Roosevelt that saved America from the Great Depression. As the print and TV media in the 21st century are firmly aligned with the government, the trust in government spills over into trust of the media that is serving the government. As the generation of Democrats enculturated with this mythology die off, Democratic trust rates will plummet toward Republican levels. It is not difficult to see why trust in the media has collapsed. The corrupt Clinton regime, which we might be on the verge of repeating, allowed a somewhat diverse and independent media to be 90% acquired by six mega-corporations. The result was the disappearance of independence in reporting and opinion.

The constraints that corporate ownership and drive for profits put on journalistic freedom and resources reduced reporting to regurgitations of government and corporate press releases, always the cheapest and uncontroversial way to report. With journalistic families driven out of journalism by estate taxes, the few remaining newspapers become acquisitions like a trophy wife or a collector Ferrari. Jeff Bezos, CEO and founder of amazon.com, handed over $250 million in cash for the Washington Post. Jeff might be a whiz in e-commerce, but when it comes to journalism he could just as well be named Jeff Bozo.

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Taleb’s been tweeting on this for a long time. Wonder if he’s read Ivan Illich’s work on institutionalism.

• The Intellectual Yet Idiot (Taleb)

The Intellectual Yet Idiot is a production of modernity hence has been accelerating since the mid twentieth century, to reach its local supremum today, along with the broad category of people without skin-in-the-game who have been invading many walks of life. Why? Simply, in most countries, the government’s role is between five and ten times what it was a century ago (expressed in%age of GDP). The IYI seems ubiquitous in our lives but is still a small minority and is rarely seen outside specialized outlets, think tanks, the media, and universities – most people have proper jobs and there are not many openings for the IYI. Beware the semi-erudite who thinks he is an erudite. He fails to naturally detect sophistry.

The IYI pathologizes others for doing things he doesn’t understand without ever realizing it is his understanding that may be limited. He thinks people should act according to their best interests and he knows their interests, particularly if they are “red necks” or English non-crisp-vowel class who voted for Brexit. When Plebeians do something that makes sense to them, but not to him, the IYI uses the term “uneducated”. What we generally call participation in the political process, he calls by two distinct designations: “democracy” when it fits the IYI, and “populism” when the plebeians dare voting in a way that contradicts his preferences. While rich people believe in one tax dollar one vote, more humanistic ones in one man one vote, Monsanto in one lobbyist one vote, the IYI believes in one Ivy League degree one-vote, with some equivalence for foreign elite schools, and PhDs as these are needed in the club.

More socially, the IYI subscribes to The New Yorker. He never curses on twitter. He speaks of “equality of races” and “economic equality” but never went out drinking with a minority cab driver. Those in the U.K. have been taken for a ride by Tony Blair. The modern IYI has attended more than one TEDx talks in person or watched more than two TED talks on Youtube. Not only will he vote for Hillary Monsanto-Malmaison because she seems electable and some other such circular reasoning, but holds that anyone who doesn’t do so is mentally ill. The IYI has a copy of the first hardback edition of The Black Swan on his shelves, but mistakes absence of evidence for evidence of absence. He believes that GMOs are “science”, that the “technology” is not different from conventional breeding as a result of his readiness to confuse science with scientism.

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Everyone should read this. And then realize that Russia in not a threat to us.

• The Existential Madness of Putin-Bashing (Robert Parry)

the United States dispatched financial “experts” – many from Harvard Business School – who arrived in Moscow with neoliberal plans for “shock therapy” to “privatize” Russia’s resources, which turned a handful of corrupt insiders into powerful billionaires, known as “oligarchs,” and the “Harvard Boys” into well-rewarded consultants. But the result for the average Russian was horrific as the population experienced a drop in life expectancy unprecedented in a country not at war. While a Russian could expect to live to be almost 70 in the mid-1980s, that expectation had dropped to less than 65 by the mid-1990s.

The “Harvard Boys” were living the high-life with beautiful women, caviar and champagne in the lavish enclaves of Moscow – as Yeltsin drank himself into stupors – but there were reports of starvation in villages in the Russian heartland and organized crime murdered people on the street with near impunity. Meanwhile, Presidents Bill Clinton and George W. Bush cast aside any restraint regarding Russia’s national pride and historic fears by expanding NATO across Eastern Europe, including the incorporation of former Soviet republics. In the 1990s, the “triumphalist” neocons formulated a doctrine for permanent U.S. global dominance with their thinking reaching its most belligerent form during George W. Bush’s presidency, which asserted the virtually unlimited right for the United States to intervene militarily anywhere in the world regardless of international law and treaties.

Without recognizing the desperation and despair of the Russian people during the Yeltsin era – and the soaring American arrogance in the 1990s – it is hard to comprehend the political rise and enduring popularity of Vladimir Putin, who became president after Yeltsin abruptly resigned on New Year’s Eve 1999. (In declining health, Yeltsin died on April 23, 2007). Putin, a former KGB officer with a strong devotion to his native land, began to put Russia’s house back in order. Though he collaborated with some oligarchs, he reined in others by putting them in jail for corruption or forcing them into exile.

Putin cracked down on crime and terrorism, often employing harsh means to restore order, including smashing Islamist rebels seeking to take Chechnya out of the Russian Federation. Gradually, Russia regained its economic footing and the condition of the average Russian improved. By 2012, Russian life expectancy had rebounded to more than 70 years. Putin also won praise from many Russians for reestablishing the country’s national pride and reasserting its position on the world stage.

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Why?

• Russia Says US Refuses To Share Syria Truce Deal With UN Council (R.)

Russia said on Friday that a U.N. Security Council endorsement of a Syria ceasefire deal between Moscow and Washington appeared unlikely because the United States does not want to share the documents detailing the agreement with the 15-member body. Russian U.N. Ambassador Vitaly Churkin and U.S. Ambassador Samantha Power had been due to brief the council behind closed-doors on Friday but that was canceled at the last minute. “The main problem … which in my mind makes it impossible to produce any resolution, is that they are refusing to give those documents to members of the Security Council or even to read those documents to the members of the Security Council,” Churkin told reporters.

“We believe that we cannot ask them (council members) to support documents which they haven’t seen,” said Churkin, suggesting there was lack of unity in U.S. President Barack Obama’s administration toward the agreement. The U.S. mission to the United Nations said it could not agree with Russia on a way to brief the council that would “not compromise the operational security of the arrangement.” [..] Churkin said Russia has given two drafts of a possible Security Council resolution to the United States. He said on Thursday that Moscow hoped a resolution could be adopted next week during the annual U.N. gathering of world leaders. “They, in their typical way, came up with a completely different thing, which is trying to interpret and reinterpret the agreement,” Churkin said, referring to U.S. officials.

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The Media Choir Worked So Hard All Week..

Aug 062016
 
 August 6, 2016  Posted by at 11:41 am Finance Tagged with: , , ,  19 Responses »


Fred Stein Streetcorner, Paris 1930s

The media choir worked so hard all week to talk down Donald Trump. A collection of headlines in the past 24 hours has the BBC going as far as: “Trump Campaign Teeters On The Brink”. Business Insider ran with: “Hillary Clinton Looks Like She’s About To Crush Donald Trump”. Bloomberg gets in on the action: “Trump Is Cratering’: New Polls Signal Deep Trouble for Republican Nominee”. WaPo does one ‘better’: ”A New Poll Has Trump In Fourth — Behind Gary Johnson AND Jill Stein”.

But then at the end of the feeding frenzy Reuters comes with: “Democratic presidential nominee Hillary Clinton’s lead over Republican rival Donald Trump narrowed to less than 3 percentage points, according to a Reuters/Ipsos opinion poll released on Friday, down from nearly 8 points on Monday.” And mind you, this is after Reuters/Ipsos changed their polling methods when they figured out that no longer offering ‘Neither’ as an option would favor Clinton.

Really, don’t believe a word they say, the goal-seeking is only going to get much worse, and don’t believe a single poll either.

Hubris, Instability and Entertainment

Jul 252016
 
 July 25, 2016  Posted by at 2:08 pm Finance Tagged with: , , , , , , , , ,  8 Responses »


Warren K. Leffler Ku Klux Klan members supporting Barry Goldwater, San Francisco 1964

John McDonnell, UK Shadow Chancellor of the Treasury (at least it sounds important) appealed to his -Labour- party on Sunday morning TV to “stop trying to destroy the party”, and of course I’m thinking NO, please don’t stop, keep at it, it’s so much fun. When you watch a building collapse, you want it to go all the way, not stop somewhere in the middle and get patched up with band-aids.

It’s alright, let it crumble, it’s had its day. And if it’s any consolation, you’re not alone. Nor is that some freak coincidence. ‘Labour’-like parties (the ‘formerly left’) all over the world are disintegrating. Which is no surprise; they haven’t represented laborers for decades. They’ve become the left wing -and even that mostly in name only- of a monotone bland centrist political blob.

The other ‘half’ of that blob, the ‘conservative’ side, is disintegrating just as rapidly, as evidenced by the rise of Trump and a motley crew of Boris Johnson ilk.

The spontaneous self-immolation of the US Democratic Party mirrors that of the British Labour Party, but admittedly, it has even more entertainment value. America does entertainment like nobody else can.

In both cases, we see entire parties turn on their own candidates, it truly is a sight to behold. Especially since people like Bernie Sanders and Jeremy Corbyn are the only ones who do have a tangible connection to the people left that they represent.

One might even say Donald Trump falls in that category too, though in a slightly different way. The others, whether they are from the supposed left or right -and it really makes no difference anymore- rely on pure hubris. The WikiLeaks files on the DNC make that so clear it hurts.

And if one thing exemplifies what’s going wrong, it’s that the DNC in all its superciliousness seeks to blame the fact that there were leaks for the mess, not the content of what was leaked. And replaces one chair with another who was just as guilty as the first one of trying to bring down one of their own candidates. As the leaks show.

The reason all this high value entertainment is presented to us is that the political system is toppling over in line with the economic one. As I’ve argued before, this is inevitable, because they are one and the same system. If one part falls, so must the other. I wrote 7 weeks ago:

The Only Thing That Grows Is Debt

What we have is a politico-economic system, with the former media establishment clinging to (or inside?!) its body like some sort of embedded parasite. A diseased triumvirate.

With the economy in irreversible collapse, the politico part of the Siamese twin/triplet can no longer hold. That is what is happening. That is why all traditional political parties are either already out or soon will be. Because they, more than anything else, stand for the economic system that people see crumbling before their eyes. They represent that system, they are it, they can’t survive without it.

Of course the triumvirate tries as hard as it can to keep the illusion alive that sometime soon growth will return, but in reality this is not just another recession in some cycle of recessions. Or, at the very minimum this is a very long term cycle, Kondratieff style. And even that sounds optimistic. The system is broken, irreparably. A new system will have to appear, eventually. But…

‘Associations’ like the EU, and perhaps even the US, with all the supranational and global entities they have given birth to, NATO, IMF, World Bank, you name them, depend for their existence on an economy that grows. The entire drive towards globalization does, as do any and all drives toward centralization. But the economy has collapsed. So all this will of necessity go into reverse, even if there are very powerful forces that will resist such a development.

And here’s the graph that I said depicts very well what is the problem with the economic system, in an ‘all you need to know’ kind of way:

 

 

We’d already be well aware of what’s wrong with our economies if our governments and media hadn’t consistently lied to us about it for all these years. These lies make sense from their point of view; they’d be out of a job and out of power once they would stop lying.

Outside of the media, in people’s own experience, there is no recovery, it’s a fairy tale. And there is no growth the way stock exchanges portray, or employment numbers. You can’t lie to all of the people all of the time. Again, though, the attempts are often good for many hours of solid amusement.

Take the way a word like populist is (ab-)used. Grab a handful of names of people who’ve been labeled populist recently, like Putin, Trump, Tsipras, Varoufakis, Sanders, Corbyn, Chávez, Maduro, Morales, Le Pen, Beppe Grillo, Wilders, etc etc, and you notice they are very different people in more ways than one.

But they have one thing in common: they reject the western establishment, at least to a degree (many merely want to ‘tweak’ it). Which makes it tempting for establishment media to slap the populist label on them, because it has such a bad connotation. Courtesy of the same media, of course.

Still, that’s only mildly funny, more in a subtle kind of way. There are better ones. Where do you think these buttons, for example, find their origin?:

 

 

 

Even better, Zero Hedge and Bryan MacDonald have a nice set of ‘plagiarized’ headlines. Altogether now on the all time favorite whipping boy, Vlad V. Putin. The DNC was at him again today as well, even though by the looks of it they don’t seem to need any help at self-destructing. That’s the one thing left they’re really good at.

 

 

 

And this one here is excellent as well, taking on America’s other favorite enemy no. 1. Again, altogether:

 

 

 

Everybody thought of the word ‘dark’ at the same time! A country full of kindred spirits. Telepathy. Yeah. In China original content is now banned in the media. But China has nothing on the west. Where the system clings together to paint a picture they all want you to believe in. A kind of propaganda Putin wouldn’t dream of. And Goebbels only considered in his wildest nightmares.

These are the death throes of a system. All parts, as separate as they may seem, or want to seem, fall apart together. Maybe not at the same time, but certainly in rapid succession. Still, it’s a bit surprising to see how fast alleged journalists -and the media they work for- have turned from reporting to endless repetition of opinions, most often not even their own.

The media feel they are under threat, and for good reason. Namely, the same reason politicians are. They’ve all been painting fake pictures, and people start to see through that for the simple reason that these pictures look nothing like what goes on in their own lives.

There’s no amount of Kardashians or other Walking Dead that can change that, and unless you let people watch this stuff 24/7, they are bound to notice sooner or later.

I see people saying the system is unstable. Fine, as long as they realize it has no chance of regaining stability, not with its present components. There will have to be a big clean-up. But it will be messy. A very limited number of people, with all of their minions, control the entire now unstable edifice, and they’ll fight tooth and nail to keep their power.

Nevertheless, they’ll lose. It’s just that they’ll drag a lot of other people down with them. They’re fully prepared to go to war just to keep the illusion of power alive. The ultimate hubris.

 

 

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