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Politics and Economics in Times of Crisis

Dec 112018
 
 December 11, 2018  Posted by at 8:45 pm Primers Tagged with: , , , , , , , , , , ,  4 Responses »


Wilhelm Trübner A Gorgon‘s head 1891

 

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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

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

 

 

Macron Heralds The End Of The Union

Dec 072018
 
 December 7, 2018  Posted by at 8:05 pm Finance, Primers Tagged with: , , , , , , , , , ,  5 Responses »


Paul Almasy Paris 1950

 

The concept of the EU might have worked, but still only might have, if a neverending economic boom could have been manufactured to guide it on its way. But there was never going to be such a boom. Or perhaps if the spoils that were available in boom times and bust had been spread out among nations rich and poor and citizens rich and poor a little more equally, that concept might still have carried the days.

Then again, its demise was obvious from well before the Union was ever signed into existence, in the philosophies, deliberations and meetings that paved its way in the era after a second world war in two score years fought largely on the European continent.

In hindsight, it is hard to comprehend how it’s possible that those who met and deliberated to found the Union, in and of itself a beneficial task at least on the surface in the wake of the blood of so many millions shed, were not wiser, smarter, less greedy, less driven by sociopath design and methods. It was never the goal that missed its own target or went awry, it was the execution.

Still, no matter how much we may dream, how much some of the well-meaning ‘founding fathers’ of the Union may have dreamt, without that everlasting economic boom it never stood a chance. The Union was only ever going to be tolerated, accepted, embraced by its citizens if they could feel and see tangible benefits in their daily lives of surrendering parts of their own decision making powers, and the sovereignty of their nations.

There are 28 countries in the Union at this point, and one of them is already preparing to leave. There are 28 different cultures too, and almost as many languages. It was always going to be an uphill struggle, a hill far too steep for mere greed to master and conquer. History soaked Europe in far too much diversity through the ages for that. To unify all the thousands of years of beauty and darkness, of creativity and annihilation, of love and hatred, passed on through the generations, a lot more than a naked and bland lust for wealth, power and shiny objects was needed.

And sure, maybe it just happened on the way, in the moments when everyone was making new friends and not watching their backs for a moment. But they all still should have seen it coming, because of those same thousands of years that culminated in where they found themselves. The European Union is like a wedding and marriage without a prenup, where partners are too afraid to offend each other to do what would make them not regret the ceremony later.

 

Today, there are far too few of the 28 EU countries that have been lifted out of their poverty and other conditions that made them want to join the Union. And within many of the countries, there are way too many people who are, and feel, left behind. While Brussels has become a bastion of power that none of the disadvantaged feel they can properly address with their grievances.

The main fault of the EU is that the biggest party at the table always in the end, when things get serious, gets its way. The 80 million or so people of Germany de facto rule the 500 million of the Union, or you know, the three handfuls that rule Germany. No important decision can or will ever be taken that Berlin does not agree with. Angela Merkel has been the CEO of Europe Inc. since November 22 2005, gathering more power as time went by. That was never going to work unless she made everyone richer. Ask the Greeks about that one.

Merkel was the leader of both Germany and of Europe, and when things got precarious, she chose to let German interests prevail above Italian or Greek ones. That’s the fundamental flaw and failure of the Union in a nutshell. All other things, the Greek crisis, Salvini, Macron, Brexit, are mere consequences of that flaw. In absence of a forever economic boom, there is nothing left to fall back on.

 

Traditional right/left parties have been destroyed all across Europe in recent national elections. And it’s those traditional parties that still largely hold power in Brussels. As much as anyone except Germany and perhaps the European Commission hold any power at all. The shifts that happened in the political spectrum of many countries is not yet reflected in the European Parliament. But there are European elections in less than 6 months, May 23-26 2019.

About a quarter of the votes in the last such election, in 2014, went to euroskeptic parties. It’s not a terrible stretch of the imagination to presume that they’ll get half of the votes this time. Then we’ll have half or more of representatives speaking for people who don’t have faith in what they represent.

And on the other hand you have the Brussels elite, who continue to propagate the notion that Europe’s problems can best, nay only, be solved with more Europe. Of that elite Emmanuel Macron is the most recent, and arguable most enthusiastic from the get-go, high priest. Which can’t be seen apart from his domestic nose-diving approval rating, and most certainly not from the yellow vest protests and riots.

Macron won his presidency last year solely because he ran against Marine Le Pen in the second round of the elections, and a vast majority on the French will never vote for her; they’ll literally vote for anyone else instead. In the first round, when it wasn’t one on one, Macron got less than 25% of the votes. And now France wants him to leave. That is the essence of the protests. His presidency appears already over.

 

Among the 28 EU countries, the UK is a very clear euroskeptic example. It’s supposed to leave on March 2019, but that’s by no means a given. Then there’s Italy, where the last election put a strongly euroskeptic government in charge. There are the four Visegrad countries, Poland, Hungary, Czech Republic and Slovakia. No love lost for Brussels there. In Belgium yesterday, PM Michel’s government ally New Flemish Alliance voted against the UN Global Compact on Migration.

Spain’s Mariana Rajoy was supported by the EU against Catalonia, and subsequently voted out. The next government is left-wing and pro EU, but given the recent right wing victory in Andalusia it’s clear there’s nothing stable there. Austria has a rightwing anti-immigration PM. Germany’s CDU party today elected a successor for Merkel (in the first such vote since 1971!), but they’ve lost bigly in last year’s elections, and their CSU partner has too, pushing both towards the right wing anti-immigrant AfD.

And with Macron gone or going, France can’t be counted on to support Brussels either. So what is left, quo vadis Europa? Well, there’s the European elections. In which national parties, often as members of a ‘voting alliance’, pick their prospective candidates for the European Parliament, then become part of a larger European alliance, and finally often of an even larger alliance. You guessed right, turnout numbers for European elections are very very low.

 

Of course Brussels is deaf to all the issues besieging it. The largest alliances of parties, the EPP (people’s party) and the “socialists”, have chosen their crown prince ‘spitzenkandidat’ to succeed Jean-Claude Juncker as head of the European Commission, and they expect for things to continue more or less as usual. The two main contenders are Manfred Weber and Frans Timmermans, convinced eurocrats. How that will work out with 50% or more of parliamentarians being euroskeptic, you tell me. How about they form their own alliance?

The Union appears fatally wounded, and that’s even before the next financial crisis has materialized. Speaking of which, the Fed has been hiking rates and can lower them again a little if it wants, but much of Europe ‘works’ on negative rates already. That next crisis could be a doozy.

But we’re getting ahead of ourselves. First thing on the menu is Macron tomorrow, and the yellow vests in the streets of Paris and many other French cities -and rural areas. He has called for 90,000 policemen on the streets, but they’ll come face to face with their peers who are firemen, ambulance personnel, you name it, lots of folks who also work for the government. Will they open fire?

Can Macron allow for French people to be killed in the streets? Almost certainly not. There’ll be pitchforks and guillotines. The only way out for him, the only way to calm things down, may be to announce his resignation. The French don’t fool around when they protest. And who’s going to be left to drive the reform of Europe then? Not Merkel, she’s gone, even if she wants to be German Chancellor for three more years. But then who? I’m trying to think of someone, honest, but I can’t.

It’ll be quite the day Saturday in Paris.

 

 

Debt Rattle November 22 2018

Nov 222018
 
 November 22, 2018  Posted by at 10:37 am Finance Tagged with: , , , , , , , , , , ,  9 Responses »


Rembrandt van Rijn Study of the Head and Clasped Hands of a Young Man as Christ in Prayer 1655

 

• Mortgage Rates Slide May Be Too Late For The Housing Market (MW)
• A $9 Trillion Corporate Debt Bomb Is ‘Bubbling’ In The US Economy (CNBC)
• Multiple Risks Are Converging on Markets (Rickards)
• May In Brussels Dash As Merkel Threatens To Pull The Plug On Brexit Summit (G.)
• Salvini Ready To ‘Confront EU’ After Italy’s Budget Rejected Again (G.)
• Facebook Admits Targeting George Soros After He Criticized Company (MW)
• House GOP To Hold Hearing Into DOJ Probe Of Clinton Foundation (Hill)
• Clinton Foundation Donations Plummet 90% (ZH)
• Tyres And Synthetic Clothes ‘Biggest Causes Of Microplastic Pollution’ (G.)
• Former New York Times Chief Lawyer: Rally to Support Julian Assange (Timm)

 

 

Despite Fed rate hikes, mortgage rates fall. An ominous sign. Maybe we should even say: mortgage rates fall because of Fed rate hikes. Is the pond getting smaller, or are there fewer fish?

• Mortgage Rates Slide May Be Too Late For The Housing Market (MW)

Rates for home loans tumbled as turmoil rocked global financial markets, but any reprieve in rates may come too late for would-be home buyers or refinancers. The 30-year fixed-rate mortgage averaged 4.81% in the November 21 week, down 13 basis points, mortgage liquidity provider Freddie Mac said Wednesday. That’s the biggest weekly decline since January 2015 and the lowest level for the popular product since early October. The 15-year fixed-rate mortgage averaged 4.24%, down 12 basis points during the week. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.09%, down from 4.15%. Those rates don’t include fees associated with obtaining mortgage loans.

Fixed-rate mortgages follow the U.S. 10-year Treasury note, although with a slight delay. As a global stock sell-off has raged over the past week, bonds have been the best house in a bad neighborhood. The yield on the benchmark 10-year bond touched a six-week low Monday. Bond yields decline as prices rise, and vice versa. Meanwhile, this week has brought a raft of fresh information on the housing market, little of it cheery. Sales of already-owned homes perked up in October, but are still lower than the year-ago selling pace by more than 5%. Home builders broke ground on more — but not enough — homes. And one fresh data point bears watching: mortgage applications for newly-constructed houses are plunging, according to the Mortgage Bankers Association.

Read more …

Forgive me for presuming there are several such debt bombs.

• A $9 Trillion Corporate Debt Bomb Is ‘Bubbling’ In The US Economy (CNBC)

At first glance, it looks like a $9 trillion time bomb is ready to detonate, a corporate debt load that has escalated thanks to easy borrowing terms and a seemingly endless thirst from investors. On Wall Street, though, hopes are fairly high that it’s a manageable problem, at least for the next year or two. The resolution is critical for financial markets under fire. Stocks are floundering, credit spreads are blowing out and concern is building that a combination of higher interest rates on all that debt will begin to weigh meaningfully on corporate profit margins. “There is angst in the marketplace. It’s not misplaced at all,” said Michael Temple, director of credit research at asset manager Amundi Pioneer.

“But are we at that moment where this thing blows sky high? I would think that we’re not there yet. That’s not to say that we don’t get there at some point over the next 12 to 18 months as rates continue to move higher.” [..] Over the past decade, companies have taken advantage of low rates both to grow their businesses and reward shareholders. Total corporate debt has swelled from nearly $4.9 trillion in 2007 as the Great Recession was just starting to break out to nearly $9.1 trillion halfway through 2018, quietly surging 86 percent, according to Securities Industry and Financial Markets Association data. Other than a few hiccups and some fairly substantial turbulence in the energy sector in late-2015 and 2016, the market has performed well.

In fact, Fitch Ratings forecasts bond defaults for 2019 at the lowest since 2013, with leveraged loans at the lowest since 2011. Such high debt levels are “certainly something to take notice of,” said Eric Rosenthal, Fitch’s senior director of U.S. leveraged finance. “In terms of the systemic risk, at the moment it’s not there.” One reason markets worry about debt is that there’s not as much cash around to cover it. The cash-to-debt ratio for corporate borrowers fell to 12 percent in 2017, the lowest ever.

Read more …

It’s starting to feel like a siege.

• Multiple Risks Are Converging on Markets (Rickards)

Warnings of economic collapse are no longer confined to the fringes of economic analysis but are now coming from major financial institutions and prominent economists, academics and wealth managers. Leading financial elites have been warning of coming collapses and dangers. These warnings range from the IMF’s Christine Lagarde, Bridgewater’s Ray Dalio, the Bank for International Settlements and many other highly regarded sources. Just when we think we’ve seen enough of these, another one arrives. This time it’s the legendary Paul Tudor Jones, who manages Tudor Investment. I’ve met Jones; he’s a cerebral yet polite and mild-mannered manager from Tennessee who has not lost his Southern accent despite decades in Connecticut and an estate on Maryland’s Eastern Shore.

What gives Jones’ voice added authority is his longevity in the fund investment world. He’s managed through the 1987 stock crash, the 1994 Mexican crisis, the 1998 Long Term Capital meltdown, the 2000 dot-com crash and, of course, the 2008 financial panic. Jones knows that panics happen, but he also knows they don’t happen all the time. Panics take years to build and usually have specific triggers (even though endpoints can spin wildly out of control). Jones does not treat the possibility of a financial crisis lightly, so his warning deserves close consideration. Jones warns that the next crisis is likely to be triggered by excessive debt, specifically corporate debt, which can be more difficult to manage or bail out than sovereign debt.

At the same time, other gurus are warning that the next panic will emerge from the foreign exchange market, overvalued equities or commercial real estate. Perhaps the real message is that all of these areas are vulnerable and the next crisis will seem to come from everywhere at once. That’s the danger. We’re looking at another debt crisis and global financial panic. Only this time it won’t come from mortgages alone but from all directions at once.

Read more …

The original headline talked of 24 hours.

• May In Brussels Dash As Merkel Threatens To Pull The Plug On Brexit Summit (G.)

Theresa May is to make an emergency dash to Brussels on Saturday to complete the Brexit negotiations after the German chancellor, Angela Merkel, threatened to pull the plug on the Sunday leaders’ summit. As she emerged from talks in Brussels lasting nearly two hours with the European commission president, Jean-Claude Juncker, the British prime minister admitted that there were some major issues to resolve. Merkel had let it be known through her diplomats in Brussels that she was unwilling to negotiate with May on Sunday at the extraordinary Brexit summit. She had demanded a finalised agreement to emerge in good time before the leaders’ meeting.

The development threatened to disrupt Downing Street’s plans for agreement among leaders this month in time for a meaningful vote in parliament in early December. After meeting the European commission president on Wednesday, May said: “We have had a very good meeting this evening. We have made further progress and as a result, we have given sufficient direction to our negotiators. “I hope for them to be able to resolve the remaining issues and that work will start immediately. I now plan to return for further meetings, including with President Junker, on Saturday to discuss how we can bring to a conclusion this process and bring it to a conclusion in the interests of all our people.”

Read more …

Salvini and Di Maio said again this morning that they won’t change a letter in their budget.

• Salvini Ready To ‘Confront EU’ After Italy’s Budget Rejected Again (G.)

Italy’s deputy prime minister Matteo Salvini has said he is prepared to confront EU leaders after the European commission rejected his country’s draft 2019 budget for a second time, while calling on them to “respect the Italian people”. Italy is facing sanctions after the commission said in a report that the government of the far-right League and anti-establishment Five Star Movement had seriously violated fiscal rules. Both parties’ leaders have refused to succumb to pressure to change their deficit target of 2.4% of GDP as they endeavour to push through campaign promises, such as introducing a universal basic income, cutting taxes and lowering the retirement age.

Italy has about €2.3tn (£2tn) of public debt and the Bank of Italy warned this month that the cost of servicing the debt could rise to €5bn in 2019 and €9bn in 2020. The government is convinced that the budget would help the Italian economy grow by 1.5% over the next year. However, the economy stagnated in the third quarter. On Wednesday Italy’s national statistics agency, Istat, revised down its growth forecast for the year to 1.1%; in May it predicted 1.4% for 2018. Salvini, who leads the League, responded sarcastically to news of the commission’s report. “A letter from the EU? I’m also waiting for one from Father Christmas,” he told reporters.

Referring to the commission president and economics commissioner, Salvini said he was ready to “confront [Jean-Claude] Juncker, [Pierre] Moscovici or whoever” over a budget he said responded to the needs of Italians.

Read more …

But Zuckerberg and Sandberg plead innocent.

• Facebook Admits Targeting George Soros After He Criticized Company (MW)

Facebook Inc. admitted Wednesday that it asked an opposition-research company to investigate billionaire George Soros over his criticism of the social network. In an internal memo released publicly late Wednesday, Elliot Schrage, Facebook’s outgoing head of communications and policy, said he was responsible for hiring the company, Definers Public Affairs, to investigate who was behind the “Freedom From Facebook” campaign. “In January 2018, investor and philanthropist George Soros attacked Facebook in a speech at Davos, calling us a ‘menace to society,’” Schrage wrote in the memo. “We had not heard such criticism from him before and wanted to determine if he had any financial motivation. Definers researched this using public information.

“Later, when the ‘Freedom from Facebook’ campaign emerged as a so-called grassroots coalition, the team asked Definers to help understand the groups behind them. They learned that George Soros was funding several of the coalition members. They prepared documents and distributed these to the press to show that this was not simply a spontaneous grassroots movement.” Definers later distributed a document suggesting Soros, a major donor to liberal causes, bankrolled the anti-Facebook campaign, playing into anti-Semitic conspiracy theories about Soros. Facebook Chief Executive Mark Zuckerberg and Chief Operating Officer Sheryl Sandberg have denied knowledge of the Definers efforts until after it was revealed by a New York Times report last week. Facebook has since cut ties with Definers.

Read more …

A long running but secretive investigation, running concurrently with Mueller’s.

• House GOP To Hold Hearing Into DOJ Probe Of Clinton Foundation (Hill)

Rep. Mark Meadows (R-N.C.) said Tuesday that House Republicans plan to hear testimony on Dec. 5 from the prosecutor appointed by former Attorney General Jeff Sessions to probe alleged wrongdoing by the Clinton Foundation. [..] Meadows, who is also the chairman of the conservative House Freedom Caucus, said the committee plans to delve into a number of Republicans concerns surrounding the foundation, including whether any tax-exempt proceeds were used for personal gain and whether the foundation complied with IRS laws. Sessions appointed Huber last year to work in tandem with the Justice Department to look into conservative claims of misconduct at the FBI and review several issues surrounding the Clintons.

This includes former Secretary of State Hillary Clinton’s ties to a Russian nuclear agency and concerns about the Clinton Foundation. Huber’s work has remained shrouded in mystery. The White House has released little information about Huber’s assignment other than Sessions’s address to Congress saying his appointed successor should address concerns raised by Republicans. But Meadows said the committee thinks it’s time Huber gives an update to Congress about his findings and expects him to be one of the witnesses at the hearing. Meadows also added that his committee is also trying to secure testimonies from whistleblowers who could have more information about potential improprieties surrounding the Clinton Foundation. “We’re just now starting to work with a couple of whistleblowers that would indicate that there is a great probability of significant improper activity that’s happening in and around the Clinton Foundation,” he said.

Read more …

They must have thought for quite a while that there would never be any scrutiny.

• Clinton Foundation Donations Plummet 90% (ZH)

The Clinton Foundation saw contributions dry up approximately 90% over a three-year period between 2014 and 2017, according to financial statements. The global charity is currently under investigation by the DOJ, FBI and IRS for a variety of allegations – including whether favors were handed out while Hillary Clinton was Secretary of State, also known as “pay for play.” The Clinton-led State Department authorized $151 billion in Pentagon-brokered deals to 16 countries that donated to the Clinton Foundation – a 145% increase in completed sales to those nations over the same time frame during the Bush administration, according to IBTimes.

2014

2017

“American defense contractors also donated to the Clinton Foundation while Hillary Clinton was secretary of state and in some cases made personal payments to Bill Clinton for speaking engagements. Such firms and their subsidiaries were listed as contractors in $163 billion worth of Pentagon-negotiated deals that were authorized by the Clinton State Department between 2009 and 2012.” -IBTimes. Then there was that $1 million check Qatar reportedly gave Bill Clinton for his birthday in 2012, which the charity confirmed it accepted. Coincidentally, we’re sure, Qatar was one of the countries which gained State Department clearance to buy US weapons while Clinton was Secretary of State, “even as the department signaled them out ofr a range of alleged ills,” according to IBTimes.

Then there was the surely unrelated $145 million donated to the Foundation from parties linked to the Uranium One deal prior to its approval through a rubber-stamp committee. “The committee almost never met, and when it deliberated it was usually at a fairly low bureaucratic level,” Richard Perle said. Perle, who has worked for the Reagan, Clinton and both Bush administrations added, “I think it’s a bit of a joke.” –CBS. Meanwhile, according to a November 2016 report by the Dallas Observer, the Clinton Foundation has been under investigation by the IRS since July, 2016, while the Arkansas FBI field office has been investigating allegations of pay-for-play and tax code violations, according to The Hill.

Read more …

Like that fleece sweater?

• Tyres And Synthetic Clothes ‘Biggest Causes Of Microplastic Pollution’ (G.)

Vehicle tyres and synthetic clothing are the two leading contributors to microplastic pollution from UK households, according to a new report from Friends of the Earth. The report estimates that between 9,000 and 32,000 tonnes of microplastic pollution enter British waterways each year from just four sources. The two leading sources are tyre abrasion, with between 7,000 and 19,000 tonnes entering surface waters each year, and clothing. In the UK an estimated two-thirds of clothing is made from synthetic plastic material, according to analysts from Eunomia, who wrote the report for FoE.

Up to 2,900 tonnes of microplastics from the washing of synthetic clothing such as fleeces could be passing through wastewater treatment into our rivers and estuaries. The scale of plastic pollution from household plastics is of the same magnitude as that from large plastic waste such as bottles and takeaway containers – about 26,000 tonnes of which enters UK waterways each year. The environmental campaign group is calling on the government’s resources and waste strategy – expected next month – to include measures for tackling microplastics as part of a comprehensive action plan. The four key contributors to microplastic pollution in the oceans from UK sources, according to the report, are:

• Vehicle tyres: 68,000 tonnes of microplastics from tyre tread abrasion are generated in the UK every year, with between 7,000 and 19,000 tonnes entering surface waters;

• Clothing: the washing of synthetic clothing could result in the generation of 2,300-5,900 tonnes of fibres annually in the UK – up to 2,900 tonnes of this could be passing through wastewater treatment into our rivers and estuaries;

• Plastic pellets used to manufacture plastic items. Up to 5,900 tonnes are lost to surface waters in the UK every year;

• Paints on buildings and road markings – weather and flake-off results in between 1,400 and 3,700 tonnes ending up in surface water every year.

Read more …

There’s a disturbing trend emerging that people are fully blind to. In this piece, and I’ve seen it a lot more recently, the topic is the 1st amendment. To make their well-meaning arguments, writers then pose questions like “What if Assange DID get his info from Russia?” or “What if Assange really DOES hate America?” The response of course is that this would make no difference as far as the 1st amendment is concerned.

But in the meantime the possibility that Assange is indeed a Russian agent who hates all Americans has been introduced into the narrative. That makes these articles effectively part of the smear campaign. There is no indication that either allegation is true, but they are posited by those ostensibly defending him. They don’t help. Or rather, they help smear.

• Former New York Times Chief Lawyer: Rally to Support Julian Assange (Timm)

I recently spoke to James Goodale, the famed First Amendment lawyer and former general counsel the New York Times, who led the paper’s legal team in the famed Pentagon Papers case about the dire impact the Justice Department’s move may have on press freedom, regardless of whether people consider Assange himself a “journalist”.

There’s speculation on what Assange could be charged with. There’s a possibility that he could be outright charged under the Espionage Act for the act of publishing classified information. Then there’s the “conspiracy theory” that Assange was engaged in a conspiracy with his sources by asking them or soliciting more information from them that the sources may have gathered illegally. Do you find that type of charge would be just as dangerous as a charge for publishing information?

I do find that that charge would be just as dangerous. As a matter of fact, a charge against Assange for “conspiring” with a source is the most dangerous charge that I can think of with respect to the First Amendment in almost all my years representing media organizations. The reason is that one who is gathering/writing/distributing the news, as the law stands now, is free and clear under the First Amendment. If the government is able to say a person who is exempt under the First Amendment then loses that exemption because that person has “conspired” with a source who is subject to the Espionage Act or other law, then the government has succeeded in applying the standard to all news-gathering.

That will mean that the press ability to get newsworthy classified information from government sources will be severely curtailed, because every story that is based on leaked info will theoretically be subject to legal action by the government. It will be up to the person with the information to prove that they got it without violating the Espionage Act. This would be, in my view, the worst thing to happen to the First Amendment-almost ever.

Read more …

Debt Rattle November 17 2018

Nov 172018
 
 November 17, 2018  Posted by at 10:43 am Finance Tagged with: , , , , , , , , , , ,  7 Responses »


René Magritte Youth 1924

 

• US Has Spent $6 Trillion On Wars That Killed Half A Million Since 9/11 (NW)
• US ‘Might Lose’ War Against China Or Russia – Report To Congress (Ind.)
• UK Austerity Has Inflicted ‘Great Misery’ On Citizens – UN (G.)
• Growing Number Of Tory MPs Join Attempt To Topple Theresa May (G.)
• Ministers Push To Reshape Theresa May’s Deal Ahead Of EU Summit (Ind.)
• ‘No Question’ Of More Negotiations If Brexit Deal Rejected – Merkel (Ind)
• Protesters Plan To Bring France To A Halt (BBC)
• CIA Says Saudi Crown Prince MbS Ordered The Killing Of Jamal Khashoggi (CNBC)
• Turkey To Use Intercepted Saudi Comms To Demolish Khashoggi Cover-Up (MEE)
• Planning Of Khashoggi’s Murder Caught On Audio, Turkish Reporter Claims (RT)
• Prosecution of Julian Assange Poses Grave Threats to Press Freedom (Greenwald)
• Policies of China, Russia and Canada Threaten 5ºC Climate Change (G.)

 

 

Not counting the 500,000 killed in Syria. Sidenote: all the omney and all the dea haven’t led to one single US victory.

• US Has Spent $6 Trillion On Wars That Killed Half A Million Since 9/11 (NW)

The United States has spent nearly $6 trillion on wars that directly contributed to the deaths of around 500,000 people since the 9/11 attacks of 2001. Brown University’s Watson Institute for International and Public Affairs published its annual “Costs of War” report Wednesday, taking into consideration the Pentagon’s spending and its Overseas Contingency Operations account, as well as “war-related spending by the Department of State, past and obligated spending for war veterans’ care, interest on the debt incurred to pay for the wars, and the prevention of and response to terrorism by the Department of Homeland Security.”

The final count revealed, “The United States has appropriated and is obligated to spend an estimated $5.9 trillion (in current dollars) on the war on terror through Fiscal Year 2019, including direct war and war-related spending and obligations for future spending on post 9/11 war veterans.” “In sum, high costs in war and war-related spending pose a national security concern because they are unsustainable,” the report concluded. “The public would be better served by increased transparency and by the development of a comprehensive strategy to end the wars and deal with other urgent national security priorities.”

[..] Wednesday’s report found that the “US military is conducting counterterror activities in 76 countries, or about 39 percent of the world’s nations, vastly expanding [its mission] across the globe.” In addition, these operations “have been accompanied by violations of human rights and civil liberties, in the US and abroad.” Overall, researchers estimated that “between 480,000 and 507,000 people have been killed in the United States’ post-9/11 wars in Iraq, Afghanistan, and Pakistan.” This toll “does not include the more than 500,000 deaths from the war in Syria, raging since 2011”..

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The military-industrial complex asking for more money, though the US already spends ten times more than Moscow, which spends its money far more efficiently.

• US ‘Might Lose’ War Against China Or Russia – Report To Congress (Ind.)

The US could lose a future war against Russia or China, a new report to Congress has suggested. America is losing its edge while rivals innovate and blend conventional, cyber and even non-military capabilities to gain the upper hand in key regions, according to a dozen national security experts tasked by politicians with scrutinising Donald Trump’s national defence strategy. The bipartisan group, led by former undersecretary of defence Eric Edelman and Gary Roughead, an ex-chief of naval operations, wrote: “The US military could suffer unacceptably high casualties and loss of major capital assets in its next conflict.

“It might struggle to win, or perhaps lose, a war against China or Russia. The United States is particularly at risk of being overwhelmed should its military be forced to fight on two or more fronts simultaneously. US military superiority is no longer assured and the implications for American interests and American security are severe.” The unquestioned dominance the US enjoyed at the end of the Cold War no longer holds, the expert commission concluded following interviews with key defence officials and reviews of secret documents, and Washington faces serious challenges to its interests in Asia, Europe and the Middle East. The experts identified Mr Trump’s tax reform bill – which greatly benefited the most wealthy – as having drained potential defence funding, alongside tax cuts by both his immediate predecessors.

The White House should look to increase taxation and slash entitlements to drastically increase funding available for the military despite the short-term “pain” the move would cause, they suggested. [..] the commission recommended that the base defence budget be increased by between 3 and 5 per cent above inflation over the next several years. According to the authors, Barack Obama’s 2011 Budget Control Act had had “pronounced detrimental effects on the size, modernisation, and readiness of the military”. Mr Trump made building up America’s armed forces a central campaign pledge and the experts said his strategy was on the right track, but did not go far enough.

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In a few years time, 40% of UK children will be living in poverty. The architect of much of this misery has been Theresa May. And she’s the PM?

• UK Austerity Has Inflicted ‘Great Misery’ On Citizens – UN (G.)

The UK government has inflicted “great misery” on its people with “punitive, mean-spirited, and often callous” austerity policies driven by a political desire to undertake social re-engineering rather than economic necessity, the United Nations poverty envoy has found. Philip Alston, the UN’s rapporteur on extreme poverty and human rights, ended a two-week fact-finding mission to the UK with a stinging declaration that despite being the world’s fifth largest economy, levels of child poverty are “not just a disgrace, but a social calamity and an economic disaster”. About 14 million people, a fifth of the population, live in poverty, and 1.5 million are destitute, unable to afford basic essentials, he said, citing figures from the Institute for Fiscal Studies and the Joseph Rowntree Foundation.

He highlighted predictions that child poverty could rise by 7% between 2015 and 2022, possibly up to a rate of 40%. “It is patently unjust and contrary to British values that so many people are living in poverty,” he said, adding that compassion had been abandoned during almost a decade of austerity policies that had been so profound that key elements of the post-war social contract, devised by William Beveridge more than 70 years ago, had been swept away. In a coruscating 24-page report, which will be presented to the UN human rights council in Geneva next year, the eminent human rights lawyer said that in the UK “poverty is a political choice”.

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The chaos is just beginning.

• Growing Number Of Tory MPs Join Attempt To Topple Theresa May (G.)

Theresa May is battling to halt a growing revolt from the Tory right after half a dozen more backbenchers came out in favour of a no-confidence vote and the organiser of the rebellion publicly predicted more MPs would follow next week. The prime minister held a conference call with local association chairmen on Friday afternoon as she fought to head off a coup and sell her hard-won Brexit deal to a sceptical and partially hostile party. Her efforts came after the number of backbenchers calling publicly for a no-confidence vote in May’s leadership increased to 23. Rebellious MPs said they were confident of reaching the required threshold of 48 letters to Sir Graham Brady, the chairman of the party’s 1922 Committee. Adam Holloway, one of the MPs demanding a vote, said his letter had been delivered “with regret”.

But, complaining about May’s Brexit plans, he added: “You cannot have someone leading a mission who does not believe in the mission. The country needs leadership.” Others who went public with their demand to hold a vote included the former cabinet minister John Whittingdale, Maria Caulfield, Marcus Fysh, and Chris Green. David Jones was also named as being among those who had written to Brady. The party rules allow for a no-confidence vote if 15% of the party’s MPs – currently 48 – submit letters. Brady would organise a vote within a couple of working days of the threshold being met. Whittingdale said he wanted the government “to pursue a proper free trade agreement” but he believed that May was not willing to do so. “Therefore I felt there is no alternative but to seek a vote of confidence,” he said.

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Useless. But yes, chaos ensured. Confidence vote next week, EU summit a few days later.

• Ministers Push To Reshape Theresa May’s Deal Ahead Of EU Summit (Ind.)

Cabinet ministers are planning a final push to remould parts of Theresa May’s Brexit strategy in a bid to find a way through the political crisis engulfing the government. Brexit-backing members of Ms May’s team will meet within days to discuss their approach, with a drive to change the text of the UK’s withdrawal agreement not ruled out. It emerged as Ms May sought to shore up her leadership following a wave of resignations, by appointing staunch ally Amber Rudd back to the cabinet six months after she was forced to resign over the Windrush scandal. Downing Street is on high alert as rebel backbenchers submitted further letters calling on Ms May to quit, ahead of a possible vote of no confidence next week. The Independent understands that House of Commons leader Andrea Leadsom is set to convene the meeting of Brexiteer frontbenchers to decide how Ms May’s strategy might evolve ahead of a critical European summit in just over a week.

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The EU won’t start the entire process from scratch.

• ‘No Question’ Of More Negotiations If Brexit Deal Rejected – Merkel (Ind)

There is “no question” of further Brexit negotiations if the deal struck by Theresa May is rejected, Angela Merkel has said. Speaking in Berlin, the German chancellor welcomed the deal but warned a chaotic exit was still possible as a “worst case” scenario. “We have a document on the table that Britain and the EU 27 have agreed to, so for me there is no question at the moment whether we negotiate further,” the Chancellor said. The warning follows EU officials close to talks saying the controversial document, which has been panned on all sides in Westminster, is “the best we can do” given the prime minister’s red lines and the bloc’s own rules.

Ms May has publicly stood by the plan, but the Huffington Post reported on Thursday night that allies of the prime minister are trying to win over Brexiteer rebels in the Conservative party with the offer of further concessions from Brussels if they fall in line. Speaking at a news conference ostensibly about her government’s digital strategy, Ms Merkel told reporters: “I am very happy that after long negotiations which were not easy, a proposal has been pulled together.

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Macron has won battles vs the unions so far. But his popularity has now reached Arctic levels.

• Protesters Plan To Bring France To A Halt (BBC)

Drivers plan to disrupt traffic across France on Saturday by blocking roads, bridges and toll booths in a mass protest at rising fuel prices. Dubbed the “yellow vests” after the high-visibility jackets they use as their symbol, they are expected to muster in at least 700 locations. They accuse President Emmanuel Macron of abandoning “the little people”. Mr Macron admitted this week that he had not “really managed to reconcile the French people with its leaders”. Nonetheless, he accused his political opponents of hijacking the movement in order to block his reform programme.

Officials have warned that, while they will not stop the protests, they will not allow them to bring the French road network to a standstill. The price of diesel, the most commonly used fuel in French cars, has risen by around 23% over the past 12 months to an average of €1.51 ($1.71) per litre, its highest point since the early 2000s, AFP news agency reports. World oil prices did rise before falling back again but the Macron government raised its hydrocarbon tax this year by 7.6 cents per litre on diesel and 3.9 cents on petrol, as part of a campaign for cleaner cars and fuel. The decision to impose a further increase of 6.5 cents on diesel and 2.9 cents on petrol on 1 January 2019 was seen as the final straw.

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How much longer do we have to watch this circus? it’s obvious what happened.

• CIA Says Saudi Crown Prince MbS Ordered The Killing Of Jamal Khashoggi (CNBC)

The CIA has determined that Saudi Crown Prince Mohammed bin Salman ordered the assassination of journalist Jamal Khashoggi, NBC News reported Friday, citing a person briefed on the CIA’s assessment. The CIA declined NBC News’ request for comment Friday night. The Washington Post, which first reported the CIA findings, said the U.S. intelligence agency has high confidence in its findings. Khashoggi was a resident of the United States from Saudi Arabia, and he was a columnist for the Washington Post. The Saudi Embassy in Washington denied the reports. “The claims in this purported assessment are false,” the embassy said in a statement.

“We have and continue to hear various theories without seeing the primary basis for these speculations.” According to the Post’s report, the CIA looked into a phone call between the crown prince’s brother, who also serves as the Saudi ambassador to the U.S., Khalid bin Salman and Khashoggi. Sources told the Post that during that call, Khashoggi was directed to pick up documents at the consulate. While the Post said it was not clear whether Khalid bin Salman knew that Khashoggi would be killed, sources told the Post that he made the call at his brother’s request.

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Gina Haspel had a team of 35 experts with her last month in Ankara. And Turkey knows just about everything.

• Turkey To Use Intercepted Saudi Comms To Demolish Khashoggi Cover-Up (MEE)

Turkey has a complete record of communications in and out of Saudi Arabia’s Istanbul consulate in the week of Jamal Khashoggi’s murder, a senior Turkish source has told Middle East Eye. The communications will be used to tear apart Riyadh’s latest version of the killing. These recordings, MEE has learned, have given Turkey a detailed picture of the various operatives, teams and missions issued from Saudi Arabia. And the contents of these communications, the source said, will turn the screw on a Saudi leadership that has sought to insulate itself from the scandal. According to the source, Turkey intends to drip feed the information gleaned from the communications to the media, as it has been doing ever since Khashoggi was brutally murdered by a team of 15 Saudis on 2 October.

The Khashoggi-related conversations that Turkish intelligence intercepted began when the Washington Post columnist first came to his country’s consulate on 28 September in an attempt to get papers required to remarry. The plan to kill Khashoggi, who was told to return to the consulate four days later, began to be hatched the moment he left the building, the source said. Key conversations, the source said, were those between Consul-General Mohammed al-Otaibi and Saudi security attache Ahmed Abdullah al-Muzaini. Muzaini has so far been spared much of the spotlight. It is unknown if he is one of at least 21 suspects detained in Saudi Arabia. But Turkish newspaper Sabah, which is close to the government, has described Muzaini as the brains behind the plot.

On the day of Khashoggi’s murder, the conversations of one man are especially important. MEE understands that Maher Abdulaziz Mutrib, the leader of the death squad sent to kill the journalist, made 19 calls to Riyadh on 2 October. [..] Puzzling to the Turkish source, however, is US intelligence’s knowledge of a phone conversation between Mutrib and Riyadh, where the team leader is apparently heard saying “tell your boss” following Khashoggi’s death. [..] When CIA chief Gina Haspel visited Turkey on 23 October for consultations over Khashoggi, she apparently arrived with a team of some 35 people. Amongst them were experts in deciphering recordings, linguists, people familiar with the Saudi accent and people who could enhance audio, the source said.

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The Turkish information drip.

• Planning Of Khashoggi’s Murder Caught On Audio, Turkish Reporter Claims (RT)

A Saudi team had planned all along to kill journalist Jamal Khashoggi and never tried to talk him into anything, a Turkish daily reports, citing recordings held by police that call Riyadh’s statement on the matter into question. An audio tape, allegedly in the possession of Turkish investigators, features a 15-minute conversation, in which “the Saudi team discusses how to execute Khashoggi,” the Turkish Hurriyet Daily wrote on Friday, citing its columnist Abdulkadir Selvi. In a recording that was allegedly made even before the journalist entered the Saudi consulate, “they are reviewing their plan, which was previously prepared, and reminding themselves of the duties of each member,” he said.

The Hurriyet report contradicts the statement made by the Saudi deputy public prosecutor, Shaalan al-Shaalan, who said that the team was actually sent to Istanbul to retrieve the journalist and bring him back to Saudi Arabia. A decision to murder the reporter –and outspoken critic of Riyadh– was allegedly taken by the head of the team after its ‘persuasion’ failed. Some other audio evidence obtained by the Turkish investigators also allegedly shows that the version of Khashoggi’s killing presented by Riyadh just does not add up, Selvi reports. “Khashoggi’s desperate attempts to survive could be heard in a seven-minute audio recording. There is no hint of anyone trying to persuade him,” he says, referring to another tape, which allegedly proved that “Khashoggi was strangulated in 7-8 minutes.”

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Glenn Greenwald knows much more than most about the situation. But he doesn’t even mention the lies involved in the Assange persecution by Mueller.

• Prosecution of Julian Assange Poses Grave Threats to Press Freedom (Greenwald)

Recall that the DNC itself is currently suing WikiLeaks and Assange for publishing the DNC and Podesta emails they received: emails deemed newsworthy by literally every major media outlet, which relentlessly reported on them. Until this current Trump DOJ criminal prosecution of Assange, that DNC lawsuit had been the greatest Trump-era threat to press freedoms – because it seeks to make the publication of documents, which is the core of journalism, legally punishable. The Trump DOJ’s attempts to criminalize those actions is merely the next logical step in this descent into a full-scale attack on basic press rights.

The arguments justifying the Trump administration’s prosecution of Assange are grounded in a combination of legal ignorance, factual falsehoods, and dangerous authoritarianism. The most common misconception is that unlike the New York Times and the Washington Post, WikiLeaks can be legitimately prosecuted for publishing classified information because it’s not a “legitimate news outlet.” Democrats who make this argument don’t seem to care that this is exactly the view rejected as untenable by the Obama DOJ. To begin with, the press freedom guarantee of the First Amendment isn’t confined to “legitimate news outlets” – whatever that might mean.

The First Amendment isn’t available only to a certain class of people licensed as “journalists.” It protects not a privileged group of people called “professional journalists” but rather an activity: namely, using the press (which at the time of the First Amendment’s enactment meant the literal printing press) to inform the public about what the government was doing. Everyone is entitled to that constitutional protection equally: there is no cogent way to justify why the Guardian, ex-DOJ-officials-turned-bloggers, or Marcy Wheeler are free to publish classified information but Julian Assange and WikiLeaks are not.

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The dead end: Always blame the others. The more you do that, the less you have to change yourself.

• Policies of China, Russia and Canada Threaten 5ºC Climate Change (G.)

China, Russia and Canada’s current climate policies would drive the world above a catastrophic 5C of warming by the end of the century, according to a study that ranks the climate goals of different countries. The US and Australia are only slightly behind with both pushing the global temperature rise dangerously over 4C above pre-industrial levels says the paper, while even the EU, which is usually seen as a climate leader, is on course to more than double the 1.5C that scientists say is a moderately safe level of heating. The study, published on Friday in the journal Nature Communications, assesses the relationship between each nation’s ambition to cut emissions and the temperature rise that would result if the world followed their example.

The aim of the paper is to inform climate negotiators as they begin a two-year process of ratcheting up climate commitments, which currently fall far short of the 1.5-to-2C goal set in France three years ago. [..] India is leading the way with a target that is only slightly off course for 2C. [..] On the opposite side of the spectrum are the industrial powerhouse China and major energy exporters who are doing almost nothing to limit carbon dioxide emissions. These include Saudi Arabia (oil), Russia (gas) and Canada, which is drawing vast quantities of dirty oil from tar sands. Fossil fuel lobbies in these countries are so powerful that government climate pledges are very weak, setting the world on course for more than 5C of heating by the end of the century.

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Debt Rattle November 14 2018

Nov 142018
 
 November 14, 2018  Posted by at 10:15 am Finance Tagged with: , , , , , , , , , , , ,  4 Responses »


Pablo Picasso Still life 1917

 

• Britiain, EU Agree on Brexit Plan (G.)
• France and Facebook Announce Partnership Against Online Hate Speech (Pol.eu)
• Oil’s Unprecedented Slide Accelerates, Capitulates To Darkening Outlook (BBG)
• Major Markets Are All Flashing Warning Signs (Roberts)
• Trump’s Tariff Battle With China Spurs Record Dollar-Yuan Trading (CNBC)
• Goldman Sachs Is Implicated In History’s Largest Financial Con (Ind.)
• IMF Says Governments Could Set Up Their Own Cryptocurrencies (G.)
• Amazon’s ‘HQ2’ Headquarters Will Cost US Taxpayers $2 Billion (R.)
• Decoding The Hypersonic Putin On A Day Of Remembrance (Escobar)
• Angela Merkel Calls For Creation Of ‘Real, True’ EU Army (Ind.)
• Saudi ‘Kill Team’s’ Luggage Contained Syringes, Defibrillators, Scissors (AFP)
• Who Gets to Live in Victimville? (Monics Lewinsky)
• Social Media Increases Depression And Loneliness (TI)
• Heatwaves Can ‘Wipe Out’ Male Insect Fertility (G.)

 

 

At sort of the last moment, the long awaited deal is announced. Alas, all it really does is push forward any awkward decisions- and there are many. And even that can be voted down by the Cabinet, or parliament, or some other party involved, like the DUP. One thing seems certain: Theresa May will no longer be in charge when actual decisions are made. So why would she care? It’s about saving face by now.

• Britiain, EU Agree on Brexit Plan (G.)

Theresa May summoned her cabinet to an emergency meeting on Wednesday afternoon to sign off her long awaited final Brexit deal, prompting hard-Brexit Tories to call for senior ministers to stand up and block it. The critical meeting is the culmination of months of negotiations and will see May’s senior ministers consider whether they can personally endorse the agreement that the prime minister has been able to reach. Ministers were summoned to No 10 in the early evening and some met individually with May or her chief of staff, Gavin Barwell. They were given the chance to read the key documents, although they were not trusted to take any papers home.

Further one-on-one meetings were expected to take place on Wednesday. “Cabinet will meet at 2pm tomorrow to consider the draft agreement the negotiating teams have reached in Brussels, and to decide on next steps,” a No 10 spokesman confirmed. “Cabinet ministers have been invited to read documentation ahead of that meeting.” Key elements of the deal began to leak in the early evening. The UK was understood to have agreed that an independent arbitration committee will judge when a UK-wide customs backstop could be terminated, comprising an equal number of British and EU representatives plus an independent element.

There will be a review in July 2020, Brussels sources added, six months before the end of the transition period, at which it will be determined if the UK is ready to move to a free trade deal; transfer to the backstop; or extend the transition period, possibly by a year to 2021.

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Scary. The leader of one political party seeks to decide with Silicon Valley, what constitutes hate speech. The main potential target of this is Marine le Pen, who’s already had her share of hate accusations. Thing is, Macron has fallen behind her in the -EU election- polls, his popularity has fallen to 23%. And now Zuckerberg gives him the tools to get rid of Le Pen.

• France and Facebook Announce Partnership Against Online Hate Speech (Pol.eu)

Emmanuel Macron just “friended” Mark Zuckerberg. The French president announced on Monday a six-month partnership with Facebook aimed at figuring out how the European country should police hate speech on the social network. As part of the cooperation — the first time that Facebook has teamed up with national politicians to hammer out such a contentious issue — both sides plan to meet regularly between now and May, when the European election is due to be held. They will focus on how the French government and Facebook can work together to remove harmful content from across the digital platform, without specifying the outcome of their work or if it would result in binding regulation.

The partnership, which will involve meetings in Paris, Dublin and California, may be broadened out to cover other as yet unnamed areas after six months. A French official who asked not to be named called the partnership an “unprecedented experiment” that would grant authorities insight into Facebook’s processes to formulate recommendations that are “concrete and operational.” The social networking giant is now trying to lobby national lawmakers on the perceived dangers of regulating the internet. “We are giving blind faith to our daily digital tools,” Macron told an audience in Paris. “Today, when I see our democracy, internet is much better used by the extremes … or by terrorist groups.”

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Feeding on itself by now?!

• Oil’s Unprecedented Slide Accelerates, Capitulates To Darkening Outlook (BBG)

Oil’s unprecedented decline deepened as investors fled a market hammered by swelling excess supplies, a darkening demand outlook and U.S. President Donald Trump’s Twitter critique of the world’s biggest crude exporter. Futures plunged 7.1 per cent in New York on Tuesday for the biggest one-day drop in three years. OPEC’s dire forecast for 2019 demand came at a time of steadily rising American production and stockpiles. Trump admonished Saudi Arabia for planning to curb output and lamented prices that settled below US$56 a barrel for the first time in a year. “This tweet certainly did not help prices,” said Warren Patterson, a senior commodities strategist at ING Bank.

“Given the growing global surplus over the first half of 2019, OPEC will likely try to ignore President Trump’s call as much as possible.” West Texas Intermediate futures have fallen for a record 12 sessions on fears that a supply glut similar to the price-killing surplus of 2014 is redeveloping. In London, Brent futures have declined in 11 of the past 12 sessions. Money managers’ combined bullish positions in WTI and Brent sank to the lowest in 14 months as of Nov. 6, Commodity Futures Trading Commission data show, as long positions shrank and shorts increased.

“Today’s move is just capitulation,” said Nick Gentile, managing partner of commodity trading advisor NickJen Capital Management & Consulting LLC in New York. “You’re getting a combination of the systematic CTAs, the trend following guys, adding to the shorts and global macro guys liquidating longs.” WTI for December delivery dropped US$4.24 to end the session at US$55.69 a barrel on the New York Mercantile Exchange. Total volume traded Tuesday was about 90 per cent above the 100-day average.

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Master graphmaker Lance Roberts has some more. I picked a few.

• Major Markets Are All Flashing Warning Signs (Roberts)

[..] the failure of the market to hold the 200-dma also increases the downside risk of the market currently. There is an important point here to be made about “bull markets” and “bear markets. While there is no “official” definition of what constitutes a “bull” or “bear” market, the generally accepted definition is a decline of 20% in the market. However, since I really don’t want to subject my clients to a loss of 20% in their portfolios, I would suggest a different definition based on the “trend” of the market as a whole. As shown in the chart below: • If prices are generally “trending higher” then such is considered a “bull market.” • A “bear market” is when the “trend” changes from positive to negative.

[..] what is happening domestically should not be a surprise. The rest of the world markets have already confirmed bear market trends and continue to trade below their long-term moving averages. (The very definition of a bear market.) While it has been believed the U.S. can “decouple” from the rest of the world, such is not likely the case. The pressure on global markets is a reflection of a slowing global economy which will ultimately find its way back to the U.S.

(Note: we closed all international and emerging market positions in our portfolios at the beginning of this year.) Just as a side note, China has been in a massive bear market trend since 2015 and is down nearly 50% from its previous highs.

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China’s foreign reserves are under severe pressure.

• Trump’s Tariff Battle With China Spurs Record Dollar-Yuan Trading (CNBC)

Market uncertainty tied to the ongoing U.S.-China trade war has spurred more transactions than ever before between the American dollar and the Chinese yuan in recent months. Much of that volume comes as businesses and investors with exposure to the Chinese market are looking to hedge their foreign exchange risk. Many of them are looking to buy into the strengthening dollar, and that’s stoked speculation that Chinese authorities are intervening in the market to defend their currency, boosting trading volumes to new highs in the process. On Tuesday, currency traders told Reuters major state-owned banks were selling dollars to defend the Chinese yuan, as the greenback climbed to a 16-month peak against a basket for currencies.

Most trading between the two currencies takes place on the spot market, where dollars and yuan change hands as soon as a deal is done. That sort of market has seen volumes surge this year for the currency pair. But futures trading — where the transaction is agreed to take place at a later date at a certain price — is also increasingly catching dollar-yuan traders’ interests, according to Benjamin Lu, an investment analyst with Singapore brokerage Phillip Futures. [..] ups-and-downs in the foreign exchange market have prompted a Singapore-based privately backed Chinese exchange to launch a new dollar-offshore yuan futures contract. “Nobody knows how the trade war will end. There’s a lot of fear and panic in the financial market and worries about trade,” said Eugene Zhu, CEO of the Chinese-backed Asia Pacific Exchange.

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Malaysia should call Blankfein to testify in court. He knew, he was there. But Goldman is far more likely to just pay some huge fine.

• Goldman Sachs Is Implicated In History’s Largest Financial Con (Ind.)

Even by Wall Street standards of gouging customers this was one hell of a skim. In 2012 and 2013, the Malaysian government was raising $6.5bn (£5bn) from investors to establish a sovereign wealth fund and finance various domestic infrastructure investment projects. And the cut for Goldman Sachs – the most prestigious investment bank in the world – for arranging the fundraising from the global capital markets? Ten per cent, or $600m. Now we can have a guess as to why the Malaysian authorities were so insouciant about those extortionate fundraising costs: because they themselves were, apparently, going to loot the pot in one of the biggest frauds in history. Around half of the fund has gone missing.

According to the US Justice Department a fair amount has been pumped into luxury American real estate and shady art auction bids. Appropriately, some went into investing in Martin Scorsese’s The Wolf of Wall Street. At one stage $680m mysteriously appeared in the bank account of the former Malaysian prime minister, Najib Razak, who chaired the 1MDB advisory board, and who is now charged in his own country with corruption. Malaysian politicians, officials and financiers had effectively bought Goldman Sachs’ blue chip reputation to pull in naive investors to the “1MDB” state investment fund. Ten per cent probably seemed a reasonable cut in the circumstances. The question is: what did Goldman know about the theft?

The bank claims today that it was completely oblivious. But the senior Goldman banker on the ground in Malaysia, Tim Leissner, certainly knew. He pleaded guilty in New York to financial crimes related to 1MDB last week, including bribery of officials to ensure Goldman was the sole fundraiser. What’s even more problematic for the bank is that Leissner told the court there was a “culture” at Goldman Sachs of bypassing internal compliance. That’s backed up by US prosecutors, who say Goldman’s business culture in the region was “highly focused on consummating deals, at times prioritising this goal ahead of the proper operation of its compliance functions”.

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And then let the IMF control them all.

• IMF Says Governments Could Set Up Their Own Cryptocurrencies (G.)

Governments should consider offering their own cryptocurrencies to prevent the systems becoming havens for fraudsters and money launderers, Christine Lagarde, head of the International Monetary Fund said referring to the fast-growing fintech industry. Lagarde said central banks had to work quickly to establish digital cash for burgeoning networks of private financial transactions or risk their mushrooming into trading networks that were inherently unstable. A system regulated by central banks could become the basis for a rapid expansion of financial services to developing world countries and the poorest people in western societies without the risks associated with privately managed digital currencies, she said.

[..] Speaking at a fintech conference in Singapore, Lagarde said central banks would take over the processing of transactions while private-sector providers offered innovative services to customers. “The advantage is clear. Your payment would be immediate, safe, cheap, and potentially semi-anonymous. And central banks would retain a sure footing in payments. In addition, they would offer a more level playing field for competition, and a platform for innovation. Meanwhile your bank or fellow entrepreneurs would have ensured a friendly user experience based on the latest technologies,. “Putting it another way. The central bank focuses on its comparative advantage – back-end settlement – and financial institutions and start-ups are free to focus on what they do best – client interface and innovation. This is public-private partnership at its best.”

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Because Bezos is barely scraping by. Everywhere you look, Amazon gets rewarded for destroying communities.

• Amazon’s ‘HQ2’ Headquarters Will Cost US Taxpayers $2 Billion (R.)

Amazon.com picked America’s financial and political capitals for massive new offices on Tuesday, branching out from its home base in Seattle with plans to create more than 25,000 jobs in both New York City and an area just outside Washington, D.C. The world’s largest online retailer plans to spend $5 billion on the two new developments in Long Island City and Arlington, Virginia, and expects to get more than $2 billion in tax credits and incentives with plans to apply for more. The prize, which Amazon called HQ2, attracted hundreds of proposals from across North America in a year-long bidding war that garnered widespread publicity for the company. Amazon ended the frenzy by dividing the spoils between the two most powerful East Coast U.S. cities and offering a consolation prize of a 5,000-person center in Nashville, Tennessee, focused on technology and management for retail operations.

[..] At the outset of its search last year, Amazon said it was looking for a business-friendly environment. The company said it will receive performance-based incentives of $1.525 billion from the state of New York, including an average $48,000 for each job it creates. It can also apply for other tax incentives, such as New York City’s Relocation and Employment Assistance Program that offers tax breaks potentially worth $900 million over 12 years. What benefit the company would actually get was unclear. In Virginia, Amazon will receive performance-based incentives of $573 million, including an average $22,000 for each job it creates. These rewards come on top of $1.6 billion in subsidies Amazon has received across the United States since 2000, according to a database from watchdog Good Jobs First.

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“We don’t have any defense that could deny the employment of such a weapon against us.”

• Decoding The Hypersonic Putin On A Day Of Remembrance (Escobar)

A battle of ideas now rages across Europe, epitomized by the clash between the globalist Macron and populism icon Matteo Salvini, the Italian interior minister. Salvini abhors the Brussels system. Macron is stepping up his defense of a “sovereign Europe.” And much to the horror of the US establishment, Macron proposes a real “European army” capable of autonomous self-defense side by side with a “real security dialogue with Russia.” Yet all these “strategic autonomy” ideals collapse when you must share the stage, live, with the undisputed stars of the global show: President Donald Trump and President Vladimir Putin.

So the optics in Paris were not exactly of a Yalta 2.0 conference. There were no holds barred to keep Trump and Putin apart. Seating arrangements featured, from left to right, Trump, Chancellor Angela Merkel, Macron, his wife Brigitte and Putin. Neither Trump nor Putin, for different reasons, took part in a “walking in the rain” stunt evoking peace. And yet they connected. Sir Peter Cosgrove, the governor general of Australia, confirmed that Trump and Putin, at a working lunch, had a “lively and friendly” conversation for at least half an hour. No one better than Putin himself to reveal, even indirectly, what they really talked about. Three themes are absolutely key.

[..] Vast sectors of the US Deep State are in denial, but Putin may have been able to impress on Trump the necessity of serious dialogue due to an absolutely key vector: the Avangard. The Avangard is a Russian hypersonic glide vehicle capable of flying over Mach 20 – 24,700km/h, or 4 miles per second – and one of the game-changing Russian weapons Putin announced at his ground-breaking March 1 speech. The Avangard has been in the production assembly line since the summer of 2018, and is due to become operational in the southern Urals by the end of next year or early 2019.

In the near future, the Avangard may be launched by the formidable Sarmat RS-28 intercontinental ballistic missile and reach Washington in a mere 15 minutes, flying in a cloud of plasma “like a meteorite” – even if the launch is from Russian territory. Serial production of Sarmat ICBMs starts in 2021. The Avangard simply cannot be intercepted by any existing system on the planet – and the US knows it. Here is General John Hyten, head of US Strategic Command: “We don’t have any defense that could deny the employment of such a weapon against us.”

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“This is one of the scariest speeches I have heard as an MEP in my nine years. Merkel is an out-and-out European federalist and we should not be pandering to her as if she is on our side. She is on the side of the superstate.”

• Angela Merkel Calls For Creation Of ‘Real, True’ EU Army (Ind.)

Angela Merkel has called for the creation of a “real, true” European army, echoing a similar call by her French counterpart. The German chancellor’s backing for the force comes amid a spat with US president Donald Trump, who took offence to a suggestion by Emmanuel Macron that such an army could ensure Europe’s security in the shadow of the United States. Ms Merkel endorsed the creation of the army while addressing MEPs at the European parliament in Strasbourg. “We should work on a vision of one day establishing a real, true European army,” Ms Merkel said. The French president made his call during a radio interview last week: “We have to protect ourselves with respect to China, Russia and even the United States of America.

“We will not protect the Europeans unless we decide to have a true European army.” He added: “When I see President Trump announcing that he’s quitting a major disarmament treaty which was formed after the 1980s Euro-missile crisis that hit Europe, who is the main victim? Europe and its security.” [..] Ms Merkel’s intervention is significant because France has historically been the strongest and most vocal proponent of an EU army, with its neighbour tentatively endorsing proposals for a joint command structure for military interventions. Eurosceptics reacted angrily to the speech. Conservative MEP David Campbell Bannerman said: “This is one of the scariest speeches I have heard as an MEP in my nine years. Merkel is an out-and-out European federalist and we should not be pandering to her as if she is on our side. She is on the side of the superstate.”

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Bone saw was a local purchase. As was the acid.

• Saudi ‘Kill Team’s’ Luggage Contained Syringes, Defibrillators, Scissors (AFP)

Luggage carried by a 15-member Saudi team dispatched to Istanbul included scissors, defibrillators and syringes that may have been used against journalist Jamal Khashoggi, who was murdered in the Saudi consulate, a pro-government Turkish daily said Tuesday. X-ray images of the luggage were published in the Sabah newspaper as the New York Times reported that a member of the team at the consulate had told a superior by phone to “tell your boss”, suspected to be Crown Prince Mohammed bin Salman, that the operation was accomplished. Turkish media has published gruesome details of the murder of 59-year-old Khashoggi who according to a Turkish prosecutor was strangled and dismembered soon after he entered the Istanbul consulate on October 2.

After repeated denials, Saudi Arabia finally admitted Khashoggi, a Washington Post columnist and Riyadh critic, had been murdered at the mission in a “rogue” operation. Turkish President Recep Tayyip Erdogan has said the 15-member Saudi team travelled from Riyadh to Istanbul to kill Khashoggi. The luggage carried by the team was loaded into two planes that left for Riyadh at 1520 GMT and 1946 GMT on October 2, Sabah newspaper said. The luggage contained 10 phones, five walkie-talkies, intercoms, two syringes, two defibrillators, a jamming device, staplers, and scissors, the paper reported. [..] Khashoggi’s body has never been found, but Sabah reported on Saturday that his killers poured his remains down the drain after dissolving them in acid.

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“..with the false narrative that my mouth was merely a receptacle for a powerful man’s desire”

• Who Gets to Live in Victimville? (Monics Lewinsky)

The process of this docuseries led me to new rooms of shame that I still needed to explore, and delivered me to Grief’s doorstep. Grief for the pain I caused others. Grief for the broken young woman I had been before and during my time in D.C., and the shame I still felt around that. Grief for having been betrayed first by someone I thought was my friend, and then by a man I thought had cared for me. Grief for the years and years lost, being seen only as “That Woman”—saddled, as a young woman, with the false narrative that my mouth was merely a receptacle for a powerful man’s desire. (You can imagine how those constructs impacted my personal and professional life.)

Grief for a relationship that had no normal closure, and instead was slowly dismantled by two decades of Bill Clinton’s behavior that eventually (eventually!) helped me understand how, at 22, I took the small, narrow sliver of the man I knew and mistook it for the whole. The process became meta. As the project re-examined the narratives, both personal and political, surrounding the events of 1998, so did I. I revisited then-President Bill Clinton’s famous finger-wagging Oval Office interview from early 1998, in which I was anointed “That Woman,” and was transported to my apartment in the Watergate apartment complex.

Sitting on the edge of my grandma’s bed and watching it unfold on TV, 24-year-old me was scared and hurt, but also happy that he was denying our relationship, because I didn’t want him to have to resign. (“I didn’t want to be responsible for that,” I thought at the time, absolving anyone else of responsibility.) Forty-five-year-old me sees that footage very differently. I see a sports coach signposting the playbook for the big game. Instead of backing down amid the swirling scandal and telling the truth, Bill instead threw down the gauntlet that day in the Oval Office: “I did not have sexual relations with that woman, Miss Lewinsky.” With that, the demonization of Monica Lewinsky began. As it so often does, power throws a protective cape around the shoulders of the man, and he dictates the spin by denigrating the less powerful woman.

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Just like alcohol and cocaine do.

• Social Media Increases Depression And Loneliness (TI)

Ever since sites like Facebook and Instagram became part of daily life, scientists have wondered whether they contribute to mental health problems. In fact, research has hinted at a connection between social media use and depression for several years. A new study, published in the Journal of Social and Clinical Psychology, has added more evidence to the theory. [..] “Here’s the bottom line,” said Melissa G. Hunt, a psychologist at the University of Pennsylvania and lead author of the study. “Using less social media than you normally would leads to significant decreases in both depression and loneliness. These effects are particularly pronounced for folks who were more depressed when they came into the study.”

She added 18-to-22-year-olds shouldn’t stop using social media altogether, but cutting down might be beneficial. “It is a little ironic that reducing your use of social media actually makes you feel less lonely,” she said. “Some of the existing literature on social media suggests there’s an enormous amount of social comparison that happens. When you look at other people’s lives, particularly on Instagram, it’s easy to conclude that everyone else’s life is cooler or better than yours.”

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Mammals too. Semen is temperature sensitive.

• Heatwaves Can ‘Wipe Out’ Male Insect Fertility (G.)

Heatwaves severely damage the fertility of male beetles and consecutive hot spells leave them virtually sterilised, according to research. Global warming is making heatwaves more common and wildlife is being annihilated, and the study may reveal a way in which these two trends are linked. The scientists behind the findings said there could also be some relevance for humans: the sperm counts of western men have halved in the last 40 years. Researchers studied beetles because their 400,000 species represent about a quarter of all known species. Insect populations are plunging worldwide as temperatures rise, falling by about 80% in 30 years in Puerto Rico’s rainforest and by 75% in German nature reserves.

Insects are such an integral part of life, as pollinators and prey, that scientists say their decline could lead to “ecological Armageddon”. Little is known about the precise causes of the decline, though climate change, habitat destruction and global use of pesticides are considered probable factors. The research, published in the Nature Communications journal, found that exposing beetles to a five-day heatwave in the laboratory reduced sperm production by three-quarters; females were unaffected. “Beetles are thought to constitute a quarter of biodiversity, so these results are very important for understanding how species react to climate change,” said Kris Sales, at the University of East Anglia, who led the work.

Other research has shown that heat can damage male reproduction in humans as well as cows, sheep and other mammals. “There could be relevance for human fertility,” said Prof Matt Gage, co-leader of the UEA research group. “The paradox is that one of the reasons the climate is warming up and we are having more heatwaves is there are too many humans. So maybe this is a leveller.” Stuart Wigby, of the University of Oxford, who was not involved in the study, said: “Given what we already know about the generality of the sensitivity of sperm to heat, there is every reason to expect that similar effects would be seen in other insects and also in mammals including humans.”

Read more …

Nationalists and Patriots

Nov 122018
 
 November 12, 2018  Posted by at 8:26 pm Primers Tagged with: , , , , , , , , ,  9 Responses »


Ivan Kramskoy Christ in the desert 1920

 

If and when a former Rothschild banker starts telling us what the words in our respective languages actually mean, beware. Even if he has dozens of professional speech writers and spin doctors to do it for him. And even if the meaning and interpretation of words, though they may seem easily translatable, differ between English, French, German, Russian, Chinese to such an extent that Lost in Translation may appear to be an understatement.

But if you’re that Rothschild banker who became president of France through a process that nobody will ever understand, and you host the 100th commemoration of perhaps the worst war ever in history, to be ‘celebrated’ with ‘leaders’ none of whom have exhibited any memory through their actions of the ‘This must never happen again’ that the war ended with, you can expect to get away with bending both history and language.

Macron’s entire audience was ready for, and willing to absorb, a message that seemed so benevolent and sincere and loving, and that perhaps most of all was yet another jab at one of his guests, the American president. They were eating it up. As long as they can appear to stand together against Trump, they can make their people, their voters, and perhaps even each other forget how divided they themselves are.

It was nothing but one more circus, one more theater piece, albeit this one extremely carefully scripted for many months and by many of the finest directors and script writers France has to offer. The underlying theme: the EU is good, so is the UN, NATO is good etc. The list would include the IMF, World Bank and on and on. Big global institutions are good, the bigger the better, and criticism of them is not.

Macron’s spin doctors had come up with a few choice lines to express these sentiments. And since I couldn’t find anyone who had looked at those lines with anything but silent and blind admiration (undoubtedly only due to the solemn occasion) , please allow me. Here’s some of the things Macron said, the way they were translated into English, according to Anglo media:

 

“The old demons are rising again, ready to complete their task of chaos and of death.” “Patriotism is the exact opposite of nationalism. Nationalism is a betrayal of patriotism.

“In saying, ‘Our interests first, whatever happens to the others’, you erase the most precious thing a nation can have, that which makes it live, that which causes it to be great and that which is most important: its moral values.”

 

Well, yes, the old demons are rising again. Or rather, they have been for years. French arms sales to countries and their often dictatorial leaders who one could classify as ‘nationalists’ have never really abated in the past 100 years. As a country, as a society, at least on the leadership level, nothing has been learned. The only ‘excuse’ Paris could provide for this is that all the other countries who sent away their young and strong to be slaughtered never learned a thing either.

But the spin doctors’ finest hour comes after this: “Patriotism is the exact opposite of nationalism. Nationalism is a betrayal of patriotism.” I’m not a linguist, but I know enough about languages -and so do you- to know this is utter nonsense. You may attempt to find some differences between nationalism and patriotism, if you want, but they will never be each other’s opposite. Unless you either are Macron looking for a catchy line or you write his speeches for him.

Obviously, Macron said this because Trump declared himself a nationalist recently. And Macron could now claim that this means Trump is not a patriot. Which we all know is hollow talk. Because Trump said it while speaking about trade, about the US economy. Which does nothing to ‘prove’ he doesn’t love his country. But that is what Macron suggests. He claims patriots love their country, and since nationalism is the opposite of patriotism, Trump does not love America.

Also, and again referring to Trump without mentioning him (if only he had the guts), Macron alleged that nationalists don’t care one bit about what happens to anyone who’s not a citizen of their country. Whereas it is much more likely to mean -I’m treading softly here- that there are people who look out for their own people first, and others after, and they expect all countries to do the same. Macron does the same. A long way away from “whatever happens to others”.

 

Trump was elected because many Americans feel shortchanged, because jobs have disappeared, because they can’t make ends meet. Macron was elected for largely similar reasons: the existing political system failed to protect people. In many other countries, the exact same dynamics are playing out. Macron’s answer to this is to emphasize -make that celebrate- the importance of the exact institutions that have been instrumental in making it all happen.

Ergo: Macron is a globalist. Or maybe I should say he believes in globalism, before someone chimes in to link this to Judaism. Macron believes in global economies and global institutions, whereas Trump does not. The Donald recognizes that global banks and multinationals are responsible to a large extent for the loss of American jobs to low-wage countries. His tariffs, especially on China, address exactly that. Even if he’s clearly conflicted when it comes to US companies who profit from the exact same thing.

Still, that doesn’t mean Trump is not a patriot. But that is precisely what Macron insinuated on Sunday. According to him, one can’t be both a nationalist and a patriot. He might have done better to let the millions who died a 100 years ago, and whom he commemorated, have their own say on that. Did the unfortunate frail forms bleeding to death in the trenches see themselves as nationalists or patriots? Wouldn’t that have been the last thing on their minds? And doesn’t that question tell the entire story?

Doesn’t it put into perspective Macron’s veiled attacks on Trump while the latter was sitting right there? The wonderboy banker trying to gain some sort of moral superiority over the real estate mogul over the heads and rotten bodies and memories of the French and British AND American troops who died deaths the western world can no longer even imagine (while they actively help inflicting them on Yemen) ? And then the entire media run with how beautiful Macron’s words, nay dedications, were?

100 years after the ‘Never Again’, France, Britain, Germany, Russia and the US are still selling billions worth of arms to regimes they know will abuse them. As long as they get their cut, right? The suggestion that Trump is somehow worse than the rest is ludicrous. If anything Trump is a little better on the warmonger front. He still has to prove that, true. The rest have proven their role already though.

Last thought: Xi Jinping is going out of his way to claim China is opening up its economy. That makes him a globalist, right? And globalists can only be nationalists, according to Macron, never patriots? Can we get someone to ask Xi how he sees this? And what about Vladimir Putin? Russia’s been bounced off the global stage through sanctions and allegations, but perhaps he would still like to be a globalist. So is Putin a nationalist or a patriot? Asking for a friend.

Again, according to Macron, you can’t be both. You think about that. What are you?

 

 

Debt Rattle November 12 2018

Nov 122018
 
 November 12, 2018  Posted by at 10:54 am Finance Tagged with: , , , , , , , , , , , ,  5 Responses »


Vincent van Gogh Burning weeds 1883

 

• Macron: Nationalism Is A “Betrayal Of Patriotism” (Ind.)
• Putin Says Had Good Conversation With Trump In Paris (AFP)
• Eastern Ukraine Elects Separatist Leaders As West Rejects Polls (AFP)
• May Says Britain Open To ‘Different Relationship’ With Russia (R.)
• Boris Johnson Says Britain On Verge Of ‘Total Surrender’ In Brexit Talks (R.)
• May Shelves Crunch Brexit Talks With Cabinet (Ind.)
• Alibaba Has Record $30.8 Billion In Sales In 24 Hours On Singles Day (CNBC)
• Foreign Capital Has Propped Up China’s Currency. What If It Leaves? (CFR)
• What Plunging Oil Prices Tell Us About The Stock Market And Global Economy (MW)
• A Worldwide Debt Default Is A Real Possibility (Mauldin)

 

 

As Macron nears record low approval rating for a French president, he lectures the world through a game of semantics. The ‘brilliance’ is that while not many could have told you the difference between nationalism and patriotism, Macron claims to have it down. Even if it has to be translated into dozens of languages, each of which may have slightly different interpretations of the -local- meaning of the words. Macron has good speech writers, but they don’t write in all the languages involved. So it’s merely semantics. The terms mean to everyone what they want them to mean.

The take-away: according to Macron, patriotism can exist along globalism, nationalism cannot. A jibe against Trump. Which also means that because Xi Jinping touts globalism all the time, we must accept, if we follow Macron, that he is not a nationalist, but a patriot.

• Macron: Nationalism Is A “Betrayal Of Patriotism” (Ind.)

Emmanuel Macron has issued a hard-hitting warning about the dangers of nationalism and of countries that put their interests before the collective good – in front of Donald Trump and Vladimir Putin. The French president denounced those who evoke nationalist sentiment to disadvantage others, calling it a “betrayal of patriotism” and moral values. The US and Russian leaders listened in silence as Mr Macron took a swipe at the rising tide of populism in the US and Europe, warning: “The old demons are rising again, ready to complete their task of chaos and of death.” During a gathering of dozens of world leaders to mark 100 years since the end of the First World War, the French president went on: “Patriotism is the exact opposite of nationalism. Nationalism is a betrayal of patriotism.

“In saying, ‘Our interests first, whatever happens to the others’, you erase the most precious thing a nation can have, that which makes it live, that which causes it to be great and that which is most important: its moral values.” [..] In a speech lasting nearly 20 minutes, Mr Macron also called on fellow leaders to fight for peace. “Ruining this hope with a fascination for withdrawal, violence or domination would be a mistake for which future generations would rightly find us responsible,” he said. The French leader also defended the European Union and the United Nations, which he said guaranteed peace and enshrined “a spirit of cooperation to defend the common property of a world whose destiny is inextricably linked”.

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Okay, is Putin a nationalist or a patriot? He seems to like globalism, but he likes Russia better. And he’s been pushed out of globalism through sanctions and tall tales.

• Putin Says Had Good Conversation With Trump In Paris (AFP)

Russian President Vladimir Putin said he had a brief but good conversation with US leader Donald Trump at World War I centenary events in Paris, Russian media reported. When journalists asked Putin whether he managed to speak to Trump on Sunday, he said: “Yes,” Russian state news agency RIA Novosti reported. Asked how it went, Putin said: “Well.” He did not provide further details, but the French presidency said the pair had a wide-ranging discussion during lunch after the commemoration. Host and French President Emmanuel Macron was there and German Chancellor Angela Merkel took part in some of the exchanges, the presidency said.

Subjects discussed included the situation in the Middle East, notably Syria, Iran and Saudi Arabia, and North Korea. White House spokeswoman Sarah Sanders said Trump had sat with world leaders including Putin, Macron and Merkel at lunch and the group had held “very good and productive discussions”. “The leaders discussed a variety of issues, including the INF (nuclear treaty), Syria, trade, the situation in Saudi Arabia, sanctions, Afghanistan, China, and North Korea,” she said. Expectations have been growing for a new Trump-Putin meeting as tensions pile up over the Cold War-era Intermediate-Range Nuclear Forces Treaty (INF) and US sanctions against Moscow.

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Macron and Merkel: “These so-called elections undermine the territorial integrity and sovereignty of Ukraine..”

Wasn’t it John McCain and Vcitoria Nuland who undermined it back in 2014 on Maidan Square?

• Eastern Ukraine Elects Separatist Leaders As West Rejects Polls (AFP)

People in Russian-backed areas of eastern Ukraine re-elected separatist leaders at the weekend, according to results released Monday of polls condemned as illegal by Kiev and Western countries. Elections in the Donetsk and Lugansk “People’s Republics”, controlled by separatists since breaking away from Ukraine’s pro-Western government in 2014, took place after the killing of the rebel Donetsk “president” in a bomb attack in August. Security was tight for Sunday’s vote with gun-toting, camouflage-clad guards deployed to ensure order. Denis Pushilin, the 37-year-old acting Donetsk leader, was elected with 61 percent of the vote with almost all ballots counted, the local electoral commission said. Leonid Pasechnik, the acting Lugansk leader, took 68 percent of the vote.

French President Emmanuel Macron and German Chancellor Angela Merkel branded the vote “illegal and illegitimate” following a meeting with Ukraine President Petro Poroshenko on the sidelines of World War I commemorations also attended by Russian leader Vladimir Putin on Sunday. “These so-called elections undermine the territorial integrity and sovereignty of Ukraine,” the pair said in a joint statement. Washington and Brussels had asked Russia not to allow the polls to go ahead, arguing they would further hamper efforts to end a conflict that has killed more than 10,000 people since 2014. “The people in eastern Ukraine will be better off within a unified Ukraine at peace rather than in a second-rate police state run by crooks and thugs, all subsidized by Russian taxpayers,” tweeted Kurt Volker, the US special envoy to Ukraine, on the day of the polls.

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if only they confess to the narratives Britain has spouted without evidence.

• May Says Britain Open To ‘Different Relationship’ With Russia (R.)

Prime Minister Theresa May will say on Monday Britain is “open to a different relationship” with Russia if Moscow takes a new path and stops “attacks” that undermine international treaties and security. Just a year ago, May used her annual speech at the Lord Mayor’s Banquet to accuse Moscow of military aggression and of meddling in elections, some of her strongest criticism even before the poisoning of a former Russian spy in Salisbury. This year, she will tell London’s financial center that the action taken since – including the largest ever coordinated expulsion of Russian intelligence officers – has deepened her belief in a “collective response” to such threats.

“We will continue to show our willingness to act, as a community of nations, to stand up for the rules around the world,” May will say, according to excerpts of her speech. Describing evolving threats, May will say the past year, including Salisbury, has “shown that while the challenge is real, so is the collective resolve of likeminded partners to defend our values, our democracies, and our people.” “But, as I also said a year ago, this is not the relationship with Russia that we want … We remain open to a different relationship – one where Russia desists from these attacks that undermine international treaties and international security,” she will say.

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Boris still wants to be King.

• Boris Johnson Says Britain On Verge Of ‘Total Surrender’ In Brexit Talks (R.)

Former British foreign minister Boris Johnson accused Prime Minister Theresa May on Sunday of forcing through a deal that would keep the country locked in the European Union’s customs union after Brexit in what he described as a “total surrender”. “I really can’t believe it but this government seems to be on the verge of total surrender,” he wrote in his weekly column in the Telegraph newspaper. “I want you to savour the full horror of this capitulation … we are on the verge of signing up for something even worse than the current constitutional position. These are the terms that might be enforced on a colony.”

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Unsolved issues.

• May Shelves Crunch Brexit Talks With Cabinet (Ind.)

Theresa May has been forced to abandon plans for an emergency cabinet meeting to approve a Brexit deal, after fresh opposition at home and abroad plunged her timetable into turmoil. The prime minister shelved the meeting, pencilled in for Monday, slamming on the brakes after fierce resistance in her cabinet and in Brussels threatened to derail the path to an agreement. A government source conceded that an outline deal might not be ready by Tuesday – making it increasingly unlikely that a special EU summit to sign it off can be held in November, as hoped.

That would leave the UK having to ramp up hugely expensive no-deal preparations and in danger of being unable to pass all necessary legislation before the Brexit deadline next March. At home, Ms May faced an open challenge to her plans from Andrea Leadsom, the Commons leader, who vowed the UK “cannot be held against its will” by the backstop plan for the Irish border. Ms Leadsom became the second cabinet minister to insist on a unilateral power to escape being bound in the EU customs union – something explicitly ruled out by Brussels.

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1.35 billion packages delivered.

• Alibaba Has Record $30.8 Billion In Sales In 24 Hours On Singles Day (CNBC)

Alibaba on Sunday tore through last year’s Singles Day sales record, racking up more than $30.8 billion in the 24-hour shopping event. Gross merchandise value (GMV), a figure that shows sales across the Chinese e-commerce giant’s various shopping platforms, surpassed last year’s $25.3 billion record at around 5:34 p.m. SIN/HK (4:34 a.m. ET) on Sunday, and kept marching higher through the rest of the day. In Chinese currency terms, GMV totaled 213.5 billion yuan, easily beating last year’s figure of 168.2 billion yuan and representing a nearly 27 percent year-on-year rise. That was, however, smaller than the 39 percent year-on-year growth recorded in 2017.

Alibaba’s Singles Day GMV beat last year’s figure in yuan terms earlier than it toppled the dollar record. The Chinese currency is weaker against the greenback from a year ago, which means more sales in yuan are required to get the same dollar amount. It was the 10th edition of the annual Singles Day event, which is also called the Double 11 shopping festival because it falls on Nov. 11. During the 24-hour period, Alibaba offered huge discounts across its e-commerce sites such as Tmall. Alibaba’s Singles Day sales haul easily exceeded the spending by consumers during any single U.S. shopping holiday.

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Wait! Shadows?

• Foreign Capital Has Propped Up China’s Currency. What If It Leaves? (CFR)

“I think China’s manipulating their currency, absolutely,” President Trump said back in August. Yet the People’s Bank of China (PBoC) was, and has been, intervening to keep the RMB up, and not to push it down, as Trump was alleging. And we believe such interventions are about to get much larger. Here is why. Over the past two years, as our left-hand figure below shows, foreign portfolio investors have piled prodigiously into Chinese assets, helping to support the RMB. But history suggests this trend is about to reverse. While inflows have been rising, Chinese stocks have been tumbling—they are down over 20 percent from their January peak. Dreadful performance like this typically drives funds out of emerging markets. We may be seeing the beginning of such outflows in China.

Repatriation of liquid foreign capital will make it far more challenging for China to keep its currency up. Of course, China could change course and let it fall, but that risks exacerbating the foreign-debt burden of its highly leveraged corporates. It could raise interest rates, but that would further slow a slowing economy. It could, to keep capital at home, demand higher returns on its foreign lending, but that would mean sacrificing its efforts to subsidize its companies operating abroad, as well those aimed at putting dollars to the service of geostrategic objectives—like Belt and Road. n short, then, there is every reason to expect that the PBoC will boost its support for the RMB by selling dollar reserves.

This is what it did back in 2015, when a plunging stock market scared away foreign capital. So in spite of President’s Trump’s repeated charges that China is manipulating its currency for competitive advantage in trade, all evidence suggests that it will continue to do the opposite. But if China were to sell reserves at the same pace as in 2015, its reserve levels would, by mid-2020, actually fall below the safety threshold implied by the IMF’s framework for reserve adequacy—as shown in the right-hand figure above.

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Not much for now. Oil rising this morning on Saudi cuts promised.

• What Plunging Oil Prices Tell Us About The Stock Market And Global Economy (MW)

What the heck happened to oil prices? But more significantly, what does it mean for the broader stock market and the global economy? That is what has some Wall Street investors scratching their noggins, as crude futures and U.S. stocks staged a tandem tumble this week, just when investors thought the worst was over following a bruising October for risk assets. Now, oil futures are unraveling, down at least 20% after putting in a 52-week high early last month. And it isn’t so much the descent into bear-market territory—as the recent slump for crude can be characterized—as it is the celerity of the selloff that has market participants unsettled.

About five weeks: That’s all it took for bulls to pivot from cavalierly pondering if $100-a-barrel oil was a genuine possibility before the end of 2018 on the back of Iranian oil export sanctions imposed by the U.S. on Nov. 4, to wondering how ugly the current implosion in black gold could get before finding a bottom. On Friday, West Texas Intermediate crude for December delivery lost 48 cents, or 0.8%, to settle at $60.19 a barrel on the New York Mercantile Exchange, for the lowest front-month contract settlement since March 8, according to FactSet data. Prices lost 4.7% for the week, tallying their fifth straight weekly drop. The 10th session decline in a row matched the longest skid since 1984.

But beyond that, the most important question is this: What does oil’s decline really mean? That is the query that Yves Lamoureux, president of macroeconomic research firm Lamoureux & Co., posed to MarketWatch via email last week as the decline in oil was gaining steam. “Very large monthly down moves in crude oil has often heralded something more ominous,” he wrote on Nov. 1. “Most market observers think there is enough damage to see a bottom in stocks. Consensus therefore looks for new record highs or a solid bounce back. We strongly disagree with this perspective.”

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No doubt there. But it’ll start somewhere.

• A Worldwide Debt Default Is A Real Possibility (Mauldin)

Is debt good or bad? The answer is “Yes.” Debt is future spending pulled forward in time. It lets you buy something now for which you otherwise don’t have cash yet. Whether it’s wise or not depends on what you buy. Debt to educate yourself so you can get a better job may be a good idea. Borrowing money to finance your vacation? Probably not. The problem is that many people, businesses, and governments borrow because they can. It’s been possible in the last decade only because central banks made it so cheap. It was rational in that respect. But it is growing less so as the central banks start to tighten. Earlier this year, I wrote a series of articles predicting a debt “train wreck” and eventual liquidation. I dubbed it “The Great Reset.”

I estimated we have another year or two before the crisis becomes evident. Now I’m having second thoughts. Recent events tell me the reckoning could be closer than I thought just a few months ago. Central banks enable debt because they think it will generate economic growth. Sometimes it does. The problem is they create debt with little regard for how it will be used. That’s how we get artificial booms and subsequent busts. We are told not to worry about absolute debt levels so long as the economy is growing in line with them. That makes sense. A country with a larger GDP can carry more debt. But that is increasingly not what is happening. Let me give you two data points.

Lacy Hunt tracks data that shows debt is losing its ability to stimulate growth. In 2017, one dollar of non-financial debt generated only 40 cents of GDP in the US. It’s even less elsewhere. This is down from more than four dollars of growth for each dollar of debt 50 years ago. This has seriously worsened over the last decade. China’s debt productivity dropped 42.9% between 2007 and 2017. That was the worst among major economies, but others lost ground, too. All the developed world is pushing on the same string and hoping for results. Now, if you are used to using debt to stimulate growth, and debt loses its capacity to do so, what happens next? You guessed it: The brilliant powers-that-be add even more debt.

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Debt Rattle November 2 2018

Nov 022018
 
 November 2, 2018  Posted by at 9:19 am Finance Tagged with: , , , , , , , , , , ,  17 Responses »


Pablo Picasso Bathers 1918

 

• Trump Plans ‘Meeting Plus Dinner’ With Xi Jinping After G20 Summit (SCMP)
• Shares Soar As Trump Hints At Possible US-China Trade Deal (G.)
• The Fed’s QE Unwind Hits $321 Billion (WS)
• Debt Is Back But This Time It’s Corporate (GolemXIV)
• The ‘True State’ Of Americans’ Financial Lives (MW)
• The American Dream Feels Further Off Than Ever For Millennials (G.)
• The Lesson of 2018 (Strassel)
• 1 in 5 Germans Is ‘At Risk Of Poverty’ Despite Record Employment (RT)
• Brexit Campaigner Arron Banks Faces Criminal Inquiry (G.)
• EU Fisheries Row Threatens May’s Customs Union Plan (G.)
• Groundskeeper In Monsanto US Weed-Killer Case Accepts Reduced Award (R.)
• Thousands Of Europe-Bound Migrants Have Simply Vanished (ZH)

 

 

This would only happen if there’s progress in talks….

• Trump Plans ‘Meeting Plus Dinner’ With Xi Jinping After G20 Summit (SCMP)

US President Donald Trump has offered to host a dinner for Chinese President Xi Jinping on December 1 in Buenos Aires after the G20 leaders summit, an invitation Beijing has tentatively accepted, people familiar with the arrangement have told the South China Morning Post. The Post reported two weeks ago that Trump and Xi had agreed to meet on November 29, the day before the official opening of the summit, but the meeting was rescheduled and upgraded into a “meeting plus dinner” at Trump’s request, the people said, who declined to be identified as the information is still classified.

A “Western-style” sit-down dinner after the G20 summit could offer the two leaders more time to talk than a chat on the sidelines of the summit and could offer a more conducive atmosphere for negotiations. “Trump originally planned to leave Buenos Aires as soon as the G20 agenda finished, but he has decided to postpone his departure to make this dinner happen,” a source said. It is not yet known what specific issues will be on the agenda. The two leaders had a call on Thursday, officially agreeing to meet in Argentina and laying the ground for further discussions on trade and North Korea.

Trump said in a tweet that he had a “long and good [phone] conversation” with Xi, adding: “We talked about many subjects, with a heavy emphasis on Trade. Those discussions are moving along nicely with meetings being scheduled at the G20 in Argentina. Also had good discussion on North Korea!” The Chinese side issued a much longer statement about the phone call. According to the official Xinhua news agency, Xi told Trump that “both of us have good intentions for the healthy and steady development of Sino-US relations and for growth in Sino-US trade cooperation, and we shall make efforts to turn these intentions into reality.”

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….but this may still be wishful thinking.

• Shares Soar As Trump Hints At Possible US-China Trade Deal (G.)

Asian shares have surged on reports that Donald Trump wants to reach an agreement with Chinese president Xi Jinping about the trade dispute that has dogged markets for months. The US president spoke to Xi on Thursday and later tweeted that trade talks with China were “moving along nicely” ahead of face-to-face talks between the pair at the G20 summit in Argentina later this month. But Bloomberg later reported that the phone call – in which Trump and Xi both expressed optimism about resolving their bitter trade disputes – prompted Trump to ask officials to begin drafting potential terms. The report lit a fire under stock markets that have beset by fears of a full-blown trade war between the world’s two biggest economies.

The Nikkei was up 2.3% in Tokyo, the Hang Seng climbed 3.35% in Hong Kong and the Shanghai Composite was up 3%. There was a also a strong gain of 3% for the export-oriented Kospi index in South Korea. US stock futures rose 0.7% and the FTSE100 is set for a jump of almost 1% when it opens in London on Friday morning. The US and China’s tit-for-tat tariffs on each other’s goods have rumbled on for months as Trump pledges to help create more US manufacturing jobs. The tariffs have been blamed for a weakening of China’s mighty manufacturing sector which this week showed a marked slowdown in activity.

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Shedding $50 billion a month. Mayhem in dollar markets.

• The Fed’s QE Unwind Hits $321 Billion (WS)

Over the four-week period from October 3 through October 31, the Federal Reserve shed $35 billion in assets, according to the Fed’s weekly balance sheet released Thursday afternoon. This brought the balance sheet to $4,140 billion, the lowest since February 12, 2014. Since October 2017, when the Fed began its QE unwind, or “balance sheet normalization,” it has now shed $321 billion. The Fed acquired Treasury securities and mortgage-backed securities (MBS) as part of QE, which ended in 2014. Between the end of QE and the beginning of the QE Unwind in October 2017, the Fed replaced maturing securities with new securities to keep their levels roughly the same.

In October last year, the Fed kicked off the QE unwind and began shedding those securities. But the balance sheet also reflects the Fed’s other activities, and the amount of its total assets is always higher than the sum of Treasury securities and MBS it holds. October was a new milestone: the QE unwind left the ramp-up phase and entered the cruising-speed phase, according to the Fed’s plan. In the cruising-speed phase, the Fed is scheduled to shed “up to” $30 billion in Treasuries and “up to” $20 billion in MBS a month, for a total of “up to” $50 billion a month. From October 3 through October 31, the Fed’s holdings of Treasury Securities fell by $23.8 billion to $2,270 billion, the lowest since February 19, 2014. Since the beginning of the QE-Unwind, the Fed has shed $195 billion in Treasuries:

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The amount of high risk debt owned by pension funds is something else. As I always say, remember the days of AAA?

• Debt Is Back But This Time It’s Corporate (GolemXIV)

On Wednesday Feb 7th 2007 HSBC issued a profit warning. It was the first in its 142 year history. The bank told its share holders it would have to take an unprecedented charge of $10.5 billion because one of its units, its sub prime lender, was in deep trouble. And so began the sub prime crisis. Today GE issued a profit warning and cut its dividend to share holders from 12 cents to 1 cent. It is only the third time since the Great Depression that GE has reduced its dividend in this way. It told its share holders it would be taking a $22 Billion charge because one of its units, its power unit, is in deep trouble. GE has about $116 billion in debt. In 2007 the banks had flooded the global market with sub-prime loans.

The banks were also holding many of those same loans themselves or had transferred them to Special Purpose Vehicles (SPVs) they had set up, staffed and lent money to. Today it is not the banking world which stands at the centre of the storm but the corporate world. In the last years they have flooded the market with junk rated bonds. At the same time they are also burdened with high yielding, leveraged and covenant- lite loans. Taken together they are about $2.4 Trillion of debt. 2007 sub prime loans. 2018 corporate junk bonds and leveraged loans. 2007 banks and SPVs funded by the banks. 2018? Where is this sub-prime corporate debt sitting today? Nearly half sits in Insurance Companies and Pension funds. Given the close ties between insurance and pensions this is not a happy picture.

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“Some 44% of people said their expenses exceeded their income in the past year and they used credit to make ends meet.”

• The ‘True State’ Of Americans’ Financial Lives (MW)

The finances of Americans may not be as good as they look from the outside. Despite optimistic metrics like a nine-year-long bullish, if volatile, stock market, low unemployment levels, and consumer confidence levels nearing record highs, millions of Americans continue to struggle, a study released Thursday from financial consultancy nonprofit the Center for Financial Services Innovation (CFSI) found. Only 28% of Americans are considered “financially healthy,” according to a CFSI survey of more than 5,000 Americans. “Financial health enables family stability, education, and upward mobility, not just for individuals today but across future generations,” the CFSI says.

“Many are dealing with an unhealthy amount of debt, irregular income, and sporadic savings habits.” Some 44% of people said their expenses exceeded their income in the past year and they used credit to make ends meet. Another 42% said they have no retirement savings at all. Meanwhile, 17% of Americans are “financially vulnerable,” meaning they struggle with nearly all financial aspects of their lives, and 55% are “financially coping,” meaning they struggle with some but not all aspects of their financial lives. The recent volatility in the Dow Jones Industrial and S&P 500 has not helped Americans feel secure, experts say.

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Can’t afford to start a family.

• The American Dream Feels Further Off Than Ever For Millennials (G.)

From adolescence to our mid-30s, my wife and I have followed every common precept of responsible young adulthood – what conservatives venerate as “the success sequence”. We finished high school (then college, then grad school). We charged into the labor market and have stayed there. We had kids in a stable marriage. Neither of us quit our jobs or took a year off to “find ourselves”. We cut coupons and buy food in bulk. We did this, in part, because we trusted what we believed was America’s basic bargain: work hard, play by the proverbial rules, and you’ll enjoy a healthy middle-class life. You’ll have a decent job, stable housing, affordable education and healthcare, and a clear route to retirement.

But that old, potholed path doesn’t deliver like it used to, even for responsible rule-followers like us. Here in our mid-30s, my wife and I are still chasing homeownership, that final, elusive piece of middle-class life. Today’s young families started to hit the labor market during the great recession. We’re buried in educational debt, and college costs for our kids are predicted to be even higher than ours. Housing near good-paying jobs is wildly expensive. Healthcare costs are uncertain. We’re less likely to have a guaranteed retirement pension through work, and current signals suggest that government-funded retirement supports will be significantly smaller, if they’re there at all. These are bread-and-butter issues.

While national political leaders are gridlocked on how to address the crises of widening inequality and limited upward mobility, we’re struggling to simply provide our children with the same opportunities that came relatively easily to earlier generations. Most young families aren’t cynical because the rich have private helicopter fleets and offshore bank accounts, per se. We’re frustrated because the American bargain we believed in is broken.

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I don’t often disagree with Kimberley Strassel, but I do disagree with “the ascendant progressive movement blew an easy victory for Democrats.” It’s the old guard that blew it, Clinton, Pelosi, Waters, Feinstein.

• The Lesson of 2018 (Strassel)

In a few days the U.S. will have its midterm results, and the Beltway press corps will lecture us on the lessons. Don’t expect to hear much about the one takeaway that is already obvious: that today’s preferred progressive politics—of character assassination, mob rule, intimidation and wacky policies—is an electoral bust. It is not what is winning Democrats anything. It is what is losing the party the bigger prize. Six weeks ago, Democrats were expecting a blue wave to rival the Republican victory of 2010, when the GOP picked up 63 House seats. Everything was in their favor. History—the party in power almost always loses seats. Money—Democrats continue to outraise Republicans by staggering amounts.

The opposition—some 41 GOP House members retired, most from vulnerable districts where Donald Trump’s favorability is low. Democrats were even positioned to take over the Senate, despite defending 10 Trump-state seats. Democrats obliterated their own breaker in the space of two weeks with the ambush of Supreme Court nominee Brett Kavanaugh. The left, its protesters and its media allies demonstrated some of the vilest political tactics ever seen in Washington, with no regard for who or what they damaged or destroyed along the way—Christine Blasey Ford, committee rules, civility, Justice Kavanaugh himself, the Constitution. An uncharacteristically disgusted Sen. Lindsey Graham railed: “Boy, y’all want power. God, I hope you never get it!”

A lot of voters suddenly agreed with that sentiment. The enormous enthusiasm gap closed almost overnight as conservative voters rallied to #JobsNotMobs. Even liberal prognosticators today forecast that Republicans will keep the Senate and Democrats will manage only a narrow majority in the House, if that. It’s always possible the polls are off, or that there is a last-minute bombshell. But it remains the case that the ascendant progressive movement blew an easy victory for Democrats.

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Thanks, Mutti. Or in other words: now you know why Merkel lost so much support.

• 1 in 5 Germans Is ‘At Risk Of Poverty’ Despite Record Employment (RT)

Germany may be Europe’s biggest and strongest economy and is enjoying record employment, but one fifth of its citizens are struggling to make ends meet, a new study reveals. Some 15.5 million people or 19 percent of the population in Germany were “at risk of poverty” or “social exclusion” in 2017, the Federal Statistics Office said. Even though the unemployment rate in Germany has fallen to record lows, many people still do not earn enough to pay their bills and keep themselves above the poverty line. Some 13.1 million Germans, roughly 16.1 percent of the population, are threatened by poverty precisely because of their low monthly income, the federal statistics bureau says.

According to the criteria introduced in the EU, people are considered to be at risk of poverty if their total income amounts to less than 60 percent of an average income in their country. In the case of Germany, it amounts to €1,096 ($1,243) for a single person per month and €2,302 ($2,611) for a family of two adults and two children under 14. 3.4 percent of the population were considered as threatened by poverty as they struggled to pay their rent on time, heat their homes adequately, travel on vacation or even to regularly get a substantial meal due to a lack of financial resources.

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This has been known for a long time, why investigate only now? And the Guardian blows its coverage of the topic by bringing Russia into the discussion. But then that’s Britain’s new favorite pastime. Another piece today on this, also in the Guardian, is by Luke Harding, career Assange and Putin basher.

• Brexit Campaigner Arron Banks Faces Criminal Inquiry (G.)

The National Crime Agency is to investigate allegations of multiple criminal offences by Arron Banks and his unofficial leave campaign in the Brexit referendum, prompting calls from some MPs for the process of departing the European Union to be suspended. The NCA would look into suspicions that a “number of criminal offences may have been committed”, the Electoral Commission said in a statement, saying there were reasonable grounds to suspect Banks was “not the true source” of £8m in funding to the Leave.EU campaign. The commission said the cases involve Banks, the insurance millionaire who heavily backed leave; Elizabeth Bilney, one of his key associates; Leave.EU itself; the company used to finance it; and “other associated companies and individuals”.

News of the investigation prompted anti-Brexit campaigners to call for a delay to the process of leaving the EU. The Labour MP David Lammy said Brexit “must be put on hold until we know the extent of these crimes against our democracy”. A series of other Labour MPs echoed the call, while the Lib Dems said Brexit could not go ahead based on “a leave campaign littered with lies, deceit and allegations of much worse”. Downing Street said it could not comment on a live investigation, but dismissed the idea of a pause: “The referendum was the largest democratic exercise in this country’s history and the PM is getting on with delivering its result.” Banks and Bilney, who chaired the Leave.EU campaign, said they rejected any allegations of wrongdoing, and argued the investigation was motivated by political considerations.

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Spending time talking fisheries is entirely useless as long as the Irish border issue is still out there.

• EU Fisheries Row Threatens May’s Customs Union Plan (G.)

Theresa May is facing fresh opposition from EU countries that have large fishing communities to her demands for an agreement before Brexit day on a temporary customs union to solve the Irish border problem. [..] The prime minister has said she wants the “backstop” solution in the withdrawal agreement, under which Northern Ireland would in effect stay in the single market and customs union alone, to be scrapped in favour of the whole of the UK staying in a customs arrangement temporarily. In the latest development, the European commission has floated a plan in which the full terms of a “bare bones” customs union for Great Britain would be laid out in the withdrawal agreement, so there would be no need for negotiations on it after Brexit. Northern Ireland would stay under the full EU customs code.

The backstop would come into force at the end of the transition period should a comprehensive trade deal to ensure there is no need for a hard border on the island of Ireland not be agreed in time. A senior EU official conceded that the proposal would not remove the need for a Northern Ireland-specific backstop that would keep the province in the single market as the UK gave up its membership. The issue of what to do about fisheries would also remain with member states likely to reject to any deal that undermines the “trade-off” envisioned in the bloc’s negotiating position papers in which British exporters were only given access to the single market in exchange for European fishing boats keeping access to the seas around the UK.

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Monsanto saved itself $200 million. But they’ll apeal again.

• Groundskeeper In Monsanto US Weed-Killer Case Accepts Reduced Award (R.)

The school groundskeeper who won a jury trial against Bayer’s Monsanto unit over allegations that the company’s glyphosate-containing weed-killers caused his cancer, accepted a court-mandated reduced punitive damages award on Wednesday. The decision by Dewayne Johnson, who sued Monsanto in 2016, brings the total award to $78 million, down from the jury’s verdict on Aug. 10 of $289 million – $39 million in compensatory and $250 million in punitive damages. Johnson’s law firm said in a statement that he accepted the reduction “to hopefully achieve a final resolution within his lifetime.”

Judge Suzanne Bolanos of San Francisco’s Superior Court of California, who oversaw the trial, earlier this month affirmed the liability portion of the verdict, but ordered punitive damages to be slashed to concur with California and federal law. Bayer denies allegations that glyphosate can cause cancer and said it will appeal the decision as the verdict was not supported by the evidence presented at trial. The verdict, which marked the first such decision against Monsanto, wiped 10 percent off the value of the company and shares have since dropped nearly 30 percent from their pre-verdict value.

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Thanks Mutti. And Europeans will just focus on the US-Mexico border of course. Is that double morals or no morals at all?

• Thousands Of Europe-Bound Migrants Have Simply Vanished (ZH)

Tens of thousands of migrants undertaking dangerous journeys in search of greener pastures throughout the world are dead or missing, according to an AP tally – nearly doubling estimates from the N’s International Organization for Migration (IOM). At least 56,800 migrants worldwide have simply vanished since 2014 by AP’s count – eclipsing the IOM’s October 1 estimate of around 28,500. This year alone, the IOM has documented over 1,900 deaths in and around the Mediterranean. “A growing number of migrants have drowned, died in deserts or fallen prey to traffickers, leaving their families to wonder what on earth happened to them,” reports Fox News. “At the same time, anonymous bodies are filling cemeteries around the world.”

Focusing on Europe alone, AP found almost 4,900 migrants whose families can’t account for their lived ones – nearly half of which are children who have been reported missing to the Red Cross. “… many of those who go missing are uncounted, including boatfuls [sic] of young Tunisians or Algerians and children whose parents lost track of them in the chaos of land border crossings. In all, The Associated Press found nearly 4,900 people whose families say they simply disappeared without a trace in Europe or en route, including more than 2,700 children whose families reported them missing to the Red Cross.” -Fox News

Meanwhile, efforts to identify those who have died in shipwrecks trying to make it to Europe have fallen flat. Of the 400 or so remains interred in a Tunisian cemetery for unidentified migrants, for example, only one has ever been identified since its opening in 2005. “Their families may think that the person is still alive, or that he’ll return one day to visit,” said one unemployed sailor, Chamseddin Marzouk. “They don’t know that those they await are buried here, in Zarzis, Tunisia.”

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Debt Rattle October 31 2018

Oct 312018
 
 October 31, 2018  Posted by at 9:59 am Finance Tagged with: , , , , , , , , , , ,  9 Responses »


Francisco Goya Witches’ Sabbath 1798

 

• US Calls For Yemen Ceasefire, Peace Talks ‘In The Next 30 Days’ (AFP)
• Erdogan Urges Saudi Prosecutor To Find Out Who Ordered Khashoggi Hit (AFP)
• Housing Market Now ‘Reminds Me Of 2006′ – Robert Shiller (MW)
• China Debt Bomb Ready to Explode (Rickards)
• China Factory Growth Weakest In Over 2 Years, Export Orders Slump Deepens (R.)
• Ray Dalio Hails Paul Volcker As ‘The Greatest Man’ He Knows (MW)
• The Monster Mash (Kunstler)
• No-Deal Brexit Would Trigger Lengthy UK Recession – S&P (G.)
• Welcome to the Jungle (Escobar)
• After Germany’s Merkel Comes Chaos (John Rubino)
• Ocean Shock (Reuters)

 

 

Both Mattis and Pompeo, a coordinated effort. 30 days seems ambitious, but MbS doesn‘t have much leverage left.

• US Calls For Yemen Ceasefire, Peace Talks ‘In The Next 30 Days’ (AFP)

The United States called Tuesday for a ceasefire and peace talks in Yemen, as the Saudi-led military coalition sent more than 10,000 new troops toward a vital rebel-held port city ahead of a new assault. Pentagon chief Jim Mattis said the US had been watching the conflict “for long enough,” adding that Saudi Arabia and the United Arab Emirates, which are in a US-backed coalition fighting Shiite Huthi rebels, are ready for talks. “We have got to move toward a peace effort here, and we can’t say we are going to do it some time in the future,” Mattis said at the US Institute of Peace in Washington. “We need to be doing this in the next 30 days.”

He said the US is calling for all warring parties to meet with United Nations special envoy Martin Griffiths in Sweden in November and “come to a solution.” US-Saudi ties have cooled in recent weeks after the murder of journalist Jamal Khashoggi, a prominent critic of the conservative kingdom, that has also tarnished the image of Crown Prince Mohammed bin Salman. Saudi Arabia and its allies intervened in the conflict between embattled Yemeni President Abedrabbo Mansour Hadi, whose government is recognized by the United Nations, and the Huthis in 2015. Nearly 10,000 people have since been killed and the country now stands at the brink of famine, with more than 22 million Yemenis — three quarters of the population — in need of humanitarian assistance.

[..] US Secretary of State Mike Pompeo called for an end to all coalition air strikes in Yemen’s populated areas. “The time is now for the cessation of hostilities, including missile and UAV (drone) strikes from Huthi-controlled areas into the Kingdom of Saudi Arabia and the United Arab Emirates,” Pompeo said in a statement. “Subsequently, coalition air strikes must cease in all populated areas in Yemen.”

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Body still not found.

• Erdogan Urges Saudi Prosecutor To Find Out Who Ordered Khashoggi Hit (AFP)

Turkish President Recep Tayyip Erdogan on Tuesday called on Saudi Arabia’s chief prosecutor to find out who ordered the murder of journalist Jamal Khashoggi, and not spare “certain people” in his investigation. “Who sent these 15 people? As Saudi public prosecutor, you have to ask that question, so you can reveal it,” Erdogan said, referring to the 15-man team suspected of being behind the hit. “Now we have to solve this case. No need to prevaricate, it makes no sense to try to save certain people,” he told reporters in Ankara. Khashoggi was killed after entering the Saudi consulate in Istanbul on October 2 to obtain paperwork ahead of his upcoming wedding. His body has not yet been found.

[..] Erdogan said that during the talks Fidan requested the 18 suspects be sent to Turkey for trial, as the killing took place in Istanbul. The Istanbul prosecutor’s office last week prepared a written request for the extradition of the 18 suspects “involved in the premeditated murder”, the justice ministry said, but Riyadh rejected Ankara’s request. Erdogan also urged Saudi Foreign Minister Adel al-Jubeir to explain who the “local co-conspirators” were that were reportedly given Khashoggi’s body after his death. “Again either the Saudi foreign minister or the 18 suspects must explain who the local co-conspirators are. Let’s know who this co-conspirator is, we can shed further light. We cannot let this subject end mid-way.”

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Only this time it’s global.

• Housing Market Now ‘Reminds Me Of 2006′ – Robert Shiller (MW)

Famed housing-watcher Robert Shiller said Tuesday that the weakening housing market reminded him of the last market top, just before the subprime housing bubble burst, slashing prices by nearly a third and costing millions of Americans their homes. Home price gains moderated again in the most recent version of the closely-watched housing index that bears his name, which was released Tuesday, and Shiller, a Nobel Prize-winning economist, told Yahoo Finance that such data shows “a sign of weakness.” Housing pivots take more time than those in the stock market, Shiller said. Still, “the housing market does have a momentum component and we’re seeing a clipping of momentum at this time.”

When a startled reporter reminded Shiller that 2006 predated the greatest financial crisis in a lifetime, the Yale economist acknowledged that any correction would likely be far less severe. “The drop in home prices in the financial crisis was the most severe drop in the U.S. market since my data begin in 1890,” Shiller said. “It could be that we’re primed to repeat it because it’s in our memory and we’re thinking about it but still I wouldn’t expect something as severe as the Great Financial Crisis coming on right now. There could be a significant correction or bear market, but I’m waiting and seeing now.”

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Foreign reserves runnning out.

• China Debt Bomb Ready to Explode (Rickards)

The great Chinese growth slowdown has been proceeding in stages for the past two years. The reason is simple. Much of China’s “growth” (about 25% of the total) has consisted of wasted infrastructure investment in ghost cities and white elephant transportation infrastructure. That investment was financed with debt that now cannot be repaid. This was fine for creating short-term jobs and providing business to cement, glass and steel vendors, but it was not a sustainable model since the infrastructure either was not used at all or did not generate sufficient revenue. China’s future success depends on high-value-added technology and increased consumption. But shifting to intellectual property and the consumer means slowing down on infrastructure, which will slow the economy.

In turn, that means exposing the bad debt for what it is, which risks a financial and liquidity crisis. China started to do this last year but quickly turned tail when the economy slowed. Now the economy has slowed so much that markets are collapsing. But doesn’t China have over $1 trillion of reserves to prop up its financial system? On paper, that’s true. But in reality, China is “short” U.S. dollars. The Chinese may have $1.4 trillion of U.S. Treasury securities in its reserve position, but they need those assets possibly to bail out their banking system or defend the yuan. Meanwhile, the Chinese banking sector, which in many ways is an extension of the state, owes $318 billion in U.S. dollar-denominated deposits of commercial paper.

From a bank’s perspective, borrowing in dollars is going short dollars because you need dollar assets to back up those liabilities if the original lenders want their money back. For the most part, the banks don’t have those assets because they converted the dollar to yuan to prop up local real estate Ponzis and local corporations. There’s not much left over to bail out the corporate, individual and real estate sectors. This is all part of a global “dollar shortage” attributable to Fed tightening, both in the forms of higher rates but also a reduction in base money. A dollar shortage seems implausible in a world where the Fed printed $4.4 trillion. But while the Fed was printing, the world borrowed over $70 trillion (on top of prior loans), so the dollar shortage is real. The math is inescapable.

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Everyone’s going to call on Beijing to come to the rescue.

• China Factory Growth Weakest In Over 2 Years, Export Orders Slump Deepens (R.)

China’s manufacturing sector in October expanded at its weakest pace in over two years, hurt by slowing domestic and external demand, in a sign of deepening cracks in the economy from an intensifying trade war with the United States. Anxiety about China’s cooling growth and its likely drag on the global economy have vexed financial markets recently, and Wednesday’s official Purchasing Managers’ Index (PMI) indicates more stress for investors through coming months. The official PMI – which gives global investors their first look at business conditions in China at the start of the last quarter of the year – fell to 50.2 in October, the lowest since July 2016 and down from 50.8 in September.

It was a touch above the 50-point mark that separates growth from contraction for a 27th straight month, but undershot the 50.6 forecast in a Reuters poll. The latest reading suggests a further loss of momentum in the world’s second-biggest economy, and the deteriorating environment for businesses could prompt more policy support from Beijing on top of a raft of recent initiatives. “All the numbers from China’s PMI release today confirm a broad-based decline in economic activity,” said Raymond Yeung, chief economist for China at ANZ in a client note, adding that conditions for the private sector is “much worse” than headline data suggested. “Besides an expected reserve requirement ratio (RRR) cut next January, we expect future supportive policy actions to be measured. The government’s priority is to avoid a financial blow-up.”

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Not hard to be better than The Oracle, Bernanke and Yellen. But where was Volcker when these three went off the rails?

• Ray Dalio Hails Paul Volcker As ‘The Greatest Man’ He Knows (MW)

Those weighty words of praise were tweeted out Tuesday by Ray Dalio, founder of hedge-fund behemoth Bridgewater Associates. Dalio’s social-media nod to the former Fed chair coincides with the release of Volcker’s memoir, “Keeping at It: The Quest for Sound Money and Good Government.”

In his new book, Volcker says he’s worried about the impact of money in politics and argues that the U.S. is devolving into a plutocracy. “We face a huge challenge in this country to restore a sense of public purpose and of trust in government,” he wrote in the book. “It will require critically needed reforms in our political processes and leaders who can restore and preserve a consensus upon which our great democracy can depend.” Volcker, 91, served as Fed chair from 1979 until 1987, and he’s widely credited for stopping runaway inflation during that time. He was also chairman of the Economic Recovery Advisory Board under Obama from 2009 to 2011.

Dalio wasn’t the only one to give Volcker some love in light of his memoir. Martin Wolf of the Financial Times is also a big fan, saying that he’s “the greatest man I have known,” because “he is endowed to the highest degree with what the Romans called virtus (virtue): moral courage, integrity, sagacity, prudence and devotion to the service of country.” Wolf said “the pinnacle of Volcker’s career” was when he achieved something many thought impossible: he slew inflation. “Great credit is due to Jimmy Carter, who appointed him, and Ronald Reagan, who supported him. But Volcker did it, despite great criticism,” Wolf explained. “The costs were huge. But he was right: it had to be done.”

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“And if it happens that the Dems don’t prevail, and don’t manage to get their hands on the machinery of congress — then what?”

• The Monster Mash (Kunstler)

The Democratic Party war on white people and their dastardly privilege has been the theme all year long, with its flanking movement against white men especially and super-especially the hetero-normative white male villains who rape and oppress everybody else. Anyway, that’s the strategy du jour. I’m not persuaded that it’s going to work so well in the coming election. The party could not have issued a clearer message than “white men not welcome here.” Very well, then, they’ll vote somewhere else for somebody else. And if it happens that the Dems don’t prevail, and don’t manage to get their hands on the machinery of congress — then what?

For one thing, a lot of people get indicted, especially former top officers from various glades of the Intel swamp. It shouldn’t be a surprise, given the numbers of them already called before grand juries and fingered by inspectors general. But it may be shocking how high up the indictments go, and how serious the charges may be: sedition… treason…? These midterm election may bring the moment when the Democratic Party finally blows up, at least enough to sweep away the current coterie of desperate idiots running it. It’s time to shove the crybabies offstage and allow a few clear-eyed adults to take the room, including men, yes even white men. And let all the shrieking, clamoring, marginal freaks return to the margins, where they belong.

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That recession is now certain, deal or not. Even in case of a deal, 1000s of documents must be signed. A deal will not mean a return to BAU.

• No-Deal Brexit Would Trigger Lengthy UK Recession – S&P (G.)

Britain’s economy will suffer rising unemployment and falling household incomes that would trigger a recession should Theresa May fail to secure a deal to prevent the UK crashing out of the European Union next year, according to analysis by the global rating agency Standard & Poor’s. Property prices would slump and inflation would spike to more than 5% in a scenario that S&P said had become more likely in recent months following deadlock with Brussels over a post-Brexit deal. In a warning that included a possible downgrade to the UK’s credit rating, which would bring with it an increase in the Treasury’s borrowing costs, S&P said it still expected both sides in the Brexit talks to come to an agreement before next March, when the UK is scheduled to leave the European Union.

But it warned that the chance of a “no-deal” Brexit had risen in recent months to such an extent that it needed to warn international investors about the potential challenges ahead. [..] S&P Global Ratings credit analyst Paul Watters, said: “Our base-case scenario is that the UK and the EU will agree and ratify a Brexit deal, leading to a transition phase lasting through 2020, followed by a free trade agreement. “But we believe the risk of no deal has increased sufficiently to become a relevant rating consideration. This reflects the inability thus far of the UK and EU to reach agreement on the Northern Irish border issue, the critical outstanding component of the proposed withdrawal treaty.”

Coming only a day after the chancellor said the failure to secure a deal would force him to hold an emergency budget, S&P’s analysis joins a welter of independent reports that forecast that a split from the EU without a deal will deal a serious blow to the prospects of the UK economy. Last month rival agency Moody’s said the risks to the British economy had “risen materially” in recent months.

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If you think Trump’s scary, this guy’s in a league of his own.

• Welcome to the Jungle (Escobar)

It’s darkness at the break of (tropical) high noon. Jean Baudrillard once defined Brazil as “the chlorophyll of our planet”. And yet a land vastly associated worldwide with the soft power of creative joie de vivre has elected a fascist for president. Brazil is a land torn apart. Former paratrooper Jair Bolsonaro was elected with 55.63 percent of votes. Yet a record 31 million votes were ruled absent or null and void. No less than 46 million Brazilians voted for the Workers’ Party’s candidate, Fernando Haddad; a professor and former mayor of Sao Paulo, one of the crucial megalopolises of the Global South. The key startling fact is that over 76 million Brazilians did not vote for Bolsonaro. His first speech as president exuded the feeling of a trashy jihad by a fundamentalist sect laced with omnipresent vulgarity and the exhortation of a God-given dictatorship as the path towards a new Brazilian Golden Age.

French-Brazilian sociologist Michael Lowy has described the Bolsonaro phenomenon as “pathological politics on a large scale”. His ascension was facilitated by an unprecedented conjunction of toxic factors such as the massive social impact of crime in Brazil, leading to a widespread belief in violent repression as the only solution; the concerted rejection of the Workers’ Party, catalyzed by financial capital, rentiers, agribusiness and oligarchic interests; an evangelical tsunami; a “justice” system historically favoring the upper classes and embedded in State Department-funded “training” of judges and prosecutors, including the notorious Sergio Moro, whose single-minded goal during the alleged anti-corruption Car Wash investigation was to send Lula to prison; and the absolute aversion to democracy by vast sectors of the Brazilian ruling classes.

That is about to coalesce into a radically anti-popular, God-given, rolling neoliberal shock; paraphrasing Lenin, a case of fascism as the highest stage of neoliberalism. After all, when a fascist sells a “free market” agenda, all his sins are forgiven.

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My old buddy John Rubino is right, but the story’s bigger than this. Merkel’s been given far too much power.

• After Germany’s Merkel Comes Chaos (John Rubino)

After a long, initially-successful run promoting European integration and mass immigration, German Chancellor Angela Merkel saw the bottom fall out of her political fortunes this year. This week she stepped down as leader of the formerly-dominant Christian Democrat party and promised not run again when her term as Chancellor ends in 2021. What happens next is almost certain to be chaotic, as the following chart (courtesy of this morning’s Wall Street Journal) makes clear. Note that in August of 2017 the two least popular parties were the far right Alternative for Germany (blue line) and the far left Greens (green line). In the ensuing 14 or so months AfG’s support rose from single digits to around 17% while the Greens rocketed from the bottom of the pack to 20%.

If you didn’t know what these two parties stood for you might think, “Fine, they’re new and interesting, so let them form a coalition and govern for a while.” Unfortunately they’re more likely to kill each other in street fights than work together, since the former want closed borders and free markets while the latter want increased regulation and unlimited immigration. The alternative to an AfG/Green coalition then becomes some combination of the remaining, more centrist (by European standards at least) parties. But the biggest of those parties – Merkel’s Christian Democrats and their coalition partner Social Democrats – are in freefall, precisely because of what they’ve done while in power. So there appears to be no way to put these puzzle pieces together to produce a stable government.

And – here’s where things get truly scary – a stable Germany under Merkel’s bland but firm hand has been the only thing holding the European Union and eurozone together. If Germany descends into internal turmoil without a coherent government to push the Italys and Hungarys around, European populists/nationalists will fill the resulting vacuum. Borders will be re-imposed within and without the EU, national government budgets – already above EU deficit limits in many cases – will explode. Already-debilitating debts will keep rising, and the ECB will be forced to bail out Italy for sure and probably several other member states after that.

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Intro to an elaborate series of reports by Reuters, kudos for the effort. Fish have moved north and deeper, leaving entire communities without their proteins.

• Ocean Shock (Reuters)

To stand at the edge of an ocean is to face an eternity of waves and water, a shroud covering seven-tenths of the Earth. Hidden below are mountain ranges and canyons that rival anything on land. There you will find the Earth’s largest habitat, home to billions of plants and animals – the vast majority of the living things on the planet. In this little-seen world, swirling super-highway currents move warm water thousands of miles north and south from the tropics to cooler latitudes, while cold water pumps from the poles to warmer climes. It is a system that we take for granted as much as we do the circulation of our own blood. It substantially regulates the Earth’s temperature, and it has been mitigating the recent spike in atmospheric temperatures, soaking up much of human-generated heat and carbon dioxide.

Without these ocean gyres to moderate temperatures, the Earth would be uninhabitable. In the last few decades, however, the oceans have undergone unprecedented warming. Currents have shifted. These changes are for the most part invisible from land, but this hidden climate change has had a disturbing impact on marine life – in effect, creating an epic underwater refugee crisis. Reuters has discovered that from the waters off the East Coast of the United States to the coasts of West Africa, marine creatures are fleeing for their lives, and the communities that depend on them are facing disruption as a result. As waters warm, fish and other sea life are migrating poleward, seeking to maintain the even temperatures they need to thrive and breed.

The number of creatures involved in this massive diaspora may well dwarf any climate impacts yet seen on land. In the U.S. North Atlantic, for example, fisheries data show that in recent years, at least 85 percent of the nearly 70 federally tracked species have shifted north or deeper, or both, when compared to the norm over the past half-century. And the most dramatic of species shifts have occurred in the last 10 or 15 years. Fish have always followed changing conditions, sometimes with devastating effects for people, as the starvation that beset Norwegian fishing villages in past centuries when the herring failed to appear one season will attest. But what is happening today is different: The accelerating rise in sea temperatures, which scientists primarily attribute to the burning of fossil fuels, is causing a lasting shift in fisheries.

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Debt Rattle October 28 2018

Oct 282018
 
 October 28, 2018  Posted by at 9:32 am Finance Tagged with: , , , , , , , , , , , ,  4 Responses »


Salvador Dali City of drawers – The Anthropomorphic Cabinet 1936

 

• OECD Countries’ Retirement Assets Surpass $43 Trillion In 2017 (PiO)
• As The Housing Market Stagnates, American Homeowners Are Staying Put (MW)
• Economist Slams ‘China Model’ That ‘Inevitably Leads To Confrontation’ (SCMP)
• Rand Paul Seeks To Punish Saudi Arabia For Khashoggi Killing (Pol.)
• Saudi Arabia Says It Is A Beacon Of Light Fighting ‘Dark’ Iran (G.)
• EU To Make Contingency Plans For A Second Brexit Referendum (Ind.)
• Germany’s Fragile Coalition Braced For More Upsets (G.)
• Russia-Turkey-Germany-France Talks On Syria Kick Off (RT)
• “My” Suspended Twitter Account (Paul Craig Roberts)
• Mexico Honors Migrants At Day Of The Dead As Caravan Treks North (R.)

 

 

2/3(?!) of it is in the US.

• OECD Countries’ Retirement Assets Surpass $43 Trillion In 2017 (PiO)

Retirement assets in OECD countries hit a record $43.4 trillion at the end of 2017, well above the pre-crisis level. The OECD said in its annual Pension Markets in Focus report that assets invested in all funded and private pension systems across 87 jurisdictions grew 12.1% over the year, and increased 53.9% compared with figures at the end of 2007. The report said assets are unevenly distributed worldwide, with less than $200 billion across 78% of the reporting countries, while 8% held more than $1 trillion each: the U.S. with about $28.2 trillion; the U.K. with $2.9 trillion; Canada at $2.6 trillion; Australia with $1.8 trillion; the Netherlands with $1.6 trillion; Japan at $1.4 trillion; and Switzerland with $1 trillion. The remaining 9% of assets, or about $3.9 trillion, are split among the other 29 OECD countries.

The largest amounts of assets are located in some of the biggest economies in the world and with a long history of retirement savings. High investment returns from equity markets partially explain the growth of these assets, said the report, with the real net investment rate of return on retirement assets exceeding 4% on average in 2017. U.S. retirement plans achieved a 7.5% real net investment rate of return in 2017, added the OECD. Funding levels for DB funds improved in the U.S., to 59.6% at end-2017 from 56% a year earlier; but worsened from 2007 figures of 68.6%. The funding ratio was calculated as the ratio of total investment and net technical provisions for occupational defined benefit plans using values reported by national authorities in the OECD template.

U.K. funding levels improved to 90.5% as of the end of 2017, up from 85.8% a year earlier, but down from 108.8% as of the end of 2007. Denmark had the highest funding level of OECD countries in the report, at 135.1%. However, that level was down from 146.1% a year earlier, but improved over the 127.4% funding level as of the end of 2007.

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Bad time to become a real estate agent.

• As The Housing Market Stagnates, American Homeowners Are Staying Put (MW)

Housing-market headwinds are keeping American homeowners in their properties for the longest stretches on record, in a sharp distortion of the mobility Americans have for decades prized. Across the country, homes that sold in the third quarter of this year had been owned an average of 8.23 years, according to an analysis from Attom Data Solutions. That’s almost double the length of time a home sold in 2000, when Attom’s data begin, had been owned. It’s partly the long tail of the housing crisis that’s created stagnant conditions and a less dynamic housing market, Attom spokesman Daren Blomquist told MarketWatch.

As of the second quarter, 2.2 million homeowners were still underwater on their mortgages, meaning they owe more to their lending institution than the home is worth, according to data from CoreLogic. Another 550,000 have 5% equity or less, meaning that if that property were to be sold the transaction costs, such as a real-estate agent’s commission, would likely leave the homeowner with nothing. The hypercompetitive market that’s emerged from the wreckage of the crisis is also keeping people in place. Many homeowners have ample equity in their homes, but hesitate to list those homes because they’re worried about finding a property to buy if they do sell. A few others may be trapped by “rate lock” — enjoying the benefits of their ultralow mortgage rates, and unwilling to spend more on financing costs.

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Interesting that he gets to say it.

• Economist Slams ‘China Model’ That ‘Inevitably Leads To Confrontation’ (SCMP)

Using the “China model” to explain the country’s economic success over the past four decades is wrong and dangerous, according to an influential Chinese economist, who says this misconception has inevitably led to antagonism between China and the West. Zhang Weiying, one of the most prominent liberal economists in the country and a professor at prestigious Peking University, made the comments in a lecture on October 14. An edited version of his speech was published on the university’s website on Wednesday. The speech is a wholesale negation of the “China model” theory that has gained traction in recent years, as the country becomes more confident in promoting its own development path under President Xi Jinping.

Zhang lashes out at those who attribute China’s economic growth to an exceptional “China model”, which includes a powerful one-party state, a colossal state sector and “wise” industrial policy, saying it is not only factually wrong, but also detrimental to the country’s future. “The theory of the ‘China model’ sets China as a frightening anomaly from the Western perspective, and inevitably leads to confrontation between China and the West,” he said. “The hostile international environment we face today is not irrelevant to the wrong interpretation of China’s achievement in the past 40 years by some economists.”

The economist’s rejection of the “China model” comes as debates about the country’s economic future are heating up. The world’s second largest economy is losing steam – growth is at its slowest pace since 2009 – as it marks 40 years since its market reforms. At home, it is grappling with a mountain of debt, plunging stocks and an ailing private sector. Abroad, tensions over the prolonged trade war with the United States appear to be spilling over into defence, diplomacy and politics. Zhang said the trade war not only reflected conflict between China and the US, but between China and the larger Western world. It also went beyond trade to reflect the clash over value systems, he said.

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Like his dad, strongly anti-war.

• Rand Paul Seeks To Punish Saudi Arabia For Khashoggi Killing (Pol.)

Sen. Rand Paul says he’s not going to let Saudi Arabia off the hook after journalist Jamal Khashoggi was killed in Turkey by agents linked to the Saudi government. The Kentucky Republican said Saturday he’s intent on forcing another vote to block billions in arm sales to the autocratic Middle Eastern kingdom and won’t settle for targeted sanctions, seeking to capitalize on negative public sentiment surrounding the Oct. 2 killing. “Are we going to do fake sanctions? Are we going to pretend to do something by putting sanctions on 15 thugs. Or are we going to do something that hurts them?” Paul said in an interview here, explaining that he thinks Saudi Arabia is trying to wait him out until Khashoggi fades from the headlines before announcing the arms sale, which would allow him to try and stop it.

“They know if they have the vote they might lose. So they’re probably not going to make any announcement until this dies down,” Paul said. Rather than focusing simply on Khashoggi, Paul has made a broader critique of Saudi Arabia as supporting “violent Jihad” and a brutal civil war in Yemen. But he’s noticed a substantive shift in the way his colleagues are now talking about the country. [..] Paul, a longtime Saudi critic, has previously forced votes to block the arms sales, but they have failed given a strong hawkish wing in the Senate that wants to keep a key ally against Iranian influence in the Middle East. Paul says that has changed. “We would win the vote right now. It would be a very bad vote if 60, 65, or even 70 people voted to cut the arms sales for now and the president were to veto that, that would be bad,” he said.

President Donald Trump has been more circumspect when discussing arms sales, questioning the wisdom of canceling sales that he believes creates hundreds of thousands of jobs. Paul said he’s tried to convince the president to come to his position, but he’s not there yet. “He says he doesn’t want to disrupt the arm sales. And it’s something we have an honest disagreement on. I don’t think arms are jobs programs,” Paul said. He said their “discussions aren’t really that much that back and forth.” [..] Paul also broke further with the president on foreign policy. He called it a “terrible idea” for the United States to back away from nuclear and weapons agreements with Russia and said he’s asked Trump to appoint nuclear negotiators in a bid to preserve the NEW START treaty and the INF agreement.

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Not sure how this would help their case at this point.

• Saudi Arabia Says It Is A Beacon Of Light Fighting ‘Dark’ Iran (G.)

Saudi Arabia’s foreign minister has described the kingdom as a “vision of light” in the region as it tries to control the fallout from Jamal Khashoggi’s killing – its biggest diplomatic crisis since the 9/11 attacks. After more than two weeks of international outrage over the journalist and dissident’s death, Adel al-Jubeir sought to portray the country as the moral beacon of the Middle East, in stark opposition to Iran, Saudi Arabia’s arch-rival. “We are now dealing with two visions in the Middle East,” Jubeir told a security summit in Bahrain on Saturday. “One is a [Saudi] vision of light … One is [an Iranian] vision of darkness which seeks to spread sectarianism throughout the region. History tells us that light always wins out against the dark.”

Condemning the media coverage of Khashoggi’s killing as “hysterical”, Jubeir rejected a call from Recep Tayyip Erdogan, the Turkish president, to try the 18 suspects in Turkey, stressing that they would be “held accountable” on Saudi soil. [..] Erdogan reiterated during an address to parliament on Friday that Riyadh must disclose the location of Khashoggi’s body and identify who ordered his killing – a sign that Ankara is willing to keep up the pressure on the beleaguered kingdom and its de facto ruler, the crown prince Mohammed bin Salman. [..] Jim Mattis, the US defence secretary, who also spoke at the summit in Manama, said that Khashoggi’s killing had “undermined regional stability”. Washington was considering additional punitive measures against those responsible after issuing visa bans for the suspects in the case, Mattis added.

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5 months left. Nothing decided on.

• EU To Make Contingency Plans For A Second Brexit Referendum (Ind.)

The EU’s chief negotiator has been warned to make contingency plans for a second Brexit referendum, as pressure builds to give the public a final say on leaving. Prominent Remain politicians met with Michel Barnier in Brussels this week and said it was time to start “serious contingency planning”, as The Independent’s petition neared one million signatures and the future of Brexit looks increasingly uncertain. In a visit on Friday, Sadiq Khan, the mayor of London, told Mr Barnier that the negotiating period should be extended so Britain could have “time to have a referendum”. The warning comes after 700,000 people took to the streets of London last weekend to make the case for a vote on the final deal.

For there to be time to hold a referendum, the EU would likely have to extend the Article 50 negotiating period, which will automatically expire on 29 March 2019, leaving Britain to slide out with a no-deal Brexit. The calls for an extension came from across a number of parties. Liberal Democrat leader Vince Cable said following a meeting with Mr Barnier on Thursday: “My message to Michel Barnier was clear: it’s time to start serious contingency planning for a People’s Vote. We know the UK government has started making such plans as a result of the growing demand for such a vote, demonstrated by last weekend’s march. “The EU should do the same, because MPs who back the People’s Vote are fast forming the biggest and most cohesive bloc in Westminster.”

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This will have an increasing effect on Europe as a whole. Who’s going to listen to Merkel as she’s fading at home?

• Germany’s Fragile Coalition Braced For More Upsets (G.)

[..] voters in the central state of Hesse have the power to deliver a second electoral upset within a fortnight to Germany’s embattled ruling parties, potentially plunging both into fresh crises. The regional election is seen as decisive for the future of Merkel’s rickety coalition government. Last-minute polling showed support plummeting for both her Christian Democrat Union (CDU) and coalition partner the Social Democrats (SPD) in a swing state traditionally seen as a bellwether for national politics. Both parties were predicted to drop 10 points each since the state’s last regional election in 2013. Such a trouncing would come on the heels of a disastrous result in Bavaria that was widely seen as a protest against the failings of the Berlin government.

“None of the parties are there for us,” said Müller, who has voted for both CDU and SPD in the past, but was still undecided. “What should I do? I have to vote, it’s my duty to stop the far right getting into power. But I also know I won’t be heard. I can vote for whoever I like; the politicians will still do whatever they want.” Hesse, home to Germany’s financial centre, Frankfurt, has been governed by CDU-led coalitions for the past two decades. But polls have the party nosediving to 28%, a result that would end the state’s CDU-Green coalition and leave a question mark over the future of CDU state premier and close Merkel ally Volker Bouffier.

With tensions running high in the CDU, mutinous members have implied that if Bouffier falls, it may cost the chancellor vital votes when she stands for re-election as party leader at its conference in early December. But Merkel, who joined Bouffier on the campaign trail last week, was at pains to play down the significance of the regional vote for her party, government and chancellorship. “Hesse, and what happens here, is being watched and considered from far beyond Germany’s borders,” Merkel told supporters on Thursday in Fulda. “I want to point out once again that on Sunday the vote is about Hesse. Afterwards we’ll talk again about Berlin.”

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The fighting in Idlib must cease. It’s the only outcome.

• Russia-Turkey-Germany-France Talks On Syria Kick Off (RT)

Leaders of Russia, Turkey, Germany and France have gathered in Istanbul to discuss the Syrian peace process. While the outcome of such tricky talks is hard to predict, the new format appears to be, at least, quite refreshing. Russia’s President Vladimir Putin, his French counterpart Emmanuel Macron and German Chancellor Angela Merkel arrived in Istanbul on Saturday to talk Syrian reconciliation. The host, Turkey’s leader Recep Tayyip Erdogan, has put high expectations on the gathering. “The whole world is watching this meeting. I hope, that the hopes will be met,” Erdogan said, while opening the summit. The four leaders are also expected to be joined by UN Special Envoy to Syria Staffan de Mistura.

The four-way summit is an entirely new format of talks on the war-torn country, which has endured years-long conflict. The meeting is all about testing the waters and trying to bring about different formats of talks on Syria, as if the leaders were to “synchronize watches” rather than reach a breakthrough, Kremlin spokesman Dmitry Peskov said. Similar opinion was expressed by Germany, with Foreign Minister Heiko Maas stating that the summit effectively brings different sides together for the very first time. “There are Russians and Turks, who have been at the same format of talks with Iran. And on the other side, there are French and us, who partake in the so-called ‘Friends of Syria’ group,” Maas said ahead of the event, adding that having a “joint conversation” was a viable idea.

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Turns out, the story was a bit different than many reported.

• “My” Suspended Twitter Account (Paul Craig Roberts)

Dear Readers:

It is all over the internet and international media that Twitter has suspended my account. This is not the case. I do not use social media. I discovered that a Twitter account was operating in my name. I requested that the account be taken down. I have no recollection of giving anyone permission to operate a Twitter account in my name. I am still extremely busy trying to help family relatives impacted by Hurricane Michael and could only quickly look at the Twitter postings. It seemed to be mainly innocuous, consisting of links or quotes from my posted columns.

However, there were other things, such as appeals that money be sent to Alex Jones InfoWars and other things. I have no objection to Alex Jones. However, my webmaster and I were concerned that things could be posted that would be dangerous for me, such as libel, death threats to others, and so forth. To repeat, the account was closed at my request. To repeat, I do not use social media.

Paul Craig Roberts

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There’s something cynical about this, but also beautiful.

• Mexico Honors Migrants At Day Of The Dead As Caravan Treks North (R.)

Mexico City dedicated its Day of the Dead parade on Saturday to migrants, just as thousands of Central Americans were trekking from the country’s southern border toward the United States under pressure from U.S. President Donald Trump to disband. In an a twist on the traditional dancing skeletons and marigold-adorned altars making their way down the capital’s main thoroughfare, the parade also referenced Mexicans who emigrated as well as foreigners who settled in the capital. “The parade… is dedicated to migrants, who in their transit to other countries have lost their lives, and who in their passing through the country have contributed to a true ‘Refuge City,’” the Mexico City government said on Twitter.

In one segment, gray metallic panels representing the Mexico side of the U.S. border wall were stenciled with the phrase, “There are also dreams on this side.” Other presentations honored exiled Spaniards, Argentineans and Jews, Mexico City’s culture ministry said. The event ahead of Nov. 1 and 2, when Mexicans observe Day of the Dead in town squares, homes and cemeteries, coincided by chance with the journey of a migrant caravan traveling into Mexico, many fleeing violence and poverty in Honduras and Guatemala.

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