Jul 302018
 
 July 30, 2018  Posted by at 9:13 am Finance Tagged with: , , , , , , , , , , , ,  


Salvador Dali Meditative rose 1958

 

Julian Assange’s Fate Is Being Decided At The Moment (ZH)
The Dollar Will Continue To Surge, Crush Emerging Markets Stocks (F.)
China’s Yuan Hits 13-Month Low On Weaker Fixing And Depreciation Bets (R.)
The Chinese Economy Is Held Together By Capital Controls (Peters)
Beijing To Shut 1,000 Manufacturing Firms By 2020 (R.)
Hedge Fund Manager Steve Eisman Bets Against Tesla (MW)
This Is What A No-Deal Brexit Actually Looks Like (Dunt)
As US Pushes For Mideast Peace, Saudi King Reassures Allies (R.)
Support For Macron & Merkel’s Coalitions Plunges To Record New Lows (RT)
IMF Reiterates Call For Greece To Meet Pledges (K.)
Number Of Migrants Prevented By Turkey To Reach Europe Increases 60% (An.)
Worms Frozen In Permafrost For Up To 42,000 Years Come Back To Life (ST)
Greece Fire Death Toll At 91, 25 Remain Missing (K.)

 

 

Ecuador refusing to meet Assange’s lawyers is not a good sign.

Julian Assange’s Fate Is Being Decided At The Moment (ZH)

Ecuador is holding high level discussions with Britain over the fate of Julian Assange, who has been living in the Ecuadorian embassy in London since 2012 after being granted political asylum, according to comments made by President Lenin Moreno to Spain’s El Pais daily newspaper. “The issue of Mr. Assange is being treated with the British government and I understand that we have already established contact with Mr. Assange’s lawyers so we can find a way out.” Not true, says Assange’s Attorney Carlos Poveda in a Sunday LaJournada article retweeted by the official WikiLeaks Twitter account. “The defense of Julian Assange is concerned about the contradictions of the government of Ecuador, which claims to be seeking a solution to the asylum of the founder of Wikileaks through dialogue, with all parties, but refuses to meet with their lawyers, said Carlos Poveda, one of the activist’s lawyers.” -LaJournada (translated)

“We have followed very closely the statements of President Lenin Moreno both in the United Kingdom and Spain,” said Poveda. “And I must warn that even the legal team that presides (the former judge of the Spanish Supreme Court) Baltasar Garzón requested a hearing to meet in London or Madrid, but they told him that Moreno’s schedule was full during the whole tour.” In other words – Moreno is talking out of both sides of his mouth while feigning a new found concern for Assange’s fate (after referring to the WikiLeaks founder as a “hacker”, “an inherited problem” and a “stone in the shoe”). “We know how (Moreno) addresses the issue , said Poveda, who said that the president’s statements leave us confused. In relation to the recent declarations of the Ecuadorian agent chief executive, of which his government is in “permanent” communication with London and with the legal team of Assange, Poveda maintained that that does not happen.” -LaJournada (translated)

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It’s much worse for Brazil and Turkey than it is for China.

The Dollar Will Continue To Surge, Crush Emerging Markets Stocks (F.)

A robust greenback is excellent for the U.S. economy because it attracts capital into the economy. More capital will result in yet more growth. But at the same time, the strong dollar is a nightmare for emerging markets because investors take their capital away and send it to the U.S. Emerging markets include lesser developed economies such as China, Russia, Brazil, and India. The result of this change in the value of the dollar has been falling values for stocks in emerging markets. The Vanguard FTSE Emerging Markets ETF (VWO), which tracks a basket of emerging markets stocks, has lost more than 6% this year while the S&P 500 gained more than 5%, according to data from Yahoo Finance. The figures do not include dividends.

Unfortunately, for those invested in emerging markets the rally of the greenback is probably not over yet. Friday morning we learned that U.S. growth in the second quarter hit 4.1%, according to the government’s first estimate. Meanwhile, growth in the single currency area of Europe, the so-called eurozone, has limped along at less than 1% for the last decade. The latest reading was a paltry 0.4%, according to data from Tradingeconomics.com that you can see here. Japan’s economy, the third largest in the world, is contracting, according to the latest reading. That differential in growth, between the U.S. and other developed economies, should be enough to keep cash flowing into the U.S. and away from other economies.

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Mixed blessings. A weaker yuan has benefits, too.

China’s Yuan Hits 13-Month Low On Weaker Fixing And Depreciation Bets (R.)

China’s yuan fell to a fresh 13-month low against the dollar on Monday, weighed by a much weaker central bank fixing and expectations the Chinese currency has further to fall as U.S. trade tensions worsen. In addition to developments in the global trade environment, investors are focusing on the amount of liquidity policy makers have injected into the financial system. “Together with announcements by the People’s Bank of China (PBOC) that will ease credit conditions, and a more gradual shift in the monetary stance over the last two months, this represents a significant change towards more accommodative policy,” analysts at Moody’s said in a note.

Prior to market opening, the PBOC lowered the midpoint rate to 6.8131 per dollar, largely matching market forecasts, 189 pips or 0.28 percent weaker than the previous fix of 6.7942 last Friday. In the spot market, the onshore yuan opened at 6.8159 per dollar and eased to a low of 6.8401 before changing hands at 6.8353 at midday, 213 pips weaker than the previous late session close and 0.33 percent softer than the midpoint. The onshore spot yuan hit its lowest intraday level since June 27, 2017. The offshore yuan was trading 0.10 percent weaker than its onshore counterpart at 6.8422 per dollar as of midday.

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“The Chinese are dying to get their money out.”

The Chinese Economy Is Held Together By Capital Controls (Peters)

“Russia at its very worst is a moderate threat to the US,” said the investor. “They have modest regional ambitions. They’re mischievous. But plenty of countries don’t do what we want.” If they wanted to nuke us, they would’ve during the Cold War. “China is the real strategic threat. They’ve coopted much of the US political and financial system,” he said. “Wall Street makes a ton of money from China.” No one that matters makes money from Russia. “It’s so telling that everyone is in hysterics over Russia. It’s a distraction that makes you wonder if the Chinese aren’t enabling or pushing the narrative.”

“The best way to bring Beijing to its knees is by running a tight monetary policy in the US,” continued the same investor. “China has the world’s most overleveraged, fragile financial system.” In 2008, China’s total debt-to-GDP was 140%. It is now roughly 300%, while GDP is slowing. “The economy is held together by capital controls. If those fail, the whole system fails.” The capital flight in 2015/16 cost the government $1trln in reserves, and that was with ultra-dove Yellen in charge. Imagine what would have happened with Volcker at the helm. “The Chinese are dying to get their money out.”

“Engineering a decade of rolling Chinese financial crises would be the most effective foreign policy the US could run,” continued the same investor. Forget about the South China Sea, don’t bother with more aircraft carriers, just let Beijing try to cope with their financial system. “And we’re 80% of the way there – we instigated a trade war, implemented a massive fiscal stimulus, which created the room to raise interest rates,” he said. “The combined policy mix makes capital want to leave at the same time it makes the dollar more attractive and effectively shuts down new investment inflows to China.”

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That’s just the city itself.

Beijing To Shut 1,000 Manufacturing Firms By 2020 (R.)

China’s capital Beijing will shut around 1,000 manufacturing firms by 2020 as part of a program aimed at curbing smog and boosting income in neighboring regions, state media said on Monday. Beijing will focus on dynamic, high-tech industries and withdraw from “ordinary” manufacturing, the Communist Party paper People’s Daily reported, citing a recent policy document published by the Beijing municipal government. The city has already rejected registration applications from 19,500 firms, and shut down or relocated 2,465 “ordinary” manufacturers, the paper said.

China launched a plan to improve coordination in the smog-prone Beijing-Tianjin-Hebei region in 2014 amid concerns that competition between the three jurisdictions was wasting resources and creating overcapacity and pollution. It plans to strip Beijing of manufacturing and heavy industry, as well as relocating universities and some government departments into Hebei’s new economic zone of Xiongan. The government also wants to create an integrated transport network and unify standards in areas such as welfare and education to make Hebei, known for its heavy industry, more attractive for investors. An official with Hebei province earlier this year said the plan has helped drive average incomes in Hebei up 41 percent since 2013, although they are still only half the level in Beijing.

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‘..being smart’s not enough you gotta execute and he’s got execution problems.’

Hedge Fund Manager Steve Eisman Bets Against Tesla (MW)

‘Look, Elon Musk is a very, very smart man but there are a lot of smart people in this world, and being smart’s not enough you gotta execute and he’s got execution problems.’ That is the view of Steve Eisman, the hedge-fund manager and investor who garnered prominence on Wall Street for his bets against dicey mortgage products engineered by some of the world’s biggest banks. Now Eisman is betting against Elon Musk’s Tesla Inc. because, as he put it during a Friday interview on Bloomberg TV, he doesn’t see value in the company and doesn’t believe Tesla is doing enough in autonomous driving. “I don’t see the value in Tesla,” Eisman said. “We’re short Tesla,” meaning he is betting that the price of the company’s shares will fall over time.

Eisman said Tesla’s quarterly results could be pivotal for the electric-car manufacturer whose polarizing founder has been ensnared in a series of controversies in recent weeks and has been described by critics as a distraction for Tesla. [..] For his part, Eisman finds more appeal in betting on General Motors, which he says would benefit if autonomous driving takes off and has emerged as a well-run institution after the 2007-09 financial crisis. “The one stock in my portfolio which I say hasn’t worked yet but has the potential for a big home run is General Motors.” Eisman garnered fame after his story of subprime mortgage glory was told in Michael Lewis’s “The Big Short,” where he wagered correctly that arcane mortgage securities would eventually rock the financial system to its very core.

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Sometimes one thinks they do it on purpose.

This Is What A No-Deal Brexit Actually Looks Like (Dunt)

March 30th 2019 becomes Year Zero. Overnight, British meat products cannot be imported into the EU. To bring these types of goods in, they have to come from a country with an approved national body whose facilities have been certified by the EU. But there has been no deal, so there’s no approval. This sounds insane. After all, British food was OK to enter Europe with minimal checks on March 29th, so why not on March 30? Nothing has changed. The reason is that food is potentially very dangerous, so we have strict systems in place for it. Imagine that right now someone is eating a burger made from the meat of a cow with a neurodegenerative disease, like BSE. This is what happened in Britain in the late-80s and led to the deaths of 177 people.

Tomorrow’s tabloid front pages will ask certain very important questions. Where did the meat come from? Was it produced domestically or imported? Who was responsible for its production, transport and storage? The people responsible will be hauled in front of cameras and Commons select committees. Ministers will have to give statements to parliament. The press will demand that heads roll. The BSE outbreak almost brought down the government. That’s how severe these threats are. And there are plenty more around, including foot and mouth, avian flu, and African swine fever, plus those that do not exist yet. This is why the certification system for food coming into Europe is so stringent and detailed.

After Brexit, we will fall out of the eco-system of EU rules, agencies and courts and become an external country. That means certification requirements will apply to us too. Certificates are approval stamps, designed per product and country, documenting the fact that it meets the various standards for human health and animal welfare. Say a container full of pork loins is sent from Leeds to Amsterdam after Brexit day. It will need to be signed off by a vet to say that the meat was slaughtered, stored, quality assured, sealed and despatched in a certain manner, with appropriate documentation proving compliance. This will be a cold splash of water to the face for Britain.

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A preposterous headline of course. But interesting that the king whistles MBS back.

As US Pushes For Mideast Peace, Saudi King Reassures Allies (R.)

Saudi Arabia has reassured Arab allies it will not endorse any Middle East peace plan that fails to address Jerusalem’s status or refugees’ right of return, easing their concerns that the kingdom might back a nascent U.S. deal which aligns with Israel on key issues. King Salman’s private guarantees to Palestinian President Mahmoud Abbas and his public defense of long-standing Arab positions in recent months have helped reverse perceptions that Saudi Arabia’s stance was changing under his powerful young son, Crown Prince Mohammed bin Salman, diplomats and analysts said. This in turn has called into question whether Saudi Arabia, birthplace of Islam and site of its holiest shrines, can rally Arab support for a new push to end the Israeli-Palestinian dispute, with an eye to closing ranks against mutual enemy Iran.

“In Saudi Arabia, the king is the one who decides on this issue now, not the crown prince,” said a senior Arab diplomat in Riyadh. “The U.S. mistake was they thought one country could pressure the rest to give in, but it’s not about pressure. No Arab leader can concede on Jerusalem or Palestine.” Palestinian officials told Reuters in December that Prince Mohammed, known as MbS, had pressed Abbas to support the U.S. plan despite concerns it offered the Palestinians limited self-government inside disconnected patches of the occupied West Bank, with no right of return for refugees displaced by the Arab-Israeli wars of 1948 and 1967. Such a plan would diverge from the Arab Peace Initiative drawn up by Saudi Arabia in 2002 in which Arab nations offered Israel normal ties in return for a statehood deal with the Palestinians and full Israeli withdrawal from territory captured in 1967.

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Shaky grounds.

Support For Macron & Merkel’s Coalitions Plunges To Record New Lows (RT)

The people’s dissatisfaction with the leading EU governments appears to be rising, as fresh polls show a record decline in the ratings of French President Emmanuel Macron and of German Chancellor Angela Merkel’s ruling coalitions. Support for Merkel’s conservative Christian Democratic Union (CDU) and its sister party, Bavaria’s Christian Social Union (CSU), has gone down to its lowest level since 2006, an Emnid poll, published by Bild am Sonntag, has revealed. The CDU/CSU are currently polling at 29 percent, their lowest result in 12 years. Merkel’s party came out tops in the country’s federal election in September 2017 with 33 percent of the vote. Such a situation is worrying for CSU, which seems to be at risk of losing its absolute majority in Germanys’ largest state of Bavaria after the regional election in October.

The survey provided no explanation for the results, but Merkel’s coalition nearly fell apart in June over a rift caused by the migrant crisis. [..] Meanwhile, in France, Macron also “has beaten his own anti-record,” the Journal du Dimanche wrote, commenting on the results of the survey, carried out for the outlet by Ifop. Support for the French President has fallen from 41 to 37 percent in the period between July 18 and 27, the research revealed. It’s the worst ratings the 40-year-old has had since he became French president in May 2017, claiming 66.1% percent of the vote in a run-off against Marine Le Pen. Macron’s previous worst result was recoded in August 2016, when he was backed by 40 percent of the French population.

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This devolves into Beckett and Ionesco. Meaningless.

IMF Reiterates Call For Greece To Meet Pledges (K.)

The IMF is due to publish its Article IV Report on the course of the Greek economy on Tuesday. This will include the much anticipated Debt Sustainability Analysis, which was carefully examined at a meeting last Friday, with the board confirming the medium-term sustainability of the Greek debt as well as the need for the government to remain committed to reforms. The IMF’s executive board spent about an hour pouring over the contents of the report and the reform course that Greece needs to pursue in the post-program period. Fund sources told the Athens-Macedonian News Agency on Friday that the Article IV Report’s timing is important – even if it is a routine process – as it comes a few days before the completion of the European Stability Mechanism’s program next month.

ANA-MPA added that the board acknowledged the achievement of significant results by Greece, but also stressed there should be no complacency and that it is necessary for the country to implement its pledges so that the sacrifices already made do not go to waste. Another issue addressed at the meeting was that of bad loans in Greece, with several IMF board members expressing doubts over the high targets set for the reduction of nonperforming exposures.

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But arrivals are also up vs last year.

Number Of Migrants Prevented By Turkey To Reach Europe Increases 60% (An.)

The number of migrants held trying to reach Europe from Turkey using illegal routes has increased by 60 percent this year, according to data from the Coast Guard Command. A total of 14,470 migrants were held in the first seven months of this year, especially in the Aegean Sea, as well as in Turkey’s southern Mediterranean Sea and the northern Black Sea, the data revealed. This figure was 9,152 during the same period in 2017. According to the data, most migrants prefer to use the illegal routes in Aegean Sea to cross into Europe as a number of Greek islands are located close to Turkish coasts. A total of 13,336 irregular migrants used the Aegean Sea to cross into Greece this year, the data revealed.

Among the irregular migrants intercepted by Turkey so far this year, 1,640 were held in January, 1,363 in February, 1,849 in March, 2,534 in April, 3,398 in May, 1,925 in June, and 1761 in first 29 days of July. Coast Guard data shows 54 irregular migrants lost their lives this year while the figure was 20 during the same period in 2017. In March 2016, the EU and Turkey reached an agreement to stop irregular migration through the Aegean Sea, and improve the conditions of more than 3 million Syrian refugees in Turkey. Turkey hosts some 3.5 million Syrians – more than any other country in the world.

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Hope?!

Worms Frozen In Permafrost For Up To 42,000 Years Come Back To Life (ST)

Nematodes moving and eating again for the first time since the Pleistocene age in major scientific breakthrough, say experts. The roundworms from two areas of Siberia came back to life in Petri dishes, says a new scientific study. ‘We have obtained the first data demonstrating the capability of multicellular organisms for longterm cryobiosis in permafrost deposits of the Arctic,’ states a report from Russian scientists from four institutions in collaboration with Princetown University. Some 300 prehistoric worms were analysed – and two ‘were shown to contain viable nematodes’. ‘After being defrosted, the nematodes showed signs of life,’ said a report today from Yakutia, the area where the worms were found.

‘They started moving and eating.’ One worm came from an ancient squirrel burrow in a permafrost wall of the Duvanny Yar outcrop in the lower reaches of the Kolyma River – close to the site of Pleistocene Park which is seeking to recreate the Arctic habitat of the extinct woolly mammoth, according to the scientific article published in Doklady Biological Sciences this week. This is around 32,000 years old. Another was found in permafrost near Alazeya River in 2015, and is around 41,700 years old. Currently the nematodes are the oldest living animals on the planet. They are both believed to be female.

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It has taken PM Tsipras a full week to visit the area today, only some 25km from his office.

Greece Fire Death Toll At 91, 25 Remain Missing (K.)

Fire officials in Greece have raised the death toll from a wildfire that raged through a coastal area east of Athens to 91 and reported that 25 people are missing six days after blaze. Before the national fire service updated the official number of fatalities Sunday night, it had stood at 86. Greek officials previously had not provided a tally of the people reported missing. The fire sped flames through the village without warning on July 23. A database maintained by the Center for the Research on the Epidemiology of Disasters in Brussels shows it as the deadliest wildfire in Europe since 1900. The vast majority of victims died in the fire itself, though a number drowned in the sea while fleeing the flames. Dozens of volunteer divers, some of them retired Navy Seals, kept searching the sea on Sunday looking for the bodies of more possible victims.

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Jul 152018
 
 July 15, 2018  Posted by at 9:31 am Finance Tagged with: , , , , , , , , , ,  


Ezra Stoller Parking garage, New Haven, Connecticut 1963

 

Theresa May: Trump Told Me To Sue The EU (BBC)
Trump Reveals The Queen’s Private Views On Brexit (G.)
Theresa May Warns There Could Be ‘No Brexit At All’ (R.)
The Chequers Brexit Compromise Offers The Worst Of Both Worlds (Mandelson)
Prepare For No-Deal Brexit, German Business Groups Tell Members (R.)
Immigrant Children, Parents Reunited Faster Under New Court Order (R.)
Spain Saves Over 340 Migrants At Sea, One On Truck Tyre (AFP)
450 Migrants Stranded At Sea As Italy, Malta Dig Heels In (AFP)
Mobile Phones Are ‘The Best Spying Device You Can Imagine’ (CNBC)
The Wealthy Are Plotting To Leave Us Behind (Rushkoff)

 

 

Stranger things have happened.

Theresa May: Trump Told Me To Sue The EU (BBC)

Donald Trump told Theresa May she should sue the EU rather than negotiate, she has told the BBC. The US president said on Friday at a joint press conference that he had given her a suggestion but she had found it too “brutal”. Asked by the BBC’s Andrew Marr what it was he had said, she replied: “He told me I should sue the EU – not go into negotiations.” She defended her blueprint for Brexit and urged her critics to back it. She said it would allow the UK to strike trade deals with other nations, end free movement of people and the jurisdiction of the European Court of Justice.

A White Paper published on Thursday fleshed out details of the agreement reached by the cabinet on how post-Brexit trade will work. Before the paper was published, Brexit Secretary David Davis and Foreign Secretary Boris Johnson resigned, saying it would not deliver the Brexit people had voted for in the 2016 EU referendum. Talking about the president’s advice on how to handle the EU, Mrs May said: “Interestingly what the president also said at that press conference was ‘don’t walk away’. “Don’t walk away from those negotiations because then you’ll be stuck. So I want us to be able to sit down to negotiate the best deal for Britain.”

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Not really.

Trump Reveals The Queen’s Private Views On Brexit (G.)

Trump enthused about his reception at Windsor Castle on Friday, where he and Melania spent 45 minutes with the Queen. “It was a very easy talk,” he said. “You know, it’s hard to talk to somebody if you’re, sort of, if there’s not that something special. You know that better than anybody. Sometimes you’ll have a guest on where no matter what you do it’s not working, right? And then sometimes it’s magic. We had a great, a great feeling.” Morgan asked: “Did you get the feeling she liked you?” “Well I don’t want to speak for her,” Trump said, “but I can tell you I liked her. So usually that helps. But I liked her a lot.”

Asked if he had discussed Brexit, Trump said: “I did. She said it’s a very – and she’s right – it’s a very complex problem. I think nobody had any idea how complex that was going to be … Everyone thought it was going to be, ‘Oh it’s simple, we join or don’t join, or let’s see what happens’.” Trump would not say if the 92-year-old monarch told him what she really thinks of Britain’s attempt to leave the European Union. “Well,” he said, “I can’t talk, you know I’ve heard very strongly from a lot of people, you just don’t talk about that conversation with the Queen, right? You don’t wanna do that … Let me tell you what I can talk about … she is an incredible woman, she is so sharp, she is so beautiful, when I say beautiful – inside and out. That is a beautiful woman.”

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That’s not a warning, it’s a wish.

Theresa May Warns There Could Be ‘No Brexit At All’ (R.)

Prime Minister Theresa May has warned there may be “no Brexit at all” because of lawmakers’ attempts to undermine her plan to leave the European Union. “My message to the country this weekend is simple: we need to keep our eyes on the prize,” May wrote in the Mail on Sunday newspaper. “If we don’t, we risk ending up with no Brexit at all.” Earlier this week two senior ministers resigned in protest at May’s plans for trade with the EU after Britain leaves the bloc next March. Her blueprint was then criticised in a newspaper interview by U.S. President Donald Trump, a position he backtracked on during a meeting with May on Friday.

May also wrote in the Mail on Sunday article that Britain would take a tough stance in its next round of negotiations with the EU. “Some people have asked whether our Brexit deal is just a starting point from which we will regress,” she said. “Let me be clear. Our Brexit deal is not some long wish-list from which negotiators get to pick and choose. It is a complete plan with a set of outcomes that are non-negotiable.”

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Damned if you do, doomed if you don’t.

The Chequers Brexit Compromise Offers The Worst Of Both Worlds (Mandelson)

When I first looked at what had been agreed on Brexit at Chequers, I thought the plan would please nobody, but that the public might conclude that these proposals represent the best available. In reality, it’s a spatchcocked, half-in, half-out plan and the business response was frustration: it is better trade news for goods but a disappointing hard Brexit for services. Those who voted to “take back control” were more vitriolic: it is an attempt to remain close to Europe, full of concessions and compromises, and therefore a million miles from what they expected. In Brussels on the day of the white paper’s publication, I met officials on the British and EU sides, as well as the Irish, and found a desire to debate its content seriously.

For the last two years Theresa May has elevated sovereignty over trade and she seemed to be making a timely correction, as well as reaffirming her Irish border commitment. But as I returned home, my earlier doubts resurfaced. This plan neither allows us to receive the economic benefits of being fully inside the EU’s trade perimeter nor will it give us the freedom to market ourselves independently to the rest of the world. It is a halfway house that will leave us hanging by a thread, subject to the EU’s rules – whatever they are in future – with no say in their formulation. As a former EU trade commissioner, I know how complicated trade negotiations are and why they always end up with fewer gains on both sides than either expects.

So I am sympathetic to the government’s desire for something more ambitious and more customised to Britain’s needs. And I understand why the CBI has welcomed this ambition, particularly because it has chosen to prioritise international manufacturing businesses and their supply chains over services. However, it is services rather than manufacturing that make up the bulk of the UK economy and to relegate them makes no sense.

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They’re as slow as the British themselves.

Prepare For No-Deal Brexit, German Business Groups Tell Members (R.)

German business groups have urged their members to step up preparations for a hard Brexit that would see Britain crash out of the European Union next year without negotiating a deal. British Prime Minister Theresa May secured a cabinet agreement last week for “a business-friendly” proposal to leave the EU, aimed at spurring stalled Brexit talks. But the hard-won compromise has come under fire from within her governing Conservative Party and may yet fall flat with EU negotiators. “Even if the British government is moving now, companies must plan for the scenario in which there is no agreement,” Joachim Lang, managing director of the BDI, Germany’s biggest industry lobby, told the Welt am Sonntag newspaper.

Thilo Brodtmann, managing director of the VDMA engineering association, told the same paper: “It is urgent to prepare for Brexit and to expect the worst case scenario.” German industry is concerned about increased friction in trade with Britain after Brexit. Britain is the second-biggest export market for German car manufacturers. But Lang said some German businesses were only just starting to analyze what Brexit would mean for them, adding: “At least that has moved us forward from a few months ago.”

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I like Dana Sabraw.

Immigrant Children, Parents Reunited Faster Under New Court Order (R.)

When Yolany Padilla was released from immigration custody in Seattle last week, she assumed she would be quickly reunited with her 6-year-old son, who had been taken from her at the U.S.-Mexico border two months earlier. But caseworkers at Cayuga Centers in New York, where the boy had been placed, told her lawyer that the government’s vetting process for reunification would take time. Fingerprint collection and analysis alone could take 60 days, and there would also be background checks of all the adults with whom she and her son would stay. It would likely be weeks before her son could be returned to her. “I didn’t want to believe that could be true,” said Padilla, who comes from Honduras and is seeking asylum in the United States.

“It hurt so much to even think it could be 60 days.” That estimate changed abruptly on Thursday night after a federal judge’s order that the government streamline some vetting procedures for reunifying parents and children. Padilla’s lawyer, Leta Sanchez, received a call from Cayuga Centers’ general counsel saying the case had been referred for expedited processing. On Saturday, Padilla and her son, Jelsin, were reunited at the Seattle airport, where he was flown from New York. Padilla ran to her son as he entered the airport waiting area, dropping to her knees and embracing the small boy as he smiled broadly. “It’s been so long since I’ve seen him, imagine how I feel inside,” Padilla said, speaking through a translator at the airport after the reunion.

“It was like my heart was going to come out of my body,” Several immigration attorneys reached by Reuters said they had seen similar expedited reunions following a July 10 order by U.S. District Judge Dana Sabraw in a case brought against the government by the American Civil Liberties Union. The judge had previously ordered the government to reunify by July 26 as many as 2,500 immigrant children it had separated from their parents at the U.S.-Mexico border in recent months. The separations were part of President Donald Trump’s efforts to crack down on illegal immigration, though some of the separated families are also asylum seekers. That policy was abandoned in June in the wake of widespread protests.

On July 10, after examining how an initial wave of reunifications of young children had gone, Sabraw concluded that government vetting policies could be streamlined to speed the process. Reunifications should not be delayed by “lengthy background checks,” the judge wrote, noting that such checks would not have been performed if the parents and children had never been separated.

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Spain is going to be the no. 1 destination.

Spain Saves Over 340 Migrants At Sea, One On Truck Tyre (AFP)

Spanish rescuers saved more than 340 migrants in the Mediterranean on Saturday (July 14), including one person from north Africa who was attempting the crossing on board a truck tyre, they said. Salvamento Maritimo, Spain’s coastguards, said their ships had rescued 240 people spread out in 12 boats, 10 of them in the Strait of Gibraltar and two others in the Alboran Sea, and on the truck tyre. A spokesman added that the Guardia Civil police force had also saved more than 100 migrants in the Mediterranean. Spain is set to overtake Italy as the country of choice for migrants trying to reach Europe.

Some 16,902 people have arrived in Spain so far this year, the International Organization for Migration’s most recent figures show, and a further 294 died in the attempt. All in all, more than 1,400 migrants have lost their lives in the Mediterranean this year, they add. Last month, Spain also agreed to take in 630 migrants who arrived aboard three vessels, including the French NGO rescue ship Aquarius.

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The EU is conspicuously silent on this.

450 Migrants Stranded At Sea As Italy, Malta Dig Heels In (AFP)

Another 450 migrants on board two military vessels were stranded at sea on Saturday as Italy and Malta locked horns over whose responsibility it was to offer them safe harbour. The boats, which are currently in Italian waters, had initially set sail from Libya in a single wooden vessel which was identified early Friday while passing through waters under Malta’s jurisdiction. But Italy’s far-right Interior Minister Matteo Salvini, who has authority over the country’s ports, on Friday refused to let them dock in his latest show of intransigence over migrants stranded at sea. And on Saturday, as those on board were transferred to two other vessels, he insisted the boats be instructed to “head south, to Libya or Malta”.

“We need an act of justice, of respect and of courage to fight against these human traffickers and generate a European intervention,” he said in talks with Prime Minister Giuseppe Conte, his remarks carried by Italian news agencies. In an exchange of messages, emails and phonecalls on Friday, Rome had tried to push Valetta to take responsibility for those on board the wooden boat. But Malta said the ship was much closer to the Italian island of Lampedusa, insisting that those on board only wanted to reach Italy. On Saturday morning, they were transferred to two military vessels but where the vessels will dock remains unclear. Eight women and children were taken to Lampedusa for medical treatment. The new standoff kicked in just hours after 67 migrants were allowed to disembark from an Italian coast guard ship in Sicily late on Thursday.

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A thousand ways to track you.

Mobile Phones Are ‘The Best Spying Device You Can Imagine’ (CNBC)

Could someone be tracking you as you drive around your city or town? You may think turning off your smartphone’s location will prevent this, but researchers from Northeastern University in Boston found that isn’t always the case. “Not a lot of people are aware of this problem. Mainly because when we think about location, we associate it with the GPS on the phone,” said Sashank Narain a postdoctoral researcher at Northeastern. In a test, Narain and his team were able to track people driving through Boston, Waltham, Massachusetts, and London. Traditional locators, like GPS were turned off — so the researchers used other sensors. “The goal of our project is to make people aware that vulnerabilities such as these exist, and they should be taken care of,” Narain added.

Guevara Noubir, a professor at Northeastern University who was involved in the research and also directs Northeastern’s Cybersecurity & Information Assurance Graduate Program, told CNBC that “there’s a whole area, what’s called the side channel attacks, where you use side information to infer something that can have an impact on security,” and specifically, privacy. Using Android phones running Google’s operating system, the researchers did the tracking using sensors in smartphones that were not designed to track location. Those tools included an accelerometer, which tracks how fast a phone is moving, a magnetometer, which works like a digital compass, and a gyroscope, which tracks rotation. These sensors are responsible for things like changing the screen orientation from horizontal to vertical when the phone is moved.

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“No matter their embedded biases, technologies are declared neutral.”

The Wealthy Are Plotting To Leave Us Behind (Rushkoff)

[..] the more devastating impacts of pedal-to-the-metal digital capitalism fall on the environment and global poor. The manufacture of some of our computers and smartphones still uses networks of slave labor. These practices are so deeply entrenched that a company called Fairphone, founded from the ground up to make and market ethical phones, learned it was impossible. (The company’s founder now sadly refers to their products as “fairer” phones.) Meanwhile, the mining of rare earth metals and disposal of our highly digital technologies destroys human habitats, replacing them with toxic waste dumps, which are then picked over by peasant children and their families, who sell usable materials back to the manufacturers.

This “out of sight, out of mind” externalization of poverty and poison doesn’t go away just because we’ve covered our eyes with VR goggles and immersed ourselves in an alternate reality. If anything, the longer we ignore the social, economic, and environmental repercussions, the more of a problem they become. This, in turn, motivates even more withdrawal, more isolationism and apocalyptic fantasy — and more desperately concocted technologies and business plans. The cycle feeds itself. The more committed we are to this view of the world, the more we come to see human beings as the problem and technology as the solution.

The very essence of what it means to be human is treated less as a feature than bug. No matter their embedded biases, technologies are declared neutral. Any bad behaviors they induce in us are just a reflection of our own corrupted core. It’s as if some innate human savagery is to blame for our troubles. Just as the inefficiency of a local taxi market can be “solved” with an app that bankrupts human drivers, the vexing inconsistencies of the human psyche can be corrected with a digital or genetic upgrade.

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Jul 102018
 
 July 10, 2018  Posted by at 9:04 am Finance Tagged with: , , , , , , , , , , , ,  


John Swope Trees in fog (Chile) 1939

 

Leveraged-Loan Risks Are Piling Up (WS)
UK House Prices Should Be Frozen For Five Years – Think Tank (Ind.)
24 Hours of Brexit Mayhem (Ind.)
Britain Has Gone To Huge Trouble To Humiliate Itself (Fintan O’Toole)
Novichok In Wiltshire Death ‘Highly Likely’ From Batch Used On Skripals (G.)
Nissan Says Emissions And Fuel Economy Tests Were Falsified (R.)
Trump Slams Pfizer After July 1 Drug Price Hikes (R.)
Judge Rejects Trump Request For Long-Term Detention Of Immigrant Children (R.)
Egypt Rejects Europe’s Intent To Set Up ‘Regional Disembarkation Centres’ (AW)
If You Love Greece, Help Us Get Rid Of Alexis Tsipras And His Zombie Party (G.)
When Collapse Goes Kinetic (Kunstler)
As Trial Opens, Man Dying Of Cancer Blames Monsanto’s Roundup (AFP)

 

 

Not learned a single thing in the past 10 years.

Leveraged-Loan Risks Are Piling Up (WS)

US junk-bond issuance in June plunged 31% from a year ago to just $14.5 billion, the lowest of any June in five years, according to LCD of S&P Global Market Intelligence. During the first half of the year, junk bond issuance dropped 23% from a year ago to $110.6 billion. Is investor appetite for risky debt drying up? Have investors given up chasing yield? On the contrary! They’re chasing harder than before, but they’re chasing elsewhere in the junk-rated credit spectrum: leveraged loans. Leveraged loans are another way by which junk-rated companies can raise money. These loans are arranged by banks and sold either as loans or as Collateralized Loan Obligation (CLOs) to other investors, such as pension funds or loan funds.

They’re a $1 trillion market and trade like securities. But the SEC, which regulates securities, considers them loans and doesn’t regulate them. No one regulates them. In the first half, companies issued $274 billion of non-amortizing leveraged loans, and $97 billion in revolving and amortizing leveraged loans, according to LCD, for a total of $371 billion, on par with the record set in the first half last year. This is well over triple the amount of junk bonds issued in same period ($110 billion). Many of these loans have floating interest rates, typically pegged to the dollar-Libor. And in an investment environment where the Fed has been trying to push up interest rates, Libor has surged, and floating-rate loans, whose interest payments increase as Libor ratchets higher, are very appealing to investors – despite the additional risks these higher interest payments pose for the companies that are already struggling with negative cash flows.

[..] Leveraged loans come with covenants that are supposed to protect investors during the term of the loan and in case of default. With strong covenants and good collateral, leveraged loans tend to be less risky than junk bonds issued by the same company. Alas, investors have the hots for this debt, and companies are taking advantage of it by weakening covenants, giving investors fewer protections and the company more leeway – such as paying interest with more debt rather than cash if it runs out of cash (payment-in-kind or PIK); normally, not being able to pay interest would constitute a default, but not with these “covenant lite” or “cov-lite” loans. The boom in cov-lite has started years ago and has surged to massive record proportions. When these loans default, investors are exposed to much greater losses.

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Interesting idea. Decades too late though.

UK House Prices Should Be Frozen For Five Years – Think Tank (Ind.)

UK house prices should be frozen for five years to help prevent another financial crisis, the think tank IPPR has said. The group has urged the Bank of England to freeze property prices under a separate new inflation target and said this could lead to house prices falling by around 10 per cent in real terms as other prices and wages continue to rise, making homes more affordable. Under the IPPR’s proposals, house prices would be allowed to increase “only after expectations of constantly rising house prices have been ‘reset’”. The think tank also said prices would be allowed to grow “no faster than the general consumer price inflation target of 2 per cent, meaning no further growth in the real value of people’s homes”.

The IPPR said its recommendations were part of a wider plan to “rebalance the UK economy away from finance” so as to avoid another financial crisis. According to the IPPR, the financial sector’s “dominance” since the 1980s has contributed to a strong pound, which has hurt exporters, and has attracted surplus money from other countries, which has been channelled into loans for speculative investors, including mortgage lending. This speculation over house prices, the think tank said, has helped drive up prices and at the same time made the economy more vulnerable to a crisis, because it has reduced funds available for more productive investment, created regional inequalities with disproportionate growth in London and the South East, and “concentrated market power into the hands of a small number of large banks”.

[..] Grace Blakeley, IPPR research fellow, said: “Since the 1980s, the UK’s business model has rested on attracting capital from the rest of the world, which it has channelled into debt for UK consumers. The 2008 crisis proved that this is unsustainable. “We need to move towards a more sustainable growth model, one built on production and investment rather than debt and speculation. To do this, we must break the cycle of ever-rising house prices driving property speculation, crowding out investment in the real economy.”

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A confidence vote looks inevitable.

24 Hours of Brexit Mayhem (Ind.)

Theresa May is clinging on to power following the dramatic resignation of Boris Johnson and a bruising 24 hours of conflict with Tory Brexiteers. Mr Johnson became the third minister to quit in the space of a day, accusing Ms May of pursuing a Brexit that would lock Britain into “the status of colony”. In a scathing letter, he said her plans for negotiating with Europe decided at Chequers last week equated to going into battle with “white flags fluttering”. But despite the resignations and the looming threat of a “vote of no confidence”, Ms May survived the day and finished it with a swipe at Mr Johnson, in which she appeared to question his motives for quitting.

After David Davis left his job as Brexit secretary just before midnight on Sunday, speculation grew as to whether there would be a slew of resignations, bringing down the government. He had been followed by fellow Brexit minister Steve Baker, but it was not until 3pm on Monday, when it emerged that Mr Johnson was walking, that Ms May looked at her most precarious. It was claimed that Downing Street leaked news of his resignation before he could write his letter, which the prime minister’ aides guessed would be wounding. When it came it said: “Brexit should be about opportunity and hope. It should be a chance to do things differently, to be more nimble and dynamic, and to maximise the particular advantages of the UK as an open, outward looking global economy. “The dream is dying, suffocated by needles doubt.”

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“Instead of the Star Trek vision of boldly going where no imperial nostalgic society had gone before, this Brexit would not have enough thrust to get the UK out of the gravitational pull of the European Union”

Britain Has Gone To Huge Trouble To Humiliate Itself (Fintan O’Toole)

The best headline about British prime minister Theresa May’s short-lived triumph over the hard Brexiteers last Friday was undoubtedly the one on Pádraig Collins’s report in the Guardian: “Possum rescued after getting head stuck in Nutella jar”. Admittedly, Collins was actually reporting, not from Chequers, but from Brisbane, Australia. Yet the accompanying photograph was the perfect image of what May is trying to do. It showed the furry creature all curled up and immobilised with its head completely encased in a glass jar streaked with visible residues of sticky brown stuff. As a spokesman for the Australian RSPCA explained, the dumb animal “managed to get his head in the jar, but obviously couldn’t get it out”.

The rescuer put “towels around the possum so she could get him out of the jar without getting scratched by his claws”. The story saves me the trouble of thinking up a metaphor. The Brexiteers have their heads stuck in a jar of sticky brown stuff that seemed so sweet and enticing. May’s compromise deal and the White Paper she is still expected to publish this week are the towels wrapped round the Brexiteers’ claws so that their heads can be pulled out of the jar without her premiership getting scratched to death.

The only problem is that David Davis and Boris Johnson, having been successfully extracted, decided to bare their claws again. As any possum or two-year-old child will tell you, sticking your head inside a glass jar is quite a thrill. You get to see the world through a distorting lens that creates a comforting distance between you and reality. You can’t hear unwanted voices raising awkward questions. Brexit has so far been conducted through a glass darkly. It has been seen through glorious fantasies of imperial revival and layers of self-pity about imaginary oppression. What May has been attempting, very late in the day, is to force her more deluded colleagues to get their heads out of the jar and look directly at Brexit.

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The story is the two have been exposed to high dose of novichok. That is not possible; they would have died in instants.

Novichok In Wiltshire Death ‘Highly Likely’ From Batch Used On Skripals (G.)

Britain’s counter-terrorism chief has said it is highly likely the novichok that killed Dawn Sturgess in Wiltshire came from the same batch used four months earlier to attack a former Russian spy and his daughter at their Salisbury home. The Metropolitan police assistant commissioner Neil Basu also said the substance that led to Sturgess and her partner Charlie Rowley falling ill on Saturday was in a vessel or container when the couple came across it. Police have opened a murder investigation after Sturgess died in hospital on Sunday at 8.26pm. Basu said: “It is both shocking and utterly appalling that a British citizen has died having being exposed to a Novichok nerve agent.

“But make no mistake, we’re determined to find out how Dawn and her partner, Charlie Rowley, came into contact with such a deadly substance; and we will do everything we possibly can to bring those responsible to justice.” Basu said Sturgess and Rowley got a high dose of novichok after handling a container containing the nerve agent. It was most likely that the container police are hunting for was linked to the attack four months earlier on the Skripals. [..] “In the four months since the Skripals and Nick Bailey were poisoned, no other people besides Dawn and Charlie have presented with symptoms. Their reaction is so severe it resulted in Dawn’s death and Charlie being critically ill. This means they must have got a high dose. Our hypothesis is they must have handled the container we are now seeking.”

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“The carmaker blamed staffing shortages for the scandal..”

Nissan Says Emissions And Fuel Economy Tests Were Falsified (R.)

Nissan has said it has found evidence of misconduct relating to exhaust emissions and fuel economy measurements for 19 models sold in Japan. The Japanese carmaker said on Monday it had discovered the testing environments for emissions and fuel economy in final vehicle inspections at most of its factories in Japan were not in line with requirements, and inspection reports were based on altered measurements. “A full and comprehensive investigation of the facts … including the causes and background of the misconduct, is under way,” Nissan said. The problems were found during voluntary compliance checks following an improper vehicle inspection scandal last year.

In October, a recall of 1.2m vehicles was triggered after Nissan said uncertified inspectors had signed off on final checks for cars sold in Japan. The carmaker blamed staffing shortages for the scandal, which caused annual operating profit to slide. Nissan said the latest misconduct did not compromise the safety of the affected models, and mileage readings were in line with levels presented in product catalogues. It was in the process of compiling data for the GT-R sports car to confirm it satisfied safety standards. The carmaker said it would take appropriate action to prevent similar problems in future.

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Time to keep promises.

Trump Slams Pfizer After July 1 Drug Price Hikes (R.)

U.S. President Donald Trump on Monday took aim at Pfizer Inc and other U.S. drugmakers after they raised prices on some of their medicines on July 1, saying his administration would act in response. “Pfizer & others should be ashamed that they have raised drug prices for no reason.” Trump wrote in a post on Twitter on Monday. “We will respond!” Health and Human Services Secretary Alex Azar followed up with his own tweet saying that drugmakers who have raised prices have created a tipping point in U.S. drug pricing policy. “Change is coming to drug pricing, whether painful or not for pharmaceutical companies,” Azar wrote. Neither Trump nor Azar detailed what policy changes would be implemented to decrease prices.

Trump had said in May that some drug companies would soon announce “voluntary, massive” cuts in prices, but none have materialized yet. During his presidential campaign, he promised lower U.S. drug costs. Pfizer raised list prices on around 40 medicines earlier this month. Those include Viagra, cholesterol drug Lipitor and arthritis treatment Xeljanz, according to Wells Fargo. List prices do not include rebates and discounts drugmakers may offer. “The list price remains unchanged for the majority of our medicines. Our portfolio includes more than 400 medicines and vaccines. We are modifying prices for approximately 10 percent of these, including some instances where we’re decreasing the price,” Pfizer spokeswoman Sally Beatty told Reuters.

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Enough of this already. Stop it.

Judge Rejects Trump Request For Long-Term Detention Of Immigrant Children (R.)

A U.S. federal judge on Monday rejected the Trump administration’s request to allow long-term detention of illegal immigrant children, a legal setback for President Donald Trump’s push to detain immigrant families taken into custody at the U.S.-Mexico border. Los Angeles U.S. District Court Judge Dolly Gee dismissed as “dubious” and “unconvincing” the U.S. Justice Department’s proposal to modify a 1997 settlement known as the Flores Agreement, which says that children cannot be held in detention for long periods. The government made its request in June after public outcry over its policy of separating children from parents who entered the United States illegally.

A judge in a different case in San Diego ordered the government last month to reunite the families it had separated. The government asserted in its Flores filing that the San Diego ruling would necessitate longer-term detention of children, since that would be the only way to both reunite them with their parents and keep the parents incarcerated during their immigration proceedings. Gee rejected that argument. “Defendants advance a tortured interpretation of the Flores Agreement in an attempt to show that the … injunction permits them to suspend the Flores release and licensure provisions,” she wrote.

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“The solution to the problem will be to resettle these refugees in their countries..” “This can only happen when the conflicts raging in these countries are settled.”

Egypt Rejects Europe’s Intent To Set Up ‘Regional Disembarkation Centres’ (AW)

Egypt’s opposition to establishing camps for screening migrants heading to Europe has made the European Union’s “regional disembarkation centres” proposal seem even more implausible. Cairo’s stand has underscored the deep worries in the Egyptian administration about the country’s increasing refugee responsibilities, analysts said. “This is a burden Egypt shoulders alone, without any support from the international community,” said MP Ghada Agamy, a member of the Egyptian parliament’s Foreign Relations Committee.

Egypt said it would not be able to accommodate “regional disembarkation centres” for migrants trying to cross the Mediterranean to Europe just hours after European leaders reached a controversial migration deal that included refugee centres in North Africa and “controlled centres” in European countries. Egypt, Tunisia, Morocco and Algeria have rejected the idea of regional disembarkation centres. The Egyptian government said establishing refugee camps would violate the Egyptian constitution. Refugees, Egyptian parliament Speaker Ali Abdel A’al said, can live wherever they want in Egypt. “We do not establish camps here,” he said. Egyptian officials are concerned about Cairo’s ability to shoulder refugee-related burdens, analysts said, particularly at a time of economic transition.

[..] Instead of asking economically struggling countries to act as refugee hosts, European leaders need to solve the problems that cause these refugees to leave their countries in the first place, particularly the unrest that has engulfed many countries, Egyptian specialists said. “The solution to the problem will be to resettle these refugees in their countries,” said Youssef al-Metany, a refugee lawyer at local NGO Egyptian Network for International Law. “This can only happen when the conflicts raging in these countries are settled.”

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Zoe Konstantopoulou is the former president of the Hellenic parliament.

If You Love Greece, Help Us Get Rid Of Alexis Tsipras And His Zombie Party (G.)

Last week was the third anniversary of the 2015 referendum, in which the Greek people voted no to more austerity, and no to the violation of democracy by the creditors. The week before Alexis Tsipras, the prime minister who betrayed the brave no of the Greek people, visited London to present his capitulation to the troika of the European commission, the International Monetary Fund and the European Central Bank as an achievement.

Imagine how the British people would view a prime minister elected to end privatisation, and who instead privatised almost every piece of public property; who was elected to serve peace, and who instead facilitated military action against targets in Syria and agreed to sell weapons to countries accused of committing international crimes; who was elected to protect people’s homes, and who stood by while banks seized them, leaving people homeless; who was elected to serve democracy and the independence of his country, and who instead turned it over to the EU, the IMF and the ECB. This is what Tsipras did to the Greek people.

I was a Syriza MP and president of the Greek parliament during the seven months of the first Syriza government. When Tsipras signed the toxic third memorandum in 2015, I fought hard to protect our parliamentary procedures that he and the troika violated. In spite of continuous pressure, I refused to bend our democratic rules and accept more illegal debt for our people. Together with dozens of other Syriza MPs, I voted against the monstrous agreement. Tsipras then dissolved parliament prematurely to get rid of me and the dissenting MPs.

Three years on, his capitulation to the troika has proved the disaster many of us predicted. People’s lives have become unbearable. Youth unemployment has become the norm and an estimated 8% of the population has left in search of work. The minimum salary doesn’t pay the bills, and hundreds of thousands of families go without electricity for extended periods of time. This tragedy began in 2010, but Tsipras’s so-called left government has done everything to prove that it can implement austerity better than its predecessors. It even brags about exceeding the troika’s cruel targets in cuts and taxes.

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“..the landscape as demolition derby..”

When Collapse Goes Kinetic (Kunstler)

I suppose many who think about the prospect of economic collapse imagine something like a Death Star implosion that simply obliterates the normal doings of daily life overnight, leaving everybody in a short, nasty, brutish, Hobbesian free-for-all that dumps the survivors in a replay of the Stone Age — without the consolation of golden ages yet to come that we had the first time around. The collapse of our techno-industrial set-up has actually been going on for some time, insidiously and corrosively, without shattering the scaffolds of seeming normality, just stealthily undermining them. I’d date the onset of it to about 2005 when the world unknowingly crossed an invisible border into the terra incognito of peak oil, by which, of course, I mean oil that societies could no longer afford to pull out of the ground.

It’s one thing to have an abundance of really cheap energy, like oil was in 1955. But when the supply starts to get sketchy, and what’s left can only be obtained at an economic loss, the system goes quietly insane. In the event, popular beliefs and behavior have turned really strange. We do things that are patently self-destructive, rationalize them with doctrines and policies that don’t add up, and then garnish them with wishful fantasies that offer hypothetical happy endings to plot lines that do not really tend in a rosy direction. The techno-narcissistic nonsense reverberating through the echo-chambers of business, media, and government aims to furnish that nostrum called “hope” to a nation that simply won’t admit darker outcomes to the terrible limits facing humanity.

Thus, we have the Tesla saga of electric motoring to save the day for our vaunted way of life (i.e. the landscape as demolition derby), the absurd proposals to colonize distant, arid, frigid, and airless Mars as a cure for ruining this watery blue planet ideally suited for our life-form, and the inane “singularity” narratives that propose to replace grubby material human life with a crypto-gnostic data cloud of never-ending cosmic orgasm. The psychological desperation is obvious. Apparently, there are moments in history when flying up your own butt-hole is the most comforting available option.

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But how do you prove it?

As Trial Opens, Man Dying Of Cancer Blames Monsanto’s Roundup (AFP)

A lawyer for a California groundskeeper dying of cancer took aim at Monsanto Monday as a jury began hearing the lawsuit accusing the chemical giant of ignoring health risks of its top-selling weed killer Roundup. “For the past 40 years, Monsanto has known the primary ingredient in Roundup can produce tumors in lab animals,” attorney Brent Wisner told a California state court. A jury is hearing the case brought by Dewayne Johnson, a 46-year-old father of two. Diagnosed in 2014 with non-Hodgkin’s lymphoma, a cancer that affects white blood cells, Johnson used a Monsanto generic version of Roundup called “Ranger Pro” repeatedly in his job at a school in Benicia, California, after being promoted to groundskeeper in 2012.

In his opening statement, Wisner said Monsanto opted against warning consumers of the risks and that instead “they have fought science” by playing down the suspected link between the chemical herbicide and cancer. “Monsanto has gone out of its way to bully scientists and fight researchers,” he told the jury. The case in California Superior Court is the first trial in which Roundup is said to have caused cancer, a claim repeatedly denied by the chemical company. If Monsanto loses, the case could open the door to hundreds of additional lawsuits against the company recently acquired by German-based pharmaceutical and chemical group Bayer.

Johnson had little warning about the risks of Roundup, his lawyer said. “He was told you could drink it, it was completely non toxic,” Wisner said with his client sitting in the San Francisco courtroom. “You will hear testimony from him that he got drenched in it, repeatedly.” The lawyer said Johnson, who is between rounds of chemotherapy, “is actually on borrowed time, he is not supposed to be alive today.” A key to Johnson’s case will be convincing jurors that Monsanto’s pesticide — whose main ingredient is glyphosate — is responsible for the illness. Wisner contended glyphosate combined with an ingredient intended to help it spread over leaves in a cancer-causing “synergy.”

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Jul 092018
 
 July 9, 2018  Posted by at 9:31 am Finance Tagged with: , , , , , , , , , , ,  


Vincent van Gogh Bridge in the rain (after Hiroshige) 1887

 

David Davis Resigns As Brexit Secretary (Ind.)
World Trade Has Decelerated Sharply (Ashoka Mody)
Market Turmoil Pushes Some China Funds To The Brink (R.)
US Faces Soaring Trade Deficits, But Rising Energy Prices Bigger Danger (CNBC)
White House Close To Refusing Interview With Russia Investigation (G.)
America the Failed State (Chris Hedges)
BOJ’s Kuroda Expresses Resolve To Keep Ultra-Easy Monetary Policy (R.)
A Parallel Currency For Italy Is Possible (Pol.eu)
Berlin Eyes Deal For Migrant Returns With Greece By End July (K.)
Italy Promises Billions To Libya If It Accepts The Return Of Migrants (EN)

 

 

Oh man, I wrote one little article and mere hours later they’re all running for cover…

David Davis Resigns As Brexit Secretary (Ind.)

David Davis has quit his cabinet job following a major row with Theresa May over her plans for post-Brexit relations with the EU. His resignation as Brexit secretary deals a heavy blow to the stability of the prime minister’s administration, with two other ministers almost immediately following suit. The departure of Mr Davis, Steve Baker and Suella Braverman, who had also served in the Department for Exiting the EU, could now embolden other senior figures to quit.
Ms May had been hoping to win over Brexiteers to her proposals agreed by the cabinet, including Mr Davis, on Friday – but since then Leave-backing Tory MPs have called for a change in leadership.

The move comes on the eve of a major test for the prime minister as she faces the house of commons on Monday, to explain her proposals, and then a stormy meeting of Conservative MPs. In his resignation letter, Mr Davis wrote: “As you know there have been a significant number of occasions in the last year or so on which I have disagreed with the Number 10 policy line, ranging from accepting the [European] Commission’s sequencing of negotiations, through to the language on Northern Ireland in the December Joint Report. “At each stage I have accepted collective responsibility because it is part of my task to find workable compromises, and because I considered it was still possible to deliver on the mandate of the referendum, and on our manifesto commitment to leave the Customs Union and the Single Market.

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China slowing down.

World Trade Has Decelerated Sharply (Ashoka Mody)

World trade has decelerated sharply. This ill omen portends severe risks in the months to come. The greatest risks are in the eurozone – where Italy is the fault line along which the most acute vulnerabilities lie. In the three months ending in April, the annual pace of world trade growth dipped slightly below 4 percent, a sharp decline from 5.5 percent rate in the second half of 2017. Trade growth in 2017 was both a barometer and cause of rare “synchronized” GDP growth with nearly every country experiencing buoyant conditions. That sweet spot is fading because the Chinese economy is slowing down. With its huge size and extensive global trade relationships, changes in Chinese domestic economic priorities have a huge impact on trade and the world economic outlook.

A blistering pace of Chinese imports propped world trade growth until January this year, and a slowdown since then in Chinese imports has dampened world trade. The shift is a consequence of the attempt by Chinese leadership to diffuse a grossly oversized credit bubble. But reduced credit has squeezed investment in infrastructure projects and, hence, in the imports of goods and materials to support those projects. Recently, retail sales have also slowed. China’s credit bubble may yet burst, causing global economic and financial mayhem. Even if the Chinese economy merely slows down, which it seems almost certain to, global trade deceleration will continue. If, in addition, the global trade war escalates, global economic conditions could deteriorate rapidly.

Growth deceleration is already evident in the eurozone. German growth relies to an extraordinary degree on exports to China and, not surprisingly, German industrial production has been in the doldrums in the past few months. Moreover, when German exporters face weaker growth prospects, they buy less from their largely European suppliers, which significantly dampens economic growth in Europe. Italy will face the ill-effects of a global slowdown most acutely. After abysmal performance through much of the last decade, Italian GDP growth had picked up to annual rate of 1.8 percent in the second half of 2017. But that did not last. Already, Italian GDP growth is slowing and forecasts for the 2018 have are down to just above a 1 percent annual growth rate.

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“.. fewer than 10 of the 800-plus Chinese equity mutual funds have made a positive return this year..”

Market Turmoil Pushes Some China Funds To The Brink (R.)

It’s already been a harsh year for Chinese funds, hit by new rules aimed at reining in debt in the country’s financial system. Now, the sell-off in China stocks induced by trade war anxiety further threatens their health and for some, their survival. Case in point: private fund house Nanjing Hu Yang Investment Co has seen its assets under management halve to 50 million yuan ($7.5 million) over the past year on redemptions and investment losses. Its chairman, Zhang Kaihua, said he is putting his funds, which bet on consumer stocks, into “a state of dormancy”. He’s also stopped publishing fund performances and shelved capital raising plans. “Our only hope is that our existing clients can stick with us so that we can survive,” he said, adding that he has seen many of his peers drop out of the market.

In the past when market turmoil has hit China’s fund industry, such as in 2015, it has managed to bounce back on loose monetary policies and relaxations in rules for the sector. But this time, asset managers face a double whammy of fleeing investors and a central bank keen to see a mopping up of excessive liquidity in the financial system – pointing to prolonged pain for the industry. And as the U.S.-China trade war heats up – the two slapped tariffs on $34 billion worth of each other’s goods on Friday – the worry is that further declines in Chinese shares, which have fallen 10 percent since late June to two year-lows, could be the last straw for some funds.

According to Morningstar, fewer than 10 of the 800-plus Chinese equity mutual funds it tracks have made a positive return this year. Even before trade war fears ramped up last month, changes to asset management rules first outlined in 2017 and aimed at encouraging banks to reel in their investments in stocks and bonds had taken their toll. Equity fundraising dwindled to minimal levels, while redemptions and liquidations spiked.

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Global trade decelerates, but US trade defecit soars.

US Faces Soaring Trade Deficits, But Rising Energy Prices Bigger Danger (CNBC)

America’s foreign trade deficits on goods transactions are getting worse. After an increase of 7.7 percent in 2017, those deficits were growing in the first five months of this year at an almost identical annual rate. Particularly disappointing is the fact that there is no progress at all in bringing trade deficits down with the European Union and China. The deficit with those two large economic systems came in at $218 billion during the January-May period, accounting for nearly two-thirds (64 percent) of America’s total trade gap. That deficit was 11.3 percent more than recorded over the same interval of last year, and, at an annual rate, it comes close to half-a-trillion dollars.

Looking at the detail of these numbers, one can clearly see that trade deficits with the EU and China, growing at respective annual rates of 15 percent and 10 percent, are driven by a strong and unrelenting import penetration of American markets by European and Chinese companies. On current evidence, the short-term outlook for American foreign trade is not good for reasons of (a) different growth dynamics, (b) confrontational trade policies and (c) the political and security fallout exacerbated by intensifying trade disputes. Barring an inflation-induced recession, of which more later, the U.S. aggregate demand components — household consumption, residential investments and business capital outlays — are underpinned by high employment, increasing inflation-adjusted after tax incomes, low credit costs and targeted fiscal incentives.

An anticipated economic growth in the area of 2.5 to 3.0 percent for the rest of this year would still be more than an entire percentage point above the estimated non-inflationary potential of the U.S. economy. That strong demand pressure will continue to spill over into the rest of the world, and will support America’s vigorous imports of foreign goods and services. That’s music to European and Chinese ears.

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And then what is Mueller going to do?

White House Close To Refusing Interview With Russia Investigation (G.)

Donald Trump’s lawyer Rudy Giuliani has warned Robert Mueller, the special counsel investigating possible collusion between Russia and the Trump campaign during the 2016 presidential election, that the White House is close to refusing to grant an interview with the president. Giuliani took the increasingly belligerent tone of the White House up a notch on Sunday when he called the Russian investigation the “most corrupt I’ve ever seen”. Speaking on This Week on ABC News, he accused the special counsel of assembling a team of investigators around him that included “very, very severe partisans working on an investigation that should have been done by people who are politically neutral”.

Asked whether they had made a decision on whether or not Trump should participate in an interview with the inquiry, he replied: “We have not determined he will not sit down with Mueller, but we are close to that.” Giuliani’s round of the Sunday TV political talkshows is the latest sign that the core Trump team has decided to abandon its earlier approach of being seen to cooperate with the Russia investigation, and move towards an antagonistic position. On Friday, Giuliani told the New York Times that Mueller would get his interview with the president only if he could satisfy the White House that he had evidence that Trump had committed a crime.

The attorney and former mayor of New York, who is a long-standing friend of Trump’s, walked back that suggestion a little on Sunday. He said the White House did not require evidence of a criminal deed but at least some factual basis supporting suspicion of a crime. Giuliani revealed to CNN’s State of the Union that the White House legal team had debriefed all the witnesses to the Mueller investigation, and reviewed 1.4m pages of documents handed over to the special counsel. As a result, he claimed, he could confidently say that Trump had nothing to answer. “I have a pretty good idea because I’ve seen all the documents they have, we’ve debriefed all their witnesses. They have nothing. They would not be pressing for this interview if they had anything.”

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John Ralston Saul is an interesting voice.

America the Failed State (Chris Hedges)

Our “corporate coup d’état in slow motion,” as the writer John Ralston Saul calls it, has opened a Pandora’s box of evils that is transforming America into a failed state. The “unholy trinity of corruption, impunity and violence,” he said, can no longer be checked. The ruling elites abjectly serve corporate power to exploit and impoverish the citizenry. Democratic institutions, including the courts, are mechanisms of corporate repression. Financial fraud and corporate crime are carried out with impunity. The decay is exacerbated by the state’s indiscriminate use of violence abroad and at home, where rogue law enforcement agencies harass and arrest citizens and the undocumented and often kill the unarmed.

A depressed and enraged population, trapped by chronic unemployment and underemployment, is overdosing on opioids and beset by rising suicide rates. It engages in acts of nihilistic violence, including mass shootings. Hate groups proliferate. The savagery, mayhem and grotesque distortions familiar to those on the outer reaches of empire increasingly characterize American existence. And presiding over it all is the American version of Ubu Roi, playwright Alfred Jarry’s gluttonous, idiotic, vulgar, narcissistic and infantile king, who turned politics into burlesque.

“Congress works through corruption,” Saul [..] said when we spoke in Toronto. “I look at Congress and I see the British Parliament in the late 18th century, the rotten boroughs. Did they have elections? Yes. Were the elections exciting? Yes. They were extremely exciting.” Rotten boroughs were the 19th-century version of gerrymandering. The British oligarchs created electoral maps through which depopulated boroughs—50 of them had fewer than 50 voters—were easily dominated by the rich to maintain control of the House of Commons.

In the United States, our ruling class has done much the same, creating districts where incumbents, who often run unchallenged, return to Congress election after election. Only about 40 of the 435 seats in the House of Representatives are actually contested. And given the composition of the Supreme Court, especially with Donald Trump poised to install another justice, it will get worse. The corruption of the British system was amended in what Saul called “a wave upwards.” The 1832 Reform Act abolished a practice in which oligarchs, such as Charles Howard, the 11th Duke of Norfolk, controlled the election results in 11 boroughs. The opening up of the British parliamentary system took nearly a century. In the United States, Saul said, the destruction of democracy is part of “a wave downwards.”

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No going back.

BOJ’s Kuroda Expresses Resolve To Keep Ultra-Easy Monetary Policy (R.)

Bank of Japan Governor Haruhiko Kuroda on Monday stressed that the central bank would maintain its ultra-loose monetary policy until inflation hits its 2 percent target. He also reiterated that Japan’s economy would see inflation accelerate towards the BOJ’s target as the output gap improved and medium- to long-term inflation expectations heightened. “Japan’s economy is expected to continue expanding moderately,” Kuroda said in a speech at a quarterly meeting of the central bank’s regional branch managers. Under a yield curve control policy adopted in 2016, the BOJ pledges to guide short-term interest rates at minus 0.1 percent and the 10-year government bond yield around zero percent.

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The EU can’t accept it.

A Parallel Currency For Italy Is Possible (Pol.eu)

In Joseph Stiglitz’s recent article for the POLITICO Global Policy Lab (“How to Exit the Eurozone,” June 29, 2018), the Nobel-prize wining economist proposes that Italy issue a parallel currency as a way to retake control of its monetary policy. It’s an insightful idea, and one worth exploring. However, Stiglitz is wrong when he suggests that “introducing a parallel currency, even informally, would almost certainly violate the eurozone’s rules and certainly be against its spirit.” Our organization — the Group of Fiscal Money — has been very active in developing and promoting such a dual-currency scheme. We call it “Fiscal Money” and believe it could be used to avoid the uncertainties of exiting the euro while allowing Italy to recover economically without breaking any EU rule.

Our proposal is for government to issue transferable and negotiable bonds, which bearers can use for tax rebates two years after issuance. Such bonds would carry immediate value, since they would incorporate sure claims to future fiscal savings. They could be immediately exchanged against euros in the financial market or used (in parallel to the euro) to purchase goods and services. Fiscal Money would be allocated, free of charge, to supplement employees’ income, to fund public investments and social spending programs, and to reduce enterprises’ tax on labor. These allocations would increase domestic demand and (by mimicking an exchange-rate devaluation) improve enterprise competitiveness through a reduction in the cost of labor.

As a result, Italy’s output gap — that is, the difference between potential and actual GDP — would close without affecting the country’s external balance. Note that under Eurostat rules, Fiscal Money bonds would not constitute debt, since the issuer would be under no obligation to reimburse them in cash. Also, as non-payable tax assets (of which many examples already exist), they would not be recorded in the budget until used for tax rebates — that is, two years after issuance when output and fiscal revenue have recovered.

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Blackmail.

Berlin Eyes Deal For Migrant Returns With Greece By End July (K.)

Even as Germany’s interior minister Horst Seehofer threatens the launch of mass returns of migrants if bilateral agreements are not achieved, German defense minister Ursula von der Leyen has suggested that such an accord with Greece may be signed by the end of the month. In comments to Der Spiegel, Seehofer said the absence of bilateral deals was “not a good strategy” and that Germany will start returning migrants reaching its border if that situation is not rectified. For his part, Alexander Dobrindt of the Christian Social Union said he believed German plans to return asylum seekers to European Union countries of first entry would not necessarily be met by cooperation.

“Whoever is not in a position to honor fundamental European regulations cannot expect cooperation in other areas,” he said. Von der Leyen, for her part, expressed her conviction that a bilateral agreement with Greece was a matter of time. “We want an agreement with Greece by the end of the month,” she told the Funke publishing group, adding that such an accord could be an example for other countries. “The Italians want us to help them in exchange,” she said. “Solidarity is significant, for everyone, irrespective of who is in government in Rome,” she said.

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1 in 10 now drown.

Italy Promises Billions To Libya If It Accepts The Return Of Migrants (EN)

Italy and Libya have agreed to reactivate a friendship treaty signed a decade ago that allowed migrants to be returned to Libyan territory. “We agreed to reactivate the 2008 Italian-Libyan friendship treaty,” said Libya’s foreign minister Mohamad Siala in a joint press conference in Tripoli with Italian counterpart Enzo Moavero Milanesi. He hailed the agreement reached during his first visit to Tripoli as “significant and promising”. The original treaty was signed by former Libyan dictator Moammar Gadhafi and Italy’s then prime minister Silvio Berlusconi, as they sought to turn a page on 40 years of stormy relations between the North African country and its former coloniser.

But the deal was suspended in February 2011, after the start of the uprising that saw Gadhafi forced from power and killed. The original treaty envisaged unlocking 4.2 billion euros of Italian investment in Libya as compensation for colonisation by Rome. In exchange, Libya would work to stop illegal migrants embarking from its shores — and receive those sent back to it. In Tripoli on Saturday the two ministers did not say if the text of the reactivated treaty had been amended. The agreement means “all the conditions are in place to work hand in hand to support stabilisation … (of) Libya’s security and unity”, Milanesi said. Libya “shares with the European Union the responsibility and the duty to deal with migrants”, he added.

The new anti-immigrant government in Rome has vowed to turn away all migrants who make it across the Mediterranean and into Italy. In recent days the UN has urged Rome to change its policy and re-allow charity rescue ships to operate in its waters and dock at its ports. It states that, whilst the amount of migrant attempting the crossing has gone down, the number of drownings has gone up.

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Jul 042018
 


Edward Hopper People in the sun 1963

 

The Velocity of Money… and Revolution (Brin)
Ecology: The Keystone Science (Hawes)
Facebook Flags, Removes Declaration of Independence Text as Hate Speech (Rea.)
Theresa May To Pitch ‘Softest Possible Brexit’ Plan (R.)
UK Government ‘Will Miss Fuel Poverty Target By More Than Six Decades’ (G.)
‘Unknown Substance’ Leaves Pair Critically Ill In Salisbury Hospital (G.)
As The State Is Dismantled, Who Will Save Britain’s Wildlife? (Monbiot)
City Properties Should Be Homes For People First – Not Investments (G.)
Ecuador Wants Ex-President Correa Extradited (DW)
Most Of Europe’s Rivers And Lakes Fail Water Quality Tests (G.)
More Than 200 Migrants Drown In Mediterranean In Three Days (G.)
Albatross

 

 

Lowest since 1949.

The Velocity of Money… and Revolution (Brin)

A recent Mauldin missive correctly cites the most disturbing symptom of trouble in the U.S. economy: a plummet in Money Velocity (MV). To quote John: “You may be asking, what exactly is the velocity of money? Essentially, it’s the frequency with which the same dollar changes hands because the holders of the dollar use it to buy something. Higher velocity means more economic activity, which usually means higher growth. So it is somewhat disturbing to see velocity now at its lowest point since 1949, and at levels associated with the Great Depression.” Somewhat… disturbing? That’s at-best an understatement, since no other economic indicator is as telling. MV is about a bridge repair worker buying furniture, that lets a furniture maker get dentures, so a dentist can pay her cleaning lady, who buys groceries….

There are rare occasions when MV can be too high, as during the 1970s hyper-inflation, when Jimmy Carter told Paul Volcker “Cure this, and to hell with my re-election.” But those times are rare. Generally, for all our lives, Money Velocity has been declining into dangerous sluggishness, falling hard since the 80s, rising a little in the 90s, then plummeting. Alas, while fellows like Hunt and Mauldin are at last pointing at this worrisome symptom, they remain in frantic denial over the cause. Absolutely, it is wealth disparity that destroys money velocity. Bridge repair workers and dentists would spend money – if they had any. We have known – ever since Adam Smith gazed across the last 4000 years – that a feudal oligarchy does not invest in productive capacity.

Nor does it spend much on goods or services that have large multiplier effects (that give middle class wage earners a chance to keep money moving). Instead, aristocrats have always tended to put their extra wealth into rentier (or passive rent-seeking) property, or else parasitic-crony-vampiric cheating through abuse of state power. Do not let so-called “tea party” confederate lackeys divert you. The U.S. Revolution was against a King and Parliament and royal cronies who commanded all American commerce to pass through their ports and docks and stores, who demanded that consumer goods like tea be sold through monopolies and even paper be stamped to ensure it came from a royal pal. Try actually reading the Declaration of Independence. “Taxation without representation” was about how an oligarchy controlled Parliament through jiggered districts and cheating, and used that power to funnel wealth upward.

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“The gravy train is running out of steam..”

Ecology: The Keystone Science (Hawes)

A missing piece from most critiques of modern capitalism revolves around the misunderstanding of ecology. To put it bluntly, there will be no squaring the circle of mass industrial civilization and an inhabitable Earth. There is no way for energy and resource use, along with all the strife, warfare, and poverty that comes along with it, to continue under the business as usual model that contemporary Western nations operate under. There is also the problem of constructing millions of solar panels and gigantic wind farms to attempt to bring the entire world’s population to a middle class existence based on a North American, or even European levels of energy use.

All of the hypothetical robots and artificial intelligence to be constructed for such a mega-endeavor needed to enact such a project would at least initially rely on fossil fuels and metals plundered from the planet, and only lead to more rapacious destruction of the world. The dominant technological model is utterly delusional. Here I would urge each of us to consider our “human nature” (a problematic term, no doubt) and the costs and the manner of the work involved: if each of us had to kill a cow for food, would we? If each of us had to mine or blast a mountain for coal or iron, or even for a wind turbine, would we do it? If each of us had to drill an oil well or bulldoze land for a gigantic solar array next to many endangered species or a threatened coral reef, would we?

My guess would be no, for the vast majority of the population. Instead, we employ corporations and specialists to carry out the dirty work in the fossil fuel industries and animal slaughtering, to name just a few. Most of us in the West have reaped the benefits of such atrocities for the past few centuries of the industrial revolution. That era is coming to a close, and there’s no turning back. The gravy train is running out of steam, and our age of comfort and the enslavement of a global proletariat to produce and gift-wrap our extravagances will hopefully be ending shortly, too. Some may romanticize loggers, factory workers, oil drillers, coal miners, or steel foundries but the chance is less than a needle through a camel’s eye that those jobs are coming back in a significant way.

Overpopulation in much of the world continues to put strain upon habitat and farmlands to provide for the Earth’s 7.5 billion and growing humans. Tragically, many with the most influence on the Left today, such as Sanders, Corbyn, and Melenchon want to preserve industrial civilization. Theirs is an over-sentimental outlook which warps their thinking to want to prop up a dying model in order to redistribute wealth to the poor and working classes. Empathy for the less fortunate is no doubt a good thing, but the fact remains that the real wealth lies in our planet’s natural resources, not an artificial economy, and its ability to regenerate and provide the fertile ground upon which we all rely. If we follow their narrow path, we are doomed.

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Happy 4th of July, Zuck.

Facebook Flags, Removes Declaration of Independence Text as Hate Speech (Rea.)

America’s founding document might be too politically incorrect for Facebook, which flagged and removed a post consisting almost entirely of text from the Declaration of Independence. The excerpt, posted by a small community newspaper in Texas, apparently violated the social media site’s policies against hate speech. Since June 24, the Liberty County Vindicator of Liberty County, Texas, has been sharing daily excerpts from the declaration in the run up to July Fourth. The idea was to encourage historical literacy among the Vindicator’s readers. The first nine such posts of the project went up without incident.

“But part 10,” writes Vindicator managing editor Casey Stinnett, “did not appear. Instead, The Vindicator received a notice from Facebook saying that the post ‘goes against our standards on hate speech.'” The post in question contained paragraphs 27 through 31 of the Declaration of Independence, the grievance section of the document wherein the put-upon colonists detail all the irreconcilable differences they have with King George III. Stinnett says that he cannot be sure which exact grievance ran afoul of Facebook’s policy, but he assumes that it’s paragraph 31, which excoriates the King for inciting “domestic insurrections amongst us, and has endeavored to bring on the inhabitants of our frontiers, the merciless Indian Savages.”

The removal of the post was an automated action, and Stinnett sent a “feedback message” to Facebook with the hopes of reaching a human being who could then exempt the Declaration of Independence from its hate speech restrictions. Fearful that sharing more of the text might trigger the deletion of its Facebook page, The Vindicator has suspended its serialization of the declaration. In his article, Stinnett is remarkably sanguine about this censorship. While unhappy about the decision, he reminds readers “that Facebook is a business corporation, not the government, and as such it is allowed to restrict use of its services as long as those restrictions do not violate any laws. Plus, The Vindicator is using Facebook for free, so the newspaper has little grounds for complaint other than the silliness of it.”

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Time to place a bet that Brexit will not happen.

Theresa May To Pitch ‘Softest Possible Brexit’ Plan (R.)

British Prime Minister Theresa May will present to her team a new proposal for trade with the European Union that in effect comprises the “softest possible Brexit”, ITV’s political editor reported on Tuesday, citing sources. Britain’s exit from the bloc next year will mark its biggest trading and foreign policy shift in almost 50 years. But May has struggled to unite pro- and anti-Brexit camps in her cabinet and party around a plan for future trade with the EU. So far, May’s advisers have come up with two options, neither of which have the full support of her party. Both have already been dismissed in principle by EU officials.

With the clock ticking toward a March departure date and passions running high, May is holding a meeting of senior ministers on Friday at which she will pitch a compromise third option, ITV political editor Robert Peston said. She will ask her cabinet to back a plan that would see Britain collect duties on imports at the rate of the EU’s common customs tariff, in effect making Britain the EU’s tax collector, according to Peston. May and her officials believe this would avoid the need for border checks between the Republic of Ireland and Northern Ireland, Peston wrote in a Facebook post.

Opposition lawmaker Hilary Benn, who chairs parliament’s Brexit committee, said he thought it was “unlikely that the EU will agree to outsource the collection of its own tax revenues to a third country”. Peston also said May’s proposal would include IT and camera technology to help reduce bureaucracy around the border, as well as British alignment with EU standards for goods and agricultural products. On services, which make up the bulk of Britain’s economy, Peston said May wants to offer the EU preferential rights for its citizens who want to live and work in Britain, in exchange for better access to the EU’s services market.

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Thatcher on steroids.

UK Government ‘Will Miss Fuel Poverty Target By More Than Six Decades’ (G.)

The government will miss a key fuel poverty target by more than half a century at the current rate homes are being insulated and upgraded, a leading thinktank has warned. Ministers are drastically off course on ensuring as many fuel-poor homes – those which people cannot afford to keep adequately heated – as possible are upgraded to energy efficiency band C by 2030 in England, according to the IPPR. The target will not be met by 2091 at the earliest, a report by the thinktank found. England has about 2.5m fuel-poor households, and the hardship they face paying energy bills is set to rise this year because of price hikes.

“At its current rate of delivery, hundreds of thousands of fuel-poor households will be left out in the cold until the end of the century,” said Luke Murphy, associate director for energy, climate, housing and infrastructure at IPPR. The thinktank said the main scheme for tackling the problem – the energy companies obligation (ECO) – was not working, and called on the government to reform it. It is estimated only 11% fuel-poor homes had reached band C by 2017, up from 8% in 2015. The IPPR looked at the rate that energy efficiency measures were installed under the ECO between April 2017, when the scheme was rebooted, and February 2018.

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Give me a break.

‘Unknown Substance’ Leaves Pair Critically Ill In Salisbury Hospital (G.)

A major incident has been declared in Wiltshire after it was suspected two people might have been exposed to an unknown substance in Amesbury. The man and woman, both in their 40s, were in a critical condition at Salisbury district hospital, Wiltshire police said. A number of scenes in the Amesbury and Salisbury area were cordoned off as a precaution, although the force said it was not yet clear if they were the victims of a crime. One of the sites cordoned off and guarded by three officers was the town’s baptist church, a modern red brick building, a few minutes’ drive away from the address where the man and woman were found.

Local radio station Spire FM reported that Queen Elizabeth Gardens in the centre of Salisbury had also been sealed off as part of the investigation. Public Health England (PHE) advised that it did not believe there to be a “significant health risk” to the wider public, although its advice was being continually assessed. The incident comes exactly four months after the former Russian spy Sergei Skripal and his daughter, Yulia, were left poisoned on 4 March by a suspected military nerve agent in Salisbury, around eight miles from Amesbury. Police said the man and woman were found unconscious at an address in Muggleton Road on Saturday evening and it was initially believed that they had taken illegal drugs, however further tests were being carried out.

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Absolutely nobody.

As The State Is Dismantled, Who Will Save Britain’s Wildlife? (Monbiot)

It feels like the collapse of the administrative state – and this is before Brexit. One government agency after another is losing its budget, its power and its expertise. The result, for corporations and the very rich, is freedom from the restraint of law, freedom from the decencies they owe to other people, freedom from democracy. The public protections that constrain their behaviour are being dismantled. An example is the cascading decline in the protection of wildlife and environmental quality. The bodies charged with defending the living world have been so enfeebled that they now scarcely exist as independent entities. Natural England, for example, has been reduced to a nodding dog in the government’s rear window.

Its collapse as an autonomous agency is illuminated by the case that will be heard next week in the high court, where two ecologists, Tom Langton and Dominic Woodfield, are challenging its facilitation of the badger cull. That the cull is a senseless waste of life and money is well established, but this is only one of the issues being tested. Another is that Natural England, which is supposed to assess whether the shooting of badgers causes wider environmental harm, appears incapable of discharging its duties.

As badger killing spreads across England, it intrudes upon ever more wildlife sites, some of which protect animals that are highly sensitive to disturbance. Natural England is supposed to determine whether allowing hunters to move through these places at night and fire their guns has a detrimental effect on other wildlife, and what the impact of removing badgers from these ecosystems might be. The claimants allege that it has approved the shooting without meaningful assessments.

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Sadiq Khan and Ada Colau, mayors of London and Barcelona. Don’t understand that social housing doesn’t solve the problem.

City Properties Should Be Homes For People First – Not Investments (G.)

For a number of years, cities around the world have been facing increasingly global and aggressive speculation in their property markets – from speculators who see housing in our cities as an asset from which to profit, rather than homes for the people we represent. In many cases, speculators take decisions from thousands of miles away. Yet for us their impact on the life and soul of our cities is very close to home. Our city centres risk being hollowed out as vibrant communities are displaced, local shops are closed, and the cost of housing rises exorbitantly. Our community groups and local government, as the part of civic life closest to local people and the most sensitive to their everyday problems, have often been the first to warn of the risks that these practices bring with them regarding the very survival of our cities.

For city leaders to be able to tackle this problem, they urgently need greater resources and powers both to increase their stocks of social-rented and other genuinely affordable housing and to strengthen tenants’ rights. Cities are not simply a collection of buildings, streets and squares. They are also the sum of their people. They are the ones who help create social ties, build communities and evolve into the places where we are so proud to live.

That is why we are determined to change the way that housing works in the cities we represent. We are building more social-rented and other genuinely affordable homes, doing all we can to strengthen the rights of tenants, and clamping down on bad practices of developers and landlords wherever we are able to. But we face a complex problem and one that operates at a global level. We still lack the powers and resources that would allow us properly to regulate the housing market, to protect tenants’ rights to remain in their homes, and to make homelessness and rough sleeping things of the past.

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Punished for supporting Assange?!

Ecuador Wants Ex-President Correa Extradited (DW)

Ecuador requested an Interpol red notice for ex-President Rafael Correa on Tuesday, hoping to have him extradited from Belgium. Correa claims the decision to request his detention and extradition from Belgium are part of an attempt by his former ally, the current president Lenin Moreno, to humiliate him and make him suffer. Correa had been ordered by Ecuadorean Judge Daniella Camacho to present himself before an Ecuadorean court every two weeks as part of the proceedings into the attempted kidnapping in Colombia of former opposition lawmaker Fernando Balda in 2012.

The former premier, whose wife is Belgian, has been living in Belgium since July last year, and has reported to the consulate in Brussels every 15 days starting June 2. On Tuesday, the judge claimed her orders for Correa to present himself to a court had been violated. According to a statement on Twitter, the public prosecutor requested the pre-trial detention of Correa for non-compliance. He called for Interpol to be notified through a red alert for Correa’s capture and extradition.

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Our waters are for dumping garbage.

Most Of Europe’s Rivers And Lakes Fail Water Quality Tests (G.)

The vast majority of Europe’s rivers, lakes and estuaries have failed to meet minimum ecological standards for habitat degradation and pollution, according to a damning new report. Only 40% of surface water bodies surveyed by the European Environmental Agency (EEA) were found to be in a good ecological state, despite EU laws and biodiversity protocols. England was one of the poorer performers to emerge from the State of Our Waters report, which studied 130,000 waterways. The EU’s environment commissioner, Karmenu Vella, said there had been a slight improvement in freshwater quality since 2010. “But much more needs to be done before all lakes, rivers, coastal waters and groundwater bodies are in good status,” he added. “Tackling pollution from agriculture, industry and households requires joint efforts from all water users throughout Europe.”

Scotland dramatically outperformed England in the clean water stocktake which covers the 2010-15 period, with water standards similar to much of Scandinavia. Precise comparisons are difficult as reporting methodologies vary across Europe but water quality in England was in the bottom half of the European table, and had deteriorated since the last stocktake in 2010. Peter Kristensen, the report’s lead author told the Guardian that higher population densities, more intensive agricultural practices, and better monitoring of waterways had all contributed to the result. “England is comparable to countries in central Europe with a high proportion of water bodies failing to reach good status,” he said. “The situation is much better in Scotland, where only around 45% of sites failed [to meet minimum standards].”

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It’s actually getting worse.

More Than 200 Migrants Drown In Mediterranean In Three Days (G.)

More than 200 migrants have drowned at sea in the Mediterranean in the past three days, taking the death toll for the year to more than 1,000 and prompting fears that human traffickers are taking greater risks because of a crackdown imposed by the Italian government and the Libyan coastguard. The UN refugee agency in Tripoli reported on Monday that 276 refugees and migrants were disembarked in the Libyan capital on Monday, including 16 survivors of a boat carrying 130 people, of whom 114 were still missing at sea. Further shipwrecks were found at the weekend. On Tuesday the Libyan coastguard reported a further seven deaths and a further 123 migrants rescued.

The 1,000 deaths landmark was reached on 1 July. It is the fourth year in succession that more than 1,000 migrants have died trying to reach Europe via the Mediterranean Sea. Othman Belbeisi, the chief of mission in Libya at the International Organization for Migration (IOM), claimed the “alarming increase” in deaths at sea was out of the ordinary. “Smugglers are exploiting the desperation of migrants to leave before there are further crackdowns on Mediterranean crossings by Europe,” he said. Overall the number of migrants reaching Italy by sea is down on last year’s figures, but the proportion of those trying to reach Italy that are drowning is rising, prompting claims that the stricter Italian government policy is to blame.

Figures prepared by Matteo Villa, a research fellow at the Italian thinktank ISPI, show that so far in 2018 only half of those leaving Libya have made it to Europe, down from 86% last year. The data shows 44% have been brought back by the Libyan coastguard, compared with 12% last year. A total of 4.5% died or had gone missing, compared with 2.3% last year. But in June, almost one in 10 died or went missing upon departure from the Libyan coast – the highest proportion ever.

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I can’t watch this.

Albatross

In the heart of the great Pacific, a story is taking place that may change the way you see everything. ALBATROSS is offered as a free public artwork. Watch the 3-minute trailer now:

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Jun 292018
 
 June 29, 2018  Posted by at 8:44 am Finance Tagged with: , , , , , , , , , , ,  


Paris 1878

 

Everyone’s Got A Plan (Roberts)
How Much Have Global Equities Tumbled Since 2018 Peak? (HE)
Debt For US Corporations Tops $6.3 Trillion (CNBC)
Deutsche Bank Fails Fed Stress Test, Three US Lenders Stumble (R.)
Corporate Brexodus Begins as “No-Deal” Brexit Looms (DQ)
How Merkel Broke The EU (Pol.eu)
EU Leaders Hail Summit Victory On Migration But Details Scant (G.)
The Globalising Wall (Danae Stratou, Yanis Varoufakis)
The Living World Is Dying Of Consumption (Monbiot)
90% Of Plastic Polluting Our Oceans Comes From Just 10 Rivers (Wef)

 

 

Until they get punched in the face.

Everyone’s Got A Plan (Roberts)

[..] much of the rally since the 2009 recessionary lows has been an influence of outside factors. Interest rates are low because of the Federal Reserve’s actions, corporate profitability is high due to share repurchases, accounting rule changes following the financial crisis, and ongoing wage suppression. But now, all of that is beginning to change. Interest rates are rising, the yield spread is flattening, and Central Banks globally are “beginning the end” of the “Quantitative Easing” experiment.

This is no small matter, although it is being dismissed as such. There has been a direct correlation between the “equity bull market” and the expansion of the Fed’s balance sheet. Yet, much to the Fed’s dismay, little of the asset surge translated into actual economic growth. But now, that support is being withdrawn and as such the market, unsurprisingly, has run into trouble. However, such shouldn’t matter if the economy, which ultimately drives earnings, is indeed firing on all cylinders as is commonly stated.

While corporate profitability has surged since the financial crisis, those profits have come at the expense of employees. Since 2009, wages for “non-supervisory employees,” which is roughly 83% of the current workforce, is lower today than at the turn of the century. The decline in economic growth epitomizes the problem that corporations face today in trying to maintain profitability. The chart below shows corporate profits as a percentage of GDP relative to the annual change in GDP. As you will see the last time that corporate profits diverged from GDP it was unable to sustain that divergence for long and economic growth subsequently declined with profits.

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That was fast.

How Much Have Global Equities Tumbled Since 2018 Peak? (HE)

-$8,700,000,000,00. That’s $8.7 trillion… From the 2018 peak, world equity indices are down -10% from $87 trillion in market capitalization to $78.6 trillion. Below are the top-10 largest drawdowns in country-specific equity markets from the 1/29 peak in global equities:
Venezuelan: -77%
Luxemborg: -54%
Argentina: -44%
Turkey: -32%
Brazil: -28%
Kazakhstan: -25%
Poland: -25%
Hungary: -24%
South Africa: -23%
China: -21%

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“..cash-to-debt ratios more similar to those of speculative issuers..”

Debt For US Corporations Tops $6.3 Trillion (CNBC)

The debt load for U.S. corporations has reached a record $6.3 trillion, according to S&P Global. The good news is U.S. companies also have a record $2.1 trillion in cash to service that debt. The bad news is most of that cash is in the hands of a few giant companies. And the riskiest borrowers are more leveraged than they were even during the financial crisis, according to S&P’s analysis, which looked at 2017 year-end balance sheets for non-financial corporations. On first glance, total debt has risen roughly $2.7 trillion over the past five years, with cash as a percentage of debt hovering around 33% for U.S. companies, flat compared to 2016. But removing the top 25 cash holders from the equation paints a grimmer picture.

Speculative-grade borrowers, for example, reached a new record-low cash-to-debt ratio of just 12% in 2017, below the 14% reported in 2008 during the crisis. “These borrowers have $8 of debt for every $1 of cash,” wrote Andrew Chang, primary credit analyst at S&P Global. “We note these borrowers, many sponsor-owned, borrowed significant amounts under extremely favourable terms in a benign credit market to finance their buyouts at an ever-increasing purchase multiple without effectively improving their liquidity profiles.” The trend persists even among highly rated borrowers: More than 450 investment-grade companies not among the top 1% of cash-rich issuers have cash-to-debt ratios more similar to those of speculative issuers, hovering around 21%.

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Add the derivatives the BOE warned about to this mess.

Deutsche Bank Fails Fed Stress Test, Three US Lenders Stumble (R.)

Deutsche Bank’s U.S. subsidiary failed on Thursday the second part of the U.S. Federal Reserve’s annual stress tests due to “widespread and critical deficiencies” in the bank’s capital planning controls. The Fed board’s unanimous objection to Deutsche Bank’s U.S. capital plan marks another blow for the German lender, sending its shares down 1% after hours. Its financial health globally has been under intense scrutiny after S&P cut its rating and questioned its plan to return to profitability. The Fed also placed conditions on three banks that passed the test. Goldman Sachs and Morgan Stanley cannot increase their capital distributions and State Street Corp must improve its counterparty risk management and analysis, the Fed said.

Deutsche Bank last week easily cleared the Fed’s easier first hurdle that measures its capital levels against a severe recession, the strictest ever run by the Fed. Thursday’s second test focuses on how the bank’s plan for that capital, such as dividend payouts and investments, stands up against the harsh scenarios. “Concerns include material weaknesses in the firm’s data capabilities and controls supporting its capital planning process, as well as weaknesses in its approaches and assumptions used to forecast revenues and losses under stress,” the Fed said in a statement. While failing the U.S. stress test would not likely affect the bank’s ability to pay dividends to shareholders, it will require Deutsche Bank to make substantial investment in technology, operations, risk management and personnel, as well as changes to its governance.

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Businesses can no longer wait. It’s not Brexit itself, it’s the inability to make decisions.

Corporate Brexodus Begins as “No-Deal” Brexit Looms (DQ)

“Exit” day is scheduled to begin on March 29, 2019, at 11 p.m. GMT. That’s 274 days away, and there’s scant sign of any progress on key sticking points such as the Northern Ireland border, the so-called “passporting” of UK financial services, and a future aviation agreement between the UK and the EU. Whatever the reasons for the potential departures from the UK, one of the things the recent constitutional crisis in Catalonia threw into stark relief is just how fickle and fearful money is, and just how quickly companies — even local ones — will up sticks if political developments in a particular region jeopardize their operations.

International banks and asset managers with large London-based operations are now scrambling to augment their EU outposts to mitigate the loss of passporting rights which enable them to offer financial, advisory and trading services to corporate clients across all EU states with just one local licence. JPMorgan is reportedly looking to expand its office space in Milan, where it already has around 250 staff, while Goldman Sachs is planning to double the number of staff in Frankfurt, which currently stands at 400.

Bank of America is merging its London-based subsidiary with its Dublin-based Irish entity, which will become its main EU base. It has also said it will expand its investment banking activities in Paris and shift some of its London-based back-office operations to Dublin. It is also transferring three of its most senior UK-based bankers to Paris in one of the most senior Brexit staff redeployments to date by a major bank, according to Reuters. But moving key operations and staff across the channel is a costly, complex undertaking. Many companies would still prefer to play a waiting game, and most of the moves that have taken place so far have involved small parts of firms’ operations.

But according to the European Banking Authority (EBA), which itself is relocating from London to Paris, time is running out. In an opinion paper released on Monday, it warned that City of London authorities and many UK-based banks were far from ready for a no-deal scenario. “Financial stability should not be put at risk because financial institutions are trying to avoid costs,” the paper says. In a remarkable coincidence Monday also saw a separate warning from the ECB that any banks that haven’t submitted their licence applications for operating in the Eurozone by the end of the month could find themselves without a permit by the time of Brexit.

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It’ll be her legacy.

How Merkel Broke The EU (Pol.eu)

Angela Merkel’s response to Europe’s refugee crisis has earned the German leader a reputation the world over as a modern-day Jeanne d’Arc, a bold defender of Western ideals against a populist onslaught. “I have immeasurable respect for Angela Merkel,” former U.S. Vice President Al Gore said during a visit to Berlin this week. “I think she’s an outstanding leader faced with a very difficult set of challenges.” While that view persists across much of the West, at home, questions about her leadership are growing louder by the day. Beyond the domestic concerns, more and more of Merkel’s erstwhile allies are asking a question still considered sacrilegious among much of Germany’s establishment: Is she tearing Europe apart?

“Dear Angela Merkel, after nearly 13 years as chancellor, the only thing Europe has left for you is animosity,” Malte Pieper, a correspondent of the normally staid German public broadcaster ARD said in a commentary this week that created waves in Berlin. “All the meetings in recent months have illustrated this. Help to finally stop Europe from veering toward division instead of unity! Make room in the chancellery for a successor.” The German leader has what could well be her last chance to prove her critics wrong at this week’s European Council summit in Brussels. She is under intense pressure to return home with a deal on refugees — one that would allow her Bavarian partners, CSU, who face a tough election campaign, to claim victory in a protracted standoff over the potent question of asylum policy.

The trick will be to win such a deal without further alienating the rest of Europe. Trouble is, Merkel is relying on an argument that is losing its resonance. What’s really at stake, Merkel has suggested time and again, isn’t Germany’s refugee policy, but the very survival of the EU. “Europe has to stay together,” she said this month in an attempt to deflect the attacks against her. “Especially in this situation, in which Europe is in a very fragile position, it’s very, very important to me that Germany doesn’t act unilaterally.”

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This is so absurd it’s hard to believe. They haven’t decided on anything but have their PR people take over. Think they can buy themselves camps in Egypt or Morocco. That money can solve the issue.

EU Leaders Hail Summit Victory On Migration But Details Scant (G.)

European leaders papered over the divisions on migration with a promise that some EU countries would take in migrants rescued from the Mediterranean sea, after marathon talks at an EU summit lasting nearly 10 hours. Announcing the end of tense summit talks shortly before dawn, the head of the European Council, Donald Tusk, tweeted that EU leaders had reached an agreement, including on migration. Hours earlier that outcome had been in doubt, when Italy threatened to veto the entire text, unless other EU states did more to help with people arriving on Italian shores. Opposition from Poland, Hungary and other central European states to any hint of mandatory action meant talks dragged through the night.

The euro jumped 0.6% on news of the deal, while French president Emmanuel Macron declared that European cooperation “has won the day”. Italy’s new prime minister, Giuseppe Conte, said: “We are satisfied. It was a long negotiation but from today Italy is no longer alone.” But the bloc dodged an agreement on controversial refugee quotas, as a quartet of central European countries resisted language on EU-wide responsibility. The outcome is already being seen as a thin deal. It also looked doubtful whether Angela Merkel has a deal that will secure the future of her coalition government, which has been rocked by disputes over handling refugees. On leaving the summit, the German chancellor conceded that “we still have a lot of work to do to bridge the different views”, but said it was “a good signal” that the EU had agreed a common text.

Merkel had warned on Thursday that the future of the European Union hinged on whether it could find answers to the “vital questions” posed by migration. [..] Finding a more consensual note, EU leaders called for migrant processing centres in north African countries. They agreed to “swiftly explore the concept of regional platforms in close cooperation” with non-EU countries and the UN refugee agency and the International Organisation for Migration, also a UN-backed agency. In essence, this means migrant processing centres in countries, such as Algeria, Egypt, Libya, Morocco, Niger and Tunisia. EU funds would be available to persuade countries to sign on, but so far no countries have agreed, while a couple have ruled themselves out.

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Varoufakis and his wife on walls, symbolic and real.

The Globalising Wall (Danae Stratou, Yanis Varoufakis)

We were hit by a great paradox: the more globalisation was meant to give reasons for dismantling the dividing lines, the less powerful the forces working to dismantle them were proving. Deepening divisions, patrolled by increasingly merciless guards, and convoluted architectural techniques, roads, tunnels and fortifications, appeared to us the homage that globalisation was paying to organised misanthropy. In this era of globalised financialisation, divisions were not what they used to be. In times past they simply fended off the enemy, and lightly imprinted the empires’ footprint on the land.

Before the ‘discovery’ of the autonomous individual, the ancient polis dreamt of demolishing its walls or, at least, of never having to keep its gates closed. When a son of an ancient Greek city won an Olympics event, the elders ordered the demolition of part of the city walls. Only at times of crisis or degeneracy were the gates ordered shut. Unlike today in North Korea or the southern states of the US, open gates were, then, a symbol of power. Hadrian and the Chinese emperors built great walls, but never with the intention of freezing human movement. They were porous walls, mere symbols of their empires’ self-imposed limits, and a form of early warning system.

[..] American deficits, even after they returned to their pre-2007 levels, could no longer stabilise globalisation. The reason? Socialist largesse for the few, and ruthless market forces for the many, damaged aggregate demand, repressed the entrepreneurs’ sales expectations, restricted investment in good jobs, diminished earnings for the many and, surprise surprise, confirmed the entrepreneurs’ pessimism that underpinned low investment and low demand. Adding more liquidity to that mix made not a scintilla of a difference as the problem was not a dearth of liquidity but the dearth of demand. Abysmal inequality was merely the symptom.

Wall Street, Walmart and walled citizens – those had been globalisation’s symbolic foundations before 2008. Today, all three have become a drag on globalisation. Banks are failing to maintain the capital movements that globalisation used to rely on, as total financial movements are less than a quarter of what they were in early 2007. Walmart, whose ideology of cheapness symbolised the devaluation of global labour and the gutting of traditional local businesses, is itself squeezed by the Amazon model, whose ultimate effect is a further shrinking of overall spending. Meanwhile, the 3D printer, CAD and AI robots promise to de-globalise – and re-localise – production, denying, in the process, countries like the Philippines and Nigeria the advantage that young populations used to bestow on them during the years of globalisation’s rude health.

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Waste.

The Living World Is Dying Of Consumption (Monbiot)

It felt as disorienting as forgetting my pin number. I stared at the caterpillar, unable to attach a name to it. I don’t think my mental powers are fading: I still possess an eerie capacity to recall facts and figures and memorise long screeds of text. This is a specific loss. As a child and young adult, I delighted in being able to identify almost any wild plant or animal. And now it has gone. This ability has shrivelled from disuse: I can no longer identify them because I can no longer find them. Perhaps this forgetfulness is protective. I have been averting my eyes. Because I cannot bear to see what we have done to nature, I no longer see nature itself; otherwise, the speed of loss would be unendurable.

The collapse can be witnessed from one year to the next. The swift decline of the swift (down 25% in five years) is marked by the loss of the wild screams that, until very recently, filled the skies above my house. My ambition to see the seabird colonies of Shetland and St Kilda has been replaced by the intention never to visit those islands during the breeding season: I could not bear to see the empty cliffs, where populations have crashed by some 90% in the past two decades. I have lived long enough to witness the vanishing of wild mammals, butterflies, mayflies, songbirds and fish that I once feared my grandchildren would not experience: it has all happened faster than even the pessimists predicted.

Walking in the countryside or snorkelling in the sea is now as painful to me as an art lover would find visits to a gallery, if on every occasion another old master had been cut from its frame. The cause of this acceleration is no mystery. The United Nations reports that our use of natural resources has tripled in 40 years. The great expansion of mining, logging, meat production and industrial fishing is cleansing the planet of its wild places and natural wonders. What economists proclaim as progress, ecologists recognise as ruin. This is what has driven the quadrupling of oceanic dead zones since 1950; the “biological annihilation” represented by the astonishing collapse of vertebrate populations; the rush to carve up the last intact forests; the vanishing of coral reefs, glaciers and sea ice; the shrinkage of lakes, the drainage of wetlands. The living world is dying of consumption.

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8 of which are in Asia.

90% Of Plastic Polluting Our Oceans Comes From Just 10 Rivers (Wef)

Over the last decade we have become increasingly alarmed at the amount of plastic in our oceans. More than 8 million tons of it ends up in the ocean every year. If we continue to pollute at this rate, there will be more plastic than fish in the ocean by 2050. But where does all this plastic waste come from? Most of it is washed into the ocean by rivers. And 90% of it comes from just 10 of them, according to a study. By analyzing the waste found in the rivers and surrounding landscape, researchers were able to estimate that just 10 river systems carry 90% of the plastic that ends up in the ocean. Eight of them are in Asia: the Yangtze; Indus; Yellow; Hai He; Ganges; Pearl; Amur; Mekong; and two in Africa – the Nile and the Niger.

“We were able to demonstrate that there is a definite correlation in this respect,” said Dr. Christian Schmidt, one of the authors of the study from the Helmholtz Centre for Environmental Research. “The more waste there is in a catchment area that is not disposed of properly, the more plastic ultimately ends up in the river and takes this route to the sea.” Schmidt and his team found that the quantity of plastic per cubic metre of water was significantly higher in large rivers than in small ones. The rivers all had two things in common; a generally high population living in the surrounding region – sometimes into the hundreds of millions – and a less than ideal waste management process. The Yangtze is Asia’s longest river and also one of world’s most ecologically important rivers.

The river basin is home to almost 500 million people (more than one third of China’s population). It is also the biggest carrier of plastic pollution to the ocean. Recently, however, China has made efforts to curb waste. For years the country had imported millions of tons of recyclable waste from overseas, but a growing recycling burden at home prompted the government to shift its policy. Last year, it ended imports of “foreign garbage”. Recently it extended the ban to metals, saying stopping imports of foreign waste was “a symbolic measure for the creation of an ecological civilization in China”. And this year China has ordered 46 cities to begin sorting waste in order to reach a 35% recycling rate by 2020.

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Jun 272018
 
 June 27, 2018  Posted by at 9:00 am Finance Tagged with: , , , , , , , , , , , ,  


Édouard Vuillard In bed 1891

 

Judge Orders Families Reunited Within 30 Days (AP)
17 US States Sue Trump Administration Over Family Separation (Ind.)
Democrats See Major Upset As Socialist Beats Top-Ranking US Congressman (G.)
How Long Can The Federal Reserve Stave Off the Inevitable? — PCR
Market Drop Prompts Trump To Offer China A Trade War “Olive Branch” (ZH)
US Asset Prices Divorced From Economic Reality More Than Ever (GMM)
IMF Sounds The Alarm Over Junk Bonds (ZH)
France And Germany Will Block May’s Single Market Plan, Says Spain (G.)
Merkel Calls For Direct Deals Between Countries To Fix Migration Crisis (R.)
Misuse Of Opioids Is A ‘Global Epidemic’ -UN (G.)
One Football Pitch Of Forest Lost Every Second In 2017 (G.)
‘There Is No Oak Left’: Are Britain’s Trees Disappearing? (G.)
‘Green Gold’: Pakistan Plants Hundreds Of Millions Of Trees (AFP)

 

 

Reason. The mother and child reunion is only a motion away.

Judge Orders Families Reunited Within 30 Days (AP)

A judge in California has ordered U.S. border authorities to reunite separated families within 30 days. If the children are younger than 5, they must be reunified within 14 days of the order, issued Tuesday. U.S. District Judge Dana Sabraw in San Diego issued the order in a lawsuit by the American Civil Liberties Union. The lawsuit involves a 7-year-old girl who was separated from her Congolese mother and a 14-year-old boy who was separated from his Brazilian mother.

Sabraw also issued a nationwide injunction on future family separations, unless the parent is deemed unfit. More than 2,000 children have been separated from their parents in recent weeks and placed in government-contracted shelters. President Donald Trump last week issued an executive order to stop the separation of families and said parents and children will instead be detained together.

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The ruling above seems to cover this?

17 US States Sue Trump Administration Over Family Separation (Ind.)

Seventeen US states and Washington DC are suing Donald Trump’s administration over its family separation policy at the US border. The lawsuit was filed by 18 Democratic Attorneys General and attempts to force the administration to reunite the approximately 2,000 separated children with their families. California Attorney General Xavier Becerra said in a statement that the policy to detain children away from parents was a “heartless political manoeuvre”. Though Mr Trump signed an executive order last week declaring that families would no longer be separated upon illegal entry into the US, the lawsuit stated the executive order is “so vague and equivocal that it is unclear when or if any changes will actually be made”.

The order did not reverse or end the underlying “zero tolerance” policy announced by US Attorney General Jeff Sessions was not ended. Families can also now be indefinitely detained and the policy still makes seeking asylum in the US a crime. Per US immigration law, people wanting the protected status must enter the US before applying for it. It stated that “family unity” will be maintained “where appropriate and consistent with law and available resources”. “Child internment camps in America…the Trump Administration has hit a new low. President Trump’s indifference towards the human rights of the children and parents who have been ripped away from one another is chilling,” Mr Becerra said.

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The choice of headlines I’ve seen for this looks weird. Someone tweeted a list of corporations that donate to Crowley. Needed a dozen tweets to cover them. Ocasio beat the system. But watch out: the system has now woken up. They never expected to lose. The big guns will now step in. Next up: Cynthia Nixon vs Cuomo. If she can pull that off, we’re in business.

Democrats See Major Upset As Socialist Beats Top-Ranking US Congressman (G.)

Joe Crowley, a 10-term Democrat pegged as his party’s next leader in Congress, lost his party’s New York congressional primary to a 28-year-old socialist, in one of the biggest upsets in recent American political history. With 98% reporting, Alexandria Ocasio-Cortez had 57.5% and Crowley had 42.5%, in a majority minority district that included parts of Queens and the Bronx Ocasio-Cortez, a Puerto-Rican American and former Bernie Sanders volunteer, defeated Crowley in his re-election bid Tuesday night, after hitting the incumbent on his ties to Wall Street and accusing him of being out of touch with his increasingly diverse district.

Crowley, head of the Queens county Democratic party and the fourth-ranking Democrat in the House of Representatives, was considered to be Nancy Pelosi’s likely successor as House speaker if she stepped down. [..] Ocasio-Cortez ran a grassroots campaign and made a surprise visit to the Mexican border on the eve of the election to emphasize her call to abolish the Immigration and Customs Enforcement agency (ICE). In contrast, Crowley was unwilling to go that far, simply calling the agency “fascist”.

Crowley had expressed confidence about the race in private conversations and as one national Democratic strategist told the Guardian: “The Crowley team did not raise red flags or ask allies for help with his primary.” Prior to 2018, Crowley had not even faced a primary since 2004, years before his opponent was even eligible to vote. He had raised over $3m for his campaign, 10 times the amount his opponent had.

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Tariffs on US companies?

How Long Can The Federal Reserve Stave Off the Inevitable? — PCR

When are America’s global corporations and Wall Street going to sit down with President Trump and explain to him that his trade war is not with China but with them? The biggest chunk of America’s trade deficit with China is the offshored production of America’s global corporations. When the corporations bring the products that they produce in China to the US consumer market, the products are classified as imports from China. Six years ago when I was writing The Failure of Laissez Faire Capitalism, I concluded on the evidence that half of US imports from China consist of the offshored production of US corporations. Offshoring is a substantial benefit to US corporations because of much lower labor and compliance costs.

Profits, executive bonuses, and shareholders’ capital gains receive a large boost from offshoring. The costs of these benefits for a few fall on the many—the former American employees who formerly had a middle class income and expectations for their children. In my book, I cited evidence that during the first decade of the 21st century “the US lost 54,621 factories, and manufacturing employment fell by 5 million employees. Over the decade, the number of larger factories (those employing 1,000 or more employees) declined by 40 percent. US factories employing 500-1,000 workers declined by 44 percent; those employing between 250-500 workers declined by 37 percent, and those employing between 100-250 workers shrunk by 30 percent.

These losses are net of new start-ups. Not all the losses are due to offshoring. Some are the result of business failures” (p. 100). In other words, to put it in the most simple and clear terms, millions of Americans lost their middle class jobs not because China played unfairly, but because American corporations betrayed the American people and exported their jobs. “Making America great again” means dealing with these corporations, not with China. When Trump learns this, assuming anyone will tell him, will he back off China and take on the American global corporations?

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Mnuchin wants less agressive policies.

Market Drop Prompts Trump To Offer China A Trade War “Olive Branch” (ZH)

One day after the market tanked followed media reports that the Trump administration would pursue new initiatives to limit Chinese investments in US tech industries, on Tuesday the president suggested that he will ease off demands for such new restrictions, and will rely instead on a 1988 law being updated by Congress that authorizes the government to review foreign investments for national security problems. Speaking to reporters at the White House, Trump said that “we have the greatest technology in the world, people come and steal it. We have to protect that and that can be done through CFIUS,” or the Committee on Foreign Investment in the U.S., which traditionally has screened foreign investments to see whether they endanger national security.

Trump also said that the recent WSJ article reporting that the administration was planning two further initiatives, in addition to CFIUS, to prevent Beijing from obtaining advanced U.S. technology, “a bad leak…probably just made up.” Why is this stated policy important? Because according to the WSJ it would represent a potential “olive branch” for Trump in the escalating trade war with China, and a signal that the US is willing to break the tit-for-tat escalation: If Mr. Trump’s decision holds through June 30, when the new policies are scheduled to be announced, it would represent a significant backing away from threats the president has made against China and a possible olive branch to Beijing before the July 6 impositon of tariffs on $34 billion of Chinese goods.

Meanwhile, lawmakers who have worked on a CFIUS reform bill have also been arguing in administration meetings that additional investment restrictions weren’t necessary given changes being made to CFIUS. Separately, the report notes that relying mainly on CFIUS — if that is the final decision — would be a big victory for Treasury Secretary Steven Mnuchin, National Economic Council Director Larry Kudlow and others who have tried to tamp down the burgeoning trade battle with China.

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Obese tails.

US Asset Prices Divorced From Economic Reality More Than Ever (GMM)

You would never know it listening to the market cheerleaders but asset prices, both real and financial, are, once again, at extreme valuation levels relative to the trend economy. The valuation reality coupled with the prevailing, but false, “don’t worry” market narrative sets us up for another major financial crisis. A third major crisis in 20 years? These are only supposed to happen once in every 100 or 1,000 or 10,000 years, so say the rocket scientists. Blame it on fat obese tails. The chart below illustrates that household net worth, as measured by real and financial assets minus liabilities, which just hit a record high at around $102 trillion, is, once again, totally divorced from the economy.

Note that one of the reasons why the highest level U.S. policymakers missed the last financial crisis is because they were too focused on this indicator, which also hit a record high in Q3 2007. They failed, or chose not to see, the massive leverage as the root cause driving up assets prices. Their error was twofold: 1) not fully recognizing or believing the risk of asymmetric mark-to-market, where asset prices are variable, while liabilities remain fixed, and 2) not understanding the economy had morphed into a giant asset-driven feedback loop, where the wealth effect drives growth (both consumption and investment confidence), which drives asset prices, which drives the wealth effect. Wash, rinse, repeat.

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Well, how timely.

IMF Sounds The Alarm Over Junk Bonds (ZH)

Ever since the start of 2018, an odd divergence has emerged in credit markets, where Investment Grade bonds have seen their spreads leak progressively wider, hitting levels not seen in 2 years, while the bid for higher yielding, and much more risky, junk bond debt has been seemingly relentless, with high yield spreads near all time lows. To be sure, many reasons have been offered, with Bank of America suggesting that IG weakness is “due to supply pressures in an environment of reduced demand that began in March and extended through last week, plus the Italian situation, which is about systemic risks running through the global IG financial system.”

Meanwhile, it believes the strength in HY is mostly due to the lack of supply of higher yielding paper. Whatever the suggested reasons, however, the underlying causes are two: an environment of artificially low interest rates created by central banks, and unyielding, pardon the pun, investor euphoria. In other words: a multi-year credit boom. And while the Fed’s “macroprudential regulation team” appears to have zero problems with what is going on in the world of junk bonds, the IMF has sounded the alarm on the troubling developments in junk bond land in particular, and capital markets in general.

In its The Chart of the Week, the IMF Blog shows the impact of a bad credit boom – one which the fund defines as followed by slower economic growth or even a recession – on economic growth in the years that follow. But first, it ask a basic question: what makes for a bad boom? The IMF’s answer: it is fueled by excessive optimism among investors. When the economy is doing well and everybody seems to be making money, some investors assume that the good times will never end. They take on more risk than they can reasonably expect to handle.

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Really, guys, you should send her packing. The damage accelerates.

France And Germany Will Block May’s Single Market Plan, Says Spain (G.)

Theresa May’s plan to protect British industry by keeping the UK in a single market for goods without respecting the free movement of people after Brexit will be rejected by an “angry” France and Germany, despite some sympathy within the EU to Downing Street’s cause, Spain’s foreign minister has said. The new Spanish government would also block such a political fix, Josep Borrell told the Guardian, ahead of both a summit of leaders in Brussels and a summer tour by the prime minister of EU capitals during which May hopes to convince leaders of her economic case. Of those member states who might see value in a deal on single market access for goods without free movement, Borrell said: “They will not win the battle. They have not enough power. Germany will say no, France will say no, Spain will say no.”

The government has been rocked by a series of warnings from industry, from Airbus to BMW, that companies will move out of the UK unless preferential access to the single market can be secured in the negotiations. Ministers have openly squabbled over how seriously they should take the threats. The business secretary, Greg Clark, urged his cabinet colleagues to “listen with respect” and the health secretary, Jeremy Hunt, called Airbus’s warnings “completely inappropriate”. The prime minister is expected to publish a white paper on the UK’s vision of the future relationship, including a proposal for regulatory alignment on goods, for the benefit of UK industry and European-wide supply chains, shortly after a meeting of the cabinet at Chequers, the prime minister’s country retreat, on 6 July.

UBS survey of 600 companies spells out Brexit “dividend”:
– 35% of companies plan to reduce UK investment post-Brexit
– 41% plan to move a large amount of capacity out of UK
– 42% plan to shift capacity to euro zone

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Too late. No unity.

Merkel Calls For Direct Deals Between Countries To Fix Migration Crisis (R.)

German Chancellor Angela Merkel said she will seek direct deals with separate EU states on migration, conceding the bloc had so far failed to find a joint solution to the issue threatening her government. Sixteen EU leaders met for emergency talks in Brussels hoping to get a deal for the full summit of all 28 states on 28 to 29 June. Ms Merkel said the meeting produced “a lot of goodwill” to resolve differences, but was clear smaller agreements may produce better results. “There will be bilateral and trilateral agreements, how can we help each other, not always wait for all 28 members,” she said.

Since Mediterranean arrivals spiked in 2015, when more than a million refugees and migrants reached the bloc, EU leaders have been at odds over how to handle them. The feud has weakened their unity and undermined Europe’s Schengen free-travel area. Wealthy Germany is where the newly-arrived mostly end up and Merkel is under pressure to curb the numbers. Her coalition partner is pushing for firmer action that could break her government. The talks were “frank and open,” but “we don’t have any concrete consequences or conclusions,” Spanish Prime Minister Pedro Sanchez said. French President Emmanuel Macron offered his backing for Ms Merkel’s proposal , saying the solution should be “European” but it could just be several states together.

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But the profits!

Misuse Of Opioids Is A ‘Global Epidemic’ -UN (G.)

The misuse of pharmaceutical opioids is fast becoming a “global epidemic”, with the largest quantities being seized in African countries for the second year in a row, according to a UN report. While huge attention has been paid to the opioid crisis in the US – where the misuse of prescription drugs like fentanyl dominates – figures released by the United Nations Office on Drugs and Crime has revealed seizures in Africa of opioids now account for 87% of the global total. Unlike in the US, the seizures – concentrated in west, central and north Africa – have largely consisted of the drug tramadol, followed by codeine.

The figures were disclosed in the latest UN world drug report, which noted that opioids were the most harmful global drug trend, accounting for 76% of deaths where drug-use disorders were implicated. The report said that while fentanyl and its analogues remain a problem in North America, tramadol – used to treat moderate and moderate-to-severe pain – has become a growing concern in parts of Africa and Asia. The report added that the global seizure of pharmaceutical opioids in 2016 was 87 tonnes, roughly the same as the quantities of heroin impounded that year.

The figures on pharmaceutical opioids were rivalled by global cocaine manufacture, which the agency said had reached the highest level ever reported in 2016, with an estimated 1,410 tonnes produced. Most of the world’s cocaine comes from Colombia, but the report also showed Africa and Asia emerging as cocaine trafficking and consumption hubs. From 2016-17, global opium production also jumped by 65% to 10,500 tonnes, the highest estimate recorded by the agency since it started monitoring global opium production nearly 20 years ago.

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They convert greenhouse gases into oxygen.

One Football Pitch Of Forest Lost Every Second In 2017 (G.)

The world lost more than one football pitch of forest every second in 2017, according to new data from a global satellite survey, adding up to an area equivalent to the whole of Italy over the year. The scale of tree destruction, much of it done illegally, poses a grave threat to tackling both climate change and the massive global decline in wildlife. The loss in 2017 recorded by Global Forest Watch was 29.4m hectares, the second highest recorded since the monitoring began in 2001. Global tree cover losses have doubled since 2003, while deforestation in crucial tropical rainforest has doubled since 2008. A falling trend in Brazil has been reversed amid political instability and forest destruction has soared in Colombia.

In other key nations, the Democratic Republic of Congo’s vast forests suffered record losses. However, in Indonesia, deforestation dropped 60% in 2017, helped by fewer forest fires and government action. Forest losses are a huge contributor to the carbon emissions driving global warming, about the same as total emissions from the US, which is the world’s second biggest polluter. Deforestation destroys wildlife habitat and is a key reason for populations of wildlife having plunged by half in the last 40 years, starting a sixth mass extinction.

“The main reason tropical forests are disappearing is not a mystery – vast areas continue to be cleared for soy, beef, palm oil, timber, and other globally traded commodities,” said Frances Seymour at the World Resources Institute, which produces Global Forest Watch with its partners. “Much of this clearing is illegal and linked to corruption.” Just 2% of the funding for climate action goes towards forest and land protection, Seymour said, despite the protection of forests having the potential to provide a third of the global emissions cuts needed by 2030. “This is truly an urgent issue that should be getting more attention,” she said. “We are trying to put out a house fire with a teaspoon.”

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No, trees are not an industrial resource. They are so much more.

‘There Is No Oak Left’: Are Britain’s Trees Disappearing? (G.)

England is running out of oak. The last of the trees planted by the Victorians are now being harvested, and in the intervening century so few have been grown – and fewer still grown in the right conditions for making timber – that imports, mostly from the US and Europe, are the only answer. “We are now using the oaks our ancestors planted, and there has been no oak coming up to replace it,” says Mike Tustin, chartered forester at John Clegg and Co, the woodland arm of estate agents Strutt and Parker. “There is no oak left in England. There just is no more.” Earlier this month, the government appointed the first “tree champion”, who will spearhead its plans to grow 11 million new trees, and conserve existing forests and urban trees.

Sir William Worsley, currently chairman of the National Forest Company, has been given the task of overseeing trees in England and Wales, including England’s iconic national tree, and ensuring that trees are not felled unnecessarily. Worsley is a former chief of the Country Land and Business Association, which represents landowners and rural businesses. Trees were once fundamental to the British economy, from the days of Magna Carta, a large section of which concerned forestry rights, to the “Hearts of Oak” centuries of the empire-building Royal Navy, up to more recent times when millions of homes were needed, and the Forestry Commission was set up immediately after the First World War to grow the material to make them, while providing jobs for returning soldiers.

Today, forestry is a tiny business and only about 13% of the UK is covered in forest, a vast improvement on the 5% after the First World War, but far less than the European average of more than 30%.

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That’s the spirit.

‘Green Gold’: Pakistan Plants Hundreds Of Millions Of Trees (AFP)

The change is drastic: around the region of Heroshah, previously arid hills are now covered with forest as far as the horizon. In northwestern Pakistan, hundreds of millions of trees have been planted to fight deforestation. In 2015 and 2016 some 16,000 labourers planted more than 900,000 fast-growing eucalyptus trees at regular, geometric intervals in Heroshah – and the titanic task is just a fraction of the effort across the province of Khyber Pakhtunkhwa. “Before it was completely burnt land. Now they have green gold in their hands,” commented forest manager Pervaiz Manan as he displayed pictures of the site previously, when only sparse blades of tall grass interrupted the monotonous landscape.

The new trees will reinvigorate the area’s scenic beauty, act as a control against erosion, help mitigate climate change, decrease the chances of floods and increase the chances of precipitation, says Manan, who oversaw the revegetation of Heroshah. Residents also see them as an economic boost – which, officials hope, will deter them from cutting the new growth down to use as firewood in a region where electricity can be sparse. “Now our hills are useful, our fields became useful,” says driver Ajbir Shah. “It is a huge benefit for us.” Further north, in Khyber Pakhtunkhwa’s Swat, many of the high valleys were denuded by the Pakistani Taliban during their reign from 2006 to 2009.

Now they are covered in pine saplings. “You can’t walk without stepping on a seedling,” smiles Yusufa Khan, another forest department worker. The Heroshah and Swat plantations are part of the “Billion Tree Tsunami”, a provincial government programme that has seen a total of 300 million trees of 42 different species planted across Khyber Pakhtunkhwa.

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Jun 262018
 
 June 26, 2018  Posted by at 8:01 pm Finance Tagged with: , , , , , , , , , ,  


Juan de la Corte (1597–1660) Lot And His Daughters Escaping From The Destruction Of Sodom And Gomorrah

 

There is no migration crisis, said an article in Toronto’s Globe and Mail a few days ago. French President Emmanuel Macron followed up over the weekend with “there is no migrant crisis”. Really? If this is not a crisis, what is? Yes, numbers of refugees landing in Europe are down from 2015. But it’s not a numbers game. It’s about people.

If Angela Merkel’s political career is forced to a close next week because the EU cannot agree on a unified refugee policy, will they call it a crisis then? Oh wait, both Macron and the G&M agree that there is a crisis, just not a migration one. No, “the crisis is political opportunism”.

But can the crisis be placed squarely on Trump and Italy’s Salvini, or is perhaps what led to their popularity partly to blame for that popularity? Salvini didn’t bomb Syria, Iraq, Afghanistan and Libya, nor did Trump cause the mayhem in Honduras, Guatemala and El Salvador, which is where most migrants come from. That was Bush, Obama, Billary, Blair, Cameron and their ilk. And before them Kissinger etc.

So who are the political opportunists exactly? “We” have exploited all of Africa, the Middle East and South and Central America for so long and so disgustingly thoroughly that it’s today the zenith of misleading arrogance to blame the consequences on Salvini, Trump and other right wingers.

You could see them coming from miles away. You created them. You literally built the space they occupy. What is happening is that the chaos we created in all these places is now boomeranging right back at us, on our own borders. And we’re not getting out of that chaos until we stop creating it in places where we don’t live. Until we allow people a future where they are born.

No, you’re right, Trump is not going to do that. His role is to disrupt the existing system that has relied on creating chaos for decades (or even longer, if you will). Salvini will play that part in Europe, by blowing up the EU. And after they’ve gone, we must find better people than them, but also better than all the rest that today fill our political classes, if we’re to turn chaos into order.

We have gathered our wealth through theft and murder. Untold millions have died and suffered for our riches. It’s time we acknowledge that. Just like it’s time that we acknowledge just how we choose our political “leaders”. Who all come from a tested model that relies on chaos and obfuscation. Because if we don’t, the chaos will continue and intensify.

Angela Merkel has created a problem for which she now has no possible solution anymore. She’s even allegedly trying to reach quid pro quo deals with Albania, Serbia and Skopje: take 100,000 or so refugees and you can become an EU member. The last gasps of Mutti. Merkel will leave behind a union about to implode. From a refugee crisis as well as a financial crisis. Thanks, Angela.

She should never have left Greece in its own double financial and refugee crisis; she should have helped to make it strong. That’s the de facto task of Europe’s leadership, even as it’s crazy that one country gets to call all the important shots for 27 others.

Too late now. Italy is very aware of how Greece has been treated, and very aware it could be next. What does Rome have to lose? They can afford to be fearless. Why not confront Brussels and Berlin? The union’s in tatters anyway.

As for Trump, he doesn’t have anyone to fear either. The Democrats, just like virtually all left wing parties in Europe, have lost their identity and therefore their voters because of Tony Blair, the Clintons stage act and Obama. The US media have become a lousy tired comedy routine, unable to see that a constant barrage of empty attacks on Trump could only ever make them irrelevant.

The New York Times, WaPo, CNN have created the space that Trump operates in. They might as well be working for him. And meanwhile the folks who actually constructed the multiple crises remain out of sight. And have their minions declare that there is no crisis. Or that it’s just a political one, brought on by opportunists.

Salvini and Trump are not the greatest specimens of the human race, but they are not to blame for what’s going on. Salvini will force Europe to either redo its Dublin accord or redo the EU altogether. Trump will water down his border policies. But the driving force behind all of it, hiding in the shadows, still remains.

And that force controls, as it has for many many years, your parliaments and governments. Want to be angry, want to be outraged? Yeah, right there. It’s not about how Trump treats the children, it’s about why they are there in the first place.

And yes, ICE and Homeland Security should be eliminated, they’re insults to America and to the Founding Fathers. But they’re not Trump’s creations. They were there for him to use. And so he did and does. But c’mon guys, take the blinders off. You can’t see a thing with them on. There is a bigger picture.

 

 

Jun 262018
 
 June 26, 2018  Posted by at 8:34 am Finance Tagged with: , , , , , , , , , , ,  


Jan van Eyck Crucifixion and Last Judgement 1430

 

A -Very- Bad Day to Be Long Wall Street’s ‘Synchronized Global Recovery’ (HE)
Fed’s Effort To Control The Rise Of Its Key Interest Rate Is Faltering (CNBC)
Russia, China And India Move To Prepare For Global Reset (Greyerz)
Trump Tariffs Force Companies To Rework Supply Chains (R.)
Trump Officials Send Mixed Signals On China Investment Curbs, Markets Sink (R.)
Pepe Escobar On Trump, ‘New York Aristocracy’ and the Deep State (ZH)
Britain Is Becoming A Stupid Country (G.)
Brexit Uncertainty Puts 860,000 Jobs At Risk, Warns Car Industry (G.)
Tesla’s “Preposterous” Model 3 Production Tent (ZH)
Accused Russian Company Says Mueller Was Unlawfully Appointed (R.)
How Comey Intervened To Kill Assange Immunity Deal (Hill)
Algeria Abandons 13,000 Migrants In The Sahara In Waves (AP)
Brazil Moves To Loosen Pesticide Laws (G.)
David Lynch on Trump (G.)

 

 

China slowdown.

A -Very- Bad Day to Be Long Wall Street’s ‘Synchronized Global Recovery’ (HE)

It’s a nasty day to be long Wall Street’s “synchronized global recovery.” Chinese stocks are down -20% from their January highs. Emerging Market equities, like Argentina and the Philippines, have been rocked by the one-two punch of a stronger dollar and slowing growth. Italian equities are down -12% since early May. Our read on global stagflation remains firmly intact. In other words, it’s not the threat of President Trump’s trade wars that continue to weigh on global equity markets, it’s slowing economic data. We don’t expect these trends to reverse anytime soon. The evidence of global growth slowing is everywhere.

The latest news out of China is that the PBoC lowered the reserve requirements for some Chinese banks, thereby releasing $108 billion in liquidity. The media quickly blamed President Trump’s “trade wars” for the move. However, the economic tea leaves suggest China’s ongoing growth slowdown is the culprit. The ripple effects of #ChinaSlowing are already being felt in Emerging Asia, like Philippine equities. (China is one of the Philippines’ primary trading partners. #ChinaSlowing = Not good.) We continue to forecast #EuropeSlowing, despite ECB head Mario Draghi’s claim that European “growth momentum” is alive and well. If the data is so good, why did Eurozone Industrial Production get more-or-less cut in half in April (1.7% YoY i! from 3.2%)?

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What control?

Fed’s Effort To Control The Rise Of Its Key Interest Rate Is Faltering (CNBC)

The Federal Reserve’s effort earlier this month to tamp down the rise of its benchmark interest rate already isn’t running as smoothly as officials might have anticipated. At its June 12-13 meeting, the Federal Open Market Committee hiked its target overnight funds rate 0.25 points to a range of 1.75 percent to 2 percent. At the same time, it raised the interest on excess reserves 0.2 points to 1.95 percent. The move was meant to contain the rise of the funds rate, which historically trails the IOER. In the weeks running up to the meeting, the funds rate closed within 5 basis points, or 0.05 percent, of the IOER, instead of staying within the midpoint of the target range as it has done since the Fed began hiking the funds rate in December 2015.

However, in the days since, the funds rate has moved even closer to the IOER. As of Friday trading, the funds rate has edged up to 1.92 percent — now just 3 basis points away from the IOER, though still 8 points away from the top of the trading range set at this month’s meeting. For the Fed, it’s a potential headache as the central bank sees to unwind the programs it initiated the pull the economy out of the financial crisis. The Fed kept interest rates at historically low levels and bought up nearly $4 trillion worth of Treasurys and mortgage-backed securities in an effort to keep rates anchored and maintain liquidity flow through the financial system. For investors, it means that continued upward pressure on the funds rate as the Fed unwinds the bonds on its balance sheet could keep the FOMC at bay in its stated intention to continue hiking interest rates.

“Here we are, and I think they will be lucky to get one more done this year, because whenever the curve flattens the market’s going to look at the Fed and say, ‘Really?’ and the Fed will have to blink,” said Christopher Whalen, head of Whalen Global Advisors, an investment bank consultancy. “They’re telling everyone there’s going to be a couple more rate increases, and that’s fanciful.”

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But when?

Russia, China And India Move To Prepare For Global Reset (Greyerz)

Egon von Greyerz: “While the US government worries about the military threat of Russia, and the trade deficit with China, they show no concern for the real problems. To understand what is really happening, all we need to do is to ‘Follow the Money.’ The flows of real money reveal where global economic power is moving. “The US has not had a real budget surplus for almost 60 years and has run balance of payment deficits every year since 1975. A country that lives above its means for over half a century is technically and economically bankrupt. Its debt should have zero value and so should its currency. But the US has skillfully avoided bankruptcy, so far, by having the reserve currency of the world and being the biggest military power.

Both Russia and China can see the writing on the wall. They understand that the world’s most indebted country cannot solve its debt problem by issuing more debt. That is why Russia and China, together with India, are buying most of the global gold production every year. In May Russia added another 600,000 oz or almost 20 tonnes to its gold reserves. Since January 2018, when Trump became president, US debt has increased by 6% or $1.1 trillion to $21.1 trillion, while Russia has added another 9 million oz of gold, and are now holding $80 billion of gold reserves. So while the US economy is taking the road to perdition, Russia knows that the only money that will survive is gold — just like it always has! For years the world has financed the US debt by buying US treasuries. But we are now seeing a marked change.

Many countries are currently liquidating US Treasuries. They know what will happen to US debt and are trying to get rid of their holdings in an orderly manner in order to avoid US Treasuries crashing together with the dollar. This is what will happen at some point in the next 1-3 years. Global investors will panic out of dollar denominated bonds, leading to a crash of both the US currency and dollar debt. The Chinese know this but their US Treasury holdings are so large that they need to sell slowly in order not to shoot themselves in the foot. In the end, China is likely to take a major loss on its dollar Treasury holdings but that is the price they have been willing to pay in order to build up their economy and manufacturing sector through financing US deficit spending.

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Multinationals and de-globalization.

Trump Tariffs Force Companies To Rework Supply Chains (R.)

From global manufacturers such as Harley-Davidson to small tech startups, companies are scrambling to rework supply chains built for an era of stable, open trade policy that is now under threat. As U.S. President Donald Trump pushes to upend the status quo of global trade, companies that initially took a wait-and-see stance are starting to take action to shield their businesses from shifting trade policy. On Monday, U.S. motorcycle maker Harley warned of higher costs because of retaliatory EU tariffs, and said it would shift production of bikes destined for the European Union out of the United States to factories it has built in India, Brazil and Thailand.

The decision of the Milwaukee, Wisconsin-based company, which Trump vowed to make great again when he took office, came less than a week after Mercedes-Benz maker Daimler cut its 2018 profit forecast, citing growing trade tensions. Its German rival BMW said it was considering “possible strategic options” in view of the rising trade tensions between China and the United States. Harley is the latest example of how companies are finding themselves in the crosshairs following “tit-for-tat” retaliations over Trump’s bid to rewrite global trade rules as part of his “America First” agenda. Office furniture maker Steelcase last week reported a 230 basis-point fall in the gross margins of its American business in the first quarter due to higher raw materials costs following Trump’s metal import tariffs.

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And still negotiating.

Trump Officials Send Mixed Signals On China Investment Curbs, Markets Sink (R.)

Conflicting signals from the Trump administration over proposed restrictions on foreign investment in U.S. technology companies, along with news that recently imposed import tariffs are starting to disrupt supply chains, sent global stock markets tumbling on Monday. Proposed restrictions on foreign investment in U.S. technology would not just be confined to China, according to U.S. Treasury Secretary Steven Mnuchin. The forthcoming restrictions would apply “to all countries that are trying to steal our technology,” he said. The U.S. Treasury is due to issue its recommendations on Chinese investment restrictions on Friday.

Late Monday White House trade and manufacturing adviser Peter Navarro sought to downplay Mnuchin’s remarks, telling CNBC television that the restrictions on investments in U.S. technology companies would just target China. Benchmark Wall Street stock indexes suffered their worst losses in two months on Monday, while safe haven Treasury debt yields fell. U.S. technology stocks were worst hit. Alphabet, the parent of Google, fell 2.6 percent, Apple lost 2.75 percent, and Amazon dropped 3.0 percent. The recent imposition of import tariffs by the U.S., and counter-measures by other countries, are also starting to affect global production and supply chains. Some U.S. steel and aluminium tariffs went into effect in April and additional tariffs begin in July.

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China has much more to lose than the US.

Pepe Escobar On Trump, ‘New York Aristocracy’ and the Deep State (ZH)

Trump, Escobar explains, wasn’t born into the Manhattan aristocracy. And though the “Masters of the Universe” – a group that includes the country’s top bankers along with the leaders of the military and intelligence communities – were initially reluctant to embrace him (as were many factions within the Republican Party), they eventually changed their minds once they understood that he would advocate for their interests. “He’s not born in lower Manhattan…and he’s not part of the New York aristocracy, the establishment that’s been there for some 150 to 200 years…he’s still regarded in New York as a wealthy outsider. But in the end, he was accepted by some sectors of the Republican Party – even though they initially didn’t want to accept him – Washington, some sectors of the Republican Party.”

He was the candidate of the establishment from the beginning, or he was a genuine candidate whose regime has now been disturbed by the Deep State. He was vetoed by the establishment – this is something that people who know how the Deep State works in DC they will tell you always the same thing: You don’t become a candidate for a President of the United States if you are not vetted…by the people who actually run the US.” Trump was vulnerable to this manipulation because he doesn’t have a nuanced enough understanding of geopolitics…which has forced him to rely on advisors whispering in his ear…advisors whose intentions aren’t always working in the best interest of the president, or the American people, for that matter.

One example is Trump’s insistence on instigating a trade war between China and the US. While China has many ways to retaliate against the US, as least when it comes to finding markets for their goods, US companies have more options than their Chinese peers. “Trump still doesn’t understand that the retaliation is going to be really huge from the Chinese and they have ways of hurting badly – they even have ways of ratcheting up taxes on products made in the Midwest. But they’re going to lose much more than we do. We have other markets. We export more to Asia, we export more to South America and we export more to Europe.”

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Been coming for a while now.

Britain Is Becoming A Stupid Country (G.)

Melvyn Bragg has said Britain is becoming a stupid country, in part because its university system is being destroyed. The broadcaster and Labour peer criticised the state of British higher education in an interview with the magazine Radio Times. “We have, per capita, the best university system in the world, but it’s being – carelessly and utterly stupidly – destroyed very slowly,” he said. “We used to be the clever country and now we’re clearly the stupid country. Except for certain highlights.”

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Wait till the bankers start to protest.

Brexit Uncertainty Puts 860,000 Jobs At Risk, Warns Car Industry (G.)

The car industry has warned Theresa May there is “no Brexit dividend” for the business, with 860,000 jobs being put at risk unless the government “rethinks” its red lines in negotiations. In the starkest warning yet from a single business sector, the car lobby has told the government that it needs “as a minimum” to remain in the customs union and a deal that delivers “single market benefits”. “There is no Brexit dividend for our industry,” Michael Hawes, chief executive of the Society of Motor Manufacturers and Traders, said. It said Brexit uncertainty was thwarting investment and repeated calls for the UK to stay in the customs partnership until the government came up with a “credible plan B”.

With investment slowing and time running out, negotiators must get on with the job of agreeing a deal that will put an end to uncertainty and prioritise the needs of the automotive sector, the SMMT said. The sector had grown for the eighth successive year with turnover at a record £82bn in 2017. However it said 2018 has showed a slowdown in output with investment earmarked for new models, equipments and facilities in the UK halving to around £347m. [..] “With decisions on new vehicle models in the UK due soon, government must take steps to boost investor confidence and safeguard the thousands of jobs that depend on the sector,” it said ahead of a key conference for the automotive industry.

The government had “no credible Plan B” for customs arrangements post-Brexit, it said, that would keep the Port of Dover flowing freely. Car manufacturers rely on what is known as “just in time” production whereby components, mostly from the EU, cross the channel just hours before they are needed on the assembly line. More than 1,000 trucks a day cross the channel with these components.

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Not even Onion.

Tesla’s “Preposterous” Model 3 Production Tent (ZH)

Bears and bulls alike following Tesla’s gripping nailbiter of a story – the company has until the end of the month to pumpt out 5,000 Model 3 sedans a week – both agree on one thing: the output of the company’s new “tent” structure which Musk erected recently to produce Model 3 vehicles is going to decide whether or not the company hits its production goal that it has touted over the last couple of months. The tent was erected in just a matter of weeks, and came online in early June, to help the company produce more vehicles at a time when they are under the microscope. Until recently, we didn’t know the details as to when it was erected, what the timing looked like and what it is expected to produce.

However, a Bloomberg article out today helped shed some light on the details of what is arguably the most important – if archaic – structure that Tesla has built yet. Not surprisingly, opinions extend the whole gamut, with some manufacturing experts claiming the tent is “basically nuts”: “Elon Musk has six days to make good on his pledge that Tesla will be pumping out 5,000 Model 3 sedans a week by the end of the month. If he succeeds, it may be thanks to the curious structure outside the company’s factory. It’s a tent the size of two football fields that Musk calls “pretty sweet” and that manufacturing experts deride as, basically, nuts. [..] Inside the tent in Fremont, California, is an assembly line Musk hastily pulled together for the Model 3. That’s the electric car that is supposed to vault Tesla from niche player for the wealthy to high-volume automaker, bringing a more affordable electric vehicle to the masses.”

Analysts at Bernstein are equally unimpressed. Here is a quote from Max Warburton who benchmarked auto assembly plants before his job as a financial analyst: “Words fail me. It’s insanity,” said Max Warburton, who benchmarked auto-assembly plants around the world before becoming a financial analyst. [..] What gives manufacturing experts pause about Tesla’s tent is that it was pitched to shelter an assembly line cobbled together with scraps lying around the brick-and-mortar plant. It smacks of a Hail Mary move after months of stopping and starting production to make on-the-fly fixes to automated equipment, which Musk himself has said was a mistake. “The existing line isn’t functional, it can’t build cars as planned and there isn’t room to get people into work stations to replace the non-functioning robots,” Warburton said. “So here we have it—build cars manually in the parking lot.”

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Surprising argument. They must think it has merit.

Accused Russian Company Says Mueller Was Unlawfully Appointed (R.)

A Russian company accused of helping fund a propaganda operation to sway the 2016 presidential election in Donald Trump’s favor asked a federal judge on Monday to dismiss charges brought by Special Counsel Robert Mueller, saying Mueller was unlawfully appointed and lacks prosecutorial authority. Concord Management and Consulting LLC, a firm that prosecutors say is controlled by a businessman dubbed by Russian media as “Putin’s cook,” argued in a filing in U.S. district court in Washington that Deputy Attorney General Rod Rosenstein violated the Appointments Clause of the U.S. Constitution when he hired Mueller in May 2017.

Concord is one of three entities, along with 13 Russian individuals, indicted by Special Counsel Robert Mueller’s office in February in an alleged criminal and espionage conspiracy to tamper with the U.S. race, boost Trump and disparage his Democratic opponent, Hillary Clinton. The indictment said Concord is controlled by Russian businessman Evgeny Prigozhin, who U.S. officials have said has extensive ties to Russia’s military and political establishment. In it, Concord is alleged to have controlled funding, recommended personnel and overseen the activities of the propaganda campaign. Concord is the only one of the defendants in the case to have formally responded to the charges in federal court. Earlier this year, it hired American lawyers to fight the indictment.

Under the Constitution’s Appointments Clause, principal officers such as cabinet secretaries are appointed by the president and confirmed by the United States Senate while “inferior officers” may be appointed by courts or department heads if permitted by Congress. Concord’s lawyers say that Mueller qualifies as an “officer” under the clause and not a routine federal employee under the law because of his vast prosecutorial authority. They say that no matter whether Mueller is deemed an “inferior” or “principal” officer, his appointment still violates the Constitution. As a principal officer, they say, he should have been appointed by the president and confirmed by the Senate.

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Behind the scenes.

How Comey Intervened To Kill Assange Immunity Deal (Hill)

One of the more devastating intelligence leaks in American history — the unmasking of the CIA’s arsenal of cyber warfare weapons last year — has an untold prelude worthy of a spy novel. Some of the characters are household names, thanks to the Russia scandal: James Comey, fired FBI director. Sen. Mark Warner (D-Va.), vice chairman of the Senate Intelligence Committee. Department of Justice (DOJ) official Bruce Ohr. Julian Assange, grand master of WikiLeaks. And American attorney Adam Waldman, who has a Forrest Gump-like penchant for showing up in major cases of intrigue. Each played a role in the early days of the Trump administration to try to get Assange to agree to “risk mitigation” — essentially, limiting some classified CIA information he might release in the future.

The effort resulted in the drafting of a limited immunity deal that might have temporarily freed the WikiLeaks founder from a London embassy where he has been exiled for years, according to interviews and a trove of internal DOJ documents turned over to Senate investigators. But an unexpected intervention by Comey — relayed through Warner — soured the negotiations, multiple sources tell me. Assange eventually unleashed a series of leaks that U.S. officials say damaged their cyber warfare capabilities for a long time to come. This yarn begins in January 2017 when Assange’s legal team approached Waldman — known for his government connections — to see if the new Trump administration would negotiate with the WikiLeaks founder, holed up in Ecuador’s London embassy.

[..] Ohr consulted his chain of command and the intelligence community about what appeared to be an extraordinary overture that raised hopes the government could negotiate what Assange would release and what he might redact, to protect the names of exposed U.S. officials. Assange made clear through the lawyer that he would never compromise his sources, or stop publishing information, but was willing to consider concessions like redactions. Although the intelligence community reviled Assange for the damage his past releases caused, officials “understood any visibility into his thinking, any opportunity to negotiate any redactions, was in the national security interest and worth taking,” says a senior official involved at the time.

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Unconscionable EU comment: “sovereign countries” can expel migrants as long as they comply with international law..”

Algeria Abandons 13,000 Migrants In The Sahara In Waves (AP)

Assamaka, Niger — From this isolated frontier post deep in the sands of the Sahara, the expelled migrants can be seen coming over the horizon by the hundreds. They look like specks in the distance, trudging miserably across some of the world’s most unforgiving terrain in the blistering sun. They are the ones who made it out alive. Here in the desert, Algeria has abandoned more than 13,000 people in the past 14 months, including pregnant women and children, stranding them without food or water and forcing them to walk, sometimes at gunpoint, under temperatures of up to 48ºC (118ºF). In Niger, where the majority head, the lucky ones limp across a desolate 15-kilometer (9-mile) no man’s land to Assamaka, less a town than a collection of unsteady buildings sinking into drifts of sand.

Others, disoriented and dehydrated, wander for days before a U.N. rescue squad can find them. Untold numbers perish along the way; nearly all the more than two dozen survivors interviewed by The Associated Press told of people in their groups who simply could not go on and vanished into the Sahara. [..] Algeria’s mass expulsions have picked up since October 2017, as the European Union renewed pressure on North African countries to head off migrants going north to Europe via the Mediterranean Sea or the barrier fences with Spain. These migrants from across sub-Saharan Africa — Mali, the Gambia, Guinea, Ivory Coast, Niger and more — are part of the mass migration toward Europe, some fleeing violence, others just hoping to make a living.

A European Union spokesperson said the EU was aware of what Algeria was doing, but that “sovereign countries” can expel migrants as long as they comply with international law. Unlike Niger, Algeria takes none of the EU money intended to help with the migration crisis, although it did receive $111.3 million in aid from Europe between 2014 and 2017. Algeria provides no figures for the expulsions. But the number of people crossing on foot to Niger has been rising steadily since the International Organization for Migration started counting in May 2017, when 135 people were dropped at the crossing, to as high as 2,888 in April 2018. In all, according to the IOM, a total of 11,276 men, women and children survived the march.

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Corrupt countries have no chance against Monsanto.

Brazil Moves To Loosen Pesticide Laws (G.)

A Brazilian Congress commission has approved a controversial bill to lift restrictions on pesticides despite fierce opposition from environmentalists, prosecutors, health and environment ministry bodies, and even United Nations special rapporteurs. Driven by a powerful agribusiness lobby, the bill now needs to be voted on in both houses of Congress and sanctioned by President Michel Temer before becoming law. Its proponents say it will free up bureaucracy and modernise dated legislation. But the bill has generated fierce opposition in Brazil, one of the world’s biggest food producers and biggest consumers of pesticides, even those banned in other countries.

Opponents dubbed it the “poison package” and said it would lead to the indiscriminate use of dangerous pesticides, while 250,000 signed an online petition against it. “The law will make us more permissive than we already are,” said Larissa Bombardi, a professor of geography and pesticides specialist at the University of São Paulo. “The economic interest will prevail over human and environmental health.” Of 121 pesticides permitted in Brazil for coffee production, 30 are already banned in the European Union, including the toxic herbicide paraquat, Bombardi reported in an extensive 2017 study. The bill overhauls existing legislation, allowing for pesticides to be given temporary register if the approval process has taken over two years and three countries in the OECD have already approved it.

[..] Under Brazil’s current legislation, pesticides with elements considered teratogenic, carcinogenic, mutagenic, endocrine disruptive, or posing risks to the reproductive system can’t be registered, they said. But under the bill, hazardous pesticides will only be prohibited when there is a “scientifically established unacceptable risk” – a definition too vague to be effective. Greenpeace attacked lawmakers for approving the bill in the face of such wide opposition. “They want a toxic product to look less threatening,” said Marcio Astrini, Greenpeace Brazil’s public policy coordinator. “The toxic garbage being banned in the rest of the planet will be sold here.”

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He’s not that wrong. He won’t be a great president, but the disruption is needed.

David Lynch on Trump (G.)

David Lynch on Trump: “He could go down as one of the greatest presidents in history because he has disrupted the thing so much. No one is able to counter this guy in an intelligent way.” While Trump may not be doing a good job himself, Lynch thinks, he is opening up a space where other outsiders might. “Our so-called leaders can’t take the country forward, can’t get anything done. Like children, they are. Trump has shown all this.”

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Jun 252018
 
 June 25, 2018  Posted by at 8:45 am Finance Tagged with: , , , , , , , , , , ,  


Edward Hopper Cape Cod morning 1950

 

China’s Central Bank Frees Up $100 Billion In Funding As Trade War Looms (SCMP)
US Plans Limits On Chinese Investment In US Technology Firms (R.)
Tit-for-Tat Tariff Battle Could Spark Downturn In Global Economy – BIS (G.)
Why The Debt Deal With The EU Is Bad For Greece (AlJ)
UK Minister Urges Gov’t to Ignore BMW, Airbus Brexit Warnings (Sp.)
Some Of The Pictures Of Border Kids That Haunt Me Most Are From 2014 (PI)
Migration Is Threat To EU Free Travel Area – Italian Prime Minister (G.)
Italy Tells Rescue Ships Not To Help Refugees In Peril At Sea (Ind.)
The US, Under Obama, Created Europe’s Refugee Crisis (Zuesse)
Merkel’s Troubles Began in Syria and End in Italy (Luongo)
Erdogan To Gain Sweeping New Powers After Declaring Election Victory (Ind.)
Erdogan Says Turkey Will Continue Advancing In Syria (R.)
‘Tourists Go Home, Refugees Welcome’ – Barcelona (G.)

 

 

Bankruptcies. Nothing to do with a trade war.

China’s Central Bank Frees Up $100 Billion In Funding As Trade War Looms (SCMP)

China’s central bank said on Sunday it would unlock at least US$100 billion for the country’s lenders to bail out troubled state firms and to help small businesses, as Beijing tries to shore up growth under the shadow of a trade war with the United States. The People’s Bank of China (PBOC) said in a statement it would cut the reserve requirement ratio, the share of deposits lenders must put aside with the central lender, for commercial banks by half a percentage point from July 5. The cut would free up 500 billion yuan (US$76.86 billion) in funds for the big banks, including Industrial and Commercial Bank of China and China Construction Bank, to finance debt-to-equity swaps, a measure often used for troubled state enterprises.

It would also free up 200 billion yuan for smaller banks to boost lending to small businesses across the country, the central bank said. The move is a “targeted operation” aimed at supporting the weak links in the economy and not a change to the country’s “neutral and prudent” monetary policy stance, the PBOC said. Although the statement did not mention China’s trade row with the United States, or its recently released weaker economic indicators, the reduction in the reserve ratio will come into effect a day before the first of US President Donald Trump’s additional tariffs on Chinese products are due to be implemented.

Deng Haiqing, a visiting scholar at Renmin University of China, wrote in a note that the PBOC’s move represented a significant shift in China’s policy, and was not just fine-tuning. “The authorities have started to see the pain inflicted on the real economy from deleveraging, and they are trying to reduce it,” he said.

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Makes sense.

US Plans Limits On Chinese Investment In US Technology Firms (R.)

The U.S. Treasury Department is drafting curbs that would block firms with at least 25 percent Chinese ownership from buying U.S. companies with “industrially significant technology,” a government official briefed on the matter said on Sunday. The official, whose comments matched a report by the Wall Street Journal, emphasized that the Chinese ownership threshold may change before the restrictions are announced on Friday. The move marks another escalation of President Donald Trump’s trade conflict with China, which threatens to roil financial markets and dent global growth.

Tariffs on $34 billion worth of Chinese goods, the first of a potential total of $450 billion, are due to take effect on July 6 over U.S. complaints that China is misappropriating U.S. technology through joint venture rules and other policies. The Treasury investment restrictions are expected to target key sectors, including several China is trying to develop as part of its “Made in China 2025” industrial plan, the U.S. official said. Among its objectives, the plan aims to upgrade China’s capabilities in advanced information technology, aerospace, marine engineering, pharmaceuticals, advanced energy vehicles, robotics and other high-technology industries. The Wall Street Journal also said the U.S. Commerce Department and National Security Council were proposing “enhanced” export controls to keep such technologies from being shipped to China.

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Give me a break: “Ten years after the start of the global crisis, central bankers should feel satisfied with the state of the global economy..”

Tit-for-Tat Tariff Battle Could Spark Downturn In Global Economy – BIS (G.)

An escalation of protectionist measures could spark a fresh downturn just as the global economy is picking itself up after the last one, the international body that represents the world’s central banks has warned. The Bank for International Settlements (BIS) said there were already signs that “the ratcheting up of rhetoric” was weighing on investment. It comes as Donald Trump steps up hostility with some of the US’s key trading partners and allies, raising fears of a full-blown trade war. What began with tariffs imposed on steel and aluminium imported into the US has turned into a broader trade battle with trading partners including China and the EU, as they respond with retaliatory measures.

The US president is threatening Beijing with tariffs on $200bn of goods imported from China and on Friday Trump threatened to impose tariffs on European cars after Brussels introduced levies on American goods such as Levi’s jeans, bourbon whiskey and Harley-Davidson motorbikes. Agustín Carstens, the general manager of BIS, said an increase in protectionist measures was a key vulnerability in the global economy that threatened to undermine growth and could spread to financial markets. “One possible trigger of an economic slowdown or downturn could be an escalation of protectionist measures. Its impact could be very significant, if such escalation was seen as threatening the open multilateral trading system.

“Indeed, there are signs that the rise in uncertainty associated with the first protectionist steps and the ratcheting up of rhetoric have already been inhibiting investment.” In its annual report on the challenges facing the global economy, BIS said that the ultra-low interest rates implemented by central banks as an emergency response to the financial crisis had served the global economy well but said loose monetary policy was posing a threat to stability. “Ten years after the start of the global crisis, central bankers should feel satisfied with the state of the global economy, after expansionary and unconventional monetary policies were left to bear the burden of recovery,” Carstens said. “But this has left a legacy of higher debts on public and private balance sheets. Still reliant on central bank support and with less room for manoeuvre. Central banks cannot continue be the only game in town.”

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This is where the EU started collapsing. Immigration issues will do the rest.

Why The Debt Deal With The EU Is Bad For Greece (AlJ)

[..] there is more to this deal than the arithmetic of long-term debt sustainability. At the heart of Greece’s protracted fiscal crisis was always a highly contentious social and political question about the real meaning of European solidarity: Who should be made to pay for the presumed “profligacy” of successive Greek governments, or the “excessive risk-taking” of profit-hungry private creditors in the lead-up to the crisis? The course of action that European leaders ended up settling on turned out to be very one-sided in this respect: Greece alone was to blame for its predicament, and therefore, Greece alone would be made to pay for it.

The real motivation behind the bailouts was always to safeguard the survival of a dangerously over-exposed European banking system – but this fact was quickly obscured. Instead, right-wing politicians and the tabloid media whipped up a frenzy of anti-Greek sentiment. The Greeks were widely portrayed as splurging the money on lavish pensions and long beach holidays – or on “booze and women,” as former Dutch finance minister Jeroen Dijsselbloem infamously put it last year. But as research by the European School of Management and Technology in Berlin has since shown, 95 percent of the bailout funds that were supposedly “given” to Greece actually went straight back to private creditors.

Meanwhile, the bailout loans themselves were added to Greece’s overall debt, and the country continued to pay interest on them over subsequent years. In other words, the Greek people never received any handouts from their European creditors. Meanwhile, the Greek government reduced the size of its public sector by 26 percent, cutting pensions and welfare spending by 70 percent and slashing the public health budget in half. As a result, incomes fell by one-third and unemployment skyrocketed to a peak of over 28 percent, unleashing a veritable humanitarian catastrophe.

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But Jeremy, they have shareholders.

UK Minister Urges Gov’t to Ignore BMW, Airbus Brexit Warnings (Sp.)

Speaking to the BBC, Health Secretary Jeremy Hunt said that businesses sounding the alarm about post-Brexit job losses actually affect the UK’s negotiations with the European Union. According to him, the best way for companies to achieve the “clarity and certainty” they need is to support the PM in her talks with Europe. Hunt suggested that a “Brexit fudge” would be likely if Theresa May’s attempts to “deliver the best possible Brexit, a clean Brexit” were undermined. The statement comes several days after BMW, a German-based car giant which employs around 8,000 people in Britain, threatened to start preparing “contingency plans” if it doesn’t get details on the UK’s post-Brexit trading arrangements by the end of summer.

BMW echoed the warning of the French aviation giant Airbus, which announced on June 21 that a no-deal scenario would have a “catastrophic” outcome and would force it to reconsider its long-term position in the UK, putting some 14,000 UK-based jobs at risk. With the UK government failing to provide clarity on Brexit for the time being, a recent survey has found that nearly half of business leaders from the rest of Europe have cut investment in the country. The poll also shows that three quarters of big companies want the bloc to make concessions to Britain to enable a better trading relationship after London’s divorce with Brussels.

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I think it’s important that we see the big picture here. You won’t find a solution if you can’t define the problem. This has been going on for years.

Some Of The Pictures Of Border Kids That Haunt Me Most Are From 2014 (PI)

The other day, a veteran immigration lawyer named R. Andrew Free shared an anecdote that sheds some really critical light on what’s happening on America’s southern border — a tale that not surprisingly got buried amid a sandstorm of news about mothers not knowing where their kids are, audiotapes of anguished, crying children, and now the protests to end the human rights abuses that the current government is undertaking in our name. What Free described on Twitter was an opportunity that few people get: A chance to personally confront the president of the United States and question him about his immigration policies.

Free wrote that the answers he received from the so-called leader of the free world “shook me to my core.” The immigration lawyer had been to two large detention centers in Texas where U.S. officials were holding hundreds of migrant families from Central America, often for months at a time. Free said some of the conditions at these makeshift detention camps were appalling. “I remember hearing the constant, violent coughing and sickness of small children, and the worry of their mothers who stood in the sun outside the clinic all day only to be told their kids should ‘drink water,’” Free tweeted. “I remember nearly doubling over when I saw the line of strollers.”

When Free had a chance encounter with the president at a political event, he warned him that the detention centers would be “a stain on his legacy.” He said the president wanted to know if Free was an immigration lawyer — implying that everyday citizens weren’t worried about what goes on at the border — and then said, according to Free: “I’ll tell you what we can’t have, it’s these parents sending their kids here on a dangerous journey and putting their lives at risk.” The message that Free took away was that the president saw family detention as a deterrent to keep more refugees from coming. This happened in 2015. The president with the looming stain on his legacy was Barack Obama.

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There goes Merkel.

Migration Is Threat To EU Free Travel Area – Italian Prime Minister (G.)

Italy has warned the future of the EU’s border-free travel zone is at stake as it sought to ease the pressure on Mediterranean countries arising from hosting refugees and migrants. Italy’s prime minister, Giuseppe Conte, was speaking at a mini-EU summit in Brussels, where he said a plan from his government presented at the summit represented a paradigm shift in dealing with migration. But his ambitious move to change what he called obsolete EU rules that govern who is responsible for asylum claimants is likely to encounter opposition from other countries.

The 10-point plan by his new populist government revives many ideas proposed by previous Italian governments, such as calling on all EU member states to share responsibility for migrants rescued at sea, and countries being docked EU funds if they refuse to take in refugees. Leaders from 16 EU countries put on a show of unity, as they left an emergency summit in Brussels on Sunday. The unorthodox meeting, boycotted by several EU countries, was called to shore up the conservative coalition government of the German chancellor, Angela Merkel, which is riven by a row over migration. Spain’s prime minister, Pedro Sánchez, said the talks had been “frank and open,” although they had not resulted in “any concrete consequences or conclusions”.

Sunday’s ad-hoc meeting sets the stage for a long-planned gathering of all EU leaders on Thursday, where it will be harder to mask Europe’s deep divisions on migration. Hungary’s prime minister, Viktor Orbán, can be expected to repeat his fierce opposition to migrant quotas, a policy opposed by other central European countries.

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Salvini is going to Libya this week.

Italy Tells Rescue Ships Not To Help Refugees In Peril At Sea (Ind.)

Italy’s far-right government told aid ships in the Mediterranean Sea not to rescue thousands of refugees in peril on Sunday – despite receiving six separate distress calls from unseaworthy boats. Officials said the vessels – carrying people from North Africa to Europe – were all in Libyan waters and, therefore, Libyan responsibility. The Spanish aid group, Proactiva Open Arms, which had ships in the area, said it had been specifically told not to help. Matteo Salvini, Italy’s interior minister, said in a tweet: “It’s right that the Libyan authorities intervene, as they’ve been doing for days, without having the NGOs interrupt them and disturb them.”

The latest revelation follows a fortnight in which Italy has refused permission for aid ships carrying rescued refugees to dock in its ports. One, the Aquarius with 630 people on board, had to reroute to Spain. Another, Lifeline holding 240 people, remained at sea over the weekend. Mr Salvini has said such refugees would only see his country “on a postcard”. Italy has said it is seeing a constant stream of people coming illegally from Africa, and has threatened to withhold payments to the EU unless a more even way of dispersing refugees is agreed.

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Zuesse misses the role that Britain -remember Blair, Cameron?- and France have played.

The US, Under Obama, Created Europe’s Refugee Crisis (Zuesse)

The current US President, Donald Trump, claimed on June 18th, that Germany’s leadership, and the leadership in other EU nations, caused the refugee-crisis that Europe is facing: “The people of Germany are turning against their leadership as migration is rocking the already tenuous Berlin coalition. Crime in Germany is way up. Big mistake made all over Europe in allowing millions of people in who have so strongly and violently changed their culture!” The US Government is clearly lying about this. The US Government itself caused this crisis that Europeans are struggling to deal with.

Would the crisis even exist, at all, if the US had not invaded and tried to overthrow (and in some instances actually overthrown) the governments in Libya, Syria, and elsewhere — the places from which these refugees are escaping? The US Government, and a few of its allies in Europe (the ones who actually therefore really do share in some of the authentic blame for this crisis) caused this war and government-overthrow, etc., but Germany’s Government wasn’t among them, nor were many of the others in Europe. If the US Government had not led these invasions, probably not even France would have participated in any of them. The US Government, alone, is responsible for having caused these refugees.

The US Government itself created this enormous burden to Europe, and yet refuses to accept these refugees that it itself had produced, by its having invaded and bombed to overthrow (among others) Libya’s Government, and then Syria’s Government, and by its aiding Al Qaeda in organizing and leading and arming, jihadists from all over the world to come to Syria to overthrow Syria’s Government and to replace it with one that would be selected by the US regime’s key Middle Eastern ally, the Saud family, who own Saudi Arabia, including its Government, and who are determined to take over Syria.

Trump blames Angela Merkel for — in essence — having been an ally of the US regime, a regime of aggression which goes back decades, and which Trump himself now is leading, instead of his ending, and of his restoring democracy to the United States, and, finally, thus, his restoring freedom (from America), and peace, to other nations, in Europe, and elsewhere (such as in Syria, Yemen, etc.).

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Chaos.

Merkel’s Troubles Began in Syria and End in Italy (Luongo)

It looks like we are entering the end of Merkel-ism in Europe. German Chancellor Angela Merkel is approaching her final days in that position. Be it next week or the end of this year, we are looking at unprecedented change in European politics thanks to Merkel’s insistence on taking in millions of Syrian and North African refugees from chaos unleashed by aggressive and insane foreign policy actions by the U.S. and supported by the EU. From the destruction of Libya to the manufactured ‘civil war’ in Syria the displacement of millions of people was created from the desired to destabilize the entire region for the betterment of the U.S. and its allies in the region, Saudi Arabia and Israel. Jordan, Turkey and Qatar were originally involved but have since jumped ship in the wake of Russia’s intervention there.

Merkel’s current plight politically stems from her intractability in accepting the chain of events that led us to this point. All of the problems of Europe now stem from the collision of these foreign policy disasters and the economic degradation of the euro-zone from the flawed structure of the euro itself. And the insistence of the U.S./Saudi/Israeli alliance to continue trying to manufacture a win in Syria that is clearly beyond their control at this point only tightens the noose around Merkel’s neck.

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Predictable but still scary.

Erdogan To Gain Sweeping New Powers After Declaring Election Victory (Ind.)

Recep Tayyip Erdogan has been declared triumphant in Turkey’s presidential vote by the country’s electoral board, amid accusations of manipulation by his opponents. Mr Erdogan had earlier claimed he had won after state run news outlets said he was victorious. An announcement from the broadcaster TRT came soon after the Anadolu Agency, who reported that he had won 52.51 per cent of the vote with 98.4 per cent of the total counted. Independent election monitors and the opposition both maintained that less than half the votes had been counted at that point. The president’s main rival, Muharrem Ince – who state media said had won 30.72 per cent of the vote – urged observers and his supporters to stay on at counting centres, warning that vote rigging was likely to place if they left under the impression that the result had been decided.

But speaking in the early hours of Monday, the head of the Supreme Election Council Sadi Guven confirmed the result. He said that Mr Erdogan “received the absolute majority of all valid votes” and the remaining ballots would not affect the outcome. In his speech Mr Erdogan had warned: “The Turkish public has mandated me as president according to unofficial results. I hope nobody will damage democracy by casting a shadow on this election and its results to hide their failure.”

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Doesn’t waste any time.

Erdogan Says Turkey Will Continue Advancing In Syria (R.)

Turkey will continue to “liberate Syrian lands” so that refugees can return to Syria safely, President Tayyip Erdogan said in an election victory speech on Monday. Speaking to supporters from the balcony of his ruling AK Party’s headquarters in Ankara after Sunday’s presidential and parliamentary elections, Erdogan said Turkey would also act more decisively against terrorist organizations.

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“In 1990 the city received 1.7 million tourists; last year the figure was 32 million – roughly 20 times the resident population.”

‘Tourists Go Home, Refugees Welcome’ – Barcelona (G.)

Early last year, around 150,000 people in Barcelona marched to demand that the Spanish government allow more refugees into the country. Shortly afterwards, “Tourists go home, refugees welcome” started appearing on the city’s walls; soon the city was inundated with protestors marching behind the slogans “Barcelona is not for sale” and “We will not be driven out”. What the Spanish media dubbed turismofobia overtook several European cities last summer, with protests held and measures taken in Venice, Rome, Amsterdam, Florence, Berlin, Lisbon, Palma de Mallorca and elsewhere in Europe against the invasion of visitors. But in contrast to many, as fiercely as Barcelona has pushed back against tourists, it has campaigned to welcome more refugees.

When news broke two weeks ago that a rescue ship carrying 629 migrantswas adrift in the Mediterranean, mayor Ada Colau was among the first to offer those aboard safe haven. Is it really the case that Barcelona would prefer to receive thousands of penniless immigrants rather than the millions of tourists who last year spent around €30bn in the city? The short answer, it appears, is yes. Increasingly it is tourism, not immigration, that people see as a threat to the city’s very identity – though numbers of both have risen exponentially in recent decades. In 2000 foreigners accounted for less than 2% of the population; a mere five years later, the figure was 15% (266,000). In 2018, it is now officially 18% although, according to Lola López, the city’s integration and immigration commissioner, the true figure is closer to 30%.

The influx of new residents has radically changed the face of the city, but Barcelona has not seen a single anti-immigrant protest of any substance – nor is immigration an issue at local elections. According to research by Paolo Giaccaria, a social scientist at the University of Turin, the case of Barcelona “establishes a connection between two types of mobility that are at odds with each other: northern tourism and southern migration. It subverts the common feeling about which kind of mobility is desirable which is not.” Immigration has changed the city, but tourism is destabilising it – and even people in the industry agree that it can’t go on like this. In 1990 the city received 1.7 million tourists; last year the figure was 32 million – roughly 20 times the resident population. The sheer volume of visitors is driving up rents, pushing residents out of neighbourhoods, and overwhelming the public space.

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