Sep 232023
 


Leonardo da Vinci Head of a Woman 1470s

 

Roadblocks: Zelensky Fails to Achieve Goals on US Visit (Sp.)
Zelensky’s US Trip Revealed Deepening Fractures in NATO Support (Sp.)
West Preparing To ‘Dump’ Zelensky – Lukashenko (RT)
McCarthy Vows To Strip Ukraine Money From Pentagon Bill (Hill)
White House Issues Ukraine Aid Warning (RT)
Pentagon Exempts Ukraine Operations From Potential Government Shutdown (Pol.)
China and Syria Forge ‘Strategic Partnership’ (RT)
Blobitis (Jim Kunstler)
Expert: NATO Helped Ukraine Strike Black Sea Fleet HQ in Sevastopol (Sp.)
Borrell Warns Migration Might ‘Dissolve’ EU (RT)
The Defunct Disinformation Governance Board Exposed (Turley)

 

 

 

 

Panahi

 

 

 

 

Pelosi Jan 6
https://twitter.com/i/status/1704806237630501284

 

 

 

 

Maui

 

 

 

 

Russell

 

 

 

 

“There’s no money in the House right now for Ukraine.”

Roadblocks: Zelensky Fails to Achieve Goals on US Visit (Sp.)

Ukrainian President Volodymyr Zelensky’s visit to the US, which wrapped up this week, proved to be a failure rather than a success.[..] The visit had a rocky start after [the NYT] published the results of its own investigation into the September 6 missile strike on Konstantinovka in eastern Ukraine, which killed 15 civilians. Kiev had blamed the attack on Moscow, however, the newspaper reported that the Ukrainian side was to blame. “Evidence, […] including missile fragments, satellite imagery, witness accounts and social media posts, strongly suggests the catastrophic strike was the result of an errant Ukrainian air defense missile fired by a Buk launch system,” the news outlet pointed out.Another US media outlet reported about “Zelensky’s frosty welcome to D.C.”, referencing six Republican senators and 22 House members’ letter to the White House, which opposed President Joe Biden’s request for $24 billion in additional funding for Ukraine.

As a result, POTUS finally announced the $325 million military assistance package for Kiev during a White House meeting with Zelensky. Notably, the Biden administration opted not to provide Ukraine with the long-range ATACMS missiles that would allow Kiev to launch strikes well behind Russian lines. House Speaker Kevin McCarthy, for his part, denied Zelensky’s request to address a joint meeting of Congress, telling reporters that Congressmen “just didn’t have time.” McCarthy was echoed by Republican Byron Donalds, who said that “There’s no money in the House right now for Ukraine.” According to Donalds, “It’s not a good time for [Zelensky] to be here, quite frankly.”The US media outlet noted in this vein that “the effectiveness of Zelensky’s personal appeals has […] been challenged, as dozens of Republicans used his visit as an occasion to snub Ukraine’s requests and mock its wartime leader.”

On September 19, the Ukrainian president addressed a UN General Assembly (UNGA) session in New York. US television channels at the time showed many empty seats in the premises where Zelensky delivered the speech. Ukrainian broadcasters, therefore, had to edit the footage so as to create an illusion of a full audience, where one could see Zelensky himself among the viewers. His visit came amid the Ukrainian Armed Forces (UAF)’s futile attempts to break through Russian defensive lines, a counteroffensive that President Vladimir Putin called a “failure rather than a standstill”. According to him, the UAF has lost more 71,000 soldiers and over 500 tanks since the beginning of the counteroffensive on June 4.

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“Clearly, the Patriots have failed in their mission. And it’s not like the United States has a better air defense system than the Patriot batteries – that’s the best we have to offer..”

Zelensky’s US Trip Revealed Deepening Fractures in NATO Support (Sp.)

As Ukrainian President Volodymyr Zelensky wrapped up his trip to the United States on Friday, where he spoke at the United Nations and visited the White House, he is preparing to return to Ukraine with far less than he expected. An expert noted the US and Ukraine are struggling to make a bad situation look better than it is. Retired CIA intelligence officer and former US State Department official Larry Johnson told Sputnik that “nothing of substance” had come from Zelensky’s trip to Washington, DC, but that careful study of the demeanor of Zelensky and several American officials revealed “they’ve had some very uncomfortable conversations behind the scenes.”
“He’s not going to get the ATACMS that he claimed he wanted,” Johnson said, referring to the ground strike missile that is launched from a HIMARS rocket system.

He noted “they are sending some M1 Abrams tanks next week – that was already on the table.” “What was clear is that you’ve got a disconnect between the rhetorical position, what the Biden administration is saying publicly to support Zelensky, and what it’s actually doing,” he pointed out. “On the one hand, they are stridently insisting that they’re going to support Ukraine to the end, that Zelensky is on their team, etc. But when it comes to the actual assistance, they didn’t increase – they’re going to continue to provide aid, but they’re not providing any kind of advanced weapons system. I don’t think they do have a weapon system that would make a difference. But, you know, for example, they talked about: ‘Oh, we have to provide Ukraine with their defense.’ I thought that was what the Patriot batteries were for.

Clearly, the Patriots have failed in their mission. And it’s not like the United States has a better air defense system than the Patriot batteries – that’s the best we have to offer. That didn’t work. But they’re talking about providing some more air defense capabilities. I think it’s a meaningless gesture,” he said. “The problem is, it doesn’t matter what equipment or money the United States supplies. The problem Ukraine faces is the lack of manpower, that they’ve suffered such enormous casualties during this failed counteroffensive that their ability to replace those is a challenge.” Johnson noted that during Zelensky’s visit, there were “subtle gestures” but nothing like the hero’s welcome he was given before.

“During his previous trip, he was celebrated with a joint session of Congress and got to kiss [then-House Speaker] Nancy Pelosi, and yet this time he didn’t get that. He did meet with some members of Congress and he heard some challenges to his position. I think there’s still a majority in the Congress, in both the House and Senate, that are saying that they really strongly support Ukraine, but there’s a growing number of voices that are saying: ‘no, we need to spend that money that’s been going to Kiev here in the United States, in Maui, Philadelphia, New York, San Francisco.’ There’s growing pressure to spend those funds in the states as opposed to selling it overseas.”

“He didn’t get a joint press conference. They did put out some sort of controlled video of both Biden and Zelensky reading prepared remarks and setting it in a controlled environment, where the press were spectators but not able to ask questions. But they didn’t have a side-by-side press-conference. So, it was a much more tepid response this time compared to previous ones. And he didn’t go back with a greater economic package than he anticipated prior to arriving. Plus, on top of it, he did have Poland and the relationship to Poland and Ukraine was sort of a backdrop to all of this,” he said.

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“Do you think that Poland is putting pressure on poor Ukraine today for no reason? No, they have been given the go-ahead from overseas: We need to dump this Zelensky, we’re tired of him..”

West Preparing To ‘Dump’ Zelensky – Lukashenko (RT)

Washington has given the go-ahead to its partners to “dump” Ukrainian President Vladimir Zelensky as he has become a nuisance, Belarusian leader Alexander Lukashenko claimed during a government meeting on Friday. Lukashenko pointed to the ongoing grain dispute between Poland and Ukraine as an example of this new policy, noting that Warsaw had been one of Zelensky’s staunchest supporters but is now sharply critical of its partner. This shift occurred after Poland, along with Hungary and Slovakia, unilaterally banned the import of Ukrainian grain despite the EU having chosen to lift its bloc-wide embargo. In turn, Kiev filed disputes against the three countries with the World Trade Organization.

“Do you think that Poland is putting pressure on poor Ukraine today for no reason? No, they have been given the go-ahead from overseas: We need to dump this Zelensky, we’re tired of him,” Lukashenko said. He noted that the US has an upcoming presidential election and suggested that no one will care about Zelensky at that point. At the same time, US President Joe Biden stressed on Friday that Washington will stick with Zelensky throughout the Russia-Ukraine conflict and announced that US-made Abrams tanks will start arriving in Ukraine next week. Meanwhile, Zelensky, who is on his second wartime visit to Washington, insisted that Kiev’s continued fight against Russia relied on sustained US military assistance and reportedly said that if it doesn’t get the aid, it “will lose the war.”

So far, the Biden administration has spent $115 billion on military and financial aid to Kiev, recently requesting an additional $24 billion to be approved by the end of the month. However, a growing number of lawmakers, predominantly from the Republican Party, have started to oppose the financing of the Zelensky government with US taxpayer money. Republican Senator Josh Hawley from Missouri stressed on Wednesday that the US should stop endlessly pouring money into Ukraine, especially since Kiev has “nothing to show for it.” The Senator was apparently referring to Kiev’s much-touted summer counteroffensive, which has failed to yield any significant territorial gains. Hawley insisted that the US should not spend “a dime more on Ukraine” and instead conduct an audit of the billions that have already been paid. The senator also suggested that Germany and other European allies should “step up to the plate” to aid Kiev.

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Cornered by Marjorie Taylor Greene.

McCarthy Vows To Strip Ukraine Money From Pentagon Bill (Hill)

Speaker Kevin McCarthy (R-Calif.) announced Friday that he will strip funding for Ukraine out of a Pentagon spending bill after Rep. Marjorie Taylor Greene (R-Ga.) joined conservatives in blocking the legislation from advancing earlier this week. McCarthy said he would remove the $300 million for Ukraine currently in the Pentagon appropriations bill and hold a separate vote on the funding. “It would be out and voted on by itself,” McCarthy said when asked about the Ukraine aid in the Pentagon appropriations bill. The Speaker’s announcement comes one day after a band of five conservatives opposed a procedural vote for the Pentagon appropriations bill, sinking the effort and preventing the legislation from moving forward.

It was the second time this week that hard-liners blocked the funding bill from advancing. Votes on rules — which govern debate for legislation — are normally partisan and predictable matters, with the majority supporting voting “yes” and the minority party voting “no.” It is very rare for rules to fail on the floor. Greene, who has emerged as a close ally of McCarthy, was one of the Republicans who voted against the rule Thursday “because it funds the war in Ukraine.” It was a shift from her vote Tuesday, when the congresswoman supported the procedural vote to advance the Defense measure. The rule failed for a second time on the same day that Ukrainian President Volodymyr Zelensky met with lawmakers in the Capitol.

The Pentagon funding bill includes $300 million “to provide assistance, including training; equipment; lethal assistance; logistics support, supplies and services; salaries and stipends; sustainment; and intelligence support to the military and national security forces of Ukraine, and to other forces or groups recognized by and under the authority of the Government of Ukraine, including governmental entities within Ukraine, engaged in resisting Russian aggression against Ukraine, for replacement of any weapons or articles provided to the Government of Ukraine from the inventory of the United States.” Greene has come out against sending additional money to Ukraine. On Friday morning, she went live on X, the platform formerly known as Twitter, and said she would support the measure if the Ukraine aid is taken out.

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Lindsey Graham returns: “..pulling the plug on Ukraine while they’re winning on the battlefield and letting Putin get away with this is far worse than Afghanistan.”

White House Issues Ukraine Aid Warning (RT)

The White House has urged American lawmakers to approve President Joe Biden’s request for an additional $24 billion for Ukraine by the end of the month in order to ensure an uninterrupted flow of aid to the country. The US government has appropriated funds for the current fiscal year, which ends on September 30, US National Security Advisor Jake Sullivan told the media on Thursday. He said additional resources were now required from Congress by October 1 to avoid disruption to the supply of aid to Ukraine. Continued assistance to Kiev in its fight against Russia is facing a growing pushback from Republican lawmakers, particularly in the House of Representatives, where the party has a majority. Critics argue that Washington has more important priorities and should have stronger safeguards against the misappropriation of the aid it sends to Kiev.

Ukrainian President Vladimir Zelensky met members of Congress on Thursday to make his case in person. Senate Majority Leader Chuck Schumer said one phrase summed up the visiting leader’s message. “Mr. Zelensky said: ‘If we don’t get the aid, we will lose the war,’” he remarked after hosting the Ukrainian president. White House officials held a classified briefing for lawmakers on Wednesday evening. Senator Josh Hawley indicated he had been cemented in the conviction that the Biden administration’s Ukraine policy was failing. “If there’s some path to victory in Ukraine, I didn’t hear it today. And I also heard that there’s going to be no end to the funding requests,”the Republican said. Senator Lindsey Graham, a fellow GOP member with an opposing view on the conflict, argued that “pulling the plug on Ukraine while they’re winning on the battlefield and letting [Russian President Vladimir] Putin get away with this is far worse than Afghanistan.”

He was referring to Biden’s 2021 decision to withdraw the US military from the Middle Eastern country, after two decades of costly counterinsurgency action and state-building experiments. Senator John Fetterman, a Democrat, promised an unorthodox concession to Republicans in the other chamber to secure money for Kiev. “If those jagoffs in the House stop trying to shut our government down, and fully support Ukraine, then I will save democracy by wearing a suit on the Senate floor next week,” he pledged on social media on Wednesday. Fetterman famously has an aversion to formal dress. Last Sunday, Schumer ditched the Senate dress code for elected officials – but not staff members – much to the chagrin of US conservatives.

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If the government shuts down US citizens won’t get paid but Ukrainians will.

Pentagon Exempts Ukraine Operations From Potential Government Shutdown (Pol.)

The Pentagon will exempt its Ukraine operations from a potential shutdown if lawmakers can’t agree on a deal to fund the government by the end of the month, allowing key training and other activities in support of Kyiv’s forces to move ahead uninterrupted, according to a Defense Department spokesperson. Washington is more resigned to the looming government shutdown every day. As the Sept. 30 deadline approaches, congressional leaders showed little progress this week in moving a stopgap funding bill to avert that scenario. The House was in chaos on Thursday as a group of GOP hardliners tanked a vote that could have offered a path to fund the government.

But if lawmakers fail to reach an agreement and government appropriations lapse, DOD has decided to continue activities supporting Ukraine, DOD spokesperson Chris Sherwood told POLITICO Thursday — just hours after Ukrainian President Volodymyr Zelenskyy met with Defense Secretary Lloyd Austin, Joint Chiefs Chair Gen. Mark Milley and other senior leaders at the Pentagon. “Operation Atlantic Resolve is an excepted activity under a government lapse in appropriations,” Sherwood said, referring to the named operation for DOD’s activities in response to the Russian invasion. The move means that the U.S. military’s activities related to the war, such as training of Ukrainian soldiers on American tactics and equipment, as well as shipments of weapons to Kyiv, will continue despite any potential shutdown. As recently as Tuesday, Sherwood had said the shutdown could halt those activities, as POLITICO first reported.

It’s good news for Zelenskyy, as U.S. and European officials worry that international support for continuing to aid Ukraine could be waning. Zelenskyy also pleaded his case with lawmakers on Capitol Hill on Thursday morning before heading to the White House to meet with President Joe Biden. The Biden administration is also expected to announce a new package of military aid for Ukraine later on Thursday, including additional air defenses and artillery. During the White House meeting, Biden announced a new $325 million package of aid for Ukraine, including more air defenses, artillery and additional cluster munitions. He also said that the first of the U.S. Army’s M1 Abrams tanks pledged to Kyiv are expected to arrive on the battlefield next week.

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Mere days after the US said it wants to split Syria in two. That just got a lot harder.

China and Syria Forge ‘Strategic Partnership’ (RT)

Beijing and Damascus announced a new “strategic partnership” during Syrian President Bashar Assad’s ongoing visit to China. President Xi Jinping met him in the city of Hangzhou before this week’s launch of the Asian Games, a high-profile international sports event. Assad is visiting China for the first time since 2004, when he met then-President Hu Jintao. Xi announced the new agreement as he welcomed his guest in the capital of Zhejiang Province on Friday. The Chinese leader stated that the relationship between the two nations has “withstood the test of international changes” and pledged to maintain them in the face of international “instability and uncertainty.” The US and its allies have been seeking to oust Assad for over a decade, accusing him of various transgressions during an armed conflict in the country.

The bloodshed started in 2011 as mass protests surged against the Syrian government but were soon hijacked by international jihadist organizations. These elements sidelined other anti-government forces, which Western nations touted as “moderate rebels,” as the main threat to Damascus. Russian intervention in 2015 turned the tide and helped the Syrian Army oust Islamist militants from most of the country. Some portions, where Turkish and American troops or their local allies are present, remain outside Damascus’ control. The US has imposed crippling unilateral sanctions on Syria, which hamper its ability to reconstruct after this brutal conflict. Xi expressed support for Assad’s efforts to rebuild the nation, keep terrorists in check, and seek a political settlement for the Syrian people.

The Arab League readmitted Syria in May as Damascus seeks to normalize relations with its neighbors. Beijing had facilitated the restoration of diplomatic relations between regional rivals, Iran and Saudi Arabia, in June. Both nations played significant roles in the Syrian crisis, the former supporting Assad’s government and the latter initially vying for his ouster. The Syrian president and First Lady Asma Assad arrived in Hangzhou on Thursday. On Saturday, the visiting dignitaries are set to attend the opening ceremony of the 19th Asian Games alongside a dozen other foreign guests.

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Jim posted this piece without a title. Update: Jim sent me an email. Something about an iPad and a 3-day getaway. The article now has a title.

Boblitis (Jim Kunstler)

Did you catch Attorney General Merrick Garland’s performance Wednesday before the House Judiciary Committee? The absurdity ran pretty rank in the chamber as the AG artfully evaded explaining how it is he doesn’t know a darn thing about the consequential cases in process at his DOJ — and if he did happen to know, he wouldn’t be able to say because… reasons. For instance, the strange inability of one US attorney David Weiss to generate charges after five whole years of investigation in the sundry matters involving the president’s son, Hunter Biden, until the statute of limitations on tax evasion dribbled away. And then, after concocting a booby trapped plea deal on a Mickey Mouse gun rap that blew up under a judge’s scrutiny, the selfsame Mr. Weiss is appointed Special Counsel (i.e. prosecutor) over those very cases. Say, whu…? Not to mention that it’s against the regulations to appoint anyone special counsel from within the DOJ.

Well, you see, Mr. Weiss is a splendid fellow, Mr. Garland explained. When asked if he could give a working definition of professional incompetence, the AG affected to be stumped. In the course of all this play-acting, Mr. Garland maybe perjured himself several times, and he seemed painfully aware of his own possible looming legal difficulties. One suspects through all this mummery and confabulation that Merrick Garland is not actually in charge of the US DOJ. Then who is? My guess would be the ultra low profile Deputy AG Lisa Monaco, a mitochondria of the DC blob, one of its energy cells. Ms. Monaco was up to her eyeballs in the Obama regime’s prep work for the Russia Collusion Hoax of 2016, and since her appointment as DAG in April, 2021, is a behind the scenes architect of the new American police state.

The Washington Post pretends that she doesn’t exist. One also wonders when a House committee will become interested in deposing her, especially on the subject of her involvement with J-6 prosecutions. So far, the blob has gotten away with its many depredations because the DC federal district court is one of its pseudopods, able to reach out, engulf, and dissolve anyone who poses a threat. But a turning point in America’s struggle against blobbery may have been crossed far away from there. Down in Texas, which is lately afflicted with blobitis, the state Attorney General Ken Paxton escaped an impeachment trap laid by Party of Chaos state legislators and blob allies revolving around Karl Rove and the next-gen Bush family, losing its legacy as owners of the Texas GOP.

Mr. Paxton must be royally pissed off by these shenanigans and maybe ready to rumble with blob agent Homeland Security Sec’y Alejandro Mayorkas and his putative boss, “Joe Biden.” As it happens, with Autumn here and temperatures along the border moderating, crossings of illegal aliens are at 10,000 a day. A few days after Mr. Paxton’s acquittal in the Texas Senate, Governor Greg Abbott officially declared “an invasion.” Under the US Constitution, federal failure to defend the border allows the states to repel the invaders with force. It also pretty explicitly spells out an impeachable offense against “Joe Biden” — failure to defend our country. The blob quivers and throbs.

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It was a major hit. CNN reports dozens of dead and wounded. Waiting for confirmation.

Expert: NATO Helped Ukraine Strike Black Sea Fleet HQ in Sevastopol (Sp.)

The headquarters of Russia’s Black Sea Fleet in the Crimean port city of Sevastopol came under a Ukrainian missile strike on Friday, as per the Russian Ministry of Defense. The Ukrainian military attacked a historic building of the Black Sea headquarters in Sevastopol this September 22, with one Russian military serviceman going missing, according to the Russian Ministry of Defense (Mod). The MoD specified that during the Kiev regime’s attack on Sevastopol, five enemy missiles had been shot down by Russia’s air defenses. “[The Ukrainians] mostly attack with Storm Shadows, they are British-made, it is quite likely that they are also French, they are basically identical and almost identical among the French SCALPs,” Vasily Dandykin, a captain 1st rank reserve and military expert, told Sputnik.

“The Americans have not yet delivered their ballistic missiles with a firing range of 300 kilometers. These missiles [Storm Shadow – Sputnik] are quite insidious, they hit the Chongarsky Bridge with them twice; they hit our plant in Sevastopol. Seven were shot down, three penetrated.” “All this is orchestrated with the help of curators and patrons [from the West]. Even though they criticize Ukrainians for such behavior and that it’s not what they are taught. They provide [Kiev] with intelligence data – US strategic surface drones are constantly hovering there – they provide data from strategic aviation, which is in the neutral waters of the Black Sea, they also provide, accordingly, space reconnaissance, especially from satellites that hang in low orbits.”

A missile warning sound was heard in the Crimean city of Sevastopol, home to the Russian Black Sea Fleet, in the morning of September 22. According to Governor Mikhail Razvozhaev, the fleet’s headquarters were subjected to a rocket strike by the Ukrainian Armed Forces. Heavy smoke was seen emerging from the city center. “The enemy launched a missile attack on the fleet headquarters. A fragment fell near the Lunacharsky Theater… All operational services went to the incident scene. Information about the victims is being clarified. Please remain calm. And do not post photos and videos,” Razvozhaev said on Telegram. He warned of a possible new attack on the Black Sea Fleet’s headquarters. The news came after the Russian MoD earlier announced that the peninsular air defenses destroyed a Ukrainian guided missile and two aircraft-type drones off the west coast of Crimea.

[..] Dandykin noted that the Russian military is due to analyze where the strikes came from and take a closer look at the remaining Ukrainian military forces in Odessa. “They attack, as I understand it, mainly from the south of Ukraine, from Odessa,” the expert suggested. “We must take into account that this is probably the only thing they are now capable of in the situation when their counteroffensive failed. This means hitting our territories, shelling the Bryansk region, Belgorod, Kursk. This means to hit the Kherson region, the Zaporozhye region, including the nuclear power plant, and, accordingly, to attack long-suffering Donetsk and Gorlovka. Here they don’t spare shells, although they always complain that they don’t have enough. “[US President Joe] Biden also gave them cluster munitions. It’s pure slaughtering, as [Ukrainians] are shooting at civilians. We need to be even more vigilant and more effective,” Dandykin concluded.

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10,000 young men land on Lampedusa, and Borrell says: “If we want to survive from a labor point of view, we need migrants..”

Borrell Warns Migration Might ‘Dissolve’ EU (RT)

The European Union’s foreign policy chief Josep Borrell has warned that immigration could become a “dissolving force” for the international bloc, arguing that some member states simply “don’t want to accept people from outside.” Speaking to the Guardian for an interview published on Friday, Borrell pointed to rising nationalist sentiment across Europe, noting that “we have not been able until now to agree on a common migration policy.” “Migration is a bigger divide for the European Union. And it could be a dissolving force for the European Union,” he said, adding “There are some members of the European Union that are Japanese-style – we don’t want to mix. We don’t want migrants. We don’t want to accept people from outside. We want our purity.”

However, Borrell argued that Europe’s current “low demographic growth” meant that some states required an influx of immigration, calling the situation a “paradox.” “If we want to survive from a labor point of view, we need migrants,” the official continued. Borrell’s comments come just days after German President Frank-Walter Steinmeier declared that his country could no longer take in migrants and refugees, telling an Italian newspaper that “Germany, like Italy, is at the limit of its capacity.” The president cited “strong immigration from the eastern borders, from Syria, Afghanistan,” as well as the arrival of “over a million refugees from Ukraine” in the last year, and called for a “permanent solidarity mechanism” to ensure a “fair distribution” of migrants in Europe

According to newspaper Die Welt, Rome is also re-evaluating its border policies amid a spike in migration, with officials reportedly notifying other EU members that Italy would be halting migrant transfers “for a limited period of time” last December. They said the move was linked to “suddenly arising” technical issues related to the country’s intake capacity, though the suspension has continued into 2023, the German outlet reported. While Borrell warned that dissent over immigration could eventually threaten the integrity of the EU, he suggested that, for now, the bloc would remain intact. Britain’s decision to leave the EU had served as a “vaccine” for other members, he argued, stating that “No one wants to follow the British leaving the European Union.”

Migration has remained a highly contentious issue within the bloc since 2015, when the EU was hit by an influx of refugees, as well as economic migrants, driven by poverty and wars in Africa and the Middle East. sSome countries, including Hungary and Poland, strongly opposed attempts by Brussels to force them to accept and settle migrants, which initially arrived in other member states. The Italian government, meanwhile, has closed its ports to ships transporting migrants from North Africa, insisting that other member states should share the burden of accepting them. The demand for tighter border controls was also one of the drivers behind the ‘Leave’ campaign during the 2016 Brexit referendum in the UK.

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Censorship as a religion, high priests and all.

The Defunct Disinformation Governance Board Exposed (Turley)

We previously discussed the defunct Disinformation Governance Board and its controversial head Nina Jankowicz. After the outcry over the program, Homeland Security Secretary Alejandro Mayorkas finally relented and disbanded the board while insisting that it was never about censoring opposing views. Jankowicz has sued over the portrayal of her views. Now, Americans for Prosperity Foundation (AFPF) has exposed just how broad the scope of the censorship efforts were under the board in combatting “misinformation, disinformation, and malinformation (MDM). This range of authority in what the agency called the “MDM space,” included targeting views on racial justice and the disastrous withdrawal from Afghanistan.

New documents obtained under the Freedom of Information Act (FOIA) requests show that the Department of Homeland Security (DHS) argued that the agency could regulate speech related to “the origins of the COVID-19 pandemic and the efficacy of COVID-19 vaccines, racial justice, U.S. withdrawal from Afghanistan, and the nature of U.S. support to Ukraine” as well as “irregular immigration.” Those subjects stretch across much of the “space” used for political speech in the last few years. Notably, within DHS, Jen Easterly, who heads the Cybersecurity and Infrastructure Security Agency, extended her agency’s mandate over critical infrastructure to include “our cognitive infrastructure.” The resulting censorship efforts included combating “malinformation” – described as information “based on fact, but used out of context to mislead, harm, or manipulate.” I testified earlier on this effort.

So DHS asserted the authority to target viewpoints on racial justice, Ukraine, and other political subjects, including views based on fact but viewed as misleading in context. What is also troubling is the continued effort to conceal these censorship activities. Homeland redacted much of this information on a now defunct board under FOIA Exemption 7(E), which protects “techniques and procedures for law enforcement investigations or prosecutions, or would disclose guidelines for law enforcement investigations.” That claim is itself chilling. After the demise of the board, National Public Radio ran an interview entitled “How DHS’s disinformation board fell victim to misinformation.”

As the title suggests, NPR just repeated the view of Jankowicz despite the objections of many of us in the free speech community. Jankowicz insisted “we weren’t going to be doing anything related to policing speech. It was an internal coordinating mechanism to make sure that we were doing that work efficiently.” Yet, what were the criminal investigations, prosecutions, and enforcement efforts now being claimed as connected to this work? Recently, a court found that the Biden Administration’s censorship efforts constituted “the most massive attack against free speech in United States history.” Those words by Chief U.S. District Judge Terry A. Doughty are part of a 155-page opinion granting a temporary injunction, requested by Louisiana and Missouri, to prevent White House officials from meeting with tech companies about social media censorship.

Yet, Democrats have gone all in on censorship, blacklisting, and even red-baiting efforts. The July 4 decision came six months after I testified before Congress that the Biden administration used social media companies for “censorship by surrogate.” Despite furious attacks by congressional Democrats in that and later hearings, a court found that the evidence overwhelmingly shows systematic violation of the First Amendment by the Biden administration. Now we have a glimpse into the chilling scope of the Homeland Security’s efforts to target opposing viewpoints. From racial justice to Covid to Ukraine, these subjects involve core political speech. Yet, the Biden Administration felt that it had the right to monitor and combat opposing views in these areas.

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Octoberfest

 

 

Protect

 

 

Cassowary

 

 

Son of the earth

 

 

 

 

Support the Automatic Earth in wartime with Paypal, Bitcoin and Patreon.

 

 

 

 

 

Aug 122019
 


Samuel Peploe Paris-plage 1907

 

Jeffrey Epstein’s Trail Of Bankruptcy And Ruined Lives (WaPo)
Jeffrey Epstein Kept “Meticulously Detailed” Secret Diaries (Mirror)
New York Coroner ‘Confident’ Epstein’s Death Was Suicide (R.)
Lawyers Say Epstein Victims To Sue Financier’s Estate This Week (R.)
Hong Kong Airport Cancels All Outgoing Flights Over Protests (BBC)
Hong Kong Protests: Brutal Undercover Police Tactics Spark Outcry (G.)
Britons Have Spent £4bn Stockpiling Goods In Case Of No-Deal Brexit (PA)
The Biggest Migration Since the Barbarian Invasions of Rome (Casey)
Assange’s Lawyer Pleads With Australians To Help Bring Him Home (TND)
Ai Weiwei On Leaving Berlin: ‘Germany Is Not An Open Society’ (Local.de)

 

 

Not a great article, but it does add something interesting to the picture: the image of Epstein as an ordinary swindler, albeit on a large scale (Ponzi). His victims are not only the underage girls.

Jeffrey Epstein’s Trail Of Bankruptcy And Ruined Lives (WaPo)

The story of Epstein’s first great escape is a tale of financial wizardry and brazen criminality, in which hundreds of thousands of Americans lost their retirement money, their life’s savings, on an investment intended to enrich only its creators. “That money would have been my real retirement,” said Veriena Braune, a 91-year-old retired teacher in Granbury, Texas, who invested all of her savings – $112,000 – in bonds that a young Epstein sold for his partner, Steven Hoffenberg. She lost every penny of the money. “Somebody should know: that Epstein did a number on a little teacher in Texas,” Ms Braune said.

Mr Hoffenberg, who headed up the investment scheme and spent 18 years in prison because of it, said in an interview with The Washington Post this week that Epstein was “the architect of the scam.” Federal prosecutors agreed. Yet Epstein was never charged. His name, initially included in prosecutors’ descriptions of the scheme, quickly vanished from the record. “I thought Jeffrey was the best hustler on two feet,” Mr Hoffenberg said. “Talent, charisma, genius, criminal mastermind. We had a thing that could make a lot of money. We called it Ponzi.” Mr Hoffenberg pleaded guilty in 1995 to mail fraud, obstruction of justice and tax evasion in two scams – one designed to misuse the assets of two Illinois insurance companies and the other fleecing more than $460 million from about 200,000 investors who bought notes and bonds from Mr Hoffenberg’s Towers Financial Corp.

[..] Sometimes, the machinations went very wrong. The money Towers used to try to buy control of Emery Air Freight was lost when Emery’s stock price plummeted. By 1993, prosecutors in Illinois and New York who had spent years investigating Mr Hoffenberg’s companies were ready to spell out their findings. In front of a grand jury in Chicago, federal prosecutor Edward Kohler walked Mr Hoffenberg, who had just agreed to cooperate with the government, through the design of the scam. In the narrative Mr Kohler laid out, Epstein was the technical wizard who kept the money moving around to support Mr Hoffenberg’s various schemes. Over and over, Mr Kohler asked Mr Hoffenberg whether Epstein had designed Towers’ scams.

Mr Hoffenberg affirmed the prosecutor’s story at every turn. “Jeffrey Epstein was the person in charge of the transactions,” Mr Hoffenberg said. “Epstein was trying to manipulate the price of the stock?” Mr Kohler asked. “Yes,” Mr Hoffenberg replied. “You didn’t object to that, sir?” “No,” Mr Hoffenberg said. That was in November 1993. Three months later, Epstein’s name disappeared from the case. In court hearings, FBI reports and affidavits throughout 1994 and 1995, prosecutors and FBI agents referred to Hoffenberg’s “co-conspirators,” “confederates” and “others.” A review of court files finds no further reference to Epstein as the case moved towards a conclusion that convicted Mr Hoffenberg and sent him to prison for 18 years.

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Prince Andrew under pressure.

Jeffrey Epstein Kept “Meticulously Detailed” Secret Diaries (Mirror)

Sources revealed Epstein kept a diary detailing his friendships with powerful associates – including Andrew and socialite Ghislaine Maxwell – as an “insurance policy”. Epstein’s diary will be a source of great anxiety to her and the other senior royals. Its existence emerged as lawyers for the victims look to obtain a statement from the Prince as part of ongoing investigations by various US law enforcement authorities. Despite Epstein’s death, government prosecutors have vowed to continue their enquiries, indicating they will pursue all those involved in the billionaire’s offending. US Attorney Geoffrey Berman said: “To those brave young women who have already come forward and to the many others who have yet to do so, let me reiterate that we remain committed to standing for you.”

And yesterday, lawyer Jack Scarola, who represents scores of victims, told the Mirror his clients “will not rest” in their fight for justice. It comes four years after an attempt to ask Andrew to testify under oath about his time with Epstein failed. Following the billionaire’s jail-cell death, it was claimed Epstein’s associates were “breathing a huge sigh of relief”. Now, as questions are being asked about whether the 66-year-old took his own life or was killed to silence him, the pervert’s secrets are set to spark panic among his powerful circle of friends, including Donald Trump and Bill Clinton. A source revealed: “All Jeff ever had he bought, including his friends. “He used his wealth to buy buddies and then bestow his money on those he courted.

“Jeff knew his relationships with the rich and famous brought him protection. “He kept a diary in meticulous detail in case he ever needed it. “One former congressman said there are a lot of people ‘breathing a huge sigh of relief’ now Jeff is dead. “They should hold their breath for a long time to come. It ain’t over.”

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Meaningless.

New York Coroner ‘Confident’ Epstein’s Death Was Suicide (R.)

New York City’s chief medical examiner is confident Jeffrey Epstein died by hanging himself in the jail cell where he was being held without bail on sex-trafficking charges, but is awaiting more information before releasing her determination, the New York Times reported on Sunday, citing a city official. An autopsy was performed earlier in the day on the disgraced financier found unresponsive on Saturday in a New York City jail, chief medical examiner Dr. Barbara Sampson said. A private pathologist observed the autopsy on behalf of Epstein’s representatives, which she called “routine practice.”


A determination on the cause of death “is pending further information at this time,” Sampson said in a statement. The suspicion in Epstein’s death was hanging, said a city official not authorized to speak on the record. The Times did not say why it could not identify the source of information on the medical examiner’s likely determination of the cause of death. Epstein, 66, was not on suicide watch at the time in his cell in the Special Housing Unit of the Metropolitan Correctional Center (MCC), a source said. Epstein, a well-connected money manager, was found hanging by his neck, according to the source, who was not authorized to speak on the record.

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“The “Child Victims Act,” which takes effect on Aug. 14, gives people a year to sue over allegations of sexual abuse, regardless of when the alleged acts occurred.”

Lawyers Say Epstein Victims To Sue Financier’s Estate This Week (R.)

Lawyers for several women who say they were sexually abused by disgraced financier Jeffrey Epstein plan to file lawsuits this week against his estate following his apparent suicide in a New York jail cell. Los Angeles attorney Lisa Bloom, who represents two women, told Reuters “we intend to promptly file those civil claims” having held off suing while federal prosecutors pursued sex trafficking charges against Epstein. New York lawyer Roberta Kaplan said she hopes to file on Wednesday on behalf of a client to take advantage of a new New York State law which makes it possible to pursue decades-old claims of abuse.


The “Child Victims Act,” which takes effect on Aug. 14, gives people a year to sue over allegations of sexual abuse, regardless of when the alleged acts occurred. Kaplan will sue on behalf of a woman described in the indictment against Epstein as a minor victim. The unidentified woman was recruited to engage in sex acts with Epstein around 2002 and paid hundreds of dollars for each encounter with the financier, according to the indictment. She was 14 when it happened, Kaplan said. [..] Epstein’s death is likely to “unleash an avalanche of civil suits against his estate,” said New York attorney Paul Callan, who is not involved with the case.

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“..one of the world’s busiest..”

Hong Kong Airport Cancels All Outgoing Flights Over Protests (BBC)

Hong Kong International Airport has cancelled departing flights, as anti-government protests in its main terminal continue for a fourth day. Thousands are gathered at the airport – which is one of the world’s busiest. In a statement, officials said operations had been “seriously disrupted” by the public assembly. Many of those protesting are critical of the actions of police, who on Sunday were caught on film firing tear gas and non-lethal ammunition at close range. Hong Kong’s mass demonstrations and unrest show no sign of abating, more than two months after they were sparked by a controversial extradition bill. In a statement on Monday, Hong Kong’s Airport Authority said they were cancelling all flights that were not yet checked in. They advised members of the public not to travel to the airport but said arrivals already heading into Hong Kong would be allowed to land.

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Looked ugly.

Hong Kong Protests: Brutal Undercover Police Tactics Spark Outcry (G.)

Rights groups and democracy activists have accused police in Hong Kong of using excessive force after teargas was fired into an enclosed subway station and officers posed as protesters before making arrests during an intense weekend of clashes. “Clashes between protesters and police over the weekend escalated to another level especially on the police side,” said Man-Kei Tam, director of Amnesty International Hong Kong. Tam cited video footage of police firing teargas into a subway station on Sunday night in Kwai Fong. It was not clear how many protesters were inside the station at the time, but it has been rare for officers to fire tear gas indoors. He also shared footage of police firing non-lethal projectiles at close range as protesters attempted to flee down a separate subway station escalator.

Tam questioned the need for such force in both cases as protesters appeared to be showing “no aggression” towards officers. “These are all very ugly things,” he said. Pro-democracy street protests in Hong Kong stretched into their 10th week on Monday with no sign of either side backing down. The police have also reported injuries among their ranks, including eye irritation from laser pointers and burns from a petrol bomb. Civil Rights Observer, a local rights group that sends observers to protests, said it had “very serious concerns” about police violence and had seen “very clear evidence to show the police are violating their guidelines”, according to spokesman Icarus Wong.

Wong said the group was particularly concerned by the use of undercover officers for the first time, who later turned on protesters on Sunday night. He said it was unclear if they may have acted as agitators before making mass arrests. During the weekend protests, website Hong Kong Free Press showed footage of one arrest that appeared to include officers dressing as protesters who injured a demonstrator pressed to the ground. The young man, who said his name was Chow Ka-lok and asked for a lawyer, was left with bleeding head wounds and a broken tooth.

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Otherwise, the economy would even look much worse.

Britons Have Spent £4bn Stockpiling Goods In Case Of No-Deal Brexit (PA)

Britons have spent £4bn stockpiling goods in preparation for a possible no-deal Brexit, new research suggests. One in five people are already hoarding food, drinks and medicine, spending an extra £380 each, according to a survey by the finance provider Premium Credit. The survey found that about 800,000 people have spent more than £1,000 building up stockpiles before the 31 October Brexit deadline. If the UK leaves with no deal, businesses predict there will be short-term supply problems, which the government says it is mitigating. Similar research in the weeks leading up to the original deadline for the UK to leave the EU found that about 17% of the population had spent some money building up supplies, with a total stockpile spend calculated at £4.6bn ahead of the 31 March deadline.


Of the people who are stockpiling, 74% of those surveyed said they had bought extra food, 50% bought medicines and 46% bought drinks. Brexit-related stockpiling is also hitting cashflow, according to the report, with companies taking out credit to cover the cost of insurance and other fixed costs. Adam Morghem of Premium Credit said: “The level of stockpiling by British businesses and households is well documented, but there has been little focus on the impact this has had on cashflow, which has been quite negative. “Interestingly, over the past three months we have seen an increase in clients looking to use premium finance to pay for their insurance, and we believe a key factor behind this is the impact of stockpiling on cashflows, forcing more businesses and households to spread the cost of their insurance. “Businesses should also check with their brokers to make sure their stockpiled goods are properly insured.”

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The Chinese move to Africa and the Africans move to Europe.

The Biggest Migration Since the Barbarian Invasions of Rome (Casey)

Africa is the only part of the world where the population is still growing and growing rapidly. Africa south of the Sahara was about 6% of the world’s population in the ’50s, now it’s about 16%. But by the turn of the century, it’s going to be 45%. Assuming there isn’t some kind of catastrophe. It’s not clear that the Africans can grow enough food for billions more people. In fact, if the West stops supporting the continent with capital and technology, it could be in for very tough times. [..] Few people realize how fast the population is growing, and things are changing in Africa. I ask knowledgeable people what they think the biggest cities in the world will be at the turn of the next century. They all guess cities in China or India.

But that’s not true. Eighty years from now, Lagos, Nigeria, will be the largest city in the world. It’s on track to have a population of more than 90 million. The world’s second biggest city will be Kinshasa in the Congo with about 80 million people. Dar es Salaam, Tanzania, will be the world’s third biggest city with a population of roughly 75 million people. It’s quite amazing. When I first visited Dar in the early ’80s, it was a quiet, exotic seaport with old tramp steamers in the harbor. Now all those people have cell phones, and they’re well aware of the fact that the standard of living is vastly higher in Europe and every other part of the world than in Africa. And they’re well aware of the fact that there are welfare benefits of all types if they can get to Europe.

[..] It’s a growing tidal wave. With the European population diminishing and the African population growing, you’re going to see Europe basically taken over by Africa in the next several generations.

Read more …

An article in Australia’s The New Daily about Jennifer Robinson’s efforts to wake up the country turns into yet another smear piece.

Assange’s Lawyer Pleads With Australians To Help Bring Him Home (TND)

Assange still has a support base in Australia, but it has dwindled in the years since he entered the embassy. Between sexual assault allegations, alleged connections to the Russian government and a failed tilt at electoral success with the WikiLeaks Party, Assange has become a divisive character. His supporters are desperately trying to separate his extradition to the US from the other storms blowing around him. Lead campaign adviser in Australia Greg Barns is asking Australians to put aside “what they think” about Assange. “At the end of the day we need to remember what is it he exposed, for which he’s been prosecuted. He revealed war crimes and he’s being punished for it,” he said.


“Irrespective of the DNC (Democratic National Committee) emails and what people think about the matters relating to Sweden, even if you don’t support Assange – you have to differentiate that from the US prosecuting him.” But Assange’s public image has suffered as debate has raged around his motives and connections. Some think he’s a neo-right activist, some a Russian agent, while others label him a leftist crusader. Ms Robinson says none of these labels matters. “If you take any of the publications since 2010, the principle of what they’ve done is the same. They publish in the public interest, irrespective of the politics. “The principle has not changed, whatever the politics. It’s about publishing in the public interest.”

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“This country doesn’t need me because it’s so self-centered.”

Ai Weiwei On Leaving Berlin: ‘Germany Is Not An Open Society’ (Local.de)

Ai Weiwei, the Chinese activist and artist, has lived in self-imposed exile in Berlin since 2015. But he plans to leave Germany because he believes it is too intolerant. In an interview with the German daily Welt published Friday, Ai said: “Germany is not an open society. It is a society that wants to be open, but above all it protects itself. German culture is so strong that it doesn’t really accept other ideas and arguments.” Ai, 61, added that there is “hardly any room for open debate”. The artist, who is an outspoken critic of China’s government, moved to Berlin in July 2015 after spending four years under house arrest in China. The artist said he had reported experiences of discrimination to authorities while living in Berlin, such as being thrown out of taxis.


However, the office investigating them had come to the conclusion the incidents involved “cultural differences” rather than discriminatory offences, he said. Ai added: “This sounds to me like the Chinese government justifying its violations of human rights with ‘cultural differences’ to the West. Ai also slammed German politicians and cultural institutions for not denouncing Chinese human rights violations. “My family and I enjoyed living here very much, but I am leaving Berlin,” he said. “This country doesn’t need me because it’s so self-centered.” The artist doesn’t yet know where he’ll move to with his family. “I don’t have a place I belong to because China has rejected me since I was born,” he said. “Those who know their destination are no longer refugees. I am a refugee.”

Read more …

 

 

 

 

 

Dec 072018
 


Paul Almasy Paris 1950

 

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

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

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

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

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

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

 

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

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

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

 

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

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

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

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

 

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

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

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

 

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

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

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

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

It’ll be quite the day Saturday in Paris.

 

 

Sep 242018
 
 September 24, 2018  Posted by at 9:31 am Finance Tagged with: , , , , , , , , , ,  3 Responses »


M. C. Escher Circle limit III 1959

 

BIS Warns Zombies Are Crippling Global Growth (ZH)
‘Key Allies’ Want FBI Docs Blocked: Trump (AAP)
White House Denies Trump Executive Order On Facebook, Google, Twitter (Ind.)
Christine Blasey Ford Reaches Deal to Testify at Kavanaugh Hearing (NYT)
OPEC Predicts Massive Rise In Oil Production Over Next Five Years (G.)
Leading Tory Eurosceptics Unveil Rival Brexit Plans (Ind.)
Labour’s New Brexit Referendum Won’t Offer Option To Remain (Ind.)
How Michael Moore Lost His Audience (Variety)
Panama Revokes Registration Of Last Migrant Rescue Ship In Central Med (R.)
America’s Era Of Climate Mass Migration Is Here (G.)
Air Pollution Rots Our Brains. Is That Why We Don’t Do Anything About It? (G.)

 

 

The benefits of easy money.

BIS Warns Zombies Are Crippling Global Growth (ZH)

In the latest quarterly review from the Bank of International Settlements, the Basel-based organization that oversees the world’s central banks warned that decades of falling interest rates have led to a sharp increase in the number of “zombie” firms, rising to an all time high since the 1980s, threatening economic growth and preventing interest rates from rising. Zombie firms are defined as companies that are at least 10 years old, yet are unable to cover their debt service costs from profits, in other words the Interest Coverage Ratio (ICR) is less than 1x for at least 3 consecutive quarters. These types of companies, which first gained attention in Japan decades ago and have since gained prevalence in Europe and, increasingly, the United States.

According to a second definition, a requirement for a “zombie” is to have comparatively low expected future growth potential. Specifically, zombies are required to have a ratio of their assets’ market value to their replacement cost (Tobin’s q) that is below the median within their sector in any given year. According to authors Ryan Banerjee and Boris Hofmann, zombie firms that fall under the two definitions are very similar with respect to their current profitability, but qualitatively different in their profitability prospects, which may be a function of how central banks have “broken” the market. Graph 1 below shows that, for non-zombie firms, the median ICR is over four times earnings under both definitions. As the majority of zombie firms make losses, the median ICRs are below minus 7 under the broad measure and around minus 5 under the narrow one, so this is hardly a surprise.

Read more …

And that’s it?

‘Key Allies’ Want FBI Docs Blocked: Trump (AAP)

US President Donald Trump says “key allies” have asked him not to release classified FBI documents related to the probe into Russian influence in the 2016 presidential election, raising speculation the Australian government could be exposed. Former Australian high commissioner to the UK Alexander Downer has become a reluctant player in the controversy for his London drinks session with former Trump foreign relations aide George Papadopoulos. Papadopoulos, sentenced to 14 days’ jail for lying to the FBI, has repeatedly targeted Downer in Twitter tirades in recent days, claiming the former Australian foreign affairs minister recorded their meeting at the Kensington Wine Rooms in May, 2016, and was acting as a spy. Downer has strongly rejected this.

“Alexander Downer will go down in history as a stooge for (Hillary) Clinton who single-handedly caused irreparable damage between the USA-Australia,” Papadopoulos wrote on Twitter on Friday. “Congrats, buddy.” On Monday Trump ordered documents related to the FBI’s Russian investigation, including text messages from FBI figures Peter Strzok and Lisa Page, be declassified and released publicly. However, on Friday the president pulled back. “I met with the DOJ concerning the declassification of various UNREDACTED documents,” Trump announced on Twitter. “They agreed to release them but stated that so doing may have a perceived negative impact on the Russia probe. “Also, key Allies’ called to ask not to release.”

[..] “After reports are finally out that the British and Australian governments were actively spying and trying to sabotage the Trump campaign, those two governments called the president to ask for him not to declassify any FISA documents,” Papadopoulos wrote on Twitter. “Strange.”

Read more …

Taking another road. If 3/4 of Americans say Big Tech is politically biased, can’t very well not investigate.

White House Denies Trump Executive Order On Facebook, Google, Twitter (Ind.)

The White House sought to distance itself Saturday from reports that President Donald Trump is considering an executive order that would subject tech giants like Facebook, Google and Twitter to federal investigations for alleged political bias. For weeks, top tech companies have been on edge, fearing that the Trump administration could seek to regulate the industry in response to the president’s tweets attacking social-media sites for silencing conservatives online. Their worst suspicions seemed to come true Friday night, with the emergence of a draft executive order that called for nearly every federal agency to study how companies like Facebook police their platforms and refer instances of “bias” to the Justice Department for further study.

But three White House aides soon insisted they didn’t write the draft order, didn’t know where it came from, and generally found it to be unworkable policy anyway. One senior White House official confirmed the document had been floating around the White House but had not gone through the formal process, which is controlled by the staff secretary. Asked about the document, Lindsay Walters, the deputy White House press secretary, said of the digital-age ‘whodunit’ on Saturday: “Although the White House is concerned about the conduct of online platforms and their impact on society, this document is not the result of an official White House policymaking process.”

Read more …

This dominates the news. Sex sells. But what a convoluted story it has become.

Christine Blasey Ford Reaches Deal to Testify at Kavanaugh Hearing (NYT)

Senators looking to confirm or refute the allegations will face a nearly impossible task. Complicating matters, Dr. Blasey has said she does not recall the specific date or location of the house where the alleged incident occurred, though she believes it was during the summer of 1982. Judge Kavanaugh’s prospects were further clouded on Sunday when The New Yorker reported on a new allegation of sexual impropriety: A woman who went to Yale with Judge Kavanaugh said that, during a drunken dormitory party their freshman year, he exposed himself to her, thrust his penis into her face and caused her to touch it without her consent.

In a statement, Judge Kavanaugh denied the allegation from the woman, Deborah Ramirez, and called it “a smear, plain and simple.” The New Yorker did not confirm with other eyewitnesses that Judge Kavanaugh was at the party. The Times had interviewed several dozen people over the past week in an attempt to corroborate her story, and could find no one with firsthand knowledge. Ms. Ramirez herself contacted former Yale classmates asking if they recalled the incident and told some of them that she could not be certain Mr. Kavanaugh was the one who exposed himself.

Read more …

Hmmm. Methinks is rates rise, US shale is in deep doodoo.

OPEC Predicts Massive Rise In Oil Production Over Next Five Years (G.)

World oil production will soar to new records over the next five years, as a dramatic expansion in demand from airlines offsets the arrival of electric cars, according to a report from Opec. In a forecast that will dismay environmentalists – and which questions the theory that oil company reserves will become “stranded assets” – Opec’s annual report significantly revised production estimates upwards. Most of the production increase will come from countries outside Opec, led by explosive growth from frackers in the United States, with China and India leading the increase in demand.

Opec expects global oil demand to reach nearly 112m barrels per day by 2040, driven by transportation and petrochemicals. That is up from almost 100m today and higher than last year’s projection. Coal will continue to be be burned in record amounts, despite concerns about its impact on climate change. Opec estimates that coal usage in the OECD countries will plummet by a third by 2040, but it will increase by 20% in developing countries to reach five times the volumes burned in the west. The world’s airlines will be the single fastest growing user of oil, increasing consumption by 2.2% a year on average, to 2040.

However, the largest absolute growth is expected to come from road transport. The number of vehicles on roads across the world are expected to leap from 1.1bn now to around 2.4bn in 2040. In its central scenario, Opec expects just 320m of those to be electric, a number that climbs to 720m in a scenario where battery-powered cars take off rapidly. It said that if the higher prediction for electric cars came to pass, oil demand would only slip slightly to 109m bpd rather than 111.7m bpd by 2040, the report said.

Read more …

Who cares about deadlines?

Leading Tory Eurosceptics Unveil Rival Brexit Plans (Ind.)

Leading Tory Eurosceptics are to spell out rival Brexit plans that directly contradict Theresa May’s proposals, setting the scene for intense Tory infighting just weeks before a deal is meant to be agreed with the EU. The rebel plans are likely to demand looser future relations with Brussels and are to be laid out by ex-cabinet minister David Davis and lead eurosceptic Jacob Rees-Mogg, but are also said to enjoy support inside the cabinet. In a sign of the impending hostilities, Brexit secretary Dominic Raab launched a pre-emptive attack on the approach taken by the Eurosceptics on Sunday, saying the kind of free trade deal they outline is “off the table”.

Ms May will meet her top team during the morning to discuss the fallout of last week’s summit in Salzburg where EU leaders torpedoed her “Chequers” proposals, forcing the prime minister to accuse them of disrespecting the UK. Monday’s cabinet meeting could also see a new clash between senior ministers over Britain’s future immigration policy and whether EU citizens should be afforded any kind of special status.

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But that’s what his own people want.

Labour’s New Brexit Referendum Won’t Offer Option To Remain (Ind.)

Remaining in the EU would not be on the ballot paper in a new Brexit referendum under Labour, John McDonnell has said. The shadow chancellor said Labour would “go for a people’s vote” on leaving the EU if it cannot push the government into calling a general election but any vote would only be on the terms of the deal. Rows over Brexit have dominated the start of Labour’s annual conference where more than 100 constituency parties submitted motions demanding a second referendum and thousands of people joined a march demanding a people’s vote on the final deal.

On Sunday, Jeremy Corbyn suggested Labour would shift its Brexit stance towards a vote on the final deal if party members backed it, but insisted that an election was a better way to solve the crisis. Unite boss Len McCluskey, a close ally of Mr Corbyn, went further, saying Labour could back a referendum on Theresa May’s deal or no-deal. However he said offering voters the chance to remain in the EU was “wrong”. Asked to guarantee that Labour would allow staying in the EU on the ballot paper, Mr McDonnell told the Today programme: “My view at the moment is that parliament will decide what will be on the ballot paper. “We’ll be arguing that it should be a vote on the deal itself, and then enable us to go back and do the negotiations.”

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He simply lost it, in more than one sense.

How Michael Moore Lost His Audience (Variety)

The films of Michael Moore have been faltering at the box office for several years now. This weekend, though, the lackluster performance of his latest truth-to-power opus, “Fahrenheit 11/9,” was notably dramatic, if not downright stark. The movie is a sequel, of sorts, to “Fahrenheit 9/11,” Moore’s scathing riff on the administration of George W. Bush. That movie, when it was released in 2004, made $119 million, becoming the highest-grossing documentary of all time. It was a special moment, of course. America was still grappling with the shock of 9/11, and Moore’s film became a lightning rod — a catharsis for liberals (or some of them, anyway) and a symbol, for conservatives, of everything that was wrong with liberalism. But one thing, perhaps, that everyone could agree on is that in “Fahrenheit 9/11,” Michael Moore, for good or ill, had become instrumental in defining the national dialogue.

“Fahrenheit 11/9,” his scathing riff on the administration of Donald J. Trump, will be lucky to gross one-tenth of what “Fahrenheit 9/11” did. That’s more than just a staggering comedown. It symbolizes a couple of things at once: how different the two eras are, but also how Michael Moore’s audience — there’s no other way to put it — has gradually drifted away. It symbolizes that Moore is no longer defining the dialogue. A Trump-era conservative would probably say, “It’s about time! Michael Moore has lied so much that it’s all finally caught up with him.” A Trump-era liberal would probably say, “I still agree with him, but I’ve seen enough Michael Moore movies. I know his message already.”

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There must be a country with a flag to share.

Panama Revokes Registration Of Last Migrant Rescue Ship In Central Med (R.)

The Panama Maritime Authority has revoked the registration of search and rescue ship Aquarius 2 in a move that means there will be no charity rescue ships off the Libyan coast in the near future unless the vessel can find a new flag to sail under. Aquarius 2, the one remaining charity rescue vessel still operating in the Central Mediterranean area, is currently at sea with 58 survivors on board. The decision by the Panama Authority (PMA) means that once the ship comes into port it will be deflagged and will not be allowed to operate again unless it can find a new flag.

SOS Mediterranee, one of the charities that operates the Aquarius, said in a statement it was reeling from news of the revocation, which it said followed pressure from the Italian government. “On Saturday … the Aquarius team was shocked to learn of an official communication from the Panamanian authorities stating that the Italian authorities had urged the PMA to take ‘immediate action’ against the Aquarius,” it said. Italy’s Interior Minister Matteo Salvini said the Italian government had applied no pressure on Panama.

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Interesting for sure, but perhaps a bit premature.

America’s Era Of Climate Mass Migration Is Here (G.)

The population shift gathering pace is so sprawling that it may rival anything in US history. “Including all climate impacts it isn’t too far-fetched to imagine something twice as large as the Dustbowl,” said Jesse Keenan, a climate adaptation expert at Harvard University, referencing the 1930s upheaval in which 2.5 million people moved from the dusty, drought-ridden plains to California. This enormous migration will probably take place over a longer period than the Dustbowl but its implications are both profound and opaque. It will plunge the US into an utterly alien reality. “It is very difficult to model human behaviour under such extreme and historically unprecedented circumstances,” Keenan admits.

The closest analogue could be the Great Migration – a period spanning a large chunk of the 20th century when about 6 million black people departed the Jim Crow south for cities in the north, midwest and west. By the end of this century, sea level rise alone could displace 13 million people, according to one study, including 6 million in Florida. States including Louisiana, California, New York and New Jersey will also have to grapple with hordes of residents seeking dry ground. “There’s not a state unaffected by this,” said demographer Mat Hauer, lead author of the research, which is predicated on a severe 6ft sea level increase.

There are established migration preferences for some places – south Florida to Georgia, New York to Colorado – but in many cases people would uproot to the closest inland city, if they have the means. “The Great Migration was out of the south into the industrialized north, whereas this is from every coastal place in the US to every other place in the US,” said Hauer. “Not everyone can afford to move, so we could end up with trapped populations that would be in a downward spiral. I have a hard time imagining what that future would be like.”

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Like the angle.

Air Pollution Rots Our Brains. Is That Why We Don’t Do Anything About It? (G.)

Researchers from Beijing University and Yale School of Health published research last month showing that people who live in major cities – which is, today, most of us – are not only suffering from increases in respiratory illnesses and other chronic conditions due to air pollution, but are losing our cognitive functions. The study showed that high pollution levels lead to significant drops in test scores in language and arithmetic, with the impact on some participants equivalent to losing several years of education. Other studies have shown that high air pollution is linked to premature birth, low birth weight, mental illness in children and dementia in the elderly.

We’re only just beginning to understand how the air we breathe affects not just our physical environment, but our mental capacity as well. And the air we breathe is changing in the long term, as well as the short. Rising carbon dioxide levels – the main driver of climate change – aren’t just a hazard to the earth and other living creatures, they’re also affecting our thinking. At higher levels, CO2 clouds the mind: it makes us slower and less likely to develop new ideas, it degrades our ability to take in new information, change our minds, or formulate complex thoughts.

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Jul 302018
 
 July 30, 2018  Posted by at 1:48 pm Finance Tagged with: , , , , , , , , , ,  10 Responses »


Pablo Picasso Family of Saltimbanques 1905

 

Why did Britain vote Yes in the Brexit vote Cameron called? To a large degree to protest policies he himself imposed. For many it’s still a mystery ‘mechanism’, but not for all. People like Steve Bannon understand it very well. That is, austerity and mass migration make voters turn to the political right. Even if they are initiated by the right. When Britain’s Tories under David Cameron and George Osborne began ripping apart much of the country’s institutions and infrastructure, they knew that their austerity measures would only make their party stronger.

The incompetence of Theresa May and her ministers on Brexit will lead to an almighty backlash, and soon, but then Boris Johnson or Jacob Rees-Mogg, far to the right of May, will take over. Labour under Corbyn doesn’t stand a chance. The same pattern repeats itself everywhere, and nobody knows how to stop it. How could they if and when they don’t understand it?

For the right, this is a ‘can’t lose’, and they’re not done. That’s why Steve Bannon is touring Europe. It’s easy pickings: a rightwing government that imposes austerity measures will be rewarded for it with more voters. If it also lets in large numbers of migrants, even more votes. Can’t lose. The migration streams in Europe are supported by the right, because they know that subsequently opposing them will keep them in power.

Under political systems as we once knew them, you’d expect people to turn left instead of right, but there is no left left to vote for. What’s left of what was once left, has become an indistinguishable part of a big shapeless blob in the center -or even center-right- of our political systems. Or perhaps we should say: the systems as we once knew them. And it’s indeed just what’s left of the left, which in most cases is very little. In many countries, the UK, Netherlands, Germany, France, Italy, formerly left parties have been all but extinguished, former ‘glory’ brought to its knees.

Spain is an exception, but leftwing PM Pablo Sanchez seems to have landed his job primarily by playing a better game of chess -or poker- than his opponents when he forced then-PM Mariano Rajoy out. But just wait till you see what happens when refugees and migrants begin flooding into Spain, instead of Greece and Italy, for real. That development has already started. Italy closed its borders, Spain opened them. It will lead to a rightwing government in Madrid, too.

This is not about opinion. it’s simply what happens. When there is no left to turn to to halt austerity, let alone temper migration numbers, people will turn to the only alternative available to them. Right. The same right that is more than ready to magnify the problems, whether it’s migration or increasing levels of poverty. They win either way.

 

In Germany, the leftwing SDP hardly exists anymore. Center-right Angela Merkel, Queen of Europe, opened the doors of the nation and whaddaya know, parties to her right started growing. If I can insert one bit of opinion here, I’d say letting one million migrants into your country in one year is asking for trouble. Migration must always take place in moderation, especially when the difference in wealth between an existing population and new arrivals is very large. It’s different in Turkey or Lebanon, where wealth disparities are much smaller.

And those countries are already largely Muslim, whereas allowing many people into your country who have completely different religions and worldviews is a whole different game. Canada does this -relatively- well: new arrivals are Canadian first, and Muslim or Syrian after. European countries have never mastered that model; that’s why they have ghetto’s and assorted other problems. Migration and assimilation must be two sides of the same coin, or you have not immigration but an invasion.

The right can do what it wants and still win and get bigger, while privatizing everything in sight and robbing the public of all they once owed. And then that same public will vote for them again. It’s neoliberal and neocon and there’s nobody left to explain, let alone fight it. And if there were, there’s a formidable propaganda machine waiting in the wings, and they’ve been at it for a while now. The -formerly- left has no such machine. The best they can do is blame Russia. But they themselves are to blame, not Moscow.

 

So the people vote against their own best interests, and it’s not even very hard to get them to do that anymore. All you need to do is deprive them of all other options. Once the left wing becomes part of the center, whether it’s in the US or any of many European countries, rien ne va plus. The die has been cast.

The left must turn against neoliberalism, but it has no economists to explain the reason why, and no leaders who understand economics. So they have become neoliberalists themselves. They’re all stuck in the austerity model, and nobody gets how damaging it is to take a meat cleaver to an already suffering economy. The people of Greece can explain that one.

Economies function -or not- because of money flowing through them. You can cut away some of the fat in lean times, but you can’t cut away the arteries. Austerity is deadly to an economy, but the irony is that it makes people vote for those who first, initiate it, and second, promote more austerity.

I don’t want to insert any political opinions, but I do think that for a society, and an economy, to properly function there needs to be a balance, between left and right, between rich and poor, between owners and workers. We’re far away from any such balance wherever I look. And as I’ve said before, that’s why we have Trump.

To reveal what has so far remained hidden: everything done under the guise of ‘left’ that was merely more neoliberalism. To allow people who don’t agree with him to form an opinion and an identity, something they thought was not necessary under neoliberals like Obama or Tony Blair or Merkel. I don’t see any of that happening though, and that means many more years of Trump and other rightwing dominance.

If the answer to austerity is to vote for more austerity, what will be the answer to collapsing stock- and housing markets? I have an idea. And it doesn’t include Jeremy Corbyn. Or Bernie Sanders.

 

 

Jul 112018
 
 July 11, 2018  Posted by at 9:24 am Finance Tagged with: , , , , , , , , , ,  10 Responses »


Edward Hopper The camel’s hump 1931

 

As Global Debt Hits A Record $247 Trillion, The IIF Issues A Warning (ZH)
US To Slap Tariffs On Extra $200 Billion Of Chinese Imports (R.)
Has the Fed Permanently Inflated Home Prices? (Whalen)
Trump Forced To Reinstate ‘Catch And Release’ After Court Defeats (G.)
40% Of Mexican Territory Is Paralyzed By Violence (G.)
EU Negotiator Michel Barnier Says 80% Of Brexit Deal Is Agreed (G.)
UK Government Draws Up Secret Plans To Stockpile Processed Food (Sun)
Red Cross Tells UK: End Damaging Immigration Detention (Ind.)
I’m A Doctor In Lampedusa. We Can’t Let These Migrant Deaths Go On (Bartolo)
US Judge Allows Lawsuits Over Monsanto’s Roundup To Proceed To Trial (R.)
Thailand Water Pumps Failed Just After Last Boy Escaped (G.)

 

 

Madness.

As Global Debt Hits A Record $247 Trillion, The IIF Issues A Warning (ZH)

Every quarter the Institute of International Finance publishes a new number of the total amount of global debt outstanding, and every quarter the result is the same: a new record high Today was no exception: according to the IIF’s latest Global Debt Monitor, the amount of debt held in the world rose by the biggest amount in two years during the first quarter of 2018, when it grew by $8 trillion to hit a new all time high of $247 trillion, up from $238 trillion as of Dec. 31, 2017 and up by $30 trillion from the end of 2016. In other words, there is now a quarter quadrillion dollars in global debt, and it represents 318% of global GDP.

More concerning is that this was the first time since Q3 2016 that global debt to GDP increased, suggesting that the marginal utility of debt is once again below 1. This is how the debt is broken down as of Q1 2018 and compared to Q1 2013: • Non-financial corporate debt: $74 trillion, up from $58 trillion in 5 years • Government debt: $67 trillion, up from $56 trillion • Financial debt: $61 trillion, up from $56 trillion • Household debt: $47 trillion, up from $40 trillion. [..] What was surprising about the report – certainly not the latest all time high debt numbers, those are now standard – is that the IIF voiced a strongly negative opinion of recent developments in the debt arena.

“The pace is indeed a cause for concern,” warned IIF’s Managing Director Hung Tran during a call with reporters. “The problem with the pace and speed is if you borrow or if you lend very quickly, the quality of the credit tends to suffer.” It also means more governments, businesses and individuals have been borrowing that could have trouble paying the money back, or merely paying interest on it as rates rise. “The quality of creditworthiness has declined sharply,” Tran added ominously, echoing what Moody’s said at the end of May.

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“Tariffs are taxes, plain and simple..”

US To Slap Tariffs On Extra $200 Billion Of Chinese Imports (R.)

The Trump administration raised the stakes in its trade war with China on Tuesday, saying it would slap 10 percent tariffs on an extra $200 billion worth of Chinese imports. U.S. officials released a list of thousands of Chinese imports the administration wants to hit with the tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminum. It also includes consumer goods ranging from car tires, , furniture, wood products, handbags and suitcases, to dog and cat food, baseball gloves, carpets, doors, bicycles, skis, golf bags, toilet paper and beauty products. “For over a year, the Trump administration has patiently urged China to stop its unfair practices, open its market, and engage in true market competition,” U.S. Trade Representative Robert Lighthizer said in announcing the proposed tariffs.

“Rather than address our legitimate concerns, China has begun to retaliate against U.S. products … There is no justification for such action,” he said in a statement. Last week, Washington imposed 25 percent tariffs on $34 billion of Chinese imports, and Beijing responded immediately with matching tariffs on the same amount of U.S. exports to China. Investors fear an escalating trade war between the world’s two biggest economies could hit global growth. President Donald Trump has said he may ultimately impose tariffs on more than $500 billion worth of Chinese goods – roughly the total amount of U.S. imports from China last year. The new list published on Tuesday targets many more consumer goods than those covered under the tariffs imposed last week, raising the direct threat to consumers and retail firms.

The tariffs will not be imposed until after a two-month period of public comment on the proposed list, but some U.S. business groups and senior lawmakers were quick to criticize the move. Senate Finance Committee Chairman Orrin Hatch, a senior member of Trump’s Republican Party, said the announcement “appears reckless and is not a targeted approach.” The U.S. Chamber of Commerce has supported Trump’s domestic tax cuts and efforts to reduce regulation of businesses, but it has been critical of Trump’s aggressive tariff policies. “Tariffs are taxes, plain and simple. Imposing taxes on another $200 billion worth of products will raise the costs of every day goods for American families, farmers, ranchers, workers, and job creators. It will also result in retaliatory tariffs, further hurting American workers,” a Chamber spokeswoman said.

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No.

Has the Fed Permanently Inflated Home Prices? (Whalen)

The importance of the fact that US bank credit metrics are showing essentially zero cost in residential lending from portfolio loans is that it begs the question as to home price valuations and thus loan-to-value (LTV) ratios. A number of analysts have predicted an imminent reset in terms of home prices, but this has not happened for several reasons. The chart below shows the Case-Shiller average for US home price appreciation. First, real estate is a local market, so generalizations such as Case-Shiller are dangerous. New York City has been slumping for the past two years, but other markets around the country such as Denver remain hot.

The work of Weiss Residential Research clearly shows a turn in some major urban markets that have been moving higher since 2012 and before. But these moves seem more a function of buyer exhaustion than a permanent move to a buyers market. They key factor is cheap money chasing a limited supply of homes. Second, the US home market is in a classic supply squeeze. Referring to the work of Laurie Goodman at Urban Institute, the US is adding less than 1 million new units per year net of attrition of obsolete homes. Basically, new household formation is 50% higher than the growth in new housing units. More, the Fed’s manipulation of interest rates and credit spreads encouraged Wall Street to allocate capital to buying residential homes as rental properties, further limiting supply of homes available for sale.

Net, net, Millennials have been priced out of the housing market because the omniscient souls on the Federal Open Market Committee think that boosting asset prices will lead to more spending and job creation. Instead, low interest rates and help from the GSES (Fannie, Freddie and Ginnie) have driven up home prices beyond the reach of many home owners in major metro areas.

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Stop. It.

Trump Forced To Reinstate ‘Catch And Release’ After Court Defeats (G.)

Donald Trump’s administration has said it will release some migrant families from detention with ankle monitors, marking a return to the so-called “catch-and-release” policy the president vehemently denounced. The announcement comes as the US government scrambles to reunite thousands of migrant children who were separated from their parents at the border under the Trump administration’s “zero tolerance” immigration policy. “Parents of children under the age of five are being reunified with their children, then released and enrolled into an alternative to detention (ATD) program, meaning they will be placed on an ankle monitor and released into the community,” said Matthew Albence, a senior official with US Immigration and Customs Enforcement.

The Trump administration was left with few options after a series of court orders. A federal judge last month ordered the reunification of children under five by 10 July. That deadline was not met, officials acknowledged, while noting plans were under way on Tuesday to reunite up to 54 migrant children under five with their parents. There are an estimated 102 migrant children under five in federal custody, with a limited number of cases not qualifying for reunification due to the parents’ criminal background or signs of child abuse. The administration additionally lost in an attempt to overturn a 1997 court precedent that says minors cannot be held for more than 20 days.

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What a job the new government has.

40% Of Mexican Territory Is Paralyzed By Violence (G.)

As much as 40% of Mexican territory is prisoner to chronic insecurity and violence, the future chief of staff of Andrés Manuel López Obrador, the incoming president, has claimed. Alfonso Romo, a prominent entrepreneur who was part of the leftist’s watershed election triumph last week, made the assertion during a summit of business leaders on Monday in Mexico City. “Veracruz is paralyzed. Tamaulipas, paralyzed; Michoacán, paralyzed. Guerrero, paralyzed,” Romo said, referring to four of the most notoriously violent states in a country that last year suffered a record 29,000 murders.

“I won’t go on, so I don’t scare you,” Romo added, according to the newspaper Unomásuno which splashed the widely-reported claim onto its front page under the bright red headline: “Paralyzed by Insecurity”. López Obrador, or Amlo as he is widely known, made cutting violence a key prong of his third presidential bid and his promise to “pacify” Mexico helped him secure more than 30 million votes. Amlo has vowed to rethink Mexico’s devastating and highly militarized war on drugs – which experts blame for at least 200,000 deaths since 2006 – and be tough on the social causes of crime.

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Hard to believe.

EU Negotiator Michel Barnier Says 80% Of Brexit Deal Is Agreed (G.)

The chief Brexit negotiator for the European Union has declared that 80% of a deal with the UK has been agreed, in a change of narrative that suggests a full agreement can be sealed before October’s deadline. Speaking in New York on Tuesday, Michel Barnier said: “After 12 months of negotiations we have agreed on 80% of the negotiations.” He added that he was determined to negotiate a deal on the remaining 20%. The declaration that four-fifths of the deal is done is a significant change of tone from the EU after months of protests that it could not negotiate because the UK had not put its own proposals on the table.

Speaking at the Council on Foreign Relations in New York, Barnier said he looked forward to a “constructive discussion” with the UK after the white paper on Brexit is published on Thursday. But he warned: “We need clarity for these negotiations to move forward for the time is very short.” Barnier said he had never been shown how Brexit provided added value when the world faced challenges from terrorism and climate change to migration, poverty and financial instability. “It will be clear, crystal clear at the end of this negotiation that the best situation, the best relationship with the EU, will be to remain a member,” he said. Barnier added: “No deal is the worst solution for everybody. It would be a huge economic problem for the UK and also for the EU. I’m not working for that deal, I’m working for a deal.”

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Fun with the Sun.

UK Government Draws Up Secret Plans To Stockpile Processed Food (Sun)

Ministers have drawn up secret plans to stockpile processed food in the event of EU divorce talks collapsing – to show Brussels that “no deal” is not a bluff. Theresa May has ordered “no deal” planning “to step up” — with the government poised to start unveiling some of the 300 contingency measures in the coming weeks. At last week’s Chequers summit, Brexiteer ministers demanded more be done to prepare for Britain leaving the EU out without a new arrangement in place. The Sun can reveal that includes emergency measures to keep Britain’s massive food and drinks industry afloat – including stockpiling ahead of exit day on 29 March next year.

More than £22 billion worth of processed food and drinks are imported in to the UK – 97 per cent from the EU – in an industry that keeps 400,000 workers employed in the UK. Similar stockpiles are also being prepared for medical supplies amid fears of chaos at British ports next year. Brexit department insiders also claim plans have also been “wargamed” to ease pressure on Calais, including importing and exporting more goods through Holland, Belgium and directly from Spain. Last night Downing Street said “no deal preparation work is to be stepped up” and led by new Brexit Secretary Dominic Raab. Yesterday the Cabinet newbie briefed fellow ministers on measures Britain is taking, with No10 saying: “It’s sensible to make preparations for all scenarios and that includes No Deal.”

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Humanity.

Red Cross Tells UK: End Damaging Immigration Detention (Ind.)

The British Red Cross has called for an overhaul of the UK’s immigration detention system. Conditions are such that detainees suffer mental health problems which sometimes lead to suicide attempts, according to the charity. Thousands of innocent asylum seekers – often fleeing war and torture – are detained each year and locked up indefinitely with no support, the charity warned. In the first intervention of its kind by a major charity, the Red Cross calls for significant reforms including a 28-day limit on detention. It found cases of asylum-seekers being detained for as long as two years and seven months. Five of the 26 detainees interviewed for the report had attempted suicide while they were detained, and just 25 of them said they had been given no access to mental health support services.

Pregnant women continue to be “needlessly detained” in breach of the Home Office’s own guidance – with 47 pregnant women detained in the year to June 2017. The charity said the “overly onerous and traumatic” experience of attending immigration reporting centres – which many are required to do every every two weeks – should be overhauled by banning the practice of detaining people when they turn up. Mike Adamson, chief executive of the British Red Cross, said: “Most of the people in the UK asylum process have fled conflict or persecution to find a place of safety. They have already experienced more trauma and anguish than the rest of us could possibly imagine.

“The threat of detention without notice hangs over many people going through the asylum process in the UK. Our research shows that not knowing whether this week will be the week they are detained again, can make the process of having to report regularly extremely distressing. “This can exacerbate existing mental health issues and mean people never truly feel free.”

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More humanity.

I’m A Doctor In Lampedusa. We Can’t Let These Migrant Deaths Go On (Bartolo)

For a long time, I was proud of my country. I work as a doctor on the small island of Lampedusa in the middle of the Mediterranean, a place that is something of a symbolic gateway between Africa and Europe. In recent decades, Italy showed how it could honour humanity, giving the word “welcome” a new meaning, without ever building walls or putting up barbed wire along its borders. These acts of openness were recognised by other countries, by the EU, and by the gratitude of the thousands of people whose lives we saved over the years. But I stopped feeling proud to be Italian from the moment our government, denying all that had previously been done, decided to establish an agreement with Libyan groups in Tripoli – which meant, directly or indirectly, with people smugglers.

I still remember how in 2016 my country had vigorously joined the outrage triggered by Europe’s decision to bankroll Turkey’s President Erdogan with €6bn so he’d ignore or stop the migration flows from Syria. Italy’s position was then sacrosanct. It has since been somehow inexplicably disavowed in deeds. There is only one dramatic difference between what Europe did with Turkey then and what Italy is doing with Libya today. Refugee camps set up in Turkey are more or less efficient; in Libya, people are detained in horror camps where they are raped, tortured and killed. Instead of the wall that Italy did not build on its own territory, we’ve erected two walls elsewhere. The one in Libya has allowed us to cut the number of arrivals on our shores by 70%; the other, within ourselves, allows us to pretend we don’t see what is being done to the 70%.

Well, I can tell you what’s being done to these people. From my workplace, the Lampedusa clinic, their fate is clear to see. They are tortured daily, atrociously, for years on end. Those brought to us, by helicopter or motorboat, are close to death, with burns, serious injuries from blows, electric currents applied to the head or genitals, gunshot wounds, and razor-blade cuts. They are almost always dehydrated, in a state of hypothermia, and so underfed they are on the brink of collapse. They bring to mind the suffering of a concentration camp – yes, a concentration camp.

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There will always be scientists willing to claim it’s not cancerous.

US Judge Allows Lawsuits Over Monsanto’s Roundup To Proceed To Trial (R.)

Hundreds of lawsuits against Monsanto by cancer survivors or families of those who died can proceed to trial, a federal judge ruled on Tuesday, finding there was sufficient evidence for a jury to hear the cases that blame the company’s glyphosate-containing weed-killer for the disease. The decision by U.S. District Judge Vince Chhabria in San Francisco followed years of litigation and weeks of hearings about the controversial science surrounding the safety of the chemical glyphosate, the key ingredient in Monsanto’s top-selling weed-killer. Monsanto is now a unit of Bayer, following a $62.5 billion takeover of the U.S. seed major which closed in June. The U.S. Environmental Protection Agency last September concluded glyphosate is likely not carcinogenic to humans.

But the World Health Organization in 2015 classified glyphosate as “probably carcinogenic to humans.” Chhabria called the plaintiffs’ expert opinions “shaky” and entirely excluded the opinions of two scientists. But he said a reasonable jury could conclude, based on the findings of four experts he allowed, that glyphosate can cause cancer in humans. The plaintiffs will next have to prove Roundup caused cancer in specific people whose cases will be selected for test trials, a phase Chhabria in his Tuesday opinion called a “daunting challenge.” Lawsuits by more than 400 farmers, landscapers and consumers who claim Roundup caused them to develop non-Hodgkin’s Lymphoma, a type of blood cell cancer, have been consolidated before Chhabria.

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Good read on what went down. Amazing people. All the equipment that was brought in. All the mud that was removed. Wow.

Thailand Water Pumps Failed Just After Last Boy Escaped (G.)

The rescue operation to free the last of the 12 boys and their football coach from a Thailand cave could have been a disaster, divers have revealed, with water pumps draining the area failing just hours after the last boy had been evacuated. Divers and rescue workers were still more than 1.5km inside the cave clearing up equipment when the main pump failed, leading water levels to rapidly increase, three Australian divers involved in the operation told the Guardian on Wednesday, in the first detailed account of the mission to be published. The trio, stationed at “chamber three”, a base inside the cave, said they heard screaming and saw a rush of head torches from deeper inside the tunnel as workers scrambled to reach dry ground. Everyone, including the last three Thai navy Seals and medic who had spent much of the past week keeping vigil with the trapped boys, was out of the cave a short time later.

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Jul 062018
 
 July 6, 2018  Posted by at 8:55 am Finance Tagged with: , , , , , , , , , , , ,  16 Responses »


Henri Matisse Reading woman in violet dress 1898

 

China Imposes Tariffs, Says US Launching ‘Largest Trade War In History’ (CNBC)
Trump Says China Could Face More Than $500 Billion In US Tariffs (CNBC)
Merkel Open To Reducing EU Tariffs On American Cars (NC5)
US Labor Shortage Is Reaching A Critical Point (CNBC)
Theresa May’s New Customs Plan ‘Dead On Arrival’ In EU (Ind.)
Theresa May Battles To See Off Revolt Ahead Of Key Brexit Summit (G.)
The Dark Cloud Of Global Debt (GT)
“People Assume That Stocks Always Rise Over Time. They’re Wrong” (Eric Peters)
Most Dangerous Market Ever – Michael Pento (USAW)
Moscow Using UK As Dumping Ground For Poison, Says Sajid Javid (G.)
If The Novichok Was Planted By Russia, Where’s The Evidence? (G.)
Seehofer Tells Merkel, Italy And Greece To Solve Migration Row (EUO)
European Parliament Rejects Controversial Copyright Rules (Ind.)

 

 

Act like grown-ups.

China Imposes Tariffs, Says US Launching ‘Largest Trade War In History’ (CNBC)

China implemented retaliatory tariffs on some imports from the U.S. Friday, state media reported, immediately after new U.S. duties had taken effect. The move signals the start of a full-blown trade war between the world’s two largest economies, after President Donald Trump’s administration had initially made good on threats to impose steep tariffs on Chinese goods. At midnight Washington time, the U.S. imposed new tariffs on $34 billion of annual imports from China. This prompted Beijing to respond in kind with levy tariffs on 545 items of U.S. imports — also worth $34 billion, state-run newspaper The China Daily reported Friday.

A spokesperson at China’s ministry of commerce said that while the Asian giant had refused to “fire the first shot,” it was being forced to respond after the U.S. had “launched the largest trade war in economic history.” “This act is typical trade bullying,” the spokesperson said, before adding: “It seriously jeopardizes the global industrial chain … Hinders the pace of global economic recovery, triggers global market turmoil and will affect more innocent multinational companies, general companies and consumers.”

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China has already retaliated.

Trump Says China Could Face More Than $500 Billion In US Tariffs (CNBC)

President Donald Trump said on Thursday he would consider imposing additional tariffs on $500 billion in Chinese goods, should Beijing retaliate. U.S. tariffs on $34 billion worth of Chinese goods kicked in on Friday. Another $16 billion are expected to go into effect in two weeks and potentially another $500 billion, Trump told reports aboard Air Force One on his way to a rally in Montana before the tariffs kicked in. China implemented retaliatory tariffs on some imports from the U.S., state media reported about two hours later, after new U.S. duties had taken effect.

First “34, and then you have another 16 in two weeks and then as you know we have 200 billion in abeyance and then after the 200 billion we have 300 billion in abeyance. Ok? So we have 50 plus 200 plus almost 300,” Trump said. “It’s only on China,” he added. Trump’s statements reinforce earlier threats that he would escalate the trade conflict. The dispute with China has roiled financial markets worldwide, including stocks, currencies and the global trade of commodities from soybeans to coal.

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Was that so hard?

Merkel Open To Reducing EU Tariffs On American Cars (NC5)

In the midst of trade tension between the European Union and the U.S., German Chancellor Angela Merkel said she’s open to lowering tariffs on American car imports. According to Reuters, Merkel said Europe would have to first agree upon a reduction in tariffs. In addition, she cited World Trade Organization rules that state lowering U.S. auto tariffs would mean doing the same for other countries as well. Merkel’s comments come after President Donald Trump imposed steel and aluminum tariffs on U.S. allies, including the EU, and threatened to put a 20 percent tax on European car imports.

The German chancellor warned Trump on Wednesday not to implement auto tariffs to avoid inciting an all-out trade war. Auto industry experts have suggested that if the Trump administration follows through on that threat, the move would negatively affect American autoworkers’ jobs and raise car prices. Trump is scheduled to travel to Brussels next week for the NATO summit, his first big meeting with European leaders together since last month’s G-7 summit.

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With 95 million still out of the labor force.

US Labor Shortage Is Reaching A Critical Point (CNBC)

America’s labor shortage is approaching epidemic proportions, and it could be employers who end up paying. A report Thursday from ADP and Moody’s Analytics cast an even brighter light on what is becoming one of the most important economic stories of 2018: the difficulty employers are having in finding qualified employees to fill a record 6.7 million job openings. Truck drivers are in perilously low supply, Silicon Valley continues to struggle to fill vacancies, and employers across the grid are coping with a skills mismatch as the economy edges ever closer to full employment. “Business’ number one problem is finding qualified workers. At the current pace of job growth, if sustained, this problem is set to get much worse,” Mark Zandi, chief economist at Moody’s Analytics, said in a statement.

“These labor shortages will only intensify across all industries and company sizes.” Private payrolls grew by 177,000 in June, a respectable number but below market expectations. It was the fourth month in a row that the ADP/Moody’s count fell short of 200,000 after four months at or above that level. The reason for the tick down in hiring certainly isn’t because there aren’t enough jobs. The Bureau of Labor Statistics reported that April closed with 6.7 million job openings. May ended with just over 6 million people the BLS classifies as unemployed, continuing a trend this year that has seen openings eclipse the labor pool for the first time. At some point that gap will have to close. Economists expect that employers are going to have to start doing more to entice workers, likely through pay raises, training and other incentives.

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“We have been telling the UK for two years that we would not accept a single market a la carte. “What do they come with? – A single market a la carte.”

Theresa May’s New Customs Plan ‘Dead On Arrival’ In EU (Ind.)

Theresa May’s new plan for future relations with the EU will be “dead on arrival”, senior figures in Brussels have told The Independent. EU officials said any hint that the UK wants to be part of the single market on goods, but not services will be rejected. It is a blow for the prime minister who has spent the last week in meetings with EU leaders, including Angela Merkel, in a bid to prevent Europe dismissing her plans out of hand when they are published next week. Ms May is expected to push her cabinet to agree to a plan at Chequers on Friday, which would see Britain remaining in full regulatory alignment with the EU on goods, but not on services.

The meeting has also been preceded by threats and warnings from the Brexiteer wing of the Conservatives that the proposals mooted by the prime minister will not be accepted by them in the UK because they keep Britain too closely tied to the EU’s rules and regulations. But before her ministers have even agreed to the deal, EU officials told The Independent the white paper would be “dead on arrival” in Brussels if, as expected, it proposes that the UK remain in the EU’s single market for goods, but not services. They claimed they had repeatedly warned UK negotiators that this option would not work. They said it had been widely discussed among EU ministers and rejected – including, crucially, by the EU’s two most powerful players, France and Germany.

One Brussels source said: “We have been telling the UK for two years that we would not accept a single market a la carte. “What do they come with? – A single market a la carte.”

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Who will be left standing by Saturday?

Theresa May Battles To See Off Revolt Ahead Of Key Brexit Summit (G.)

Theresa May was battling to see off a revolt on the eve of a critical cabinet summit, as Boris Johnson convened a meeting of pro-Brexit ministers to discuss their options amid an atmosphere of tension and recrimination. The government was forced to deny “selective leaks” that appeared to suggest that the UK could struggle to strike a trade deal with the US in the future. No 10 insisted that paperwork released to ministers ahead of Friday’s crunch Brexit meeting at Chequers said just the opposite – as a caucus of seven cabinet members including Johnson, Michael Gove, Liam Fox and David Davis met at the Foreign Office to discuss their concerns.

An early leak suggested that the UK should “maintain a common rulebook” with the European Union on food and farming standards and that could make striking a trade deal with the more free market-oriented US more difficult as a result. That prompted a series of complaints from backbench Tory MPs and led to the Thursday evening meeting at the Foreign Office hosted by Johnson, the foreign secretary. Sources at No 10 said there had been selective leaks from the paperwork and the controversial passage appeared on page 15 out of 50 from one of several documents sent to all members of the cabinet.

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It’s corporations this time around.

The Dark Cloud Of Global Debt (GT)

While everyone is debating the effects of possible trade sanctions on the global economy, few are paying attention to a far more serious issue. Enormous global debt, combined with low-interest rates, have set the stage for a global recession that has the potential for economic chaos. The combination of enormous debt and artificially low-interest rates were at the center of the 2008 credit bubble. One would expect central banks to be aware of this and show more concern. However, the overall silence has been astonishing. An exception to this is the Bank for International Settlements (BIS), which has been making loud noises about the toxic level of global debt and the anticipated bubble.

It recently reported that the global debt of 2008 was $60 trillion, small when compared to the current debt of $170 trillion. To make matters worse, today’s global debt is 40 percent higher in relation to GDP than it was in 2008, just prior to the Lehman Bros. downfall. To add to the current headache are the rising debt levels of emerging markets and corporate debts. According to McKinsey & Company, a global consulting firm, two-thirds of U.S. corporate debt are from corporations that pose a high default risk. Countries such as Brazil, India, and China have been busy issuing questionable credit. This dubious credit being issued in many emerging markets has come with extremely low-interest rates.

If the borrowers’ default, the lenders won’t be looking at enough compensation to recoup their loses. Low-interest rates have become an overall global problem, including the rates in the U.S. high-yield bond market. Central banks around the world have been keeping interest rates artificially low while printing money with abandon. The current global debt is the direct result of this policy. $2 trillion in corporate debt will be maturing annually through 2022. A considerable amount of this debt may default and cause debt repricing. The damage caused by central banks and their policy of easy credit has been done, and there is little that can be done at this point to stem the tide. It can only be hoped that they are more aware now than they were in 2008.

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Central banks don’t really matter anymore.

“People Assume That Stocks Always Rise Over Time. They’re Wrong” (Eric Peters)

We’ve all looked at the stats, and we’re now at an unemployment rate in the US of sub-4% – 3.8%–3.7%. I think what a lot of people focus on is if the participation rate were back where it was pre-2008 you’d end up with an unemployment rate that had an 8 handle or something like that. So that’s what people are referring to. But making comparisons like that is difficult because a lot of things are changing. The US labor force is shrinking because people are getting older. There is the opioid issue. And this disability issue. Which are difficult to really handicap in terms of how big an impact that’s having on the US labor force.

If the central banks have been the ones who have gotten us here, they just – by definition – they’re not the ones that are going to get us out of here. So I think – look, we’re always going to look at what central banks are doing, they will be important. But I think that they’re no longer going to be dominant. What’s going to be dominant are the politicians. You’re seeing that in the US right now. I know that everyone loves to hang on every word that Powell speaks. And they look at the Fed statement. And people are still trained to look at the Fed dot plots (which are probably going to go away). People are trained to look at all of these things because that’s what they’ve done their whole careers.

But they just are not going to matter that much anymore. Whether the Fed’s terminal rate is 2.25 or 2.5 or 2.75 – we’re not talking about much. What are we going to do in terms of immigration policy? What are we going to do in terms of trade policy? How is that going to impact all of the major corporations’ global supply chains? These are the things that are really going to matter.

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“It is a confluence of events coming in October ..”

Most Dangerous Market Ever – Michael Pento (USAW)

Money manager Michael Pento is sounding the alarm because we are getting very close to something called a “yield curve inversion.” Pento explains, “Why do I care if the yield curve inverts? Because 9 out of the last 10 times the yield curve inverted, we had a recession. . . . The spread with the yield curve is the narrowest it has been since outside of the start of the Great Recession that commenced in December of 2007. . . . The last two times the yield curve inverted, we had a stock market drop of 50%. The market dropped, and the S&P 500 lost 50% of its value.” Can we keep partying in the markets like it’s 1999 or is there an expiration date for the good times?

Pento says, “Well, I have put a check on the calendar for October because of the fact the rate of quantitative easing goes to $15 billion per year, because the trade war will reach a crescendo, then because I believe, unfortunately because I am conservative, the Republicans lose the House of Representatives, because the Chinese credit boom will be in full reverse by October. It is a confluence of events coming in October . . . we’ve already entered into the beginnings of a bear market around the world. The top 22 banks in the world are in a bear market. There are many, many examples of banks around the world that are in a bear market. You have a bear market in Chinese shares. 20% of the S&P 500 is in a bear market. This is an incipient bear market that is already beginning. I believe it manifests clearly to even the people on CNBC by October.”

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None of this makes any sense.

Moscow Using UK As Dumping Ground For Poison, Says Sajid Javid (G.)

Britain will consult its allies about a possible response to Russia over the latest poisonings in Wiltshire as it emerged that the couple taken critically ill had handled an item contaminated with the nerve agent novichok. The home secretary, Sajid Javid, accused Moscow of using the UK as a “dumping ground” for poison and urged Russia to explain “exactly what has gone on”. In Salisbury, public health and council chiefs warned people not to pick up unidentified objects but dismissed the idea of making a general sweep of the city for novichok, although they said they could not rule out the possibility that more of the nerve agent was present.

The Guardian understands that the novichok that harmed them may have been in a sealed container left following the attack on the former Russian spy Sergei Skripal and his daughter, Yulia, in March. Sources close to the investigation dropped a hint that they may now know the identity of the would-be killers who targeted the Skripals. The Metropolitan police confirmed on Thursday evening that the couple taken ill, Dawn Sturgess, 44, from Salisbury, and Charlie Rowley, 45, of Amesbury, collapsed after picking up a contaminated item.

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Even the Guardian allows itself to publish out right criticism. Putin has a really successful World Cup going. Brexit splits Britain. 1+1=2

If The Novichok Was Planted By Russia, Where’s The Evidence? (G.)

I seem to be the only person alive with no clue as to who has poisoned four people in Wiltshire. I am told that only Russians have access to the poison, known as novichok – though the British research station of Porton Down, located ominously nearby, clearly knows a lot about it. Otherwise, I repeat, I have no clue. I suppose I can see why the Kremlin might want to kill an ex-spy such as Sergei Skripal and his daughter, so as to deter others from defecting. But why wait so long after he has fled, and why during the build-up to so highly politicised an event as a World Cup in Russia? Four months on from the crime, the Skripals have been incommunicado in a “secure location”. Barely a word has been heard from them.

Theresa May has persistently blamed Russia. She has called the incident “brazen and despicable”, and MI5 condemned “flagrant breaches of international rules”. But I cannot see the diplomatic or other purchase in prejudging the case, when no one can offer a clue. As to why the same person or persons should want to kill a couple, unconnected to the Skripals, on an Amesbury housing development, the questions are even more baffling. It seems a funny sort of carelessness. Did the couple pick up the infecting agent nearer the original site, eight miles away? Might the new poisoning be an attempt to divert attention from the earlier one? Could it be a devious plot, to make it seem that novichok is available on every street corner, from your friendly neighbourhood drug dealer?

Or perhaps one of the victims, Charlie Rowley, has mates in Porton Down? Perhaps someone is showing off, or panicking, or behaving like a complete idiot. Who knows? Since I have not a smidgen of an answer to any of these questions, I feel no need to capitulate to the politics of terror and fear. I can open my front door without cleaning my hand. I can visit Wiltshire in peace and safety and marvel at the spire of Salisbury Cathedral. I can revel in the remains of the bronze age Amesbury archer – whose death from bone disease has finally been resolved by the scientists. Where knowledge is nonexistent, ignorance is bliss.

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NIMBY on steroids.

Seehofer Tells Merkel, Italy And Greece To Solve Migration Row (EUO)

German interior minister Horst Seehofer defused tensions with Austria on Thursday (5 July) but increased political pressure on his boss, chancellor Angela Merkel, as well as on Italy and Greece, to find a way how Germany can reject asylum seekers without closing its border with Austria. “There will be no measures taken by Germany at the expense of Austria,” Austrian chancellor Sebastian Kurz said after meeting Seehofer in Vienna. Under a plan agreed on Monday between Merkel’s centre-right CDU party and Seehofer’s CSU, its Bavarian conservative sister party, asylum seekers would be sent back to the EU country where they were first registered, or to Austria.

Kurz had warned that in reaction, Austria would consider closing its own border with Italy and Slovenia in order to prevent migrants from coming in. This, Vienna had warned, would lead to a “domino effect” of closing borders and imperil the free-movement Schengen area. But Seehofer assured Kurz that Austria would have to take no specific measures, and that it would be up to Italy and Greece, where three-quarters of asylum seekers come from, to take them back. The Bavarian politician has been trying for almost a month to impose his plan on Merkel, who first refused to unilaterally reject asylum seekers. She advocated instead a “European solution” to be agreed with other member states, who would accept taking refugees from Germany.

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It’s not defeated yet.

European Parliament Rejects Controversial Copyright Rules (Ind.)

The European Parliament has voted against an incredibly controversial new set of copyright rules that campaigners claim could “ban memes”. The law will now be sent for a full reconsideration and debate inside the parliament, during which activists will try and remove the controversial Article 11 and 13. Article 11 has been referred to by campaigners as instituting a “link tax”, by forcing tech companies like Google and Facebook to pay to use snippets of content on their own sites. Article 13 adds rules that make tech companies responsible for ensuring any copyrighted material is not spread over their platforms. Those rules could force technology companies to scan through everything their users post and check it doesn’t include copyrighted material.

If it is found, the post will be forced to be removed, which campaigners claim could destroy the kind of memes and remixes that spread across the internet. The revamp has triggered strong criticism from Wikipedia founder Jimmy Wales, World Wide Web inventor Tim Berners-Lee, net neutrality expert Tim Wu, internet pioneer Vint Cerf and others. Copyright campaigners claim that the rules are necessary to ensure that material isn’t illegally spread across the internet. Europe’s broadcasters, publishers and artists including Paul McCartney backed the rules, arguing the controversial Article 13 would protect the music industry.

A total of 318 law makers voted against opening talks with EU countries based on the committee’s proposal while 278 voted in favour, and 31 abstained. In practice, the vote only delays the final decision on the rules and gives the European Parliament more time to deliberate on them. Another decision will be taken in September.

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Jul 032018
 


Edward Hopper Summer interior 1909

 

Buybacks Are The Only Thing Keeping The Stock Market Afloat (CNBC)
Stock Markets Look Ever More Like Ponzi Schemes (Murphy)
A Japanese Tsunami Out Of US CLOs Is Coming (HC)
The Eurozone’s Coming Debt Crisis (Lacalle)
The ‘Dirty Dozen’ Sectors Of Global Debt (Rochford)
UK’s Latest Brexit Proposal Is Unrealistic, Say EU Officials (G.)
Nassim Taleb Slams “These Virtue-Signaling Open-Borders Imbeciles” (ZH)
Merkel Dodges Political Bullet With Controversial Migrant Deal (AFP)
Austria Says To ‘Protect’ Its Borders After German Migrant Deal (AFP)
Is Facebook A Publisher? In Public It Says No, But In Court It Says Yes (G.)
Tesla’s All-Nighter To Hit Production Goal Fails To Convince Wall Street (R.)
The New York Times Squares off with the Truth, Again (AHT)
Anthony Kennedy and Our Delayed Constitutional Crisis (GP)
‘Snowden is the Master of His Own Destiny’ – Russia (TeleSur)

 

 

And then QE ends.

Buybacks Are The Only Thing Keeping The Stock Market Afloat (CNBC)

Stocks right now are hanging by a thread, boosted by a bonanza of corporate buying unrivaled in market history and held back by a burst in investor selling that also has set a new record. Both sides are motivated by fear, as corporations find little else to do with their $2.1 trillion in cash than buy back their own shares or make deals, while individual investors head to the sidelines amid fears that a global trade war could thwart the substantial momentum the U.S. economy has seen this year. “Corporate cash is going to find a home, and it’s either going to be in buybacks, dividends or M&A activity. What it’s not going to be is in capex,” said Art Hogan, chief market strategist at B. Riley FBR.

“Individuals are looking at the turbulence we’ve seen this year that we had not seen last year. That creates its own sort of exit sign for investors who don’t want to deal with that.” The numbers showing where each side put their cash in the second quarter are striking. Companies announced $433.6 billion in share repurchases during the period, nearly doubling the previous record of $242.1 billion in the first quarter, according to market research firm TrimTabs. Dow components Nike and Walgreens Boots Alliance led the most recent surge in buybacks, with $15 billion and $10 billion, respectively, last week. In all, 31 companies announced buybacks in excess of $1 billion during June.

At the same time, investors dumped $23.7 billion in stock market-focused funds in June, also a new record. For the full quarter, the brutal June brought global net equity outflows to $20.2 billion, the worst performance since the third quarter of 2016, just before the presidential election. The selling is particularly acute in mutual funds, which saw $52.9 billion in outflows during the quarter and are typically more the purview of the retail side.

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“People think their savings and pensions are safe because of rising share prices. They do not realise it is all a con-trick.”

Stock Markets Look Ever More Like Ponzi Schemes (Murphy)

The FT has reported this morning that: “Debt at UK listed companies has soared to hit a record high of £390bn as companies have scrambled to maintain dividend payouts in response to shareholder demand despite weak profitability.” They added: “UK plc’s net debt has surpassed pre-crisis levels to reach £390.7bn in the 2017-18 financial year, according to analysis from Link Asset Services, which assessed balance sheet data from 440 UK listed companies.” So what, you might ask? Does it matter that companies are making sense of low-interest rates to raise money when I am saying that government could and should be doing the same thing?

Actually, yes it does. And that’s because of what the cash is being used for. Borrowing for investment makes sense. Borrowing to fund revenue investment (that is training, for example, which cannot go on the balance sheet but still adds value to the business) makes sense. But borrowing to pay a dividend when current profits and cash flow would not support it? No, that makes no sense at all. Unless, of course, you are CEO on a large share price linked bonus package and your aim is to manipulate the market price of the company. It is that manipulation that is going on here, I suggest. These loans are being used to artificially inflate share prices.

The problem is systemic. In the US the problem is share buybacks, which I read recently have exceeded $5 trillion in the last decade, meaning that US companies are now by far the biggest buyers of their own shares. That is, once again, market manipulation. And this manipulation does matter. People think their savings and pensions are safe because of rising share prices. They do not realise it is all a con-trick. And companies claim that their pension funds are better funded as a result of these share prices, and so they are meeting their obligations to their employees when that too is a con-trick. They may be insolvent when the truth is known, so serious is the fraud.

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Japan plays a strange role in the global economy. It won’t be able to keep that up much longer. The Bank of Japan has many options; none are good.

A Japanese Tsunami Out Of US CLOs Is Coming (HC)

Japan is at the very centre of the global financial system. It has run current account surpluses for decades, building the world’s largest net foreign investment surplus, or its accumulated national savings. Meanwhile, other nations, such as the US, have borrowed from nations like Japan to live beyond their own means, building net foreign investment deficits. We now have unprecedented levels of cross-national financing.

Much of Japan’s private sector saving is placed in Yen with financial institutions who then invest overseas. These institutions currency hedged most of their foreign assets to reduce risk weighted asset charges and currency write down risks. The cost of hedging USD assets has however risen due to a flattening USD yield curve and dislocations in FX forwards. As shown below, their effective yield on a 10 year US Treasury (UST) hedged with a 3 month USDJPY FX forward has fallen to 0.17%. As this is below the roughly 1% yield many financial institutions require to generate profits they have been selling USTs, even as unhedged 10 year UST yields rise. The effective yield will fall dramatically for here if 3 month USD Libor rises in line with the Fed’s “Dot Plot” forecast for short term rates, assuming other variables like 10 year UST yields remain constant.

As Japanese financial institutions sell US Treasuries, which are considered the safest foreign asset, they are shifting more into higher yielding and higher risk assets; foreign bonds excluding US treasuries as well as foreign equity and investment funds. This is a similar pattern to what we saw prior to the last global financial crisis. In essence, Japan’s financial institutions are forced to take on more risk in search of yield to cover rising hedge costs as the USD yield curve flattens late in the cycle. Critically as the world’s largest net creditor they facilitate significant added liquidity for higher risk overseas borrowers late into the cycle.

I follow these flows closely. One area I think is rather interesting is US Collateralised Loan Obligations (CLOs) which Bloomberg reports “ballooned to a record last quarter thanks in large part to unusually high demand from Japanese investors”. CLOs are essentially a basket of leveraged loans provided to generally lower rated companies with very little covenant protection. Alarmingly, some US borrowers have used this debt to purchase back so much of their own stock that their balance sheets now have negative net equity. A recent Fed discussion paper shows in the following chart that CLOs were the largest mechanism for the transfer of corporate credit risk out of undercapitalised banks in the US and into the shadow banking sector. Japanese financial institutions have been the underwriter of much of that risk in their search for yield.

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“This reduction in costs is financed by pensioners and savers who are forced to invest in these debt instruments, often by institutional mandate.”

The Eurozone’s Coming Debt Crisis (Lacalle)

The European Central Bank (ECB) has signaled the end of its asset purchase program and even a possible rate hike before 2019. After more than 2 trillion euros of asset purchases and a zero interest rate policy, it is long overdue. The massive quantitative easing (QE) program has generated very significant imbalances and the risks far outweigh the questionable benefits. The balance sheet of the ECB is now more than 40 percent of the eurozone GDP. The governments of the eurozone, however, have not prepared themselves at all for the end of stimuli. They often claim that deficits have been reduced and risks contained. However, closer scrutiny shows that the bulk of deficit reductions came from lower cost of government debt.

Eurozone government spending has barely fallen, despite lower unemployment and rising tax revenues. Structural deficits remain stubborn, and in some cases, unchanged from 2013 levels. In other words, the problems are still there, they were just hidden for a while, swept under the rug of an ever-expanding global economy. The 19 eurozone countries have collectively saved 1.15 trillion euros in interest payments since 2008 due to ECB rate cuts and monetary policy interventions, according to German media outlet Handelsblatt. This reduction in costs is financed by pensioners and savers who are forced to invest in these debt instruments, often by institutional mandate.

However, that illusion of savings and budget stability will rapidly disappear as most Eurozone countries face massive amounts of debt coming due in the 2018–2020 period and wasted precious years of quantitative easing without implementing strong structural reforms. The recent troubles of Italian banks are just one precursor of things to come. Taxes rose for families and small and medium-sized enterprises, while current spending by governments barely fell, competitiveness remained poor, and a massive 1 trillion euro in nonperforming loans raises doubts about the health of the European financial system.

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Good overview. Crises wherever you look.

The ‘Dirty Dozen’ Sectors Of Global Debt (Rochford)

When considering where the global credit cycle is at, it’s often easy to form a view based on a handful of recent articles, statistics and anecdotes. The most memorable of these tend to be either very positive or negative otherwise they wouldn’t be published or would be quickly forgotten. A better way to assess where the global credit cycle is at is to look for pockets of dodgy debt. If these pockets are few, credit is early in the cycle with good returns likely to lie ahead. If these pockets are numerous, that’s a clear indication that credit is late cycle.

In reviewing global debt, twelve sectors standout for their lax credit standards and increasing risk levels. There’s excessive risk taking in developed and emerging debt, as well as in government, corporate, consumer and financial sector debt. This points to global credit being late cycle. Central banks have failed to learn the lessons from the last crisis. By seeking to avoid or lessen the necessary cleansing of malinvestment and excessive debt, this cycle’s economic recovery has been unusually slow. Ultra-low interest rates and quantitative easing have increased the risk of another financial crisis, the opposite of the financial stability target many central bankers have.

For global debt investors, the current conditions offer limited potential for gains beyond carry. With credit spreads in many sectors at close to their lowest in the last decade, there is greater potential for spreads to widen dramatically than there is for spreads to tighten substantially. Keeping credit duration low, staying senior in the capital structure and shifting up the rating spectrum will cost some carry. However, the cost of de-risking now is as low as it has been for a long time. If the risks in the dirty dozen sectors materialise in the medium term, the losses avoided by de-risking will be a multiple of the carry foregone.

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I’d say it’s about time for the British to wake up to the damage May et al are inflicting on the nation.

UK’s Latest Brexit Proposal Is Unrealistic, Say EU Officials (G.)

A draft of Theresa May’s Brexit plan has already been dismissed as unrealistic by senior EU officials, who say the UK has no chance of changing the European Union’s founding principles. The prime minister is gathering her squabbling ministers at Chequers on Friday for a one-day discussion to thrash out the UK’s future relationship with the EU. But EU sources who have seen drafts of the long-awaited British white paper said the proposals would never be accepted. “We read the white paper and we read ‘cake’,” an EU official told the Guardian, a reference to Boris Johnson’s one-liner of being “pro having [cake] and pro-eating it”. Since the British EU referendum, “cake” has entered the Brussels lexicon to describe anything seen as an unrealistic or far-fetched demand.

May’s white paper is expected to propose the UK remaining indefinitely in a single market for goods after Brexit, to avoid the need for checks at the Irish border. While the UK is offering concessions on financial services, it wants restrictions on free movement of people – a long-standing no-go for the EU. Jean-Claude Piris, a former head of the EU council’s legal service, said it would be impossible for the EU to split the “four freedoms” underpinning the bloc’s internal market, which are written into the 1957 treaty that founded the European project: free movement of goods, services, capital and people. “The EU is in difficulties at the moment; the one and only success which glues all these countries together is a little bit the money and the internal market,” Piris said. “If you fudge the internal market by allowing a third state to choose what they want … it is the beginning of the end.”

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Not easy to find the right position on the topic. But Europe seems to show that uncontrolled immigration leads to the rise of right wing movements. Merkal gave birth to Salvini.

Nassim Taleb Slams “These Virtue-Signaling Open-Borders Imbeciles” (ZH)

As liberals across America continue to attempt to one-up one another with the volume of virtue they can signal, specifically on the question of ‘open borders’ – especially since ‘jenny from the bronx’ victory over the weekend, none other than Nassim Nicholas Taleb unleashed a trite 3-tweet summary of how farcical this argument is…

What intellectuals don’t get about MIGRATION is the ethical notion of SYMMETRY:

1) OPEN BORDERS work if and only if the number of pple who want to go from EU/US to Africa/LatinAmer equals Africans/Latin Amer who want to move to EU/US

2) Controlled immigration is based on the symmetry that someone brings in at least as much as he/she gets out. And the ethics of the immigrant is to defend the system as payback, not mess it up. Uncontrolled immigration has all the attributes of invasions.

3) As a Christian Lebanese, saw the nightmare of uncontrolled immigration of Palestinians which caused the the civil war & as a part-time resident of N. Lebanon, I am seeing the effect of Syrian migration on the place.

So I despise these virtue-signaling open-borders imbeciles.

Silver Rule in #SkinInTheGame

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Mutti’s holding centers.

Merkel Dodges Political Bullet With Controversial Migrant Deal (AFP)

German Chancellor Angela Merkel survived a bruising challenge to her authority with a compromise deal on immigration but faced charges Tuesday that it spelt a final farewell to her welcoming stance toward refugees. In high-stakes crisis talks overnight, Merkel had put to rest for now a dangerous row with her hardline Interior Minister Horst Seehofer that had threatened the survival of her fragile coalition government. In separate statements, Merkel praised the “very good compromise” that she said spelt a European solution, while Seehofer withdrew a resignation threat and gloated that “it’s worth fighting for your convictions”.

In a pact both sides hailed as a victory, Merkel and Seehofer agreed to tighten border controls and set up closed holding centres to allow the speedy processing of asylum seekers and the repatriations of those who are rejected. They would either be sent back to EU countries that previously registered them or, in case arrival countries reject this – likely including frontline state Italy – be sent back to Austria, pending an agreement with Vienna. CSU general secretary called the hardening policy proposal the last building block “in a turn-around on asylum policy” after a mass influx brought over one million migrants and refugees.

But criticism and doubts were voiced quickly by other parties and groups, suggesting Merkel may only have won a temporary respite. Refugee support group Pro Asyl slammed what it labelled “detention centres in no-man’s land” and charged that German power politics were being played out “on the backs of those in need of protection”. Bernd Riexinger of the opposition far-left Die Linke party spoke of “mass internment camps” as proof that “humanity got lost along the way” and urged Merkel’s other coalition ally, the Social Democrats (SPD), to reject the plan.

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And Merkel made Kurz possible, too.

Austria Says To ‘Protect’ Its Borders After German Migrant Deal (AFP)

Austria’s government warned Tuesday it could “take measures to protect” its borders after Germany planned restrictions on the entry of migrants as part of a deal to avert a political crisis in Berlin. If the agreement reached Monday evening is approved by the German government as a whole, “we will be obliged to take measures to avoid disadvantages for Austria and its people,” the Austrian government said in a statement. It added it would be “ready to take measures to protect our southern borders in particular,” those with Italy and Slovenia. German Chancellor Angela Merkel reached a deal Monday on migration with her rebellious interior minister, Horst Seehofer, to defuse a bitter row that had threatened her government.

Among the proposals is a plan to send back to Austria asylum seekers arriving in Germany who cannot be returned to their countries of entry into the European Union. Austria said it would be prepared to take similar measures to block asylum seekers at its southern borders, with the risk of a domino effect in Europe. “We are now waiting for a rapid clarification of the German position at a federal level,” said the statement, signed by Austria’s conservative Chancellor Sebastian Kurz and his allies of the far-right Freedom party, Vice Chancellor Heinz-Christian Strache and Interior Minister Herbert Kickl. “German considerations prove once again the importance of a common European protection of the external borders,” the statement said.

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Wonder what the strategy meetings were like.

Is Facebook A Publisher? In Public It Says No, But In Court It Says Yes (G.)

Facebook has long had the same public response when questioned about its disruption of the news industry: it is a tech platform, not a publisher or a media company. But in a small courtroom in California’s Redwood City on Monday, attorneys for the social media company presented a different message from the one executives have made to Congress, in interviews and in speeches: Facebook, they repeatedly argued, is a publisher, and a company that makes editorial decisions, which are protected by the first amendment. The contradictory claim is Facebook’s latest tactic against a high-profile lawsuit, exposing a growing tension for the Silicon Valley corporation, which has long presented itself as neutral platform that does not have traditional journalistic responsibilities.

The suit, filed by an app startup, alleges that Mark Zuckerberg developed a “malicious and fraudulent scheme” to exploit users’ personal data and force rival companies out of business. Facebook, meanwhile, is arguing that its decisions about “what not to publish” should be protected because it is a “publisher”. In court, Sonal Mehta, a lawyer for Facebook, even drew comparison with traditional media: “The publisher discretion is a free speech right irrespective of what technological means is used. A newspaper has a publisher function whether they are doing it on their website, in a printed copy or through the news alerts.” [..] Mehta argued in court Monday that Facebook’s decisions about data access were a “quintessential publisher function” and constituted “protected” activity, adding that this “includes both the decision of what to publish and the decision of what not to publish”.

David Godkin, an attorney for Six4Three, later responded: “For years, Facebook has been saying publicly … that it’s not a media company. This is a complete 180.” Questions about Facebook’s moral and legal responsibilities as a publisher have escalated surrounding its role in spreading false news and propaganda, along with questionable censorship decisions. Eric Goldman, a Santa Clara University law professor, said it was frustrating to see Facebook publicly deny that it was a publisher in some contexts but then claim it as a defense in court. “It’s politically expedient to deflect responsibility for making editorial judgements by claiming to be a platform,” he said, adding, “But it makes editorial decisions all the time, and it’s making them more frequently.”

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He did pull it off. But it may be too little too late. Biggest no-no: Model 3 was supposed to be $35,000. ended up at $78,000.

Tesla’s All-Nighter To Hit Production Goal Fails To Convince Wall Street (R.)

Tesla’s burning the midnight oil to hit a long-elusive target of making 5,000 Model 3 vehicles per week failed to convince Wall Street that the electric carmaker could sustain that production pace, sending shares down 2.3% on Monday. Tesla met the target by running around the clock and pulling workers from other projects, workers said. The company also took the unprecedented step of setting up a new production line inside a tent on the campus of its Fremont factory, details of which Chief Executive Elon Musk tweeted last month. Tesla’s heavily-shorted shares rose as much as 6.4% to $364.78 in early trading, but sank after several analysts questioned whether Tesla would be able to sustain the Model 3 production momentum, which is crucial for the long-term financial health of the company.

“In the interim, we do not see this production rate as operationally or financially sustainable,” said CFRA analyst Efraim Levy. “However, over time, we expect the manufacturing rate to become sustainable and even rise.” Levy cut CFRA’s rating on Tesla stock to “sell” from “hold.” Tesla, which Chief Executive Elon Musk hailed on Sunday as having become a “real car company,” said it now expects to boost production to 6,000 Model 3s per week by late August, signaling confidence about resolving technical and assembly issues that have plagued the company for months. Tesla also reaffirmed a positive cash flow and profit forecast for the year. Tesla has been burning through cash to produce the Model 3. Problems with an over-reliance on automation, battery issues and other bottlenecks have potentially compromised Tesla’s position in the electric car market as a host of competitors prepare to launch rival vehicles.

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NATO is “justified by the need to manage the security threats provoked by its enlargement.”.

The New York Times Squares off with the Truth, Again (AHT)

Whenever I’m having a rough day and need a pick-me-up, I turn to The New York Times’ editorial page. It’s always a gas to see how far the empire’s leading propaganda outfit is prepared to go in its mission to pull the wool over we the people’s gullible little eyes. The good editors have come through for me again with their latest entry, “Trump and Putin’s Too-Friendly Summit.” (Original title: “Trump and Putin: Best Frenemies for Life”). No doubt the original headline was deemed rather too impish for such a serious newspaper—it might, for instance, have alerted readers to the fact that the editorial’s content is not to be taken very seriously—and so was understandably jettisoned.

“One would think,” the editors write, “that the president of the United States would let Mr. Putin know that he faces a united front of Mr. Trump and his fellow NATO leaders, with whom he would have met days before the [Putin] summit in Helsinki.” Alas, during said meeting Trump reportedly remarked that “NATO is as bad as NAFTA”—the “free trade” agreement that has succeeded in decimating most of the manufacturing jobs spared by the automation wrecking ball. In other words, Trump does not necessarily think it’s a good idea to encircle Russia with a hostile military alliance whose existence, according to geopolitical expert Richard Sakwa, is “justified by the need to manage the security threats provoked by its enlargement.” (If you haven’t read Professor Sakwa’s comprehensive study of the Ukrainian crisis, Frontline Ukraine, put it at the top of your summer reading list.)

One notes the Turgidsonian delight with which the Times reminds us that, should push come to shove, we’ve got those Russki bastards outgunned. Of course, gullibles like you and I are to pay no mind to the fact that such a confrontation (a military one, for the Times brought up NATO) would almost certainly involve a nuclear exchange, rendering the disparity in manpower that so excites the Times totally meaningless. No, what’s important is that NATO has twenty-nine member states and counting, while the Warsaw Pact was dissolved twenty-seven years ago: ergo, unless he wants the old mailed fist, Putin had better ask “how high?” when we tell him to jump. One would be hard-pressed to come up with a more delusional assessment of where things stand.

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“We are in that constitutional crisis now, but just at the start of it.”

Anthony Kennedy and Our Delayed Constitutional Crisis (GP)

Like “swing vote” Justice Sandra Day O’Connor before him, “swing vote” justice Anthony Kennedy has been one of the worst Supreme Court jurists of the modern era. With swing-vote status comes great responsibility, and in the most consequential — and wrongly decided — cases of this generation, O’Connor and Kennedy were the Court’s key enablers. They • Cast the deciding vote that made each decision possible • Kept alive the illusion of the Court’s non-partisan legitimacy. Each of these points is critical in evaluating the modern Supreme Court. For two generations, it has made decisions that changed the constitution for the worse. (Small “c” on constitution to indicate the original written document, plus its amendments, plus the sum of all unwritten agreements and court decisions that determine how those documents are to be interpreted).

These horrible decisions are easy to list. They expanded the earlier decision on corporate personhood by enshrining money as political speech in a group of decisions that led to the infamous Citizens United case (whose majority opinion, by the way, was written by the so-called “moderate” Anthony Kennedy); repeatedly undermined the rights of citizens and workers relative to the corporations that rule and employ them; set back voting rights equality for at least a generation; and many more. After this next appointment, many fear Roe v. Wade may be reversed. Yet the Court has managed to keep (one is tempted to say curate) its reputation as a “divided body” and not a “captured body” thanks to its so-called swing vote justices and the press’s consistent and complicit portrayal of the Court as merely “divided.”

The second point above, about the illusion of the Court’s legitimacy, is just as important as the first. If the Court were ever widely seen as acting outside the bounds of its mandate, or worse, seen as a partisan, captured organ of a powerful and dangerous political minority (which it certainly is), all of its decisions would be rejected by the people at large, and more importantly, the nation would plunged into a constitutional crisis of monumental proportions. We are in that constitutional crisis now, but just at the start of it. We should have been done with it long ago. Both O’Connor and Kennedy are responsible for that delay.


Image credit: Mike Thompson / Detroit Free Press

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A tale of two refugees
Putin: Snowden is free to do whatever he wants
Lenin: I ordered Assange to be gagged and isolated and am coordinating “next steps” with US

‘Snowden is the Master of His Own Destiny’ – Russia (TeleSur)

United States President Donald Trump is expected to pressure Russia to hand over NSA whistleblower Edward Snowden in exchange for sanctions relief at the upcoming Trump-Putin summit; however, Russia has emphasized that they “are not in a position” to expel Snowden and will “respect his rights” if any such attempt is made. “I have never discussed Edward Snowden with (Donald Trump’s) administration,” Russian Foreign Minister Sergey Lavrov said to Channel 4 reporters. “When he (Putin) was asked the question, he said this is for Edward Snowden to decide. We respect his rights, as an individual. That is why we were not in a position to expel him against his will because he found himself in Russia even without a U.S. passport, which was discontinued as he was flying from Hong Kong.”

Snowden, who is being prosecuted in the United States for leaking classified documents that showed surveillance abuse by U.S. intelligence agencies, was given political asylum in Russia after his passport was revoked. “Edward Snowden is the master of his own destiny,” Lavrov said. Trump is meeting with Russian President Vladimir Putin on July 16 in Helsinki, where Putin is expected to push for an end to U.S. sanctions. Trump has said he would like better relations with Russia, perhaps as a way of pulling them away from China, but Trump’s opponents in the United States are already applying political pressure on him for holding the summit, in the midst of the tensest U.S.-Russian relations since the height of the Cold War.

The fate of Wikileaks founder Julian Assange also lay in the balance when U.S. Vice President Mike Pence met with Ecuador’s President Lenin Moreno this week. “The vice president raised the issue of Mr. Assange. It was a constructive conversation. They agreed to remain in close coordination on potential next steps going forward,” a White House official said in a statement.

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Jun 252018
 


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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Jun 242018
 
 June 24, 2018  Posted by at 9:10 am Finance Tagged with: , , , , , , , , ,  12 Responses »


Ivan Aivazovsky The Ninth Wave 1849

 

Mueller’s Fruit of the Poisonous Tree (WSJ)
Refugees Now Make Up 1% Of The World’s Population (Wef)
There’s No Migration Crisis – The Crisis Is Political Opportunism (G&M)
Divided EU Leaders Convene For Emergency Talks On Migration (R.)
Italy Says ‘Arrogant’ France Could Become Main Enemy On Migration (R.)
Xi Says China Must Lead Way In Reform Of Global Governance (R.)
Turkey’s Erdogan Faces Resurgent Opposition In Twin Election Test (AFP)
Huge Anti-Brexit Demonstration Throngs Central London (G.)
Airbus Warns Of Harsh Brexit Reality With 100,000 Jobs Under Threat (Ind.)
Bitcoin Drops to $5,860, Lowest since October 2017 (WS)
The Eurozone Isn’t Ready For The Next Big Shock (Pol.eu)
Shooting The Messenger: Criminalising Journalism (G.)

 

 

Two lawyers in the WSJ warning that the FBI had so tainted the process, Mueller should at a minimum pause his investigation.

Mueller’s Fruit of the Poisonous Tree (WSJ)

Special counsel Robert Mueller’s investigation may face a serious legal obstacle: It is tainted by antecedent political bias. The June 14 report from Michael Horowitz, the Justice Department’s inspector general, unearthed a pattern of anti-Trump bias by high-ranking officials at the Federal Bureau of Investigation. Some of their communications, the report says, were “not only indicative of a biased state of mind but imply a willingness to take action to impact a presidential candidate’s electoral prospects.” Although Mr. Horowitz could not definitively ascertain whether this bias “directly affected” specific FBI actions in the Hillary Clinton email investigation, it nonetheless affects the legality of the Trump-Russia collusion inquiry, code-named Crossfire Hurricane.

Crossfire was launched only months before the 2016 election. Its FBI progenitors—the same ones who had investigated Mrs. Clinton—deployed at least one informant to probe Trump campaign advisers, obtained Foreign Intelligence Surveillance Court wiretap warrants, issued national security letters to gather records, and unmasked the identities of campaign officials who were surveilled. They also repeatedly leaked investigative information.

Mr. Horowitz is separately scrutinizing Crossfire and isn’t expected to finish for months. But the current report reveals that FBI officials displayed not merely an appearance of bias against Donald Trump, but animus bordering on hatred. Peter Strzok, who led both the Clinton and Trump investigations, confidently assuaged a colleague’s fear that Mr. Trump would become president: “No he won’t. We’ll stop it.” An unnamed FBI lawyer assigned to Crossfire told a colleague he was “devastated” and “numb” after Mr. Trump won, while declaring to another FBI attorney: “Viva le resistance.”

[..] The totality of the circumstances creates the appearance that Crossfire was politically motivated. Since an attempt by federal law enforcement to influence a presidential election “shocks the conscience,” any prosecutorial effort derived from such an outrageous abuse of power must be suppressed. The public will learn more once the inspector general finishes his investigation into Crossfire’s genesis. But given what is now known, due process demands, at a minimum, that the special counsel’s activity be paused. Those affected by Mr. Mueller’s investigation could litigate such an argument in court. One would hope, however, that given the facts either Mr. Mueller himself or Deputy Attorney General Rod Rosenstein would do it first.

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War and peace.

Refugees Now Make Up 1% Of The World’s Population (Wef)

If all the world’s refugees came together as a single nation they would collectively create one of the largest countries on Earth. According to the UNHCR, there are now almost 70 million forcibly displaced people worldwide, around 1% of the world’s population – the highest number in modern history. The number of refugees has steadily increased since 1951 but has jumped dramatically in the last 10 years. That’s mostly because of the Syrian civil war which began in 2011 and has since forced millions to flee their homes and seek refuge in neighbouring countries and in Europe. The most recent Global Peace Index, an annual report produced by Australian think tank the Institute for Economics and Peace, has found that for the fourth year in a row, overall levels of peace around the world have deteriorated.

92 countries have seen declining peace, while 71 countries have improved. Increased terrorist activity, conflicts in the Middle East and rising tensions in Eastern Europe and north-east Asia have all contributed to declining levels of peace. Even the most peaceful regions in the world according to the index – Europe, North America, Asia-Pacific, and South America – have all recorded declines. The rising number of refugees and heightened political tensions in Europe and the US have meant that even stable countries have seen their scores lowered. For instance, 23 out of 36 countries in Europe deteriorated last year. Now in its seventh year of civil war, Syria is the least peaceful country in the world, along with Afghanistan, South Sudan, Iraq and Somalia.

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But the article above talks about the highest number of refugees in history.

There’s No Migration Crisis – The Crisis Is Political Opportunism (G&M)

“Desperate times at our southern border call for desperate measures on the other side:” That was the very loud message from right-wing leaders in the United States and Europe this week. Their desperate measures shocked the world. The Trump administration’s policy requiring thousands of infants and children to be seized from their parents and held in detention left leaders and citizens aghast (and its most inhumane elements remain in place). On the other side of the Atlantic, we watched the new Italian Deputy Prime Minister Matteo Salvini order boatloads of migrant families turned back into the sea, following his call last year to deal with immigration with a “mass cleansing, street by street, quarter by quarter.”

Most reasonable people agree that these are not humane ways to deal with what these politicians call a “migration emergency.” But too many people take their word that there actually is some sort of a migration emergency. To be clear: There is no immigration crisis in 2018. Not in the United States, not in Europe, not in Canada. “It is not a migration emergency – it’s a political emergency,” William Lacy Swing, the American director-general of the International Organization for Migration, said this week. The IOM’s 8,400 staff monitor the movement of people around the world, and while they’ve identified plenty of challenges, there aren’t any overwhelming or unmanageable movements of people this year. “The overwhelming majority of migration is taking place in a regular, safe and orderly fashion,” he said.

“There is a very serious problem of communication, but what we’re seeing is that the numbers are pretty modest,” said Angel Gurria, secretary-general of the Organization for Economic Co-operation and Development. The OECD, which advises 34 countries (including the United States and Canada) on immigration policy, this week released its annual report on migration levels in OECD countries. It showed a fall in numbers to ordinary, non-crisis levels. The United States has always had movement, some of it undocumented, across its southern border. The 2018 numbers are somewhat higher than the 2017 numbers – but they’re a small fraction, less than a third, of the rate experienced in the 2000s under George W. Bush, or in the 1990s under Bill Clinton, or in the 1980s under Ronald Reagan. Since 2008, illegal crossings have fallen to lows not seen since the early 1970s.

What has risen, since 2014, has been the far smaller fraction of people on the Mexican border who are refugee claimants from Guatemala, Honduras and especially El Salvador. Those countries are experiencing crises of political and civic violence, and those fleeing have legitimate claims for asylum under the Refugee Convention, to which Washington subscribes. They are not illegal and they’re certainly not dangerous.

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No agreement seems possible anymore.

Divided EU Leaders Convene For Emergency Talks On Migration (R.)

European Union leaders gather in Brussels on Sunday in an attempt to bridge their deep divisions over migration, an issue that has been splitting them for years and now poses a fresh threat to German Chancellor Angela Merkel. Though arrivals across the Mediterranean are only a fraction of what they were in 2015, when more than a million people reached Europe, a recent opinion poll showed migration was the top concern for the EU’s 500 million citizens. Under heavy pressure from voters at home, EU leaders have been fighting bitter battles over how to share out asylum seekers in the bloc. Unable to agree, they have become more restrictive on asylum and tightened their external borders to let fewer people in.

They have given money and aid to countries in Northern Africa and the Middle East to keep people from heading for Europe. Only 41,000 refugees and migrants have made it to the EU across the sea so far this year, U.N. figures show. But the issue has in the meantime won and lost elections for politicians across the bloc from Italy to Hungary, with voters favoring those advocating a tougher stance on migration. On Saturday, French President Emmanuel Macron said France favored financial sanctions for EU countries that refuse migrants with proven asylum status. Merkel is under pressure because her longtime conservative allies, Bavaria’s Christian Social Union (CSU), have threatened to start turning away at the German border all asylum seekers already registered elsewhere in the EU unless the bloc reaches an agreement on distributing them more evenly.

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Not smart Macron.

Italy Says ‘Arrogant’ France Could Become Main Enemy On Migration (R.)

Italy on Saturday said “arrogant” France risked becoming its “No.1 enemy” on migration issues, a day before European leaders convene in Brussels for a hastily arranged meeting on the divisive topic. In answer to comments by French President Emmanuel Macron, who said migration flows toward Europe had reduced compared with a few years ago, Italy’s Deputy Prime Minister Luigi Di Maio said Macron’s words showed he was out of touch. “Italy indeed faces a migration emergency and it’s partly because France keeps pushing back people at the border. Macron risks making his country Italy’s No.1 enemy on this emergency,” Di Maio wrote on his Facebook page.

Macron said European cooperation had managed to cut migration flows by close to 80 percent and problems stemmed from “secondary” movements of migrants within Europe. “The reality is that Europe is not experiencing a migration crisis of the same magnitude as the one it experienced in 2015,” the French president said. “A country like Italy has not at all the same migratory pressure as last year. … The crisis we are experiencing today in Europe is a political crisis.” But Italy’s Interior Minister and Deputy Prime Minister Matteo Salvini said his country had faced 650,000 arrivals by sea over the past four years, 430,000 asylum requests and the hosting of 170,000 “alleged refugees” for an overall cost of more than 5 billion euros ($5.8 billion).

“If for the arrogant President Macron this is not a problem, we invite him to stop insulting and to show instead some concrete generosity by opening up France’s many ports and letting children, men and women through at Ventimiglia,” he said in a statement, referring to the northwestern Italian town at the border with France.

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Filling a void.

Xi Says China Must Lead Way In Reform Of Global Governance (R.)

China must lead the way in reforming global governance, the foreign ministry on Saturday cited President Xi Jinping as saying, as Beijing looks to increase its world influence. China has sought a greater say in global organizations such as the World Bank, the IMF and UN, in line with its growing economic and diplomatic clout. Since taking office in late 2012, Xi has taken a more muscular approach, setting up China’s own global bodies like the Asian Infrastructure Investment Bank and launching his landmark Belt and Road project to build a new Silk Road. Beijing has cast itself a responsible member of the international community, especially as President Donald Trump withdraws the United States from agreements on climate change and Iran, and as Europe wrestles with Brexit and other issues.

China must “uphold the protection of the country’s sovereignty, security and development interests, proactively participate in and show the way in reform of the global governance system, creating an even better web of global partnership relationships”, Xi said in comments reported at the end of a two-day high-level Communist Party meeting. This would help create conditions for building a modern, strong socialist country, the ministry cited him as saying at the meeting attended by officials from the foreign and commerce ministries, the military, the propaganda department and the Chinese embassy in the United States.

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Blocking the opposition from TV.

Turkey’s Erdogan Faces Resurgent Opposition In Twin Election Test (AFP)

Turks began voting Sunday in dual parliamentary and presidential polls seen as President Recep Tayyip Erdogan’s toughest election test, with the opposition revitalised and his popularity at risk from growing economic troubles. Erdogan has overseen historic change in Turkey since his Islamic-rooted ruling party first came to power in 2002 after years of secular domination. But critics accuse the Turkish strongman, 64, of trampling on civil liberties and displaying autocratic behaviour. Polling stations opened at 0500 GMT and were due to close at 1400 GMT, with the first results expected late in the evening.

Over 56 million eligible voters can for the first time cast ballots simultaneously in the parliamentary and presidential elections, with Erdogan looking for a first round knockout and an overall majority for his ruling Justice and Development Party (AKP). But both these goals are in doubt in the face of an energetic campaign by his rival from the secular Republican People’s Party (CHP), Muharrem Ince, who has mobilised hundreds of thousands in mega rallies, and a strong opposition alliance in the legislative polls. Erdogan remains the favourite to hold on to the presidency – even if he needs a second round on July 8 – but the outcome is likely to be much tighter than he expected when calling the snap polls one-and-a-half years ahead of schedule.

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It’s going to take demos ten times that size. You need millions on the streets.

Huge Anti-Brexit Demonstration Throngs Central London (G.)

At least 100,000 people took to the streets yesterday as part of the largest ever demonstration of support for a new referendum over Britain’s final Brexit deal. With more businesses poised to issue dire Brexit warnings this week and senior Tories already drawing up plans to soften Theresa May’s exit proposals, organisers of the march on Sunday said it showed Britain’s departure from the European Union was not a “done deal”. A former aide to Margaret Thatcher, several Labour MPs and pro-EU campaigners from across Britain took part in the demonstration, marking two years since the Brexit vote. Organisers said that people from every region and walk of life were among those who took part in the march down Whitehall.

Conservative supporters marched alongside Labour voters and Liberal Democrats during the protest, which saw angry denunciations of the chaos that has ensued inside government since the Brexit vote. Labour’s leadership also came under pressure at the march for refusing to back a second public vote. There were chants of “Where’s Jeremy Corbyn” from the crowd. The Labour leader was on a visit to a Palestinian refugee camp. Anger on the streets at the prime minister’s handling of the Brexit negotiations is being accompanied by a renewed push from industry to ensure that trade with Europe is not disrupted as a result of leaving. More prominent manufacturing firms are set to issue warnings about Britain’s Brexit negotiations within days, after Airbus and BMW broke cover to say they could reconsider their UK investment plans unless a Brexit deal was reached keeping Britain closely aligned with Europe.

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Reality should dawn on the British people.

Airbus Warns Of Harsh Brexit Reality With 100,000 Jobs Under Threat (Ind.)

“The dawning of reality,” is how Tom Williams, the chief operating officer of Airbus, described it, after warning that Airbus is seriously considering pulling out of the UK in the event of a no deal Brexit. It’s worth taking a moment to consider what that would mean. The firm employs 14,000 people directly in this country. It has provided 4,000 high quality apprentices over the last decade, thus supporting a flagship policy of the Government. It contributed £1.7bn to the UK exchequer in tax last year, before you consider the economic contributions of its employees, who are in well paid, unionised jobs. It is estimated that Airbus supports another 86,000 people through its supply chain, bringing the total number of jobs at risk to 100,000.

The companies in that supply chain, and their employees, further add to the tax take, and contribute to the economy. If, when, Airbus does go, if it seeks alternatives when it comes to the production of its wings, those jobs will not be replaced. Once they are gone, they are gone. Perhaps the Brextremists expect the people who held them to pick the fruit that the soft fruit industry has been warning about rotting in the fields for months? It once again puts the shockingly mendacious talk by ministers of a “Brexit dividend” to fund the NHS – even Chancellor Philip Hammond has now descended into that pit – into context. The economic damage if Airbus goes, and if other companies; car makers, and their suppliers, for example, do the same, no one will be talking about dividends. Quite the reverse.

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Wolf Richter is no fan.

Bitcoin Drops to $5,860, Lowest since October 2017 (WS)

Bitcoin dropped to $5,860 at the moment, below $6,000 for the first time since October 29, 2017. It has plummeted 70% in six months from the peak of $19,982 on December 17. There have been many ups on the way down, repeatedly dishing out fakes hopes, based on the ancient theory that nothing goes to hell in a straight line (chart via CoinMarketCap): If you’re a True Believer and you just know that bitcoin will go to $1 million by the end of 2020, as promised by a whole slew of gurus, including John McAfee – “I will still eat my dick if wrong,” he offered helpfully on November 29 – well you probably don’t need this sort of punishment. You’re suffering enough already. And I apologize. I feel your pain.

I was a true believer too a few times, and every single time it was a huge amount of fun, and I felt invincible and indestructible until I got run over by events. With 17.11 million bitcoins circulating today, if bitcoin were at $1 million today, it would amount to a market cap of $17 trillion. But new bitcoins are constantly being created out of nothing (“mined”) by computers that suck up enormous amounts of electricity. And by the end of 2020, there will be many more bitcoins, and if the price were $1 million each, the total would amount to about the size of US GDP. This doesn’t even count all the other cryptos that would presumably boom in a similar manner, amounting perhaps to half of global GDP, or something.

People who promote this brainless crap are either totally nuts or the worst scam artists. But I feel sorry for the True Believers whose fiat money got transferred and will continue to get transferred from them to others. So OK, there’s still some time left. It’s not the end of 2020 yet. And True Believers still have room for the fake hope of a $1-million bitcoin. But at the moment, bitcoin is even worse – incredibly – than one of the worst fiat currencies in the world, the Argentine peso, which has plunged “only” 35% over the period during which bitcoin plunged 70%. That takes some doing!

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France and Germany should stop trying to dictate the future. It will backfire.

The Eurozone Isn’t Ready For The Next Big Shock (Pol.eu)

The return to economic growth in the eurozone has produced a dangerous sense of complacency on the Old Continent, especially in the richer countries of the north. But Italy’s flirtation with an exit from the euro under a populist government is a stark reminder that, if left unaddressed, the deep structural weaknesses that plague the single currency could trigger an existential crisis across the EU. It would be a mistake, therefore, to believe we can drive along in business-as-usual mode, or just take a few small steps toward more European integration. This week’s Meseberg Declaration signed by Angela Merkel and Emmanuel Macron, although a step in the right direction, is part of a collective denial about what needs to be done.

You don’t need to be a populist to recognize that Europe’s monetary union is dysfunctional and in dire need of more substantial reforms than those proposed by Germany and France. To keep the single currency alive, it needs two major structural improvements. First, it needs to reduce the fragmentation in Europe’s banking system that has caused the Continent to experience more severe crises than other parts of the world — most notably in comparison to the U.S. Second, it has to develop a streamlined and legitimate decision-making process to respond quickly and boldly to the next major recession.

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Amen.

Shooting The Messenger: Criminalising Journalism (G.)

The fact that during the 10 years he was in office, the US president, Barack Obama, prosecuted more whistleblowers than all the presidents in US history combined is an indication of the increasing threat to journalism. In 2017 the head of the CIA questioned the first amendment rights which protect free speech, and the US attorney-general threatened that the WikiLeaks founder, Julian Assange, would be prosecuted (for what he was not clear). Both are acts of intimidation designed to silence. It has been argued that governments are not that concerned about most of the work that journalists do so, for most, concerns about surveillance are unnecessary. But the problem there is that, generally speaking, if governments are not worried about what journalists are doing, the journalists are not doing their jobs.

Reporting local news may be a useful social function, but the issues that arise where nations go to war, or where countries are involved in breaking the law, or plundering the treasure of other nations, are of great importance and need investigating. It is in these significant areas that journalists must be protected from the vested interests of the executive state; where the very people who make the decisions, as in the Iraq war, need to be exposed and held to account before the event, not after it. What is so disturbing is that the media has often aided and abetted governments and the intelligence agencies – who always want more access to information – as they invoked the fear of terrorism as grounds for introducing tougher surveillance laws.

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