Aug 142018
 
 August 14, 2018  Posted by at 7:37 am Finance Tagged with: , , , , , , , , , , , ,  


Vincent van Gogh Vincent’s House in Arles (The Yellow House) 1888

 

Turkey Will Be The Largest EM Default Of All Time (Russell Napier)
‘What Happens In Turkey Won’t Stay In Turkey’ (CNBC)
Italy Expects Financial Market Attack In August (R.)
The Price of Cheap Dollar/Euro Debts: Local Currencies Come Unglued (WS)
Indian Rupee Drops To All-Time Low Against Dollar Over Turkish Crisis (Ind.)
Close Up and Long Shot (Kunstler)
Musk: “I Am Working With Silver Lake, Goldman On Taking Tesla Private” (ZH)
The Law As Weapon (Paul Craig Roberts)
Russia-Gate One Year After VIPS Showed a Leak, Not a Hack (CN)
Greek Fishermen Accuse Turkish Boats of Opening Fire off Leros Island (GR)
Turkish FM Accuses Greece Of Escalating Tensions In Aegean (K.)
Palm Oil A New Threat To Africa’s Primates (BBC)
Scotland’s Mountain Hare Population Is At Just 1% Of 1950s Level (G.)

 

 

Napier thinks Turkey will default on $500 billion in debt by imposing capital controls.

Turkey Will Be The Largest EM Default Of All Time (Russell Napier)

Regular readers of the Fortnightly will know that The Solid Ground has long forecast a major debt default in Turkey. More specifically, the forecast remains that the country will impose capital controls enforcing a near total loss of US$500bn of credit assets held by the global financial system. That is a large financial hole in a still highly leveraged system. That scale of loss will surpass the scale of loss suffered by the creditors of Bear Stearns and while Lehman’s did have liabilities of US$619bn, it has paid more than US$100bn to its unsecured creditors alone since its bankruptcy. It is the nature of EM lending that there is little in the way of liquid assets to realize; they are predominantly denominated in a currency different from the liability, and also title has to be pursued through the local legal system.

Turkey will almost certainly be the largest EM default of all time, should it resort to capital controls as your analyst expects, but it could also be the largest bankruptcy of all time given the difficulty of its creditors in recovering any assets. So the events of last Friday represent only the end of the beginning for Turkey. The true nature of the scale of its default and the global impacts of that default are very much still to come. Strong form capital controls produce a de facto debt moratorium, and very rapidly investors realize just how little their credit assets are worth. A de jure debt moratorium at the outbreak of The Great War in 1914 bankrupted almost the entire European banking system – it was saved by mass government intervention.

While the imposition of capital controls in recent years has hit selected investors hard, in Iceland, Cyprus, Greece and key emerging markets, there has been nothing of this size and it is to be fully borne by financial institutions who believe they hold not just valuable credit assets but actually liquid credit assets! The loss of hundreds of billions of assets recently considered liquid by global financial institutions, through the de facto debt moratorium of capital controls, will be a huge shock to the global financial system.

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Turkey=corporate debt. How do you bail that out?

‘What Happens In Turkey Won’t Stay In Turkey’ (CNBC)

The markets have seen much of this movie before: a heavily indebted country finds itself in crisis, the currency plunges and talk quickly turns to contagion and, ultimately, an expensive globally financed bailout. In Turkey’s case, the plot line is a little different, however. Where the other debt crises generally involved government borrowing, Turkey’s is mostly a corporate story, making the bailout mechanics more complicated and thus raising fears that what started in a small country with only marginal systemic importance on its face could quickly escalate. “How can a country where the entire market cap of Turkish equities traded on the Istanbul Stock exchange is less than the market cap of Netflix wreak such havoc? It is all about the direct and indirect impacts,” wrote Katie Nixon, chief investment officer for wealth management at Northern Trust.

“There are certain emerging market countries with relatively weak currencies and a heavy reliance on external (predominately dollar based) financing. The fear is that what happens in Turkey won’t stay in Turkey.” Nixon said that while the crisis does not appear to have major global implications, a strong U.S. dollar coupled with weakening emerging market currencies could fuel the problem. To date, the debt emergencies in Greece, Cyprus, Italy and other euro zone countries — not to mention Argentina, Malaysia and perhaps Pakistan before long — have had limited global spillovers. Several required bailout loans from the IMF, an organization that gets 17.5 percent of its funding from the U.S.

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Low market volumes in summer make an attack easier to execute.

Italy Expects Financial Market Attack In August (R.)

Speculators will probably attack Italian financial markets this month but the country has the resources to defend itself, a senior and highly influential government official said in a newspaper interview on Sunday. Giancarlo Giorgetti, undersecretary in the prime minister’s office and a leading light in the far-right League party, said thin summer trading volumes helped fuel market assaults. “I expect an attack (in August),” Giorgetti told Libero. “The markets are populated by hungry speculative funds that choose their prey and pounce … In the summer the market volumes are small, you can lay the groundwork for aggressive initiatives against countries. Look at Turkey.”

Turkish markets slumped last week on growing concerns over the country’s economy and political leadership. Italian assets have also come under strain in recent weeks, with investors concerned that the governing coalition, made up of the League and the anti-establishment 5-Star Movement, might tear up EU fiscal rules to pay for big-spending budget plans. “If the (market) storm comes, we will open our umbrella. Italy is a big country and has the resources to react, thanks in part to its large amount of private savings,” said Giorgetti, who is seen as a moderating force within the League. Quoting a report by bankers’ federation Fabi, Italian newspapers said on Sunday household savings in Italy totaled some 4.4 trillion euros against 2.2 trillion in 1998.

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The reason for all the trouble? Cheap central bank credit.

The Price of Cheap Dollar/Euro Debts: Local Currencies Come Unglued (WS)

Turkey has its own sets of problems and isn’t even seriously trying to prop up its currency. Now global bondholders are clamoring for the IMF to step in and calm the waters around the currency crisis in Turkey that has turned into a debt crisis that is now dragging some European banks through the dirt. Those global bondholders want the IMF to lend Turkey money to bail out Turkey’s bondholders to put an end to the turmoil and torture in emerging markets bonds that were so hot just eight months ago. In return for an IMF bailout of its bondholders, Turkey would have to follow the IMF’s program, slash its expenses, including social expenses, and curtail its crazy borrowing binge. But no go.

Instead of trying to address the problem, or beg the IMF for a bailout, the Turkish government has heaped scorn on the West. In return, the Turkish lira plunged another 8% against the dollar on Monday, to 7.04 lira to the dollar. Seen the other way around, as the chart below shows, the value of 1 lira has now dropped to 14.4 US cents, from 25 cents just four months ago, which, if nothing else, tells people to go figure out how to invest in gold and silver. Monday’s drop brings the grand collapse over the past three days to 24%, and over the past four months to 43%.

After nine years of experimental monetary policies in the US, Europe, Japan, and elsewhere, the Emerging Market economies have become addicted to this debt borrowed in a hard currency that they cannot inflate away. In Turkey, this cheap debt – cheap even for junk-rated issuers such as the government of Turkey – funded a construction boom in the property sector. This construction boom has been crucial to the economy – which is why the government is trying to ride this bull all the way. Turkey’s inflation is surging. In July, annual inflation reached 16%, the highest since January 2004. Inflation is what ultimately destroys a currency. But it’s not yet 30% as in Argentina, and perhaps the government thinks it still has some leeway.

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Are you calling New Zealand an emerging market?

Indian Rupee Drops To All-Time Low Against Dollar Over Turkish Crisis (Ind.)

The Indian currency has dropped to an all-time low against the dollar, while the New Zealand dollar has slumped to two-year lows as emerging markets feel the effects of the crisis in Turkey. Investors have instead moved towards safe haven currencies such as the yen, which surged to a six-week high, and the Swiss franc, which jumped close to a one-year high against the euro. The Indian central bank reportedly intervened to prevent a sharp drop in the rupee’s value, however, it did little to stem the decline, and the currency fell to 69.62 rupees per dollar. The New Zealand dollar has also felt the effects of the Turkish crisis, dropping below $0.66 for the first time in two years over the weekend. Meanwhile, the euro fell against the dollar to $1.14, as investors try to work out how badly European banks might be affected by the problems in Turkey, with the Spanish, French, and Italian in particular all hugely exposed to Turkish debt.

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“President Trump’s tariff monkeyshines are shoving the Chinese banking system up against a wall of utterly irresolvable insolvency problems..”

Close Up and Long Shot (Kunstler)

Who cares about the currency of a second-rate player in the global economy? A lot of SIFIs (“systemically important financial institutions”) otherwise known as Too-Big-To-Fail banks. That’s who. Deutsche Bank’s stock dropped over 6 percent when the Turkish Lira tanked on Friday. Turkey’s nickname since the collapse of the Ottoman Empire in the 1920s has been “the sick man of Europe” and Deutsche Bank in the post-2008-crash era is widely regarded as the sick man of SIFI banks. One analyst wag downgraded its status a year ago to “dead bank walking.” Its balance sheet was a Cave of Winds littered with the moldering skeletons of malinvestment.

If the European Central Bank (aka Germany) has to bail out DB, all bets are off for the Euro, which was showing serious signs of distress Friday. And who is going to bail out Turkey? If the IMF is your go-to vehicle, then you mean US taxpayers. Anyway, Turkey’s Lira is only one of several Emerging Market currencies whose hands have been called at the global poker table, where the four-flushers are getting flushed out. The Russian ruble was another one, ostensibly to the delight of America’s Destroy-Russia-at-All-Costs faction. China is also having to play a round of super Three Card Monte with its currency, the yuan.

President Trump’s tariff monkeyshines are shoving the Chinese banking system up against a wall of utterly irresolvable insolvency problems and threatening the stability of Xi Jinping’s one-party government. The Chinese export trade is at the heart of the world’s current economic arrangements. If you pull it out of the globalism machine, the machine will stop. It is going to stop one way or another anyway, but the gathering crisis of autumn 2018 will hasten that. All of this is happening because the whole world can’t handle the debts it has racked up, and the whole world knows it. And knowing it, they also know that their debt-based currencies are worthless. And knowing that, they also know that absolutely everybody else is broke and unable to meet their obligations. That is some dangerous knowledge.

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Will Musk get away with not following the rules?

Musk: “I Am Working With Silver Lake, Goldman On Taking Tesla Private” (ZH)

Update 2: And here things get bizarre because according to Reuters, Silver Lake is not currently discussing participating as an investor in Elon Musk’s proposed take-private deal for Tesla, citing an unidentified person. Reuters also adds that Silver Lake is offering assistance to Musk without compensation and hasn’t been hired as financial adviser in an official capacity.

Update: in a tweet sent out on Monday evening, Musk said the he was working with Silver Lake and Goldman Sachs as financial advisors, as well as Wachtell Lipton as legal advisors, on his “proposal” to take Tesla private.

It was not immediately clear why Silver Lake, an investor, is serving as a financial advisor, nor was it clear why Musk defined the “going private” transaction as merely a proposal when he previously classified it as a firm deal, with “secured funding.” The tweet followed a blog post by Musk in which he finally offered more details on his tweet that he had “funding secured” to take Tesla Inc. private, however as Bloomberg echoed our skepticism from earlier (see below) , “it’s unlikely to get U.S. regulators off his back.” Musk’s elaboration doesn’t wash away the investor confusion he triggered a week ago by failing to provide evidence that he had financing. Without more information, investors were left guessing at how far along negotiations on a bid had progressed.

Musk’s fresh disclosure might even help the Securities and Exchange Commission show that his initial tweet was misleading, lawyers said. Bloomberg quoted Keith Higgins, a Ropes & Gray lawyer who said that “a cautious lawyer would have said you shouldn’t have said ‘funding secured’ unless you had a commitment letter,” which Musk clearly did not have, and certainly not from the Saudi Wealth Fund which as Musk admitted, needed to do more due diligence and analysis and had yet to conduct an “internal review process for obtaining approvals.” John Coffee, director of the Center on Corporate Governance at Columbia Law School, agreed. He said Monday’s post indicates Musk was being overly bullish last week, potentially increasing his vulnerability in any SEC investigation. “He clearly had not secured funding at the time of his tweet – he concedes that obliquely,” Coffee said.

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How Mueller arrived at Manafort.

The Law As Weapon (Paul Craig Roberts)

Robert Mueller is supposed to be investigating Russiagate, which has been shown to be a hoax concocted by former CIA director John Brennan, former FBI director James Comey, and current deputy Attorney General Rod Rosenstein. As Russiagate is a hoax, Mueller has not been able to produce a shred of evidence of the alleged Trump/Putin plot to hack Hillary’s emails and influence the last presidential election. With his investigation unable to produce any evidence of the alleged Russiagate, Mueller concluded that he had to direct attention away from the failed hoax by bringing some sort of case against someone, knowing that the incompetent and corrupt US media and insouciant public would assume that the case had something to do with Russiagate.

Mueller chose Paul Manafort as a target, hoping that faced with fighting false charges, Manafort would make a deal and make up some lies about Trump and Putin in exchange for the case against him being dropped. But Manafort stood his ground, forcing Mueller to go forward with a false case. Manafort’s career is involved with Republican political campaigns. He is charged with such crimes as paying for NY Yankee baseball tickets with offshore funds not declared to tax authorities and with attempting to get bank loans on the basis of misrepresentation of his financial condition. In the prosecutors’ case, Manafort doesn’t have to have succeeded in getting a loan based on financial misrepresentation, only to be guilty of trying.

Two of the people testifying against him have been paid off with dropped charges. Mueller’s investigation is restricted to Russiagate. In other words, Mueller has no mandate to investigate or bring charges unrelated to Russiagate. In my opinion, Muller gets away with this only because the deputy Attorney General is in on the Russiagate plot against Trump. Mueller and Rosenstein know that they can count on the presstitutes to continue to deceive the public by presenting the Manafort trial as part of Russiagate.

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But people like Mueller still claim a hack, because otherwise they can’t involve Russia.

Russia-Gate One Year After VIPS Showed a Leak, Not a Hack (CN)

A year has passed since highly credentialed intelligence professionals produced the first hard evidence that allegations of mail theft and other crimes attributed to Russia rested on purposeful falsification and subterfuge. The initial reaction to these revelations—a firestorm of frantic denial—augured ill, and the time since has fulfilled one’s worst expectations. One year later we live within an institutionalized proscription of proven reality. Our discourse consists of a series of fence posts and taboos. By any detached measure, this lands us in deep, serious trouble. The sprawl of what we call “Russia-gate” now brings our republic and its institutions to a moment of great peril—the gravest since the McCarthy years and possibly since the Civil War. No, I do not consider this hyperbole.

Much has happened since Veteran Intelligence Professionals for Sanity published its report on intrusions into the Democratic Party’s mail servers on Consortium News on July 24 last year. Parts of the intelligence apparatus—by no means all or even most of it—have issued official “assessments” of Russian culpability. Media have produced countless multi-part “investigations,” “special reports,” and what-have-yous that amount to an orgy of faulty syllogisms. Robert Mueller’s special investigation has issued two sets of indictments that, on scrutiny, prove as wanting in evidence as the notoriously flimsy intelligence “assessment” of January 6, 2017. Indictments are not evidence and do not need to contain evidence. That is supposed to come out at trial, which is very unlikely to ever happen.

Nevertheless, the corporate media has treated the indictments as convictions. Numerous sets of sanctions against Russia, individual Russians, and Russian entities have been imposed on the basis of this great conjuring of assumption and presumption. The latest came last week, when the Trump administration announced measures in response to the alleged attempt to murder Sergei and Yulia Skripal, a former double agent and his daughter, in England last March. No evidence proving responsibility in the Skripal case has yet been produced. This amounts to our new standard. It prompted a reader with whom I am in regular contact to ask, “How far will we allow our government to escalate against others without proof of anything?” This is a very good question.

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I hinted at this in my article Sunday. Many Greek islands are off the Turkish coast, as per the 1923 Lausanne Treaty. If Erdogan wants to push nationalism -and he does-, this may be his best bet. In essence, the Treaty finally ended the Ottoman Empire, and a lot more territory was lost, but this part is what Turks will be receptive to. One other piece on the Treaty: Turkey ceded all claims to Cyprus. We know how that fared.

Greek Fishermen Accuse Turkish Boats of Opening Fire off Leros Island (GR)

Greek fishermen have reported that they were fired upon by Turkish fishing boats near Kalapodi islet, 300 meters off the coast of Leros island. Two Greek seamen, owners of fishing boats, spoke to Alpha television saying that the Turkish boats were inside Greece’s territorial waters on Sunday when their crews shot at them. They also said that, since July, Turkish fishing boats have repeatedly intruded upon Greek waters to fish in the area. The Greek fishermen said that usually they call the coast guard upon seeing the Turkish boats; the intruders are forced to exit Greek waters upon the arrival of coast guard ships. This time, however, Leros fisherman Kostas Tsiftis told Alpha, the crew of the Turkish boat fired gunshots at them. He also said that the gunfire was from an automatic weapon because some of the shots were repeated.

The Greek fishermen were forced to leave the area and called the Hellenic Coast Guard. Upon the arrival of two coast guard patrol vessels, the Turkish fishing boats moved towards international waters. The fishermen noted that even though they are used to provocative acts by Turkish fishermen, Sunday’s incident was unprecedented. “We heard six shots. The two of them, the third and the fourth, were repeated. The gun was neither a hunting rifle, nor a revolver,” said Lefteris Giannoukas, who was in one of the Greek boats. “The Turkish fishermen were about 200 meters away. This is the first time that the Turks shot at us. Of course we were afraid, we did not expect it,” Tsiftis said. The Greek fisherman noted that this is the first time the Turkish boats came this close.

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And there you go. For domestic consumption.

Turkish FM Accuses Greece Of Escalating Tensions In Aegean (K.)

Greece is responsible for escalating tension in Aegean and Mediterranean, even though Turkey has always stood by Greeks in their times of difficulty, Turkey’s foreign minister has told his country’s ambassadors. “In their difficult days, we are always at their side. But in the Aegean and the Mediterranean, they are again increasing tension. They do bizarre things, which are not acceptable. Don’t we all want the eastern Mediterranean to become a region of peace and prosperity?” Mevlut Cavusoglu told the 10th conference of Turkish ambassadors. He also called for a new process to resolve the Cyprus issue, blaming the Republic of Cyprus for the impasse. “In order to reach a solution in Cyprus, a new process must be launched. Greek Cypriots do not want to cooperate. And this we saw last year. We saw it in Geneva, we saw it in Crans-Montana,” Tsavousoglou said. And “Greece is no different,” he alleged.

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It’s devastated Borneo. Now it’s coming for Africa. Next up Amazon?

Palm Oil A New Threat To Africa’s Primates (BBC)

Endangered monkeys and apes will almost certainly face new risks if Africa becomes a big player in the palm oil industry. That is the message of a study looking at how large-scale expansion of the oil crop in Africa might affect the continent’s rich diversity of wildlife. Most areas suitable for growing palm oil are key habitats for primates, according to researchers. They say consumers can help by choosing sustainably-grown palm oil. Ultimately, this may mean paying more for food, cosmetics and cleaning products that contain the oil, or limiting their use. “If we are concerned about the environment, we have to pay for it,” said Serge Wich, professor of primate biology at Liverpool John Moores University, and leader of the study. “In the products that we buy, the cost to the environment has to be incorporated.”

[..] Many companies growing palm oil are looking to expand into Africa. This is a worry for conservationists, as potential plantation sites are in areas of rich biodiversity. They are particularly worried about Africa’s primates. Nearly 200 primate species are found in Africa, many of which are already under threat. Habitat destruction is one of the main reasons why all great apes are at the edge of extinction. The introduction of palm oil plantations to Africa is expected to accelerate the habitat loss. [..] The study found that while oil palm cultivation represents an important source of income for many tropical countries, there are few opportunities for compromise by growing palm oil in areas that are of low importance for primate conservation.

“We found that such areas of compromise are very rare throughout the continent (0.13 million hectares), and that large-scale expansion of oil palm cultivation in Africa will have unavoidable, negative effects on primates,” said the research team. To put that figure into context, 53 million hectares of land will be needed by 2050 to grow palm oil in order to meet global demand.

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An entire article without naming any numbers, only percentages. How many mountain hares are there in Scotland? 2, 20, 2 million?

Scotland’s Mountain Hare Population Is At Just 1% Of 1950s Level (G.)

The number of mountain hares on moorlands in the eastern Scottish Highlands has fallen to less than 1% of the level recorded more than 60 years ago, according to a long-term study. The Centre for Ecology & Hydrology and the RSPB teamed up to study counts of the animals over several decades on moorland managed for red grouse shooting and nearby mountain land. From 1954 to 1999, the mountain hare population on moorland sites decreased by almost 5% every year, the study found, saying the long-term decline was likely to be due to land use changes such as the loss of grouse moors to conifer forests. However, from 1999 to 2017 the scale of the “severe” moorland declines increased to over 30% every year, leading to counts last year of less than 1% of original levels in 1954, researchers said.

On higher, alpine sites, numbers of mountain hares fluctuated, but increased overall until 2007, and then declined, although not to the lows seen on the moorland sites, the study noted. The report stated: “The study found long-term declines in mountain hare densities on moorland, but not alpine, sites in the core area of UK mountain hare distribution in the eastern Highlands of Scotland. “These moorland declines were faster after 1999 at a time when hare culling by grouse moor managers with the specific aim of tick and LIV [Louping ill virus, which is spread by ticks] control has become more frequent.” Gamekeepers and estate managers claim culls limit the spread of ticks, protect trees and safeguard fragile environments, and a policy of voluntary restraint is in place. However, campaigners believe the practice is cruel and unnecessary.

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Aug 082018
 
 August 8, 2018  Posted by at 8:20 am Finance Tagged with: , , , , , , , , , , ,  


Vincent van Gogh The red tree house 1890

 

Tesla Shares Soar After Elon Musk Floats Plan To Take Company Private (G.)
Securities Lawyers Shocked By Elon Musk’s Tweet (CNBC)
Alex Jones Pleads With Donald Trump To Fight ‘Censorship’ (Ind.)
US Think Tank’s Tiny Lab Helps Facebook Battle Fake Social Media (R.)
Trump’s Sanctions Causing Turmoil In Turkey (CNBC)
Turkish Banks Scramble to Stave Off Debt Crisis (DQ)
Europe ‘Needs To Get A Backbone’ On Trump’s Iran Sanctions – Ron Paul (RT)
EU Foreign Policy Chief Calls On Firms To Defy Trump Over Iran (G.)
The Blowup With Canada Is the Latest Saudi Overreach (IC)
London Is The World’s Airbnb Capital (ZH)
My Amsterdam Is Being Un-Created By Mass Tourism (G.)
First Trial Alleging Monsanto’s Roundup Causes Cancer Goes To Jury (R.)
The American Sea of Deception (TD)

 

 

$82 billion in funding arranged? Perhaps the SEC should have a word with Musk about that.

Tesla Shares Soar After Elon Musk Floats Plan To Take Company Private (G.)

Elon Musk has launched a campaign to take Tesla private on a day that included several provocative tweets, a suspension (and resumption) of trading in the company’s shares, reports of a significant Saudi investment, a surge in stock price, and an evocative, Musk-tinged appeal to the Tesla faithful: “The future is very bright and we’ll keep fighting to achieve our mission.” The ride started with Tesla’s stock rising more than 7% after Musk tweeted he was “considering taking Tesla private” and had funding in place to do so at a price of $420 (£325) per share. Shortly afterwards, Tesla published a blogpost written by Musk entitled ‘Taking Tesla private’ that had been sent to all employees.

The tweet appeared to be triggered by a report in the Financial Times that Saudi Arabia has built up a stake in Tesla worth up to $2.9bn. At $420 a share, Tesla would have an enterprise value of about $82bn including debt, well above its stock market value, which reached $63.8bn on Tuesday. Shares closed up 11% at $378. To take Tesla private, Musk would have to pull off the largest leveraged buyout in history, surpassing Texas electric utility TXU’s in 2007. Analysts say Tesla doesn’t fit the typical profile of a company that can raise tens of billions of dollars of debt to fund such a deal. In a follow up tweet, Musk wrote: “I don’t have a controlling vote now and wouldn’t expect any shareholder to have one if we go private. I won’t be selling in either scenario.”

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Social media and its consequences.

Securities Lawyers Shocked By Elon Musk’s Tweet (CNBC)

“If his comments were issued for the purpose of moving the price of the stock, that could be manipulation, it could also be securities fraud,” former SEC Chairman Harvey Pitt told CNBC on Tuesday. “The use of a specific price for a potential going private transaction is highly unprecedented and therefore raises significant questions about what his intent was. So, that would have to be investigated.” [..] Five years ago the Securities and Exchange Commission had to clarify its social media policy after Netflix founder and CEO Reed Hastings set off a firestorm of his own.

Companies can use social media like Facebook and Twitter to announce key information and be OK under Fair Disclosure regulations as long as investors know that they can find that information on the social media accounts. Reg FD was designed to make sure investors could get information at the same time, rather than having select disclosures to some before others. The SEC’s enforcement division had investigated Hasting’s use of a personal Facebook page back in 2012 to say the streaming service’s monthly online viewing had exceeded 1 billion hours for the first time.

The SEC didn’t take any action against Netflix or Hastings but clarified its social media policy. “Personal social media sites of individuals employed by a public company would not ordinarily be assumed to be channels through which the company would disclose material corporate information,” the SEC said in a statement at the time. There might not be any SEC action this time, either, but it’s only a matter of time before an executive gets accused of making a false or misleading statement on social media, said Kevin LaCroix, an attorney focused on management liability issues. “There will be a case someday.”

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A hard one for Trump. Alex Jones is his biggest media asset. But how can Washington stop Silicon Valley?

Alex Jones Pleads With Donald Trump To Fight ‘Censorship’ (Ind.)

Far-right conspiracy theorist Alex Jones has appealed to Donald Trump to pursue an end to “censorship” after the InfoWars host was banned from all but one of the West’s major content platforms. On Monday, Apple deleted most of Mr Jones’s podcasts saying they contained hate speech; Facebook removed four of his pages down for “repeated violations of community standards”; YouTube terminated Mr Jones’s account after he violated a 90-day ban; and Spotify removed one of Jones’s podcasts for “hate content”. In a free-wheeling monologue posted online, the prominent far-right personality praised the president, condemned the mainstream press, and accused China of meddling in US elections.

“Mr President, America knows you’re real. They know the Democrats are the anti-American globalists allied with the ChiComms, radical Islam, the unelected EU, and others,” he said. “If you come out before the midterms and make the censorship the big issue of them trying to steal the election. “And if you make the fact we need an Internet Bill of Rights, and anti-trust busting on these companies, if they don’t back off right now. “And if you don’t come out and point out that the communist Chinese have penetrated and infiltrated and are way, way worse than the Russians …. then they will be able to steal the midterms and start the impeachment.” He said cracking down on China and speaking out against censorship was “the right thing to do”.

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The Atlantic Council doesn’t find the truth, it makes its own. Main Russiagate proponents.

US Think Tank’s Tiny Lab Helps Facebook Battle Fake Social Media (R.)

A day before Facebook announced that it had discovered and disabled a propaganda campaign designed to sow dissension among U.S. voters, it exclusively shared some of the suspicious pages with an online forensics team so busy it hasn’t put a nameplate on the door. The Atlantic Council’s Digital Forensic Research Lab is based in a 12-foot-by-12-foot office in the Washington, D.C., headquarters of the nearly 60-year-old Council www.atlanticcouncil.org, a think tank devoted to studying serious and at times obscure international issues. Facebook is using the group to enhance its investigations of foreign interference. Last week, the company said it took down 32 suspicious pages and accounts that purported to be run by leftists and minority activists.

While some U.S. officials said they were likely the work of Russian agents, Facebook said it did not know for sure. It fell to the lab to point out similarities to fake Russian pages from 2016 during Facebook’s news conference last week. Facebook began looking for outside help amid criticism for failing to rein in Russian propaganda ahead of the 2016 presidential elections. The U.S. Justice Department won indictments against 13 Russians and three companies for using social media in that election to influence voters. U.S. President Donald Trump’s national security team warned last week of persistent attempts by Russia to use social media against the 2018 congressional elections as well.

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All they need to do is release a pastor.

Trump’s Sanctions Causing Turmoil In Turkey (CNBC)

The Turkish lira and benchmark sovereign bond hit a record low as the threat of U.S. sanctions added pressure to already ailing markets. The U.S. dollar rose to 5.4 against the lira on Monday before trading around 5.29 on Tuesday. Turkey’s 10-year bond fell to a record low on Tuesday, pushing its yield up to around 20 percent before hovering around 18.8 percent. Bond prices move inversely to yields. Turkish capital markets have struggled this year as the country deals with a weakening economy. The sharp moves down come after President Donald Trump threatened last month to slap “large sanctions” on the Middle Eastern nation if it refuses to free Andrew Brunson, an evangelical pastor.

The U.S. then announced on Aug. 1 sanctions on Turkey’s justice and interior ministers, prohibiting U.S. citizens from doing business with them. “This is a shot across the bow,” said Marcus Chenevix, an analyst at TS Lombard. “Now, I think the U.S. will give them time to respond. It’s not like the U.S. sees this as a pressing political matter, it just can’t seem to be backing down to these hostage tactics.” Turkey detained Brunson in October 2016, accusing him of spying and trying to overthrow the government after a failed coup earlier that year. Trump demanded in a July 26 tweet the Turkish government release Brunson.

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20% yields on bonds… As the lira has lost 25% or so of its value..

Turkish Banks Scramble to Stave Off Debt Crisis (DQ)

Highly leveraged companies currently face a potent cocktail of soaring borrowing costs and a plunging Lira. As the local currency weakens against the dollar and the euro, it gets harder and harder for local companies to service foreign currency bonds. That’s how a currency crisis becomes a debt crisis. Turkish companies are sitting on $337 billion in debt. With as much as $100 billion in debt scheduled to come due over the course of the next year, Turkish banks are under growing pressure to restructure foreign-currency denominated corporate loans as those companies struggle to service them.

The banks have proposed rules to accelerate the restructuring of company debt and allow lenders to avoid booking these loans as “non-performing loans,” a move that may help prevent defaults from piling up. As has happened in Italy since Europe’s sovereign debt crisis, the banks will try to extend loans indefinitely in order to avoid gaping holes developing on their balance sheets. But it may already be too late. The downgrades, both sovereign and corporate, are coming thick and fast. On July 20, Fitch Ratings downgraded the Long-Term Foreign Currency Issuer Default Ratings (LTFC IDRs) of 24 Turkish banks and their subsidiaries, in many cases by two notches.

The agency also slashed Turkey’s sovereign rating deeper into junk territory, downgrading its Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘BB’ from ‘BB+’ with a negative outlook. Moody’s also downgraded the ratings of 17 banks in July. These downgrades will make it even more costly for Turkish banks and the Turkish government to raise funds, with the yield on Turkey’s benchmark 10-year bond soaring to an eye-watering 19% on Tuesday.

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“In time people are going to realize we might have to adjust because countries are not going to tolerate what we have done..”

Europe ‘Needs To Get A Backbone’ On Trump’s Iran Sanctions – Ron Paul (RT)

Washington is powerful, but Europe needs to “stick to its guns” against President Donald Trump’s threats that any countries doing business with Iran will not to do business with the US, according to former Congressman Ron Paul. In an interview with RT, Paul said that while the US can “throw its weight around” the EU needs to “get some backbone” to resist Trump’s threats. “If they stick to their guns I think the United States would have to adjust our policies a bit, because how are they going to enforce that? You know, if China and Russia and other countries and India, they do business with Iran — how are we going to punish them?” he said. Paul acknowledged that standing up to Washington might be difficult if major companies are faced with the threat of losing business in the US. “In time people are going to realize we might have to adjust because countries are not going to tolerate what we have done,” he said.

Asked about the anti-Russia sentiment currently gripping the US, Paul said that the people who are in favor of taking a very negative view of Russia — and who are pushing the narrative that Trump colluded with Russia to win the presidency — are in control in both the media and in Congress. “I think it’s tragic what’s happening, because they have no proof of anything and for some reason these senators have come up with this new [Russia sanctions] bill — Graham and McCain and Menendez — just out of the clear blue, they have no evidence whatsoever of their charges that they have made,” he said. Paul, who has long advocated a non-interventionist foreign policy and taken a negative view of sanctions, said that the US tendency to blame other countries for everything, slapping them with sanctions and then complaining when they retaliate is “very, very bad foreign policy.”

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Catch 22.

EU Foreign Policy Chief Calls On Firms To Defy Trump Over Iran (G.)

The EU is set on a collision course with Donald Trump after its foreign policy chief called for Europeans to increase their business dealings with Iran in defiance of bellicose statements from the US president. As Trump vowed to block those trading with Iran from the US market, the EU stepped up efforts to save the Iran nuclear deal by encouraging its companies to ignore the White House. Federica Mogherini, the EU’s high representative for foreign affairs, said Brussels would not let the 2015 agreement with Tehran die, and she urged Europeans to make their own investment decisions. The EU, China and Russia remain signatories to the joint comprehensive plan of action under which economic sanctions on Iran have been lifted in return for the regime curtailing its nuclear aspirations.

Trump reneged on the deal in May, describing it as “a horrible one-sided deal that should never, ever have been made”. The clash risks destabilising the wider transatlantic relationship weeks after the European commission president, Jean-Claude Juncker, and Trump vowed in the White House rose garden to increase tariff-free trade between the EU and the US and to move on from recent disagreements. During a trip to Wellington, New Zealand, on Tuesday, Mogherini said: “We are doing our best to keep Iran in the deal, to keep Iran benefiting from the economic benefits that the agreement brings to the people of Iran, because we believe this is in the security interests of not only our region but also of the world.

“If there is one piece of international agreements on nuclear non-proliferation that is delivering, it has to be maintained. We are encouraging small and medium enterprises in particular to increase business with and in Iran as part of something [that] for us is a security priority.” Hours earlier, Trump had tweeted: “The Iran sanctions have officially been cast. These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level. Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!”

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“Have the Saudis gone stark-raving bonkers?”

The Blowup With Canada Is the Latest Saudi Overreach (IC)

Have the Saudis gone stark-raving bonkers? First, they pick a fight with Canada — yeah, that Canada! Maple syrup-loving, hockey-playing, poutine-eating, liberal, multicultural Canada; the land with free health care and a prime minister who wears “Eid Mubarak” socks. On Sunday, Saudi Arabia (over)reacted to a single tweet from the Canadian foreign ministry. The tweet called on the Saudis to “immediately release” imprisoned activist Samar Badawi, sister of Raif, as well as “all other peaceful #humanrights activists.” The Saudi foreign ministry lambasted the Canadians for an “unfortunate, reprehensible, and unacceptable” statement, announced the “freezing of all new trade and investment transactions” with Canada, demanding the Canadian ambassador leave the country “within the next 24 hours.”

At the same time, Saudi trolls took to Twitter to declare their loud support for … Quebec’s independence. Who knew that an absolute Persian Gulf monarchy was so passionate about a French-speaking secessionist movement 6,000 miles away? (Hey, Canadian trolls — if you even exist — my advice would be to retaliate by offering Ottawa’s backing for independence in the restless, Shia-dominated Eastern Province of Saudi Arabia. It’ll drive them totally nuts.) And Saudi Arabia was just getting started. On Monday, the kingdom escalated the row by suspending scholarships “for about 16,000 Saudi students” studying in Canada, the Toronto Star reported, “and ordered them to attend schools elsewhere.” (Can you think of a better example of biting your bigoted nose to spite your intolerant face?)

Then — and this is my favorite part of this whole bizarre episode — a Saudi group put out an image on Twitter of a Canadian airliner flying directly toward Toronto’s tallest building over a warning against interfering in others’ affairs. (The Saudi group later deleted it and apologized) Are. You. Kidding. Me?

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Destruction in its wake.

London Is The World’s Airbnb Capital (ZH)

10 years ago, in early August 2008, the website Airbedandbreakfast.com went online, marking the birth of Airbnb. Back then the three founders, Brian Cheky, Joe Gebbia and Nathan Blecharczyk wanted to help short-term travelers find affordable accommodation and provide renters with an opportunity to make an extra buck by renting out spare rooms or even just the namesake airbed on the floor. However, as Statista’s Felix Richter notes, little did they know that 10 years later their little venture would be one of the hottest private companies in the world, valued at nearly $30 billion.

Over the years, Airbnb has developed into much more than what it was originally meant to be. These days you can rent millions of houses, apartments and rooms on the platform. For many young travelers is has become the favorite if not the only way to find accommodation when travelling. Luckily for Airbnb, its rise coincided with a steep increase in city tourism. In cities such as London, Paris or New York, where hotel rooms are often hard to find and/or expensive, Airbnb has become an affordable and popular way to experience cities in a less touristy way.

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Politicians can’t keep up with tech developments. They’re always late. They sit on their hands until someone else does something.

“..the red light district is no longer under government control at weekends. Criminals operate with impunity; the police can no longer protect citizens; ambulances struggle to reach victims on time.”

My Amsterdam Is Being Un-Created By Mass Tourism (G.)

The word on everyone’s lips is “Venice”. It starts as a whisper, some time in early spring, when the lines in front of the Rijksmuseum get a little longer, and the weekend shopping crowds in the Negen Straatjes begin to test your bike-navigation skills. By the time it’s July those streets are flooded. You don’t even try steering through the crowds. You’d be like Moses, except that God is not on your side, the Red Sea will not part in your favour, and the crowds will wash you away: the middle-aged couples from the US and Germany, here for the museums; and the stag parties from Spain, Italy and the UK, here in their epic attempt to drink all the beer and smoke all the pot.

So you learn to take the long way round to your destination and skip entire areas of Amsterdam – which nevertheless means that, perhaps once every summer, you’ll be down on the pavement after crashing into a distracted tourist who walked in front of your bike, and the whisper becomes a curse: “Fucking Venice!” (The Dutch like to swear in English.) “Venice”is shorthand for a city so flooded by tourists that it no longer feels like a city at all. In the famed 2013 Dutch documentary I Love Venice a tourist asks: “At what time does Venice close?” It’s very funny, except, of course, that it is not funny at all.

This year Amsterdam’s 850,000 inhabitants will see an estimated 18.5 million tourists flock to the city – up 11% on last year. By 2025, 23 million are expected. Last week the city’s ombudsman condemned the red light district as no longer under government control at weekends. Criminals operate with impunity; the police can no longer protect citizens; ambulances struggle to reach victims on time. [..] There are several ways to react. One is to leave town. A study shows that in the past five years 40% of couples relocated to smaller towns after their first child. Many feel this is no longer a city to raise kids.

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Hard to prove, I said it before. But a jury might decide anyway. Huge case, 5,000 more plaintiffs to come.

First Trial Alleging Monsanto’s Roundup Causes Cancer Goes To Jury (R.)

Groundskeeper Dewayne Johnson is one of more than 5,000 plaintiffs across the United States who claim Monsanto’s glyphosate-containing herbicides, including the widely-used Roundup, cause cancer. His case, the first to go to trial, began in San Francisco’s Superior Court of California four weeks ago. Johnson’s lawyer Brent Wisner on Tuesday urged jurors to hold Monsanto liable and punish them with a verdict he said would “actually change the world.” Wisner claimed Monsanto knew about glyphosate’s cancer risk, but decided to bury the information. Monsanto, a unit of Bayer following a $62.5 billion acquisition by the German conglomerate, denies the allegations and says expert testimony on which Johnson and others rely does not satisfy any scientific or legal requirements.

“The message of 40 years of scientific studies is clear: this cancer is not caused by glyphosate,” Monsanto’s lawyer George Lombardi said, according to an online broadcast of the trial by Courtroom View Network. The U.S. Environmental Protection Agency in September 2017 concluded a decades-long assessment of glyphosate risks and found the chemical not likely carcinogenic to humans. The World Health Organization’s cancer arm in 2015 classified glyphosate as “probably carcinogenic to humans.” If it finds Monsanto liable, the jury can decide to award punitive damages on top of the more than $39 million in compensatory damages Johnson demanded. The jury is expected to start deliberating on Wednesday.

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All the Presidents’ lies.

The American Sea of Deception (TD)

U.S. President Franklin D. Roosevelt lied to Congress and the American people when he claimed that the Japanese attack on Pearl Harbor was “unprovoked” by the U.S. and a complete “surprise” to the U.S. military. President Dwight Eisenhower flatly lied to the American people and the world when he denied the existence of American U-2 spy plane flights over Russia. President John F. Kennedy lied about the supposed missile gap between the United States and the Soviet Union. And Kennedy lied when he claimed that the United States sought democracy in Latin America, Southeast Asia and around the world. President Lyndon Johnson lied on Aug. 4, 1965, when he claimed that North Vietnam attacked U.S. Navy destroyers in the Gulf of Tonkin. This provided a false pretext for a massive escalation of the U.S. war on Vietnam, resulting in the deaths of more than 50,000 U.S. military personnel and millions of Southeast Asians.

Regarding Vietnam, Daniel Ellsberg recalled 17 years ago that his 1971 release of the Pentagon Papers exposed U.S. military and intelligence documents “proving that the government had long lied to the country. Indeed, the papers revealed a policy of concealment and quite deliberate deception from the Truman administration onward. … A generation of presidents,” Ellsberg noted, “chose to conceal from Congress and the public what the real policy was. …” President Richard Nixon lied about wanting peace in Vietnam (his agent, Henry Kissinger, actively undermined a peace accord with Hanoi before the 1968 election) and about respecting the neutrality of Cambodia. He lied through secrecy and omission about the criminal and fateful U.S. bombing of Cambodia—a far bigger crime than the burglarizing of the Democratic Party headquarters in the Watergate complex, about which he of course famously lied.

The serial fabricator Ronald Reagan made a special address to the nation in which he lied by saying, “We did not—repeat—we did not trade weapons or anything else [to Iran] for hostages, nor will we.” President George H.W. Bush falsely claimed on at least five occasions in the run-up to the 1990-91 Persian Gulf War that Iraqi forces, after invading Kuwait, had pulled babies from incubators and left them to die.

President Bill Clinton shamelessly lied about his White House sexual shenanigans with Monica Lewinsky. He falsely claimed to be upholding international law and to be opposing genocide when he bombed Serbia for more than two months in early 1999. The serial liar George W. Bush and his administration infamously, openly and elaborately lied about Saddam Hussein’s alleged Iraqi “weapons of mass destruction” and about Iraq’s purported links to al Qaida and the 9/11 jetliner attacks. After the WMD fabrication was exposed, Bush falsely claimed to have invaded Iraq to spread liberty and democracy.

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May 032018
 
 May 3, 2018  Posted by at 8:20 am Finance Tagged with: , , , , , , , , , , , ,  


Daniel Garber Buds and Blossoms 1916

 

Stock Market Unimpressed By Best First-Quarter Results In 24 Years (MW)
Whole Thing Will Come Tumbling Down – Charles Nenner (USAW)
EU to Fight Back Against China’s Growing Trade Dominance (BBG)
China Shuns US Soybeans (BBG)
Elon Musk Acted Like A Jerk, And Tesla Stock Paid The Price (MW)
UK’s May Faces Local Election Losses As Key Brexit Tests Near (R.)
May in Crisis With Cabinet ‘Brexiteers’ Outgunning Her on Customs Plan (BBG)
UK MPs Vote Against Windrush Disclosures (BBC)
No Suspects Yet In Skripal Nerve Agent Attack, MPs Told (G.)
EU: Data-Harvesting Tech Firms Are ‘Sweatshops Of Connected World’ (G.)
North Korea Releases 3 US Detainees From Labor Camps (IBT)
Flooding the Voter Rolls in US and Greece (GI)
Frontex Signals Significant Increase In Arrivals To Greece From Turkey (K.)
Greece Vows To Reduce Number of Refugees On Islands (AP)
South American Armyworm Has Colonised Three-Quarters Of Africa (AFP)

 

 

Confidence.

Stock Market Unimpressed By Best First-Quarter Results In 24 Years (MW)

By at least one measure, corporate earnings are the best in nearly a quarter-century. However, the stock market is not enthused! Rather than rally on the back of upbeat results, the main equity benchmarks have sulked lower. According to Thomson Reuters I/B/E/S, of the 343 companies, or about 70%, of S&P 500 members that have reported earnings to date, 79.9% have reported earnings per share that were above analysts’ expectations, putting the season on track for the highest earnings beat rate on record, going back to 1994. So far, the first-quarter growth rate for EPS is 22%, compared with consensus earnings growth of 16.3% as of April 12, according to Lindsey Bell, investment strategist at CFRA.

Bell said recent quarterly results have seen outperformance of about 3 to 4 percentage points better than analysts’ consensus estimates on average, compared with the 5.7 percentage points earnings are currently running ahead. [..] Bell said what’s really impressive is that expectations were already lofty and this quarter represented the first in which the bar was raised to factor in fiscal stimulus measures such as corporate tax cuts, which took effect in late 2017. “It’s significant because we haven’t seen a change like this from the very beginning to (the) start of reporting season,” Bell said. She said the numbers have been cut for each quarter going back to the second quarter of 2006.

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“The mainstream media talking heads are telling you to buy, but never tell you to sell.”

Whole Thing Will Come Tumbling Down – Charles Nenner (USAW)

Renowned geopolitical and financial cycle expert Charles Nenner says, “The mainstream media talking heads are telling you to buy, but never tell you to sell.” Nenner says the time to sell stocks is getting close and explains, “It’s just a hopeless situation. I feel sorry for people who invest their money. We have had a nice ride, but soon the whole thing will come tumbling down. They listen to all these things and have no clue on how to invest . . . . I think soon . . . this will become the longest expansion in financial history. . . . So, this could be the longest expansion ever, what are you playing with? You are gambling with nonsense. So, it’s over.

Nenner goes on to say, “Then, you have the inflation story. The inflation story is brought about by people who don’t do their historical homework. They remember for the last 30 years, there was always inflation. So, they continue to talk about inflation. I proved that in most of the financial history that deflation is the norm. . . . They have talked about inflation for two years, and there is still no inflation. . . . Copper is going down. Crude is going down, and we have a deflation problem, not an inflation problem.”

Nenner is predicting interest rates “are going down” and not up in the foreseeable future. Nenner is also calling for the stock market to go on a “downward slide through the year 2020.” Nenner says, “I can’t explain it, but the cycle topped, and the cycle is down until 2021.” How bad will it be? Nenner says, “Very bad. I called for Dow Jones 5,000, and I still call for Dow Jones 5,000. . . . It’s going to be a blood bath, but as I said the last time, in the 1990’s when the Dow was 5,000, the world still looked okay.”

Is there a big debt reset coming? Nenner says, “The last time we were in this situation was when Roosevelt was President. It was very interesting because they paid off only 25% on the dollar because the inflation that came. Now, the problem is if you don’t have inflation, you still owe the whole amount of money. This is why they urgently need this inflation. So, the value of the money goes down, and you have to pay off less. There is no inflation. So, it is a big problem, but they can keep this going forever. I don’t think it’s a problem because countries can keep printing money as long as they want.” Then Nenner said, “I see the dollar becoming strong again.” Nenner is “dollar positive.” The other big cycle Nenner has been seeing is the so-called “war cycle.” Nenner says, “The next four or five years in this war cycle is very dangerous.” On gold and silver, Nenner is bullish, but “not until after this summer.”

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More protectionism.

EU to Fight Back Against China’s Growing Trade Dominance (BBG)

Europe is set to tighten controls over foreign investment, a sign of growing wariness of China’s efforts to use its $11 trillion economy to become a dominant global power. A Bloomberg survey of the European Union’s 28 member states found that at least 15 governments actively or tacitly support draft legislation that would screen investments from outside the bloc. With a majority prepared to wave it through, the proposal is on course for passage by the European Parliament, the bill’s next step to becoming law. The results show that Europe is waking up to the risks and not just the benefits of inward investment, predominantly from China.

A Bloomberg audit found that China has invested at least $318 billion in Europe over the past decade, from critical infrastructure to high-tech companies — more than in the U.S. over the same period. Europe’s pushback reflects a dilemma shared by governments worldwide as they grapple with China’s growing global clout. U.S. Treasury Secretary Steven Mnuchin is leading a delegation to Beijing this week amid disputes over trade, reciprocal market access and China’s state-driven economic model. As the U.S., Japan and Australia adopt rigorous screening programs, Europe risks becoming “the shop of last resort” for those seeking advanced technologies, the European Council on Foreign Relations warned in a December report.

Italy is among those pushing for tighter screening “because we believe that trade must be fair and investment must be productive,” Sandro Gozi, Italy’s junior minister for European affairs, said in an interview. “We have to assess whether investment by non-EU countries aims to do business, to promote growth, to create jobs in Europe, or whether it’s just aimed to acquire and then take the know-how of our businesses away from Europe.”

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They still have to get them somewhere, one would assume.

China Shuns US Soybeans (BBG)

The world’s biggest oilseed processor just confirmed one of the soybean market’s biggest fears: China has essentially stopped buying U.S. supplies amid the brewing trade war. “Whatever they’re buying is non-U.S.,” Bunge Ltd. Chief Executive Officer Soren Schroder said in a telephone interview Wednesday. “They’re buying beans in Canada, in Brazil, mostly Brazil, but very deliberately not buying anything from the U.S.” In a move that caught many in U.S. agriculture by surprise, China last month announced planned tariffs on American shipments of soybeans. As the market waited for the measure to take effect, there was some hope among traders and shippers alike that relations between the nations could ease in the meantime and the trade flow would continue.

But that doesn’t seem to be the case, at least for now, according to Bunge. It’s “very clear” that the trade tensions have already stopped China from buying U.S. supplies, Schroder said. “How long that will last, who knows? But so long as there is this big cloud of uncertainty, that’s likely to continue.” Price volatility in farm goods has picked up in recent weeks as the saber-rattling between the U.S. and China intensifies. Other agricultural products caught up in the dispute include corn, pork and sorghum. Soybeans are the second-largest American crop and prices are heavily dependent on trade with the Asian nation, the world’s top importer. In the two weeks ended April 19, China canceled a net 62,690 metric tons of U.S. soybean purchases for the marketing year that ends Aug. 31, U.S. Department of Agriculture data show.

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Free advertisement.

Elon Musk Acted Like A Jerk, And Tesla Stock Paid The Price (MW)

Tesla CEO Elon Musk held a long, odd earnings conference call Wednesday in which he insulted analysts, the media, federal regulators and people who died behind the wheel of his cars, and then told anyone concerned about volatility not to invest in his company. Unsurprisingly, volatility ensued, as Tesla shares dropped quickly during an increasingly bizarre call with the very analysts and media whom Musk attacked. Tesla on Wednesday disclosed the largest quarterly loss in the history of a company known far and wide for losing vast sums of money, with a net loss of almost $785 million. The numbers still managed to beat expectations that have been repeatedly lowered for more than a year, which led Musk to take a victory lap on Twitter after losing more than three quarters of a billion dollars in three months.

It only got weirder from there. In his conference-call introduction, Musk confused per-week and per-day production figures, described a “super complicated” robot Tesla designed and built before realizing it could not perform its unnecessary function, then mentioned offhandedly that he planned to restructure the company this month — a disclosure he never revisited to provide more information. When the question-and-answer session started, Musk turned vitriolic, and not even his fellow executives were safe. After Chief Financial Officer Deepak Ahuja referred to Tesla as “best in class” for batteries while responding to an analyst query, he was interrupted by Musk. “The best. It is not a class,” Musk interjected. “Yes, we’re the best. Sorry,” Ahuja replied.

“The best in a class of one,” Musk made sure to point out. Soon, Musk turned his ire toward the financial analysts who were asking the questions. When Bernstein analyst Toni Sacconaghi attempted to ask about capital-expenditure spending and the money needed, Musk cut him off by yelling “Next!” When RBC Capital Markets analyst Joseph Spak then asked how many people with Model 3 reservations were actually taking delivery of their cars, Musk declined to answer any more “boring,” “dry” questions. “You’re killing me,” he said.

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Vote her into oblivion.

UK’s May Faces Local Election Losses As Key Brexit Tests Near (R.)

Voters will pass judgment on Prime Minister Theresa May’s party on Thursday in local government elections expected to show rising support for her opponents in London that will add to pressure on her position over Brexit. The elections will be viewed as a gauge of support for May at a time when she is facing a possible revolt over her Brexit strategy and a scandal over immigration policies that has already forced the resignation of one of her closest allies. A poor set of results is unlikely to spark internal calls for her resignation, but could weaken her authority over a party deeply divided about the right approach to Brexit ahead of several key parliamentary tests of unity on future customs arrangements with the EU.

“Winning elections keeps people together, losing causes dissent. Conservatives will need to avoid the ill-discipline of fighting like ferrets in a sack,” said Rob Wilson, a former Conservative lawmaker, writing for the party’s grassroots website ConservativeHome. Thursday’s vote will decide more than 4,400 council seats, determining the makeup of 150 local government authorities who are responsible for the day-to-day provision of public services. Just over 40 percent of the seats are in London. The headline-grabbing results in the capital are forecast to see a swing toward the opposition Labour Party, reinvigorated under socialist Jeremy Corbyn and fighting a campaign focused on the effects of eight years of Conservative-led spending cuts.

A Survation poll on Wednesday in London showed Labour 20 percentage points ahead of the Conservatives. May’s party could lose control of some of the eight London boroughs it currently runs out of 32 in total. This would reflect both weariness over cutbacks that affect citizens’ daily lives and broader issues like Brexit and the treatment of migrants.

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There doesn’t appear to be a compromise without heads having to roll.

May in Crisis With Cabinet ‘Brexiteers’ Outgunning Her on Customs Plan (BBG)

Theresa May is facing a crisis after pro-Brexit ministers paired up with Conservative hardliners to demand a clean break from the European Union’s customs system, rejecting her plea for a compromise solution. The U.K. prime minister was outnumbered at a meeting of her inner Cabinet on Wednesday, with ministers unable to agree on either of the middle-of-the-road customs options that May had proposed. Speaking afterward, one senior British official said that with both proposals apparently dead, she could have as little as a week to get a compromise or face the stark choice between staying in Europe’s customs union or leaving without a deal. Either could see rebels in her party destroy her government.

A day that started with a pro-Brexit group of Conservative lawmakers threatening to withdraw support from the prime minister if she insisted on her proposed customs relationship with the European Union ended with her newest appointee, Home Secretary Sajid Javid, weighing in against her plan, joining other senior ministers in defying her. It was a reflection of May’s impossible position: Before she can even start trying to sell a deal to the EU, she has to find a proposal that both her Cabinet and Parliament will support. Both are fundamentally split, with each side strong enough to block a plan, but not to push one through. May has so far survived by avoiding a final confrontation with either side. So it was no surprise that the so-called “War Cabinet” put off its decision once again on Wednesday afternoon.

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Who do you trust?

UK MPs Vote Against Windrush Disclosures (BBC)

MPs have voted against an opposition motion calling on the government to disclose papers on Windrush migrants. Labour had hoped to force the government to release documents about its immigration policy relating to people who came to the UK from Commonwealth countries. They arrived between the late 1940s and 1970s but some have been threatened with deportation in recent years. The government won the vote by 316 votes to 221. Of Labour’s 258 MPs, 180 voted in favour, while 306 Conservative MPs opposed the motion. Labour wanted the government to be made to hand over evidence, including emails and text messages, for scrutiny by MPs on the Home Affairs Committee.

Shadow home secretary Diane Abbott described the vote as “an opportunity for the Tories to start to right the wrongs they have done to the Windrush generation”. She accused Theresa May of ordering her MPs to “vote to cover up the truth of her involvement”. Ms Abbot said many people felt “all roads lead back to the prime minister”, with Mrs May having previously been home secretary at the time the government brought in changes to immigration rules in 2014.

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Still looking for a patsy. First Skripal ‘news’ in weeks.

No Suspects Yet In Skripal Nerve Agent Attack, MPs Told (G.)

Police and intelligence agencies have failed so far to identify the individual or individuals who carried out the nerve agent attack in Salisbury, the UK’s national security adviser has disclosed. The comments by Sir Mark Sedwill punctured hopes that the police and other security agencies had pinpointed suspects but were withholding the name or names from the public. Asked by an MP at a Commons defence committee hearing if he knew the individuals responsible, he replied curtly: “Not yet.” Sedwill, who coordinates the work of the MI6, MI5, the surveillance agency GCHQ and others, did not elaborate but among problems that have hampered the agencies is a lack of CCTV coverage in Salisbury compared with London. Known Russian spies based in Britain have also been investigated and ruled out.

[..] Sedwill made the rare move in April of releasing classified intelligence on the case. It allegedly showed Russia had tested whether nerve agents could be delivered through door handles and had targeted the email accounts of both the Skripals since at least 2013. He told the committee on Tuesday the decision to go public had been taken to help counter Russian disinformation. The attack raised questions about whether the police and MI6, which has a duty to protect agents, should have done more to protect the Skripals. Sedwill said the attack had changed the security services’ appreciation of which dissidents and defectors could be at risk from revenge attacks.

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“..these sweatshops of the connected world extract more than one’s labour, and while clocking into the online factory is effortless it is often impossible to clock off.”

EU: Data-Harvesting Tech Firms Are ‘Sweatshops Of Connected World’ (G.)

The European data protection supervisor has hit out at social media and tech firms over the recent constant stream of privacy policy emails in the run up to GDPR, calling them the “sweatshops of the connected world”. With the tough new General Data Protection Regulations coming into force on 25 May, companies around the world are being forced to notify their users to accept new privacy policies and data processing terms to continue to use the services. But Giovanni Buttarelli, the European data protection supervisor (EDPS), lambasted the often-hostile approach of the recent deluge of notifications.

“If this encounter seems a take-it-or-leave it proposition – with perhaps a hint of menace – then it is a travesty of at least the spirit of the new regulation, which aims to restore a sense of trust and control over what happens to our online lives,” said Buttarelli. “Consent cannot be freely given if the provision of a service is made conditional on processing personal data not necessary for the performance of a contract.” “The most recent [Facebook] scandal has served to expose a broken and unbalanced ecosystem reliant on unscrupulous personal data collection and micro-targeting for whatever purposes promise to generate clicks and revenues.

“The digital information ecosystem farms people for their attention, ideas and data in exchange for so called ‘free’ services. Unlike their analogue equivalents, these sweatshops of the connected world extract more than one’s labour, and while clocking into the online factory is effortless it is often impossible to clock off.”

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Winning.

North Korea Releases 3 US Detainees From Labor Camps (IBT)

Ahead of the planned meeting between President Donald Trump and North Korean leader Kim Jong Un, and an unprecedented thaw in the relationship between North and South Koreas, Pyongyang decided to release the three Korean-Americans detained in the country’s labor camps Tuesday. Choi Sung-ryong, a representative of the families of the prisoners, told South Korean news outlet Naver: “We talked with a source in North Korea today. North Korean authorities released Kim Dong-cheol, Kim Sang-deok and Kim Hak-seong, who were in jail at the labor correction center in early April, and they are currently in a ‘course’ where they are treated and educated at a hotel outside Pyongyang.”

Choi added that the source revealed North Korea was negotiating with the United States about the best way to get the detainees back home. One of the ways involved was releasing them back on the day of the Trump-Kim summit, although no specific date has been finalized yet for the meeting. Newly appointed National Security Advisor John Bolton told Fox News on Sunday: “If North Korea releases the detained Americans before the North-US summit, it will be an opportunity to demonstrate their authenticity.” Dong-chul is a South Korea-born American pastor who was arrested and detained by North Korea in 2015 on the charge of spying. He was sentenced to 10 years hard labor in 2016. Hak-song and Sang-duk were both working at the Pyongyang University of Science and Technology, when they were detained last year on suspicion of “hostile acts.”

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“As a result, a total of 800,000 immigrants — almost one-tenth of the native Greek population — will soon become citizens. Transposed to the United States, that would be the equivalent of 32,000,000 new voters.”

Flooding the Voter Rolls in US and Greece (GI)

As Greece struggles with accelerating economic decline and an increasing lack of public faith in the political leadership, the ruling Syriza coalition appears to be adopting a strategy of garnering votes from immigrants by expediting their naturalization process. According to a recent report in the Greek daily Parapolitika, Interior Minister Panos Skourletis is laying the groundwork to enable hundreds of thousands of immigrants to become citizens and vote in the next elections. Although the mandate of Prime Minister Alexis Tsipras ends in September 2019, some analysts have been predicting a call for elections by the end of 2018. Until now, candidates for Greek citizenship had to be vetted by a committee.

Under the new system, applicants will be granted citizenship automatically if they correctly answer 20 out of 30 questions online. In addition, the government is planning to allow immigrants over the age of 65 to obtain Greek IDs, without testing their knowledge of the Greek language. In other words, it will be easier to obtain Greek citizenship than a Greek fishing license. As a result, a total of 800,000 immigrants — almost one-tenth of the native Greek population — will soon become citizens. Transposed to the United States, that would be the equivalent of 32,000,000 new voters.

In principle, the idea is no different from George Soros’s 220-page guide, released by DC Leaks, seemingly to create a permanent voting majority for the Democratic Party by “enlarge[ing] the U.S. electorate by 10 million voters by 2018.” Easing citizenship requirements may be a calculated electoral ploy, but it is also in keeping with an overall European multiculturalism. The current leadership is not interested in the origins of the country’s illegal immigrants, many of whom hail from Afghanistan, Pakistan and sub-Saharan Africa and do not respect the Judeo-Christian roots and culture of modern Greek civilization. Nor does the government appear to concern itself with the danger involved in allowing huge numbers of migrants from terrorist-ridden Muslim-majority countries to become citizens, without vetting them.

Meanwhile, as its immigrant population increases, Greece is simultaneously undergoing a brain-drain. Over the past 8 years, for example, 500,000 skilled and educated young people left the country and have chosen to remain abroad rather than return home and contribute to the economy, the culture and society in general.

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Time for another deal with Erdogan?

Frontex Signals Significant Increase In Arrivals To Greece From Turkey (K.)

The influx of refugees from Turkey to Greece has increased significantly, the executive director of Frontex, the European Union’s border monitoring agency has told Germany’s Bild. In comments to Bild that were published on Wednesday, Fabrice Leggeri said arrivals of migrants from Turkey to Greece’s Aegean islands have increased by 17% in the past four to five weeks alone. According to Leggeri, the key reason for the increase is the spike in refugees leaving Iran, Iraq and Syria. The Frontex chief proposed the further bolstering of the border force as well as an increase in deportations. On a pan-European level, only 40% of repatriation decisions are carried out, he said. Despite the increase in migration flows, Leggeri said Frontext has the EU’s external borders “under control.”

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If only Merkel would let them.

Greece Vows To Reduce Number of Refugees On Islands (AP)

Greek officials on Wednesday vowed to reduce severe overcrowding at migrant camps on Greeces islands, amid mounting protests that the immigration crisis has hurt the vital local tourism industry for a fourth successive summer. Migration Minister Dimitris Vitsas, who was visiting the island of Lesbos, said the government aimed to cut the number of migrants on five large Greek islands from the current level of 15,500 to 6,500 — equivalent to the capacity of refugee shelter facilities — by the end of September. The promised changes came despite a recent spike in daily arrivals at the islands and at Greeces land border with Turkey.

Prime Minister Alexis Tsipras is due to visit Lesbos on Thursday, and islanders are planning street protests and a strike by businesses in the main port. As scores of police officers took up positions in the port Wednesday, protest organizers uses a van fitted with loudspeakers to urge local residents to join the strike. The overcrowding has triggered frequent flare-ups of violence at the sprawling Moria refugee camp on Lesbos, where many still live in squalid conditions. More than a dozen were injured when migrants were attacked with flares and burning trash bins during an anti-migrant protest organized in part by far-right groups on the island 10 days ago.

On Wednesday, Vitsas held a town hall meeting and spent several hours talking with Lesbos residents. Many angrily voiced their complaints and accused the government of abandoning the island. “I cannot say when everything will happen but we will move forward,” he said. “We are dragging out feet forward but hopefully that will improve.” He promised that several hundred additional staff would be hired over the summer to help clear a huge backlog of asylum claims.

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Rapidly developes resistance against anything thrown at them: pesticides, GMOs.

South American Armyworm Has Colonised Three-Quarters Of Africa (AFP)

On farms across Africa, a seemingly innocuous brown and beige caterpillar is waging a silent war, devastating rural incomes and posing a major threat to the continent’s food supply. In just two years, the so-called fall armyworm has colonised three-quarters of Africa, according to the British-based Centre for Agriculture and Biosciences International (CABI). Its favourite food is maize, also known as corn, the staple on which over 200 million smallholder farming families depend for their livelihoods. The fall armyworm is believed to have made its bridgehead in West Africa after being accidentally brought in from South America, its native home, by sea or air cargo. It was first detected in Africa in 2016.

“Since then, it has very rapidly spread across the entire continent. It’s reportedly now causing damage in more than 40 countries,” said Boddupalli Prasanna, an expert at the International Maize and Wheat Improvement Centre (CIMMYT) in Mexico. The larval, or caterpillar, armyworm is perfectly adapted for destruction. Growing up to about 50 millimetres (two inches), it nestles in the leaves around the head of maize. The critter then attacks methodically, leaving behind shredded leaves and chewed or hollowed ears of corn. In one Kenyan county visited by experts last year, 30% of the crop was lost. The impact on farmers and on households can be huge.

Wycliffe Ngoda, a 64-year-old farmer from near Kisumu, in western Kenya, said he lost nearly a quarter of his income last year in an armyworm outbreak, and the price of a two-kilo (4.4-pound) bag of maize doubled in his area. “The attack was very fast and furious. In a short while, huge swathes of (crops) had been eaten,” he said. “I lost 50% of my crop, others up to 70%,” he said. “This is how we were introduced to armyworm: very rudely.”

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Apr 152018
 
 April 15, 2018  Posted by at 9:50 am Finance Tagged with: , , , , , , , , , ,  


 

Russia Claims OPCW Manipulated Skripal Findings (AFP)
To Opt Out Of Facebook’s Tracking, I’m Going To Have To Join Facebook (Wired)
Tesla Is The Worst Car Manufacturer In The Developed World (F.)
New Lawsuit Alleges Musk Knowingly Lied About Model 3 Production (ZH)
Subprime Stages Comeback As ‘Non-Prime’ (CNBC)
247,977 Stories In The Vacant City (NYDN)
Judge Rules Exxon Can’t Stop Probe Into Whether They Lied For Decades (Ind.)
World May Hit 2ºC Warming in 10-15 Years Thanks to Fracking (NC)
‘There Is No Such Thing As Past Or Future’ (G.)
Time is Elastic (Rovelli)

 

 

Curiouser. You’d think Russia doesn’t just make up an entire Swiss lab.

Russia Claims OPCW Manipulated Skripal Findings (AFP)

Moscow on Saturday accused the chemical weapons watchdog of manipulating the results of its investigation into the poisoning of a former Russian spy, saying his samples had traces of a nerve agent used by the west. Britain says former double agent Sergei Skripal and his daughter Yulia were last month targeted with a nerve agent of the novichok family, which was developed in the Soviet Union. The attack shredded ties between Russia and Britain and led to a crisis in relations between Moscow and the west including a huge wave of tit-for-tat diplomatic expulsions. The Organisation for the Prohibition of Chemical Weapons has said it confirmed “the findings of the United Kingdom relating to the identity of the toxic chemical” without naming the substance involved.

On Saturday, Russia’s foreign minister, Sergei Lavrov, claimed the UN-linked Organisation for the Prohibition of Chemical Weapons (OPCW) had sent the Skripals’ biomedical samples to Swiss experts who found they contained traces of the nerve agent BZ, used by the west. “According to the results of the examination, the samples had traces of toxic chemical BZ and its precursors,” Lavrov said, citing what he said was “confidential information”. “Russia and the USSR never developed such chemical substances,” he said. “In this regard we are asking the OPCW why the information which reflected the conclusions of specialists from the Spiez laboratory was completely omitted from the final document.”

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Not a discussion we should leave up to Facebook. Or Congress.

To Opt Out Of Facebook’s Tracking, I’m Going To Have To Join Facebook (Wired)

Now I know what you’re thinking. What kind of person has never been on Facebook? I’d like to tell you it was all about privacy, but the truth is, I just had a bad feeling about it. You see, I went to Cambridge, so I was one of the first to get the chance to join what you insist on calling your “community.” And almost instantly, it was clear that it turned people into wankers. (Bigger wankers. This was Cambridge, after all.) If I remember correctly, in the early days everyone was desperate to have a higher friend count. Then it was obsessive tagging in photos. Yes, even in its earliest days, your system brought out the worst in people.

It’s not easy, not being on Facebook. At first, it was the parties. At a certain point, people stopped sending email invites. They just assumed you were on Facebook – and, if you weren’t, you didn’t find out. I’m 35 now, so I don’t get invited to parties, unless they’re for small children. Instead, I miss out on work, because I can’t contact people or share my articles. When you finally make journalism pivot to Facebook Groups, I’ll be completely screwed. I considered joining many times. But every time I aired the thought, I got the same reaction: “Don’t! It’s the worst!” I wasn’t sure if I remembered this correctly, so I called a few people to check. All agreed: they hate your service, but they have to use it, because everyone else does. (One person objected. She works in your London office.)

Every other social network, even Twitter, has a core of fans that genuinely wish it well. You’re the sole exception. Then I got into tech, and privacy, and data protection, and I learned that you were throttling internet freedoms in developing countries, and letting random strangers see your users’ most intimate details, so I started becoming one of those paranoid people who uses a VPN all the time, and puts a scrap of torn-off Post-It note on their laptop camera. Just like you! But you probably knew all this about me anyway. Which brings me back to my question. In your testimony to Congress, you said: “Anyone can turn off or opt out of any data collection for ads, whether they use our services or not.”

But, as you should know, while that’s possible for someone on Facebook, for me, a non-Facebook user, it’s not. Your illegal trackers follow me across 30 per cent of the internet, building a “shadow profile” you store in a nonanonymised format in your “Hive” analysis database. You claim to do it “for security purposes” (let me tell you, if Facebook’s security requires you to surveil the world’s population, then you have made a desert and called it peace). But reporters – and people who used to work in your advertising team – say the information is collected to improve the friend suggestions you’ll give me in case I do ever sign up. It’s one more growth hack on a whole site of them.

What can I do to stop you? I’ve installed tracker blockers on my browser, but, since you killed the media business, a lot of my favourite sites make me disable them. And your trackers work in the apps on my phone. Unless I go full tin-foil hat (and it’s tempting), you’ve basically left me with one option. To opt out of Facebook’s tracking, I’m going to have to join Facebook. So yeah: fuck you. Because, of course, this is exactly your plan. Forcing people onto Facebook is what you’re all about.

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“..that is a terrible way to produce a consumer product, and a terrible way to generate returns for shareholders.”

Tesla Is The Worst Car Manufacturer In The Developed World (F.)

I visited my first auto plant in 1992, and have been fortunate enough to visit plants in most countries where cars are made. I have seen workers sleeping under half-finished bodies in Brazil, seen employees trying to make doors fit by using rubber hammers at a now-closed Ford facility in New Jersey and, noted, that, yes, they do have beer in the vending machines at many German auto factories. To see a rack of die castings sitting outside exposed to the weather at a facility that is, according to Google Maps, 10.7 miles away from the actual Tesla assembly facility in Fremont is just mind-boggling. Tesla is the worst car manufacturer in the developed world. Bar none. Note that I didn’t write “designer” or “marketer,” but manufacturer.

Musk had zero auto industry experience when founding Tesla and CTO J.T. Straubel—who according to Tesla’s 10-K filing personally holds Tesla’s important patents—developed a love for electric vehicles by rebuilding golf carts. It’s just astounding to me that the markets are affording a $50 billion valuation to a company that can’t perform the most basic task for which it was incorporated. Famed VW purchasing chief José Ignacio López de Arriortúa famously walked into a plant and repeatedly pointed at boxes of yet-to-be-used parts and yelled the word “capital.” When capital is tied up in byzantine manufacturing processes that stunts the development of cash flow. It’s all connected. This is why Tesla has such dire cash flow problems.

This is why I believe—sorry, Elon—Tesla is going to have to issue equity this year. My favorite automotive mantra is “quality is designed in.” That’s the most damning piece of information in the CNBC article, actually, more damning than the pictures of parts racks. Here is the quote: “Current and former employees from the company’s Fremont, Calif. and Sparks, Nevada factories blame Tesla for spending less time to vet suppliers than is typical in auto manufacturing. These people said the company failed to comprehensively test “variance specs” with some vendors before embarking on Model 3 production.”

Tesla has cut corners in building up to current production, and published reports this week indicated Tesla was alerting suppliers of an incredibly fast 19-month design-to-job one timetable on the upcoming Model Y crossover. So, it would seem corner-cutting is continuing, and that is a terrible way to produce a consumer product, and a terrible way to generate returns for shareholders.

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He better hope he wins this one.

New Lawsuit Alleges Musk Knowingly Lied About Model 3 Production (ZH)

A new securities class action lawsuit filed in late March 2018, which names Elon Musk as a defendant, alleges that the Tesla CEO knew that the Model 3 was not going to be able to be produced as the rates he claimed – and that the company was not going to be able to meet production goals due to – get this – the production lines not even being assembled. The lawsuit alleges that this didn’t prevent Elon Musk from going out and telling the investing public otherwise, hence the allegation of securities fraud. First, the allegation that Musk was told by his own employees that the Model 3 couldn’t be mass produced by the end of 2017, which was the company’s stated goal.

Then, after claiming in May 2017 that the company was “on track” to meet its mass production goal, it’s alleged the company hadn’t even finished building its production lines, clearly meaning it wasn’t “on track”. The lawsuit alleges that Musk knew the line was “way behind”. The suit alleges that the company was building Model 3’s by hand at a “pilot shop” at the same time Tesla claimed to be on track for “mass production”; it also claims that it was “evident to anyone who visited the facility” – including Elon Musk – that the line wasn’t built and that “construction workers were spending most of their shifts sitting around with nothing to do”. We also read in the lawsuit that Tesla’s Gigafactory, at the time in question, was allegedly capable of producing only one battery pack per day – and that the production of one battery pack took “two shifts” to complete.

The suit alleges that the company’s former CFO, Jason Wheeler – who is one of more than 50 key executives and VPs to have left the company over the last half decade or so – told Elon Musk personally that they wouldn’t be able to mass produce by the end of 2017. The entire lawsuit is available at this link and some of the most interesting content was first shared by critics of the company on Twitter. The drumbeat of accountability for Elon Musk continues to pound louder and louder as each day progresses, with some analysts calling for the SEC to investigate him if the company doesn’t meet its stated cash flow positive and “no capital raise” guidance for the back end of 2018.

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Got to find the last sucker.

Subprime Stages Comeback As ‘Non-Prime’ (CNBC)

They were blamed for the biggest financial disaster in a century. Subprime mortgages – home loans to borrowers with sketchy credit who put little to no skin in the game. Following the epic housing crash, they disappeared, due to strong, new regulation, and zero demand from investors who were badly burned. Barely a decade later, they’re coming back with a new name — nonprime — and, so far, some new standards. California-based Carrington Mortgage Services, a midsized lender, just announced an expansion into the space, offering loans to borrowers, “with less-than-perfect credit.” Carrington will originate and service the loans, but it will also securitize them for sale to investors.

“We believe there is actually a market today in the secondary market for people who want to buy nonprime loans that have been properly underwritten,” said Rick Sharga, executive vice president of Carrington Mortgage Holdings. “We’re not going back to the bad old days of ninja lending, when people with no jobs, no income, and no assets were getting loans.” Sharga said Carrington will manually underwrite each loan, assessing the individual risks. But it will allow its borrowers to have FICO credit scores as low as 500. The current average for agency-backed mortgages is in the mid-700s. Borrowers can take out loans of up to $1.5 million on single-family homes, townhomes and condominiums.

They can also do cash-out refinances, where borrowers tap extra equity in their homes, up to $500,000. Recent credit events, like a foreclosure, bankruptcy or a history of late payments are acceptable. All loans, however, will not be the same for all borrowers. If a borrower is higher risk, a higher down payment will be required, and the interest rate will likely be higher. “What we’re talking about is underwriting that goes back to common sense sort of practices. If you have risk, you offset risk somewhere else,” added Sharga, while touting, “We probably are going to have the widest range of products for people with challenging credit in the marketplace.”

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It’s not about people, it’s about money. Fundamental flaw.

247,977 Stories In The Vacant City (NYDN)

There’s a hidden city in the five boroughs. Though its permanent population is zero, it is growing faster than any other neighborhood. Early numbers from the Census Bureau’s Housing and Vacancy Survey show the unoccupied city has ballooned by 65,406 apartments since 2014, an astonishing 35% jump in size in the three years since the last survey. Today, 247,977 units — equivalent to more than 11% of all rental apartments in New York City — sit either empty or scarcely occupied, even as many New Yorkers struggle to find an apartment they can afford. The Vacant City — let’s call it that, with a tip of the hat to the 1948 movie and old TV series “Naked City” — has tripled in 30 years.

A generation ago, there were just 72,051 apartments in the Vacant City. Back in 1987, when rents were cheap by today’s standards at a median $395 a month, the Vacant City made up less than 4% of rental apartments. Today, the median rent is $1,450, having risen twice as fast as inflation, even while the Vacant City tripled in size. The numbers just don’t add up the way conventional wisdom said they should. For years, development officials, the real estate industry and think tanks have told us that artificially low rents are holding the city back. Higher rents, the argument went, would free landlords to make a reasonable amount of money and serve as an incentive to increase the housing supply.

The new Census gleanings finally put the lie to that reasoning. We have higher prices for sure — but the only part of the city’s residential real estate that has grown is the Vacant City. More apartments are being held off the market than ever. Some remain vacant for legitimate reasons. Almost 28,000 of those unused units have been rented or sold but not yet occupied, or are awaiting a sale. Almost 80,000 are getting renovated, 9,600 tied up in court, and 12,700 vacant because the owner is ill or elderly or simply can’t be bothered. But that still leaves more than 100,000 units — 74,945 occupied temporarily or seasonally, and 27,009 held off the market for unexplained reasons.

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Shell, Exxon, they’ve all known all along. But they have lots of power.

Judge Rules Exxon Can’t Stop Probe Into Whether They Lied For Decades (Ind.)

A Massachusetts judge has ruled that ExxonMobil cannot stop a probe into whether the oil giant misled shareholders for decades about the dangers of climate change and its impact on their business. The judge, in a Friday ruling, found that Massachusetts Attorney General Maura Healey has grounds to pursue its civil investigation into the matter even though Exxon is not technically an in-resident corporation. The judgement follows after a federal judge in New York dismissed a similar lawsuit aimed at ending the climate change probe late last month. In that lawsuit, Exxon argued that Ms Healey and her New York counterpart, Eric Schneiderman, were pursuing their climate probes in bad faith. The judge dismissed the argument as “implausible”.

“For the second time this month, Exxon’s scorched earth campaign to block our investigation has been entirely rejected by the courts. In its decision today, our state’s highest court affirmed that Exxon is subject to our laws, and that our office has authority to investigate,” Ms Healey said in a statement following the decision. “Now Exxon must come forward with the truth, what it knew about climate change, when, and what it told the world. The people of Massachusetts — and people everywhere — deserve answers.” New York and Massachusetts first began their climate change probes after news reports in 2015 found that Exxon had known for years that reducing greenhouse gas emissions is necessary to combat climate change impacts, but did not reveal those concerns to shareholders or the public.

Exxon has denied that their public policies were in any way inconsistent with what their scientists’ findings that climate change poses a serious risk to its business and to the environment.

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It’s used to be 2100. Now it’s 2030.

World May Hit 2ºC Warming in 10-15 Years Thanks to Fracking (NC)

In 2011, a Cornell University research team first made the groundbreaking discovery that leaking methane from the shale gas fracking boom could make burning fracked gas worse for the climate than coal. In a sobering lecture released this month, a member of that team, Dr. Anthony Ingraffea, Professor of Engineering Emeritus at Cornell University, outlined more precisely the role U.S. fracking is playing in changing the world’s climate. The most recent climate data suggests that the world is on track to cross the two degrees of warming threshold set in the Paris accord in just 10 to 15 years, says Ingraffea in a 13-minute lecture titled “Shale Gas: The Technological Gamble That Should Not Have Been Taken,” which was posted online on April 4.

That’s if American energy policy follows the track predicted by the U.S. Energy Information Administration, which expects 1 million natural gas wells will be producing gas in the U.S. in 2050, up from roughly 100,000 today. An average global temperature increase of 2° Celsius (3.6° Fahrenheit) will bring catastrophic changes — even as compared against a change of 1.5° C (2.7° F). “Heat waves would last around a third longer, rain storms would be about a third more intense, the increase in sea level would be approximately that much higher and the percentage of tropical coral reefs at risk of severe degradation would be roughly that much greater,” with just that half-degree difference, NASA‘s Jet Propulsion Laboratory explained in a 2016 post about climate change.

A draft report from the Intergovernmental Panel on Climate Change (IPCC), which was leaked this January, concludes that it’s “extremely unlikely” that the world will keep to a 1.5° change, estimating that the world will cross that threshold in roughly 20 years, somewhat slower than Ingraffea’s presentation concludes.

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Hawking’s successor.

‘There Is No Such Thing As Past Or Future’ (G.)

Rovelli’s work as a physicist, in crude terms, occupies the large space left by Einstein on the one hand, and the development of quantum theory on the other. If the theory of general relativity describes a world of curved spacetime where everything is continuous, quantum theory describes a world in which discrete quantities of energy interact. In Rovelli’s words, “quantum mechanics cannot deal with the curvature of spacetime, and general relativity cannot account for quanta”. Both theories are successful; but their apparent incompatibility is an open problem, and one of the current tasks of theoretical physics is to attempt to construct a conceptual framework in which they both work.

Rovelli’s field of loop theory, or loop quantum gravity, offers a possible answer to the problem, in which spacetime itself is understood to be granular, a fine structure woven from loops. String theory offers another, different route towards solving the problem. When I ask him what he thinks about the possibility that his loop quantum gravity work may be wrong, he gently explains that being wrong isn’t the point; being part of the conversation is the point. And anyway, “If you ask who had the longest and most striking list of results it’s Einstein without any doubt. But if you ask who is the scientist who made most mistakes, it’s still Einstein.”

How does time fit in to his work? Time, Einstein long ago showed, is relative – time passes more slowly for an object moving faster than another object, for example. In this relative world, an absolute “now” is more or less meaningless. Time, then, is not some separate quality that impassively flows around us. Time is, in Rovelli’s words, “part of a complicated geometry woven together with the geometry of space”. For Rovelli, there is more: according to his theorising, time itself disappears at the most fundamental level. His theories ask us to accept the notion that time is merely a function of our “blurred” human perception.

We see the world only through a glass, darkly; we are watching Plato’s shadow-play in the cave. According to Rovelli, our undeniable experience of time is inextricably linked to the way heat behaves. In The Order of Time, he asks why can we know only the past, and not the future? The key, he suggests, is the one-directional flow of heat from warmer objects to colder ones. An ice cube dropped into a hot cup of coffee cools the coffee. But the process is not reversible: it is a one-way street, as demonstrated by the second law of thermodynamics. Time is also, as we experience it, a one-way street. He explains it in relation to the concept of entropy – the measure of the disordering of things.

Entropy was lower in the past. Entropy is higher in the future – there is more disorder, there are more possibilities. The pack of cards of the future is shuffled and uncertain, unlike the ordered and neatly arranged pack of cards of the past. But entropy, heat, past and future are qualities that belong not to the fundamental grammar of the world but to our superficial observation of it. “If I observe the microscopic state of things,” writes Rovelli, “then the difference between past and future vanishes … in the elementary grammar of things, there is no distinction between ‘cause’ and ‘effect’.”

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Extract from Carlo Rovelli’s The Order of Time.

Why do things fall? Because “..the movement of things inclines naturally towards where time passes more slowly..”

Time is Elastic (Rovelli)

Reality is often very different from what it seems. The Earth appears to be flat but is in fact spherical. The sun seems to revolve in the sky when it is really we who are spinning. Neither is time what it seems to be. Let’s begin with a simple fact: time passes faster in the mountains than it does at sea level. The difference is small but can be measured with precision timepieces that can be bought today for a few thousand pounds. This slowing down can be detected between levels just a few centimetres apart: a clock placed on the floor runs a little more slowly than one on a table. It is not just the clocks that slow down: lower down, all processes are slower. Two friends separate, with one of them living in the plains and the other going to live in the mountains.

They meet up again years later: the one who has stayed down has lived less, aged less, the mechanism of his cuckoo clock has oscillated fewer times. He has had less time to do things, his plants have grown less, his thoughts have had less time to unfold … Lower down, there is simply less time than at altitude. Einstein understood this slowing down of time a century before we had clocks precise enough to measure it. He imagined that the sun and the Earth each modified the space and time that surrounded them, just as a body immersed in water displaces the water around it. This modification of the structure of time influences in turn the movement of bodies, causing them to “fall” towards each other.

What does it mean, this “modification of the structure of time”? It means precisely the slowing down of time described above: a mass slows down time around itself. The Earth is a large mass and slows down time in its vicinity. It does so more in the plains and less in the mountains, because the plains are closer to it. This is why the friend who stays at sea level ages more slowly. If things fall, it is due to this slowing down of time. Where time passes uniformly, in interplanetary space, things do not fall. They float. Here on the surface of our planet, on the other hand, the movement of things inclines naturally towards where time passes more slowly, as when we run down the beach into the sea and the resistance of the water on our legs makes us fall headfirst into the waves. Things fall downwards because, down there, time is slowed by the Earth.

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