Frank Larson Chrysler reflection, 42nd Street near 5th Ave, New York 1950s
Update: Dutch Foreign Minister Halbe Zijlstra resigned at 5pm local time, before the parliamentary debate could take place. But that still leaves Rutte in place with his own version of “when it gets serious, you have to lie”.
There will be a parliamentary debate in Holland (the Netherlands) today about abject lies about Russia and Vladimir Putin that its Foreign Minister, Halbe Zijlstra, has been telling the country for a few years now. Zijlstra is supposed to fly to Russia tomorrow to meet with his Russian peer, Sergey Lavrov. One would suppose Zijlstra will be fired later today, if only to prevent such a meeting from taking place, but that is by no means a given.
Here’s what happened: in 2006, there was a ‘conference’ in Putin’s dacha outside of Moscow. Zijlstra worked for Shell at the time at a lower level. Later, he has pretended he way present at a meeting with Putin in which the latter supposedly talked about his dreams for a ‘Greater Russia’.
Now, Zijlstra has revealed he was not at that meeting. He claimed ‘a source’ was there and told him about it, and he had wanted to protect the source and therefore pretended he himself was present. That source, then-Shell CEO Jeroen van der Veer, not only never asked for any such protection, he also sent an email to paper De Volkskrant saying that Zijlstra had ‘misinterpreted’ the story Van der Veer had told him (a diplomatic word for he lied).
Putin never talked about ambitions for a Greater Russia, and never said Kazachstan was ‘nice to have’. Zijlstra made that all up. There had been mention of Greater Russia, but in a nostalgic, historical manner. And now Van der Veer, undoubtedly much to his chagrin, gets dragged into this entire false tale.
Because the entire Dutch government, longtime Prime Minister Mark Rutte first and most of all, has said Zijlstra’s lies were somehow acceptable because the ‘inhoud’ (tenor, content, narrative) of his story was true. That is to say, Rutte claims that Putin does indeed dream of land-grabbing, of invading Ukraine, the Baltic States etc.
It doesn’t matter if you have no proof of something (see the painfully botched MH17 investigation), and neither does it matter if you just make the whole thing up. The only thing that matters in Holland is that you stick to the narrative. Which, there is no other way to look at it, is fully unproven and entirely made up.
This makes the government of Holland (a NATO member), and certainly Rutte, a danger to world peace. Therefore, Rutte has to go along with Zijlstra. Because he not only condones the latter’s lies and fantasies, maintained in his days as Foreign Minister, Rutte himself also makes claim after claim based on no proof at all. Or at least nothing he has ever revealed.
Holland should never have chaired the MH17 investigation, because it was its main victim (2/3 of the near 300 who died in the plane crash had Dutch passports). In the 3,5 years since the tragedy, not an ounce of evidence has ever been published by the investigators that proves Russia was the culprit. But claims to that end have been freely made over the entire period.
Fro his Putin-bashing, then-Dutch Foreign Minister Frans Timmermans got himself a cushy job as second to EU head Jean-Claude Juncker (and yes, Juncker’s “when it gets serious, you have to lie” comes to mind in the Zijlstra thing). Timmermans, like then-US Secretary of State Joe Biden, wasted no time in fingering Russia as the perpetrator. They both made this claim within minutes. Again, without any proof.
None of this is a specific Dutch issue. The western world, led by the US, has created an atmosphere and a narrative in which it’s deemed acceptable to lie about Russia, about Vladimir Putin, about Russian hackers, and about connections Americans and western Europeans who don’t abide by the narrative, have to Russia and everything connected with it.
And well, they are right in one sense: there is a pattern here. The Russiagate investigations in the US into ties of Trump associates with Russians, like the Dutch investigation into MH17, continue ad infinitum without producing a sliver of proof.
Various and multiple claims pertaining to alleged Russian actions in Crimea, Ukraine, Syria etc. have come up hollow. Indeed, what actions Russia has undertaken are largely in response to American and EU ‘provocation’.
And yes, all this plays out against the backdrop of the military-industrial complex that hides behind the identity of NATO, an organization without a reason to exist even since the Berlin wall came down (the wall has now been gone longer than it ever existed). NATO is a convenient entity for the entirety of the western arms industry, and the neocons that still hold sway in various of its member-nations, to publicize its fear-mongering anti-Russia messages from.
Those messages keep being duly publicized by mainstream media. The Russian Foreign Ministry issued a statement today in which it said “bilateral relations with Holland are being overshadowed by an unparalleled anti-Russia campaign in Dutch media.”
“Holland accuses Russia of spreading disinformation (fake news). People in the Dutch government keep on making such unfunded claims.” Dutch media readily and uncritically disperse the idea that Russian authorities are obsessed with the creation of a Great Russia. How is that not an example of fake news?”
Holland would be crazy to let Zijlstra go to Moscow tomorrow to talk to Lavrov. But, given what has already been said, one can only conclude that the country is indeed crazy. Or at the very least its government is. Still, even if parliament today decides that Zijlstra must leave his post, chances that they’ll send Rutte packing as well are zero.
Even though as prime minster he’s publicly stated that his Foreign Minister telling outright lies about another country is no problem as long as he stays with the narrative that said country is a threat, a narrative for which apparently no evidence must ever be presented.
At the next EU meeting Rutte is more likely to be hailed for his stance, because the narrative is that of the entire EU, of Brussels, Berlin and Paris. And NATO.
Will this episode wake up the Dutch people? Fat chance. They will focus on Zijlstra, and probably clamor for him to leave, and then go about their daily job of feeding their readers and watchers their, as Moscow puts it, “unparralleled anti-Russia campaign.”
People like Rutte and Merkel do a very good job of showing us that Europeans have more to fear from their own governments than they do of Putin. But nobody is listening. Because their media have become as much of an echo chamber as the US MSM.
Still, make no mistake: what Rutte tells his people is that he cannot be trusted. That there are things more important than the truth: the narrative. This means they will never again be able to trust him to tell them the truth. He just said so himself.
President Donald Trump plans to sign the tax bill on Jan. 3 to ensure automatic spending cuts to Medicare and other programs don’t take effect, according to a House Republican aide familiar with the plans. The White House informed House GOP members of the timetable, following the likely decision by House Republicans to leave the so-called PAYGO provision out of a year-end spending deal to avoid a government shut down before Friday, the person said who asked not to be named because the plan hasn’t been publicly announced. Trump and GOP leaders have repeatedly said the president would sign the legislation before Christmas. White House National Economic Council Director Gary Cohn signaled Wednesday morning that the signing date could be pushed back because of the potential for triggering the cuts.
Under the PAYGO law, automatic cuts to Medicare and other spending categories would be triggered by the tax bill in January because the bill is scored as increasing the deficit by $1.5 trillion over 10 years. Waiting until January means that those cuts would be delayed until 2019, according to budget expert Ed Lorenzen of the Committee for a Responsible Federal Budget. White House officials insisted that no firm timetable had been set. Trump could sign the tax legislation earlier if Congress passed a waiver to the PAYGO rules, but that is unlikely to happen before lawmakers leave Washington for a holiday recess. “I think we’re just working out some of the logistics on that,” Treasury Secretary Steven Mnuchin said Wednesday on Fox News. “He’ll sign it as quickly as he can.”
Back in October 2016, the “millionaire, billionaire, private jet owners” of America’s elitist, liberal mega-cities (A.K.A. New York and San Francisco) celebrated the tax hikes that a Hillary Clinton presidency would have undoubtedly jammed down their throats proclaiming them to be a ‘patriotic duty’. Unfortunately, now that Trump has given them exactly what they apparently wanted…an amazing opportunity to ‘spread their wealth around”…they’re suddenly feeling a lot less patriotic. Of course, as we’ve noted numerous times, while most people across the country and across the income spectrum will benefit from the Republican tax reform package, the folks who stand to lose are those living in high-tax states with expensive real estate as their SALT, mortgage interest and property tax deductions will suddenly be capped. And, as Bloomberg points out today, that has a lot of Wall Street Traders in New York drowning their sorrows in expensive vodka and considering a move to Florida.
“One trader, sipping a Bloody Mary on a morning flight to somewhere more tropical, said he’s going to stop registering as a Republican. En route, he sent more than a dozen text messages ripping the tax bill. A pair of hedge fund managers said the tax bill is too tilted toward corporations, rather than individuals who should get more relief. “My clients are hard-working young professionals on Wall Street. I don’t have a lot of good news for them,” said Douglas Boneparth, a financial adviser in lower Manhattan who counsels people throughout the industry. Most are coming to terms with it. “I don’t think anyone is going to be surprised by the economic reality.” “This provides a clear incentive for financial advisers to go independent,” said Louis Diamond of Diamond Consultants. “We’re hearing from a lot of clients on this; it’s just another reason why it makes a ton of sense, economically, to become self-employed.”
[..] global diversification has enhanced portfolio returns this year. Spreading wealth among different markets and sectors has allowed investors to capture strong equity performance. You see, on the trend higher, investors may seek to employ a series of risk horses to fully participate in the race. Fixed income or bonds, and cash equivalents do a good job of helping investors manage risk through bear markets as they are negatively correlated to stocks. On the way down, stocks across markets connect and head south in sync; some fall faster than others. Unfortunately, when stock diversification is needed the most, it fails. With current valuations and stock prices extended well beyond their long-term trends, investors must be aware of reversions that have the probability of wiping out a decade or longer in gains.
Stock diversification will not protect you if or when this occurs (let me know if you’ve heard this from your broker’s research hub as of late; I bet you haven’t). Strategists for big-box financial retailers are consistently wishy-washy when it comes to the current unsustainable altitude of stock prices. It’s not in their best interest to take a stand. It would be a death knell for their careers. Recently, one of the paunchiest of the brethren shared on CNBC: Stocks are “slightly overvalued;” followed by – “that doesn’t mean you should do anything here.” Perfect. Well done. That’s how seven-figure compensation packages are earned, folks. When it comes to retail investors, time is as or more precious a commodity as money; we at RIA consistently write and research the math of investment losses to make sure you remain emotionally grounded and don’t allow greed to blind your judgment. We are not afraid to outline the risks inherent in extended markets.
Personally, I’m not willing to give up a decade or two to break even. Are you? Don’t worry about your friendly neighborhood talking heads. They’ll continue to collect big paychecks and hefty year-end bonuses as long as they play senior managements’ game. A broker’s research department superstar spokesperson is paid handsomely to point out when markets reach new highs but rarely expound on how long it takes to achieve or in most cases, reclaim them. A big-box financial retail investment strategist’s primary role is to forge and fortify a firm’s presence or brand and help front-line brokers keep investors fully invested through rough market cycles, nothing more.
If you’re still holding out hope that the following chart is anything but another massive housing bubble in the making then you should probably ignore the disturbing evidence to the contrary that we’re about to present below… Back in 2005/2006, one of the key signs that housing markets across the country were overheating was the number of houses that, thanks to soaring demand from speculators, were suddenly selling at prices well in excess of their asking price. That said, as a local CBS affiliate in San Francisco points out, the premiums of 2005/2006 pale in comparison to homes in Silicon Valley today that are selling for as much as $1-$2 million over their original asking prices.
But if you thought they area housing market couldn’t get any more outrageous, consider a home on Colorado Avenue in Palo Alto. It listed for $2.9 million, but sold for $3.9 million, $1 million over asking price. Another home on Anacapa Drive in the Los Altos hills listed for $2.8 million, but sold for $4.5 million. That is $1.67 million over asking. Finally, there is this home on University Avenue in Los Altos that listed at $7.9 million, but sold for $1.8 million over asking. In 2017, 10 homes in the mid-Peninsula area sold for $1 million over asking. Six of those listings belonged to Deleon Realty.
He’s taken on President Donald Trump and the Federal Reserve. Now, libertarian former congressman Ron Paul is taking on bitcoin. According to Paul, cryptocurrencies have become an asset that rivals the bubble he sees in stocks. “I think it’s going to continue to do exactly what it’s doing. It’s going higher and it’s going lower,” he said Tuesday on CNBC’s “Futures Now.” “We can look at what’s happening now, which to me is a climactic end of QEs.” Paul, who has done commercials touting currency competition for a company that benefits from bitcoin’s rise, views the crypto craze as a side effect of central banks doing several rounds of quantitative easing to cope with the last financial crisis. “I look at the problems we face. I think they’re gigantic and people are desperate and looking everywhere. Why would they buy bonds that pay negative interest rates? Why would they buy stocks, and say well this time it’s different? ” asked Paul.
“Cryptocurrency is a reflection of the disaster of the monetary dollar system.” Paul, who’s also a medical doctor and former Republican presidential candidate, argues that cryptocurrencies are in an “exponential bubble” where trying to calculate its real value is extremely difficult. Bitcoin, the largest of the cryptocurrencies, has been trading above $17,000. He hasn’t been able to pinpoint when a plunge could happen in cryptocurrencies or the stock market. But Paul says the danger is real. “They’re both big bubbles in the sense that it occurred because there was excessive credit. But if you look at the curves, I think that the cryptocurrency curve looks more threatening,” Paul said.
Uber Technologies Inc. will be regulated in European Union countries as a transport company after the bloc’s top court rejected its claim to be a digital service provider, a decision that could increase legal risks for other gig-economy companies including Airbnb. While the EU Court of Justice’s ruling covered UberPop – which used drivers without taxi licenses and has already been shuttered in many countries due to the legal issues – it’s a real blow as the first definitive finding that Uber must be regulated by transport authorities. The decision clarifies for the first time that connecting people via an app to non-professional drivers forms an integral part of a transport service. It rejects Uber’s view that such services are purely digital and could fuel further scrutiny of other gig-economy firms.
Paris regulators are already clamping down on Airbnb, treating the home-rental service more like a hotel, and British food-delivery start-up Deliveroo is in the spotlight for its treatment of workers. In the EU judges’ view, “the most important part of Uber’s business is the supply of transport – connecting passengers to drivers by their smartphones is secondary,” said Rachel Farr at law firm Taylor Wessing. “Without transport services, the business wouldn’t exist.” Uber has argued that it’s a technology platform connecting passengers with independent drivers, not a transportation company subject to the same rules as taxi services. The case has been closely watched by the technology industry because of its precedent for regulating the gig economy, where freelancers make money by plying everything from spare rooms to fast-food deliveries via apps on smartphones and PCs.
“After today’s judgment innovators will increasingly be subject to divergent national and sectoral rules,” said Jakob Kucharczyk, of the Computer & Communications Industry Association, which speaks for companies like Uber, Amazon.com, Google and Facebook. “This is a blow to the EU’s ambition of building an integrated digital single market.” While the ruling is valid EU-wide, it remains limited to Uber’s services and won’t directly affect other disputes Uber is facing over how its drivers are treated. One such case is pending at the U.K. court of appeal.
The IMF has strongly defended its gloomy forecasts for the UK after Brexit, saying pre-referendum warnings of slower growth were coming true. Christine Lagarde, the fund’s managing director, said the vote to leave the EU in June 2016 was already having an impact and Britain’s weaker growth this year was in contrast to accelerating activity in the rest of the world. Speaking at the Treasury as the IMF announced the results of its annual health check of the UK economy, Lagarde hit back at those who lambasted the fund when predictions of an immediate post-referendum recession failed to come to pass. “We feared that if Britain decided to leave, it would most likely entail a depreciation of sterling, higher inflation leading to a squeeze on disposable income and a reduction in investment,” she said.
“People said ‘Oh those experts’, but we are seeing the narrative we identified as a potential risk being rolled out as we speak. This is not the experts speaking, it’s what the economy is demonstrating.” The IMF trimmed its forecast for UK growth this year from 1.7% in October to 1.6%, and said it expected the economy to grow by 1.5% in 2018. It was one of several economic forecasters to say the UK would suffer a downturn should voters back leaving the EU. Last year, the fund had said growth for 2017 would be 1.1%, before raising the forecast to 2%. Since the turn of the year, Lagarde said activity had slowed notably and the UK’s recent performance was a disappointment in the light of the best showing by the global economy since the financial crash.
The Bank of England plans to allow European banks to maintain their UK operations under current rules following Brexit, in a direct challenge to European Union regulators to adopt the same policy towards UK-based banks. The Bank said it wanted to press ahead with assessing the risks posed by the 177 banks and insurance companies based in the European Economic Area that have branches in London, following the agreement between Theresa May and EU officials to move to the second stage of Brexit talks. In a move that pre-empts trade talks between the UK and EU, the Bank said it would assess each foreign bank’s branch operation to decide whether it needed to be converted into a subsidiary, which effectively separates it from its overseas parent with its own capital.
Banks domiciled in the EEA will be keen to maintain UK branches, which are cheaper to run and come under more direct head office control. They also maintain their chief regulator in their home country. Most branches are expected to retain their current status despite needing to satisfy stringent rules. The BoE said it would carry out a broad assessment of the risks posed by branches, though it would rely heavily on cooperation with regulators across the EU. Branches that are considered to pose a systemic risk to London’s financial centre could be forced to convert to being subsidiaries. The Treasury is expected to give the Bank additional powers to supervise foreign bank branches in the UK, a job largely done by regulators based inside the EU.
Some pro-Brexit campaigners are expected to view the move as throwing away a major bargaining chip in trade talks. The UK might have threatened to block EU access to facilities in the City as the price of concessions in other areas, such as manufacturing and fishing rights. However, Mark Carney, the Bank’s governor, told MPs on the Treasury select committee on Wednesday that the decision to allow EU banks to continue operating under existing UK rules had been taken on the assumption that a “high degree of supervisory cooperation with the EU” would continue after Brexit.
Fresh from sacking her trusted deputy, U.K. Prime Minister Theresa May heads to Poland on Thursday to attempt to get close – but not too close – to its new government. May was forced to tell First Secretary of State Damian Green to resign Wednesday afternoon after an inquiry into his behavior found he’d made misleading statements over pornography found on his parliamentary computer by police nearly a decade ago. Green is the third Cabinet minister to quit in two months. A couple of recent Brexit-related successes mean the prime minister is better equipped to handle Green’s departure than she might have been a month ago: The European Union has agreed to move negotiations on to the next phase, and late Wednesday, May’s flagship Brexit Bill completed the detailed scrutiny stage of its journey through the House of Commons.
Still, his departure leaves her without her closest ally in Cabinet. The flight to Warsaw will give May a chance to consider how she manages without him. She’ll be accompanied by her most senior ministers for a summit where she’ll promise cooperation on defense and security as part of a charm offensive to win friends in Europe before negotiations on post-Brexit trade start in March. But Poland’s rift with the EU over judicial reforms – and its government’s fears of a shortfall in EU funding after Britain leaves the bloc – threaten to overshadow the meeting with new Polish Prime Minister Mateusz Morawiecki. “The prime minister will raise her concerns with the prime minister when they meet,” May’s spokesman James Slack told reporters in London.
“We place importance on respect for the rule of law and we expect all our partners to abide by international norms and standards.” Britain’s rush to forge links with Morawiecki’s populist administration reflects a desire both to win friends for the talks ahead and to reassure former eastern European countries that it will continue to support them against Russian expansionism after Brexit. British troops are already stationed in Poland, and May will announce increased cooperation on cyber security.
The Polish government has accused the European commission of a politically motivated attack after the EU’s executive body triggered a process that could see the country stripped of voting rights in Brussels, over legal changes that the bloc claims threaten the independence of the judiciary. In a highly symbolic moment, Poland’s fellow 27 EU member states were advised by the commission on Wednesday that the legislative programme of Poland’s government was putting at risk fundamental values expected of a democratic state by allowing political interference in its courts. The row represents the greatest crisis in the EU since Britain’s decision to leave the EU last year, with the Polish government showing little inclination to back down.
Frans Timmermans, the vice-president of the commission, told reporters in Brussels that in two years 13 laws had been adopted that put at serious risk the independence of Poland’s judiciary and the separation of powers. “Judicial reforms in Poland mean that the country’s judiciary is now under the political control of the ruling majority. In the absence of judicial independence, serious questions are raised about the effective application of EU law,” Timmermans, a former Dutch diplomat, said. “We are doing this for Poland, for Polish citizens.” Poland’s new prime minister, Mateusz Morawiecki, responded on Twitter: “Poland is as devoted to the rule of law as the rest of the EU.” The Polish foreign ministry said in a statement: “Poland deplores the European commission’s launch of the procedure […] which is essentially political, not legal.”
Catalans head to the polls on Thursday to vote in an extraordinary and bitterly contested election that will pit secessionists against unionists and determine the next phase of the long-running campaign for independence from Spain. The election was called by the Spanish prime minister, Mariano Rajoy, at the end of October when the central government took control of Catalonia and sacked the regional government after it staged an illegal independence referendum and made a unilateral declaration of independence. Polls suggest Catalonia is set for a hung parliament, with the pro-independence Catalan Republican Left party (ERC) vying for first place with the unionist, centre-right Citizens party.
With no clear winner in sight, Thursday’s result is likely to lead to coalition negotiations to form a government that will either maintain the drive for independence in some form or defend the constitutional status quo. Tensions remain high in the region following the referendum and the Spanish police’s heavy-handed efforts to stop it. Secessionists believe that Madrid’s imposition of direct rule and the jailing of senior independence leaders could increase support for their cause. Unionists, however, argue that Catalans are sick of the social unrest and economic uncertainty generated by the unilateral actions of the government of deposed regional president Carles Puigdemont.
The exceptional circumstances surrounding the election are compounded by the fact that Puigdemont has been campaigning from Belgium. He fled to Brussels hours before Spain’s attorney general asked for charges of rebellion, sedition and misuse of public funds to be brought against his cabinet almost two months ago. Puigdemont’s former number two, Oriol Junqueras, has been fighting the election from prison, where he and two prominent independence leaders are being held as part of a judicial investigation into October’s events. “This is not a normal election,” Puigdemont told supporters via video link on Tuesday evening as the campaign drew to a close.
Due to a historic data-dump on December 10th, the biggest swindle that occurred in the 20th Century (or perhaps ever) is now proven as a historical fact; and this swindle was done by the US Government, against the Government and people of Russia, and it continues today and keeps getting worse under every US President. It was secretly started by US President George Herbert Walker Bush on the night of 24 February 1990; and, unless it becomes publicly recognized and repudiated so that it can stop, a nuclear war between the US and all of NATO on one side, versus Russia on the other, is inevitable unless Russia capitulates before then, which would be vastly less likely than such a world-ending nuclear war now is.
This swindle has finally been displayed beyond question, by this, the first-ever complete release of the evidence. It demonstrates beyond any reasonable doubt (as you’ll verify yourself from the evidence here), that US President G.H.W. Bush (and his team) lied through their teeth to Soviet President Mikhail Gorbachev (and his team) to end the Cold War on Russia’s side, when the US team were secretly determined never to end it on the US-and-NATO side until Russia itself is conquered. And this swindle continues today, and keeps getting worse and worse for Russians.
Until now, apologists for the US-Government side have been able to get away with various lies about these lies, such as that there weren’t any, and that Gorbachev didn’t really think that the NATO issue was terribly important for Russia’s future national security anyway, and that the only limitation upon NATO’s future expansion that was discussed during the negotiations to end the Cold War concerned NATO not expanding itself eastward (i.e., closer to Russia) within Germany, not going beyond the then-existing dividing-line between West and East Germany — that no restriction against other east-bloc (Soviet-allied) nations ever being admitted into NATO was discussed, at all. The now-standard US excuse that the deal concerned only Germany and not all of Europe is now conclusively disproven by the biggest single data-dump ever released about those negotiations.
Years ago, camping in Alaska’s Arctic national wildlife refuge, I watched a herd of caribou – 100,000 bulls, cows and their three-week-old calves – braid over the tundra, moving to a rhythm as old as the wind. “Not many places like this left today,” said my friend Jeff, sitting next to me above an ice-fringed river. And so Alaska senator Lisa Murkowski believes this refuge – 80 miles east of Prudhoe Bay – could generate $1bn over 10 years once it’s opened to oil leasing. She and her Republican colleagues slipped this drilling provision into the Senate Republican tax bill. Murkowski repeatedly says this development would cover just 2,000 acres, “about one ten-thousandth of ANWR”.
The acronym ANWR conveniently deletes the words “wildlife” and “refuge”, with no regard for the polar bears, Arctic fox, musk oxen and migratory ground-nesting birds that come there every summer, some species from as far away as Patagonia. Alaska’s lieutenant governor, Byron Mallott, has said that drilling in ANWR is necessary to deal with climate change. His caddywhompus logic: we need to drill for more oil to raise money to address a problem that’s caused by humanity’s addiction to oil. Why not just say the truth? We want the money. Murkowski adds: “We have waited nearly 40 years for the right technology to come along for a footprint small enough for the environment to be respected.” They have not. Alaskans have been trying to drill here for decades, using one crazy rationale after another.
At one hearing the state’s lone congressman, Don Young, put a blue pen mark on his nose to show how small the industry footprint would be. Clever man. The development would in fact be a spider web of roads, pipelines, well pads and landing strips smack in the middle of the biological heart of the refuge. It would look less like a refuge and more like Prudhoe Bay, where thousands of spills have been reported. Senator Maria Cantwell of Washington says the whole idea is “ludicrous”, noting that the Republican tax plan would add roughly $1.5tn to the national deficit in five years [with the richest 1% of Americans reaping half of the tax cuts]. “I am disturbed,” she says. She should be. Christopher Lewis, a retired BP manager of exploration, has said: “I do not believe that there are any adequate, commercially viable reservoirs in the Arctic refuge.” The reality is “there are other less sensitive and less costly places to explore”.
George Kachmazov, a Russian realtor, is buying up property in Athens. The Moscow-based chief executive officer of real-estate platform Tranio.com has bought a building in the Greek capital and is in the process of acquiring five others with a view to selling apartments to international investors. For Kachmazov, the sales pitch is clear: buying property in Greece can give an investor a so-called golden visa to the country – and with it an entree into much of Europe. What’s more, the country’s real estate market may be poised for a rebound, helping buyers make some money on their purchase. “Greece’s real estate market is one of the remaining few in Europe that hasn’t recovered since the 2008 economic crisis,” Kachmazov said in an interview in Athens.
Prices in Spain, Portugal, Ireland, Poland and Hungary are heading toward pre-crisis levels because of high liquidity in Europe, he said. Kachmazov is among agents making a beeline for Greece to help property hunters from Russia, China, Turkey and elsewhere bet on a market that may be on the cusp of a revival as the country exits its bailout program in August 2018. Property prices in Greece have fallen more than the 25% contraction in the economy since Europe’s sovereign debt crisis began in 2008. Prices of apartments in Athens more than five years old shrank by 45% between 2008 and June 2017, according to Bank of Greece data.
“The belief is that the worst is over and that this is a good time to take advantage of the low prices and to benefit from future capital gains as the market recovers,” said Carrie Law, CEO of Juwai.com, a Chinese international property website. Juwai this year signed an agreement with Warren Buffett’s real estate brokerage firm to advertise homes in the U.S. The average price per square meter in Greece is 2,846 euros ($3,369), according to Germany-based statistics company Statista. That’s almost 1,000 euros cheaper than Portugal, which has a similar golden visa program for property buyers, one and a half times cheaper than in Spain and Germany, and almost three times cheaper than in Italy and Austria. Greece is more expensive than Bulgaria, Croatia, Romania and Estonia.
The mayor of the eastern Aegean island of Lesvos has filed suit against all responsible parties over the conditions at the Moria refugee and migrant processing center. Spyros Galinos filed his suit in Lesvos’s Court of Misdemeanors, claiming that the law is being broken at the government-run facility, which is supervised by the military. His action comes two days after foreign media published videos shot covertly inside the camp and showing the squalor and cramped conditions to which thousands of refugees and migrants are being subjected. The mayor stressed that the facility, a former military base, should not be accommodating more than 1,800 people at a time if decent living standards are to be ensured.
“Unfortunately, though, for the past two years and this year especially there is an extremely large number of third-country citizens and vulnerable groups (men, women – among which pregnant women – and children) indiscriminately trapped and cramped together, coming to more than 6,000 individuals,” Galinos said in his lawsuit. He also stressed poor safety and sanitation standards, saying that an inadequate water and sewerage network is putting the lives of the camp’s residents and workers at risk. People living at the camp “every day experience serious psychological problems and have been led to suicide attempts and self-harm, while others are compelled to serious acts of lawlessness in order to survive,” Galinos said.
His suit came just hours after about a dozen people were injured in a brawl that went on for hours between rival groups at the camp and resulted in extensive destruction. The mayor further stressed the impact of conditions at Moria on the lives of the island’s residents, saying that authorities are failing in their duty to control and monitor such a large number of refugees and migrants. Galinos added that overcrowding at the camp has forced hundreds of migrants to move into the main town of Mytilene in search of some kind of shelter, “taking over public spaces, the city’s parks, sidewalks and courtyards of public and municipal buildings.” In the suit, Galinos asks that “all responsible parties” are taken to task over the situation, as “their actions and omissions are malicious and deliberate, and put at risk the desperate and poor people trapped in [Moria’s] illegal facilities.”
“The disruption of social cohesion and the risk of criminal offenses in defense of life and property by a part of the island’s native population is evident and very likely,” Galinos warned. Since the onset of the refugee crisis at the start of 2015, the residents of Lesvos and its mayor have been distinguished for the support they have given to tens of thousands of migrants that have landed on the island’s shores.
That whoosh you just heard? It’s Chinese money pulling back from property in London to Sydney to New York. Capital centres globally should brace for tumbling real-estate prices as Beijing manages to do what Brexit and higher interest rates haven’t. Reflecting tighter regulations, China overseas direct property investment could drop 84% to $US1.7 billion ($2.15 billion) this year and about another 15% to $US1.4 billion in 2018, according to Morgan Stanley. Mainland money began piling into offshore commercial property in 2013. Land prices were expensive at home, and investors wanted to find a hedge against a weakening yuan. Another draw was the prospect of higher returns in cities such as Sydney where yield spreads – the difference between rental yields and what government bonds pay – are higher.
A slumping British pound post June 2016’s Brexit vote helped, too. While some marquee transactions are still being inked – think the purchase earlier this year of London’s “Cheesegrater” tower by Chongqing-based, Hong Kong-listed CC Land Holdings – their numbers are dwindling. A strengthening yuan, along with China’s One Belt One Road initiative that needs funding, will see many property deals dry up. Over the past few months, Beijing has made it tougher to get money out, clamped down on more fanciful transactions such as the buying of football clubs and luxury hotels, and is now going after some of the country’s most prolific acquirers. Dalian Wanda Group, Anbang Insurance Group, HNA Group and Fosun International have all included real estate in their global buying binges.
Against that backdrop, and with increasing foreign-government scrutiny thrown into the mix, it’s hard to see how Chinese offshore real estate acquisitions can continue at such a pace. Domestic developers are already finding it harder to tap international debt markets, and have been resorting to short-term securities instead. This matters because Chinese capital accounted for one-quarter of commercial property transactions in central London last year, up from 1% a decade ago. China is now the second-largest foreign investor in the US after Canada, and is responsible for between 12 and 25% of all office transactions by value in Australia over the past two to three years.
Most people around the world still seem to believe China’s ascent is relentless and inevitable. A recent survey by the Pew Research Center showed that while more of those polled still see the U.S. as the world’s leading economy, China is quickly narrowing the gap. Chinese President Xi Jinping has been feeding that positive image by presenting his country as a champion of globalization, trade and economic progress. Statistics tell a different story. The common perception is that China is swamping the world with exports of everything from mobile phones to steel to sneakers. In fact, the entire Chinese export machine is sputtering. Between 2006 and 2011, China’s total merchandise exports nearly doubled, powering the country through the Great Recession. Since then, they’ve increased less than 11%, according to World Trade Organization data.
The same trend holds for China’s currency. In late 2014, the renminbi broke into the top five most-used currencies for global payments, reaching an almost 2.2% share. China seemed well on the way to achieving its long-stated goal of turning the yuan into a true rival to the dollar. But that progress has reversed. In June, the renminbi chalked up only a 2% share, according to Swift, slipping behind the Canadian dollar. The situation isn’t very different in China’s capital markets. While the government has cracked open its stock and bond markets to foreign investors, they still prefer buying Chinese shares listed in Hong Kong or New York to those in Shanghai or Shenzhen. For instance, domestically traded A-shares in a China equities fund managed by Zurich-based GAM account for less than 10% of its holdings.
In part, China is simply running into the difficult transition every country faces when losing its low-cost advantage. Facing stiff competition from countries like India and Vietnam, where wages are lower, China is losing ground in apparel and textile exports to the United States. Meanwhile, the Chinese economy isn’t replacing these traditional exports with new, high-value ones quickly enough. For example, in 2016, China exported 708,000 passenger and commercial vehicles, a sharp deterioration from the more than 910,000 shipped abroad in 2014. Rather than boosting China’s global expansion, government policy is holding it back. The renminbi remains a sideshow in currency markets because the state can’t stop fussing with its value. In May, the central bank actually reversed its stated policy to liberalize the renminbi’s trading and imposed more control.
[..] Nowhere is the disconnect between China’s global ambitions and actual policy greater than with the government’s interference in overseas direct investment. For a while, officials were encouraging big companies to shop abroad, resulting in a surge of deal-making by firms like Anbang. That led to a debt-crazed buying binge. Having created the problem, the government then stepped in to “fix” it, by suddenly changing course and clamping down on foreign deals. According to the American Enterprise Institute, China’s offshore investment still grew by 9% in the first half of 2017, but only because of one giant deal – state-owned China National Chemical Corp.’s acquisition of Syngenta AG. Take that one out, and overseas investment would have fallen by about a third.
Who would have expected that today’s otherwise boring monthly consumer credit report would be the day’s most exciting event. Well, moments ago the monthly update from the Federal Reserve confirmed that as of the end of June, total revolving (i.e. credit card) credit rose to $1,021.7 billion, an increase of $4.1 billion on the month, and a new all time high, taking out the previous record high set during the summer of 2008.
Coupled with the monthly $8.3 billion increase in non-revolving credit, which also rose to an all time high of $2,834.1 billion…
… means that total consumer credit in June increased by $12.4 billion, slightly less than the $13.9 billion expected and modestly less than the $18.4 billion increase in May, to $3,855.8 billion, also a record high.
Taking a closer look at the quarterly update in non-revolving debt, we find that for another consecutive quarter, both student and auto loans hit record highs, of $1.450 trillion and $1.131 trillion respectively, although there does appears to be a modest slowdown in credit issuance for these two largest categories.
No, Cantor Fitzgerald CEO Howard Lutnick didn’t “save” $81 million when he bought the most expensive listing in New York City, the 12,000-square-foot, 16-room triplex penthouse on the 41st, 42nd, and 43rd floors of The Pierre, a co-op tower on Fifth Avenue dating from 1930s. By the way, the owner also pays monthly maintenance charges for the apartment of $51,840). Asking price was $125 million when it was first listed in March 2013. In December that year, the price was slashed to $95 million. In 2015, it was cut to $63 million. That’s half of the original asking price. But it still didn’t sell. So it was taken off the market. After it underwent a modern redesign, it was re-listed in April 2016 for $57 million. It still didn’t sell. But on August 2, Page Six reported that Lutnick bought it for $44 million. At 65% below asking.
“Cantor Fitzgerald CEO buys iconic triplex at $81M discount,” said the Page Six headline. “Best Real Estate Headline Ever,” said Jonathan Miller, real-estate appraiser and author of the Elliman Report series, in his Housing Notes. Miller has a word for this phenomenon of enormous blue-sky asking prices that trigger subsequent massive and serial price reductions until finally someone bites: “Aspirational pricing.” “The very idea that a home seller would discount their home by $81 million to make the sale is an insane thought. This speaks to the concept I call “aspirational pricing.” The asking price was set to a price so ridiculous that it would literally sit on the market for years and the market would unlikely catch up in a lifetime. More importantly, it serves as misdirection for other high-end properties coming to the market by influencing them to also wildly over price as well.”
The 6,800-square-foot fully furnished penthouse occupying the top floor of the beachfront condo tower at 321 Ocean in South Beach, Miami Beach, was listed for sale in December 2015 for $53 million. The sellers had bought it when the building was completed six months earlier, for $20 million. “Financier Aims for Ambitious $53 Million Miami Penthouse Flip,” The Wall Street Journal said at the time. The hopeful flippers are Boris Jordan and Elizabeth Jordan: Founder of the private-equity and advisory firm the Sputnik Group, Mr. Jordan previously served as chief executive of the state-controlled Russian media conglomerate Gazprom-Media, and as head of the Russian television network NTV. But the hot air has come out of the condo market in Miami Beach. In the second quarter, after years of soaring, the median sale price for non-distressed condos dropped 7.5%, and the average price plunged 15.2%, according to the Elliman Report.
We’ve asserted that President Trump is far smarter and the powers that be far stupider and weaker than current consensus estimates. Trump’s primary motivation is power. The nonstop vilification campaign against him has little to do with policy differences and instead reflects establishment fears that Trump will investigate, expose, and punish its criminality. The upshot of these hypotheses: Trump is winning and has consolidated his power. [..] Even the Washington Post has admitted the Russia probe is “crumbling.” Trump and Sessions know Special Prosecutor Robert Mueller won’t find much because there’s nothing there, although there may be a sacrificial offering or two to propitiate the investigatory gods.
Trump read Sessions the riot act via Twitter and a Wall Street Journal interview about not investigating Hillary Clinton, intelligence community leaks to the press, and Ukrainian efforts to sabotage his presidential campaign. He’s been roundly condemned for publicly criticizing Sessions, but here’s a speculative leap: perhaps publicly criticizing Sessions was not really what Trump was doing. Perhaps Trump was giving his attorney general political cover to pursue investigations against high-profile Democrats who cannot help Trump, sub rosa or otherwise. Investigations of Hillary Clinton, former Attorney General Loretta Lynch, Susan Rice, Samantha Power, Fusion GPS, and Debbie Wasserman Schultz would demoralize the Democrats, preoccupy and harass key players, expose criminality, and electrify Trump’s base.
Providing Sessions further cover, twenty Republican representatives have sent a letter to the Attorney General and Deputy Attorney General Rod Rosenstein demanding the appointment of a second Special Counsel to look into potentially illegal acts by Clinton, Lynch, and former FBI director James Comey. After recusing himself from the Russiagate investigation, which he knows is pointless, and being “scolded” by Trump, Sessions is now a sympathetic, squeaky-clean figure; even Democrats have expressed support. He has far more latitude to pursue the investigations his boss wants him to pursue. Most of the ensuing criticism will be directed at Trump, which will bother Trump not at all (although there will undoubtedly be answering Twitter blasts).
Trump has quietly (when Trump does anything quietly, take note) made two sea changes in US policy in Syria. At the G20 summit, he negotiated a cease fire with Vladimir Putin for southwest Syria. Last week he ended a CIA program that armed Syrian jihadists fighting Bashar al-Assad’s regime. Both changes are anathema to the US Deep State, the mainstream media, and US allies Saudi Arabia, the Gulf States, Israel, and Turkey, yet other than “rote denunciation,” they have been surprisingly docile. The latter change could presage abandonment of a pillar of US foreign and military policy since President Carter supplied arms and other aid to the mujahideen in Afghanistan during their successful fight against the Soviet Union. The US may be out of the business of arming Islamic insurgents against regimes it seeks to change.
Attorney General Jeff Sessions recently ordered the Justice Department to increase the use of civil asset forfeiture, thus once again endorsing an unconstitutional, authoritarian, and increasingly unpopular policy. Civil asset forfeiture, which should be called civil asset theft, is the practice of seizing property believed to be involved in a crime. The government keeps the property even if it never convicts, or even charges, the owner of the property. Police can even use civil asset theft to steal from people whose property was used in criminal activity without the owners’ knowledge. Some have even lost their homes because a renter or houseguest was dealing drugs on the premises behind the owners’ backs. Civil asset theft is a multi-billion dollar a year moneymaker for all levels of government.
Police and prosecutors receive more than their “fair share” of the loot. According to a 2016 study by the Institute for Justice, 43 states allow police and prosecutors to keep at least half of the loot they got from civil asset theft. Obviously, this gives police an incentive to aggressively use civil asset theft, even against those who are not even tangentially involved in a crime. For example, police in Tenaha, Texas literally engaged in highway robbery — seizing cash and other items from innocent motorists — while police in Detroit once seized every car in an art institute’s parking lot. The official justification for that seizure was that the cars belonged to attendees at an event for which the institute had failed to get a liquor license. The Tenaha police are not the only ones targeting those carrying large sums of cash.
Anyone traveling with “too much” cash runs the risk of having it stolen by a police officer, since carrying large amounts of cash is treated as evidence of involvement in criminal activity. Civil asset theft also provides an easy way for the IRS to squeeze more money from the American taxpayer. As the growing federal debt increases the pressure to increase tax collections without raising tax rates, the IRS will likely ramp up its use of civil asset forfeiture. Growing opposition to the legalized theft called civil asset forfeiture has led 24 states to pass laws limiting its use. Sadly, but not surprisingly, Attorney General Jeff Sessions is out of step with this growing consensus. After all, Sessions is a cheerleader for the drug war, and civil asset theft came into common usage as a tool in the drug war. President Trump could do the American people a favor by naming a new attorney general who opposes police state policies like the drug war and police state tactics like civil asset theft.
The authorities in this nation, including government, business, and academia, routinely lie about our national financial operations for a couple of reasons. One is that they know the situation is hopeless but the consequences are so awful to contemplate that resorting to accounting fraud and pretense is preferable to facing reality. Secondarily, they do it to protect their jobs and reputations — which they will lose anyway as collapse proceeds and their record of feckless dishonesty reveals itself naturally.
The underlying issue is the scale of human activity in our time. It has exceeded its limits and we have to tune back a lot of what we do. Anything organized at the giant scale is headed for failure, so it comes down to a choice between outright collapse or severe re-scaling, which you might think of as managed contraction. That goes for government programs, military adventures, corporate enterprise, education, transportation, health care, agriculture, urban design, basically everything.
There is an unfortunate human inclination to not reform, revise, or re-scale familiar activities. We’ll use every kind of duct tape and baling wire we can find to keep the current systems operating, and we have, but we’re close to the point where that sort of cob-job maintenance won’t work anymore, especially where money is concerned. Why this is so has been attributed to intrinsic human brain programming that supposedly evolved optimally for short-term planning. But obviously many people and institutions dedicate themselves to long-term thinking. So there must be a big emotional over-ride represented by the fear of letting go of what used to work that tends to disable long-term thinking.
It’s hard to accept that our set-up is about to stop working — especially something as marvelous as techno-industrial society. But that’s exactly what’s happening. If you want a chance at keeping on keeping on, you’ll have to get with reality’s program. Start by choosing a place to live that has some prospect of remaining civilized. This probably doesn’t include our big cities. But there are plenty of small cities and small towns out in America that are scaled for the resource realities of the future, waiting to be reinhabited and reactivated. A lot of these lie along the country’s inland waterways — the Ohio, Mississippi, Missouri river system, the Great Lakes, the Hudson and St. Lawrence corridors — and they also exist in regions of the country were food can be grown.
You’ll have to shift your energies into a trade or vocation that makes you useful to other people. This probably precludes jobs like developing phone apps, day-trading, and teaching gender studies. Think: carpentry, blacksmithing, basic medicine, mule-breeding, simplified small retail, and especially farming, along with the value-added activities entailed in farm production. The entire digital economy is going to fade away like a drug-induced hallucination, so beware the current narcissistic blandishments of computer technology. Keep in mind that being in this world actually entitles you to nothing. One way or another, you’ll have to earn everything worth having, including self-respect and your next meal. Now, just wait a little while.
Fossil fuels have two major problems that paint a dim picture for their future energy dominance. These problems are inter-related but still should be discussed separately. First, they cause climate change. We know that, we’ve known it for decades, and we know that continued use of fossil fuels will cause enormous worldwide economic and social consequences. Second, fossil fuels are expensive. Much of their costs are hidden, however, as subsidies. If people knew how large their subsidies were, there would be a backlash against them from so-called financial conservatives. A study was just published in the journal World Development that quantifies the amount of subsidies directed toward fossil fuels globally, and the results are shocking. The authors work at the IMF and are well-skilled to quantify the subsidies discussed in the paper.
Let’s give the final numbers and then back up to dig into the details. The subsidies were $4.9 tn in 2013 and they rose to $5.3 tn just two years later. According to the authors, these subsidies are important because first, they promote fossil fuel use which damages the environment. Second, these are fiscally costly. Third, the subsidies discourage investments in energy efficiency and renewable energy that compete with the subsidized fossil fuels. Finally, subsidies are very inefficient means to support low-income households. With these truths made plain, why haven’t subsidies been eliminated? The answer to that is a bit complicated. Part of the answer to this question is that people do not fully appreciate the costs of fossil fuels to the rest of us. Often we think of them as all gain with no pain.
So what is a subsidy anyway? Well, that too isn’t black and white. Typically, people on the street think of a subsidy as a direct financial cost that result in consumers paying a price that is below the opportunity cost of the product (fossil fuel in this case). However, as pointed out by the authors, a more correct view of the costs would encompass: “..not only supply costs but also (most importantly) environmental costs like global warming and deaths from air pollution and taxes applied to consumer goods in general.” The authors argue, persuasively, that this broader view of subsidies is the correct view because they “reflect the gap between consumer prices and economically efficient prices.”
Without getting too deep into the weeds, the authors discuss both consumer subsidies (when the price paid by a consumer is below a benchmark price) and producer subsidies (when producers receive direct or indirect support which increases their profitability). The authors then quantify what benefits would be achieved if the fossil fuel subsidies were reformed. Interested readers are directed to the paper for further details, but the results are what surprised me. Pre-tax (the narrow view of subsidies) subsidies amount to 0.7% of global GDP in 2011 and 2013. But the more appropriate definition of subsidies is much larger (8 times larger than the pre-tax subsidies). We are talking enormous values of 5.8% of global GDP in 2011, rising to 6.5% in 2013.
While both political parties have denounced the rising cost of prescription drugs, neither Democrats nor Republicans have done much to address the problem. But this summer, a new tool to restrict the rising prices of drugs developed with taxpayer dollars has been introduced by the two U.S. senators who don’t belong to either party. The mechanism works like this: Drug manufacturers who take federal money to develop drugs must keep their U.S. prices in line with the prices they charge in other economically advanced nations — typically much lower than drug prices in the U.S. The system would prevent pharmaceutical companies from effectively double-charging U.S. consumers by using their tax money for research and then charging them some of the steepest prices in the world at the pharmacy.
Pharmaceutical companies, who pour millions of dollars into both the Democratic and Republican parties, are against the idea, which is perhaps why the fix is being pushed by Bernie Sanders of Vermont and Angus King of Maine, the only independents in congress. The U.S. has the highest level of per capita pharmaceutical spending of any nation on Earth, according to the OECD. And while Americans spend more than any other country to buy their drugs, they also spend more than any other country to develop those same drugs. In June, King successfully added an amendment to the 2018 military spending bill (still working its way through congress) that would allow the Department of Defense to take away exclusive patents from drug companies that benefitted from DoD funding if their drug price in the U.S. rises above the median price in seven foreign countries with similar economies.
Then last week, Sanders introduced legislation that would tie the prices of drugs made with government funding to costs in other countries. Unlike King’s amendment, Sanders’ bill would expand the concept beyond the DoD. The bill requires companies taking federal funds to develop drugs to enter into “reasonable pricing” agreements with the Secretary of Health and Human Services. “Under this insane system, Americans pay twice. First we pay to create these lifesaving drugs, then we pay high prices to buy those drugs,” wrote Sanders in a New York Times op-ed. “Our government must stop being pushovers for the pharmaceutical industry and its 1,400 lobbyists.”
European leaders have made a priority of greater military cooperation, yet the ability of NATO forces to operate in Europe is still hindered by border restrictions and mismatched infrastructure, according to uniformed commanders and EU defense ministers. While NATO has made substantial progress in surmounting legal hurdles to cross-border operations, lingering bureaucratic requirements — such as passport checks at some border crossings and infrastructure problems, like roads and bridges that can’t accommodate large military vehicles — could slow or even cripple any allied response to an emerging threat, officials warned. To lift the roadblocks, and speed coordinated military action, the Dutch defense minister, Jeanine Hennis-Plasschaert, called on EU officials to create a so-called military Schengen zone.
The idea, loosely modeled on the open-border travel zone that has covered most of Europe since 1996, has also been a long-time goal of the senior United States Army commander in Europe, Lieutenant General Ben Hodges. “We must be able to move quickly to any place where there is a threat,” Hennis-Plasschaert said in a statement announcing her proposal at a meeting of NATO defense ministers in June. NATO leaders insist they have addressed the most problematic obstacles to cross-border operations, but nonetheless welcomed the Dutch proposal as a way to raise political pressure and create a sense of urgency around further improving the “interoperability” of allied countries. Officials say the obstacles are only apparent during peacetime exercises and planning, and that during a real military emergency, NATO’s supreme allied commander for Europe — based in Mons, Belgium — would simply warn allies and deploy as needed.
Days after a reshuffle of Turkey’s top military commanders, President Tayyip Erdogan has revived warnings of military action against Kurdish fighters in Syria that could set back the U.S.-led battle against Islamic State. Kurdish militia are spearheading an assault against the hardline militants in their Syrian stronghold Raqqa, from where Islamic State has planned attacks around the world for the past three years. But U.S. backing for the Kurdish YPG fighters in Syria has infuriated Turkey, which views their growing battlefield strength as a security threat due to a decades-old insurgency by the Kurdish PKK within in its borders. There have been regular exchanges of rocket and artillery fire in recent weeks between Turkish forces and YPG fighters who control part of Syria’s northwestern border.
Turkey, which has the second largest army in NATO after the United States, reinforced that section of the border at the weekend with artillery and tanks and Erdogan said Turkey was ready to take action. “We will not leave the separatist organization in peace in both Iraq and Syria,” Erdogan said in a speech on Saturday in the eastern town of Malatya, referring to the YPG in Syria and PKK bases in Iraq. “We know that if we do not drain the swamp, we cannot get rid of flies.” The YPG denies Turkish allegations of links with Kurdish militants inside Turkey, saying it is only interested in self-rule in Syria and warning that any Turkish assault will draw its fighters away from the battle against Islamic State which they are waging in an alliance with local Arab forces.
For the first time since 2011, Germany will again begin the resettlement of refugees to Greece under the EU Dublin Regulation. Migration Policy Minister Yiannis Mouzalas confirmed on German television that Greece will accept refugees who are currently in Germany and whose first entry into the EU was from Greece. The regulation applies to all refugees entering the EU since March 2017. The Dublin Regulation determines the EU Member State responsible to examine an application for asylum seekers seeking international protection. Usually, the responsible Member State will be the state through which the asylum seeker first entered the EU.
In an interview with the German TV to be aired on Monday evening, Mouzalas says: “A few days ago, we approved a small number of refugee returns related to the Dublin Regulation, by Germany and some other EU member states. Greek asylum authorities have undertaken the implementation of the procedure. “There was pressure from EU countries to start accepting resettlements. I understand that governments want to convince their citizens that they are doing something [about the refugee crisis]. That’s why I want to help them.” Deutsche Welle reports that according to the German Ministry of Interior, up to July 31, a total of 392 applications for resettlement were filed with the Greek authorities. The German ministry adds that “the specific dates for their return to Greece depends on the Greek authorities.”
So how much did it end up taking after ECB President Mario Draghi memorably said five years ago he’d do “whatever it takes” to save the euro? About €1.2 trillion ($1.4 trillion). That’s the amount that the ECB’s balance sheet has expanded in the half-decade since Draghi made those remarks at a conference in London (an ironic location from today’s post-Brexit perspective.) Deutsche Bank analysts including Luke Templeman go on to note there’s several things that have changed by that magnitude – €1.2 trillion – in the past five years, in an eerie Da Vinci Code-like confluence:
• The euro region’s gross domestic product has risen about €1.2 trillion
• The Federal Reserve’s balance sheet has also climbed the equivalent of roughly €1.2 trillion
• The combined market cap of the FANG stocks – Facebook, Amazon, Netflix and Alphabet – has jumped about the equivalent of €1.2 trillion
Templeman and his colleagues warn against making too much of the symmetry. After all, for the U.S. numbers to be related, it would suggest “every bond the Federal Reserve bought drove people to spend more time on these websites.”
President Vladimir Putin on Sunday said the United States would have to cut 755 diplomatic staff in Russia and warned of a prolonged gridlock in its ties after the US Congress backed new sanctions against the Kremlin. Putin added bluntly that Russia was able to raise the stakes with America even further, although he hoped this would be unnecessary. A US State Department official denounced the move as a “regrettable and uncalled for act,” adding that Washington was now weighing a potential response. On Friday, the Russian foreign ministry demanded Washington cut its diplomatic presence in Russia by September 1 to 455 people – the same number Moscow has in the US.
“More than a thousand people – diplomats and technical personnel – were working and are still working” at the US embassy and consulates, Putin said in an interview with Rossia-24 television. The US State Department would not confirm the number of US officials serving at the mission. Putin added that an upturn in Russia’s relations with Washington could not be expected “any time soon.” “We have waited long enough, hoping that the situation would perhaps change for the better,” he said. “But it seems that even if the situation is changing, it’s not for any time soon.” Putin warned that Russia could further ratchet up the pressure, but he hoped this would not be needed.
The undeniable improvement in living standards over the last 150 years is seen as evidence of progress. Improvements in diet, health, safe water, hygiene and education have been central to increased life spans and incomes. The lifting of billions of people globally out of poverty is a considerable achievement. But many of these individuals earn between $2 and $10 dollars a day. Their position is fragile, exposed to the vicissitudes of health, employment, economic conditions and political and societal stability. As William Gibson observed: “The future is already here — it’s just not very evenly distributed”. Economic progress also has come at a cost. Growth and wealth is increasingly based on borrowed money, used to purchase something today against the uncertain promise of paying it back in the future.
Debt levels are now unsustainable. Growth has been at the expense of existentially threatening environmental changes which are difficult to reverse. Higher living standards rely on the profligate use of under-priced, finite resources, especially water and energy, which have been utilised without concern about conservation for future use. Current growth, short-term profits and higher living standards for some are pursued at the expense of costs which are not evident immediately but will emerge later. Society has borrowed from and pushes problems into the future. The acquisition of material goods defines progress. The concept of leisure as shopping and consumption as the primary economic engine now dominate. Altering Bob Dylan’s lyrics, the Angry Brigade, an English anarchist group, described it as: “If you are not being born, you are busy buying”.
[19th-century Thomas Carlyle], who distrusted the “mechanical age”, would have been puzzled at the unalloyed modern worship of technology. Much of our current problems, environmental damage and pollution, are the unintended consequences of technology, especially the internal combustion engine and exploitation of fossil fuels. The invention of the motor vehicle was also the invention of the car crash. Technology applied to war continues to create human suffering. Mankind’s romance with technology increasingly is born of a desperate need for economic growth and a painless, cheap fix to problems such as reducing in greenhouse gas without decreasing living standards.
[..] Pre-occupation with narcissistic self-fulfilment and escapist entertainment is consistent with Carlyle’s concern about the loss of social cohesiveness, spirituality and community. His fear of a pervasive “philosophy of simply looking on, of doing nothing, of laissez-faire … a total disappearance of all general interest, a universal despair of truth and humanity, and in consequence a universal isolation of men in their own ‘brute individuality” … a war of all against all … intolerable oppression and wretchedness” seems modern.
In China, taxi rides aren’t just a form of transportation any more. They’ve also become useful for bond buyers doing due diligence. Dining out at restaurants is also helpful. It’s all part of a boom in field trips by market participants coming to grips with a new reality in China: the potential for bond defaults. After decades when authorities effectively provided blanket assistance to keep troubled companies from going under, the Communist leadership’s focus on shuttering unproductive assets has upended the market. A total of 45 onshore corporate bonds have defaulted since the start of last year, a surge from the eight recorded in 2014 and 2015 – which themselves were the first since the market was established in the 1980s. While China has the world’s third-largest bond market, corporate financial transparency can be limited, forcing investors to get creative.
“If you just sit in the office, you would never know if an issuer has actually closed business,” said Xu Hua at Colight Asset Management in Shanghai. “When you go to the local places, be sure to have a chat with taxi drivers or restaurant customers after talking to the issuer – ask them if they have friends working for the company. Has their friends’ pay been cut or raised this year? Has the company delayed paying salaries? What’s the local reputation?” Recent incidents have showcased concerns about corporate governance and disclosure standards. The onshore bonds of two China Hongqiao units slumped in March after the world’s biggest aluminum maker said full-year results may be delayed because of issues raised by its auditor. Bondholders of China Shanshui Cement are still trying to recoup most of their money – at one point the company said it couldn’t repay interest without a company seal.
Rideshare companies – mostly Uber, but now also Lyft elbowing into the scene – are changing the way business travelers look at ground transportation. In the process, these worker bees, who’re spending their company’s money, are not only crushing the taxi business but also that end of the rental car business. The collapse of business travel spending on taxis and rental cars is just stunning. And there is no turning back. Uber’s and Lyft’s combined share of the ground transportation market in terms of expense account spending in the second quarter has soared to 63%, with Uber hogging 55% and Lyft getting 8%. The share of taxis has plunged to 8%, now equal with Lyft for the first time, according to Certify, which provides cloud-based expense management software.
Uber hit that point in Q1 2015, when expense account spending on Uber matched spending on taxis for the first time, each with 25% of the market; rental cars still dominated with a 50% share. But that was an eternity ago. Note that the share of rental cars and taxis has declined at roughly the same rate. Uber’s growth in the business travel ground transportation market has continued despite its constant drumbeat of intricate debacles in the news, but the rate of growth has slowed. And Lyft’s rate of growth has surged. The chart above shows this surge in the growth rate of Lyft, which caused its share to jump from 3% a year ago to 8% now.
US Vice President Mike Pence on Sunday raised the possibility of deploying the Patriot anti-missile defence system in Estonia, one of three NATO Baltic states worried by Russian expansionism, Prime Minister Juri Ratas said. “We spoke about it today, but we didn’t talk about a date or time,” Ratas told state broadcaster ERR after Pence began a visit to the tiny frontline state. The Patriot is a mobile, ground-based system designed to intercept incoming missiles and warplanes. “We talked about the upcoming (Russian military) manoeuvres near the Estonian border… and how Estonia, the United States and NATO should monitor them and exchange information,” Ratas said.
Relations between Moscow and Tallinn have been fraught since Estonia broke free from the crumbling Soviet Union in 1991, joining both the EU and NATO in 2004 – a move that Russia says boosted its own fears of encirclement by the West. Concern in Estonia and fellow Baltic states Latvia and Lithuania surged after Russia annexed Crimea from Ukraine in 2014 and stepped up military exercises. Pence, in remarks to journalists in the Estonian capital of Tallinn, spoke in strong but general terms about US support for eastern European countries. On Monday, he heads to Georgia – a non-NATO member that is also worried about Russia – and then to Montenegro, which became NATO’s 29th member on June 5. “President (Donald) Trump sent me to Europe with a very simple message. And that is that America first doesn’t mean America alone,” Pence said.
Some European countries, namely Italy, Germany, France and the UK, are facing the so-called “substitution of nations,” where the national ethnical majority is disappearing physically and biologically, and is being substituted by migrants, according to a recent report. Sputnik Italy discussed the issue with Daniele Scalea, the author of the report. The recent report of the Italian-based Machiavelli Center of Political and Strategic Studies, “How immigration is changing Italian demographics” has revealed that a number of European countries are facing the “biological and physical extinction” of their national ethnicities. Ethnic majorities in such countries as Italy, Germany, France and the UK, are gradually turning into ethnic minorities, while being “substituted” by incoming migrants. Sputnik Italy discussed the issue with Daniele Scalea, an analyst at the center and the author of the report.
Migration is drastically changing the habitual course of life in Italy, he told Sputnik. The reason for the influx of African migrants into Europe is not wars or catastrophes, but an explosive demographic increase on the African continent, from 9% to 25% of the global population throughout the last century. While Europe, which accounted for over a fifth of the entire world population in 1950 (22%), is expected to make up just 7% of the world population in the year 2050, the%age of the African population will make a sweeping rise from 9% to 40%. Italy’s fertility rate is less than half of what it was in 1964, the analyst explained in his report. It has dropped from 2.7 children per woman to just 1.5 children per woman currently, a figure well below the replacement level for zero population growth of roughly 2.1 children per woman.
As of the first half of this year, Italy had over 5 million foreigners living as residents, a remarkable 25% growth relative to 2012 and a whopping 270% since 2002. At that time, foreigners made up just 2.38% of the population while 15 years later the figure has nearly trebled to 8.33% of the population. Moreover, even the children being born in Italy are overrepresented by immigrants, whose birthrate is considerably higher than native Italians, the study revealed. It is “unsurprising,” therefore, that Italian regions with the highest fertility rates are no longer in the south, as was usual the case, but in the Italian north and in the Lazio region, where there is a higher concentration of immigrants. If current trends continue, by 2065, first- and second-generation immigrants will exceed 22 million persons, or more than 40% of Italy’s total population.
By comparison, it was only in the not far-off 2001 that the percentage of foreigners living in Italy crossed the low threshold of 1%, which reveals the speed and magnitude of demographic change occurring in Italy, a phenomenon “without precedent” in Italy’s history, the study asserts.
Greece’s hard times aren’t over. A return to the bond market last week, the pledge of 8.5 billion euros ($9.5 billion) in new loans from euro-area creditors, the possibility of more money from the International Monetary Fund and a S&P Global Ratings outlook upgrade have coalesced to bolster investor sentiment that Greece has turned a corner. Trouble is, much depends on the country implementing reforms — dozens of the 140 measures agreed to are in various stages of application and more than 100 additional actions are needed to access the remaining 26.9 billion euros in funds before the current bailout program ends in August 2018. While the evidence of belt-tightening is everywhere in Greece, from falling incomes to rising poverty, the country has less to show in terms of structural overhauls.
Creditor demands for more measures threaten to become politically explosive as Greek citizens and businesses count the cost of the financial crisis that has thrown their lives into turmoil over the last seven years. Over the years, creditors have imposed reforms that have affected the daily lives of Greeks, from requiring receipts for tax breaks and e-prescriptions for patients to prevent abuse to pension payout cuts of as much as 50%. While Greece’s record of implementing reforms hasn’t won it any kudos, it is now hitting against even more challenging structural measures aimed at profoundly changing entrenched habits. The real problem is with reforms like fixing the tax system and the judiciary that require “long implementation,” said Gerassimos Moschonas, an associate professor of comparative politics at Panteion University in Athens. Belt-tightening measures have had a dramatic effect on life, making further long-lasting reforms difficult, he said.
“The income of an average household has decreased at least 40% during the crisis, poverty risk has increased 35.6%, pension cuts are enormous and there is over-taxation,” he said. Since Greece became the epicenter of the European debt crisis in 2010, the country has agreed to austerity measures to restructure its economy, which has shrunk by more than a quarter over the period. In exchange, euro-area creditors and the IMF have provided more than 260 billion euros in bailout funds to keep Greece afloat. “Progress with structural reforms has fallen far short of what is needed to allow Greece to succeed in the euro zone, but the program foresees some intensification of efforts,” the IMF said in its report on July 20.
Prime Minister Alexis Tsipras’s government is struggling to squeeze pensions even more, allow Sunday openings for stores – which could threaten the livelihoods of small mom-and-pop shops that dot the country – consider further taxes and change labor laws that would make it even harder for employees to go on a strike. “There’s no serious implementation,” of difficult structural reforms, said Moschonas. “The Greek state has failed” to put them in place even after they were voted in parliament because of a lack of political will and the absence of technical expertise, he said.
Athens, like most urban centres, has been hardest hit by a crisis that has seen the country’s economic output contract by a devastating 26%. A study by the DiaNeosis thinktank found that 15% of the population, or 1,647,703 people, in 2015 earned below the extreme poverty threshold. In 2009 that number did not exceed 2.2%. The net wealth of Greek households fell by a precipitous 40% in the same period, according to the Bank of Greece. Unemployment, austerity’s most pernicious effect, hovers around 22%, by far the highest in the EU, despite a 5% drop in the last two years. Although the worst is over in terms of fiscal adjustment, few believe Greece will be able to escape a fourth bailout even if Athens regains market access when its current EU-IMF sponsored programme ends in August next year.
“It is very difficult to see the country being able to make a clean exit [from international stewardship] and raise the sort of money it needs to refinance its debt,” said Kyriakos Pierrakakis, director of research at DiaNeosis. “It will almost certainly need a new financial credit line, a bailout light, and that will come with new conditions.” In such circumstances, faith in government claims that the country has turned the corner – based as much on last week’s market foray as completion of a landmark compliance review and disbursement of €8.5bn in bailout funds – is in short supply. “Greeks can’t see any light at the end of any tunnel,” said Christodoulaki, shaking her head in disbelief. “They won’t believe anything at this point until they see it for real in front of their eyes.”
Across town in the communist party stronghold of Kaisariani, municipal authorities are already preparing for winter. In the giant 1960s concrete town hall, the social services department has lined up fundraising events, including concerts and theatre performances, to finance food donations that local stores and supermarkets can no longer afford to make. “Needs have grown exponentially,” said Marilena Christodoulou, her office wall adorned with the slogan “poverty is not a crime”.
Jean-Paul Sartre once famously stated that “a lost battle is a battle one thinks one has lost.” The tragic reality in Greece today, most Greeks, beaten down by the crisis and by the effects of what can be described as savage globalization, are plagued by feelings of collective guilt, self-loathing, hopelessness, feelings of inferiority, and apathy. The “inferiority” of Greece and the Greek people, and their “guilt,” are accepted as “facts of life.” It is, therefore, no surprise to see Greece ranked fourth worldwide in Bloomberg’s misery index for 2017. When one believes they have lost a battle, that means that they also recognize some other entity as the victor. In the case of Greece, that victor could be recognized as the EU and countries considered by average Greeks as “superior” and “civilized.” Writing in 1377, North African historian and historiographer Ibn Khaldun provides us with insights which could help explain Greece’s “xenomania” and nationwide Stockholm Syndrome today:
“The vanquished always want to imitate the victor in his distinctive mark, his dress, his occupation, and all his other conditions and customs. The reason for this is that the soul always sees perfection in the person who is superior to it and to whom it is subservient. It considers him perfect, either because the respect it has for him impresses it, or because it erroneously assumes that its own subservience to him is not due to the nature of defeat but to the perfection of the victor. If that erroneous assumption fixes itself in the soul, it becomes a firm belief. The soul, then, adopts all the manners of the victor and assimilates itself to him. This, then, is imitation.” It is, unfortunately, this very imitation that one observes in crisis-stricken Greece today. A society where the majority whines and complains, or simply gets up and leaves, but does not demand.
A nation that is demoralized; defeated; consumed by hopelessness; devoid of pride, self-respect, and self-confidence; paralyzed by fear; hampered by ignorance; and gripped by feelings of inferiority, cannot deliver change. This situation, of course, suits the powers that be magnificently. A society of self-loathers, a nation that is defeated and demoralized, will not pose a threat to those responsible for that oppression, while other “civilized” countries reap the ancillary benefits of the crisis, as the economic beneficiaries of the mass exodus and “brain drain” from Greece. This is savage globalization in action. In other words, Greece is a prime candidate for, in the words of Oscar López Rivera, the kickstarting of a decolonization process. His words may have been intended for Puerto Rico, but they are similarly applicable to Greece. But will the people of Greece heed Oscar’s words?
Slave traders today make a return on their investment 25-30 times higher than their 18th- and 19th-century counterparts. Siddharth Kara, a slavery economist and director of the Carr Center for Human Rights Policy at Harvard Business School, has calculated that the average profit a victim generates for their exploiters is $3,978 (£3,030) a year. Sex trafficking is so disproportionately lucrative compared to other forms of slavery that the average profit for each victim is $36,000. In his book Modern Slavery, to be published in October, Kara estimates that sex trafficking accounts for 50% of the total illegal profits of modern slavery, despite sex trafficking victims accounting for only 5% of modern slaves. Kara based his calculations, shared exclusively with the Guardian, on data drawn from 51 countries over a 15-year period, and from detailed interviews with more than 5,000 individuals who have been victims of slavery.
The first move to eradicate slavery was made in 1833, when the British parliament abolished it, 26 years after outlawing the trade in slaves. Nonetheless, at least twice as many people are trapped in some form of slavery today as were traded throughout the 350-plus years of the transatlantic slavery industry. Experts believe roughly 13 million people were captured and sold as slaves by professional traders between the 15th and 19th centuries. Today, the UN’s International Labour Organisation believes at least 21 million people worldwide are in some form of modern slavery. “It turns out that slavery today is more profitable than I could have imagined,” Kara said. “Profits on a per slave basis can range from a few thousand dollars to a few hundred thousand dollars a year, with total annual slavery profits estimated to be as high as $150bn.”
Upbeat data helped send world shares to a fourth all-time high in less than a month on Thursday as Wall Street edged higher in anticipation of solid earnings, while crude oil gained on evidence of stronger demand in China. Stocks were buoyed in Asia and elsewhere a day after Federal Reserve Chair Janet Yellen signaled a rise in interest rates would be less aggressive than some investors had expected. Sentiment was boosted after China reported upbeat data on exports and imports for June, the latest sign that the global growth is picking up a bit. That offset reports of higher production by key members of OPEC in a report by the International Energy Agency (IEA), lifting oil prices.
The data pushed Asian shares up more than 1% and lifted MSCI’s 47-country gauge of global equity markets to a fresh record high with a gain of 0.29%. “Yesterday’s move was in response to Yellen comments that should inflation remain below the 2% target rate, the central bank will be less aggressive in their tightening program,” said Sam Stovall, chief investment strategist at CFRA Research. “Today, the market is saying that’s old news and let’s focus on the matter at hand, which is earnings that will be coming out in earnest this week,” Stovall said. U.S. shares rose in anticipation second-quarter earnings will grow 7.8% for S&P 500 companies, according to Thomson Reuters data.
Britain’s public finances are in worse shape to withstand a recession than they were on the eve of the 2007 financial crash a decade ago and face the twin threat of a fresh downturn and Brexit, the Treasury’s independent forecaster has warned. The Office for Budget Responsibility – the UK’s fiscal watchdog – said another recession was inevitable at some point and that Theresa May’s failure to win a parliamentary majority in last month’s election left the public finances more vulnerable to being blown off course than they were in 2007. In its first in-depth analysis of the fiscal risks facing Britain, the OBR said its main message was clear: “Governments should expect nasty fiscal surprises from time to time – because policy can only reduce risks, not eliminate them – and plan accordingly.
“And they have to do so in the context of ongoing pressures that are likely to weigh on receipts and drive up spending and a variety of risks that governments choose to expose themselves to for policy reasons. This is true for any government, but this one also has to manage the uncertainties posed by Brexit, which could influence the likelihood or impact of other risks.” The OBR said the size of the UK’s Brexit divorce bill – currently a matter of dispute between London and Brussels – would have little impact on the public finances. But it noted that even a small fall in Britain’s underlying growth rate after departure from the EU would lead to a big increase in the country’s debt burden.
If a knock to trade with the rest of Europe caused productivity to slip by just 0.1 percentage points over the next 50 years, tax receipts would be £36bn lower. With spending growth left unchanged, the debt-to-GDP ratio would end up around 50 percentage points higher, the OBR added. The campaign group Open Britain said the OBR’s report showed “a hard Brexit poses a real threat to our economy. People voted for £350m a week for the NHS, not a £36bn black hole in the public finances that could mean severe cuts to the NHS”.
The IMF said on Thursday that while Canada’s economy has regained momentum, housing imbalances have increased and uncertainty surrounding trade negotiations with the United States could hurt the recovery. The report, written before the central bank raised interest rates by a quarter of a percentage point on Wednesday to 0.75%, also said the Bank of Canada’s current monetary policy stance is appropriate, and it cautioned against tightening. “While the output gap has started to close, monetary policy should stay accommodative until signs of durable growth and higher inflation emerge,” it said, adding that rate hikes should be “approached cautiously.” Cheng Hoon Lim, IMF mission chief for Canada, later clarified that even with Wednesday’s rate hike, monetary policy remains “appropriately accommodative.”
“The Bank of Canada’s increase of the policy rate reflects encouraging economic data over the past few months. We welcome the good news on the economy,” Lim said in an emailed statement. “Given the considerable uncertainty around the growth and inflation outlook, the Bank should continue to take a cautious approach in further adjusting the monetary policy stance,” she added. In a statement following its annual policy review with Canada, the IMF cautioned that risks to Canada’s outlook are significant – particularly the danger of a sharp correction in the housing market, a further decline in oil prices, or U.S. protectionism. It said financial stability risks could emerge if the housing correction is accompanied by a recession, but said stress tests have shown Canadian banks could withstand a “significant loss” on their uninsured residential mortgage portfolio, in part because of high capital position.
House prices in Toronto and Vancouver have more than doubled since 2009 and the boom has fueled record household debt, a vulnerability that has also been noted by the Bank of Canada. “The main risk on the domestic side is a sharp correction in the housing market that impairs bank balance sheets, triggers negative feedback loops in the economy, and increases contingent claims on the government,” the Fund said. The Fund also warned U.S. protectionism could hurt Canada, laying out a scenario for higher tariffs that could come with the renegotiation of NAFTA. If the United States raises the average tariff on imports from Canada by 2.1 percentage points and there is no retaliation from Canada, there would be a short-term impact on real GDP of about 0.4%.
Recall that as we showed first all the way back in 2011, the total cash on the books of commercial banks with operations in the US tracks the Fed’s excess reserves almost dollar for dollar. More importantly, the number is broken down by small and large domestic banks, as well as international banks. It is the last number that is of biggest interest, because now that Congress is finally scrutinizing the $4.5 trillion elephant in the room, i.e., the Fed’s balance sheet, it may be interested to know that approximately 40%, or $838 billion as of the latest weekly data, in reserves parked at the Fed belongs to foreign banks.
While we will reserve judgment, and merely point out that of the $100 or so billion in dividends and buybacks announced by US banks after the latest stress test a substantial amount comes directly courtesy of the Fed – cash that ultimately ends up in shareholders’ pockets – we will note that the interest the Fed pays to foreign banks operating in the US who have parked reserves at the Fed, amounts to $10.4 billion annualized as of this moment. This is a subsidy from the Fed, supposedly an institution that exists for the benefit of the US population, going directly and without any frictions to foreign banks, who – just like in the US – then proceed to dividend and buybacks these funds, “returning” them to their own shareholders, most of whom are foreign individuals.
While the number appears modest, it is poised to grow substantially as the Fed Funds rate is expected to keep growing, ultimately hitting 3.0% according to the Fed. Indicatively, assuming excess reserves remain unchanged for the next 2-3 years and rates rise to 3.0%, that would imply a total annual subsidy to commercial banks amounting to $65 billion, of which $25 billion would go to foreign banks every year. We wonder if this is the main reason why the Fed is so desperate to trim its balance sheet as it hikes rates, as sooner or later, someone in Congress will figure this out.
Unbeknownst to unassuming corporate bond holders, they too will soon be forced into the slow lane. For the moment, the vast majority fancy themselves that equally exasperating driver who won’t get out of the fast lane, determined to bully their way to their damned destination. As for the perils of tailgating, they’re for the other guy, the less agile driver with rubbery reflexes. That’s all good and well and has been for many years. Bond market fender benders are nearly nonexistent. The question is: Will central bankers worldwide turn placid parkways into highways to hell as they ‘remove accommodation,’ to borrow from their gently genteel jargon? That’s certainly one way to interpret Federal Reserve Chair Janet Yellen’s latest promise to shrink the balance sheet ‘appreciably.’
Care for a translation? How easily does “Aggressive Quantitative Tightening” roll off the tongue? Perhaps you’ve just bitten yours instead. Enter the International Monetary Fund (IMF), The Institute of International Finance (IIF), The Bank of International Settlements (BIS), and by the way, the Emerging Markets complex including and especially China. As a former central banker, it is with embarrassing ease yours truly can bandy about fantastic figures. No surprise that nary an eyebrow was raised at the latest figures out of the IIF that aggregate global debt is closing in on $220 trillion, as touched on last week. Consider that to be the broad backdrop. Now, narrow in on the IMF’s concerns that financial stability could be rocked by a rumble in US corporate debt markets.
Using firms’ capacity to service their debts from current earnings as a simple and elegant yard stick, the report warned that one in ten firms are failing outright. The last two years of levering up have exacted rapid damage: earnings have fallen to less than six times interest expense, this during an era of unprecedented low interest rates. And as record non-financial debt as a percentage of GDP quickly approaches 50%, the share of income required to service this mountain is at a seven-year high. Should financial conditions tighten (the report was published in April prior to the Fed’s June rate hike), one-in-five firms are likely to default, which rises to 22% if rates continue to rise.
“..The Russian system would not be compatible with other NATO defense systems, but also wouldn’t be subject to the same constraints imposed by the alliance, which prevents Turkey from deploying such systems on the Armenian border, Aegean coast or Greek border..”
Turkey has agreed to pay $2.5 billion to acquire Russia’s most advanced missile defense system, a senior Turkish official said, in a deal that signals a turn away from the NATO military alliance that has anchored Turkey to the West for more than six decades. The preliminary agreement sees Turkey receiving two S-400 missile batteries from Russia within the next year, and then producing another two inside Turkey, according to the Turkish official, who asked not to be named because of the sensitivity of the matter. A spokesman for Russia’s arms-export company Rosoboronexport OJSC said he couldn’t immediately comment on details of a deal with Turkey. Turkey has reached the point of an agreement on a missile defense system before, only to scupper the deal later amid protests and condemnation from NATO.
Under pressure from the U.S., Turkey gave up an earlier plan to buy a similar missile-defense system from a state-run Chinese company, which had been sanctioned by the U.S. for alleged missile sales to Iran. Turkey has been in NATO since the early years of the Cold War, playing a key role as a frontline state bordering the Soviet Union. But ties with fellow members have been strained in recent years, with Turkish President Recep Tayyip Erdogan pursuing a more assertive and independent foreign policy as conflict engulfed neighboring Iraq and Syria. Tensions with the U.S. mounted over U.S. support for Kurdish militants in Syria that Turkey considers terrorists, and the relationship with the European Union soured as the bloc pushed back against what it sees as Turkey’s increasingly autocratic turn.
Last month, Germany decided to withdraw from the main NATO base in Turkey, Incirlik, after Turkey refused to allow German lawmakers to visit troops there. The missile deal with Russia “is a clear sign that Turkey is disappointed in the U.S. and Europe,” said Konstantin Makienko, an analyst at the Center for Analysis of Strategies and Technologies, a Moscow think-tank. “But until the advance is paid and the assembly begins, we can’t be sure of anything.” The Russian system would not be compatible with other NATO defense systems, but also wouldn’t be subject to the same constraints imposed by the alliance, which prevents Turkey from deploying such systems on the Armenian border, Aegean coast or Greek border, the official said. The Russian deal would allow Turkey to deploy the missile defense systems anywhere in the country, the official said.
[..] The official said the systems delivered to Turkey would not have a friend-or-foe identification system, which means they could be deployed against any threat without restriction.
The scale of Turkey’s crackdown on alleged government opponents following last year’s attempted coup was confirmed by a top official, as the nation prepares to mark the anniversary of the failed putsch amid deepening concern over the rule of law. Authorities have fired 103,824 state employees and suspended 33,483 more since the July 15 bid to seize power by a section of the military, Deputy Prime Minister Numan Kurtulmus said in an interview. The purge of suspected followers of U.S.-based cleric Fethullah Gulen, accused by the government of orchestrating the coup attempt, is necessary to ensure national security, he said. ustice Ministry data showed 50,546 suspected members of Gulen’s organization were in prison on July 3, and that arrest warrants had been issued for 8,000 others. The preacher denies involvement in the takeover attempt.
“There might be crypto members of Feto who walk on the snow without leaving tracks,” Kurtulmus said, using an abbreviation of Gulen’s first name that officials have adopted since the defeated military power grab to refer to his movement. “Related agencies are carefully conducting their work against this possibility.” Just this week, Erdogan rebuffed criticism over the detention of a group of international rights activists, including the director of Amnesty International Turkey, as they held a workshop on an island off Istanbul. “They gathered as if they were holding a meeting to continue July 15,” the president said. Amnesty criticized Turkey on Tuesday after the detentions were extended by seven days. “It is truly absurd that they are under investigation for membership of an armed terrorist organization,” Amnesty Europe Director John Dalhuisen said in an email. “For them to be entering a second week in police cells is a shocking indictment of the ruthless treatment of those who attempt to stand up for human rights in Turkey.”
A group of cigarette company executives stood in the lobby of a drab convention center near New Delhi last November. They were waiting for credentials to enter the World Health Organization’s global tobacco treaty conference, one designed to curb smoking and combat the influence of the cigarette industry. Treaty officials didn’t want them there. But still, among those lined up hoping to get in were executives from Japan Tobacco International and British American Tobacco Plc. There was a big name missing from the group: Philip Morris International Inc. A Philip Morris representative later told Reuters its employees didn’t turn up because the company knew it wasn’t welcome. In fact, executives from the largest publicly traded tobacco firm had flown in from around the world to New Delhi for the anti-tobacco meeting.
Unknown to treaty organizers, they were staying at a hotel an hour from the convention center, working from an operations room there. Philip Morris International would soon be holding secret meetings with delegates from the government of Vietnam and other treaty members. The object of these clandestine activities: the WHO’s Framework Convention on Tobacco Control, or FCTC, a treaty aimed at reducing smoking globally. Reuters has found that Philip Morris International is running a secretive campaign to block or weaken treaty provisions that save millions of lives by curbing tobacco use. [..] Confidential company documents and interviews with current and former Philip Morris employees reveal an offensive that stretches from the Americas to Africa to Asia, from hardscrabble tobacco fields to the halls of political power, in what may be one of the broadest corporate lobbying efforts in existence.
It was only a few decades ago that globalisation was held by many, even by some critics, to be an inevitable, unstoppable force. “Rejecting globalisation,” the American journalist George Packer has written, “was like rejecting the sunrise.” Globalisation could take place in services, capital and ideas, making it a notoriously imprecise term; but what it meant most often was making it cheaper to trade across borders – something that seemed to many at the time to be an unquestionable good. In practice, this often meant that industry would move from rich countries, where labour was expensive, to poor countries, where labour was cheaper. People in the rich countries would either have to accept lower wages to compete, or lose their jobs. But no matter what, the goods they formerly produced would now be imported, and be even cheaper.
And the unemployed could get new, higher-skilled jobs (if they got the requisite training). Mainstream economists and politicians upheld the consensus about the merits of globalisation, with little concern that there might be political consequences. Back then, economists could calmly chalk up anti-globalisation sentiment to a marginal group of delusional protesters, or disgruntled stragglers still toiling uselessly in “sunset industries”. These days, as sizable constituencies have voted in country after country for anti-free-trade policies, or candidates that promise to limit them, the old self-assurance is gone. Millions have rejected, with uncertain results, the punishing logic that globalisation could not be stopped. The backlash has swelled a wave of soul-searching among economists, one that had already begun to roll ashore with the financial crisis. How did they fail to foresee the repercussions?
Radioactive tritium, said to pose little risk to human health, will be released from the crippled Fukushima No. 1 nuclear power complex into the sea, according to a top official of the plant operator. “The decision has already been made,” Takashi Kawamura, chairman of Tokyo Electric Power Company, said in a recent interview with media outlets, referring to the discharge of tritium, which remains in filtered water even after highly toxic radioactive materials are removed from water used to cool the damaged reactors at the plant. At other nuclear power plants, tritium-containing water has routinely been released into the sea after it is diluted. But the move by Tepco has prompted worries among local fishermen about the potential ramifications for their livelihood as public perceptions about fish and other marine products caught off Fukushima could worsen.
They are the first public remarks by the utility’s management on the matter, as Tepco continues its cleanup of toxic water and tanks containing it continue to fill the premises of the plant, where three reactors suffered meltdowns after tsunami flooded the complex in March 2011 following a massive earthquake. Kawamura’s comments came at a time when a government panel is still debating how to deal with tritium-containing water at the Fukushima plant, including whether to dump it into sea. Saying its next move is contingent on the panel’s decision, Kawamura indicated in the interview that Tepco will wait for a decision by the government before it actually starts releasing the water into sea. “We cannot keep going if we do not have the support of the state” as well as Fukushima Prefecture and other stakeholders, he said.
Italians living below the level of absolute poverty almost tripled over the last decade as the country went through a double-dip, record-long recession. The absolute poor, or those unable to purchase a basket of necessary goods and services, reached 4.7 million last year, up from almost 1.7 million in 2006, national statistics agency Istat said Thursday. That is 7.9% of the population, with many of them concentrated in the nation’s southern regions. As Italy went through its deepest, and then its longest, recession since World War II between 2008 and 2013, more than a quarter of the nation’s industrial production was wiped out. Over the same period unemployment also rose, with the rate rising to as high as 13% in 2014 from a low of 5.7% in 2007. Joblessness was at 11.3% at last check in May.
For decades, Italy has grappled with a low fertility rate – just 1.35 children per woman compared with a 1.58 average across the 28-nation EU as of 2015, the last year for which comparable data are available. “The poverty report shows how it is pointless to wonder why there are fewer newborn in Italy,” said Gigi De Palo, head of Italy’s Forum of Family Associations. “Making a child means becoming poor, it seems like in Italy children are not seen as a common good.” The number of absolute poor rose last year in the younger-age classes, reaching 10% in the group of those between 18 and 34 years old. It fell among seniors to 3.8% in the age group of 65 and older, the Istat report also showed.
Earlier this year, the Rome-based parliament approved a new anti-poverty tool called inclusion income that is replacing existing income-support measures. It will benefit 400,000 households, for a total of 1.7 million people, Il Sole 24 Ore daily reported, citing parliamentary documents. The program will be funded with resources of around €2 billion ($2.3 billion) this year which should rise to nearly €2.2 billion in 2018, Sole also said
An inevitable story. And a too-easy trap: the Guardian presumes that it itself escapes this. It doesn’t. Blaming Trump for that is false: he doesn’t write the stories. Every news outlet is responsible for its own journalistic standards. “Trump made me do it” lacks all credibility. And besides, the Guardian, like so many US media, has been trying to put Trump down for a long time. Just like it hammered Jeremy Corbyn as ‘unfit’ and much worse until it did an embarrassing 180. Is Trump right in reacting as agressively as he has and does? Perhaps not, probably not. But is he justified? Perhaps he is. In the end for the media this is about the beam in thine own eye.
You can find exactly the same fractured dialogue in Britain, too. What did the surprise of the Brexit vote show? Here’s another tidal wave of articles talking about the non-metropolitan forgotten masses. That, briefly, seemed a national call for understanding and change, one inchoately confirmed in the June election. But see how deafness and disdain soon set in. Let’s blame something – Boris, Rupert Murdoch, Paul Dacre, the BBC – for Brexit. Let’s contemplate the rise of Jeremy Corbyn and press a panic button. The Mail talks about “fake news, the fascist left and the REAL purveyors of hate”. Guardian columnists denounce the “open sewer” of Dacre coverage. Terms like “Tory scum” float from protesters’ posters into the new mass media. Jon Snow, amongst others, gets pasted for his supposed views about modern Conservatism. Irate Leave MPs stomp on the BBC welcome mat.
And every new day seems to bring fresh ingredients. Kensington council seeks to shut journalists out of its crucial meeting. Andrea Leadsom extols a “patriotic” press. There’s a raw edge to the debate now, sharpened after Grenfell Tower by outbreaks of pure and, sometimes, simulated rage. But: “Sit up, though, and look around. You may notice that, amid almost no public outrage whatsoever, we are quite a lot closer than once we were” to losing press freedom, says Hugo Rifkind in the Times. This is politics, and journalism, from the trenches as trust in the media plummets both here and in the US: American trust in the media down to just 38% in the latest Reuters Institute findings, the UK seven points down to 43%. Blame “deep-rooted political polarisation and perceived mainstream media bias”, says Reuters. In short, blame the frenzied state we’re in.
[..] observe how the new nihilism of scum and sewers brings its own narrow benefits. Richard Cohen in the Washington Post arrives clear-eyed. “Circulation is up. Eyeballs are popping. Trump is political pornography – gripping, exciting, lewd, fascinating. He devours adjectives so that, soon, we run out of them. The bizarre becomes ordinary. But he has done his damage. He has normalised contempt for the news media, framing it as a daily tussle between him, the tribune of the people, and us, vile overeducated snobs.”
And Jeet Heer of the New Republic pushes the argument on a notch as he charts the advantage of Trump’s alignment with the likes of the National Enquirer: “The tabloids offer a sordid vision of society, where the mainstream image of celebrities elides their secretly miserable lives (whether because of addiction, ageing, infidelity, or bankruptcy). In this nihilistic world, everyone is corrupt and every public statement is a lie. And if everyone is equally bad and untrustworthy, there’s no reason to hold Trump to any higher standard. This, ultimately, is why Trump and the tabloids were made for each other: They’re both committed to defining deviancy down.”
And while we’re at it, Guardian, let’s denounce this kind of thing for what it is. The G20 countries are responsible for poverty in Africa, and they’re not now going to solve it too. Just like the Paris agreement is complete nonsense: schemes to get rich.
G20 nations launched an unprecedented initiative Saturday at the group’s summit in Germany to fight poverty in Africa, but critics called the plan half-hearted. Under German Chancellor Angela Merkel’s “Investment Compacts”, an initial seven African countries would pledge reforms and receive technical support in order to attract new private investment. More than half of Africans are under 25 years old and the population is set to double by mid-century, making economic growth and jobs essential for the young to stop them from leaving, Merkel has said. Germany’s partner nations are Ghana, Ivory Coast and Tunisia, while Ethiopia, Morocco, Rwanda and Senegal are also taking part. Far poorer nations such as Niger or Somalia are so far not on the list.
“We are ready to help interested African countries and call on other partners to join the initiative,” said the G20 in their final communique. The plan, as well as multinational initiatives on helping girls, rural youths and promoting renewable energy, would help “to address poverty and inequality as root causes of migration”. Some 100,000 people, most of them sub-Saharan Africans, have made the dangerous journey to Europe across the Mediterranean in rickety boats this year as the migration crisis shows no sign of abating. Anti-poverty group ONE said that the investment compacts “promised much, but too many G20 partners missed the memo and failed to contribute. “The flimsy foundations must now be firmed up, follow through and improved, especially for Africa’s more fragile states.”
If your enemy is waging economic war on you, it’s prudent to camouflage how well your farms and factories are doing. Better the attacker thinks you’re on your last legs, and are too exhausted to fight back. A new report on the Russian economy, published by Jon Hellevig, reveals the folly in the enemy’s calculation. Who is the audience for this message? US and NATO warfighters against Russia can summon up more will if they think Russia is in retreat than if they must calculate the cost in their own blood and treasure if the Russians strike back. That’s Russian policy on the Syrian front, where professional soldiers are in charge. On the home front, where the civilians call the shots, Hellevig’s message looks like an encouragement for fight-back – the economic policymaker’s equivalent of a no-fly zone for the US and European Union. It’s also a challenge to the Kremlin policy of appeasement.
Hellevig, a Finnish lawyer and investment analyst, has been directing businesses in Russia since 1992. His Moscow-based consultancy Awara has published its assessment of Russian economic performance since 2014 with the title, “What Does Not Kill You Makes You Stronger.” The maxim was first coined by the `19th century German philosopher Friedrich Nietzsche. He said it in a pep talk for himself. Subsequent readers think of the maxim as an irony. Knowing now what Nietzsche knew about his own prognosis but kept secret at the time, he did too. The headline findings aren’t news to the Kremlin. It has been regularly making the claims at President Vladimir Putin’s semi-annual national talk shows; at businessmen’s conventions like the St. Petersburg International Economic Forum (SPIEF); and in Kremlin-funded propaganda – lowbrow outlets like Russia Today and Sputnik News, and the highbrow Valdai Club.
A charter for a brand-new outlet for the claims, the Russian National Convention Bureau, was agreed at the St. Petersburg forum last month. Government promotion of reciprocal trade and inward investment isn’t exceptional for Russia; it is normal practice throughout the world. The argument of the Hellevig report is that the US and NATO campaign against Russia has failed to do the damage it was aimed to do, and that their propaganda outlets, media and think-tanks are lying to conceal the failure. Small percentage numbers for the decline in Russian GDP and related measures are summed up by Hellevig as “belt-tightening, not much more”. Logically and arithmetically, similarly small numbers in the measurement of the Russian recovery this year ought to mean “belt expanding, not much more.” But like Nietzsche, Hellevig is more optimistic.
Here’s what he concludes:
• “Industrial Production was down merely 0.6%. A handsome recovery is already on its way with an expected growth of 3 to 4% in 2017. In May the industrial production already soared by a promising 5.3%.”
• “Unemployment remained stable all through 2014 – 2016, the hoped-for effect of sanctions causing mass unemployment and social chaos failed to materialize.”
• “GDP was down 2.3% in 2014-2016, expected to more than make up for that in 2017 with 2-3% predicted growth.”
• “The really devastating news for ‘our Western partners’ (as Putin likes to refer to them) must be – which we are the first to report – the extraordinary decrease in the share of oil & gas revenue in Russia’s GDP.”
• “In the years of sanctions, Russia has grown to become an agricultural superpower with the world’s largest wheat exports. Already in the time of the Czars Russia was a big grain exporter, but that was often accompanied with domestic famine. Stalin financed Russia’s industrialization to a large extent by grain exports, but hereby also creating domestic shortages and famine. It is then the first time in Russia’s history when it is under Putin a major grain exporter while ensuring domestic abundance. Russia has made an overall remarkable turnaround in food production and is now virtually self-sufficient.”
• “Russia has the lowest level of imports (as a share of the GDP) of all major countries… Russia’s very low levels of imports in the global comparison obviously signifies that Russia produces domestically a much higher share of all that it consumes (and invests), this in turn means that the economy is superbly diversified contrary to the claims of the failed experts and policymakers. In fact, it is the most self-sufficient and diversified economy in the world.
Britain’s government isn’t due to announce a new budget until the autumn, but debate is already raging over public-sector pay. With Brexit bearing down, the embattled prime minister, Theresa May, will have to choose between making another embarrassing U-turn and defending a policy that is both unpopular and unnecessary. Sadly for May, the U-turn makes better sense. For years it was an article of faith among Britain’s Conservatives that the budget deficit had to be eliminated — by 2020, if not yesterday. Some Tories are now ready to abandon that line of thinking; others still hold the principle, if not the timetable, sacrosanct. Speaking in Parliament on Wednesday, May came down firmly on the side of austerity: Greece shows you where fiscal indiscipline leads, she argued.
Labour leader Jeremy Corbyn was unmoved. He decried the “low-wage epidemic” and argued that the 1 percent cap on increases in public-sector wages should be removed. Corbyn has a point. Britain’s workers are getting squeezed, especially in the public sector, thanks to rising inflation caused in part by the Brexit-induced fall in sterling. But he’s wrong to look at wages in isolation. Public-sector pay is only one of many claims on the government’s budget. The National Health Service, for instance, is in a state of permanent crisis; spending on care for the elderly and other needs is woefully inadequate. The list of other worthy expenditures is endless. Trying to meet all such claims would indeed be a formula for fiscal collapse. The government has to prioritize.
Where higher wages are needed to recruit and retain workers for essential services, raise them. Where additional public spending is needed to provide vital infrastructure, spur productivity, and support growth, make the investment. In such cases, higher taxes and/or higher public borrowing can be justified. If caps and ceilings are used in a way that makes this necessary flexibility impossible – not as emergency measures, moreover, but as a system of long-term control – they’ll do more harm than good. May’s embrace of blanket austerity, by the way, is bad politics as well as bad economics. Most British voters have forgotten, or never experienced, the ruinous consequences of profligate public spending.
That’s why Corbyn’s expansive promises are more popular than you might expect – and why there’ll be greater support for fiscal control if it’s seen to be smart and discriminating, rather than an act of blind ideological faith. To be sure, the timing for a change of fiscal strategy is hardly propitious. Brexit has alarmed investors, giving the government less room for maneuver. Even so, the government shouldn’t be paralyzed – and shouldn’t argue that cautious flexibility would make the country another Greece. That line won’t fly. Targeted spending to improve vital services and drive future growth is good policy, and Britain’s best buffer against the perils ahead.
Retirement is right around the corner for baby boomers – if they haven’t already entered it – yet so many are financially unprepared. Baby boomers, or those born between 1946 and 1964, expect they’ll need $658,000 in their defined contribution plans by the time they retire, but the average in those employer-sponsored plans is $263,000, according to a survey of 900 investors by financial services firm Legg Mason. Older boomers, who are 65 to 74, have an average of $300,000. Their asset allocation for all of their investments are also conservative, according to QS Investors, an investment management firm Legg Mason acquired in 2014, with 30% in cash, 24% in equities, 22% in fixed income, 4% in non-traditional assets, 8% in investment real estate, 2% in gold and other precious metals and 8% in other investments.
“They have less than half the assets they hope to have in retirement,” said James Norman, president of QS Investors. “That’s a pretty big miss.” Americans across the country, and all age groups, are drastically under-saved for retirement. Only a third of Americans who have access to a 401(k) plan contribute to it, and previous research suggests the typical middle-aged American couple only has $5,000 saved for the future. Meanwhile, millennials may not be able to picture themselves in retirement at all, though are urged by financial professionals to make a habit of saving, if even only as little as $5. There are a multitude of reasons people may not have enough for retirement, such as having to leave the workforce in between their prime years to care for loved ones, not working long enough to qualify for certain government benefits. or choosing to pay for their childrens’ college tuition instead of saving for their own retirement.
Still, not saving enough was the biggest regret among older Americans, according to a survey of 1,000 participants by personal finance site Bankrate.com. Generation X, or those born between 1965 and 1981, aren’t doing all that much better, though they have the benefit of more time to reach their financial goals. More of them have a defined contribution plan, according to the Legg Mason survey, with an average of $199,000 stashed away for a goal of $541,000 by retirement. They are also investing conservatively, with 25% in cash, 21% in equities, 17% in fixed income, 11% in non-traditional assets, 16% in investment real estate, 7% in gold and other precious metals and 4% in other investments. Conversely, QS Investors suggest their Gen-X aged clients have 80% in equities, which faces more risks from the stock market but could also realize higher returns.
Retirement isn’t the picture-perfect image of lounging on a beach with the idea of a 9-to-5 job long gone. Benefits aren’t the same, either – for example, in 1985, retirees could expect Social Security to cover most of their income and employers typically covered most health-care costs. Retirees 30 years ago also probably didn’t expect to live for decades after resigning at 65, whereas now people are being told to plan to live well into their 80s.
Buyers who purchased new properties direct from some of the UK’s biggest builders have been left in the dark as investment companies play pass-the-parcel with the land their homes stand on. Take Joanne Darbyshire, 46, and her husband Mark, 47. They bought a five-bedroom house in Bolton from Taylor Wimpey in 2010, and are among thousands of unfortunate leaseholders put on “doubling” ground rent contracts that in extreme cases have left their properties almost worthless, with mortgage lenders refusing loans to future buyers. The only way to escape the escalating payments is to buy the freehold. But in Darbyshire’s case, Taylor Wimpey sold it to Adriatic Land 2 (GR2) in 2012. In January 2017 that company transferred it to Adriatic Land 1 (GR3), while some of Darbyshire’s neighbours have seen their freeholds transferred from Adriatic Land 2 (GR2) to Abacus Land Ltd.
“You have no idea who owns the land under your feet,” says Darbyshire. “Your dream house is traded from one offshore company to another for tax reasons, or who knows what else?” Paul Griffin (not his real name) bought a property from Morris Homes in Winsford, Cheshire, in November 2014. By last year, when he decided to add a conservatory, his freehold was in the hands of Adriatic Land 3 and managed by its fee-collecting agents HomeGround. Young was horrified to discover he had to pay £108 just to look at his file. Although the conservatory didn’t need local authority planning permission and was not subject to building regulations, HomeGround then demanded £1,200 for a “licence” for the work to go ahead. This was broken down into solicitors fees (£480), surveyors (£360), and its own fee of £360.
On top of this it demanded numerous official documents at Young’s expense totalling about £400. Helen Burke (not her real name) in Ellesmere Port, meanwhile, was shocked to discover that after Bellway sold her freehold to Adriatic, the cost of seeking consent for a small single-storey extension rocketed. Initially, she had applied to Bellway – the freeholder at the time – and it wanted £300. But after putting off the work for a few months she discovered that Bellway had sold the freehold to Adriatic Land 4 (GR1) Ltd. HomeGround then demanded £2,440 for consent. That is not planning permission, which householders must obtain separately from the local authority. It is simply a fee charged without any material services provided.
“It’s daylight robbery,” says Burke. “The most disgusting thing is the developers like Bellway think they are doing nothing wrong selling the freeholds on and state that our T&Cs don’t change. Yes, the lease terms don’t change, but for a permission fee to increase from £300 to £2,440 in a matter of months is disgraceful and it should absolutely be pointed out to new homeowners, up front, that this might happen if they don’t buy the freeholds.” Burke said she was quoted £3,750 to buy the freehold off Bellway, but once it was sold to Adriatic the price quadrupled to £13,000. After a long legal battle she has acquired it for £7,680.
Easy Wall Street cash is leading U.S. shale companies to expand drilling, even as most lose money on every barrel of oil they bring to the surface. Despite a 17% plunge in prices since April, drillers are on pace to break the all-time U.S. oil production record, topping 10 million barrels a day by early next year if not sooner, according to government officials and analysts. U.S. crude fell again on Friday, dropping 2.8% to $44.23 a barrel on the New York Mercantile Exchange. Yet the U.S. oil rig count rose Friday to the highest level in more than two years. Operators have now put more than 100 rigs back to work from Oklahoma to North Dakota in the past three months. Companies have more capital to keep drilling thanks to $57 billion Wall Street has injected into the sector over the last 18 months.
Money has come from investors in new stock sales and high-yield debt, as well as from private equity funds, which have helped provide lifelines to stronger operators. Flush with cash, virtually all of them launched campaigns to boost drilling at the start of 2017 in the hope that oil prices would rebound. The new wave of crude has again glutted the market. The shale companies are edged even further from profitability, and a few voices have begun to question the wisdom of Wall Street financing the industry’s addiction to growth. “The biggest problem our industry faces today is you guys,” Al Walker, chief executive of Anadarko, told investors at a conference last month.
Wall Street has become an enabler that pushes companies to grow production at any cost, while punishing those that try to live within their means, Mr. Walker said, adding: “It’s kind of like going to AA. You know, we need a partner. We really need the investment community to show discipline.” Even if companies cut back on drilling now, it wouldn’t be enough to stop a new wave of oil from hitting the market in the second half of the year: U.S. shale output typically lags behind new drilling by four to six months, analysts say. “There’s been insufficient discrimination on the part of sources of capital,” said Bill Herbert, an energy analyst with Piper Jaffray’s Simmons. Big shale companies “are able to get what they want and invest what they want.”
One morning in late March, Brij Khandelwal called the Agra police to report an attempted murder. Days before, the high court in India’s Uttarakhand state had issued a landmark judgment declaring the Yamuna river – and another of India’s holiest waterways, the Ganges – “living entities”. Khandelwal, an activist, followed the logic. “Scientifically speaking, the Yamuna is ecologically dead,” he says. His police report named a series of government officials he wanted charged with attempted poisoning. “If the river is dead, someone has to be responsible for killing it.” In the 16th century, Babur, the first Mughal emperor, described the waters of the Yamuna as “better than nectar”. One of his successors built India’s most famous monument, the Taj Mahal, on its banks.
For the first 250 miles (400km) of its life, starting in the lower Himalayas, the river glistens blue and teems with life. And then it reaches Delhi. In India’s crowded capital, the entire Yamuna is siphoned off for human and industrial use, and replenished with toxic chemicals and sewage from more than 20 drains. Those who enter the water emerge caked in dark, glutinous sludge. For vast stretches only the most resilient bacteria survive. The waterway that has sustained civilisation in Delhi for at least 3,000 years – and the sole source of water for more than 60 million Indians today – has in the past decades become one of the dirtiest rivers on the planet.
“We have water records which show that, until the 1960s, the river was much better quality,” says Himanshu Thakkar, an engineer who coordinates the South Asia Network on Dams, Rivers and People, a network of rights groups. “There was much greater biodiversity. Fish were still being caught.” What happened next mirrors a larger Indian story, particularly since the country’s markets were unshackled in the early 1990s: one of runaway economic growth fuelled by vast, unchecked migration into cities; and the metastasising of polluting industries that have soiled many of India’s waterways and made its air the most toxic in the world.
There is a venerable, centrist point of view that partisan polarization is a function of Washington’s warring politicians, who inflate artificial differences into causes for political war. Out there in the country, it is thought, Americans simply want politicians to come together and work out sensible, centrist policies. Whatever this gospel’s general applicability, it is increasingly clear that in the era of Donald Trump it’s The People who are even more polarized than their representatives in Washington. A new poll from Morning Consult for Politico has this jarring news: after the president’s first overseas trip, his job approval ratings rose. But so, too, did the percentage of Americans who want impeachment proceedings against him to begin post-haste.
Indeed, we are rapidly approaching the point where Americans are basically divided between those who think the president’s doing a good job (45% at present), and those who think he should be removed from office before his first term ends (43% at present). Unsurprisingly, these sentiments closely match partisan preferences. According to this same poll, 82% of self-identified Republicans approve of Trump’s job performance, 46% of them strongly. 79% of self-identified Democrats disapprove of Trump’s job performance, 65% of them strongly. These grassroots Americans are really, really at odds. That becomes even more obvious when the possibility of impeachment is introduced. Seventy-one% of Democrats want Congress to initiate impeachment proceedings.
Over half of these impeachment supporters say he’s unfit to serve, whether or not he has committed an impeachable offense. 76% of Republicans oppose the idea. For all the talk about anti-Trump Republicans and moderate Democrats, the truth is there is not a lot of support out there for anything other than the highly partisan approach Trump and the congressional GOP have taken this year, and for what some Democrats have called “the resistance.”
Students usually don’t think of themselves as a class. They seem “pre-class,” because they have not yet entered the labor force. They can only hope to become part of the middle class after they graduate. And that means becoming a wage earner – what impolitely is called the working class. But as soon as they take out a student debt, they become part of the economy. They are in this sense a debtor class. But to be a debtor, one needs a means to pay – and the student’s means to pay is out of the wages and salaries they may earn after they graduate. And after all, the reason most students get an education is so that they can qualify for a middle-class job. The middle class in America consists of the widening sector of the working class that qualifies for bank loans – not merely usurious short-term payday loans, but a lifetime of debt.
So the middle class today is a debtor class. Shedding crocodile tears for the slow growth of U.S. employment in the post-2008 doldrums (the “permanent Obama economy” in which only the banks were bailed out, not the economy), the financial class views the role industry and the economy at large as being to pay its employees enough so that they can take on an exponentially rising volume of debt. Interest and fees (late fees and penalties now yield credit card companies more than they receive in interest charges) are soaring, leaving the economy of goods and services languishing. Although money and banking textbooks say that all interest (and fees) are a compensation for risk, any banker who actually takes a risk is quickly fired. Banks don’t take risks. That’s what the governments are for. (Socializing the risk, privatizing the profits.)
Anticipating that the U.S. economy may be unable to recover under the weight of the junk mortgages and other bad debts that the Obama administration left on the books in 2008, banks insisted that the government guarantee all student debt. They also insisted that the government guarantees the financial gold-mine buried in such indebtedness: the late fees that accumulate. So whether students actually succeed in becoming wage-earners or not, the banks will receive payments in today’s emerging fictitious “as if” economy. The government will pay the banks “as if” there is actually a recovery. And if there were to be a recovery, then it would mean that the banks were taking a risk – a big enough risk to justify the high interest rates charge on student loans.
This is simply a replay of what banks have negotiated for real estate mortgage lending. Students who do succeed in getting a job hope to start a family, or at least joining the middle class. The most typical criterion of middle-class life in today’s world (apart from having a college education) is to own a home. But almost nobody can buy a home without getting a mortgage. And the price of such a mortgage is to pay up to 43% of one’s income for thirty years, that is, one’s prospective working life (in today’s as-if world that assumes full employment, not just a gig economy).
Boy, is she doing a bad job. Calling an election and not showing up. And yeah, we get it: if she would show up, numbers would be even worse. On Twitter: “A Ladbrokes customer in Chelsea has just had £2,000 at 100/1 for Boris Johnson to be PM on July 1st. #GE2017”
Labour is closing the gap with Tories and now stands just three points from Theresa May’s party, a new YouGov poll shows. The poll, commissioned by The Times, found the Conservative lead has slipped dramatically in recent weeks and is now within the margin of error. The figures show the Conservatives on 42 points but Labour are close behind on 39. Meanwhile, the Liberal Democrats are struggling to maintain the momentum of their “fightback” as they slip to just 7% vote share. The poll points to a remarkable change in fortunes for the Tories, which had a 24-point lead over Labour when the snap general election was called in April. Ms May has struggled in recent weeks after she was forced into an embarrassing U-turn over plans to reform social care in the party’s manifesto.
The party said elderly people who needed care will be able to put off playing for it until after their deaths so they could potentially stay in their own home for as long as possible. But critics said this would unfairly penalise people who suffer a slow decline from illnesses like dementia, over people who die suddenly and can then leave their estate to their children. Ms May has faced criticism for refusing to to engage with voters, especially after she declined to take part in televised debates. During the debate, Green party leader Caroline Lucas said: “You don’t call a general election and say it is the most important election in her lifetime and then not even be bothered to debate the issues at hand.” She added: “I think the first rule of leadership is to show up.”
Before 8.30am today, I had never interviewed a Prime Minister. Heading back to the office to transcribe my encounter with Theresa May at Plymouth’s fish market, I couldn’t be certain that had changed. To start with, it was quite an exciting experience. We got the call late on Tuesday night, and the visit was kept totally secret until her arrival. We waited in the drizzle as she chatted with fishermen and nodded earnestly at nets and buckets, leopard print heels click-clacking on the harbour floor. ired-looking campaign managers hurried back and forth, mulling over our request for a filmed interview which had been denied on her previous visit. Then suddenly we were on. I had a list of four questions, all on local issues, carefully prepared with the help of my newsroom colleagues.
Two visits in six weeks to one of the country’s most marginal constituencies – is she getting worried?
May: “I’m very clear that this is a crucial election for this country.”
Plymouth is feeling the effects of military cuts. Will she guarantee to protect the city from further pain?
May: “I’m very clear that Plymouth has a proud record of connection with the armed forces.”
How will your Brexit plan make Plymouth better off?
May: “I think there is a better future ahead for Plymouth and for the whole of the UK.”
Will you promise to sort out our transport links?
May: “I’m very clear that connectivity is hugely important for Plymouth and the South West generally.”
I was pleased to have secured the interview and happy to have squeezed all my points in. But no sooner had the ministerial car pulled away from Sutton Harbour than I began to feel a bit deflated. If the ultimate job of a journalist is to get answers, I had failed. Should I have stopped her and demanded she be more specific? Could I have gone full angry Paxman, or brought the interview to an abrupt close in protest? Back at the office, we scratched our heads and wondered what the top line was. She had and given me absolutely nothing. It was like a postmodern version of Radio 4’s Just A Minute. I pictured Nicholas Parsons in the chair: “The next topic is how Plymouth will be affected by Brexit, military cuts and transport meltdown. Theresa, you have three minutes to talk without clarity, candour or transparency. Your time starts now.”
The unsayable in Britain’s general election campaign is this. The causes of the Manchester atrocity, in which 22 mostly young people were murdered by a jihadist, are being suppressed to protect the secrets of British foreign policy. Critical questions – such as why the security service MI5 maintained terrorist “assets” in Manchester and why the government did not warn the public of the threat in their midst – remain unanswered, deflected by the promise of an internal “review”. The alleged suicide bomber, Salman Abedi, was part of an extremist group, the Libyan Islamic Fighting Group, that thrived in Manchester and was cultivated and used by MI5 for more than 20 years. The LIFG is proscribed by Britain as a terrorist organisation which seeks a “hardline Islamic state” in Libya and “is part of the wider global Islamist extremist movement, as inspired by al-Qaida”.
The “smoking gun” is that when Theresa May was Home Secretary, LIFG jihadists were allowed to travel unhindered across Europe and encouraged to engage in “battle”: first to remove Mu’ammar Gadaffi in Libya, then to join al-Qaida affiliated groups in Syria. Last year, the FBI reportedly placed Abedi on a “terrorist watch list” and warned MI5 that his group was looking for a “political target” in Britain. Why wasn’t he apprehended and the network around him prevented from planning and executing the atrocity on 22 May? These questions arise because of an FBI leak that demolished the “lone wolf” spin in the wake of the 22 May attack – thus, the panicky, uncharacteristic outrage directed at Washington from London and Donald Trump’s apology.
The Manchester atrocity lifts the rock of British foreign policy to reveal its Faustian alliance with extreme Islam, especially the sect known as Wahhabism or Salafism, whose principal custodian and banker is the oil kingdom of Saudi Arabia, Britain’s biggest weapons customer. This imperial marriage reaches back to the Second World War and the early days of the Muslim Brotherhood in Egypt. The aim of British policy was to stop pan-Arabism: Arab states developing a modern secularism, asserting their independence from the imperial west and controlling their resources. The creation of a rapacious Israel was meant to expedite this. Pan-Arabism has since been crushed; the goal now is division and conquest.
“The BoE has busted a gut to keep the mortgage market afloat with one scheme after another to subsidise everything from deposits to the lenders themselves. It must have been upsetting to see a fall in approvals for house purchases in April for the third month in a row.”
As the election on 8 June nears, the debate has intensified over how much Britain’s frothy cappuccino-drinking economy can cope without endless dollops of interest-free credit. Financial regulators are worried about it. So are the debt charity workers who pick up the pieces when the debt merry-go-round grinds to a halt. And they should be worried. Many of the biggest, shiniest new cars zipping round UK streets would still be sitting on the garage forecourt without ultra cheap credit deals that rival mortgages for their rock-bottom rates. On the high street, shops have in recent years relied more heavily on consumers using their credit cards for big purchases. Back in 2014 these shoppers could avoid paying the 18.9% interest commonly applied to credit card balances and use the two, even three-year interest-free period many card operators allow.
As we know from recent experience, when debt bubbles burst, they hit everyone and drag the economy down into recession. The Bank of England’s most recent data for April shows that the mania for borrowing last year and the year before has paused somewhat since January. That should be seen as good news. Net mortgage lending is down at levels seen a year ago while unsecured borrowing on credit cards and loans has stabilised at a growth rate of of just over 10% a year. But not everybody at the Bank of England will be content to see consumers putting their credit cards in a drawer. The economists attached to the BoE’s interest rate-setting committee know the economy runs on debt. To adapt a well-known first world war poster, they know Britain needs borrowers. If a reminder of this basic economic rule was needed, it was made clear earlier this month when the latest UK GDP figures appeared.
The relative lack of borrowing in the first three months of the year coincided with a dive in GDP growth from 0.7% in the final quarter of 2016 to 0.2% in the first quarter of this year. The BoE has busted a gut to keep the mortgage market afloat with one scheme after another to subsidise everything from deposits to the lenders themselves. It must have been upsetting to see a fall in approvals for house purchases in April for the third month in a row. Now there are signs that the credit habit is returning as almost zero interest rates work their magic again, Easter’s spending is out of the way and wage rises are being outpaced by inflation. Analysts say GDP growth in Q2 will be higher for this very reason. Is that a return of consumer confidence with shoppers shrugging off the election, they ask? Or is it, as the debt charities suspect, cash-strapped consumers rolling over their debts and taking out a bit more credit just to get by?
The UK has slumped to the bottom of the league table of advanced economies after Canada registered stellar growth in the first three months of the year. Canada was the final member of the G7 to report its growth figures, which confirmed the UK as officially the joint worst performing member so far this year. The announcement marked a significant decline for the UK economy, which a year ago was outshining Germany, the US and Japan. In February it was announced that Germany had pipped the UK as the fastest-growing G7 nation during 2016 by 10 basis points. However, the latest figures for Canada, which showed that growth accelerated to 0.9% in the first quarter, putting it top of the G7 performers, has left Britain languishing alongside Italy at the bottom of the table.
Germany is in second spot at 0.6%, followed by Japan with 0.5%, France 0.4% and the US at 0.3%. The UK and Italy are then level on growth of just 0.2%. The sluggish expansion in the first quarter provides the latest evidence that the early resilience to the EU referendum result last June is now wearing off as higher inflation puts consumers under pressure. Prices have been increasing since the Brexit vote because the referendum result sent the pound sharply lower and has raised the cost of imports to the UK. That higher inflation has hit household budgets and dented the main driver of UK growth, consumer spending. The Bank of England said earlier this month that it expected GDP growth would edge up marginally to 1.9% for 2017 from 1.8% in 2016. But it warned that living standards would fall this year because inflation would be higher than pay growth.
President Donald Trump’s politically incorrect behavior at the gathering of NATO leaders in Brussels on Thursday could, in its own circuitous way, spotlight an existential threat to the alliance. Yes, that threat is Russia, but not in the customary sense in which Westerners have been taught to fear the Russian bear. It is a Russia too clever to rise to the bait – a Russia patient enough to wait for the Brussels bureaucrats and generals to fall of their own weight, pushed by financial exigencies in many NATO countries. At that point it will become possible to see through the West’s alarmist propaganda. It will also become more difficult to stoke artificial fears that Russia, for reasons known only to NATO war planners and neoconservative pundits, will attack NATO. As long as Russian hardliners do not push President Vladimir Putin aside, Moscow will continue to reject its assigned role as bête noire.
First a request: Let me ask those of you who believe Russia is planning to invade Europe to put down the New York Times for a minute or two. Take a deep cleansing breath, and try to be open to the possibility that heightened tensions in Europe are, rather, largely a result of the ineluctable expansion of NATO eastward over the quarter-century since the Berlin Wall fell in 1989. Actually, NATO has doubled in size, despite a U.S. quid-pro-quo promise in early 1990 to Russian leader Mikhail Gorbachev in early 1990 not to expand NATO “one inch” to the east of Germany. The quid required of Russia was acquiescence to a reunited Germany within NATO and withdrawal of the 300,000-plus Russian troops stationed in East Germany.
The US reneged on its quo side of the bargain as the NATO alliance added country after country east of Germany with eyes on even more – while Russia was not strong enough to stop NATO expansion until February 2014 when, as it turned out, NATO’s eyes finally proved too big for its stomach. A U.S.-led coup d’etat overthrew elected President Viktor Yanukovych and installed new, handpicked leaders in Kiev who favored NATO membership. That crossed Russia’s red line; it was determined – and at that point able – to react strongly, and it did.
If Donald Trump and Barack Obama agree on something, does that mean it’s true? In the case of Europe’s woeful support of its collective defense, yes: Member states need to contribute their “fair share” toward the North Atlantic Treaty Organization, a phrase both men used in speeches in European capitals. The question is what “fair share” means. Instead of measuring how much member nations spend on their defense, NATO should pay more attention to how they spend it. The current definition – members are expected to spend at least 2% of GDP on defense – is both misleading and unfair. Currently, only four European members meet the alliance’s target and things are going the wrong direction. Across Europe, including non-NATO members, military spending as a percentage of GDP has dropped by almost 9% in the last five years.
But some kinds of military spending are better than others. Money for major training exercises, or transport planes and helicopters for airlift operations, is far more valuable than lots of spending on ill-equipped troops in glorified jobs programs. Spending on national defense is always going to reflect national priorities. That said, better coordination among member nations can bolster both their security and the alliance’s. A wealthy nation may want some shiny new fighter jets, but the collective defense may be better served by more prosaic equipment such as refueling tankers. To their credit, not only have the alliance’s newer members such as the Baltic States been paying up, they’ve been helpful in buying what NATO most needs. Arriving at a consensus as to what constitutes useful spending among 28 separate militaries would be contentious and difficult, to put it mildly. It would still be a useful exercise.
The oil market has serious doubts that the production deal between OPEC and Russia is sufficient enough to bring the world oil market back into balance, against a potential wave of new supply. As a result, traders appeared to be adding to short positions, as crude fell sharply Wednesday morning, analysts said. The decline in oil prices was triggered by news that Libya had increased its production to a three-year high of 827,000 barrels a day. “The game of chicken between them and the market is back on again,” said John Kilduff, partner at Again Capital. West Texas Intermediate crude for July settled off 2.7%, at $48.32 per barrel after briefly breaking $48. Brent, the international benchmark, dipped temporarily below the psychological $50 for the first time in two weeks, and was down 3% at $50.66 in afternoon trading.
Last week, Saudi Arabia and other members of OPEC agreed with Russia and other producers to extend their agreement to cut back output by 1.8 million barrels a day for another nine months. But market expectations had been hinging on the idea that producers would take even more barrels off the market because of the overhang of supply. Oil plunged 5% last Thursday, after the announcement. “The meeting was much more of a failure than people realize because of what wasn’t achieved. There are no caps on production for Libya, or Nigeria, or Iran,” said Kilduff. Libya has shipped an average of 500,000 barrels per day of oil so far this year, up from 300,000 per day last year. Production reached 800,000 barrels per day earlier this month.
“Shadow bank run” is a good way to put it. I’ve been warning about Chinese shadown banking for years, and I haven’t been wrong. Baidu is a search engine, for pete’s sake… which “does not need to set aside large capital against potential defaults on its WMPs”… Beijing facilitates the shadows, and they in turn lend into the economy what Beijing’s state banks can’t do without raising bright red alarms.
Less than a week after Moody’s downgraded China’s sovereign credit rating, prompting an unprecedented currency response by the PBOC which as noted earlier resumed its crusade against Yuan shorts by sending CNH overnight deposit rates as high as 65%, on Wednesday another rating agency, Fitch, took aim at what many consider the weakest link in China’s financial system: the nearly $9 trillion in shadow banking “assets”, of which roughly $4 billion are Wealth Management Products. Just as surprising was the target of Fitch’s wrath: none other than China’s tech giant Baidu, which Fitch put on “negative watch” warning that the company’s financial services division faced increased risk of default as a result of its growing reliance on shadow banking in general and Wealth Management Products (WMPs) in particlar.
As reported previously, China’s popular WMPs offer a higher yielding alternative to conventional financial instruments by bundling together investments into money market bonds, corporate loans and many other products, all of which are usually a mystery to the buyer. As of 2016, China had nearly 30 trillion yuan outstanding in WMPs. Baidu, China’s dominant search engine, has not been immune to the scramble for funding optionality provided by shadow banking alternatives, and has been getting into the WMP game by rapidly expanding its Financial Services Group, which Fitch says is increasing Baidu’s overall business risk. While Baidu is not under obligation to pay the returned target on these products, a failure could be potentially damaging to Baidu’s reputation, Fitch warned.
“As with Chinese banks, Baidu does not need to set aside large capital against potential defaults on its WMPs … WMPs have become an alternative form of financing for projects or investments that would not qualify for bank loans,” Fitch said. This could lead to an increased risk of default or “shadow bank run”, since many of the bundled assets are of poor quality and would not qualify for bank loans. The WMP warning from Fitch came less than two weeks after Moody’s also put Baidu’s corporate debt on watch for a potential downgrade. WMPs have been behind the staggering surge in total assets of Baidu’s Financial Services Group, which have more than doubled to CNY25 billion in the period ended April 2017.
Spending $1 billion on a new building that you will never be able to visit tells you what these people think of you. But the, NATO is the ideal vehicle for the arms industry: no democracy anywhere in sight.
U.S. President Donald Trump on Thursday intensified his accusations that NATO allies were not spending enough on defense and warned of more attacks like this week’s Manchester bombing unless the alliance did more to stop militants. In unexpectedly abrupt remarks as NATO leaders stood alongside him, Trump said certain member countries owed “massive amounts of money” to the United States and NATO – even though allied contributions are voluntary, with multiple budgets. His scripted comments contrasted with NATO’s choreographed efforts to play up the West’s unity by inviting Trump to unveil a memorial to the Sept. 11, 2001, attacks on the United States at the new NATO headquarters building in Brussels.
“Terrorism must be stopped in its tracks, or the horror you saw in Manchester and so many other places will continue forever,” Trump said, referring to Monday’s suicide bombing in the English city that killed 22 people, including children. “These grave security concerns are the same reason that I have been very, very direct … in saying that NATO members must finally contribute their fair share,” Trump said. NATO Secretary-General Jens Stoltenberg defended Trump, saying that although he was “blunt” he had “a very plain and clear message on the expectations” of allies. But one senior diplomat said Trump, who left the leaders’ dinner before it ended to fly to Italy for Friday’s Group of Seven summit, said the remarks did not go down well at all. “This was not the right place or time,” the diplomat said of the very public harangue. “We are left with nothing else but trying to put a brave face on it.”
In another unexpected twist, Trump called on NATO, an organization founded on collective defense against the Soviet threat, to include limiting immigration in its tasks. And Trump did say that the United States “will never forsake the friends who stood by our side” but NATO leaders had hoped he would more explicitly support the mutual defense rules of a military alliance’s he called “obsolete” during his campaign. Instead, he returned to a grievance about Europe’s drop in defense spending since the end of the Cold War and failed to publicly commit to NATO’s founding Article V rule which stipulates that an attack on one ally is an attack against all. “23 of the 28 member nations are still not paying what they should be paying for their defense,” Trump said, standing by a piece of the wreckage of the Twin Towers. “This is not fair to the people and taxpayers of the United States, and many of these nations owe massive amounts of money from past years,” Trump said as the other leaders watched.
G7 leaders meet Friday determined to put on a display of united resolve in the fight against jihadist terrorism, despite deep divisions on trade and global warming. The two-day summit in Sicily’s ancient hilltop resort of Taormina kicks off four days after children were among 22 people killed in a concert bomb attack in Manchester. British Prime Minister Theresa May will lead a discussion on terrorism in one of Friday’s working sessions and is expected to issue a call for G7 countries to put more pressure on internet companies to remove extremist content. “The fight is moving from the battlefield to the internet,” a senior British official said ahead of the talks.
With May and Donald Trump among four new faces in the club of the world’s major democracies, the gathering in Italy is being billed as a key test of how serious the new US administration is about implementing its radical policy agenda, particularly on climate change. Senior officials are preparing to work through the night of Friday-Saturday in a bid to bridge what appear to be irreconcilable differences over Trump’s declared intention of ditching the US commitment to the landmark Paris according on curbing carbon emissions. Officials acknowledge the summit, one of the shortest in the body’s history, is effectively about damage limitation against a backdrop of fears among US partners that the Trump presidency, with its ‘America First’ rhetoric, could undermine the architecture of the post-World War II world. Summit host Paolo Gentiloni, a caretaker Italian prime minister also making his G7 debut, acknowledged as much on the eve of the meeting.
In a stinging rebuke to President Donald Trump, a U.S. appeals court refused on Thursday to reinstate his travel ban on people from six Muslim-majority nations, calling it discriminatory and setting the stage for a showdown in the Supreme Court. The decision, written by Chief Judge Roger Gregory, described Trump’s executive order in forceful terms, saying it uses “vague words of national security, but in context drips with religious intolerance, animus, and discrimination.” Attorney General Jeff Sessions said in a statement that the government, which says the temporary travel ban is needed to guard against terrorist attacks, would seek a review of the case at the Supreme Court. “These clearly are very dangerous times and we need every available tool at our disposal to prevent terrorists from entering the United States and committing acts of bloodshed and violence,” said Michael Short, a White House spokesman.
He added that the White House was confident the order would ultimately be upheld by the judiciary. In its 10-3 ruling, the U.S. 4th Circuit Court of Appeals said those challenging the ban, including refugee groups and individuals, were likely to succeed on their claim that the order violates the U.S. Constitution’s bar against favoring one religion over another. Gregory cited statements by Trump during the 2016 presidential election calling for a Muslim ban. During the race, Trump called for “a total and complete shutdown of Muslim’s entering the United States” in a statement on his website. The judge wrote that a reasonable observer would likely conclude the order’s “primary purpose is to exclude persons from the United States on the basis of their religious beliefs.”
The National Security Agency under former President Barack Obama routinely violated American privacy protections while scouring through overseas intercepts and failed to disclose the extent of the problems until the final days before Donald Trump was elected president last fall, according to once top-secret documents that chronicle some of the most serious constitutional abuses to date by the U.S. intelligence community. More than 5%, or one out of every 20 searches seeking upstream Internet data on Americans inside the NSA’s so-called Section 702 database violated the safeguards Obama and his intelligence chiefs vowed to follow in 2011, according to one classified internal report reviewed by Circa. The Obama administration self-disclosed the problems at a closed-door hearing Oct. 26 before the Foreign Intelligence Surveillance Court that set off alarm.
Trump was elected less than two weeks later. The normally supportive court censured administration officials, saying the failure to disclose the extent of the violations earlier amounted to an “institutional lack of candor” and that the improper searches constituted a “very serious Fourth Amendment issue,” according to a recently unsealed court document dated April 26, 2017. The admitted violations undercut one of the primary defenses that the intelligence community and Obama officials have used in recent weeks to justify their snooping into incidental NSA intercepts about Americans. Circa has reported that there was a three-fold increase in NSA data searches about Americans and a rise in the unmasking of U.S. person’s identities in intelligence reports after Obama loosened the privacy rules in 2011. Officials like former National Security Adviser Susan Rice have argued their activities were legal under the so-called minimization rule changes Obama made, and that the intelligence agencies were strictly monitored to avoid abuses.
Labour has slashed the Conservatives’ lead in the polls to just five points, the latest YouGov/Times results show. The party has made consistent gains in recent weeks as leader Jeremy Corbyn claimed his message was finally getting through to voters. The results show a four point change since last week when the Tories were leading by 9 percentage points – the first time Labour had narrowed the gap to single figures since Theresa May called the snap election on 18 April. The latest poll comes after the Prime Minister made an unprecedented U-turn over her “dementia tax” plans, just four days after making them the centrepiece of her election manifesto.
A separate poll, conducted after the Tory manifesto launch, found 28% of voters said they were less likely to vote Conservative because of the social care package. It comes as Mr Corbyn prepares to take the hugely controversial step of blaming Britain’s foreign wars for terror attacks such as the Manchester suicide bombing. The Labour leader will claim a link between “wars our government has supported or fought in other countries and terrorism here at home”, as he relaunches his party’s election campaign on Friday after the three-day pause. Mr Corbyn will stress his assessment is shared by the intelligence and security services and “in no way reduces the guilt of those who attack our children”. The Independent understands Mr Corbyn wishes to draw attention to his March 2011 vote against the Libya bombing – when he was one of just 13 MPs to oppose David Cameron.
May will use Manchester and fear for all she can suck out of it. Corbyn will be portrayed as incapable leader for the country, in the same way he has been called unfit to lead his party. He would have been way ahead in the polls if his own party had not turned on him. Re: Bernie.
Britain’s politicians resume campaigning in earnest on Friday with national security in the spotlight, as police scramble to bust a Libya-linked jihadist network thought to be behind the Manchester terror attack. Prime Minister Theresa May and Labour leader Jeremy Corbyn had suspended campaigning after Monday’s bombing at a Manchester pop concert, which killed 22 people, including many teenagers, and wounded dozens more. Eight suspects are currently in detention on UK soil in connection with the blast, for which the Islamic State group has claimed responsibility, while police in Libya have detained the father and brother of 22-year-old suicide bomber Salman Abedi. Washington’s top diplomat Rex Tillerson is due to visit London on Friday in an expression of solidarity, after Britain reacted furiously to leaks of sensitive details about the investigation to US media.
Opposition leader Corbyn in a speech in London later on Friday is expected to say it is the “responsibility” of governments to minimise the risk of terror by giving police the funding they need. A YouGov poll published in Friday’s edition of The Times put Conservatives on 43% compared to Labour on 38%, far better for Labour than the double-digit margin that had previously separately it from the ruling party. YouGov polled 2,052 people on Wednesday and Thursday. But analysts said that the Conservative prime minister – who previously served as interior minister for six years – could benefit at the polls from the shift in focus ahead of the general election on June 8. “If security and terrorism become more prominent then I can only see one winner from this – Theresa May,” said Steven Fielding, a professor of politics at the University of Nottingham. The YouGov poll also found that 41% of respondents said that the Conservatives would handle defence and security best, compared to 18% who said the same of Labour.
The EU will next month demand Britain agree to pay a fixed percentage of the EU’s outstanding obligations on the day it leaves the bloc, in defiance of a British rejection of that logic as “preposterous”. A draft EU negotiating paper, seen by Reuters, that will be put to London when Brexit talks begin following a national election in Britain on June 8 makes clear that suggestions from Prime Minister Theresa May’s government that the Union might end up owing rather than getting money cut no ice in Brussels. The paper on principles of the financial settlement that the EU wants from London on departure in March 2019 sets no figure, and chief negotiator Michel Barnier has made clear it cannot be calculated until the end as it depends on the EU’s spending.
However, he wants an agreement on how the “Brexit bill” will be calculated, perhaps by late this year, before the Europeans agree to launch talks that May wants on a free trade agreement. EU chief executive Jean-Claude Juncker has said Britain may have to pay its 27 allies some €60 billion on departure and some experts estimated the up-front cost, before later refunds, could be nearly double that – suggestions May’s foreign minister Boris Johnson called “absolutely preposterous”. The paper to be discussed among diplomats next week before Barnier presents the opening demands to London in the week of June 19, spells out that while Britain will get some credit – notably its €39 billion share of the capital of the European Investment Bank.
But the list of what it must pay, and go paying for some years after Brexit, is much longer. Four pages of appendix details list more than 70 EU bodies and funds to which Britain has committed payment in a budget set out to 2020. Yet the three-page main document made no mention of Britain getting credit for a share of, say, EU buildings, as British ministers have said it should have. EU officials argue Britain was not asked to pay extra for existing infrastructure in Brussels when it first joined the bloc in 1973. Among obligations Britain will be asked to cover are the funding until summer 2021 of British teachers seconded to schools catering to the EU’s staff and diplomats.
Other payments include promises to fund Syrian refugees in Turkey, aid for the Central African Republic, the EU aviation safety agency and the European Institute for Gender Equality. “The United Kingdom obligations should be fixed as a percentage of the EU obligations calculated at the date of withdrawal in accordance with a methodology to be agreed in the first phase of the negotiations,” the paper states. It adds that people, businesses and organizations in Britain would continue to benefit from some EU funds for some time after Brexit. Britain has about 13% of the EU’s 507 million population and accounts for some 16% of its economy. Its net contribution to the EU’s €140 billion annual budget has typically been roughly €10 billion in recent years.
China’s structural reforms will slow the pace of its debt build-up but will not be enough to arrest it, and another credit rating cut for the country is possible down the road unless it gets its ballooning credit in check, officials at Moody’s said. The comments came two days after Moody’s downgraded China’s sovereign ratings by one notch to A1, saying it expects the financial strength of the world’s second-largest economy to erode in coming years as growth slows and debt continues to mount. In announcing the downgrade, Moody’s Investors Service also changed its outlook on China from “negative” to “stable”, suggesting no further ratings changes for some time.
China has strongly criticized the downgrade, asserting it was based on “inappropriate methodology”, exaggerating difficulties facing the economy and underestimating the government’s reform efforts. In response, senior Moody’s official Marie Diron said on Friday that the ratings agency has been encouraged by the “vast reform agenda” undertaken by the Chinese authorities to contain risks from the rapid rise in debt. However, while Moody’s believes the reforms may slow the pace at which debt is rising, they will not be enough to arrest the trend and levels will not drop dramatically, Diron said. Diron said China’s economic recovery since late last year was mainly thanks to policy stimulus, and expects Beijing will continue to rely on pump-priming to meet its official economic growth targets, adding to the debt overhang.
Moody’s also is waiting to see how some of the announced measures, such as reining in local government finances, are actually implemented, Diron, associate managing director of Moody’s Sovereign Risk Group, told reporters in a webcast. China may no longer get an A1 rating if there are signs that debt is growing at a pace that exceeds Moody’s expectations, Li Xiujun, vice president of credit strategy and standards at the ratings agency, said in the same webcast. “If in the future China’s structural reforms can prevent its leverage from rising more effectively without increasing risks in the banking and shadow banking sector, then it will have a positive impact on China’s rating,” Li said. But Li added: “If there are signs that China’s debt will keep rising and the rate of growth is beyond our expectations, leading to serious capital misallocation, then it will continue to weigh on economic growth in the medium term and impact the sovereign rating negatively.”
House sales fell 26% in the Toronto region in the month following the Ontario government’s introduction of a foreign-buyer’s tax as many potential purchasers stepped back and waited to assess the market impact. In the 30 days after the province announced the immediate introduction of a 15-per-cent foreign-buyer’s tax on April 20, the number of houses sold in the Greater Toronto Area fell 26% compared with the same period last year, according to data compiled by Toronto realtor John Pasalis, president of Realosophy Realty Inc. Communities north of Toronto saw the greatest declines between April 20 and May 20, with sales falling 61% in Richmond Hill, 46% in Markham and 44% in Newmarket. The City of Toronto recorded a 23% drop in the number of homes sold, while Brampton and Mississauga west of Toronto had sales declines of 16% and 27%, respectively.
The sales review looked only at freehold homes, including detached and semi-detached houses, but did not include condominiums. The drop in selling activity is part of a broad cooling in the Toronto region market that began in April as buyers moved to the sidelines while home owners rushed to list their houses to try to cash in before the market peaked. In the first two weeks of May alone, sales of all types of homes in the GTA fell 16% compared with the same period in May last year, while the number of new listings soared 47%, according to data compiled by the Toronto Real Estate Board. The average GTA home sold for $890,284 in the first two weeks of May, a 17-per-cent increase from a year earlier, primarily because of large gains earlier this year. But the price was down 3% compared with April, when the average sale price for all types of GTA homes was $920,791.
Mr. Pasalis said he does not believe the new foreign-buyer’s tax is directly responsible for much of the drop in sales since April 20 because foreign buyers were not a large enough part of the market to cause such a significant decline, and many foreign buyers will qualify for rebates of the tax. Instead, he believes the drop is a result, in part, to a decline in demand from domestic investors who were purchasing second properties to rent or flip. Most investors have stopped buying as they wait to see the impact of a suite of new measures announced by the province in April, including the foreign-buyer’s tax, he said. “They disappeared – no one is talking about buying money-losing rental properties any more,” Mr. Pasalis said. “The whole excitement and euphoria is kind of gone right now.”
The World Bank’s chief economist has been stripped of his management duties after researchers rebelled against his efforts to make them communicate more clearly, including curbs on the written use of “and.” Paul Romer is relinquishing oversight of the Development Economics Group, the research hub of the Washington-based development lender, according to an internal staff announcement seen by Bloomberg. Kristalina Georgieva, the chief executive for the bank’s biggest fund, will take over management of the unit July 1. Romer will remain chief economist, providing management with “timely thought leadership on trends directly affecting our client countries, including the ‘future of work,’” World Bank President Jim Yong Kim said in the note to staff dated May 9.
Romer said he met resistance from staff when he tried to refine the way they communicate. “I was in the position of being the bearer of bad news,” he said in an interview. “It’s possible that I was focusing too much on the precision of the communications and not enough on the feelings my messages would invoke.” [..] But in recent years, his attacks on the credibility of macroeconomic models irritated many of his peers. His combativeness didn’t endear him to some of the more than 600 economists who work in DEC, according to people familiar with the matter. Romer wanted DEC to set the intellectual agenda among those who think deeply about how to help the world’s poorest countries, said one of the people, who spoke on condition of anonymity.
The World Bank is already considered a major source of development research, ranking first among institutions in terms of the number of times its work is cited, ahead of Brown University, the London School of Economics and Harvard University. But Romer expressed to those around him that the department should communicate more clearly, dive right into public debates, and align its work with the institution’s goals of ending extreme poverty and reducing inequality. It didn’t take him long to shake things up. He declared several positions redundant and enforced term limits on senior managers. In the interview, Romer said he cut more than $1 million in annual expenses from the group’s budget.
Recent data on the performance of the U.S. economy has been generally on the soft side, a sore point discussed at length by Federal Reserve officials at their latest meeting, minutes of the gathering released on Wednesday showed. In fact, measures developed by Citigroup economists to track how incoming economic data stacks up against market expectations show the latest numbers from the United States have been falling persistently short of forecasts. Meanwhile, Citi’s comparable “economic surprise” indexes for other regions show just the opposite: upside surprises. Of particular concern for the Fed are recent undershoots on key gauges of inflation that have been lagging the central bank’s stated target of 2% annualized consumer price growth.
Market-based measures of long-term inflation expectations have also weakened substantially, enough so that Fed policymakers agreed at their last meeting that before raising rates again they would need stronger data to confirm recent weakness was not a new trend. With doubts rising over U.S. President Donald Trump’s ability to deliver policies to promote faster economic growth, many of these gauges have fallen back to near Election Day levels. Citi’s inflation surprise indexes underscore the Fed’s anxiety. [..] recent U.S. inflation readings have returned to their long-term trend of underperforming against forecasts after a brief run of upside surprises earlier this year.
Meanwhile, inflation reports from Europe have topped expectations by the widest margin on record. The rest of the so-called Group of 10 largest developed economies are meanwhile beating forecasts by the most since the financial crisis nearly a decade ago, even after taking into account the drag from U.S. numbers. Even Japan, notorious for its decades-long struggles against deflation, is posting inflation data notably above forecasts.
The euro area should focus on implementing its banking union and consigning bailouts to the history books, rather than exploring ambitious ideas such as a common budget or shared liabilities, according to Finland’s finance minister. “We’re willing to engage in a discussion on different scenarios on the future of European Monetary Union,” Petteri Orpo said in an emailed response to questions Wednesday. “I would be cautious about proposals that aren’t consistent with the current stage of political union in Europe, such as eurobonds.” The debate over the future of the EU has received new impetus following the U.K.’s decision to leave, with the European Commission outlining five possible scenarios.
Those hoping for a re-start in the integration drive in response to populist criticisms have drawn new energy from the lovefest on display in Berlin when German Chancellor Angela Merkel hosted a first meeting with Emmanuel Macron, the new French president. Italy and Spain, meanwhile, are renewing their push for mutually-backed debt. The priorities of Finland’s finance minister are not as lofty. “The banking union is by far the most important element,” Orpo said. “Risk reduction must come before risk sharing.” Finland may have a special interest in boosting the banking union now that the largest Nordic lender, Nordea Bank, is considering relocating its headquarters to Helsinki from Stockholm.
Critical talks on easing Greece’s massive debt burden remain fraught with conflict, despite assurances from the IMF on Thursday that the sides are closer to an agreement. A deal to secure debt relief for Athens from the eurozone is the missing piece to unlocking loans the country needs to make debt payments and begin to recover from the years-long crisis. But transcripts of part of the recent discussions between the IMF, the ECB and eurozone finance ministers published by Greek financial website Euro2day on Thursday show many disputes remain and few of the participants are satisfied, least of all Greece Finance Minister Euclid Tsakalotos. He slammed one of the proposals floated in the discussions the “worst of all worlds” for Greece. “I don’t think anyone here can say that is a good deal for us, who have negotiated in good faith.”
This seems to contradict comments from an IMF official Thursday, who said the differences are narrowing even though the fund needs more specifics on a debt relief plan before it can agree to release more financing. “Everyone is optimistic that agreement can be reached and hopefully can be reached at the next Eurogroup meeting” in mid-June, IMF spokesman Gerry Rice told reporters. In contrast, the IMF’s main negotiator, Poul Thomsen, said he was “very far away from being able to tell our board that we are close to a strategy we can agree to” on debt relief, according to the transcripts. [..] Eurogroup president Jeroen Dijsselbloem floated the possibility of the IMF approving a loan for Greece, but withholding disbursement of the funds until it had sufficient details on the debt relief — something virtually unheard of in IMF aid programs.
Thomsen said it was an “interesting proposal” that he could raise with the management, even while Tsakalotos slammed the idea. One advantage to the unusual arrangement, were the IMF to agree, is that it would take the discussion of Greek debt relief out of play in Germany’s election in September. The German public is hostile to more financial support for Athens. Rice vehemently denied doing any political favors for Germany. “We are exploring all options within our existing practices and rules,” he said. IMF lending depends on each country’s circumstances “but we try to be as flexible as we can,” he added. German Finance Minister Wolfgang Schaeuble called the lack of a deal at Monday’s talks “a major failure,” and said “I’m not very optimistic that things will improve.”
The IMF also disagrees with Europe’s forecasts for Greek growth and primary fiscal surplus which are key to the debt discussions, Rice said. Europe continues to forecast a surplus excluding debt payments of 3.5% of GDP even after 2022, which the IMF believes is not sustainable and would impose undue hardship on the country. Athens could better use its budget to fuel growth and “Greece cannot grow while maintaining such a high surplus,” Rice said. “It does not help anyone to have assumptions that are overly optimistic.”
People living near the location of a new migrant detention center on the island of Chios say they will fight its construction. The facility will be used as a holding center for those who have had their asylum requests rejected and are due to be deported. A high-ranking police official, Nikolaos Zisimopoulos, informed authorities on Chios that construction of the new center would begin immediately, and containers carrying building materials arrived on the island Thursday. The municipal council called an emergency meeting last night to discuss the matter, as residents say their patience is reaching breaking point and that they will take action to fight the center’s construction.
Chios Mayor Manolis Vournous has asked for more time to allow the island’s residents to discuss the location of the new center. The Hellenic Police (ELAS), however, says there is no more time for any further discussion as the situation on the island’s existing camps is dire. ELAS also notes that a shift in the main flow of migrants toward Chios and away from Lesvos is adding fuel to the fire. Authorities say this shift can be attributed to the migrants knowing Chios does not have a closed facility like Lesvos does. So far this month more than half of all refugee and migrant arrivals in Greece have come to Chios.
Looking at the incredible mess built up by the likes of Trump and Hillary, Farge and Theresa May, Angela Merkel and Marine Le Pen, Jeremy Corbyn looks better all the time. He’s an actual person, and he sticks to his guns.
Maybe what goes against him most is that people in this day and age don’t recognize him as a politician anymore; politicians are supposed to stab backs, tell lies and conspire against anyone threatening their shot at power.
Is there anyone who would argue that the world would have been a worse place with Bernie Sanders in the White House and Jeremy Corbyn at no. 10?
As the left has moved, and become, right, we need a left just for balance in our societies. Nothing to do with if you are a socialist or not, just balance.
Britain’s opposition Labour Party pledged to raise taxes on the well-off, renationalise key industries and end austerity in its manifesto on Tuesday, presenting voters with their starkest choice in decades in next month’s election. Labour leader Jeremy Corbyn called the programme “radical and responsible”, saying the country had been run “for the rich, the elite and the vested interests” in seven years of Conservative government. “It will change our country,” he will say in his speech at the presentation of the manifesto in Bradford in northwest England, according to extracts released by the party’s press office. “It will lead us through Brexit while putting the preservation of jobs first,” he said. The manifesto is expected to include a tax increase from 40% to 45% for salaries of between ££80,000 (€94,000, $103,000) and ££150,0000 a year, according to The Times and The Daily Telegraph.
The current 40% tax rate applies to people earning between ££31,500 and ££150,000. There would also be a new top rate of income tax of 50%, the reports said. Labour has said the rise would fund increased investment in the state-run National Health Service (NHS) and would only affect 5% of earners. The Guardian reported that the party was also planning a levy on businesses with staff earning large salaries, set at 2.5% on those earning over ££330,000 and 5.0% on those earning more than ££500,000. Labour will also promise to renationalise the railways, the Royal Mail postal service and water companies, according to various reports. Labour has also promised it will increase corporation tax to 26% by 2022 and impose a “Robin Hood tax” on financial transactions. “It’s a programme that will reverse our national priorities to put the interests of the many first,” Corbyn is expected to say. “This is a programme of hope. The Tory campaign, by contrast, is built on one word: fear.”
An academic investigation has caught the UK media trying incredibly hard to keep Jeremy Corbyn out of Number 10. The mainstream TV and newspaper media are pushing the agenda of the Conservative Party within their coverage, according to an investigation from Loughborough University. The Conservatives are the “most frequently reported” and “most extensively quoted” party, while issues pushed by Labour are “marginalised”, say the report’s authors. In newspapers, for example, the Conservatives received by far the most direct quotation, exceeding Labour by 45%. One of the most striking findings is how much non-political personality pervades the entire media’s election coverage. Last week, Theresa May made a policy-free appearance on The One Show with her husband Philip May. The BBC hosted the personality-driven chat, despite the sitting Prime Minister refusing to debate her record on TV.
Then, according to the content analysis, the broader media amplified the appearance and sidelined the real issues. And this is precisely the aim of a Conservative Party opting for cosy sofa chats over serious policy debate. The sheer weight of reporting on the sanitised family affair propelled the Conservative leader’s husband into the fifth most covered political figure during the study’s time frame. He received nearly double the coverage of the SNP’s Nicola Sturgeon, who leads a party controlling 56 out of the 59 Scottish seats. The Conservative leader’s husband, a family figure irrelevant to the election, also received nearly as much coverage as Labour’s Shadow Chancellor. John McDonnell was the fourth most covered political figure, reported on in 6.1% of all the election news items analysed. Theresa May was easily the most prominent, featuring in 32.4% – over a third of all news items analysed. Corbyn received much less coverage across TV and newspaper media, appearing in 21.4%.
Dystopia is here. It’s not just the “imagined place” of the dictionary definition or a future state of dystopian novels. It is very real and right now, at least for those of us trying to follow national politics. And it’s not just Donald Trump. It’s Barack Obama, it’s Ted Cruz, it’s the New York Times, it’s Breitbart News. It is an alternate universe detached from the world we live in but intruding into it in painful and dangerous ways. It is a media narrative of political conspirators colluding with a dictatorial archenemy, of an intemperate and delusional leader overturning the institutions of democracy, of a “deep-state” resistance to constitutional authority. It is a dystopia of rampant hypocrisy, where obstructing legislation, supporting a law-enforcement official who strays beyond the limits of his authority, or boycotting a president’s appointments is evil and undemocratic until it’s your party that wants to do it.
Two dystopian classics have shot back to the top of best-seller lists because the media suggest the authoritarian surveillance societies they portray have arrived. The 1948 novel “1984” and the 1985 novel “The Handmaid’s Tale” are touted as descriptions of where we are headed under Trump. While the author of “Handmaid,” Margaret Atwood, and the cast of the Hulu miniseries based on it see a Trump administration as the realization of the misogyny depicted in the novel, it’s obvious the U.S. is not about to become a Puritanical theocracy like that in the book. Critics on both the left and the right dispute the media meme that “Handmaid” is a depiction of the Trump era. Irish feminist Angela Nagle writes in the left-wing Jacobin magazine that it is neoliberal market forces that are oppressing women, not an imaginary theocratic state.
“The real-world dystopia for the majority of women in the age of Trump is not that they are being forced to have children by a repressive traditionalist state,” she wrote last week, “but that they’re being compelled not to by far more insidious forces, and those that do are financially and socially punished at every turn.” We are ruled by myths, she continues, but not those in the miniseries. “The mythologies of our age in the West are not enforced by repressive theocratic regimes,” Nagle says, “but by the market command to be free, to be creative, to be flexible, to love what you do for even the most uninspiring of jobs.”
Americans’ opinions of the two major political parties are now similar after the Democratic Party’s ratings slipped to 40% – from 45% last November – while the Republican Party’s image is essentially unchanged at 39%. The latest update on the party’s images is based on a May 3-7 Gallup poll, which asked Americans whether they have a favorable or an unfavorable opinion of each party. Throughout last year’s contentious presidential election campaign, U.S. adults rated neither party highly. In fact, more rated each party unfavorably than favorably. But Democrats maintained a slight edge in favorable ratings, including 45% to 40% in Gallup’s prior measurement, conducted last November after Donald Trump’s victory in the 2016 presidential election.
So far, Trump’s unpopularity as president has done little to erode Americans’ views of the GOP, perhaps because they were already quite negative. However, Americans are now less positive toward the Democratic Party than they were last fall. The decline in Democratic Party favorability is mostly a result of lower ratings from self-identified Democrats. In November, 83% of Democrats had a positive opinion of the Democratic Party; now, 77% do. Independents are also slightly less positive toward the Democratic Party, while Republicans’ negative views of the opposing party are steady.
[..]Americans are quite negative toward both of the major political parties at this time. Trump’s unpopularity and the GOP’s challenges in governing a divided nation have done little to weaken the party’s poor image further. But those same factors have also done little to cast the opposing party, the Democrats, in a more favorable light. If anything, the Democratic Party’s positioning appears weakened, largely because its own supporters now hold a less positive view of the party. That could indicate Democrats are frustrated with the party’s minority status in Washington. Not since 2003 through 2006 have Democrats failed to control the presidency, House of Representatives or Senate. Prior to that, Democrats had control of either Congress or the presidency for more than 50 years.
Pvt. Chelsea Manning, the transgender soldier convicted of giving classified government materials to WikiLeaks, is due to be released from a Kansas military prison on Wednesday after serving seven years of her 35-year sentence. President Barack Obama granted Manning clemency in his final days in office in January. Though she’s set to be released from Fort Leavenworth, Manning’s lawyers and the Army have refused to say when and how she’ll be freed due to potential security concerns. Manning, who was known as Bradley Manning before transitioning in prison, was convicted in 2013 of 20 counts, including six Espionage Act violations, theft and computer fraud. She was acquitted of the most serious charge of aiding the enemy.
The Crescent, Oklahoma, native tweeted after being granted clemency that she plans to move to Maryland. Neither she nor her attorneys explained why, but she has an aunt who lives there. Manning, a former intelligence analyst in Iraq, has acknowledged leaking the materials, which included battlefield video. She said she wanted to expose what she considered to be the U.S. military’s disregard of the effects of war on civilians and that she released information that she didn’t believe would harm the U.S. Critics said the leaks laid bare some of the nation’s most-sensitive secrets and endangered information sources, prompting the State Department to help some of those people move to protect their safety. Several ambassadors were recalled, expelled or reassigned because of embarrassing disclosures.
Manning, who was arrested in 2010, filed a transgender rights lawsuit in prison and attempted suicide twice last year, according to her lawyers. Obama’s decision to commute Manning’s sentence to about seven years, including the time she spent locked up before being convicted, drew strong criticism from members of Congress and others, with Republican House Speaker Paul Ryan calling the move “just outrageous.” In a statement last week — her first public comments since Obama intervened — Manning thanked that former president and said that letters of support from veterans and fellow transgender people inspired her “to work toward making life better for others.” “For the first time, I can see a future for myself as Chelsea,” she said.
“I can imagine surviving and living as the person who I am and can finally be in the outside world. Freedom used to be something that I dreamed of but never allowed myself to fully imagine.” Her attorneys have said Manning was subjected to violence in prison and argued the military mistreated her by requiring her to serve her sentence in an all-male prison, restricting her physical and mental health care and not allowing her to keep a feminine haircut. The Army said Tuesday that Manning would remain on active duty in a special, unpaid status that will legally entitle her to military medical care, along with commissary privileges. An Army spokeswoman, Lt. Col. Jennifer Johnson, said Manning will be on “excess leave” while her court-martial conviction is under appellate review.
Seven people who sheltered the whistleblower Edward Snowden in June 2013 are at risk of return to torture and persecution at home, Human Rights Watch said today. On May 11, 2017, the Hong Kong Immigration Department rejected their asylum claim; their lawyers are in the process of appealing the decision and pursuing a separate case for entry and asylum in Canada, where sponsors are ready to assist them. “Those who helped Edward Snowden in Hong Kong when he was seeking asylum now find themselves at dire risk if sent back to their countries,” said Dinah PoKempner, general counsel at Human Rights Watch. “Canada has the opportunity to a prevent a terrible outcome and should act immediately.”
The asylum-seekers include two men and a woman from Sri Lanka, and a woman from the Philippines, along with their three children who were born in Hong Kong and are stateless. The adults allege that they suffered torture and persecution in their home countries, and have been pursued by powerful people or officials who have tracked or threatened them. Their asylum lawyer, Robert Tibbo, brought Snowden, another client, to their homes in 2013 after he revealed he had disclosed classified information to the press. The families each freely allowed Snowden to stay with them for a short time after his disclosures became public but before his arrest was sought.
Neither the asylum-seekers nor their lawyer revealed their role in Snowden’s journey. However, journalists independently discovered their identities shortly before the release of an Oliver Stone movie about Snowden that shows him being hidden among asylum-seekers in Hong Kong. At that point, the asylum-seekers went public in an effort to have some control over how they were portrayed in the media.
[..] we were somewhat shocked to come across a report from money manager United Income which effectively argues that American retirees are saving too much money rather than too little. To summarize the thesis, United Income argues that retirees become more conservative as they grow older which causes them to save more and allocate less to equities…which is, of course, a somewhat self-serving conclusion but never mind that.
“Innovations in medicine and technology have extended human life by over 30 years since 1900. This has helped to double the amount of time the average adult now spends in retirement compared to several decades ago. But, the benefits of longer lives and retirement may be limited if older households curb their consumption or investment in preventive health measures because they are overly pessimistic about their future financial health. Overly negative viewpoints toward the future may also create self-fulfilling economic problems if it leads to an overly aggressive fixed-income portfolio.”
Unfortunately, when combined with the fact that “Median Net Wealth” is actually shrinking, it’s easy to deduce that while the majority of American retirees are actually spending their retirement income (and then some), there is a group of super wealthy old folks who simply can’t spend enough money to offset annual investment income growth….which speaks more to the growing wealth gap than to some economic fear that is causing retirees to hoard cash. In this context, it’s not too difficult to understand why aggregate YoY spending trends collapse as old folks get older. The most wealthy retirees can only find so many ways to burn their massive nest eggs which means that, at least for these folks, YoY spending doesn’t grow but retirement balances do…while the overwhelming majority of people simply run out of cash and have to cut every corner possible to survive….
Australia’s prized AAA rating will only rest on a firm footing once there’s a “meaningful moderation” in housing and credit, S&P Global Ratings said as it maintained a negative outlook on the country’s sovereign score. The country’s rating was affirmed by the credit assessor after the latest federal government budget projected a return to surplus by 2021, although S&P noted that revenue could disappoint and lawmakers may struggle to implement fiscal repair policies. It also highlighted risks stemming from Australia’s high level of external indebtedness. S&P has maintained a negative outlook on the country since last July when it issued a warning in the wake of a knife-edge federal election.
“The ratings could stabilize if we were to see a significant and sustained improvement in the medium-term budget outlook, leading to a return to a general government surplus,” S&P said in a statement Wednesday. “A stabilization of the ratings would also require a meaningful moderation of the credit and house price boom.” Home prices in Sydney and Melbourne have surged in the wake of unprecedented interest-rate cuts by the Reserve Bank of Australia as the country navigates its way through the aftermath of a mining boom. Regulators have progressively tightened lending restrictions amid concerns about financial stability.
China’s just-completed conference touting its Belt and Road initiative certainly looked like a triumph, with Russian President Vladimir Putin playing the piano and Chinese leaders announcing a string of potential deals and massive financial pledges. Underneath all the heady talk about China positioning itself at the heart of a new global order, though, lies in uncomfortable question: Can it afford to do so? Such doubts might seem spurious, given the numbers being tossed around. China claims nearly $900 billion worth of deals are already underway, with estimates of future spending ranging from $4 trillion to $8 trillion, depending on which Chinese government agency is doing the talking. At the conference itself, Chinese President Xi Jinping pledged another $78 billion for the effort, which envisions building infrastructure to link China to Europe through Asia, the Middle East and Africa.
From no other country in the world would such pledges be remotely plausible. Yet even for China, they’ll be difficult to fulfill without clashing with the country’s other objectives. The first question is what currency to use for all this lending. Denominating loans in renminbi would accelerate China’s stated goal of internationalizing its currency. But it would also force officials to tolerate higher levels of offshore renminbi trading and international price-setting. So far, they’ve shown little appetite for either. Additionally, countries along the Belt-and-Road route would need to run trade surpluses with China in order to generate the currency needed to repay such loans. In fact, as Bloomberg Intelligence economist Tom Orlik has noted, China ran a $250 billion surplus with Belt-and-Road countries in 2016.
It will be mathematically impossible for Sri Lanka and Pakistan to repay big yuan-denominated loans when they’re running trade deficits with China close to $2 billion and $9 billion, respectively. Financing projects in dollars is no panacea either. Unless China conducts U.S. dollar bond offerings to fund these investments, it’ll have to tap its official foreign-exchange reserves. Those now hover around $3 trillion. That sounds like a lot. But outside estimates suggest anywhere from a few hundred billion to nearly $1 trillion of that money is illiquid. China needs nearly $900 billion to cover short-term external debt and another $400 to $800 billion to cover imports for three to six months. Pouring additional billions into Central Asian infrastructure projects would only tie up money China needs to defend the yuan.
And, borrowers would need to run significant dollar surpluses in order to repay dollar-denominated loans. Obviously, not every country can do so, or undervalue its currency to try and build up a surplus. Beyond the specific mechanisms, it’s unclear whether China has the financial capacity to lend at these levels to borrowers of dubious creditworthiness. As French bank Natixis S.A. has noted, in order to finance $5 trillion in projects, China “would need to see growth rates of around 50% in cross-border lending.” This would wreak havoc on Chinese creditworthiness and raise external debt from a “very comfortable” level (around 12% of GDP) to “more than 50%” if China can’t bring in other lenders.
“The relations between Turkey and the United States have been erected upon common democratic values and common interests.” That’s what Turkey’s president Recep Tayyip Erdogan said at a White House press conference with US president Donald Trump on Tuesday (May 16). But shortly after the event, Erdogan’s bodyguards proceeded to beat and kick people outside the Turkish ambassador’s residence in Washington DC. The altercation was captured on camera, and resulted in nine people being hurt, Voice of America said.
A photojournalist at the site said it seemed to be a pro-Turkey gathering at first, while some witnesses said the group outside the residence included a person carrying a flag of a Kurdish party in Syria allied with a militia the US plans to aid, over Turkey’s objections. [..] It’s not the first time Erdogan’s security has roughed up protesters on American soil. In 2016, the Washington Post reported clashes between protesters and the Turkish leader’s security detail. And in 2014, in New York, Turkish security threatened and pushed around journalists working for a newspaper perceived to be critical of Erdogan.
Turkish aeroplanes and helicopters illegally entered Greece’s airspace 141 times yesterday (15 May), the Hellenic National Defence General Staff reported. According to Greek press reports, 20 Turkish F-16, 5 CN-235 maritime surveillance aircraft and 19 helicopters entered the Athens flight information region (FIR) without submitting a flight plan. In all cases, Turkish aircraft were identified and intercepted by Greek fighters, while in nine cases the interception process resulted in near combat situations. In addition, two Turkish missile boats entered Greek territorial waters off the southeast Aegean island of Agathonisi. The vessels, which were taking part in a maritime exercise code-named Denizkurdu (Seawolf), stayed in Greek territorial waters for about 20 minutes.
As Kathimerini journal reported, last month Agathonisi was described as a “Turkish island” by Turkey’s Minister of European Union Affairs Omer Celik. While the EU and the international community recognise the sovereignty of Greece over the Greek Aegean islands, Turkey has a list of issues regarding the delimitation of territorial waters, national airspace, exclusive zones, etc. Ankara also claims “grey zones” of undetermined sovereignty over a number of small islets, most notably the islets of Imia/Kardak. The serious incidents occurred just a few hours after the meeting of Greek premier Alexis Tsipras with Turkish President Tayyip Erdogan in Beijing. The Greek Ministry of Foreign Affairs issued a strong communique saying that the incident “constitutes a flagrant violation of international law”.
“It is clear that there are forces in Turkey that do not want understanding and good neighbourly relations between the two countries,” the Greek ministry added. In the meantime, tensions between Ankara and Berlin also escalated. The German government is exploring the possibility of moving its troops out of Turkey’s Incirlik air base, which is crucial for the fight against ISIS, after a second German parliamentary delegation was prevented from visiting the Incirlik facility. German news agency dpa quoted Wolfgang Hellmich, the chairman of the Bundestag Defense Committee, as saying “we’re not going to be blackmailed” by the Ankara government.
Prime Minister Shinzo Abe’s sudden rush to change the pacifist constitution that has defined Japan’s security policy since World War II risks eroding his popularity before an election due by the end of next year. This month, Abe proposed an amendment to recognize the existence of Japan’s Self-Defense Forces while maintaining Article 9, which renounces the right to war and prohibits land, sea and air forces. He wants the change to take effect by 2020, when Tokyo hosts the Olympics. Rewriting the constitution has been a longstanding goal of the ruling Liberal Democratic Party, whose original members – including Abe’s grandfather, who was a prime minister – saw the document as a U.S. imposition that humiliated Japan after World War II.
For Abe, the timing appears opportune: not only are tensions high over North Korea, but his opponents are weak. Yet it also carries risks. The public is divided on changing the constitution, and even some members of his own party don’t support it. The issue could galvanize the opposition and potentially hurt Abe’s chances of becoming Japan’s longest-serving prime minister. “It’s going to be very difficult for him to pull this off,” said Gerald Curtis, an emeritus professor of political science at Columbia University who is currently in Tokyo. “It will eat away at his support. Whether it eats away enough to threaten his third term – that’s unlikely.”
A group of about 50 combat engineers based at Canadian Forces Base Gagetown were deployed to Latvia on April 29 as part of Operation Reassurance. The mission is to build a town for 500 soldiers. According to commanding officer Lt.-Col. Chris Cotton, the installation will have «everything you would expect in a small town, from its kitchen to its quarters, its electrical distribution system, water distribution system, internet, gym facilities that would allow people to survive over the long term in Latvia». Obviously, this is an element of vast infrastructure to provide for a long-term commitment. In early April, a US-led battle group of 1,350 soldiers for NATO’s Enhanced Forward Presence in Eastern Europe arrived at its base near Orzysz in northeastern Poland.
It took place just a few days after a NATO-Russia Council meeting took place on March 30. Secretary-General Jens Stoltenberg called the talks with Moscow «frank» and «constructive». Then the usual song and dance followed under the slogan of Russian threat. British RAF fighters are scheduled to be stationed to Romania this May. In March the first of 800 UK troops arrived in Estonia supported by around 300 armed vehicles. Along with French and Danish forces they’ll be stationed there on what NATO leadership calls «rotational basis». In January, German and Belgian forces arrived in Lithuania near the Russian enclave of Kaliningrad. The UK leads the Estonia Battlegroup while other NATO members are deploying forces to Latvia, Lithuania and Poland as part of the bloc’s Enhanced Forward Presence battalion.
All in all, 4,000 NATO troops with tanks, armored vehicles, air support, and high-tech intelligence centers deployed to Poland, Latvia, Lithuania, and Estonia. In accordance with the fiscal year 2017 European Reassurance Initiative budget proposal, the US Army is reopening or creating five equipment-storage sites in the Netherlands, Poland, Belgium and two locations in Germany. Last September, the service began to assemble more Army Prepositioned Stocks (APS) for permanent storage in Europe. Those stocks will be sufficient for another armored brigade to fall in on. The rotating brigade will bring its own equipment. The move will add hundreds of the Army’s most advanced weapons systems to beef up the US European Command’s combat capability. It will also free up an entire brigade’s worth of weapons currently being used by US forces training on the continent to enable more American troops to be rushed in on short notice.
The EU’s newest members are the fiercest opponents of its single market. As with so many of the toughest fights in Brussels, it all boils down to farmers and food. Central Europeans say big Western European landowners and multinational supermarkets are wiping out their farmers and shopkeepers. Protecting smallholders from powerful investors like banks has leapt to the top of the political agenda. Eastern European governments have rolled out a complex web of new laws to stop foreigners buying out swaths of ultra-cheap farmland. The European Commission regards this new legislation in the former communist countries as an existential threat to the EU’s free flow of goods, people and capital — the single market, in short — and struck back with infringement cases intended to preserve its sanctity.
In Bulgaria, for example, the European Commission launched an infringement proceeding last year over a law that investors should be resident for more than five years before they can buy farmland. In Romania, Brussels objected this year to rules that supermarkets should source 51 percent of fresh produce from local suppliers. There has been no decision on either case. It is in Poland, the regional heavyweight, that the battle over respect for the single market is fought the hardest. Brussels has already ordered the authorities to halt a tax on the retail sector on the grounds it grants a selective advantage to small, local shops with a low turnover over big foreign-owned supermarkets. All eyes are now focusing on how the European Commission will react to a growing chorus of complaints in Poland over the rights of foreigners to buy farmland.
Italy and Germany are reportedly seeking an EU mission to stabilise Libya’s 5,000km southern border with neighbouring countries and curb migration. German newspaper Welt am Sonntag reported on Sunday (14 May) that the German interior minister, Thomas de Maiziere, and his Italian counterpart, Marco Minniti, want the mission set up between Libya and Niger. The ministers sent a joint-letter last week to the European Commission, saying that an EU mission at the border between the two nations was needed “as soon as possible.” “The first months of this year have shown that our efforts up to this point have been insufficient. We must prevent hundreds of thousands of people who are in the hands of smugglers from risking their lives in Libya and the Mediterranean,” the letter states.
The letter, also seen by the French news agency AFP, says greater development and local support is needed for people living along the border. It also calls for “technical and financial support” to Libyan authorities. Abdulsalam Kajman, the vice president of the UN and EU-backed government seated in Tripoli, had also told Italy’s Corriere della Sera newspaper on Sunday that Libya was willing to launch patrols with the help of other countries. “If we don’t resolve southern Libya’s problems, we will not resolve the migrant issue,” he said. Kajman added that Italy was prepared to help train a new patrol guard for the task. The plans are part of a broader effort to prevent people from leaving Libya on boats towards the EU and crack down on migrant smugglers. The exodus from the coast has increased by over 44% – when compared to the same period last year – with some 45,000 people having disembarked between January and mid-May so far.
U.S. President Donald Trump ignited a political firestorm on Tuesday by firing FBI Director James Comey, who had been leading an investigation into the Trump 2016 presidential campaign’s possible collusion with Russia to influence the election outcome. The Republican president said he fired Comey, the top U.S. law enforcement official, over his handling of an election-year email scandal involving then-Democratic presidential nominee Hillary Clinton. The move stunned Washington and raised suspicions among Democrats and others that the White House was trying to blunt the FBI probe involving Russia. Some Democrats compared Trump’s move to the “Saturday Night Massacre” of 1973, in which President Richard Nixon fired an independent special prosecutor investigating the Watergate scandal.
White House officials denied allegations that there was any political motive in the move by Trump, who took office on Jan. 20. Senate Democratic leader Chuck Schumer said he spoke to Trump and told him he was “making a very big mistake” in firing Comey, adding the president did not “really answer” in response. An independent investigation into Moscow’s role in the election “is now the only way to go to restore the American people’s faith,” Schumer said. Though many Democrats have criticized Comey’s handling of the Clinton email probe, they said they were troubled by the timing of Trump’s firing of him.
[..] Pushing back against critics of the move, White House officials said Deputy Attorney General Rod Rosenstein, a career prosecutor who took office on April 25, assessed the situation at the FBI and concluded that Comey had lost his confidence. Rosenstein sent his recommendation to Sessions, who concurred and they forwarded their recommendation to Trump, who accepted it on Tuesday, they said. The White House released a memo in which Rosenstein wrote: “I cannot defend the Director’s handling of the conclusion of the investigation of Secretary Clinton’s emails, and I do not understand his refusal to accept the nearly universal judgment that he was mistaken.”
Not to defend retired Lt. Gen. Michael Flynn for his suspect judgment, but it should be noted that his case represents a disturbing example of how electronic surveillance and politicized law enforcement can destroy an American citizen’s life in today’s New McCarthyism. The testimony on Monday by former acting Attorney General Sally Yates and former Director of National Intelligence James Clapper offered no evidence of Flynn’s wrongdoing – those facts were deemed “classified” – yet the pair thoroughly destroyed Flynn’s reputation, portraying him as both a liar and a potential traitor. That Senate Democrats, in particular, saw nothing troubling about this smearing of the former director of the Defense Intelligence Agency and, briefly, President Trump’s national security adviser was itself troubling. Republicans were a bit more skeptical but no one, it seemed, wanted to be labeled as soft on Russia.
So, there was no skepticism toward Yates’s curious assertion that Flynn’s supposed lying to Vice President Mike Pence about the details of a phone call with Russian Ambassador Sergey Kislyak somehow opened Flynn to Russian blackmail – her core explanation for why she rushed to Trump’s White House with warnings of this allegedly grave danger. Yates also talked ominously about “underlying” information that raised further questions about Flynn’s patriotism, but that evidence, too, couldn’t be shared with the American people; it was classified, leaving it to your imagination the depth of Flynn’s perfidy. Despite the thinness of Yates’s charges – and the echoes of Sen. Joe McCarthy with his secret lists of communists that he wouldn’t release – the mainstream U.S. news media has bestowed on Yates a hero status without any concern that she might be exaggerating the highly unlikely possibility that the Russians would have blackmailed Flynn.
Her supposition was that since Vice President Mike Pence’s account of the Kislyak-Flynn conversation deviated somewhat from the details of what was actually said, the Russians would seize on the discrepancy to coerce Flynn to do their bidding. But that really makes no sense, in part, because even if the Russians did pick up the discrepancy, they would assume correctly that U.S. intelligence had its own transcript of the conversation, so there would be no basis for blackmail. Yates’s supposed alarm might make for a good spy novel but it has little or no basis in the real world. But it is hard for Americans to assess her claims because all the key facts are classified.
In Donald Trump’s eyes, NATO Secretary-General Jens Stoltenberg was actually the head of an alliance that history had made superfluous. The new American president made clear during his election campaign that he considered NATO to be a Cold War relic – cumbersome, expensive and useless. But when Stoltenberg appeared at a joint press conference during a visit to the new U.S. leader in the White House, nary a word indicated any resentment over NATO. “I said it was obsolete. It is no longer obsolete,” Trump said in a spectacular turnaround. So what happened? Stoltenberg chuckles at the question before fastening his seat belt. The Belgian air force passenger jet taxis onto the runway at the airport in Rome as it prepares to take off for Brussels. “We learn something new every day,” he says.
“Donald Trump and I discussed how NATO must further develop because the world has changed.” Above all, change means that the Europeans will have to increase their defense spending in the future – both Republican Trump and Social Democrat Stoltenberg are in agreement on the issue. In recent weeks, an alliance has formed between the two, very different men. The blustering U.S. president, who has little foreign policy experience, and the measured secretary-general from Norway are now pulling together, with both desiring more money for the alliance. Stoltenberg, 58, is now paying visits to European capitals in order to drum up the necessary funds. In two weeks, Trump plans to travel to Europe for the first time as U.S. president, and it is no coincidence that one of his first stops on May 25 will be to the massive new NATO headquarters in Brussels.
In addition to his demand for more money from other alliance members, Trump is also hoping NATO will take on a greater role in the fight against Islamic State (IS). He would like to see NATO join the U.S.-led coalition against the terrorist organization. Stoltenberg has long been of the opinion that the era of peace dividends has passed, particularly given Russia’s annexation of Crimea and the IS establishment of a “caliphate” in Syria and Iraq. But it was only with Trump’s election that his demands have gained significant momentum. Ironically, the very man who until recently considered NATO to be superfluous is now one of Stoltenberg’s closest allies.
Two U.S. defense officials tell NBC News that President Donald Trump has approved a plan to arm the Syrian Kurdish militia — an important U.S. ally in Syria in the fight against ISIS. One of the officials said the move is significant because it supports the notion that the Syrian Democratic Force is the fighting force that will eventually go in to Raqqa, a city in Syria’s center which has been under ISIS control since 2014. The move also reinforces the idea that the entire Syrian Democratic Force, Syrian Kurds (YPG) and the Syrian Arab Coalition, has the backing of the U.S. Trump and members of the Cabinet spoke about it during a meeting late yesterday at the White House with Secretary of Defense James Mattis joining by video teleconference.
The order has been signed and that “allows the process to begin to function,” one official said. Once the order comes to the Pentagon, the U.S. can begin providing the Syrian Kurds with arms and equipment fairly quickly since some equipment is pre-positioned. [..] The Turks will be notified about the decision soon and the officials expect a strong reaction from them. In March, Secretary of State Rex Tillerson traveled to Turkey to meet with President Recep Tayyip Erdogan, who sees the YPG as terrorists.
Turkey hopes the United States will end its policy of supporting the Syrian Kurdish YPG militia, Deputy Prime Minister Nurettin Canikli said on Wednesday, adding that Ankara could not accept its NATO ally backing the group. Canikli’s comments are among the first official responses after U.S. officials said on Tuesday that President Donald Trump has approved supplying arms to the YPG to support an operation to retake the Syrian city of Raqqa from Islamic State. Ankara views the YPG as the Syrian extension of the outlawed Kurdistan Workers Party (PKK), considered a terrorist group by the United States, Turkey and Europe. The United States sees the YPG as a valuable partner in the fight against Islamic State in northern Syria.
“We cannot accept the presence of terrorist organizations that would threaten the future of the Turkish state,” Canikli said in an interview with Turkish broadcaster A Haber. “We hope the U.S. administration will put a stop to this wrong and turn back from it. Such a policy will not be beneficial, you can’t be in the same sack as terrorist organizations.” Turkish President Tayyip Erdogan is expected to meet Trump in Washington next week. Erdogan has repeatedly castigated the United States for its support for the YPG, saying its NATO ally should support it fully in the fight against terrorism. The Pentagon has sought to stress that it saw arming the Kurdish forces as necessary to ensure a victory in Raqqa, Islamic State’s de facto capital in Syria and a hub for planning the group’s attacks against the West.
Mr Assange, declared by the Donald Trump administration as US public enemy number one, was speaking ahead of a live Spanish television interview. He told current affairs show When It’s Gone: “The CIA is basically useless. They are extremely incompetent as an organisation. “It is the organisation that gave us the end of democracy in Iran, Pinochet, the destruction of Libya, the rise of ISIS within Libya, al-Qaeda, the Syrian disaster and the Iraq war. “It is one of the most useless organisations in the world.” US intelligence agencies have concluded that Russia was behind the hack, and used Wikileaks to harm the chances of Mrs Clinton and favour Mr Trump. Mr Assange said the release was not intended to affect the election.
[..] “There will be panic in the financial markets. This is not priced in. The market isn’t expecting anything. I think it will cause some very difficult times.” The interviewer then asked what his expectations on a government shutdown would look like with Trump.” [..] “I doubt he’ll go for a shutdown by choice. The leadership is not going to stand for it. They have a false idea that Republicans can govern by keeping the Washington Monument open even if we’re bankrupting the country by piling spending. I don’t think they’re going to elect to have a shutdown. What I think is going to happen instead is they’re going to run out of borrowing authority with the debt ceiling, it is now frozen on March 15. We’re locked in at $19.8 trillion so when they run out of cash in a few months, they’ll need a majority in both houses to vote through a multi-trillion bill in both houses. They won’t have the votes.”
[..] “The market is pricing itself for perfection for all of eternity. This is crazy. We’ve got headwinds everywhere. The auto industry is now starting to roll over. The red ponzi in China has only a matter of time before it explodes. We now have debt for the household sector above where it was for the 2008 crisis. I think the market could easily drop to 1,300-1,600 by 30% or more once the fantasy ends. The government will show its true colors. We are headed for a fiscal bloodbath.” Stockman voiced his concern for clarity remarking, “This crazy notion that there is going to be a Trump tax cut and fiscal stimulus must be put to rest once and for all. It’s not going to happen. They can’t pass a tax cut that big without a budget resolution that incorporates $10 or $15 trillion of debt over the next decade. Week by week, slowly the market is beginning to figure this out.
What it means is, all of the corporate insiders are selling stock like there is no tomorrow… where institutional sales of stock have been going up since the election and what we have is the usual end of the cycle. This is the greatest suckers rally we’ve ever seen.” When asked what he would recommend to protect yourself he urged, “The main thing is, get out of the markets. These markets are unstable. They’re rigged and unsustainable… there is no reason to own stocks at this point in the game. It is so overvalued that maybe you can get another two or three out but you’re facing a 30% or 40% down. The risk versus reward is horrible. The bond market is one giant bubble because the central bank’s have been buying bonds worldwide. They’re buying a trillion and still buying a trillion or so on an annual basis. All of that is coming to a halt.”
U.S. shale explorers are boosting drilling budgets 10 times faster than the rest of the world to harvest fields that register fat profits even with the recent drop in oil prices. Flush with cash from a short-lived OPEC-led crude rally, North American drillers plan to lift their 2017 outlays by 32% to $84 billion, compared with just 3% for international projects, according to analysts at Barclays. Much of the increase in spending is flowing into the Permian Basin, a sprawling, mile-thick accumulation of crude beneath Texas and New Mexico, where producers have been reaping double-digit returns even with oil commanding less than half what it did in 2014. That’s bad news for OPEC and its partners in a global campaign to crimp supplies and elevate prices. Wood Mackenzie estimates that new spending will add 800,000 barrels of North American crude this year, equivalent to 44% of the reductions announced by the Saudi- and Russia-led group.
“The specter of American supply is real,” Roy Martin, a Wood Mackenzie research analyst in Houston, said in a telephone interview. “The level of capital budget increases really surprised us.” Drilling budgets around the world collapsed in 2016 as the worst crude market collapse in a generation erased cash flows, forcing explorers to cancel expansion projects, cut jobs and sell oil and natural gas fields to raise cash. The pain also swept across OPEC, which in November relented by agreeing with several non-OPEC nations to curb output by 1.8 million barrels a day. Oil prices that initially popped above $55 in the weeks after the cut was announced have since dipped to around $46, reflecting pessimism that the OPEC-led deal can withstand the onslaught of U.S. shale.
[..] EOG, the second-largest U.S. explorer that doesn’t own refineries, plans to boost spending by 44% this year to between $3.7 billion and $4.1 billion. Pioneer is eyeing a 33% increase to $2.8 billion. The sub-group that includes North American shale drillers like EOG and Pioneer is collectively targeting $53 billion in spending this year, up from $35 billion in 2016, according to the Barclays analysts. U.S. oil production is already swelling, even though output from the new wells being drilled won’t materialize above ground for months. The Energy Department’s statistics arm raised its full-year 2017 supply estimate to 9.31 million barrels a day on Tuesday, a 1% increase from the April forecast. Next year, U.S. fields will pump 9.96 million barrels a day, 0.6% more than the department estimated last month.
Dozens of Conservative MPs expect to learn shortly whether they will be charged with fraud in relation to their spending at the last election, as deadlines for the Crown Prosecution Service to make a decision approaches. MPs and their agents have been under investigation by 14 police forces for more than a year over their spending declarations at the 2015 election. They are now likely to learn their fates before the general election, possibly as soon as Wednesday as the various time limits for bringing charges are coming to an end. If it happens on Wednesday, this could be in time for Theresa May to jettison any candidates facing prosecution before the deadline for final nominations at 4pm on Thursday, but the timeline for replacements would be extremely tight.
Any decision to prosecute them would be an explosive twist in the general election with more than 20 MPs in the last parliament potentially facing charges under the Representation of the People Act. But the bar for prosecution is considered to be high, with the police having to prove intent to submit wrongful expenditure claims. Tory MPs maintain they recorded their spending as directed by the national party. The allegations centre around the declaration of spending on Conservative battle bus tour in 2015, which took activists to dozens of marginal seats before the election. This was declared as national campaign spending, with the Tories some millions below their official limit. But it emerged that the activists had been campaigning on behalf of specific Conservative MPs, rather than the party generally, leading to claims that the spending should have been record as local expenditure.
The infamous hacktivist group Anonymous has released a chilling new video — urging people across the globe to “prepare” for World War 3 – as the US and North Korea continue to move “strategic pieces into place” for battle. “All the signs of a looming war on the Korean peninsula are surfacing,” the group says in the ominous six-minute clip, posted on YouTube over the weekend. Using their signature Guy Fawkes character, the hackers make several claims about recent military movements in the region — and alleged warnings made by Japan and South Korea about imminent nuclear attacks from the North — as they deliver their frightening prophecy. “Watching as each country moves strategic pieces into place,” the organization says, in its notorious robotic voice. “But unlike past world wars, although there will be ground troops, the battle is likely to be fierce, brutal and quick. It will also be globally devastating, both on environmental and economical levels.”
According to Anonymous, President Trump’s test of the Minuteman 3 intercontinental ballistic missile last week — coupled with a recent warning from Japanese officials to citizens, telling them to make preparations for a possible nuclear attack — are ultimately proof that all signs are pointing to a major conflict between the US and North Korea. In addition, China reportedly has urged its citizens in the Hermit Kingdom to return home as tensions continue to escalate over their nuclear weapons program. “This is a real war with real global consequences,” the group explains. “With three superpowers drawn into the mix, other nations will be coerced into choosing sides, so what do the chess pieces look like so far?”
Marine Le Pen’s defeat, if the vote count was honest, indicates that the French are even more insouciant than Americans. The week before the election the Russian high command announced that Washington had convinced the Russian military that Washington intended a preemptive nuclear first strike against Russia. No European leader saw danger in this annoucement except Le Pen. No European leader, and no one in Washington, has stepped forward to reassure the Russians. In the US apparently only my readers even know of the Russian conclusion. Simply nothing is said in the Western media about the extraordinary risk of convincing Russia that the US is preparing a first strike against Russia. Nothing in the 20th century Cold War comes close to this. Le Pen, as Trump did prior to his castration by the military/security complex, understands that military conflict with Russia means death for humanity.
Why were the French voters unconcerned with what may be their impending deaths? The answer is that the French have been brainwashed into believing that to stand for France, as Marine Le Pen does, is to place patriotism and nationalism above diversity and is fascist. All of Europe, except for the majority of the British, has been brainwashed into the belief that it is Hitler-like or fascist to stand up for your country. For a French man or woman to escape the fascist designation, he or she must be Europeans, not French, German, Dutch, Italian, Greek, Spanish, Portuguese. Brainwashed as the French are that it is fascist to stand up for France, the French voted for the international bankers and for the EU. The French election was a disaster for Europeans, but it was a huge victory for the American neoconservatives who will now be able to push Russia to war without European opposition.
So in the end the West was saved by the election of Emmanuel Macron as President of France: relief in Brussels, a buoyant eurozone, rallies in Asian markets. That was always a no-brainer. After all, Macron was endorsed by the EU, Goddess of the Market, and Barack Obama. And he was fully backed by the French ruling class. This was a referendum on the EU – and the EU, in its current set-up, won. Cyberwar had to be part of the picture. No one knows where the MacronLeaks came from – a last minute, massive online dump of Macron campaign hacked emails. WikiLeaks certified the documents it had time to review as legitimate. That did not stop the Macron galaxy from immediately blaming it on Russia. Le Monde, a once-great paper now owned by three influential Macron backers, faithfully mirrored his campaign’s denunciation of RT and Sputnik, information technology attacks and, in general, the interference of Russia in the elections.
The Macron Russophobia in the French media-sphere also happens to include Liberation, once the paper of Jean-Paul Sartre. Edouard de Rothschild, the previous head of Rothschild & Cie Banque, bought a 37% controlling stake in the paper in 2005. Three years later, an unknown Emmanuel Macron started to rise in the mergers and acquisitions department, soon acquiring a reputation as “the Mozart of finance.” After a brief stint at the Ministry of Finance, a movement, En Marche! was set up for him by a network of powerful players and think tanks. Now, the presidency. Welcome to the revolving door, Moet & Chandon-style. In the last TV face-off with Marine Le Pen, Macron did not shy from displaying condescending/rude streaks and even raked some extra%age points by hammering “Marine” as a misinformed, corrupt, “hate-filled” nationalist liar who “feeds off France’s misery” and would precipitate “civil war.”
That may in fact come back to haunt him. Macron is bound to be a carrier of France’s internal devaluation; a champion of wage “rigor,” whose counterpoint will be a boom of under-employment; and a champion of increasing precariousness on the road to boost competitiveness. Big Business lauds his idea of cutting corporate tax from 33% to 25% (the European average). But overall, what Macron has sold is a recipe for a “see you on the barricades” scenario: severe cuts in health spending, unemployment benefits and local government budgets; at least 120,000 layoffs from the public sector; and abrogation of some key workers’ rights. He wants to advance the “reform” of the French work code – opposed by 67% of French voters – ruling by decree.
First mistake: Emmanuel Macron’s handlers played Beethoven’s “Ode to Joy” instead of the French national anthem at the winner’s election rally. Well, at least they didn’t play “Deutschland Über Alles.” The tensions in the Euroland situation remain: the 20%-plus youth unemployment, the papered-over insolvency of the European banks, and the implacable contraction of economic activity, especially at the southern rim of the EU. The clash of civilizations brought on by the EU’s self-induced refugee glut still hangs over the continent like a hijab. That there was no Islamic terror violence around the election should not be reassuring. The interests of the jihadists probably lie in the continued squishiness of the status quo, with its sentimental multiculture fantasies — can’t we all just get along? — so En Marche was their best bet. LePen might have pushed back hard. Macron looks to bathe France’s Islamic antagonists in a nutrient-medium of Hollandaise lite.
The sclerosis of Europe is assured for now. But events are in charge, not elected officials so much, and Europe’s economic fate may be determined by forces far away and beyond its power to control, namely in China, where the phony-baloney banking system is likely to be the first to implode in a global daisy-chain of financial uncontrolled demolition. Much of that depends on the continuing stability of currencies. The trouble is they are all pegged to fatally unrealistic expectations of economic expansion. Without it, the repayment of interest on monumental outstanding debt becomes an impossibility. And the game of issuing more new debt to pay the interest on the old debt completely falls apart. Once again, the dynamic relationship between real capital creation and the quandaries of the oil industry lurks behind these failures of economy.
In a crisis of debt repayment, governments will not know what else to do except “print” more money, and this time they are liable to destroy faith in the value of “money” the world over. I put “money” in quotation marks because the dollars, euros, yuan, and yen are only worth what people believe them to be, subject to measurement against increasingly fictional indexes of value, such as interest rates, stock and bond markets, government-issued employment and GDP stats, and other benchmarks so egregiously gamed by the issuing authorities that Ole Karl Marx’s hoary warning finally comes to pass and everything solid melts into air.
Revolving credit seemed like a good idea through the 20th century, and it sure worked to build an economic matrix based on cheap energy, which is, alas, no more. What remains is the wishful pretense that the old familiar protocols can still work their magic. The disappointment will be epic, and the result next time may be political figures even worse than LePen and Trump. Consider, though, that what you take for the drumbeat of nationalism is actually just a stair-step down on a much-longer journey out of the globally financialized economy. Because the ultimate destination down this stairway is a form of local autarky that the current mandarins of the status quo can’t even imagine.
The Bavarian Minister of Finance, Markus Soeder (CSU), a fierce Grexit supporter of Merkel’s CDU sister party apparently has moved away from his demand for a Greek euro exit. During a visit to Athens, Soeder said that the problems around Britain’s exit from the EU showed how difficult a Grexit would be. In addition, the Brexit already causes enough uncertainty. and Germany wants neither problems, nor uncertainty that could harm its profits especially before the parliamentary elections in autumn 2017. As Grexit is out of question, Greece should use gold reserves and real estate as collateral if the IMF stays out of the Greek program. However, Markus Soeder brought back an older idea of his, an idea he openly formulated in February 2017: that Greece pledges Gold, cash and real estate in order to get the bailout tranches, the loans by the European creditors, who love to call them financial aid.
“Soeder did not give up serious demands on Greece wile he was in Athens,” German magazine Der Spiegel writes. If the IMF does not participate in the Greek program, “new money can only be provided against collateral such as cash or real estate,” Soeder said. Soeder referred to Finland that participated in the second aid package for Greece only in 2012 and only after then Greek finance minister Evangelos Venizelos signed a bilateral agreement on colateral. “This worked,” the CSU politician said about the deal. Soeder’s demand is, however, amply theoretical, since he continues to regard an IMF participation as indispensable. He has the same problem as Federal Minister of Finance Wolfgang Schäuble (CDU): He strongly rejects further debt relief, as the IMF makes it a condition. “I have made it quite clear that a debt cut is out of question for Germany, as it the idea about issuing Eurobonds or similar.”
The Plenary of the State Audit Council has ruled that the cuts to main and supplementary pensions that the government and its creditors have agreed on contravene the European Convention of Human Rights, sources said on Tuesday night. The council also decided that the fiscal bill containing the cuts, to be implemented from 2019, contravenes Greek legislation as it has been tabled to the audit council without an actuarial study. A bill, outlining the pension cuts and other measures agreed with creditors is due to go to a vote in Parliament next week.
1. EU Court of Auditors found “overcrowded” camps, migrants “sleeping rough”, and “scant access to basic services” According to the Court of Auditors, hotspots are seriously overcrowded, particularly on the Greek islands of Lesvos, Chios and Samos. People are fleeing from the camps, because they don’t have sufficient access to water and there are too few doctors to provide adequate health care. People also didn’t feel safe in the hotspots since fights often break out in the camps. Many of these people ended up sleeping on the streets outside the hotspots. The appalling situation in hotspots is also documented by NGOs, who have reported that people in the hotspots have been exposed to degrading conditions and had their rights denied. More than 2,000 people were forced to sleep in barely heated tents during the freezing winter.
2. Children held for months in “inappropriate conditions” against international laws and standards, the auditors say The auditors raised serious concerns about the situation of unaccompanied children in hotspots. In most hotspots children were confined either to fenced areas, or accommodated without protection from adults, exposing them to the risk of abuse. Children were held for three months or more closed in behind fences in the Moria hotspot after it was converted to a de-facto detention centre. In some hotspots, girls and boys were held together, against standard practice. NGOs have been raising concerns about this situation for months. Now the Court of Auditors has confirmed that the welfare of the children in Moria was put at risk.
3. ‘‘No framework for remedying bottlenecks or sharing lessons learnt”, the Court found Overall, the ‘hotspot approach’ has been disorganised and inconsistent, the EU auditors found. The absence of consistent guidelines for the way hotspots should be managed means that responsibilities between the various actors are not clearly defined. Conditions and services are far worse in some hotspots than in others. The unfairness of this inconsistency has been criticised by NGOs, who have also highlighted the lack of oversight over decisions and accountability for human rights violations.
Furthermore, it is difficult to track the situation of people in the hotspots and how the management of the camps affects them – because key data is not shared between authorities. Neither the length of time migrants spend in hotspots while waiting to register and complete their asylum application in Greece, nor the total number of migrants identified, registered, or receiving return orders in Italy was shared. The Court of Auditor’s recommendations to better define the roles of the different agencies involved and to appoint a manager for each hotspot exposes that management is currently lacking.
4. The auditors highlight that the “functioning of hotspots is affected by bottle-necks in the follow-up procedures” The hotspots were meant to be just a first step in the EU’s migration response. Member states should then have stepped in to facilitate the relocation and integration of these people across Europe, or facilitate their safe and dignified return. That has not happened. The set-up of the hotspots is a completely new way for national governments to cooperate with EU institutions and agencies within a member state’s territory. If follow up continues to falter, the pressure on the hotspots will only grow. This could lead to people living in the hotspots being exposed to even more suffering, and the risk that authorities will abandon acceptable legal and living standards increases. This has been evident since December, if not earlier.
5. The EU-Turkey deal “had a major impact on the functioning of hotspots” and on detentions, the auditors say The EU-Turkey deal of March 2016 had a great impact on the functioning of the hotspots, as becomes evident when we look at the details of the auditors’ report. When the deal with Turkey was announced, hotspots turned into de-facto detention centres, provoking criticism from many NGOs. But the current European approach only attempts to increase the use of detention for asylum seekers even further. The auditors have detailed the hotspots procedures in the annex to their report, and reading this makes clear how difficult it is not to be detained in the process they record.
The findings of the European Court of Auditors suggest that hotspots are being made to work at the expense of people, for the sake of fulfilling policy objectives. It is vital that safeguards are in place to ensure that people are not forced to stay in the hotspots under the conditions the EU auditors and NGOs have found to be degrading. Very close scrutiny is needed to protect the rights of those who arrive looking for safety on Europe’s shores.