Aug 292018
 
 August 29, 2018  Posted by at 9:17 am Finance Tagged with: , , , , , , , , , , ,  


Pablo Picasso In “Le Lapin Agile” or harlequin with a glass 1905

 

Almost Half Of Americans Can’t Pay For Their Basic Needs (CBS)
White House Probes Google After Trump Accuses It Of Bias (R.)
Trump Unblocks More Twitter Users After US Court Ruling (R.)
Facebook Censorship, Mad Ben Nimmo and the Atlantic Council (Craig Murray)
The Greatest Fake Bull Ever (Stockman)
China’s Building-Boom Hits A Wall As Shadow-Banking System Collapses (ZH)
A Senator Masquerading as a Gas Station (Dmitry Orlov)
Brazil Sends Army To Border As Venezuelans Flee Crisis At Home (R.)
Syria Ready To Take One Million Returning Refugees – Moscow (AFP)
Just 10 Rivers Carry 95% Of All Plastic Into The Ocean (BT)
Bees Develop Preference For Pesticides (PA)

 

 

Now imagine a shrinking economy thrown in.

Almost Half Of Americans Can’t Pay For Their Basic Needs (CBS)

Four in 10 Americans are struggling to pay for their basic needs such as groceries or housing, a problem even middle-class households confront, according to a new study from the Urban Institute. Despite the U.S. economy being near full employment, 39.4 percent of adults between 18 and 64 years old said they experienced at least one type of material hardship in 2017, according to the study, which surveyed more than 7,500 adults about whether they had trouble paying for housing, utilities, food or health care. The findings surprised researchers at the Urban Institute, who had expected to find high levels of hardship among poor Americans but hadn’t predicted so many middle-class families would also struggle to meet their basic needs.

That may illustrate that a middle-class income “is no guarantee” of protection from hardship, said Michael Karpman, research associate at the Urban Institute’s health Policy Center and a co-author of the report. Against the backdrop of President Donald Trump’s boasting about low unemployment and strong economic growth, the research adds nuance to the problems facing American families. Middle-class households tend to struggle with paying their health care bills rather than utilities, for instance. Health care costs have outpaced wages and inflation, pushing more Americans into high-deductible plans, which can backfire when serious health problems arise.

“A lot of people are looking at the fact that wages aren’t keeping up with household costs as one reason families are having difficulty making ends meet,” Karpman said. “Even for families with health insurance, they may be facing high deductibles that leave them facing high costs.”

Read more …

The bias is obvious. How to fight it is not.

White House Probes Google After Trump Accuses It Of Bias (R.)

U.S. President Donald Trump on Tuesday accused Google’s search engine of promoting negative news articles and hiding “fair media” coverage of him, vowing to address the situation without providing evidence or giving details of action he might take. Trump’s attack against the Alphabet Inc unit follows a string of grievances against technology companies, including social media Twitter Inc and Facebook Inc, which he has accused of silencing conservative voices, and Amazon.com Inc, which he has said is hurting small businesses and benefiting from a favorable deal with the U.S. Postal Services. He frequently berates news outlets for what he perceives as unfair coverage.

Google denied any political bias, saying in a statement that its search engine is “not used to set a political agenda and we don’t bias our results toward any political ideology.” Trump said in several tweets on Tuesday that Google search results for “Trump News” were “rigged” against him because they showed only coverage from outlets like CNN and not conservative publications, suggesting the practice was illegal. “I think Google is really taking advantage of our people,” Trump said on Tuesday in the Oval Office. “Google, and Twitter and Facebook, they are really treading on very, very troubled territory, and they have to be careful. It’s not fair to large portions of the population.”

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A pattern emerges. Trump violates 1st amendment when blocking users, but Twitter “retains authority to revoke access”. That cannot stand.

Trump Unblocks More Twitter Users After US Court Ruling (R.)

U.S. President Donald Trump on Tuesday unblocked some additional Twitter users after a federal judge in May said preventing people from following him violated individuals constitutional rights. U.S. District Judge Naomi Reice Buchwald in Manhattan ruled on May 23 that comments on the president’s account, and those of other government officials, were public forums and that blocking Twitter Inc users for their views violated their right to free speech under the First Amendment of the U.S. Constitution. The Knight First Amendment Institute at Columbia University on August 10 sent the Justice Department a list of 41 accounts that had remained blocked from Trump’s @RealDonaldTrump account. The seven users who filed suit had their accounts unblocked in June.

The 41 blocked users include a film producer, screenwriter, photographer and author who had criticized President Trump or his policies. At least 20 of those individuals said on Twitter that Trump had unblocked them on Tuesday. The 41 users were not a comprehensive list of those blocked by Trump. Rosie O’Donnell, a comedian, said on Twitter late Tuesday that she remained blocked. [..] The ruling has raised novel legal issues. The Internet Association, a trade group that represents Twitter, Facebook Inc, Amazon.com, and Alphabet Inc, filed a brief in the case earlier this month that did not back Trump or the blocked users but urged the court to “limit its decision to the unique facts of this case so that its decision does not reach further than necessary or unintentionally disrupt the modern, innovative Internet.”

[..] The Internet Association said the court “should make clear that this case does not implicate the overwhelming majority of social media accounts throughout the Internet.” “Despite any First Amendment status that this court might find in the ‘interactive spaces’ associated with President Trump’s account, Twitter retains authority to revoke access to both his account and the account of any user seeking to comment on President Trump’s account,” the group said.

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Facebook deletes posts from a former UK ambassador.

Facebook Censorship, Mad Ben Nimmo and the Atlantic Council (Craig Murray)

Facebook has deleted all of my posts from July 2017 to last week because I am, apparently, a Russian Bot. For a while I could not add any new posts either, but we recently found a way around that, at least for now. To those of you tempted to say “So what?”, I would point out that over two thirds of visitors to my website arrive via my posting of the articles to Facebook and Twitter. Social media outlets like this blog, which offer an alternative to MSM propaganda, are hugely at the mercy of these corporate gatekeepers.

Facebook’s plunge into censorship is completely open and admitted, as is the fact it is operated for Facebook by the Atlantic Council – the extreme neo-con group part funded by NATO and whose board includes serial war criminal Henry Kissinger, Former CIA Heads Michael Hayden and Michael Morrell, and George Bush’s chief of Homeland Security Michael Chertoff, among a whole list of horrors.

The staff are worse than the Board. Their lead expert on Russian bot detection is an obsessed nutter named Ben Nimmo, whose fragile grip on reality has been completely broken by his elevation to be the internet’s Witchfinder-General. Nimmo, grandly titled “Senior Fellow for Information Defense at the Atlantic Council’s Digital Forensic Research Lab”, is the go-to man for Establishment rubbishing of citizen journalists, and as with Joseph McCarthy or Matthew Clarke, one day society will sufficiently recover its balance for it to be generally acknowledged that this kind of witch-hunt nonsense was not just an aberration, but a manifestation of the evil it claimed to fight.

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“..the generational fiscal catastrophe that looms in the 2020s as 80 million baby-boomers pile onto the social security/medicare wagon.”

The Greatest Fake Bull Ever (Stockman)

the Wall Street stock indices have vastly out-run the meager gains in the main street economy since the pre-crisis peak; and that at this late stage of the business cycle—merely 10 months from the prior record—there is absolutely no plausible risk/reward equation left. That’s because earnings will plummet in the next recession—by 40% or more if history is any guide. And that’s likely to be conservative in view of the elephant in the casino that Wall Street stubbornly refuses to acknowledge. To wit, back in June 2007, the S&P 500 earnings peaked at $85 per share, but that reflected fully $55 per share of after-tax interest expense. Fast forward to the LTM period ending in December 2017 when earnings per share posted at $110 per share, but reflected only $19 per share of after-tax interest expense.

In other words, more than 100% of the gain over the past 11 years was due to the drastic financial repression of the central banks and its impact on corporate interest expense. Yet the central banks of the world—led belatedly by the Fed—have made an epochal pivot to QT (quantitative tightening) and interest rate normalization, even as the value of the interest expense deduction has been reduced to chump change owing to the new effective tax rate of about 15%. So interest expense is marching back up the hill, and it’s not remotely priced-in—not any more than the next recession or the generational fiscal catastrophe that looms in the 2020s as 80 million baby-boomers pile onto the social security/medicare wagon.

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Xi has let the shadows grow to fake the growth, and will have a hard time tackling them now.

China’s Building-Boom Hits A Wall As Shadow-Banking System Collapses (ZH)

Beijing wants to shore up growth without inundating the economy with cheap credit. But, as WSJ’s Walter Russell Mead pointed out previously, it’s not easy… “Chinese leaders know that their country suffers from massive over-investment in construction and manufacturing, that its real-estate market is a bubble that makes the Dutch tulip frenzy look restrained, that both conventional debt and debt in the shadow-banking system are too large and growing too rapidly. But even as the Communist Party centralizes power and clamps down on dissent, it dithers when it comes to the costly and difficult work of shifting China’s economic development onto a sustainable track. Chinese authorities have tried to tackle some of these problems, but often retreat when reforms start to bite and powerful interests push back.”

To see how hard that will be, The Wall Street Journal’s Nathaniel Taplin takes a look at China’s roads and railways. “China is the 800-pound gorilla of global infrastructure. Its building prowess has permeated popular culture, as in the disaster movie “2012” where China constructs giant ships to help humankind escape rising seas. Recently, however, China’s infrastructure build has all but ground to a halt.” Here’s why… The central government last year started to crack down on unregulated, opaque – so-called ‘shadow-bank’ borrowing – alarmed at its vast scale, and potential for corruption.

For five straight months, the shadow banking system has contracted under this pressure, sucking the malinvestment lifeblood out of economic growth and construction booms as Chinese local governments, which account for the bulk of such investment, set up as so-called local-government financing vehicles (off balance sheet), or LGFVs, and have seen an unprecedented net $19 billion outflow in recent months. As WSJ’s Talpin notes, these days Beijing prefers that local governments borrow on-the-books, through the now legal municipal bond market. The problem is that lower-rated and smaller cities are mostly shut out, even though they do most actual capital spending. As a result, investment has kept slowing even though China’s net muni bond issuance in July was three times higher than it was in March.

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“Other Americans just marched around ineffectually, waving banners and shouting antiwar slogans, but not McCain!”

A Senator Masquerading as a Gas Station (Dmitry Orlov)

John McCain is dead, and many people are celebrating whereas they should be sad. He wasn’t a friend of mankind—he was its enemy, but a really bad one. But with such grossly incompetent enemies—who needs friends? McCain did a great deal to destroy America. He devoted his entire lifetime to American destruction. To start with, he was quite effective as a protester against America’s genocidal war on the people of Vietnam. Other Americans just marched around ineffectually, waving banners and shouting antiwar slogans, but not McCain! His own father had a lot to do with starting that war, but McCain made up for that by destroying 26 American war planes. That’s quite something! If every American flyer crashed as many planes, countless innocent lives would have been saved.

Of course, he could have done even better—and he did try. He almost managed to destroy the US aircraft carrier Forrestal by setting it ablaze. To top off his illustrious military career, he surrendered to the enemy and spent five years in a Vietnamese prison. This made him a hero—in Americans’ eyes only, while the rest of the world saw in him a murderer of Vietnamese children. His “martyrdom” as a POW helped pave his way to a political career, first in Congress, then in the Senate. During his obscenely long career in national politics, McCain did what he could to make American “democracy” look like a complete joke and to hasten America’s collapse. This, by the way, wasn’t a tall order: American “democracy” had long been a cesspool—a playground for lobbyists and political technologists based on a fully gerrymandered system of fake elections. But he did his thing, and is therefore twice the hero.

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Fast getting out of hand.

Brazil Sends Army To Border As Venezuelans Flee Crisis At Home (R.)

Brazil said it was sending armed forces to keep order near the Venezuelan border area, while Peru declared a health emergency, as a regional crisis sparked by thousands of Venezuelans fleeing economic collapse escalated on Tuesday. In Brazil, where residents rioted and attacked Venezuelan immigrants in a border town earlier this month, President Michel Temer signed a decree to deploy the armed forces to the border state of Roraima. He said the move was aimed at keeping order and ensuring the safety of immigrants. Peru, meanwhile, declared a 60-day health emergency in two provinces on its northern border, citing “imminent danger” to health and sanitation.

The decree, published in the government’s official gazette, did not give more details on the risks, but health authorities have previously expressed concerns about the spread of diseases such as measles and malaria from migrants. The exodus of Venezuelans to other South American countries is building toward a “crisis moment” comparable to events involving refugees in the Mediterranean, the United Nations said this week. Temer blamed the socialist Venezuelan government of President Nicolas Maduro for the migration crisis. “The problem of Venezuela is no longer one of internal politics. It is a threat to the harmony of the whole continent,” Temer said in a televised address.

Read more …

If the US lets Syria rebuild.

Syria Ready To Take One Million Returning Refugees – Moscow (AFP)

Russia’s defence minister said on Tuesday that war-torn Syria would be ready to accept one million returning refugees, following Moscow-backed reconstruction work. “Since 2015, when towns and villages gradually started to be freed, more than one million people have returned home,” Sergei Shoigu said in comments reported by Russian news agencies. “Now every opportunity has been created for the return of roughly one million (more) refugees,” he told journalists. “Huge infrastructure reconstruction work is ongoing, the rebuilding of transport routes and security points so that Syria can begin accepting refugees.”

Russia, a long-time ally of Syria, launched a military intervention in 2015 to support the embattled regime of President Bashar al-Assad, a move that changed the course of the war. Assad and his allies have since recovered swathes of territory and the government is turning its attention to post-conflict reconstruction, with the aid of Moscow. The war that erupted in 2011, one of the most devastating conflicts since World War II, has displaced more than half of Syria’s population, including more than five million beyond its borders. Most of them fled to neighbouring countries, particularly Turkey, Jordan and Lebanon.

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It’ll take a gargantuan effort to stop this.

Just 10 Rivers Carry 95% Of All Plastic Into The Ocean (BT)

Cheap, durable and multifunctional, plastic is one of humanity’s most successful inventions. From the 1950s to 2015, we’ve produced 8.3 billion metric tons of the stuff. By now, it’s everywhere. It’s also non-biodegradable. And that’s devastating the environment. Only 9% of all plastic waste has been recycled, and another 12% has been incinerated. That means that almost 80%—nearly 6.3 billion tons—has turned into waste with no half-life to speak of: condemned to an eternity as landfill, litter or ocean-clogging junk. Every year, plastic kills around 1 million seabirds, 100,000 sea mammals and inestimable numbers of fish. The volume of plastic trash in the world’s oceans is currently estimated to be around 150 million tons. No less than eight million tons are added to that every year—that’s one truckload every minute.

Between 0.5 and 2.75 million tons come from rivers alone. Large rivers are particularly efficient conveyors of plastic waste to the oceans, especially in countries lacking a well-developed waste management infrastructure. Up to 95% of river-borne plastic comes from just 10 rivers, scientists at the Helmholtz Center for Environmental Research in Leipzig, Germany have found. The scientists analysed data on both microplastic debris (<5mm) such as beads and fibres, as well as microplastic objects (plastic bottles, bags, etc.) from 79 sampling sites on 57 of the world’s largest rivers, singling out the 10 mapped out here as the biggest culprits, due to “mismanagement of plastic waste in their watersheds”.

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Nicotine addiction.

Bees Develop Preference For Pesticides (PA)

Bumblebees acquire a taste for pesticide-laced food that can be compared to nicotine addiction in smokers, say scientists. The more of the nicotine-like chemicals they consume, the more they appear to want, a study has shown. The findings suggest that the risk of potentially harmful pesticide-contaminated nectar entering bee colonies is higher than was previously thought. In a series of studies, a team of British researchers offered bumblebees a choice of two sugar solutions, one of which was laced with neonicotinoid pesticides. They found that over time the bees increasingly preferred feeders containing the pesticide-flavoured sugar.

Dr Richard Gill, from the Department of Life Sciences at Imperial College London, said: “Given a choice, naive bees appear to avoid neonicotinoid-treated food. However, as individual bees increasingly experience the treated food they develop a preference for it. “Interestingly, neonicotinoids target nerve receptors in insects that are similar to receptors targeted by nicotine in mammals. “Our findings that bumblebees acquire a taste for neonicotinoids ticks certain symptoms of addictive behaviour, which is intriguing given the addictive properties of nicotine on humans, although more research is needed to determine this in bees.” Controversial neonicotinoid pesticides are chemically similar to nicotine, the addictive compound in tobacco.

Read more …

Apr 282018
 
 April 28, 2018  Posted by at 8:21 am Finance Tagged with: , , , , , , , , , , , ,  


Edgar Degas At the Milliner’s 1905-10

 

Happy New Universe Day (Caitlin Johnstone)
Counter-#Resistance? (Jim Kunstler)
North Korea Says Historic Summit Opens ‘New Era For Peace’ (AFP)
Jumping The Great White Shark Of Bubble Finance (David Stockman)
Structural Racism At Heart Of British Society, UN Human Rights Panel Says (G.)
Brexit Failure Looks More Likely Every Day (Ritholtz)
Mayday on May Day? Trump Steel Tariff Deadline Looms (R.)
Donald Trump and the Next Crash (Nomi Prins)
US Issues New Warning To China On Its Handling Of Intellectual Property (BBG)
China Is Bolstering Lenders Before A New Assault On Shadow Banking (BBG)
World’s Central Banks Just Can’t Quit on Currency Intervention (BBG)
Hawaii Takes Historic First Step Toward Creating ‘Utility of the Future’ (RE)
Fukushima is Now Officially Worse Than Chernobyl (CP)
EU Votes To Ban Bee-Killing Pesticides (AFP)
The Hills Are Alive With The Signs Of Plastic (G.)

 

 

Kanye brings hope.

Happy New Universe Day (Caitlin Johnstone)

I’m not sure what this is, but it’s definitely different. A bunch of tweets and videos by Mike Cernovich, Scott Adams and Kanye West have been dancing in an unexpected way that has conservatives now talking about a shift in consciousness transforming the way humanity functions in the near future. Liberals and leftists are scoffing at it of course, but it’s definitely a thing, and in my opinion it’s downright fascinating. The MAGA crowd has always impressed me with its ability to energetically and spontaneously unify behind a single theme as a group, like a flock of birds or school of fish changing direction together on a dime. There are certainly worse things they could pour their collaboration into than manifesting a spiritual revolution.

And who the hell am I to say they’re wrong about that? It’s not like we’ve got a choice anyway; either our species will change the way it functions or we’ll wipe ourselves out via nuclear holocaust or climate catastrophe within a few decades, no matter how loudly and smugly we scoff at the guys in MAGA hats. If humanity is going to take a last-ditch, evolve-or-die leap into the unknown and unprecedented, now would surely be the time to do it. If a bunch of right-wingers get it into their heads that humanity is undergoing a spiritual transformation, that certainty could be all it takes to tip us into the shift we all know we need to make anyway.

Could something big be in the works? Something which transcends all our little echo chamber walls and ideological boundaries, which comes not from the repetitive thought loops in our minds but from our deep evolutionary drive to survive? I hope so. And call me naive and deluded if you like, but right now I’m seeing plenty of reasons to hope.

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“Candace seems to have drive, guts, and stamina and there’s no sign that she’s going to shut up. Won’t some Ivy League university please invite her to speak, just to see what happens?”

Counter-#Resistance? (Jim Kunstler)

Who hit Kanye with that white privilege stick? The rapper / fashion maven / theologian / Kardashian arm candyman sent chills through the Twitterverse when he declared himself, somewhat elliptically, off-the-bus of the Progressive #Resistance movement and an admirer of the Golden One in the Oval Office. This came in his endorsement of YouTube blogger Candace Owen, who happens to not be down with the cause of the national victim lottery. Both Kanye and Candace have apparently crossed some boundary into a Twilight Zone of independent thought. Many probably wonder how they are able to get out of bed in the morning without instructions from Don Lemon.

Speaking as a white cis-hetero mammal, I’m not quite as dazzled by the president, but it’s a relief to see, at last, some small rebellion against the American Stasi who have turned the public arena into a giant holding pen for identity offenders — though it is but one corner of the triad-of-hysteria that also includes the Hate Russia campaign and the crusade against men. This nonsense has been going on long enough, while the country hurtles heedlessly into a long emergency of economic disarray. Next in line after Kanye and Candace, a popular Twitter critter name of Chance the Rapper endorsed Kanye endorsing Candace, more or less, by tweeting “black people don’t have to be Democrats.”

The horror this thought aroused! Slavery, these days, it turns out, has a lot of appeal — maybe not so much for laboring in the canefields under the noonday sun as for serving juleps in the DNC plantation house. It happened that Kanye’s mom was a college professor, Chance’s dad was an aide to Chicago Mayor Daley (Jr.), and later worked in Mr. Obama’s Department of Labor. Candace describes her childhood home in Stamford, CT, as “very poor,” but she rose far-and-fast out of college to become an executive on Wall Street in her twenties. What they seem to have in common is being tainted with bourgeois values, horror again!

[..] I dunno about the perpetually scowling Kanye, with his periodic mood problems and spotlight-stealing antics on stage, or Chance the Rapper’s artificial hood raptures, but Candace makes the argument for the value of a common culture that might bind us together as a nation of individuals, not hostile tribes, starting with a language that everybody can understand. Of course, the whole Kanye / Candace dust-up may be forgotten by the middle of next week, and the country can go back to gaslighting itself into either a new civil war or world war three. Candace seems to have drive, guts, and stamina and there’s no sign that she’s going to shut up. Won’t some Ivy League university please invite her to speak, just to see what happens?

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Yeah, we’ll have to wait and see. But Kim does what his people want, and more importantly what his father wanted.

North Korea Says Historic Summit Opens ‘New Era For Peace’ (AFP)

North Korea on Saturday hailed its summit with the South as a “historic meeting” that paved the way for the start of a new era, after the two leaders pledged to pursue denuclearisation and a permanent peace. The official KCNA news agency carried the text of the leaders’ Panmunjom Declaration in full and said the encounter opened the way “for national reconciliation and unity, peace and prosperity”. In the document, North Korean leader Kim Jong Un and the South’s President Moon Jae-in “confirmed the common goal of realising, through complete denuclearisation, a nuclear-free Korean Peninsula”. But the phrase is a diplomatic euphemism open to interpretation on both sides.

Pyongyang has long wanted to see an end to the US military presence and nuclear umbrella over the South, but it invaded its neighbour in 1950 and is the only one of the two Koreas to possess nuclear weapons. Analysts warn that previous displays of inter-Korean affection and pledges by the North ultimately came to naught. For years, Pyongyang insisted it would never give up the “treasured sword” of its nuclear arsenal, which it says it needs to defend itself against a possible US invasion. But it has offered to put it up for negotiation in exchange for security guarantees, according to Seoul – although Kim made no public reference to doing so at Friday’s spectacular summit. In a separate report, KCNA said the two leaders had a “candid and open-hearted exchange of views” on issues including “ensuring peace on the Korean Peninsula and the denuclearisation of the peninsula”.

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“..Fully 96% of Amazon’s $5.0 billion of LTM operating income was accounted for by its cloud services business..”

Jumping The Great White Shark Of Bubble Finance (David Stockman)

Wall Street has now truly jumped the shark – the one jockeyed by Jeff Bezos. Last night Amazon reported a whopping 41% plunge in free cash flow for the March 2018 LTM period compared to prior year. Yet it was promptly rewarded by a $50 billion surge in market cap – with $10 billion of that going to the guy riding topside on the Great White Shark of Bubble Finance. That’s right. Amazon’s relatively meager operating free cash flow for the March 2017 LTM period had printed at $9.0 billion, but in the most recent 12 months the number has slithered all the way down to just $5.3 billion. And that’s where the real insanity begins. A year ago Amazon’s market cap towered at $425 billion – meaning that it was being valued at a downright frisky 47X free cash flow.

But fast forward a year and we get $780 billion in the market cap column this morning and 146X for the free cash flow multiple. Folks, a company selling distilled water from the Fountain of Youth can’t be worth 146X free cash flow, but don’t tell the giddy lunatics on Wall Street because they are apparently just getting started. Already at the crack of dawn SunTrust was out with a $1900 price target – meaning an implied market cap of $970 billion and 180X on the free cash flow multiple. At this point, of course, you could say who’s counting and be done with it. But actually it’s worse – and for both Amazon and the US economy.

That’s because Amazon is both the leading edge of the most fantastic ever bubble on Wall Street and also a poster boy for the manner in which Bubble Finance is hammering growth, jobs, incomes and economic vitality on main street. Moreover, soon enough a collapsing Wall Street bubble will bring the already deeply impaired main street economy to its knees. So Amazon is a double-destroyer. [..] Fully 96% of Amazon’s $5.0 billion of LTM operating income was accounted for by its cloud services business (AWS). The e-Commerce juggernaut, by contrast, posted just $188 million of LTM operating income, which amounts to, well, 0.1% of sales on a computational basis. But we’d round that to zero – especially because Amazon’s e-Commerce business was already almost there in the year ago period when its margin on sales came in a tad higher at 0.6%!

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No kidding.

Structural Racism At Heart Of British Society, UN Human Rights Panel Says (G.)

The disproportionate number of deaths of black and brown people in incidents with the police shows that structural racism remains rooted in the fabric of British society, a panel of UN human rights experts has said. The panel cited data from the Metropolitan police showing a disproportionate number of minority ethnic people – particularly those of African or Caribbean descent – dying due to excessive use of force by the state. Noting that there had never been a successful prosecution of a police officer for a death in police custody, the panel said: “This points to the lack of accountability and the impunity with which law enforcement and state agencies operate.”

The warning from members of the UN human rights council comes before a 12-day visit to the UK by E Tendayi Achiume, the special rapporteur on racism, beginning on Monday. “The deaths reinforce the experiences of structural racism, over-policing and criminalisation of people of African descent and other minorities in the UK,” they said. “Failure to properly investigate and prosecute such deaths results in a lack of accountability for those individuals and state agencies responsible, as well as in the denial of adequate remedies and reparation for the families of the victims.” The panel pointed particularly to the disproportionate use of stun guns. People from black and minority ethnic backgrounds were three times more likely to be subjected to the use of such weapons by police, they said.

The members added: “People of African descent with psychosocial disabilities and those experiencing severe mental or emotional distress reportedly face multiple forms of discrimination and are particularly affected by excessive use of force.” A report last year by David Lammy, the Labour MP for Tottenham, found racial disparities across the criminal justice system. He has consistently said that young black men feel as though they are living in a police state and that a different standard of policing is applied to black youths, compared with whites.

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Me, I predict a giant mess.

Brexit Failure Looks More Likely Every Day (Ritholtz)

Today, I will violate one of my favorite principles, and hereby make this prediction: No Brexit! In other words, the U.K. will not exit the European Union. By 2023, we will look back at the entire ridiculous affair as if it were a rediscovered lost episode of “Fawlty Towers.” Soon after the referendum in which Brits unwisely voted to leave the EU, I suggested there was a 33% chance that Brexit wouldn’t occur. Now, I raise that to 75%, and with each passing day of incompetence shown by Prime Minister Theresa May’s administration, the probabilities move higher.

With that disclosure out of the way, I’d like to explain the thinking behind this not-so-bold forecast. From the very beginning, I have been a skeptic that a full Brexit would occur. The concept was simply so foolish and self-destructive that the reasonable expectation was cooler heads would prevail. But that was a modest assumption and didn’t anticipate the feckless May government making a bad situation even worse. There seem to be several ways this can, and probably will, fall apart. In order of likelihood (recognizing a combination of any and all of these is possible):

1) Doing nothing
2) Snap parliamentary election leading to a May loss
3) New referendum
4) Ireland/Scotland make it too complicated
5) Europe makes it impossible

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The EU is ready for a fight.

Mayday on May Day? Trump Steel Tariff Deadline Looms (R.)

While more than 100 countries take a day off for May Day, U.S. President Donald Trump will spend next Tuesday deciding whether to extend a largely U.S.-China trade standoff into a more global dispute. In a week featuring a Federal Reserve monetary policy meeting, U.S. monthly jobs data and first estimates on euro zone inflation and economic growth, Trump’s decision on metal tariffs may prove to the be biggest market mover. The United States set import tariffs of 25% on steel and 10% on aluminum a month ago, but granted temporary exemptions to the European Union, NAFTA partners Canada and Mexico, as well as Argentina, Brazil, Australia and South Korea. Those exemptions expire on May 1.

Korea secured a permanent exemption for steel within days of agreeing to a revision of its trade pact with the United States. Canada and Mexico may rely on advances in talks on North American Free Trade Agreement (NAFTA) for an extension. Continued exemptions for the other countries, and notably the European Union, remain in doubt. French President Emmanuel Macron and German Chancellor Angela Merkel were meeting Trump in Washington as part of EU lobbying effort in the past week, but German officials played down the chances of a breakthrough before Merkel’s Friday visit. “From today’s point of view, we must reckon that the tariffs will come on May 1,” one official said.

The European Commission, which oversees trade policy for the 28-member bloc, has insisted the United States grant it a permanent exemption without conditions. White House economic adviser Larry Kudlow said on Thursday that Trump wanted concessions on automobiles, for which import duties are higher into Europe than into the United States.

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The Fed as a cult.

Donald Trump and the Next Crash (Nomi Prins)

We have entered a landmark moment: no president since Woodrow Wilson (during whose administration the Federal Reserve was established) will have appointed as many board members to the Fed as Donald Trump. His fingerprints will, in other words, not just be on Supreme Court decisions, but no less significantly Fed policy-making for years to come — even though, like that court, it occupies a mandated position of political independence. The president’s latest two nominees to that institution’s Board of Governors exemplify this. He has nominated Richard Clarida, a former Treasury Department official from the days of President George W. Bush who later became a strategic adviser to investment goliath Pimco, to the Fed’s second most important slot, while giving the nod to Michelle Bowman, a Kansas bank commissioner, to represent community banks on that same board.

Like many other entities in Washington, the Fed’s Board of Governors has been operating with less than a full staff. If Clarida is approved, he will join Trump-appointed Fed Chairman Jerome Powell and incoming New York Federal Reserve Bank head John C. Williams — the New York Fed generally exists in a mind meld with Wall Street — as part of the most powerful trio at that institution. Williams served as president of the San Francisco Fed. Under his watch, the third largest U.S. bank, Wells Fargo, created about 3.5 million fake accounts, gave its CEO a whopping raise, and copped to a $1 billion fine for bilking its customers on auto and mortgage insurance contracts.

Not surprisingly, Wall Street has embraced Trump’s new Fed line-up because its members are so favorably disposed to loosening restrictions on financial institutions of every sort. Initially, the financial markets reflected concern that Chairman Powell might turn out to be a hawk on interest rates, meaning he’d raise them too quickly, but he’s proved to be anything but. As Trump stacks the deck in his favor, count on an economic impact that will be felt for years to come and could leave the world devastated. But rest assured, if the Fed can help Trump keep the stock market buoyant for a while by letting money stay cheap for Wall Street speculation and the dollar competitive for a trade war, it will.

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And Canada?!

US Issues New Warning To China On Its Handling Of Intellectual Property (BBG)

The U.S. issued a new warning to China on its handling of intellectual property as President Donald Trump prepares to dispatch senior advisers to the Asian nation to head off a trade dispute. The U.S. Trade Representative’s office kept China on its “priority watch list” of countries whose IP practices require monitoring. China has an “urgent need” to fix a range of IP-related concerns, including trade-secret theft, online piracy, and forced technology transfer, USTR said in its annual report on IP protection and enforcement. Escalating trade tensions between the world’s two-biggest economies have rattled markets and sparked fears of a trade war. Trump has proposed tariffs on as much as $150 billion of Chinese imports on the grounds of alleged IP theft, while Beijing has vowed to retaliate on everything from American soybeans to airplanes.

The annual list, which carries no immediate penalties, is supposed draw attention to the need for nations to address everything from copyright infringement to online piracy. Trump said this week Treasury Secretary Steven Mnuchin and other senior officials will visit China within days, adding that there’s a “very good chance” the two countries can reach a deal. U.S. Trade Representative Robert Lighthizer and White House economic adviser Larry Kudlow will also be part of the delegation. Kudlow said he expects serious negotiations on a range of trade irritants, including technology-related issues, and the U.S. will be looking for specific actions from China. Officials in Beijing in recent weeks have been announcing steps to further open up the economy, such as gradually scrapping foreign ownership caps on local vehicle companies.

The administration added Canada and Colombia to the highest priority watch list for IP challenges, and it dropped Thailand from the regular watch list. Canada is the only Group of Seven country on the monitoring list. The USTR said the country has failed to resolve “key longstanding deficiencies,” including poor border and law enforcement with respect to counterfeit and pirated goods, weak patent protection and pricing for pharmaceuticals, and inadequate copyright protection.

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It’s the shadow banks that have financed that 6.8% growth they miraculously achieve every single month and year.

China Is Bolstering Lenders Before A New Assault On Shadow Banking (BBG)

Investors who pushed up Chinese bank shares last week on news of lower reserve requirements may have been celebrating too soon. The subtext to Tuesday’s move is an effort to prepare the banks for a painful new phase in China’s campaign to reduce financial-sector risks, as regulators free up deposit rates and accelerate their crackdown on the nation’s $16 trillion shadow banking sector. “China is gearing up to crack a hard nut with deleveraging and financial reforms, and the central bank is offering some coordinated policies to ensure it will be a smooth transition,” said Xia Le, chief Asia economist at Banco Bilbao Vizcaya Argentaria in Hong Kong.

The People’s Bank of China’s decision to free up more liquidity for banks by slashing reserve ratio requirements, at a time when funding conditions are plentiful, shows the central bank is trying to insulate lenders for the next phase of reform, said Ming Ming, head of fixed-income research at Citic Securities. A key element of that reform process is a plan to give banks greater freedom to set interest rates, flagged by PBOC Governor Yi Gang at the Boao forum earlier this month. That will help banks better compete for deposits from Chinese savers and hasten the shift away from shadow instruments such as wealth management products.

Already, China Construction Bank, Bank of China and other large lenders have started trying to attract funding by rolling out certificates of deposit with sharply higher interest rates. But the move away from off balance sheet WMPs to on-balance sheet deposit funding is likely to be painful. Guosen Securities analyst Wang Jian described interest rate liberalization as like “throwing a bomb at banks” in an April 11 note, saying the need to offer higher deposit rates to attract funds could push them into riskier lending, to real estate for example, in order to protect profits.

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What are the little ones going to do?

World’s Central Banks Just Can’t Quit on Currency Intervention (BBG)

History shows that central banks rarely stem a currency’s long-term decline simply by spending foreign-exchange reserves. Yet not stepping in at all can prove far worse. That’s the argument used by authorities in Brazil, Indonesia and most recently Argentina to explain why it makes sense to shower billions of dollars on what looks like a losing bet. This week alone, Argentina spent about $3 billion, or 5% of its reserves, to bolster the peso after it plunged to a record low. Then, wielding another monetary cudgel, it unexpectedly goosed interest rates. In Buenos Aires, the combination worked – at least for today. The peso ended just a blip or two in the green after sliding 1.8% earlier. It’s still this year’s worst-performing major currency, nosing out Russia’s ruble and the Turkish lira.

“It was a success in the sense that it gave two signals to the market,” said Daniel Chodos, a strategist at Credit Suisse based in the Argentine capital. “One is that it can and will use all available instruments to conduct monetary policy, that is, interest-rate and FX interventions. The second signal is that because of the tool kit it has, it can intervene and cause some pain to markets.” Indonesia is a more cautionary tale. The southeast Asian nation’s central bank drained $6 billion of foreign reserves in February and March partly to stabilize the rupiah, and may have further eroded the $126 billion pile as it stepped up intervention this month. But the moves, coupled with a threat to hike rates, didn’t calm volatility. That led the central bank to say it’s preparing a second line of defense to ensure liquidity.

Brazil’s interventions in the foreign-exchange market, using currency swaps, became so regular between 2013 and 2015 that traders started likening them to “ração diária,” the moment each day set aside to feed your pets.

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“..for the first time they are going to charge based on factors including affordability, reliability, transparency, renewable energy integration, efficiency..”

Hawaii Takes Historic First Step Toward Creating ‘Utility of the Future’ (RE)

In what could be the beginning of the new way forward to utilities, on Tuesday, Hawaiian Gov. David Ige signed the Ratepayer Protection Act, a new law that directs utilities in Hawaii to change their business models and fully decouple revenue and capital expenditures. “This is the first jurisdiction that is doing this. It’s a concept that’s been discussed at some length among scholars and experts in the field but no one has actually implemented this so this was definitely a moonshot bill,” said State Sen. Stanley Chang in an interview. “Instead of charging what the market can bear or letting utilities charge on a cost-plus basis to recoup their costs, for the first time they are going to charge based on factors including affordability, reliability, transparency, renewable energy integration, efficiency,” he added.

“That’s a total change to the business model of these utilities.” Today, one of the only ways that utilities all across the world can generate revenue is by rate-basing capital expenditures. What that means in plain English is that the more utilities spend on infrastructure, such as upgrading transmission and distribution equipment (and building new generation plants in some territories), the more money they make because they are allowed to add those capital expenditures to their electric rates plus a healthy margin and recover their costs through ratepayer dollars.

As of July 1, 2020, this model will cease to exist in Hawaii. Under the new law Hawaiian utilities and the public utility commission (PUC) will need to come up with “performance incentives and penalty mechanisms that directly tie an electric utility revenues to that utility’s achievement on performance metrics and break the direct link between allowed revenues and investment levels,” according to the new law.

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“Contamination of soil, vegetation and water is so widespread in Japan that evacuating all the at-risk populations could collapse the economy..”

Fukushima is Now Officially Worse Than Chernobyl (CP)

The radiation dispersed into the environment by the three reactor meltdowns at Fukushima-Daiichi in Japan has exceeded that of the April 26, 1986 Chernobyl catastrophe, so we may stop calling it the “second worst” nuclear power disaster in history. Total atmospheric releases from Fukushima are estimated to be between 5.6 and 8.1 times that of Chernobyl, according to the 2013 World Nuclear Industry Status Report. Professor Komei Hosokawa, who wrote the report’s Fukushima section, told London’s Channel 4 News then, “Almost every day new things happen, and there is no sign that they will control the situation in the next few months or years.”

Tokyo Electric Power Co. has estimated that about 900 peta-becquerels have spewed from Fukushima, and the updated 2016 TORCH Report estimates that Chernobyl dispersed 110 peta-becquerels.[1](A Becquerel is one atomic disintegration per second. The “peta-becquerel” is a quadrillion, or a thousand trillion Becquerels.) Chernobyl’s reactor No. 4 in Ukraine suffered several explosions, blew apart and burned for 40 days, sending clouds of radioactive materials high into the atmosphere, and spreading fallout across the whole of the Northern Hemisphere — depositing cesium-137 in Minnesota’s milk.[2]

The likelihood of similar or worse reactor disasters was estimated by James Asselstine of the Nuclear Regulatory Commission (NRC), who testified to Congress in 1986: “We can expect to see a core meltdown accident within the next 20 years, and it … could result in off-site releases of radiation … as large as or larger than the releases … at Chernobyl.[3] Fukushima-Daiichi came 25 years later. Contamination of soil, vegetation and water is so widespread in Japan that evacuating all the at-risk populations could collapse the economy, much as Chernobyl did to the former Soviet Union. For this reason, the Japanese government standard for decontaminating soil there is far less stringent than the standard used in Ukraine after Chernobyl.

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75% of insects are gone in France and Germany and they make this only about the bees?

EU Votes To Ban Bee-Killing Pesticides (AFP)

European Union countries voted on Friday in favour of a near-total ban on neonicotinoid insecticides which are blamed for an alarming collapse in bee populations. The move comes after the European food safety agency said in February that most uses of the chemicals posed a risk to bees, prompting environmentalists to push the 28-nation EU to immediately outlaw them. Bees help pollinate 90% of the world’s major crops, but in recent years have been dying off from “colony collapse disorder,” a mysterious scourge blamed on mites, pesticides, virus, fungus, or a combination of these factors.

Campaigners dressed in black and yellow bee suits rallied outside the headquarters of the European Commission in Brussels ahead of the vote for a ban on three key pesticide chemicals. EU Environment Commissioner Vytenis Andriukaitis said he was “happy that member states voted in favour of our proposal” to restrict the chemicals and tweeted a picture of the activists.

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Time for a very large and thorough study into plastics in humans.

The Hills Are Alive With The Signs Of Plastic (G.)

Microplastic pollution contaminates soil across Switzerland, even in remote mountains, new research reveals. The scientists said the problem could be worse in other nations with poorer waste management and that research was urgently needed to see if microplastics get into food. In the first major study of microplastics in soil, the researchers analysed soil samples from 29 river flood plains in nature reserves across Switzerland. They found microplastics, fragments under 5mm in size, in 90% of the soils. The scientists believe the particles are carried across the country by the wind. Research on microplastic pollution to date has largely concentrated on the oceans, in which it is found across the globe, including the Arctic. The particles have been shown to harm marine life and can absorb toxins from the water.

Record levels of microplastics were revealed in rivers by research released in March and last year tap water around the world was found to contain plastic fibres. Other studies have found microplastics in bottled water, which prompted the World Health Organization to launch a review, as well as in beer, honey and salt. However, almost no research has yet been done on whether the particles end up being widely consumed by people and whether they are harmful. Michael Scheurer and Moritz Bigalke at the Geographical Institute of the University of Bern, conducted the new research, which is published in the journal Environmental Science and Technology. “These findings are alarming,” Scheurer said. “For example, new studies indicate that microplastics in the soil can be harmful to and even kill earthworms in the soil.”

Microplastics were found even in remote mountain regions that can only be reached by foot. “We were really surprised,” said Bigalke. “All the areas were in national parks. We thought we might find one or two plastic particles, but we found a lot.” [..] One of the very few studies into microplastics in food examined backyard chickens in Mexico. The researchers found 57 particles per gramme in the gizzards of the chickens. “Chicken gizzard is a specialty in the Mexican kitchen and the intake of the present plastics form a strong risk for human health,” the scientists said.

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Apr 272018
 
 April 27, 2018  Posted by at 7:57 am Finance Tagged with: , , , , , , , , , , ,  


Edward Curtis Red Hawk 1905

 

Moon and Kim’s Unprompted DMZ Dance (AFP)
Sophisticated North Korean Diplomacy Rewards Kim Jong-un (Pieraccini)
China Open To Trade Negotiations With United States – Li (R.)
BOJ Maintains Stimulus While Removing Language on Timing of 2% (BBG)
What’s The Most Important Chart For Investors? (MW)
A New Type Of Poverty Is Hurting The Middle Class (SMH)
Amazon Cloud Revenue Jumps 49% In First Quarter (CNBC)
Facebook Profits Soar 63% Despite Cambridge Analytica (Ind.)
EU Doesn’t Need The City Of London, Says Chief Brexit Negotiator (G.)
Turkey Crackdown Suffocates Society, Creates Climate Of Fear (Amnesty)
Greece’s Economic Crisis Is Over Only If You Don’t Live There (WaPo)
Greece: Economic Health In Grim State (EN)
Solar And Wind Really Do Increase Electricity Prices (F.)
EU Member States To Vote On Near-Total Neonicotinoids Ban (BBC)

 

 

Kim needs money.

Moon and Kim’s Unprompted DMZ Dance (AFP)

It was a historic handshake that Koreans had waited more than a decade to see — and it sparked a completely unscripted dance with the two leaders hopping back and forth over the border that divides their nations. Everything about the inter-Korean summit had been minutely choreographed and rehearsed but the North’s Kim Jong Un went off-script when he invited his southern counterpart Moon Jae-in to join him over the border. After a prolonged clasp lasting almost half a minute over the Military Demarcation Line that acts as the border, a beaming Moon invited his guest over to South Korea. They posed for pictures as Kim became the first Northern leader to set foot in the country since Korean War hostilities ceased in 1953.

Kim then beckoned Moon over to the other side. Moon seemed initially hesitant but the North’s jovial young leader was not taking “no” for an answer, grabbing his hand and accompanying him across the border before they warmly shook hands again. Grinning broadly, the pair then crossed back to the South hand-in-hand, to be presented with flowers by children from a village in the buffer area next to the Demilitarized Zone. It all went to show that even for a moment as carefully planned as the first inter-Korean summit in more than a decade, where the North’s nuclear arsenal will be high on the agenda, the best-laid preparations rarely run completely to schedule. South Korean officials had carried out a full dress rehearsal on the eve of the summit, including stand-ins for the two leaders. “We examined every single detail including lighting and flower decorations,” a Moon spokesman said.


You put your left foot in: Kim Jong Un and Moon Jae-in were engaged in a metaphorical and literal diplomatic dance on Friday when they met at the frontier (AFP Photo/Korea Summit Press Pool)

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Sanctions bite too. And “United States with its back against the wall” is perhaps not the right picture.

Sophisticated North Korean Diplomacy Rewards Kim Jong-un (Pieraccini)

[..] what appears to be emerging is very similar to a strategy cleverly developed by the North Korean leadership over a number of years. As Pyongyang needed to bring the United States to the negotiating table, while at the same time guaranteeing its survival, it pursued its nuclear-weapons program. Since Washington seems to have understood that a military solution is not practicable, especially given the pressure brought to bear by its allies all too cognizant of a nuclear-armed DPRK, Pyongyang is now willing to display its good will, deciding to surprise the world by embarking on negotiations, with the renunciation of its nuclear weapons as a major bargaining chip.

Under these conditions, Pyongyang is willing to cooperate, and South Korea welcomes the initiative with open arms, accelerating the meeting between the two leaders and paving the way for peace on the peninsula. The People’s Republic of China applauds the diplomatic efforts and encourages South Korea, and later America, in these diplomatic efforts. Seoul, Beijing and Pyongyang have every interest in reaching an all-encompassing deal, with or without Washington. The diplomatic ability of this trio has managed to leave the United States with its back against the wall, first of all obliging it to sit down at the negotiating table (something already revolutionary for reasons explained above), and then requiring it to ease sanctions considerably.

Otherwise, North Korea would be seen as the party that is willing to achieve peace, while Washington is left isolated and looking like the warmonger. North Korea finds itself in a win-win situation. If sanctions are eased and peace talks are managed in the right manner, then the process of socio-economic rebirth, which Kim Jong-un considers a priority, can begin. Should the rhetoric of war prevail in Washington, then Washington would find itself at odds with its main ally, Seoul. It is likely that China could even justifiably renounce its sanctions against the DPRK, blaming the US for not making any progress in the face of extraordinary offers by Kim Jong-un to renounce his nuclear weapons.

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Win win.

China Open To Trade Negotiations With United States – Li (R.)

China is open to negotiating with the United States to resolve trade tensions, Premier Li Keqiang was quoted as saying by state media late on Thursday, noting that the countries should manage their conflicts through dialogue. Li made the remarks at a meeting with U.S. Secretary of Transportation Elaine Chao, state broadcaster China Central Television (CCTV) said. U.S. Treasury Secretary Steven Mnuchin is due to lead a delegation to China for talks intended to ease trade tensions. President Donald Trump has threatened a new round of tariffs on $100 billion worth of Chinese products that could target mobile phones, computers and other consumer goods. China retaliated against an initial round of U.S. tariffs on $50 billion in Chinese exports.

“There is no winner in trade conflict, which will not only affect the recovery of the world economy but also the global industrial chain,” Li said in comments reported by the official Xinhua news agency. “It is also what the international community expects from our two countries,” he said. Larry Kudlow, Trump’s top economic adviser, who will join Mnuchin’s delegation in Beijing, said on Thursday he hoped the talks with China would yield progress but that resolving U.S. complaints would be “a long process.” Xinhua cited Li as saying he hoped the two countries would be able to “manage and control” their differences. Li added China would “unswervingly open further to the outside world”, reiterating President Xi Jinping’s assurances over about the country opening more widely to trade.

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Abenomics was all about inflation targeting. Silently forgotten.

BOJ Maintains Stimulus While Removing Language on Timing of 2% (BBG)

The Bank of Japan left its stimulus program unchanged on Friday, while removing language from its statement declaring that it would reach 2% inflation around fiscal 2019. The decision to maintain the yield-curve control program and asset purchases was forecast by all analysts surveyed by Bloomberg. As he enters his sixth year at the helm, Governor Haruhiko Kuroda has the BOJ pushing forward with stimulus even as other major central banks move further toward policy normalization, if at a more moderate pace. Though it removed the language on reaching its 2% target, indicating that more time may be needed, the BOJ left its inflation forecasts largely unchanged. It still forecasts core inflation, which excludes fresh food prices, to reach 1.8% in fiscal 2019.

Still, seven of nine board members said risks to that forecast were weighted to the downside. “The momentum for achieving the inflation target as early as possible is fading,” said Masamichi Adachi, senior economist at JPMorgan Chase. “I take the change as a positive because you can say that their communication is becoming realistic.” Kuroda is expected to reiterate his intention to carry on with the stimulus during his news conference later on Friday. Doing so would likely provide a tailwind for the yen to continue falling, as rising U.S. bond yields widens the gap between returns in the U.S. and Japan.

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Pick your favorite.

What’s The Most Important Chart For Investors? (MW)

Wolf Richter, the man behind the Wolf Street blog, had no trouble zeroing in on the theme for his pick for “chart of the century”: U.S. debt. He did have trouble choosing whether the chart should show ballooning student loans, or ballooning government debt. Either way, ballooning’s the key, as he predicts both narratives will continue to raise alarms. When push came to shove, he opted for the government debt chart.

[..] Spending and debt are also the theme of the chart selected by Lance Roberts, chief strategist for Clarity Financial. But his chart focuses on the consumer side of that picture. Visualized here is the widening gap between cost of living, and the income and credit Americans have at their disposal. Up until the late 1980s, disposable income, savings and debt funded the standard cost of living. Since then, however, this chart shows that hasn’t been the case — and the national personal savings rate has dropped from above 10% in the 1970s to below 4% today.

[..] While we’re on the topic of the dollar and rising rates, Tadas Viskanta of the Abnormal Returns blog says this chart tells “the most important story of the century”. “Central banks engineered 0% or in some cases negative yields on cash for the better part of the decade,” Tadas said. “We’re only now coming out of it. Investors may once again begin to think of cash as a viable investment option.”

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From Australia, but applicable anywhere. You’re not poor yet? Give us a minute.

A New Type Of Poverty Is Hurting The Middle Class (SMH)

The banking and finance royal commission has cast light on a new type of poverty to emerge in our society: middle class poverty. To understand it, we have to go back to an earlier government inquiry: the 1972 Commission of Inquiry into Poverty, conducted by Professor Ronald Henderson [which] gave prominence to the Henderson Poverty Index: a measure of consumption described by Henderson as so austere that it was unchallengeable. Updated versions of this index remain a standard benchmark of poverty. But more than 45 years on, the royal commission into finance is revealing that poverty is no longer just about low income.

The commission has heard that Australian banks have adopted actual lending practices (as distinct from their official lending policies) that claim so much household income for contract payments that borrowers are left without enough money to fund basic consumption levels: they are living in poverty. This isn’t an accident: it is a strategic policy by banks. How much do banks think households need for daily living? According to the Australian Prudential Regulation Authority’s submission to the royal commission, banks “typically use the Household Expenditure Measure [a relative poverty measure] or the Henderson Poverty Index in loan calculators to estimate a borrower’s living expenses”. So measures designed to capture the impacts of low incomes are now targeting financially-enmeshed middle-income households, and not as a statement of social shame, but as strategic objects of bank policy.

This has caused embarrassment to APRA, the regulator charged with overseeing those bank practices. In response, it was permitted to make a supplementary submission to the royal commission in March. A consequence of APRA neglect is that “poverty” now goes significantly up the income scale, well into what we generally call the middle class. Middle income people are the cohort in greatest financial risk. They are highly leveraged: they spend more of their income on loan repayments than do people with higher incomes. Second, their assets are undiversified: they own labour market skills, some home equity and some superannuation. Third, these assets are illiquid (not easily sold): you can’t transfer your skills to another, houses are costly to sell and superannuation is generally inaccessible..

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The cloud is not a safe environment.

Amazon Cloud Revenue Jumps 49% In First Quarter (CNBC)

Amazon’s cloud business exceeded analyst estimates, with revenue climbing 49% in the first quarter. Amazon Web Services reported sales on Thursday of $5.44 billion, compared to the $5.26 billion average estimate of analysts surveyed by FactSet. AWS contributed about 11% of Amazon’s total revenue for the period, up from 8.5% in the prior quarter. AWS continues to be a big revenue driver and even larger profit engine for its parent company, which dominates the low-margin e-commerce market.

In cloud-computing infrastructure, Amazon has a substantial market share lead over Microsoft Azure, Google’s Cloud platform and IBM, as well as other players like Alibaba and Oracle. While AWS has maintained growth above 40%, Microsoft and Google are currently expanding much faster and picking up share. In the first quarter Microsoft’s Azure cloud grew 93%. AWS produced $1.4 billion in operating income in the first quarter. That accounted for 73% of Amazon’s $1.93 billion in operating income.

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How much of that comes from selling data?

Facebook Profits Soar 63% Despite Cambridge Analytica (Ind.)

Facebook profits soared 63% to $5bn (£3.6bn) in the first three months of the year despite the company being engulfed in a data privacy scandal that has angered millions of users. Allegations that up to 87 million Facebook users’ data was collected without their knowledge and then used by Cambridge Analytica to try to sway the US Presidential election and the Brexit vote, did little to slow the tech company’s rapid growth. Total revenues jumped 49% compared to the same three months last year, Facebook reported on Wednesday. Facebook has been scrambling to mollify angry politicians and reassure users that it will safeguard their personal information.

Amid the turmoil, observers were keenly watching the company’s user figures to assess the potential damage and see if the scandal would suppress Facebook’s growth. Despite high-profile social media campaigns calling users to boycott Facebook, user numbers kept in line with expectations. Those results again demonstrated the company’s ability to thrive amid controversy. It continued to grow over the last year despite a steady drumbeat of revelations that Russian-linked actors used the platform to try and fracture the electorate and promote Mr Trump ahead of the 2016 presidential election.

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But the CIty still has lots of political power.

EU Doesn’t Need The City Of London, Says Chief Brexit Negotiator (G.)

The EU does not need the City of London, and Theresa May’s “pleading” for a special deal for the UK’s financial services sector will not be rewarded, the EU’s chief negotiator, Michel Barnier, has said. In his toughest rebuff yet to the demands made by the British prime ministerin her landmark Mansion House speech, Barnier suggested the City would be granted nothing more generous than that enjoyed by Wall Street. “Some argue that the EU desperately needs the City of London, and that access to financing for EU27 business would be hampered – and economic growth undermined – without giving UK operators the same market access as today,” Barnier said at a meeting of finance ministers in Sofia, Bulgaria. “This is not what we hear from market participants, and it is not the analysis that we have made ourselves.”

May had argued in March, in a keynote speech spelling out her vision of a future UK-EU trading relationship, that failing to construct a special deal for the City would hurt economies on both sides. The City provided more than £1.1tn of cross-border lending to the rest of the EU in 2015 alone. May conceded in her speech that the current “passporting” regime, under which UK-based financial services would automatically have the right to operate across the EU, would not survive Brexit. However, she went on to suggest that a mutually agreed system would be necessary that would give the UK’s financial services sector greater assurances over future rules than the current “equivalence regime”.

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Our ‘leaders’ look the other way, they have other priorities.

Turkey Crackdown Suffocates Society, Creates Climate Of Fear (Amnesty)

The report reveals how few areas of Turkey’s once vibrant independent civil society have been left untouched by the ongoing state of emergency. A nationwide crackdown has resulted in mass arrests and dismissals, thehollowing out of the legal system and the silencing of human rights defenders through threats, harassment and imprisonment. “Whilst the jailing of journalists and activists may have hit the headlines, the profound impact that Turkey’s crackdown has had on wider society is harder to quantify but it is no less real,” said Amnesty International’s Europe Director, Gauri van Gulik. “Under the cloak of the state of emergency, Turkish authorities have deliberately and methodically set about dismantling civil society, locking up human rights defenders, shutting down organisations and creating a suffocating climate of fear.”

The state of emergency, declared in July 2016 as a temporary exceptional measure in the wake of the failed coup attempt, was renewed for a seventh time last week. Under its imposition, the rights to freedom of expression to liberty and security and to fair trials have been decimated. In so doing, the last line of defence for any healthy society – namely the work of human rights defenders – has been breached. Blanket bans on public gatherings in cities across Turkey have curtailed the right to assembly and association. Meanwhile more than 100,000 people have faced criminal investigations and at least 50,000 people have been imprisoned pending trial. More than 107,000 public sector employees have been summarily dismissed.

Many of the country’s most prominent journalists and human rights defenders, including Taner Kılıç, honorary chair of Amnesty International Turkey, have been jailed on baseless “terrorism” charges. But their arrests are merely the tip of the iceberg. Anti-terrorism laws and trumped-up coup related charges are used to target and silence peaceful, legitimate dissent. Prominent journalists, academics, human rights defenders and other civil society actors are subjected to arbitrary detention, prosecutions and, if found guilty in unfair trials, face long sentences.

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Greek recovery narrative is an insult.

Greece’s Economic Crisis Is Over Only If You Don’t Live There (WaPo)

Greece’s economic crisis is over only if you don’t live there. Everyone else, in other words, might have moved on because Greece isn’t threatening to knock over the other dominoes that are known as the global economy anymore, but its people are still stuck in what is the worst collapse a rich country has ever gone through. Indeed, if the International Monetary Fund’s latest projections are correct, it might be at least another 10 years before Greece is back to where it was in 2007. And that’s only if there isn’t another recession between now and then. Two lost decades, then, are something of a best-case scenario for Greece. The numbers are staggering. It’s not just that Greece’s economy shrank 26% in per capita terms between the middle of 2007 and the start of 2014.

That, as you can see below, might have put it on par with some of the biggest calamities in economic history — it was a little better than the United States had done in the 1930s, but a little worse than Argentina had done in the 2000s — but it didn’t distinguish it among them. No, it’s that Greece has grown only a total of 2.8% — again, adjusted for its population — in the first four years of what is supposedly a recovery. To give you an idea how miserable that is, 1930s America grew 30.2% and 2000s Argentina grew 26.9% during the first four years of theirs. The result is that, by this point of their recoveries, the United States was nearly all the way back to where it had been before its crash, and Argentina was actually 17.1% richer than it had been. Greece, meanwhile, is still 23.5% poorer than it was.

The IMF somewhat optimistically thinks that Greece will still be 12.8% poorer than it was in 2007 in 2023, which would put it on pace to get back to its pre-recession peak sometime around 2030 or so. They have made a desert, and called it a recovery.

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“..33% of Greeks now work for less than 380 euros a month. Gross, before tax…”

Greece: Economic Health In Grim State (EN)

In an extended interview in Lisbon, Greece’s former finance minister Yanis Varoufakis has given a very grim assessment of his country’s economic health. It came after European Commission President Jean-Claude Juncker said on Thursday, whilst on a visit to Athens, that Greece will become what he termed a “normal” country by the end of the summer. “Everyday is worse than the previous day. All talk of recovery, and of Greece having turned the corner, is to add insult on the injuries of the Greek people,” Varoufakis said. “We have a constant reduction in pensions, in wages. Do you know that 33% of Greeks now work for less than 380 euros a month? Gross, before tax.

“Already the government has committed, even legislated, to introduce pension cuts in January 2019, to introduce a further increase in taxation of the poorest families, after January 2019. They have comitted to escalate exponentially the evictions of poor families from their homes, repossessions. So, of course there will be no changes after the summer of 2018.” In 2016 Varoufakis formed the DiEM25, a pan-European left-wing party which is now asssembling a list of candidates for next’s year’s EU parliamentary elections.

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The only thing that counts is the energy that isn’t used.

Solar And Wind Really Do Increase Electricity Prices (F.)

In my last column I discussed an apparent paradox: why, if solar panels and wind turbines are so cheap, do they appear to be making electricity so expensive? One big reason seems to be their inherently unreliable nature, which requires expensive additions to the electrical grid in the form of natural gas plants, hydro-electric dams, batteries, or some other form of stand-by power. Several readers kindly pointed out that I had failed to mention a huge cost of adding renewables: new transmission lines. Transmission is much more expensive for solar and wind than other plants. This is true around the world — for physical reasons. Think of it this way. It would take 18 of California’s Ivanpah solar farms to produce the same amount of electricity that comes from our Diablo Canyon nuclear plant.

And where just one set of transmission lines are required to bring power from Diablo Canyon, 18 separate transmission lineswould be required to bring power from solar farms like Ivanpha. Moreover, these transmission lines are in most cases longer. That’s because our solar farms are far away in the desert, where it is sunny and land is cheap. By contrast, Diablo Canyon and San Onofre nuclear plants are on the coast right near where most Californians live. (The same is true for wind.) New transmission lines can make electricity cheaper, but not when they are used only part of the time and duplicate rather than replace current equipment. Other readers pointed to cases that appear to challenge the claim that increased solar and wind deployments increase electricity prices.

[..] What is most remarkable about U.S. states heavy in solar and wind is that electricity prices rose so much given the huge decline in natural gas prices. Had natural gas prices not plummeted at what was almost the exact same time as the beginning of the large-scale build-out of solar and wind in the United States, price increases in solar and wind heavy states would have been far larger. Around the world, from Germany and Denmark to Spain and South Australia, even modest penetrations of solar and wind, compared to what advocates claim we will need to decarbonize, lead to large price increases.

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It’s a step alright. But it’s far from total.

EU Member States To Vote On Near-Total Neonicotinoids Ban (BBC)

Member states will vote on Friday on an almost complete ban on the use of neonicotinoid insecticides across the EU. Scientific studies have linked their use to the decline of honeybees, wild bees and other pollinators. The move would represent a major extension of existing restrictions, in place since 2013. Manufacturers and some farming groups are opposed, saying the science remains uncertain. Neonicotinoids are the most widely used class of insecticides in the world, but concerns about their impact on bees have been reinforced by multiple research efforts, including so-called “real world” trial results published last year. Back in 2013 the European Union opted for a partial ban on the use of the three chemicals in this class: Imidacloprid, clothianidin and thiamethoxam.

The restrictions applied to crops including maize, wheat, barley, oats and oil seed rape. The new Commission proposal would go much further, meaning that almost all outdoor uses of the chemicals would be banned. The action has been driven by a recent report from the European Food Safety Authority (Efsa), which found that neonicotinoids posed a threat to many species of bees, no matter where or how they are used in the outdoor environment. Another key element that has pushed the Commission to hold a vote has been the UK’s change of heart on the use of these insecticides. Environment Secretary Michael Gove announced last November that the UK would now support further restrictions. “I think it has helped the dynamic,” Franziska Achterberg from Greenpeace told BBC News.

“It has helped sway Ireland definitely, and then lately, the Germans, the Austrians and the Dutch. I think the fact the UK had come around was a good signal for them as well, that they could not stay behind.” During the partial ban, some countries including the UK were given permission to use neonicotinoids for short periods. However, the EU Commission is now signalling that it is seemingly intent on pushing the proposal through as it stands. “Several countries have said they want exemptions on sugar beet for example,” said Sandra Bell from Friends of the Earth (FOE). “So far the Commission have been very strong on this, because they say the Efsa evidence backs the extension of the ban to sugar beet and therefore they are following the science and won’t put in an exemption for a compromise.”

Growers will be free to use neonicotinoids in greenhouses across the EU, despite some environmental groups having reservations about the chemicals leaching into water supplies. Other neonicotinoids including thiacloprid and sulfoxaflor will continue to be exempt from the ban.

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