President Donald J. Trump
The White House
1600 Pennsylvania Avenue, N.W.
Washington, DC 20500.
I write to you because I’m seeing something unfold that concerns you, and I have no way of knowing if you’re aware of it, nor have I seen anyone else mention it. That is, sir, you are being set up, a trap is being set for you, and unless you are aware of it, you may well walk into that trap eyes wide open.
It may not be in your briefing this morning, but the WikiLeaks organization has reported that high-ranking Ecuadorean state officials have told them Julian Assange will be expelled from their London embassy in a matter of “hours to days”. Now, I don’t know what your personal opinion is of Mr. Assange, maybe you think he deserves punishment for leaking secret files to the public.
Your personal opinion of Mr. Assange, however, is not the most important issue here, no offense. What’s most important to your own situation, as well as that of Mr. Assange, is that the people who are after him are the very same people who have been after you for 3 years, and who will double their efforts after suffering a huge loss due to Robert Mueller’s No Collusion report.
What the trap set for you consists of is that if you let these -largely anonymous- deep state actors get their hands on Mr. Assange, you will greatly empower them (even further). But, sir, his enemies inside US intelligence are the same as yours, and empowering one’s enemies is not the way to do battle.
We know they are the same people because of Robert Mueller. Mr. Assange was the only way Mr. Mueller could think of to link you to “the Russians”. This is a narrative built upon the -false- notion that “Russians” hacked the DNC servers and sent the contents to Mr. Assange. The narrative has been fully discredited by multiple voices multiple times, but Mr. Mueller has never retracted it.
For good reason: this way he -and others- can leave the story, and suspicion, open that there is a link between you, Mr. Assange and the Russians, despite the Mueller report’s no collusion conclusion. And do note: it not only maintains the popular and media suspicion of Mr. Assange, it also leaves suspicion of you alive.
Former British ambassador Craig Murray explained the intricacies -again- a few days ago:
Robert Mueller repeats the assertion from the US security services that it was Russian hackers who obtained the DNC emails and passed them on to Wikileaks. I am telling you from my personal knowledge that this is not true. Neither Mueller’s team, not the FBI, nor the NSA, nor any US Intelligence agency, has ever carried out any forensic analysis on the DNC’s servers. The DNC consistently refused to make them available. The allegation against Russia is based purely on information from the DNC’s own consultants, Crowdstrike.
William Binney, former Technical Director of the NSA (America’s US$40 billion a year communications intercept organisation), has proven beyond argument that it is a technical impossibility for the DNC emails to have been transmitted by an external hack – they were rather downloaded locally, probably on to a memory stick. Binney’s analysis is fully endorsed by former NSA systems expert Ed Loomis. There simply are no two people on the planet more technically qualified to make this judgement. Yet, astonishingly, Mueller refused to call Binney or Loomis (or me) to testify. Compare this, for example, with his calling to testify my friend Randy Credico, who had no involvement whatsoever in the matter, but Mueller’s team hoped to finger as a Trump/Assange link.
The DNC servers have never been examined by intelligence agencies, law enforcement or by Mueller’s team. Binney and Loomis have written that it is impossible this was an external hack. Wikileaks have consistently stressed no state actor was involved. No evidence whatsoever has been produced of the transfer of the material from the “Russians” to Wikileaks. Wikileaks Vault 7 release of CIA documents shows that the planting of false Russian hacking “fingerprints” is an established CIA practice. Yet none of this is reflected at all by Mueller nor by the mainstream media. “Collusion” may be dead, but the “Russiagate” false narrative limps on.
Mr. Trump, sir, I don’t doubt you have realized by now that you are not rid yet of Robert Mueller. But Mr. Mueller is but one cog in the large wheel of intelligence running against you. Yes, the same wheel that runs against Mr. Assange. I’m sure you recognize that it’s hugely ironic, but there is a for now unbreakable bond between the two of you.
Not because of anything you did yourselves, but because Russiagate conspirators in the media, the Democratic party and the intelligence community have created it. And you need to be careful on account of that bond, because they’re going to -try to- use it against you.
I may be a lot more sympathetic to Mr. Assange than you are, but as I said before, this has nothing to do with personal opinion. This is about a trap being set for you. And Mr. Assange is an important part of that trap.
Through him, and especially if they keep him incommunicado, they can keep Russiagate alive, which allows for hundreds of billions of dollars in annual arms expenditures and the 24/7/365 threat of war.
Without the empty allegations against Mr. Assange, Robert Mueller would have had to drop his probe much earlier, but in keeping the allegations alive by silencing Mr. Assange, Russiagate can live on, because the link between Russian hackers and WikiLeaks can be left hanging in the air. And that, Mr. President, will be bad news for you, whether you like it or not, whether you acknowledge it or not.
We haven’t talked about the media yet, but there’s another giant irony in the US media clamoring about press freedom, and using it to smear you for 3 years, but not saying a single word to defend that same freedom when it comes to Mr. Assange. They, too, will continue to haunt you, using Mr. Assange as their bait. Don’t let them.
I don’t know what you intend to do about Russiagate and its main perpetrators, but I do know you can make things much easier for yourself if you solve the Assange conundrum first. And you can’t do that by allowing your own enemies to get their hands on him and rendition him; that will backfire on you.
You could pardon him, but that may be a step too far for you at this point. It might be better to simply allow him to go home to Australia.
What would amuse me to no end is if you would personally nominate him for a Nobel Peace Prize. That would piss off so many of your enemies it would be a sight to see. The biggest bird you can flip them all. And then after that, you know, go talk to Vladimir Putin and tell him you’re sorry for all this bad theater.
There’s this scene in the Godfather where Marlon Brando as the ageing Don tells Al Pacino how to recognize the traitor in his own midst: the one who suggests setting up a meeting. This is very similar: whoever comes to you to suggest the harshest treatment of Julian Assange, will be the one(s) intent on coming after you too.
One last thing, Mr. President: Julian Assange, Chelsea Manning and Edward Snowden are among the best, brightest and bravest people our world has to offer. We need people like them, and we need them badly. And it’s a lot more stupid than it is simply ironic, that they are the ones we are locking up and silencing. That way America will never be great again, guaranteed.
And you, sir (I know, more irony) may be their -and our- best and even last hope. You have the power to set free our best. Please use it wisely. And Mr. President, sir, be careful out there.
World leaders have been told they have moral obligation to ramp up their action on the climate crisis in the wake of a new UN report that shows even half a degree of extra warming will affect hundreds of millions of people, decimate corals and intensify heat extremes. But the muted response by Britain, Australia and other governments highlights the immense political challenges facing adoption of pathways to the relatively safe limit of 1.5C above pre-industrial temperatures outlined on Monday by the IPCC. With the report set to be presented at a major climate summit in Poland in December, known as COP24, there is little time for squabbles. The report noted that emissions need to be cut by 45% by 2030 in order to keep warming within 1.5C.
That means decisions have to be taken in the next two years to decommission coal power plants and replace them with renewables, because major investments usually have a lifecycle of at least a decade. Mary Robinson, a UN special envoy on climate, said Europe should set an example by adopting a target of zero-carbon emissions by 2050. “Before this, people talked vaguely about staying at or below 2C – we now know that 2C is dangerous,” she said. “So it is really important that governments take the responsibility, but we must all do what we can.” The UK, which has gone further than most nations by cutting its annual emissions by 40% since 1990, will need to step up if the more ambitious goal is to be reached.
Two American economists at the forefront of work on climate change and the role of governments in boosting growth have been jointly awarded the prestigious Nobel Memorial prize for economics. The Royal Swedish Academy of Sciences said William Nordhaus and Paul Romer were being honoured for their research into two of the most “basic and pressing” economic issues of the age. Nordhaus made his name by warning policymakers during the first stirrings of concern about climate change in the 1970s that their economic models were not properly taking account of the impact of global warming and he is seen as one of the pioneers of environmental economics.
The Yale economist was honoured a day after the latest UN warning on global warming said that urgent and unprecedented changes were needed to keep climate change to a maximum of 1.5C (2.7F). The co-winner – Romer – is seen as the prime mover behind the endogenous growth theory, the notion that countries can improve their underlying performance if they concentrate on supply-side measures such as research and development, innovation and skills. [..] Responding to news of his award, Romer said it was perfectly possible for global warming to be kept to a maximum of 1.5C, in line with the latest recommendation of the UN Intergovernmental Panel on Climate Change. “Once we start to try to reduce carbon emissions, we’ll be surprised that it wasn’t as hard as we anticipated. The danger with very alarming forecasts is that it will make people feel apathetic and hopeless.
“One problem today is that people think protecting the environment will be so costly and so hard that they want to ignore the problem and pretend it doesn’t exist. Humans are capable of amazing accomplishments if we set our minds to it.” [..] Nordhaus has been a prominent advocate of the use of a uniformly applied carbon tax as the best way to put a true cost on the use of burning fossil fuels and so reducing greenhouse gas emissions. The committee that awarded the prize said he was the first person to design “simple but dynamic and quantitative models of the global economic-climate system, now called integrated assessment models (IAMs). “His tools allow us to simulate how the economy and climate would co-evolve in the future under alternative assumptions about the workings of nature and the market economy, including relevant policies.”
Nordhaus was widely expected to be a winner for his work on the economics of climate change. For decades he has assembled and tweaked a model called DICE (Dynamic Integrated Climate-Economy), that melds computable general equilibrium theory from economics and equations from the various strands of climate science. His goal has been to estimate the “optimal” amount of climate change, where the marginal cost of abating it equals the marginal cost of undergoing it. From this comes an optimal carbon price, the “social cost of carbon”, which should be implemented now and allowed to rise over time at the rate of interest. In his first published work using DICE, from the early 1990s, he recommended a carbon tax of $5 a tonne of CO2, inching slowly upward until peaking at $20 in 2085. His “optimal” policy was expected to result in an atmospheric concentration of CO2 of over 1400 ppm (parts per million) at the end of this planning horizon, yielding global warming in excess of 3º C. (Nordhaus, 1992)
Over time Nordhaus has become slightly more concerned with the potential economic costs of climate change but also more sanguine about the prospects for decarbonized economic growth, even in the absence of policy. In his latest work he advocates a carbon tax of $31 per tonne in 2015, increasing at 3% per year over the following century. This too would result in more than 3º warming. To give a sense of how modest his suggestion is, consider that, in the same paper, Nordhaus calculates that the most efficient carbon tax to limit warming to 2.5º is between $107-184 per tonne depending on assumptions. The target of the Paris Accord is 2º, and most scientists consider this an upper bound for the amount of warming we should permit.
What do these “optimal” tax numbers mean? Based on the carbon content of gas, each $1 carbon tax translates into a one cent tax on a gallon of gas at the pump. If we adopted Nordhaus’ suggestion for carbon pricing, the result would be minuscule compared to the year-to-year fluctuations in energy prices due to other causes. In other words, while his prize is being trumpeted as a statement from the Swedish bankers on the importance of climate change, in fact he is a key spokesman for the position, rejected by nearly all climate scientists, that the problem is modest and can be solved by easy-to-digest, nearly imperceptible adjustments to energy prices. If we go down his road we face a significant risk of a climate apocalypse.
Brexit has been in its “something will turn up phase” for some time now and possibly, at last, something has. This is meant to be Theresa May’s “Hell Week”, with important post-Brexit proposals to be published in both Brussels and the UK, both of which will of course necessitate demented rows within her own party (current “strategies” include threatening to vote down the Budget), but Hell Week could hardly have got off to a better start. The most sensible reading of Hell Week is that it looks likely to end with May agreeing to keep the UK in the EU’s customs union until 2022. In the circumstances, the prime minister will not have failed to notice that, according to this morning’s report from the UN’s IPCC, that is a mere eight years before all of the planet’s inbuilt life preserving systems are currently scheduled to turn against humanity in act of vengeance that will be swift and total.
To borrow briefly from the probability-based lexicon of the climate science community, let’s take a look at the likelihood of Brexit being concluded by then in any meaningful way. Even in the unlikely event of Britain voting to leave the European Union, right up until around 8am on 24 June 2016, the latest point at which it was all meant to have been sorted out was 24 June 2018. But when David Cameron decided not to trigger the two-year Article 50 process “straight away” as he had consistently claimed he would, but resigned instead, that date was eventually pushed back by May to 29 March 2019, expanding Brexit by 37.5 per cent.
Then, in March 2018, the Brexit “transition period” was agreed to last until until 31 December 2020, and now, just seven months later, that deadline has been extended until the next general election in 2022, a further eighteen months. At the most conservative estimate, that gives Brexit a rate of expansion of around two hundred per cent, or four years for every two. If the depth to which it can be kicked into the long grass can be maintained on this exponential gradient, May has every reason to be optimistic that tornadoes of sulphuric gas will be moving freely over the Irish border long before she has to deliver any acceptable proposals for how to avoid the reintroduction of customs infrastructure across it.
Global stock markets staged a sharp sell-off on Monday amid growing concerns over a budget showdown between Italy and the EU and the prospect of weaker growth in the Chinese economy. Italian borrowing costs jumped and the euro dropped on foreign exchanges as the war of words between Rome and Brussels escalated, while shares on Wall Street and other major international markets declined amid growing concerns over the US-China trade war. Italian bond yields jumped by as much as 30 basis points to the highest levels since early 2014 after the Italian deputy prime minister, Matteo Salvini, attacked the European commission president, Jean-Claude Juncker, and the economics commissioner, Pierre Moscovici, as enemies of Europe.
Speaking at a news conference with the French far-right leader Marine Le Pen, he said the country would not cave to pressure from the financial markets or retreat from its plan for government spending. “We are against the enemies of Europe — Juncker and Moscovici — shut away in the Brussels bunker,” he said. Brussels has told Italy it is concerned over the plan because it would mean the nation running a larger budget deficit – the gap between income from taxes and government spending – than previously planned for the next three years. Rome is to submit its draft budget to the commission, the EU’s executive arm, which will check whether it is in line with EU rules by 15 October.
As of September 30, total assets on the Bank of Japan’s elephantine balance sheet dropped by ¥5.4 trillion ($33 billion) from a month earlier, to ¥537 trillion ($4.87 trillion). It was the fourth month-over-month decline in a series that started in December. This chart shows the month-to-month changes of the balance sheet. Despite all the volatility, the trend since mid-2016 is becoming clear: Abenomics became the economic religion of Japan in later 2012, and “QQE” (Qualitative and Quantitative Easing) was an integral part of it. So has the “QQE Unwind” commenced? Are central bankers, even at the Bank of Japan, getting cold feet about the consequences?
At BOJ policy meetings, concerns have been voiced over the “sustainability” of the stimulus program, according to the minutes of the July meeting, released on September 25. So the BOJ staff “proposed measures to enhance the sustainability of the current monetary easing while taking into consideration, for example, their effects on financial markets.” And “flexibility” has been proposed as solution to those concerns. The minutes reiterated that the BOJ would continue to buy Japanese Government Bonds (JGBs) in “a flexible manner” so that its holdings would increase by about ¥80 trillion a year. But this is precisely what has not been happening, in line with this “flexibility.”
Over the past 12 months, the BOJ’s holdings of JGBs rose by “only” ¥26.2 trillion – not ¥80 trillion. And they declined in September from the prior month (more in a moment). Shortly after the minutes had been released, BOJ Governor Haruhiko Kuroda, once the most reckless among the money printers, changed his tune and said in a speech that, “in continuing with powerful monetary easing, we now need to consider both its positive effects and side-effects in a balanced manner.” The Fed has already whittled down its balance sheet by $285 billion since it started its QE unwind last October. The ECB has tapered its QE from a peak of buying €85 billion a month to buying €15 billion currently and will end it altogether in December. The discussion has switched to raising rates and unwinding QE.
Federal Reserve Chair Jerome Powell thinks the economy is awesome. And he has no problem telling us so. What Powell will never discuss, however, is the “way-too-low-for-way-too-long” stimulus that the central bank engaged in to get here. In particular, the Fed has kept the neutral rate of interest far beneath the rate of inflation (CPI) for an entire decade. Consumers, corporations and Uncle Sam predictably borrowed as if there’d never be consequences. What consequences? Asset bubbles. Stocks, bonds, real estate, collectibles, cryptos, alternatives, everything. Straight across the Ouija board.
Perhaps ironically, we have seen this streaming video before. “Too-low-for-to-long” rate policy in the previous economic expansion (11/01-12/07) created an environment whereby the quality and the quantity of household mortgage debt became toxic. Granted, mortgage debt is less of an issue in the current credit cycle. Nevertheless, total household debt levels may not be sustainable at higher average interest costs. Meanwhile, the federal government is making households look downright responsible.
Long after the Great Recession ended, the country averaged $1.07 trillion in deficits (2010-2017). We’ve now hit $21.5 trillion in our national debt. Uncle Sammy’s bar tab won’t be getting smaller anytime soon. The new tax law, which has provided a near-term kick start for economic growth (GDP), will keep the trillion-dollar deficit train running for years to come. None of this would be so ominous were it not for the rapid-fire advance of interest expense. Interest expense alone accounts for 11% of the federal budget. Just interest. No debt repayment. Tack on higher interest rates to new borrowing needs? Pretty soon interest expense will surpass the money that goes to the Department of Defense (13.6%).
Pakistan, the flagship country for China’s global infrastructure building initiative, said Monday that it needed a bailout from the International Monetary Fund, amid growing concerns that Beijing’s program is pushing recipient countries into financial crisis. The fiscal constraints of an IMF program would also undercut the promises made by Prime Minister Imran Khan’s new government, which include millions of new jobs and the establishment of a welfare state.
But a ballooning trade deficit and fast-depleting foreign exchange reserves left the Pakistani government no other choice, officials said, after markets were spooked by the government’s recent suggestions that it might try to make do without the fund. “Uncertainty was growing and the stock market was falling,” said Chaudhry Fawad Hussain, the Information Minister. “We decided to end the uncertainty.” The Pakistani request for an IMF loan could further test already-strained U.S.-China relations. In July, U.S. Secretary of State Mike Pompeo warned that the U.S. didn’t want to see any IMF lending to Pakistan “go to bail out Chinese bondholders or—or China itself.”
IMF Chief Economist Maurice Obstfeld said on Tuesday that he was not concerned about the Chinese government’s ability to defend its currency despite the recent depreciation of the yuan. “No, I don’t think it’s a problem,” Obstfeld said when asked about the issue on the sidelines of a news conference at the IMF and World Bank annual meetings in Bali. But Obstfeld also told the news conference that Beijing would face a “balancing act” between actions to shore up growth and ensure financial stability. China’s yuan currency has faced strong selling pressure this year, losing over 8% between March and August at the height of market worries, though it has since pared losses as authorities stepped up support.
On Tuesday, China’s central bank fixed the yuan’s official mid-point for trading at 6.9019 per dollar, edging close to the psychologically important 7.0 barrier and helping to send Asian stocks to a 17-month low. A U.S. Treasury official on Monday repeated that the Trump administration was concerned about the yuan’s recent weakening as the department prepares a semi-annual report on currency manipulation due out next week. Obstfeld said financial markets have overly emphasized short-term movements in China’s currency, adding that the yuan has often quickly recovered from periods of volatility in recent years.
Britain’s retailers experienced a sharp slowdown in consumer spending last month, bringing to a close the World Cup-inspired summer spree on the high street. According to the British Retail Consortium (BRC) and the accountancy firm KPMG, growth in total sales dropped to the weakest level in almost a year. Total sales grew at an annual rate of 0.7% in September, compared with 2.3% growth during the same month a year ago. The BRC said this was the lowest growth rate since October 2017. Excluding new store openings, like-for-like sales dropped by 0.2% in the year to September, compared with a 19.9% increase for the same period a year ago.
The latest snapshot for the retail sector comes before the important autumn and winter shopping periods, vital for industry profits, when sales of gifts and electrical goods are lifted by the Black Friday sales event in November and shoppers buying Christmas presents. Retailers have been hit hard by a combination of problems that have led to job cuts and store closures across Britain. The ongoing shift to online shopping has increased competition, while sluggish wage growth and high levels of inflation have damaged the spending power of British households. Sales of stationery, footwear and clothing fell last month, while retailers sold more computers, jewellery, furniture, home accessories and food.
Alphabet Inc’s Google said on Monday it was no longer vying for a $10 billion cloud computing contract with the U.S. Defense Department, in part because the company’s new ethical guidelines do not align with the project, without elaborating. Google said in a statement “we couldn’t be assured that [the JEDI deal] would align with our AI Principles and second, we determined that there were portions of the contract that were out of scope with our current government certifications.” The principles bar use of Google’s artificial intelligence (AI) software in weapons as well as services that violate international norms for surveillance and human rights.
Google was provisionally certified in March to handle U.S. government data with “moderate” security, but Amazon.com Inc and Microsoft Corp have higher clearances. Amazon was widely viewed among Pentagon officials and technology vendors as the front-runner for the contract, known as the Joint Enterprise Defense Infrastructure cloud, or JEDI. Google had been angling for the deal, hoping that the $10 billion annual contract could provide a giant boost to its nascent cloud business and catch up with Amazon and fellow JEDI competitor Microsoft. That the Pentagon could trust housing its digital data with Google would have been helpful to its marketing efforts with large companies. But thousands of Google employees this year protested use of Google’s technology in warfare or in ways that could lead to human rights violations.
U.S. Treasury Secretary Steven Mnuchin said he’s unconcerned about the bond market’s ability to absorb rising government debt after his department said it borrowed a record amount for the first quarter. “It’s a very large, robust market — it’s the most liquid market in the world, and there is a lot of supply,” he said in a Bloomberg TV interview on Monday. “But I think the market can easily handle it.” Earlier on Monday the Treasury said net borrowing totaled $488 billion from January through March, a record for that period and about $47 billion more than it had previously estimated, according to a statement released in Washington. The end-of-March cash balance was $290 billion, compared with an initial estimate of $210 billion.
“By definition supply and demand will equate,” Mnuchin said. “I’m not concerned about that. I think that there are still a lot of buyers for U.S. Treasuries,” he said when asked about the risks of reduced demand for Treasuries and increased supply. The Treasury’s debt-management plans were complicated earlier this year by a political fight that was resolved when lawmakers agreed to suspend the federal debt limit in a two-year budget agreement in February. The U.S.’s need to issue more Treasuries is expected to grow as the fiscal picture deteriorates. The budget deficit widened to $600 billion halfway through the fiscal year, as spending increased at three times the pace of revenue growth in the October-to-March period, according to Treasury figures released earlier this month.
Tax and spending measures approved by Congress and President Donald Trump are expected to push the budget gap to $804 billion in the current fiscal year, from $665 billion in fiscal 2017, and then surpass $1 trillion by 2020, according to the Congressional Budget Office. In an accompanying statement about the state of the economy, the Treasury said Monday that tax changes are “poised to underpin near-term consumption and investment” and “the stage is set for a pick-up in growth over the near term.”
China has developed a craving for consumer goods, the more luxurious, the better. Along with most other countries, China’s credit boom and spending spree are being followed by out-of-control debt. While household debt is spiraling, the Chinese government is pushing to double the size of the economy by 2020 (setting this goal in 2010). This ambitious project will almost certainly entail more lending and increased debts. There is a question as to exactly how much more debt China can handle. China’s debt has been rising steadily, from 141 percent of GDP in 2008 to 256 percent of GDP in 2017. This type of rapidly-increasing debt level has frequently been the precursor of a hard economic fall, and the world is watching China carefully.
While countries such as the U.S. and the U.K. also have large debt-to-GDP ratios, the difference is that both are high-income countries, while China has only reached middle-income status, with only $15,400 in household purchasing power. This is a quarter of the household purchasing power of the US. Getting out of debt on China’s low level of income will be far more difficult than in higher-income nations. [..] China’s economic growth has encouraged widespread home buying and mortgage debts as property prices soar. Mortgage debt has increased by 25 percent in two years. People who have bought during the economic boom are now facing monthly mortgage payments that equal up to half of their monthly income.
Household budgets are stretching to the breaking point. This has forced many to curtail spending elsewhere and putting off other necessary big purchase items. This at a time when the government is encouraging greater consumer consumption.
Politicians like to describe government as like a household. When you’ve borrowed too much, you cut your spending so you can pay off debt, don’t you? You might be able to get a better-paid job, which helps you to pay it off faster. But you still budget to reduce your debt over time. Going on a spending spree means tightening your belt later. Similarly, if government borrows too much, there must be austerity to pay it down. Stands to reason, doesn’t it? People understand this reasoning. It is politically popular, especially when times are hard. In March 2009, when the U.S. was in the deepest recession since the 1930s, John Boehner, former Speaker of the House of Representatives, said on CBS News that “it’s time for government to tighten their belts and show the American people that we ‘get it.’”
“Government is like a household” can even win elections. At the height of the financial crisis in 2008, David Cameron, then leader of the U.K.’s Conservative party, wrote this in the (now defunct) News of the World: “This [Labour] government has maxed out our nation’s credit card—and they want to keep on spending by getting another. We believe we need to get a grip, be responsible and help families now in a way that doesn’t cost us our future.” He became the U.K.’s Prime Minister in May 2010. Keynesian economists such as Paul Krugman argue that instead of trying to reduce public deficits in a recession, government should increase spending, helping businesses to grow and providing employment. Government debt will rise, of course, but the government can run fiscal surpluses to pay it down when growth returns. Austerity is for the good times, not the bad times.
But this message has not been heard. In the name of “living within our means,” “balancing the books” and “paying down the debt,” governments on both sides of the Atlantic have pursued austerity policies ever since the Great Recession. The terrible story of Greece shows us that harsh austerity is the wrong medicine for a poorly-performing, highly indebted economy. But Greece is merely the worst example. Many Western countries have suffered deep and lasting damage, both from the Great Recession itself and from premature attempts to reduce public deficits.
The Federal Reserve Bank of St. Louis has provided some high-profile validation for a core premise of Bitcoin and other cryptocurrency. A blog post this week based on an earlier Fed research paper said that “bitcoin units have no intrinsic value” – but added that currencies “such as the U.S. dollar, the euro, and the Swiss france . . . have no intrinsic value either.” The post, titled “Three Ways Bitcoin is Like Regular Currency,” doesn’t precisely endorse Bitcoin or cryptocurrency. In another recent report, the St. Louis Fed was critical of Bitcoin’s inefficiency. Cryptocurrency has also become rife with scams since its surge in value last year, and may constitute a global risk because it enables clandestine money laundering, capital flight, and tax evasion.
But the St. Louis Fed has provided a credible rebuttal to one of the most widespread and misguided criticisms of cryptocurrency: That, because it isn’t tied to a particular real-world commodity, it should have a monetary value of zero. As Fed researchers point out, since decoupling from the gold standard in the early 1970s, almost all global reserve currencies rely on nothing but trust to function as a media of value exchange. In the case of the dollar, that’s mostly trust in the U.S. government and economy. For Bitcoin and other cryptocurrencies, it’s trust in computer code and, at least to some extent, developers.
Surprisingly, the Fed’s new statement also echoes one of the predominant arguments that cryptocurrency fans use to disparage government-backed currency – though in a rather roundabout way. The post argues in part that “there’s a limited supply” of both cash and Bitcoin. The libertarian boosters at the heart of the crytpocurrency movement have often argued that Bitcoin is better than government currency because central banks can devalue national currencies through inflation, while Bitcoin has a strictly fixed supply. Though the Fed’s post points out that it doesn’t actually print cash – in the sense of physical notes – it acknowledges its ability to expand the money supply.
The May 1 deadline for steel and aluminum tariff exemptions for U.S. allies has been extended, the White House said. Instead, the White House has decided to postpone the decision on some allies, including the European Union, for 30 days to allow further discussions. Those extensions will affect the EU, Canada and Mexico. As for Argentina, Australia and Brazil, a senior White House official said agreements have been reached in principle, and they will also receive a 30-day extension so details can be finalized. South Korea’s exemption from tariffs is permanent because it agreed to quotas as part of a new trade deal. Administration officials have asked other countries what level of quotas they would agree to.
One person briefed by the administration told CNBC: “Quotas are an active part of the discussion with every country on the exemption list.” U.S. Trade Representative Robert Lighthizer is leading the process for country exemptions, except for the European Union, which Commerce Secretary Wilbur Ross is leading. The Department of Commerce is also spearheading the process for product exemptions. The National Security Council is overseeing the entire process. The May 1 deadline on the tariff exemptions was set in a presidential memorandum on the topic.
The EU’s chief Brexit negotiator has warned that talks are at risk if the UK does not soften its red line on the Irish border issue. Speaking to reporters on his third visit to Ireland since the referendum, Michel Barnier said he was “not optimistic” and “not pessimistic” but “determined” that the two sides can break the current impasse on talks. He repeated recent declarations that unless Britain came up with fresh thinking on how to avoid a hard border by the June EU council summit, further talks were in danger of collapsing. “Until we reach this agreement and this operational solution for Northern Ireland, a backstop [solution], and we are ready for any proposal … there is a risk, a real risk,” he said.
But he hinted that the UK would not have to come up with the final deal for Ireland, describing the June summit as “a stepping stone” to the October deadline for the wider Brexit deal to be completed. The Irish prime minister, Leo Varadkar, said Britain’s “approach to negotiations will need to change in some way” if there is to be agreement over the issue. Appearing alongside Varadkar and his deputy, Simon Coveney, Barnier said the EU was “absolutely united” on the Irish question but wanted to work with the UK to find a practical solution. Coveney warned that there would be “difficulties” at the next EU council summit in June in progressing to wider Brexit talks unless the UK commited to wording for a “backstop” solution for the Irish border.
South Korean President Moon Jae-in said U.S. President Donald Trump deserves a Nobel Peace Prize for his efforts to end the standoff with North Korea over its nuclear weapons program, a South Korean official said on Monday. “President Trump should win the Nobel Peace Prize. What we need is only peace,” Moon told a meeting of senior secretaries, according to a presidential Blue House official who briefed media. Moon and North Korean leader Kim Jong Un on Friday pledged at a summit to end hostilities between their countries and work toward the “complete denuclearization” of the Korean peninsula. Trump is preparing for his own summit with Kim, which he said would take place in the next three to four weeks.
The Trump administration has led a global effort to impose ever stricter sanctions on North Korea and the U.S. president exchanged bellicose threats with Kim in the past year over North Korea’s development of nuclear missiles capable of reaching the United States. In January, Moon said Trump “deserves big credit for bringing about the inter-Korean talks. It could be a resulting work of the U.S.-led sanctions and pressure”. Trump’s predecessor, Barack Obama, won the 2009 Nobel Peace Prize just months into his presidency, an award many thought was premature, given that he had little to show for his peace efforts beyond rhetoric.
Even Obama said he was surprised and by the time he collected the prize in Oslo at the end of that year, he had ordered the tripling of U.S. troops in Afghanistan. As well as Obama, three U.S. presidents have won the Nobel Peace Prize: Theodore Roosevelt, Woodrow Wilson, and Jimmy Carter. Moon’s Nobel Prize comment came in response to a congratulatory message from Lee Hee-ho, the widow of late South Korean President Kim Dae-jung, in which she said Moon deserved to win the prize, the Blue House official said. Moon responded by saying Trump should get it.
Robert Mueller, the special counsel investigating Russian interference in the US election, wants to ask Donald Trump about contact between his former election campaign manager Paul Manafort and Russia, the New York Times reported on Monday. The paper said it had obtained a list of nearly 50 questions that Mueller, investigating Russian meddling in the 2016 presidential election, wants to put to the US president. More than half relate to potential obstruction of justice. “What knowledge did you have of any outreach by your campaign, including by Paul Manafort, to Russia about potential assistance to the campaign?” is one of the more dramatic questions published by the Times.
The pointed reference to Manafort breaks tantalising new ground, since there was no previous evidence linking him to outreach to Moscow. Benjamin Wittes, a senior fellow at the Brookings Institution thinktank in Washington, tweeted: “This is very interesting – strong evidence that there are still collusion threads that are not yet public.” Manafort and his deputy, Rick Gates, pleaded not guilty last October to a 12-count indictment accusing them of conspiring to defraud the US by laundering $30m from their work for a Russia-friendly political party in Ukraine. a dramatic insight into the special counsel’s mind and make clear that Trump is a subject, not a mere witness, in the investigation. It is not yet known whether the president will agree to be interviewed.
One batch of questions relates to alleged coordination between the Trump election campaign and Moscow. Donald Trump Jr’s June 2016 meeting at Trump Tower in New York with a Russian lawyer who promised damaging information about rival Hillary Clinton is naturally under scrutiny. Mueller wants to ask when Trump became aware of the meeting; Trump Jr claimed his father did not know about it in advance.
The first eight members of a “caravan” of Central American migrants entered U.S. territory to seek asylum on Monday, after a month-long journey through Mexico that drew the wrath of President Donald Trump. The eight women and children walked through a door into the San Ysidro port of entry on the bidding of a customs and border patrol officer, a Reuters witness said, hours after Vice President Mike Pence promised they would be processed in line with U.S. law. About three quarters of claims by Central American asylum seekers are ultimately unsuccessful, resulting in detention and deportation.
I had a fellow on my latest podcast, released Sunday, who insists that the world population will crash 90-plus percent from the current 7.6 billion to 600 million by the end of this century. Jack Alpert heads an outfit called the Stanford Knowledge Integration Lab (SKIL) which he started at Stanford University in 1978 and now runs as a private research foundation. Alpert is primarily an engineer. At 600 million, the living standard in the USA would be on a level with the post-Roman peasantry of Fifth century Europe, but without the charm, since many of the planet’s linked systems — soils, oceans, climate, mineral resources — will be in much greater disarray than was the case 1,500 years ago.
Anyway, that state-of-life may be a way-station to something more dire. Alpert’s optimal case would be a world human population of 50 million, deployed in three “city-states,” in the Pacific Northwest, the Uruguay / Paraguay border region, and China, that could support something close to today’s living standards for a tiny population, along with science and advanced technology, run on hydropower. The rest of world, he says, would just go back to nature, or what’s left of it. Alpert’s project aims to engineer a path to that optimal outcome. I hadn’t encountered quite such an extreme view of the future before, except for some fictional exercises like Cormac McCarthy’s The Road. (Alpert, too, sees cannibalism as one likely byproduct of the journey ahead.)
Obviously, my own venture into the fictionalized future of the World Made by Hand books depicted a much kinder and gentler re-set to life at the circa-1800 level of living, at least in the USA. Apparently, I’m a sentimental softie. Both of us are at odds with the more generic techno-optimists who are waiting patiently for miracle rescue remedies like cold fusion while enjoying re-runs of The Big Bang Theory. (Alpert doesn’t completely rule out as-yet-undeveloped energy sources, though he acknowledges that they’re a low-percentage prospect.) We do agree with basic premise that the energy supply is mainly what supports the way we live now, and that it shows every evidence of entering a deep and destabilizing decline that will halt the activities necessary to keep our networks of dynamic systems running.
A question of interest to many readers is how soon or how rapid the unraveling of these systems might be. When civilizations crumble, it tends to fast-track. The Roman empire seems to be an exception, but in many ways it was far more resilient than ours, being a sort of advanced Flintstones economy, with even its giant-scale activities (e.g. building the Coliseum) being accomplished by human-powered work.
In May, tough new privacy laws are being introduced across Europe, offering EU consumers far greater control over their data and large fines for firms which break the rules. It is worth pausing to think about how we got to this point. To begin to understand, we must remember that data can easily be copied, shared and collected from multiple sources. Whenever we use digital devices – everything from web browsers, to phones, loyalty cards and CCTV cameras – we create data that allows advertisers, insurers, the police and others to understand aspects of our lives. Only its availability and the ingenuity of its handler limits what it can tell us. This is very different to a traditional commodity that can be bought and sold: a house, for example.
If you sell your house, the buyer might come to understand something of your personality, perhaps through a taste for high-spec kitchens and red carpets. Beyond that, the potential insight into your life is limited – your diaries and photo albums will have moved with you. With data, it is more complicated. Once you sign up for an online service, constant and often seamless data collection starts. Minimal understanding and agreement are often sufficient for this collection to begin: clicking “I agree” to terms and conditions you may or may not have read can be enough. It’s as if, rather than handing over a clean and tidy house, you have invited the buyer to move in with you and start taking notes: how you behave, whom you talk to, who visits you and who spends the night.
Many people never have a clear understanding of how the data they produce is shared, collected and interpreted. It can be combined with data from other sources, and investigated in unpredictable and unforeseen ways to gain in-depth knowledge about our lives, preferences, and likely future behaviours. This knowledge can be used to influence us in subtle but powerful ways. The advertisements, news, and friends we encounter online are often the result of this nudging. And, unlike a house, the data can be copied again and again at little to no cost, reaching an unlimited number of people. It is clear that the risks to privacy with data are substantial. Recognising this, additional safeguards are being introduced.
In 2014 Gemma Morton, the headteacher of a large secondary school, told Education Guardian her school had helped to pay for the funeral of a student whose family couldn’t afford it, even after they had sold their car. Three years on, she has helped to pay for two more funerals. “When a child dies, nobody’s saved for it,” says Morton. “There is literally nowhere for families to go apart from the people they already know, and most of them are poverty-struck too.” Over the past few years, as austerity has deepened, more schools and individual teachers are bailing out disadvantaged families because they simply can’t say no. The latest government figures show 100,000 more children propelled into poverty in just 12 months.
There are 4.1 million children – nearly a third of the entire child population – living in households on less than 60% of the average income. At Gill Williams’s primary school in the north-west of England, local supermarkets deliver bread and fresh vegetables three times a week, which are placed in the playground for parents to help themselves. There is rarely a crumb left. Williams says it is not so much that poverty is more severe, but that it has spread. “It’s everybody. Your average family is like that now.” The core group of those needing support in her school is three times larger than when she became a head 10 years ago.
Evidence of hungry children is clear, say teachers. “You notice kids borrowing money from friends to buy food, kids falling asleep, kids saying they’ve got a tummy ache, and they didn’t have breakfast because Mummy didn’t have anything in,” says Morton. She has also seen children taking scraps from the school bins. Heads in poor catchments notice a difference when they attend meetings at other schools. “If you go and see kids in two different areas, they’ll be noticeably different heights,” says Morton.
Dr. D feels his own golden age coming on. It’s just a bit dark gold. Nothing a good polish can’t help, I’m sure. In the end, the spirit is familiar:
A man only begins to grasp the true meaning of life when he plants a tree under whose shade he knows he will never sit.
That is literally how he finishes this:
It’s going where it’s going, as I grow plants and make the bees happy, let the trees rest in the forests, as best I’m able when devoid of any help. They will survive. We are as perennial as grass, and will diminish someday. When we do, I will have left the trees, the seeds, the order, the patterns that will feed the generations that follow, as true men, not infants, should.
Would rather work on a more positive article, something about life, nature, spring, gardens; however I find that they are so complicated as to be inexpressible. So many, from Thoreau to Sand County Almanac spend entire books and barely scratch an overview of the complexity of nature. It’s at once so obvious and, lacking personal experience, so inexplicable. So I haven’t done that, but it’s been chilly and till the asparagus, start the plants (too early) and wait for the leaves.
Maybe it’s the case that once we understand how much there is, no thoughts can be put into a 1,000 word article. Certainly that’s to the detriment of modern thinking and persuasion. Maybe I just always use too many words to say things and draw in sidelines that are better neglected, however interesting and connected; for all things are really equally connected in mind just as in nature, and because of our linear minds we can’t look at them at once, but only one by one.
John Day is correct of the gestalt, however seldom that happens to humankind. And what is it? Does that not mean we partake of Jung’s mass consciousness, that we are in fact telepathic, like schools of fish and flocks of birds gyring in the sky? The nation has gone insane, truly mad, I could not describe it to you. 80% of people believe whatever they think that minute is reality. When CNN tells them the opposite of yesterday, or the beginning of the sentence is the opposite of the ending, it causes no distress.
It’s truly Robespierre, cultural revolution, and it doesn’t end well, for the expression of all of it is Crowley’s “Do what thou will” with Ayn Rand’s “What’s best for me is best for all” so you have a system of plundering by power, whether by force or victimhood, where the reality – actually, earnestly, incontrovertibly believed – is whatever will get me the most in this moment. Is it easier to fake medical paperwork, not check patients, and let them die rather than get out of a chair once an hour? We do it.
Call them on it and they’ll deny it, believing even to themselves. Steal from your own work, your family, banish them on Facebook if they call you on it, then expect a minute later there should be no ill will, no consequences? Certainly. Look around and call on public opinion for the callous, selfish, murdering behavior, and 80% of them support you, they think it’s normal and fine, punishing the 20% who still have order, consequences, cause and effect, logos.
I have no explanation for it, nor is there an end, but I greatly fear the only cure for it is for the good people to withdraw and leave the bad people starving in a ditch, their children and dogs included, for as adults, it is nearly impossible for them to change, and impossible for any good people to trust that change. And how are you supposed to run a justice system, a society, in a world of truly pathological, lying, self-serving sociopaths? How even will their children not end up the same, with only 20% left to throw a lifeline? A lifeboat cannot save the ship, you know. It can hardly save itself.
I was surprised at the comments today, for this open, transparent, appalling, illogical lies are still completely internalized, completely believed at the meta level. Trump has an open war on the CIA and Deep State – I don’t know how it could possibly be more obvious or advertised – and any common level would tell you we have been antagonizing North Korea to justify keeping country-sized bases in Japan and SoKo because the men needed to contain China wouldn’t fit in Pearl Harbor and are too far away. And yet when Trump’s team openly undercuts the CIA and peace breaks out everywhere, it’s suddenly not him.
It’s Kim Jong actually, I read yesterday, he beat the U.S., Trump lost (when Trump also wasn’t trying anything) and…I don’t know, NoKo is going to invade us and SoKo, after they nuke Miami and the moon with the CNN missiles that can hit anywhere on earth? After Pompeo (and allegedly Trump) met with Kim Jong in the Forbidden City? Earlier, however, he WAS completely responsible for war and the 12M dead Wolf Blitzer and Rachel Maddow longed for. So let me translate: all bad things forever in time and space are Trump, all good things forever in time and space, not Trump. And that’s logic now.
Maybe it’s inappropriate to give the Nobel to a man when it’s often a team, maybe we shouldn’t give prizes for doing a normal, decent thing and simply not killing each other, but that’s not the tradition. Personally, I wouldn’t give it to him because in my estimation all he did was STOP the CIA from holding Kim and NoKo hostage to his own Deep State Generals. Kim is a Swiss-raised trust fund playboy: he doesn’t want war unless forced to it. I can’t give a medal for simply stopping a war that never should have existed, and one they even now lie about and won’t admit.
But that’s not the point. The point is, our own readers, who are very smart and should be more than up to speed, seem to completely fall for CNN, Brian Williams, and an endless list of exposed, transparent liars for 20+ years, instead of you, for example, who’s been calling it out and they read every day. My God, what will it take? It’s disheartening. I believe that is part of the same Jungean mass-mind they have somehow hacked and it’s a struggle for even smart people to break through.
So apparently Kanye, following Professor Griff and a wide number of other immediately ignored and sidelined black artists, has woken up before our own readers. Not that Trump is great or anything, because he’s a jerk, but that they’ve arranged the same system from 100 years ago where darkie has to think and vote the way master says, or else. That’s the worst system of slavery ever devised. You think your color, vote your color, dress your color, watch your color, apply for jobs according to your color, and not your free thinking, your talents, your politics, your soul.
Yet again, that’s normal: that’s not racism to tell groups how they better vote, yet it IS racism to tell them to think for themselves. All overwhelmingly racist countries easily elect and accept Black Presidents with Muslim names, have black leaders in both parties, black billionaires, black megastars. That’s how we know they’re racist, right? Reality doesn’t matter, evidence doesn’t matter, logic doesn’t matter, it hasn’t mattered my whole life, it will never matter ever again.
It strikes me that although pretty poor, whose mascot should be the rhino, Republicans are the party AGAINST slavery, AGAINST the southern Democrats, born AGAINST the KKK, who have black cabinet members, black presidential candidates going back decades as still today.
Doesn’t matter. Doesn’t have the slightest effect. Then they are so racist, so bigoted, that when any member of a subgroup, be they Kanye, Milo, Janda, Diamond and Silk should cross the aisle, they are easily welcomed as party members and people, as thinkers, and not as races, skin colors, or issues – no backlash, no contention in the party. Doesn’t matter. Hasn’t mattered in 100 years, doesn’t matter now. It’s truly astonishing.
Like I said, I once thought, “if only people knew”, if only there were events that would remove the mask of lies, corruption, and abuse, but there are dozens daily, and as Churchill said, they pick themselves up and brush it off, continuing with the lie, no matter how continually debunked, for example, daily for two hysterical years.
So what are we supposed to do when that lie — which everyone knows is a lie, but they lie and claim it’s not a lie — can get us into a war ending life on earth? I do not know. I say stop lying, as Trump plays along, for all the good that does us. People tell the truth constantly: big, high-profile journalists, stars, senators…doesn’t have the slightest effect. They’re still crazy, and the Assad-gassed-his-people-because-he-likes-to-lose-although-we-sniffed-the-backpack-and-door-handle-and-found-nothing are still credible and rational.
Nor do I trust the gestalt. They have a bad habit of going where they’re going, and when driven by what are essentially insane people have a bad habit of going astray, meeting their karma, with all the bad consequences therein. I can’t stop that, but I am an American, and it’s my duty to survive this madness and this civil conflict as did my ancestors before me. And I’m sure I will, or well enough. Where would I go to escape this karma anyway? Britain? Belgium? China? I don’t think so.
It’s going where it’s going, as I grow plants and make the bees happy, let the trees rest in the forests, as best I’m able when devoid of any help. They will survive. We are as perennial as grass, and will diminish someday. When we do, I will have left the trees, the seeds, the order, the patterns that will feed the generations that follow, as true men, not infants, should.
World finance leaders on Thursday decried a growing populist backlash against globalization and pledged to take steps to ensure trade and economic integration benefited more people currently left behind. Their comments at the start of the IMF and World Bank fall meetings signaled frustration with persistently low growth rates and the surge of public anger over free trade and other pillars of the global economic system. The meetings are the first since Britain voted in June to leave the EU and U.S. billionaire Donald Trump secured the Republican presidential nomination with a campaign that attacked trade deals.
“More and more, people don’t trust their elites. They don’t trust their economic leaders, and they don’t trust their political leaders,” German Finance Minister Wolfgang Schaeuble said during an IMF panel discussion in Washington. “In the UK, everyone from the elites told the people, ‘don’t vote for a Brexit.’ But they did.” Schaeuble said Germany was trying to “hold Europe together” in the face of rising nationalism, and failure to do so would bode poorly for global economic cooperation. Last week, the World Trade Organization slashed its global trade volume growth forecast to the slowest pace since 2007, saying it expected it to rise just 1.7% this year, down from the 2.8% it forecast in April.
With just a little over a month until election day, Donald Trump has racked up zero major newspaper endorsements, a first for any major party nominee in American history. While newspaper endorsements don’t necessarily change voters’ minds, this year’s barrage of anti-Trump endorsements could actually move the needle come November, experts say. “It’s significant,” Jack Pitney, professor of government at California’s Claremont McKenna College, told TheWrap. “The cumulative effect of all these defections could have an impact on moderate Republicans.” Some conservative papers, which have endorsed Republicans for decades, are now breaking with tradition to endorse Hillary Clinton or, at the very least, urge their readers not to vote for Trump.
Several have taken a stand even at the expense of losing subscribers at a time when newspapers are barely staying afloat. Some papers have received death threats. But for a growing number of newspaper editorial boards, staying on the sidelines is no longer an option. The Dallas Morning News, which has endorsed every Republican nominee since 1940, was so appalled by the idea of a President Trump that it introduced its Clinton endorsement with this caveat: “We don’t come to this decision easily. This newspaper has not recommended a Democrat for the nation’s highest office since before World War II — if you’re counting, that’s more than 75 years and nearly 20 elections.”
Something funny happened on the way to the bank: In August, commercial and industrial loans outstanding at all banks in the US fell for the first time month-to-month since October 2010, which had marked the end of the collapse of credit during the Financial Crisis. In October 2008, the absolute peak of the prior credit bubble, there were $1.59 trillion commercial and industrial loans outstanding. As the Great Recession chewed into the economy, C&I loans plunged. Many of them were cleansed from bank balance sheets via charge-offs. But then the Fed decided what the US needed was more debt to fix the problem of too much debt, thus kicking off what would become the greatest credit bubble in US history. By July 2016, C&I loans had surged to $2.064 trillion, 30% above their prior bubble peak.
But in August, something stopped working: C&I loans actually fell 0.3% to $2.058 trillion, according to the Federal Reserve Board of Governors. That translates into an annualized decline of 3.8%, after an uninterrupted six-year spree of often double-digit annualized increases. Note that first month-to-month dip since October 2010. [..] The ugliest credit stories in terms of bonds, according to Standard & Poor’s Distress Ratio, are the doom-and-gloom categories of “Energy” and “Metals, Mining, and Steel.” Next down the line are two consumer-facing industries: brick-and-mortar retailers and restaurants.
But these metrics by credit ratings agencies are based on companies that are big enough to be rated by the ratings agencies and that are able to borrow in the capital markets by issuing bonds. The 18.9 million small businesses in the US and many of the 182,000 medium size businesses don’t qualify for that special treatment. They can only borrow from banks and other sources. And they’re not included in those metrics. But when they go bankrupt, they are included in the overall commercial bankruptcy numbers, and those numbers are getting uglier by the month. In September, US commercial bankruptcy filings soared 38% from a year ago to 3,072, the 11th month in a row of year-over-year increases, according to the American Bankruptcy Institute.
A “fat finger” error by a trader or computerised chain reaction was thought responsible as the pound plunged to a new three-decade low during “insane” early trading in Asia on Friday – adding to the huge losses sterling had already suffered amid speculation that Britain is heading for a “hard Brexit”. The pound fell almost 10% at one point to US$1.1378, prompting confusion among traders who were struggling to identify any news or market event that could have been to blame. As the currency recovered to around $1.2415 there was speculation a technical glitch or human error had sparked a rash of computer-driven orders.
“What we had was insane – call it flash crash but the move of this magnitude really tells you how low the currency can really go,” said Naeem Aslam, chief market analyst of Think Markets, in a note. “Hard Brexit has haunted the sterling.” [..] The pound has fallen 13% against the dollar since Britain voted in late May to leave the EU, with its losses accelerated after Theresa May announced on Sunday that she would trigger Article 50 by next March, a move that would begin Britain’s formal exit from the EU. Sean Callow, senior currency strategist at Westpac, noted that sterling had been “on a precipice” since May’s declaration in a speech at the Conservative party conference. “I think we’ve underestimated how many people had money positions for a very wishy-washy Brexit, or even none,” he said.
Kevin de Leon, the leader of the California Senate, has said the state of California is now the fifth largest economy in the world after UK’s vote to leave the EU. His comments came a day after the pound sterling hit a new 31-year low against the dollar as on-going fears over the consequences of a “hard” Brexit spooked traders. Speaking at an event celebrating the tenth anniversary of the California Global Warming solution Act, de Leon said: “As of this morning California is officially the 5th largest economy in the world. “We have created more jobs than the other top two job creators in the US, Florida and Texas, combined,” he added.
Economists tend to be wary of comparing the relative size of economies using volatile market exchange rates, generally preferring to use a Purchasing Power Parity measure which adjusts for differences in local purchasing power. However, according to the US Bureau of Economic Analysis, California’s GDP in 2015 was $2.46 trillion. This compares to a GDP of $2.36 trillion for the UK in 2016, at the current currency exchange rate of $1.27. In June, the state of California’s GDP surpassed France to become the sixth largest in the world on this measure.
Tai Hui is experiencing deja vu. China’s surge in home prices reminds JPMorgan Asset Management’s chief Asia market strategist of last year’s stock market mania. Spiraling leverage and implicit state support are among the common denominators, he says. Shanghai property values jumped 31% in August from a year earlier, the latest data show. In 2015, a 60% rally in the city’s equities through June 12 was followed by a $5 trillion rout. Deutsche Bank warned last month that China’s housing market is in a bubble, while Goldman Sachs said this week it sees growing risks across the real estate industry. Home prices started to take off last year in the wake of the stock market crash after the governments eased curbs on property purchases.
In recent days, cities including Shenzhen have started re-imposing restrictions. “It’s similar to the equity market where if you let things loose, it just runs like a stallion,” said Hui. “And then you have to really rein it back, then it’s like an ice bucket challenge. So you go through this extreme heat and cold. That’s not particularly good for the economy because then you’re going through very aggressive investment cycles.” [..] Home prices started to climb after China eased mortgage policies and down-payment requirements in March 2015 to arrest what was then a slide in prices. New curbs, such as higher deposits to limits on the number of homes people can buy, are proving ineffective given the easy access homebuyers have to leverage, said Wee May Ling at Henderson Global Investors.
Medium and long-term new loans, mostly mortgages, totaled 529 billion yuan ($79 billion) in August, while aggregate financing jumped to 1.47 trillion yuan, helping fuel a 39% jump in property sales by value in the first eight months. Private investment in fixed assets, meanwhile, stalled at 2.1% for a second straight month in the January through August period, matching a record low. While HSBC says the overall level of China’s household debt remains low, Deutsche Bank said it sees “clear sign of a bubble” in property – one that will end in a major correction in two years’ time. Just like last year’s equity boom, China is using credit growth to boost the economy, Zhiwei Zhang, chief China economist at Deutsche Bank, wrote in a report on Sept. 28.
Deutsche Bank, indicted for colluding with Banca Monte dei Paschi di Siena to conceal the Italian lender’s losses, mismarked the transaction and dozens of others on its own books, according to an audit commissioned by Germany’s regulator. Executives at Deutsche Bank arranged 103 similar deals with a total value of €10.5 billion ($11.8 billion) for 30 clients, according to the audit, a copy of which was seen by Bloomberg. The lender, Germany’s largest, adjusted the accounting of 37 of those trades in 2013, in addition to Monte Paschi’s, changing them from loans that had been kept off the books to derivatives, the audit said. The widespread use of a transaction that’s now the subject of a criminal case highlights the lender’s appetite for complexity at a time when the bank was expanding its fixed-income empire.
While Deutsche Bank has since cut risky assets and eliminated thousands of jobs to bolster capital, mounting legal costs have become a source of increasing concern to investors, driving shares to a record low. “Very complex deals prevent the market and regulators from properly understanding the state of a bank’s balance sheet, inhibiting proper regulatory monitoring and distorting market discipline,” said Emilios Avgouleas at the University of Edinburgh. The audit found that while Monte Paschi was the only client that used a transaction to “window dress” its books, Deutsche Bank didn’t correctly account for similar deals with banks from Italy to Indonesia made between 2008 and 2010. The report also said senior executives didn’t properly authorize the Monte Paschi trade, dubbed Santorini, or adequately review the transaction after receiving a subpoena from the U.S. Federal Reserve in 2012.
[..] Deutsche Bank and six current and former managers, including Michele Faissola, who oversaw global rates at the time, and Ivor Dunbar, former co-head of global capital markets, were indicted in a Milan court on Oct. 1 for the 2008 Monte Paschi transaction. Both were top deputies to former Deutsche Bank co-Chief Executive Officer Anshu Jain, and all three have left the company.
Fourteen senators are calling on the Justice Department to open a criminal investigation of Wells Fargo executives after revelations that bank employees opened millions of fake banks and credit card accounts. A bank teller who steals bills from a cash drawer is likely to face charges, the senators said in a statement, but “an executive who oversees a massive fraud that implicates thousands of bank employees and costs customers millions of dollars can walk away with a hefty retirement package and millions in the bank.” House and Senate hearings last month with Wells Fargo CEO John Stumpf “raised serious questions” that point to possible wrongdoing by Stumpf and other high-ranking executive, said the senators, all but one of them Democrats.
U.S. and California regulators have fined San Francisco-based Wells Fargo $185 million, saying bank employees trying to meet aggressive sales targets opened up to 2 million fake deposit and credit card accounts in customers’ names. Regulators said employees issued and activated debit cards and signed people up for online banking without permission. The abuses are said to have gone on for years, unchecked by senior management. In their letter, the senators urged Attorney General Loretta Lynch to hold Wells Fargo accountable as a corporation and also prosecute individual executives who may have broken the law. “Every time the Department of Justice settles a case of corporate fraud without holding individuals accountable, it reinforces the notion that the wealthy and powerful have purchased a higher class of justice for themselves,” the senators said.
The letter was led by Democratic Sen. Mazie Hirono of Hawaii and signed by 12 other Democrats, including Sens. Elizabeth Warren of Massachusetts, Jeff Merkley of Oregon and Patrick Leahy of Vermont. Warren and Merkley serve on the Senate Banking Committee, while Leahy is senior Democrat on the Judiciary Committee.
UBS Securities Australia reported today that about 28% of Australian mortgages issued in 2015 and 2016 are what we in the US have come to call “liar loans,” which played a big role in the housing boom and the collapse and subsequent bailout of the global financial system. Reality is the last phase of a housing bubble needs liar loans to keep going because buyers have to reach beyond their limits, and the only way to do this is lie now, or miss out forever on buying a home. Evidence that home buyers are lying about income, assets, expenses, and other things on their mortgage applications has been surfacing for a while, along with fears that this would eventually lead to a “Mortgage Meltdown.” The US-style mortgage fraud would be a “Nuclear Bomb” to Australia’s banks.
Hedge funds are betting on this meltdown by shorting the big four banks. But everyone else wants these bank stocks that dominate the Australian stock exchange to rise. They’re in everyone’s portfolio. And they’re all doing what they can to turn shorting the banks into a widow-maker trade. To get “hard evidence,” UBS Securities Australia and UBS Evidence Lab surveyed 1,228 Australians who’d taken out a residential mortgage in 2015 or 2016. Participants, who remained anonymous, were asked 63 questions. The survey was broad based, covering all states and territories in Australia. Given the size of the sample and broad spread of respondents we believe the results are representative of Australian mortgage borrowers. Conclusions based on the total sample have a potential sampling error of just ±2.71% at a 95% confidence level.
The resulting report, “Mortgages – Time for the Truth?” found that 28% of the respondents admitted that they’d lied on their mortgage application: • 21% claimed their applications were “mostly factual and accurate.” • 5% stated they were “partially factual and accurate”• 2% “would rather not say.” How many of these liar-loan applicants lied on the survey to hide their lies on the mortgage application? We don’t know. But the actual percentage of liar loans could even be higher, given the propensity of liar-loan applicants – just my hunch – to lie on surveys to cover their tracks.
[..] while modern portfolio management is statistically based (all those “standard deviations” you always see referenced in quantitative analyses), the markets behave fractally. Fractals are known as the geometry of chaos, for they describe how seemingly stable systems can quickly, and unpredictably, degrade into chaos. But as Mandelbrot explains, “100-year floods” actually occur with startling regularity in all markets. Put another way: you cannot disappear all risk with fancy statistical models and credit default swaps, etc., that offload the risk onto others, i.e. counterparties. In other words, all you’re really doing is masking the risk-you’re not eliminating it. And in hiding the real risk, you are lulling the market participants into a pernicious choice architecture in which their willingness to take riskier and riskier actions is rewarded and encouraged, while caution is punished.
This is the Paradox of Risk: by masking risk behind assurances that the Fed has your back, the Federal Reserve is encouraging unwary investors to increase their exposure to risk without even being aware of the dangers. I covered the perverse consequences of believing risk can be “managed away to near-zero” in my book An Unconventional Guide to Investing in Troubled Times. This is how you get a total systemic collapse of the entire choice architecture. And by this I mean not just the financial markets, but the backstop provided by central banks. In a system that is now highly correlated to central bank policies, the idea that some counterparty will cover your losses is illusory. This is magical thinking: that when the system implodes, the counterparties will magically escape the highly correlated collapse.
Mike is one of the few people who understands the importance of money velocity -and deflation- the way the Automatic Earth has talked about it for a long time. We’ve been in touch off and on for many years now, lots of mutual respect. I’m not focused so much on the ‘crisis as opportunity’ story though, since in my view it leaves too many people behind.
History shows that once or twice in a generation a global crisis comes along that radically devastates people’s way of life. A fundamental shift so big and drastic and overwhelming that it destroys their standard of living and impacts every area of their lives. We are about to experience one of those events… As Mike Maloney outlines in his brand new episode of the Hidden Secrets of Money, that next major event is deflation. And the culprit will be a relatively obscure monetary term that will impact virtually every area of your life: money velocity. You may not know exactly what money velocity means, but we will all soon experience it firsthand. In fact, money velocity will be the culprit of not just deflation, but the resulting inflation—and maybe hyperinflation—that will immediately follow.
One of the most widely accepted propositions among political economists is the following: Every monopoly is bad from the viewpoint of consumers. Monopoly is understood in its classical sense to be an exclusive privilege granted to a single producer of a commodity or service, i.e., as the absence of free entry into a particular line of production. In other words, only one agency, A, may produce a given good, x. Any such monopolist is bad for consumers because, shielded from potential new entrants into his area of production, the price of the monopolist’s product x will be higher and the quality of x lower than otherwise. This elementary truth has frequently been invoked as an argument in favor of democratic government as opposed to classical, monarchical or princely government.
This is because under democracy entry into the governmental apparatus is free – anyone can become prime minister or president – whereas under monarchy it is restricted to the king and his heir. However, this argument in favor of democracy is fatally flawed. Free entry is not always good. Free entry and competition in the production of goods is good, but free competition in the production of bads is not. Free entry into the business of torturing and killing innocents, or free competition in counterfeiting or swindling, for instance, is not good; it is worse than bad. So what sort of “business” is government? Answer: it is not a customary producer of goods sold to voluntary consumers. Rather, it is a “business” engaged in theft and expropriation — by means of taxes and counterfeiting — and the fencing of stolen goods.
Hence, free entry into government does not improve something good. Indeed, it makes matters worse than bad, i.e., it improves evil. Since man is as man is, in every society people who covet others’ property exist. Some people are more afflicted by this sentiment than others, but individuals usually learn not to act on such feelings or even feel ashamed for entertaining them. Generally only a few individuals are unable to successfully suppress their desire for others’ property, and they are treated as criminals by their fellow men and repressed by the threat of physical punishment. Under princely government, only one single person – the prince – can legally act on the desire for another man’s property, and it is this which makes him a potential danger and a “bad.”
However, a prince is restricted in his redistributive desires because all members of society have learned to regard the taking and redistributing of another man’s property as shameful and immoral. Accordingly, they watch a prince’s every action with utmost suspicion. In distinct contrast, by opening entry into government, anyone is permitted to freely express his desire for others’ property. What formerly was regarded as immoral and accordingly was suppressed is now considered a legitimate sentiment. Everyone may openly covet everyone else’s property in the name of democracy; and everyone may act on this desire for another’s property, provided that he finds entrance into government. Hence, under democracy everyone becomes a threat.
As referenced quite lost here before: it’s an uncomfortable feeling if the far right is the only voice to speak the truth. But make no mistake: it speaks loud and clear to the failure of the entire rest of the political system.
With the proxy war in Syria escalating dramatically on a day by day basis, with ideological support for the warring powers split along West vs Russia (and China) lines, one particular outlier in the “western world” emerged overnight when Marine Le Pen, leader of France’s National Front party and the frontrunner for the role of president in near year’s French elections, accused the EU of being responsible for the ongoing chaos in Syria. She added that Europe has been too busy trying to overthrow Assad while Russia was actually fighting terrorists.
“You’ve done everything to bring down the government of Syria, throwing the country into a terrible civil war, while accusing Russia which is actually fighting Islamic State. Your responsibility could not be concealed”, she said speaking at the European Parliament plenary session in Strasbourg on Wednesday. “You cannot hide your responsibility […] for plunging this part of the world into an absolutely monstrous chaos,” Le Pen said, alleging that policies advocated by both the United States and the EU had contributed to the state Syria is currently in, as well as neighboring Iraq.
Italian Prime Minister Matteo Renzi cannot wriggle out of his pledge to quit if he loses the country’s referendum on constitutional reform, his main rival said. Luigi Di Maio, a leader of the anti-establishment Five-Star Movement and deputy-speaker of the lower house, said Italy will have to hold elections “as soon as possible” if Renzi’s plans for reform are rejected by voters on Dec. 4. “I am sure that Italians will ask him to maintain that promise despite the fact he has changed his mind,” Di Maio said in an interview at Bloomberg’s Rome office on Wednesday. “If Italians vote “No,” Renzi must keep the promise.” The premier has repeatedly pledged to step down if he loses the referendum which he says is central to his plans to make Italy work again after years of stagnation.
Still, he has backtracked somewhat in recent interviews as surveys show the “No” camp edging ahead and investors concerns mounting. The 30-year-old from near Naples is already described as “prime minister-in-waiting” by newspapers like Corriere della Sera with Five-Star neck-and-neck with Renzi’s Democratic Party in opinion polls. If he manages to supplant Renzi he plans to hold his own referendum – on Italian membership of the euro area. “I’d also like to see a European referendum on the euro, to see other countries starting to talk about it,” Di Maio said. “I know this is very difficult but I don’t think the Europe we know today will be the one we will face when we’re in government in a couple of years’ time.”
Emilia Kamvysi is not the typical Nobel Peace Prize candidate. The 86-year-old is not a politician, activist or lawyer. Her days are simple and slow. Like other Greek retirees on the island of Lesbos off the Turkish coast, she cooks for her children and grandchildren, watches the evening news and sits on the bench with her neighbors gazing at the sea. Then her life changed. Along with two neighbors -aged 89 and 85- Kamvysi was sitting on a bench in February, helping out a Syrian refugee mother by feeding her child with a bottle. The photo went viral, and she and the two other grannies in the photo became symbols of Greek generosity toward the migrants who have fled to Europe in recent years.
Soon after, a group of Greek lawmakers, academics and others nominated the grandmother as well as Greek fisherman Stratis Valiamos and actress Susan Sarandon. A second nomination included the grandmother and local agencies. Both cited their humanitarian efforts for the refugees. This Friday, Kamvysi and her granny-corps will find out whether she’ll become an official laureate. “I wish that Greece wins this prize, not just me,” Kamvysi said, pledging if she wins to give her share of the $1.2 million prize to the decaying Greek healthcare system. She lives well enough now on a $360-per-month farmer’s-pension, she said. “What am I going to do with it anyway?” she asked. “There are many people that helped the refugees — the fishermen, the volunteers. It wasn’t just us. Those poor babies, escaping war and drowning in the waters. It’s such a shame. We’re all crying in the village whenever there’s a shipwreck.”
The EU launched its beefed-up border force Thursday in a rare show of unity by the squabbling bloc as it seeks to tackle its worst migration crisis since World War II. EU officials inaugurated the new task force at the Kapitan Andreevo checkpoint on the Bulgarian-Turkish border, the main land frontier for migrants seeking to enter the bloc and avoid the dangerous Mediterranean sea crossing. The European Border and Coast Guard Agency (EBCG) will have at its disposal some 1,500 officers from 19 member states who can be swiftly mobilised in case of an emergency, like a sudden surge of migrants. Brussels hopes the revamped agency will not just increase security, but also help heal the huge rifts that have emerged between member states clashing over the EU’s refugee policies.
The long-term goal is to lift border controls inside the bloc and fully restore the passport-free Schengen Zone. “The new agency is stronger and better equipped to tackle migration and security challenges,” EBCG director Fabrice Leggeri said at the launch. The force will also conduct stress tests at the bloc’s external borders to “identify vulnerabilities before a crisis hits”, he added. EU Migration Commissioner Dimitris Avramopoulos hailed the launch as a “historical day for the European Union”. “From now onwards, the external EU border of one member state is the external border of all member states – both legally and operationally,” he said. “Countries like Bulgaria, Greece and Italy are still under pressure, but they are not alone.”