Apr 272023
 
 April 27, 2023  Posted by at 9:11 am Finance Tagged with: , , , , , , ,  52 Responses »


Pablo Picasso Woman sitting in a armchair 1910

 

Pentagon Top Brass Pleased With Carlson Exit – Politico (RT)
Tucker Carlson Reappears In 8PM Time Slot, But Not With Fox (ZH)
Poland Seizes Russian Embassy And Trade Mission Funds (RT)
Russia Understands Western Sanctions Aren’t ‘Temporary’ – PM (RT)
Moscow Reacts To Xi-Zelensky Call (RT)
Kiev Could ‘Capture Small Russian Towns’ For Leverage – WaPo (RT)
Ukraine Conflict Helps Prepare For Potential China Clash – Pentagon (RT)
Zelensky’s Right-Hand Man Contradicts US General (RT)
Biden Threatens North Korea With Annihilation (RT)
The Historic US-Saudi Relationship Cannot Bounce Back (Sweidan)
Twitter, Tiktok And Instagram To Face Much Stricter Content Rules In EU (Az.)
Ex-CIA Boss Intervened On Russia Collusion In 2016, Benghazi In 2012 (JTN)
The RFK Jr. Tapes (David Samuels)
Musk’s Lawyer Invokes ‘Deepfake’ Defense (RT)
EU Countries Sinking In Debt – Bloomberg (RT)
Gold Leading ‘Revolt Against Dollar’ – Economist (RT)

 

 

 

 

Macgregor It’s over and Ukraine is doomed

 

 

 

 

RFK Tucker

RFK – Unavoidably unsafe

RFK pharma ads
https://twitter.com/i/status/1651222441715281921

 

 

Digital trap

 

 

“Alexander Dugin, a prominent Russian thinker, in a conversation with Al-Mayadin: The global structure is between two possible scenarios; The first scenario belongs to the year 2050, in which the complete and irreversible victory for globalization and the unipolar era and the emergence of the post-human era and the destruction of all types of humanity have been achieved. The second possible future is that we will win and everything will change and a multipolar world will emerge.

Russia is currently fighting the real devil, Joe Biden, George Soros, and Western crazies; We need to create a new network outside of Western control. We need the continuation of international relations in a successful global trade system, without Western domination. The world is not limited to the West and globalism does not necessarily have a Western meaning. I believe that we are on the verge of the global collapse of liberalism. Its main cause is the growth of internal contradictions in the world system; A new global network should be created based on justice and equality. Globalization is nearing its collapse and end.”

 

 

 

 

“What we absolutely won’t do is take personnel advice from a talk show host or the Chinese military.”

Pentagon Top Brass Pleased With Carlson Exit – Politico (RT)

Senior Pentagon officials have welcomed the departure of Tucker Carlson from Fox News, Politico has claimed. The popular host regularly criticized the US military’s diversity and inclusivity policies, claiming they were imposed at the expense of battle readiness. “We’re a better country without him bagging on our military every night in front of hundreds of thousands of people,” a senior Defense Department official told the news outlet on condition of anonymity. The source claimed Carlson had “made a mockery” of the free press and “repeatedly cherry-picked department policies and used them to destroy DoD [Defense Department] as an institution.” Commenting on Carlson’s exit from the conservative network, another official reportedly said: “Good riddance.”

The popular former prime-time host regularly accused the Pentagon of undermining US fighting capabilities for the sake of ideologically-motivated inclusivity, imposed under pressure from President Joe Biden’s administration. In a March 2021 segment, Carlson blasted the introduction of flight suits for pregnant aviators, suggesting that Washington was heading in entirely the wrong direction – unlike its rival Beijing. “While China’s military becomes more masculine as it assembles the world’s largest navy, our military needs to become, as Joe Biden says, more feminine,” Carlson said. “This is a mockery of the US military and its core mission, which is winning wars.”


The remarks triggered a rare direct rebuke by the Pentagon, with then-spokesman John Kirby responding: “What we absolutely won’t do is take personnel advice from a talk show host or the Chinese military.” “We know we’re the greatest military in the world today and even for all the things we need to improve, we know exactly why that’s so,” Kirby insisted. When asked by Politico what he thought about the reported glee at his departure among senior Pentagon officials, Carlson replied in a text message: “Ha! I’m sure.” The news that Carlson and Fox News were parting ways broke on Monday, shortly before his prime-time show was due to be broadcast. Neither party has offered an explanation for the split.

https://twitter.com/i/status/1651421792936894467

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“Where can you still find Americans saying true things? There aren’t many places left, but there are some – and that’s enough..”

Tucker Carlson Reappears In 8PM Time Slot, But Not With Fox (ZH)

After Tucker Carlson’s surprise split from Fox News, the #1 rated cable news host in history re-emerged from his home office on Wednesday to offer a stunning 8PM monologue covering his thoughts on the media landscape, and his future. According to Carlson, one of the things one notices when one takes a little ‘time off’ is “how unbelievably stupid most of the debates you see on television are. They’re completely irrelevant. They mean nothing. “In five years we won’t even remember that we had them… and yet, at the same time, the undeniably big topics – the ones that will define our future – get virtually no discussion at all. War, civil liberties, emerging science, demographic change, corporate power, natural resources. When was the last time you heard a legitimate debate about any of those issues?”

“Debates like that are not permitted in American media,” Carlson continued, adding “Both political parties, and their donors, have reached consensus on what benefits them – and they actively collude to shut down any conversation about it. “Suddenly the United States looks like a one-party state,” Carlson said. Carlson doesn’t think this will last, however, noting that while the above is a “depressing realization,” he doesn’t think this is permanent. “Our current orthodoxies won’t last. They’re brain-dead. Nobody actually believes them. Hardly anyone’s life is improved by them. This moment is too inherently ridiculous to continue, and so it won’t.


The people in charge know this, that’s why they’re hysterical and aggressive. They’re afraid. They’ve given up persuasion – they’re resorting to force. But it won’t work. When honest people say what’s true, calmly and without embarrassment, they become powerful. At the same time, the liars who’ve been trying to silence them shrink – and they become weaker. That’s the iron-law of the universe; true things prevail.” Tucker rhetorically asked “Where can you still find Americans saying true things? There aren’t many places left, but there are some – and that’s enough. As long as you can hear the words, there is hope. See you soon.”

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Wild West.

Poland Seizes Russian Embassy And Trade Mission Funds (RT)

All the money in the accounts of the Russian embassy and trade office in Warsaw has been seized by the Polish prosecutor’s office, Ambassador Sergey Andreyev revealed on Wednesday. “We received a notification from the prosecutor’s office that the funds from the Santander Bank accounts of the embassy and the trade representation were transferred to the accounts of the prosecutor’s office,” Andreyev told RIA Novosti. Santander Bank then informed the embassy that it had “ceased cooperation” with the Russian government and closed the accounts, Andreyev added. There were “significant amounts” of both US dollars and Polish zlotys in both accounts, according to the diplomat. Andreyev called the incident “a flagrant violation of the Vienna Convention on Diplomatic Relations,” the 1961 treaty governing the rights and responsibilities of diplomats.

The Polish authorities had previously frozen the embassy account, citing suspicions that it might be involved in “money laundering or terrorism.” When this prevented the embassy from paying the lease on a recreational facility near Warsaw, the Polish authorities terminated the lease and seized the property in November 2022. Another property, a residence on 100 Sobieski Street, was seized last spring. Warsaw Mayor Rafal Trzaskowski said at the time it should be handed to refugees from Ukraine. The Polish foreign ministry said the building was “illegally owned” by the embassy as it was not being used for diplomatic or consular purposes. The embassy’s explanation, that the building was unfit for occupancy as it needed repairs, was ignored.

Poland has also sought to confiscate the embassy-operated school in Warsaw, citing the same pretext. The Russian Foreign Ministry has protested both seizures as a flagrant violation of international law. Many EU and NATO countries have expelled dozens of Russian diplomats after the Ukraine conflict escalated in February 2022, but most did not go so far as to sever relations with Moscow. The US and its allies have insisted they are not actually involved in the conflict, even while they sent Kiev over $100 billion worth of weapons and financial aid.

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“..slapping Russia with restrictions to “disrupt the economy, hurt the people and hit their standard of living, ‘cancel’ Russia and strip it of the ability to choose its own path based on its peoples’ interests.”

Russia Understands Western Sanctions Aren’t ‘Temporary’ – PM (RT)

Russia’s leadership is well aware the nation is likely to live under Western sanctions for a long time, Prime Minister Mikhail Mishustin said on Wednesday. The government is calculating all the risks associated with the existing and potential future restrictions and is ready for any scenario, he added. “We understand that sanctions are not a temporary phenomenon. They will not be lifted in an instant. Our former partners have gone too far to just turn around and retreat,” he told the ‘Znanie’ (‘Knowledge’) forum in Moscow. According to the prime minister, the US and its allies have been slapping Russia with restrictions to “disrupt the economy, hurt the people and hit their standard of living, ‘cancel’ Russia and strip it of the ability to choose its own path based on its peoples’ interests.”

The Russian economy has been weathering the sanctions push well so far and demonstrated its resilience, Mishustin said, adding that some industries still need to fully restore their production chains. The prime minister earlier told the State Duma that the downturn the Russian economy experienced in 2022 was not as drastic as had been predicted, adding that the nation is going back to economic growth now. The Russian government’s head also warned that the “sanctions war” ultimately led nowhere and only impeded global economic development. The world is now dominated by developments affecting every aspect of life, the prime minister said, naming the rapid development of information technologies used in various fields as one of such processes. “They [IT technologies] are now an important condition of long-term quality economic growth,” he said.

Last week, the head of the Russian Central Bank, Elvira Nabiullina, said that the Western sanctions Russia had to face last year were worse than “even the most pessimistic scenario.” Although no one could have predicted anything like that, both the Russian people and the country’s businesses demonstrated remarkable adaptability in the face of this new reality, she added. The US and EU have introduced a total of ten rounds of sanctions over the conflict. In December, the EU, along with the G7 countries and Australia, introduced a price cap on Russian seaborne oil, set at $60 per barrel.

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“She said Russian and Chinese visions for a path to peace were “broadly in tune” with one another. “The problem lies not with the lack of good plans,” Zakharova said.”

Moscow Reacts To Xi-Zelensky Call (RT)

Ukraine’s “unrealistic” demands are standing in the way of peace negotiations, Russian Foreign Ministry spokeswoman Maria Zakharova has stated. She made her comments in response to a question about the phone call between Ukrainian President Vladimir Zelensky and Chinese President Xi Jinping. The leaders spoke on Wednesday for the first time since Russia launched its military operation in the neighboring state in February 2022. Zakharova praised Beijing for its efforts to help restart meaningful negotiations. She said Russian and Chinese visions for a path to peace were “broadly in tune” with one another. “The problem lies not with the lack of good plans,” Zakharova said.

“The Kiev regime has so far not been receptive to any reasonable initiative aimed at a political and diplomatic settlement of the Ukrainian crisis. Its occasional agreement to hold negotiations is being tied to ultimatums with obviously unrealistic demands.” The spokeswoman blamed Kiev for the eventual breakdown of negotiations last spring when Russian and Ukrainian teams held several rounds of meetings. Kiev, meanwhile, has repeatedly said that negotiations can resume only after Russia surrenders its recently incorporated territories. Moscow has called such demands unacceptable. Crimea voted to leave Ukraine and join Russia in the wake of the 2014 coup in Kiev. The Donetsk and Lugansk People’s Republics, as well as the Kherson and Zaporozhye regions, did the same after holding referendums on the matter in September.

In October, Zelensky signed a decree that declared the “impossibility” of conducting negotiations with Russian President Vladimir Putin. Beijing, which unveiled a 12-point roadmap for peace in Ukraine in February, has maintained that the conflict can only end through dialogue. China, unlike many Western countries, has also refused to condemn Russia for its actions. China named diplomat Li Hui its special envoy to Ukraine and “other countries” on Wednesday. Xi said that the envoy would be tasked with conducting “in-depth communication with all parties on the political settlement of the Ukraine crisis.” Li was China’s ambassador to Moscow from 2009 to 2019. Zelensky, meanwhile, has appointed former strategic industries minister Pavel Ryabkin as the country’s new ambassador to China.

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“The profile of the unit published by the Post claims that Azov has “evolved” away from its neo-Nazi origins..”

Kiev Could ‘Capture Small Russian Towns’ For Leverage – WaPo (RT)

The interim commander of Ukraine’s Azov Brigade (the current incarnation of a former volunteer unit known for its neo-Nazi ideology) has said that Kiev’s forces could capture Russian towns and use them to put pressure on Moscow. In an interview with the Washington Post, Bogdan Krotevich was asked about Ukraine’s much-anticipated planned offensive against Russia. He was referring to the experience of Chechen militants in the mid-1990s who “adopted a strategy of capturing small Russian towns to use as leverage to recover Russian-held areas” during the military conflict in the southern Russian republic. The Ukrainian fighter said his country “may do the same,” the newspaper reported on Wednesday. It was not clear which episodes of the conflict in Chechnya Krotevich was referring to.

One of the most tragic examples of violence spilling outside of the Chechen Republic at the time came in June 1995, when a militant force led by Shamil Basayev raided the city of Budyonnovsk, taking over 1,000 civilians hostage at a local hospital. Another raid targeted the city of Kizlyar in Dagestan the next year, in which Chechen militants led by terrorist Salman Raduyev likewise resorted to hostage-taking. Dozens of people were killed in both cases. The Post’s article noted the desire of Krotevich and other Azov leaders to have more prisoner exchanges between Russia and Ukraine so that captured members of the unit can be returned. The man himself spent several months in Russian custody after he and other Azov fighters surrendered in the Donbass city of Mariupol. Krotevich was freed in a Türkiye-mediated swap last September.

“I came to the conclusion that the fastest way to release our prisoners is to take more Russian soldiers prisoner, and to end this war with our victory,” Krotevich stated. The profile of the unit published by the Post claims that Azov has “evolved” away from its neo-Nazi origins. Moscow regards the original Azov Battalion, which was created in 2014, and its successor organizations as a terrorist group. The unit was incorporated into the Ukrainian National Guard early in its history and has now become one of nine ‘Attack Guard’ volunteer brigades. The Interior Ministry revealed them in February, touting service in the units as “an opportunity to dispose of enemies” of the country.

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Dress rehearsal.

Ukraine Conflict Helps Prepare For Potential China Clash – Pentagon (RT)

The Pentagon will use the lessons learned from supplying military aid to Ukraine to help Taiwan in a potential conflict with China, US Deputy Secretary of Defense Kathleen Hicks has said. “There are many advantages we’ve gained for a potential Pacific challenge from the Ukraine conflict,” Hicks told Bloomberg in an interview published on Wednesday. “We’re learning now to grow our industrial base and to study that industrial base, which has been for the last 60 years in a bit of a feast and famine cycle.” The conflict highlighted the difficulties of quickly procuring enough weapons and equipment for Kiev, Hicks explained. The US repeatedly used the Presidential Drawdown Authority (PDA) to speed up the transfer of stockpiles to Ukraine and plans to do the same with Taiwan.

“We’re thinking about how we use those authorities right now to generate faster and higher-capacity delivery of munitions to provide to our forces in the Pacific,” Hicks said, adding that the Pentagon has “a clear strategy that’s focused on China.” Although the deputy secretary admitted that the US did not believe Beijing was planning an “imminent attack” on Taiwan, she maintained that the Pentagon was committed to “making sure that the (Chinese) leadership wakes up every day and says today is not the day to undertake aggression that threatens US interests.” In December, US President Joe Biden signed the 2023 National Defense Authorization Act, which includes $2 billion in military loans to Taipei. The law also allows Washington to muster an emergency stockpile of ammunition worth up to $100 million on or near the island.

Taiwanese Premier Chen Chien-jen said on Monday that negotiations of assembling “regional contingency stockpiles” were still ongoing. Beijing held large-scale military exercises around the island this month in response to a visit by Taiwanese President Tsai Ing-wen to the US. Beijing considers Taiwan – which has been ruled by a separate government since the late 1940s – its territory and views contact between local and foreign officials as meddling into its domestic affairs. China has also accused Washington of backing “secessionist forces” on the island. Chinese President Xi Jinping said last year that Beijing favored peaceful “reunification” with Taiwan but reserved the right to use force if necessary. The US supports the ‘One China’ policy by refraining from establishing formal diplomatic ties with Taiwan. At the same time, Washington has been selling arms to the local authorities and promised to defend the island in case of an invasion.

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“..98% of promised combat vehicles had already been delivered..”

Zelensky’s Right-Hand Man Contradicts US General (RT)

Ukraine still needs more weapons and equipment for the much-hyped spring “counteroffensive,” especially artillery ammunition, President Vladimir Zelensky’s adviser Mikhail Podoliak said on Wednesday. He disagreed with the US general commanding NATO forces in Europe, who told Congress earlier in the day that 98% of promised combat vehicles had already been delivered. General Christopher Cavoli gave that statistic to the House Armed Services Committee on Wednesday morning. “I am very confident that we have delivered the materiel that they need and we’ll continue a pipeline to sustain their operations as well,” Cavoli added, responding to questions about the expected Ukrainian attack.

Podoliak challenged that assessment later in the day, speaking during a telethon hosted by Ukrainian television. He said only the Ukrainian General Staff can offer accurate numbers, and that Cavoli’s statistics weren’t up to date. “In my opinion, 98% is too much, too large a number. He proceeds from certain mathematical data, things he knows today,” the adviser said, referring to Cavoli. “There should be much more equipment, there is a real shortage of shells, especially of heavy calibers. We are trying to solve this problem.”

The current rate of supply allows the Ukrainian military to take “certain actions” at the frontline, Podoliak said, adding that there is “never enough” weapons and equipment when facing an enemy such as Russia. The much-anticipated counteroffensive may have already begun, he suggested, urging the public not to regard it as a single event but a large number of engagements on various fronts Multiple US outlets have sought to temper expectations about the Ukrainian attack over the past week, citing anonymous government officials worried about the political fallout from its possible failure. Last Friday, the White House even warned of a possible Russian offensive taking place instead.

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Biden=Trump.

Biden Threatens North Korea With Annihilation (RT)

US President Joe Biden declared on Wednesday that a North Korean nuclear attack on his country or South Korea would spell doom for Pyongyang. Under a new agreement between Washington and Seoul, the US would respond to such an attack with nuclear weapons, South Korean President Yoon Suk-yeol added. “A nuclear attack by North Korea against the United States or its allies or partners is unacceptable and will result in the end of whatever regime were to take such an action,” Biden told reporters at the White House. Speaking alongside Biden, Yoon declared that “sustainable peace on the Korean peninsula does not happen automatically.”

“We can achieve peace through the superiority of overwhelming forces and not a false peace based on the goodwill of the other side,” Yoon said, adding that in the event of a nuclear attack from the north, the US and South Korea would “respond swiftly, overwhelmingly and decisively using the full force of the alliance, including US nuclear weapons.” Biden’s words echo those of his predecessor, Donald Trump, who in 2017 warned North Korea that he would respond with “fire and fury like the world has never seen” if the country threatened the US with nuclear weapons. Although the north tested a nuclear bomb a month later, Trump and North Korean leader Kim Jong-un agreed to a detente and went on to meet several times, and the north’s missile tests came to a halt for most of Trump’s remaining time in office.

These tests have since restarted and ramped up. Pyongyang has test-fired more than 100 missiles since the beginning of 2022, and this month tested its first solid-fuel intercontinental ballistic missile and a nuclear-capable underwater attack drone. Officials in Washington and Seoul have claimed since last year that the north is gearing up for its seventh underground test of a nuclear weapon. Yoon’s predecessor, Moon Jae-in, largely went along with Trump’s policy of diplomatic outreach to Kim. Yoon, however, has taken a much more hardline stance on his neighbor to the north. In a speech in January, Yoon raised the possibility of his administration acquiring “our own nuclear weapons,” something that more than two thirds of South Koreans want, according to recent polls.

The agreement signed on Wednesday has brought an end to that idea, as it stipulates that Seoul will not pursue its own nuclear armament. Known as the ‘Washington Declaration’, the agreement boosts nuclear information-sharing between the US and Korea, and provides for more joint military drills and the deployment of nuclear-armed US submarines and bombers to South Korea on a rotating basis.

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“..all US efforts to persuade Riyadh to flood global oil markets have failed, and the Russians have managed to maintain both their exports and their economy..”

The Historic US-Saudi Relationship Cannot Bounce Back (Sweidan)

Since the Cold War era began, oil has been a key pillar of the Russian (and former Soviet) economy. It has long been a US priority to be able to influence prices as a pressure tool against Moscow. Since Saudi Arabia is considered an oil superpower, Washington’s cooperation with Riyadh – despite its own dramatically reduced Saudi oil imports – is at the heart of US economic strategies to counter Russia. For example, in the mid-eighties, during the Soviet invasion of Afghanistan, the US asked the Saudis to flood oil markets in order to lower prices and undermine the oil revenue-reliant USSR. In 1986, oil prices dropped by two-thirds, from $30 per barrel to nearly $10 per barrel, ultimately crippling the Soviet economy and its geopolitical reach. But attitudes have sharply altered during the intervening 37 years.

Saudi Arabia now views the US as an energy market competitor due to Washington’s increased shale oil production and disinterest in boosting oil imports. Between 2010 and 2021, US shale oil production grew from approximately 0.59 million bpd to 9.06 million bpd. Riyadh’s response to this new geo-economic development was to raise oil production in 2016, with the aim of lowering prices to undercut the US shale industry, which operates at significantly higher costs. The Saudis indeed fear a declining role as a strategic supplier of global oil, in large part due to expanded US shale production and energy self-sufficiency. This has driven the Saudis to try and reimpose their oil superiority by lowering prices to undercut competitors with higher production costs – despite the short-term domestic damage caused by increased Saudi oil production.

To this day, Saudi Arabia continues to present an obstacle to US energy interests, and has instead found most common ground with Washington’s main adversaries – Russia, China, Iran – with whom Riyadh’s energy interests intersect. Contrary to expectations since the outbreak of the Ukraine war in February 2022, all US efforts to persuade Riyadh to flood global oil markets have failed, and the Russians have managed to maintain both their exports and their economy. It has become manifestly clear to Washington’s decision-makers that Saudi Arabia today is not the Saudi Arabia of 1985, willing to undermine its own revenues and energy interests in order to serve a US geopolitical agenda. Discussions in Washington today have likewise turned to the feasibility of maintaining the US commitment to Saudi Arabia’s security, particularly since Riyadh neither provides Americans with energy nor follows its political diktats.

Some believe that the US’ role of acting as a security guarantor in the Persian Gulf merely serves Beijing’s interests by securing China’s main energy sources. Yet others argue that a US military withdrawal from the Persian Gulf will create a vacuum filled by Beijing, which will keenly seek to ensure its own energy security. The one point of clarity, however, is that US-Saudi energy interests are no longer synergistic and that Riyadh’s interests line up far more closely with those of Beijing and Moscow. This remains a key factor driving Saudi Arabia’s foreign policy and economic diversification today. What remains to be seen is how far the Saudis – deeply and historically bound to western interests – will be willing to challenge the US’ regional hegemony as their goals diverge and Riyadh finds common cause with Washington’s rivals.

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“..a “Very Large Online Platform” (VLOP) or a “Very Large Online Search Engine” (VLOSE)..”

Twitter, Tiktok And Instagram To Face Much Stricter Content Rules In EU (Az.)

The list features platforms with more than 45 million monthly active users, which also includes certain services from Amazon, Google, Meta, Instagram and Microsoft. The volume of users puts the platforms under a new EU law, known as the Digital Services Act (DSA), imposing measures from August such as annual audits and a duty to effectively counter disinformation and hate content. In four months’ time, “these platforms and search engines will not be able to act as if they were ‘too big to care’,” Thierry Breton, the EU’s internal market commissioner, said in a statement. “This new supervision system will cast a wide and tight net and catch all points of failure in a platform’s compliance,” he added.

Platforms meeting the 45-million-plus threshold include Twitter, owned by US billionaire Elon Musk; Alphabet’s Google Search, Google Maps, Google Shopping and Google Play units as well as its YouTube subsidiary; and Meta’s Facebook and Instagram. Microsoft’s LinkedIn, Apple’s iOS App Store, online encyclopedia Wikipedia, messaging app Snapchat and creative image website Pinterest are also covered under the legislation. Under the DSA, they are categorised as a “Very Large Online Platform” (VLOP) or a “Very Large Online Search Engine” (VLOSE). Most of the companies on the list are US-based but Chinese-owned platforms TikTok and e-commerce site AliExpress also feature. The commission also listed German online fashion retailer Zalando. Breton told journalists today that his team will hold “stress tests” to check Twitter’s compliance readiness at the end of June.

He added that TikTok had also expressed an interest in cooperating to ensure compliance. The announcement follows a deadline in February for online companies to publish user figures in Europe. The DSA has a wide range of objectives, including forcing platforms to better protect children, strengthen transparency around digital services, prohibit the sale online of unsafe goods and allow users to have greater choice when online in the EU. The rules allow the EU to impose fines of up to six percent of the platforms’ annual global sales for repeated infringements. By 25 August, the 19 platforms must have an independent compliance system in place and give their first annual risk assessment to the European Commission, including how they plan to handle content on mental health and gender-based violence.

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Lying and cheating. Working for Hillary, Obama and Biden. For years. It’s a sad picture.

Ex-CIA Boss Intervened On Russia Collusion In 2016, Benghazi In 2012 (JTN)

Morell, a 33-year veteran of the CIA who retired shortly after Brennan took over in 2013, has now stirred controversies in three straight elections with actions that relied in part on his intelligence community ties. In September 2012, as Obama was seeking reelection in a close race against Republican Mitt Romney, Morell edited intelligence talking points to delete references to al Qaeda’s role in the deadly attack on the U.S. compound in Benghazi. The edits ended up sending National Security Advisor Susan Rice onto the Sunday talk shows to make a false insinuation that an anti-Muslim video spurred the attack on Benghazi when in fact the CIA had strong evidence an al Qaeda-related arm had instigated it.

Republicans accused the former CIA chief of a cover-up. Morell defended his actions in testimony two years later, insisting his edits were not designed to be political but instead were well-meaning actions taken in the heat of a dramatic intelligence drama. “These allegations accuse me of taking these actions for the political benefit of President Obama and then secretary of state Clinton,” Morell testified. “These allegations are false.” But by that time, the talking points had become a major controversy in the 2012 election.

In 2016, Morell’s insertion into the Russia collusion narrative came as Brennan, his successor, was warning Obama the Clinton campaign was crafting a dirty trick. In declassified notes, Brennan recounted how during a July 28, 2016 meeting with Obama he relayed a warning that there was intelligence that Clinton was trying to conjure up a Trump-Russia scandal to distract from Mrs. Clinton’s email controversies. The Clinton campaign had helped fund the Steele dossier, it was later learned. “We’re getting additional insight into Russian activities from [REDACTED],” Brennan’s notes read. “Cite alleged approval by Hillary Clinton of a proposal from one of her foreign policy advisers to vilify Donald Trump by stirring up a scandal claiming interference by the Russian security services.”

Two months later, Brennan’s CIA would send a similar warning to the FBI, which was investigating Russian collusion based in part on the now-discredited Steele dossier. CIA is aware of an intercept “discussing US presidential candidate Hillary Clinton’s approval of a plan concerning US presidential candidate Donald Trump and Russian hackers hampering US elections as a means of distracting the public from her use of a private email server,” the agency wrote in a teletype to the bureau. Brennan’s warning to Obama was significant because just four days earlier the Clinton campaign — where current Biden National Security Adviser Jake Sullivan served at the time as a security adviser — put out a statement saying Russia hacked the Democrat Party documents to help Trump. Mueller’s probe found no proof Trump or his team played a role in the hack.

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Long read.

The RFK Jr. Tapes (David Samuels)

The heir to the family’s political mantle in the third generation of Kennedys was always Bobby. It was Bobby who became the leader of his tribe of orphaned brothers and sisters after their father’s death, trying and failing to make up for the absence of a charismatic father and the near-total absence of adult supervision. A friend who was close to the family in those years recalls visits to their home in Hickory Hill, Virginia, as like visiting a zoo—quite literally, with live sea mammals in the swimming pool, and animals of all shapes and sizes, frequently untamed, roaming freely throughout the house. Bobby’s hawks nested in the eaves and children climbed in and out of windows. Eventually, the friend’s mother forbade further visits, on account of it being too physically dangerous.

If the Kennedys were a kind of American royalty, then Bobby was their Prince Hal—charismatic and beloved, yet also dangerous and frequently out of control, a fatherless child who was trying to emulate the adult father figures who had been taken from him before he could truly understand who they were or what their brand of world-shaping masculinity meant. In 1983, Bobby was found nodding off in an airplane bathroom, and then pleaded guilty to heroin possession. The death of his brother David, who worshipped Bobby, a year later from a heroin overdose, made an uphill climb back to respectability seem even more unlikely, even after he got clean, and his decades of hard work as an environmental lawyer for Riverkeeper and the NRDC established him as one of the most effective environmental activists in the country.

During the 1990s and early 2000s, Bobby kept his name alive in political circles through a familiar striptease dance with the New York press, which was no doubt orchestrated in part by his best friend from college, Peter Kaplan, the sharp-eyed editor of The New York Observer: A dutiful accounting of his environmental good works ridding New York’s waterways of deadly toxins, a dash of Kennedy fairy dust, a tour of his falcons—falconry being a lifelong hobby, pursued with characteristic dedication—and a tantalizing hint of a possible future race for some political office that would re-up his star power and help promote his advocacy. Of course, he never ran—which prevented the publication of the inevitable attack articles ripping him to pieces.

Running would have been messy. His sister Kerry was married to the governor of New York, Andrew Cuomo—heir to another political dynasty whose name meant more in New York state than the name Kennedy did. Then it all came apart. In 2005, Kerry and Andrew Cuomo divorced. In 2010, Bobby separated from his wife, Mary Richardson, who had been Kerry’s college roommate at Brown and appeared to be suffering from substance abuse issues; a judge awarded temporary full custody of their four children to Bobby. In 2012, Mary Richardson hung herself. In 2013, Peter Kaplan died of cancer.

Meanwhile, Bobby Kennedy Jr. found success as an environmentally friendly venture capitalist along with a new cause: vaccines. In 2005, Kennedy wrote a blockbuster Rolling Stone magazine article titled “Deadly Immunity,” which presented compelling evidence of an ongoing vaccine safety cover-up led by U.S. national health bureaucrats, including transcripts of a 2000 CDC conference in Norcross, Georgia, where researchers presented information linking the mercury compound thimerosol with neurological problems in children. At its root, the case Kennedy made in his article was no more or less plausible and empirically grounded than the cases that he and dozens of other environmental advocates had been making for decades against large chemical companies for spewing toxins into America’s air, water, and soil, and then lying about it.

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“..the company’s defense could make all of Musk’s public statements “immune” from legal scrutiny simply because he is “famous.”

Musk’s Lawyer Invokes ‘Deepfake’ Defense (RT)

A judge has ordered Elon Musk to testify under oath about whether he made certain claims about his company’s electric cars, after Tesla lawyers said statements attributed to him by plaintiffs in an ongoing lawsuit could have been fabricated with ‘deepfake’ software. The ruling from California Judge Evette Pennypacker was handed down on Wednesday, part of a lawsuit against Tesla over the death of Walter Huang, who was killed in a car wreck involving one of the company’s vehicles in 2018. Musk was ordered to provide a three-hour interview under oath regarding some of his past comments about Tesla cars and their ‘Autopilot’ capabilities, as the CEO is alleged to have claimed that some models could “drive autonomously with greater safety than a person” at a conference in 2016.

The plaintiffs in the suit say the claims were misleading and that the self-driving features on Huang’s Tesla had failed, resulting in his death. The carmaker, however, maintains that Huang was on his cell phone before the crash and had disregarded warnings from the vehicle, denying any liability. Company lawyers also dispute the comments pinned on Musk, saying that he, “like many public figures, is the subject of many ‘deepfake’ videos and audio recordings that purport to show him saying and doing things he never actually said or did.” Though Huang’s family cited a 2016 YouTube video which appears to show Musk making the statement in question, Tesla’s legal team has opposed the CEO’s deposition, also stating that he cannot remember his past comments.

Judge Pennypacker said Tesla’s claims are “deeply troubling,” suggesting the company’s defense could make all of Musk’s public statements “immune” from legal scrutiny simply because he is “famous.” She warned similar arguments could allow celebrities and public figures to “avoid taking ownership of what they did actually say and do.” However, the judge’s order was tentative, meaning that another hearing will be held on Thursday to determine whether Musk will be deposed under oath. Such rulings are not uncommon in California courts, which frequently allow parties to offer additional arguments to dispute motions before they are finalized.

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Join the crowd.

EU Countries Sinking In Debt – Bloomberg (RT)

Countries in Eastern Europe have borrowed some $32 billion so far this year, three times more than during the same period a year ago, Bloomberg reported on Tuesday. Poland has tapped overseas markets for nearly $9 billion, putting it second among emerging-market economies in terms of overseas borrowing, trailing only Saudi Arabia. Meanwhile, Romania and Hungary, which have borrowed a respective $6 billion and $5 billion, are the fourth and fifth largest emerging-market borrowers. This marks the first time in a dozen years that three Eastern European countries are among the top five overseas emerging-market borrowers.

The surge in borrowing is attributable to an increasing need to dole out subsidies due to the still-raging energy crisis, as well as soaring spending related to the military conflict in Ukraine, according to Bloomberg. Eastern European countries have had to build up their military capabilities and help refugees from the neighboring state. Meanwhile, hawkish policies pursued by key central banks have made it much more expensive to borrow in bond markets, even for highly rated nations. Poland is paying 5.5% in annual interest on a new 30-year bond, significantly above the less than 4% the same bond would have sold for back in 2021.

Rising interest rates are projected to add to the suddenly swelling budget deficits across Eastern Europe, inevitably putting more pressure on finances in the region. According to analyst estimates on Bloomberg, Eastern Europe’s budget deficit will surge to 4.3% of the region’s gross domestic product in 2023, up from the 1.3% recorded two years ago. The conflict in Ukraine “hits fiscal deficits from both sides,” Daniel Wood, a fixed income portfolio manager at William Blair International, told Bloomberg. “It lowers growth, which reduces revenue collection for the government, and on the expenditure side it has been necessary for governments to help those that have been hit hard by the cost of living.”

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“Some countries began to seek alternatives after seeing Russian assets frozen abroad and the country cut off from the SWIFT global financial messaging system. “Suddenly, it was clear that any nation could be a target..”

Gold Leading ‘Revolt Against Dollar’ – Economist (RT)

Central banks around the world are shifting away from the US dollar and turning their attention to gold as a safe haven asset, the chairman of Rockefeller International, Ruchir Sharma, has said. Prices for the commodity have surged 20% in the past six months, with demand coming not from “the usual suspects” such as large and small investors “seeking a hedge against inflation and low real interest rates,” but from “heavy buyers” like central banks, Sharma wrote in the Financial Times on Sunday. According to the investment expert, regulators are sharply reducing their dollar holdings and seeking a safe alternative. Central banks now account for a record 33% of monthly global demand for gold and are ramping up gold-buying more than at any time since data began in 1950, Sharma added.

“This buying boom has helped push the price of gold to near-record levels and more than 50% higher than what models based on real interest rates would suggest,” he explained, adding that “clearly, something new is driving gold prices.” Sharma pointed out that nine of the top ten central bank buyers are in the “developing world,” including Russia, India, and China. “Not coincidentally, these three countries are in talks with Brazil and South Africa about creating a new currency to challenge the dollar,” Sharma noted. He attributed the rush for the precious metal to increasing sanctions pressure exerted by the US and its allies, with as many as 30% of nations facing international penalties – up from 10% in the early 1990s.

“Thus, the oldest and most traditional of assets, gold, is now a vehicle of central bank revolt against the dollar,” Sharma argued. Some countries began to seek alternatives after seeing Russian assets frozen abroad and the country cut off from the SWIFT global financial messaging system. “Suddenly, it was clear that any nation could be a target,” Sharma wrote. According to the expert, the US saw sanctions as a “cost-free way to fight Russia,” but in reality the weaponization of the dollar has come at a cost for Washington as even allies such as Thailand and the Philippines have started to look for alternatives.

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CO2

 

 

 

 

Progress

 

 

 

9/11

 

 


Biologists found a marine green algae during a trip to the island in 2019. It took two years to identify it and give it a name: acetabularia jalakanyakae. The main feature of the species is that the plant is made up of one gigantic cell with a nucleus

 

 

Tippy taps

 

 

 

 

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

 

 

 

 

 

Apr 222023
 


Piet Mondriaan The red cloud 1907

 

Bobby Steps Up (Jim Kunstler)
All NATO Allies Agree Ukraine Must Join, But After Victory – NATO Chief (TASS)
Kiev Extremism, Crimes Confirm Special Operation Must Go On – Russia (TASS)
Relations With West Won’t Improve – Putin’s Special Representative (Az.)
Canceling Russian Culture Is A Mistake – Italian President (RT)
Poll Reveals Level Of Russian Public’s Confidence In Putin (TASS)
Russia’s Losses In Ukraine Exceed 185,000 Soldiers (Az.)
Russia Could Arm North Korea If South Sends Weapons To Ukraine – Medvedev (RT)
Russia To Deliver Free Fertilizer To Africa – Foreign Ministry (RT)
US Lawmakers Demand Halt To ‘Unrestrained’ Ukraine Aid (RT)
Reuters Interviews Soldier ‘Adolf’ In Ukraine (RT)
UK Minister Calls for Jailing Social Media Bosses Who Don’t Censor (Turley)
BRICS De-Dollarization Push Gaining Momentum – Indonesia (RT)
Chile Nationalizes Lithium Industry Overnight (ZH)

 

 

The West is buying up Ukraine. All of it.

 

 

Lock ’em all up

 

 

Here’s all 51 of them:

 

 

Tucker interference

 

 

Oath of Office

 

 

MEDVEDEV: “The belief of the British degenerates in their exclusivity is magnificent. The Russian court that was hearing cases of grave crimes against our citizens was sanctioned, and a little earlier the ambassador of this country was yapping something outside our court building. It’s not even about the specific “case”, but about their holy confidence that this is a terrible punishment and that Russian officials will beat themselves up in hysterics about it.

Still, it is obvious that the conflict of outdated form (the degenerate British monarchy) and mocking content (look at the faces of their recent prime ministers – Boris Johnson, Theresa May and what’s-his-name, Sunack) creates some pretty bizarre creatures. I don’t give a damn about their decisions, though. Britain was, is and will be our eternal enemy. At least until their insolent and nasty, raw island is swept into the abyss of the sea by the wave created by Russia’s latest weapons system. ‘Let it be’, as the Beatles sang…”

 

 

 

 

Well, we can hope.

Bobby Steps Up (Jim Kunstler)

Of course, Yahoo News, and all the rest of the in-the-tank news media greeted Robert F. Kennedy, Jr.’s presidential announcement by branding him a “noted-anti-vaxxer,” as if that’s a bad thing. Yes, noted, thank you very much. Reuters elaborated: “Kennedy has been banned from YouTube and Instagram for spreading misinformation about vaccines and the COVID-19 pandemic.” By now, whenever you see the agit-prop platitude spreading misinformation, does your brain not instantly translate that into telling the truth? And by now, does banishment from social media not tell you that certain guilty parties recognize a truth-teller when they see one?

Bobby Kennedy stepped up on Wednesday and gave a long and comprehensive speech so rich with historic resonance, intelligence, and flat-out bravery — in the face of, let’s face it, a Satanic opposition — that he made every other figure aspiring to high office within memory look like quality-control rejects from evolution’s Homo sapiens assembly line. For 90-minutes in a Boston ballroom, RFK, Jr. told America the truth: that its entire matrix of leadership has laid one trip after another on our country going all the way back to the murders of his father and uncle, and he did it plainly, gently, humorously at times, but with an unmistakable gravitas and decorum that must scare the beJeezus out of the low life-forms currently running things.

Most of all, Bobby demonstrated that there is a way out of the bad-faith wilderness America has been lost in for years. He spoke to the audience in the ballroom, and to the country, in an adult conversational tone, without notes, as if he expected that voters would actually understand the problems we face: the wicked partnerships of corporations and governments to swindle and gaslight the public; the reckless military adventurism-for-profit campaign that has bankrupted the USA, now culminating in the Ukraine fiasco; the botched response to the Covid-19 episode and the chicanery that induced it; the insults to our ecosystem that are destroying the other organisms who live with us on this planet; and the financial chicanery that is driving America into inflation and bankruptcy. He reminded the nation of the good-faith efforts sixty years ago to end racial injustice — which has lately turned into a series of dispiriting hustles to promote antagonism and separation.

[..] I think RFK, Jr. sees very clearly the historical moment he represents. He’s keenly aware of the shade thrown over this land by the murders of his father and President Kennedy, and he has said flat-out in so many words that our own CIA was behind the dastardly acts. He’s been in a position to know the animus between JFK and the founding director of the CIA, Allen Dulles, and the reckless blunders of the agency and its partners in the Pentagon who buffaloed President Kennedy into the Bay of Pigs farce and then tried to drag him deeper into the Vietnam quagmire. JFK resisted that, threatened to shred the CIA into a thousand pieces and scatter them to the four winds… and Allen Dulles whacked him. He got away with it the same way that today’s Intel “community” got away with RussiaGate and all their subsequent crimes. In short, Bobby Kennedy knows what it looks like when a government is at war against its own people.

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Ukraine has and is already lost. What victory?

All NATO Allies Agree Ukraine Must Join, But After Victory – NATO Chief (TASS)

All NATO member countries have agreed that Ukraine should join the alliance, but a meaningful discussion of the issue is possibly only after it wins in the armed conflict with Russia, NATO Secretary General Jens Stoltenberg said on Friday. He made the statement as he arrived at US Ramstein Air Base in Germany before a meeting of the Ukraine Defense Contact Group that will consider new supplies of weapons to Kiev. “All NATO Allies have agreed that Ukraine will become a member,” he said in comments broadcast by the alliance. But he said “if Ukraine doesn’t prevail as a sovereign, independent nation in Europe, there is no meaning in discussing membership.”


Stoltenberg also said the alliance will help Ukraine to build a “better and brighter future” for its people. The secretary general, who visited Kiev on April 20, said his message to Ukrainian President Vladimir Zelensky was that NATO will support Ukraine over a long time. He pledged new weapons supplies to Kiev and assistance to ensure that the systems, which have already been provided, function well. The NATO chief said the Ukrainian president had asked the alliance to supply more air defense systems, heavy tanks and jets.

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“..punish the residents of Crimea and Donbass for their wish to pin their future on Russia.”

Kiev Extremism, Crimes Confirm Special Operation Must Go On – Russia (TASS)

The Kiev regime’s extremist statements and crimes confirm the need to continue the special military operation until all of its objectives have been achieved, the Russian Foreign Ministry said in a statement on Friday. The ministry drew attention to “the latest portion of extremist statements by some Ukrainian officials,” in particular, Mikhail Podolyak, an advisor to the head of the Ukrainian presidential office, who, “while discussing the situation involving the canonical Ukrainian Orthodox Church, openly stated that today the Kiev regime has a unique chance to quickly and painlessly physically ‘mop up’ a large number of pro-Russian people.”


“Such rhetoric and criminal actions by the Kiev regime confirm the need for continuing the special military operation until the tasks of denazification and demilitarization of Ukraine and the elimination of threats to Russia’s security emanating from its territory have been fully accomplished,” the Russian Foreign Ministry pointed out. It recalled that Podolyak “also promised to punish the residents of Crimea and Donbass for their wish to pin their future on Russia.” “He is echoed by the mayor of Dnepropetrovsk, renamed to Dnepr, Boris Filatov, who says that Ukraine does not forgive offenses,” the Russian Foreign Ministry added.

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US cancel culture is domestic AND international.

Relations With West Won’t Improve – Putin’s Special Representative (Az.)

The fractured ties between Moscow and the West will not improve anytime soon given that Russian artists continue to be blacklisted and joint projects canceled, said Mikhail Shvydkoy, President Vladimir Putin’s special representative for international cultural cooperation. “I don’t think relations with the European Union and the US, with unfriendly Western countries, will be ‘unfrozen’. So far, I don’t see any prospect for change,” Shvydkoy, a former culture minister, told the news agency RIA Novosti on Thursday. “On the contrary, they are expanding the lists of [Russians] working in the cultural field that have been sanctioned. There is still a ban in the West for cultural institutions to have contacts with Russian state institutions,” the official said. Shvydkoy added that, despite the tensions, some individual artists and scientists from the West are ready to interact with their Russian counterparts. Moscow, in turn, continues to be open to projects with other countries across the globe.


As part of the restrictions imposed on Russia in response to its military operation in Ukraine, the EU blacklisted a number of public figures who support the Russian government, including Oscar-winning filmmaker Nikita Mikhalkov, actors Sergey Bezrukov and Vladimir Mashkov, singers Oleg Gazmanov, Grigory Leps, and Nikolay Rastorguyev. Some artists lost work in the West shortly after the armed conflict broke out between Moscow and Kiev in February 2022. Carnegie Hall in New York canceled a performance by famed conductor Valery Gergiev and pianist Denis Matsuev. Putin slammed the reprisals against Russian artists and works last year as “simply stupid,” and said that “attempts to cancel our culture are doomed to fail.”

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Smart man. Wise words.

“Mattarella stressed that culture does not lend itself to “convenient cataloging,” and aspires to offer itself as a vision that contrasts with the real world. “What kills culture is homogenization, conformity, even that to which we submit unconsciously or culpably due to mental laziness, due to opportunism..”

Canceling Russian Culture Is A Mistake – Italian President (RT)

Russian culture is an inseparable part of European history, Italian President Sergio Mattarella said in an interview with Corriere Della Sera on Friday. The leader condemned the recent attempts to cancel Russian works of art amid Moscow’s conflict with Kiev. Asked if it is “right to abolish” Russian literature and art from Europe’s long cultural history, Mattarella stated that the ‘cancel culture’ against everything Russian is a mistake. “The attitude towards the cultures produced by man, by the most diverse intellectuals and artists, can only be openness, curiosity, knowledge, comparison,” he said. “Progress comes from this. Not from rejection, not from cancelation.” “The cancel culture towards Russian literature and art is a mistaken gesture,” the president said, adding that Russian culture is an inseparable part of European history.

Mattarella stressed that culture does not lend itself to “convenient cataloging,” and aspires to offer itself as a vision that contrasts with the real world. “What kills culture is homogenization, conformity, even that to which we submit unconsciously or culpably due to mental laziness, due to opportunism,” he said. Ever since Russia launched its military operation in Ukraine in February 2022, there have been numerous calls and attempts in the West to boycott any and all Russian art in retaliation. Many Western cultural institutions have sought to completely remove Russian-linked works from their galleries and opera houses.

The Cardiff Philharmonic Orchestra in Wales dropped the music of composer Pyotr Tchaikovsky from a concert, Britain’s Royal Opera House canceled a tour by the Bolshoi Ballet, and New York’s Carnegie Hall and Metropolitan Opera have stopped allowing Russian musicians and organizations to perform at their venues. The clampdown, which has been actively encouraged by Kiev, has affected Russian musicians, filmmakers, artists, and athletes, many of whom have been banned from performing or competing in the West, as well as being allowed access to Western markets. President Vladimir Putin slammed the reprisals against Russian artists and works last year while speaking at the Valdai Discussion Club forum, and suggested that it is reminiscent of the Nazi book burnings.

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Confusing numbers.

Poll Reveals Level Of Russian Public’s Confidence In Putin (TASS)

The proportion of Russian citizens’ confidence in President Vladimir Putin amounted to over 80%, according to the All-Russian Public Opinion Research Center that published the results of a survey conducted between April 10 and 16 among 1,600 respondents aged over 18. “When asked about trust in Putin, 80.1% of respondents answered positively (+0.4% over the week), the approval rate of the Russian president’s work was up by 0.4% and stood at 77.5%,” the pollster noted. “Positive assessment figures for the Prime Minister and the Russian government amounted to 54.8% (-0.1%) and 51.8% (-2.3%), respectively,” the report stressed. Mikhail Mishustin was trusted by 63.3% of respondents (-0.2% over the week).


Those surveyed also expressed their confidence in the heads of various parliamentary factions. Russia’s Communist Party (CPRF) leader Gennady Zyuganov was trusted by 33.5% of respondents (-0.1%), Sergey Mironov, the leader of A Just Russia – For Truth, received 30.7% (-0.6%), the leader of the Liberal Democratic Party of Russia (LDPR) Leonid Slutsky got 17.7% (+1.4%), and the leader of The New People party Alexey Nechayev procured 6.7% (-1.1%). The poll also revealed that the level of support for the United Russia party stood at 39.0% (-0.8%), with the CPRF supported by 10.2% (-0.1%). The LDPR got 9.3% (+0.4%), A Just Russia – For Truth procured 5.2% (-0.3% over the week), and The New People party’s figures came to 4.3% (-0.4%).

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As I commented yesterday, this has no credibility. If only because, as Doug Macgregor has been saying for a long time now, and Bobby Kennedy confirms in the video below, 7-8 times more Ukrainian troops die than Russians. And I don’t believe 1.2-1.5 million Ukrainians have died to date. Better to stick with, also from the video, the 300,000 number Kennedy mentions. So, divided by 7 or 8, ± 40,000 Russians. And I do realize we’re not talking numbers here, we’re talking sons and fathers etc. Real people, with hopes and expectations and futures. And sons and daughters and spouses and parents. Deeply tragic.

Russia’s Losses In Ukraine Exceed 185,000 Soldiers (Az.)

The Ukrainian army has liquidated 630 Russian soldiers over the past day, the General Staff of the Armed Forces of Ukraine said, Report informs via RBC-Ukraine. Besides, the Armed Forces of Ukraine destroyed 6 armored fighting vehicles and 8 drones. The total number of losses of the Russian army since the beginning of the war is 185,050 soldiers.

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“I wonder what the residents of this nation would say when they see the newest example of Russian weapons in possession of their closest neighbors..”

Russia Could Arm North Korea If South Sends Weapons To Ukraine – Medvedev (RT)

Moscow could offer advanced weapons to North Korea if South Korea begins to supply military aid to Ukraine, former Russian President Dmitry Medvedev has suggested. South Korean President Yoon Suk-yeol indicated a possible policy shift regarding the Ukraine conflict in an interview with Reuters on Wednesday, ahead of a state visit to the US next week. “If there is a situation the international community cannot condone, such as any large-scale attack on civilians, massacre or serious violation of the laws of war, it might be difficult for us to insist only on humanitarian or financial support,” Yoon said. “Considering our relationship with the parties engaged in the war and developments in the battlefield, we will take the most appropriate measures,” he added.

Medvedev, who currently serves as deputy chair of the Russian National Security Council, noted that Seoul had thus far refused to supply lethal aid to Kiev. “I wonder what the residents of this nation would say when they see the newest example of Russian weapons in possession of their closest neighbors, our partners from the DPRK [Democratic People’s Republic of Korea]?” Medvedev wrote on social media. Yoon told Reuters that he plans to discuss with US President Joe Biden how the two nations can achieve “tangible outcomes” in deterring North Korea. He added that Seoul is developing “ultra-high-performance, high-power weapons” to fend off perceived threats from its neighbor. Last week, Pyongyang reported testing its first solid-propellant intercontinental ballistic missile.

South Korea, which is a major arms producer, has refrained from sending lethal aid to Ukraine, citing its policy against supplying weapons to war zones. President Yoon’s office said his remarks to Reuters did not signal a policy change by the government, according to the Yonhap news agency. South Korean media claimed last week that the country had considered “loaning” the US some 500,000 rounds for 155mm artillery guns. Ukraine is reportedly in desperate need of this type of munition for the conflict with Russia. A government official described the arrangement to the Dong-A Ilbo newspaper as “indirect aid to Ukraine” which would supposedly show that Seoul was a responsible member of the international community “without provoking Russia.”

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They have a hard time giving it away. Or rather, to get it where it’s needed.

Russia To Deliver Free Fertilizer To Africa – Foreign Ministry (RT)

Moscow is preparing two batches of fertilizers to be shipped to Kenya and Nigeria free of charge, Russian Deputy Foreign Minister Sergey Vershinin has revealed. The announcement comes amid uncertainty over the prospects for an extension of the Black Sea grain deal. “So far, one shipment [of Russian fertilizers] of 20,000 tons, has been transported to Malawi, and it took six months. More [deliveries of fertilizers] to Kenya and Nigeria are being prepared, but they have not yet been implemented,” Vershinin told Russia 24 TV on Friday. The deputy foreign minister noted that he was speaking about supplies of Russian fertilizers which fell under Western sanctions and were delivered at the expense of Moscow. “This is the real picture of what’s happening today, which, unfortunately, many are trying to conceal,” Vershinin said, expressing confidence that “they won’t succeed.”

The Western sanctions do not directly target Russian agricultural goods, but affect payments, insurance, and shipping. With many Russian banks disconnected from SWIFT, direct settlements for exports have been made difficult. Under the Black Sea grain deal – which was brokered last July by the UN and Türkiye to help keep agricultural shipments from Ukraine going – Russia was to receive a sanctions reprieve for its own agricultural goods. However, Moscow has expressed discontent with UN efforts to lift Western restrictions affecting the sector. According to the Kremlin, only half of the agreement is currently being implemented because not all parties have kept their side of the bargain.

The deal has already been extended once but is now set to expire on May 18, and there is uncertainty about the prospects for an extension. Moscow has said it would only consider another extension if the demands regarding its own exports are met. Last September, President Vladimir Putin announced that Moscow was ready to transfer 300,000 tons of Russian fertilizers – stuck in EU ports due to Western sanctions – to developing countries free of charge. While Putin welcomed the decision to allow Russian fertilizers into the EU, he criticized Brussels for only allowing the bloc’s member states to buy them.

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“Ukraine is burning through more artillery rounds each month than the US can produce in six months..”

US Lawmakers Demand Halt To ‘Unrestrained’ Ukraine Aid (RT)

A coalition of 19 Republican legislators in the US Senate and House has urged President Joe Biden to focus on seeking a diplomatic solution to the Russia-Ukraine crisis rather than continuing to prolong the bloodshed by sending billions of dollars’ worth of weaponry to Kiev. “Our national and economic security demand an alternative,” Senators Mike Lee, Rand Paul and other Republicans said on Thursday in a letter to the president. “Unrestrained US aid for Ukraine must come to an end, and we will adamantly oppose all future aid packages unless they are linked to a clear diplomatic strategy designed to bring this war to a rapid conclusion.”

Biden’s push to impose sanctions on Moscow and supply weapons to Kiev creates more risk of escalating the crisis and lacks “much-needed strategic clarity,” the lawmakers said. They warned that Biden has offered no clear strategy to end the fighting. “A proxy war with Russia in Ukraine is not in the strategic interest of the United States and risks an escalation that could spiral out of control.” Congress has approved $113 billion in military, economic and humanitarian aid to Ukraine since the conflict began in February 2022. Some of the weapons recently committed to Kiev, including M1 Abrams tanks, require months of training and transport – suggesting that Biden’s administration is “settling in” for a long-term conflict, the lawmakers said.

“With every new aid package and every new weapon provided to Ukraine, the risk of direct conflict with Russia climbs,” said the letter, which was also signed by Senator J.D. Vance and Representatives Lauren Boebert, Matt Gaetz, Marjorie Taylor Greene, Anna Paulina Luna and Andy Biggs, among others. The legislators added that escalating US involvement in the conflict, including military training and intelligence support, “makes it increasingly difficult to deny Russian accusations of US complicity in a proxy war.” Ukraine is burning through more artillery rounds each month than the US can produce in six months, according to the letter. Washington has given Kiev more Javelin anti-tank missiles than it can make in four years. “The US is in no position to expend $113 billion reinforcing a foreign military as our own military atrophies,”

The Republicans also argued that Biden’s tactics have brought Russia and China closer together, giving credence to allegations that Washington is “inextricably opposed” to the interests of Moscow and Beijing. Biden and the Pentagon also have disregarded their top responsibility, keeping Americans safe, by pushing the limits of America’s security readiness to arm Ukraine, the letter said. Open-ended aid to Ukraine is “fundamentally incompatible” with US interests, the Republicans said, adding, “There are appropriate ways in which the US can support the Ukrainian people, but unlimited arms supplies in support of an endless war is not one of them. Our national interests, and those of the Ukrainian people, are best served by incentivizing the negotiations that are urgently needed to bring this conflict to a resolution.”

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Still scary.

Reuters Interviews Soldier ‘Adolf’ In Ukraine (RT)

International news agency Reuters has published an interview with a Ukrainian recruit codenamed “Adolf.” The footage is the latest in a long line of videos, photos, and stories linking Kiev’s forces with Nazi ideology. In a post to Twitter on Friday, Reuters described how “newly recruited servicemen for the Spartan storm brigade” were practicing at an undisclosed location in Kharkov Region. “A serviceman with the nom-de-guerre ‘Adolf’ said they had been trained in ‘first aid, tactics, [and] firing drills’,” the agency added. In an accompanying video, ‘Adolf’ spoke to Reuters about the drills. A caption identified him by his apparently Nazi-influenced moniker, a title that was also visible on a patch on his vest. In comments below the video, Twitter users wondered how an agency like Reuters did not notice the obvious reference to Adolf Hitler.

“How many times is something like this going to happen before reporters start probing a bit?” documentary filmmaker Jake Hanrahan wrote. “Speaking from experience, the number of guys you encounter with straight-up neo-Nazi tattoos/patches/callsign is not small,” CNN and CBC reporter Neil Hauer, who has reported from Ukraine over the last year, commented. The ‘Spartan’ brigade is one of several new units being hastily assembled by the Ukrainian military ahead of an anticipated counteroffensive against Russian forces. The new brigades will include a replenished Azov regiment, an infamous neo-Nazi paramilitary force that was formally incorporated into the Ukrainian National Guard in 2014 before being destroyed by Russian forces in Mariupol last summer.

According to Reuters, some 40,000 new “storm brigade” troops are being trained at the moment. It is unclear if “storm brigades” is a deliberate reference by the Ukrainian military to the Nazi “Sturmabteilung,” or SA, paramilitaries of the 1920s and 1930s, or whether “Spartan storm brigade” is a deliberate nod to “SS Brigade,” referring to the elite Nazi units most responsible for implementing the Holocaust. Since the start of Russia’s military operation in Ukraine last February, countless photographs and videos have emerged of Ukrainian soldiers wearing Nazi regalia, some of which were posted to social media by President Vladimir Zelensky, who is Jewish. In February, Zelensky bestowed the honorary title ‘Edelweiss’ upon the 10th Separate Mountain Assault Brigade of the Ukrainian army. The title was previously used by Nazi Germany’s 1st Mountain Division, which took part in the invasion of the Soviet Union in 1941 and raised a swastika flag on Mount Elbrus.

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There’s only one.

UK Minister Calls for Jailing Social Media Bosses Who Don’t Censor (Turley)

As previously discussed, after Musk decided to buy Twitter, Hillary Clinton called upon European countries to force social media companies to censor Americans. The European Union quickly responded by threatening Musk and other executives. Now, Technology and Science Secretary Michelle Donelan has announced plans to jail social media executives if they fail to censor so-called “harmful” content on their websites. The government, of course, will determine what is deemed too harmful for citizens to see or hear. Donelan is seeking speech arrests under the UK’s Online Safety Bill, a draconian censorship bill that would effectively ban end-to-end encryption for private internet users.

The bill uses Britain’s broadcasting regulator Ofcom to censor “all forms of expression which spread, incite, promote or justify hatred” based on various progressive characteristics, including transgenderism. So the government can censor anyone who it views as promoting or justifying hatred against virtually any group. Those who do not censor can now be rounded up by Donelan and her minions. According to a report by The Telegraph, companies will also face fines of up to 10 per cent of their global revenue should they dare to ignore Britain’s demands to preemptively delete or obscure posts violating its coming censorship regime. The decline of free speech in the United Kingdom has long been a concern for free speech advocates. A man was convicted for sending a tweet while drunk referring to dead soldiers. Another was arrested for an anti-police t-shirt. Another was arrested for calling the Irish boyfriend of his ex-girlfriend a “leprechaun.”

Yet another was arrested for singing “Kung Fu Fighting.” A teenager was arrested for protesting outside of a Scientology center with a sign calling the religion a “cult.” Recently we discussed the arrest of a woman who was praying to herself near an abortion clinic. English courts have seen criminalized “toxic ideologies” as part of this crackdown on free speech. Donelan is only the latest voice of a rising generation of censors. These officials proudly parade their intent to silence or jail those with dissenting views. Yet, they do so in the name of tolerance. This is why free speech is in a free fall in Europe and why we must remain vigilant in this country to resist figures like Clinton who want to bring European censorship to our shores.

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Indonesia would add another 275 million people to BRICS. The country with the single largest population of Muslims.

BRICS De-Dollarization Push Gaining Momentum – Indonesia (RT)

Indonesia is following the lead of the BRICS group of developing nations in its policy of shifting away from the US dollar in trade and financial transactions, according to the country’s central bank. Jakarta has introduced transactions in the local currency to settle cross-border trades, the portal SINDOnews has reported, citing Bank of Indonesia Governor Perry Warjiyo. “Indonesia has initiated diversification of the use of currency in the form of LCT [local currency trading]. The direction is the same as the BRICS. In fact, Indonesia is more concrete,” Warjiyo said on Friday, addressing a press conference with the board of governors meeting. Indonesia has already implemented the practice with a number of countries, such as Thailand, Malaysia, China, and Japan, he added.

It also plans to sign a cooperation agreement with South Korea regarding local currency trading in early May. Warjiyo’s statement comes as the BRICS economic bloc – comprising Brazil, Russia, India, China, and South Africa – claims to be working on establishing a joint payment network to cut reliance on the Western financial system, and on the dollar in particular. The member countries have been increasing the use of local currencies in mutual trade and also working on establishing a new reserve currency. Last month, Brazil and China signed an agreement to trade in their own currencies, thus abandoning the greenback as an intermediary. China’s attempts to ditch the greenback in international trade have intensified against the backdrop of the sweeping sanctions introduced by Western nations against Russia, a major global energy producer and exporter.

Indian policymakers have also taken several steps towards shifting away from the greenback to rubles and rupees in mutual trade with Moscow. Russia began de-dollarizing its economy in 2014, when the West introduced the first round of sanctions against the country over Crimea. Moscow has been boosting the use of alternative currencies in transactions since last year, with President Vladimir Putin suggesting earlier that the Chinese yuan should be used more widely, not only in trade with China, but also in Russia’s transactions with countries in Africa and Latin America. The latest data from the Bank of Russia shows that the yuan has become a major player in Russia’s foreign trade.

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They still need cooperation. We could still see a coup. Unless perhaps China gets involved.

Chile Nationalizes Lithium Industry Overnight (ZH)

The weaponization of commodities in a world that is increasingly turning multipolar and where legacy trade links and commercial bridges are burning down metaphorically (and in some cases literally) is accelerating. Chile’s President Gabriel Boric stunned the world on Thursday when he said he would nationalize the country’s lithium industry, the world’s second largest producer of the metal essential in electric vehicle batteries, to boost its economy and protect its environment. The shock move in the country with the world’s largest lithium reserves would in time transfer control of Chile’s vast lithium operations from industry giants SQM and Albemarle to a separate state-owned company. The nationalization poses a fresh challenge to electric vehicle (EV) manufacturers scrambling to secure battery materials, as more countries look to protect their natural resources.

Mexico nationalized its lithium deposits last year, and Indonesia banned exports of nickel ore, a key battery material, in 2020. “This is the best chance we have at transitioning to a sustainable and developed economy. We can’t afford to waste it,” Boric said in an address televised nationwide. Future lithium contracts would only be issued as public-private partnerships with state control, he said, hoping to extract far more profits from lithium demand by EV giants such as Tesla and well, everyone else these days. The government would not terminate current contracts, but hoped companies would be open to state participation before they expire, he said, without naming Albemarle and SQM, the world’s No.1 and No.2 lithium producers respectively. In other words, they can volunteer to hand over control of their assets. SQM’s contract is set to expire in 2030 and Albemarle’s in 2043.


SQM, formally called Sociedad Quimica Y Minera de Chile, and Albemarle supply Tesla Inc, LG Energy Solution Ltd and other EV and battery manufacturers. Albemarle said the announcement would have “no material impact on our business” and it would continue talks on investing in further growth and using new technologies in Chile. South Korean battery maker SK On, which has a long-term supply contract with SQM, said it would monitor the development and respond with a long term view. The announcement by Chile did not trigger a reversal in lithium prices which as we noted previously, have plunged more than 70% from a November peak due to weakening EV demand in China, the world’s biggest auto market. The most-traded lithium carbonate futures on the Wuxi Stainless Steel Exchange in China fell 3.4%.

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Rubik

 

 

John Steinbeck.

 

 

Crow
https://twitter.com/i/status/1649470006860587015

 

 

PuppyDuck

 

 

Strange fruit

 

 

 

 

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

 

 

 

 

 

Feb 242020
 


John Vachon Rain. Pittsburgh, Pennsylvania 1941

 

 

Wuhan Eases Coronavirus Lockdown As Xi Warns Of Historic ‘Crisis’ (G.)
Large Parts Of China Relax Coronavirus Curbs, Many Report Zero New Cases (R.)
Coronavirus China’s Fastest-Spreading Public Health Crisis – Xi Jinping (SCMP)
Chinese Workers Refuse To Go Back To Work Despite Beijing’s Demands (ZH)
Coronavirus Credit Crunch Hits Millions Of Chinese Firms (BBC)
85% Of Chinese Businesses Set To Run Out Of Cash In 3 Months (ZH)
“Tsunami-Like” Coronavirus Floods South Korea With New Cases (ZH)
COVID19 Did Not Originate In Wuhan Seafood Market – Chinese Scientists (SCMP)
Austria Stops Passenger Train Traffic With Italy Amid Coronavirus Panic (RT)
North Korea Quarantines Foreigners Amid Virus Fears (BBC)
Record Two Million Britons At Risk Of Type 2 Diabetes (Ind.)
What If Bernie Has Already Won This Thing? (Hill)
Chris Matthews Faces Calls For Resignation (Hill)
Chief Magistrate In Assange Case Was Funded By Shadowy Groups (DMav)
An End of Aboriginal Rights and Title (IC)

 

 

Before we get to the virus news, an observation: I was watching Trump arrive in India today on CNN, and thought: poor CNN, they have no choice but to cover this. How can they make him look bad now? Imagined Jeff Zucker, who wanted ONLY impeachment news as that circus went on, pacing up and down his office trying to find an angle. Then they found it: one of the talking heads said Trump and Modi are both right-wing populists who don’t like Muslims! AND they made sure that during Trump’s speech a bit later, there was always a talking head talking, so nobody could hear what Trump said. Well done!

 

As the virus continues to spread, rapidly, China starts to relax lockdown measures in certain regions, citing zero new cases there. For some reason this coincides with plummeting western stock markets and an incredible surge in gold (almost 3%). “As virus fears mount” says the media. “As China relaxes lockdown measures”, says I.

In reality, China makes a Russian roulette (Chinese roulette?) kind of gamble. Beijing realizes that if it doesn’t restart the economy real fast now, problems risk becoming insurmountable. So they say: no new cases in 1-2 days? Let’s go! Workers are less eager to get back, however. After all, they see President Xi declaring this the biggest health crisis, and 2 minutes later telling them it’s safe to take the subway or bus to work.

South Korea (red alert, 800 cases), Italy (152 cases) and Iran (12 deaths) are in various stages of exponential outbreak, and maybe Japan should be in that list as well, if only because infections aboard the Diamond Princess rose to 691. Oh well, maybe it’s good news that the Worldometer mortality rate has dropped to 9% (see below).

Turkey, Pakistan have closed borders with Iran, while Austria and soon others closed them with Italy. Note that the Schengen Treaty is under severe threat from this. Oh, and Axios reports shortages of 150 essential drugs likely.

 

Cases 79,707 (+ 841 from yesterday’s 78,866).

Deaths 2,626 (+ 162 from yesterday’s 2,464, a sharp rise from 102)

 

From SCMP:

 

 

Note: Worldometer mortality rate has dropped to 9%

 

 

 

 

The vast majority of cases and deaths are still in Hubei province, but who cares, we must produce. The economy forces us into the worst possible decisions.

Wuhan Eases Coronavirus Lockdown As Xi Warns Of Historic ‘Crisis’ (G.)

Wuhan, the centre of the coronavirus outbreak in China, has loosened lockdown measures and several provinces have lowered their emergency alert levels, as top officials sought to assure the public that the virus is being contained. On Monday, China’s National Health Commission reported its highest number of deaths in 11 days, with another 150 dead and 409 new cases, bringing the total number of confirmed cases of Covid-19 in China to 77,150. All but one of the fatalities and 11 of the new infections were in Hubei province, the centre of the outbreak.


Officials had delayed the daily announcement of the data, a day after a major speech and meeting held by China’s leader, Xi Jinping. Xi warned the Covid-19 crisis was “both a crisis and a big test” for the country, according to Xinhua News agency. Xi said the virus was a major public health emergency, which had spread quickly, causing the most extensive and difficult-to-contain infection since the founding of the People’s Republic of China. “The outbreak of novel coronavirus pneumonia will inevitably have a relatively big impact on the economy and society,” Xi said, but added that the impact would be temporary and generally manageable. Some observers greeted Monday’s figures with scepticism and as part of efforts to project a sense of control over the crisis. Chinese officials have twice changed the criteria for confirmed infections, making the data harder to parse.

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Key: “China’s GDP may slow in the first quarter, possibly easing to 3% growth or even lower..”

Large Parts Of China Relax Coronavirus Curbs, Many Report Zero New Cases (R.)

Urged to restore economic activity by President Xi Jinping, large parts of China relaxed curbs on transport and movement of people on Monday as reported new cases of the coronavirus outside the worst-hit province fell to the lowest in a month. Figures released by the national health authority on Monday showed 24 out of China’s 31 provinces and regions – including Beijing, Shanghai and populous provinces such as Henan and Anhui – reported zero cases of new infections on Feb. 23, the best showing since it began publishing nationwide figures on Jan. 20. There were just 11 new cases in six other provincial-level jurisdictions, while in Hubei province, the epicenter of the epidemic, the number of new cases fell to 398 from 630 a day earlier.

On Sunday, President Xi hailed the positive trend, and urged businesses to resume work and safeguard jobs. He also told low-risk provinces to restore economic activity and output, while high-risk regions focused on controlling the epidemic. Yunnan, Guangdong, Shanxi and Guizhou on Monday lowered their coronavirus emergency response measures from the most serious level, joining the provinces of Gansu and Liaoning in relaxing restrictions on traffic and movement of people. The coronavirus has infected nearly 77,000 people and killed more than 2,500 in China in one of the most serious public health crises in decades. The pathogen has also spread to other countries such as South Korea, Italy and Iran. Whether or not China can defeat the epidemic is “a major test of (Communist) Party organizations, party members and cadres of all levels,” Xi said, warning officials to avoid complacency.

In the rest of China, factories, businesses and construction sites have already gradually restarted. Large state-owned enterprises have been told to spearhead a recovery in industry while policymakers roll out measures to support struggling small and medium-sized companies. China’s GDP may slow in the first quarter, possibly easing to 3% growth or even lower, from 6% in the previous quarter – which was already the weakest pace in nearly 30 years, economists estimated. “The risk is that, with the emphasis on the economy and a differentiation of regions based on the number of new infection cases, the quality of new infection data reported by local governments could be compromised again,” Nomura wrote in a research note. “Cover-ups could lead to slack preventions…” it said.

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But do go to work!

Coronavirus China’s Fastest-Spreading Public Health Crisis – Xi Jinping (SCMP)

In a meeting on an unprecedented scale, Chinese President Xi Jinping said the coronavirus epidemic was the country’s most serious public health crisis and promised more pro-growth policies to help overcome it. According to state news agency Xinhua, Xi’s address via teleconference on Sunday was open to every county government and every military regiment throughout the country. He said the epidemic was “the fastest spreading, with the most infected and was the most difficult to prevent and control” since the founding of the People’s Republic. “This is a crisis for us and it is also a major test,” he said, acknowledging that the country needed to learn from the “obvious shortcomings exposed” in its response, so it could improve its ability to handle future crises. But Xi also told the Communist Party cadres that “the party Central Committee’s assessment of the epidemic is accurate, all the work arrangements are timely, and the measures adopted are effective”.


“The effectiveness of the prevention and control work has once again demonstrated the significant advantages of the leadership of the Communist Party of China and the socialist system with Chinese characteristics,” he said. He said that controlling the outbreak in the central Chinese city of Wuhan and the wider province of Hubei as well as preventing the epidemic from spreading to Beijing, China’s political centre, were the country’s top two strategic goals. “First, [we must] resolutely curb the spread of epidemic … increase the rate of treatment and cure, and reduce the infection and death rates effectively in Hubei and Wuhan,” he said. “Second, [we need to] make every effort to prevent and control the spread in Beijing … strengthen joint defenses and control in the Beijing-Tianjin-Hebei region, and cut off the source of infection as much as possible.”

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Your virus or your money…

Chinese Workers Refuse To Go Back To Work Despite Beijing’s Demands (ZH)

When we commented earlier that the coronavirus pandemic means that the vast majority of Chinese small and medium enterprises (SMEs) have at most 2-3 months of cash left, a potentially catastrophic outcome that will not only crippled China’s economy but its $40 trillion financial system, we summarized the circular quandary in which Beijing finds itself, to wit: “… unless China reboots its economy, it faces an economic shock the likes of which it has never seen before in modern times. Yet it can’t reboot the economy unless it truly stops the viral pandemic, something it will never be able to do if it lies to the population that the pandemic is almost over in hopes of forcing people to get back to work. Hence the most diabolic Catch 22 for China’s social and economic system, because whereas until now China could easily lie its way out of any problem, in this case lying will only make the underlying (viral pandemic) problem worse as sick people return to work, only to infect even more co-workers, forcing even more businesses to be quarantined.”

Shockingly (or perhaps not at all in light of China’s tremendous human rights record), Beijing has picked output over life expectancy, and in a furious scramble to restart its economy, which as we showed earlier remains flatlined… … according to most high-frequency metrics, it has been “advising” people to get back to work, even as new coronavirus cases are still coming in, in the process threatening to blow out the current epidemic with orders of magnitude more cases as places of employment become the new hubs of viral distribution.

As Bloomberg picked up late on Sunday, following what we said earlier namely that “local governments around the country face a daunting question of whether to focus on staving off the virus or encourage factory reopenings” China’s central and local governments are one again easing the criteria for factories to resume operations “as they walk a tightrope between containing a virus that has killed more than 2,400 people and preventing a slump in the world’s second-largest economy.” This schizophrenic dilemma for a government which faces two equally terrible choices, was best summarized by the following two banners observed in China:

And yet, even with both options equally terrible, Beijing also has no choice but to pick one. As a result, as Bloomberg writes, “the rush to restart has been propelled by China’s leader Xi Jinping and top leaders, who are urging companies to resume production so the country can continue to meet lofty goals for growth and economic development in 2020.” Regular Zero Hedge readers know the rest: with most of Chinese economic output paralyzed, officials in China’s provinces have taken up Xi’s call, with one region after another relaxing rules that had kept more than half the nation’s industrial base idle following the Lunar New Year holiday.

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Why I warn for too much focus on Apple and iPhones: “Small- and medium-sized companies account for 60% of the economy and 80% of jobs..”

Coronavirus Credit Crunch Hits Millions Of Chinese Firms (BBC)

Mounting debts have hit Chinese companies struggling to pay workers and suppliers amid the coronavirus outbreak. President Xi Xinping said on Sunday that China faces a “big test” to combat the virus. The government has asked banks to offer more credit for an economy stunned as the virus spreads rapidly. But a survey of small and medium Chinese firms found millions at the edge of survival. The Chinese Association of Small and Medium Enterprises said around 60% could cover regular payments for only one to two months before running out of cash. Only 10% said they could hold out six months or longer. At the same time, the industry group said that “nearly 60% of the enterprises (surveyed) have resumed work.” Small- and medium-sized companies in China are a particular focus because they account for 60% of the economy and 80% of jobs, according to the People’s Bank of China.

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“..as of last Monday, only about 25% of people had returned to work in China’s tier-one cities..”

85% Of Chinese Businesses Set To Run Out Of Cash In 3 Months (ZH)

And here is the stark reality of China’s T-minus 3 months countdown: 85% of 1,506 SMEs surveyed in early February said they expect to run out of cash within three months, according to a report by Tsinghua University and Peking University. And forget about profits for the foreseeable future: one-third of the respondents said the outbreak is likely to cut into their full-year revenue by more than 50%, according to the Nikkei. “Most SMEs in China rely on operating revenue and they have fewer sources for funding” than large companies and state-owned enterprises, said Zhu Wuxiang, a professor at Tsinghua University’s School of Economics and Management and a lead author of the report.

The problem with sequential supply chains is that these also apply to the transfer of liquidity: employers need to pay landlords, workers, suppliers and creditors – regardless of whether they can regain full production capacity anytime soon. Any abrupt and lasting delays will wreak havoc on China’s economic ecosystem. “The longer the epidemic lasts, the larger the cash gap drain will be,” Zhu said, adding that companies affected by the trade war face a greater danger of bankruptcy because many are already heavily indebted. “Self-rescue will not be enough. The government will need to lend help.”

So where are we nearly two months after the epidemic started? Well, as of last Monday, only about 25% of people had returned to work in China’s tier-one cities, according to an estimate by Japanese brokerage Nomura, based on data from China’s Baidu. By the same time last year, 93% were back on the job. And making matters worse, as we first noted several weeks ago, local governments around the country face a daunting question of whether to focus on staving off the virus or encourage factory reopenings, as the following tweet perfectly captures.

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“..bringing the total of 763, a 25-fold increase in cases in one week,..”

“Tsunami-Like” Coronavirus Floods South Korea With New Cases (ZH)

Update (2200ET): In a release that was about 4 hours late, China’s Hubei province said it has 398 New Coronavirus Cases As Of Feb 23 and 149 New Coronavirus Deaths. Overall, China reported an additional 409 coronavirus cases across the entire nation, and 150 additional deaths as of February 23 vs. 648 additional cases and 97 deaths on February 22. This brings the total number of cases across China to 77,150, and total deaths to 2592. None of these numbers are even remotely credible any more, and serve merely the propaganda purpose of giving the impression that Beijing is winning the war against the spread of the Coronavirus, when in reality nobody has any idea anymore what is going on on the ground in China, and is why workers refuse to show up to their place of business.

Consider this: two days ago, WaPo reporters pointed to a clear case of manipulation where the authorities suppressed the true number of cases. Authorities in Hubei province reported good news Thursday: There were only 349 new coronavirus cases the previous day, the lowest tally in weeks. The bad – and puzzling – news? Wuhan, the capital of Hubei, reported 615 new cases all by itself. And then there was the Hunan doctor who said he had treated no less than 50 patients with coronavirus on the same day official data reported just one new case.

Update (2015 ET): The epidemic in South Korea is accelerating exponentially, with the country reporting 161 additional virus cases, bringing the total of 763, a 25-fold increase in cases in one week, along with two more deaths bringing the death toll there to seven. The Kospi is continuing its decline and is down 3.0% and approached the 2100 level on the downside. More ominously, the number of cases under inspection is nearly 10,000. Earlier in the day, S.Korea elevated the virus alert level to “red”, the highest in its four-tier system. According to Yonhap, in escalating the virus alert level, President Moon said, “a few days from now is a watershed moment.” In the first 30 days, S. Korea seemed to have been effectively combating the Covid-19. But within the past few days, the number of confirmed cases spiked, first linked to a religious sect and now starting to spread across the country. Yet, the city of Daegu and the Gyeongbuk area have a higher concentration of virus cases – representing 84% of the total number of infections – than other regions.

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Let’s check that lab, shall we?

COVID19 Did Not Originate In Wuhan Seafood Market – Chinese Scientists (SCMP)

The novel coronavirus that has claimed the lives of more than 2,400 people did not originate at a seafood market in the central China city of Wuhan as was first thought, according to a new study by a team of Chinese scientists. The severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) was instead imported from elsewhere, said researchers from Xishuangbanna Tropical Botanical Garden under the Chinese Academy of Sciences and the Chinese Institute for Brain Research. The team, led by Dr Yu Wenbin, sequenced the genomic data of 93 SARS-CoV-2 samples provided by 12 countries in a bid to track down the source of the infection and understand how it spreads.

What they found was that while the virus had spread rapidly within the Huanan Seafood Wholesale Market in Wuhan, there had also been two major population expansions on December 8 and January 6. According to the study, which was published on the institute’s website on Thursday, analysis suggested that the coronavirus was introduced from outside the market. “The crowded market then boosted SARS-CoV-2 circulation and spread it to the whole city in early December 2019,” it said. Earlier reports by Chinese health authorities and the World Health Organisation said that the first known patient showed symptoms on December 8, and that most of the subsequent cases had links to the seafood market, which was closed on January 1.

The research went on to say that based on the genome data it was possible that the virus began spreading from person to person in early December or even as early as late November. “The study concerning whether Huanan market is the only birthplace of SARS-CoV-2 is of great significance for finding its source and determining the intermediate host, so as to control the epidemic and prevent it from spreading again,” the research team said.

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Note the use of the word “panic”.

Austria Stops Passenger Train Traffic With Italy Amid Coronavirus Panic (RT)

Authorities in Austria have stopped an incoming train at the Italian border, after it emerged that two passengers may be infected with the Covid-19 coronavirus. Later, all train traffic to and from Italy was halted.
The Eurocity 86 train was stopped at the Brenner Pass border crossing on Sunday, after officials at Italian State Railways told their Austrian counterparts that two passengers on board had fever symptoms consistent with the Covid-19 coronavirus.The train, bound for Munich in Germany, was halted and returned to the Italian side of the alpine crossing, Interior Minister Karl Nehammer confirmed.

Austrian authorities later stopped all train traffic to and from Italy, tabloid newspaper OE24 said on its website. The stoppage marks the first time European borders have been shut following the outbreak of the deadly disease, which surfaced in the Chinese city of Wuhan in late 2019 and has to date spread to more than 30 countries worldwide, killing nearly 2,500 people. At least 100 cases and three deaths have been recorded in Italy, making the Mediterranean country Europe’s coronavirus hotspot, and the only European country to see fatalities. Cities and towns in the northern regions of Lombardy and Veneto have been placed on lockdown, and Venice’s world-famous carnival has ended two days early, as authorities grapple to stop the spread of the illness.

In Milan, grocery stores were emptied by panic-stricken shoppers, and shortages of disinfectant and respirators have been reported. Europe’s largely porous borders could pose a serious risk for further transmission across the continent. However, EU officials have told the public that “there is no need to panic.” “The EU has full confidence in the Italian authorities and the decisions they are taking,” the bloc’s economic affairs commissioner, Paolo Gentiloni, said on Sunday.

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If they have an outbreak, will we ever know?

North Korea Quarantines Foreigners Amid Virus Fears (BBC)

North Korea has quarantined 380 foreigners in a bid to stop the coronavirus from breaking out. The foreigners are mostly diplomats stationed in the capital Pyongyang, said news agency Yonhap, quoting the Korean Central Broadcasting Station. Around 200 foreigners had already been confined to their compounds for the past 30 days – but as that came to an end, the quarantine has been extended. There have not been any reported cases of Covid-19 in North Korea. It’s not known how long the new quarantine for foreigners will last. [..] North Korea has not confirmed any cases – but there are clearly fears of it spreading, as the country shares a border with China.


All foreigners coming into the country must be quarantined for 30 days. There are relatively few foreigners in North Korea, and only around 200 westerners, according to one expert. North Korean authorities have also cancelled the annual Pyongyang marathon, which typically sees people from all over the world participating. Around 3,000 people in North Pyongan province – a north-western region bordering China – are also now under monitoring for reportedly showing suspected symptoms, said state media.

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Reminds me of a doctor in the southern States who said a few years ago: We’re raising a generation of blind amputees.

Record Two Million Britons At Risk Of Type 2 Diabetes (Ind.)

A record number of people are at risk of developing type 2 diabetes, increasing their chances of suffering a heart attack or stroke, the NHS has warned. A “growing obesity crisis” has led to nearly two million people in England being exposed to the condition that causes the level of sugar in the blood to become too high. As part of efforts to tackle the problem, a radical new liquid diet will be available on the NHS to put type 2 diabetes into remission. Five thousand patients will be restricted to 800 calories per day for three months in a pilot to be rolled out from April.


This will be followed by a further nine months of support to help them maintain weight loss. According to new NHS figures, there are 1,969,610 patients registered with a GP who have non-diabetic hyperglycaemia, a condition that puts people at risk of type 2 diabetes. The health service warned the problem could become greater still due to the rise in obesity levels. Projections indicate the growing number of diabetes sufferers could lead to 39,000 extra people suffering a heart attack in 2035 and more than 50,000 experiencing a stroke. One in six hospital beds are now occupied by someone with diabetes, the NHS said.

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If it were just about the votes, sure.

What If Bernie Has Already Won This Thing? (Hill)

Virtually all of the political oxygen in the room over the past two weeks has been consumed by former NYC mayor Mike Bloomberg’s recent rise in the polls. After skipping almost an entire year of campaigning, more than half a dozen debates, as well as the first four caucuses and primaries, suddenly Bloomberg is finding himself taken seriously. Spending nearly half a billion dollars will buy you some attention, it turns out. Certainly, Bloomberg is due for scrutiny, with his extensive history of horrifying statements about the trans community, the financial collapse, stop and frisk, sexual harassment, the NSA — honestly pick a topic and Bloomberg has been on the wrong side of it…

…but I want you to consider the possibility that this 24/7 Bloomberg media frenzy is hiding the real story of the 2020 Democratic primary: Has Bernie Sanders already won this thing? I know. I know. I’m probably getting ahead of myself. We hit Nevada, but we’re still waiting on a Super Tuesday and the truly delegate-rich states. There’s a lot of campaign left to be had, and any number of twists and turns could develop between now and the (possibly contested) Dem convention. But hear me out. By every traditional standard, Bernie Sanders is in a stronger position at this point in the primary process than any Democratic candidate stretching back decades. Bernie received the most votes in the disastrous Iowa caucuses and won the New Hampshire primary as well.

South Carolina follows, and while Bernie is not yet positioned to definitively take first there, he has turned Biden’s once-dominant lead into an effective tie. In the most delegate-rich Super Tuesday states, the RealClearPolitics polling average for California has Bernie up by 12, and Texas effectively tied between Sanders and Biden. He’s looking quite strong in a number of other states. Nationally, Bernie Sanders now holds a 15 point lead over second-place Joe Biden. That’s a jump of 8 points in just one month, as Biden has plummeted. The story is effectively the same when you turn to the much talked about “electability” measure, with Bernie now leading at 30 percent when asked who has the best chance to defeat Donald Trump.

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Bernie the Jewish anti-semite.

Chris Matthews Faces Calls For Resignation (Hill)

MSNBC’s Chris Matthews is under fire after comparing Sen. Bernie Sanders’s (I-Vt.) decisive win in the Nevada caucuses to the Nazi invasion of France in 1940, with some on social media calling for the “Hardball” host to resign. “I was reading last night about the fall of France in the summer of 1940,” Matthews said during MSNBC’s live coverage of the caucuses on Saturday. “And the general, Reynaud, calls up Churchill and says, ‘It’s over.’ And Churchill says, ‘How can that be? You’ve got the greatest army in Europe. How can it be over?’ He said, ‘It’s over.'” Criticism quickly poured in on social media over Matthews using the analogy.


Sanders, who is Jewish, had most of his family killed in the Holocaust. One such response came from Mike Casca, who serves as Sanders’s 2020 communications director. “..never thought part of my job would be pleading with a national news network to stop likening the campaign of a jewish presidential candidate whose family was wiped out by the nazis to the third reich…but here we are.”

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Please let something good come out of Julian’s extradition hearing today. Only 16 spots for the media, that’s not a good sign.

Chief Magistrate In Assange Case Was Funded By Shadowy Groups (DMav)

The senior judge overseeing the extradition proceedings of WikiLeaks publisher Julian Assange received financial benefits from two partner organisations of the British Foreign Office before her appointment, it can be revealed. It can further be revealed that Lady Emma Arbuthnot was appointed Chief Magistrate in Westminster on the advice of a Conservative government minister with whom she had attended a secretive meeting organised by one of these Foreign Office partner organisations two years before. Liz Truss, then Justice Secretary, “advised” the Queen to appoint Lady Arbuthnot in October 2016. Two years before, Truss — who is now Trade Secretary — and Lady Arbuthnot both attended an off-the-record two-day meeting in Bilbao, Spain.

The expenses were covered by an organisation called Tertulias, chaired by Lady Arbuthnot’s husband — Lord Arbuthnot of Edrom, a former Conservative defence minister with extensive links to the British military and intelligence community exposed by WikiLeaks. Tertulias, an annual forum held for political and corporate leaders in the UK and Spain, is regarded by the UK Foreign Office as one of its “partnerships”. The 2014 event in Bilbao was attended by David Lidington, the Minister for Europe, while the Foreign Office has in the past funded Lord Arbuthnot’s attendance at the forum. The Foreign Office has long taken a strong anti-Assange position, rejecting UN findings in his favour, refusing to recognise the political asylum given to him by Ecuador, and even labelling Assange a “miserable little worm”.

Lady Arbuthnot also benefited financially from another trip with her husband in 2014, this time to Istanbul for the British-Turkish Tatlidil, a forum established by the UK and Turkish governments for “high level” individuals involved in politics and business. Both Tertulias and Tatlidil are secretive gatherings about which little is known and are not obviously connected — but Declassified has discovered that the UK address of the two organisations has been the same. Lady Arbuthnot personally presided over Assange’s case as judge from late 2017 until mid-2019, delivering two controversial rulings. Although she is no longer personally hearing the Assange extradition proceedings, she remains responsible for supporting and guiding the junior judges in her jurisdiction. Lady Arbuthnot has refused to declare any conflicts of interest in the case.

The new revelations follow previous investigations by Declassified showing that Lady Arbuthnot received gifts and hospitality in relation to her husband from a military and cybersecurity company exposed by WikiLeaks. Declassified also revealed that the Arbuthnots’ son is linked to an anti-data leak company created by the UK intelligence establishment and staffed by officials recruited from US intelligence agencies behind that country’s prosecution of the WikiLeaks founder.

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Canada’s Supreme Court was very clear in 1997. But various governments, including Trudeau’s, piss on them. Love the photo, and the cape.

No Surrender: An End of Aboriginal Rights and Title (IC)

The Wet’suwet’en Nation has never signed treaties or ceded territory to the Canadian government — a fact that its leaders have defended fiercely in court as well as on the ground. Its hereditary chiefs were behind a landmark Supreme Court of Canada decision in 1997 known as Delgamuukw vs. the Queen, which recognized the existence of aboriginal title, whereby Indigenous people have the right to “exclusive use and occupation” of territory. However, because of a technicality, the court did not resolve the boundaries of the Wet’suwet’en’s claim to 8,500 square miles of land, stating that title would have to be sought through separate legal or treaty-making proceedings, which were never completed.

Documents obtained by the Canadian publication The Narwhal show that the Delgamuukw decision sent chills through Canadian extractive industries. The documents indicate that the government of British Columbia, a province largely made up of unceded territory, rushed to reassure industry officials, inviting them to provide input on a treaty-making process meant to settle questions over authority on unceded land. In one memo, describing a meeting held in the wake of the ruling, Marlie Beets, then vice-president of the B.C. Council of Forest Industries, told B.C. officials that Indigenous nations must hand over their land to Canada. “The decision makes the need for certainty through surrender all the more clear,” she said. “We see no other alternative.”

Other industries echoed the alarm. “The oil and gas industry in particular has expressed concern about their ability to continue to do business in the province absent a clear direction from the government on how it will address the implications of the Delgamuukw decision,” stated a memo by a Delgamuukw strategy team formed by the government. At a meeting set up by British Columbia’s treaty officials, one lawyer, whose client is unclear, underlined that “what is needed is a clear exchange and an end of Aboriginal rights and title for a defined set of treaty rights.”


Ts’akë ze’ Howihkat, Freda Huson, passes an installation of red dresses as she waits for police to enforce Coastal GasLink’s injunction at the Unist’ot’en healing center on Feb. 9, 2020. The red dresses are a symbol of the thousands of missing and murdered Indigenous women and girls. Photo: Amber Bracken

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Jun 152018
 
 June 15, 2018  Posted by at 12:42 pm Finance Tagged with: , , , , , , , , , , ,  15 Responses »


Edward John Poynter Erato, Muse of Poetry 1870

 

This is something I’ve commented on many times. Like two months ago, when I wrote:

“As for Donald Trump, as much as we would like to engage in constructive criticism of the man and his government, we find we no longer can. The anti-Trump echo-chamber has turned so deafening that any intelligent debate about his policies is being drowned out amid the never ending flow of fake news and half truths and innuendo and empty smears that US media continue to spout. With a brief lull when the bombs fell on Syria.

Thank you, New York Times, WaPo, CNN, MSNBC. Thank you for killing the entire discussion, thank you for killing off journalism. There is a lot to say about Trump, much of it critical, but we can no longer open our mouths. Because we don’t want to be in the same camp as you. Life in the echo chamber has given us vertigo. We had to get out.”

Jim Kunstler thanked me for saying that. He very much feels the same way. Nothing has changed. They’re still at it, and we still can’t get a word in edgewise. I was thinking earlier today that the best the MSM can do to promote its own case is to praise Trump from time to time. Because that is the only way they could attract some ears and eyes from outside their echo chamber.

They won’t do it. Being negative about the US president makes them too much money. It leaves us with a situation in which the one half of America that reads and hears New York Times, WaPo, CNN, MSNBC has become fully isolated from the other half. Yes, this is risky. But this, too, will be blamed on Trump.

Meanwhile, border policies where children are forcefully separated form their parents need criticism and condemnation from all of the nation. But there is nobody left who can reach the entire nation. A year and a half of 24/7 unproven allegations about collusion with Russia has seen to that.

Therefore, when the Intercept wrote about a Human Rights Watch report last month in Obama’s Deportation Policy Was Even Worse Than We Thought , the MSM don’t cover it, because it doesn’t fit the narrative. But when Trump uses the same ICE machinery to scare potential immigrants away, it’s suddenly considered newsworthy.

Oh, and France uses the exact same scare tactics, going as far as ripping children’s soles from their shoes. We should all condemn these atrocities, and make them stop. But it’s not going to happen if you guys insist on making it an anti-Trump thing, because half the country won’t listen to any more of that.

Journalism and news media must be a force to unite a nation, not one that divides it simply because there’s -more- profit in that.

The neverending Trump innuendo reached another new high in the North Korea meeting, with the ‘media’ competing with each other to find yet another terrible mistake or intentional screw-up by the man who is President of all Americans (like it or not). A feeding frenzy on nothingburgers.

Trump was accused of hob-nobbing with dictators. Excuse me, but all US presidents have done that. He wasn’t being tough enough, he was giving far too much away with nothing in return. Well, that’s not how South Koreans see it, and this concerns them a whole lot more than a bunch of ‘reporters’ covering the beltway.

Truth is, Trump did a good job, everything went well, he put Kim Jong-un in a position where the latter will have to deliver on denuclearization, or face the -international- consequences. It is quite the achievement, but if you wake up every single morning looking for more bad things to say about someone, yes, chances are you miss the good things.

You’re also probably missing the Saudi, US-supported, attacks on Hodeidah, the port city that is Yemen’s last lifeline to the world, and the only chance millions of people have of escaping a famine not seen since the Middle Ages.

That is the kind of thing that should be on your front pages, and opening your news shows, not that North Korea happens to have a border with Russia nudge nudge wink wink, and Trump saluted some Korean general.

America needs real news and real journalism, and it needs it badly. Instead it has an increasingly divisive set of well-paid propagandists who break the country ever further apart. The OIG report that came out yesterday confirms this more and better than anything.

When the country’s own ‘intelligence’ conspires to influence the political process, while the media report on outside influence only, then yes, you have a problem. As I was writing earlier today, you have to wonder how many people will still be working at the FBI by the end of the year.

Something else I’ve said before: the only hope of survival the MSM have in the age of the interwebs is to be brutally honest and open. Real news and real journalism. Because simply spouting opinions is something they will be trumped on by the many many millions of people with social media accounts who already do that every day, anonymously, and for free.

The old media don’t stand a chance against that army. The only thing that can save them is the truth.

 

 

Jun 142018
 
 June 14, 2018  Posted by at 8:42 am Finance Tagged with: , , , , , , , , , , , , ,  5 Responses »


Wassily Kandinsky Free Curve to the Point – Accompanying Sound of Geometric Curves 1925

 

This Fed Grows Relentlessly More Hawkish (WS)
ECB Gets Ready To Pull The Plug On Stimulus Scheme (R.)
The ECB, Not The Fed, Is The Match That Will Spark Bond Market Volatility (MW)
China Holds Fire On Rates, Posts ‘Shockingly Weak’ Activity Growth (R.)
Riskiest Junk Bonds Completely Blow Off the Fed, Face “Sudden” Reckoning (WS)
Cryptocurrency Bloodbath Continues, Tether Accused Of Manipulating Bitcoin (MW)
The Tories’ Chaotic Brexit Has Lost The Trust Of Business – Jobs Will Go (G.)
The North Korea Summit Through the Looking Glass (Jacobin)
Italy-France Relations Collapse Amid North-African Migrant Spat (ZH)
Apple Steps Up Encrytion To Thwart Police Cracking of iPhones (AFP)
FYROM and Greece Fail To Resolve Bitter Naming Dispute (G.)
Antarctic Ice Melting Faster Than Ever (G.)

 

 

Is there anyone alive who thinks that the US, EU, global economies are strong enough to withstand large scale liquidity withdrawal?

This Fed Grows Relentlessly More Hawkish (WS)

“The economy is in great shape,” Fed Chairman Jerome Powell said today at the press conference after the FOMC meeting. Inflation as measured by the Fed’s preferred low-ball measure “core PCE” has hit the Fed’s target of 2%, and the Fed expects it to hit 2.1% by year-end. Inflation as measured by CPI jumped to 2.8%. “Job gains have been strong,” today’s statement said. The “unemployment rate has declined,” while “growth of household spending has picked up,” and “business fixed investment has continued to grow strongly.” This is no longer the crisis economy of yore. But the interest rates are still low and stimulative, befitting for a crisis economy. So something needs to be done, and it’s getting done, if “gradually.”

There were all kinds of intriguing elements in the FOMC’s increasingly hawkish but “gradual” hoopla today. By unanimous vote, the FOMC raised its target for the federal funds rate by a quarter percentage point to a range between 1.75% and 2.0%. This was expected; what’s intriguing is the unanimous vote, unlike prior rate hikes. Four rate hikes in 2018 (two more this year) are now gradually being baked in, according to the median expectation of the 15 members of the FOMC, per the infamous “dot plot” with which the Fed tries to communicate potential rate moves: One member expects 5 rate hikes in 2018; seven members expect 4 hikes; five members expect 3 hikes, and two members expect no more hikes.

At the March meeting, four rate hikes had appeared in the dot plot as a real but more distant possibility. Two more hikes this year would bring the top end of the target range to 2.5% by year-end. This shows the 2018 section of the dot plot:

Rates are expected to continue to rise, three times in 2019 and once in 2020, nudging the federal funds rate to nearly 3.5%. A presser after every meeting – oh boy. During the press conference, Powell said that, starting next January, there will be a press conference after every FOMC meeting. This idea has been mentioned a couple of times recently to prepare markets for it. Now it’s official. As in every Fed announcement, it’s no biggie, really, trust us. The move is designed to “explain our actions and answer your questions,” Powell said. It was “only about improving communications.” It didn’t mean at all that the Fed would be speeding up its rate hikes, he said.

[..] Interest paid to the banks on excess reserves gets a makeover. Banks have about $1.89 trillion in “excess reserves” on deposit at the Fed. The Fed has been paying banks interest on these excess reserves at a rate that was equal to the top of the Fed’s target range – so 1.75% since the last rate hike, which amounts to an annual rate of $33 billion of easy profits for the banks. In theory with today’s rate hike, the FOMC would also have increased the rate it pays on excess reserves to 2.0%.

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But the European economy is not ready. What now, accelerate Target2 even more?

ECB Gets Ready To Pull The Plug On Stimulus Scheme (R.)

The ECB will debate on Thursday whether to end its huge asset purchases by year-end, in what would be its biggest step towards dismantling crisis-era stimulus credited with pulling the euro zone economy out of recession. Financial investors are coming to terms with the end of a decade of easy money from the world’s top central banks, with the Federal Reserve on Wednesday raising interest rates for a seventh time in 3-1/2 years in a further shift from policies used to battle the 2007-2009 financial crisis and recession. Meeting as growth is slowing and political populism threatens to set off market turbulence, the ECB is expected to argue that its 2.55 trillion euro bond-buying scheme has done its job in bringing the 19-member currency bloc back from the brink of collapse.

Whether policymakers take the actual decision at their meeting in Riga on Thursday or hold off until July appears secondary as they have long argued that the scheme, commonly known as quantitative easing (QE), should be concluded and the policy focus shift to the expected path of interest rates. The biggest complication could be the increasingly murky economic outlook, weighed down by a developing trade war with the United States, a populist challenge from Italy’s new government and softening export demand. But these factors could actually hasten the ECB’s decision rather than hold it back as the bank has little policy firepower left and a further weakening of the outlook could make a later exit more difficult.

“We believe the ECB may be in a hurry to close the QE chapter,” Bank of America Merrill Lynch said in a note to clients. “We think this is essentially political, as the ECB would not want its monetary policy to be affected by claims of supporting or conversely impairing the new policy course in Italy.”

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Don’t forget the BOJ and China.

The ECB, Not The Fed, Is The Match That Will Spark Bond Market Volatility (MW)

Rising real interest rates haven’t yet made for a sustained pickup in Treasury volatility, leaving some investors to ask what it would take to spark some turbulence. Danielle DiMartino Booth of Quill Intelligence said the European Central Bank, and not the Federal Reserve, holds the key as it looks to set a timetable for winding down its ultra-accommodative policies. With the Federal Reserve’s shrinking balance sheet unable to offset easy global financial conditions on its own, investors should closely watch the ECB at Thursday’s meeting where the central bank is expected to discuss the end of quantitative easing, though the actual wind-down almost certainly remains several months away at the earliest. “The culmination of ECB QE will remove a bond-volatility governor,” said Booth, in a note published on Tuesday.

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And there comes China. Xi fighting the shadows is like Don Quixote and the windmills.

China Holds Fire On Rates, Posts ‘Shockingly Weak’ Activity Growth (R.)

China’s economy is finally starting to cool under the weight of a multi-year crackdown on riskier lending that is pushing up borrowing costs for companies and consumers, with data on Thursday pointing to a broad slowdown in activity in May. China’s central bank sparked concerns over the health of the economy earlier in the day when it left short-term interest rates unchanged, surprising markets which had expected it to follow a hike by the Federal Reserve, as it has tended to do. Industrial output, investment and retail sales all grew less than expected, suggesting further weakness ahead if Beijing perseveres with its crackdowns on pollution, questionable local government spending and off-balance sheet “shadow” financing.

The data, which showed the slowest investment growth in over 22 years, “was all shockingly weak by Chinese standards,” economists at Rabobank said, adding that the readings may explain the central bank’s decision to keep rates on hold. “Get ready for headlines talking about Chinese deleveraging hitting the economy – except it isn’t even deleveraging yet! China is walking more of a tightrope than markets believe – and the data underline that issue clearly,” they said. China has been walking a fine line between rolling out measures to curb financial risks and pollution and tapping the brakes so hard that business activity slows sharply.

Much of their effort so far has focused on the banking sector rather than corporate debt reduction or deleveraging – possibly explaining why China’s headline growth has been so surprisingly solid. GDP has expanded at a steady 6.8 percent for three straight quarters. But official and unofficial gauges are now showing the regulatory crackdown is starting to filter through to the broader economy, with companies complaining it is harder to get financing and a growing number of firms defaulting on bonds.

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In a world of their own.

Riskiest Junk Bonds Completely Blow Off the Fed, Face “Sudden” Reckoning (WS)

High-grade corporate bonds are “gradually” – the key word in everything the Fed says – and reluctantly coming to grips with the new era: Yields are rising and bond prices are falling. The Fed has been laboring to accomplish that. With high-grade debt, the Fed’s plan is working “gradually.” But investors in the riskiest corporate junk debt are totally blowing off the Fed. They’re floating around in their own dream world, facing a very rude awakening. In terms of high-grade corporate bonds, the sell-off has been significant, even if it’s just the beginning. The S&P index for AA-rated bonds is down 2.7% so far this year. As prices have declined, yields have surged, with the average AA yield now at 3.51%, up from around 2.2% in mid to late-2016 (data via ICE BofAML US AA Effective Yield Index):

These are the types of bonds that Apple and other large companies hold in their “cash or cash equivalent” accounts that are registered overseas, and that are now being “repatriated” and sold, and the proceeds from the sales are now being plowed into mega-share buyback programs. These corporations, once avid buyers of this high-grade corporate debt, have turned into sellers.

[..] at the riskiest end of the corporate bond spectrum, with bonds rated CCC or below (deep junk), the party that started at the end of the oil bust in February 2016 simply continued. The S&P bond index for CCC-rated bonds has risen 4.5% so far this year (compared to a 2.7% decline for AA-rated index). Since February 2016, when Wall Street decided to plow new money into junk-rated energy companies, the CCC-rated index has skyrocketed 82%. The average yield of bonds rated CCC or lower is now at 9.56%, down from 12.5% in December 2016, when the Fed got serious, and down from 22% during the peak of the oil bust. This is the lowest yield since the bygone era of “QE Infinity” in June 2014:

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“Less than 1% of hours with such heavy Tether transactions are associated with 50% of the meteoric rise in bitcoin and 64% of other top cryptocurrencies..”

Cryptocurrency Bloodbath Continues, Tether Accused Of Manipulating Bitcoin (MW)

The bloodbath in the digital currency market showed no sign of abating, with all major coins trading in the red Wednesday. In the past 24-hours, a further $25 billion has been wiped off the total value of all cryptocurrencies, led by bitcoin, the world’s biggest digital currency, which reached its lowest level since Feb. 5. A single bitcoin traded to an intraday low of $6,133.31 and has since bounced to $6,280.18, down 3.8%, since Tuesday 5 p.m. Eastern Time on the Kraken Exchange. The total value of all cryptocurrencies dipped below $270 billion in late afternoon New York trading, the lowest level since April 11, according to data from CoinMarketCap. The move lower came after a research report found data that it said suggested the price of bitcoin may have been manipulated in late 2017.

In the University of Texas paper, researchers said they uncovered data that they believe shows Tether, a stable coin that is pegged to the U.S. dollar, was used to artificially push up the price of bitcoin during its late 2017 rally towards $20,000. “Less than 1% of hours with such heavy Tether transactions are associated with 50% of the meteoric rise in bitcoin and 64% of other top cryptocurrencies,” wrote John M. Griffin, a finance professor and Amin Shams, a graduate student. Questions have surrounded Tether and crypto exchange Bitfinex, which were both subpoenaed by the Commodity Futures Trading Commission in 2017 seeking data on Tether and its backing of U.S. dollars. Today’s findings will bring the 11th most traded cryptocurrency back into the spotlight.

“Overall, we find that Tether has a significant impact on the cryptocurrency market. Tether seems to be used both to stabilize and manipulate bitcoin prices,” they said.

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Losing business support may prove fatal for May.

The Tories’ Chaotic Brexit Has Lost The Trust Of Business – Jobs Will Go (G.)

[..] away from parliament, and far from the tabloid front pages, a serious breach is opening up in British politics. Last week some of the most senior business leaders in Britain came out of a Brexit meeting at No 10, and promptly tore the prime minister to shreds. “We’re playing economics; [the politicians] are playing politics,” said Paul Drechsler, president of the bosses’ organisation, the Confederation of British Industry. “In the world of business, we’re frustrated. We’re angry.” An extraordinary statement, especially from an executive invited to tea and biscuits with May. If supposedly tame industrialists now talk like this, you have to wonder what sounds come out of the feral lot.

Yet the CBI’s impatience is shared by many. Once the long-haul arm of the Tory movement, the Freight Transport Association lashed out at May last week for “playing chicken with crucial parts of the British economy and the livelihoods of … 7 million Britons”. These are close friends of the Conservative party.As one senior representative of a leading business organisation says: “Over the past two years, most company bosses would never risk saying openly that Brexit is turning out to be a disaster, in case it scared off their best staff.” With fewer than 290 days before Britain formally leaves the EU, their caution is running out.

This is a far bigger story than the one on the front pages about who promised which amendment to which band of Tories. One of the fundamental relationships in the establishment is fracturing – and the consequences for government and economy could prove to be historic.

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“Not Trump” is not an identity.

The North Korea Summit Through the Looking Glass (Jacobin)

On Tuesday, as Donald Trump and Kim Jong-un shook hands for their much-anticipated summit in Singapore, one Korean reporter observed a curious episode. Koreans watching the scene unfold on a TV screen at a railway station in Seoul began applauding. Meanwhile, some nearby Western tourists, perturbed by this development, scratched their heads in confusion. “I am actually baffled to see them clapping here,” said one British tourist. There’s perhaps no better symbol of the gulf in worldwide reactions to the summit than this episode. While South Koreans cautiously celebrated a historic step in the thawing of hostilities that have hung over them for almost seventy years, the Western media seemed to look on with alarm — even anger.

Hostility to the summit, much of it from Democrats and liberals, had been a staple of press coverage in the months leading up to it, often from commentators who just a few months earlier had been panicking about exactly the opposite outcome. But it reached a fever pitch over the last few days. There was, for example, the collective hyperventilation over a symbolic arrangement of North Korean and US flags. There was MSNBC’s Nicole Wallace, who warned that the whole summit was actually a “Trumpian head fake,” a mere artifact of Trump’s “midterm strategy” and his “get out of sitting with Bob Mueller strategy.” Sue Mi Terry of the defense contractor–funded Center for Strategic and International Studies cautioned that “a peace treaty is not okay” and should “come at the end of the process” because it “undermines the justification of our troops staying in South Korea.”

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Let’s see what happens when the next ship comes.

Italy-France Relations Collapse Amid North-African Migrant Spat (ZH)

Italy has postponed high-level discussions with France on Wednesday after French President Emmanuel Macron criticized Rome for refusing to take in a migrant rescue ship full of 629 shipwrecked North Africans – forcing it to divert to Valencia, Spain. After the ship ran out of supplies, the Italian Navy agreed to escort them across the Mediterranean. “Italy’s new Economy Minister Giovanni Tria said he was cancelling a meeting with his French counterpart Bruno le Maire in Paris. The French economy ministry later said the ministers had “agreed that Mr Tria will come to Paris in the coming days”. -AFP

Italy’s decision to refuse the migrants came after their new Interior Minister, Matteo Salvini, said in early June that “the good times for illegals are over” – writing an urgent letter ordering Malta to accept the 629 migrants picked up by the non-governmental organization (NGO) ship MV Aquarius, run by the group SOS Mediterranee. Salvini called Malta the “safest port” for the passengers, advising that Rome would not offer refuge. After Malta refused leading to several days in limbo, Spain agreed to take the passengers. In response to the ordeal, French President Emmanuel Macron accused Italy of “cynicism and irresponsibility,” adding that their EU neighbor is “playing politics” with the refugees.

Meanwhile Gabriel Attal, the spokesman for Macron’s party, called Italy’s actions “nauseating”. Italian Interior Minister Matteo Salvini responded – saying on Tuesday that he would not “accept hypocritical lessons from countries that have preferred to look the other way on immigration,” and adding on Wednesay that unless France issues an “official apology” for Macron’s inflammatory comments, a Friday meeting between Italian Prime Minister Guiseppe Conte and Macron should be canceled.

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What will the police do when quantum computing gets involved?

Apple Steps Up Encrytion To Thwart Police Cracking of iPhones (AFP)

Apple said Wednesday it was strengthening encryption on its iPhones to thwart police efforts to unlock handsets without legitimate authorization. The move by Apple, the latest in an ongoing clash with law enforcement, comes amid reports of growing use of a tool known as GrayKey which can enable police to bypass iPhone security features. Apple said the new features are not designed to frustrate law enforcement but prevent any bypassing of encryption by good or bad actors. “At Apple, we put the customer at the center of everything we design,” the company said in a statement.

“We’re constantly strengthening the security protections in every Apple product to help customers defend against hackers, identity thieves and intrusions into their personal data. We have the greatest respect for law enforcement, and we don’t design our security improvements to frustrate their efforts to do their jobs. Apple said it was working a fix to mitigate the possibility of accessing data from GrayKey or similar tools. Apple said that it has a team that responds to law enforcement and national security requests 24 hours a day. But the company has been a target of some in law enforcement for rejecting efforts to allow easy access to iPhones.

Two years ago, Apple went to court to block an FBI effort to force it to weaken iPhone encryption on the device of a mass shooter in San Bernardino, California, but officials dropped the case after finding a tool to unlock the phone.

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As square pegs and round holes go, this one will linger… Greeks don’t want the name Macedonia used in any way, Skopje wants nothing else.

FYROM and Greece Fail To Resolve Bitter Naming Dispute (G.)

Governments in Skopje and Athens have faced a furious backlash as the challenge of solving one of the world’s most bitter diplomatic feuds hit home just a day after Macedonia announced it was willing to change its name. Hours after the two neighbours declaring they had reached a landmark accord that would see the tiny Balkan state rename itself the Republic of North Macedonia, the nation’s president refused point-blank to sign the deal. “My position is final and I will not yield to any pressure, blackmail or threats,” president Gjorge Ivanov, who is backed by the nationalist opposition, told a news conference in Skopje. The agreement had conceded far too much to Greece – even if its ultimate aim was the country’s future membership of Nato and the EU, he said.

The backlash came despite officials in Brussels, London and Washington reacting with unbridled enthusiasm to the breakthrough. Nato secretary general, Jens Stoltenberg welcomed the accord, saying: “This is really an historical agreement by [politicians] who have shown courage and great political leadership.” Greece has long argued that the state’s name – adopted when it broke away from Yugoslavia in 1991 – conveys thinly disguised irredentist claims on its own northern province of Macedonia. The appropriation of figures associated with ancient Greek history – not least Alexander the Great – had reinforced fears in a region prone to shifting borders.

But opposition to the deal was also pronounced in Greece. As in Skopje – where prime minister Zoran Zaev’s leftist coalition was accused of leading the country to national humiliation – prime minister Alexis Tsipras and his leftist Syriza party was also charged with surrendering cherished national rights. One newspaper ran a front-page graphic showing Tsipras, the Greek foreign minister and president being shot by firing squad for treason.

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84 scientists from 44 international organisations..

Antarctic Ice Melting Faster Than Ever (G.)

Ice in the Antarctic is melting at a record-breaking rate and the subsequent sea rises could have catastrophic consequences for cities around the world, according to two new studies. A report led by scientists in the UK and US found the rate of melting from the Antarctic ice sheet has accelerated threefold in the last five years and is now vanishing faster than at any previously recorded time. A separate study warns that unless urgent action is taken in the next decade the melting ice could contribute more than 25cm to a total global sea level rise of more than a metre by 2070. This could lead eventually to the collapse of the entire west Antarctic ice sheet, and around 3.5m of sea-level rise.

Prof Andrew Shepherd, from Leeds University and a lead author of the study on accelerating ice loss, said: “We have long suspected that changes in Earth’s climate will affect the polar ice sheets. Thanks to our satellites our space agencies have launched, we can now track their ice losses and global sea level contribution with confidence.” He said the rate of melting was “surprising.” “This has to be a cause for concern for the governments we trust to protect our coastal cities and communities,” Shepherd added. The study, published in Nature, involved 84 scientists from 44 international organisations and claims to be the most comprehensive account of the Antarctic ice sheet to date.

It shows that before 2012, the Antarctic lost ice at a steady rate of 76bn tonnes per year – a 0.2mm per year contribution to sea-level rise. However since then there has been a sharp increase, resulting in the loss of 219bn tonnes of ice per year – a 0.6mm per year sea-level contribution. The second study, also published in Nature, warns that time is running out to save the Antarctic and its unique ecosystem – with potentially dire consequences for the world. The scientists assessed the probable state of Antarctica in 2070 under two scenarios. The first in which urgent action on greenhouse gas emissions and environmental protection is taken in the next few years, the second if emissions continue to rise unabated and the Antarctic is exploited for its natural resources.

Read more …

May 252018
 


Wassily Kandinsky Moscow Red Square 1916

 

Riskiest Junk Bonds Still Blissful in La-La Land, High-Grade Bonds Bleed (WS)
When Rates Go Up, Stuff Blows Up (Dillian)
Where America’s Debt Slaves Are the Most Vulnerable (WS)
North Korea Says Still Open To Talks After Trump Cancels Summit (R.)
Brilliant Strategy Of Offering North Korea “The Libya Model” Falls Through (CJ)
About $1.2 Billion In Cryptocurrency Stolen Since 2017 (R.)
Zuckerberg Set Up Fraudulent Scheme To ‘Weaponise’ Data, Court Case Alleges (G.)
Facebook Accused Of Conducting Mass Surveillance Through Its Apps (G.)
EU Officials Tear Into UK’s ‘Fantasy’ Brexit Negotiating Strategy (Ind.)
Italy’s Belligerent New Coalition Is Bad News For The EU (Marsili)
Greece’s Post-Bailout Program Contains At Least 20 Milestones For 2018-2022 (K.)
How Rural America Became A Hospital Desert (G.)

 

 

Perhaps not a good time to chase yield?

Riskiest Junk Bonds Still Blissful in La-La Land, High-Grade Bonds Bleed (WS)

High-grade corporate bonds have had a hard time. Yields have surged as prices have fallen. The S&P bond index for AA-rated corporate bonds is down 3.2% so far this year. Losses are concentrated on bonds with maturities of 15 years and over. They’re down 7%, according to Bloomberg. As prices have declined, yields have surged, with the average AA yield now at 3.47%, up from around 2.2% in mid to late-2016:

In the chart above of the ICE BofAML US AA Effective Yield Index, I marked some key events, in terms of the bond yield:
• The election in November 2016, after which the yield spiked.
• In December 2016, the Fed’s second rate hike in this cycle. This was when the Fed got serious and added an increasingly more hawkish – or less dovish – tone. But the market blew it off, yield fell again, and bonds returned to la-la-land.
• In September 2017, the Fed announced details of its QE unwind, and yields began to rise again and then started spiking in late-2017. This was when the bond market got serious.

But at the riskiest end of the spectrum, with corporate bonds rated CCC or below (deep into junk), there is no such pain. In fact, the S&P bond index for CCC rated bonds is up 4.3% so far this year. They’ve had a blistering 82%-run since February 2016, when Wall Street decided that the oil bust was over and plowed new money into junk-rated energy companies. The average yield of bonds rated CCC or lower is now at 9.78%, down from 12.5% in December 2016, when the Fed got serious, and down from 22% during the peak of the oil bust:

Read more …

Looking for the third victim.

When Rates Go Up, Stuff Blows Up (Dillian)

When rates go up sharply, stuff blows up, because lots of people are negatively exposed to higher rates. Households, corporates, and governments are all negatively exposed to higher rates, in different degrees. Back in 1994, we found that it was Mexico, Procter & Gamble, and Orange County, California who all suffered because of higher interest rates. Where does the risk live today? We will soon find out. There is a playbook for when interest rates go up. Rising interest rates do not necessarily cause a recession per se, but they are usually found at the scene of the crime. There was no recession in 1994, but the financial world shivered. Today, we have rising rates and a more-hawkish Fed which has shown no signs of letting up.

As usual, emerging markets are puking their guts out. I was in Argentina last week and saw the carnage first-hand. The Argentine peso declined a smooth 20% in a week. Meanwhile, Turkish President Recep Erdogan is calling himself an “enemy of interest rates.” He is an FX trader’s dream. Of course, there are idiosyncratic things going on in Argentina and Turkey, but all EM currencies and stock markets have been getting hit hard. Emerging markets was a consensus pick at the beginning of 2018, so it is making some people look a bit foolish.

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“..the ratio of non-housing consumer debt to disposable income – the burden these consumers carry on the backs in relationship to their incomes – is higher than ever..”

Where America’s Debt Slaves Are the Most Vulnerable (WS)

Many consumers are debt free and have lots of money and good jobs. Other consumers have large amounts of debt, lousy jobs or no jobs, and are paying for groceries by charging them on their credit cards. Credit problems always involve the most vulnerable consumers. During the mortgage crisis, the delinquency rate peaked at 11.5% in 2010. It wasn’t the 60% of homeowners that had significantly payed down their mortgages or owed no money on their homes who triggered that event. It was the financial mayhem among the smaller portion of the most exposed and most vulnerable. For a different view of the burden of debt, let’s look at non-housing consumer debt, because this is where the music is playing right now.

To eliminate for a moment the impact of interest rates, let’s look at the amount of debt – not the monthly payments – as percent of disposable income. And suddenly, the risks emerge a little more clearly. At year-end 2017, the ratio of non-housing debt – revolving credit such as credit card balances, plus auto loans and student loans – to disposable income reached a new record of 26.3%, up from 23% at the end of 2010, and up from 24% in 2007, the peak before it all came apart during the Great Recession:

So the ratio of non-housing consumer debt to disposable income – the burden these consumers carry on the backs in relationship to their incomes – is higher than ever, and only historically low interest rates have kept it manageable. But interest rates are now rising, and many of these consumer debts have variable rates. This explains a phenomenon that is already appearing: How this toxic mix – rising interest rates and record high consumer debt in relationship to disposable income – has now started to bite the most vulnerable consumers once again. And for them, debt service is getting very difficult. In Q1, the delinquency rate on credit card debt at banks other than the largest 100 – so at the 4,788 smaller banks – spiked to 5.9%, higher than at the peak during the Financial Crisis, and the credit-card charge-off rate spiked to 8%.

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They seem more than open.

North Korea Says Still Open To Talks After Trump Cancels Summit (R.)

North Korea responded on Friday with measured tones to U.S. President Donald Trump’s decision to call off a historic summit with leader Kim Jong Un scheduled for next month, saying Pyongyang hoped for a “Trump formula” to resolve the standoff over its nuclear weapons program. On Thursday, Trump wrote a letter to Kim to announce his withdrawal from what would have been the first-ever meeting between a serving U.S. president and a North Korean leader in Singapore on June 12. “Sadly, based on the tremendous anger and open hostility displayed in your most recent statement, I feel it would be inappropriate, at this time, to have this long-planned meeting,” Trump wrote.

Trump’s announcement came after repeated threats by North Korea to pull out of the summit over what it saw as confrontational remarks by U.S. officials. Friday’s response by North Korean Vice Foreign Minister Kim Kye Gwan was more conciliatory, specifically praising Trump’s efforts. “We have inwardly highly appreciated President Trump for having made the bold decision, which any other U.S. presidents dared not, and made efforts for such a crucial event as the summit,” Kim said in a statement carried by state media. “We even inwardly hoped that what is called “Trump formula” would help clear both sides of their worries and comply with the requirements of our side and would be a wise way of substantial effect for settling the issue,” he said, without elaborating.

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Caitlin: “..Pence blathered something about it being “a fact”, not a threat, but that is because he is a fake plastic doll manufactured by Raytheon. ..”

Brilliant Strategy Of Offering North Korea “The Libya Model” Falls Through (CJ)

Three days before President Trump announced him as the new National Security Advisor, deranged mutant death walrus John Bolton appeared on Radio Free Asia and said of negotiations with North Korea, “I think we should insist that if this meeting is going to take place, it will be similar to discussions we had with Libya 13 or 14 years ago.” Bolton has been loudly and publicly advocating “the Libya model” with the DPRK ever since. “I think we’re looking at the Libya model of 2003, 2004,” Bolton said on Face the Nation last month, and said the same on Fox News Sunday in case anyone failed to get the message.

Bolton never bothered to refine his message by saying, for example, “Without the part where we betray and invade them and get their leader mutilated to death in the streets.” He just said they’re doing Libya again. This was what John Bolton was saying before he was hired, and this was what John Bolton continued to say after he was hired. This was what John Bolton was hired to do. He was hired to sabotage peace and facilitate death and destruction. That is what he does. That is what he is for. Can openers open cans, John Bolton starts wars. You don’t buy a can opener to rotate your tires, and you don’t hire John Bolton to facilitate peace. It should have surprised no one, then, when the administration saw Bolton’s Libya comments and raised him a canceled peace talk.

“You know, there were some talk about the Libya model last week,” Vice President Pence told Fox News on Saturday. “And you know, as the president made clear, you know, this will only end like the Libya model ended if Kim Jong-un doesn’t make a deal.” “Some people saw that as a threat,” Fox’s Martha MacCallum replied, because there is no other way it could possibly be interpreted. Pence blathered something about it being “a fact”, not a threat, but that is because he is a fake plastic doll manufactured by Raytheon.

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The comments here on GDPR are at least as interesting.

About $1.2 Billion In Cryptocurrency Stolen Since 2017 (R.)

Criminals have stolen about $1.2 billion in cryptocurrencies since the beginning of 2017, as bitcoin’s popularity and the emergence of more than 1,500 digital tokens have put the spotlight on the unregulated sector, according to estimates from the Anti-Phishing Working Group released on Thursday. The estimates were part of the non-profit group’s research on cryptocurrency and include reported and unreported theft. “One problem that we’re seeing in addition to the criminal activity like drug trafficking and money laundering using cryptocurrencies is the theft of these tokens by bad guys,” Dave Jevans, chief executive officer of cryptocurrency security firm CipherTrace, told Reuters in an interview. Jevans is also chairman of APWG.

Of the $1.2 billion, Jevans estimates that only about 20 percent or less has been recovered, noting that global law enforcement agencies have their hands full tracking down these criminals. Their investigations of criminal activity will likely take a step back with the European Union’s new General Data Protection Regulation, which takes effect on Friday. “GDPR will negatively impact the overall security of the internet and will also inadvertently aid cybercriminals,” said Jevans. “By restricting access to critical information, the new law will significantly hinder investigations into cybercrime, cryptocurrency theft, phishing, ransomware, malware, fraud and crypto-jacking,” he added.

GDPR, which passed in 2016, aims to simplify and consolidate rules that companies need to follow in order to protect their data and to return control of personal information to EU citizens and residents. The implementation of GDPR means that most European domain data in WHOIS, the internet’s database of record, will no longer be published publicly after May 25. WHOIS contains the names, addresses and email addresses of those who register domain names for websites.

WHOIS data is a fundamental resource for investigators and law enforcement officials who work to prevent thefts, Jevans said. He noted that WHOIS data is crucial in performing investigations that allow for the recovery of stolen funds, identifying the persons involved and providing vital information for law enforcement to arrest and prosecute criminals. “So what we’re going to see is that not only the European market goes dark for all of us; so all the bad guys will flow to Europe because you can actually access the world from Europe and there’s no way you can get the data anymore,” Jevans said.

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Facebook makes contradictory claims: First, it says it’s a neutral platform. But then it also wants full freedom to edit.

Interesting court case: the claim is Facebook stiffed 40,000 (!) companies. Reason why? It completely missed the shift to smartphones, and its ads were not ready for that at all.

Zuckerberg Set Up Fraudulent Scheme To ‘Weaponise’ Data, Court Case Alleges (G.)

Mark Zuckerberg faces allegations that he developed a “malicious and fraudulent scheme” to exploit vast amounts of private data to earn Facebook billions and force rivals out of business. A company suing Facebook in a California court claims the social network’s chief executive “weaponised” the ability to access data from any user’s network of friends – the feature at the heart of the Cambridge Analytica scandal.A legal motion filed last week in the superior court of San Mateo draws upon extensive confidential emails and messages between Facebook senior executives including Mark Zuckerberg. He is named individually in the case and, it is claimed, had personal oversight of the scheme.

Facebook rejects all claims, and has made a motion to have the case dismissed using a free speech defence. It claims the first amendment protects its right to make “editorial decisions” as it sees fit. Zuckerberg and other senior executives have asserted that Facebook is a platform not a publisher, most recently in testimony to Congress. Heather Whitney, a legal scholar who has written about social media companies for the Knight First Amendment Institute at Columbia University, said, in her opinion, this exposed a potential tension for Facebook. “Facebook’s claims in court that it is an editor for first amendment purposes and thus free to censor and alter the content available on its site is in tension with their, especially recent, claims before the public and US Congress to be neutral platforms.”

The company that has filed the case, a former startup called Six4Three, is now trying to stop Facebook from having the case thrown out and has submitted legal arguments that draw on thousands of emails, the details of which are currently redacted. Facebook has until next Tuesday to file a motion requesting that the evidence remains sealed, otherwise the documents will be made public.

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Somewhat oddly similar to the article above, also Guardian. Facebook is up against people who actually DO understand the field.

Facebook Accused Of Conducting Mass Surveillance Through Its Apps (G.)

Facebook used its apps to gather information about users and their friends, including some who had not signed up to the social network, reading their text messages, tracking their locations and accessing photos on their phones, a court case in California alleges. The claims of what would amount to mass surveillance are part of a lawsuit brought against the company by the former startup Six4Three, listed in legal documents filed at the superior court in San Mateo as part of a court case that has been ongoing for more than two years. A Facebook spokesperson said that Six4Three’s “claims have no merit, and we will continue to defend ourselves vigorously”. Facebook did not directly respond to questions about surveillance.

Documents filed in the court last week draw upon extensive confidential emails and messages between Facebook senior executives, which are currently sealed. Facebook has deployed a feature of California law, designed to protect freedom of speech, to argue that the case should be dismissed. Six4Three is opposing that motion. The allegations about surveillance appear in a January filing, the fifth amended complaint made by Six4Three. It alleges that Facebook used a range of methods, some adapted to the different phones that users carried, to collect information it could use for commercial purposes.

“Facebook continued to explore and implement ways to track users’ location, to track and read their texts, to access and record their microphones on their phones, to track and monitor their usage of competitive apps on their phones, and to track and monitor their calls,” one court document says.

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All over the place.

EU Officials Tear Into UK’s ‘Fantasy’ Brexit Negotiating Strategy (Ind.)

Brexit negotiations have begun to dramatically sour after months of deadlock, with exasperated EU officials tearing into Britain’s “fantasy” negotiating strategy and warning that Theresa May’s latest customs plan would ruin any chance of progress. This week’s latest meetings are understood to have produced no progress on the core issues of the Northern Ireland border and customs, with last year’s business-like start to discussions having given way to bitter behind-the-scenes briefings. One senior EU official said the UK still lacked negotiating positions on a wide variety of issues and that in others it was “chasing the fantasy of denying the consequences of Brexit in a given policy area” – while a UK government source accused Brussels of trying to “insult” the British negotiating team.

Another Brussels official close to talks told The Independent they had been warned internally that there would probably be no progress by the June meeting of the European Council – which would throw off the timetable and raise the risk of a disastrous “no deal”. News that Theresa May wants to align the whole UK with the customs union and single market on a time-limited basis until 2023 as a backstop to solve the Irish border issue was particularly poorly received in Brussels. The Prime Minister is due to actually announce the new policy in the comings weeks, but people familiar with the talks confirmed it had already been raised by UK negotiators. The European Commission’s negotiators have already rejected the plan before its public announcement

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Then agan, Tsipras folded too…

Italy’s Belligerent New Coalition Is Bad News For The EU (Marsili)

As Giuseppe Conte is asked to form Italy’s next government, I walk out of a screening of Loro, the controversial portrayal of Silvio Berlusconi by Oscar-winning director Paolo Sorrentino. With images of drug-fuelled sex parties still in my mind, the uproar that accompanies the announcement about Conte appears odd. Italy has endured more than 30 years of dreadful governments. For much of the last two decades the country was led by a convicted tax fraudster. Before that, it was led by Bettino Craxi, a politician so corrupt that he ended his days as a fugitive in Tunisia. Why worry now? Part of the answer lies in the outsider nature of the new governing parties. Italian elites have traditionally been very adept at assimilating political newcomers.

Who, in turn, have been willingly co-opted by the system. But the new coalition of the Five Star Movement and far-right League appears peculiarly unconnected to Italy’s high establishment: the risk of loss of influence is real enough. Previous governments were quick to guarantee policy continuity, maintaining a neoliberal economic stance, overall respect for EU obligations, and a US-aligned foreign policy. The coalition promises to break away from this consensus, ushering in an era of fiscal expansion, resentment at Italy’s eurozone membership and closer ties to Russia. The key question now is: will the new government abandon its fiery stance or stick to it? Both alternatives are unfortunately dreadful.

The capitulation scenario is a familiar one. Just like Alexis Tsipras, who turned into a reliable implementer of austerity measures in Greece, so Conte’s government might decide to set aside its promises. The gulf is wide: the coalition programme contains at least €60bn of additional yearly expenses, or 3.5% of Italy’s GDP, while the EU is demanding a 0.6% deficit reduction for 2018. A bargain might look strikingly similar to what Matteo Renzi has achieved in recent years: a moderate loosening of deficit targets allowing for an insignificant fiscal expansion. In other words: business as usual.

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Cuts, cuts, cuts, taxes and sell-offs.

Greece’s Post-Bailout Program Contains At Least 20 Milestones For 2018-2022 (K.)

The sweeping agreement for the conclusion of the fourth bailout review, publicized early on Thursday by the European Commission, contains binding commitments for Greece until 2022. It more or less constitutes an extension to the bailout agreement for another four years, but without the inflow of money, while rendering the coalition government’s rhetoric regarding a “clean exit” and its so-called “holistic plan for growth” irrelevant. The text uploaded by the Commission on its website leaves open the possibility for the income tax discount reduction to be brought forward by 12 months to January 2019, and provides for the monitoring of the deal’s implementation in the context of the enhanced surveillance to be agreed in the next Eurogroup meeting on June 21.

Besides the almost 90 milestones that need to be implemented in the next three weeks for the completion of the program, the government is undertaking at least 20 post-program obligations to be applied by 2022. The post-program milestones start from the fiscal side: Apart from the well-known primary budget surplus of 3.5% of GDP, the adjusted bailout agreement calls for additional interventions should any court decisions annul any austerity measures in place.

The text also contains the reduction of pensions from 2019 to save 1% of GDP, the full abolition of the EKAS benefit for people on low pensions, the completion of the National Cadaster by June 2021, the implementation of privatizations such as the gas network operator (DESFA), the 17% stake in PPC, and the Elliniko development, among others, and ceilings on civil servant employment and salaries by 2022. The document further refers to the need to improve labor mediation to avert recourse to arbitration, the completion of the process for hiring general and special secretaries for ministries, and the immediate transfer of railway property company GAIAOSE and the company managing the Olympic Sports Center of Athens to the privatizations hyperfund.

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Don’t let accountants run your health care.

How Rural America Became A Hospital Desert (G.)

It makes sense to sell this old place now, but he can’t bring himself to leave her ashes. Barry Gibbs lives alone in a single-story home among the loblollies of Hyde County in eastern North Carolina. The army veteran collects a small disability check after he tore tendons in his shoulder during a fall at his maintenance job at the local school. He winces every time he stands up. He’s 64 years old and the closest hospital is more than an hour away, a distance he came to understand too damn well on the day she needed help. Their wedding portrait still hangs on the living room wall. It’s one of those 1980s shots with the laser beam backgrounds, her hair big and his mustache combed, his hand on her shoulder.

The interior of the house is almost as she left it four years ago: white oak floors, paintings of black bears, family Christmas photos on end tables. Outside along the driveway, a line of cypress trees shades a headstone that marks where Barry cut a ditch and spread Portia’s ashes, right where she asked to be. Everybody called her Po. She was picking up sticks from the yard on 7 July 2014, five days shy of her 49th birthday, when she felt a sharp pain in her chest. Six days earlier, their community hospital had closed. Pungo district hospital was 47 miles west of their house, in Belhaven, and had served the county since 1949, back when crab-picking plants and lumber mills kept these small waterfront communities working.

If you’re an accountant, hospitals are only as good as the number of paying patients. Belhaven’s population is about half what it was then. And Hyde county is now the fifth-sparsest county on the east coast, with nine people per square mile. This spongy stretch of North Carolina’s inner banks represents the suffering side of a modern migration pattern in which southern cities are flourishing, but rural areas are shrinking and losing healthcare options. Since 2010, 53 rural hospitals have closed in 11 southern states, compared with 30 in the other 39 states.

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Apr 212018
 
 April 21, 2018  Posted by at 9:00 am Finance Tagged with: , , , , , , , , , , , ,  1 Response »


James McNeill Whistler Morning Glories 1869

 

A US Recession Ahead? Fed Policymakers Say Not To Worry (R.)
If Treasuries Reach 3%, That Would Be Big (BBG)
Kim Jong-Un Halts Nuclear & Missile Tests, Shuts Down Testing Site (RT)
DNC Sues Russia, Trump, Wikileaks For Conspiring To Hurt Hillary in 2016 (ZH)
DNC Lawsuit Against WikiLeaks a Serious Threat to Press Freedom (IC)
Trump To “Counter” DNC Lawsuit (ZH)
Comey Memos Probed By DOJ For Classified Info Leaks (ZH)
Wells Fargo’s $1 Billion Pact Gives U.S. Power to Fire Managers (BBG)
IMF’s Thomsen Proposes Broadening Greek Tax Base (K.)
Windrush: When Even Legal Residents Face Deportation (Atlantic)

 

 

The illusion of control. Watch the hand.

A US Recession Ahead? Fed Policymakers Say Not To Worry (R.)

As the gap between short- and long-term borrowing costs hovers near its lowest in more than 10 years, speculation has risen over whether the so-called yield curve is signaling that a recession could be around the corner. Not to worry, two influential Federal Reserve policymakers said on Friday. Another, whose views are typically outside the mainstream at the Fed, disagreed. Growth prospects look pretty strong, which is why the Fed is raising short-term interest rates, the two sanguine policymakers explained. Those rate hikes, they said, are in and of themselves acting to flatten the yield curve. In addition, they argued, the curve will likely steepen as the U.S. government runs a bigger deficit and issues more debt.

The calming comments, from the New York Fed’s incoming chief John Williams and from Chicago Fed President Charles Evans in back-to-back but separate appearances, appeared calculated to allay concern about a potential slowdown ahead. “The yield curve is not nearly as much of a concern as I might have pointed to a couple months ago,” Evans said in Chicago after a speech, in response to a reporter’s question. Williams, who will leave his current job as San Francisco Fed president in June to take over at the New York Fed, also said he expects the Fed’s shrinking balance sheet will help steepen the curve by putting upward pressure on longer-term rates.

In January the U.S. Congress passed a budget deal that boosts U.S. government spending, following a December tax package that slashes corporate tax rates. Both changes are expected to lead to an increase in government borrowing in coming years. The Fed policymakers reason that a bigger supply of debt should put downward pressure on Treasury prices and deliver a corresponding lift to yields. “We’ve got more fiscal debt in train in the U.S. That has to be funded,” and will likely push up long rates and steepen the yield curve, Evans said. At their March meeting, Fed officials “generally agreed that the current degree of flatness of the yield curve was not unusual by historical standards,” according to the meeting minutes.

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Where the Fed loses control.

If Treasuries Reach 3%, That Would Be Big (BBG)

The global bond market’s primary benchmark, the 10-year U.S. Treasury yield, is knocking on the door of 3 percent, a level it hasn’t topped in more than four years. That’s more than just a nice round number. Higher yields make the burden of everything from mortgages to student loans and car payments even heavier. Some market gurus see it as a turning point with effects that could be felt for years — and not just in bonds. With the Federal Reserve signaling interest rates are going up even more, investors in riskier assets like stocks and high-yield debt are left to wonder if this is how their post-recession party ends.

1. What’s so important about yield? A bond’s yield is a measure of the return an investor can expect from buying it. It’s determined by the bond’s interest rate and the price paid for it. For instance, buying a security that pays a fixed 2 percent (the “coupon”) at face value (known as “par”) results in a yield of 2 percent. Buying it at a cheaper price would raise the yield for the investor, while paying a premium would reduce the overall yield. (Maybe the most confusing aspect of the bond market to outsiders is the inverse relationship between price and yield.)

2. How do you determine the benchmark 10-year yield?In the $14.9 trillion Treasuries market, the benchmark is based on the most recently auctioned 10-year security (known as the “on-the-run”). It’s the best measure because it tends to have a price close to par and a coupon close to the current yield. On Friday, the 10-year yield closed at 2.96 percent.

3. Why are yields going up?The Fed is raising its short-term lending rate as the U.S. economy strengthens, after holding it near-zero in the wake of the financial crisis. The three rate hikes last year pushed up two- and five-year Treasury yields in particular, but they’ve also affected 10-year yields as central bankers expect more boosts this year. Another reason: inflation is showing signs of picking up, which erodes the value of bonds’ fixed payments and leads investors to demand higher yields.

4. Why is 3 percent a milestone?Since 2011, it’s been touched only twice, briefly, in 2013 and early 2014, before a bond bull market drove yields to record lows. But 3 percent has also been cited by prominent fixed-income investors like Jeffrey Gundlach at DoubleLine Capital and Scott Minerd at Guggenheim Partners as critical to determining whether the three-decade bull market in bonds is at an end. In the mind of analysts who look at market patterns, once the yield breaks much beyond the 3.05 percent, to levels last reached in 2011, that threshold could flip to a floor from a ceiling.

5. Why does it matter?The 10-year Treasury yield is a global benchmark for borrowing costs. Corporations will have to pay more to issue debt, which they’ve done cheaply in recent years. So will state and local governments, which could jeopardize investments in public infrastructure. Homeowners will face higher mortgage rates (or lose out on refinancing at a lower cost). Taking out loans for cars or college could also become more expensive.

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A Nobel Peace Prize.

Kim Jong-Un Halts Nuclear & Missile Tests, Shuts Down Testing Site (RT)

North Korea’s nuclear and ballistic missile programs have allowed it to secure strategic stability and peace, so there is no need for additional missile and nuclear tests anymore, Kim Jong-un has proclaimed. “From April 21, 2018, nuclear tests and intercontinental ballistic missile tests will be discontinued,” the Korean Central News Agency cited Kim as saying at a plenary meeting of the central committee of the ruling Worker’s Party of Korea (WPK). Furthermore, since North Korea’s nuclear test center has “completed” its mission, it “will be discarded in order to ensure the transparency of the nuclear test suspension,” KCNA reported.

Announcing the new course, the ruling party has declared that North Korea “will never use nuclear weapons, unless there is nuclear threat or nuclear provocation to our country, and in no case we will proliferate nuclear weapons and nuclear technology.” In the announcement, North Korea noted that the “suspension of nuclear testing is an important process for global nuclear disarmament.” Therefore, North Korea is willing to join international denuclearization efforts. North Korea’s last major missile test took place on November 29. Pyongyang announced at the time that it had tested a new type of intercontinental ballistic missile known as the Hwasong-15 that could reach the entire continental United States.

US President Donald Trump, who has traded insults and threats with Kim since taking office, tweeted that the latest decision by Pyongyang is “good news for North Korea and the world,” calling it “big progress.” China has also hailed the move, expressing hope that Pyongyang will continue towards the path of denuclearization and “political settlement” on the Korean Peninsula. “Denuclearization of the peninsula and lasting peace in the region are in line with the common interests of the people of the peninsula,” the Chinese Foreign Ministry said in a statement on Saturday.

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Have they really thought this through?

DNC Sues Russia, Trump, Wikileaks For Conspiring To Hurt Hillary in 2016 (ZH)

Did The Democrats’ “The Russians did it” narrative just jump the shark? The Washingtoin Post reports that The Democratic National Committee filed a multimillion-dollar lawsuit Friday against the Russian government, the Trump campaign and the WikiLeaks organization alleging a far-reaching conspiracy to disrupt the 2016 campaign and tilt the election to Donald Trump. The lawsuit alleges that in addition to the Russian Federation, the General Staff of the Armed Forces of the Russian Federation, Wikileaks and Guccifer 2.0, top Trump campaign officials, including Donald Trump Jr, Roger Stone, Jared Kushner, Paul Manafort and pretty much everyone else who has been mentioned in the same paragraph as Trump….

… conspired with the Russian government and its military spy agency to hurt Democratic presidential nominee Hillary Clinton and help Trump by hacking the computer networks of the Democratic Party and disseminating stolen material found there. [..] The suit filed today seeks millions of dollars in compensation to offset damage it claims the party suffered from the hacks. The DNC argues that the cyberattack undermined its ability to communicate with voters, collect donations and operate effectively as its employees faced personal harassment and, in some cases, death threats.

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And Julian Assange is not allowed to see this. Let alone defend himself. A pattern in his life.

DNC Lawsuit Against WikiLeaks a Serious Threat to Press Freedom (IC)

The Democratic National Committee (DNC) filed a lawsuit this afternoon in a Manhattan federal court against the Russian Government, the Trump campaign and various individuals it alleges participated in the plot to hack its email servers and disseminate the contents as part of the 2016 election. The DNC also sued WikiLeaks for its role in publishing the hacked materials, though it does not allege that WikiLeaks participated in the hacking or even knew in advance about it; its sole role, according to the DNC’s lawsuit, was publishing the hacked emails.

The DNC’s suit, as it pertains to WikiLeaks, poses a grave threat to press freedom. The theory of the suit – that WikiLeaks is liable for damages it caused when it “willfully and intentionally disclosed” the DNC’s communications (paragraph 183) – would mean that any media outlet that publishes misappropriated documents or emails (exactly what media outlets quite often do) could be sued by the entity or person about which they are reporting, or even theoretically prosecuted for it, or that any media outlet releasing an internal campaign memo is guilty of “economic espionage” (paragraph 170).

It is extremely common for media outlets to publish or report on materials that are stolen, hacked, or otherwise obtained in violation of the law. In October, 2016 – one month before the election – someone mailed a copy of Donald Trump’s 1995 tax returns to the New York Times, which published parts of it even though it is illegal to disclose someone’s tax returns without the taxpayer’s permission; in March, 2017, MSNBC’s Rachel Maddow did the same thing with Trump’s 2005 tax returns.

In April, 2016, the Washington Post obtained and published a confidential internal memo from the Trump campaign. Media outlets constantly publish private companies’ internal documents. Just three weeks ago, BuzzFeed obtained and published a secret Facebook memo outlining the company’s internal business strategies, the contents of which were covered by most major media outlets. Some of the most important stories in contemporary journalism have come from media outlets obtaining and publishing materials that were taken without authorization or even in violation of the law. Both the New York Times and Washington Post published thousands of pages from the top secret Pentagon Papers after Daniel Ellsberg took them without authorization from the Pentagon – and they won the right to publish them in the U.S. Supreme Court.

The Guardian and the Washington Post won the 2014 Pulitzer Prize for Public Service for publishing and reporting on huge numbers of top secret documents taken by Edward Snowden from the NSA. The Guardian, the New York Times, and numerous papers from around the world broke multiple stories by publishing classified classified documents downloaded by Chelsea Manning without authorization and sent to WikiLeaks. In 2016, more than 100 newspapers from around the world published and reported on millions of private financial documents known as the “Panama Papers,” which were taken without authorization from one of the world’s biggest offshore law firms and revealed the personal finances of people around the world.

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Did the DNC see this coming, and is that why they sued first?

Trump To “Counter” DNC Lawsuit (ZH)

President Trump is eager to go head-to-head with the DNC which filed a multimillion-dollar lawsuit on Friday against several parties, including the Russian government, the Trump campaign and the WikiLeaks organization – alleging a “far-reaching conspiracy to disrupt the 2016 campaign and tilt the election to Donald Trump.” Hours after the Washington Post broke the news of the lawsuit, Trump tweeted “Just heard the Campaign was sued by the Obstructionist Democrats. This can be good news in that we will now counter for the DNC server that they refused to give to the FBI,” referring to the DNC email breach. Trump also mentioned “the Debbie Wasserman Schultz Servers and Documents held by the Pakistani mystery man and Clinton Emails.”

The “Pakistani mystery man” is a clear reference to former DNC CHair Debbie Wasserman Schultz’s longtime IT employee and personal friend, Imran Awan – whose father, claims a Daily Caller source, transferred a USB drive to the former head of a Pakistani intelligence agency – Rehman Malik. Malik denies the charge. Of note, the DNC would not allow the FBI to inspect their servers which were supposedly hacked by the Russians – instead relying on private security firm Crowdstrike. Meanwhile, the “Wasserman Schultz Servers” Trump mentions is likely in reference to the stolen House Democratic Caucus server – which Imran Awan had been funneling information onto when it disappeared shortly after the House Inspector General concluded that the server may have been “used for nefarious purposes.”

Imran Awan, his wife Hina Alvi and several other associates ran IT operations for at least 60 Congressional Democrats over the past decade, along with the House Democratic Caucus – giving them access to emails and computer data from around 800 lawmakers and staffers – including the highly classified materials reviewed by the House Intelligence Committee.

Napolitano: He was arrested for some financial crime – that’s the tip of the iceberg. The real allegation against him is that he had access to the emails of every member of congress and he sold what he found in there. What did he sell, and to whom did he sell it? That’s what the FBI wants to know. This may be a very, very serious national security situation.

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“..all of Comey’s memos – all of them, were classified at the time they were written, and they remain classified.”

Comey Memos Probed By DOJ For Classified Info Leaks (ZH)

The Department of Justice (DOJ) inspector general is now conducting an investigation into classification issues concerning the “Comey memos” leaked to the New York Times by former FBI Director James Comey. Sources tell the Wall St. Journal that at least two of the memos which Comey leaked to his “good friend,” Columbia Law Professor Daniel Richman, contained information that officials now consider classified – prompting the review by the Office of the Inspector General, headed by Michael Horowitz. “Of those two memos, Mr. Comey himself redacted elements of one that he knew to be classified to protect secrets before he handed the documents over to his friend. He determined at the time that another memo contained no classified information, but after he left the Federal Bureau of Investigation, bureau officials upgraded it to “confidential,” the lowest level of classification.” -WSJ

Comey told Congressional investigators that he considered the memos to be personal rather than government documents. The memos – leaked through Richman, were a major catalyst in Deputy Attorney General Rod Rosenstein’s decision to appoint former FBI Director Robert Mueller as special counsel to investigate Russian interference in the 2016 US election. While Richman told CNN “No memo was given to me that was marked ‘classified,’ and James Comey told Congressional investigators he tried to “write it in such a way that I don’t include anything that would trigger a classification,” it appears the FBI’s chief FOIA officer disagrees.

We previously reported that Senator Chuck Grassley (R-IA) said four of the 7 Comey memos he reviewed were “marked classified” at the “Secret” or “Confidential” level – however in January the FBI’s chief FOIA officer reportedly told Judicial Watch – in a signed declaration, that every single Comey memo was classified at the time. “We have a sworn declaration from David Hardy who is the chief FOIA officer of the FBI that we obtained just in the last few days, and in that sworn declaration, Mr. Hardy says that all of Comey’s memos – all of them, were classified at the time they were written, and they remain classified.” -Chris Farrell, Judicial Watch

Therefore, Farrell points out, Comey mishandled national defense information when he “knowingly and willfully” leaked them to his friend at Columbia University. It’s also mishandling of national defense information, which is a crime. So it’s clear that Mr. Comey not only authored those documents, but then knowingly and willfully leaked them to persons unauthorized, which is in and of itself a national security crime. Mr. Comey should have been read his rights back on June 8th when he testified before the Senate. Farrell told Lou Dobbs “Recently retired and active duty FBI agents have told me – and it’s several of them, they consider Comey to be a dirty cop.”

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“Wells Fargo fined twenty days worth of net income sounds a lot less daunting than $1 billion..”

Wells Fargo’s $1 Billion Pact Gives U.S. Power to Fire Managers (BBG)

Wells Fargo’s $1 billion fine won’t close the book on fallout from its consumer scandals. The nation’s third-largest bank submitted to an unprecedented order Friday that would give the Office of the Comptroller of the Currency the right to remove some of the lender’s executives or board members. That comes on top of the penalties Wells Fargo will pay to settle U.S. probes into mistreatment of consumers, the largest sanction of a U.S. bank under President Donald Trump. The OCC said it “reserves the right to take additional supervisory action, including imposing business restrictions and making changes to executive officers or members of the bank’s board of directors.” The agency could also veto potential executive candidates.

The bank will pay $500 million in penalties each to the OCC and the Consumer Financial Protection Bureau, according to a statement Friday. Wells Fargo warned shareholders last week it would soon face a fine of that size, which it will book retroactively in the first quarter. The bank remains under a Federal Reserve penalty that bans growth in total assets. “CEOs who hoped the Trump administration would be universally lenient regulators missed the difference between a dislike for rules that stifle innovation and employment and a dislike for rules against wrongdoing,” said Erik Gordon, a professor at the University of Michigan’s Ross School of Business.

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Squeezing that stone for all he’s worth.

IMF’s Thomsen Proposes Broadening Greek Tax Base (K.)

Poul Thomsen, director of the International Monetary Fund’s European department, on Friday spoke in favor of broadening Greece’s tax base though he stopped short of determining whether the IMF would call for reductions to the tax-free threshold (due to come into effect in January 2020) to apply a year in advance. Speaking in Washington, where the IMF is holding its Spring Meetings, Thomsen said that raising taxes had played a large part in the country’s fiscal adjustment in recent years but that Greece must find a way of meeting fiscal targets that is “growth-friendly.” The IMF will not impose any specific policies, he said but proposed a “discussion” about the timing of tax reforms.

As regards the Fund’s potential role in Greece’s third international bailout, which expires in August, he said at least one bailout review must be carried out before a decision can be made as well as agreement to lighten Greece’s debt. “Time is running short for us to be able to activate the program,” he said. A discussion on debt measures is likely to take place at the next meeting of eurozone finance ministers, scheduled for April 27 in Sofia. Talks there will also focus on a growth plan that the government has presented to bailout auditors. Finance Minister Euclid Tsakalotos on Friday met in Washington with European Economic and Monetary Affairs Commissioner Pierre Moscovici, Eurogroup Chairman Mario Centeno and European Central Bank President Mario Draghi and is to meet Thomsen and IMF chief Christine Lagarde on Saturday.

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If this doesn’t bring down the government, Britain has a whale of a problem. And no excuses. May suddenly offering them money now, after being exposed, is perhaps the worst part of it. You can’t buy off blatant racism with taxpayer money. And those taxpayers should let that be known, very loudly. Or they’re just as guilty.

Windrush: When Even Legal Residents Face Deportation (Atlantic)

In the aftermath of World War II, the British government invited thousands of people from Caribbean countries in the British Commonwealth to immigrate to the United Kingdom and help address the war-torn country’s labor shortages. Now, nearly 70 years later, many of those same people, now elderly, are having their legal status in the country questioned and are facing deportation. Though the deportation threats date as far back as October, the crisis burst into wider view this week after Caribbean diplomats representing a dozen Commonwealth nations chastised the U.K. government publicly. “This is about people saying, as they said 70 years ago, ‘Go back home.’ It is not good enough for people who gave their lives to this country to be treated like this,” Guy Hewitt, the high commissioner from Barbados to the U.K., said at a gathering of the diplomats.

The migrants are known as the “Windrush generation,” named for the HMT Empire Windrush that brought the first group of them to the U.K. in June 1948. Of the half a million people who immigrated to the U.K. from the Commonwealth between then and 1971, an estimated 50,000 lack the proper documentation to prove it. In a meeting with Caribbean leaders on Tuesday, U.K. Prime Minister Theresa May apologized “for any anxiety that has been caused” and promised no deportations would take place. Still, such assurances won’t necessarily convince those who remain skeptical of the U.K.’s strict immigration policies—ones May herself championed when she served as home secretary between 2010 and 2016.

During that time, May sought to meet then-Prime Minister David Cameron’s goal of reducing net immigration to the tens of thousands by making the U.K. a “hostile environment” for illegal immigration. In practice, this meant requiring doctors, employers, landlords, and schools to confirm that those whom they served were in the country legally. “The determination was to go systematically through any interaction people might have with the state, short of putting checkpoints in the road, just to have people’s immigration status checked,” Polly Mackenzie, the director of cross-party think tank Demos and the former policy director to Deputy Prime Minister Nick Clegg, told me. The Windrush generation wasn’t supposed to be part of that calculus—they had immigrated to the country legally and were thereby entitled to public services, including the right to education, healthcare, and social security.

But after the implementation of the “hostile environment” policies in 2012, these individuals suddenly had to prove their right to live and work in the country—a right which was guaranteed to them under the Immigration Act of 1971, though not everyone obtained the documentation to confirm it. This documentation problem arose in part from the fact that so many people belonging to the Windrush generation immigrated to the U.K. as children, often on their parents’ passport. What’s more, the British government didn’t keep records of who was permitted to stay in the country, nor did they issue documentation confirming it. What little records the government did keep, such as the landing cards documenting the arrival dates of Windrush-era immigrants, were discarded in 2010.

For some, the result was catastrophic. In one case, a woman had lived and worked in the U.K. for 50 years before she was wrongfully declared an illegal immigrant and almost forced on a plane to her native Jamaica. In another, a man who had lived in the U.K. for 59 years received a letter that not only informed him of his illegal status in the country, but also offered him “help and support on returning home voluntarily.” Perhaps one of the most severe cases concerned a man who, after living in the U.K. for 44 years, had his cancer treatment through the National Health Service withheld because he couldn’t provide sufficient documentation to prove he lived in the country continuously since immigrating from Jamaica in 1973.

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Apr 172018
 


Charles Sprague Pearce Lamentations over the Death of the First-Born of Egypt 1877

 

In Matthew 12:22-28, Jesus tells the Pharisees:

 

Every kingdom divided against itself is brought to desolation, and every city or house divided against itself will not stand.

In 1858, US Senate candidate Abraham Lincoln borrows the line:

 

On June 16, 1858 more than 1,000 delegates met in the Springfield, Illinois, statehouse for the Republican State Convention. At 5:00 p.m. they chose Abraham Lincoln as their candidate for the U.S. Senate, running against Democrat Stephen A. Douglas. At 8:00 p.m. Lincoln delivered this address to his Republican colleagues in the Hall of Representatives. The title reflects part of the speech’s introduction, “A house divided against itself cannot stand,” a concept familiar to Lincoln’s audience as a statement by Jesus recorded in all three synoptic gospels (Matthew, Mark, Luke).

Even Lincoln’s friends regarded the speech as too radical for the occasion. His law partner, William H. Herndon, considered Lincoln as morally courageous but politically incorrect. Lincoln read the speech to him before delivering it, referring to the “house divided” language this way: “The proposition is indisputably true … and I will deliver it as written. I want to use some universally known figure, expressed in simple language as universally known, that it may strike home to the minds of men in order to rouse them to the peril of the times.”

On April 12, 2018, the Washington Post runs this headline:

We need to go big in Syria. North Korea is watching.

The WaPo is undoubtedly disappointed that James Mattis prevailed over more hawkish voices in Washington and the least ‘expansive’ attack was chosen.

Then after the attack, Russian President Putin warns of global ‘chaos’ if the West strikes Syria again. And I’m thinking: Chaos? You ‘Predict’ Chaos? You mean what we have now does not qualify as chaos?

Yes, Washington Post, North Korea is watching. And you know what it sees? It sees a house divided. It sees an America that is perhaps as divided against itself as it was prior to the civil war. An America that elects a president and then initiates multiple investigations against him that are kept going seemingly indefinitely. An America where hatred of one’s fellow countrymen and -women has become the norm.

An America that has adopted a Shakespearian theater as its political system, where all norms of civil conversation have long been thrown out the window, where venomous gossip and backstabbing have become accepted social instruments. An America where anything goes as long as it sells.

 

In an intriguing development, while Trump pleased the Washington Post, New York Times, CNN and MSNBC, his declared arch-enemies until the rockets flew, his own base turned on him. While the ‘liberals’ (what’s in a word) cheered and smelled the blood, the right wing reminded the Donald that this is not what he was elected on – or for.

Can Trump afford to lose his base? Isn’t the right wing supposed to be the side that calls for guns and bombs? It’s unlikely that he can do without his base, it would weaken him a lot as the Lady Macbeths watch his every move looking for just that one opportunity, that one moment where his back is turned.

As for the right wing not being the bloodthirsty one, that is quite the shift. Not that it’s a 180 on a dime, it has been coming for a while. It’s not just interesting with regards to Trump, there are many war hawks who -will- see their support crumble too if or when they speak out for more boots in deserts. Maybe John McCain should consider changing parties?

 

So yeah, what does North Korea see? Should it be afraid? Will it have become more afraid? Kim Jong-Un will have watched for China’s reaction, much more important to him that what the US does. And China has condemned the attack. It would do the same if America were to attack North Korea, and a lot stronger. Therefore Kim Jong-Un doesn’t believe Washington will dare attack him.

An interesting line from Chinese state run newspaper Global Times illustrates how China sees the world, and the US in particular, at present:

 

“A weak country has no diplomacy. As a hundred years have passed, China is no longer that [weak] China, but the world is still that world.”

That is how China, and in its wake, North Korea, see America. And so does Russia. Americans may -and do- think that they are still no. 1, and the most powerful, economically, politically, militarily, but that’s no longer what the rest of the world sees.

Is the US still mightier than China militarily? Probably, but not certainly. Still, how do you conquer 1.3 billion people and keep them subdued? Xi Jinping is very aware of that, and he bides his time.

Is the US still mightier than Russia militarily? Almost certainly not. To quote Paul Craig Roberts once more (and he’s no amateur):

The Russians know that they can, at will within a few minutes, sink the entire US fleet, destroy every US airplane & ship in the ME & within range of the ME, completely destroy all of Israel’s military capability & wipe out the military of the two-bit punk state of Saudi Arabia.

I’ve written this before in the past: there is a big difference between how America sees and treats its military, and how Russia does it. A difference that explains how Russia can, with one tenth of American defense spending, still be militarily superior, or at least make any wars against it unwinnable.

That is, in the US the focus is not on making the best weapons, it’s on making the most money on weapons. Boeing, Raytheon, Lockheed will develop those weapons that are most profitable, not those that are most effective. The interminable story of the development of the Joint Strike Fighter is perhaps the best example of this, but there are many others. The Pentagon is a money pit.

Americans can perhaps still make the best weapons for the least money, but they don’t do it. Russia does. For Putin, the best weapons are a matter of survival. Russia has been under American threat as long as he can remember.

While Americans believe so strongly in their supremacy, and have grown so accustomed to the idea, that they no longer see having the best weapons as a matter of survival for the nation. They have come to see their superiority as something automatic and natural.

 

The attack on Syria is seen as a sign of weakness. Because there was no need for it. Because the evidence is flimsy at best. Because the world has international bodies to deal with such issues. Because there is no logic in allowing the blood to flow in the Gaza and Yemen but cite humanitarian reasons for bombing alleged chemical facilities elsewhere.

What the world sees is bluster emanating from a deeply divided nation (and we haven’t even tackled Britain). It sees that less than 48 hours after the airstrikes, a former FBI chief talks about his former boss in terminology that nobody would dare use in most countries, and throughout most of history,

James Comey is beyond Shakepeare. And in America, the issue is who’s right in the Comey-Trump conflict. In Russia, China et al it’s not. They see a house, a country divided. A weak country has no diplomacy.

That’s how all empires end. Complacency and division. That is what North Korea sees when it watches America, what China, and Russia see. And they may even know how Jesus put it. He didn’t just say a kingdom divided would become less powerful or wealthy, he said:

 

Every kingdom divided against itself is brought to desolation.

 

 

Sep 032017
 


Edward Hopper Sunday 1926

 

America’s Superstar Companies Are a Drag on Growth (BBG)
Forget Wall Street – Silicon Valley Is The New Political Power In DC (G.)
Google To Be Hit With Record EU Fine Over Claims Of Phone Software Abuse (T.)
North Korea Quake Seems Related To Nuclear Test (BBG)
Bitcoin Tumbles To Pre Korea-Missile-Launch Level After Topping $5000 (ZH)
China Sees New World Order With Oil Benchmark Backed By Gold (ANR)
Why Houston Doesn’t Need Federal Flood Relief (Mises)
Harvey Could Bankrupt The Federal Flood-Insurance Program (ZH)
Harvey Makes Landfall in Saudi Arabia (BBG)
Pesticides Linked To Birth Abnormalities In Major New Study (Ind.)
France Votes Against The Use Of Pesticide Glyphosate (FarmingUK)

 

 

The perfect recipe for strangling an economy: “..as a result of this increased market power, the big superstar companies have been raising their prices and cutting their wages. This has lifted profits and boosted the stock market, but it has also held down real wages, diverted more of the nation’s income to business owners, and increased inequality. It has also held back productivity, since raising prices restricts economic output.”

America’s Superstar Companies Are a Drag on Growth (BBG)

Here’s a story about the U.S. economy that more people are telling these days. Since the 1980s, antitrust enforcement has gotten weaker. As a result, a few big companies have managed to capture a much bigger share of the market in various industries. Technology may have helped too, by letting big companies spread their geographic reach, and by creating network effects that keep customers locked in to platforms like Facebook. Anyway, as a result of this increased market power, the big superstar companies have been raising their prices and cutting their wages. This has lifted profits and boosted the stock market, but it has also held down real wages, diverted more of the nation’s income to business owners, and increased inequality. It has also held back productivity, since raising prices restricts economic output.

Like all big, sweeping theses about the economy, this story can’t be proven or disproven with a single research paper, or even a dozen papers. But like detectives, economists can probe various pieces and see how each one checks out. In the past few years, researchers have found that industrial concentration – measured by the market share of the four biggest companies in an industry – has indeed been increasing in most parts of the U.S. economy. They’ve documented a correlation between industrial concentration and a decline in labor’s share of national income. They’ve confirmed that profits have risen substantially. They’ve documented a slackening in the enforcement of antitrust law. And they’ve found some evidence that after mergers, prices go up while productivity doesn’t improve.

Now, a series of new papers provides even more support for key aspects of the story. The first, a paper by economists Jan de Loecker and Jan Eeckhout, has caused quite a stir in the economics press and on the blogs. De Loecker and Eeckhout find that markups – the amount that companies charge over and above their costs – have been on the rise since about 1980. Back then, according to the authors’ estimates, the average company charged a price that was about 18% above costs – now, the number is 67%.

The authors then use some very simple econ models to link a rise in markups to declines in labor’s share of national income, low-skilled workers’ wages, reduced labor force participation and a slowdown in the broader economy. It all fits with basic economic theory – less competition leads to increased market power, leading in turn to all sorts of bad economic outcomes. The second paper, by German Gutierrez and Thomas Philippon, looks at declining levels of business investment. Basic theory suggests that when top companies get more market power, they invest less in their businesses as they restrict output and raise prices. Market power could therefore be one big reason for the decline in U.S. business investment:

Read more …

But these ‘superstar’ companies can do what they want; they have the power, both politically and economically.

Forget Wall Street – Silicon Valley Is The New Political Power In DC (G.)

Funding thinktanks is just one of the ways that America’s most powerful industries exert their influence over policymakers. Much of the work takes place a quarter of a mile from the White House, in a lesser-known political power base: Washington’s K Street corridor, the epicenter of the lobbying industry. In addition to thinktanks, K Street is packed with slick corporate representatives, hired guns, and advocacy groups. The lobbyists spend their days swarming over members of Congress to ensure their private interests are reflected in legislation and regulation. While the big banks and pharma giants have flexed their economic muscle in the country’s capital for decades, there’s one relative newcomer that has leapfrogged them all: Silicon Valley. Over the last 10 years, America’s five largest tech firms have flooded Washington with lobbying money to the point where they now outspend Wall Street two to one.

Google, Facebook, Microsoft, Apple and Amazon spent $49m on Washington lobbying last year, and there is a well-oiled revolving door of Silicon Valley executives to and from senior government positions. Tech companies weren’t always so cozy with Capitol Hill. During its 1990s heyday, Microsoft accumulated enormous wealth and market share. Despite being one of the world’s largest companies, the PC software pioneer mostly kept away from Washington, spending just $2m on lobbying in 1997. However, the company’s size and anticompetitive business practices attracted the scrutiny of regulators in Clinton’s administration, whipped up by the lobbying of disgruntled competitors including Sun Microsystems, IBM and a company called Novell. The following year, the Department of Justice sued Microsoft, accusing it of using a Windows operating system monopoly to push its Internet Explorer browser to the disadvantage of rivals.

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US ‘superstar’ companies’ power has not yet fully pervaded Europe. A matter of time?!.

Google To Be Hit With Record EU Fine Over Claims Of Phone Software Abuse (T.)

Google faces a multibillion-euro fine by the European Commission for using its Android smartphone software to stifle competition. The record-breaking penalty could be imposed as soon as this month, according to industry and legal sources in Brussels. Other insiders said the commission may wait until later in the year before sanctioning Google. Brussels has accused the world’s second-biggest company of breaking anti-trust laws by forcing mobile phone manufacturers to pre-load Google apps on their devices. The fine will escalate the company’s regulatory woes in Europe, where the commission has waged a long-running campaign to try to ensure competition flourishes in the digital economy. In June, the competition commissioner Margrethe Vestager fined Google €2.4bn (£2.2bn) for doctoring search results to favour its price-comparison shopping service.

Vestager also ordered the company to change how it presents search results. It has until the end of the month to comply with the demand, or face daily fines of 5% of its global turnover. Sources expect the Android fine to be substantially higher than the shopping penalty. The software is a central pillar of the $650bn (£502bn) empire of Alphabet, Google’s owner. It powers an estimated 80% of smartphones. About half of all internet traffic is through phones. Last year Vestager, 49, accused Google of using Android as a tool to “protect and expand its dominant position in internet search”. The company allows handset makers to use the software without paying a fee, but they must pre-install Google’s Chrome browser, search bar and other apps. This stipulation “harms consumers” and prevents digital rivals “from competing on their own merits”, according to Vestager.

In addition to fining Google, she is expected to demand a fundamental overhaul of its relationship with smartphone makers, such as Samsung. That could undermine the big profits Google earns through Android. It monetises the software platform by analysing the mountains of data generated by its apps and selling targeted adverts to clients. [..] the company has strenuously denied breaking competition laws. Last year it said giving away Android “keeps manufacturers’ costs low, while giving consumers unprecedented control of their mobile devices”.

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The pressure on Xi will rise a lot. And US should sit down with Putin. Urgently.

North Korea Quake Seems Related To Nuclear Test (BBG)

North Korea said it successfully tested a hydrogen bomb with “unprecedentedly big power” on Sunday that can be loaded onto an intercontinental ballistic missile, in its first nuclear test under U.S. President Donald Trump’s watch. The test, ordered by Kim Jong Un, was a “perfect success” and confirmed the precision and technology of the hydrogen bomb, according to the Korean Central News Agency. Kim’s regime has defied Trump’s warnings as it seeks the capability to strike America with an atomic weapon. “The creditability of the operation of the nuclear warhead is fully guaranteed,” KCNA said. South Korea’s weather agency said it detected a magnitude 5.7 earthquake around 12:29 p.m. local time near the Punggye-ri nuclear test site in northeast North Korea. Energy from Sunday’s explosion was about six times stronger in force than the nuclear test conducted by Pyongyang last September, the weather agency said.

“All options are on the table,” Japanese Foreign Minister Taro Kono said on public broadcaster NHK. Prime Minister Shinzo Abe said a North Korea nuclear test would be “absolutely unacceptable and we must protest it strongly.” Pyongyang’s actions are set to further increase tensions in Northeast Asia, where concerns have grown this year that a war of words between Trump and Kim could set off a military conflict. It was the sixth nuclear test by Pyongyang since 2006 and the first since the U.S. and South Korea elected new leaders. Trump had no immediate response to the nuclear test, though he sent a tweet thanking relief workers after Hurricane Harvey devastated states in the southern U.S. He has repeatedly lashed out at North Korea since taking office, warning last month of “fire and fury” if Kim’s regime continues to threaten the U.S.

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“Chinese market regulators have begun cracking down on ICOs as “illegal fundraising vehicles” in disguise..“

Bitcoin Tumbles To Pre Korea-Missile-Launch Level After Topping $5000 (ZH)

Shortly after topping $5,000 (according to several exchanges), Bitcoin began to tumble dramatically – now down almost $500 – erasing all the post-North-Korea missile anxiety gains.

Ethereum has crashed even more.

Meanwhile, one of the world’s largest bitcoin exchange, Shanghai-based BTC China, announced it had suspended ICOCoin deposits as well as trading and withdrawals, starting 6pm on Sunday, while Caixin reports that authorities shut down a blockchain conference over the weekend on concerns unregulated Initial Coin Offerings were being used to raise funds illegally, adding that Chinese market regulators have begun cracking down on ICOs as “illegal fundraising vehicles” in disguise, and in taking a page out of the SEC playbook, will soon issue official rules on ICOs. As CoinTelegraph adds, the self-regulatory group National Internet Finance Association of China warned its members about the dangers in participating in initial coin offerings (ICO).

The group claimed that ICOs could be using misleading information as part of fundraising campaigns. In a statement in late August 2017, the online finance organization further warned its member companies to exercise extreme caution when dealing with the new fundraising mechanism. Part of the statement reads: “China Internet Finance Association members should take the initiative to strengthen self-discipline, to resist illegal financial behavior.” [..] an official for Russia’s national legislature said that new laws regulating the exchange of cryptocurrencies will be complete by the end of the fall. Anatoly Aksakov, who leads the State Duma’s financial markets committee, told Russian media this week that next steps involve the formation of a dedicated working group to address the issue.

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Sounds overcooked. But yes, US sanctions are not helping. Still, physical delivery in gold is not what anyone wants, far too clumsy for real trade. And who trusts paper gold? Even better: no-one trusts the yuan.

China Sees New World Order With Oil Benchmark Backed By Gold (ANR)

China is expected shortly to launch a crude oil futures contract priced in yuan and convertible into gold in what analysts say could be a game-changer for the industry. The contract could become the most important Asia-based crude oil benchmark, given that China is the world’s biggest oil importer. Crude oil is usually priced in relation to Brent or West Texas Intermediate futures, both denominated in U.S. dollars. China’s move will allow exporters such as Russia and Iran to circumvent U.S. sanctions by trading in yuan. To further entice trade, China says the yuan will be fully convertible into gold on exchanges in Shanghai and Hong Kong. “The rules of the global oil game may begin to change enormously,” said Luke Gromen, founder of U.S.-based macroeconomic research company FFTT.

The Shanghai International Energy Exchange has started to train potential users and is carrying out systems tests following substantial preparations in June and July. This will be China’s first commodities futures contract open to foreign companies such as investment funds, trading houses and petroleum companies. Most of China’s crude imports, which averaged around 7.6 million barrels a day in 2016, are bought on long-term contracts between China’s major oil companies and foreign national oil companies. Deals also take place between Chinese majors and independent Chinese refiners, and between foreign oil majors and global trading companies. Alan Bannister, Asia director of S&P Global Platts, an energy information provider, said that the active involvement of Chinese independent refiners over the last few years “has created a more diverse marketplace of participants domestically in China, creating an environment in which a crude futures contract is more likely to succeed.”

China has long wanted to reduce the dominance of the U.S. dollar in the commodities markets. Yuan-denominated gold futures have been traded on the Shanghai Gold Exchange since April 2016, and the exchange is planning to launch the product in Budapest later this year. Yuan-denominated gold contracts were also launched in Hong Kong in July – after two unsuccessful earlier attempts – as China seeks to internationalize its currency. The contracts have been moderately successful. The existence of yuan-backed oil and gold futures means that users will have the option of being paid in physical gold, said Alasdair Macleod, head of research at Goldmoney, a gold-based financial services company based in Toronto. “It is a mechanism which is likely to appeal to oil producers that prefer to avoid using dollars, and are not ready to accept that being paid in yuan for oil sales to China is a good idea either,” Macleod said.

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The size of both Texas and Houston Metro GDP is quite something.

Why Houston Doesn’t Need Federal Flood Relief (Mises)

In his article today, Christopher Westley noted that Texas’s economy — when measured by GDP — is larger than Canada’s. In other words: If Texas were an independent country, it would be the world’s 10th largest economy (totaling $1.6 trillion), and its citizens would be more than capable of addressing natural disasters of the magnitude of a major flood. Texas’s economy is also larger than those of Russia and Australia. By why stop our analysis at the state of Texas? Indeed, if we look at the GDP of the Houston metropolitan area, we find it comes in at $503 billion. This total is similar to the GDPs of Poland, Belgium, and Austria. It’s significantly larger than the GDPs of Norway and Denmark. Nor is Texas’s GDP largely driven by federal spending — so we can’t say that Texas’s economy depends on federal spending to stay afloat.

When we look at federal spending in Texas compared to the federal taxes paid by Texans, we find it’s nearly a one-for-one relationship. So, if the Federal government stopped spending in Texas — but allowed Texans to keep their money, Texas would be fine. [..] Of course, we’ll be told that federal disaster relief programs are all about “sharing” and “cooperation” and “kindness.” In reality, it’s all just about forcing one group of people to hand over money to another group of people. There is no doubt that Texas and Houston now face significant challenges in rebuilding after the flood. But, when we demand that other regions and states pay for the rebuilding of Texas, we’re acting as if those other states and communities don’t have problems of their own. Needs related to poverty, infrastructure, and education in, say, Michigan did not magically disappear because Texas experienced a flood.

The only reason it now seems right to take money from people in Michigan, and hand it over to Houstonians, is because Houston’s problems are in the headlines, and Michigans mundane daily problems are not. The central planners have decided that Houstonians deserve Michigan’s money. But the rationale for this decision is purely political, and thus arbitrary. This isn’t to say real sharing and kindness are a bad thing. It’s excellent that private charities have already been hard at work helping with the cleanup in Houston. If one wants to insist that governments be involved, there’s nothing stopping other states from handing over funds to Texas directly. The federal government need not be involved at all.

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Which is why the possibility of a second hurricane hitting the US this year is intriguing.

Harvey Could Bankrupt The Federal Flood-Insurance Program (ZH)

Hurricane Harvey may solve the auto industry’s inventory problem. But right now, it’s about to create a giant headache for the federal government. Based on the latest estimates from Irvine, California-based CoreLogic, insured flood losses for homes in the affected areas of Texas and Louisiana could total between $6.5 billion to $9.5 billion. Since private insurers typically don’t provide personal flood insurance, all but $500 million of that will fall to the Federal Emergency Management Agency’s National Flood Insurance Program, or NFIP. According to the Street, if insured damages reach the high end of this range, it would totally deplete the $7.5 billion of cash and available credit available to the 49-year-old government program, which provides about 98% of residential flood insurance. The program is already about $25 billion in debt to the US Treasury Department and would need Congressional authorization for additional funding.

To be sure, final totals could be much, much higher given the severity of the the “1-in-1000-year” flood. The potential funding shortfall could create problems if Congress doesn’t act quickly this month to shore up the financially-troubled flood-insurance program. As we’ve reported, Congress already has a full agenda in September – a month where lawmakers must pass a funding bill to keep the government open, and another to raise the debt limit and stave off a technical default on US debt. Initially, President Trump said he would force a government shutdown if Congress didn’t approve funding for his border wall in its next budget. However, it appears that he has backed away from this, as the Washington Post reported today that the administration has quietly notified Congress that the $1.6 billion in wall funding would not need to be included in the September continuing resolution.

Furthermore, Congress must explicitly pass legislation to keep the NFIP intact. Without it, the entire program will lapse. To be sure, there are some signs that Republicans are taking steps to ensure that emergency disaster-relief funding is approved as quickly as possible. According to a report in the Wall Street Journal, some Republican lawmakers are raising the possibility that funding for the cleanup effort could be attached to the debt-ceiling bill, giving both measures a strong chance of passing. But it didn’t say if funding for the flood-insurance program would be included. Thanks, in part, to the hurricane, and the perceived political consequences of failing to aid the disaster victims (though Texas has proven to be a reliably red state), Goldman has cut its odds of a government shutdown to 15%.

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“..even as Saudi Arabia sees prices of the end products of its industry spiking, by and large it is not capturing that windfall for itself..”

Harvey Makes Landfall in Saudi Arabia (BBG)

Hurricane Harvey has devastated the Gulf Coast, and its impact is now spreading out to the rest of the U.S., chiefly at gas pumps. But America’s resurgent role in the global energy trade means the ripples extend far beyond its own shores. One place they are lapping onto is Saudi Arabia.In theory, the de-facto leader of efforts by OPEC, Russia and other members of the so-called Vienna Group stands to gain from disruption at the nerve center of the shale boom that has helped to suppress oil prices. In practice, things are a bit more complicated.

The shale boom has moved a lot of U.S. oil production inland and contributed to a glut of barrels building up in storage. So Harvey’s biggest impact on the region’s energy industry has been the closure of ports, refineries and pipelines – and keeping many drivers off highways that have turned into lakes and streams.The net result is depressed demand for crude oil due to absent refiners and panic buying of refined products such as gasoline for the same reason. So even as Saudi Arabia sees prices of the end products of its industry spiking, by and large it is not capturing that windfall for itself:

The disruption should cause U.S. inventories of refined products to fall as they are used to cover shortages and stocks of crude oil and products to drop elsewhere as, for example, European refiners run flat-out to send fuel to the U.S. to capture higher prices. This ultimately helps Saudi Arabia.Again, though, there’s a complicating factor.Saudi Arabia has explicitly targeted the U.S. in its strategy to drain the glut; shipments of its oil to America have dropped noticeably this summer:

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Will we ever stop poisoning ourselves? No high hopes here.

Pesticides Linked To Birth Abnormalities In Major New Study (Ind.)

High exposure to pesticides as a result of living near farmers’ fields appears to increase the risk of giving birth to a baby with “abnormalities” by about 9%, according to new research. Researchers from the University of California, Santa Barbara, compared 500,000 birth records for people born in the San Joaquin Valley between 1997 and 2011 and levels of pesticides used in the area. The average use of pesticides over that period was about 975kg for each 2.6sq km area per year. But, for pregnant women in areas where 4,000kg of pesticides was used, the chance of giving birth prematurely rose by about 8% and the chance of having a birth abnormality by about 9%. Writing in the journal Nature Communications, the researchers compared this to the 5 to 10% increase adverse birth outcomes that can result from air pollution or extreme heat events.

“Concerns about the effects of harmful environmental exposure on birth outcomes have existed for decades,” they wrote. “Great advances have been made in understanding the effects of smoking and air pollution, among others, yet research on the effects of pesticides has remained inconclusive. “While environmental contaminants generally share the ethical and legal problems of evaluating the health consequences of exposure in a controlled setting and the difficulties associated with rare outcomes, pesticides present an additional challenge. “Unlike smoking, which is observable, or even air pollution, for which there exists a robust network of monitors, publicly available pesticide use data are lacking for most of the world.”

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Addicted farmers: “More than half of British farmers say they are concerned that a ban could cost them more than £10,000 every year.”

France Votes Against The Use Of Pesticide Glyphosate (FarmingUK)

The French government has voted against the renewal of an EU Commission license for the pesticide glyphosate. The decision by the French government comes as evidence emerges of the risk of birth defects caused by exposure to pesticides. Monsanto is the major supplier of products containing glyphosate, with ‘Roundup’ being the best-known product. The product is widely used by farmers, gardeners and local authorities to control weeds. In 2015 the World Health Organisation’s (WHO) classified glyphosate as a probable carcinogen. But in March, the EU’s chemicals agency said glyphosate should not be classed as a carcinogen. And a survey has shown that a ban on glyphosate in the UK could force one in five wheat farms into ‘serious financial difficulty’. More than half of British farmers say they are concerned that a ban could cost them more than £10,000 every year.

Speaking at Cereals 2017, NFU Vice President Guy Smith said: “This year looks like being a watershed year for classical chemistry for arable farms with these three decisions on the horizon from Europe. “A poor decision on endocrine disruptor definition could see an end to the availability of around 26 active ingredients; the European Commission is proposing a ban on the use of neonicotinoids on all outdoor crops; and a decision on the reauthorisation of glyphosate is due by the end of the year. “The NFU will continue to make the case for evidence-based decisions to be made in all three of these areas, and we will continue to work with our members to help them make the case to politicians and other decision makers about the importance of these products and to demonstrate the damage that bad decisions will have on farming and our food supply.”

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Aug 152017
 
 August 15, 2017  Posted by at 8:42 am Finance Tagged with: , , , , , , , , , ,  3 Responses »


Stanley Kubrick Walking the streets of New York 1946

 

Prepare For Negative Interest Rates In The Next Recession – Rogoff (Tel.)
We’re Still Not Ready for the Next Banking Crisis (BBG)
World’s Biggest Banks Face £264 Billion Bill For Poor Conduct (G.)
US Stock Buybacks Are Plunging (BBG)
Consumer Spending Expectations Down Again (Mish)
Dow 30,000, Not If Demographics Have Anything To Say (SA)
Ten Years After The Crash, There’s Barely Suppressed Civil War In Britain (G.)
Broadening Internal Dispersion (Hussman)
Trump Orders Probe Of China’s Intellectual Property Practices (R.)
China Imposes Ban on Imports From North Korea, Yields to Trump’s Calls (Sp.)
North Korea Leader Holds Off On Guam Plan (R.)
Australia’s Central Bank Renews Alert on Mounting Household Debt (G.)
Australia Says New Zealand Opposition Trying To Bring Down Government (G.)
Greek Population Set To Shrink Up To 18% By 2050 (K.)
Sharp Fall In Number Of Refugees, Migrants Arriving In Italy (AFP)

 

 

Feels like we’re being prepared, or maybe set up is a better way to put it. They’re going to take over everything, criminalize anything they can’t control. All for your own good. Rogoff is one scary dude.

Prepare For Negative Interest Rates In The Next Recession – Rogoff (Tel.)

Negative interest rates will be needed in the next major recession or financial crisis, and central banks should do more to prepare the ground for such policies, according to leading economist Kenneth Rogoff. Quantitative easing is not as effective a tonic as cutting rates to below zero, he believes. Central banks around the world turned to money creation in the credit crunch to stimulate the economy when interest rates were already at rock bottom. In a new paper published in the Journal of Economic Perspectives the professor of economics at Harvard University argues that central banks should start preparing now to find ways to cut rates to below zero so they are not caught out when the next recession strikes. Traditionally economists have assumed that cutting rates into negative territory would risk pushing savers to take their money out of banks and stuff the cash – metaphorically or possibly literally – under their mattress.

As electronic transfers become the standard way of paying for purchases, Mr Rogoff believes this is a diminishing risk. “It makes sense not to wait until the next financial crisis to develop plans and, in any event, it is time for economists to stop pretending that implementing effective negative rates is as difficult today as it seemed in Keynes time”, he said. The growth of electronic payment systems and the increasing marginalisation of cash in legal transactions creates a much smoother path to negative rate policy today than even two decades ago. Countries can scrap larger denomination notes to reduce the likelihood of cash being held in substantial quantities, he suggests. This is also a potentially practical idea because cash tends now to be used largely for only small transactions. Law enforcement officials may also back the idea to cut down on money laundering and tax evasion.

The key consequence from an economic point of view is that forcing savers to keep cash in an electronic format would make it easier to levy a negative interest rate. “With today’s ultra-low policy interest rates – inching up in the United States and still slightly negative in the eurozone and Japan – it is sobering to ask what major central banks will do should another major prolonged global recession come any time soon,” he said, noting that the Fed cut rates by an average of 5.5 percentage points in the nine recessions since the mid-1950s, something which is impossible at the current low rate of interest, unless negative rates become an option. That would be substantially better than trying to use QE or forward guidance as central bankers have attempted in recent years.

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If we don’t take away political power from banks and central banks, we’re doomed.

We’re Still Not Ready for the Next Banking Crisis (BBG)

The 10th anniversary of the financial crisis has prompted a lot of analysis about what we’ve learned and whether we’re ready for the next one. Pretty much everything you need to know, though, can be found in one chart: the capital ratios of the largest U.S. banks. Capital, also known as equity, is the money that banks get from shareholders and retained earnings. Unlike debt, it has the advantage of absorbing losses, a feature that makes individual banks and the whole system more resilient. Bank executives typically prefer to use less equity and more debt – that is, more leverage – because this magnifies returns in good times. Hence, capital levels can serve as an indicator of the balance of power between bankers and regulators concerned about financial stability. Here’s a chart showing tangible common equity, as a percentage of tangible assets, at the six largest U.S. banks from December 2001 to June 2017:

The downward slope in the first several years demonstrates the extent to which leverage got out of hand before the crisis. As late as 2008, when the financial sector was already in distress, the Federal Reserve was still allowing banks to pay out capital in the form of dividends, even though some had equity of less than 3% of assets. That proved to be a fatal miscalculation: By 2009, forecasts of total losses on loans and securities reached 10% of assets. A crippled banking system tanked the economy and had to be rescued at taxpayer expense. After the crisis, regulators pushed banks to get stronger. The biggest U.S. institutions more than doubled their tangible common equity ratios – to an average of about 8% of assets (or, by international accounting standards, closer to 6% of assets). That’s an achievement, and better than in Europe, but the starting point was so low that they still fall short of what’s needed. Researchers at the Minneapolis Fed, for example, estimate that capital would have to more than double again to bring the risk of bailouts down to an acceptable level.

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How crime got re-defined. Poor conduct. Orwell.

World’s Biggest Banks Face £264 Billion Bill For Poor Conduct (G.)

Fines, legal bills and the cost of compensating mistreated customers reached £264bn for 20 of the world’s biggest banks over the five years to 2016, according to new research that raises doubts about efforts by the major financial services players to restore trust in the sector. This figure is higher than in the previous five-year period – when the costs amounted to £252bn – and is up 32% on the period 2008-12, the first time the data was collated by the CCP Research Foundation, one of the few bodies that analyses the “conduct costs” of banks. The report said the data showed that 10 years on from the onset of the financial crisis, the consequences of misconduct continue to hang over the banking sector. The latest analysis shows that in 2016 the total amount put aside by the banks surveyed rose to more than £28.6bn – higher than in the previous year when there had been a fall from a peak of £63bn in 2014.

Chris Stears, research director of the foundation, writes in the latest report: “Trust in, and the trustworthiness of, the banks must surely correlate to, and be conditional on, banks’ conduct costs. And persistent level of conduct cost provisioning is worrying. “It remains to be seen whether or not the provisions will crystallise in 2017 [or later] and what effect this will have on the aggregated level of conduct costs.” Two UK high street banks – Royal Bank of Scotland and Lloyds Banking Group – are in the top five of banks with the biggest conduct costs. RBS set aside extra provisions for fines and legal costs largely related to a forthcoming penalty from the US Department of Justice for mis-selling toxic bonds in the run-up to the financial crisis. That residential mortgage bond securitisation mis-selling scandal is responsible for £66bn of the costs incurred during the five-year period and the single largest factor, according to the foundation.

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The only thing that propped up stocks is vaporizing.

US Stock Buybacks Are Plunging (BBG)

U.S. stocks have been able to hit fresh highs this year despite a dearth of demand from a key source of buying. Share repurchases by American companies this year are down 20% from this time a year ago, according to Societe Generale global head of quantitative strategy Andrew Lapthorne. Ultra-low borrowing costs had encouraged large firms to issue debt to buy back their own stock, thereby providing a tailwind to earnings-per-share growth. “Perhaps over-leveraged U.S. companies have finally reached a limit on being able to borrow simply to support their own shares,” writes Lapthorne. Repurchase programs account for the lion’s share of net inflows into U.S. equities during this bull market. Heading into 2017, equity strategists anticipated that the buyback bonanza would continue in earnest, fueled in part by an expected tax reform plan that would provide companies with repatriated cash to invest.

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Deflation.

Consumer Spending Expectations Down Again (Mish)

Fed Chair Janet Yellen keeps citing consumer confidence and jobs as reasons consumer spending and inflation will pick up. Curiously, the New York Fed Survey on Consumer Spending Expectations keeps trending lower and lower, despite survey-high expectations for wage growth. The report for July 2017 was released today. I downloaded the survey results and produced the following charts.

Household Spending Projections

 

Household Income Projections

 

Income projections are volatile but at least they are trending higher across the board. Spending projections are less volatile and trending lower at every level. At the 25th%ile level, a group that no doubt spends every cent they make, spending expectations are zero. Those projections were in negative territory in April. Fed Chair Janet Yellen does not believe the Fed’s own reports. Instead, she relies on consumer confidence numbers that tend to track the stock market or gasoline prices more than anything else. Perhaps New York Fed President William Dudley does believe in the report.

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If you weren’t scared yet…

Dow 30,000, Not If Demographics Have Anything To Say (SA)

Nowadays, it is easy to get caught up in the day to day of markets with main stream media pumping the hot stock or warning of market crashes that rarely come. Focusing on the longer term cycles is how you stay with the trend, reduce portfolio churn and costs. I am not advocating for a purely passive strategy as I think the current state of passive investing is contributing to over-valuation and a lack of pricing discovery, which is another topic I won’t get into in this piece. Longer term cycles are largely influenced by demographics. Boomers were entering the workforce in the 1970s and started having children (Millennials) in the early 1980s. The surge in home purchases, appliances, and the multitude of things you buy for kids helped drive the economy for 30 years. The giant buildup in credit that I have covered in a previous article is another reason for a 35-year bull market.

The potential problem now is Boomers are hitting retirement, and roughly 10,000 Boomers retire each day. The above chart is the age distribution of the U.S. population by age. You can see the cliff of Boomers that are turning 70 this year. There are a couple ramifications of Boomers retiring. First is the moment they quit their job or sell their business, they are on a finite budget from there on out. Second, fewer people will be available for work down the road leaving less tax payers contributing to already stressed government budgets. Lastly, Boomers are incentivized to retire at 70.5 due to social security rules and will also start drawing on pensions. What makes matters worse is the majority of Boomers have less than $200k saved for retirement and a large portion have less than $50k saved per PWC’s Annual survey. This means that Boomers are heavily relying on Social Security or they have to work longer, which is currently evidenced by the following chart from the BLS.

Boomers have essentially garnered the majority of wage gains and now are working longer either out of necessity or preference. You might be thinking the surge in Millennials entering the work force will save the day, but due to the above facts, younger generations have to wait longer to move up the corporate ladder or have to attain levels of higher education to receive an adequate salary. As a result, student debt has risen exponentially in the U.S. jeopardizing the future of many starting their professional lives.

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“Debt racked up through the greed of financiers being dumped on the poor, the young and people with disabilities in what must rank as the biggest bait and switch in postwar Britain.”

Ten Years After The Crash, There’s Barely Suppressed Civil War In Britain (G.)

All history now, isn’t it? The credit crisis that began in August 2007, the ensuing banking crash and global recession. One bumper episode from the long-ago past, when the iPhone was a newborn and Amy Winehouse still made records. Now done, dusted, reformed and resolved. Or so one assumes, from the official self-congratulation. The European commission marks the 10th anniversary of the credit crisis by trumpeting: “Back to recovery thanks to decisive EU action.” Yes, the same clapped-out European establishment that has spent the last decade kicking a can down the road. The head of the derivatives industry body, ISDA, admits: “We sometimes forget to articulate the social value of what we do.” Indeed so: before the crash, bankers emailed each other about how the derivatives that they were paid so much to flog were “crap” and “vomit”.

Everyone knows history is written by the victors, but this is something else: bullshit recounted by the bullshitters. Even the banks are back to bragging how many billions they generously chip in to Her Majesty’s Exchequer, presumably hoping no one will point out that they took £1.3tn from taxpayers in just a few months in 2008. Let’s get three things straight. First, it was working- and middle-class Britons who paid for the mess, who are still paying for it now and who will keep paying for it decades from now. Second, the crash has prompted almost no fundamental reckoning or reform. And, most importantly, the combination of those first two factors means the crash that began in 2007 cannot be consigned to the past. Today’s politics – from Brexit to Trump and the collapse of centrism – is just one of its products.

For politicians and financiers to treat the crash as history brings to mind Stephen Dedalus in Ulysses: “History is a nightmare from which I am trying to awake.” Here’s the stuff of historical bad dreams: at the height of the banking crisis in 2008, every man, woman and child in Britain handed over £19,721 each to bankers. The economy tanked, Gordon Brown got booted out – and David Cameron pretended a private banking catastrophe was a crisis of a supposedly profligate public sector. You know what happened next: first the kids’ Sure Start centre closed, then the library; your mum waited ages to get her hip replacement; the working poor had their social security stolen, and the local comp began sending begging letters. Debt racked up through the greed of financiers being dumped on the poor, the young and people with disabilities in what must rank as the biggest bait and switch in postwar Britain.

I say that, but we have only had seven years of austerity. If Philip Hammond stays in No 11 and sticks to plan (one must hope he does neither), the cuts will continue until the middle of the next decade. After 2025, who knows what will remain of our councils, our welfare state and our public realm. One truism of this era is that the average British worker earns less after inflation than they did when RBS nearly died. Most of us have seen not a recovery, but a ripping up of our social contract – so that over 7 million Britons are now in precarious employment. But the highest earners are way ahead of where they were in 2008. Finance-sector bonuses are as generous as they were during the boom, while a bad year for the average FTSE boss is one in which he or she pulls in a mere £4.53m.

And so we remain reliant on debt – aptly termed “the raw material for bubbles and crashes” by Daniel Mügge at the University of Amsterdam. According to the Bank for International Settlements, the UK is far deeper in the red now than it was when Northern Rock collapsed. Government debt has shot up under the Conservatives, but so too has household borrowing. Were the UK to crash again, its government no longer has the political capital nor the fiscal headroom to save the financial system.

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“The deterioration and widening dispersion in market internals is no longer subtle.”

Broadening Internal Dispersion (Hussman)

It’s important to observe that if short-term interest rates were still at zero and market internals were favorable, even the most extreme overvalued, overbought, overbullish syndromes we identify would not be enough to push us to a hard-negative market outlook. That, in a nutshell, is the central lesson from quantitative easing, and is one that could alone have dramatically altered our own challenging experience in the recent speculative half-cycle. At present, however, we observe not only the most obscene level of valuation in history aside from the single week of the March 24, 2000 market peak; not only the most extreme median valuations across individual S&P 500 component stocks in history; not only the most extreme overvalued, overbought, overbullish syndromes we define; but also interest rates that are off the zero-bound, and a key feature that has historically been the hinge between overvalued markets that continue higher and overvalued markets that collapse: widening divergences in internal market action across a broad range of stocks and security types, signaling growing risk-aversion among investors, at valuation levels that provide no cushion against severe losses.

[..] Again, the principal lesson of the recent half-cycle was that in the face of zero interest rates, even the most extreme “overvalued, overbought, overbullish” syndromes were not enough to anticipate steep market losses (as they typically were in prior market cycles). Instead, investors were driven to believe that they had no other alternative but to continue their yield-seeking speculation. In the face of zero interest rates, one had to wait for market internals to deteriorate before adopting a hard negative market outlook. At present, we observe neither zero interest rates, nor uniformly favorable market internals. In the current environment, we expect that obscene valuations and severe “overvalued, overbought, overbullish” syndromes are likely to be followed by the same outcomes that have attended similar conditions across history. The chart below shows the percentage of U.S. stocks above their respective 200-day moving averages, along with the S&P 500 Index. The deterioration and widening dispersion in market internals is no longer subtle.

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It’s about Apple and Google.

Trump Orders Probe Of China’s Intellectual Property Practices (R.)

President Donald Trump on Monday authorized an inquiry into China’s alleged theft of intellectual property in the first direct trade measure by his administration against Beijing, but one that is unlikely to prompt near-term change. Trump broke from his 17-day vacation in New Jersey to sign the memo in the White House at a time of heightened tensions between Washington and Beijing over North Korea’s nuclear ambitions. The investigation is likely to cast a shadow over relations with China, the largest U.S. trading partner, just as Trump is asking Beijing to step up pressure against Pyongyang. U.S. Trade Representative Robert Lighthizer will have a year to look into whether to launch a formal investigation of China’s trade policies on intellectual property, which the White House and U.S. industry lobby groups say are harming U.S. businesses and jobs.

Trump called the inquiry “a very big move.” Trump administration officials have estimated that theft of intellectual property by China could be as high as $600 billion. Experts on China trade policy said the long lead time could allow Beijing to discuss some of the issues raised by Washington without being seen to cave to pressure under the threat of reprisals. Although Trump repeatedly criticized China’s trade practices on the campaign trail, his administration has not taken any significant action. Despite threats to do so, it has declined to name China a currency manipulator and delayed broader national security probes into imports of foreign steel and aluminum that could indirectly affect China.

[..] The Information Technology Industry Council, the main trade group for U.S. technology giants, such as Microsoft, Apple and Google, said it hoped China would take the administration’s announcement seriously. “Both the United States and China should use the coming months to address the issues causing friction in the bilateral trade relationship before Presidents Trump and Xi have their anticipated meeting ahead of the November APEC leaders meeting,” ITI President Dean Garfield said in a statement.

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“On August 15, a full ban on imports of coal, iron, iron ore, lead, lead ore, seafood from North Korea is introduced..”

China Imposes Ban on Imports From North Korea, Yields to Trump’s Calls (Sp.)

China is introducing a ban on imports of some goods from North Korea in line with a UN Security Council resolution, the Chinese Commerce Ministry said Monday. US President Donald Trump has repeatedly called on Beijing to increase economic pressure on North Korea as China is Pyongyang’s biggest trade partner. “On August 15, a full ban on imports of coal, iron, iron ore, lead, lead ore, seafood from North Korea is introduced,” the ministry said in a statement. According to the statement, North Korean products arrived at Chinese ports before the ban would be allowed to enter the country. Import applications of products from North Korea will be halted from September 5. Meanwhile, Chinese companies are still allowed to import coal from third countries via the North Korean port of Rason. However, Chinese importers need to apply for approval from a UN committee set up under the UN Security Council resolution 1718.

Interestingly, Beijing’s move came amid media speculations that Trump is mulling a trade crackdown on China. China is by far the largest trading partner of North Korea. In April, the Chinese General Administration of Customs said trade between the two countries in the first quarter increased 37.4% year-over-year, even despite the UN sanctions on North Korean supplies of coal, the country’s top export earner. The tensions around North Korea have been high over the recent months and they have escalated further after the tightening of economic sanctions against North Korea by the United Nations Security Council (UNSC) last week in response to July’s launches of ballistic missiles by Pyongyang. On August 5, new UNSC sanctions against North Korea could cut the nation’s annual export revenue by $1 billion.

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Saving face.

Kim Jong-un Holds Off On Guam Plan (R.)

North Korea’s leader received a report from his army on its plans to fire missiles toward Guam and said he will watch the actions of the United States for a while longer before making a decision, the North’s official news agency said on Tuesday. North Korea said last week it was finalizing plans to launch four missiles into the waters near the U.S. Pacific territory of Guam, and its army would report the strike plan to leader Kim Jong Un and wait for his order. Kim, who inspected the command of the North’s army on Monday, examined the plan for a long time and discussed it with army officers, the official KCNA said in a report. “He said that if the Yankees persist in their extremely dangerous reckless actions on the Korean peninsula and in its vicinity, testing the self-restraint of the DPRK, the latter will make an important decision as it already declared,” the report said.

The DPRK stands for North Korea’s official name, the Democratic People’s Republic of Korea. Pyongyang’s detailed plans for the strike near Guam prompted a surge in tensions in the region last week, with U.S. President Donald Trump warning he would unleash “fire and fury” on North Korea if it threatened the Unite States. South Korean and U.S. officials have since sought to play down the risks of an imminent conflict, helping soothe global concerns somewhat on Monday. Kim said the United States should make the right choice “in order to defuse the tensions and prevent the dangerous military conflict on the Korean peninsula,” the KCNA report said.

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Oh, get real: “..poised to benefit from the tailwind of a much improved global backdrop.”

Australia’s Central Bank Renews Alert on Mounting Household Debt (G.)

Australia’s central bank renewed its focus on mounting household debt, even as the outlook for the nation’s economy improved, according to the minutes of this month’s policy decision where interest rates were left unchanged. RBA noted “need to balance the risks associated with high household debt in a low-inflation environment” in its decision to stand pat on policy. Better hiring this year meant “forecasts for the labor market were starting from a stronger position”. The bank reiterated GDP growth was expected to rise to around 3% in 2018 and 2019, supported by low rates; faster growth in non-mining business investment is expected. The main change is one of emphasis after the Reserve Bank of Australia removed the labor market and added household balance sheets – where debt is currently at a record 190% of income – to its key areas of concern alongside the residential property market.

But the minutes convey rising confidence that Australia’s economy will strengthen and is poised to benefit from the tailwind of a much improved global backdrop. Yet areas of substantial uncertainty remain: how China manages the trade-off between growth and the build-up of leverage; the fact the forecasts for the domestic economy are based on no change in the exchange rate in the period through 2019; and whether better employment would lead to higher household income and increased consumption, or whether ongoing weak wage growth and high household debt would cut into consumption.

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Neither country seems to know how one gets a passport down under. Curious.

Australia Says New Zealand Opposition Trying To Bring Down Government (G.)

Australia and New Zealand have become embroiled in an extraordinary diplomatic spat over claims the New Zealand opposition colluded with the Australian Labor party (ALP) in an attempt “to try and bring down the government”. During a febrile day of politics in both countries, Australia’s foreign affairs minister, Julie Bishop, said New Zealand’s opposition party was threatening the stability of a usually robust partnership between the two nations. She said she would find it “very hard to build trust” if New Zealand’s opposition Labour party were to win the general election in September. Her comments came only 24 hours after it was revealed that Australia’s deputy prime minister, Barnaby Joyce, held New Zealand citizenship and may be ineligible to sit in parliament under the Australian constitution, which disqualifies dual nationals.

Malcolm Turnbull’s government currently commands a majority of one seat in the House of Representatives. But Australia’s ruling coalition has now accused the opposition Labor party of planting a question in the New Zealand parliament in order to extract the information about Joyce’s nationality. Australian government minister Christopher Pyne accused the ALP of being part of a conspiracy to bring down the government. “Clearly the Labor party are involved in a conspiracy using a foreign government, in this case New Zealand, to try and bring down the Australian government,” he said. “How many other foreign governments, or foreign political parties in other countries, has the Labor party been colluding with to try to undermine the Australian government? “Has he been talking to the people in Indonesia, or China, or the Labour party in the UK?”

Joyce made the admission after media inquiries on the subject, but it subsequently also emerged that on 9 August the New Zealand Labour MP Chris Hipkins submitted two written questions to the internal affairs minister, Peter Dunne, in parliament, both of an unusual nature. “Are children born in Australia to parents who are New Zealand citizens automatically citizens of New Zealand; if not, what process do they need to follow in order to become New Zealand citizens?” Hipkins asked. He also asked: “Would a child born in Australia to a New Zealand father automatically have New Zealand citizenship?”

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What austerity also does.

Greek Population Set To Shrink Up To 18% By 2050 (K.)

A new study released by the Berlin Institute for Population and Development suggests that Greece is set to lose up to 18% of its population by the middle of the century. The deep economic crisis – which has hit young people especially hard and is identified as a key reason behind the country now having one of the lowest birth rates in the world – is cited as the primary cause of this decline, which has accelerated in recent years. According to the study, Greece had already lost nearly 3% of its population between 2011 and 2016. In 2016, Greece’s population stood at 10.8 million. That is expected to drop to 9.9 million by 2030 and 8.9 million by 2050. That is a nearly 18% decline in the country’s population over the next 33 years. Greece also has a rapidly aging population, with 21% already over the age of 65 and fewer than 100,000 babies being born each year. This percentage is currently the second highest in Europe, after Italy. Greece will have the highest ratio of pensioners to workers in Europe by 2050.

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They’re stuck in hell.

Sharp Fall In Number Of Refugees, Migrants Arriving In Italy (AFP)

Italy has seen a sharp fall in the number of migrants arriving on its shores, a decline that has left experts scrambling for an explanation. Summer is traditionally the peak season for migrants attempting the hazardous crossing of the Mediterranean from North Africa to Europe. But, to much surprise, only 13,500 have arrived in Italy since July 1, compared to 30,500 over the same period in 2016 – a year-on-year fall of more than 55%. Many migrants are from poor sub-Saharan Africa, fleeing violence in their home country or desperate for a better life in prosperous Europe. “It’s still too early to talk of a real trend,” cautions Barbara Molinario, a spokeswoman for the UN High Commissioner for Refugees (UNHCR).

One mooted reason for the fall is tougher action by the Libyan coastguard. The force which has been strengthened by help from the European Union (EU), which trained about 100 personnel over the winter, while Italy has provided patrol vessels, recently supported by Italian warships in Libyan waters. But according to figures from UN’s International Office of Migration (IOM), the Libyan coastguard have intercepted fewer than 2,000 migrants since early July, compared to more than 4,000 in May. Another reason put forward to explain the decline is tougher action by NGOs who have been accused by critics of colluding with smugglers to pick up migrants at sea to prevent them from drowning. But these organisations have been involved in only a fraction of migrant rescues – and three NGO vessels are still operating in the hope of picking up those in need.

[..] Since 2014, 600,000 migrants have landed in Italy, but more than 14,000 have died. Italian newspapers which, just a few weeks ago, were accusing NGOs of abetting an influx that seemed uncontrollable have now switched to reports on the terrifying conditions faced by migrants in Libya. “Sending them back to Libya right now means sending than back to Hell,” the deputy foreign minister, Mario Giro, said earlier this month.

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