Jun 202019
 
 June 20, 2019  Posted by at 6:42 pm Finance, Primers Tagged with: , , , , , , , , , , , , ,  


Caravaggio I musici 1595-96

 

The investigation into the crash of the MH17 Malaysia Airlines plane in East Ukraine was always compromised, right from the start. The crash on July 17 2014 came shortly after the “Euromaidan revolution” in Kiev – which first began in November 2013 and culminated in the ousting of elected president Yanukovich on 23 February 2014, happily helped along by John McCain, Victoria Nuland and then-US ambassador to Ukraine (now ambassador to Greece) Geoffrey Pyatt for the USA, as well as various EU actors.

Russia reacted by “annexing” Crimea – a large majority of whose people had voted for Yanukovich, thereby safeguarding its access to its only warm water port. Not a shot was fired there, but it was very different in East Ukraine (Donbass), where people -of Russian origin- also didn’t want to be subjected to a new regime under Nuland’s puppet Yatsenyuk -and later Poroshenko. They started a civil war which continues to this day.

It was in that heated political climate that the MH17 came down, killing all its 298 passengers, 196 of whom had the Dutch nationality. 3 weeks later, on August 8, a Joint Investigation Team (JIT) was formed, which was to be led by Holland, and to also include representatives from Australia, Belgium and Ukraine. Which is odd, since at that time, Ukraine certainly was a potential perpetrator of the downing.

Malaysia joined only in December, allegedly because only then did it finally agree to allow Ukraine, a nation that was a suspect, a veto over any conclusions that the team would publish. Malaysia had already been handed the black boxes by pro-Russian rebels in the area, and passed them on to the team in August. Summarized, the way the JIT was formed was highly curious. The countries even signed a secret agreement.

 

Immediately after the crash, people like then-US VP Joe Biden, as well as Frans Timmermans, then-Dutch Foreign Minister and today candidate for the EU top job, pointed the finger at Russia as the party responsible for shooting down the plane. Also curious, since there had been no investigation and the plane crashed in a civil war zone where access was almost impossible. There was talk at the time of the US having satellite images, but none have ever been produced.

In that atmosphere, the JIT yesterday, June 19 2019, held another press conference, in which it accused four men, three from Russia and one from Ukraine, of being “involved” in shooting down the plane. But again, almost 5 years after the incident, the team produced no evidence for its accusations, saying it will only be presented 9 months from now when a trial will start in the Netherlands.

It also again accused Russia of refusing to cooperate, though Russia has offered its help ever since the MH17 came down. It’s just not the help the people want who have accused the Russians since before there was any hint of evidence it was involved. And there still is no evidence. Russia has filed long and detailed reports on the incident despite being ignored, but these reports have been … ignored.

 

The trial will take place starting March 9 2020 without the accused, since Russia doesn’t extradite its citizens, and neither does Ukraine. Moreover, the one Ukrainian who is accused is thought to be in the Donbass, where the government has no access.

So this will be a show trial. And one must wonder why it is staged. What’s the use of a trial where defendants don’t defend themselves? Sure, the official line is they would love to have the men provide a defense, but that smells a bit too much like what has happened to Julian Assange. What are the odds of a fair trial when so many conclusions have been drawn at such early times?

There is not a soul in Europe west of the Russian border who doesn’t believe the Russians did it. The media take care of that. Nor is there in the US. But the Malaysian PM himself yesterday, again, said the team has proven nothing, and only provided hearsay. I kid you not, I read a piece on the BBC today that asked if the 93-year-old who lost 43 of his countrymen only said that because he wanted to sell palm oil to Russia.

And in the meantime, the evidence is not there, and won’t be for another 9 months, if ever, and the EU today added another year to its Russia sanctions over Crimea, and 4 men can deny their involvement all they want, but they can make their case only in March 2020, and only at a show trial, with international search warrants hanging over their heads.

 

The four men in question, by the way, are not accused of firing the BUK missile that supposedly downed the MH17. They are only accused of facilitating the transport of the missile and launcher from Russia to Ukraine -and back. The JIT Ukrainian team bases the entire story of that transport on serial numbers it says it has found.

On September 17 2018, the Russian Ministry of Defense in a YouTube response to a May 24 2018 JIT exhibition, said it had tracked down those serial numbers, 8868720, and 1318869032, and 9M38, and said both the launcher and missile corresponding to the numbers were purchased by Ukraine from Russia as far back as 1986, transferred there, and had never left the country since.

I get that information from a lengthy, deep-digging and highly recommended essay by Eric Zuesse, from December 2018, MH17 Turnabout: Ukraine’s Guilt Now Proven, which I’ve been reading the past few days, in which Eric says: “…if the JIT’s supplied evidence is authentic — which the Ukrainian team asserts it to be — then it outright convicts Ukraine. This is an evidentiary checkmate, against the Ukrainian side.”

Zuesse also details, in that article, contentions from multiple sources that, while the MH17 may have been hit with a BUK missile, it certainly wasn’t the only thing that hit it. There was at least one fighter jet seen close to the plane before it came down, as multiple eye-witness reports claim, and it is alleged that they fired on the cockpit for sure and perhaps other parts of the plane. It is an excellent article that is very well researched and chock-full of links to prove its points.

 

There are many things wrong with the MH17 investigation. Having the PM of one of your member investigative countries complain that after 5 years you produce only hearsay and no evidence may be the least of the worries. The Netherlands, as main victim, leading the investigation, is strange. How neutral could they be? Their Foreign Minister blamed Russia way before any investigating was done. And Holland was a main sponsor in the “Euromaidan revolution”, i.e. the ousting of an elected president.

Still, Ukraine’s position in all this must be the biggest warning sign. They stood a lot to gain from committing atrocities and then blaming Russia for them. Plus, Yatsenyuk and Nuland and the US and the EU were mightily angry that Russia had outsmarted them all over Crimea.

But instead of keeping Ukraine out of the investigation, they became a major contributor, and were even given veto rights on anything that came out of it, as far as we know the only party with such rights. If you present a crime novel or movie with ingredients like that, nobody would believe you. Such things don’t happen in real life.

 

 

 

 

Jan 242019
 
 January 24, 2019  Posted by at 10:40 am Finance Tagged with: , , , , , , , , , , , , , , ,  


Giuseppe Arcimboldo Four elements – Air 1566

 

Russia And Key Allies Vow To Stand By Maduro In Venezuela Crisis (G.)
Trump Delays State Of The Union (ZH)
Julian Assange Launches Legal Challenge Against Trump Administration (G.)
US Prosecutors Press Witnesses To Testify Against Assange: WikiLeaks (R.)
Hundreds Of Companies To Flee UK Because Of Brexit (Ind.)
EU Will Never Accept Theresa May’s Brexit ‘Plan-B’ – Barnier (Ind.)
No-Deal Brexit ‘Poses Threat To Global Stability’ – CBI Head in Davos (G.)
Australia Heatwave Breaks All-Time Records (G.)
How The Clinton Machine Flooded The FBI With Trump-Russia Dirt (Solomon)
EU Commissioner Avramopoulos Says Greece-FYROM Name Deal ‘Is Problematic’ (K.)
Planetary Collision Created Moon, Seeded Earth With Life-Producing Elements (RT)

 

 

The CIA couldn’t get to Chavez, but the moment he passed this became inevitable. Why Trump supports an unelected puppet while Russia, China, and Venezuela’s own army do not is anyone’s guess. The power of Langley.

Russia And Key Allies Vow To Stand By Maduro In Venezuela Crisis (G.)

Venezuela’s opposition leader, Juan Guaidó, has declared himself the interim president and has won the backing of the US, the EU and most of the regional bloc called the Lima Group – but a number of key allies remained steadfast in support of president Nicolás Maduro. Russia, a major Venezuelan ally, considers attempts to force Maduro from power to be illegal, Vyacheslav Volodin, the speaker of Russia’s lower house of parliament, was quoted as saying on Thursday by the Interfax news agency. Franz Klintsevich, a senator and retired colonel, has warned that Moscow could wind up its military cooperation with Venezuela if Maduro, who he called the legitimately-elected president, was ousted.

Other MPs criticised US actions against Maduro. “The US is trying to carry out an operation to organise the next ‘colour revolution’ in Venezuela,” said Andrei Klimov, deputy chairman of the foreign affairs committee of the upper house of parliament, using a term for the popular uprisings that unseated leaders in Georgia, Ukraine and Kyrgyzstan. Another committee member, Vladimir Dzhabrailov, said: “I do not think that we can recognise this – it is, in essence, a coup.” Russia’s largest oil company, Rosneft, is heavily invested in the South American nation’s oil fields, which produce declining amounts of crude each month. [Turkish President] Erdogan telephoned Maduro and offered his support, a spokesman said on Thursday.

China has not yet publicly declared its support for Maduro but Venezuela has been one of Beijing’s closest allies in Latin America, and the largest recipient of Chinese financing, as much as £38bn in loans by 2017. China is Venezuela’s largest creditor, prompting concerns that as Venezuela’s economy spirals, state assets could fall into Chinese hands, as was the case with Sri Lanka’s Hambantota port. Mexico, part of the 14-member Lima Group, departed from the regional bloc’s call for democratic transition and said it would stick to its “constitutional principles of non-intervention”. It joined with Uruguay – the only other prominent Latin American country still recognising Maduro – in calling for additional talks between the government and opposition to find a “peaceful solution”.

Read more …

And why not. Things are not ugly enough yet.

Trump Delays State Of The Union (ZH)

After more than a week of back-and-forth with the Democratic leadership, President Trump has called off his search for an alternative venue for the State of the Union according to a pair of tweets sent late Wednesday night. Instead, he will reschedule the speech after the shutdown has ended due to the difficulty in finding a venue “that can compete with the history, tradition and importance of the House Chamber!” Trump blamed the decision to reschedule on Pelosi, and rightfully so. The Democratic leader is refusing to pass a resolution needed to formally invite the president to give the address at the Capitol. But lest Americans accuse her of pursuing political ends, Pelosi argued that “security concerns” motivated her to cancel the speech ue to both the Secret Service and DHS being affected by the shutdown, though both have assured the president that security wouldn’t be an issue if the SOTU was allowed to move forward.

Read more …

It’s absolutely nuts that it’s the Guardian, never having apologized for its fake piece about Assange and Manafort in November, which now comes with this, and even cites its own involvement in Assange’s initial leaks.

It’s like nothing ever happened.

Julian Assange Launches Legal Challenge Against Trump Administration (G.)

Julian Assange, the fugitive WikiLeaks founder whose diplomatic sanctuary in the Ecuadorian embassy appears increasingly precarious, is launching a legal challenge against the Trump administration. Lawyers for the Australian activist have filed an urgent application to the Washington-based Inter-American Commission of Human Rights (IACHR) aimed at forcing the hand of US prosecutors, requiring them to “unseal” any secret charges against him. The legal move is an attempt to prevent Assange’s extradition to the US at a time that a new Ecuadorian government has been making his stay in the central London apartment increasingly inhospitable.

[..] The IACHR monitors human rights in the Americas and hears appeals on individual cases. The Trump administration, however, has boycotted its recent hearings. The 1,172-page submission by Assange’s lawyers calls on the US to unseal any secret charges against him and urges Ecuador to cease its “espionage activities” against him. Baltasar Garzón, the prominent Spanish judge who has pursued dictators, terrorists and drug barons, is the international coordinator of Assange’s legal team. He has said the case involves “the right to access and impart information freely” that has been put in “jeopardy”.

The Trump administration is refusing to reveal details of charges against Assange despite the fact that sources in the US Department of Justice have confirmed to the media that they exist under seal. “The revelation that the US has initiated a prosecution against Mr Assange has shocked the international community”, the legal submission to the IACHR states. The US government “is required to provide information as to the criminal charges that are imputed to Mr Assange in full”. The application alleges that US prosecutors have begun approaching people in the US, Germany and Iceland and pressed them to testify against Assange in return for immunity from prosecution. [..] In December, the New York Times reported that Ecuador’s new president, Lenin Moreno tried to negotiate handing over Mr Assange to the US. in exchange for “debt relief”..

Read more …

The Feds like traitors.

US Prosecutors Press Witnesses To Testify Against Assange: WikiLeaks (R.)

U.S. federal prosecutors have stepped up efforts to pressure witnesses to testify against WikiLeaks founder Julian Assange, WikiLeaks said on Wednesday, in connection with what it said were secret criminal charges filed by the Trump administration. [..] A spokesman for the federal prosecutors’ office in Alexandria, Virginia, which has taken the lead for several years in investigations into WikiLeaks, did not respond to a request for comment on this story. According to the document filed to the human rights commission, one of the people contacted by Alexandria prosecutors was Jacob Appelbaum, a Berlin-based U.S. computer expert and hacker. Appelbaum told Reuters that while prosecutors offered him broad immunity from prosecution, he had no interest in cooperating or testifying before a grand jury.

Another potential witness targeted by U.S. prosecutors was David House, a Massachusetts computer programmer, the document said. House was involved in setting up a group to support Chelsea Manning, a U.S. soldier who passed on military communications to WikiLeaks and was jailed by U.S. authorities. House could not be reached. The American Civil Liberties Union which represented him in connection with the Manning case did not respond to requests for comment. The Justice Department also contacted American activist and computer scientist, Jason Katz. Katz, who has lived in Iceland since 2011, did not respond to a request for comment sent to that country’s Pirate Party, of which he was a founding member.

Read more …

“The Netherlands has sometimes appeared better prepared for Brexit than the UK..” Everyone is.

Hundreds Of Companies To Flee UK Because Of Brexit (Ind.)

More than 250 companies are in touch with the Dutch government about moving to the Netherlands because of Brexit, officials have said. The trade and investment arm of the country’s government has been soliciting moves from companies worried about access to the EU market, with Britain set to leave the single market and customs union. A number of high-profile companies have already announced a decision to cross the North Sea, most recently Japanese electronics giant Sony specifically citing Brexit. Last year Panasonic also announced it was moving to Amsterdam. Michiel Bakhuizen, a spokesman for the Netherlands Foreign Investment Agency (NFIA), told the AFP news agency that the number of firms in talks was growing.

“The number of businesses we are in contact with for a possible arrival is growing. At the start of 2017 it was 80, at the start of 2018 150, and now it’s more than 250,” he said. [..] The Netherlands has sometimes appeared better prepared for Brexit than the UK, with advanced plans to recruit as many as 1,000 extra border officials to deal with potential disruption and extra bureaucracy caused by the UK’s exit. In addition to private businesses, the UK has also lost a key EU agency to Amsterdam: the European Medicines Agency, which employs around 900 highly skilled workers. The Netherlands is not the only country to benefit from the UK’s policies. The EY financial services tracker reported earlier this month that 80 out of the 222 finance companies it follows have publicly said they are considering or have confirmed the relocation of UK staff and operations to the continent.

Read more …

“..opposing a no deal will not stop a no deal from happening at the end of March..”

EU Will Never Accept Theresa May’s Brexit ‘Plan-B’ – Barnier (Ind.)

The EU’s chief Brexit negotiator has ruled out ever accepting Theresa May’s Brexit plan B, in a major blow to the prime minister’s bid to get MPs to back her plan. Michel Barnier said repeated requests for a time limit on the controversial backstop had already been discussed and rejected twice by EU leaders. But he also signalled there could be a way to avoid a hard border in Ireland in the event of a no deal, telling an EU committee on Wednesday: “We will have to find an operational way of carrying out checks and controls without putting back in place a border.” In a separate joint interview with continental newspapers Mr Barnier said “we cannot tie the backstop to a time limit” as suggested by the prime minister.

He said the withdrawal agreement on the table was “the only possible option” for Britain and also ruled out the possibility of a so-called “managed no deal” as advocated by some Tory Brexiteers. “In the case of no deal, action will of course be taken to ensure that planes can land but … the ‘no deal’ cannot be a sum of mini-deals and be a situation of ‘business as usual’,” he [said]. “Even an agreement for an ordered Brexit will cause disruptions and have serious consequences. The ‘no deal’ even more so.” At the committee the chief negotiator elaborated, warning that the only way to avoid the UK crashing was to endorse another option on the table. “There appears to be a majority in the Commons to oppose a no deal but opposing a no deal will not stop a no deal from happening at the end of March”, he told the committee. “To stop no deal, a positive majority for another solution will need to emerge.”

Read more …

The cold and snowy air gets to people’s heads.

No-Deal Brexit ‘Poses Threat To Global Stability’ – CBI Head in Davos (G.)

Fears are growing internationally that a no-deal Brexit poses a threat to the stability of the global economy, the head of Britain’s leading business body has warned. Carolyn Fairbairn, director-general of the CBI, said the failure to sort out Britain’s departure from the European Union was damaging Britain’s brand abroad and had joined a list of systemic risks to the world economy. Speaking at the World Economic Forum in Davos, Fairbairn said there was mounting concern at the potential for a no-deal Brexit to cause damage well beyond the UK. The CBI held a private breakfast for UK business leaders in Davos attended by the head of the International Monetary Fund, Christine Lagarde. The UK chancellor, Philip Hammond, will address a CBI lunch on Thursday.

Fairbairn told the Guardian: “At my meetings at Davos, there is a recognition that the causes of vulnerability of the global economy now include Brexit.” The annual gathering of the WEF has been marked this year by anxiety about slowing growth and the trade dispute between the US and China. Fairbairn said Brexit had now catapulted up the list of worries. “It is everyone’s interest that Britain leaves the EU in a way that works for the British economy, the European economy and indeed the global economy,” she said.

Read more …

Port Augusta’s 49.5ºC is 121.1ºF.

Australia Heatwave Breaks All-Time Records (G.)

Temperature records have tumbled across South Australia, with the city of Adelaide experiencing its hottest day on record, as the second heatwave in as many weeks hit southern parts of Australia. Adelaide hit 46.6C on Thursday afternoon, the hottest temperature recording in any Australian state capital city since records began 80 years ago. The Red Lion, a pub in the city’s Elizabeth North suburb, promised to hand out free beers if the mercury rose above 45C. By 1pm, there was a line out the door and round the block.In Port Augusta, 300km north-west, an all-time record was also set, as the city hit 49.5C.

Last week, temperatures in Adelaide, home to 1.3 million people, hit 45C, sending homelessness shelters into a “code red”, and sparking fears of another mass fish death in the Menindee Lakes in the neighbouring state of New South Wales. In central and western Australia, local authorities were forced to carry out an emergency animal cull, shooting 2,500 camels – and potentially a further hundred feral horses – who were dying of thirst.

Read more …

As soon as I read Victoria Nuland’s name I know what is going on.

How The Clinton Machine Flooded The FBI With Trump-Russia Dirt (Solomon)

Then-senior State Department official Jonathan Winer, who worked for then-Secretary John Kerry, wrote that Steele first approached him in the summer with his Trump research and then met again with him in September. Winer consulted his boss, Assistant Secretary for Eurasia Affairs Victoria Nuland, who said she first learned of Steele’s allegations in late July and urged Winer to send it to the FBI. (If you need further intrigue, Winer worked from 2008 to 2013 for the lobbying and public relations firm APCO Worldwide, the same firm that was a contractor for both the Clinton Global Initiative and Russia’s main nuclear fuel company that won big decisions from the Obama administration.) When the State Department office that oversees Russian affairs sends something to the FBI, agents take note.

But Steele was hardly done. He reached out to his longtime Justice Department contact, Bruce Ohr, then a deputy to Deputy Attorney General Sally Yates. Steele had breakfast July 30, 2016, with Ohr and his wife, Nellie, to discuss the Russia-Trump dirt. (To thicken the plot, you should know that Nellie Ohr was a Russia expert working at the time for the same Fusion GPS firm that hired Steele and was hired by the Clinton campaign through Sussmann’s Perkins Coie.) Bruce Ohr immediately took Steele’s dirt on July 31, 2016, to then-FBI Deputy Director Andrew McCabe. When the deputy attorney general’s office contacts the FBI, things happen. And, soon, Ohr was connected to the agents running the new Russia probe.

Around the same time, Australia’s ambassador to London, Alexander Downer, reached out to U.S. officials. Like so many characters in this narrative, Downer had his own connection to the Clintons: He secured a $25 million donation from Australia’s government to the Clinton Foundation in the early 2000s. Downer claims WikiLeaks’s release of hacked Clinton emails that month caused him to remember a conversation in May, in a London tavern, with a Trump adviser named George Papadopoulos. So he reported it to the FBI. The saturation campaign kept building. Sometime in September, Winer and Nuland got another version of Steele-like research suggesting Trump-Russia collusion, this time from known associates of the Clintons: Sidney Blumenthal and Cody Shearer. Again, it was sent to the FBI.

Read more …

A rare wiser voice: “..the government should have sought to achieve a national consensus”

Vote is later today, riots are certain. How bad is it going to get?

EU Commissioner Avramopoulos Says Greece-FYROM Name Deal ‘Is Problematic’ (K.)

EU Commissioner for Migration Dimitris Avramopoulos on Wednesday described the name deal reached between Greece and the Former Yugoslav Republic of Macedonia (FYROM) as “problematic,” arguing it favors the latter. “The Prespes agreement is not balanced, and therefore it is problematic. The geographic qualifier on which all [Greek] governments agreed on is one thing, but the historic qualifier, attempted through the agreement, is another,” he was quoted as saying by state-run news agency ANA-MPA. He said ethnicity and language constitute national identity and, in the case of the Prespes accord, they “open the way for irredentist, nationalist policies.” Avramopoulos said the government should have sought to achieve a national consensus on the name dispute before making the deal.

Read more …

And then I saw God.

Planetary Collision Created Moon, Seeded Earth With Life-Producing Elements (RT)

The elemental building-blocks of life arrived on Earth when it collided with a “Mars-sized planet” 4.4 billion years ago – an impact that also created the Moon, a new study has found. Carbon, nitrogen, sulfur, and other volatile elements integral to life were transferred to Earth’s outer layers through collision with a slightly smaller planet rich in these elements at the beginning of its existence. This impact produced the moon and, eventually, gave rise to carbon-based life, according to a new model of Earth’s development devised by petrologists at Rice University. In a collision with Earth, the volatile materials could transfer from the Mars-sized planet to Earth’s surface, but wouldn’t permeate to its core, which does not interact with its outer layers.

This model solves a mystery that has puzzled geologists for decades regarding why these vital elements exist in all layers of Earth except its molten core. “The core doesn’t interact with the rest of Earth, but everything above it, the mantle, the crust, the hydrosphere and the atmosphere, are all connected,” explained Damanveer Grewal, lead author of the study, which was published in Science Advances. “Material cycles between them.” The collision theory resembles existing models in which a meteorite is responsible for seeding the volatile elements on Earth. Unfortunately, the carbon to nitrogen ratio in such meteorites (called carbonaceous chondrites) is much lower than the ratio found in Earth’s non-core material. Additionally, the collision theory explains why the moon and Earth have the same elemental composition – they were once part of the same sphere.


© Rasjdeep Dasgupta

Read more …

Jan 272017
 
 January 27, 2017  Posted by at 10:11 am Finance Tagged with: , , , , , , , , , , ,  


Kathimerini Trump and Evolution Jan 25 2017

Theresa May: US and UK Will No Longer Invade Foreign Countries (Ind.)
Donald Trump’s Plan For China Relations Is To Be Unpredictable (G.)
Wave Of US State Department Personnel Resign, Are Fired (ZH)
How America Could Collapse (Nation)
Outrage Dilution (Adams)
How America Lost Its Identity – Megalomania & Small-Mindedness (Spiegel)
Obama Bequeaths A More Dangerous World (Parry)
China’s Shadow Banking Crusade Risks Bond Market Crash (R.)
China’s Army of Global Homebuyers Is Suddenly Short on Cash (BBG)
Lurching Towards the New Paradigm (Art+M)
Greece Creditors Demand Legislation Of Reforms For 2018-19 (Kath.)
Greek Supreme Court Rules Against Extraditing Eight Turkish Soldiers (WSJ)
EU Looks To Camps In Africa To Cut Immigration (R.)
Europe’s Crackdown On African Immigration Is Hitting Vulnerable Refugees (G.)
EU’s Mishandled Millions Not Reaching Refugees (DW)

 

 

If it could only be true. Between this from Theresa May, and the disappearance of Victoria Nuland, not such a bad day. But I find it hard to go through all the ‘serious’ press who report on things like the US spelling Theresa without the ‘h’. Is that worth paying a journalist for? That’s the best you got? Then again, I did like the person on twitter pointing out that Teresa May is the name of a pornstar, and wondering who Trump thought he was going to meet.

Theresa May: US and UK Will No Longer Invade Foreign Countries (Ind.)

Britain and the US will never again invade sovereign foreign countries “in an attempt to make the world in their own image,” Theresa May told Republican policymakers in Philadelphia. The Prime Minister vowed never to repeat the “failed policies of the past” in reference to Western military intervention in Iraq and Afghanistan, breaking from the “liberal intervention” principle established by Tony Blair. Referencing the “special relationship” between the UK and US, Ms May also stressed the importance of cooperation between the two countries to meet their “obligations of leadership” and “stand up for our interests”. “It is in our interests – those of Britain and America together – to stand strong together to defend our values, our interests and the very ideas in which we believe,” she said.

“This cannot mean a return to the failed policies of the past. The days of Britain and America intervening in sovereign countries in an attempt to remake the world in our own image are over.” However she called for “strong, smart and hard-headed” actions to stand up for Western principles, adding: “Nor can we afford to stand idly by when the threat is real and when it is in our own interests to intervene.” She also pledged support to Mr Trump in the continued fight against the “new enemies of the west and our values”. Ms May said it was a “priority” to push back on “Iran’s aggressive efforts” to increase its “arc of influence from Tehran through to the Mediterranean”. However, she defended the nuclear deal brokered by Barack Obama despite threats from Mr Trump that he would rip up the agreement, saying it had been successful in neutralising a potential threat. [..] “With President Putin, my advice is to engage but beware.”

Read more …

What’s that worth if you announce it, though?

Donald Trump’s Plan For China Relations Is To Be Unpredictable (G.)

Donald Trump’s game plan for relations with China is to use unpredictability as a means of wrong-footing the country’s Communist party leaders and extracting economic concessions, a prominent adviser has said. Since his election, Trump and his team have repeatedly discombobulated the Chinese government with a series of interventions on sensitive issues such as the South China Sea, US relations with Taiwan and China’s alleged manipulation of its currency, the yuan. Those moves have unsettled and angered Beijing, which had expected Trump to tone down his anti-China rhetoric after his victory. In an interview with China’s state-run broadcaster, Michael Pillsbury, a former Pentagon official and longtime China scholar, suggested Trump’s decision to repeatedly tweak Beijing’s nose was part of a calculated strategy.

The US president believed the Chinese were “the best negotiators in the whole world, so to get an advantage he wants to be unpredictable in the eyes of the Chinese government,” Pillsbury told CGTN, an international mouthpiece for the Chinese government that was formerly called CCTV. “I think he has succeeded in this, don’t you?” Pillsbury, a fluent Mandarin speaker who is known for his contacts within China’s People’s Liberation Army and has been advising Trump’s team, said the president had outlined this strategy in his most recent book, Great Again: How To Fix Our Crippled America. In it Trump writes: “The element of surprise wins battles. So I don’t tell the other side what I’m doing, I don’t warn them, and I don’t let them fit me comfortably into a predictable pattern … I like being unpredictable. It keeps them off balance.”

In a chapter on foreign policy, Trump accuses his predecessors of “rolling over” for Beijing and hints it will be one of the main targets of his strategy. “There are people who wish I wouldn’t refer to China as our enemy. But that’s exactly what they are,” Trump writes. China specialists on both sides of the Pacific fear relations between Beijing and Washington could deteriorate rapidly under Trump, increasing the risks of a potentially calamitous great power conflict. However, Pillsbury, who has written a book about a supposed Chinese plot to become the world’s preeminent military, political and economic power by 2049, claimed ties could warm. “I say the road to making America great again runs through Beijing,” he told CGTN, calling for greater Chinese investment in the US.

“It can be win-win. I think it will be win-win,” Pillsbury said, using one of the favourite phrases of Chinese diplomats. Another China scholar who is understood to have offered advice to Trump’s team also said this week that he believed an improved relationship was on the cards. “I don’t quite understand why people seem to be operating under the assumption that the relationship with China was good and now all of a sudden it is going to change to be less good,” Daniel Blumenthal, the director of Asian Studies at the American Enterprise Institute told the Guardian.

Read more …

Bit confusing who left of their own accord and who got a pink slip. Been a thorough clean-up. Getting rid of Victoria Nuland is worth just about any price.

Wave Of US State Department Personnel Resign, Are Fired (ZH)

Update: according to a CNN report – so as always take with lots of salt – the story has shifted materially, because according to two senior administration officials, it wasn’t a resignation by the State Department officials, but more of a termination: “the Trump administration told four top State Department management officials that their services were no longer needed as part of an effort to “clean house” at Foggy Bottom.”

Patrick Kennedy, who served for nine years as the undersecretary for management, Assistant Secretaries for Administration and Consular Affairs Michele Bond and Joyce Anne Barr, and Ambassador Gentry Smith, director of the Office for Foreign Missions, were sent letters by the White House that their service was no longer required, the sources told CNN. All four, career officers serving in positions appointed by the President, submitted letters of resignation per tradition at the beginning of a new administration. The letters from the White House said that their resignations were accepted and they were thanked for their service.

The White House usually asks career officials in such positions to stay on for a few months until their successors are confirmed. “Any implication that that these four people quit is wrong,” one senior State Department official said. “These people are loyal to the secretary, the President and to the State Department. There is just not any attempt here to dis the President. People are not quitting and running away in disgust. This is the White House cleaning house.” Mark Toner, the State Department’s acting spokesman, said in a statement that “These positions are political appointments, and require the President to nominate and the Senate to confirm them in these roles. They are not career appointments but of limited term.”

A second official echoed that the move appeared to be an effort by the new administration to “clean house” among the State Department’s top leadership. “The department will not collapse,” the second official said. “Everyone has good deputies. It’s a huge institutional loss, but the department has excellent subordinates and the career people will step up. They will take up the responsibility.” Victoria Nuland, the State Department’s assistant secretary for Europe, was also not asked to stay on. The following org charts breaks out the unfilled appointee positions, in blue, while the red crosses show the resignations.

Read more …

America has killed its resilience and redundancy, its back-up system. All western nations have. Best argument for protectionism: produce your own essentials.

How America Could Collapse (Nation)

A few months ago, a friend in the entertainment industry told me of a new business model in Hollywood: hoarding videotapes. Apparently, the earthquake in Japan knocked offline a Sony factory that makes certain types of tape. That factory was also in the tsunami zone, so now there’s a serious tape shortage threatening the television industry. The NBA scrambled to get enough tape to broadcast the NBA finals; one executive told the Hollywood Reporter, “It’s like a bank run.” In the last few years, economists have spent a lot of time and energy thinking about bank runs. A bank run happens when depositors think a bank is weak and scramble to get their money out before it collapses. “Tight coupling” of financial institutions, like when banks are overly dependent on each other, can create a cascading series of problems for the system itself.

We saw this with Lehman Brothers when it went bankrupt. Its AAA-rated debt instruments lost value unexpectedly; that caused money market funds that held those presumably safe bonds to suddenly lose value. A shadow bank run was the result, as investors rushed to withdraw from the money market funds. Worryingly, there’s been very little consideration of how systemic collapses can happen in another, perhaps more dangerous realm—the industrial supply system that keeps us in everything from medicine to food to cars to, yes, videotape. In 2004, for instance, England closed one single factory, which caused the United States to lose half of its flu vaccine supply. Barry Lynn of the New America Foundation has been studying industrial supply shocks since 1999, when he noticed that global computer chip production was concentrated in Taiwan.

After a severe earthquake in that country, the global computer industry nearly shut down, crashing the stocks of large computer makers. This level of concentration of the production of key components in a globalized economy is a new phenomenon. Lynn’s work points to the highly dangerous side of globalization, the flip side of a hyper-efficient global supply chain. When one link in that chain is broken, there is no fallback. Lynn has continued to study industrial supply shocks and says, “What I have found most interesting recently is the apparent role supply chain shocks played in triggering a synchronized slowdown of industrial economies in April—production down (in USA, China, Europe, Southeast Asia), jobs down, demand down, GDP numbers down—due almost entirely to the loss of a single factory that makes microcontroller chips for cars.”

[..] There’s a good amount of grumbling about the state of American infrastructure—collapsing bridges, high-speed rail, etc. But American infrastructure is not just about public goods, it’s about how the corporations that enforce, inform and organize economic activity are themselves organized. Are they doing productive research? Are they spreading knowledge and know-how to people who will use it responsibly? Are they creating prosperity or extracting wealth using raw power? And most importantly, are they contributing to the robustness of our society, such that we can survive and thrive in the normal course of emergencies? The answer to all of these questions right now is “no.” And while this may not be hitting the elite segments of the economy right now, there will be no escape from a flu pandemic or significant food shortage. The re-engineering of our global supply chain needs to happen—and it will happen, either through good leadership or through collapse.

Read more …

As much as people may dislike Scott Adams, he has a story to tell that many do not understand but should.

Outrage Dilution (Adams)

I’m having a fun time watching President Trump flood the news cycle with so many stories and outrages that no one can keep up. Here’s how the math of persuasion works in this situation: 1 outrage out of 3 headlines in a week: Bad Persuasion. 25 outrages out of 25 headlines in a week: Excellent Persuasion. At the moment there are so many outrages, executive orders, protests, and controversies that none of them can get enough oxygen in our brains. I can’t obsess about problem X because the rest of the alphabet is coming at me at the same time. When you encounter a situation that is working great except for one identifiable problem, you can focus on the problem and try to fix it. But if you have a dozen complaints at the same time, none of them looks special. The whole situation just looks confusing, and you don’t know where to start. So you wait and see what happens.

Humans need contrast in order to make solid decisions that turn into action. Trump removed all of your contrast by providing multiple outrages of similar energy. You’re probably seeing the best persuasion you will ever see from a new president. Instead of dribbling out one headline at a time, so the vultures and critics can focus their fire, Trump has flooded the playing field. You don’t know where to aim your outrage. He’s creating so many opportunities for disagreement that it’s mentally exhausting. Literally. He’s wearing down the critics, replacing their specific complaints with entire encyclopedias of complaints. And when Trump has created a hundred reasons to complain, do you know what impression will be left with the public? He sure got a lot done. Even if you don’t like it. In only a few days, Trump has made us question what-the-hell every other president was doing during their first weeks in office. Were they even trying?

For a fun party trick, ask your most liberal friends if they think the Federal government should have a say in whether a woman gets an abortion or not. When they say the Federal government should stay out of that decision, inform them that President Trump shares their opinion. He doesn’t want the Federal government to be in the business of making health care choices for women. He prefers leaving that decision to the woman, her doctor, and state laws.

Read more …

Not bad at all from Der Spiegel.

How America Lost Its Identity – Megalomania & Small-Mindedness (Spiegel)

On a frigid January evening one year ago, I was standing in a line of around 1,000 people in Burlington, Vermont, to see Donald Trump. I reported my very first story on the United States in 1991 and had been living in the country since 2013. I thought I knew the country well. But on that evening in January, I realized that I had been mistaken. Burlington lay under a blanket of snow and next to me in line stood Mary and Tim Loyer, both wrapped in dark-blue parkas. Mary was unemployed and her son Tim had a job at a bar. Both told me they were Bernie Sanders supporters. Tim said he was particularly bothered by the power held by large companies, that the division of wealth was unfair and that people like him no longer had opportunities to improve their lives. It was the anthem of the working class.

When asked what he found attractive about Trump, Tim said: “Bernie and Trump are the only politicians who say what they’re thinking and do what they say,” as his mother Mary nodded along. Hillary Clinton, by contrast, is corrupt, he said. In an election pitting Trump against Clinton, Tim said he would not vote for Clinton. Again, Mary nodded. At the entrance, security personnel patted us down and asked if we were planning on voting for Trump. Only those who said yes were allowed to proceed. When Trump began speaking, a demonstrator stood up and yelled that Trump was a racist. The candidate paused, shook his fist and demanded that security throw the protester out. “Keep his coat. Confiscate his coat,” Trump said from the stage. It was 21 degrees Fahrenheit (-6 degrees Celsius) outside.

Trump snarled as his fans jumped to their feet hooting and jeering. One was reminded of a lynch mob. I learned three things on that evening in Burlington: In the fatherland of capitalism, anger with the elite is so vast that even leftists would rather vote for a narcissist billionaire than a veteran of the political establishment. In a country that values freedom of opinion higher than almost any other country in the world, there were now attitude tests prior to admission to political rallies. And many Americans, who are otherwise so polite, lose all restraint when confronted by those who think differently. Everything that I associated with America seemed no longer to apply on that evening in Burlington. What had happened to this once-proud country?

I found answers to this question on a journey through American society – to places like Vermont, Maryland, Rhode Island and Virginia. Those are just a few of the places I have visited in the last four years – places where those symptoms could be seen that together add up to the huge crisis that has gripped America. This self-confident country that has spent decades exporting its values with imperialist hubris has lost its identity. Democratic capitalism no longer works well enough to keep together a country of 325 million people and to guarantee domestic peace. The United States is not alone in having been struck by this identity crisis: It has also hit the United Kingdom, France, Germany and other countries. But America, where capitalism flourishes to a greater degree than anywhere else, has been hit the hardest of all.

Read more …

Not Robert Parry’s strongest effort, he seems to want to stick to two contradictory stories at the same time: is Obama a closet neocon or is he a coward?

Obama Bequeaths A More Dangerous World (Parry)

[..] perhaps Obama’s most dangerous legacy is the New Cold War with Russia, which began in earnest when Washington’s neocons struck back against Moscow for its cooperation with Obama in getting Syria to surrender its chemical weapons (which short-circuited neocon hopes to bomb the Syrian military) and in persuading Iran to accept tight limits on its nuclear program (another obstacle to a neocon bombing plan). In both cases, the neocons were bent on “regime change,” or at least a destructive bombing operation in line with Israeli and Saudi hostility toward Syria and Iran. But the biggest challenge to these schemes was the positive relationship that had developed between Obama and Russian President Vladimir Putin. So, that relationship had to be shattered and the wedge that the neocons found handy was Ukraine.

By September 2013, Carl Gershman, the neocon president of the U.S.-government-funded National Endowment for Democracy, had identified Ukraine as “the biggest prize” and a steppingstone toward the ultimate goal of ousting Putin. By late fall 2013 and winter 2014, neocons inside the U.S. government, including Sen. John McCain and Assistant Secretary of State for European Affairs Victoria Nuland, were actively agitating for a “regime change” in Ukraine, a putsch against elected President Viktor Yanukovych that was carried out on Feb. 22, 2014. This operation on Russia’s border provoked an immediate reaction from the Kremlin, which then supported ethnic-Russian Ukrainians who had voted heavily for Yanukovych and who objected to the coup regime in Kiev. The neocon-dominated U.S. mainstream media, of course, portrayed the Ukrainian conflict as a simple case of “Russian aggression,” and Obama fell in line with this propaganda narrative.

After his relationship with Putin had deteriorated over the ensuring two-plus years, Obama chose to escalate the New Cold War in his final weeks in office by having U.S. intelligence agencies leak unsubstantiated claims that Putin interfered in the U.S. presidential election by hacking and publicizing Democratic emails that helped Trump and hurt Hillary Clinton. The CIA also put in play salacious rumors about the Kremlin blackmailing Trump over a supposed video of him cavorting with prostitutes in a Moscow hotel. And, according to The Wall Street Journal, U.S. counterintelligence agents investigated communications between retired Gen. Michael Flynn, Trump’s national security advisor, and Russian officials. In the New McCarthyism that now surrounds the New Cold War, any conversation with Russians apparently puts an American under suspicion for treason.

The anti-Russian frenzy also pulled in The New York Times, The Washington Post and virtually the entire mainstream media, which now treat any dissent from the official U.S. narratives condemning Moscow as prima facie evidence that you are part of a Russian propaganda apparatus. Even some “progressive” publications have joined this stampede because they so despise Trump that they will tout any accusation to damage his presidency.

Read more …

Scary insane: “..WMPs jumped 42% year-on-year to 26 trillion yuan ($3.8 trillion) at the end of June, doubling in just two years.”

China’s Shadow Banking Crusade Risks Bond Market Crash (R.)

China’s campaign to cut high debt levels in its economy is aiming this year to shrink the $3 trillion shadow banking sector, which could drain a critical source of income for the country’s banks and of funding for its fragile bond market. Shadow banking, a term for financial agents that perform bank-like activity but are not regulated as banks, has boomed in China, the world’s second-largest economy, as a way of circumventing government’s tight controls on lending. It has been a key driver of the breakneck growth in debt in the economy, which UBS says rose to 277% of GDP from 254% in 2016, and is now a target as Beijing tries to reduce that figure before it destabilizes the economy.

But with banks’ shadow banking business accounting for about a fifth of total outstanding loans, analysts fear that the unintended consequences of government efforts could trigger the fate it seeks to avoid. “We see a policy-induced drastic deleveraging in shadow banking as a policy miscalculation that could trigger unexpected tail risks for the banking sector,” said Liao Qiang, credit analyst at S&P Global Ratings. Investors’ concerns stem from new rules this month that put lenders’ wealth management products (WMPs), the biggest component of shadow banking, under the scrutiny of the People’s Bank of China (PBOC) for the first time and into its calculations on prudence, capital adequacy and loan growth guidelines.

According to the latest official data, WMPs jumped 42% year-on-year to 26 trillion yuan ($3.8 trillion) at the end of June, doubling in just two years. WMPs are typically kept off banks’ balance sheets, making it difficult for regulators to assess the stability of a banking sector reliant upon them for growth. And just as in the global financial crisis of 2008, banks’ interconnectedness amplifies the risks. Banks are increasingly buying into each other’s WMPs, such that interbank WMPs hit 4 trillion yuan in June, a doubling from two years ago.

Read more …

Wonder how this connects to the shadow banks.

China’s Army of Global Homebuyers Is Suddenly Short on Cash (BBG)

China’s escalating crackdown on capital outflows is sending shudders through property markets around the world. In London, Chinese citizens who clamored to purchase flats at the city’s tallest apartment tower three months ago are now struggling to transfer their down payments. In Silicon Valley, Keller Williams Realty says inquiries from China have slumped since the start of the year. And in Sydney, developers are facing “big problems” as Chinese buyers pull back, according to consultancy firm Basis Point. “Everything changed’’ as it became more difficult to send money offshore, said Coco Tan, a broker associate at Keller Williams in Cupertino, California. Less than a month after China announced fresh curbs on overseas payments, anecdotal reports from realtors, homeowners and developers suggest the restrictions are already weighing on the world’s biggest real estate buying spree.

While no one expects Chinese demand to disappear anytime soon, the clampdown is deterring first-time buyers who lack offshore assets and the expertise to skirt tighter capital controls. “If it’s too difficult, I’m out,’’ said Mr. Zheng, 66, a retired civil servant in Shanghai who declined to give his first name to avoid attracting regulatory scrutiny. He may abandon a 2.4 million yuan ($348,903) home purchase in western Melbourne, even after shelling out a 300,000 yuan deposit last August. He’s due to make another big payment next month. The change spooking Zheng and his compatriots came in a statement from the State Administration of Foreign Exchange on Dec. 31, hours before the reset of Chinese citizens’ annual foreign currency quotas.

Among other requirements, SAFE said all buyers of foreign exchange must now sign a pledge that they won’t use their $50,000 quotas for offshore property investment. Violators will be added to a government watch list, denied access to foreign currency for three years and subjected to money-laundering investigations, SAFE said. “A lot of clients are worried and have started hesitating,’’ said Wang Ning, vice president of the international department at Fang Holdings, China’s most popular property website.

Read more …

A pity this ends in a political rant, the first part is interesting.

Lurching Towards the New Paradigm (Art+M)

The world heaved under the sudden weight of its own nervous system. Lit up and lashed to the planet in only a few decades, we lost our bearings in the paradox of connectivity: minute detail of every moment yet removed from any tangible presence, our animal bandwidth compressed to sound and vision, crowded and alone. We got connected and it’s terrifying. Direct confrontation with The Other. Massive social relativism. A fractal collage of affinity networks and sub genres and Things That Seem Really Different. Nature red in tooth and claw, in full glorious monstrosity. And now it’s like “oh shit you mean we’re responsible for all of this??” The Web is a planetary architecture that compresses and distributes information. There’s only so much bandwidth and the Web is just one modality of acting in the world.

The network compresses physical experience from 5 senses to mostly one. The lo-fidelity of text invites us to project our fears and insecurities on vagaries stripped of all the social cues we use to interrogate communication. No tone of voice, no body language, no skin flush or eye contact or simple touch. We get complete vision at the expense of physical connection. We casually act like monsters when online, say terrible things, things we would never say to someone’s face. We’d see their hurt, feel their anger. Yet, such is the new asymmetry of power that dateless trolls can destroy lives from the safety of their parents’ basement. It turns out social media is pretty sociopathic. But this couch is pretty comfortable and many of us in the developed world enjoy tremendous security, all things being equal.

Our relentless sapien modeling no longer frets about saber toothed beasts rumbling in the brush to devour us, but abstracts those same spirits, those hopes and fears, into the characters and dramatic occurrences that enchant our fickle minds. So we sat on the couch and projected ourselves into the astral theater of television. The Gods we looked to for hope and guidance, for rules and consequences, those gods became priests, then politicians, and then celebrities. The Stars of the Silver Screen. Then we broke open the screen, tore apart the TV and unbundled its business entanglements and made it so we could all walk onto the soundstage and stand beneath those glowing lights, big smile, ready to share ourselves with the masses. On the way to Godhead we are tempted by Stardom.

Read more …

The longer this takes, and there’s no end in sight, the more I’ll be thinking of the Treaty of Versailles. It won’t lead to a new Hitler, but the risk of destabilizing the entire region is very real. Destroying a country is always a bad idea, destroying a member of your own union is much worse. And entirelu unnecessary too.

Greece Creditors Demand Legislation Of Reforms For 2018-19 (Kath.)

Eurozone finance ministers turned the heat up on Athens on Thursday, demanding that it legislates measures now for the period after 2018, when the country’s bailout ends, dashing the government’s hopes of a swift conclusion to the second review of its third bailout. The Eurogroup in Brussels, which the government hoped would pave the way for the return to Athens of the representatives of the country’s quartet of creditors to continue talks, was held just two days after the emphatic refusal by Prime Minister Alexis Tsipras to enact any further measures now. Finance Minister Euclid Tsakalotos said the demands by the IMF went “well beyond the European framework of democracy.”

“It’s not correct to ask a country in a program to legislate two to three years beforehand what it will do in 2019,” he said after the Eurogroup. Moreover, what is worrisome for the leftist-led government is that Greece appears to have lost the support of the European Commission, which aligned itself with the demands made by the IMF and German Finance Minister Wolfgang Schaeuble for Athens to legislate measures now for the period after 2018. However, Eurogroup chief Jeroen Dijsselbloem said that completing the review is “in everybody’s interest,” adding that Greece’s creditors remain committed to continuing talks, and that eurozone finance ministers want to expedite procedures that will allow creditor representatives to return to Athens “as quick as possible.” The good news, he said, was that the Greek economy is recovering fiscally, and that state revenues were higher than expected.

Read more …

The only possible decision. Time for the EU to stand up for Greece. Yeah, right.

Greek Supreme Court Rules Against Extraditing Eight Turkish Soldiers (WSJ)

Greece’s Supreme Court rejected an extradition request for eight Turkish military officers who fled to Greece after a failed coup, a decision that Turkey warned would hurt the countries’ relations. The court ruled that the servicemen wouldn’t get a fair trial in Turkey and that their extradition could put their lives at risk while exposing them to torture or degrading treatment. The decision is final and cannot be appealed. “We protest this judgment which prevents these individuals who actively participated in the coup attempt which targeted the democratic order in Turkey, killed 248 members of our security forces and civilians, wounded 2193 of our citizens and attempted against the life of our President, to be brought before the independent Turkish judiciary,” Turkey’s foreign ministry said in a written statement in English.

The Turkish statement accused Greece of sheltering “putschists” and said it that in light of a decision “taken for political motives,” Turkey will evaluate bilateral ties, including cooperation against terrorism. The eight officers, with ranks up to the level of major, flew by helicopter to the northern Greek city of Alexandroupolis the day after the July 15 coup attempt in Turkey. The Turkish government requested the rapid extradition of the men, whom it has described as “traitors,” to face charges of trying to overthrow the democratic constitution. The eight men deny the charges. They say they were unaware of the coup attempt until it was under way and fled to Greece to escape violent reprisals against soldiers after the coup failed. Greek intellectuals and activists, including prominent author Apostolos Doxiadis, campaigned forcefully against the men’s extradition in recent weeks, turning the men’s plight into a high-profile political issue.

Read more …

Like Trump’s ‘safe places’. In other words, rebuild what you destroyed. Not going to happen. They’ll just throw billions at it and hope it disappears. It won’t. But then they can say they tried the best they could.

EU Looks To Camps In Africa To Cut Immigration (R.)

EU interior ministers will consider plans on Thursday to finance camps in Africa where the UN refugee agency and aid groups would process migrants to prevent them trying to cross the Mediterranean to Europe. The sea crossing from Libya to Italy, operated by people smugglers, is now the main route for migrants seeking better lives in wealthy Europe, but the EU wants to shut it down and admit only refugees. More than 4,500 people are known to have drowned last year alone trying to make the crossing. The European Union has deployed a naval mission in the Mediterranean and is training the Libyan coastguard to cut the numbers attempting the journey. Now it also wants to return migrants plucked from the sea to where they came from. “The idea is to send them to a safe place, without bringing them into Europe,” German Interior Minister Thomas de Maiziere told reporters as he arrived for the talks in the Maltese capital Valletta.

“The people taken up by the smugglers need to be saved and brought to a safe place, but then from this safe place outside Europe we would bring into Europe only those who require protection,” he said. The camps in Libya or its neighbors would be run by the UN refugee agency UNHCR or the International Organization for Migration (IOM), which would screen the migrants and help return those not eligible for asylum to their home countries. Most of those taking the Libya-Italy route are regarded as economic migrants with no chance of winning asylum in the EU. Since the influx of more than a million people in 2015, many of them fleeing the Syrian conflict, the EU has tightened border controls, making it increasingly hard for migrants and asylum seekers alike to enter the 28-nation bloc.

It is also offering money and assistance to countries along the migration routes in the hope that fewer people will seek to leave their homes or will be stopped on the way before they embark for Europe. The idea of financing camps in Africa enjoys wide political backing in the EU, but poses legal and security challenges. Libya sank into chaos following the 2011 overthrow of veteran ruler Muammar Gaddafi, and the new UN-backed government in Tripoli exercises no control over its territory. Such lawlessness means returning people to Libya would likely violate international law, which prohibits sending people back to a place where their lives could be in danger. That is why the EU needs the UNHCR and IOM to create sites there that could be deemed as meeting international humanitarian standards. It is an effort to replicate parts of existing agreements the EU has with Turkey, Jordan and Lebanon, which host several million Syrian refugees in camps on their soil.

Read more …

“The German magazine Der Spiegel revealed a warning from the European commission that “under no circumstances” should the public learn what was said during talks held in March last year.”

Europe’s Crackdown On African Immigration Is Hitting Vulnerable Refugees (G.)

Documents cited in the Guardian on Monday showing that the UK government downplayed the risk of human rights abuses in Eritrea in an attempt to reduce asylum-seeker numbers are the latest indication of Britain’s determination to reduce African immigration. But this is a Europe-wide initiative, co-ordinated in Brussels. With French, German, Dutch and Italian elections later this year, there is intense pressure across the European Union to cut the flows of refugees and migrants across the Mediterranean. European plans to deal with the question have been veiled in secrecy, since they involve close cooperation with some of Africa’s most notorious dictatorships.

The German magazine Der Spiegel revealed a warning from the European commission that “under no circumstances” should the public learn what was said during talks held in March last year. A member of staff working for Federica Mogherini, the EU high representative for foreign affairs, warned of the risk to Europe’s reputation. Plans are being formulated under arrangements agreed between the EU and African leaders in Malta in November 2015. These called for close cooperation between European security services and those of African states. Among those around the table at Valletta were representatives of repressive regimes in Sudan (whose president, Omar al-Bashir, is wanted by the International Criminal Court for war crimes) and Eritrea, which has been accused of crimes against humanity.

Read more …

Everybody accuses the other. Meanwhile, it’s going to be very cold again in Greece this weekend.

EU’s Mishandled Millions Not Reaching Refugees (DW)

On January 18, Dimitris Avramopoulos, European Commissioner for Migration, arrived on the Greek island of Lesbos. The reason for his visit was simple, if disheartening: a wave of bitterly cold weather had blanketed much of Greece in snow, and with it the country’s refugee camps. In the world’s richest continent, images emerged of refugees – many of them children, elderly or disabled -battling sub-zero temperatures with little more protection than tents and blankets. A few days earlier Ioannis Mouzalas, the country’s Minister for Migration, had stated, “No refugee or migrant is in the cold.” Avramopoulos called on authorities and NGOs to do more. Pointedly he noted that Greece was the single biggest recipient of EU Home Affairs funding, with €1 billion ($1.1 billion) made available over two years in financial support.

So where has the money gone? And why has the country proven unable to provide rudimentary living conditions for many of the roughly 50,000 refugees? The fact is that the €1 billion figure touted by Avramopoulos conflates a number of funds many of which have not yet been spent. Nevertheless the funds that have already been awarded to the government or NGOs remain substantial. Since the start of 2015, the Greek government, according to data from the European Commission and the Greek Ministry of Development, has absorbed 179 million euros of emergency funds from the Directorate General of Home Affairs (DG HOME). This is in addition to €60 million from the €509 million of long-term funding allocated to Greece for the period 2014-2020.

Meanwhile the UNHCR, the European Asylum Support Office (EASO) and the International Organization for Migration (IOM) have received €175 million from DG HOME’s emergency funds. An additional €186 million of emergency funding has also been contracted to a number of major NGO’s for humanitarian assistance in Greece from the Directorate General for European Civil Protection and Humanitarian Aid Operations (DG ECHO) for projects starting in 2016. An additional €500 million has been earmarked for this fund until 2018.

Read more …

Nov 072016
 
 November 7, 2016  Posted by at 10:30 am Finance Tagged with: , , , , , , , , ,  


NPC Auto wreck, Washington, DC April 1917

Betting Sites See Record Wagering On US Presidential Election (R.)
When Might We Know Who Won? Potentially Hours Earlier Than Usual (BBG)
Could Trump Or Clinton Face Impeachment As President? (John Crudele)
This Election Has Disgraced the Entire Profession of Journalism (Silverstein)
Much More Than Trump (Repost), by Robert Gore
Private Capital Allocation As Inefficient As In Great Depression (Beversdorf)
Housing ‘Wealth Creation’ Leads To National Wealth Destruction (Janda)
China Might Finally Give Wall Street What It Wants – 20 Years Late (WSJ)
Hong Kong Derails Property Streetcar (BBG)
Negative Bond Yields in Japan Don’t Look So Bad With Deflation (BBG)
Architect Of Euro In Stark Warning (BBC)
Obama Aiming To Make Lasting Impression With Athens Speech (Kath.)
Erdogan Blasts West As Turkey’s Kurdish Party Boycotts Parliament (R.)
Great Barrier Reef: What Have We Left For Our Children? (Naomi Klein)

 

 

How fitting.

Betting Sites See Record Wagering On US Presidential Election (R.)

The raucous, passionate and unpredictable 2016 U.S. presidential election is on track to notch another distinction: the most wagered-upon political event ever. With many opinion polls showing a tight race just one day before Tuesday’s election, record numbers of bettors are pouring millions into online platforms from Ireland to Iowa in the hope of capturing a financial windfall from a victory by Democrat Hillary Clinton or Republican Donald Trump. UK-based internet betting exchange Betfair said on Sunday its “Next President” market was set to become the most traded it had ever seen and expected to surpass even Brexit. By Sunday, roughly $130 million had been traded on who will become the next U.S. president, compared with $159 million on the Brexit referendum, Betfair spokeswoman Naomi Totten said.

The amount bet so far on the 2016 contest dwarfs the roughly $50 million laid on the 2012 race. “We think it is because (of) how raw the Brexit (vote) is in people’s minds – they’re not convinced yet that it’s a done deal,” Totten said. Most polls leading into Britain’s June 23 referendum predicted Britons would choose to remain in the EU. Instead, they voted to leave by a 52% to 48% margin. Betfair’s “Next President” market was by far the largest of more than 70 markets on the site related to the U.S. election. As of Friday, some $140 million has been put into play on markets ranging from who will win the popular vote to how many states each party will carry. On Ireland’s Paddy Power, which merged with Betfair earlier this year, the U.S. presidential election “is definitely on course to be the biggest political event,” said spokesman Féilim Mac An Iomaire. The site has had about $4.38 million bet on the race so far.

Read more …

Who needs the west?

When Might We Know Who Won? Potentially Hours Earlier Than Usual (BBG)

4. When might the public know who won? Potentially hours earlier than usual.

5. Why’s that? There’s a wrinkle this year that might undermine the tradition of major television networks holding off declaring a new president until polls close on the West Coast. Exit polling available to the networks and the Associated Press, combined with early returns in key districts, can point to a likely winner hours before the polls close. Since 1980, when Ronald Reagan’s landslide victory was called while West Coast polls were still open – spurring complaints that some voters didn’t see any reason to go to the polls — networks have resisted calling winners until a given state’s polls have closed.

6. Who’s challenging that arrangement this year? A startup company called VoteCastr plans to collect data from seven battleground states – Colorado, Florida, Nevada, New Hampshire, Ohio, Pennsylvania and Wisconsin – on Election Day, stream it through a mobile app and use it “to generate minute-by-minute projected outcomes.” The news website Slate.com will publish VoteCastr’s findings as they come in. “Publishing our data will help level the playing field, so that voters know as much as campaigns do,” Slate’s editor, Julia Turner, said.

Read more …

Not easy. Entirely new information would be needed.

Could Trump Or Clinton Face Impeachment As President? (John Crudele)

[..] .. might it be possible for Congress to initiate impeachment proceedings immediately after their swearing-in as president, whoever wins? I asked professor Eric Schickler, who is the chairman of Travers Department of Political Science at the University of California, Berkeley. “That is an interesting question”, Schickler said. “The conventional understanding of impeachment is that it is due to actions taken while in office. That is how it has traditionally been applied. But impeachment, as anyone who has lived through the Nixon and Bill Clinton eras knows, is ultimately a political decision”, says Schickler. “The Constitution does not define ‘high crimes and misdemeanors’, which is supposed to be the standard for an impeachable offense. “As such, there is discretion for Congress to define its range”, he added.

But Schickler says it would be a “serious case of political overreach for Congress to impeach after an election for actions taken before a person is in office. That s particularly so where those actions were known at the time of the election itself”, he says. OK, my turn again. So what he s saying is that an impeachment proceeding right after the election would really piss voters off. Then, how about a month after inauguration? Or six months? Or a year from now, when the economy still isn t buzzing (as it s unlikely to be) and people have had enough of our new president – whoever that may be. So let’s figure out what crimes we can come up with for Trump and Hillary Clinton. Clinton’s crimes are obvious. Her opponent has described her as a liar and a crook, and so have I.

She has nearly been indicted twice, and could easily have other offenses that are lurking in the background. She’s become very wealthy because of connections made while in public service. She’s had numerous shady real estate deals and even had a commodities transaction – admittedly long ago – that reeked. And there’s the e-mail controversy. And perhaps lying to Congress and the FBI. And things that may have occurred at the Clinton Foundation. And on and on and on. And if the Republicans keep control of Congress, it’s anyone’s guess if they will go after her. Trump’s “crimes” are a little harder to spot. He’s a pig, that’s for sure. But pinching someone in a bar or saying vulgar things on camera aren’t really impeachable unless, of course, the enemies in his own party decide that they’d prefer vice presidential candidate Mike Pence as a substitute.

Professor Michael J. Gerhardt, the Samuel Ashe Distinguished Professor of Constitutional Law at the University of North Carolina at Chapel Hill, says that a president “may be impeached based on serious misconduct committed prior to the time the individual entered the office he or she currently occupies.” A federal district judge, for instance, got impeached (which is like an indictment) and convicted for lying on a questionnaire he needed to fill out for the job. But there’s a catch, says Gerhardt. The misconduct has to be serious — which is a tricky term to define — and not considered at the time of the election. “It becomes a trickier case if the American people can be said to have ‘ratified’ the prior misconduct” by electing that person.

Read more …

Planet Ponzi speaks.

This Election Has Disgraced the Entire Profession of Journalism (Silverstein)

There’s nothing secret about the media’s anti-Trump stance. A formal declaration of war was launched on August 7, when Jim Rutenberg, the New York Times media columnist, wrote a story under the headline, “Trump Is Testing the Norms of Objectivity in Journalism.” Rutenberg wrote that journalists were in a terrible bind trying to stay objective because Trump, among other things, “cozies up to anti-American dictators,” has “put financial conditions on the United States defense of NATO allies,” and that his foreign policy views “break with decades-old …consensus.” Rutenberg made clear that he and other reporters viewed “a Trump presidency as something that’s potentially dangerous,” which required them to report on him with a particularly critical point of view. This, he said, would make journalists “move closer than you’ve ever been to being oppositional,” which would be “uncomfortable and uncharted territory.”

There are so many things wrong with all this that it’s hard to know where to start. Rutenberg’s comment about dictators was clearly a reference to Vladimir Putin, who is an authoritarian leader who Trump, to his shame, admires. However, Russia is not the world’s worst dictatorship — and has been far more effective at fighting ISIS than the Obama administration — and Hillary’s cordial relationship with the Saudi regime, to cite just one example, seems far more dangerous. But rethinking “the alliances that have guided our foreign policy for 60 years” — the alliances that have resulted in non-stop war since 9/11 and the U.S.’s current involvement in seven overseas conflicts — is not an acceptable position for a presidential candidate in Rutenberg’s view.

Furthermore, how is it that the media has derogated to itself the right to decide what candidates deserve special scrutiny and what policies are acceptable? In a democracy, that is supposed to be the voters’ job. And worst of all is Rutenberg’s statement about the role of journalists. “All governments are run by liars and nothing they say should be believed,” I.F. Stone once wrote. “Journalism is printing what someone else does not want printed: everything else is public relations,” said George Orwell. For those two self-evident reasons, being “oppositional” is the only place political journalists should ever be, no matter who is in power or who is campaigning. But for Rutenberg and the New York Times being oppositional is only “uncomfortable” when it comes to covering Hillary Clinton.

It didn’t seem uncomfortable at all when it came to running a story about Trump’s taxes based on three pages of a decades-old tax return that was sent anonymously or when it ran another story with the headline, “The 282 People, Places and Things Donald Trump Has Insulted on Twitter: A Complete List.” All during the campaign we have watched Hillary Clinton rehearse campaign themes and, almost as if by magic, the media amplifying those themes in seeming lockstep. The hacked emails from Clinton campaign chairman John Podesta have demonstrated that this was not mere happenstance, but, at least in part, resulted from direct coordination between the Clintonistas and the press.

Read more …

“..a chasm that cannot be straddled..”

Much More Than Trump (Repost), by Robert Gore

While the Kennedy assassination offered the American public a glimpse into the heart of darkness, only a few independent-minded skeptics challenged the Warren Commission whitewash. Vietnam was different; hundreds of thousands returned knowing not just that the so-called best and brightest couldn’t win the war, but that for years they had lied to the American public. In the following decades, it had to have been especially galling for the Vietnam veterans that the hippies, draft-deferred campus protesters, the “fortunate sons” (google Credence Clearwater Revival) whose numbers never came up, and the mockers of the values they held dear ended up among the elite. The Clintons, of course, became the prime example.

Disaffected veterans were the core of a group that would grow to millions, their “faith” in government and the people who ran it obliterated by its repeated failures and lies. Revolutions dawn when an appreciable number of the ruled realize their rulers are intellectual and moral inferiors. The mainstream media is filled with vituperative, patronizing, and insulting explanations of what’s “behind” the Trump phenomenon. It all boils down to revulsion with the self-anointed, incompetent, pretentious, hypocritical, corrupt, prevaricating elite that presumes to rule this country. It is, in a word, inferior to the populace on the other side of the yawning chasm, the ones they have patronized and insulted for decades, and the other side knows it.

Peggy Noonan is one of the few mainstream writers who has tried to understand, rather than insult or condemn, the Trump phenomenon. In a widely cited article, she ascribed it to the split between the “protected,” those who run the government and its allied institutions, and the “unprotected,” the government’s and its allies’ victims (“Trump and the Rise of the Unprotected,” The Wall Street Journal, 2/25/16). It was a nice try, but Ms. Noonan is attempting to straddle a chasm that cannot be straddled. She writes for the Journal, an establishment organ, some of whose writers have been either so clueless or disingenuous that they have denied the existence of an establishment. And ultimately, the protected-unprotected differentiation doesn’t fly.

Most Trump supporters don’t want the government to do something for them; they want the government to quit doing things to them. They viscerally revile the elite—it’s personal—and they want no part of that class or its government. They know how to take care of themselves, and many know the government hurts the most those whom it ostensibly protects.

Read more …

Whet can be done when demand is set to be weak for a long time?

Private Capital Allocation As Inefficient As In Great Depression (Beversdorf)

1) Economic policy objectives (monetary and fiscal) are meant to incentivize domestic private business investment, which drives incomes and the money multiplier effect, i.e. the engine of the economy.

2) Economic policy objectives have failed because CEO’s, the private capital allocators, simply cannot accommodate business investment when the demand function is as weak as we currently find it, no matter how available and how cheap the capital.

3) The demand function is weak because we misunderstood and ignored the side effects of trade policies and their reliance on new world economies that naturally have a lower money multiplier effect than old world economies.

4) A materially damaged demand function leads to a misallocation of resources; for the past 15 years capital has been and continues at an accelerating rate to be allocated to cash distribution (the most economically inefficient use of capital) rather than investment, further deteriorating the demand function (economic death spiral).

5) The only question that matters now then is; How do we get private sector capital allocators to allocate capital more efficiently? I’ll give you a hint, it requires indications of sustainable demand improvement and neither monetary nor fiscal policy have the capacity to generate sustainable demand improvement when the demand function is damaged to the point that CEO’s refuse to invest productively. This then requires a new economic policy framework, one that CAN generate sustainable demand improvement, which will allow capital allocators to invest productively.

We can understand the problem without villainizing any particular stakeholders by focusing on where we are today and delivering a viable solution. Mistakes were made and judging whether they were honest or malicious in nature is irrelevant to finding the solution. Our focus here is a solution.

Read more …

Bloated home prices strangle consumption, which is typically 50-70% of GDP.

Housing ‘Wealth Creation’ Leads To National Wealth Destruction (Janda)

Robertson cites two brunches a week, two coffees a day and a $60 dinner a week as areas where many Gen Ys could save some cash. Aside from the many responses I’ve heard from Gen Ys who don’t spend anything like this much on such items, when you add up the savings it really isn’t that much. On Robertson’s figures one could save just under $6,000 a year. Let’s be extra tight arse and cut out the booze, say $50 a week for $2,600 a year, save another $1,000 by holidaying up the coast in a caravan park instead of heading overseas and $400 more through buying cheaper clothes. So let’s assume it’s reasonable to cut $10,000 in expenses and let’s also assume, even though it’s unlikely given their other spending habits, that our hypothetical Gen Y already saves $5,000 a year from their post-tax, post-HECS/HELP repayment income.

With a median home price of $800,000 in Sydney, it would take a single person more than a decade to save a deposit, so more than five years for a couple who were both saving $15,000 a year. But first time buyers shouldn’t be buying the median, or middle-priced, home I hear boomers respond. Agreed. So let’s take the median apartment price instead. Given the number of studios and tiny one-bedders out there, the median unit price probably gets you a pretty small apartment within 10km of the CBD or a two-bedder somewhere further out. Surely the boomers can’t begrudge that as being excessively luxurious? That’s still $138,000 for a 20% deposit, not including stamp duty, legal and moving costs.

For a single person that’s still nine years of saving, or the best part of five for a couple, and that’s assuming home prices don’t keep rising faster than their incomes and the earnings on their savings, which has been the experience of the past four years. Even a deposit on a Melbourne apartment is six-and-a-half years of saving for a single and more than three years for a couple, again not including other unavoidable purchase costs. That’s the individual challenge that Gen Ys face, even those on pretty decent incomes which are becoming rarer in an increasingly part-time and casualised labour market. But what all of the analysis thus far has ignored is the macroeconomic cost. Imagine for a second that hundreds of thousands of Gen Ys gave up all their brunches and coffees – cafes across Australia would be going broke.

Who do they employ? Often Gen Ys. Likewise the restaurants, bars and retailers that would also be hit if Gen Y really did close their wallets completely. This illustrates the problem with an over-inflated housing market, it absolutely sucks the life out of every other part of the economy.

Read more …

“Chinese banks had a 10% share of investment-banking revenue in Asia [..] a decade ago… This year, that share has increased to 61%..”

China Might Finally Give Wall Street What It Wants – 20 Years Late (WSJ)

Beijing is considering allowing Wall Street firms to run their own investment-banking businesses on the mainland, according to people briefed on the discussions, a long-awaited step that would give them more access to China’s hard-to-crack domestic market. The move is being discussed as part of a new U.S.-China trade and investment framework. Firms such as Goldman Sachs and J.P. Morgan Chase potentially could operate investment-banking business in China on their own. Currently, the firms must pair with domestic brokerages in joint ventures. The people briefed on the discussions caution negotiations aren’t finalized. Details need to be hashed out with Chinese regulators, and any agreement would need to be ratified by the U.S. Senate.

The possibility of getting closer to the Chinese market is a breakthrough for Wall Street firms. Global banks have limited access to the $7.48 trillion stock markets of Shanghai and Shenzhen and China’s domestic bond market, compared with the ease they can operate in global markets such as London and Tokyo. Any change, however, would come at a late stage. China’s banks have large balance sheets and have become formidable rivals. The banks also have long relationships with corporate Chinese clients, some of whom may not recognize Western brand names.

Chinese banks had a 10% share of investment-banking revenue in Asia, excluding Japan and Australia, a decade ago, according to data provider Dealogic. This year, that share has increased to 61%, boosted by Chinese companies that prefer to do business with domestic firms. Although U.S. banks have spent heavily to bulk up operations in the region, their share has declined since 2000, from 43% to just 14% so far this year, according to Dealogic.

Read more …

Popping bubbles before they become tumors.

Hong Kong Derails Property Streetcar (BBG)

When pro-market authorities tamper with prices to cool asset bubbles, economists speak of “throwing sand in the wheels of finance.” Having emptied its bucket of sand without stanching the desire to own property, Hong Kong decided to derail the out-of-control streetcar in a pit of exorbitant taxation. Considering the more painful alternative, it’s a wise move. Now that foreigners, including all-important mainland Chinese buyers, must pay a 30% stamp duty to buy overpriced shoeboxes, transactions could drop by 70%, Bloomberg News reported. Weaker demand might jolt earnings of the city’s developers. That’s what the biggest drop in 16 months in Cheung Kong Property’s shares suggested Monday. A more violent reaction, which might have occurred as Hong Kong’s U.S.-linked interest rates rose, may have been avoided.

As Gadfly pointed out, Hong Kong property has been a magnet for the kind of speculative frenzy that Singapore managed to tame. A gush of money out of the People’s Republic and into something – anything – in Hong Kong is the main reason a skilled worker in the territory was being asked to hand over seven years’ more wages than his Singapore counterpart to own the roof over his head. Even as Hong Kong’s pro-democracy activists are ticked off by Beijing for trying to chart an independent political course, the city can exert more control over its economic destiny by making the world’s least affordable housing a little less so. Not only will the 30% tax dissuade mainland buyers, it also could also put an end to speculative land purchases by Chinese developers.

Read more …

Well, let’s all get us some deflation then.

Negative Bond Yields in Japan Don’t Look So Bad With Deflation (BBG)

If you thought Japan’s negative yields don’t offer any value, take a look at the nation’s fall back into deflation. The 10-year Japanese government bond yield of minus 0.065% turns into a real yield of about 44 basis points, near a three-year high, after accounting for consumer prices. The figure beats the U.S. 10-year real yield of about 30 basis points. The Bank of Japan last week acknowledged its negative short-term interest rates and its plan to control the yield curve will need more time to push up living costs. It forecast 2% inflation won’t be achieved until the year ending March 2019. Bondholders are the beneficiaries, with Japan’s debt market little changed over the past month, even as Treasuries dropped 0.4%, based on the Bloomberg World Bond Indexes.

“Even with the BOJ being vigilant about controlling bond levels, Japanese yields are on a gradual declining path given the lack of conviction that prices will rise,” said Souichi Takeyama at SMBC Nikko Securities Inc. in Tokyo, a unit of Japan’s second-biggest lender. “There is a lack of concern about inflation.” The government will test demand when it sells 10-year debt Tuesday and 30-year bonds on Thursday. Japanese consumer prices are falling at a year-on-year pace of 0.5%, matching the biggest declines since 2013, giving bondholders reason to stick with the securities at a time when the central bank is trying to hold nominal 10-year yields at about zero. In the U.S., investors get 1.80%. Japan’s 40-year bond is more attractive at 0.575%, or a real yield exceeding 1%.

Read more …

Wonder how much he blames himself for.

Architect Of Euro In Stark Warning (BBC)

A founding father of monetary union has given a damning assessment of the euro bloc, saying that not incorporating an exit strategy was a mistake. Prof Otmar Issing told the BBC’s Wake up to Money that faultlines across the eurozone remain, citing economic weakness in Greece, Portugal and Italy. The ECB’s first chief economist also warned about the impact of negative interest rates. And he said political pressures threatened central banks’ independence. Prof Issing told the BBC that structural problems in the eurozone and dwindling public support in some countries were still major problems. The euro currency was “stable and performing much better than expected”, he said. “But I wish I could say the same about the euro area.”

Countries that tipped the bloc into recession during the global financial meltdown were still in serious economic trouble. Greece was in “permanent crisis”, and economic reforms in Portugal and Italy were either on hold or being reversed, the professor said. Prof Issing, a former adviser to Germany’s Chancellor Angela Merkel, has in recent years become suspicious of the euro project he helped to create, warning that it would collapse without reform. He told the BBC that it was a “mistake in the construction of the whole arrangement that once a member, you remain a member for eternity”. It meant that countries not complying with the eurozone’s economic and budgetary rules “can blackmail the others”. Allowing a temporary exit would, for example, have helped Greece to reform its economy so that it could then return later in better financial health.

However, some countries should never have joined the euro in the first place, he said, without naming names. They “were not yet ready to thrive under a single monetary policy and one central bank”. Prof Issing is also increasingly concerned about central banks’ use of zero or negative interest rates in a bid to stimulate growth. The policy has been used by, among others, the ECB, Japan, Switzerland and Sweden It is hindering the recovery of banks, he said, adding: “If it persists for longer, then I think we will see dramatic consequences for insurance companies and pension schemes.” Furthermore, “the longer zero interest rates continue, the more difficult it will be to exit from this situation”.

Read more …

A lasting impression accompanied by Victoria Nuland and new ambassador to Greece Geoffrey Pyatt. Athens has better be very careful with the Ukraine star couple in place.

Obama Aiming To Make Lasting Impression With Athens Speech (Kath.)

US President Barack Obama is planning to deliver what American officials have described to Kathimerini as a “legacy speech” when he visits Athens on November 15. Although the details of the president’s trip have not been finalized, officials in Washington indicated that Obama intends to make a statement that resonates when he comes to Greece. One official likened it to the historic speech delivered by John F. Kennedy when he visited Berlin in 1962. Obama is expected to make extensive references to democracy and how it has endured in Greece despite its recent problems. The US president is also due to highlight the need for Athens to receive debt relief and for the Greek government to persist with structural reforms.

Obama is expected to tread carefully on the issue of debt so that his comments do not appear as an attack on German Chancellor Angela Merkel, who he considers an important partner and who he will be visiting after his trip to Athens. Sources said that the American president’s speech will also contain a message for Turkey. Obama wants to draw attention to the refugee crisis during his visit to Greece but due to security concerns a visit to the island of Lesvos has been ruled out. There is, however, a possibility that he will visit a refugee camp in Attica.

It is not yet known who will accompany the American leader on his visit but the impression is that First Lady Michelle Obama will not accompany him on the trip. There has been no final decision on whether Treasury Secretary Jack Lew will also travel to Athens. It is considered likely that Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland and Special Envoy for International Energy Affairs Amos Hochstein will be part of the team that will fly to Greece from Washington.

Read more …

Prediction: “we” are going to let this run awfully out of control.

Erdogan Blasts West As Turkey’s Kurdish Party Boycotts Parliament (R.)

Turkish President Tayyip Erdogan accused Europe on Sunday of abetting terrorism by supporting Kurdish militants and said he did not care if it called him a dictator. Turkey drew international condemnation for the arrest on Friday of leaders and lawmakers from the pro-Kurdish Peoples’ Democratic Party (HDP), the second-largest opposition grouping in parliament, as part of a terrorism investigation. The government accuses the HDP, which made history last year by becoming the first Kurdish party to win 10% of the vote and enter parliament, of financing and supporting an armed Kurdish insurgency, which it denies. The HDP announced a partial boycott of parliament on Sunday, saying it was “halting its legislative efforts” and that its deputies would stop participating in sessions of the legislature or meetings of parliamentary commissions.

“I don’t care if they call me dictator or whatever else, it goes in one ear, out the other. What matters is what my people call me,” Erdogan said in a speech at an Istanbul university, where he was receiving an honorary doctorate. Erdogan and the government are furious at what they see as Western criticism of their fight against the Kurdistan Workers Party (PKK) militant group, which has waged a three-decade insurgency for Kurdish autonomy and whose allied groups in Syria enjoy U.S. support in the fight against Islamic State. Erdogan said the PKK, listed as a terrorist group by the EU and US, had killed almost 800 members of the security forces and more than 300 civilians since a ceasefire in the largely Kurdish southeast collapsed last year. [..] “Europe, as a whole, is abetting terrorism. Even though they declared the PKK a terrorist organisation, this is clear,” Erdogan said. “We see how the PKK can act so freely and comfortably in Europe.”

HDP co-leaders Selahattin Demirtas and Figen Yuksekdag were jailed pending trial on Friday after refusing to give testimony in a probe linked to “terrorist propaganda”. Ten other HDP lawmakers were also detained, though some were later released. The US expressed deep concern, while Germany and Denmark summoned Turkish diplomats over the Kurdish arrests. European Parliament President Martin Schulz said the actions “call into question the basis for the sustainable relationship between the EU and Turkey”. “After discussions with our parliamentary group and our central executive board, we have decided to halt our legislative efforts in light of everything that has happened,” HDP spokesman Ayhan Bilgen said in a statement read out in front of the party’s offices in Diyarbakir and broadcast online. HDP officials would consult with the party’s supporters, many of whom are in the largely Kurdish southeast, and could then consider a full withdrawal from parliament, he said.

Read more …

“Climate change is intergenerational theft.”

Great Barrier Reef: What Have We Left For Our Children? (Naomi Klein)

There is no question that the strongest emotions I have about the climate crisis have to do with Toma and his peers. I have flashes of sheer panic about the extreme weather we have already locked in for them. But even more intense than this fear is the sadness about what they won’t ever know. These kids are growing up in a mass extinction, robbed of the cacophonous company of being surrounded by so many fast-disappearing life forms. According to a new WWF report, since I was born in 1970 the number of wild animals on the planet has dropped by more than half – and by 2020 it is expected to drop by two-thirds. What a lonely world we are creating for these kids. And what more powerful place to illustrate that absence than the Great Barrier Reef, on the knife-edge of survival?

So this film shows the reef through Toma’s eyes. He’s too young to understand concepts like coral bleaching and dying – it’s tough enough for him to understand that coral was ever alive in the first place. It also shows the Great Barrier Reef through the eyes of his mother: moved by the beauty that remains, heartbroken and infuriated by what has been lost. Because what has happened to this wondrous part of the world is not just a tragedy, it’s a crime. And the crime is still very much in progress, with our respective governments busily clearing the way for new coalmines and new oil pipelines.

Read more …

Mar 112015
 
 March 11, 2015  Posted by at 6:23 am Finance Tagged with: , , , , , , , , , , ,  


DPC Grace Church, New York 1905

The Blistering Pace Of Dollar’s Rally Is Rattling Markets (MarketWatch)
EM Currency Turmoil As US Rate-Hike Jitters Bite (CNBC)
Here’s Why Draghi’s Inflation Bomb Could Prove to Be a Dud (Bloomberg)
Stronger Dollar Sends U.S. Stocks to Biggest Drop in Two Months (Bloomberg)
Get Ready For A Much Bigger Oil Shock (CNBC)
Thomas Piketty on the Eurozone: ‘We Have Created a Monster’ (Spiegel)
Why Understanding Money Matters in Greece (Rob Parenteau)
Varoufakis Unsettles Germans With Admissions In Documentary (Reuters)
Tsipras Says Will Pursue German War Reparations (Kathimerini)
Greece Got a ‘Deal’ in February, But Things Still Haven’t Calmed Down (Bloomberg)
Eurozone Central Bank Buying Crushes Yield Curves (Bloomberg)
Why Does America Continue To Subsidize Housing For The Wealthy? (Guardian)
China’s Solution to $3 Trillion Debt Is to Deal with It Later (Bloomberg)
Yellen Meets Senate Bank Chief With Fed Transparency in Focus (Bloomberg)
Chaos: Practice and Applications (Dmitry Orlov)
‘We’ll Buy Reverse Gas Supplies At $245’- Ukraine’s President (RT)
US Applies Pressure to States Opposing Anti-Russian Sanctions: Nuland (Sputnik)
It’s NATO That’s Empire-Building, Not Putin (Peter Hitchens)

The Blistering Pace Of Dollar’s Rally Is Rattling Markets (MarketWatch)

It’s probably not the dollar’s unrelenting march higher that is unsettling U.S. stock investors, but it might be the speed of the rally. “I think what people are concerned about is the pace of the dollar strength,” Douglas Borthwick at Chapdelaine said. “Countries can always adapt to currencies strengthening or weakening, but certainly as the dollar strengthens very, very quickly it leaves very little chance for others to adapt,” he said. On a trade-weighted basis, the dollar remains far from its highs in the mid-1980s and early 2000s, but the pace of the rise over the past half year is the second fastest in the last 40 years, noted David Woo at Bank of America Merrill Lynch.

The ICE dollar index, a measure of the U.S. unit against a basket of six major rivals, is up 9% since the end of last year alone to trade at its highest level since late 2003. U.S. stocks dipped significantly, leaving the S&P 500 down 0.9% and within a whisker of erasing its 2015 gain after clawing back some of its earlier decline. The long-term correlation between the direction of the dollar and the S&P 500 is near zero, analysts note. But there have been periods when the dollar and stocks marched either in lock step or in opposite directions for significant periods. In the end, it all seems to come down to context. If the dollar rises because investors are confident about the future of the economy, then stocks can rise, too, as was the case in the late 1990s.

Read more …

“..currencies where countries have higher deficits or fiscal issues are under increased selling pressure..”

EM Currency Turmoil As US Rate-Hike Jitters Bite (CNBC)

Emerging market currencies were hit hard on Tuesday, while the euro fell to a 12-year low versus the U.S. dollar, on rising expectations for a U.S. interest rate rise this year. The South African rand fell as much as 1.5% to a 13-year low at around 12.2700 per dollar, while the Turkish lira traded within sight of last Friday’s record low. The Brazilian real fell over one% to its lowest level in over a decade. It was last trading at about 3.1547 to the dollar. Meanwhile, Europe’s single currency fell as low as $1.0731, its lowest level in 12 years, fueling talk of a move closer to parity against the greenback. A perception that a U.S. rate hike could come sooner rather than later has been building since the release of Friday’s stronger-than-expected U.S. non-farm payrolls report.

Analysts said that concerns about fiscal issues were compounding weakness in some currencies. In the case of the euro, the massive quantitative easing (QE) program just unleashed by the ECB weighed. “It’s a case of broad-based dollar strength amid increased expectations of a U.S. rate hike this year,” Lee Hardman at Bank of Tokyo-Mitsubishi told CNBC. “So currencies where countries have higher deficits or fiscal issues are under increased selling pressure, such as the South Africa rand, the Turkish lira and the Brazilian real. The euro is weakening on its own accord because of QE.”

Read more …

“..the higher the dollar goes the more likely investors will flee developing nations..”

Here’s Why Draghi’s Inflation Bomb Could Prove to Be a Dud (Bloomberg)

Mario Draghi’s inflation bomb could prove to be a dud. That’s because the weakness in the euro resulting from the European Central Bank’s €1.1 trillion quantitative-easing program risks being more than offset globally by the deflationary impact of a stronger dollar. Making that case as the euro trades around its lowest in 11 years against the greenback is David Woo, head of global rates and currencies at Bank of America Merrill Lynch in New York. He’s telling clients that pressure from a rising dollar threatens to rattle emerging markets, undermine U.S. stocks and curb commodities prices. Here’s how:

First, the higher the dollar goes the more likely investors will flee developing nations; that will make their borrowings in the U.S. currency more expensive, damaging their already-shaky outlook for growth. As Woo notes, the Turkish lira and Mexican peso have both reached or traded near all-time lows against the dollar in the past few days and Brazil’s real is at its weakest since 2004. China, which manages the value of its yuan against a basket of other currencies, may be forced to devalue to keep its products cheap in the international marketplace.

Next, because commodities are priced in dollars, the higher the greenback goes the more downward pressure will be applied to oil prices. Bank of America already says the likelihood is greater that crude falls rather than rises. Finally, Woo estimates the dollar’s rise is starting to undermine profits at home. U.S. companies in the Standard & Poor’s 500 Index get 40% of their earnings from overseas and the index has fallen in 19 out of 27 trading days this year in which the greenback gained. “The obvious implication is that investors are becoming concerned about the ability of the U.S. economy to cope with the strengthening dollar,” Woo said in a report to clients Monday. “The decline of euro/dollar below 1.10 may be less benign than it may appear at first.”

Read more …

Pretty big losses.

Stronger Dollar Sends U.S. Stocks to Biggest Drop in Two Months (Bloomberg)

U.S. stocks fell the most in two months as the dollar strengthened to near a 12-year high versus the euro amid speculation the Federal Reserve is moving closer to raising interest rates. Intel and Cisco lost at least 2.4% as technology companies in the Standard & Poor’s 500 Index led declines. United Technologies Corp., Goldman Sachs and Home Depot dropped more than 1.8% to pace losses among the biggest companies. The S&P 500 retreated 1.7% to 2,044.16 at the close in New York, falling below its average price for the past 50 days for the first time since Feb. 9. The Dow Jones Industrial Average lost 332.78 points, or 1.9%, to 17,662.94. Both indexes erased gains for the year. The Nasdaq 100 Index fell 1.9%. About 7.1 billion shares changed hands on U.S. exchanges, 2.8% above the three-month average.

“A continuation of dollar strength and euro destruction is certainly raising some concerns,” Michael James at Wedbush Securities said in a phone interview. “I don’t think there was any one specific event or item that caused this, but the fact that it’s a trend that’s been going on for the last several weeks is concerning given the levels we’re at now.” Concern the Fed may start raising interest rates this year amid a strengthening economy has weighed on equities and helped boost the dollar. In his last speech as president of the Fed Bank of Dallas, Richard Fisher said the central bank should begin to gradually raise rates before the economy reaches full employment to avoid triggering a recession.

Read more …

“..the Iran production growth story is just one but it makes factors such as Libya’s piddly production oscillation and rig count obsessions in the US pale into insignificance.”

Get Ready For A Much Bigger Oil Shock (CNBC)

So what’s the biggest trade in the markets right now? Could it be the one way bet on European fixed income with Draghi’s massive bond-buying program set to obliterate anyone who challenges ludicrously low bond yields? Or the tech bull position with the Nasdaq around year-2000 highs? For now let’s ignore the collapse in euro zone yield and the nose-bleeding valuations in tech and concentrate on my favourite trade – the brutal battle being fought in the oil market. Last week, InterContinental Exchange revealed that the hedge-betters and speculators were piling into the oil trade in levels not seen since the middle of last year. You remember the middle of last year, that was when crude was still at $110 per barrel, pretty much double where it is now. So are we setting ourselves up for another massive bout of volatility after a few weeks of relatively calm price action?

The longs are out in force, according to the data but are they too early in calling an end to the oil price rout? Brent may have had a fantastic rally in February, having plummeted to the low $40s region after last year’s rout. But was that a dead cat bounce ignoring the still dreadful near term fundamentals? Despite a lot of excitement about the falling rig count and the huge number of job expenditure cuts across exploration and production, there is still over-production not only in the US but also across the world. In fact, if you believe the bears, then the US will shortly run out of storage space above ground. The guys who’ve been in the industry and have seen cycle after cycle like this keep telling me that the cure for lower prices is lower prices. But when will we see supply and demand responses to $50-60 oil?

Well, many of the global wells just can’t afford to stop just yet, whether it is because of the need for Middle Eastern petro-dollars of the demanding Texan bank manager who still expects the oil well-related loan to be serviced. Surely the key factors in where we go next have still to come to the fore this year and we are still at the appetiser stage. For many, June will be the main event. That month is when the next scheduled OPEC meeting is due to take place and it is possibly the most likely time we will see a supply response from the group representing around a third of global production. The end of June just also happens to be the deadline for the Iran nuclear deal. If – and it’s a big “if” – Iran gets a framework agreement by the end of this month, the country will be desperate to ramp up production of oil as quickly as possible. And, believe me, it may take them months if not years but they really want to ramp it up.

Iran doesn’t just want to up its levels from the current 2.8 million barrels a day. It wants to first get to the 4 million barrels it was producing back in 2008 and then it wants to keep going on and on and on. That will set up Iran for a huge row with Saudi over OPEC production levels. Yes, the Iran production growth story is just one but it makes factors such as Libya’s piddly production oscillation and rig count obsessions in the US pale into insignificance. So for me the phoney war going on in the oil market at the moment may just result in a stalemate until the middle of the year. That is when we may get the real battle. The one that may just justify at least one side of the extreme calls from $20 to back up to $90 per barrel.

Read more …

A morally bankrupt monster.

Thomas Piketty on the Eurozone: ‘We Have Created a Monster’ (Spiegel)

SPIEGEL: You publicly rejoiced over Alexis Tsipras’ election victory in Greece. What do you think the chances are that the European Union and Athens will agree on a path to resolve the crisis?
Piketty: The way Europe behaved in the crisis was nothing short of disastrous. Five years ago, the United States and Europe had approximately the same unemployment rate and level of public debt. But now, five years later, it’s a different story: Unemployment has exploded here in Europe, while it has declined in the United States. Our economic output remains below the 2007 level. It has declined by up to 10% in Spain and Italy, and by 25% in Greece.

SPIEGEL: The new leftist government in Athens hasn’t exactly gotten off to an impressive start. Do you seriously believe that Prime Minister Tsipras can revive the Greek economy?
Piketty: Greece alone won’t be able to do anything. It has to come from France, Germany and Brussels. The International Monetary Fund (IMF) already admitted three years ago thatthe austerity policies had been taken too far. The fact that the affected countries were forced to reduce their deficit in much too short a time had a terrible impact on growth. We Europeans, poorly organized as we are, have used our impenetrable political instruments to turn the financial crisis, which began in the United States, into a debt crisis. This has tragically turned into a crisis of confidence across Europe.

SPIEGEL: European governments have tried to avert the crisis by implementing numerous reforms. What do mean when you refer to impenetrable political instruments?
Piketty: We may have a common currency for 19 countries, but each of these countries has a different tax system, and fiscal policy was never harmonized in Europe. It can’t work. In creating the euro zone, we have created a monster. Before there was a common currency, the countries could simply devalue their currencies to become more competitive. As a member of the euro zone, Greece was barred from using this established and effective concept.

SPIEGEL: You’re sounding a little like Alexis Tsipras, who argues that because others are at fault, Greece doesn’t have to pay back its own debts.
Piketty: I am neither a member of Syriza nor do I support the party. I am merely trying to analyze the situation in which we find ourselves. And it has become clear that countries cannot reduce their deficits unless the economy grows. It simply doesn’t work. We mustn’t forget that neither Germany nor France, which were both deeply in debt in 1945, ever fully repaid those debts. Yet precisely these two countries are now telling the Southern Europeans that they have to repay their debts down to the euro. It’s historic amnesia! But with dire consequences.

SPIEGEL: So others should now pay for the decades of mismanagement by governments in Athens?
Piketty: It’s time for us to think about the young generation of Europeans. For many of them, it is extremely difficult to find work at all. Should we tell them: “Sorry, but your parents and grandparents are the reason you can’t find a job?” Do we really want a European model of cross-generational collective punishment? It is this egotism motivated by nationalism that disconcerts me more than anything else today.

SPIEGEL: It doesn’t sound as if you are a fan of the Stability Pact, the agreement implemented to force euro-zone countries to improve fiscal discipline.
Piketty: The pact is a true catastrophe. Setting fixed deficit rules for the future cannot work. You can’t solve debt problems with automatic rules that are always applied in the same way, regardless of differences in economic conditions.

Read more …

Great read. h/t Yves.

Why Understanding Money Matters in Greece (Rob Parenteau)

As Greece staggers under the weight of a depression exceeding that of the 1930s in the US, it appears difficult to see a way forward from what is becoming increasingly a Ponzi financed, extend and pretend, “bailout” scheme. In fact, there are much more creative and effective ways to solve some of the macrofinancial dilemmas that Greece is facing, and without Greece having to exit the euro. But these solutions challenge many existing economic paradigms, including the concept of “money” itself. At the Levy Economics Institute conference held in Athens in November 2013, I proposed tax anticipation notes, or “TANs”, as a way for Greece to exit austerity without having to exit the euro.

This proposal is based on a deeper understanding of what money actually is, and the many roles that it plays in the economies we inhabit. In this regard, Abba Lerner captured the essence of modern fiat currencies, which are created out of thin air by modern states with sovereign currency arrangements. Lerner’s essential insight is contained in the following passage from over half a century ago (and, you will note, Lerner’s view informs much of the neo-chartalist view espoused by advocates of what is called Modern Monetary Theory):

The modern state can make anything it chooses generally acceptable as money…It is true that a simple declaration that such and such is money will not do, even if backed by the most convincing constitutional evidence of the state’s absolute sovereignty. But if the state is willing to accept the proposed money in payment of taxes and other obligations to itself the trick is done.

The modern state, then, imposes and enforces a tax liability on its citizens, and chooses that which is necessary to pay taxes. That means a state with a sovereign currency is never revenue constrained. In fact, the government has to first create the money before the private sector can find a way to get the money it requires to pay taxes and by government bonds. Taxes and bonds are therefore not really the source of government funding or finance. Wait, what? The government itself ultimately is the source of money required to pay for government expenditures. Taxes simply give value to money, as households and nonbank firms cannot create money – that is counterfeiting. Instead, they have to sell an asset or a product or a service to the government to get money, or they need to be beneficiaries of government corporate subsidy or household transfer programs to get money.

Read more …

Weird coincidence?

Varoufakis Unsettles Germans With Admissions In Documentary (Reuters)

Greek Finance Minister Yanis Varoufakis has described his country as the most bankrupt in the world and said European leaders knew all along that Athens would never repay its debts, in blunt comments that sparked a backlash in the German media on Tuesday. A documentary about the Greek debt crisis on German public broadcaster ARD was aired on the same day euro zone finance ministers met in Brussels to discuss whether to provide Athens with further funding in exchange for delivering reforms. “Clever people in Brussels, in Frankfurt and in Berlin knew back in May 2010 that Greece would never pay back its debts. But they acted as if Greece wasn’t bankrupt, as if it just didn’t have enough liquid funds,” Varoufakis told the documentary.

“In this position, to give the most bankrupt of any state the biggest credit in history, like third class corrupt bankers, was a crime against humanity,” said Varoufakis, according to a German translation of his comments. It was unclear when the program was recorded. Although strident criticism of the way Greece has been treated is typical for Varoufakis, a Marxist economist, the remarks caused a stir in Germany where voters and politicians are increasingly reluctant to lend Greece money. Bild daily splashed the comments on the front page and ran an editorial comment urging European leaders to stop providing Greece with ever more financial support. “The Greek government is behaving as if everyone must dance to its tune. But there must be an end to this madness. Europe must not be made to look stupid,” wrote a commentator.

Read more …

Syriza is not taking the attempts at humiliations lying down.

Tsipras Says Will Pursue German War Reparations (Kathimerini)

Prime Minister Alexis Tsipras Tuesday expressed his government’s firm intention to seek war reparations from Germany, noting that Athens would show sensitivity that it hoped to see reciprocated from Berlin. In a speech in Parliament, launching a debate on the creation of a committee to seek war reparations, the repayment of a forced loan and the return of antiquities, Tsipras told MPs that the matter of war reparations was “very technical and sensitive” but one he has a duty to pursue. He also seemed to indirectly connect the matter to talks between Greece and its international creditors on the country’s loan program. “The Greek government will strive to honor its commitments to the full,” he said.

“But it will also strive to ensure all unfulfilled obligations toward Greece and the Greek people are fulfilled,” he added. “You cannot pick and choose on ethical issues.” Tsipras noted that Germany got support “despite the crimes of the Third Reich” chiefly thanks to the London Debt Agreement of 1953. Since reunification, German governments have used “silence, legal tricks and delays” to avoid solving the problem, he said. “We are not giving morality lessons but we will not accept morality lessons either,” Tsipras said. In comments to Parliament later PASOK leader Evangelos Venizelos said it was important not to link the issue of reparations with Greece’s talks with creditors.

Read more …

Given the above, what’s that deal worth?

Greece Got a ‘Deal’ in February, But Things Still Haven’t Calmed Down (Bloomberg)

On February 20th, the Eurogroup came to an agreement with Greece on a way forward that would allow Greece access to further bailout funding. The agreement covered the way forward for Greece and consisted of three main elements.
• Greece would come up with a set of budgetary measures that would allow a successful review by the institutions.
• Greece would then implement these measures.
• The institutions would disburse funding to Greece as successful implementation progressed.

With this deal in place, it briefly seemed like things would quiet down for Greece, for a few months at least. Unfortunately, a sticking point has already emerged, which was highlighted at yesterday’s Eurogroup meeting. That sticking point is due to the very slow progress on meeting any of the elements of the February deal. The institutions are now going to take a larger role in formulating the measures Greece must undertake. The first meeting between Greece and the institutions is due to take place in Brussels tomorrow. If these meetings can produce measures that are acceptable to both sides, that will be a first step. But for Greece to access further funding it will have to also take the second step and start to implement those agreed measures. With time running out, there should be willingness on both sides to expedite this quickly. Recent events have shown, however, that each step forward in the process only happens at the last possible moment.

Read more …

Let’s all get sunk in a bottomless pit.

Eurozone Central Bank Buying Crushes Yield Curves (Bloomberg)

Euro-area government bonds with longer maturities surged as the region’s central banks bought sovereign debt for a second day, pushing yields closer to those on shorter-dated notes. That’s flattening so-called the yield curves of debt from Germany to Italy. Euro-system central banks were said to have purchased securities, including German five-year notes with a negative yield, under the ECB’s expanded quantitative-easing plan, according to three people with knowledge of the transactions. Belgian and Italian securities were also acquired, one of the people said. As the ECB and national members embark on purchases of sovereign debt designed to boost price growth in the region, rates on short-term securities are below zero in seven euro-area nations, meaning a buyer now would get less back than they paid if they held them to maturity.

That’s boosting demand for longer-dated bonds, particularly as the ECB’s rules preclude purchases of debt yielding below its deposit rate of minus 0.2%. German 30-year yields dropped the most in more than two months and touched an all-time low. “Nobody wants to fight the flow,” said Felix Herrmann, an analyst at DZ Bank in Frankfurt. “We have many investors who are desperately looking for yield. They are simply scaling into those bonds that yield some interesting pick up.” The yield premium investors demand to hold Germany’s 30-year bunds instead of two-year notes shrank to 100 basis points, or 1%age point, at 3:59 p.m. London time, the least since October 2008. The spread is down from 234 basis points a year ago. A yield curve is a chart of rates on bonds of varying maturities.

The Bundesbank may struggle to meet its buying quotas given the amount of German debt yielding less than the ECB deposit rate, SocGen analysts wrote in a client note. Germany’s seven-year yield dropped below zero for the first time since Feb. 27. “Without good purchases in the short-dated bonds, where outstandings are big, it is difficult to see how the Bundesbank is going to get its share of the program done,” the analysts wrote. Germany’s three-year note yields reached minus 0.24% Tuesday, while the four-year rate touched minus 0.197%, less than one basis point from the ECB’s deposit rate.

Longer-dated bonds are also being favored after policy makers last week failed to agree on how to share losses from buying bonds with negative yields. 78 of the 346 securities in the Bloomberg Eurozone Sovereign Bond Index already have rates below zero. “For me, as a fund manager, it doesn’t make sense to hold any bonds with a negative yield, so I’m happy to sell,” Christoph Kind, head of asset allocation at Frankfurt Trust, which manages about $20 billion, said Monday. “We are selling to the brokers, not directly to the ECB, but maybe in the end this will be bought by the ECB.”

Read more …

Because that’s the only way to keep the housing industry alive.

Why Does America Continue To Subsidize Housing For The Wealthy? (Guardian)

Many people in the US have given up on the American dream of owning a house: US homeownership rates have now dropped to the lowest point in almost 20 years. But the government shouldn’t be focusing on trying to raise that rate – for now, their priorities should lie with increasing affordable housing. For too long, well-off, high-income homeowners have benefited from generous government support. All the while, ordinary Americans are struggling to pay the rising rent. It is time to stop prioritizing home sales – increasingly out of reach for many Americans – and help everyday people attain a much more basic, and pressing need: affordable housing. Since the Great Depression, US housing policies have aimed almost exclusively at encouraging Americans to become homeowners.

Housing policies favor and heavily subsidize homeownership because it is said to help create strong communities and build family wealth. But it would be a mistake to continue with this approach now. Homeowners receive tax benefits for their housing expenses, mostly because of the enormously expensive mortgage interest deductions, which disproportionately benefits higher-income taxpayers. But no such support is offered to lower-income renters. The government should consider introducing housing tax credits or other tax benefits that would help those who are struggling to pay the rent. The federal government should also consider providing tax subsidies for land trusts or shared equity plans that help renters become homeowners but share the home’s appreciation with a third-party.

The old have policies have failed; we need to try a new approach. Though housing policies succeeded in encouraging renters to buy homes until the 1990s, homeownership has now become unaffordable for lower- and middle-income Americans largely because they do not have savings, and they have unstable and stagnated income – which has changed little (adjusted for inflation) since 1995. Because housing sales have been sluggish since the 2007-2009 recession, the US government has repeatedly tried to get people to buy houses, and keep existing homeowners in their houses. Yet programs like Hope for Homeowners program, the Home Affordable Modification Program and the Home Affordable Refinance Program all failed to achieve their goals of preventing owners from losing their homes, largely because of design flaws.

The homeownership problem is particularly acute in young adults, who entered the labor market at the time of the recession. Overall unemployment rates in 2007 were only 4.6%, but then soared to 9.3% by 2009. The jobs that have been created since the recession ended have mostly come from the low-wage retail, service and food/beverage sectors, making it harder even for young adults who have jobs to save money for a down payment – or even to pay rent. Student debt, which has skyrocketed, isn’t helping: average student loan balances increased by 91% from 2003 to 2012.

Read more …

Sounds sort of smart, but most debt is with the shadow banks, and that remains open.

China’s Solution to $3 Trillion Debt Is to Deal with It Later (Bloomberg)

China’s government has a creative solution to address repayment concerns hanging over more than $3 trillion in regional debt. It will deal with it later. The Finance Ministry issued a 1 trillion yuan ($160 billion) quota for local governments to convert maturing high-cost debt into lower-yielding municipal notes to be repaid at a future date on March 8. Questions left unanswered include whether investors will be forced into the swap, how much transparency there will be over assets involved and whether the liabilities will strain the nation’s finances. China’s bond risk rose the most in a month on March 9 even as debt-rating companies welcomed the government’s plan to address regional debt, which Mizuho estimates may have reached 25 trillion yuan, bigger than Germany’s economy.

The ministry’s 500 billion yuan municipal bond trial and the auction of 100 billion yuan of special bonds is insufficient to meet local-government financing vehicle debt due this year while funding budgets, Moody’s Investors Service said. “It will buy time for the government to solve the local debt problem, as the transition period takes three to five years,” said Ivan Chung, a senior vice president at Moody’s in Hong Kong. “The 1 trillion yuan debt-swap plan will be able to cover the refinancing needs of the maturing bonds this year, as municipal bond issuance is not enough.” The government is seeking to rein in local-government borrowing while accelerating infrastructure spending to defend a 7% economic growth target. Regional authorities set up thousands of funding units to finance projects from sewage systems to subways after a 1994 budget law barred them from issuing notes directly. Their fundraising helped liabilities jump 67% from the end of 2010 to 17.9 trillion yuan as of June 2013.

Read more …

“That doesn’t jump out at me as a significant enough change.”

Yellen Meets Senate Bank Chief With Fed Transparency in Focus (Bloomberg)

Federal Reserve Chair Janet Yellen reached out on Tuesday to Republicans who want to shake up the central bank, meeting with the powerful head of the Senate Banking Committee who has called for more accountability from the Fed. Yellen declined to comment after her 25 minute-long meeting with Alabama Republican Richard Shelby at his offices in Washington. Shelby earlier told reporters that “what we are doing is trying to figure out exactly what we need to do legislatively to make the Fed more accountable to the people and to do a better job as a regulator.” Lawmakers from both parties have voiced concerns about the central bank and are narrowing their focus to the New York Fed, which is the target of proposals to either make its president subject to Senate confirmation or dilute its policy powers.

Republicans have complained about the Fed’s aggressive monetary policies and what they consider regulatory overreach. Democrats have accused the Fed of failing to police the largest banks to prevent the kind of excessive risk-taking that contributed to the financial crisis of 2008. Shelby previously said he’s looking “very strongly” at a proposal from Dallas Fed President Richard Fisher, who is retiring next week, that would strip the New York Fed of its permanent vote on the policy-making Federal Open Market Committee.

Fisher’s staff has already responded to questions about his proposal from Shelby’s aides. Sherrod Brown, the senior Democrat on the Senate banking panel, said on Tuesday he favors a plan to make the president of the New York Fed a presidential appointment requiring Senate approval, like members of the Fed’s Washington-based Board of Governors. “The way we have the Fed structure, banks have so much influence over their regulator,” Brown, from Ohio, told reporters. “I don’t know if it should go any further than the New York Fed but it makes a lot of sense that the New York Fed be selected by the president and be confirmed.” While saying he would like to look more closely at the Fisher proposal, Brown said, “That doesn’t jump out at me as a significant enough change.”

Read more …

You can call it the Silly Empire, but that seems to ignore that chaos is the goal, rather than the means.

Chaos: Practice and Applications (Dmitry Orlov)

The term “chaos” has been popping up a lot lately in the increasingly collapse-prone world in which we find ourselves. Pepe Escobar has even published a book on it. Titled Empire of Chaos, it describes a scenario “where a[n American] plutocracy progressively projects its own internal disintegration upon the whole world.” Escobar’s chaos is tailor-made; its purpose is “to prevent an economic integration of Eurasia that would leave the U.S. a non-hegemon, or worse still, an outsider.” Escobar is not the only one thinking along these lines; here is Vladimir Putin speaking at the Valdai Conference in 2014:

A unilateral diktat and imposing one’s own models produces the opposite result. Instead of settling conflicts it leads to their escalation, instead of sovereign and stable states we see the growing spread of chaos, and instead of democracy there is support for a very dubious public ranging from open neo-fascists to Islamic radicals.

Why do they support such people? They do this because they decide to use them as instruments along the way in achieving their goals but then burn their fingers and recoil. I never cease to be amazed by the way that our partners just keep stepping on the same rake, as we say here in Russia, that is to say, make the same mistake over and over.

Indeed, Escobar’s chaos doesn’t seem to be working too well. Eurasian integration is very much on track, with China and Russia now acting as an economic, military and political unit, and with other Eurasian states eager to play a role. The European Union is, for the moment, being excluded from Eurasia because it is effectively under American occupation, but this state of affairs is unlikely to last due to budgetary problems. (To be precise, we have to say that it is under NATO occupation, but if we dig just a little, we find that NATO is really just the US military with a European façade hammered onto it Potemkin village-style.)

And so the term “empire” seems rather misplaced. Empires are ambitious undertakings that seek to exert control over their domain, and what sort of an empire is it if its main activity is stepping on the same rake over and over again? A silly one? Then why not just call it “The Silly Empire”? Indeed, there are lots of fun silly imperial activities to choose from. For example: arm and train moderate opposition to a regime you want to overthrow; find out that it isn’t moderate at all; try to bomb them into submission and fail at that too.

Read more …

Russia won’t stand for it.

‘We’ll Buy Reverse Gas Supplies At $245’- Ukraine’s President (RT)

Ukraine will pay $245 per thousand cubic meters for the gas it will get through reverse flow from Europe as the country diversifies its natural gas suppliers away from Russia, President Petro Poroshenko has said. Ukraine has significantly reduced its energy dependence on Russia, and will buy Russian gas through reverse flows from Europe at $245 per 1,000 cubic meters, Ukrainian President Petro Poroshenko said in a TV interview Monday. “We have lived through the winter; we bought only 2 billion cubic meters of gas with the last purchase at a price of less than $300 per 1,000 cubic meter. As a result, it all came down to the Russian Federation having had to apply for a pumping volume increase of 68%, which crashed the gas market. And today we will buy gas for $245 under reverse deliveries,” Poroshenko said.

Ukraine has increased the amount of gas collecting in its underground storage facilities to 23 million cubic meters per day compared with 8 million cubic meters in February, according to the data provided by the GSE association on Tuesday. Currently the country is accepting 10 million cubic meters of Russian gas daily at a price of $329 per 1,000 cubic meters. Ukraine claims it pays 15% more for Russian gas than Europe. Ukraine currently receives reverse deliveries of natural gas from Slovakia, Hungary and Poland. Gas supplies from Hungary have been reduced by Ukraine and stand at 715,000 cubic meters a day from March 7, which is almost 5 times lower than in February, according to reports from the TASS news agency. Capacity from Slovakia remains at 37.7 million cubic meters a day. Poland can deliver up to 717, 000 cubic meters a day compared with 840,000 cubic meters in February. Last week Ukraine imported 330 million of cubic meters of natural gas from Europe, and 81 million cubic meters from Russia.

Read more …

Send her home and keep her there.

US Applies Pressure to States Opposing Anti-Russian Sanctions: Nuland (Sputnik)

The United States government is applying pressure to European countries that oppose sanctions against Russia, US Assistant Secretary of State for European Affairs Victoria Nuland said at a US Senate hearing on Tuesday. “We continue to talk to them bilaterally about these issues,” Nuland said of Hungary, Greece, and Cyprus, whose leaders have opposed anti-Russian sanctions. “I will make another trip out to some of those countries in the coming days and weeks.” Nuland noted that “despite some publically stated concerns, those countries have supported sanctions” in the European Union Council. Additionally, discussions between the United States and Europe have continued, Nuland said in her opening statements to the US Senate Foreign Affairs Committee.

“We have already begun consultations with our European partners on further sanctions pressure should Russia continue fueling the fire in the east or other parts of Ukraine, fail to implement Minsk or grab more land,” she said. The United States, the European Union and their allies blame Russia for fueling the internal conflict in Ukraine and have imposed a series of sanctions against Russia targeting its defense, banking, and energy sectors. Russia has repeatedly denied the allegations and responded with targeted export bans. Some European nations including Greece, Hungary and Cyprus, have opposed further sanctions, and Spain has recently stated its opposition as well.

Read more …

Obviously.

It’s NATO That’s Empire-Building, Not Putin (Peter Hitchens)

Just for once, let us try this argument with an open mind, employing arithmetic and geography and going easy on the adjectives. Two great land powers face each other. One of these powers, Russia, has given up control over 700,000 square miles of valuable territory. The other, the European Union, has gained control over 400,000 of those square miles. Which of these powers is expanding? There remain 300,000 neutral square miles between the two, mostly in Ukraine. From Moscow’s point of view, this is already a grievous, irretrievable loss. As Zbigniew Brzezinski, one of the canniest of the old Cold Warriors, wrote back in 1997, ‘Ukraine… is a geopolitical pivot because its very existence as an independent country helps to transform Russia. Without Ukraine, Russia ceases to be a Eurasian empire.’

This diminished Russia feels the spread of the EU and its armed wing, Nato, like a blow on an unhealed bruise. In February 2007, for instance, Vladimir Putin asked sulkily, ‘Against whom is this expansion intended?’ I have never heard a clear answer to that question. The USSR, which Nato was founded to fight, expired in August 1991. So what is Nato’s purpose now? Why does it even still exist? There is no obvious need for an adversarial system in post-Soviet Europe. Even if Russia wanted to reconquer its lost empire, as some believe (a belief for which there is no serious evidence), it is too weak and too poor to do this. So why not invite Russia to join the great western alliances?

Alas, it is obvious to everyone, but never stated, that Russia cannot ever join either Nato or the EU, for if it did so it would unbalance them both by its sheer size. There are many possible ways of dealing with this. One would be an adult recognition of the limits of human power, combined with an understanding of Russia’s repeated experience of invasions and its lack of defensible borders.

Read more …

Mar 082015
 
 March 8, 2015  Posted by at 1:21 pm Finance Tagged with: , , , , , , , , ,  


DPC Sternwheeler Falls City, the levee, Vicksburg, Mississippi 1900

Austria Is Fast Becoming Europe’s Latest Debt Nightmare (Telegraph)
Tsipras: ‘We Don’t Want to Go on Borrowing Forever’ (Spiegel)
Eurogroup To Consider Greek Reform Proposals Amid Scramble For Funding (Kath.)
The ECB’s Lunatic Full Monty Treatment (Tenebrarum)
7 Things To Know About The ECB’s QE Game Plan (MarketWatch)
30 Years Of A Polarised Economy Have Squeezed Out The Middle Class (Observer)
Foreign Banks Tighten Lending Rules For China State-Backed Firms (Reuters)
China’s February Exports Surge 48.3% (CNBC)
Azerbaijan Should Be Very Afraid of Victoria Nuland (GR)
EU Won’t Be Pushed Into Confrontation Over Ukraine – Foreign Policy Chief (RT)
Why Do Russians Still Support Vladimir Putin? (New Statesman)
The Dark Undercurrents Of The War In The Ukraine (Saker)
‘Give Peace A Chance, Decide Sanctions Later’: EU Rethinks Russia (RT)
Layoffs And Empty Streets As Australia’s Boom Towns Go Bust (Reuters)
Venezuela To Get South American Help For Food Crisis (BBC)
Why Fresh Water Shortages Will Cause The Next Great Global Crisis (Guardian)
The Francis Miracle: Inside The Transformation Of The Pope And The Church (TIME)

The hills are alive with the sound of too little money.

Austria Is Fast Becoming Europe’s Latest Debt Nightmare (Telegraph)

Ah Austria, land of schnitzel, lederhosen, Mozart, alpine meadows and beer drinking. Less widely appreciated is its special place in the history of catastrophic banking crises. It was the failure of Creditanstalt, a Viennese bank founded in 1855 by Anselm von Rothschild, that arguably sparked the Great Depression, setting off an unstoppable chain reaction of bankruptcies throughout Europe and America. No-one would think that what happened last week at Austria’s failed Hypo Alpe-Adria Bank International falls into quite the same category; we are meant to be in the recovery phase of the latest global banking crisis, so this is more about re-setting the system than again bringing it to its knees, right? Well, make up your own mind. I suspect neither financial markets nor policymakers have yet caught onto the full significance of the latest turn of events.

In a nutshell, the Austrian government has had enough of funding the bank’s losses, and announced plans to “bail-in” external creditors to the tune of €7.6bn instead. As such, this marks a test case of new European rules to make creditors pay for failing banks. About time too, you might say. What took them so long? Only in this case, the bonds are notionally guaranteed by the Austrian state of Carinthia, which now theoretically becomes liable for the bail-in. It’s an echo of the mess Ireland got itself into at the height of the banking crisis, when it foolishly attempted to stem the panic by underwriting all Irish banking liabilities; the move very nearly ended up bankrupting the entire country. Hypo will bankrupt Carinthia. Essentially, what the Austrian government is doing is cutting loose an entire region, rather in the way the federal authorities in the US allowed Detroit to go bust a number of years ago.

It’s a mini-Greece going off in the heartlands of Europe. In Hypo’s case, the bail-in also threatens knock-on consequences for public bodies elsewhere, including Bayern Landesbank, a big holder of Hypo bonds which is owned by the German state of Bavaria, and the Munich based FMSW, which is again publicly underwritten. All this is just the tip of the iceberg; Europe is awash with interlinked banking and public liabilities, many of which will never be repaid and basically need to be written off. Massive creditor losses are in prospect. The European authorities had us all half convinced that Europe’s debt crisis was over. In truth, it may have barely begun.

Read more …

Good interview. Read.

Tsipras: ‘We Don’t Want to Go on Borrowing Forever’ (Spiegel)

SPIEGEL: Mr. Prime Minister, most of your European partners are indignant. They accuse you of saying one thing in Brussels and then saying something completely different back home in Athens. Do you understand where such accusations come from?
Tsipras: We say the same things in Germany as we do in Greece. But sometimes, problems can be viewed differently, depending on the perspective. (He points to his water glass.) This glass here can be described as being half full or half empty. The reality is that it is a glass filled half-way with water.

SPIEGEL: In Brussels, you have given up your demands for a debt haircut. But back home in Athens, you continue talking about a haircut. What does that have to do with perspective?
Tsipras: At the summit meeting, I used the language of reality. I said: Prior to the bailout program, Greece had a sovereign debt that was 129% of its economic output. Now, it is 176%. No matter how you look at that, it’s not possible to service that debt. But there are different ways to solve this problem: via a debt cut, debt restructuring or bonds whose payback is tied to growth. The most important thing, though, is solving the true problem: the austerity which has driven debt way up.

SPIEGEL: Are you a linguist or a politician? You told the Greeks that you got rid of the troika and sold it as a victory. But the European Commission, the International Monetary Fund (IMF) and the European Central Bank (ECB) are still monitoring your reforms. Now, they are simply called “the institutions.”
Tsipras: No, it isn’t a question of terminology. It has to do with the core of the issue. Every country in Europe has to work together with these institutions. But that is something very different than a troika that is beholden to nobody. Its officials came to Greece to strictly monitor us. Now, we are again speaking directly with the institutions. Europe has become more democratic because of this change.

SPIEGEL: What change? You still have to submit your reform plans to three “institutions” for approval.
Tsipras: The reforms won’t be approved by the institutions. They have a say in the process and establish a framework that applies to all in Europe. Previously, the situation was such that the troika would send an email telling the Greek government what it had to do. Our planned reforms are necessary, but we are deciding on them ourselves. They aren’t being forced onto us by anyone. We want to stop large-scale tax evasion and tax fraud more than anybody. Thus far, it has only been the low earners and not the wealthy that paid. We also want to make the state more efficient.

Read more …

Lots of emptiness.

Eurogroup To Consider Greek Reform Proposals Amid Scramble For Funding (Kath.)

Greece faces another tough Eurogroup summit Monday when a slew of reform proposals from Athens are to come under the microscope in Brussels, with the two sides apparently far from a compromise even as state coffers in Athens are close to emptying. Finance Minister Yanis Varoufakis is expected to face a barrage of questions from his eurozone counterparts on a series of proposals set out in an 11-page letter he sent to Eurogroup President Jeroen Dijsselbloem, which include the creation of a so-called fiscal council to generate budget savings, the revision of licensing for gaming and lotteries and the hiring of non-professionals, including students and tourists, as tax agents to help a foundering crackdown on tax evasion.

Sources suggested over the weekend that the proposals had met with skepticism from eurozone officials. In comments on Saturday on the sidelines of a conference in Venice, Varoufakis said he had received a response from Dijsselbloem. He added that Greece was keen to move forward with reforms but that the two sides must agree on “the process by which the reforms will be made more specific, implemented and evaluated so that they can be reviewed by the Eurogroup.” Varoufakis added that Greece’s reform program would be “discussed by technical teams that will convene shortly in Brussels.” Some eurozone officials appeared to be running out of patience. ECB governing council member Luc Coene said in an interview on Saturday that Greece must realize “there is no other way than to reform,” noting that Greeks had been sold “false promises.”

Read more …

“Perhaps the cupboards of the monetary bureaucrats are short a few plates and in need of a little pharmacological fine-tuning. Just saying.”

The ECB’s Lunatic Full Monty Treatment (Tenebrarum)

The belief that the market economy requires “steering” by altruistic central bankers, who make decisions influencing the entire economy based on their personal epiphanies, has rarely been more pronounced than today. Most probably it has actually never been stronger. It is both highly amusing and disconcerting that so many economists who would probably almost to a man agree that it would be a very bad idea if the government were to e.g. take over the computer industry and begin designing PCs and smart phones by committee, think that government bureaucrats should determine the height of interest rates and the size of the money supply.

We know of course that central banks are the major income source for many of today’s macro-economists, so it is in their own interest not to make any impolitic noises about these central planning institutions and their activities. Besides, most Western economists have not exactly covered themselves with glory back when the old Soviet Union still existed. Even in the late 1980s, Über-Keynesian Alan Blinder for instance still remarked that the question was not whether we should follow its example and adopt socialism, but rather how much of it we should adopt. The recent ECB announcement detailing its new “QE” program once again confirms though that there is nothing even remotely “scientific” about what these planners are doing. Common sense doesn’t seem to play any discernible role either. [..]

Leaving for the moment aside how sensible it is for the bond yields of virtually insolvent governments mired in “debt trap” dynamics to trade at less than 1.3%, one must wonder: what can possibly be gained by pushing them even lower? Does this make any sense whatsoever? Meanwhile, the ECB let it be known that it wouldn’t buy any bonds with a negative yield-to-maturity exceeding 20 basis points – the level its negative deposit rate currently inhabits as well. What a relief! What makes just as little sense is that the economic outlook presented by Mr. Draghi on occasion of his press conference was actually quite upbeat. To summarize: yields are at record lows, with about €2 trillion in European government bonds sporting negative yields to maturity. The economic outlook is said to be good.

The current slightly negative HICP rate is held to be a transitory phenomenon (it very likely will be). Needless to say, the arbitrary 2% target for “price inflation” makes absolutely no sense anyway. Not a single iota of wealth can be created by pushing prices up. Last but certainly not least, year-on-year money supply growth in the euro area has soared into double digits recently. And the conclusion from all this is that the central bank needs to boost its balance sheet by €1 trillion with a massive debt monetization program? Are these people on drugs? If not, then they should perhaps see a shrink. Perhaps the cupboards of the monetary bureaucrats are short a few plates and in need of a little pharmacological fine-tuning. Just saying.

Read more …

It’s no longer useful to view this from an investor point of view.

7 Things To Know About The ECB’s QE Game Plan (MarketWatch)

After years of discussion, months of urgent calls and weeks of preparation, the European Central Bank is about to write history—on Monday it will kick of its €1.1 trillion-euro, quantitative-easing program. Unlike its U.S., U.K. and Japanese central-bank peers, the ECB never resorted to sovereign QE at the height of the global financial crisis. Instead, it’s attempted an array of other extraordinary policy measures, including a negative deposit rate, programs to provide cheap funding to eurozone banks, and a less-powerful bond-buying program, often called “private QE,” focused on purchasing asset-backed securities and covered bonds. Now, as investors prepare for the launch of full-blown QE on March 9, here’s what we know about the program so far.

What’s the aim of the QE? Under quantitative easing, a central bank creates money electronically, which it then uses to buy securities, such as government bonds, from banks and other institutions. It’s hoped that these institutions will then use the new bank reserves to buy other assets, lowering interest rates and encouraging spending. The ECB hopes QE will revive growth and inflation in the eurozone. Despite repeated attempts to spur an economic recovery, the currency bloc is still grappling with painfully high unemployment, slow growth and negative inflation among its members.

Will the ECB buy government bonds with negative yields?Yes, but nothing that carries a yield below the ECB’s own deposit rate, which currently stands at negative 0.2%. The limit means that bonds currently yielding more than the deposit rate have room to fall further. Even before the big QE bazooka has been fired, yields for most eurozone countries have tanked. For Germany, France, Austria, Belgium, Holland and Finland borrowing costs for shorter-dated debt are now negative, meaning that bondholders essentially agree to pay issuers to hold their debt.

What will QE do to bond yields? Initially, sovereign QE and lower bond yields should march together hand in hand. As the ECB buys large quantities of government debt, bond prices should go up, which will send yields lower. On Friday, borrowing costs for Italy, Spain and Portugal dropped to record lows in anticipation of QE takeoff. However, big moves in the bond markets show much of the impact may have already been priced in. Longer-term, as the QE liquidity injection begins to work on the eurozone economy, and likely boost inflation and growth, bond yields should start to rise to reflect the stronger economy. The latest eurozone data indicate that the region may be turning a corner, leaving room for higher borrowing costs.

Read more …

London is a wasteland. It may be rich, but it’s still a wasteland. No there there.

30 Years Of A Polarised Economy Have Squeezed Out The Middle Class (Observer)

London has always been a city of extremes but the extent to which it has become polarised between rich and poor is laid bare in research that reveals a 43% decrease in middle-income households between 1980 and 2010. England is increasingly divided between the rich and the poor, with a 60% increase in poor households and a 33% increase in wealthy households. This has come at a time – 1980 to 2010 – when the number of middle-income households went down by 27%. But the trend is most marked in London, according to an analysis of census data by Benjamin Hennig and Danny Dorling of the School of Geography and the Environment at the University of Oxford.

Over the three decades, the capital has seen an 80% increase in poor households, an 80% increase in wealthy households – and a 43% decrease in middle households. Around 36% of London households are now classified as poor (up from 20% in 1980), while 37% are middle income (down from 65%). The largest%age point fall in households in the middle has been in Westminster, which saw its middle reduce from nearly three-quarters of all households to just one-third. The largest%age-point increase in wealthy households has been in Richmond-upon-Thames, where more than half of households are now wealthy, compared with a fifth in 1980. In contrast, in Newham, almost one in two households is now poor.

The researchers have drawn up maps of England according to wealth, described by Dorling as “fancy pie charts”. The polarising of wealth has been exacerbated in recent years, with economic growth having been slower than had been hoped, and wages in the middle failing to rise in parallel with the recovery. The economic divide between the beneficiaries of the property bubble and non-homeowners also continues to widen in the country as a whole, with upward pressure on land values. Dorling said: “This analysis shows that England is becoming more polarised, with an increase in households that are poor and those that are wealthy. The number of households in poverty has jumped by 60% since 1980, meaning that now almost three in 10 are poor.

Read more …

So more PBOC QE too?

Foreign Banks Tighten Lending Rules For China State-Backed Firms (Reuters)

Some banks are adopting stricter lending criteria for China’s state-owned enterprises (SOEs), demanding collateral from some companies they used to deem as safe as government debt, as Beijing tries to reform its bloated firms and the economy slows. Singapore’s DBS Group, which recently suffered a loss on a bad loan to an SOE-related firm it had assessed as risk-free, plans to launch a “decision grid” to assess the creditworthiness of SOEs, according to draft internal risk guidelines reviewed by Reuters. A banker at Taiwan’s Chang Hwa Commercial Bank said that from the beginning of this year his bank would only lend to state-owned Chinese companies that provide collateral, in recognition that SOEs were no longer risk free.

Such changes in policy suggest some foreign banks are preparing for a rise in defaults in the world’s second-largest economy, which is growing at its slowest pace in a quarter of a century and where the government is trying to make the state sector more efficient.
DBS will now lend more conservatively to SOEs seen as receiving less government support, as China plans to prioritize SOEs in strategic sectors. The January-dated DBS document said: “Not all SOEs receive the same degree of government support. It is our further belief that the differentiation of such support will widen in the future as the government continues to pursue market economy.” DBS will now divide SOEs into tiers according to their likely level of government support, with subsidiaries considered more risky than top-level holding companies.

Group companies that are not consolidated into the parent SOE’s financial statements will be evaluated as an ordinary borrower, the decision grid shows. DBS effectively acknowledges that lenders can no longer take for granted implicit support from above. “Compared to ordinary corporates, implicit support obtained from the parents of SOEs are subject to higher risks because of the risk of policy and people changes,” the document said. A DBS spokeswoman said: “It is still business as usual for us in China. With slower regional economic growth, we continue to be disciplined and watchful of risks in all the markets we operate in..”

Read more …

C’mon, admit it, you were due for a good laugh.

China’s February Exports Surge 48.3% (CNBC)

China’s exports surged 48.3% on year in February, sharply above analysts’ forecasts, potentially signaling stronger economic growth for its trade partners. Imports fell 20.5% for the period, according to data from China’s customs department. A Reuters poll had forecast exports would rise 14.2% and imports would fall 10%. For January and February combined – a common metric to help smoothe distortions from the Lunar New Year holiday period – exports rose 15% from a year earlier, while imports declined 20.2%. “The demand from the advanced economies bodes well,” ANZ said in a note Sunday, citing data showing shipments to the U.S. and European Union rose 40.3% and 36.6% on-year respectively.

But the bank noted that the jump in exports could be due to a base effect. “The February 2014 figures were extremely low as Chinese authorities cracked down the round-tripping trade flows,” it said. “We still see strong headwinds facing China’s exports this year,” ANZ said, citing weak export order PMI data. ANZ attributed the decline in imports to weak commodity demand compounded by sharp drops in commodity prices, citing as an example the 45.4% on year drop in the value of iron-ore imports, although the iron-ore import volume only fell 0.9%. As well, “Chinese commercial banks have significantly tightened the trade financing facilities for commodity traders,” ANZ said.

Read more …

“..it is not likely that she came to Baku with positive intentions, or even with a positive image of the country in her mind.”

Azerbaijan Should Be Very Afraid of Victoria Nuland (GR)

The US’ Assistant Secretary of State for European and Eurasian Affairs, Victoria Nuland, visited Baku on 16 February as part of her trip to the Caucasus, which also saw her paying stops in Georgia and Armenia. While Azerbaijan has had positive relations with the US since independence, they’ve lately been complicated by Washington’s ‘pro-democracy’ rhetoric and subversive actions in the country. Nuland’s visit, despite her warm words of friendship, must be look at with maximum suspicion, since it’s not known what larger ulterior motives she represents on behalf of the US government. [..]

Given the ideological context in which Nuland likely sees eye-to-eye on with her husband, plus her experience in instigating the Color Revolution in Ukraine, it is not likely that she came to Baku with positive intentions, or even with a positive image of the country in her mind. This is all the more so due to the recent scandal over Radio Free Europe/Radio Liberty. The US-government-sponsored information agency was closed down at the end of December under accusations that it was operating as a foreign agent. While the US has harshly chided the Azeri government for this, at the end of the day, it remains the country’s sovereign decision and right to handle suspected foreign agents as it sees fit. Azerbaijan’s law is similar to Russia’s, in that entities receiving foreign funds must register as foreign agents, and interestingly enough, both of these laws parallel the US’ own 1938 Foreign Agents Registration Act (FARA).

So why does the US feel that it reserves the sole right to register foreign agents and entities, and if need be, identify and punish those that are acting in the country illegally, but Azerbaijan is deprived of this exercise of sovereignty? The reason is rather simple, actually – it’s the US that is the most likely to use these foreign agents to destabilize and potentially overthrow governments (as in Ukraine most recently), whereas Azeri agents in America, should they even exist, are nothing more than an administrative nuisance incapable of inflicting any real harm on the authorities. This double standard is at the core of the US’ relations with all countries in the world, not just Azerbaijan, but it’s a telling example of the power and leverage Washington attempts to hold over Baku, which is seen most visibly by the blistering criticism leveled on the government after Radio Free Europe/Radio Liberty’s closing in compliance with the law.

Read more …

Too little too late. Fait accompli.

EU Won’t Be Pushed Into Confrontation Over Ukraine – Foreign Policy Chief (RT)

The EU is resisting calls from hotheads to supply arms to Ukraine, saying it won’t be pulled into a confrontation with Russia. Europeans cite the progress in implementing a ceasefire in eastern Ukraine between Kiev and local rebels. The idea of providing lethal aid to Kiev is popular among many NATO officials and American politicians. US House Speaker John Boehner and a bipartisan group of top lawmakers called on President Barack Obama to deliver the weapons. But Europeans are opposing the move, which would likely escalate tensions with Russia. “The European Union today is extremely realistic about developments in Russia. But we will never be trapped or forced or pushed or pulled into a confrontative [sic] attitude,” the EU’s Foreign Policy Chief Federica Mogherini told the media on Friday, following an informal meeting of EU foreign ministers in Riga, Latvia.

“We still believe that around our continent – not only in but around – cooperation is far better than confrontation. We still argue for that,” she added. Austrian Foreign Minister Sebastian Kurz said the EU’s goal in Ukraine is “a ceasefire, not an escalation.” Germany has been among the most vocal critics of sending arms to Ukraine and now German officials question the assessment of the situation in the country voiced by Kiev armament pundits. “The statements [on Ukraine] from our source do not fully coincide with the statements made by NATO and the US,” German FM Frank-Walter Steinmeier said after the conference. “We are interested in not allowing it to grow into a misunderstanding.” The German Spiegel magazine reported on Saturday that Chancellor Angela Merkel’s government suspects the US and NATO of trying to derail the EU’s mediation effort in Ukraine.

The Minsk ceasefire agreement between Kiev and rebels in eastern Ukraine was brokered last month by Germany, France and Russia. So far, it’s mostly holding, with both parties pulling some of their heavy weapons back from the front line, and OSCE monitors reporting a significant reduction in violence. The EU says it wants to increase the number of OSCE observers on the ground, doubling its current ceiling of 500. “The main point is obviously working to increase the number of selected and skilled people that can do the job,” Mogherini said. The more observers the tougher it would be to violate the conditions of the Minsk agreement with impunity. Kiev and its foreign backers, particularly in Washington, accuse Russia of propping up the rebel forces with weapons and troops. Moscow insists that it has no involvement in the armed conflict and has only delivered humanitarian aid to the ravaged areas.

Read more …

“86% of the respondents approve of Vladimir Putin as Russia’s president. When asked to name five or six politicians or government officials they trust, 59% responded: ”Putin”.”

Why Do Russians Still Support Vladimir Putin? (New Statesman)

The news of the assassination of Boris Nemtsov, a Russian opposition politician, dominated the news this weekend. It was possible to imagine – just for a day or two – that the charismatic Boris Nemtsov, who first entered the national political arena in Russia back in the Yeltsin days, had been a prominent figure without whom the opposition would struggle to have a say against Kremlin. Unfortunately, the truth is that Nemtsov was hardly a force to be reckoned with. However open his position on Putin was and however brave his last interview to the Moscow radio station Echo Moskvy was, just hours before his death, Boris Nemtsov was not important. Like any other opposition leader in Russia, he was a scribble on the margin of current affairs. The overwhelming majority of the Russian population supports the country’s president, Vladimir Putin.

A recent poll, conducted between 20-23 February 2015 among 1,600 Russians aged 18 or more in 46 different regions of Russia by an independent Russian not-for-profit market research agency Levada Centre for Echo Moskvy radio station, found that 54% of the population agreed that “[Russia] is moving in the right direction”. 86% of the respondents approve of Vladimir Putin as Russia’s president. When asked to name five or six politicians or government officials they trust, 59% responded: ”Putin”.

Let’s put aside the possibility of rigged polls because there is little to suggest Putin’s popularity is fake. Putin is respected, if not revered. He is referred to as batyushka, the holy father. Many Russians are particularly upset and angry about Nemtsov’s murder because western fingers are pointing at Putin. In their opinion, Nemtsov was most likely killed as a provocation to destabilise Russia and fuel hostility between Kremlin and the west. “With all due respect to the memory of Boris Nemtsov, in political terms he did not pose any threat to the current Russian leadership or Vladimir Putin, said presidential press secretary Dmitriy Peskov. “If we compare popularity levels, Putin’s and the government’s ratings and so on, in general Boris Nemtsov was just a little bit more than an average citizen.”

Read more …

Who’s “our son of a bitch“?

The Dark Undercurrents Of The War In The Ukraine (Saker)

The situation in the Ukraine is more or less calm right now, and this might be the time to step back from the flow of daily reports and look at the deeper, underlying currents. The question I want to raise today is one I will readily admit not having an answer to. What I want to ask is this: could it be that one of the key factors motivating the West’s apparently illogical and self-defeating desire to constantly confront Russia is simply revanchism for WWII? We are, of course, talking about perceptions here so it is hard to establish anything for sure, but I wonder if the Stalin’s victory against Hitler was really perceived as such by the western elites, or if it was perceived as a victory against somebody FDR could also have called “our son of a bitch“. After all, there is plenty of evidence that both the US and the UK were key backers of Hitler’s rise to power (read Starikov about that) and that most (continental) Europeans were rather sympathetic to Herr Hitler.

Then, of course and as it often happens, Hitler turned against his masters or, at least, his supporters, and they had to fight against him. But there is strictly nothing new about that. This is also what happened with Saddam, Noriega, Gaddafi, al-Qaeda and so many other “bad guy” who began their careers as the AngloZionists’ “good guys”. Is it that unreasonable to ask whether the western elites were truly happy when the USSR beat Nazi Germany, or if they were rather horrified by what Stalin had done to what was at that time the single most powerful western military – Germany’s? [..] for the western elites, [..] they must have known that their entire war effort was, at most, 20% of what it took to defeat Nazi Germany and that those who had shouldered 80%+ were of an ideology diametrically opposed to capitalism. Is there any evidence of that fear? I think there is and I already mentioned them in the past:

Plan Totality (1945): earmarked 20 Soviet cities for obliteration in a first strike: Moscow, Gorki, Kuybyshev, Sverdlovsk, Novosibirsk, Omsk, Saratov, Kazan, Leningrad, Baku, Tashkent, Chelyabinsk, Nizhny Tagil, Magnitogorsk, Molotov, Tbilisi, Stalinsk, Grozny, Irkutsk, and Yaroslavl.

Operation Unthinkable (1945) assumed a surprise attack by up to 47 British and American divisions in the area of Dresden, in the middle of Soviet lines.This represented almost a half of roughly 100 divisions (ca. 2.5 million men) available to the British, American and Canadian headquarters at that time. (…) The majority of any offensive operation would have been undertaken by American and British forces, as well as Polish forces and up to 100,000 German Wehrmacht soldiers.

Operation Dropshot (1949): included mission profiles that would have used 300 nuclear bombs and 29,000 high-explosive bombs on 200 targets in 100 cities and towns to wipe out 85% of the Soviet Union’s industrial potential at a single stroke. Between 75 and 100 of the 300 nuclear weapons were targeted to destroy Soviet combat aircraft on the ground.

But the biggest proof is, I think, the fact that none of these plans was executed, even though at the time the Anglosphere was safely hidden behind its monopoly on nuclear weapons (and have Hiroshima and Nagasaki not been destroyed in part to “scare the Russians”?). And is it not true that the Anglos did engage in secret negotiations with Hitler’s envoys on several occasions? (The notion of uniting forces against the “Soviet threat” was in fact contemplated by both Nazi and Anglo officials, but they did not find a way to make that happen.) So could it be that Hitler was, really, their “son of a bitch”?

Read more …

“We support sanctions that bring the other side to the negotiation table.. But we are against sanctions that are imposed simply because someone is angry.”

‘Give Peace A Chance, Decide Sanctions Later’: EU Rethinks Russia (RT)

The latest EU meeting has shown that many of its members are in no rush to extend the sanctions which were imposed on Russia last year following a US example, or to exert any more pressure on Moscow, as long as the Minsk ceasefire agreement is holding. Most foreign ministers at the EU two-day meeting in the Latvian capital expressed hopes that the latest Minsk agreement would be a success, and there would be no need to impose further sanctions on Russia. The meeting had a format of an informal discussion, where the ministers touched the topics of the Minsk agreements and the OSCE mission in Ukraine, as well as the possible stepping up of pressure on Russia to “promote peace.”

Scheduled ten days before an official summit in Brussels, the meeting has shown that the EU can’t yet agree even on the automatic extension of existing sanctions – a move that some of the hawkish states have been actively promoting. “In my opinion, we must not make any other steps, we have to give peace a chance. The extension could take place, but only if there is no improvement of the situation,” Spanish FM Jose Manuel Garcia-Margallo said, expressing his views after the meeting , according to Russian news agency RIA Novosti. The Spanish FM is heading to Moscow, during which he will not only discuss the Ukrainian crisis, but will also meet with the Russian Energy minister.

Meanwhile, Italian FM Paolo Gentiloni told reporters the he sees “encouraging signals” on the ground in eastern Ukraine, and so “at the moment we don’t need either new sanctions or automatic renewals.” Austrian Foreign Minister Sebastian Kurz shared the views of his Italian counterpart, saying that there is a “glimpse of hope” following the Minsk agreements: “We should do everything now to improve the situation and decide later whether that improvement really happened and we can reduce the sanctions, or, if we have to, extend them,” Kurz said. Greece has also spoke out against any new sanctions as long as Russia supports the Minsk agreements, with Greek Foreign Minister Nikos Kotzias saying the Greek experience suggests that “not every sanction is constructive” and can succeed. “We support sanctions that bring the other side to the negotiation table,” Kotzias told German ARD. “But we are against sanctions that are imposed simply because someone is angry.”

Read more …

Wait! Where have we heard this before? “Owner will throw in a brand new car..” “Just pick your favorite colour.”

Layoffs And Empty Streets As Australia’s Boom Towns Go Bust (Reuters)

When Probo Junio got a visa to work in Australia, he thought he had won a ticket to the good life. In 2013, the 45-year-old boilermaker left his hometown of Cebu in the Philippines, where he was getting paid about $10 a day, to work in Karratha in Western Australia for $30 an hour. Enough to support his relatives and build a new life Down Under. What Junio didn’t expect was that Australia’s booming resources industry would go bust less than two years later, taking his job, and leaving him just 60 days to find work or go home. “It’s very difficult because most of the companies don’t want 457 visa holders,” he said, referring to temporary permits for skilled workers.Across the country, people like Junio are falling victim to downsizing. Jobs, once plentiful and well paid, are scarce.

Real estate prices in boom towns are sinking and even the notoriously high coffee prices in mining capital Perth have levelled off at under $4. Prices of iron ore and coal, the country’s two biggest export earners, have plunged during the last two years amid falling demand from China, in the wake of its economic slowdown. Just a few years ago, foreign workers were flooding into Australia, lured by huge pay as the resources industry scrambled to fill positions. Truck driving and cooking jobs offering $100,000 a year made headlines abroad. But those workers, like Junio, are now hard-pressed to find work, especially if they are on temporary visas. Even permanent residents have to take lower pay. “There is reality coming into the marketplace about salaries,” said John Downing, who runs global resources recruiting firm Downing Teal, adding that salary expectations have fallen 10% to 25%.

“For Lease” signs are everywhere in West Perth, the headquarters of many mining, oil and gas companies. “You could shoot a cannon down those streets,” said resources analyst Peter Strachan. “There’s nobody there.”Commercial vacancy rates in the city are near a 20-year high of 15% as resources companies downsize or shut down, said Joe Lenzo, of the Property Council of Australia. The real estate market has also been hit in the coal country of Queensland, across the continent. “Owner will throw in a brand new car,” read advertisements for houses in the coal-mining town of Moranbah. “Just pick your favorite colour.”

Read more …

There’s something very positive about South America.

Venezuela To Get South American Help For Food Crisis (BBC)

Foreign ministers from 12 South American nations gathering in Caracas have promised to help Venezuela overcome an ongoing shortage of food, medicine and other products. The regional Unasur bloc agreed with President Nicolas Maduro to provide items that have gone missing from many Venezuelan supermarkets. The shortage of staples has contributed to popular discontent. Unasur highlighted the importance of safeguarding democratic stability. “The idea is to get all the countries to support the distribution of staples,” said Ernesto Samper, Secretary-General of Unasur (Union of South American Nations). “We will work together with the Venezuelan authorities to strengthen the distribution networks in our countries so they help Venezuela,” said Mr Samper.

He criticised recent anti-government protests in Venezuela that descended into violence. The opposition must “express its opinions in a democratic, peaceful and lawful manner,” said Mr Samper. The Unasur ministers will meet opposition leaders and government officials in the next few days to seek guarantees that Venezuela will be able to hold free and fair elections later this year. Opposition leader Henrique Capriles told the AFP news agency on Tuesday that Mr Maduro could cancel the vote, which is scheduled for the second half of this year. “The government had never had such a large deficit [in the polls] heading into an election. Now it does. How does it change that? It rigs the game,” said Mr Capriles. Mr Maduro said the elections would go ahead as planned.

Read more …

“For us, water is [now] more important than oil.”

Why Fresh Water Shortages Will Cause The Next Great Global Crisis (Guardian)

Water is the driving force of all nature, Leonardo da Vinci claimed. Unfortunately for our planet, supplies are now running dry – at an alarming rate. The world’s population continues to soar but that rise in numbers has not been matched by an accompanying increase in supplies of fresh water. The consequences are proving to be profound. Across the globe, reports reveal huge areas in crisis today as reservoirs and aquifers dry up. More than a billion individuals – one in seven people on the planet – now lack access to safe drinking water. Last week in the Brazilian city of São Paulo, home to 20 million people, and once known as the City of Drizzle, drought got so bad that residents began drilling through basement floors and car parks to try to reach groundwater.

City officials warned last week that rationing of supplies was likely soon. Citizens might have access to water for only two days a week, they added. In California, officials have revealed that the state has entered its fourth year of drought with January this year becoming the driest since meteorological records began. At the same time, per capita water use has continued to rise. In the Middle East, swaths of countryside have been reduced to desert because of overuse of water. Iran is one of the most severely affected. Heavy overconsumption, coupled with poor rainfall, have ravaged its water resources and devastated its agricultural output. Similarly, the United Arab Emirates is now investing in desalination plants and waste water treatment units because it lacks fresh water.

As crown prince General Sheikh Mohammed bin Zayed al-Nahyan admitted: “For us, water is [now] more important than oil.” The global nature of the crisis is underlined in similar reports from other regions. In south Asia, for example, there have been massive losses of groundwater, which has been pumped up with reckless lack of control over the past decade. About 600 million people live on the 2,000km area that extends from eastern Pakistan, across the hot dry plains of northern India and into Bangladesh, and the land is the most intensely irrigated in the world. Up to 75% of farmers rely on pumped groundwater to water their crops and water use is intensifying – at the same time that satellite images shows supplies are shrinking alarmingly.

Read more …

“I look at . . . so many forests, all cut, that have become land . . . that can [no] longer give life..”

The Francis Miracle: Inside The Transformation Of The Pope And The Church (TIME)

It was probably inevitable that the first pope named Francis—inspired by a saint who preached to birds and gave pet names to the sun and the moon—has turned out to be a strong environmentalist. In fact, Francis has said that concern for the environment is a defining Christian virtue. (The young Jorge Bergoglio trained as a chemist, so he has a foundation to appreciate the scientific issues involved.) This element of the social gospel bubbled to the surface as early as his inaugural mass, when Francis issued a plea to “let us be ‘protectors’ of creation, protectors of God’s plan inscribed in nature, protectors of one another and of the environment.” St. Francis’s imprint on this pope is clearly strong. In unscripted comments during a meeting with the president of Ecuador in April 2013, he said, “Take good care of creation. St. Francis wanted that.

People occasionally forgive, but nature never does. If we don’t take care of the environment, there’s no way of getting around it.” The two previous popes were also environmentalists. The mountain-climbing, kayaking John Paul II was a strong apostle for ecology, once issuing an almost apocalyptic warning that humans “must finally stop before the abyss” and take better care of nature. Benedict XVI’s ecological streak was so strong that he earned a reputation as “the Green Pope” because of his repeated calls for stronger environmental protection, as well as gestures such as installing solar panels atop a Vatican audience hall and signing an agreement to make the Vatican Europe’s first carbon-neutral state. Francis is carrying that tradition forward.

Among other things, he told French President François Hollande during a January 2014 meeting that he is working on an encyclical on the environment. (An encyclical is considered the most developed and authoritative form of papal teaching.) The Vatican has since confirmed that Francis indeed intends to deliver the first encyclical ever devoted entirely to environmental issues. In a July 2014 talk at the Italian university of Molise, Francis described harm to the environment as “one of the greatest challenges of our times.” It’s a challenge, he said, that’s theological as well as political in nature. “I look at . . . so many forests, all cut, that have become land . . . that can [no] longer give life,” the pope continued, citing South American woodlands in particular. “This is our sin, exploiting the Earth. . . . This is one of the greatest challenges of our time: to convert ourselves to a type of development that knows how to respect creation.”

Read more …

Mar 062015
 
 March 6, 2015  Posted by at 12:20 pm Finance Tagged with: , , , , , , ,  


Harris&Ewing War-bond rally on Penn. Avenue, Washington DC 1918

Dollar-Euro Parity A Matter Of When Not If (CNBC)
“Chinese Economic Activity Has Probably Slowed To Less Than 3%” (Zero Hedge)
Mario Draghi’s Yield of Dreams (WSJ)
Greece Seeks To Plug Its ‘Bermuda Triangle’ Of Lost Taxes (AFP)
Draghi Declares Victory for Bond-Buying Before It Starts (Bloomberg)
Nowhere But Down? Euro Reacts To QE (CNBC)
Is Greece Already Rolling Back On Its Pledges? (CNBC)
Wall Street Will Crush Obama’s Plan To Protect 401(k) Savers (Paul B. Farrell)
Storage Dearth May Drive Oil Prices To $30 (MarketWatch)
UK Trade Deal Finances ‘Dirty Energy’ Projects In Mexico (Guardian)
The American Woman Who Stands Between Putin and Ukraine
Victoria Nuland: Russia’s Actions In Ukraine Conflict An ‘Invasion’
‘Nuland Ensconced In Neocon Camp Believes In Noble Lie’ (Ron Paul Inst. at RT)
A Mediterranean Diet Is Even Better For You Than You Thought (Independent)
El Nino Declared As Climate Scientists Watch On With ‘Amazement’ (SMH)

Major shift afoot.

Dollar-Euro Parity A Matter Of When Not If (CNBC)

Parity between the dollar and euro is likely “a matter of when not if,” a strategist told CNBC on Thursday. Sameer Samana of Wells Fargo said on “Squawk on the Street” that it would depend on quantitative easing in Europe and economic data in the U.S. “The economic surprises in Europe have been getting a little bit better and the ones in the U.S. are getting a little more negative so I would say appreciation probably starts to happen at a much-slower pace,” he said. “Parity is probably only a matter of when not if.”

Meanwhile, Ward McCarthy, Jefferies chief financial economist, expects money to flow to the U.S. “Investors who sell bonds to the ECB are going to look for some place to put their money,” he also said on “Squawk on the Street.” “The dollar should strengthen and the U.S. bond market continues to be high yield, so I think expectations are a lot of this money will find its way over here and I think that is exactly what’s going to happen.” Samana recommends investors stay in stocks with diversified portfolios. “Going forward it looks like Europe has the chance to actually surprise to the upside.”

Read more …

I’ve been saying this forever: there’s no way they get 7% in a 1% at best world.

“Chinese Economic Activity Has Probably Slowed To Less Than 3%” (Zero Hedge)

In a world in which sell-side research (and even that of independent third-parties) is not only meaningless – because as we first said in 2010 the only thing that matters in the New Paranormal is ‘the Fed’s H.4.1 statement’ – there are few sources of insightful, non-conflicted analysis. One place which stands out is Cornerstone Macro – yes, it costs a lot of money, but it’s worth it. Cornerstone is the one place which actually turned bearish a little over a month ago, purely on fundamental factors (FX, oil, global recession), and has been pointing out many of the discrepancies in the narrative (then again, as we showed before, in a world in which central banks are set to have the greatest amount of nominal “intervention” surpassing even the post-Lehman period…

… one doesn’t have to be a rocket surgeon to realize that things are not only not good, but have rarely been worse even with the benefit of $13 trillion in central bank liquidity).

We bring it up because Cornerstone’s analysis of recent developments in China bears keeping a very dose eye on. We won’t spoil it, especially for those who are paying subscribers to the paid (and quite expensive) service, but we will present what they have chosen to broadcast publicly on their research section, which in light of last night’s official news of yet another confirmation the slowdown in China is getting worse (not only on the unprecedented debt build up which we have covered extensively in the past, and where monetary ‘austerity’ is suddenly a very hot topic, but where capital outflows have become the number one focal issue) has released several key research reports. Here are the key publicly-available excerpts from some of their salient recent reports:

From Hello Beijing, We Have a Problem:
China is likely to continue to ease, for 3 reasons:
1. Chinese economic activity has probably slowed to less than 3%.
2. China is likely to experience broad-based deflation.
3. China is Nicely to continue to experience net capital outflows. That last bullet, net capital outflows, is the focus of the report today.

Read more …

“Mr. Draghi’s open-mouth operations to talk down the euro..”

Mario Draghi’s Yield of Dreams (WSJ)

The ECB begins its much-anticipated purchases of sovereign bonds on Monday, and ECB President Mario Draghi says the program known as quantitative easing is working before it has even begun. He’s right about that, as strange as it sounds, and therein lies the paradox of Europe’s dive into QE: It may already have had the most effect it is going to have through Mr. Draghi’s salesmanship and Europe’s will to believe. Recall how the ECB got here. Demands have grown for years for an ECB program to match the bond purchases by central banks in the U.S., U.K. and Japan. Mr. Draghi started hinting at a willingness to play along in his August speech at the global central banking conference at Jackson Hole, Wyo. By the time Mr. Draghi in September announced a plan to buy private securities, investors viewed it as a stepping-stone to buying sovereign debt too.

As investors came to view QE as inevitable, prices responded, especially the price of the euro. As a result of Mr. Draghi’s open-mouth operations to talk down the euro—coupled with an expectation that interest rates might rise soon in the U.S.—the euro has declined steadily against the dollar and other currencies. On Thursday it hit an 11-year low of $1.10, compared to about $1.40 last summer. QE boosters hope the euro devaluation will enhance European export competitiveness, although there’s little evidence so far. The euro’s fall might also have produced some inflation through higher euro-denominated import prices had the global price of oil not fallen by some 50% in the past few months. Above all, by demonstrating his commitment to bold steps to avert full-blown deflation, Mr. Draghi has been trying to jolt market expectations about future price moves.

QE expectations have driven down bond yields across Europe, which is supposed to be another benefit. Yields on government bonds have fallen significantly, some into negative territory. Large companies are also starting to line up to issue ultralow yield debt. French energy company GDF Suez on Wednesday sold bonds worth €500 million ($551 million) with a zero coupon, the first such deal in Europe in more than 14 years. Berkshire Hathaway on Thursday raised €3 billion in its first euro-denominated bond issue. So Mr. Draghi has some cause to say, as he did Thursday, that “we have already seen a significant number of positive effects” from the ECB’s January QE announcement.

Read more …

“.. the only efficient way of countering smuggling was to cut the tax on cigarettes..”

Greece Seeks To Plug Its ‘Bermuda Triangle’ Of Lost Taxes (AFP)

It could be a scene from a thriller: a ghost ship abandoned in the crystal-clear bay of a Greek island, its hold crammed with millions of illegal cigarettes, the crew nowhere to be seen. And no one knows where the freighter Amaranthus or its cargo were bound for when it beached on the island of Zanthe off the Ionian coast of western Greece in December. But such discoveries are now almost routine for police as cigarette and petrol smuggling has become big business in crisis-hit Greece. Every country in Europe has a problem with cigarette smuggling but in Greece – which has the highest proportion of smokers of any developed country – it has mushroomed since the economy sank into crisis. A security official told AFP corruption and a lack of resources had caused “major failings in the Greek Customs system” with few major seizures or investigations into smuggling rings.

Yet it is by cracking down on this multi-billion euro business, and the even more lucrative trade in petrol smuggling, that the new left-wing government hopes to find some of the money it needs to pay off Greeces gigantic debts. Prime Minister Alexis Tsipras has made stamping out fuel and cigarette fraud one of his priority reforms, with the state losing an estimated €1.5 billion a year in petrol tax alone, and between €500 and €600 million in lost revenue on tobacco. According to the market research company Nielsen, which used official Greek data, more than one cigarette in five smoked in Greece last year was smuggled, compared with only 3% in 2009 when the crisis that has devastated the Greek economy first struck.

But with the price of cigarettes rocketing, and cash-strapped governments raising taxes on them five times in as many years, researcher Ioannis Michaletos of the Institute of Defence Studies and Analyses said “the only efficient way of countering smuggling was to cut the tax on cigarettes”. This is not, however, what the government, desperate to fill the states empty coffers, want to hear, and it seems determined instead to tighten controls and fully implement European rules on the traceability of cigarettes. Michaletos is sceptical any such crackdown would work “given that European states better equipped than Greece have not had much success.”

Read more …

No kidding: “We don’t have any experience with this quantitative easing, so anybody who knows this now should speak up.”

Draghi Declares Victory for Bond-Buying Before It Starts (Bloomberg)

Mario Draghi is claiming victory for his quantitative-easing program before it even starts. As the European Central Bank president set a start date of Monday for his 1.1 trillion euro ($1.2 trillion) bond-buying program, he said the stimulus will spur the euro area’s fastest economic growth since 2007 and return inflation to the ECB’s goal within three years. The bullish tone after policy makers met in Nicosia on Thursday signals optimism that what Draghi called the ECB’s “final set of measures” will restore the 19-nation currency bloc to health. The risk is that this is just yet another false dawn, leaving the central bank needing to do more. “Draghi had a tough battle to reach the QE compromise, now of course he wants to promote it as much as possible,” said Thomas Harjes at Barclays in Frankfurt. “He gave a strong statement that QE will deliver.”

Draghi’s faith in quantitative easing, which he pushed through against German-led opposition, was reflected in the ECB’s new economic forecasts. After consumer prices fell 0.3% in February, the central bank now sees a deflationary spiral averted. Prices are projected to be flat over the whole of 2015. Inflation should average 1.5% next year, twice as much as the 0.7% estimate in December, and 1.8% in 2017. The ECB’s goal is just below 2%, a level not seen since early 2012. As for economic growth, the ECB’s economists lifted their outlook for this year to 1.5% from 1%, for 2016 to 1.9%, and projected 2.1% in 2017. The economy hasn’t expanded faster than 2% since 2007. “Our monetary-policy decisions have worked,” Draghi told reporters in the Cypriot capital.

He may be catching a lucky break. Critics of quantitative easing, such as Bundesbank President Jens Weidmann, said the euro-zone economy would enjoy an uplift anyway after oil prices fell by half, the euro tumbled, and stimulus in recent months such as interest-rate cuts take effect. Whether QE will work “is not that easy to answer,” Bundesbank board member Andreas Dombret said on Bloomberg TV on Thursday. “We don’t have any experience with this quantitative easing, so anybody who knows this now should speak up.”

Read more …

“Killing three birds with one stone…”

Nowhere But Down? Euro Reacts To QE (CNBC)

With the ECB about to launch its €1 trillion bond-buying program on Monday, foreign exchange experts are already preparing to readjust their forecasts for the single currency. After the ECB announced its massive quantitative easing (QE) campaign would start Monday, the euro fell below $1.1000 for the first time since September 2003. On Friday, the currency was hovering around 1.1012. Against sterling, the euro had also fallen to near seven-year lows of 72.29 pence. Whether the euro could recover after the ECB announced that it was to begin purchasing €60 billionworth of assets a month has prompted analysts to question their forecasts for the currency. One market analyst said the euro was being “brutally punished” by traders. “Volatility is the name of the game for today,” Naeem Aslam at Ava Trade said.

“Short the euro and buy the dollar is probably the most crowded trade for the last year, and yet till this day, investors are not afraid to put more chips on the table. This is causing a tremendous amount of pressure for the euro zone currency.” Derek Halpenny at Bank of Tokyo-Mitsubishi, said in a note Thursday that his year-end forecasts for euro/dollar “might quickly look too conservative.” “(The) ECB press conference certainly highlighted the determination of the ECB to implement the QE program but the forecasts suggest the markets should not expect more,” Halpenny said in a note Thursday. Currencies tend to weaken during QE as there is more money in circulation and lower interest rates tend to encourage consumers to spend and businesses to invest. Killing three birds with one stone, a cheaper euro is expected to help combat deflation and stimulate both the region’s economy and exports, which become more attractive with a cheaper currency.

Read more …

At this point, it’s not Greece that’s the problem.

Is Greece Already Rolling Back On Its Pledges? (CNBC)

It’s payback time for Greece. Despite securing a four-month lifeline on its loans, the bills are already piling up. On top of this month’s repayments to the International Monetary Fund worth a total of 1.5 billion euros, the country faces debt obligations amounting to €22.5 billion for 2015. And there are mounting concerns that, in spite of the extension, Greece still won’t be able to pay its way. A snap election on January 25th led to a new government headed by left-wing Syriza party, which has pledged to make a break from the past austerity measures imposed on it by its lenders. 5 years down the line, and Greece is still tied to two loan programs worth €240 billion overseen by the so-called Troika of the EC, the ECB and the IMF. The bailout, that was due to expire at the end of last year, has been extended twice to give time to Greece’s international creditors to negotiate with the new government.

State revenues, key to helping Greece repay its loans, dropped dramatically in January as people stopped paying taxes in the hope of new legislation. Banks, meanwhile, have been hit by a big wave of capital flight as depositors took money abroad in fear of a “Grexit”.
Meanwhile, Spain’s finance minister, Luis de Guindos, said this week that a third bailout on top of the 240 billion euros already doled out is inevitable. “It is absolutely clear from a market’s perspective that Greece will have to continue relying on official sector financing if it likes to stay in the euro. The new government may try different ways to raise tax revenue etc. than previous governments, but investors have heard the same song over and again”, David Schnautz, interest rates strategist for Commerzbank in New York told CNBC.

The new Greek government is pushing for the money that it thinks is rightfully theirs. Finance minister Yanis Varoufakis has been arguing that the ECB should release €1.9 billion that it gained in interest from its Greek bond holdings. These proceeds, currently held by other euro zone countries, would be returned to Greece once the final review of the country’s bailout programme was concluded. A further €7.2 billion, the last tranche of aid from this second package, is also to be released. Eurogroup President Jeroen Dijsselbloem said this week that a first disbursement could be made as soon as this month, if Greece picked up the speed of its reforms – as the country agreed on February 20th.

Read more …

“Janet Yellen’s Fed favors too-greedy-to-fail banks versus America’s 95 million Main Street investors..”

Wall Street Will Crush Obama’s Plan To Protect 401(k) Savers (Paul B. Farrell)

President Obama’s new fiduciary rule for retirement advice is DOA. Why? Not just because a 2004 GOP Senate killed the fiduciary rule Vanguard’s Jack Bogle has been pushing for over a half century. Not just because Wall Street banks will defeat any and every proposed fiduciary rule, just like they’ve been killing all bank reforms like Dodd-Frank since the 2008 crash. And not just because Janet Yellen’s Fed favors too-greedy-to-fail banks versus America’s 95 million Main Street investors. Even if Obama’s fiduciary rule is not dead on arrival, it will get buried soon in Washington’s deadly partisan graveyard. No such rule will ever go far in today’s hostile GOP Congress, any more than Bogle’s Fidelity Rule did a decade ago. Why? Because banks will fight to the death to protect the hundred of billions in fees generated without any fiduciary rules.

Banks and the financial industry a ideologically selfish. They will never voluntarily put the investor’s interests first, never! Even without a fiduciary rule, America’s 95 million Main Street investors can beat Wall Street at its own game, building a bigger, better retirement portfolio. Here’s how: Last year we built our own new set of rules based on a comparison of fees in the Wall Street Journal. Listen: “For example, imagine putting $200,000 in stock ETFs averaging 0.04% fees. Do that and you’ll have $2 million for your retirement in three decades. But put the same $200,000 in mutual funds charging the industry average, an annual fee of 1.25%, and you’d have only $1.4 million in 30 years. Yes, you lose $600,000. You’d have $600,000 less for your retirement years. Meanwhile, some clever advisers would pocket your $600,000 into their retirement accounts.”

Read more …

Or $10.

Storage Dearth May Drive Oil Prices To $30 (MarketWatch)

As the U.S. runs out of space to store its glut of crude-oil supplies, prices for the commodity could sink to as low as $30 a barrel. When storage is full, there is pressure on those holding oil in storage to “dump that inventory,” said Charles Perry, chief executive officer of energy-consulting firm Perry Management. So a space shortage could cause a drop in prices to the $30 to $40-per-barrel range, he said. West Texas Intermediate crude – the U.S. benchmark — has already seen its prices halved from a year ago. A cost of $30 per barrel of oil represents a 40% drop from the current level, which stands near $51. At Cushing, Okla., the “mecca” of oil storage in the U.S., “the Motel 6 may have a vacancy sign out, but the storage terminals really don’t,” said Kevin Kerr, president of Kerr Trading International.

Here’s why storage plays such a big part: While there are several storage options such as pipelines, very large crude carriers, also known as VLCCs, aboveground tanks and underground salt caverns, the costs for these have “dramatically increased, forcing some companies to sell their inventory as a cheaper option, thus putting significant pressure on prices,” said John Macaluso at Tyche Capital Advisors. It’s not clear how much costs have increased but Perry, an oil-and-gas industry veteran, points out that he’s always heard the going rate for aboveground storage at Cushing was, more or less, 50 cents a barrel a month. Oil tanker storage is the most expensive, with prices likely in the $1 to $1.25 a barrel a month range, he said. Total utilization of crude storage capacity in the U.S. is at about 60% as of the week ended Feb. 20, and capacity at Cushing, the delivery point for WTI futures contracts, is about 67% full, the EIA reported Wednesday.

Coincidentally, the CME Group announced plans Wednesday for what it calls the “first-ever physically delivered crude-oil storage futures contract.” Storage is a major component of the supply-glut dilemma. U.S. crude inventories are at their highest level on record, according to EIA records dating back to the 1980s. Supplies have climbed for eight weeks straight. Capacity for many of the storage locations will be at or near capacity in several weeks to a few months, Kerr estimates — and if storage facilities “begin to turn away supplies and/or dump them on the market en masse,” the market could see oil prices at or below the $45 level. “The scenario could keep us in cheap oil for some time to come,” Kerr said. “We don’t see much spare storage opening up anytime soon. What we do expect are higher rates for storage and a glut of supply.”

Read more …

Anything for a buck.

UK Trade Deal Finances ‘Dirty Energy’ Projects In Mexico (Guardian)

The UK government has become embroiled in a row over financial support for fossil fuel companies after announcing a $1bn (£660m) funding package involving Pemex, the Mexican state oil group. Greenpeace said the move to provide credit for “dirty” energy projects under the UK Export Finance (UKEF) scheme flew counter to the government’s commitments to fighting climate change. The Tories and Lib Dems pledged in 2010 that export finance would be used to champion British companies that developed and exported innovative green technologies around the world, “instead of supporting investment in dirty fossil fuel energy production”.

“The truth is that the ‘greenest government ever’ has spent the last five years bankrolling some of the dirtiest energy developments on the planet, from Russian coal mining to the Saudi oil industry,” said Lawrence Carter, a Greenpeace UK energy campaigner. “Our ministers should stop acting like the merchant bankers of climate change and start using export finance to promote the cutting-edge clean technologies that are reshaping energy markets the world over.” The financing agreement was revealed during a visit to Aberdeen by Matthew Hancock, the UK energy minister, alongside Mexico’s president Enrique Peña Nieto who is on a wider state trip to the UK.

Mexico’s energy system is undergoing significant reform and Nieto was visiting Scotland to speak to energy leaders across the business and education sectors, as well as signing agreements with the UK government for greater collaboration in the areas of energy and climate change. “This visit today by President Peña Nieto to the UK’s energy capital cements the already close links between our two countries and heralds an era of closer collaboration in energy,” said Hancock. “The government of Mexico expects $50bn of investment by 2018 in the wake of its energy reforms – boosting the economy and creating jobs while rejuvenating production,” he added.

Read more …

See my artcile March 5.

The American Woman Who Stands Between Putin and Ukraine

Ukraine is a nation at war, which is why Natalie Jaresko, the minister of finance, has traveled 20 miles from Kiev to the town of Irpin, a settlement of 40,000 on the edge of a pine forest. She’s here to visit a rearguard army hospital and to console convalescing veterans of recent battles against Russian forces and their proxies in the Ukrainian east. “Where did you serve?” she asks, moving slowly from room to room. “How were you wounded?” She may be from Chicago’s West Side, but she speaks Ukrainian fluently, and if anyone notices her American accent, no one seems to care. Jaresko tells the soldiers they’re heroes, the country’s national accountant handling a job for generals. The crisis has thrust people into unlikely roles.

Three months ago, Jaresko, 49, left the private equity firm that she co-founded in Ukraine in 2006 to join the government of Petro Poroshenko. At the time, Jaresko didn’t even have Ukrainian citizenship. Now, as the country’s top economic official, she’s Ukraine’s liaison to the World Bank, the IMF, and the European Bank for Reconstruction and Development. Tax reform is hers. So is the treasury.

[..].. whether Ukraine succeeds as an independent democratic nation arguably depends as much on the efforts of Jaresko and her colleagues as it does on the military battles. Together they must rebuild a shattered economy and restore international confidence in Ukraine while confronting the corruption and cronyism that have haunted the country since the fall of communism. And they must somehow do so as state-owned banks teeter on the brink of collapse, the national treasury counts its last foreign notes, and inflation is at 28% and rising. The longer the war carries on and reforms are delayed, the more hostile Ukrainians will become to their government and its Western supporters, leaving the country even more vulnerable to Vladimir Putin.

Get rid of the freak already.

Victoria Nuland: Russia’s Actions In Ukraine Conflict An ‘Invasion’

Assistant secretary of state Victoria Nuland has admitted the US considers Russia’s actions in Ukraine “an invasion”, in what may be the first time a senior American official has used the term to describe a conflict that has killed more than 6,000 people. Speaking before the House committee on foreign affairs, Nuland was asked by representative Brian Higgins about Russia’s support of rebels in eastern Ukraine, through weapons, heavy armor, money and soldiers: “In practical terms does that constitute an invasion?”

Nuland at first replied that “we have made clear that Russia is responsible for fielding this war,” until pressed by Higgins to answer “yes or no” whether it constitutes an invasion. “We have used that word in the past, yes,” Nuland said, apparently marking the first time a senior official has allowed the term in reference to Russia’s interference in eastern Ukraine, and not simply its continued occupation of the Crimean peninsula.

Obama administration officials across departments have strenuously avoided calling the conflict an invasion for months, instead performing verbal contortions to describe an “incursion”, “violation of territorial sovereignty” and an “escalation of aggression”. In November Vice-President Joe Biden, who has acted as one of Obama’s primary liaisons with the Ukrainian president, Petro Poroshenko, rapidly corrected himself after breaking from the White House’s careful language on CNN, saying “When the Russians invaded – crossed the border – into Ukraine, it was, ‘My god. It’s over.’”

“.. the US does not want peace to break out.” “..the US hasn’t provided one piece of proof, except for Ambassador Geoffrey Pyatt’s Rorschach tests he passes off as a satellite photo.”

‘Nuland Ensconced In Neocon Camp Believes In Noble Lie’ (Ron Paul Inst. at RT)

RT:World leaders and international monitors agree the situation in Ukraine is generally improving. Why are we still witnessing aggressive rhetoric from some US officials?

Daniel McAdams: Because the US does not want peace to break out. The US is determined to see its project through. But unfortunately like all of its regime change projects this one is failing miserably. Victoria Nuland completely disregards the role of the US in starting the conflict in Ukraine. She completely glosses over the fact that the army supported by Kiev has been bombarding Eastern Ukraine, as if these independent fighters in the east are killing themselves and their own people. Victoria Nuland was an aid to Dick Cheney; she is firmly ensconced in the neocon camp. The neocons believe very strongly in lying, the noble lie… They lied us into the war in Iraq; they are lying now about Ukraine. Lying is what the neocons do.

RT: Nuland listed a lot of hostile actions by Russia without providing any reliable proof. Do you think she can be challenged on these topics?

DM: Maybe she is right but the US hasn’t provided one piece of proof, except for Ambassador Geoffrey Pyatt’s Rorschach tests he passes off as a satellite photo. Maybe they are true but we have to present some evidence because we’ve seen now the neocons have lied us into the war. This is much more serious than the attack on small Iraq. This has the potential for a global nuclear war. So I think they should be held to a higher level of scrutiny. Thus far they have not provided any. We do know however that the US is providing military aid. As the matter of fact this week hundreds of American troops are arriving in Ukraine. Why is that not an escalation? Why is it only an escalation when the opponents of the US government are involved?

RT: How probable is that the Western nations ship lethal aid to Ukraine?

DM: It is interesting because Victoria Nuland this week spent some time with Andriy Parubiy, one of the founders of the fascist party in Ukraine and I believe one of the founders of the Joseph Goebbels Institute. She met with him this week and had a photo taken with him. He came back to Ukraine and assured his comrades that the US will provide additional, non-lethal weapons – whatever that means – and felt pretty strongly that they would provide lethal weapons. The Chairman of the Joint Chiefs of Staff, General Martin Dempsey has been urging the US government to provide lethal weapons as has the new US defense secretary [Ashton Carter], both of whom come from the military industrial complex which is thrilled by prospect of a lot more arms to be sold.

RT: Nuland has said the State Department is in talks with EU leaders for another round of sanctions on Russia. Do you think the EU will agree?

DM: I think they will be pressured into agreeing. It is interesting that Nuland said that the new Rada, the new Ukrainian parliament, in this first four months has been a hive of activity. I was just watching some videos from the fights in the Ukrainian parliament. So that was one bit of unintentional humor probably in her speech. It looks like a fight club over there.

Read more …

Or just stop eating crap.

A Mediterranean Diet Is Even Better For You Than You Thought (Independent)

You’ve heard the evidence before but one can never be too sure – yet another study has shown that adopting a Mediterranean diet is good for your health. Filling up on oily fish, nuts, whole grains and fruit and vegetables – and even the odd glass of red wine – could cut your risk of developing heart disease by almost half over a 10-year period. Scientists at Harokopio University in Athens found that the benefits even outweigh those of regular exercise – and it doesn’t matter whether you’re a man or a woman, old or young. The study, which will be presented at the American College of Cardiology’s 64th Annual Scientific Session in San Diego later this month, reinforces previous research. But it is also the first of its kind, in that it tracked heart disease risk in a general population. Most other studies have focused on middle-aged people.

Ekavi Georgousopoulou, a PhD candidate, who conducted the study along with Professor Demosthenes B Panagiotakos, said: “Our study shows that the Mediterranean diet is a beneficial intervention for all types of people – in both genders, in all age groups, and in both healthy people and those with health conditions. “It also reveals that the Mediterranean diet has direct benefits for heart health, in addition to its indirect benefits in managing diabetes, hypertension and inflammation.” More than 2,500 Greek adults, aged 18 to 89, provided researchers with details about their health each year from 2001 to 2012. The participants also completed comprehensive surveys about their medical records lifestyle and dietary habits three times throughout the study: at the start, after five years and after 10 years.

Read more …

Weak little kid.

El Nino Declared As Climate Scientists Watch On With ‘Amazement’ (SMH)

Unusual warming of waters in the central equatorial Pacific has prompted the US government to declare an El Nino event and predict a better-than-even chance that it will linger through the middle of the year. The US National Oceanic and Atmospheric Administration said the above-average sea-surface temperatures had exceeded key thresholds, triggering the declaration of the “long-anticipated” El Nino. However, the location of the main warming – about 10 degrees west of the International Dateline rather than to the east – and its timing early in the year are puzzling climate experts looking for similar events. “Climate scientists are monitoring this with amazement,” said Cai Wenju, a principal CSIRO research scientist who has published widely on the El Nino Southern Oscillation (ENSO) climate pattern. “We only understand what we have seen.”

El Ninos involve the relative warming of sea-surface temperatures in the eastern equatorial Pacific, compared with western regions. In such events, the typical east-to-west trade winds abate or reverse, and large areas of the western Pacific including eastern Australia receive reduced rainfall. Currently, the area of most anomalous warmth is located about 7000 kilometres west of the area where El Ninos are typically centred. They also tend to appear in the late autumn to winter period for the southern hemisphere. “All these are very different from a classic El Nino,” Dr Cai said. While Japanese researchers have identified similar central Pacific warming events – dubbing them El Nino Modoki, or “same but different” in Japanese – the current pattern is about 1500 kilometres further to the west than previous ones, Dr Cai said.

Earlier this week, the Bureau of Meteorology upgraded its ENSO Tracker to “watch” level, reflecting the recent warming. “Weakened trade winds are forecast to continue, and this may induce further warming,” the bureau said. Andrew Watkins, the bureau’s supervisor of its Climate Prediction Services unit, said Australia’s definition differs from the NOAA’s so it is yet to declare an El Nino event. “Even by their definition, it’s very weak,” Dr Watkins said. “It just scrapes over the line.” For the bureau to declare an El Nino event, greater warmth needs to persist in the monitored areas – 0.8 degrees above average compared with 0.5 degrees – and the atmosphere must begin to “couple” with the changed ocean conditions, reinforcing them.

Read more …

Mar 062015
 
 March 6, 2015  Posted by at 4:57 am Finance Tagged with: , , , , , , , ,  


Harris&Ewing US Weather Bureau kiosque, Pennsylvania Avenue, Washington, DC 1921

See, by now you would think that anyone who reads that all 31 US banks that were tested have passed the Fed stress test, knows this says absolutely nothing about the banks, but all the more about the test. You would think. But the media try – and succeed – to cram it down the public’s throat as a success story anyway.

There’s simply a very strong feeling, if not conviction, in the western media, that they’ve won the propaganda battle. They have no adversary other than the blogosphere, and since they reach a thousand times more people, who are to a (wo)man more complacent and gullible than any of your typical interwebs readers, Bob’s their uncle.

But come on guys, are we really going to let this happen without raising our voices or even batting as much as one of our eyes? We’re drowning in nonsense here, and we’re prepared to just die without even trying to swim?

Look, I find real fun in reading that the UK House of Lords issues a report that claims 150,000 jobs will be created by 2050 in the ‘drone industry’, and at the same time clamors for a ‘personal drone registry’. I mean, these guys are way too old to even know how to spell ‘drone’. But that’s just mindless ‘journalism’, and to a point innocent.

What is not is the two portraits of US girl power in Ukraine from the Guardian and Bloomberg that appeared over the past two days. That’s not innocent, that’s vile and bastardly lies. Victoria Nuland and Natalie Jaresko should not be praised by the western media, they should be taken apart bone by bone, because the roles they play are far too shady to stand up to our alleged democratic principles.

Bloomberg is, well, Bloomberg, but why the Guardian gets involved in this sort of apologetic feel-good ‘reporting’ is beyond me. Other than: how much does it pay?! I mean, who needs a brain when you have a keyboard? Nuland and her hubby Robert Kagan – and don’t you even try and make me picture them in bed together plotting fresh invasions – are the flashing neon signs for everything neocon in America today.

She has – more or less voluntarily – admitted to staging the year-old Kiev coup and installing US puppet Yatsenyuk as Ukraine PM, as well as pushing $5 billion in US taxpayer funds to various Ukraine ‘charities’ to make it happen.

And then the Guardian has the gall to present her as your average American girl next door? Nuland creates wars, and misery, and bloodshed, and she does so fully convinced she’s serving some deity’s purpose. She should have long since been removed from any and all offices, but she’s still in place, which paints a damning enough picture of US politics all by itself.

Yeah, sure, let’s make Victoria look normal, right, Guardian?

Victoria Nuland: Russia’s Actions In Ukraine Conflict An ‘Invasion’

Assistant secretary of state Victoria Nuland has admitted the US considers Russia’s actions in Ukraine “an invasion”, in what may be the first time a senior American official has used the term to describe a conflict that has killed more than 6,000 people. Speaking before the House committee on foreign affairs, Nuland was asked by representative Brian Higgins about Russia’s support of rebels in eastern Ukraine, through weapons, heavy armor, money and soldiers: “In practical terms does that constitute an invasion?”

Nuland at first replied that “we have made clear that Russia is responsible for fielding this war,” until pressed by Higgins to answer “yes or no” whether it constitutes an invasion. “We have used that word in the past, yes,” Nuland said, apparently marking the first time a senior official has allowed the term in reference to Russia’s interference in eastern Ukraine, and not simply its continued occupation of the Crimean peninsula.

Obama administration officials across departments have strenuously avoided calling the conflict an invasion for months, instead performing verbal contortions to describe an “incursion”, “violation of territorial sovereignty” and an “escalation of aggression”. In November Vice-President Joe Biden, who has acted as one of Obama’s primary liaisons with the Ukrainian president, Petro Poroshenko, rapidly corrected himself after breaking from the White House’s careful language on CNN, saying “When the Russians invaded – crossed the border – into Ukraine, it was, ‘My god. It’s over.’”

But that’s nothing compared to today’s Bloomberg portrait of Natalie Jaresko, the US stooge installed late last year to run Ukraine’s economy into the ground as finance minister. This is something else altogether. The first thing that comes to mind is: ‘have you no shame?’, but then you realize it’s Bloomberg. The subtitle is: Why Natalie Jaresko Is As Important As The Country’s Generals. I kid you not. In days of old, the CIA would have had to look through the Yellow Pages, but this time around I’m pretty sure they used Facebook to find Americans with Ukie blood ties. They then pumped her full of dollars, 100s of millions of them, and then she was ready to go. Mind you, she was picked way ahead of the regime change a year ago. The whole thing was planned well in advance. 10 years or so in advance.

C’mon, the first paragraph alone should be profoundly sickening to any functioning neuron:

The American Woman Who Stands Between Putin and Ukraine

Ukraine is a nation at war, which is why Natalie Jaresko, the minister of finance, has traveled 20 miles from Kiev to the town of Irpin, a settlement of 40,000 on the edge of a pine forest. She’s here to visit a rearguard army hospital and to console convalescing veterans of recent battles against Russian forces and their proxies in the Ukrainian east. “Where did you serve?” she asks, moving slowly from room to room. “How were you wounded?” She may be from Chicago’s West Side, but she speaks Ukrainian fluently, and if anyone notices her American accent, no one seems to care. Jaresko tells the soldiers they’re heroes, the country’s national accountant handling a job for generals. The crisis has thrust people into unlikely roles.

Three months ago, Jaresko, 49, left the private equity firm that she co-founded in Ukraine in 2006 to join the government of Petro Poroshenko. At the time, Jaresko didn’t even have Ukrainian citizenship. Now, as the country’s top economic official, she’s Ukraine’s liaison to the World Bank, the IMF, and the European Bank for Reconstruction and Development. Tax reform is hers. So is the treasury.

The country’s bankrupt. So much so that no amount of IMF funding can change that. Besides, a substantial amount of whatever funding will be made available, will need to go to what is still called an army, lest Kiev loses out completely against the rebels it has tried to annihilate for a year now. But it can get worse, just read this bit:

[..].. whether Ukraine succeeds as an independent democratic nation arguably depends as much on the efforts of Jaresko and her colleagues as it does on the military battles. Together they must rebuild a shattered economy and restore international confidence in Ukraine while confronting the corruption and cronyism that have haunted the country since the fall of communism. And they must somehow do so as state-owned banks teeter on the brink of collapse, the national treasury counts its last foreign notes, and inflation is at 28% and rising. The longer the war carries on and reforms are delayed, the more hostile Ukrainians will become to their government and its Western supporters, leaving the country even more vulnerable to Vladimir Putin.

Uh-uh. The people will turn against the US and EU, but they don’t really know what’s good for them do they? Even if they hate the heebees out of us, we must still protect them from Vlad the Impaler. Sorry, it’s for your own good…

Jaresko, 5 feet 6 inches tall, wears her dark hair at chin length. As she continues through the Irpin hospital, she’s solemn, respectful. More soldiers receive her, cramped two and three to closetlike rooms, jammed into beds sized for children. They discuss their lack of firepower in the field: Why don’t we have modern weapons? How does the enemy know where we are all the time? Jaresko listens. She knows better than any general that Ukraine doesn’t have the funds to better arm itself. She asks the soldiers what they plan to do once they’ve recovered. To a man, they say they’ll return to the front lines.

Ex-f##king-cuse me, but since I know anywhere between half a million to over a full million men have fled the country just to escape serving in the Kiev army, I’m wondering what lengths Bloomberg’s Brett Forrest and his new-found Mother Teresa went through to find a hospital where defeated soldiers, to a man no less, claimed they’d go back if only they could. Who believes this shit? And who needs it to begin with?

Yada yada, Jaresko life story, Ellis Island, Chicago, yada yada, and then this:

In the mid-1990s, Ukraine endured hyperinflation of 10,000%. A few years later came the shock waves of Russia’s financial crisis. The Ukrainian economy showed its first signs of growth only in 2000, after almost a decade of decline. Then, in 2004, came the Orange Revolution. While the country entered a new period of uncertainty, international institutional investors began to arrive. Two years later, Jaresko and three partners opened investment management firm Horizon Capital. It managed the Western NIS Enterprise Fund and eventually raised two more. When she left last December, it had roughly $600 million of Ukrainian investments under management.

I don’t think that’s Ukrainian investments, I’m thinking it’s western investments in Ukraine. Jaresko was set up very well, financially. From the $5 billion VIctoria Nuland admitted the US had spent to change the regime. She’s a well paid stooge. You do have to wonder what’s left of Jaresko’s riches now that Kiev’s as broke as a wino in the dead of winter.

Last year’s regime change, Jaresko says, represented a real turning point—a chance to finally end kleptocratic rule. “Anyone close to Ukraine understood that this was an incredible moment to take Ukraine forward in a way that it hadn’t gone quickly enough over the past 22 years,” she says. “That there had been a radical change in civil society, and that civil society’s expectations could no longer be put on the back burner by anyone.”

‘Forward’ in this case apparently means into war and bankruptcy, that’s all that’s been accomplished. Yeah, sure, Nuland’s neocons understood that ‘this was an incredible moment to take Ukraine forward in a way that it hadn’t gone quickly enough over the past 22 years..’ Just read that sentence again knowing it comes from that woman, and knowing she’s helped bring down the entire nation. It gives it a whole other meaning.

Yada yada, headhunting firm happenstanced upon an American CEO in Kiev (there’s so many of them it’s hard to keep track ;-)). “They played hard on my patriotism..” “I sometimes wonder what my father would think..” Please hand me a bucket!

Then some to and fro about how the state is too weak to fight Russia – which they’re not, they’re fighting their own citizens -, and paragraphs of financial blubber and outright lies, culminating in:

…economics minister Abromavicius saying his office projects a 5.5% reduction in the economy this year. That doesn’t take into account Putin’s future actions in the east. We work under the assumption that there will be peace very soon, he says. This conflict is misguided. The Russian leadership is misguided about Ukraine in general. They just don’t understand Ukraine. This country wants to be left alone. This country wants to make its own decisions.

‘This country wants to make its own decisions?’ Well, you should have made sure you didn’t go broke then. Because from here on in, you’ll never again make any decision you can call your own, and that includes choosing the color of toilet paper in your government offices. The US will do that for you. That’s why Jaresko is where she is. Ukraine had a lot more freedom before Maidan.

As the young government’s leaders and supporters tirelessly point out, the war with Russia has so far been contained to less than 10% of Ukraine’s territory.

First, there is no war with Russia, only with Ukrainian citizens. And if it’s less than 10% of the territory, that’s only because the rebels have no claim on anything but their own land. They don’t want Kiev, they just want Kiev to leave them alone and stop killing their women and children. But if it won’t, the rebels will take more territory, just so Kiev can’t use it to attack them anymore.

But it must be convenient to be able to hang an entire country’s demise on one person, no matter what happens. I just read that US House Speaker Boehner sent a letter to Obama claiming that Russia’s actions in Ukraine are a ‘grotesque violation of international law’. If that is so, what does that say about America’s actions in Ukraine?

The US must withdraw Nuland and Jaresko from their respective positions starting yesterday morning. But they won’t, they have achieved exactly what they were aiming for: a nation so shattered it’s dependent on US and IMF money just to survive, just to pay for the ink needed to draw its borders on a map.

From here on, it’s just a matter of waiting for Putin to get so sick of all this he decides he can’t let Kiev go down any further, lest all that’s left is neonazis and neocons, and they start aiming their US and/or UAE supplied ‘lethal defensive’ weapons eastward. And then they’ll get what they’ve wanted all along, Yatsenyuk and Poroshenko and Nuland and Jaresko: They’ll get War. But it won’t come the way they envisioned it. Putin’s way too smart for that.

Anyway, what a shameless depiction of Ukraine we get here. It’s all-out propaganda, no prisoners taken. I’m getting tired of getting angry about it, but someone has to.

Mar 052015
 
 March 5, 2015  Posted by at 10:53 am Finance Tagged with: , , , , , , , ,  


Harris&Ewing Washington, DC, Storm damage..” Between 1913 and 1918

Liquidity Evaporates In China As ‘Fiscal Cliff’ Nears (AEP)
China Lowers Growth Target to About 7% as Headwinds Intensify (Bloomberg)
IMF Director Batista: Greek Bailout Was ‘To Save German & French Banks’ (KTG)
Why ECB Risks Running Out Of Ammunition (SocGen’s Olivier Garnier at FT)
Greece Struggles to Make Debt Math Work Amid Bailout Standoff (Bloomberg)
IMF Abdication On Greece (Peter Doyle)
Greek Officials Have Ruffled Feathers In Brussels Over Diplomatic Manners (AFP)
Denmark Can’t Print Money Fast Enough (Bloomberg)
US Running Out Of Room To Store Oil; Price Collapse Next? (AP)
London Property Boom Built On Dirty Money (Independent)
Warren: Wall Street Received $6 Trillion Backdoor Bailout from Fed (Martens)
David Zervos: Here’s Who’s Buying All That Debt at Negative Yields (Bloomberg)
Brazil Raises Rate to Highest Since 2009 After Prices Surge (Bloomberg)
Why This Tech Bubble is Worse Than the Tech Bubble of 2000 (Mark Cuban)
Russia Accuses US of Plot to Oust Putin Via Opposition Aid (Bloomberg)
Victoria Nuland: Russia’s Actions In Ukraine Conflict An ‘Invasion’ (Guardian)
Oklahoma Scientists Downplay Link Between Earthquakes And Fracking (Grist)
Italy Rescues 1000 Refugees From Mediterranean Over Two Days (AP)

“China is no longer buying US Treasuries and global bonds. It has become a net seller, stepping in to offset accelerating outflows of capital.” [..] “The PBOC’s reserve body, SAFE, was still buying $30bn a month of global bonds a year ago. It is now selling an estimated $10bn a month.”

Liquidity Evaporates In China As ‘Fiscal Cliff’ Nears (AEP)

Nobody can fault China’s leaders for lack of bravery. The Politburo has kept its nerve as the world’s most giddy experiment in credit-driven growth faces assault on three major fronts at once. Real interest rates have rocketed. The trade-weighted rise in the yuan over the past two years has been spectacular. Fiscal policy is about to tighten drastically as the authorities clamp down on big-spending local governments. Put together, China is pursuing the most contractionary mix of economic policies in the G20, relative to the status quo ante. Collateral damage is already visible in the sliding global prices of iron ore, copper, nickel, lead and zinc over recent months, as well as thermal coal, oil, corn and even sugar. Zhiwei Zhang, from Deutsche Bank, says China faces a “fiscal cliff” this year as Beijing attempts to rein in spending. “This year, China will likely face the worst fiscal challenge since 1981. This is not well recognised in the market,” he said.

The IMF says China’s budget deficit topped 10pc of GDP in 2014 if measured properly, including borrowing by the regions through “financing vehicles” as well as land sales – a patently unsustainable form of funding that makes up 35pc of local government revenue. This is the highest deficit of any major country in the world, and far above safe levels. A budget squeeze is already emerging as the property slump drags on. Zhiwei Zhang says land revenues fell 21pc in the fourth quarter of last year. “The decline of fiscal revenue is the top risk in China and will lead to a sharp slowdown,” he said. China’s Development Research Centre (DRC) – the brain trust of premier Li Keqiang – has issued a new report on the bankruptcy of California’s Orange County in 1994. “It is a warning to China that the country needs to improve its tax system,” said the paper.

Interestingly, the DRC has also published a report recently on the decline in China’s electrical, mechanical and car industries, a finding that might surprise some in the West. The Chinese tax system is highly leveraged to the property cycle, like Ireland’s before the boom broke in 2007. The scale is epic. A study by the US Federal Reserve found that property investment in China has risen from 4pc to 15pc of GDP since 2008. This is even higher than in Japan in the blow-off years of the late 1980s. The denouement is well under way. Home prices fell 3.1pc in January from a year earlier. Average sales have dropped 7pc from a year ago in the large Tier 1 cities, 22pc for Tier 2 and 15pc for the Tier 3 towns. The inventory overhang has risen to 18 months, three times US levels. New floor space has dropped 30pc on a three-month moving average.

China is not the only country in Asia facing a hangover. Nomura’s Rob Subbaraman says housing booms in India, Hong Kong and Taiwan all match or exceed the US bubble in 2008, with Malaysia not far behind. “Asia is setting itself up for a major credit crunch,” [..] There is another twist to this. The PBOC’s reserve body, SAFE, was still buying $30bn a month of global bonds a year ago. It is now selling an estimated $10bn a month. This is a $40bn a month shift in central bank intervention in the asset markets, a lot more than the extra $15bn a month that the Bank of Japan has been buying since October. Or put another way, Asia is “tapering” at a pace of $25bn a month. You could argue that this neutralises half the quantitative easing soon to come from the ECB.

Read more …

Hey, everyone can set targets… I got some great ones, and a bridge in Brooklyn too.

China Lowers Growth Target to About 7% as Headwinds Intensify (Bloomberg)

China set the lowest economic growth target in more than 15 years as leaders tackle the side effects of a generation-long expansion that has spurred corruption, fueled debt risks and polluted skies and rivers. The goal of about 7% – down from last year’s aspiration of about 7.5% – was given in a work report that Premier Li Keqiang will deliver to the annual meeting of the legislature today in Beijing. The inflation target was set at about 3%. Headwinds that include a property slump, excess capacity in industry and disinflation prompted the second interest-rate cut in three months at the weekend. The government has vowed to move away from expansion at all costs as it tries to clean up the nation’s environment and control a debt surge.

“The government will lower its growth target for 2015 to focus more on the quality than the quantity of growth,” said Nomura Holdings Inc. economists led by Zhao Yang in a note on Feb. 27. “While reiterating that economic development is its primary task, we expect the NPC to also take a hard line on anti-corruption, committing to its clean governance efforts.” Li’s work report, which opens the meeting of the National People’s Congress, is his second since the 59-year-old was named premier toward the end of 2013’s legislative gathering. Along with President Xi Jinping, the pair are seeking to increase efficiencies and strengthen market forces. Policymakers are trying to balance the need to cushion the economy’s slowdown with monetary and fiscal stimulus against longer-term goals.

They’re seeking to increase the role of private business, promote innovation and reshape the fiscal framework as they shift the economy from reliance on debt-fueled investment toward greater consumption and services. Li has said a slower expansion is tolerable as long as enough jobs are created. Even after growth slowed to 7.4% last year, the weakest pace since 1990, the nation created 13.2 million new urban jobs, exceeding a target of 10 million and the previous year’s 13.1 million. The goal of about 7% compares to the IMF’s forecast of a 6.8% expansion this year and the World Bank’s 7.1% estimate.

Read more …

That has been clear for ages..

IMF Director Batista: Greek Bailout Was ‘To Save German & French Banks’ (KTG)

This was never said officially before! “They gave money to save German and French banks, not Greece,” Paolo Batista, one of the Executive Directors of the IMF told Greek private Alpha TV on Tuesday. Batista strongly criticized not only the euro zone and the ECB but also the IMF and the Fund’s managing Director Christine Lagarde for defending Europe much too much.. He urged Greece to directly negotiate with the IMF and favored the restructuring of the Greek debt that is been hold by the European partners.

Read more …

“.. the ECB is now close to running out of ammunition. The true constraints on further ECB intervention lie in the 25% issue limit and 33% issuer limit on its sovereign bond purchases.”

Why ECB Risks Running Out Of Ammunition (SocGen’s Olivier Garnier at FT)

The European Central Bank’s quantitative easing programme announced in January has been well received by financial markets. Its size (€60bn a month) and open-endedness have positively surprised. The fact that 80% of the bond purchases will not be subject to loss sharing between national central banks has rightly been seen as the price worth paying to get a bigger programme and a wider consensus within the ECB governing council. Indeed, this so-called risk-sharing issue has been overemphasised since all the monetary claims created by the programme will remain a joint and several liability of the eurosystem, whatever the loss-sharing arrangement on asset holdings. Having said that, the ECB is now close to running out of ammunition. The true constraints on further ECB intervention lie in the 25% issue limit and 33% issuer limit on its sovereign bond purchases.

These limits are not arbitrary and could not be easily raised or removed: they are the byproducts of the conditions set in January by the European Court of Justice Advocate General in its opinion on the legality of outright monetary transactions (OMTs), the sovereign bond-buying backstop revealed by Mario Draghi, ECB president, in 2012 after he promised to do “whatever it takes” to bring order to sovereign debt markets. Except for Greek debt, the 25% and 33% caps should not prove binding in a scenario where the ECB keeps its monthly asset purchase pace of €60bn. However, the limits could be reached in worst-case scenarios where the ECB would have to boost the size of its QE programme or implement OMTs targeted on specific sovereigns.

The first type of worst-case scenario would be a new global deflationary shock. It might be triggered by faltering US growth or a sharper than expected slowdown in China. The consequence would be fiercer currency wars with balance sheet expansion races among central banks. In this competition, the ECB would be handicapped: it would not have much room to significantly increase the size of its bond purchase programme. For instance, if monthly purchases had to be raised to €100bn, the 25% issue limit would be reached after only eight months in the case of German government debt. Given the narrow size of the eurozone corporate bond market, any substantial further expansion of the asset purchase programme would then have to include equities. But this could prove controversial within the ECB governing council.

Read more …

“We go into the negotiations with optimism, with especially good preparation, and I believe there won’t be a development..”

Greece Struggles to Make Debt Math Work Amid Bailout Standoff (Bloomberg)

As talks over the disbursement of bailout funds for Greece drag on into their seventh consecutive month, the deadlock threatens to pull the country back into a recession this quarter, or even a possible default within weeks. Greece needs to refinance or repay about €6.5 billion euros in debt and interest in the next three weeks, including Treasury bill redemptions, according to data compiled by Bloomberg. To top that, its budget forecasts a €2.1 billion cash deficit in March. A shortfall in tax revenue already opened a cash hole of €217 million in January, derailing budget targets. Having lost market access, Greece’s only lifeline is emergency loans extended by euro-area member states and the IMF.

Failure to secure an agreement on the disbursement of funds by them has triggered a liquidity squeeze, raising doubts about the country’s solvency, as well as the sustainability of its nascent economic recovery. “There’s no chance the quarrel won’t affect the economy” said Haris Theoharis, a lawmaker for Greece’s River party and a former secretary of public revenue. “Every investment has been put on hold, pending the result of the talks,” he said by phone on Wednesday. Greek Finance Minister Yanis Varoufakis said that the country has an alternative plan to plug its financing shortfall in March, without specifying what it was. “We go into the negotiations with optimism, with especially good preparation, and I believe there won’t be a development,” Varoufakis said in Athens, on Wednesday. The answer to the question of whether “there is an alternative is that there is one,” he said.

Greece’s month-old anti-austerity government led by Prime Minister Alexis Tsipras has yet to agree with its creditors on the terms for the disbursement of an outstanding aid tranche totaling about €7 billion. Negotiations that started in Paris in early September between the previous government and the troika of the European Commission, the IMF and the ECB didn’t yield any results. A snap election in January put an abrupt end to the talks. Two officials directly involved in Greece’s €240 billion bailout said the country could potentially use its available reserves to make it past the end of this month. A third official said Greek financing needs, including debt repayments to the IMF, are only safely covered for another two weeks. The officials asked not to be named while negotiations continue. A spokesman for Greece’s finance ministry declined to comment on when the country may run out of cash.

Read more …

“With so much in play, why did the IMF not clearly put that marker on the record?”

IMF Abdication On Greece (Peter Doyle)

In an otherwise sound critique of Mr. Varoufakis’ list of proposals for Greek government policies last week, Mme. Lagarde’s letter to Mr. Dijsselbloem contains an additional, unremarked, but revealing element. After saying that, in the IMF’s view, the Greek list was sufficiently comprehensive to be a valid starting point for a successful conclusion of the review, she added:

… but a determination in this regard should of course rest primarily on an assessment by Member States themselves and by the relevant European institutions.

One might casually read that phrase as throwaway diplomacy or simply as recognizing the facts of life. But either way, the IMF thereby washed its hands about what might follow if the Europeans determined that the letter was insufficient as a starting point. The message would have been very different had her phrase been:

… and I would [strongly?] encourage you and your European colleagues to reach a similar determination promptly.

With so much in play, why did the IMF not clearly put that marker on the record? The explanation is unlikely to be that it understood via midnight phone calls that the Europeans had pre-approved the letter. At the least, European officials on the other end of such calls had no assurance of how their various parliaments would respond to the IMF’s own substantive and strongly expressed concerns with Greek plans. Instead, the explanation is likely that, in the IMF view, Grexit was unlikely to follow a negative determination or/and that if it did, it would not be systemic even if, as Mme. Lagarde had just publicly stated, it would be disastrous for Greece itself.

The former judgement might have assumed that in the event of a negative determination by Euro parliaments, Mr. Varoufakis would quickly rewrite his letter. But to presume that and that nothing else would occur—despite the heated GreekEuro negotiations, the ongoing bank run, the prospect of ELA suspension, and broader peripheral political contagion—would have been to presume a great deal. The alternative explanation—the judgement that Grexit, if it occurred, would not be systemic—would contradict the IMF’s own detailed analysis of the Eurozone financial system.

Read more …

WHy should they act like the others, when the others is exactly who they don’t want to be?

Greek Officials Have Ruffled Feathers In Brussels Over Diplomatic Manners (AFP)

Strapped for cash and under pressure to deliver on reforms, Greece’s new radical government has ruffled feathers in Brussels by not respecting the diplomatic niceties of the negotiating table. From 40-year-old Prime Minister Alexis Tsipras downwards, Greek officials have gone into EU meetings in fighting mood, their hard talk taking many by surprise and leaving some aghast. Tsipras startled fellow European leaders on Saturday when he spoke of a “trap by aggressive conservative forces” led by an “axis” of Spain and Portugal to undermine the month-old Greek government by cutting off EU funds. Tsipras’ outburst was termed “unusual foul play” by Berlin, and German Finance Minister Wolfgang Schaeuble this week told the broadcaster ARD: “Greece has made its position worse with a rhetoric that is difficult for someone on the outside to understand.”

Maverick Finance Minister Yanis Varoufakis and bullish Foreign Minister Nikos Kotzias have also been involved in clashes as they insisted on Greece’s right to be treated as an equal partner despite its debts to the other members of the eurozone. “Some people thought that Greece should continue to be slapped around, as it had been for the past five years. We will no longer be slapped around,” Kotzias told Greek radio Alpha last week. A former communist, Kotzias in January forced EU foreign ministers to adopt a more conciliatory statement on Russian sanctions over the crisis in Ukraine. “We have the right to strengthen our relations with whichever state we think would benefit our country. We will not raise our hand for permission, like a pupil in class,” the minister said.

At a series of eurozone finance ministers meetings last month to hammer out a four-month loan extension for Athens, the Greeks again exasperated their peers by leaking draft documents and shedding light on secret negotiations. “It’s terrible – the Greeks seem to live on another planet,” a frustrated European official said after the first of three Eurogroup meetings ended in acrimony. The writing had been on the wall from when new finance minister Varoufakis had his first meeting in Athens with austere Eurogroup chief Jeroen Dijsselbloem on January 30. At the end of a frosty press conference – during which Varoufakis said Greece would no longer cooperate with EU-IMF auditors – Dijsselbloem stormed off to the joy of Greek social media, which had a field day with the spat. “Baldie, bring your crew to the square in Brussels in one hour,” the bespectacled Dutchman tells shaven-headed Varoufakis in a popular mock photo of the scene that did the rounds. “Four-eyes, I’ll break you in two like a twig,” Varoufakis responds.

Read more …

Going down in the race to the bottom.

Denmark Can’t Print Money Fast Enough (Bloomberg)

Denmark is unleashing huge amounts of ammunition in its battle to prevent the krone from appreciating. The cost of the campaign, though, suggests that any renewed assault by speculators could require an even more aggressive response — capital controls. The nation revealed yesterday that its foreign currency reserves soared by 173 billion kroner ($26 billion) in February – the biggest increase ever. The central bank has been cranking up the printing presses, minting domestic currency for sale on the foreign exchange market to stop the krone from straying too far from its target rate of about 7.46 per euro. As it offloads kroner, the central bank buys foreign currencies, which go into a reserve account that held a record 737 billion kroner last week.

Those sales, combined with four rate cuts this year – driving the benchmark deposit rate to minus 0.75% – are deterring traders from betting they can make money pushing the currency higher: The initial pressure on Denmark’s currency came after Switzerland abandoned its currency peg in January, and as the European Central Bank’s plan to unveil a government bond-buying program discouraged investors from wanting to own the euro. The Danish government says it’s determined not to let its exports take a hit from currency appreciation. But prices in the derivatives market suggest the war isn’t over. Traders who buy and sell contracts to speculate on where the krone will be in a year’s time are still anticipating it will strengthen. The current bet is for a 0.8% variation from the target rate, which is still within the official 2.25% range the central bank says it will tolerate, but outside the 0.5% band it has typically maintained.

Read more …

Yup.

US Running Out Of Room To Store Oil; Price Collapse Next? (AP)

The U.S. has so much crude that it is running out of places to put it, and that could drive oil and gasoline prices even lower in the coming months. For the past seven weeks, the United States has been producing and importing an average of 1 million more barrels of oil every day than it is consuming. That extra crude is flowing into storage tanks, especially at the country’s main trading hub in Cushing, Oklahoma, pushing U.S. supplies to their highest point in at least 80 years, the Energy Department reported last week. If this keeps up, storage tanks could approach their operational limits, known in the industry as “tank tops,” by mid-April and send the price of crude — and probably gasoline, too — plummeting.

“The fact of the matter is we are running out of storage capacity in the U.S.,” Ed Morse at Citibank said at a recent symposium at the Council on Foreign Relations in New York. Morse has suggested oil could fall all the way to $20 a barrel from the current $50. At that rock-bottom price, oil companies, faced with mounting losses, would stop pumping oil until the glut eased. Gasoline prices would fall along with crude, though lower refinery production, because of seasonal factors and unexpected outages, could prevent a sharp decline.

Read more …

I see squatters in your future.

London Property Boom Built On Dirty Money (Independent)

Billions of pounds of corruptly gained money has been laundered by criminals and foreign officials buying upmarket London properties through anonymous offshore front companies – making the city arguably the world capital of money laundering. Some 36,342 properties in London have been bought through hidden companies in offshore havens and while a majority of those will have been kept secret for legitimate privacy purposes, vast numbers are thought to have been bought anonymously to hide stolen money. The flow of corrupt cash has driven up average prices with a “widespread ripple effect down the property price chain and beyond London”, according to property experts cited in the most comprehensive study into the long-suspected money laundering route through central London real estate, by anti-corruption organisation Transparency International.

Some sources claim it has skewed developers towards building high-priced flats and houses rather than ones ordinary people can afford. While corruption and tax evasion are likely to be the biggest sources of the illicit money, drug dealing, people trafficking and sanctions busting are also common, police say. TI’s research, which includes previously unreleased internal figures from the Metropolitan Police Proceeds of Corruption Unit, found that 75% of properties owned by people under criminal investigation for corruption are held through secret offshore companies. London has become a global magnet for corrupt funds, TI said, due to the high prices of property – enabling millions of pounds to be laundered at a time – and Britain’s notoriously lax rules on the disclosure of property ownership.

Any anonymous company in a secret location, such as the British Virgin Islands, can buy and sell houses in the UK with no disclosure of who the actual purchaser is. Meanwhile, TI said, estate agents only have to carry out anti-money-laundering checks on the person selling the property, leaving the buyers bringing their money into the country facing little, if any scrutiny. Anti-corruption activists including Boris Nemtsov, the Russian opposition figure murdered in Moscow last Friday, have repeatedly expressed frustration that the UK does so little to stem the flow of money stolen from their countries. Robert Barrington, executive director of TI, said: “This has a devastating effect on the countries from which the money has been stolen and it’s hard to see how welcoming the world’s corrupt elite is beneficial to communities in the UK.”

Read more …

Why are we still discussing this? Is anyone denying it?

Warren: Wall Street Received $6 Trillion Backdoor Bailout from Fed (Martens)

Yesterday, the Senate Banking Committee held the first of its hearings on widespread demands to reform the Federal Reserve to make it more transparent and accountable. Senator Elizabeth Warren put her finger on the pulse of the growing public outrage over how the Federal Reserve conducts much of its operations in secret and appears to frequently succumb to the desires of Wall Street to the detriment of the public interest. Warren addressed the secret loans that the Fed made to Wall Street during the financial crisis as follows:

“During the financial crisis, Congress bailed out the big banks with hundreds of billions of dollars in taxpayer money; and that’s a lot of money. But the biggest money for the biggest banks was never voted on by Congress. Instead, between 2007 and 2009, the Fed provided over $13 trillion in emergency lending to just a handful of large financial institutions. That’s nearly 20 times the amount authorized in the TARP bailout.

“Now, let’s be clear, those Fed loans were a bailout too. Nearly all the money went to too-big-to-fail institutions. For example, in one emergency lending program, the Fed put out $9 trillion and over two-thirds of the money went to just three institutions: Citigroup, Morgan Stanley and Merrill Lynch. “Those loans were made available at rock bottom interest rates – in many cases under 1%. And the loans could be continuously rolled over so they were effectively available for an average of about two years.”

One of the key reasons that the Fed wanted to keep this information buried from the public is that Citigroup was insolvent during the period it was receiving loans from the Fed. There is also growing distrust of how some Fed personnel appear to cozy up to Wall Street. During Federal Reserve Chair Janet Yellen’s appearance before the Senate Banking Committee a week earlier, Senator Warren severely criticized the actions of Scott Alvarez, the General Counsel of the Federal Reserve. Warren said Alvarez had delivered a speech before the American Bar Association challenging Dodd-Frank’s so-called push-out rule that would bar insured depository banks from holding dangerous derivatives and swaps on their books. Not long thereafter, Citigroup slipped a repeal of the provision into the must-pass spending bill that would keep the government running through this September.

Read more …

“Zervos says of those who are late to change: ” They will be fleeced! They will be the sheep of Wall Street!”

David Zervos: Here’s Who’s Buying All That Debt at Negative Yields (Bloomberg)

David Zervos at Jefferies takes a look at negative yielding European sovereign debt in a note sent to clients today. In the note he asks what seems like an obvious question: “Who in their right mind would ever buy this many negative yielding bonds? Or, put another way, how can an investor look themselves in the mirror after a day of hard work buying bonds with a ‘guaranteed’ loss?” His answer to the question, and what that answer means, should be of great interest to investors in the euro zone. He blames the index-driven world in which many investors live. Managers follow benchmarks, set under ” longstanding rules which never anticipated negative nominal yields.” The answer for these managers is to change the rules or mandates of their funds to allow them to ignore the rules that are currently forcing them to guarantee a loss on the funds they manage.

Zervos then argues that this change will turbocharge the portfolio effect in the euro zone. When the highest-rated sovereign debt carries a negative yield, it is no longer a risk-free asset; it is a guaranteed loser. Investors will therefore move into risk assets (e.g. quities).
According to Zervos, this move will happen over the coming quarters rather than over a period of years, as happened in the US. Zervos’s comments come as investors look to the European Central Bank to start sovereign bond purchases after its meeting tomorrow. With already negative yields across much of northern Europe and Mario Draghi saying that the ECB would be happy to buy at negative yields, investors will be rushing to change their investment mandates. Zervos says of those who are late to change: ” They will be fleeced! They will be the sheep of Wall Street!”

Read more …

Going going gone.

Brazil Raises Rate to Highest Since 2009 After Prices Surge (Bloomberg)

Brazil raised borrowing costs for a fourth straight meeting to the highest level in almost six years after monthly inflation jumped the most since 2003. The board, led by President Alexandre Tombini, maintained the pace of monetary policy tightening with a half-point increase to 12.75%, as expected by 59 of 63 economists surveyed by Bloomberg. Four analysts forecast a quarter-point increase. The vote was unanimous and took into consideration “the macroeconomic scenario and the inflation outlook,” according to the central bank statement. Pledging fiscal consolidation after a record budget deficit last year, President Dilma Rousseff’s new economic team, spearheaded by Finance Minister Joaquim Levy, is unwinding tax breaks and allowing government regulated prices to rise.

While the bank expected the fiscal adjustments to spur a brief pick-up in prices, the threat of faster inflation posed by the real’s plunge to a 10-year low gives the bank no flexibility to address Brazil’s looming recession, said Jankiel Santos, chief economist at BESI Brasil. “With the real at current levels, there’s nothing else the central bank could do, and there’s no good news on other fronts regarding inflation,” said Santos by telephone from Sao Paulo before the decision. Annual inflation accelerated to 7.36% in mid-February as prices surged 1.33% in the month. Policy makers in January raised their 2015 forecast for increases in regulated prices, such as energy, to 9.3% from 6%. They also saw gasoline prices soared 8% because of higher taxes.

Economists surveyed weekly by the central bank have increased their year-end inflation forecast to 7.47%, above the central bank’s target of 4.5%, plus or minus two%age points. Brazil last missed its target in 2003 when prices rose 9.3%. Policy makers’ concern over the pass-through effects of the real’s depreciation was probably key to the bank’s decision, Carlos Kawall, chief economist at Banco Safra, said by telephone. Since the bank’s January meeting, the real has declined 12.7% to extend its six-month slide against the dollar to 25%, the worst performance among the world’s 16-most traded currencies. The currency fell 1.6% Wednesday to 2.9798 per dollar from 2.9316 on Tuesday, its weakest level since 2004.

Read more …

“..unlike back then when the dream of riches was from a public company, now its from a private company. And there in lies the rub.”

Why This Tech Bubble is Worse Than the Tech Bubble of 2000 (Mark Cuban)

Ah the good old days. Stocks up $25, $50, $100 more in a single day. Day trading was all the rage. Anyone and everyone you talked to had a story about how they had made a ton of money on such and such a stock. In an hour. Stock trading millionaires were being minted by the week, if not sooner. You couldn’t go anywhere without people talking about the stock market. Everyone was in or new someone who was in. There were hundreds of companies that were coming public and could easily be bought and sold. You just pick a stock and buy it. Then you pray it goes up. Which most days it did. Then it ended. Slowly by surely the air came out of the bubble and the stock markets declined and declined till the air was completely gone.

The good news was that some people were able to see it coming and get out. The bad is that others were able to get out, but at significant losses. If we thought it was stupid to invest in public internet websites that had no chance of succeeding back then, it’s worse today. In a bubble there is always someone with a “great” idea pitching an investor the dream of a billion dollar payout with a comparison to an existing success story. In the tech bubble it was Broadcast.com, AOL, Netscape, etc. Today its, Uber, Twitter, Facebook, etc. To the investor, its the hope of a huge payout. But there is one critical difference. Back then the companies the general public was investing in were public companies.

They may have been horrible companies, but being public meant that investors had liquidity to sell their stocks. The bubble today comes from private investors who are investing in apps and small tech companies. Just like back then there were always people telling you their idea for a new website or about the public website they invested in, today people always have what essentially boils down to an app that they want you to invest in. But unlike back then when the dream of riches was from a public company, now its from a private company. And there in lies the rub. People we used to call individual or small investors, are now called Angels. Angels. Why do they call them Angels? Maybe because they grant wishes?

Read more …

“It’s clear that the White House has been counting on a sharp deterioration in Russians’ standard of living, mass protests..”

Russia Accuses US of Plot to Oust Putin Via Opposition Aid (Bloomberg)

Russia’s Security Council accused the U.S. of plotting to oust President Vladimir Putin by financing the opposition and encouraging mass demonstrations, less than a week after a protest leader was murdered near the Kremlin. The U.S. is funding Russian political groups under the guise of promoting civil society, just as in the “color revolutions” in the former Soviet Union and the Arab world, council chief Nikolai Patrushev said in an e-mailed statement Wednesday. At the same time, the U.S. is using the sanctions imposed over the conflict in Ukraine as a “pretext” to inflict economic pain and stoke discontent, he said. U.S. officials have dismissed the suggestion of a plot. Secretary of State John Kerry said this week that Putin “misinterprets a great deal of what the United States has been doing and has tried to do.”

Will Stevens, a spokesman for the U.S. Embassy in Moscow, said by e-mail that sanctions on Russia are aimed at seeking a change in the country’s policies, not its government. More than 50,000 people turned out in central Moscow on Sunday to mourn the death of Boris Nemtsov, a former deputy premier-turned Putin opponent who was gunned down in one of the most heavily guarded areas of the capital late Friday. That was the biggest rally Russia has seen since 2011-2012, when Putin was preparing to return to the presidency for a third term. “It’s clear that the White House has been counting on a sharp deterioration in Russians’ standard of living, mass protests,” Patrushev said. Russia can withstand the pressure, though, thanks to its resilience and “decades of experience in combating color revolutions,” he said. [..]

Patrushev, like Putin an ex-KGB officer and former head of the Federal Security Service, said the U.S. is also working to undermine governments in the Middle East, including by promoting extremism and supporting militant groups. While the U.S. is leading an international coalition to fight the Islamic State in Iraq and Syria, it appears to be slowing its efforts to destroy the terrorist group to avoid bolstering Russia’s biggest ally in the region, Syrian President Bashar al-Assad, Patrushev said. “Our trans-Atlantic partners have a clear goal to divide the Muslim world and to weaken Russia and China at the same time,” Patrushev said.

Read more …

Why is this person still around?

Victoria Nuland: Russia’s Actions In Ukraine Conflict An ‘Invasion’ (Guardian)

Assistant secretary of state Victoria Nuland has admitted the US considers Russia’s actions in Ukraine “an invasion”, in what may be the first time a senior American official has used the term to describe a conflict that has killed more than 6,000 people. Speaking before the House committee on foreign affairs, Nuland was asked by representative Brian Higgins about Russia’s support of rebels in eastern Ukraine, through weapons, heavy armor, money and soldiers: “In practical terms does that constitute an invasion?” Nuland at first replied that “we have made clear that Russia is responsible for fielding this war,” until pressed by Higgins to answer “yes or no” whether it constitutes an invasion. “We have used that word in the past, yes,” Nuland said, apparently marking the first time a senior official has allowed the term in reference to Russia’s interference in eastern Ukraine, and not simply its continued occupation of the Crimean peninsula.

Obama administration officials across departments have strenuously avoided calling the conflict an invasion for months, instead performing verbal contortions to describe an “incursion”, “violation of territorial sovereignty” and an “escalation of aggression”. In November Vice-President Joe Biden, who has acted as one of Obama’s primary liaisons with the Ukrainian president, Petro Poroshenko, rapidly corrected himself after breaking from the White House’s careful language on CNN, saying “When the Russians invaded – crossed the border – into Ukraine, it was, ‘My god. It’s over.’” Barack Obama has so far declined to use the term, as have US ambassadors, the secretary of state, John Kerry, and EU leaders such as the German chancellor, Angela Merkel.

The leaders have probably avoided the word to prevent it from complicating already difficult diplomatic efforts, since it would probably exacerbate antagonistic rhetoric between the parties and diminish the Kremlin’s will to compromise. Samantha Power, US ambassador to the UN warned in August that continued Russian intervention would “viewed as an invasion”, but has not used the term since. Major James Brindle, a Pentagon spokesman, declined to characterize Russia’s actions as an invasion, using terms like “serious military escalation” and “blatant violation of international law”. “To be clear we care much less about what you call it, we’ve been focused on how to respond to it,” he said.

Read more …

America lost its spine.

Oklahoma Scientists Downplay Link Between Earthquakes And Fracking (Grist)

Oklahoma has been experiencing an earthquake boom in recent years. In 2014, the state had 585 quakes of at least magnitude 3. Up through 2008, it averaged only three quakes of that strength each year. Something odd is happening. But scientists at the Oklahoma Geological Survey have downplayed a possible connection between increasing fracking in the state and the increasing number of tremors. Even as other states (Ohio, for example) quickly put two and two together and shut down some drilling operations that were to blame, OGS scientists said that more research was needed before their state took similar steps.

Now, though, emails obtained by EnergyWire reporter Mike Soraghan reveal that the University of Oklahoma and its oil industry funders were putting pressure on OGS scientists to downplay the connection between earthquakes and the injection of fracking wastewater underground. In 2013, a preliminary OGS report noted possible correlation between the two, and OGS signed on to a statement by the U.S. Geological Survey that also noted such linkages. Soon after, OGS’s seismologist, Austin Holland, was summoned to meetings with the president of the university, where OGS is housed, and with executives of oil company Continental. Continental CEO Harold Hamm was a major university funder, while the university president David Boren serves on Continental’s board, for which he earned $272,700 in cash and stock in 2013. From EnergyWire:

“I have been asked to have ‘coffee’ with President Boren and Harold Hamm Wednesday,” [Holland] wrote in an Nov. 18, 2013, email to a co-worker. The significance was not lost on his colleague, OGS Public Information Coordinator Connie Smith. “Gosh,” Smith responded. “I guess that’s better than having Kool-Aid with them. I guess.” A meeting with such powerful figures in the state would be intimidating for a state employee such as Holland, said state Rep. Jason Murphey of Guthrie. “Wow. That’s a lot of pressure,” said Murphey, a Republican whose district has been rattled by numerous quakes. “That just sends chills up your spine if you’re from Oklahoma.”

Oklahoma geologist Bob Jackman, who has tried to get the word out about the connection between fracking and the quakes, recalls Holland saying last year that he couldn’t do the same. According to Jackman, Holland, when pressed, blurted out, “You don’t understand — Harold Hamm and others will not allow me to say certain things.”

Read more …

The original headline said 10,000, but that’s a bit much in 2 days. Still, what a disgrace.

Italy Rescues 1000 Refugees From Mediterranean Over Two Days (AP)

More than 1000 refugees have been saved in the Mediterranean north of Libya in the past two days but 10 people died at sea, Italian officials have said. A flotilla of rescue vessels, including from Italy’s coastguard and navy, and three cargo ships saved 941 people in seven separate operations on Tuesday. On Wednesday, the coastguard and two cargo ships rescued 94 migrants whose motorised dinghy was in distress 40 miles (65 km) north of Libya. Survivors were ferried to southern Italian ports. The migrants rescued on Tuesday had been aboard five motorised dinghies and two larger vessels. One of the larger boats capsized and 10 people were later found dead. For months now, hundreds – sometimes thousands – of migrants fleeing conflicts or poverty have been reaching Italy every week on smugglers’ boats from Libya.

Italy’s interior ministry said 7,882 migrants arrived in the first two months of this year, compared to 5,506 over the same time in 2014. A total of 170,000 migrants and asylum seekers were rescued at sea by Italy’s coast guard, navy and other vessels? including cargo ships last year. It is believed the tally will be higher this year. The coastguard said the migrants saved in the latest rescues claimed to be Syrians, Palestinians, Libyans, Tunisians and people from sub-Saharan Africa. More than 30 children were among those rescued. One of the 50 pregnant women aboard was urgently evacuated for medical treatment. A tug deployed at offshore oil platforms raised one of the first alarms before joining in the rescue operations about 50 miles north of Libya, the coast guard said.

For years, Italy has been appealing to the EU to help with ships, aircraft or funding. It points out that most of those rescued intend to reach relatives or jobs in other European countries. This year, an EU patrol mission known as Triton replaced Italy’s Mare Nostrum air and sea mission that had saved tens of thousands of lives. Triton patrols only EU national waters, while the Italians had carried out rescues off Libya’s coast, where many of the unseaworthy and overcrowded vessels founder. Italy says it won’t turn its back on those in danger. “Often the SOS call [arrives] when the migrant boats are outside the Italian rescue zone, 50 or 60 miles from the Libyan coast,” the coastguard commander Filippo Marini told the AP. International law obliges Italy to alert the coastal country with jurisdiction, he said, but calling on Libyan authorities would yield little help due to the country’s chaotic security situation.

“If there is no reaction or intervention for this country, we must rescue these people,” Marini said. The EU’s smaller-scale mission is fodder for rightwing Italian politicians, including Matteo Salvini, the leader of the anti-immigrant, anti-Europe Northern League party. “Ten more dead and 900 clandestine migrants ready to disembark,” Salvini said on Wednesday. “In Rome and in Brussels, there are full pockets and hands stained with blood.” The migrants’ traffickers are reportedly getting even more ruthless. An Italian child protection advocate, Carlotta Bellini of Save the Children, said migrants have recently reported that armed traffickers demanded they jump into the boat and depart even if weather is bad.

Italian lawmakers also demanded the EU do more. Khalid Chaouki, from premier Matteo Renzi’s Democratic party, lamented “this unexplainable European indifference”. In Brussels, the migration commissioner, Dimitris Avramopoulos, told reporters: “Now more than ever we need a comprehensive and long-term strategy.” He spoke after a commission orientation debate on the EU’s new migration policy. Italian officials have expressed concern that militants could mingle among migrants from Libya, where a group affiliating itself with Islamic State (Isis) has gained a foothold.

Read more …